Preview
ELECTRONICALLY FILED
1 Superior Court of California
SPERTUS, LANDES & UMHOFER, LLP
Matthew Donald Umhofer (SBN 206607) County of Santa Barbara
2 Diane H. Bang (SBN 271939) Darrel E. Parker, Executive Officer
1990 South Bundy Dr., Suite 705 6/23/2020 1:31 PM
3 Los Angeles, California 90025 By: Elizabeth Spann, Deputy
Telephone: (310) 826-4700
4 Facsimile: (310) 826-4711
matthew@spertuslaw.com
5 diane@spertuslaw.com
6 Attorneys for Mark Schaub and TLG Ltd.
7
SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
FOR THE COUNTY OF SANTA BARBARA
9
10 MARK SCHAUB, an individual; Case No.: 20CV02113
~ ;::_
v TLG LTD., a Hong Kong limited
...-1
"'"' 11 liability company,
as" ~ 6
""'
] "~~;- 12
VERIFIED
DAMAGES:
COMPLAINT FOR
s "?. g
~ Plaintiffs,
::i~~ ~
o(3~~b~
~ ~ 13 v. CONVERSION;
rn
(}') 0
Cl) mt'7
!;t:
"'O
~
J:z '
§ ~ ~6 INTENTIONAL
~ (/) _g 14 ANDREW WYLES WATERS, an SREPRESENT ATION-FRAUD;
0 -
~- g: ::.' individual; FCP CORPORATE LTD., (3) CONCEALMENT; and
Q)
- 15
:r
0.
15 a Hong Kong limited liabili!Y (4) UNJUST ENRICHMENT.
0. ~
r:/j f:!- company; FCP PRIVATE, I.LC, a
16 California limited liability
~orpo~ation; and DOES 1 through 10
17 mcius1ve, JURY TRIAL DEMANDED
18 Defendants.
19
20
21
22
23
24
25
26
27
28
COMPLAINT
1 Plaintiffs Mark Schaub and TLG Ltd. ("Plaintiffs") allege as follows:
2 INTRODUCTION
3 1. This is a simple case of theft. Plaintiffs funds were stolen by
4 Defendants, who now refuse to return it.
5 2. In July 2019, through a series of unforeseen events, approximately
6 US$1. 9 million was transferred from Plaintiffs to two different accounts in
7 Defendants' control.
8 3. Despite his pleas to Defendants to return the funds that rightfully
9 belong to him, Mr. Schaub's long-time friend and business associate, Andrew
p... r:;.
10 Wyles Waters, lied about the following: (a) that the bank had frozen the accounts
.....:iv
.....:i
~
$-4n
"'
0
"'
~ ~-
12 from an illegitimate source; and (c) that he would have to go to Hong Kong to
::::i Vl, 0"' V\"
dd ~5~
c
~
r.tl 13
,,,- ;,,-
~ 0
resolve the situation with the frozen accounts.
m
(l.)~ !;;::
'"d z
::i::.
~ 5~ ~ 14 4. Months later, Mr. Schaub finally discovered that Defendant Waters
~ ~ _g 6
. "'
2~
0 ~
"'zw
.... 0
:z: 15 had been lying to him all along and that Defendant Waters had been withdrawing
~
Cl)
0.
r:ri ;::.
16 the funds from the allegedly frozen accounts until nothing remained.
17 5. Mr. Schaub confronted Defendant Waters with the truth, but
18 Defendant Waters refuses to acknowledge the theft, refuses to return the money,
19 and maintains the funds are still frozen in the Citibank accounts that he controls.
20 THE PARTIES
21 6. Plaintiff Mark Schaub is an individual residing in the United
22 Kingdom.
23 7. PlaintiffTLG Ltd., is a Hong Kong limited liability company,
24 owned by Mr. Schaub.
25 8. Defendant Andrew Wyles Waters, is a natural person who is, and at
26 all times relevant hereto, was a resident of the County of Santa Barbara, State of
27 California, and was conducting substantial business in the State of California,
28 including the County of Santa Barbara.
1
r'Ql\
\..,
KOT A Tl\. Yr
lVJ.r L.t'\...ll'li J.
II
1 9. Defendant FCP Corporate Ltd., upon information and belief, is a
2 Hong Kong limited liability company. For all intents and purposes, FCP
3 Corporate is controlled by Defendant Waters.
4 10. Defendant FCP Private, LLC is a California limited liability
5 company, conducting substantial business in the State of California, including the
6 County of Santa Barbara, and its principal place of business located at 555
7 Montgomery St., Suite 500, San Francisco, California 94111. For all intents and
8 purposes, upon information and belief, FCP Private is controlled by Defendant
9 Waters.
10 11. Plaintiffs are unaware of the true names and capacities, whether
11 individual, corporate, associate or otherwise, of Defendants Does 1 through 10,
12 inclusive, and therefore sues these Defendants by such fictitious names.
13 Plaintiffs will seek leave of Court to amend this Complaint to show the true
14 names and capacities of such Defendants when the same have been ascertained.
