Legal Document: CODY KERNS ET AL VS FXWINNING, LTD. ET AL

On July 24, 2023 a Response to Motion - Due Date: Complete Date: was filed involving a dispute between Kerns Capital Management, Inc., Kerns, Cody, Wftmb Holdings Llc, and Bbrc Real Estate, Llc, Brito Cutie, Rafael, Da Rocha Gomes Bastos, Renan, Fxwinning, Ltd., Kuschner, Julian, Lopez, Jonathan, Merino, David, for Business Torts in the District Court of Miami-Dade County.

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Filing # 188085416 E-Filed 12/14/2023 08:29:00 PM

IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA

CIRCUIT CIVIL DIVISION

CASE NO.: 2023-020202-CA-01

CODY KERNS, et al.,

Plaintiffs,

FXWINNING, LTD., et al.,

Defendants.
/

PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANTS
RENAN DA ROCHA GOMES BASTOS AND BBRC REAL ESTATE, LLC’S
MOTION TO DISMISS AMENDED COMPLAINT

Plaintiffs, Cody Kerns (“Kerns”), Kerns Capital Management, Inc. (“Kerns Capital”), and

WFTMB, LLC (“WFTMB”) (collectively, “Plaintiffs”), respond in opposition to Defendants

Renan da Rocha Gomes Bastos (“Bastos”) and BBRC Real Estate, LLC’s (“BBRC”) (collectively,

“Defendants”) motion to dismiss the Amended Complaint (D.E. 103 (“Motion”)), and state:

INTRODUCTION

Defendants Bastos and BBRC have moved to dismiss the Amended Complaint. In doing

so, they omit key allegations of the Amended Complaint that provide the very facts they insist are

missing. They also ignore this Court’s prior ruling that expressly rejected the very arguments they

make here when the Court denied the co-Defendants’ motion to dismiss on certain grounds. Bastos

and BBRC also cite case law related to the homestead exemption when this case has nothing to do

with the homestead exemption, as well as impermissibly insist that this Court tackle questions of

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fact at this stage. Finally, they demonstrate a fundamental misunderstanding of the Florida

Uniform Fraudulent Transfer Act.

This Court should deny the Motion.

ARGUMENT

I. Plaintiffs Sufficiently Alleged their Conspiracy to Commit Fraud Claim

Bastos has moved to dismiss Plaintiffs’ claim for conspiracy to commit fraud. D.E. 103 at

3-4. According to Bastos, “nowhere in the . . . [Amended] Complaint do Plaintiffs provide any

factual predicate to demonstrate that [Bastos] ‘agreed’ with other defendants to defraud

Plaintiffs.’” Id. In support, he lists several allegations that he tells the Court (albeit incorrectly)

constitute the full list of allegations against him. Id. at 2. Conspicuously absent from Bastos’s list

are paragraphs 239 and 240 of the Amended Complaint, the first two paragraphs of the

conspiracy to commit fraud count, which allege:

Kuschner, Lopez, Merino, Bastos, and Brito did come to an agreement to commit
fraud against Plaintiffs whereby Kuschner, Lopez, Merino, Bastos, and Brito would
be able to pull commissions directly from Plaintiffs’ FXWinning accounts and/or
obtain the principal investments directly from Plaintiffs’ FXWinning accounts that
Plaintiffs would create in reliance on false representations such as the Website
Misrepresentations on the website that, at minimum, Merino had management and
control over, along with the Kuschner-Kerns Website Misrepresentations and the
Kuschner/Lopez-McGinnis Website Misrepresentations, and Misrepresentations #1
through #12. Kuschner, Lopez, Merino, Bastos, and Brito agreed to use those
misrepresentations to induce Plaintiffs to deposit money with FXWinning and/or
avoid making withdrawals from their FXWinning accounts, while knowing that
FXWinning was a fraudulent scheme to induce investors to transfer money to
FXWinning, that FXWinning did not have the liquidity providers it touted on
FXWinning’s website, that Plaintiffs would not receive a high rate of return, and
that Plaintiffs would never receive a full withdrawal of their deposited money as
they were promised.

Kuschner, Lopez, Merino, Bastos, and Brito did agree to commit an unlawful act –
that is, commit fraud – against Plaintiffs in the manner alleged above.

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D.E. 96 at ¶¶ 239-240. The reason for Bastos’s omission of those paragraphs in his Motion is

obvious: they provide the very facts he insists are missing from the conspiracy claim.

Incredibly, Bastos argues that “he could have . . . received a commission, without ever

knowing [FXWinning’s scheme] was fraudulent or agreeing to participate in the fraud,” and as

such, “[t]o assume or speculate that [Bastos] participated in a conspiracy merely because [he]

ultimately received some benefits from the investments is insufficient for the imposition of liability

against [him].” D.E. 103 at 4. Again, Bastos misapprehends the Amended Complaint. Unlike in

the cases Bastos cites, Plaintiffs are not asking the Court to assume facts that Plaintiffs have not

already alleged. Here, as shown above, Plaintiffs do allege that Bastos knew that FXWinning’s

scheme was fraudulent. D.E. 96 at ¶ 239. Plaintiffs do allege that Bastos agreed to participate in

the fraud. Id. at ¶¶ 239-240. Thus, despite Bastos’s attempts to ignore the unambiguous allegations

in the very conspiracy claim itself, Plaintiffs do not merely allege that Bastos received

commissions. They allege that he received commissions as part of a fraudulent scheme he agreed

to and knew about, as well as the details of that agreement to defraud Plaintiffs. Id.

