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CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 1 of 8
IN THE COURT OF COMMON PLEAS
SUMMIT COUNTY, OHIO
O&O INVESTMENT SERVICES, ) CASE NO. 2022-06-1968
LLC, et. al., )
) JUDGE PATRICIA A. COSGROVE
Plaintiffs, )
)
-v- )
)
SP INVESTMENTS, LLC, et. al., )
)
Defendants. )
)
)
MARK E. DOTTORE, RECEIVER )
OF THE AEM SERVICES, LLC, )
)
Cross-claim Plaintiff )
)
-v- )
)
SP INVESTMENTS, LLC et. al., )
)
Cross-claim Defendants )
MOTION OF MARK E. DOTTORE, RECEIVER OF THE AEM SERVICES,
LLC FOR A DISCOVERY CONFERENCE
Mark E. Dottore, (the “Receiver”), the duly appointed and acting Receiver of
Defendant The AEM Services, LLC (“Services”), by and through counsel, moves
this Court to schedule a Discovery Conference. Issues have arisen among the
various counsel regarding:
1. the failure of SP Investment Services LLC (“SP Investments”) and its
principals and owners, Defendants Mr. Pruneski (“Pruneski”) and Mr.
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Siebert (“Siebert” and together with SP Investments, the “SP
Defendants”), to provide documents and information;
2. whether the Receiver will be allocated adequate time for the Receiver’s
examination by deposition of Pruneski and Siebert;
3. the logical and orderly progression of discovery given the posture of the
case, including for example, the timing of the depositions of Mssrs.
Pruneski and Siebert.
The Receiver is seeking to avoid filing a Motion to Compel Discovery and/or a
Motion for Protection by requesting a conference concerning the production of
documents and information from SP Investments and the ground rules for
depositions and discovery in this case. The reasons for the requested relief are set
forth in the Memorandum in Support of this Motion attached below.
Date: November 2, 2023 Respectfully submitted,
/s/Mary K. Whitmer
Mary K. Whitmer (0018213)
James W. Ehrman (0011006)
Robert M. Stefancin (0047184)
M. Logan O’Connor (0100214)
WHITMER & EHRMAN LLC
2344 Canal Road, Suite 401
Cleveland, Ohio 44113-2535
Telephone: (216) 771-5056
Telecopier: (216) 771-2450
Email: mkw@WEadvocate.net
rms@WEadvocate.net
jwe@WEadvocate.net
mlo@WEadvocate.net
Attorneys for Mark E. Dottore, Receiver
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Sandra Kurt, Summit County Clerk of Courts
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MEMORANDUM IN SUPPORT
I. STATUS OF PLEADINGS
Plaintiffs O&O, Rene Oldham, and Jeff Oldham (collectively, the
“Plaintiffs”) initiated this case by the filing of their original complaint on June 15,
2022. The Receiver was appointed by this Court on June 22, 2022 in Summit
County Case No. 2022-05-1754 (the “Receiver Order”).
On July 20, 2022, Plaintiffs filed their First Amended Complaint. Because of
the Receiver’s appointment, the case was stayed. On May 2, 2023 the Receiver was
granted leave to file an answer to Plaintiffs’ First Amended Complaint, instanter,
which answer included cross-claims against the SP Defendants. On June 1, 2023,
the SP Defendants filed their answer to the Receiver’s cross-claims, which also
asserted affirmative cross-claims against the Receiver in his individual capacity. On
July 27, 2023, the Court entered an order permitting the Receiver’s amended cross-
claims against the SP Defendants. In response, the SP Defendants filed Amended
and Affirmative Cross-claims and sought leave to file a response until November 3,
2023. The Receiver is seeking an additional seven (7) days to file its answer to SP
Investments’ amended crossclaims until November 10, 2023 by separate motion.
The Receiver’s original Answer to Plaintiffs’ Complaint and its cross-claims
against the SP Defendants did not include counterclaims against the Plaintiff
because the Plaintiffs alleged, and the Receiver believed, that they were victims in
the Dente-AEM Ponzi scheme. The Receiver now knows otherwise.
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On October 4, 2023, Rene Oldham admitted in answers to interrogatories
that she received a “referral payment” from SP Investments and that she
disseminated an Investor Plan to an individual who invested with SP Investments.
