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Case 2:21-ap-01034-BB Doc 377 Filed 04/20/26 Entered 04/20/26 23:05:07 Desc
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CHRISTOPHER E. PRINCE (SBN 183553)
1
cprince@lesnickprince.com
2 LISA R. PATEL (SBN 341574)
lpatel@lesnickprince.com
3 LESNICK PRINCE PAPPAS & ALVERSON LLP
315 W. Ninth Street, Suite 705
4 Los Angeles, CA 90015
Telephone: (213) 493-6496
5
Facsimile: (213) 493-6596
6
Attorney for Plaintiff Dikla Gavrieli, individually
7 and derivatively on behalf of Gavrieli Brands,
LLC
8
UNITED STATES BANKRUPTCY COURT
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CENTRAL DISTRICT OF CALIFORNIA
10
LOS ANGELES DIVISION
11
12 In re Case No. 2:21-bk-10826-BB
13 KFIR GAVRIELI, Chapter 11
Debtor.
14 Adv. No. 2:21-ap-01034-BB
15 DIKLA GAVRIELI a/k/a DIKLA GAVRIELI
UNATIN, individually and derivatively on COMPENDIUM OF EXHIBITS FOR
16 behalf of GAVRIELI BRANDS, LLC, a MOTIONS FOR LEAVE TO AMEND
California limited liability company, COMPLAINT RE WAYFAIR AND
17 ASPIRATION
Plaintiff, ____________________________
18 v.
19 Hearing Information:
KFIR GAVIELI, an individual, Date: May 12, 2026
20 Defendant. Time: 2:00 p.m.
Place: Courtroom 1539
21 -and- 255 E. Temple Street
Los Angeles, CA 90012
22 GAVRIELI BRANDS, LLC, a California Or Remotely Via ZoomGov
limited liability company,
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Nominal Defendant.
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1 Exhibit Description
2 A Redline of Proposed Fourth Amended Complaint
3 B Excerpts of Bank Records
4 C [Intentionally left blank]
5 D Alhusseini Plea Agreement
6 E Sanberg Plea Agreement
7 F Bloomberg Article re Aspiration
8 G SEC Complaint (Sanberg)
9 H CTN Holdings, Inc. chapter 11 petition
10 I Discovery Requests re Wayfair and Aspiration
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Exhibit A
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PROOF OF SERVICE OF DOCUMENT
I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is:
Lesnick Prince Pappas & Alverson LLP, 315 W. 9th Street, Suite 705, Los Angeles, CA 90015
A true and correct copy of the foregoing document entitled COMPENDIUM OF EXHIBITS FOR MOTIONS
FOR LEAVE TO AMEND COMPLAINT RE WAYFAIR AND ASPIRATION will be served or was served
(a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below:
1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General
Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On
(date)April 20, 2026I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that
the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated
below:
Gregory K Jones gjones@stradlinglaw.com, smjohnson@sycr.com;smjohnson@stradlinglaw.com
Robert Allan Kors (TR) robertkorstrustee@gmail.com
Allison L Libeu alibeu@hueston.com, sjones@hueston.com
William N Lobel wlobel@tocounsel.com, mmason@tocounsel.com
Kerri A Lyman klyman@steptoe.com, #-
FirmPSDocketing@Steptoe.com;nmorneault@Steptoe.com;mhernandez@steptoe.com;aodonnell@steptoe.com
Christopher E Prince cprince@lesnickprince.com,
jmack@lesnickprince.com;cprince@ecf.courtdrive.com;porpe@lesnickprince.com
United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Richard Lee Wynne richard.wynne@hoganlovells.com,
tracy.southwell@hoganlovells.com;cindy.mitchell@hoganlovells.com;rick-wynne-7245@ecf.pacerpro.com
Service information continued on attached page
2. SERVED BY UNITED STATES MAIL:
On (date) , I served the following persons and/or entities at the last known addresses in this bankruptcy
case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail,
first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the
judge will be completed no later than 24 hours after the document is filed.
Service information continued on attached page
3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method
for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) , I served the
following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to
such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration
that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is
filed.
Service information continued on attached page
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.
April 20, 2026 Christopher E. Prince /s/ Christopher E. Prince
Date Printed Name Signature
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
June 2012 F 9013-3.1.PROOF.SERVICE
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1 LATHAM & WATKINS LLP
Daniel Scott Schecter (Bar No. 171472)
2 daniel.schecter@lw.com
Nima H. Mohebbi (Bar No. 275453)
3 nima.mohebbi@lw.com
Tara A. McCortney (Bar No. 334942)
4 tara.mccortney@lw.com
Alexandra N. Ibrahim (Bar No. 340972)
5 alexandra.ibrahim@lw.com
10250 Constellation Blvd.CHRISTOPHER E.
6 PRINCE (SBN 183553)
cprince@lesnickprince.com
7 LISA R. PATEL (SBN 341574)
lpatel@lesnickprince.com
8 LESNICK PRINCE PAPPAS & ALVERSON LLP
315 W. Ninth Street, Suite 1100705
9 Los Angeles, California 90067CA 90015
Telephone: +1.424.653.5500 (213) 493-6496
10 Facsimile: +1.424.653.5501 (213) 493-6596
11 AttorneysAttorney for Plaintiff Dikla Gavrieli
a/k/a Dikla, individually and derivatively on behalf
12 of Gavrieli UnatinBrands, LLC
13
UNITED STATES BANKRUPTCY COURT
14
CENTRAL DISTRICT OF CALIFORNIA
15
In re Case No. 2:21-bk-10826-BB (Chapter 11)
16
KFIR GAVRIELI, Adversary No. 2:21-ap-01034-BB
17
Debtor. THIRD AMENDED VERIFIED DERIVATIVE
18 COMPLAINT FOR:
19 DIKLA GAVRIELI a/k/a DIKLA (1) BREACH OF FIDUCIARY DUTY;
GAVRIELI UNATIN, individually and
20 derivatively on behalf of GAVRIELI (2) CONVERSION;
BRANDS, LLC, a California limited
21 liability company, (3) CORPORATE WASTE; AND
22 Plaintiff, (4) VIOLATION OF CAL. PEN. CODE § 496
23 v.
24 KFIR GAVRIELI, an individual,
25 Debtor,
26
27 - and -
28 GAVRIELI BRANDS, LLC, a
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1 California limited liability company,
2 Nominal Defendant.
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1 Plaintiff Dikla Gavrieli a/k/a Dikla Gavrieli Unatin (“Plaintiff”), derivatively on behalf of
2 Nominal Defendant Gavrieli Brands, LLC, hereby complains and alleges against Debtor Kfir
3 Gavrieli (“Defendant”) as follows:
4 JURISDICTION, VENUE, AND THE PARTIES
5 1. On February 1, 2021, Defendant filed a voluntary petition under Chapter 11 of the
6 United States Bankruptcy Code in this Court, styled In re: Kfir Gavrieli, No. 2:21-bk-10826-BB
7 (Bankr. C.D. Cal.) (the “Bankruptcy Case”). This Court has jurisdiction over this adversary
8 proceeding pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper in this District pursuant to 28
9 U.S.C. § 1409.
10 2. Plaintiff is an individual residing in this District.
11 3. Defendant is an individual residing in this District.
12 4. Nominal Defendant Gavrieli Brands, LLC (the “Company”) is a California limited
13 liability company with its principal place of business in this District; both of its members (Plaintiff
14 and Defendant) reside in this District.
15 DEMAND FUTILITY ALLEGATIONS
16 5. The Company has two members and managers, Plaintiff and Defendant. Plaintiff
17 has been a member at all times during the conduct and time period complained of herein.
18 6. During the relevant period for all claims asserted in this action, the Company has
19 manufactured, marketed, and sold a stylish foldable women’s shoe that could fit into a purse, yet
20 still be comfortable and durable enough to be worn all day.
21 7. Plaintiff will adequately and fairly represent the interests of the Company in
22 enforcing and prosecuting its rights.
23 8. Beginning in September 2017 and to the present day, Defendant has been and
24 remains in sole control over all aspects of the Company’s business. 1 As explained below,
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1
26 References herein to Defendant’s seizure of control of the Company in late-2017 and exclusion
of Plaintiff from Company management, operations, and finances since that time to the present,
27 are offered only by way of background to establish that during the relevant period at issue on the
claims asserted in this Third Amended Complaint, Defendant bears sole and complete
28 responsibility for the Company’s affairs and its massive decline. In light of the Court’s prior
3
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1 Defendant has steadfastly refused to provide critical information about the Company’s operations,
2 finances, and performance to Plaintiff despite multiple requests. There are no other current
3 managers or members of the Company on whom a demand could be made.
4 9. Plaintiff first filed an Adversary Complaint asserting derivative claims against
5 Defendant on February 19, 2021 (Dkt. 001), filed a First Amended Complaint asserting derivative
6 claims against Defendant on May 24, 2021 (Dkt. 029), and filed a Second Amended Adversary
7 Complaint asserting derivative claims against Defendant on September 2, 2022 (Dkt. 114) based
8 on a substantial decline in the Company’s value and profits. Defendant has failed to address the
9 allegations set forth in these complaints.
10 10. Given Defendant’s intransigence and his sole control of the Company, no demand
11 is necessary and, in any event, demand would be futile given that Defendant is plainly not
12 independent and disinterested as the allegations of this action are asserted against him personally,
13 and include allegations that he has intentionally impaired the Company’s performance and value.
14 In addition, as discussed below, Defendant has shown no willingness to address the Company’s
15 dire performance and has rejected Plaintiff’s proposal that the Company engage a financial advisor
16 to review the Company’s options and situation. All of this renders any demand futile.
17 11. This is not a collusive action to confer jurisdiction on this Court that it would not
18 otherwise have.
19 FIRST CLAIM FOR RELIEF
(Breach Of Fiduciary Duty)
20 (By Dikla Gavrieli Unatin Derivatively Against Defendant)
21 12. This derivative claim for breach of fiduciary duty is based on and limited to acts
22 and omissions by Defendant which either occurred on or after July 22, 2019, and/or were
23 discovered by Plaintiff on or after July 22, 2019 (the “Relevant Period”). July 22, 2019 (the
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rulings (which Plaintiff intends to contest on appeal), Plaintiff does not intend to rely on
26 Defendant’s seizure of control of the Company or exclusion of Plaintiff from the Company as
grounds for imposing liability on Defendant in this proceeding (although Plaintiff expressly
27 reserves her position asserted in briefing on Defendant’s prior Motions to Dismiss that she
should not have to exclude such facts from the claims asserted in this action). Rather, the claims
28 asserted herein are based on Defendant’s acts and omissions in connection with his sole
operation and management of the Company from July 22, 2019 to the present.
4
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1 “Operative Date”)2 is the date of the statutory discovery cutoff (under California Code of Civil
2 Procedure § 2024.020) in the matter of Gavrieli v. Gavrieli, Los Angeles Superior Court Case No.
3 BC686856 (the “State Court Litigation”).3
4 A. The Company’s Massive Decline During The Relevant Period While Under
Defendant’s Sole Control.
5
6 13. Because Defendant barred Plaintiff from Company management and from access
7 to the Company’s operations, finances, and books and records beginning in late-2017 and
8 continuing throughout the Relevant Period, due to Defendant’s conduct, and despite Plaintiff’s
9 repeated efforts to obtain information which Defendant repeatedly has resisted (as discussed
10 below), Plaintiff has minimal information about the Company’s operations, finances, and books
11 and records.