As even Bastos concedes, all Plaintiffs must do at this stage is plead, with sufficient

particularity, (1) an agreement between two or more parties, (2) to do an unlawful act by unlawful

means, (3) an overt act in furtherance of the conspiracy, and (4) damage to the plaintiff as a result

of the act performed in furtherance of it.” D.E. 103 at 3 (quoting Gilison v. Flagler Bank, 303 So.

3d 999, 1004 (Fla. 4th DCA 2020)). As shown above, Plaintiffs alleged the first and second

elements in paragraphs 239 and 240 of the Amended Complaint. D.E. 96 at ¶¶ 239-240.

For the third element, Plaintiffs allege that

Bastos’s overt acts include, but are not limited to, the following: a. [p]ulling
commissions directly from Plaintiffs’ accounts; b. Splitting the commissions pulled
from Plaintiffs’ accounts with his co-conspirators; c. Refraining from returning the
commissions he pulled directly from Plaintiffs’ accounts; and d. Instructing

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Kuschner and Lopez not to inform Plaintiffs that Bastos was involved in the
operation of the VIP MAM and that Bastos was receiving commissions directly
from their accounts so that Bastos could stay hidden from Plaintiffs.

Id. at ¶ 254. Plaintiffs allege additional, specific details as to Bastos’s overt acts. See id. at ¶ 73

(“Plaintiffs later learned that this new opportunity was an FXWinning account for VIP clients that

Bastos managed or controlled.”); Id. at ¶ 85 (“Once per month, Kuschner, Lopez, Bastos, and

Merino pulled out 35-50% commissions directly from the Kerns Account, the Kerns Capital

Account, and the McGinnis Account, and thereafter divided those commissions amongst

themselves.”); Id. at ¶ 87 (“Upon information and belief, Bastos received approximately $80

million to $90 million in commissions through the scheme Defendants perpetrated against

FXWinning clients, including as mentioned, from commissions Bastos received directly from

Plaintiffs’ accounts.”).

Finally, for the fourth element – damages as a result of the overt acts – Plaintiffs have

alleged the “loss of [their] funds deposited in FXWinning and the loss of funds to Kuschner, Lopez,

Merino, and Bastos in the form of commissions that they received directly from” Plaintiffs’

respective accounts. Id. at ¶¶ 257-59.

In short, this Court should deny Bastos’s request to dismiss the conspiracy claim against

him.

II. Plaintiffs Have Stated a Cause of Action for Violating FDUTPA

Turning to Plaintiffs’ FDUTPA claim, Bastos concedes that Plaintiffs need merely allege

that he was “a direct participant in the improper dealings or had actual knowledge of those

practices.” D.E. 103 at 5 (quoting KC Leisure, Inc. v. Haber, 972 So. 2d 1069, 1074 (Fla. 5th DCA

2008)). According to Bastos, “[w]hile [Plaintiffs] make detailed allegations concerning

FXWinning’s deceptive trade practices made through other [Defendants]; Plaintiffs do not allege

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any facts showing that Bastos participated in or even had knowledge of FXWinning’s, Lopez’s, or

Kuschner’s deceptive trade practices.” D.E. 103 at 5-6.

Contrary to Bastos’s argument, Plaintiffs specifically allege in the FDUTPA count that:

• “Bastos actively participated in FXWinning’s deceptive practices through controlling and

managing the VIP MAM that he offered through Kuschner and Lopez and by instructing

Kuschner and Lopez to not divulge his involvement with the VIP MAM or that he was

receiving commissions,” and

• “Bastos also had a measure of control over FXWinning’s deceptive practices through

controlling and managing the VIP MAM that he offered through Kuschner and Lopez and

by instructing Kuschner and Lopez to not divulge his involvement with the VIP MAM or

that he was receiving commissions.”

D.E. 96 at ¶¶ 446-447.

Beyond that, Plaintiffs also alleged that Bastos “agreed to use” Misrepresentations #10, 11,

and 12 “to induce Plaintiffs to deposit money with FXWinning and/or to avoid making

withdrawals from their FXWinning accounts, while knowing that FXWinning was a fraudulent

scheme . . . .” Id. at ¶ 239. Those misrepresentations were related to the VIP MAM, which Bastos

“managed or controlled.” Id. at ¶ 76 (“Thus, on or about December 19, 2022, via text message,

both Kuschner and Lopez, in their individual capacities and as agents of FXWinning and Merino,

told Kerns that they needed to deposit a minimum of $3.5 million by the end of 2022 to be eligible

for the VIP MAM. (‘Misrepresentation #10’).”) (emphasis in original); Id. (“Lopez, in his

individual capacity and as agent of FXWinning and Merino, also told Kerns and Kerns Capital on

December 19, 2022, via text message, that there was a ‘huge line’ of investors waiting to join the

VIP group (‘Misrepresentation #11’).”) (emphasis in original); Id. at ¶ 81 (“In or around

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December 2022, Kuschner and Lopez, acting in their individual capacities and as agents of

FXWinning and Merino, represented to McGinnis in person and/or via telephone calls that he had

to maintain a balance of approximately $4 million to stay in the VIP MAM, with the minimum

balance going up to $5 million soon. (‘Misrepresentation #12’).”) (emphasis in original).

Plaintiffs also allege that “Bastos received approximately $80 million to $90 million in

commissions through the scheme Defendants perpetrated against FXWinning clients, including as

mentioned, from commissions Bastos received directly from Plaintiffs’ accounts.” Id. at ¶ 87. 1

Moreover, and lest there be any doubt, Plaintiffs allege how Bastos participated in and had

knowledge of the deceptive trade practices:

D.E. 96 at ¶ 239; see also id. at ¶ 422 (re-alleging and incorporating paragraph 239 into FDUTPA

claim).

