Federal Judges

Rogue Florida Lawyers, Russians, Real Estate and Fraud Claims Assigned to Judge Marra’s Courtroom. Here’s What Happened Next

The facts of this court order is limited to whether or not two attorney’s should be sanctioned by Marra and delegated to Magistrate Judge Matthewman. In the end, another standard issue, wordsmithed opinion dismisses the motion for sanctions.

It’s Another Shocking Court Coverup at S.D. Fl. as Marra and Matthewman Defend Two Rogue, High-Profile Lawyers from Sanctions

But there’s a lot more to this case than you think and we’ve delved into the background. Read the articles that follow this court order for more detail on the case(s). It would appear dismissing the sanctions rapidly was the goal – in order to keep the media attention away from the real facts of this case…and in doing so, protecting many more parties, banks, lawyers and law firms from unwanted media and public scrutiny.

Filippova v. Mogilevsky, Civil No. 18-80044-CIV-Marra/Matthewman (S.D. Fla. Mar. 6, 2019)

FLORIDA ATTORNEY GARY ROSEN

WILLIAM MATTHEWMAN, UNITED STATES MAGISTRATE JUDGE

ORDER ON FORMER-DEFENDANTS SAPODILLA 513 , LLC, KING DAVID REAL ESTATE INVESTMENT HOLDINGS, LLC AND TAM TAM INVESTMENTS, LLC’S MOTION TO STRIKE OR FOR INVOLUNTARY DISMISSAL OF ACTION WITH PREJUDICE FOR FRAUD ON THE COURT AND FOR SANCTIONS [DE 370]

THIS CAUSE is before the Court upon Former-Defendants, Sapodilla 513, LLC, King David Real Estate Investment Holdings, LLC, and Tam Tam Investments, LLC’s (“Movants”) Motion to Strike or for Involuntary Dismissal of Action with Prejudice for Fraud on the Court and for Sanctions (“Fraud Motion”) [DE 370].

This matter was referred to the undersigned by United States District Judge Kenneth A. Marra. See DE 465.

Former-Defendants Tama Beth Kudman Richman and Erikah Bertoloti have filed Notices of Adoption of the Fraud Motion [DEs 372, 382].

Plaintiff Tamara Filippova and Former-Defendant Natalia Mogilevsky have filed responses to the Fraud Motion [DEs 401, 418]. Movants have filed a reply in support of the Fraud Motion [DE 421].

The Court held an evidentiary hearing on the Fraud Motion on February 4, 2019. At the February 4, 2019 hearing, the Court gave the parties the opportunity to file supplemental memoranda on or before February 15, 2019, in lieu of making closing arguments.

Counsel for Plaintiff, Gary Rosen, Esq., and counsel for Natalia Mogilevsky, Stuart Kaplan, Esq., filed a joint supplemental memorandum [DE 511] on counsel’s behalf, but not on behalf of either Plaintiff or Natalia Mogilevsky.

Movants also filed a supplemental memorandum [DE 512].

Thereafter, Former-Defendants Tama Beth Richman Kudman and Erikah Bertoloti filed Notices of Adoption of Movants’ supplemental memoranda [DEs 514, 516].

Finally, Mr. Rosen and Mr. Kaplan filed a “Three Sentence Reply to Defendants Sapodilla 513, LLC, Et Al [sic] Supplemental Memorandum” [DE 515].

FLORIDA ATTORNEY STUART KAPLAN

I. BACKGROUND

Plaintiff Tamara Filoppova, the mother of Former-Defendant Natalia Mogilevsky, filed her initial Complaint [DE 1] against multiple defendants on January 16, 2018.

The initial federal Complaint was filed shortly after Natalia Mogilevsky had filed a dissolution of marriage action against her husband, Ilia Mogilevsky, on November 11, 2017, in the Fifteenth Judicial Circuit, in and for Palm Beach County. [DE 370, p. 2, f.n. 1].

As noted above, one of the defendants named in the federal Complaint was Natalia Mogilevsky, Plaintiff’s daughter. Plaintiff filed her First Amended Complaint [DE 119] on February 28, 2018. While the other defendants filed motions to dismiss the First Amended Complaint [DEs 143, 186, 187, 194, 195, 196, 197, 224, 226, 227], Natalia Mogilevsky filed an answer which admitted liability and asserted crossclaims [DE 193]. Plaintiff then filed a motion to amend her complaint [DE 237], which was granted. See DE 272.

On May 26, 2018, Plaintiff filed her Second Amended Complaint [DE 273]. Again, the defendants other than Natalia Mogilevsky filed motions to dismiss [DEs 276, 277, 279, 282, 285, 290, 293, 294, 295, 319]. Again, Ms. Mogilevsky filed an answer which admitted liability and asserted crossclaims [DE 309]. While the motions to dismiss the Second Amended Complaint remained pending, the instant Fraud Motion was filed on August 1, 2018.

Thereafter, on August 29, 2018, Judge Marra entered an Order Granting Motions to Dismiss the Second Amended Complaint [DE 415]. Judge Marra granted all of the pending motions to dismiss, partially on shotgun pleading grounds and partially on merit grounds. Id. at p. 12. Judge Marra explicitly dismissed several of the counts with prejudice. Id. at pp. 10-12.