12 14. During the Relevant Period, Defendant has been in sole control of the Company
13 and has repeatedly and continuously denied Plaintiff access to the Company’s accounts and
14 information to which she is entitled as a member of the Company.
15 15. During the Relevant Period, Defendant delayed providing financial data to the
16 Company’s accountant to intentionally hinder and delay Plaintiff’s eventual receipt of the
17 Company’s summary, year-end financial information long into the following calendar year.
18 During the Relevant Period, when Plaintiff finally did receive financial information for the prior
19 year, it revealed declines in Company performance. However, the year-end financial information
20 that was provided to Plaintiff (again, many months into the following calendar year) came in the
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22 As used herein, the term “Relevant Period” refers to the period from the Operative Date (July 22,
2019) to the date of filing of this Third Amended Adversary Complaint.
23 3
Plaintiff’s claims in this Third Amended Complaint are limited to acts and omissions occurring
24 during the Relevant Period (after the July 22, 2019 discovery cutoff in the State Court Litigation,
based on the Court’s ruling on Defendant’s Motion to Dismiss the Second Amended Complaint).
25 However, Plaintiff avers that the limited discovery which she was able to obtain from Defendant
in the State Court Litigation provided little to no information about the mismanagement of the
26 Company under Defendant’s sole control, and as noted in footnote 1 and in prior filings, Plaintiff
reserves her position for appeal that the date limitations Plaintiff has been required to apply to her
27 claims here are inconsistent with prevailing Ninth Circuit law (see Howard v. City of Coos Bay,
871 F.3d 1032, 1039–40 (9th Cir. 2017); L.A. Branch NAACP v. L.A. Unified Sch. Dist., 750 F.2d
28 731, 739 (9th Cir. 1984); Media Rights Techs., Inc. v. Microsoft Corp., 922 F.3d 1014, 1021–22
(9th Cir. 2019)).
5
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1 form of annual financial reports and lists of bank and credit card transactions, all of which were
2 submitted without analysis, key business metrics, reports, or data. Without this critical context,
3 and almost entirely without substantiation, this information does not reveal or disclose the reasons
4 for the Company’s decline.
5 16. As just one example of Defendant’s embargo on providing critical information to
6 Plaintiff, the only information Plaintiff received during the Relevant Period about Defendant’s
7 management of the Company’s customer acquisition strategies or advertising – which is critical in
8 driving the Company’s sales – is an alleged annual advertising expenditure and a list of credit card
9 charges which total that amount. The total dollar volume of the prior year’s multimillion dollar
10 advertising spend omits virtually all necessary information about the nature, frequency, and
11 performance of advertisements under Defendant’s sole management, which is essential to
12 assessing the extent of Defendant’s willful, grossly negligent, and/or reckless handling of that key
13 aspect of the Company.
14 17. During the Relevant Period, Defendant also has never provided any monthly or
15 quarterly progress reporting to Plaintiff on the Company’s financial or operational performance,
16 nor any informal reporting, even after the judgment in the State Court Litigation (the “State Court
17 Judgment”) confirmed her 50% ownership and right of joint control and management.
18 18. Simply put, during the Relevant Period, beyond denying Plaintiff the information
19 and access she always had, Defendant has not provided anything remotely akin to the information,
20 reporting, or presentations that would be provided to a board of directors, lenders, private equity
21 sponsors, venture capital investors, or an executive committee, let alone a partner with equal right
22 of joint management and control. Instead, Defendant has frozen out Plaintiff since taking control
23 of the Company.
24 19. Thus, it was not until September 12, 2019 when Plaintiff first learned of the
25 Company’s purportedly final 2018 financial results from financial statements and tax returns
26 provided by the Company’s forensic accountant. On September 12, 2019, Plaintiff learned that,
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1 under Defendant’s sole control, the Company had experienced a decline in net income (profit) of
2 approximately 15% from 2017 to 2018.4
3 20. Due to Defendant’s delay and concealment of Company financial information,
4 Plaintiff first learned of the Company’s 2019 financial results in mid-2020, when she learned that
5 Defendant’s mismanagement had caused the Company to do far worse in 2019 than prior years –
6 even though 2019 entirely predated any impacts of the COVID-19 pandemic.
7 21. Under Defendant’s sole management and control in 2019, the Company
8 experienced a 58% decline in net income (profit) from 2017 to 2019, and a 27% decline in sales
9 over that same period. This drastic decline under Defendant’s sole control, which was
10 accompanied by his continued failure and refusal to take any steps to mitigate the massive (and
11 deliberate) decline, occurred as Defendant continued to seek a buyout of Plaintiff’s interest in the
12 Company for pennies on the dollar.
13 22. Due to Defendant’s continued delay and concealment of Company financial
14 information, Plaintiff learned of the Company’s 2020 financial results in mid-2021, during the
15 pendency of the Bankruptcy Case, when she learned that, under Defendant’s sole management and
16 control in 2020, the Company experienced an over 80% decline in net income (profit) from 2017
17 to 2020, and a nearly 40% decline in sales over that same period.
18 23. Under Defendant’s sole management and control in 2021, the Company’s financial
19 results declined even further. According to draft financial reports received in June 2022,
20 Defendant oversaw an 82% decline in net income (profit) from 2017 to 2021, and a 49% decline
21 in sales over that same period. Plaintiff has yet to receive the Company’s final 2021 financial
22 reports.
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In April 2019, Plaintiff received a preliminary estimate for the Company’s expected 2018 net
26 income on which estimated tax payments could be made. However, those preliminary numbers
only showed a decline in net income of about 7% compared to the prior year, less than half of the
27 decline illustrated by the Company’s year-end financials provided on September 12, 2019, which
showed a decline in net income of about 15%. The 7% decline in net income reflected in the
28 Company’s 2018 preliminary numbers in April 2019 was not enough to put Plaintiff on notice of
the major harm being inflicted upon the Company by Defendant.
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1 24. Defendant has not yet provided financial statements or any interim reporting on
2 2022 results, and he continues to refuse to provide Plaintiff with the necessary information or
3 access to substantiate the financial results he has reported. Plaintiff is informed and believes and
4 alleges thereon that the Company’s performance under Defendant’s control in 2022 to date has
5 declined even further from its performance in 2021. The information necessary to confirm this
6 allegation is in Defendant’s sole possession, custody, and control, and he has declined to provide
7 that information to Plaintiff.
8 25. The chart below indicates the Company’s catastrophic downturn under Defendant’s
9 sole management and control based on information provided to Plaintiff during the Relevant
10 Period:
11 Comparison to 2017 Performance
12 Year Sales Decline From 2017 Net Income Decline From 2017 Company Value Per
Defendant’s Experts
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2017 $388 million (year-end)
14 2018 5
-10.1% -18.9%
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2019 -26.9% -58.2%
15 7
2020 -39.8% -80.4% $40 million
(Feb. 2021)
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20218 -49.3% -82.3%
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18 26. Based on tax returns and financial statements prepared for the Company by its
19 forensic accountant Howard, Kittle & Company provided to Plaintiff since July 22, 2019, the
20 Company has suffered lost profits totaling tens of millions of dollars and far more in value under
21 Defendant’s sole control and mismanagement.
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2018 results were first reported on September 12, 2019 in Profit & Loss Statement prepared for
24 the Company by Howard, Kittle & Company. Howard, Kittle & Company provided updated
results for 2018 in an August 5, 2021 Profit & Loss Statement.
25 6
Per August 5, 2021 Profit & Loss Statement prepared for the Company by Howard, Kittle &
26 Company.
7
Per August 28, 2021 Profit & Loss Statement prepared for the Company by Howard, Kittle &
27 Company.
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28 Per draft Profit & Loss Statement prepared for the Company by Howard, Kittle & Company and
provided to Plaintiff in June 2022.
8
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1 27. Indeed, Defendant and his own financial experts confirmed an extraordinary loss
2 of Company value under his sole control in sworn testimony in this bankruptcy case and in the
3 State Court Litigation. For example:
4 a. Defendant’s valuation expert, Dr. Bruce Strombom of Analysis Group, Inc.,
5 testified under oath in the State Court Litigation that the Company’s valuation
6 entering 2018 was $388 million. That was almost precisely when Defendant seized
7 sole control of the Company and became solely responsible for its performance.
8 To arrive at this figure, Defendant’s expert utilized the Market Approach and
9 Income Approach methods of valuation, with each method indicating a value of
10 $410.9 million and $366.2 million, respectively, at December 31, 2017.
11 Defendant’s expert then took the average of these two values to reach a Weight-
12 Adjusted Fair Market Value of the Company at $388 million for the time at which
13 Defendant’s sole management began.
14 b. In March 2021, early in his Bankruptcy Case, Defendant submitted a valuation of
15 his ownership interest in the Company prepared by his financial advisor, Michael
16 VanderLey of Force 10 Partners. (Bk. Dkt.9 184-2 at 3.) In the Liquidation
17 Analysis prepared in connection with Defendant’s First Amended Disclosure
18 Statement, and also submitted in a Declaration in Support of the Debtor’s Response
19 to the Court’s Order to Show Cause regarding Appointment of a Trustee, Mr.
20 VanderLey valued Defendant’s 50% ownership interest in the Company at $20
21 million, which implied a maximum valuation of the Company of just $40 million
22 as of 2021. (Bk. Dkt. 184 at 23; Bk. Dkt. 184-2 at 3; Bk. Dkt. 289 at 11.)
23 28. These valuations prepared by Defendant’s own financial experts establish that
24 during the Relevant Period, Defendant presided over a decline in value of approximately $350
25 million – and the destruction of an astonishing 90% of the Company’s value.
26
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28 “Bk. Dkt.” refers to Defendant’s Chapter 11 Case: In re: Kfir Gavrieli, No. 2:21-bk-10826-BB
(Bankr. C.D. Cal.).
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1 29. As discussed below, Plaintiff has not yet had an opportunity to obtain discovery
2 into or information about the Company’s operations and Defendant’s management during the
3 Relevant Period (indeed, she did not have the chance to obtain such discovery for the period before
4 July 22, 2019, and the discovery Defendant provided in the State Court Litigation provided
5 minimal information about the Company’s management, operation, or finances). As such, she
6 remains unable to have a financial expert prepare a reliable and independent valuation of the
7 Company or measurement of the damage inflicted by Defendant during the Relevant Period. It is
8 possible that the value destruction caused by Defendant’s acts and omissions exceeds the 90%
9 figure established by his own experts, but this will be the subject of fact and expert discovery in
10 this action.
11 30. Based on the minimal information available to Plaintiff, she is informed and
12 believes and alleges thereon that the Company’s value has decreased even further since
13 Defendant’s financial expert conducted his valuation in early 2021. While the specific value of
14 the Company and the value destruction caused by Defendant will be subject to proof at trial, the
15 significant drop in sales and profits reported for the Company during the calendar year 2021 as
16 compared to 2020, as well as expected results for 2022, suggests a lower overall value than Mr.
17 VanderLey’s March 2021 valuation, which presumably was based on the Company’s 2020
18 performance. Moreover, the Company’s value may be further impacted by the fact that Defendant
19 now has presided over four consecutive years of declining sales and profits. Therefore, Plaintiff
20 is informed and believes and alleges thereon that Defendant may have presided over a destruction
21 of over 90% of the Company’s value from 2018 to the present.