1
Plaintiffs re-alleged and incorporated paragraphs 1 through 259 as if fully set forth in the
FDUTPA claim. Id. at ¶ 422.
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Accordingly, Plaintiffs have met their burden to allege that Bastos was a direct participant

in the improper dealings and had knowledge of the deceptive practices. The Court should deny

Bastos’s motion to dismiss as to the FDUTPA claim.

III. Plaintiffs’ Have Adequately Alleged Their Unjust Enrichment Claim

Next, Bastos moves to dismiss Plaintiffs’ unjust enrichment claim. D.E. 103 at 6-7.

According to Bastos, Plaintiffs allege that the commissions payments were an indirect benefit to

Bastos instead of a direct benefit. Id. Bastos misapprehends Plaintiffs’ allegations.

As a threshold matter, Bastos’s co-defendants Julian Kuschner (“Kuschner”) and Jonathan

Lopez (“Lopez”) already raised this argument in their own motion to dismiss. See D.E. 35 at 16

(“The Court should also dismiss Count V for unjust enrichment because the Complaint confirms

that Plaintiffs did not confer a direct benefit on Kuschner or Lopez.”). In the then-operative

Complaint, Plaintiffs’ allegations against Kuschner and Lopez were the same as those against

Bastos – “Plaintiffs conferred a benefit on Defendants in the manner aforesaid, including but not

limited to, depositing their funds with FXWinning and commissions and profits from the scheme.”)

D.E. 2 at ¶ 140.

This Court denied Kuschner and Lopez’s motion to dismiss on that basis, finding that

the alleged benefit was sufficiently direct for unjust enrichment (and even mentioning Bastos

(“Da Rocha”) as being included in the commission earners):

MR. LEVINE [Plaintiff’s counsel]: . . . We’ve alleged that [Defendants] took their
commissions out of [Plaintiffs] accounts, so this is unlike the case law that they’ve
cited where there’s no A to B connection. Here, you have these defendants taking
commissions directly out of our clients’ account and that forms the basis of our
unjust enrichment. . . .

...

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MR. BIANCHI [Kuschner/Lopez’s counsel]: The question they’re saying is that
commissions were taken out from the gentleman’s account – or the hedge fund
account, it says they were divided. I’m not sure what that means. . .

THE COURT: No. It actually to me seemed to be spelled out. One of them was
taking a million dollars a month –

...

MR. BIANCHI: They would have to be saying that they received a benefit –

THE COURT: I don’t see how it doesn’t plead that.

…

MR. BIANCHI: There’s not even an allegation here that my clients owned
FXWINNING, that monies that got deposited in FXWINNING came to them.
There has to be some kind of allegation that ties them with the money. It can’t be,
oh, commissions are earned. There has to be something that ties –

THE COURT: Commissions were divided. What’s wrong with that?

MR. BIANCHI: Well, divided meaning –

THE COURT: “Commissions were derived from the money plaintiffs invested in
FXWINNING that conferred a benefit.”

MR. BIANCHI: Well, for it to be a benefit, if you look at the cases, there has to be
some money flow that you can trace.

THE COURT: That he was – well, it says Da Rocha [Bastos] was receiving
commissions on their account:

MR. BIANCHI: But Da Rocha [Bastos] is not –

THE COURT: “Received $80 million to 90 million in commissions.”

MR. BIANCHI: But those are not my clients. Da Rocha [Bastos] is not my client.
The only –

THE COURT: So Lopez earned a million dollars a month, but somehow he’s not
receiving the money?

MR. BIANCHI: If he doesn’t – they have to allege he received it. They can’t –

THE COURT: Well, I’ve never seen a case that says that.

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MR. BIANCHI: Well, Your Honor, when you look at the cases for unjust
enrichment, they speak of direct benefit. All of those speak of monies or something
of value being transferred to them.

THE COURT: I don’t need to hear more on that.

See October 2, 2023 Hearing Transcript at 19:22-25:4, the relevant portion of which is attached

hereto as Exhibit A. Given that the Court denied Kuschner and Lopez’s motion to dismiss the

unjust enrichment claim, it should do the same to Bastos’s motion to dismiss.

In fact, in the Amended Complaint, Plaintiffs have made the allegations even clearer as to

the direct nature of the benefit, alleging as follows:

• “Once per month, Kuschner, Lopez, Bastos, and Merino pulled out 35-50%

commissions directly from the Kerns Account, the Kerns Capital Account, and the

McGinnis Account, and thereafter divided those commissions amongst themselves.”;

• “Upon information and belief, Bastos received approximately $80 million to $90 million

in commissions through the scheme Defendants [including Bastos] perpetrated against

FXWinning clients, including, as mentioned from commissions Bastos received

directly from Plaintiffs’ accounts.”; and

• “Plaintiffs conferred a benefit on Kuschner, Lopez, Merino, and Bastos in the manner

aforesaid, including but not limited to, the commissions Kuschner, Lopez, Merino, and

Bastos received directly from Plaintiffs by pulling those commissions directly from

the Kerns Account, Kerns Capital Account, and McGinnis Account, respectively.”

D.E. 96 at ¶¶ 85, 87, 465 (emphasis added). If the allegations in the original Complaint were

adequate, then a fortiori, those enhanced allegations in the Amended Complaint are definitely

sufficient.

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Undeterred, Bastos cites case law in which the commissions were paid by a third party.

D.E. 103 at 6-7. Unlike in those cases, Plaintiffs have alleged that Bastos pulled his commissions

directly from Plaintiffs’ accounts. D.E. 96 at ¶¶ 85, 87, 465. This Court should deny Bastos’s

motion to dismiss the unjust enrichment claim.

IV. Plaintiffs’ Have Properly Stated Their Fraudulent Transfer Cause of Action

Finally, BBRC moves to dismiss Plaintiffs’ fraudulent transfer claim under the Florida

Uniform Fraudulent Transfer Act (“FUFTA”). D.E. 103 at 7-9.

