Franzone v. Kapila (24-CV-21430-RKA) Posted 05/02/2024 – Modified 06/05/2024
MAY 2, 2024 | REPUBLISHED BY LIT: DEC 9, 2024
Andrew Franzone has appealed both in his individual capacity and derivatively on behalf of the FF Fund Liquidating Trust and F5 Liquidating Trust the Bankruptcy Court’s “Order Denying Emergency Motion to Reverse Transactions Related to Coreweave, Inc.” His initial brief is due on June 17, 2024.
If interested, please email FLSD_ProBono@flsd.uscourts.gov (link sends e-mail)
United States v. Andrew Franzone
(1:21-mj-04261)
District Court, S.D. New York
APR 20, 2021 | REPUBLISHED BY LIT: DEC 9, 2024
Courtlistener is not naturally updating this case, so LIT pulled the docket from July 2024 to see activity based on SEC update below. The case is ongoing, slowly.
U.S. District Court
Southern District of New York (Foley Square)
CRIMINAL DOCKET FOR CASE #: 1:21-cr-00446-VSB All Defendants
Case title: USA v. Franzone
|
Date Filed: 07/08/2021 |
| Date Filed | # | Docket Text |
|---|---|---|
| 07/11/2024 | 136 | MOTION for Extension of Time to File Supplemental Briefing. Document filed by Andrew Franzone. (Wachtell, Daniel) (Entered: 07/11/2024) |
| 07/12/2024 | 137 | ENDORSED LETTER as to Andrew Franzone addressed to Judge Vernon S. Broderick from Attorneys Daniel F. Wachtell, Elena Fast, dated July 11, 2024 re: Together with my co-counsel, Elena Fast of the Fast Law Firm, P.C., we write on behalf of Defendant Andrew Franzone in the captioned case. As the Court is aware, on June 7, Your Honor granted a thirty-day extension, to July 15, of Defendant’s supplemental briefing deadline in connection with our motion to suppress, as AUSA Kiersten Fletcher had unexpectedly filed a notice of withdrawal as counsel of record and had been replaced by AUSA Sarah Mortazavi, who is new to this matter. In the interest of furthering discussions amongst both sides, we respectfully request an additional 30-day extension of the supplemental motion deadline, to on or about August 15, 2024, as well as corresponding extensions of the Government’s deadline to file its opposition and the defense’s deadline to file a reply. We have consulted with AUSA Mortazavi, who has informed us that she consents to this extension request. ENDORSEMENT: APPLICATION GRANTED. SO ORDERED. ( Supplemental Motions due by 8/15/2024. )(Signed by Judge Vernon S. Broderick on 7/12/2024) (bw) (Entered: 07/12/2024) |
| 08/14/2024 | 138 | NOTICE OF ATTORNEY APPEARANCE: Joseph R. Corozzo appearing for Andrew Franzone. Appearance Type: Retained. (Corozzo, Joseph) (Entered: 08/14/2024) |
| 08/14/2024 | 139 | LETTER MOTION addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 8/14/2024 re: Extension of Tomorrow’s Deadline ., MOTION for Extension of Time to File . Document filed by Andrew Franzone. (Corozzo, Joseph) (Entered: 08/14/2024) |
| 08/14/2024 | 140 | LETTER by USA as to Andrew Franzone addressed to Judge Vernon S. Broderick from USA dated August 14, 2024 re: Opposition to Request for Extension Document filed by USA. (Mortazavi, Sarah) (Entered: 08/14/2024) |
| 08/15/2024 | 141 | LETTER MOTION addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 8/15/24 re: Request for a Status Conference . Document filed by Andrew Franzone. (Corozzo, Joseph) (Entered: 08/15/2024) |
| 08/15/2024 | 142 |
MEMO ENDORSEMENT as to Andrew Franzone (1) denying 139 LETTER MOTION addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 8/14/2024 re: Extension of Tomorrow’s Deadline. ENDORSEMENT: APPLICATION DENIED. Mr. Corozzo’s application for an extension of time is DENIED at this time. The Court will hold a conference in this case on Thursday, August 22, 2024 at 2:00 p.m. in Courtroom 518 of the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, New York 10007. At the conference, the parties should be prepared to discuss any application from Ms. Fast to be relieved as counsel, the terms of Mr. Corozzo’s retention, and the pretrial briefing schedule in this case. SO ORDERED. (Signed by Judge Vernon S. Broderick on 8/15/2024) (lnl) Modified on 8/16/2024 (lnl). (Entered: 08/15/2024) |