22 31. This massive, consistent, and catastrophic decline in the Company’s performance
23 cannot be explained away by mere competition or market forces. Indeed, no executive or manager
24 would be retained after presiding over such a calamitous decline. Rather, this decline is the product
25 of Defendant’s intentional, reckless, and grossly negligent misconduct, as is Defendant’s complete
26 and total failure to take any steps to arrest or reverse the decline.
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1 32. In particular, Defendant is acting willfully and intentionally to depress the
2 Company’s value to try to increase Plaintiff’s financial distress, with the ultimate goal of obtaining
3 Plaintiff’s ownership interest in the Company for pennies on the dollar.
4 33. To achieve his personal goals to the detriment of the Company, and in
5 contravention of the Company’s historically innovative operations (which led to its renowned
6 status), Defendant intentionally, knowingly, recklessly, and in a grossly negligent manner caused
7 the Company’s performance to decline and did nothing to try to prevent, arrest, or reverse the
8 decline.
9 34. Defendant has failed to implement strategies, or even bring in outside professionals
10 or consultants to advise on possible strategies, which could have arrested or reversed the
11 Company’s decline, let alone produce some improvement in the Company’s performance. The
12 Company has been flush with cash throughout the Relevant Period, and easily could have invested
13 in growth strategies and/or hired or engaged experienced professionals and/or outside experts.
14 Defendant nevertheless stood idle as the Company went into a tailspin, which his own experts
15 confirm have resulted in destruction of almost the entire value of the Company. Defendant cannot
16 explain or justify why he failed to act as the Company imploded while it had massive cash reserves
17 which Defendant failed to deploy, and his inaction constitutes willful, grossly negligent, and
18 reckless conduct.
19 35. Plaintiff is informed and believes, and alleges thereon, that Defendant’s complete
20 inaction in the face of the Company’s decline and implosion was to serve his own personal interests
21 in trying to force Plaintiff to sell her ownership interest at a minimal value. In doing so, he
22 breached his fiduciary duties to the Company by putting his personal interest in buying out his co-
23 owner above the Company’s.
24 B. Defendant Has Wrongfully Concealed And Withheld Company Information
Which Would Provide The Reasons For The Company’s Decline And Either
25 Prove Or Disprove Defendant’s Feeble Excuses.
26 36. As part of his effort to conceal the nature and extent of his misconduct, Defendant
27 has refused to provide Plaintiff with relevant and crucial financial information about the Company,
28 which Plaintiff repeatedly has sought, and to which she is entitled on multiple grounds, including:
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1 (1) as a member and manager of the Company; (2) pursuant to the State Court Judgment and
2 permanent injunction; and (3) through formal or informal discovery during the Bankruptcy Case.
3 Plaintiff’s efforts to obtain crucial information about the Company through formal and informal
4 means during the pendency of Defendant’s Bankruptcy Case include:
5 a. February 26, 2021 and March 4, 2021: After filing the adversary complaint, the
6 Unatins propounded discovery on the Defendant that included requests directed at
7 Company operations and management. Defendant refused to provide responses to
8 that discovery, other than some basic information unrelated to the Company.
9 b. August 4, 2021: Counsel for Plaintiff submitted to the Chapter 11 Trustee a list of
10 informal requests for information about the Company and Defendant’s
11 management. The Chapter 11 Trustee declined to provide information in response
12 to this request due to Defendant’s objections.
13 c. October 26, 2021: At the request of counsel for the Chapter 11 Trustee, Plaintiff
14 streamlined her informal request for information about the Company and
15 Defendant’s management. This request was also denied.
16 d. January 31, 2022: Shortly after the Trustee filed his Plan of Reorganization (“the
17 Plan”) and Disclosure Statement, the Unatins made yet another modest, informal
18 request for information about the Company and Defendant’s management to assist
19 in their preparation of a response to the Plan and Disclosure Statement. Counsel
20 for the Unatins also asked for a deposition of the Defendant, which was rebuffed.
21 e. February 9 and 16, 2022: Plaintiff served formal discovery requests on Defendant
22 and the Trustee in Defendant’s Bankruptcy Case seeking information about the
23 Company and Defendant’s management. Defendant refused to produce the
24 documents and information requested regarding the Company.
25 f. March 15, 2022: The Trustee sought and obtained a protective order on an
26 expedited basis. Since then, the Trustee provided a handful of documents (183 in
27 total) “pertaining to Force Ten LLC’s work in connection with the Trustee’s Plan
28
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1 of Reorganization.” In the cover letter transmitting these documents, the Trustee
2 made clear that he would not be producing documents pertaining to the Company.
3 g. May 2, 2022: The Trustee allowed counsel for Plaintiff to conduct a deposition on
4 Mr. VanderLey of Force 10. In this deposition, Mr. VanderLey refused to provide
5 information about the Company and counsel for the Chapter 11 Trustee instructed
6 him not to answer questions regarding the Company.
7 37. On September 1, 2022, in another effort to obtain information to allow Plaintiff to
8 ascertain the specific reasons for the Company’s decline and the precise dimensions of Defendant’s
9 misconduct, Plaintiff issued an inspection demand pursuant to California Corporations Code
10 Section 17704.10(a). The information requested in the demand has not been provided to Plaintiff
11 by Defendant or the Company to this day; instead, counsel for the Company, selected and hired
12 exclusively by Defendant, responded to the demand months late on January 17, 2023 and offered
13 only to provide Mrs. Unatin with the same limited information that she already has.
14 C. Defendant’s Willful, Reckless, And Grossly Negligent Conduct Regarding The
Company’s Business.
15
16 38. Although Defendant’s concealment and withholding of Company information
17 precludes Plaintiff from fully detailing his ongoing misconduct at this stage of the litigation, she
18 alleges on information and belief – based on the record of the Company’s recent abysmal financial
19 performance, and the limited information available to her – that from July 22, 2019 to the present,
20 critical strategic and operational components such as the Company’s sales and marketing,
21 advertising, product line, administration, e-commerce storefront, creative, customer service,
22 supply chain, and various other areas have been intentionally hindered and/or mismanaged by
23 Defendant through grossly negligent and reckless conduct, all as part of Defendant’s efforts to
24 advance his own personal interests at the expense of the Company.
25 39. On information and belief, examples of Defendant’s intentional, reckless, and
26 grossly negligent misconduct since July 22, 2019 include the following (without limitation):
27 40. Defendant has manipulated and intentionally, recklessly, and in a grossly negligent
28 manner mismanaged the Company’s customer acquisition and advertising strategies, which he
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1 personally oversees, thereby harming sales, profits, and brand strength, and increasing costs.
2 Specifically, Defendant has manipulated advertising budgets and customer acquisition
3 mechanisms to artificially limit or otherwise lower sales, for example by limiting the reach, spend,
4 or budget of well-performing ads to slow and restrict sales.
5 41. Defendant has allowed the Company to spend massive amounts on stale and poor
6 producing ads, causing the Company to incur millions of dollars in annual spend on unproductive
7 ads and declining sales.
8 42. Defendant has failed to market the Company’s product in other countries, despite
9 having the resources and ability to do so, including in dozens of countries where the Company
10 already invested significant resources to protect its intellectual property therein specifically in
11 preparation for marketing and sales, and in which the Unatins were working to capitalize at the
12 time Defendant locked them out. This includes various English-speaking markets where
13 advertising would be highly cost-effective and efficient, as the Company could largely run already
14 available ads and creative to reach substantial new markets.
15 43. Defendant has failed to leverage, maintain, or expand the brand through various
16 available and potentially lucrative sales channels. This includes any attempt to sell or distribute
17 the Company’s product with any retailer whatsoever, including various hugely popular online
18 marketplaces (such as Zappos, an online retailer with a massive customer base that extended an
19 offer to sell the Company’s products), online retailers, or traditional brick and mortar retailers.
20 44. Defendant has failed to cultivate and has mismanaged the Company’s formerly
21 vibrant online communities, squandering a longtime core strength of the brand. Defendant has
22 failed to implement meaningful marketing or advertising campaigns, failed to maintain or continue
23 successful campaigns, and in other cases recycled stale campaigns from prior years (for example:
24 in 2019-2022 repeatedly relaunching a “Neon” campaign including reusing certain creative
25 elements created and advertised earlier; and in 2020 launching the “Rosé” shoe by copying the
26 Company’s previous and heavily used “Champagne” shoe campaign).
27 45. Defendant has grossly mismanaged and neglected the Company’s business
28 development efforts, brand partnerships, and other direct and third-party campaigns that have
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1 driven past Company success. As a result of Defendant’s intentional mismanagement of the
2 Company’s sales efforts, the Company’s sales are currently limited entirely to just its own small
3 website.
4 46. Defendant has intentionally, recklessly, and in a grossly negligent manner
5 mismanaged the Company’s product, including the failure to expand or meaningfully refine the
6 Company’s existing product line. As a result, the Company’s sales are based entirely on a single
7 shoe style, a women’s ballet flat. Although the Company’s product is available in various colors,
8 as Defendant ran out of those colors and materials which had been hand-picked by Plaintiff,
9 Defendant has in large part eschewed the launch of new colors, and when he did, he made
10 regrettable choices in many instances further damaging the Company’s sales and brand. Defendant
11 also took an unlaunched children’s product line with tremendous potential, and mismanaged its
12 marketing, severely limiting its sales and potential to strengthen the brand. Defendant’s gross
13 mismanagement including the relaunch of shoes that were originally marketed as limited releases,
14 one-of-a-kind shoes, and seasonal styles, has undermined brand credibility and alienated customers
15 who purchased “limited edition” or “seasonal” shoes under the impression that they would not be
16 relaunched at a later date. This included repeatedly making available the “Champagne” and “Love
17 Potion” shoes which were marketed specifically as having limited and brief availability with
18 enhanced exclusivity and value.
19 47. Defendant has failed to adapt or capitalize on obvious consumer and industry
20 trends. Those include materials usage where, for example, Defendant has mismanaged the
21 Company’s pioneering Vegan line, for which there was significant demand and even more
22 potential. Defendant instead chose to develop shoes made from materials that are known in the
23 industry to be poor quality for footwear -- such as velvet -- even though Defendant and Plaintiff
24 previously had decided not to use such materials precisely because of these quality concerns and
25 lack of demand.
26 48. Defendant has failed to expand the Company’s brand into other product categories
27 discussed and planned by the parties, including various categories in which the Company has long
28 since invested significant resources to protect its intellectual property in preparation for that
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1 expansion. Those product lines, and the intellectual property therefore, sit unused at a time when
2 the Company’s performance is significantly suffering. Thus, Defendant’s intentional
3 mismanagement of the Company’s product line has limited the Company’s sales entirely to a
4 single shoe style, with no attempt to broaden that product line, limiting the Company’s sales and
5 performance in the face of catastrophic decline.
6 49. Defendant has intentionally, recklessly, and in a grossly negligent manner
7 mismanaged the Company’s inventory and supply chain generating large wasteful and costly
8 surpluses of some styles, and insufficient supply of others. This includes his failure to
9 appropriately order certain colors, sizes, and components, resulting in shortages and lost sales.