Discovery has also disclosed that the formation of O&O Investments LLC (“O&O”)
occurred on March 12, 2020, shortly after the formation of SP Investment Services,
LLC on January 15, 2020 and the fictitious name registration of SP Investments as
the SP-AEM Joint Venture on February 27, 2020. Discovery also disclosed that
O&O entered into an Affiliate Agreement with “SP Investments, LLC” which was
signed by both Ruth Oldham and Jeff Oldham as principals of O&O on March 15,
2020, a copy of which is attached as Exhibit A. The Affiliate Agreement states:
SP has developed a plan to encourage individuals and
entities (“Affiliates”) to contribute funds for ST
Transactions in exchange for a commission of the
revenues generated from those transactions and to
encourage Affiliates to pursue and obtain additional
contributions from additional parties for ST Transactions.
By virtue of the admissions in the Interrogatories, the existence of the
Affiliate Agreement, and the timing of the creation of O&O in conjunction with SP,
it is clear Plaintiffs participated in the SP-AEM Ponzi scheme by recruiting
additional investors, for which efforts they were compensated. Accordingly, the
Receiver has concluded that the Plaintiffs are not victims, but rather conspired with
the SP Defendants and Mark Dente to further the Dente-AEM Ponzi scheme and
further that O&O’s lawsuit against the SP Defendants is just an effort to involve
the Court in dividing up the spoils. In order to put the newly discovered claims
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Sandra Kurt, Summit County Clerk of Courts
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against O&O before the Court, the Receiver must amend his Answer to the
Plaintiffs’ First Amended Complaint and add counterclaims.
The upshot is that the parties are still in the pleading phase of this
complicated lawsuit and they are adding causes of action and seeking to dismiss
other causes of action filed by the SP Defendants. The Receiver does not seek delay
for the sake of delay; rather he is still learning about the facts of the underlying
transactions as discovery progresses. The Receiver proposes a more orderly
administration of the case in order to recover every dollar he can for the investor-
victims and he wants to do it as quickly as possible.
II. THE STATUS OF DISCOVERY
All parties have been actively participating in robust discovery. The Receiver
has received documentation from O&O and the SP Defendants. The Receiver has
provided extensive discovery to all sides, including access to an electronic data room
which includes the documents obtained by the Receiver’s many subpoenas to the
Receivership Entities’ banking institutions and other parties. In addition, the
Receiver has provided access to a hard copy data room located at the Receiver’s
warehouse in Cleveland.
On October 3, 2023, Ms. Rachel Steinlage, attorney for the Receiver, directed
a letter to Mark Young, the attorney for the SP Defendants detailing deficiencies in
the discovery provided by Mr. Pruneski (Exhibit B). Although the date for the
taking of Pruneski’s deposition was looming, Mr. Young took 20 days to respond to
Ms. Steinlage’s letter. Mr. Young’s response was inadequate (Exhibit C). The SP
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Defendants refuse to provide information about Pruneski’s (or Siebert’s) personal
finances including tax returns. The personal financial information and tax
information is relevant to the tracing of funds and to Pruneski’s intent when he
received payments from SP Investments. The Receiver alleges that these payments,
which Pruneski admits totaled at least $585,000.00, were in reality, Dente-AEM
Ponzi scheme fraudulent transfers. How he treated them for tax purposes is
relevant.
Additionally, via email dated September 11, 2023 (Exhibit D), Mr. Young
advised the Receiver that “No party has authority or standing to respond to
discovery on behalf of SP-AEM Joint Venture as that joint venture is comprised of
two separate, independent companies that disagree regarding the factual
circumstances and legal liability for the actions of AEM under the written joint
venture agreement.” The SP-AEM Joint Venture was owned 50-50 by SP
Investments and AEM but it was controlled and dominated by Siebert and
Pruneski, not Mark Dente or AEM. The Receiver believes and asserts that SP
Investments maintained the books and records and had signature authority over
the accounts and information. As such, SP Investments and Mssrs. Pruneski and
Siebert are in possession of evidence calculated to lead to relevant evidence and the
discovery rules require that they provide this information. Kamatani v. BenQ Corp.,
(U.S.D.C. E.D. Tex.) Civil Action No. 2:03-CV-437 (Exhibit E). It is worth noting
that the party seeking the information about SP-AEM is the other Joint Venturer
(AEM), now under the supervision of this Court by way of the Receiver. As such, the
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SP Defendants’ refusal to provide information about SP-AEM is not just a discovery
violation, it is also a violation of the Receiver Order ¶ 3.
III. THE DISCOVERY DISPUTES
It is not logical or desirable to take depositions before pleadings are finished
and all the documents and information has been provided. If the depositions
proceed in November and December, O&O will take the Pruneski deposition before
or critically near the time O&O and the SP Defendants will see the Receiver’s
Counterclaim against O&O and its principals and his Amended Cross-claims
against the SP Defendants. The inability to properly inquire and the expense O&O
will incur will form the basis of possible prejudice O&O will later complain about.