15 VENUE AND JURISDICTION
16 12. Venue is proper in Santa Barbara County because: (1) one or more
17 Defendants reside in the County of Santa Barbara and is subject to the personal
18 jurisdiction of this Court; and (2) the events giving rise to the claims in issue
19 occurred in the County of Santa Barbara.
20 13. The amount in controversy exceeds the jurisdictional limits of the
21 Superior Court, Limited Jurisdiction.
22 GENERAL ALLEGATIONS
23 14. In July 2019, ahnost $2 million in funds belonging to Mr. Schaub
24 was transferred to Defendant FCP Corporate's Citibank account in Hong Kong
25 by mistake. Two separate transfers were made from TLG's HSBC account,
26 which is controlled by Mr. Schaub, to two different FCP Corporate Citibank
27 accounts that are controlled by Defendant Waters. Specifically, the following
28 transfers were made on July 22, 2019:
2
II
1 Account Amount
2 FCP Corporate account ending 029 US$1, 762,894.27
3 FCP Corporate account ending 002 HK$1,404,699.74
4
5 15. The transferred funds unquestionably belonged-and still belong-
6 to Mr. Schaub and TLG. They were not a loan, a gift, or a payment, and at no
7 time were Defendants authorized to do anything with these funds.
8 16. Mr. Schaub asked Defendant Waters to return the funds to him, but
9 instead of complying, Defendant Waters insisted that the Citibank accounts that
p.... 10 held Mr. Schaub's funds were somehow frozen.
.....:ir::.
..,.
.....:i
M"~
"'0?"'11 17. In an email dated August 22, 2019, Defendant Waters wrote to Mr.
~ ~
......
0 w "'
] ~j
t::
:>
Vl
0
0
-
"
12 Schaub and stated, "hey called the bank to check that money is there[.] [T]hey
~ ii5 v_~~~-
<>'d
en~ ;9g 13 said they want to close the FCP corporate account .... There must be something
c:o
('t) ~
:::J
'"O z
:I: '
~ ~ c:t: ~
~ ~
:>
.3"' "'614 wrong with that money[.]"
.a. "'
0 ~
C/J"' "'zw
~
~
0
il: 15 18. On August 28, 2019, Defendant Waters told Mr. Schaub that he
!j
0..
UJ ~
16 "needs to fix things with [C]iti first so [he] can use the account and make sure it
17 does not affect [his] other accounts."
18 19. On August 30, 2019, Defendant Waters told Mr. Schaub that he has
19 to go to Hong Kong to "fill out some statutory declarations" related to the origin
20 of the funds that were transferred to the FCP Corporate accounts.
21 20. On September 2, 2019, Defendant Waters told Mr. Schaub that he
22 would find out from Citibank the next day what needs to be provided in order for
23 the funds to be released.
24 21. On September 3, 2019, Defendant Waters told Mr. Schaub that
25 "[his] account is locked" and that information will have to be provided to
26 compliance to unfreeze the accounts.
27 22. Meanwhile, Defendant Waters withdrew all the money transferred
28 from TLG' s HSBC accounts to FCP Corporate' s Citibank accounts. By
3
C01'1PLAil~T
II
1 September 10, 2019, the balance in both Citibank accounts was zero.
2 23. In an effort to further conceal his fraud, and with the knowledge that
3 he is in fact unlawfully in possession of Plaintiffs' funds, in November and
4 December 2019, Defendant Waters transferred $750,000 from a Chase bank
5 account belonging to Defendant FCP Private to Mr. Schaub. The purpose of the
6 transfer was to maintain the pretense that the stolen funds remained frozen in the
7 Citibank accounts in Hong Kong. Defendant Waters continuously claimed, and
8 still claims, that the $750,000 was his own personal funds. However, the FCP
9 Private Chase bank account is one of the accounts to which some of Plaintiffs'
p... ;::._
10 stolen funds were transferred, and is controlled by Defendant Waters.
~ 'V
~
~n ~
'°
N
°? 11 24. After being strung along for many months, Mr. Schaub was alarmed
~ " ~
O~l/'\~
] 5
g
N,:
ti) ~ 12 to discover that Defendant Waters had been lying to him the whole time.
::i fS, <("' :.;'v;
~ [:;~.. 1:-
..
00
z w
::i
_I
0
0 13 Although Mr. Schaub requested the immediate return of his funds, Defendant
co
Cl) ~ ~
"'dI Z '
a§~~ 14 Waters refused and continues to refuse to this day.
~I/)
0
.96~
Bn~
~
~
15
....
Q) ii: 15 25. Now, Defendant Waters accuses Mr. Schaub ofhaving instructed
0.. :::
r:n !='-
16 HSBC to transfer the funds to FCP Corporate's Citibank accounts so as to avoid
17 detection and to prevent his own account from being closed. Defendant Waters
18 attempts to blame Mr. Schaub for the closing of the FCP Corporate Citibank
19 accounts and claims he himself has been damaged as a result.
20
FIRST CAUSE OF ACTION
21 (Conversion)
22 Against All Defendants
23 26. Plaintiffs incorporate by reference and re-allege all above
24 paragraphs as if fully set forth herein.
25 2 7. The funds transferred by Plaintiffs to Defendants were and are the
26 property of Plaintiffs.
