Court Orders DOJ to Indict Serial Fraudster for Criminal Contempt
Post 4890
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September 13, 2024
The USDC described Defendant Alberto Marzan as a serial fraudster who has largely managed to dodge accountability for victimizing individuals in the entertainment industry. Plaintiff Michaleen Josephs sued Marzan and his company, Press Media Group (“PMG”), after Marzan fraudulently induced Josephs to issue a series of bogus investments and other payments. When Marzan failed to respond, the Court entered default judgment for Josephs and awarded damages and equitable relief, including a requirement that Marzan divest from his enterprises and provide any future potential investors, employees, or business associates with copies of the Court’s default judgment order and his 2014 guilty plea for insurance fraud.
In Michaleen Josephs v. Alberto Jose Marzan and Press Media Group, Inc., doing business as VumaTV, CIVIL No. 21-749 (JRT/DTS), United States District Court, D. Minnesota (August 22, 2024) found its patience exhausted because Marzan has continued to defraud others using the same businesses and has not complied with the Court’s disclosure orders, all while expressing his knowledge of, and disdain for, the Court’s order.
The Court asked the United States Department of Justice to prosecute Marzan for criminal contempt.
BACKGROUND
Marzan fraudulently induced Josephs to lend him and his business, PMG, more than $250,000, which he never repaid. Josephs also rented and furnished an apartment for Marzan based on his promise to repay her, incurring nearly $50,000 in additional expenses. Marzan’s fraud was nothing new: Josephs discovered Marzan’s prior convictions for insurance and investment fraud and eight unpaid default judgments for which Marzan was responsible.
Josephs sued Marzan for violations of the Racketeering Influenced and Corrupt Organizations Act (“RICO”) predicated on mail and wire fraud, fraud, breach of contract, promissory estoppel, and abuse of process. The Court ordered default judgment for Josephs and awarded her over $800,000 in damages, interest, and attorney’s fees.
The Court entered the injunction after considering the statutory and constitutional propriety of equitable relief. The USDC found that Marzan has created an enterprise designed to skirt damages awards and is using the enterprise to intentionally evade recovery by the same people and entities harmed by the enterprise. The undisputed facts show that he takes advantage of the court’s leniency to find a new victim.
Equitable relief is appropriate when defendants take advantage of the law to shield themselves from accountability at law.
VIOLATIONS
Marzan continues to defraud employees and contractors from a business that the Court ordered him to divest from and without issuing the required disclosures. And he has done so while making clear that he is aware of, but has no regard for, the Court’s order.
DISCUSSION
Because the Court cannot let Marzan’s blatant disregard for its order go unpunished and neither compensatory nor coercive civil contempt are appropriate, the Court refers this case to the United States Attorney for a criminal contempt prosecution.
Fines would likely accomplish nothing, as Marzan habitually ignores monetary judgments.
The Court found that Marzan knew of the Court’s order and the proper mechanisms to ask the Court to reconsider, but decided he would instead disobey the order while denigrating these proceedings. He was not entitled to take matters into his own hands by unilaterally deciding to disregard the Court’s order.
The Court, therefore, requests that the United States Department of Justice prosecute Defendant Alberto Jose Marzan for criminal contempt.
ZALMA OPINION
Marzan’s actions and disrespect and failure to obey court orders is a aggressive form of chutzpah. He blatantly disobeys the orders of the court, fails to appear after receiving an order to show cause, and ignores judgments rendered against him and disobeys orders of the court. It takes a great deal of abuse to cause a U.S. District Court Judge to request the DOJ to prosecute a party before the court for criminal contempt. Hopefully the DOJ will fulfill the court’s request. Fraud should not be allowed to continue.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...
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