Judge Marra specifically noted that the 277-page, 1565-paragraph Second Amended Complaint was “at best incoherent and riddled with redundancy,” and that reading it was a “mind numbing experience.”

Id. at p. 6.

The undersigned has also found in his recent Reports and Recommendations recommending the award of attorney’s fees to various former-defendants that the First and Second Amended Complaints…

were deficient, that they were rambling, confusing and disjointed, and that it is shocking that a member of the Florida Bar would file such woefully deficient complaints.

See DEs 502, 503, 510, and 517.

Plaintiff filed her Third Amended Complaint [DE 423] on September 18, 2018, and did not name Natalia Mogilevsky as a defendant.

II. THE FRAUD MOTION , RESPONSES, AND REPLY

The Fraud Motion first sought the striking or dismissal of Plaintiff’s federal lawsuit with prejudice [DE 370, p. 1]. However, dismissal is now a moot issue since all of Plaintiff’s causes of actions have been dismissed, abandoned, or resolved. No current complaint remains pending before the Court.

The Fraud Motion next sought an award of attorney’s fees and costs against Plaintiff and her counsel, Mr. Rosen, and against Former-Defendant Natalia Mogilevsky and her counsel, Mr. Kaplan. [DE 370, p. 1].

In summary, Movants argued that Plaintiff and Former-Defendant Natalia Mogilevsky, and their counsel, acted in concert to create an illegitimate sham lawsuit and pervert the legal system. Id. According to Movants, this federal action was filed soon after Natalia Mogilevsky filed a dissolution of marriage action, and the intent of this federal lawsuit was to prevent certain assets from being equitably distributed in the dissolution of marriage action. Id. at p. 2, f.n. 1 & 2.

Movants maintained that Plaintiff’s counsel, Gary Rosen, drafted pleadings for Natalia Mogilevsky, including an answer admitting liability and crossclaims, a fact uncovered by their forensics computer expert. Id. at pp. 2-11. Movants argued that Plaintiff and Natalia Mogilevsky committed a fraud on the court in an effort to falsely create diversity jurisdiction by listing Natalia as a defendant, when, in reality, she was a proper plaintiff. Id. at p. 15.

Plaintiff’s Response argued that this lawsuit is not a sham and that Natalia Mogilevsky is a necessary defendant to permit complete relief to Plaintiff. [DE 401]. Plaintiff asserted that this federal action is not “leverage” for the dissolution of marriage action between Natalia Mogilevsky and her husband, Ilia Mogilevsky. Id. at p. 6. Plaintiff contended that she and Natalia have a “common interest” in having the monies Plaintiff entrusted to her daughter and her daughter’s husband repaid to her. Id. at p. 10. Finally, Plaintiff admitted that her counsel and Natalia’s counsel worked together in this lawsuit. Id. at p. 12.

Former-Defendant Natalia Mogilevsky’s Response asserted that no fraud on the court has occurred. [DE 418]. Natalia argued that Plaintiff’s counsel, Gary Rosen, and her counsel, Stuart Kaplan, often work together on cases and that counsel jointly cooperated in this case for the benefit of Plaintiff and Natalia. Id. at p. 6.

In their Reply, Movants again argued that Plaintiff and Natalia Mogilevsky have committed a fraud on the court and hid their cooperation from the Court and from the other parties in the case. [DE 421].

III. EVIDENTIARY HEARING

On February 1, 2019, the Court entered its Omnibus Order on Motions Related to the February 4, 2019 Evidentiary Hearing and Order Providing Instructions to Counsel Regarding the Scope of Evidence and Testimony to Be Considered by the Court [DE 495]. The Order specified the scope of the evidentiary hearing. Additionally, prior to the start of the hearing, the parties entered into a Stipulation Regarding Expert Testimony [DE 500].

The Court held the evidentiary hearing on February 4, 2019. See DE 499. Gary Rosen, counsel for Plaintiff Tamara Filippova, testified, and Stuart Kaplan, counsel for Former-Defendant Natalia Mogilevsky, testified. [DEs 501, 513]. No additional witnesses testified, and no exhibits other than the Stipulation Regarding Expert Testimony [DE 500] were introduced at the evidentiary hearing.

A week after the evidentiary hearing, on February 11, 2019, a Notice of Receipt of Emails by Counsel for Defendant’s [sic] Sapodilla 513, LLC, King David Real Estate Investment Holdings, LLC and Tam Tam Investments, LLC [DE 504] was filed with the Court.

The attached emails are allegedly from Plaintiff to her counsel, Mr. Rosen, and from Natalia Mogilevsky to her counsel, Mr. Kaplan. [DEs 504-1, 504-2, and 504-3]. Both women request that their respective counsel withdraw from the case, and Plaintiff’s email alleges that her counsel, Mr. Rosen, has “committed fraud on the court.” Id.

IV. SUPPLEMENTAL MEMORANDA

Movants submitted a supplemental memorandum, as did Mr. Rosen and Mr. Kaplan on their own behalf. The Court notes that no supplemental memorandum was submitted on behalf of Plaintiff or on behalf of Former-Defendant Natalia Mogilevsky; instead, a supplemental memorandum was submitted on behalf of Mr. Rosen and Mr. Kaplan. See DE 511.