27 28. The funds transferred by Plaintiffs to Defendants are the property of
28 Plaintiffs and were required to have been returned to Plaintiffs as Defendants had
4
CO~v1PLAINT
1 no right to retain or use those funds.
2 29. Defendant Waters, through FCP Corporate and FCP Private,
3 intentionally and substantially interfered with Plaintiffs' funds by taking the
4 funds and misappropriating the funds for his own personal use and enjoyment.
5 30. Plaintiffs did not consent in any manner to Defendants taking the
6 funds at issue for their own personal use.
7 31. Defendants have not returned the funds to Plaintiffs.
8 32. Defendants are liable to Plaintiffs for harm caused to Plaintiffs as a
9 result of the conversion of Plaintiffs' funds committed by Defendant Waters.
p... 10 33. Plaintiffs have been damaged in an amount to be proven at trial as a
......1
......1
..,
;:::.
"'
N
"-4... IJ"\
00 11 result of Defendants' actions in converting and misappropriating Plaintiffs'
6
""'
Cl)
0
" ~
..8~ ~;
8 ~
"?. g 12 funds.
~ ci ~~
drji:;~~
~ ~ 13
(/)
Cl)
'"d z
0
CD::)~
:x::'
SECOND CAUSE OF ACTION
~ <(
t- ~
tt$
~
::i
~
0
V)
_g
00
6
~
14 (Intentional Misrepresentation-Fraud)
n <1' rn
"'
E .-"'~
~ Against Defendant Waters
.....
ii)
:r
..
15
0. '.j
r:/J !'.'
16 34. Plaintiffs incorporate by reference and re-allege all above
17 paragraphs as if fully set forth herein.
18 35. Defendant Waters willfully and intentionally engaged in fraud and
19 misrepresentation as defined by California Civil Code§ 1572.
20 36. Defendant Waters induced Plaintiffs into sending some of the funds
21 to the accounts under his control on the basis it was a trust account. Defendant
22 Waters induced Plaintiffs into believing that the funds transferred to accounts
23 under his control could not be withdrawn by representing that those accounts had
24 been frozen by the bank, when in fact, they were not. Defendant Waters'
25 fraudulent representations regarding the frozen funds occurred from beginning in
26 August 2019 and continue to the present.
27 37. Defendant Waters' assertions and representations of facts were not
28 true, Defendant Waters did not believe his assertions and representations to be
5
CO~v1PLAINT
1 true, and Defendant Waters made such representations recklessly and without
2 regard for the truth.
3 38. Defendant Waters intentionally suppressed from Plaintiffs the true
4 facts that there was no freeze on the accounts, and that any freeze on the accounts
5 were falsely made by Defendant Waters to hide his unlawful scheme. Further,
6 Defendant Waters intentionally suppressed from Plaintiffs the true facts that the
7 funds in Defendants' Citibank accounts were transferred to other accounts under
8 Defendant Waters' control or to make payments to parties unknown to the
9 Plaintiffs.
P-.
10 39. Defendant Waters made promises to Plaintiffs to facilitate the
~ "-
v
.....:i
1-t" '
"'<'?
N
l.f"\ 11 transfer of funds to Plaintiffs, which he had no intention of honoring. To the
(])
0 0
""
]
"
~ ~;
~
svi_g~ 12 contrary, Defendant Waters intended to keep Plaintiffs' funds for his own
0 g ~~
df3~ ~.. ~..
00~ ~ 0 13 personal use.
m
Cl) tj~
'"'d
:cz I
~ t-<(~
~
::>
~
0
"'
_g
00
6
~
14 40. Defendant Waters' acts, representations, and communications with
.8....
0
~
"' w
"'
z
0
:I: 15 Plaintiffs in regards to the frozen accounts were knowingly false and made with
~
(])
0.
if) .:::
16 the intent that Plaintiffs rely on his false representations in order to deceive
17 Plaintiffs so that Defendant Waters could unlawfully misappropriate Plaintiffs'
18 funds for his own personal use.
19 41. All of Defendant Waters' acts, representations, and communications
20 with Plaintiffs in regards to the unavailability of the funds were knowingly false
21 and made with the intent that Plaintiffs rely on his false representations in order
22 to deceive Plaintiffs so that Defendant Waters could unlawfully misappropriate
23 Plaintiffs' funds for his own personal use.
24 42. Based on Defendant Waters' status as a business associate and years
25 of maintaining a personal relationship with Mr. Schaub, Plaintiffs justifiably and
26 reasonably relied on the representations, promises, and assertions made by
27 Defendant Waters in inducing Plaintiffs to believe the funds were frozen.
28 43. Plaintiffs have been damaged in an amount to be proven at trial as a
6
CO:r-v1PLAINT
II
1 result of Defendant Waters' fraudulent and deceitful actions in misappropriating
2 Plaintiffs' funds.
3 44. In addition, Plaintiffs' damages as a result of Defendant Waters'
4 fraudulent and deceitful acts are ongoing and increasing due to Defendant
5 Waters' refusal to return the funds.
6
THIRD CAUSE OF ACTION
7 (Concealment)
8 Against All Defendants
9 45. Plaintiffs incorporate by reference and re-allege all above
p...,
10 paragraphs as if fully set forth herein.