| 08/16/2024 | 143 | MEMO ENDORSEMENT as to Andrew Franzone granting 141 LETTER MOTION addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 8/15/24 re: Request for a Status Conference. ENDORSEMENT: APPLICATION GRANTED. The status conference currently scheduled for August 22, 2024, (Doc. 142), is hereby ADJOURNED to Tuesday, August 27, 2024 at 2:00 p.m. in Courtroom 518 of the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, New York 10007. SO ORDERED. (Status Conference set for 8/27/2024 at 02:00 PM in Courtroom 518, 40 Centre Street, New York, NY 10007 before Judge Vernon S. Broderick) (Signed by Judge Vernon S. Broderick on 8/16/2024) (lnl) (Entered: 08/16/2024) |
| 08/26/2024 | Set/Reset Hearings as to Andrew Franzone: The Status Conference scheduled for Tuesday, 8/27/2024 is hereby adjourned to Thursday, 8/29/2024 at 10:00 AM in Courtroom 518, 40 Centre Street, New York, NY 10007 before Judge Vernon S. Broderick. (ldi) (Entered: 08/26/2024) | |
| 08/29/2024 | Minute Entry for proceedings held before Judge Vernon S. Broderick: Status Conference as to Andrew Franzone held on 8/29/2024. Defendant Andrew Franzone present with CJA Counsel, Elena Fast and Daniel Wachtell. Attorney Joseph R. Corozzo present. AUSA Sarah Mortazavi present. Status conference held. For the reasons stated on the record, the Court will notify counsel with its decision by tomorrow. (Court Reporter Kristen Carannante) (ap) (Entered: 08/29/2024) | |
| 08/30/2024 | 144 |
ORDER as to Andrew Franzone. On August 29, 2024, I held a conference in this case to discuss Mr. Corozzo’s availability to represent Defendant Andrew Franzone at trial, currently scheduled for November 12, 2024. Having considered the issues raised at the conference, it is hereby ORDERED that trial in this matter is adjourned to February 3, 2025 at 10:00 a.m. The adjournment is necessary to permit Mr. Corozzo sufficient time to review the voluminous discovery produced by the Government. The Court finds that the ends of justice served by granting a continuance outweigh the best interests of the public and the defendant in a speedy trial. Accordingly, it is further ordered that the time between August 29, 2024 and February 3, 2025 is hereby excluded under the Speedy Trial Act, 18 U.S.C. 3161(h)(7)(A), in the interest of justice. IT IS FURTHER ORDERED that the parties’ joint proposed voir dire questions, a short description of the case, jury instructions, and verdict forms or trial memoranda shall be filed on or before January 21, 2025. In addition, each party shall email those documents as Word documents to BroderickNYSDChambers@nysd.uscourts.gov. IT IS FURTHER ORDERED that a final pretrial conference in this matter will be held on January 28, 2025 at 10:30 a.m. IT IS FURTHER ORDERED that Mr. Corozzo shall file a letter, by September 6, 2024, explaining why additional pretrial briefing is appropriate in light of his earlier filings. In his letter, Mr. Corozzo shall specifically identify what motions—and arguments—he seeks to supplement. Because Mr. Franzone has retained Mr. Corozzo, Ms. Fast and Mr. Wachtell are hereby relieved as counsel. The Clerk of Court is respectfully directed to terminate Ms. Fast and Mr. Wachtell from this suit. SO ORDERED. ( Letter by Mr. Corozzo due by 9/6/2024. Final Pretrial Conference set for 1/28/2025 at 10:30 AM before Judge Vernon S. Broderick. Jury Trial set for 2/3/2025 at 10:00 AM before Judge Vernon S. Broderick. )(Signed by Judge Vernon S. Broderick on 8/30/2024) (bw) (Entered: 08/30/2024) |
| 08/30/2024 | Attorney update in case as to Andrew Franzone. Attorneys: Elena Fast and Daniel F. Wachtell terminated. [*** NOTE: See Order, Doc.# 144 . ***] (bw) (Entered: 08/30/2024) |
|