It should be noted that Mr. Rosen and Mr. Kaplan have not yet been permitted to withdraw from this case by the Court.

In their memorandum, Mr. Rosen and Mr. Kaplan argue that “[t]here was no fraudulent creation of diversity jurisdiction” because Natalia Mogilevsky was not a real party in interest plaintiff, and she was a proper defendant since she had fiduciary duties to Plaintiff in that she held Plaintiff’s power of attorney. [DE 511, p. 2].

Mr. Rosen and Mr. Kaplan also argue that there was “no conflict of interest or collusion” in that Mr. Rosen did not actually author any of Mr. Kaplan’s pleadings. Id. at pp. 2-3.

According to Mr. Rosen and Mr. Kaplan, Mr. Kaplan often used Mr. Rosen’s templates for motions and other legal filings, but he “made his own substantive statements in the pleadings.” Id. at p. 7. Mr. Rosen and Mr. Kaplan additionally maintain that the fact that Natalia’s father paid her legal fees did not amount to a violation of the Florida Bar Rules. Id. at p. 5.

In their supplemental memorandum, Movants contend Mr. Rosen’s and Mr. Kaplan’s testimony at the evidentiary hearing lacked credibility. [DE 512, p. 7]. They assert that there is clear and convincing evidence that Plaintiff and Natalia Mogilevsky perpetrated a fraud on the Court in that they came to an agreement “under which Plaintiff drafted pleadings and documents for and in conjunction with Natalia, without the knowledge of the Court and other Defendants in the action.” Id. at p. 11.

Movants argue that “[m]ultiple inconsistencies about whether Natalia could have been a plaintiff on behalf of herself, or on behalf of her Mother, and whether Natalia was a ‘friendly defendant’ or ‘adverse defendant’ further evidence the fraud perpetrated on the Court.

Pleadings and testimony show conflicting assertions as to Natalia’s position in the case.” Id. at p. 15.

Movants contend that it is clear that, “unbeknownst to Movants and the Court, Plaintiff’s counsel met with Natalia and her counsel, including at least one meeting in which Natalia’s investigator presented Plaintiff’s counsel with evidence against Natalia, and worked together in drafting of pleadings, Rule 26 disclosures and other court filed documents.” Id.

Movants further argue that, according to the relevant case law, Natalia Mogilevsky could have been a plaintiff on behalf of her mother as the holder of the power of attorney, and diversity of citizenship would have been maintained. [DE 512, pp. 15-16].

They contend that Natalia was not named as a plaintiff on behalf of her mother for purely improper, strategic reasons. Id. at p. 16. Finally, Movants maintain the “secret agreement between Plaintiff and Natalia meets several elements for a Mary Carter agreement,” but that the “secret agreement between Plaintiff and Natalia and their attorneys is graver than a Mary Carter agreement because the circumstances, pleadings, and testimony show Plaintiff was drafting pleadings for Natalia, and the agreement was formed at the inception of the lawsuit.” Id. at p. 19.

Mr. Kaplan and Mr. Rosen filed a reply [DE 515], on their own behalf, to Movants’ supplemental memoranda even though they did not attempt to secure the Court’s leave to do so.

In the reply, Mr. Kaplan and Mr. Rosen acknowledge that they “shared information and work product.” Id.

They argue, however, that the “mother and daughter relationship was tangled; translating it via the lawsuit was maladroit, but it was not ‘fraud.’ Making Natalia a plaintiff would have merely made it a state court matter; there was no ‘fraudulent’ advantage to being in federal court.” Id.

V. ANALYSIS

At the time the Fraud Motion was filed, Movants were seeking an Order striking Plaintiff’s Second Amended Complaint, involuntarily dismissing the action with prejudice, and imposing sanctions against Plaintiff.

There is no longer an operative complaint in this case as all of Plaintiff’s causes of action have been dismissed, abandoned, or resolved. See DEs 423, 467, 492. There is no pending complaint. Clearly, Movants’ Fraud Motion is moot and due to be denied to the extent that it seeks the striking of a complaint or involuntary dismissal.

The only issue left for the Court to determine is whether Movants have established by clear and convincing evidence that Plaintiff and Former-Defendant Natalia Mogilevsky and/or their counsel perpetrated a fraud on the court or acted in bad faith, and if so, what the appropriate sanctions–in the form of attorney’s fees and costs–should be.

The Court also notes that the pending Fraud Motion is not seeking Rule 11 sanctions, so the only way that Movants can recover reasonable attorney’s fees and costs is if the Court finds that there was a fraud on the court or that Mr. Rosen and/or Mr. Kaplan have acted in bad faith, as further explained later in this Order.

A. Fraud on the Court

“A ‘fraud on the court’ occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier [of fact] or unfairly hampering the presentation of the opposing party’s claim or defense.” Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989).

“[P]roving a fraud on the court requires ‘clear and convincing evidence of an unconscionable plan designed to improperly influence the court in its decision.'”