....:i
....:i
..,
;:;_
"'
N
a;>
~"I.I'\ 11 46. Defendants intentionally failed to disclose to Plaintiffs that the funds
cu0 0
'+-<
" -
] ~ ~ ;'
s v:. g
~ 12 transfened from TLG' s HSBC account to FCP Corporation's Citibank accounts
:::>
f5. <(
"""~
o<36~~--
U)
z w
:::i
_,
0
0 13 were not frozen and could be withdrawn.
Q)COQ~
"'d:cz '
§~~~ 4 7. When Defendants concealed such information and made such
~ ~ .36 14
0 -
_a"~ ~
-
.... 6
:J: 15 representations described herein, Plaintiffs reasonably relied upon such false
cu ~
0..
r:rJ !='-
16 representations. As a result of Defendants' actions, Plaintiffs did not know of the
17 concealed facts. Defendants intended to deceive Plaintiffs by concealing the
18 facts. Had Defendants disclosed the omitted information, Plaintiffs would have
19 behaved differently, and would not have been without access to funds that
20 rightfully belong to Plaintiffs.
21 48. As a proximate result of Defendants' false, misleading, and deceitful
22 representations, promises, and/or concealments, and Plaintiffs' reasonable and
23 justifiable reliance thereon, Plaintiffs sustained damages for which this claim is
24 made. The injuries suffered by Plaintiffs are substantial and continuing.
25 49. Defendants' conduct as described herein was despicable and was
26 committed maliciously and fraudulently with the wrongful intention of injuring
27 Plaintiffs and with a willful and conscious disregard of the rights of Plaintiffs.
28 Defendants subjected Plaintiffs to unjust hardship, and via intentional
7
0£\ll. KTlT A Tl\. T'T'
\ ...A.JlY.Lr L~.Ll 'j .L
II
1 misrepresentation, deceit, or concealment of material facts, Defendants as .
2 aforesaid intended to deprive Plaintiffs of property or legal rights all to the
3 detriment of Plaintiffs and to the financial benefit of Defendants.
4
FOURTH CAUSE OF ACTION
5 (Unjust Enrichment)
6 Against All Defendants
7 50. Plaintiffs incorporate by reference and re-allege all above
8 paragraphs as if fully set f mih herein.
9 51. Defendants derived monetary benefits from Plaintiffs and were
P-. r:_
10 unjustly enriched during the time period in which the alleged wrongful conduct
,_:)
...-l
v
~"
culf\
0
i?"'
0
11 occurred, to the detriment of Plaintiffs.
<+=<
" -
] § ~;
svi_g~ 12 52. Defendants' enrichment is directly and causally related to the
~ ~ J~
~6~~ 13 detriment caused to Plaintiffs.
00 5 ~ 0
Q)m t:J
!:;:
'\j Z
::C 1
§~~~
~ ~ _g6 14 53. These benefits were accepted by Defendants under such
0 -
;g
0
"'
"'
a
~
"'
~......
....
cu t: 15 circumstances that make it inequitable for Defendants to retain such benefits. As
0. ~
Cl)
"' 16 alleged above, Defendants obtained these benefits through intentional deceit.
17 Therefore, Defendants are not justified in retaining the benefits conferred upon
18 them.
19 PRAYER FOR RELIEF
20 WHEREFORE, Plaintiffs demand and pray that judgment be entered
21 against Defendants as follows:
22 (1) Actual damages, statutory damages, punitive or treble damages, and
23 such other damages as provided by statute;
24 (2) Pre-judgment and post-judgment interest;
25 (3) Equitable relief in the form of an injunction prohibiting the illicit
26 conduct described herein;
27 ( 4) For an award of Plaintiffs' costs in prosecuting this action,
28 reasonable attmneys' fees, court costs, and other expenses of litigation incurred
8
r'r\11. KllTA T1'. T'T'
'-.,VlV.l.r LI\...11 'i .l
II
1 in this action; and
2 ( 5) For such other and further relief as the Court may deem just and
3 proper.
4 DEMAND FOR JURY TRIAL
5 Plaintiffs hereby request a jury trial on any and all claims so triable.
6
7 Dated: June 23, 2020
8
9
10 Attorneys for Plaintiff:
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
COMPLAINT
1 VERIFICATION
2 I, Mark Schaub, am the named individual Plaintiff in this matter. I verify
,.,
.) that I have reviewed the allegations in this complaint and know the contents
4 thereof. The same is true of my own knowledge, except as to those matters
5 which are therein stated on information and belief, and, as to those matters, I
6 believe it to be true.
7 I declare under penalty of perjury that the foregoing is true and correct.
8 Executed on June 23, 2020, in London, England, United Kingdom.
9
P-.
10
~
r:::.
'1"
~
1-1"
II\
"'"'
00 11
~ R ~
..8§~;' Mark Schaub
S"'.g~ 12
0 ~ ~~
15 ~ ~-
o'(l
00 ~ ~ g 13
000D!;;t:
""O z
:c: '
~5~~ 14
i-:.1 ~
0
..90
~
""' rn
B ~
....