| 09/05/2024 | 145 | LETTER by Andrew Franzone addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 9/5/24 re: Addressing Court’s Order dated August 30, 2024 (Corozzo, Joseph) (Entered: 09/05/2024) |
| 09/09/2024 | 146 | MEMO ENDORSEMENT as to Andrew Franzone on re: 145 LETTER by Andrew Franzone addressed to Judge Vernon S. Broderick from Joseph R. Corozzo dated 9/5/24 re: Addressing Court’s Order dated August 30, 2024. ENDORSEMENT: The Government is directed to respond to Mr. Corozzo’s letter by September 13, 2024. In its response, the Government shall set forth its position as to whether the answers to the four questions Mr. Corozzo seeks to address are available in the record and, in any event, whether that info1mation is necessa1y to resolve the pending motions. (Responses due by 9/13/2024) (Signed by Judge Vernon S. Broderick on 9/9/2024) (ap) (Entered: 09/09/2024) |
| 09/11/2024 | 147 | LETTER by USA as to Andrew Franzone addressed to Judge Vernon S. Broderick from USA dated September 11, 2024 re: Response to Defendant’s September 5, 2024 Letter Document filed by USA. (Mortazavi, Sarah) (Entered: 09/11/2024) |
| 09/18/2024 | 148 | ENDORSED LETTER as to Andrew Franzone addressed to Judge Vernon S. Broderick from AUSA Sarah Mortazavi re: The Government writes in response to the Court’s September 9, 2024 Order directing the Government to respond to the defense’s letter seeking to supplement its motion to suppress Franzone’s Google account (the “Motion”) by responding to certain discrete questions raised at the September 26, 2023 oral argument (the “Proceeding”). (ECF No. 146)…. For these reasons, the questions the defense offers to answer do not alter the Franks analysis, and this Court need not take up any further offer of proof to resolve the pending motion. ENDORSEMENT: Mr. Franzones request to submit supplemental briefing is DENIED at this time. To the extent that the Court requires any additional information from the parties it will so advise them. SO ORDERED: (Signed by Judge Vernon S. Broderick on 9/18/2024) (bw) (Entered: 09/18/2024) |
| PACER Service Center | |||
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| Transaction Receipt | |||
| 12/09/2024 06:49:08 |
Don’t trust the US Government with your homes. https://t.co/Nl75A3NpRx pic.twitter.com/kuTIj8jIWX
— lawsinusa (@lawsinusa) December 8, 2024
Securities & Exchange Commission v. Franzone
(1:21-cv-03619)
District Court, S.D. New York
APR 20, 2021 | REPUBLISHED BY LIT: DEC 9, 2024
VIA ECF
The Honorable Colleen McMahon
United States District Judge
United States Courthouse
500 Pearl Street, Courtroom 24A
New York, NY 10007-1312
Re: SEC v. Andrew T. Franzone, et al., No. 21-cv-3619 (CM)
Dear Judge McMahon:
I serve as lead counsel to Plaintiff Securities and Exchange Commission (the “SEC”) in the above-referenced case. In accordance with Your Honor’s Order dated January 17, 2023 (ECF No. 17), this letter is submitted on behalf of the SEC, in consultation with the United States Attorney’s Office for the Southern District of New York (“USAO”), regarding the status of this case.
On June 14, 2021, this Court granted the USAO’s motion to intervene and stay this case. (ECF No. 14) The Court stayed this case until ten days after the jury delivers a verdict in the USAO’s parallel criminal case, United States v Andrew T. Franzone, 21 Mag 4261 (S.D.N.Y.) (the “Criminal Case”), which has since been transferred to Judge Vernon Broderick under case number 21 CR 446.
The USAO has informed us that it is actively prosecuting the Criminal Case, and believes that this civil case should remain stayed during its pendency.
The USAO states that the defendant in the Criminal Case has changed counsel twice, and has moved to suppress the fruits of certain searches. That motion is awaiting decision.
Judge Broderick has scheduled a status conference in the Criminal Case on January 27, 2023. The undersigned is happy to provide further updates as the Court so orders.
We thank Your Honor for the opportunity to submit this Status Report.