A. Plaintiffs Have Adequately Alleged a Right to Payment

First, BBRC argues that since Plaintiffs’ conspiracy to commit fraud, FDUTPA, and unjust

enrichment claims against Bastos “fail for the reasons” raised in his motion to dismiss, “Plaintiffs

fail to establish any right to payment from Bastos and are accordingly not his ‘creditors.’” Id. at

7. Yet, as shown above, Plaintiffs have sufficiently alleged those claims. See §§ I-III, supra. They

have, therefore, adequately alleged that they are Bastos’s creditors under FUFTA.

B. Plaintiffs Need Not Allege that Bastos Used Plaintiffs’ Money to Fund BBRC’s
Purchase of the Real Property

Next, BBRC insists that, to assert a claim under FUFTA, Plaintiffs must “allege that Bastos

used their money to fund BBRC’s acquisition of the home at issue . . . .” D.E. 103 at 7. In doing

so, it demonstrates a fundamental misunderstanding of FUFTA. Specifically, FUFTA is “designed

to prevent debtors from transferring their [i.e., the debtor’s] property in bad faith before creditors

can reach it.” Wiand v. Morgan, 919 F. Supp. 2d 1342, 1354 (M.D. Fla. 2013) (emphasis added).

It does not require Plaintiffs to trace their exact money into the transfer.

Oddly, BBRC cites Conseco Servs. LLC v. Cuneo, 904 So. 2d 438 (Fla. 3d DCA 2005) in

support of its position. D.E. 103 at 7. That case involved the Florida homestead exemption, which,

“absent one of the three constitutional exceptions” to the homestead protection, does require a

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plaintiff to prove that “the funds used to invest in, purchase or improve the homestead were

obtained through fraud or egregious conduct.” Conseco Servs., 904 So. 2d at 440. Here, given

that BBRC is a limited liability company, the homestead exemption cannot possibly apply. See

Fla. Const. Art. X, § 4 (“There shall be exempt from forced sale . . . the following property owned

by a natural person:”); see also Centennial Bank v. The Noah Group, LLC, 755 F. Supp.2d 1256,

1260 (S.D. Fla. 2020) (“Under Florida law, homestead status is only afforded to properties owned

by a ‘natural person.’ The property at issue is owned by the Noah Group, a limited liability

corporation. Thus, the affirmative defense is inapplicable.”); Pasternack v. Klein, No. 8:16-cv-

482-T-33CPT, 2019 WL 330593, *6 (M.D. Fla. Jan. 25, 2019) (“At most, Klein owned an interest

in a limited liability company that owned the property, which is insufficient under Florida law to

obtain homestead protection.”). Regardless, even if Bastos is claiming the homestead exemption

here (which he has not and clearly cannot), any assertion that it applies impermissibly goes well

beyond the four corners of the complaint. Steiner Transocean Ltd. v. Efremova, 109 So. 3d 871,

873 (Fla. 3d DCA 2013) (“As a general rule, when considering a motion to dismiss, a trial court is

limited to the allegations within the four corners of the complaint and any attachments.”).

Moreover, the FUFTA itself demonstrates that Plaintiffs need not trace their own funds into

the purchase. Florida Statutes Section 726.105(1) “provides two theories by which a present or

future creditor may recover fraudulent transfers: an actual fraud theory, under subsection (a), and

a constructive fraud theory, under subsection (b).” Oginsky v. Paragon Properties of Costa Rica,

LLC, 784 F. Supp. 2d 1353, 1369-70 (S.D. Fla. 2011); see also Wiand, 919 F. Supp. 2d at 1354

(explaining the two possible theories and noting that subsection (a) of section 726.105(1)

“codif[ies] actual fraud” and subsection (b) sets forth the requirements for constructive fraud).

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A plaintiff does not have to allege both. See § 726.105(1), Fla. Stat. (“[a] transfer made . .

. is fraudulent as to a creditor . . . if the debtor made the transfer . . . (a) [w]ith actual intent to

hinder, delay, or defraud any creditor of the debtor; or (b) [w]ithout receiving a reasonably

equivalent value in exchange for the transfer and the debtor 1. [w]as engaged or was about to

engage in a business or a transaction for which the assets of the debtor were unreasonably small in

relation to the business and transaction; or 2. [i]ntended to incur, or believed and reasonably should

have believed that he or she would incur, debts beyond his or her ability to pay as they became

due.”) (emphasis added).

Plaintiffs have brought their fraudulent transfer claim against BBRC under the actual fraud

theory, not the constructive fraud theory. See D.E. 96 at ¶¶ 472-73 (“Bastos made the transfer

listed in paragraph 470 with the actual intent to hinder, delay, or defraud Plaintiffs.”). “To state a

claim for actual fraud under [F]UFTA, a plaintiff must allege (1) there was a creditor sought to be

defrauded; (2) a debtor intending fraud; and (3) a conveyance of property which could have been

available to satisfy the debt.” Oginsky, 784 F. Supp. 2d at 1369-70; see also Nat’l Maritime Servs.,

Inc. v. Straub, 979 F. Supp. 2d 1322, 1327 (S.D. Fla. 2013) (quoting In re PSI Indus., Inc., 306

B.R. 377, 387 (Bankr. S.D. Fla. 2003)) (laying out the elements of actual fraud under section

726.105(1)(a)); In re Ramsurat, 361 B.R. 246, 254 (Bankr. M.D. Fla. 2006) (same). Nowhere in

those elements or the statute itself does it require Plaintiffs to allege that Bastos transferred

Plaintiff’s money to BBRC to purchase the real property. It only requires the transfer of “property

which could have been available to satisfy the debt.” Oginsky, 784 F. Supp. 2d at 1369-70; see

also Wiand, 919 F. Supp. 2d at 1354 (FUFTA is “designed to prevent debtors from transferring

their [i.e., the debtor’s] property in bad faith before creditors can reach it.”) (emphasis added).