The SP Defendants also might complain about prejudice in not being able to
properly prepare for the defense of Pruneski’s deposition.
Nor can the Receiver take effective depositions before he receives the
documents and information which were timely requested in discovery. The result is
that the non-Receiver parties have banded together to rush to take depositions that
are calculated to disadvantage the Receiver and advantage the SP Defendants,
O&O and Mark Dente. There is absolutely no reason to race to take these
depositions and very important reasons to wait until the case is ready for them.
In addition, the parties will not assure the Receiver that he will be provided
time to fully and fairly examine Pruneski, Siebert and other Defendants. O&O’s
examination is, frankly, on a separate topic than the Receiver’s. O&O and its
principals, who are finders, are seeking a division of the profits received out of the
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Dente-AEM Ponzi scheme by the SP Defendants, also finders. The Receiver seeks or
will seek recovery of all funds received by the SP Defendants and O&O and its
principals out of the Dente-AEM Ponzi scheme as ill-gotten gains and/or fraudulent
transfers. O&O’s attorneys have not provided information on the length of its
examination and will not make assurances about how much time the Receiver will
have to examine Pruneski (Exhibit F). In the interest of the defrauded investors in
this case, Court supervision is required to ensure that the Receiver is able to fully
examine Pruneski, Siebert and the principals of O&O.
IV CONCLUSION
Based upon the foregoing, the Receiver respectfully requests that the Court
grant his motion and enter an order scheduling a discovery conference to address
the issues stated above and for such other and further relief as is just in the
circumstances.
Date: November 2, 2023 Respectfully submitted,
/s/Mary K. Whitmer
Mary K. Whitmer (0018213)
James W. Ehrman (0011006)
Robert M. Stefancin (0047184)
M. Logan O’Connor (0100214)
WHITMER & EHRMAN LLC
2344 Canal Road, Suite 401
Cleveland, Ohio 44113-2535
Telephone: (216) 771-5056
Telecopier: (216) 771-2450
Email: mkw@WEadvocate.net
rms@WEadvocate.net
jwe@WEadvocate.net
mlo@WEadvocate.net
Attorneys for Mark E. Dottore, Receiver
4869-0852-5708 v.1 8
Sandra Kurt, Summit County Clerk of Courts
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CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 1 of 8 IN THE COURT OF COMMON PLEAS SUMMIT COUNTY, OHIO O&O INVESTMENT SERVICES, ) CASE NO. 2022-06-1968 LLC, et. al., ) ) JUDGE PATRICIA A. COSGROVE Plaintiffs, ) ) -v- ) ) SP INVESTMENTS, LLC, et. al., ) ) Defendants. ) ) ) MARK E. DOTTORE, RECEIVER ) OF THE AEM SERVICES, LLC, ) ) Cross-claim Plaintiff ) ) -v- ) ) SP INVESTMENTS, LLC et. al., ) ) Cross-claim Defendants ) MOTION OF MARK E. DOTTORE, RECEIVER OF THE AEM SERVICES, LLC FOR A DISCOVERY CONFERENCE Mark E. Dottore, (the “Receiver”), the duly appointed and acting Receiver of Defendant The AEM Services, LLC (“Services”), by and through counsel, moves this Court to schedule a Discovery Conference. Issues have arisen among the various counsel regarding: 1. the failure of SP Investment Services LLC (“SP Investments”) and its principals and owners, Defendants Mr. Pruneski (“Pruneski”) and Mr. 4869-0852-5708 v.1 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 2 of 8 Siebert (“Siebert” and together with SP Investments, the “SP Defendants”), to provide documents and information; 2. whether the Receiver will be allocated adequate time for the Receiver’s examination by deposition of Pruneski and Siebert; 3. the logical and orderly progression of discovery given the posture of the case, including for example, the timing of the depositions of Mssrs. Pruneski and Siebert. The Receiver is seeking to avoid filing a Motion to Compel Discovery and/or a Motion for Protection by requesting a conference concerning the production of documents and information from SP Investments and the ground rules for depositions and discovery in this case. The reasons for the requested relief are set forth in the Memorandum in Support of this Motion attached below. Date: November 2, 2023 Respectfully submitted, /s/Mary K. Whitmer Mary K. Whitmer (0018213) James W. Ehrman (0011006) Robert M. Stefancin (0047184) M. Logan O’Connor (0100214) WHITMER & EHRMAN LLC 2344 Canal Road, Suite 401 Cleveland, Ohio 44113-2535 Telephone: (216) 771-5056 Telecopier: (216) 771-2450 Email: mkw@WEadvocate.net rms@WEadvocate.net jwe@WEadvocate.net mlo@WEadvocate.net Attorneys for Mark E. Dottore, Receiver 4869-0852-5708 v.1 2 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 3 of 8 MEMORANDUM IN SUPPORT I. STATUS OF PLEADINGS Plaintiffs O&O, Rene Oldham, and Jeff Oldham (collectively, the “Plaintiffs”) initiated this case by the filing of their original complaint on June 15, 