~
:I: 15
~
(t)
0..
ifJ >='
16
17
18
19
20
21
22
23
24
25
26
27
28
10
co:rvIPLAINT
II
Preview
ELECTRONICALLY FILED 1 Superior Court of California SPERTUS, LANDES & UMHOFER, LLP Matthew Donald Umhofer (SBN 206607) County of Santa Barbara 2 Diane H. Bang (SBN 271939) Darrel E. Parker, Executive Officer 1990 South Bundy Dr., Suite 705 6/23/2020 1:31 PM 3 Los Angeles, California 90025 By: Elizabeth Spann, Deputy Telephone: (310) 826-4700 4 Facsimile: (310) 826-4711 matthew@spertuslaw.com 5 diane@spertuslaw.com 6 Attorneys for Mark Schaub and TLG Ltd. 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 FOR THE COUNTY OF SANTA BARBARA 9 10 MARK SCHAUB, an individual; Case No.: 20CV02113 ~ ;::_ v TLG LTD., a Hong Kong limited ...-1 "'"' 11 liability company, as" ~ 6 ""' ] "~~;- 12 VERIFIED DAMAGES: COMPLAINT FOR s "?. g ~ Plaintiffs, ::i~~ ~ o(3~~b~ ~ ~ 13 v. CONVERSION; rn (}') 0 Cl) mt'7 !;t: "'O ~ J:z ' § ~ ~6 INTENTIONAL ~ (/) _g 14 ANDREW WYLES WATERS, an SREPRESENT ATION-FRAUD; 0 - ~- g: ::.' individual; FCP CORPORATE LTD., (3) CONCEALMENT; and Q) - 15 :r 0. 15 a Hong Kong limited liabili!Y (4) UNJUST ENRICHMENT. 0. ~ r:/j f:!- company; FCP PRIVATE, I.LC, a 16 California limited liability ~orpo~ation; and DOES 1 through 10 17 mcius1ve, JURY TRIAL DEMANDED 18 Defendants. 19 20 21 22 23 24 25 26 27 28 COMPLAINT 1 Plaintiffs Mark Schaub and TLG Ltd. ("Plaintiffs") allege as follows: 2 INTRODUCTION 3 1. This is a simple case of theft. Plaintiffs funds were stolen by 4 Defendants, who now refuse to return it. 5 2. In July 2019, through a series of unforeseen events, approximately 6 US$1. 9 million was transferred from Plaintiffs to two different accounts in 7 Defendants' control. 8 3. Despite his pleas to Defendants to return the funds that rightfully 9 belong to him, Mr. Schaub's long-time friend and business associate, Andrew p... r:;. 10 Wyles Waters, lied about the following: (a) that the bank had frozen the accounts .....:iv .....:i ~ $-4n "' 0 "' ~ ~- 12 from an illegitimate source; and (c) that he would have to go to Hong Kong to ::::i Vl, 0"' V\" dd ~5~ c ~ r.tl 13 ,,,- ;,,- ~ 0 resolve the situation with the frozen accounts. m (l.)~ !;;:: '"d z ::i::. ~ 5~ ~ 14 4. Months later, Mr. Schaub finally discovered that Defendant Waters ~ ~ _g 6 . "' 2~ 0 ~ "'zw .... 0 :z: 15 had been lying to him all along and that Defendant Waters had been withdrawing ~ Cl) 0. r:ri ;::. 16 the funds from the allegedly frozen accounts until nothing remained. 17 5. Mr. Schaub confronted Defendant Waters with the truth, but 18 Defendant Waters refuses to acknowledge the theft, refuses to return the money, 19 and maintains the funds are still frozen in the Citibank accounts that he controls. 20 THE PARTIES 21 6. Plaintiff Mark Schaub is an individual residing in the United 22 Kingdom. 23 7. PlaintiffTLG Ltd., is a Hong Kong limited liability company, 24 owned by Mr. Schaub. 25 8. Defendant Andrew Wyles Waters, is a natural person who is, and at 26 all times relevant hereto, was a resident of the County of Santa Barbara, State of 27 California, and was conducting substantial business in the State of California, 28 including the County of Santa Barbara. 1 r'Ql\ \.., KOT A Tl\. Yr lVJ.r L.t'\...ll'li J. II 1 9. Defendant FCP Corporate Ltd., upon information and belief, is a 2 Hong Kong limited liability company. For all intents and purposes, FCP 3 Corporate is controlled by Defendant Waters. 4 10. Defendant FCP Private, LLC is a California limited liability 5 company, conducting substantial business in the State of California, including the 6 County of Santa Barbara, and its principal place of business located at 555 7 Montgomery St., Suite 500, San Francisco, California 94111. For all intents and 8 purposes, upon information and belief, FCP Private is controlled by Defendant 9 Waters. 10 11. Plaintiffs are unaware of the true names and capacities, whether 11 individual, corporate, associate or otherwise, of Defendants Does 1 through 10, 12 inclusive, and therefore sues these Defendants by such fictitious names. 13 Plaintiffs will seek leave of Court to amend this Complaint to show the true 14 names and capacities of such Defendants when the same have been ascertained. 15 VENUE AND JURISDICTION 16 12. Venue is proper in Santa Barbara County because: (1) one or more 17 Defendants reside in the County of Santa Barbara and is subject to the personal 18 jurisdiction of this Court; and (2) the events giving rise to the claims in issue 19 occurred in the County of Santa Barbara. 