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To be sure, Plaintiffs have alleged all three of the elements for a fraudulent transfer claim

under the actual fraud theory. D.E. 96 at ¶ 471 (“Given that Bastos owed and owes Plaintiffs for

the scheme perpetrated against Plaintiffs, Plaintiff’s possessed a ‘claim,’ as defined in Section

726.102(4), Florida Statutes, when the transfer listed in paragraph 470 was made. Plaintiffs,

therefore, were and are Bastos’s creditors.”); Id. at ¶ 472 (“Bastos made the transfer listed in

paragraph 470 with the actual intent to hinder, delay, or defraud Plaintiffs.”); Id. at ¶ 473 (listing

the badges of fraud that Bastos’s transfer exhibited); Id. at ¶ 470 (“Between September 2, 2022,

and September 27, 2022, Bastos transferred funds to BBRC (a) in order for BBRC to purchase, or

(b) through the purchase, in BBRC’s name of, the real property located at 2608 Biarritz Drive,

Miami Beach . . . .”).

Moreover, “[i]n determining a debtor’s actual intent and whether it was to hinder, delay, or

defraud any creditor of the debtor, the [F]UFTA looks to indicia of intent commonly known as

‘badges of fraud’.” Nat’l Maritime Servs., 979 F. Supp. 2d at 1328. Those non-exhaustive badges

of fraud are listed in Florida Statutes Section 726.105(2). See § 726.105(2), Fla. Stat. (“In

determining actual intent under paragraph (1)(a), consideration may be given, among other factors

to whether: [listing badges of fraud]”). As even BBRC concedes, Plaintiffs have alleged five such

badges of fraud, all of which are among those listed in Section 726.105(2). D.E. 96 at ¶ 473 (“In

particular, Bastos’s transfer shows an actual intent in that, among other things: a. [t]he transfer was

to an insider as defined in Florida Statutes; b. Bastos retained possession or control of the property

after the transfer; c. [t]he transfer was concealed; d. [t]he value of the consideration received by

Bastos was not reasonably equivalent to the value of the asset transferred; and e. [t]he transfer

occurred shortly after a substantial debt was incurred.”).

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“The existence of badges of fraud create a prima facie case and raise a rebuttable

presumption that the transaction is void.” Nat’l Maritime Servs., 979 F. Supp. 2d at 1328 (internal

quotations and citations omitted); see also Wiand v. Lee, 753 F.3d 1194, 1200 (11th Cir. 2014)

(quoting Gen. Elec. Co. v. Chuly Int'l, LLC, 118 So.3d 325, 327 (Fla. 3d DCA 2013) (same); U.S.

v. Ressler, 433 F. Supp. 459, 464 (S.D. Fla. 1977) (“[w]ith respect to creditors [such as Plaintiffs]

existing at the time of the conveyance under attack, under Florida law a conveyance without

consideration by one who is indebted is presumptively fraudulent, regardless of the actual intent

of the transferor.”); id. (“[r]etention of possession of the property after the transfer creates a prime

facia presumption of fraud.”). Given that even BBRC concedes that Plaintiffs have alleged five

badges of fraud, Plaintiffs have raised a rebuttable presumption that the transfer was void.

C. Plaintiffs Do Not Need To File Suit Under a Constructive Fraud Theory, Much
Less Under Florida Statutes Section 726.106 (An Entirely Different Statute)

BBRC further demonstrates its complete misapprehension of the FUFTA when it asserts

that Plaintiffs must allege (1) that Bastos’s transfer was made when he ‘was engaged or was about

to engage in a business or a transaction for which the remaining assets of the debtor were

unreasonably small in relation to the business transaction’ or that he ‘[i]ntended to incur, or

reasonably should have believed that [he] would incur, debts beyond [his] ability to pay as they

became due’”, as well as (2) that “Bastos was insolvent at the time of the transfer or became

insolvent as a result.” D.E. 103 at 8.

The first of those is the constructive fraud theory under Florida Statutes Section

726.105(1)(b) that, as shown above, need not be alleged when a plaintiff is suing under actual

fraud theory under Section 726.105(1)(a). See § IV(B), supra. The second, that “Bastos was

insolvent at the time of the transfer or became insolvent as a result,” is only required if a plaintiff

is suing under Florida Statutes Section 726.106, an entirely different statute from the one under

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which Plaintiffs have sued BBRC. See § 726.106, Fla. Stat. Unlike Section 726.106, Section

726.105(1)(a) does not require that Plaintiffs allege, much less prove, that Bastos was insolvent at

the time of the transfer or became insolvent as a result. Compare § 726.105(1)(a), Fla. Stat. with

§ 726.106, Fla. Stat.

D. Plaintiffs Have Sufficiently Alleged Intent

Apparently recognizing that to assert a fraudulent transfer claim under Florida Statutes

Section 726.105(1)(a) a plaintiff need only allege the “actual intent to hinder, delay, or defraud

Plaintiffs”, BBRC then pivots to argue that Plaintiffs “fail to allege any interaction that Bastos ever

had with Plaintiffs,” asking the Court “How could Bastos have intention to defraud Plaintiffs if

they were not in contractual privity and he had no interactions with them whatsoever?” D.E. 103

at 8.