Tarasewicz v. Royal Caribbean Cruises Ltd., No. 14-CIV-60885, 2016 WL 3944176, at *4 (S.D. Fla. Feb. 9, 2016), report and recommendation adopted, No. 14-CIV-60885, 2016 WL 3944178 (S.D. Fla. Mar. 17, 2016) (quoting Johnson v. Law Offices of Marshall C. Watson, PA, 348 Fed.Appx. 447, 448 (11th Cir. 2009).

“Generally speaking, only the most egregious misconduct, such as bribery of a judge or members of the jury, or the fabrication of evidence by a party in which an attorney is implicated, will constitute fraud upon the court.”

Aguilar v. United Floor Crew, Inc., No. 14-CIV-61605, 2015 WL 2415421, at *9 (S.D. Fla. May 21, 2015) (citing Rozier v. Ford Motor Co., 573 F.2d 1332, 1338 (5th Cir. 1978)).

The Eleventh Circuit has “consistently held that a fraud between parties is not fraud on the court” even “declar [ing] … that perjury does not constitute fraud on the court.”

Patterson v. Lew, 265 F. App’x 767, 769 (11th Cir. 2008) (citing S.E.C. v. ESM Grp., Inc., 835 F.2d 270 (11th Cir.1988)).

“Fraud on the court is therefore limited to more egregious forms of subversion of the legal process … those we cannot necessarily expect to be exposed by the normal adversary process.”

Idearc Media Corp. v. Kimsey & Assocs., P.A.,, 2009 WL 928556, at *5 (M.D. Fla. Mar. 21, 2009) (quoting Great Coastal Express v. International Broth. of Teamsters, Chauffeurs, Warehousemen, 675 F.2d 1349, 1357 (4th Cir. 1982)).

After carefully reviewing the papers, testimony, and stipulation, and the entire docket in this case, the Court finds that Movants simply have not met their heavy burden of establishing fraud on the court in this case.

While Mr. Kaplan and Mr. Rosen clearly engaged in very suspicious and highly unusual, surreptitious conduct, failed to answer some questions directly at the evidentiary hearing, and effectively bungled the pleadings in this case, Movants have not shown by clear and convincing evidence that Plaintiff, Mr. Rosen, Natalia Mogilevsky, and/or Mr. Kaplan engaged in fraud on the court.

The Court notes that, in the Stipulation Regarding Expert Testimony [DE 500], the parties stipulated that the following docket entries were filed by Former-Defendant Natalia Mogilevsky’s counsel, Mr. Kaplan, but originated on Plaintiff’s counsel’s computer: DE 193, DE 38, and DE 354.

An example of the troubling nature of these docket entries is DE 193, in which Natalia Mogilevsky answered Plaintiff’s poorly drafted First Amended Complaint, which complaint failed to state a cause of action, admitted liability, and then filed crossclaims against Tama Beth Kudman and Ilia Mogilevsky.

The fact that this pleading filed by Former-Defendant Natalia Mogilevsky was initiated on Plaintiff’s counsel’s computer, and partially typed by Plaintiff’s counsel, is very troubling.

Why would Plaintiff’s counsel be drafting an answer admitting liability and asserting crossclaims against other persons on behalf of Natalia Mogilevsky, a defendant?

Other documents are also referenced in the Stipulation Regarding Expert Testimony.

At the evidentiary hearing, Plaintiff’s counsel, Mr. Rosen, and Natalia Mogilevsky’s counsel, Mr. Kaplan, testified that they met in Mr. Rosen’s office and that, at times, Mr. Rosen would read the First Amended Complaint and Second Amended Complaint to Mr. Kaplan while Mr. Kaplan typed the text in the answers and crossclaims, and then, because Mr. Rosen was a faster typist, he would type while Mr. Kaplan stated what text to type in the pleadings. [DE 513-1, p. 27, lines 5-19; p. 34, lines 1-4; p. 34, lines 24-25; p. 35, lines 11-15; p. 35, lines 19-20; p. 51, lines 1-10; p. 51, lines 14-25; p. 52, lines 2-14; p. 60, lines 13-25; p. 61, lines 1-5; p. 65; lines 17-22; p.77, lines 5-13]. This is a very bizarre arrangement between counsel in a case where Plaintiff was suing Natalia Mogilevsky and others for over four million dollars.

While this arrangement raises suspicions of improper conduct and surreptitious behavior of Mr. Rosen and Mr. Kaplan, there simply is not clear and convincing evidence of an actual fraud on the court based upon the limited record before the Court.

This is especially true where neither Plaintiff nor Former-Defendant Natalia Mogilevsky appeared at the evidentiary hearing or testified as to their consent or lack of consent to such a bizarre arrangement between counsel for opposing parties.

And, although Plaintiff has purportedly sent an email stating that Mr. Rosen committed fraud on the court, Plaintiff has not come forward to testify or support such a claim.

Therefore, the Court cannot give her email any weight, although it does further raise suspicions as to counsel’s conduct in this case.

