Developments in the FTC versus Innovative Marketing lawsuit
Well well, it looks like Sam Jain, fugitive from justice, is still around...
17 February 2009 - RESPONSE in Opposition re MOTION for Other Relief Order Holding Sam Jain and Kristy Ross In Contempt Of Court And Requiring The Repatriation Of Their Assets filed by Sam Jain. Replies due by 3 March 2009. (Entered: 17 February 2009)
17 February 2009 - RESPONSE in Opposition re MOTION for Other Relief Order Holding Sam Jain and Kristy Ross In Contempt Of Court And Requiring The Repatriation Of Their Assets (PROTECTIVE MEMORANDUM) filed by Kristy Ross. Replies due by 3 March 2009. (Entered: 17 February 2009)
17 February 2009 - MOTION to Modify Preliminary Injunction re Preliminary Injunction by Sam Jain Responses due by 6 March 2009 (Entered: 17 February 2009)
17 February 2009 - Paperless ORDER granting Consent Motion to Withdraw Motion to Dismiss (relevant to the FTC/James Reno Consent Motion) (Entered: 17 February 2009)
17 February 2009 - MOTION to Dismiss Complaint by Sam Jain. Responses due by 6 March 2009 (Entered: 17 February 2009)
17 February 2009 - MOTION to Dismiss COMPLAINT by Kristy Ross. Responses due by 6 March 2009 (Entered: 17 February 2009)
19 February 2009 - RESPONSE in Opposition re MOTION to Dismiss Complaint, MOTION to Dismiss COMPLAINT filed by Federal Trade Commission. Replies due by 5 March 2009 (Entered: 19 February 2009)
20 February 2009 - ACKNOWLEDGEMENT OF SERVICE Executed Acknowledgement filed by Federal Trade Commission (Entered: 20 February 2009)
23 February 2009 - MOTION for Alternative Service as to Daniel Sundin by Federal Trade Commission. Responses due by 12 March 2009 (Entered: 23 February 2009)
23 February 2009 - REPLY to Response to Motion re MOTION to Strike, MOTION for Other Relief Order Holding Sam Jain and Kristy Ross In Contempt Of Court And Requiring The Repatriation Of Their Assets OR IN THE ALTERNATIVE MOTION to Strike, MOTION for Other Relief Order Holding Sam Jain and Kristy Ross In Contempt Of Court And Requiring The Repatriation Of Their Assets OR IN THE ALTERNATIVE MOTION for Extension of Time filed by Kristy Ross. (Entered: 23 February 2009)
24 February 2009 - ORDER granting Motion for Alternative Service of Process on Daniel Sundin. Signed by Judge Richard D Bennett on 23 February 09. (Entered: 24 February 2009)
Sam Jain's Motion to Dismiss (17 February) asked that the Court "dismiss Plaintiff Federal Trade Commission’s complaint for failure to join Innovative Marketing, Inc., a necessary and indispensable party." You may recall from my previous reports that IM was served in the USA when the Process Server served documents on a licensed attorney by the name of Jack Palladino. Palladino was served at Jain's residence (which also happens to be Palladino's "satellite office"). According to the Process Server who served the documents on Palladino, Palladino said to the Process Server that he would accept service, that he was "expecting these documents" and that he "had a lot of reading to do". Be that as it may, Jain claims in his motion that Palladino was not authorized to accept service and that, therefore, IM has not been properly served (aka joined).
Unfortunately for Jain, Innovative Marketing, Inc. was also legally served in Belize on 6 January 2009 by a Process Server who served the Preliminary Injunction and Contempt Order on IM by serving IM’s registered agent at IM’s registered office, Apex Trust Corporation Limited, in Belize. Belize is not a signatory to the Hague Convention (nor is the Ukraine, btw) but that does not matter, because the FTC has still achieved service of the documents upon Innovative Marketing, and that service of documents is "specifically authorized under the laws of Belize".
The FTC did not file a proof of service about the service of documents on Innovative Marketing in Belize because their position is that the initial proof of service on Palladino is valid and binding. It is to avoid delay and keep things moving that they have now submitted a second proof of service.
In the other motions Jain complains that the U.S. Attorney’s Office for the Northern District of Illinois is conducting an ongoing criminal investigation of Innovative Marketing, Mr. Jain, and others for alleged wire fraud and computer fraud, and that in late September 2008 Mr. Jain’s criminal counsel met with an Assistant U.S. Attorney and two FBI agents in Chicago, who stated unequivocally that Mr. Jain will be indicted on those fraud charges as a result of the Illinois Investigation “sooner rather than later.” and that the FTC’s complaint raised "grave Fifth Amendment conflicts" (specifically "self incrimination") in relation to the Illinois investigation.
Kristy Ross’s motion to dismiss depends on, and repeats, Jain’s argument. If Jain’s motion is denied because IM *was* legally served *before* the motion to dismiss was filed, then Ross’s motion can also be denied. Ross has also presented the argument that the FTC has not proven that she is "currently" an officer of Innovative Marketing, and claims that just because she signed an affidavit nearly two years ago admitting that she is an officer of IM does not mean that she is one *now*. But at the same time as making this claim, she does not want to provide proof that she is not because, she says, to do so will resulting her waiving her Fifth Amendment (self incrimination) privilege. She cites the precedent Three Grand Jury Subpoenas Duces Tecum dated January 29 1999, 191 F.3d 173 178-83 (2d Cir. 1999) (holding that a former employee can assert Fifth Amendment protection against production of corporate records in his possession).
In other developments, Maurice D'Souza now has legal representation. Daniel Sundin continues to evade personal service of the court documents, but an Order has been issued allowing alternative service (by email, by service on his attorneys, and service of the documents on the registered agent for Innovative Marketing, and by publication of a notice in certain newspapers in the UK and Sweden for a period of 3 weeks).
Finally, my favorite quote from the FTC's consolidated opposition to Sam Jain and Kristy Ross’s motion to dismiss the FTC complaint is:
"The Motion to Dismiss filed by Sam Jain and joined by Kristy Ross establishes a new high-water mark for evasion and delay by the defendants."