10 50. Defendant’s intentional, reckless, and/or grossly negligent mismanagement of
11 inventory has also resulted in a massive surplus of total inventory totaling hundreds of thousands
12 of pairs on hand and generated a multiyear prepaid supply of product. For example, the limited
13 data available to Plaintiff indicates that despite plummeting sales, Defendant poured millions of
14 dollars into inventory and purchasing, growing inventory by nearly 25% in 2019 alone, and by
15 maintaining an increasingly massive stockpile of surplus inventory through 2020, 2021, and
16 beyond. In addition to stockpiling inventory beyond any reasonable metric given the Company’s
17 declining sales under his control, Defendant has inexplicably made payments to suppliers that
18 exceed what was purchased, effectively pre-paying hundreds of thousands of dollars to suppliers
19 for no rational business purpose and thus improperly reducing the Company’s cash on hand. These
20 habits and Defendant’s stockpiling are unheard of in the fashion industry for a Company of this
21 size. By maintaining a huge surplus of shoe inventory, Defendant also risks negatively impacting
22 the quality and condition of the Company’s fine leather shoes as they sit for months or years before
23 selling, as well as loss from theft and other damage (an audit and inspection of inventory will be
24 required to determine the extent of any impairment from these large stockpiles). Despite these
25 issues, Defendant continues to maintain and add to the Company’s now multiyear supply of shoes
26 on hand, and he has done so deliberately to manipulate and reduce the Company’s cash on hand,
27 while reducing the cash available for distribution, by converting that cash to inventory, in service
28 of his own personal interests against Plaintiff.
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1 51. Defendant has intentionally, recklessly, and in a grossly negligent manner
2 mismanaged various aspects of Company operations, including his failure to hire professional
3 management to properly or efficiently run the Company. This includes Defendant’s deliberate
4 refusal to bring in any experienced managers, directors, or executives to improve the various areas
5 of the Company contributing to its drastic financial decline. Defendant refuses to bring in such
6 professionals because of his deliberate efforts to suppress the Company’s value, and conceal the
7 occurrences and effects of his mismanagement.
8 52. Defendant has failed to implement any reliable accounting system for the
9 Company, despite the significant tax and financial issues at the core of this dispute. For example,
10 companies of all sizes, let alone ones as successful as the Company, use at least basic accounting
11 software to track financial data throughout the year.
12 53. Even the most basic accounting software allows companies to track sales and
13 expenses, substantiate spending, generate financial reports, and maintain necessary oversight and
14 visibility over a company’s financial operations. However, Defendant has refused to implement
15 any accounting software, such as QuickBooks, or bookkeeping system whatsoever at the
16 Company.
17 54. Rather than have any appropriate system, Defendant instead waits until after a
18 calendar year ends, and typically months longer, and then sends a host of bank and credit card
19 transactions to an outside forensic accountant who is then forced to try and reconstruct financial
20 statements and a general ledger for the Company for the previous year.
21 55. Moreover, the bank account and credit card transactions sent to the accountant lack
22 the necessary detail and itemization to properly classify business expenses. As the accountant is
23 not at the Company, and because there is no bookkeeper at the Company or any bookkeeping
24 system or accounting software in place, the accountant is forced to rely on Defendant’s
25 representations regarding the thousands of financial transactions to be classified, or guess what
26 each charge was for in his attempts to categorize the Company’s expenses for the previous year.
27 56. Additionally, Defendant’s baffling accounting practices in the face of the
28 Company’s substantial tax and financial issues suggest that he intentionally, recklessly, or with
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1 gross negligence fails to implement any sort of accounting or bookkeeping system in order to
2 obscure improper transactions or transfers of funds made entirely for his own benefit or for the
3 benefit of his family members and others assisting him.
4 57. Defendant has intentionally, recklessly, and in a grossly negligent manner
5 mismanaged the Company’s e-commerce website, which remains its sole storefront and source of
6 revenue despite years of rapidly declining sales under his sole management and control.
7 Defendant’s mismanagement of the design and development of the Company’s website includes
8 his failure to implement industry standard applications and technologies that facilitate shopping
9 online. For example, Defendant uses an outdated, unsecure, and costly to develop e-commerce
10 shopping cart platform (putting Company and customer information at risk), has failed to adopt or
11 implement available productive and industry standard features, and has failed to improve the user
12 interface or user experience of the Company’s website design.
13 58. Defendant has intentionally, recklessly, and in a grossly negligent manner
14 mismanaged the Company’s customer service operations, causing an increase in refunds, returns,
15 expenses, and dissatisfaction with the brand. 10
16 59. Defendant has intentionally, recklessly, and in a grossly negligent manner
17 mismanaged the Company’s legal affairs, running up millions of dollars in legal fees in the process.
18 However, as Defendant has refused to disclose key information regarding the Company’s legal
19 matters or operations to which Plaintiff is entitled and despite her explicit request, Plaintiff cannot
20 allege more details regarding the full extent of Defendant’s mismanagement of the Company’s
21 legal affairs. Defendant continues to expend considerable sums initiating new litigation without
22 consulting Plaintiff. (See, e.g., Gavrieli Brands LLC v. Xiamen Huaxi Tech. Co., No. 2:22-cv-
23 5924 (C.D. Cal. filed Aug. 19, 2022); Gavrieli Brands LLC v. Lovie Pearl GmbH, No. 2:22-cv-
24 6112 (C.D. Cal. filed Aug. 26, 2022)).
25
10
26 Defendant also had the Company enter into off-brand business partnerships that intentionally,
recklessly, or in a grossly negligent manner damaged the Company’s brand. For instance, in May
27 2020, Defendant entered the Company into a partnership with Aspiration Bank, a company
affiliated with his friend and lender , whereby the Company’s high-end designer shoe customers
28 were asked to sign up for an Aspiration bank account in exchange for a Tieks discount. This
arrangement was understandably poorly received by the Company’s customers.
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1 D. Defendant’s Failure To Take Steps To Arrest The Company’s Decline Is The
Product Of Independent Willful Misconduct, Recklessness, And Gross
2 Negligence.
3 60. Defendant has no excuse for failing to take appropriate steps to create profit and
4 revenue growth for the Company, such as pursuing other markets, online sales channels, traditional
5 brick and mortar sales channels, improving its advertisements and customer acquisition, refreshing
6 or expanding its product lines, modernizing and improving its e-commerce storefront and website,
7 hiring talented and experienced employees and professionals, or expanding into international
8 markets.
9 61. Indeed, almost two years ago, Defendant stated under oath in his Bankruptcy Case
10 that the Company may need to expend capital to “significantly expand its sales and marketing
11 channels” (Bk. Dkt. 36 ¶ 10), yet throughout the Relevant Period the Company has maintained
12 approximately $20 million in cash sitting idle, which Defendant never deployed to expand, alter,
13 or modify sales and marketing channels used by the Company or add new product offerings, or
14 take other steps to address the Company’s decline. Despite the Company being flush with enough
15 cash that could have been utilized in multiple ways to address the downward trajectory of the
16 Company, Defendant never brought in outside professionals or consultants to advise on possible
17 strategies to arrest the Company’s decline and even produce substantial improvement in the
18 Company’s performance.11
19 62. Instead, Defendant spent millions of dollars of Company assets on unsubstantiated
20 and questionable payments while Company profits dwindle under his sole control with no rational
21 business purpose, and while he continues to conceal all Company information, particularly that
22 which will confirm his present misconduct. Furthermore, at no time during the Relevant Period
23 has Defendant solicited input from the Unatins on how to address the Company’s collapse or
24 improve its performance such as to the levels it enjoyed under the Unatins’ sole management in
25 2017 or the parties’ joint management in prior years.
26
27 11
To the extent Defendant claims that the State Court injunction barred him from doing so,
28 Defendant never once asked Plaintiff to consent to any capital expenditures to improve the
Company’s performance.
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1 E. Defendant’s Rejection Of Plaintiff’s December 3, 2019 Proposal That The
Company Retain A Financial Advisor To Help The Company Address Its
2 Decline Under Defendant’s Control.
3 63. Separate and apart from the foregoing wrongful acts, Defendant rejected a proposal
4 by Plaintiff to bring in outside professionals to help address the Company’s financial decline under
5 his watch. Plaintiff made this proposal in December 2019, after the trial in the State Court
6 Litigation, based on 2018 year-end results provided to Plaintiff on September 12, 2019. Plaintiff’s
7 proposal to Defendant was made in an effort address the Company’s downturn as it was then
8 known to her, before Defendant revealed the deep extent of the Company’s continuing decline
9 during 2019.
10 64. On December 3, 2019, Plaintiff (through counsel) made an explicit proposal in
11 writing to Defendant’s counsel (the “Financial Advisor Proposal”):
12 As we discussed this evening, given the deadlock between Mrs. Unatin
and Mr. Gavrieli which you have commented on, and in light of the
13 Company’s performance over the past two years (as confirmed by Mr.
Gavrieli’s testimony during Phase II of the trial), Mrs. Unatin believes it
14 is in the best interests of all involved for the Company to engage a financial
advisor to review the Company’s options and situation (and Mrs. Unatin’s
15 and Mr. Gavrieli’s options as owners), including a potential sale of some
or all of the Company to a strategic or financial buyer.
16
Specifically, Mrs. Unatin proposes that the Company engage a financial
17 advisor to be selected and overseen by mutual agreement of Mrs. Unatin
and Mr. Gavrieli for this purpose. Please advise if Mr. Gavrieli agrees to
18 this proposal.
19 65. The Financial Advisor Proposal was a straightforward, neutral proposal which
20 plainly was in the best interests of the Company and its members, particularly given Defendant’s
21 awareness of the Company’s 2019 decline which he had not yet disclosed to Plaintiff. Given the
22 Company’s stunning decline in 2018 and 2019, any prudent manager (or officer or board member)
23 would have sought out expert advice on how to address the Company’s performance issues.
24 66. Nevertheless, despite the Company’s abysmal performance in 2019 – entirely prior
25 to the onset of the COVID-19 pandemic – Defendant rejected the Financial Advisor Proposal.
26 Defendant did so intentionally, recklessly, and with gross negligence in an effort to maximize his
27 personal goal of driving down the price at which he could acquire Plaintiff’s membership interest
28 in the Company.
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1 67. There is no possible excuse for Defendant’s rejection of the Financial Advisor
2 Proposal and refusal to bring in outside advisors to provide guidance to the Company (and its
3 members and managers) on how to address its poor performance, other than his intention to do
4 financial harm to Plaintiff and to suppress the Company’s value in anticipation of making a lowball
5 buyout proposal to Plaintiff.
6 68. Even apart from Defendant’s intentional breach of his fiduciary duty to the
7 Company in rejecting the Financial Advisor Proposal, his rejection of that proposal – which would
8 have provided the Company, its managers, and members with information and expert advice on
9 how to address the Company’s declining fortunes – was grossly negligent and reckless.
10 69. Defendant’s rejection of the Financial Advisor Proposal caused the Company
11 massive damage. Based on the minimal information Defendant has provided about the Company’s
12 performance in calendar years 2020 and 2021, it is evident that Defendant caused further
13 significant decline in the Company’s sales and net income after he rejected the Financial Advisor
14 Proposal at the end of 2019. Defendant has no excuse or legitimate business reason for his
15 rejection of Plaintiff’s explicit, simple proposal to bring in a mutually acceptable, neutral expert
16 to help the Company arrest its decline. At the end of 2019, the Company had more than $17
17 million in cash in its bank account, making the cost of retaining a financial advisor virtually
18 inconsequential and rendering Defendant’s intransigent rejection of the Financial Advisor
19 Proposal totally inexplicable.
20 70. Defendant willfully refused Plaintiff’s proposal that the Company bring in a
21 neutral, outside financial advisor because he had intentionally, recklessly, and in a grossly
22 negligent manner caused the Company’s decline for his own personal reasons. Defendant had no
23 desire to arrest that decline because such a neutral advisor for the Company would have exposed
24 details of Defendant’s malfeasance and mismanagement.