2022. The Receiver was appointed by this Court on June 22, 2022 in Summit County Case No. 2022-05-1754 (the “Receiver Order”). On July 20, 2022, Plaintiffs filed their First Amended Complaint. Because of the Receiver’s appointment, the case was stayed. On May 2, 2023 the Receiver was granted leave to file an answer to Plaintiffs’ First Amended Complaint, instanter, which answer included cross-claims against the SP Defendants. On June 1, 2023, the SP Defendants filed their answer to the Receiver’s cross-claims, which also asserted affirmative cross-claims against the Receiver in his individual capacity. On July 27, 2023, the Court entered an order permitting the Receiver’s amended cross- claims against the SP Defendants. In response, the SP Defendants filed Amended and Affirmative Cross-claims and sought leave to file a response until November 3, 2023. The Receiver is seeking an additional seven (7) days to file its answer to SP Investments’ amended crossclaims until November 10, 2023 by separate motion. The Receiver’s original Answer to Plaintiffs’ Complaint and its cross-claims against the SP Defendants did not include counterclaims against the Plaintiff because the Plaintiffs alleged, and the Receiver believed, that they were victims in the Dente-AEM Ponzi scheme. The Receiver now knows otherwise. 4869-0852-5708 v.1 3 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 4 of 8 On October 4, 2023, Rene Oldham admitted in answers to interrogatories that she received a “referral payment” from SP Investments and that she disseminated an Investor Plan to an individual who invested with SP Investments. Discovery has also disclosed that the formation of O&O Investments LLC (“O&O”) occurred on March 12, 2020, shortly after the formation of SP Investment Services, LLC on January 15, 2020 and the fictitious name registration of SP Investments as the SP-AEM Joint Venture on February 27, 2020. Discovery also disclosed that O&O entered into an Affiliate Agreement with “SP Investments, LLC” which was signed by both Ruth Oldham and Jeff Oldham as principals of O&O on March 15, 2020, a copy of which is attached as Exhibit A. The Affiliate Agreement states: SP has developed a plan to encourage individuals and entities (“Affiliates”) to contribute funds for ST Transactions in exchange for a commission of the revenues generated from those transactions and to encourage Affiliates to pursue and obtain additional contributions from additional parties for ST Transactions. By virtue of the admissions in the Interrogatories, the existence of the Affiliate Agreement, and the timing of the creation of O&O in conjunction with SP, it is clear Plaintiffs participated in the SP-AEM Ponzi scheme by recruiting additional investors, for which efforts they were compensated. Accordingly, the Receiver has concluded that the Plaintiffs are not victims, but rather conspired with the SP Defendants and Mark Dente to further the Dente-AEM Ponzi scheme and further that O&O’s lawsuit against the SP Defendants is just an effort to involve the Court in dividing up the spoils. In order to put the newly discovered claims 4869-0852-5708 v.1 4 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 5 of 8 against O&O before the Court, the Receiver must amend his Answer to the Plaintiffs’ First Amended Complaint and add counterclaims. The upshot is that the parties are still in the pleading phase of this complicated lawsuit and they are adding causes of action and seeking to dismiss other causes of action filed by the SP Defendants. The Receiver does not seek delay for the sake of delay; rather he is still learning about the facts of the underlying transactions as discovery progresses. The Receiver proposes a more orderly administration of the case in order to recover every dollar he can for the investor- victims and he wants to do it as quickly as possible. II. THE STATUS OF DISCOVERY All parties have been actively participating in robust discovery. The Receiver has received documentation from O&O and the SP Defendants. The Receiver has provided extensive discovery to all sides, including access to an electronic data room which includes the documents obtained by the Receiver’s many subpoenas to the Receivership Entities’ banking institutions and other parties. In addition, the Receiver has provided access to a hard copy data room located at the Receiver’s warehouse in Cleveland. On October 3, 2023, Ms. Rachel Steinlage, attorney for the Receiver, directed a letter to Mark Young, the attorney for the SP Defendants detailing deficiencies in the discovery provided by Mr. Pruneski (Exhibit B). Although the date for the taking of Pruneski’s deposition was looming, Mr. Young took 20 days to respond to Ms. Steinlage’s letter. Mr. Young’s response was inadequate (Exhibit C). The SP 4869-0852-5708 v.1 5 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 6 of 