In doing so, BBRC improperly raises a question of fact that this Court cannot decide at the

motion to dismiss stage. Olsen v. First Team Ford, Ltd., 359 So. 3d 873, 878 (Fla. 5th DCA 2023)

(“intent is a question of fact that should not be decided on summary judgment”) (quoting Hodge

v. Cichon, 78 So. 3d 719, 723 (Fla. 5th DCA 2012)); see also Godwin v. Dep’t of Professional

Regulation, 461 So. 2d 226, 228 (Fla. 1st DCA 1984) (“Intent is normally a question of fact.”);

Miller v. Equitable Bank, 39 F.3d 301, 306 (11th Cir. 1994) (the “determination of whether a debtor

acted with the requisite intent is a question of fact”).

All Plaintiffs must do is provide sufficient allegations of actual intent through allegations

of the badges of fraud. As shown above, they do. See § IV(B), supra. 2

2
Even assuming arguendo that Plaintiffs needed to allege something more than that, they
have. As shown above, Plaintiffs have alleged Bastos’s direct participation in, knowledge of, and
agreement regarding the FXWinning scheme. See supra; see also D.E. 96 at ¶ 469 (incorporating
the general allegations, the conspiracy to commit fraud claim, the FDUTPA claim, and the unjust
enrichment claim into the fraudulent transfer claim against BBRC). While engaging in that
15
Moreover, when it comes to intent, “[a]n evil motive is not required. The requirement is

merely an intentional act prejudicial to creditors.” Ressler, 433 F. Supp. at 464. A transfer of

Bastos’s “funds to BBRC (a) in order for BBRC to purchase, or (b) through the purchase, in

BBRC’s name, of the real property” in Miami Beach constitutes an intentional act prejudicial to

creditors. Those funds are no longer collectible from Bastos himself. Creditors have to jump

through additional hoops to collect from BBRC, an entity that was not involved in the FXWinning

fraudulent scheme in and of itself.

Unsatisfied, BBRC insists that Plaintiffs “fail to allege any facts to support three of . . .

[Plaintiffs’ alleged badges of Bastos’s fraud].” D.E. 103 at 8 (emphasis in original). Yet, under

Florida Rule of Civil Procedure “intent . . . may be averred generally.” Fla. R. Civ. P. 1.120

(emphasis added). Plaintiffs do not need to allege any facts beyond the badges of fraud.

Regardless, the badges of fraud that BBRC insists do not include facts are actually facts in

and of themselves. See D.E. 96 at ¶ 473(c) (“The transfer was concealed.”); id. at ¶ 473(d) (“The

value of the consideration received by Bastos was not reasonably equivalent to the value of the

asset transferred.”); id. at ¶ 473(e) (“The transfer occurred shortly after a substantial debt was

incurred.”).

conduct, which made Plaintiffs Bastos’s creditor, Bastos made the transfer to BBRC. Id. at ¶¶470-
471. That answers the question of why Bastos would intend to defraud them in their ability to
collect against him despite no direct interactions between them. See Wiand, 753 F.3d at 1200
(“Although FUFTA lists a number of badges of fraud, ‘[i]t is clear from the language of the statute
that in determining intent, consideration may be given to factors other than those listed.’”) (quoting
(Gen. Trading Inc. v. Yale Materials Handling Corp., 119 F.3d 1485, 1498 (11th Cir.1997))
(citation and internal quotation omitted); see also Gen. Elec. Co., 118 So.3d at 327 (citing Kirk v.
Edinger, 380 So.2d 1336, 1337 (Fla. 5th DCA 1980)) (“Courts may take into account the
circumstances surrounding the conveyance.”).

16
BBRC then flatly disputes the veracity of one of those alleged facts. D.E. 103 at 8

(claiming that the transfer was not concealed). It also insists that the other badges of fraud are not

really evidence of fraud in this particular case. Id. (claiming that purchasing a home through a

separate entity happens all the time). Those assertions raise questions of fact that this Court cannot

decide on a motion to dismiss. Olsen, 359 So. 3d at 878; Godwin, 461 So. 2d at 228; Miller, 39

F.3d at 306. Moreover, BBRC forgets that “the existence of badges of fraud creat a prima facie

case and raise a rebuttable presumption that the transaction is void.” Nat’l Maritime Servs., 979

F. Supp. 2d at 1328 (internal quotations and citations omitted). Under the facts alleged, BBRC –

not Plaintiffs – has the burden to convince the jury that this was not fraud. A motion to dismiss is

not the time for that.

This Court should deny BBRC’s motion to dismiss Plaintiffs’ fraudulent transfer claim

against it.

WHEREFORE, Plaintiffs, Cody Kerns, Kerns Capital Management, Inc., and WFTMB

Holdings, LLC, respectfully request that this Court deny Defendants Bastos and BBRC’s motion

to dismiss the amended complaint, and for such other and further relief as this Court deems just

and proper.

Dated: December 14, 2023 Respectfully submitted,

SANCHEZ FISCHER LEVINE, LLP
1200 Brickell Avenue, Suite 750
Miami, FL 33131
Tel: (305) 942-9947

By: /s/ David M. Levine
David M. Levine, Esq.
Florida Bar No.: 84431
Email: dlevine@sfl-law.com
Secondary: eservice@sfl-law.com
Fausto Sanchez, Esq.
Florida Bar No.: 86229

17
Email: fsanchez@sfl-law.com
Lauren M. Allen, Esq.
Florida Bar No.: 1018424
Email: lallen@sfl-law.com
Robert Kemper, Esq.
Florida Bar. No.: 1038549
Email: rkemper@sfl-law.com

Counsel for Plaintiffs

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on December 14, 2023 a true and correct copy of the foregoing

was filed with the Clerk of the Court and served on all counsel of record via the Florida Courts

eFiling Portal.

By: /s/ David M. Levine
David M. Levine, Esq.