20 13. The amount in controversy exceeds the jurisdictional limits of the 21 Superior Court, Limited Jurisdiction. 22 GENERAL ALLEGATIONS 23 14. In July 2019, ahnost $2 million in funds belonging to Mr. Schaub 24 was transferred to Defendant FCP Corporate's Citibank account in Hong Kong 25 by mistake. Two separate transfers were made from TLG's HSBC account, 26 which is controlled by Mr. Schaub, to two different FCP Corporate Citibank 27 accounts that are controlled by Defendant Waters. Specifically, the following 28 transfers were made on July 22, 2019: 2 II 1 Account Amount 2 FCP Corporate account ending 029 US$1, 762,894.27 3 FCP Corporate account ending 002 HK$1,404,699.74 4 5 15. The transferred funds unquestionably belonged-and still belong- 6 to Mr. Schaub and TLG. They were not a loan, a gift, or a payment, and at no 7 time were Defendants authorized to do anything with these funds. 8 16. Mr. Schaub asked Defendant Waters to return the funds to him, but 9 instead of complying, Defendant Waters insisted that the Citibank accounts that p.... 10 held Mr. Schaub's funds were somehow frozen. .....:ir::. ..,. .....:i M"~ "'0?"'11 17. In an email dated August 22, 2019, Defendant Waters wrote to Mr. ~ ~ ...... 0 w "' ] ~j t:: :> Vl 0 0 - " 12 Schaub and stated, "hey called the bank to check that money is there[.] [T]hey ~ ii5 v_~~~- <>'d en~ ;9g 13 said they want to close the FCP corporate account .... There must be something c:o ('t) ~ :::J '"O z :I: ' ~ ~ c:t: ~ ~ ~ :> .3"' "'614 wrong with that money[.]" .a. "' 0 ~ C/J"' "'zw ~ ~ 0 il: 15 18. On August 28, 2019, Defendant Waters told Mr. Schaub that he !j 0.. UJ ~ 16 "needs to fix things with [C]iti first so [he] can use the account and make sure it 17 does not affect [his] other accounts." 18 19. On August 30, 2019, Defendant Waters told Mr. Schaub that he has 19 to go to Hong Kong to "fill out some statutory declarations" related to the origin 20 of the funds that were transferred to the FCP Corporate accounts. 21 20. On September 2, 2019, Defendant Waters told Mr. Schaub that he 22 would find out from Citibank the next day what needs to be provided in order for 23 the funds to be released. 24 21. On September 3, 2019, Defendant Waters told Mr. Schaub that 25 "[his] account is locked" and that information will have to be provided to 26 compliance to unfreeze the accounts. 27 22. Meanwhile, Defendant Waters withdrew all the money transferred 28 from TLG' s HSBC accounts to FCP Corporate' s Citibank accounts. By 3 C01'1PLAil~T II 1 September 10, 2019, the balance in both Citibank accounts was zero. 2 23. In an effort to further conceal his fraud, and with the knowledge that 3 he is in fact unlawfully in possession of Plaintiffs' funds, in November and 4 December 2019, Defendant Waters transferred $750,000 from a Chase bank 5 account belonging to Defendant FCP Private to Mr. Schaub. The purpose of the 6 transfer was to maintain the pretense that the stolen funds remained frozen in the 7 Citibank accounts in Hong Kong. Defendant Waters continuously claimed, and 8 still claims, that the $750,000 was his own personal funds. However, the FCP 9 Private Chase bank account is one of the accounts to which some of Plaintiffs' p... ;::._ 10 stolen funds were transferred, and is controlled by Defendant Waters. ~ 'V ~ ~n ~ '° N °? 11 24. After being strung along for many months, Mr. Schaub was alarmed ~ " ~ O~l/'\~ ] 5 g N,: ti) ~ 12 to discover that Defendant Waters had been lying to him the whole time. ::i fS, <("' :.;'v; ~ [:;~.. 1:- .. 00 z w ::i _I 0 0 13 Although Mr. Schaub requested the immediate return of his funds, Defendant co Cl) ~ ~ "'dI Z ' a§~~ 14 Waters refused and continues to refuse to this day. ~I/) 0 .96~ Bn~ ~ ~ 15 .... Q) ii: 15 25. Now, Defendant Waters accuses Mr. Schaub ofhaving instructed 0.. ::: r:n !='- 16 HSBC to transfer the funds to FCP Corporate's Citibank accounts so as to avoid 17 detection and to prevent his own account from being closed. Defendant Waters 18 attempts to blame Mr. Schaub for the closing of the FCP Corporate Citibank 19 accounts and claims he himself has been damaged as a result. 20 FIRST CAUSE OF ACTION 21 (Conversion) 22 Against All Defendants 23 26. Plaintiffs incorporate by reference and re-allege all above 24 paragraphs as if fully set forth herein. 25 2 7. The funds transferred by Plaintiffs to Defendants were and are the 26 property of Plaintiffs. 27 28. The funds transferred by Plaintiffs to Defendants are the property of 28 Plaintiffs and were required to have been returned to Plaintiffs as Defendants had 4 CO~v1PLAINT 1 no right to retain or use those funds. 