25 F. Defendant’s Wrongful Self-Dealing And Use Of Company Property To
Financially Benefit Himself, Family And Friends.
26
27 71. Instead of maintaining the Company’s success or fulfilling his fiduciary duties, on
28 information and belief, Defendant has intentionally, recklessly, and in a grossly negligent manner
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1 repeatedly put his own interests above the Company, and has improperly taken and used Company
2 resources for his own benefit, in instances that cannot be attributed to any rational business
3 purpose. As noted above, as part of his effort to conceal the nature and extent of his misconduct,
4 Defendant has concealed information about these transactions from Plaintiff, which she has
5 requested multiple times and to which she is entitled on multiple grounds, including (1) as a
6 member and manager of the Company (including an inspection demand pursuant to California
7 Corporations Code Section 17704.10(a)); (2) pursuant to the State Court Judgment and permanent
8 injunction; and (3) through formal or informal discovery during the Bankruptcy Case which
9 Defendant and the Chapter 11 Trustee refused to provide. Plaintiff reserves the right to amend this
10 complaint to add additional information which Defendant has concealed and refused to disclose to
11 Plaintiff despite repeated requests.
12 72. These suspect transactions since July 22, 2019 include (without limitation):
13 a. Stealing from the Company through payments to himself or on his behalf, or to
14 individuals who have aided Defendant’s misconduct, and concealing and otherwise
15 failing to substantiate many others. For example:
16 i. Defendant has charged millions of dollars on credit cards which are
17 issued in his personal name, and has made personal expenses and
18 payments, all from Company funds without consent or authorization.
19 For example, Company funds have been used to pay tens of thousands
20 of dollars, if not more, to various retailers like Amazon, Nordstrom, and
21 Target, personal assistants, public relations services, grocery stores, and
22 other items to benefit Defendant personally at the Company’s expense.
23 Defendant has transferred or caused to be transferred millions of dollars
24 in Company funds to various unknown individuals and entities,
25 including various foreign entities. This includes hundreds of individual
26 foreign transactions and thousands of domestic transactions, including
27 various wires, electronic transfers, and handwritten paper checks, with
28 no oversight or substantiation. Additionally, Defendant has allowed
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1 others to charge millions of dollars on credit cards paid from Company
2 funds. This includes purported Company credit cards he had issued in
3 the name of family members and others for their and/or his benefit, as
4 well as electronic payments and handwritten checks drawn directly from
5 the Company’s operating account. Despite demands, Defendant has
6 failed to substantiate such charges, which include thousands of
7 individual transactions during the Relevant Period on apparent personal
8 expenses at various grocery stores (Bristol Farms, BevMo, Glatt Mart,
9 Pavilions, Ralph’s, Smart and Final, Trader Joe’s, Vons, Whole Foods),
10 personal credit services (Experian), luxury gym memberships
11 (Equinox), high-end clothing retailers (Nordstrom), home goods
12 (Amazon, Bath & Body Works, Bed Bath & Beyond, Home Depot,
13 HomeGoods, Target, Walmart), bakeries (Hansen Cakes, Krispy
14 Kreme, La Brea Bakery, La Provence Patisserie, Magnolia Bakery, Mrs.
15 Field’s, Porto's Bakery, Susie Cakes), drug and convenience stores (7-
16 Eleven, CVS, Rite Aid), restaurant delivery (DoorDash, Instacart,
17 Postmates, Uber Eats), transportation (Rapid Gas, Uber), countless
18 restaurants, and many others. Just a few examples include: (1)
19 handwritten checks by Defendant’s sister for pool service at
20 Defendant’s mother’s home in September 2019 and again in January
21 2021, with over $1,000 of Company funds used in 2021 alone for
22 routine pool maintenance; (2) thousands of dollars for personal
23 healthcare services including to Medicare, Blue Shield and other
24 recipients outside of the Company’s employee healthcare program, with
25 approximately $9,000 of Company funds used is 2021 alone for medical
26 expenses believed to be for Defendant’s mother; (3) tens of thousands
27 of dollars by Defendant to fund personal assistants and other unknown
28 personal expenses through Upwork.com; (4) recurring membership
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1 expenses for Defendant’s mother’s personal Care.com services,
2 personal Google/cloud computing services, and credit card and
3 membership fees; (5) tens of thousands of dollars spent by Defendant’s
4 sister Mrs. Betesh at restaurants and grocery stores often at locations
5 near her home and on weekends or days when the Company’s office
6 was closed, such as purchases during the height of the COVID-19
7 lockdown when employees were all or largely out of the office, or an
8 October 20, 2019 purchase by Mrs. Betesh at a Trader Joe’s in Torrance,
9 far from the Company’s office and on a Sunday when it was closed, a
10 January 1, 2020 purchase by Mrs. Betesh at the Whole Foods near her
11 home on New Year’s day, a July 5, 2020 purchase by Mrs. Betesh at the
12 Bristol Farms near her home on Saturday of Fourth of July weekend,
13 and a December 26, 2020 purchase by Mrs. Betesh at the Ralph’s near
14 her home on Saturday of the Christmas holiday weekend, and many
15 more; (6) thousands of dollars spent by Defendant’s personal assistant,
16 Catherine Pickard, on various seemingly personal items for Defendant
17 and/or herself; (7) thousands of dollars spent by Mrs. Betesh at retailers
18 ranging from specialized cultural shops such as Abi’s Judaica & Gifts
19 and Glatt Kosher Market, to traditional and online retailers such as
20 Target, Costco, Amazon and others; and (8) hundreds of handwritten
21 paper checks written by Mrs. Betesh to various individuals with no
22 oversight or substantiation. Even limited to the little information
23 currently available to Plaintiff, these examples are in no way exhaustive,
24 and are instead included for illustrative purposes regarding Defendant’s
25 massive unsubstantiated and unchecked spending of Company funds,
26 including tens of thousands of transactions for which no substantiation
27 has been offered.
28
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1 ii. During the Relevant Period, Defendant has used Company funds to
2 intentionally and substantially overpay his expected tax liabilities.
3 From 2020 through 2022 alone, these payments have totaled over $3
4 million dollars, despite Defendant’s knowledge, including repeated
5 representations by Defendant to this Court in his Bankruptcy Case, that
6 he expected little to no tax liability for those years. Defendant’s actions
7 to substantially overpay his tax liabilities were undertaken with the
8 intent to benefit himself personally by generating large refunds and
9 offsets, thereby funneling Company cash to himself under the guise of
10 payments to the IRS and FTB.
11 iii. During the Relevant Period, Defendant has used Company funds to
12 benefit and pay for the expenses of family members completely
13 unrelated to the Company. These payments have included thousands of
14 dollars to attorneys in Hawaii for Defendant’s brother, such as a $5,000
15 payment on March 9, 2020; a $2,000 payment on May 12, 2020; a
16 $5,000 payment on October 22, 2020; and a $3,000 payment on May
17 18, 2022.
18 iv. During the Relevant Period, Defendant shifted millions of dollars of
19 Company spending away from the Company’s American Express cards
20 to specific credit card(s) in his name. Defendant did so to generate
21 substantial credit card rewards and cash back benefits worth tens of
22 thousands of dollars that he personally retained at the Company’s
23 expense. In addition to Defendant improperly benefitting himself,
24 Defendant knowingly cost the Company at least tens of thousands of
25 dollars by depriving it of the substantial discounts and benefits it would
26 otherwise receive if the spending had not been shifted away from the
27 Company’s longtime use of its American Express charge cards that
28 generate an immediate 1.5% discount on all spending.
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1 b. Refusing to remove family members from the Company payroll who were not
2 employees and who provided no services to the Company, and instead rewarding
3 them for their loyalty to him through improper benefits at the Company’s expense.
4 For example:
5 i. During the Relevant Period, Defendant has paid his mother hundreds of
6 thousands of dollars directly via the Company’s payroll, even though
7 she does not work for the Company. Confirming the impropriety of
8 these substantial funds to Defendant’s mother, the Company’s forensic
9 accountant is then forced to manually re-allocate the amount of those
10 and related payments to remove them from the Company’s Salaries &
11 Wages Expense, including payroll taxes improperly paid on her behalf,
12 and reclassify all such funds as distributions for the purposes of the
13 Company’s taxes and financial statements. However, Defendant’s
14 funneling of these funds to his mother has still not stopped, nor have
15 any of these funds been repaid or returned to the Company. Defendant’s
16 improper payments to his mother, totaling hundreds of thousands of
17 dollars, is of particular concern because Defendant’s mother claims to
18 be a substantial creditor in his Bankruptcy Case with a claim of
19 $500,000, based on an alleged loan which she and Defendant admitted
20 was not documented, had no stated interest rate or maturity, and which
21 involved an alleged payment of $90,366 – not made by wire or check –
22 but entirely in cash.
23 c. Mismanaging, running off and/or firing valuable Company employees, while
24 retaining, elevating, and improperly compensating others, regardless of
25 performance, based on perceived loyalty to him above the Company. For example,
26 Defendant has used Company funds to give substantial “bonuses” and raises to
27 certain Company employees and individuals who testified falsely on his behalf
28 during the State Court Litigation to reward their support for him. These bonuses
26
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1 and raises dramatically increased the total compensation to these individuals by 75-
2 90% in a four-year period, making them the highest paid employees at the
3 Company. Further, Defendant rewarded these individuals with these massive
4 increases in their compensation, despite the Company’s unprecedented poor
5 financial performance over the same period including the areas of which these
6 employees are ostensibly responsible.
7 73. Despite Defendant’s half-hearted attempt to excuse the Company’s precipitous
8 decline under his watch as the result of an alleged sudden onset of competition (oddly concurrent
9 with him seizing sole control of the Company) or the COVID-19 pandemic (which saw a marked
10 increase in e-commerce sales across the industry as a whole), competition has always existed, and
11 the decline was engineered by Defendant and, as noted in the above chart, was well underway
12 before the onset of the pandemic (e.g., Defendant caused profits to decline by almost 50% by the
13 end of 2019, totaling tens of millions of dollars).
14 G. The Wayfair Issue.
15
74. Prior to 2018, longstanding Supreme Court precedent precluded states from
16
collecting sales tax from sellers with no physical presence in their state. On June 21, 2018, the
17
Court reversed its prior rulings in South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018). The
18
Wayfair decision established an "economic nexus" test, thereby allowing states to impose sales
19
tax obligations on out-of-state businesses based solely on their sales volume or transaction count,
20
even without a physical presence. Post-Wayfair, every state that imposes sales tax requires
21
remote sellers to collect and remit sales tax once their sales exceed a specific economic
22
threshold.
23
75. In 2024, Kfir’s counsel notified Plaintiff’s counsel that the Company was ignoring
24
its obligation to pay sales tax under Wayfair. Kfir’s counsel also indicated Kfir was acting
25
deliberately, with the implication being that Kfir believed that not filing required tax returns and
26
not paying taxes for years would ultimately reduce the Company’s exposure that Kfir was
27
knowingly creating. Based on information and belief, Kfir: (1) understood the sales tax obligation
28
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1 existed, but chose not to collect sales tax from customers; (2) chose not to make the appropriate
2 filings and tax returns; and (3) chose not to remit required sales tax payments. By doing so he
3 created a significant liability for the Company that was easily avoidable. Moreover, it is alleged
4 that Kfir’s sales tax misconduct was deliberate, and part of Kfir’s misguided attempt to avoid what
5 was owed by delaying compliance to a future period of lower sales.