Respectfully submitted,
/s/Duane K. Thompson
Duane K. Thompson
LIT’s statement on the @CFPB Lexington Law Press Release. https://t.co/llqezrBxOo pic.twitter.com/QdHZNtnTBO
— lawsinusa (@lawsinusa) December 6, 2024
United States v. Andrew Franzone
(1:21-mj-04261)
District Court, S.D. New York
APR 20, 2021 | REPUBLISHED BY LIT: DEC 9, 2024
That was super short-lived….transferred to new judge.
Co-Founder Of Hedge Fund Charged With $40 Million Securities Fraud Scheme
APR 23, 2021 | REPUBLISHED BY LIT: APR 27, 2021
Audrey Strauss, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the arrest yesterday afternoon of ANDREW FRANZONE, the founder and former general partner of FF Fund I L.P. on charges of securities fraud and wire fraud for his role in a scheme to fraudulently induce more than 100 investors to invest approximately $40 million in his fund by, among other things, lying about the fund’s investment strategy, liquidity, and amount of assets under management. FRANZONE was arrested yesterday afternoon in Fort Lauderdale, Florida, on a criminal complaint (the “Complaint”) and will be presented before a magistrate judge in the Southern District of Florida.
Manhattan U.S. Attorney Audrey Strauss said: “Andrew Franzone allegedly promised his clients access to his successful liquid trading strategy and consistent, positive trading returns. As alleged, those promises were lies. Franzone lied about his fund’s investments and performance, and he lied in promising clients that they had could readily access their invested capital. While his investors lost money, Franzone enriched himself. We will continue to work with our law enforcement partners to protect investors from these types of deceptive practices.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Franzone allegedly misled investors to believe his fund was liquid and he could cover their redemption requests, in a scheme to lure them in to investing in his hedge fund. This should be a reminder that greed has no boundaries and does not care about a favorable portfolio. Postal Inspectors remind all investors to thoroughly check offers, and if they sound too good to be true, keep your money in the bank.”
As alleged in the Complaint unsealed today in Manhattan federal Court[1]:
FRANZONE co-founded Farrell Franzone Investments LLC in 2010. FRANZONE described Farrell Franzone as an opportunity for investors to invest, through the purchase of limited partnership (“LP”) interests, in a hedge fund purporting to trade preferred securities and options and to maintain a highly liquid portfolio for its investors. FRANZONE renamed the fund FF Fund I (“FF Fund”) in 2014, and served as its general partner from that time until approximately September 2019.
In connection with marketing the FF Fund to investors, FRANZONE touted FF Fund as a “multi-strategy investment program … focus[ed] on three unique asset classes: the preferred stock market, the option market, and the private investment portfolio.” When discussing FF Fund, FRANZONE assured investors that FF Fund was focused on trading in the preferred securities and options markets, which afforded its investors access to quarterly liquidity, and that FF Fund had a track record of consistent positive trading returns since its inception in August 2010.
FRANZONE’s representations about FF Fund’s strategy, liquidity, and performance were largely fabricated. Instead of engaging primarily in preferred securities and options trading that ensured the FF Fund’s liquidity, FRANZONE instead diverted more than 80% of FF Fund’s capital to high-risk, illiquid private investments, many of which were either worthless or significantly impaired. FRANZONE also misappropriated FF Fund’s assets to fund his own personal business interests, including the purchase of an airplane hangar, and lied to investors about FF Fund’s performance and assets under management.
Through these and other fraudulent misrepresentations and omissions, FRANZONE induced over 100 investors to invest more than $40 million in FF Fund. Despite showing investors positive trading returns as late as 2019, FF Fund was unable to fulfill redemption requests in early 2019 and is currently in the process of being liquidated.
* * *
FRANZONE, 44, of Fort Lauderdale, Florida, is charged with one count of securities fraud, which carries a maximum potential sentence of 20 years in prison, and one count of wire fraud, which carries a maximum potential sentence of 20 years in prison. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the investigative work of the USPIS and thanked the U.S. Securities and Exchange Commission, which has separately filed a civil action against FRANZONE and FF Fund Management.
This case is being handled by the Office’s Securities and Commodities Task Force. Assistant United States Attorney Kiersten A. Fletcher is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
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