The Court also finds that Movants have not shown by clear and convincing evidence that Natalia Mogilevsky was named as a defendant in the Complaint, First Amended Complaint, or Second Amended Comlpaint solely to create diversity jurisdiction. Again, although the designation of Natalia Mogilevsky as a defendant, combined with the fact that Plaintiff’s counsel admittedly aided Natalia Mogilevsky’s counsel by typing certain pleadings and providing templates for those pleadings, including an answer admitting liability and asserting crossclaims, is highly suspicious and seemingly improper, especially if undertaken without express client consent,

Movants have not shown by clear and convincing evidence that Mr. Rosen and Mr. Kaplan committed fraud on the court.

According to the testimony of Mr. Rosen and Mr. Kaplan, Mr. Kaplan allegedly borrowed templates from Mr. Rosen, the two attorneys had meetings regarding the case (sometimes with Natalia Mogilevsky present), Mr. Kaplan’s investigator made a presentation of the facts of the case to Mr. Rosen before he filed any complaint, and Mr. Rosen typed a portion of the two answers and crossclaims filed by Natalia Mogilevsky in this case at the direction of Mr. Kaplan.

From the evidence and testimony presented, the Court is unable to find a fraud on the court by clear and convincing evidence.

The Court has also considered the fact that Natalia Mogilevsky was the only defendant to answer and admit the allegations in Plaintiff’s incredibly poorly written complaints, but this fact alone, while clearly raising suspicions, does not establish fraud on the court by clear and convincing evidence—especially in light of Mr. Rosen and Mr. Kaplan’s testimony that they believed that Ms. Mogilevsky was obligated to answer the complaints and participate in the lawsuit due to her ongoing duties to Plaintiff as Plaintiff’s power of attorney. See, e.g., DE 513-1, p. 21, lines 6-10; p. 25, lines 18-21; p. 57, lines 10-14; p. 53, lines 14-18.

Finally, Movants have not established by clear and convincing evidence that Plaintiff and Natalia Mogilevsky and/or their counsel entered into an illegal and improper analogous to an improper Mary Carter agreement.

The Court emphasizes that there is a limited evidentiary record before the Court. Neither Plaintiff nor Natalia Mogilevsky testified. In fact, there was no testimony presented by Movants in an effort to contradict that of Mr. Kaplan and Mr. Rosen.

Case law has established that the threshold for establishing fraud on the court is very high, and that even evidence of fraud on other parties is insufficient.

The Court is not at all pleased with the conduct of Mr. Rosen or Mr. Kaplan in this case.

However, Movants simply have not established that the conduct of Plaintiff, Natalia Mogilevsky, and their counsel was egregious enough to merit a finding of fraud on the court in this case.

B. Sanctions Pursuant to the Court’s Inherent Power

The Court can also award attorney’s fees and costs pursuant to the Court’s inherent power, even if the Court concludes that there has not been fraud on the court.

The Court’s inherent power is derived from the Court’s need “to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases.” Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (internal citations and quotation marks omitted).

Courts have long been recognized as having certain implied powers that are “necessary to the exercise of all others.” Id. at 43 (citing United States v. Hudson, 7 Cranch 32, 34, 3 L.Ed. 259 (1812) and Roadway Express, Inc. v. Piper, 447 U.S. 752, 764, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980)).

These powers are “governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Chambers, 501 U.S. at 43 (quoting Link v. Wabash R. Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962)).

A court’s “inherent power extends to a full range of litigation abuses” and “must continue to exist to fill in the interstices.” Id. at 46. A federal court possesses the inherent power to impose sanctions when there has been willful misconduct. See Id. at 44.

To exercise its inherent power to impose sanctions, a court must find that the party acted in bad faith. McDonald v. Cooper Tire & Rubber Co., 186 Fed. Appx. 930, 931 (11th Cir. 2006); Martin v. Automobili Lamborghini Exclusive, Inc., 307 F.3d 1332, 1335 (11th Cir. 2002); see also Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1320 (11th Cir. 2002) (noting that “before a court can impose sanctions against a lawyer under its inherent power, it must find that the lawyer’s conduct constituted or was tantamount to bad faith.”) (citation and quotations marks omitted).

The Court has the ability to assess attorney’s fees and costs against the client or his attorney, or both, when the client or attorney has “acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” McDonald, 186 Fed. Appx. at 931 (citation omitted).

A party seeking to invoke this inherent power must prove bad faith by clear and convincing evidence. See JTR Enterprises, LLC v. An Unknown Quantity of Colombian Emeralds, Amethysts and Quartz Crystals, 93 F.Supp.3d 1331 (S.D.Fla. 2015), aff’d sub nom JTR Enterprises, LLC v. Columbian Emeralds, 697 F. App’x 976 (11th Cir. 2017); Barash v. Kates, 585 F.Supp.2d 1347, 1365 (S.D. Fla. 2006).

With these principles in mind, the Court must determine whether sanctions in the form of attorney’s fees, costs, or expenses against Plaintiff, Natalia Mogilevsky, Mr. Kaplan, and/or Mr. Rosen, are appropriate, and if so, the nature of the sanctions that should be imposed.

Having considered all of the filings in this case and the testimony and evidence admitted at the February 4, 2019 hearing, the Court finds that an award of attorney’s fees and costs is not warranted in this case.

With regard to Plaintiff and Natalia Mogilevsky, there is really no evidence of bad faith or vexatiousness.