6 76. Kfir’s continuing intentional failure to pay sales tax across the United States is a
7 breach of fiduciary duty. Kfir himself has estimated that the Company’s Wayfair liability could
8 be “in the range of” five to ten million dollars. Due to Kfir’s ongoing misconduct, the Company’s
9 liability may also be increasing .
10 77. In addition, although the Company collects sales taxes in California, it appears
11 Kfir has long caused the Company to report false sales numbers to California taxing authorities
12 and is potentially underpaying California sales taxes. For example, since seizing sole control of
13 the Company, the Company’s sales tax filings show 15 quarters where Kfir reported the
14 Company’s California sales to be incredibly at exactly ten percent of total sales, even when
15 rounded out to a thousandth of a percent. Statistically, this is so improbable that it can be
16 considered impossible.
17 78. The flat ten percent figure Kfir reported for years is not only arbitrary and,
18 therefore, inaccurate, but it may also substantially underreport the Company’s California sales
19 and tax. Before the period of Kfir’s unlawful sole control, the Company had not observed or
20 reported less than 12% of its sales from California, and often significantly higher. And the
21 Company did not experience consecutive quarters with the exact same California sales
22 percentage, let alone an inconceivable 15 consecutive quarters as reported by Kfir. If the
23 Company’s true California sales percentage did in fact remain above 10% as suggested by prior
24 years, and Kfir underreported California sales at 10%, then Kfir has caused the Company to
25 collect more in sales taxes than it remits to the taxing authorities – the cardinal sin of sales tax
26 evasion. This constitutes another breach of fiduciary duty.
27
28
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1 H. The Aspiration Fraud.
2
79. In May 2020, Kfir had the Company enter into an off-brand business partnership
3
that damaged the Company’s brand. Specifically, Kfir entered the Company into a partnership
4
with Aspiration Bank, a company founded by his friend and Plan Backstop lender Joseph
5
Sanberg, whereby the Company’s high-end designer shoe customers were asked to sign up for
6
Aspiration bank accounts in exchange for a Tieks discount. Plaintiff has long alleged this
7
arrangement to be an example of Kfir’s self-interested misconduct and mismanagement. Now,
8
Kfir’s motivation to allow the Company’s reputation to be tarnished with Aspiration has been
9
revealed.
10
80. On January 21, 2025, the Department of Justice filed a sealed “information” as to
11
Ibrahim Ameen Alhusseini, a member of Aspiration’s board of directors. On February 7, 2025,
12
Alhusseini pled guilty to conspiring with Joseph Sanberg to defraud investors in Aspiration. The
13
financial mechanism of Alhusseini’s confessed fraud was very similar to the Sanberg’s Plan
14
Backstop in Kfir’s bankruptcy case. Sanberg solicited approximately $150 million in loans from
15
two investment funds, pledging Aspiration stock as collateral and putting forth a backstop from
16
Alhusseini: if Sanberg defaulted on the loans, Alhusseini agreed to purchase the Aspiration stock
17
that Sanberg had pledged as collateral for a price sufficient to pay the loans.
18
81. What the investors did not know is that Alhusseini’s backstop was worthless. On
19
February 28, 2025, the Department of Justice filed a criminal complaint against Sanberg for his
20
conspiracy with Alhusseini. Three days later, Alhusseini’s case – including his guilty plea – was
21
unsealed, and 30 days after that, Aspiration filed for chapter 11 bankruptcy protection. By
22
August, Aspiration’s assets were sold to one of its secured lenders, the case was converted to
23
chapter 7, and Sanberg had pleaded guilty to the crimes described in Alhusseini guilty plea.
24
82. Sanberg’s guilty plea, however, included significant additional criminal acts
25
unrelated to his conspiracy with Alhusseini, most notably a revenue fraud scheme whereby
26
Aspiration’s revenue was fraudulently inflated to defraud investors out of hundreds of millions
27
using contracts for phony tree planting services.
28
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1 83. The fraud worked as follows: Sanberg and certain “friends and associates”
2 solicited letters of intent (“LOIs”) from various companies and individuals (“LOI Customers”)
3 that purported to obligate the LOI Customers to pay huge sums of money for purported tree
4 planting services. The revenue from these LOIs was then booked by Aspiration and used to
5 solicit investment.
6 84. Plaintiff is informed and believes that Kfir conspired with Sanberg to execute and
7 obtain these fraudulent LOIs. Specifically, Plaintiff is informed and believes that Kfir executed
8 at least one fraudulent LOI himself in the name of the Company and solicited numerous other
9 LOI Customers as well. The terms of the Gavrieli Brands fraudulent LOI that Kfir signed
10 obligated the Company to buy $350,000 worth of “sustainability services” per month from
11 Aspiration, an incredible sum for the Company which has no reason to purchase carbon credits.
12 85. Plaintiff is informed and believes that of the 27 LOI Customers listed on an SEC
13 Complaint against Sanberg (and identified by initials), a substantial number were solicited by
14 Kfir directly or with the assistance of his cousin, Guy Davidyan.
15 86. Plaintiff is informed and believes that Kfir paid at least one of the LOI Customers
16 from Company funds in connection with their participation in the LOI fraud.
17 87. Kfir’s use of Company funds, and his involvement of the Company in his
18 conspiracy with Sanberg was a breach of his fiduciary duty.
19 G.I. Defendant’s Conduct Constitutes A Breach Of Fiduciary Duty To The
Company.
20
21 74.88. By virtue of Defendant’s position as a manager and member of the Company, a
22 California LLC, he owed unqualified fiduciary duties of good faith, care, and loyalty to the
23 Company pursuant to, inter alia, California Corporations Code § 17704.09, as well as common
24 law.
25 75.89. During the Relevant Period, Defendant has exercised sole control over the
26 Company and has precluded Plaintiff from exercising the rights and responsibilities of a manager
27 of the Company (despite the permanent injunction included in the State Court Judgment). As a
28
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1 result, Defendant effectively made himself the sole manager of the Company and he owes the
2 Company the fiduciary duties associated with his sole control of the Company.
3 76.90. Defendant has wholly disregarded these duties under California law. Defendant
4 breached his fiduciary duties as set forth herein, deliberately and in bad faith to suppress Company
5 profits and value in order to advance his personal position with respect to Plaintiff. In doing so,
6 Defendant is significantly harming the Company.
7 77.91. As set forth herein, Defendant’s wrongful conduct is adversely and materially
8 affecting the Company’s performance. Notably, according to Defendant’s own experts, since
9 Defendant took sole control over the Company’s operations he has presided over a 90% decline in
10 valuation equal to hundreds of millions of dollars, in addition to the loss of tens of millions of
11 dollars in profits.
12 78.92. Defendant undertook this conduct to advance his personal interest at the Company’s
13 expense, in hopes of buying out Plaintiff’s ownership share for pennies on the dollar by attempting
14 to lower the Company’s apparent valuation.
15 79.93. As a proximate result of these and other breaches of fiduciary duties by Defendant,
16 the Company has suffered damages in an amount to be determined at trial, but which exceed the
17 jurisdictional requirements of this Court. According to Defendant’s financial experts, these
18 damages to the Company may exceed $300 million.
19 80.94. The wrongful conduct particularized herein was not due to any honest error in
20 judgment or an attempt to act in the best interests of the Company, but rather due to Defendant’s
21 willful misconduct, bad faith, and, at a minimum, his reckless and grossly negligent disregard for
22 his fiduciary duties to the Company, without the reasonable and ordinary care he owed to it.
23 81.95. Defendant’s oppressive and malicious misconduct in breaching his fiduciary duties
24 to the Company also gives rise to exemplary and punitive damages pursuant to California Civil
25 Code § 3294.
26 82.96. Plaintiff requests, derivatively and on behalf of the Company, pursuant to this
27 Court’s equitable powers, the expulsion or dissociation of Defendant as a member of the Company,
28 an order barring Defendant from ever serving again as a manager or officer of the Company, and/or
31
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1 the appointment of a provisional director and/or receiver to manage the Company’s business and
2 affairs pending the resolution of this dispute, as well as all other equitable remedies and rights
3 under California Corporations Code § 17701.01 et seq.
4 SECOND CLAIM FOR RELIEF
(Conversion)
5 (By Dikla Gavrieli Unatin Derivatively Against Defendant)
6 83.97. This derivative claim for conversion is based on and limited to acts and omissions
7 by Defendant which either occurred on or after July 22, 2019, and/or were discovered by Plaintiff
8 on or after July 22, 2019.
9 84.98. Plaintiff reasserts and re-alleges the allegations of paragraphs 13 through 8287
10 against Defendant as if fully set forth herein.
11 85.99. During the Relevant Period, the Company maintained dominion and control (and
12 had the right of control) over its funds.
13 86.100.During the Relevant Period, Defendant has converted substantial funds from the
14 Company through various means including directly to himself and other parties for his benefit,
15 without consent or authorization, and has done so intentionally and knowingly.
16 87.101.On information and belief, as set forth in paragraphs 13 through 8287, these acts of
17 conversion include, but are not limited to: financially benefitting himself directly, and others aiding
18 his misconduct, including family members; making unauthorized transfers and payments; and
19 paying millions of dollars to credit cards in his name with Company funds with limited or no
20 attempt to substantiate such expenditures.
21 88.102.Defendant’s wrongful conversion of the Company’s funds and assets was an
22 intentional interference with the Company’s dominion and control over such property.
23 89.103.As a proximate result of Defendant’s wrongful conversion of the Company’s
24 interests and property, the Company has suffered damages in an amount to be proven at trial, but
25 which exceed the jurisdictional requirements of this Court.
26 90.104.Between the time of Defendant’s conversion of the Company’s interests and
27 property for his own use and the filing of this claim, Plaintiff, derivatively on behalf of the
28
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1 Company, has expended substantial time and money in pursuit of the wrongfully converted
2 property (including in attorneys’ fees and related costs spent filing this suit and making the
3 multiple demands described herein on Defendant) and has suffered further damages in an amount
4 to be proven at trial.
5 91.105.Defendant’s oppressive and malicious misconduct in converting the Company’s
6 funds also gives rise to exemplary and punitive damages pursuant to California Civil Code § 3294.
7 92.106.Plaintiff requests, derivatively and on behalf of the Company, pursuant to this
8 Court’s equitable powers, the expulsion or dissociation of Defendant as a member of the Company,
9 an order barring Defendant from ever serving again as a manager or officer of the Company, and/or
10 the appointment of a provisional director and/or receiver to manage the Company’s business and
11 affairs pending the resolution of this dispute, as well as all other equitable remedies and rights
12 under California Corporations Code § 17701.01 et seq.
13 THIRD CLAIM FOR RELIEF
(Corporate Waste)
14 (By Dikla Gavrieli Unatin Derivatively Against Defendant)
15 93.107.This derivative claim for corporate waste is based on and limited to acts and
16 omissions by Defendant which either occurred on or after July 22, 2019, and/or were discovered
17 by Plaintiff on or after July 22, 2019.
18 94.108.Plaintiff reasserts and re-alleges the allegations of paragraphs 13 through 8287
19 against Defendant as if fully set forth herein.
20 95.109.On information and belief, as set forth in paragraphs 13 through 8287, Defendant
21 made numerous improper transfers, gifts, and other transactions using Company funds for his own
22 personal benefit or for the personal benefit of friends or family members, and these transactions
23 served no rational business purpose.
24 96.110.The exchanges laid out above were so one-sided that no business person of
25 ordinary, sound judgment could conclude that the Company received adequate consideration.