18
EXHIBIT A
IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT
IN AND FOR MIAMI-DADE COUNTY, FLORIDA

CASE NO. 2023-020202-CA-01

CODY KERNS, an individual; KERNS CAPITAL
MANAGEMENT, INC., a British Virgin Islands
Company; and WFTMB HOLDINGS, LLC, a
Florida Limited Liability Company;

Plaintiffs,

vs.

FXWINNING, LTD., a Hong Kong Limited Company;
JONATHAN LOPEZ, an individual;
JULIAN KUSCHNER, an individual;
DAVID MERINO, an individual;
RAFAEL BRITO CUTIE, an individual;
BBRC REAL ESTATE, LLC, a Florida
Limited Liability Company;

Defendants.

_____________________________________/

HEARING BEFORE THE HONORABLE LISA WALSH
MIAMI-DADE COUNTY COURTHOUSE
73 WEST FLAGLER STREET, COURTROOM 3-3
MIAMI, FL 33130
Monday, October 2, 2023
11:35 a.m. - 12:05 p.m.

Stenographically Reported by:

John Paul Cano
1 APPEARANCES:

2 On behalf of the Plaintiffs
David Levine, Esquire
3 Fausto Sanchez, Esquire
Lauren Allen, Esquire
4 Sanchez, Fischer, Levine, LLP
1200 Brickell Avenue
5 Suite 750
Miami, Florida 33131-3255
6 (305) 925-9947
dlevine@sfl-law.com
7 fsanchez@sfl-law.com
lallen@sfl-law.com
8
On behalf of Jonathan Lopez and Julian Kuschner
9 Jaime Bianchi, Esquire
Zachary Dickens, Esquire
10 White & Case LLP
200 South Biscayne Boulevard
11 Miami, Florida 33131-2310
(305) 995-5259
12 jbianchi@whitecase.com

25
1 conspiracy.

2 You don't have to know the entire actions of the

3 conspiracy to be bound by the conspiracy as long as you

4 had a role in it and you have an overt act, which we've

5 alleged.

6 THE COURT: Let me look at the withdrawals. Who was

7 enabled to withdraw?

8 MR. LEVINE: Sure. We've alleged under a specific

9 section titled Commissions.

10 THE COURT: Right.

11 MR. LEVINE: Starting at paragraph 69 on page 15.

12 THE COURT: Right. So they were divided between

13 these four defendants.

14 MR. LEVINE: Correct. And when it comes to unjust

15 enrichment, they've argued that they have not conferred a

16 direct benefit -- or that the plaintiffs have not

17 conferred a direct benefit on the defendants. Here, we

18 have specifically alleged that Plaintiff Kerns, Plaintiff

19 Kerns Capital and Plaintiff McGuinness all had specific

20 accounts in their name at FXWINNING. And we've alleged --

21 and we've even defined them as the Kerns account, the

22 McGuinness account and the Kerns Capital account. We've

23 alleged that they took their commissions out of those

24 accounts, so this is unlike the case law that they've

25 cited where there's no A to B connection.
1 Here, you have these defendants taking commissions

2 directly out of our clients' account and that forms the

3 basis of our unjust enrichment. Beyond that,

4 everything --

5 THE COURT: There's also the basis or could be

6 alleged as the basis to -- that there's an agreement.

7 MR. LEVINE: Correct.

8 THE COURT: Nobody else got -- well, there is

9 another individual, right, who took commissions who is not

10 included here?

11 MR. LEVINE: Yes. It would be the CEO Brito, I

12 believe.

13 THE COURT: Right.

14 MR. LEVINE: But as far as a conspiracy, again, the

15 conspiracy -- the goal of the conspiracy was an unlawful

16 purpose. It was to take our clients' money and they

17 achieved that. They have not given back over $20 million

18 that our three clients had in there. And so we absolutely

19 have at least, at the very least, have an inference that

20 they colluded for an improper purpose, and we've been

21 specific as to what each one of their roles were.

22 I know I'm short on time --

23 THE COURT: Right.

24 MR. LEVINE: -- so everything else is in our moving

25 papers. And I will end with the fact that our claims
1 against Lopez and Kuschner do not rely on agency. Same

2 thing for FDUTPA. They directly participated in the

3 scheme regardless of vicarious liability. It's their

4 actions that we're going after for them and we've alleged

5 what those are. Thank you, Judge.

6 THE COURT: Sure. Reply.

7 MR. BIANCHI: Judge, just real quick on the issue of

8 conspiracy. We cited to you Eagle Tech. Eagle Tech says

9 you need to explain what the scheme was and you need to

10 set forth the act, the second requirement pleading

11 conspiracy. Saying there's an agreement is insufficient,

12 it's just tracking the elements of the claim. The issue

13 with the commissions, there's no claim here that -- at

14 least that I looked at, pages 69 through 75, which are

15 under the general allegations that say that the clients

16 were ever paid or received a commission.

17 The question they're saying is that commissions were

18 taken out from the gentleman's account -- or the hedge

19 fund account, it says they were divided. I'm not sure

20 what that means. Does it mean that they took the money?

21 Or does it mean that it just gives them a credit in some

22 account that never gets paid to them?

23 THE COURT: No. It actually to me seemed to be

24 spelled out. One of them was taking a million dollars a

25 month --
1 MR. BIANCHI: No. It said --

2 THE COURT: One of them...

3 MR. BIANCHI: It said, earned a million one. Lopez

4 says on paragraph 75, "Upon information believed, Lopez

5 earned more than a million one." Now, the allegation here

6 is for this to work is presumably the money that was

7 flowing from their accounts was somehow being received and

8 paid, it was a direct benefit coming to my client. That

9 has to be alleged. Now, there are no facts, I believe,

10 that will support that, but that's -- you know, we are at

11 the pleading stage here. But my point though is there has

12 to be a specific --

13 THE COURT: So if he's perpetrating a fraud and

14 he's, quote, "Earning a million dollars," that's not an

15 unjust enrichment?