It appears, based on the testimony adduced at the evidentiary hearing, that the two women simply relied on their attorneys’ advice throughout this case and were not active participants in the litigation strategy.

In fact, Mr. Rosen and Mr. Kaplan retained their own counsel, Bruce Rogow, Esq., for the evidentiary hearing and then the attorneys themselves testified at said hearing rather than calling Plaintiff or Natalia Mogilevsky to testify. This is an implicit acknowledgment that, if any sanctions were to be awarded, it was due to counsel’s conduct and not to the parties’ conduct. No attorney’s fees or costs should be imposed against Plaintiff or Natalia Mogilevsky with regard to the Fraud Motion [DE 370] as no evidence has been presented that would support such an imposition of sanctions against the parties.

Next, the Court must determine whether Movants have established by clear and convincing evidence that Mr. Kaplan and Mr. Rosen acted in bad faith in this case.

As noted previously, the Court is not pleased with Mr. Kaplan’s or Mr. Rosen’s conduct in this case.

Even Mr. Rogow, counsel for Mr. Rosen and Mr. Kaplan, deems some of their efforts in this case to be “maladroit.” [DE 515]. That is certainly true.

Both attorneys behaved in a very suspicious and surreptitious manner throughout this case regarding their joint drafting of pleadings and other documents on behalf of their clients. The various complaints were shoddily drafted, as were Former-Defendant Natalia Mogilevsky’s answers and cross-claims. Moreover, both attorneys failed at times during the evidentiary hearing to provide clear and straightforward responses to some of the questions posed to them at the evidentiary hearing.

See, e.g., DE 513-1, p. 31, lines 6-25; p. 32, lines 1-20; p. 73, lines 16-25. ——–

However, the Court finds, based upon the limited record before the Court, that the conduct of both Mr. Rosen and Mr. Kaplan in this case does not constitute willful misconduct, but rather negligence.

Based upon the limited record, the Court cannot find bad faith on behalf of Mr. Rosen or Mr. Kaplan.

The Court also notes that, after the instant Fraud Motion was filed, Plaintiff omitted Movants from the Third Amended Complaint.

If Plaintiff had again listed them as defendants, especially in light of Judge Marra’s Order dismissing the Second Amended Complaint, the Court might find an award of fees and costs to be appropriate.

Given the specific facts of this case, however, the Court chooses to exercise its discretion in this matter and not to enter an award of attorney’s fees, costs, or expenses against Mr. Rosen or Mr. Kaplan.

C. Possible Violations of the Florida Bar Rules

The Court also deems that it is not appropriate for this Court to formally determine, on the limited record before it, whether or not Mr. Kaplan or Mr. Rosen violated the Rules Regulating the Florida Bar given the above findings and given that this case will be closed shortly, thereby divesting the Court of jurisdiction.

Although the conduct of Mr. Rosen and Mr. Kaplan raises issues of conflict of interest, candor to the court and to other parties, and other potential Florida Bar Rule violations, the Court shall not decide these serious issues on this limited record.

The Florida Bar is the proper authority to determine such issues in the event that a Bar complaint is filed by any party or counsel in this case.

VI. CONCLUSION

Based on the foregoing, the Court hereby ORDERS AND ADJUDGES that Former-Defendants, Sapodilla 513, LLC, King David Real Estate Investment Holdings, LLC, and Tam Tam Investments, LLC’s Motion to Strike or for Involuntary Dismissal of Action with Prejudice for Fraud on the Court and for Sanctions [DE 370] is DENIED in its entirety.

DONE and ORDERED in Chambers this 6th day of March, 2019, at West Palm Beach, Palm Beach County in the Southern District of Florida.

/s/_________
WILLIAM MATTHEWMAN
UNITED STATES MAGISTRATE JUDGE

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NEWS ARTICLES PROVIDING FURTHER BACKGROUND TO THE ABOVE LAWSUIT/SANCTIONS

The Russian has stolen from the mother-in-law $ 8 million and 52 apartments in Miami

A pensioner from Irkutsk, Tamara Filippova, accuses her son-in-law Ilya Mogilevsky of stealing $ 8 million and 52 apartments in Miami from her, which he fraudulently reregistered.

ORIGINALLY PUBLISHED: MAY 2, 2018 (TRANSLATED FROM RUSSIAN ARTICLE) | REPUBLISHED BY LIT: MAR 8, 2021

The woman filed a lawsuit against her husband’s husband in an American court. According to Filippova, she transferred $ 8 million to Mogilev for investment in real estate in Miami. By order of the mother-in-law, the man had to buy and sell objects, earning his percentage on it.

But Mogilevsky had other plans. According to the investigation, the man managed to buy 52 apartments and houses in the state of Florida, but rewrote them to himself, in addition, he fraudulently received $ 2.7 million from a local bank through a fictitious lending scheme.

The story of the conflict between the son-in-law and the mother-in-law goes back to the beginning of the 2000s, when Natalia Filippova’s daughter moved to the USA with her husband, Elijah Mogilevsky, taking his surname. The woman got a nurse license and started working in West Palm Beach. The parents of Ilya, who at that time had been living in the USA for about 20 for years, helped them settle in the USA.