26 Thus, Defendant has irrationally squandered and given away Company assets.
27 97.111.As a result of Defendant’s misconduct as set forth above, since Defendant assumed
28 sole control over the Company’s operations five years ago, Defendant has presided over a 90%
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1 decline in valuation, and an over 80% decline in the Company’s profits—if Defendant’s own
2 filings before this Court are to be believed.
3 98.112.As a proximate result of Defendant’s misconduct, the Company has suffered
4 damages in an amount to be determined at trial, but which exceed the jurisdictional requirements
5 of this Court. According to Defendant’s financial experts, these damages to the Company may
6 exceed $300 million.
7 99.113.Based on Defendant’s intentional, reckless, and grossly negligent misconduct in
8 wasting corporate assets, the Company is entitled to exemplary and punitive damages pursuant to
9 California Civil Code § 3294.
10 100.114. Plaintiff requests, derivatively and on behalf of the Company, pursuant to
11 this Court’s equitable powers, the expulsion or dissociation of Defendant as a member of the
12 Company, an order barring Defendant from ever serving again as a manager or officer of the
13 Company, and/or the appointment of a provisional director and/or receiver to manage the
14 Company’s business and affairs pending the resolution of this dispute, as well as all other equitable
15 remedies and rights under California Corporations Code § 17701.01 et seq.
16 FOURTH CLAIM FOR RELIEF
(Violation Of Cal. Pen. Code § 496)
17 (By Dikla Gavrieli Unatin Derivatively Against Defendant)
18 101.115. This derivative claim for violation of California Penal Code § 496 is based
19 on and limited to acts and omissions by Defendant which either occurred on or after July 22, 2019,
20 and/or were discovered by Plaintiff on or after July 22, 2019.
21 102.116. Plaintiff reasserts and re-alleges the allegations of paragraphs 13 through
22 8287 against Defendant as if fully set forth herein.
23 103.117. On information and belief, Defendant stole, concealed, and withheld
24 millions of dollars of Company’s funds and assets since July 22, 2019 as set forth in paragraphs
25 13 through 8287.
26 104.118. At all times mentioned herein, Defendant knew that using the Company’s
27 funds and assets in this manner was unauthorized and constituted theft of the Company’s property.
28
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1 105.119. As a proximate result of Defendant’s receipt of stolen property as set forth
2 above, the Company suffered damages in an amount to be proven at trial, but which exceed the
3 jurisdictional requirements of this Court. The Company is thus entitled to three times the amount
4 of actual damages, plus costs and attorneys’ fees as provided under California Penal Code Section
5 496(c).
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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1 PRAYER FOR RELIEF12
2 WHEREFORE, Plaintiff prays for judgment as follows:
3 1. For an award of compensatory damages against Defendant in favor of the
4 Company, in an amount to be determined at trial, including interest;
5 2. For an award of punitive damages against Defendant in favor of the Company;
6 3. For an award of actual damages, treble damages, costs and attorneys’ fees in favor
7 of the Company as provided under California Penal Code Section 496(c);
8 4. For an Order that Defendant make restitution to the Company for any unjust
9 enrichment, in an amount to be determined at trial;
10 5. For an accounting to determine the full extent of Defendant’s unlawful acts toward
11 the Company and the sums owed to the Company by Defendant;
12 6. For an Order expelling Defendant as a member, manager and/or officer of the
13 Company and barring Defendant from ever serving again as a manager or officer of the Company
14 pursuant to California Corporations Code § 17706.02(e);
15 7. For the appointment of a provisional director and/or receiver to manage the
16 Company’s business and affairs pursuant to California Code of Civil Procedure § 564;
17 8. For costs of suit; and
18 9. For such other and further relief as the Court deems just and proper.
19
20
21
12
22 In the original Complaint and First Amended Complaint, Plaintiff included claims to establish
that the derivative claims asserted in this pleading (and claims based on the money judgment issued
23 in the State Court Litigation) are nondischargeable pursuant to 11 U.S.C. §§ 523(a)(2), 523(a)(4),
and 523(a)(6). Under the terms of the Plan confirmed by the Court (Dkt. 829), Defendant does
24 not receive a discharge until the Final Distribution Date (as defined in Dkt. 829 at 13 as “date that
the final payment required pursuant to the terms of this Plan is made.”). Multiple provisions of
25 the Plan establish that to the extent the claims set forth in this adversary proceeding are allowed,
they are subject to payment and no discharge will be sought until such allowed claims are paid in
26 full.
27 Accordingly, Plaintiff omits as moot a claim for nondischargeability, but reserves the right to assert
such a claim in the (unlikely) event that a discharge is sought for Debtor on the claims set forth in
28 this adversary proceeding before there is payment in full or a final, non-appealable judgment in
Defendant’s favor on all claims.
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1 Dated: March 30, 2026 LATHAM & WATKINS LLP
Daniel Scott Schecter
2 Nima H. Mohebbi
Tara A. McCortney
3 Alexandra N. Ibrahim
4
By /s/ Daniel Scott Schecter
5 Daniel Scott Schecter
6 Attorneys for Plaintiff Dikla Gavrieli a/k/a Dikla Gavrieli Unatin
7 DATED: April 20, 2026 LESNICK PRINCE PAPPAS & ALVERSON LLP
8
9 By:
/s/
10
11
12 Christopher E. Prince
Counsel for Plaintiff Dikla Gavrieli a/k/a
13 Dikla Gavrieli Unatin, individually and
derivatively on behalf of Gavrieli Brands,
14 LLC
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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Exhibit B
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Details Posting Date Description Amount Type
DEBIT 5/5/2025 COAL‐05Apr25‐508 $ (233,670.83) MISC_DEBIT
DEBIT 7/14/2025 COAL‐13Jun25‐464 $ (3,289.87) MISC_DEBIT
ORIG CO NAME:WI DEPT REVENUE ORIG
ID:X000015200 DESC DATE:250717 CO ENTRY
DESCR:TAXPAYMNT SEC:CCD
TRACE#:042000012622606 EED:250718 IND
ID:784890912 IND NAME:GAVRIELI
DEBIT 7/18/2025 BRANDS LLC TRN: 1982622606TC $ (1,483.42) ACH_DEBIT
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Exhibit C
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Exhibit D
Case
Case2:25-cr-00042-SVW
2:21-ap-01034-BB Doc
Document
377 Filed
26 Filed
04/20/26
02/10/25
EnteredPage
04/20/26
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1 JOSEPH T. MCNALLY
Acting United States Attorney
2 LINDSEY GREER DOTSON
Assistant United States Attorney
3 Chief, Criminal Division
BRETT A. SAGEL (Cal. Bar No. 243918)
4 Assistant United States Attorney 2/10/2025
Chief, Corporate and Securities Fraud Strike Force
asi
5 JENNA G. WILLIAMS (Cal. Bar No. 307975)
NISHA CHANDRAN (Cal. Bar No. 325345)
6 Assistant United States Attorney
Corporate and Securities Fraud Strike Force
7 1100 United States Courthouse
312 North Spring Street
8 Los Angeles, California 90012
Telephone: (213) 894-2429
9 Facsimile: (213) 894-0141
Email: Nisha.Chandran@usdoj.gov
10
GLENN S. LEON
11 Chief, Fraud Section
Criminal Division, U.S. Department of Justice
12 THEODORE M. KNELLER (D.C. Bar No. 978680)
ADAM L.D. STEMPEL (D.C. Bar No. 1615015)
13 Trial Attorneys, Fraud Section
Criminal Division, U.S. Department of Justice
14 1400 New York Avenue, NW
Washington, DC 20530
15 Telephone: (202) 514-5799
Facsimile: (202) 514-3708
16 Email: Theodore.Kneller@usdoj.gov
17 Attorneys for Plaintiff
UNITED STATES OF AMERICA
18
19 UNITED STATES DISTRICT COURT
20 FOR THE CENTRAL DISTRICT OF CALIFORNIA
21 UNITED STATES OF AMERICA, No. CR 25-00042-SVW
22 Plaintiff, PLEA AGREEMENT FOR DEFENDANT
IBRAHIM AMEEN ALHUSSEINI
23 v.
24 IBRAHIM AMEEN ALHUSSEINI,
25 Defendant.
26
27 1. This constitutes the plea agreement between IBRAHIM AMEEN
28 ALHUSSEINI (“defendant”) and the United States Attorney’s Office for
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1 the Central District of California (the “USAO”) and the Fraud Section
2 of the U.S. Department of Justice (“DOJ” and together with the USAO,
3 the “United States”) in the above-captioned case. This agreement is
4 limited to the USAO and DOJ and cannot bind any other federal, state,
5 local, or foreign prosecuting, enforcement, administrative, or
6 regulatory authorities.
7 DEFENDANT’S OBLIGATIONS
8 2. Defendant agrees to:
9 a. Give up the right to indictment by a grand jury and,
10 at the earliest opportunity requested by the United States and
11 provided by the Court, appear and plead guilty to the single-count
12 superseding information in United States v. Ibrahim Ameen AlHusseini,
13 CR No. 25-00052-SVW, in the form attached to this agreement as
14 Exhibit A or a substantially similar form, which charges defendant
15 with wire fraud, in violation of 18 U.S.C. § 1343.
16 b. Not contest facts agreed to in this agreement.
17 c. Abide by all agreements regarding sentencing contained
18 in this agreement.
19 d. Appear for all court appearances, surrender as ordered
20 for service of sentence, obey all conditions of any bond, and obey
21 any other ongoing court order in this matter.
22 e. Not commit any crime; however, offenses that would be
23 excluded for sentencing purposes under United States Sentencing
24 Guidelines (“U.S.S.G.” or “Sentencing Guidelines”) § 4A1.2(c) are not
25 within the scope of this agreement.
26 f. Be truthful at all times with the United States
27 Probation and Pretrial Services Office and the Court.
28
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1 g. Pay the applicable special assessment at or before the
2 time of sentencing unless defendant has demonstrated a lack of
3 ability to pay such assessments.
4 h. Defendant agrees that any and all criminal debt
5 ordered by the Court will be due in full and immediately. The
6 government is not precluded from pursuing, in excess of any payment
7 schedule set by the Court, any and all available remedies by which to
8 satisfy defendant’s payment of the full financial obligation,
9 including referral to the Treasury Offset Program.
10 i. Complete the Financial Disclosure Statement on a form
11 provided by the USAO and, within 30 days of defendant’s entry of a
12 guilty plea, deliver the signed and dated statement, along with all
13 of the documents requested therein, to the USAO by either email at
14 usacac.FinLit@usdoj.gov (preferred) or mail to the USAO Financial
15 Litigation Section at 300 North Los Angeles Street, Suite 7516, Los
16 Angeles, CA 90012. Defendant agrees that defendant’s ability to pay
17 criminal debt shall be assessed based on the completed Financial
18 Disclosure Statement and all required supporting documents, as well
19 as other relevant information relating to ability to pay.
20 j. Authorize the USAO to obtain a credit report upon
21 returning a signed copy of this plea agreement.
22 k. Consent to the USAO inspecting and copying all of
23 defendant’s financial documents and financial information held by the
24 United States Probation and Pretrial Services Office.
25 3. Defendant further agrees to cooperate fully with the United
26 States, the Federal Bureau of Investigation and United States Postal
27 Inspection Service, and, as directed by the United States, any other
28 federal, state, local, or foreign prosecuting, enforcement,
3
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1 administrative, or regulatory authority. This cooperation requires
2 defendant to:
3 a. Respond truthfully and completely to all questions
4 that may be put to defendant, whether in interviews, before a grand
5 jury, or at any trial or other court proceeding.