16 MR. BIANCHI: Not if he's not receiving it.

17 THE COURT: But he earned it.

18 MR. BIANCHI: Well, Your Honor, but the question,

19 the way this -- if you look at the complaint in its

20 totality --

21 THE COURT: How is that vague?

22 MR. BIANCHI: Well, let me say how it is in this

23 case. In this case it apparently is, if you look at

24 the -- I had to look it up on Google myself. But the

25 fraud here is that they invested in something called an
1 MAM account, which apparently stands for a Managed

2 Multi-Account, and essentially what it is is a master

3 account that has subaccounts.

4 The question here at the end of the day has to be

5 is, their clients were investing in this, it was run by

6 FXWINNING and presumably my clients were getting a cut and

7 receiving the money. Not that they're getting some

8 accounting entry in some fraud that they never got the

9 money out themselves. They would have to be saying that

10 they received a benefit --

11 THE COURT: I don't see how it doesn't plead that.

12 MR. BIANCHI: Well, Your Honor, they would have to

13 say that they received the money. They say they earned

14 it.

15 THE COURT: I don't know that that's a pleading

16 issue.

17 MR. BIANCHI: Well, Your Honor, if there has to be a

18 direct benefit and the direct benefit isn't some vague

19 proposition of you were benefitted indirectly because you

20 were part of something. Like, there are all those cases

21 about parents and subsidiaries. There's not even an

22 allegation here that my clients owned FXWINNING, that

23 monies that got deposited in FXWINNING came to them.

24 There has to be some kind of allegation that ties them

25 with the money. It can't be, oh, commissions are earned.
1 There has to be something that ties --

2 THE COURT: Commissions were divided. What's wrong

3 with that?

4 MR. BIANCHI: Well, divided meaning --

5 THE COURT: "Commissions were derived from the money

6 plaintiffs invested in FXWINNING that conferred a

7 benefit."

8 MR. BIANCHI: Well, for it to be a benefit, if you

9 look at the cases, there has to be some money flow that

10 you can trace.

11 THE COURT: That he was -- well, it says Da Rocha

12 was receiving commissions on their account.

13 MR. BIANCHI: But Da Rocha is not --

14 THE COURT: "Received $80 million to 90 million in

15 commissions."

16 MR. BIANCHI: But those are not my clients.

17 Da Rocha is not my client. The only --

18 THE COURT: So Lopez earned a million dollars a

19 month, but somehow he's not receiving the money?

20 MR. BIANCHI: If he doesn't -- they have to allege

21 he received it. They can't --

22 THE COURT: Well, I've never seen a case that says

23 that.

24 MR. BIANCHI: Well, Your Honor, when you look at the

25 cases for unjust enrichment, they speak of direct benefit.
1 All of those speak of monies or something of value being

2 transferred to them.

3 THE COURT: I don't need to hear more on that.

4 Anything else?

5 MR. BIANCHI: Fraudulent transfer, if I may. The

6 allegations on that, what I would say is this, Your Honor,

7 is again, fraudulent transfer is a tracing statute.

8 THE COURT: Right.

9 MR. BIANCHI: The question here is there has to be

10 monies or something that's flowing from these

11 individuals --

12 THE COURT: Money or interest?

13 MR. BIANCHI: Something. Something. To my clients

14 that went into purchasing this home.

15 THE COURT: Paragraph 155, "Lopez transferred

16 ill-gotten gains from FXWINNING perpetrated against

17 plaintiff to himself in order to purchase property located

18 at 1000 Biscayne Boulevard Unit 4901." How is that not

19 sufficient?

20 MR. BIANCHI: The question here is, their point is

21 this fraud all happened in, I think, it was June or

22 something it came up that the monies froze in June of '23.

23 They bought these houses before then.

24 THE COURT: But he used these commissions that he

25 received which were, quote, "ill-gotten gains," so you may
1 C E R T I F I C A T E

2 - - -

4 I, John Paul Cano, Notary Public, State of Florida at Large,

5 certify that I was authorized to and did stenographically

6 report the foregoing proceedings and that the transcript is a

7 true and complete record of my stenographic notes.

9 Dated this 5th day of October, 2023.

13 ____________________________

14 John Paul Cano

Case Info

Judge

CA44 - Downtown Miami - Judge Walsh, Lisa S Track Judge’s New Case

Case No.

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Document Filed Date

December 14, 2023

Case Filing Date

July 24, 2023

County

Parties

Barakat, Brian Attorney for the Defendant
BBRC Real Estate, LLC Defendant
Bianchi, Jaime Augusto Attorney for the Defendant
Brito Cutie, Rafael Defendant
da Rocha Gomes Bastos, Renan Defendant
FXWinning, Ltd. Defendant
Kaplan, Justin B Attorney for the Defendant
Kerns Capital Management, Inc. Plaintiff
Kerns, Cody Plaintiff
Kuschner, Julian Defendant
Levine David M Attorney for the Plaintiff
Lopez, Jonathan Defendant
Merino, David Defendant
WFTMB Holdings LLC Plaintiff
Fausto Sanchez Attorneys for Plaintiffs
Lauren Allen Attorneys for Plaintiffs
Ryan Todd Attorney
Elaine Kussurelis Attorney
Grant Smith Attorneys for Defendants
Jocelyne Macelloni Attorneys for Defendants
Jo-Jean Figueira Attorney
Spencer Thompson Attorney
Matthew Akiba Attorney
Michael Sontag Attorney
Zachary Dickens Attorneys for Defendants

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