A couple of years after her daughter’s move, Tamara Filippova decided to buy real estate in the United States and began to transfer money to the children’s accounts.

In 2010, she made the first and largest tranche of $ 5 million with the aim of “investing in real estate assets.” In subsequent years, the pensioner transferred about $ 3 million more.

Seven years later, Tamara Konstantinovna found out that the bank accounts are almost empty, and the property, although purchased, was rewritten for her daughter and son-in-law.

At first, the woman tried to reach an agreement in a peaceful way, and when she failed, she went to court, using the services of one of the most prestigious law firms in New York. Rosen Law.

Now Ilya, along with his wife Natalya and almost a dozen other business partners, appear as defendants in a criminal lawsuit in a court in the Southern District of Florida.

A pensioner accuses them of falsifying documents, violating contractual obligations and even on one of the points of the harsh American law RICO (The Racketeer Influenced and Corrupt Organizations Act). This law was developed specifically to combat the mafia in 1970-s and provides for the responsibility for the use of capital derived from racketeering and fraud. On it can give from 10 years in prison to life imprisonment.

Plus Filippova requires an arrest on real estate and until the end of the case to freeze operations on all accounts of the son-in-law. Ilya’s mother-in-law was handed over by one of his business partners, who is now being tried in court as a secret witness.

At first, Mogilevsky agreed with Filippova that she would be her confidant and manager. His task was to manage real estate, buy it and put it up for sale, in addition, he had to monitor the condition of the apartments. For these works, the son-in-law relied from 5 to 10 percent from each successful transaction.

According to the investigation, at some point Ilya conspired with his acquaintances lawyers and issued with their help fictitious powers of attorney that the notary participating in the scheme helped them to do.

In order to crank the scam, Mogilevsky opened 30 of various firms and trust funds. With the help of trusts, he bought exactly those assets that the mother-in-law asked for, but he wrote them down on himself and his partners.

One of the first purchases was an apartment in the Trump Tower in Miami, a man bought an apartment there for $ 1.1 million.

An enterprising young man set up a company to buy a condominium on the first line of the coast. Trump Real Estate Investment.

However, since the laws of Florida require the disclosure of the names of the owners of the companies, Ilya wrote a Florida firm to another one he created in Wyoming.

The ends were hidden: Wyoming companies can hide the owners, and neither the mother-in-law, nor the inspectors without special sanctions could not find out the final beneficiary of the transaction.

In the same way, Mogilevsky designed himself and other apartments. A man bought 11 apartments on the outskirts of Miami. The apartment building is a motel-type building with a gallery around the perimeter and with separate doors opening onto the gallery.

In just seven years, during which Mogilevsky was deceiving the mother-in-law, he and his wife managed to become full owners of 52 apartments and houses in various Florida cities. Most of the houses Mogilevsky bought in Palm Beach, as well as in the city of Palm Beach Gardens.

It is not clear yet where the Irkutsk pensioner has got millions of dollars. In the city there is one owner of a private medical center, whose name completely coincides with the name of the plaintiff in a US court. Perhaps this is the mother-in-law of Mogilev.

However, it still does not explain the presence of such wealth. The medical center earned only about 18 million rubles and appeared only in the middle of 2013. By that time, the daughter and son-in-law had already received millions of tranches from Philippi for three years.

In addition, the plaintiff previously worked on the board of directors of the Irkutsk real estate firm “Gorozhanin”.

The company is owned by 70-year-old Yuri Filippov (husband of Tamara Konstantinovna).

Tamara’s spouse is engaged in the cement business in the Irkutsk region, receives government contracts from the local government and in different years owned a whole brood of firms with billions of dollars in turnover. His business interests range from real estate to printing and shipping.

The estimated cumulative annual revenue of all Filippov firms is close to one billion rubles. So it is possible that Filippov could give his wife $ 8 million to buy apartments in Miami.

Ilya Mogilevsky in the US pulls in with the execution of legal requirements and is in no hurry to appear in court. And since a legal investigation is practiced in America, that is, the search for new circumstances right during the sessions, Mogilevsky faced a new potential accusation. It turned out that he was still interrogated in 2007 on suspicion of damaging the bank, Hillcrest in florida. From the actions of Ilya, the bank allegedly suffered losses in the amount of $ 2.7 million.

Federal suit claims Palm Beach Gardens man was real estate “racketeer”

ORIGINALLY PUBLISHED: JAN 19, 2019 | REPUBLISHED BY LIT: MAR 8, 2021

Ilia Mogilevsky (2009)

While Tamara Filippova sat in her house in Siberia, her son-in-law in Palm Beach Gardens used her name to create a real estate world that defrauded her of more than $8 million, her lawyers say in a federal lawsuit filed this week.

The 21-count, 158-page suit against Ilia Mogilevsky, which cites the federal Civil Racketeer Influenced and Corrupt Organizations Act (RICO), claims “a pattern of rackeetering activity” by Mogilevsky since 2007 “which has caused millions of dollars of losses to not only plaintiff but to others.”

It says Mogilevsky “has a long history and persistence for committing real estate frauds.”