8 Defendants refuse to provide information about Pruneski’s (or Siebert’s) personal finances including tax returns. The personal financial information and tax information is relevant to the tracing of funds and to Pruneski’s intent when he received payments from SP Investments. The Receiver alleges that these payments, which Pruneski admits totaled at least $585,000.00, were in reality, Dente-AEM Ponzi scheme fraudulent transfers. How he treated them for tax purposes is relevant. Additionally, via email dated September 11, 2023 (Exhibit D), Mr. Young advised the Receiver that “No party has authority or standing to respond to discovery on behalf of SP-AEM Joint Venture as that joint venture is comprised of two separate, independent companies that disagree regarding the factual circumstances and legal liability for the actions of AEM under the written joint venture agreement.” The SP-AEM Joint Venture was owned 50-50 by SP Investments and AEM but it was controlled and dominated by Siebert and Pruneski, not Mark Dente or AEM. The Receiver believes and asserts that SP Investments maintained the books and records and had signature authority over the accounts and information. As such, SP Investments and Mssrs. Pruneski and Siebert are in possession of evidence calculated to lead to relevant evidence and the discovery rules require that they provide this information. Kamatani v. BenQ Corp., (U.S.D.C. E.D. Tex.) Civil Action No. 2:03-CV-437 (Exhibit E). It is worth noting that the party seeking the information about SP-AEM is the other Joint Venturer (AEM), now under the supervision of this Court by way of the Receiver. As such, the 4869-0852-5708 v.1 6 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 7 of 8 SP Defendants’ refusal to provide information about SP-AEM is not just a discovery violation, it is also a violation of the Receiver Order ¶ 3. III. THE DISCOVERY DISPUTES It is not logical or desirable to take depositions before pleadings are finished and all the documents and information has been provided. If the depositions proceed in November and December, O&O will take the Pruneski deposition before or critically near the time O&O and the SP Defendants will see the Receiver’s Counterclaim against O&O and its principals and his Amended Cross-claims against the SP Defendants. The inability to properly inquire and the expense O&O will incur will form the basis of possible prejudice O&O will later complain about. The SP Defendants also might complain about prejudice in not being able to properly prepare for the defense of Pruneski’s deposition. Nor can the Receiver take effective depositions before he receives the documents and information which were timely requested in discovery. The result is that the non-Receiver parties have banded together to rush to take depositions that are calculated to disadvantage the Receiver and advantage the SP Defendants, O&O and Mark Dente. There is absolutely no reason to race to take these depositions and very important reasons to wait until the case is ready for them. In addition, the parties will not assure the Receiver that he will be provided time to fully and fairly examine Pruneski, Siebert and other Defendants. O&O’s examination is, frankly, on a separate topic than the Receiver’s. O&O and its principals, who are finders, are seeking a division of the profits received out of the 4869-0852-5708 v.1 7 Sandra Kurt, Summit County Clerk of Courts CV-2022-06-1968 BREAUX, ALISON 11/02/2023 16:35:30 PM MOTI Page 8 of 8 Dente-AEM Ponzi scheme by the SP Defendants, also finders. The Receiver seeks or will seek recovery of all funds received by the SP Defendants and O&O and its principals out of the Dente-AEM Ponzi scheme as ill-gotten gains and/or fraudulent transfers. O&O’s attorneys have not provided information on the length of its examination and will not make assurances about how much time the Receiver will have to examine Pruneski (Exhibit F). In the interest of the defrauded investors in this case, Court supervision is required to ensure that the Receiver is able to fully examine Pruneski, Siebert and the principals of O&O. IV CONCLUSION Based upon the foregoing, the Receiver respectfully requests that the Court grant his motion and enter an order scheduling a discovery conference to address the issues stated above and for such other and further relief as is just in the circumstances. Date: November 2, 2023 Respectfully submitted, /s/Mary K. Whitmer Mary K. Whitmer (0018213) James W. Ehrman (0011006) Robert M. Stefancin (0047184) M. Logan O’Connor (0100214) WHITMER & EHRMAN LLC 2344 Canal Road, Suite 401 Cleveland, Ohio 44113-2535 Telephone: (216) 771-5056 Telecopier: (216) 771-2450 Email: mkw@WEadvocate.net rms@WEadvocate.net jwe@WEadvocate.net mlo@WEadvocate.net Attorneys for Mark E. Dottore, Receiver 4869-0852-5708 v.1 8 Sandra Kurt, Summit County Clerk of Courts