2 29. Defendant Waters, through FCP Corporate and FCP Private, 3 intentionally and substantially interfered with Plaintiffs' funds by taking the 4 funds and misappropriating the funds for his own personal use and enjoyment. 5 30. Plaintiffs did not consent in any manner to Defendants taking the 6 funds at issue for their own personal use. 7 31. Defendants have not returned the funds to Plaintiffs. 8 32. Defendants are liable to Plaintiffs for harm caused to Plaintiffs as a 9 result of the conversion of Plaintiffs' funds committed by Defendant Waters. p... 10 33. Plaintiffs have been damaged in an amount to be proven at trial as a ......1 ......1 .., ;:::. "' N "-4... IJ"\ 00 11 result of Defendants' actions in converting and misappropriating Plaintiffs' 6 ""' Cl) 0 " ~ ..8~ ~; 8 ~ "?. g 12 funds. ~ ci ~~ drji:;~~ ~ ~ 13 (/) Cl) '"d z 0 CD::)~ :x::' SECOND CAUSE OF ACTION ~ <( t- ~ tt$ ~ ::i ~ 0 V) _g 00 6 ~ 14 (Intentional Misrepresentation-Fraud) n <1' rn "' E .-"'~ ~ Against Defendant Waters ..... ii) :r .. 15 0. '.j r:/J !'.' 16 34. Plaintiffs incorporate by reference and re-allege all above 17 paragraphs as if fully set forth herein. 18 35. Defendant Waters willfully and intentionally engaged in fraud and 19 misrepresentation as defined by California Civil Code§ 1572. 20 36. Defendant Waters induced Plaintiffs into sending some of the funds 21 to the accounts under his control on the basis it was a trust account. Defendant 22 Waters induced Plaintiffs into believing that the funds transferred to accounts 23 under his control could not be withdrawn by representing that those accounts had 24 been frozen by the bank, when in fact, they were not. Defendant Waters' 25 fraudulent representations regarding the frozen funds occurred from beginning in 26 August 2019 and continue to the present. 27 37. Defendant Waters' assertions and representations of facts were not 28 true, Defendant Waters did not believe his assertions and representations to be 5 CO~v1PLAINT 1 true, and Defendant Waters made such representations recklessly and without 2 regard for the truth. 3 38. Defendant Waters intentionally suppressed from Plaintiffs the true 4 facts that there was no freeze on the accounts, and that any freeze on the accounts 5 were falsely made by Defendant Waters to hide his unlawful scheme. Further, 6 Defendant Waters intentionally suppressed from Plaintiffs the true facts that the 7 funds in Defendants' Citibank accounts were transferred to other accounts under 8 Defendant Waters' control or to make payments to parties unknown to the 9 Plaintiffs. P-. 10 39. Defendant Waters made promises to Plaintiffs to facilitate the ~ "- v .....:i 1-t" ' "'<'? N l.f"\ 11 transfer of funds to Plaintiffs, which he had no intention of honoring. To the (]) 0 0 "" ] " ~ ~; ~ svi_g~ 12 contrary, Defendant Waters intended to keep Plaintiffs' funds for his own 0 g ~~ df3~ ~.. ~.. 00~ ~ 0 13 personal use. m Cl) tj~ '"'d :cz I ~ t-<(~ ~ ::> ~ 0 "' _g 00 6 ~ 14 40. Defendant Waters' acts, representations, and communications with .8.... 0 ~ "' w "' z 0 :I: 15 Plaintiffs in regards to the frozen accounts were knowingly false and made with ~ (]) 0. if) .::: 16 the intent that Plaintiffs rely on his false representations in order to deceive 17 Plaintiffs so that Defendant Waters could unlawfully misappropriate Plaintiffs' 18 funds for his own personal use. 19 41. All of Defendant Waters' acts, representations, and communications 20 with Plaintiffs in regards to the unavailability of the funds were knowingly false 21 and made with the intent that Plaintiffs rely on his false representations in order 22 to deceive Plaintiffs so that Defendant Waters could unlawfully misappropriate 23 Plaintiffs' funds for his own personal use. 24 42. Based on Defendant Waters' status as a business associate and years 25 of maintaining a personal relationship with Mr. Schaub, Plaintiffs justifiably and 26 reasonably relied on the representations, promises, and assertions made by 27 Defendant Waters in inducing Plaintiffs to believe the funds were frozen. 28 43. Plaintiffs have been damaged in an amount to be proven at trial as a 6 CO:r-v1PLAINT II 1 result of Defendant Waters' fraudulent and deceitful actions in misappropriating 2 Plaintiffs' funds. 3 44. In addition, Plaintiffs' damages as a result of Defendant Waters' 4 fraudulent and deceitful acts are ongoing and increasing due to Defendant 5 Waters' refusal to return the funds. 