The lawsuit also asks for injunctions to keep him from disposing of scores of contested properties in Palm Beach County and across South Florida.

The filing is the latest legal trouble for both Mogilevsky, 40, and his wife Natalia, 39. On Nov. 11, she was arrested, charged with biting her husband’s wrist in front of the couple’s children, ages 12 and 3, at their BallenIsles Country Club home. The domestic battery charges are pending. The couple, immigrants from Russia, had filed for divorce nine days earlier, on Nov. 2.

Natalia Mogilevsky

The previous year, the two had settled a Palm Beach County Circuit Court lawsuit by Gustav “Gus” Renny, himself a frequent investor and entrepreneur.

Renny, who’d been a partner with Ilia in a nightclub at 251 Sunrise Ave. in Palm Beach, was also a partner with the couple and relatives in at least 49 Florida corporations, most of them set up to flip South Florida real estate. Renny claimed that Ilia Mogilevsky hid most or all of 500-plus transactions from oversight, stiffing him out of what should have been 50 percent of profits. The couple later countersued Renny.

Gary Rosen, attorney for the mother-in-law, said Thursday he intends to forwarded his findings to the U.S. Attorney for possible criminal investigations.

While Filippova’s suit lists her daughter Natalia as a defendant, and alleges she helped her husband mislead her mother, Rosen said that Natalia “was duped by Ilia.”

And Stuart Kaplan, who represents Natalia in her domestic battery case, said she plans to countersue him in federal court, “now that we see the breadth of this alleged fraudulent activity.”

No local criminal charges ever have been filed against either Ilia or Natalia Mogilevsky as a result of any of the real estate dealings.

The new federal lawsuit repeats many allegations made both by Renny’s lawsuit and by Natalia Mogilevsky’s divorce filing. In it, she said she was a stay-at-home mom, at the insistence of her husband, who “has been secretive about his income, financial dealing, assets and liabilities.” She alleged Ilia “misappropriated, dissipated, hypothecated, secreted and/or removed funds and or assets.”

At the Nov. 12 bond hearing on the domestic battery arrest, attorney Kaplan told the judge the two fought because the husband had taken Natalia’s cellphones, obtained bank account passwords from them and cleaned out the couple’s accounts of $110,000.

Rosen said Tamara Filippova, whose husband had been a very successful businessman, and who visits the United States every few years, had been persuaded to invest in American properties. Palm Beach County property records show the mother-in-law as the buyer of the couple’s home in December 2013, at $2.05 million, and that she transferred it in April 2014 to a partnership of herself and Natalia.

Rosen said Filippova would wire money to her American bank accounts from her home in Irkutsk, Russia, and from Israel.

The daughter then would use her power of attorney to buy properties for the mother. He said Ilia “was never supposed to own anything.” But, he alleged, Ilia accessed corporate records and changed all of them to make himself the owner.

The suit also claims Mogilevsky or his corporations defaulted on several mortgages, both before and after he began using his mother-in-law’s money, which caused banks to lose tens of thousands of dollars.

Mogilevsky filed in 2010 for federal bankrupcty protection, claiming assets of about $1 million and liabilities of the same. The filing was closed in April 2011. The new lawsuit claims Mogilevsky lied about his assets to the trustee to settle the case.

Rosen, of Palm Beach Gardens, said that after the November divorce filing, Ilia folded many of the Florida entities into two shell companies in Wyoming, because that state’s corporate laws made it easier to hide the corporations and their transactions from his wife and others.

The lawsuit alleges Ilia also forged Natalia’s signature on numerous documents transferring ownership to him, and then got associates to notarize or witness the fraudulent signatures.

It names Shlomo Ben Ishak, who Rosen identified as Ilia’s father and who lives in Israel. The suit said Ben Ishak was a partner with Ilia on some real estate entities.

It lists Frank Cavallino, a Palm Beach County friend of Ilia’s, who it says fraudulently clamed to have witnessed Natalia’s signature on a document transferring a property to her husband.

It makes the same allegation against Ilia’s former office manager, Erikah Bertoloti, of West Palm Beach, whom the suit calls “a paramour” of Ilia.

The suit lists four others in Palm Beach County that it says took part in notarizing fake documents: Kristin Demeritt and Stephanie Reeves, and the Leslie Robert Evans law firm and attorney Jason Evans.

Ben Ishak, contacted in Israel, said in broken English he did not know about the federal lawsuit. Reeves declined comment, as did both Bertoloti and her lawyer. The others did not return calls made to them or their lawyers.

The suit also names a “Jane Doe #1,” an attorney it does not identify but who it claims took part in the fraud. It does not elaborate.

Calls to phone numbers for Ilia Mogilevsky either were not returned or the number was disconnected. Attorney Doug Duncan, who has represented Ilia Mogilevsky in the past, and Mark Luttier, Ilia’s divorce attorney, did not return calls.

Krista Barth, who’s representing Natalia in the divorce, said it wouldn’t be appropriate to comment on the divorce, and that she’s not involved in the federal lawsuit.

Rogue Florida Lawyers, Russians, Real Estate and Fraud Claims Assigned to Judge Marra’s Courtroom. Here’s What Happened Next
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