6 THIRD CAUSE OF ACTION 7 (Concealment) 8 Against All Defendants 9 45. Plaintiffs incorporate by reference and re-allege all above p..., 10 paragraphs as if fully set forth herein. ....:i ....:i .., ;:;_ "' N a;> ~"I.I'\ 11 46. Defendants intentionally failed to disclose to Plaintiffs that the funds cu0 0 '+-< " - ] ~ ~ ;' s v:. g ~ 12 transfened from TLG' s HSBC account to FCP Corporation's Citibank accounts :::> f5. <( """~ o<36~~-- U) z w :::i _, 0 0 13 were not frozen and could be withdrawn. Q)COQ~ "'d:cz ' §~~~ 4 7. When Defendants concealed such information and made such ~ ~ .36 14 0 - _a"~ ~ - .... 6 :J: 15 representations described herein, Plaintiffs reasonably relied upon such false cu ~ 0.. r:rJ !='- 16 representations. As a result of Defendants' actions, Plaintiffs did not know of the 17 concealed facts. Defendants intended to deceive Plaintiffs by concealing the 18 facts. Had Defendants disclosed the omitted information, Plaintiffs would have 19 behaved differently, and would not have been without access to funds that 20 rightfully belong to Plaintiffs. 21 48. As a proximate result of Defendants' false, misleading, and deceitful 22 representations, promises, and/or concealments, and Plaintiffs' reasonable and 23 justifiable reliance thereon, Plaintiffs sustained damages for which this claim is 24 made. The injuries suffered by Plaintiffs are substantial and continuing. 25 49. Defendants' conduct as described herein was despicable and was 26 committed maliciously and fraudulently with the wrongful intention of injuring 27 Plaintiffs and with a willful and conscious disregard of the rights of Plaintiffs. 28 Defendants subjected Plaintiffs to unjust hardship, and via intentional 7 0£\ll. KTlT A Tl\. T'T' \ ...A.JlY.Lr L~.Ll 'j .L II 1 misrepresentation, deceit, or concealment of material facts, Defendants as . 2 aforesaid intended to deprive Plaintiffs of property or legal rights all to the 3 detriment of Plaintiffs and to the financial benefit of Defendants. 4 FOURTH CAUSE OF ACTION 5 (Unjust Enrichment) 6 Against All Defendants 7 50. Plaintiffs incorporate by reference and re-allege all above 8 paragraphs as if fully set f mih herein. 9 51. Defendants derived monetary benefits from Plaintiffs and were P-. r:_ 10 unjustly enriched during the time period in which the alleged wrongful conduct ,_:) ...-l v ~" culf\ 0 i?"' 0 11 occurred, to the detriment of Plaintiffs. <+=< " - ] § ~; svi_g~ 12 52. Defendants' enrichment is directly and causally related to the ~ ~ J~ ~6~~ 13 detriment caused to Plaintiffs. 00 5 ~ 0 Q)m t:J !:;: '\j Z ::C 1 §~~~ ~ ~ _g6 14 53. These benefits were accepted by Defendants under such 0 - ;g 0 "' "' a ~ "' ~...... .... cu t: 15 circumstances that make it inequitable for Defendants to retain such benefits. As 0. ~ Cl) "' 16 alleged above, Defendants obtained these benefits through intentional deceit. 17 Therefore, Defendants are not justified in retaining the benefits conferred upon 18 them. 19 PRAYER FOR RELIEF 20 WHEREFORE, Plaintiffs demand and pray that judgment be entered 21 against Defendants as follows: 22 (1) Actual damages, statutory damages, punitive or treble damages, and 23 such other damages as provided by statute; 24 (2) Pre-judgment and post-judgment interest; 25 (3) Equitable relief in the form of an injunction prohibiting the illicit 26 conduct described herein; 27 ( 4) For an award of Plaintiffs' costs in prosecuting this action, 28 reasonable attmneys' fees, court costs, and other expenses of litigation incurred 8 r'r\11. KllTA T1'. T'T' '-.,VlV.l.r LI\...11 'i .l II 1 in this action; and 2 ( 5) For such other and further relief as the Court may deem just and 3 proper. 4 DEMAND FOR JURY TRIAL 5 Plaintiffs hereby request a jury trial on any and all claims so triable. 6 7 Dated: June 23, 2020 8 9 10 Attorneys for Plaintiff: 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 COMPLAINT 1 VERIFICATION 2 I, Mark Schaub, am the named individual Plaintiff in this matter. I verify ,., .) that I have reviewed the allegations in this complaint and know the contents 4 thereof. The same is true of my own knowledge, except as to those matters 5 which are therein stated on information and belief, and, as to those matters, I 6 believe it to be true. 7 I declare under penalty of perjury that the foregoing is true and correct. 8 Executed on June 23, 2020, in London, England, United Kingdom. 9 P-. 10 ~ r:::. '1" ~ 1-1" II\ "'"' 00 11 ~ R ~ ..8§~;' Mark Schaub S"'.g~ 12 0 ~ ~~ 15 ~ ~- o'(l 00 ~ ~ g 13 000D!;;t: ""O z :c: ' ~5~~ 14 i-:.1 ~ 0 ..90 ~ ""' rn B ~ .... ~ :I: 15 ~ (t) 0.. ifJ >=' 16 17 18 19 20 21 22 23 24 25 26 27 28 10 co:rvIPLAINT II