6 b. Attend all meetings, grand jury sessions, trials or
7 other proceedings at which defendant’s presence is requested by the
8 United States or compelled by subpoena or court order.
9 c. Produce voluntarily all documents, records, or other
10 tangible evidence relating to matters about which the United States,
11 or its designee, inquires.
12 d. If requested to do so by the United States, act in an
13 undercover capacity to the best of defendant’s ability in connection
14 with criminal investigations by federal, state, local, or foreign law
15 enforcement authorities, in accordance with the express instructions
16 of those law enforcement authorities. Defendant agrees not to act in
17 an undercover capacity, tape record any conversations, or gather any
18 evidence except after a request by the United States and in
19 accordance with express instructions of federal, state, local, or
20 foreign law enforcement authorities.
21 4. For purposes of this agreement: (1) “Cooperation
22 Information” shall mean any statements made, or documents, records,
23 tangible evidence, or other information provided, by defendant
24 pursuant to defendant’s cooperation under this agreement or pursuant
25 to the letter agreement previously entered into by the parties dated
26 December 17, 2024 (the “Letter Agreement”); and (2) “Plea
27 Information” shall mean any statements made by defendant, under oath,
28
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1 at the guilty plea hearing and the agreed to factual basis statement
2 in this agreement.
3 THE UNITED STATES’ OBLIGATIONS
4 5. The United States agrees to:
5 a. Not contest facts agreed to in this agreement.
6 b. Abide by all agreements regarding sentencing contained
7 in this agreement.
8 c. At the time of sentencing, move to dismiss the
9 underlying information as against defendant. Defendant agrees,
10 however, that at the time of sentencing the Court may consider any
11 dismissed charges in determining the applicable Sentencing Guidelines
12 range, the propriety and extent of any departure from that range, and
13 the sentence to be imposed.
14 d. At the time of sentencing, provided that defendant
15 demonstrates an acceptance of responsibility for the offense up to
16 and including the time of sentencing, recommend a two-level reduction
17 in the applicable Sentencing Guidelines offense level, pursuant to
18 U.S.S.G. § 3E1.1, and recommend and, if necessary, move for an
19 additional one-level reduction if available under that section.
20 6. The United States further agrees:
21 a. Not to offer as evidence in its case-in-chief in the
22 above-captioned case or any other criminal prosecution that may be
23 brought against defendant by the United States, or in connection with
24 any sentencing proceeding in any criminal case that may be brought
25 against defendant by the United States, any Cooperation Information.
26 Defendant agrees, however, that the United States may use both
27 Cooperation Information and Plea Information: (1) to obtain and
28 pursue leads to other evidence, which evidence may be used for any
5
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1 purpose, including any criminal prosecution of defendant; (2) to
2 cross-examine defendant should defendant testify, or to rebut any
3 evidence offered, or argument or representation made, by defendant,
4 defendant’s counsel, or a witness called by defendant in any trial,
5 sentencing hearing, or other court proceeding; and (3) in any
6 criminal prosecution of defendant for false statement, obstruction of
7 justice, or perjury.
8 b. Not to use Cooperation Information against defendant
9 at sentencing for the purpose of determining the applicable guideline
10 range, including the appropriateness of an upward departure, or the
11 sentence to be imposed, and to recommend to the Court that
12 Cooperation Information not be used in determining the applicable
13 guideline range or the sentence to be imposed. Defendant
14 understands, however, that Cooperation Information will be disclosed
15 to the United States Probation and Pretrial Services Office and the
16 Court, and that the Court may use Cooperation Information for the
17 purposes set forth in U.S.S.G § 1B1.8(b) and for determining the
18 sentence to be imposed.
19 c. In connection with defendant’s sentencing, to bring to
20 the Court’s attention the nature and extent of defendant’s
21 cooperation.
22 d. If the United States determines, in its exclusive
23 judgment, that defendant has both complied with defendant’s
24 obligations under paragraphs 2 and 3 above and provided substantial
25 assistance to law enforcement in the prosecution or investigation of
26 another (“substantial assistance”), to move the Court pursuant to
27 U.S.S.G. § 5K1.1 to fix an offense level and corresponding guideline
28
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1 range below that otherwise dictated by the sentencing guidelines, and
2 to recommend a term of imprisonment within this reduced range.
3 DEFENDANT’S UNDERSTANDINGS REGARDING COOPERATION
4 7. Defendant understands the following:
5 a. Any knowingly false or misleading statement by
6 defendant will subject defendant to prosecution for false statement,
7 obstruction of justice, and perjury and will constitute a breach by
8 defendant of this agreement.
9 b. Nothing in this agreement requires the United States
10 or any other prosecuting, enforcement, administrative, or regulatory
11 authority to accept any cooperation or assistance that defendant may
12 offer, or to use it in any particular way.
13 c. Defendant cannot withdraw defendant’s guilty plea if
14 the United States does not make a motion pursuant to U.S.S.G. § 5K1.1
15 for a reduced guideline range or if the United States makes such a
16 motion and the Court does not grant it or if the Court grants such a
17 United States motion but elects to sentence above the reduced range.
18 d. At this time the United States makes no agreement or
19 representation as to whether any cooperation that defendant has
20 provided or intends to provide constitutes or will constitute
21 substantial assistance. The decision whether defendant has provided
22 substantial assistance will rest solely within the exclusive judgment
23 of the United States.
24 e. The United States’ determination whether defendant has
25 provided substantial assistance will not depend in any way on whether
26 the government prevails at any trial or court hearing in which
27 defendant testifies or in which the government otherwise presents
28 information resulting from defendant’s cooperation.
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1 NATURE OF THE OFFENSE
2 8. Defendant understands that for defendant to be guilty of
3 the crime charged in the first superseding information, that is, wire
4 fraud, in violation of Title 18, United States Code, Section 1343,
5 the following must be true: (1) defendant knowingly participated in a
6 scheme or plan to defraud, or a scheme or plan for obtaining money or
7 property by means of false or fraudulent pretenses, representations,
8 or promises; (2) statements made as part of the scheme were material,
9 that is, they had a natural tendency to influence, or were capable of
10 influencing, a person to part with money or property; (3) defendant
11 acted with the intent to defraud, that is, the intent to deceive and
12 cheat; and (4) defendant used, or caused to be used, an interstate
13 wire communication to carry out or attempt to carry out an essential
14 part of the scheme.
15 PENALTIES AND RESTITUTION
16 9. Defendant understands that the statutory maximum sentence
17 that the Court can impose for a violation of Title 18, United States
18 Code, Section 1343, is: 20 years imprisonment; a 3-year period of
19 supervised release; a fine of $250,000 or twice the gross gain or
20 gross loss resulting from the offense, whichever is greatest; and a
21 mandatory special assessment of $100.
22 10. Defendant understands that defendant will be required to
23 pay full restitution to the victim(s) of the offense to which
24 defendant is pleading guilty. Defendant agrees that, in return for
25 the United States’ compliance with its obligations under this
26 agreement, the Court may order restitution to persons other than the
27 victim(s) of the offense to which defendant is pleading guilty and in
28 amounts greater than those alleged in the count to which defendant is
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1 pleading guilty. In particular, defendant agrees that the Court may
2 order restitution to any victim of any relevant conduct, as defined
3 in U.S.S.G. § 1B1.3, in connection with the offense to which
4 defendant is pleading guilty for any losses suffered by that victim
5 as a result. The parties currently believe that the applicable
6 amount of restitution is approximately $145 million, and the
7 defendant agrees that the Court may order restitution in the amount
8 of $145 million based on this agreement, but recognize and agree that
9 this amount could change based on facts that come to the attention of
10 the parties prior to sentencing.
11 11. Defendant understands that supervised release is a period
12 of time following imprisonment during which defendant will be subject
13 to various restrictions and requirements. Defendant understands that
14 if defendant violates one or more of the conditions of any supervised
15 release imposed, defendant may be returned to prison for all or part
16 of the term of supervised release authorized by statute for the
17 offense that resulted in the term of supervised release, which could
18 result in defendant serving a total term of imprisonment greater than
19 the statutory maximum stated above.
20 12. Defendant understands that, by pleading guilty, defendant
21 may be giving up valuable government benefits and valuable civic
22 rights, such as the right to vote, the right to possess a firearm,
23 the right to hold office, and the right to serve on a jury.
24 Defendant understands that he is pleading guilty to a felony and that
25 it is a federal crime for a convicted felon to possess a firearm or
26 ammunition. Defendant understands that the conviction in this case
27 may also subject defendant to various other collateral consequences,
28 including but not limited to revocation of probation, parole, or
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1 supervised release in another case and suspension or revocation of a
2 professional license. Defendant understands that unanticipated
3 collateral consequences will not serve as grounds to withdraw
4 defendant’s guilty plea.
5 13. Defendant and his counsel have discussed the fact that, and
6 defendant understands that, if defendant is not a United States
7 citizen, the conviction in this case makes it practically inevitable
8 and a virtual certainty that defendant will be removed or deported
9 from the United States. Defendant may also be denied United States
10 citizenship and admission to the United States in the future.
11 Defendant understands that while there may be arguments that
12 defendant can raise in immigration proceedings to avoid or delay
13 removal, removal is presumptively mandatory and a virtual certainty
14 in this case. Defendant further understands that removal and
15 immigration consequences are the subject of a separate proceeding and
16 that no one, including his attorney or the Court, can predict to an
17 absolute certainty the effect of his conviction on his immigration
18 status. Defendant nevertheless affirms that he wants to plead guilty
19 regardless of any immigration consequences that his plea may entail,
20 even if the consequence is automatic removal from the United States.
21 FACTUAL BASIS
22 14. Defendant admits that defendant is, in fact, guilty of the
23 offense to which defendant is agreeing to plead guilty. Defendant
24 and the United States agree to the statement of facts provided below
25 and agree that this statement of facts is sufficient to support a
26 plea of guilty to the charge described in this agreement and to
27 establish the Sentencing Guidelines factors set forth in paragraph 15
28 below but is not meant to be a complete recitation of all facts
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1 relevant to the underlying criminal conduct or all facts known to
2 either party that relate to that conduct.
3 Beginning no later than in or about March 2020, and continuing
4 through in or about February 2023, in Los Angeles County, within the
5 Central District of California, and elsewhere, defendant along with
6 Joseph Sanberg (“Sanberg”), knowingly and with intent to defraud,
7 participated in and executed a scheme to defraud INVESTOR FUND A and
8 INVESTOR FUND B, as to material matters, and to obtain money and
9 property from these victims by means of material false and fraudulent
10 pretenses, representations, and promises, including untrue statements
11 and omissions concerning defendant’s financial assets and net worth.
12 Beginning no later than January 2020, Sanberg, who was an
13 associate of defendant, began negotiating the terms of a $55 million
14 loan from INVESTOR FUND A to Sanberg. Under the terms of the loan,
15 Sanberg pledged approximately 10.3 million shares of stock in
16 Aspiration Partners as collateral. On or around January 26, 2020,
17 Sanberg introduced defendant to INVESTMENT ADVISER 1 to be the seller
18 of a put option to INVESTOR FUND A. Sanberg also guided defendant in
19 his negotiations with INVESTMENT ADVISER 1 regarding the March 2020
20 put option. As a condition of making the loan to Sanberg, INVESTMENT
21 ADVISER 1 negotiated for INVESTOR FUND A to purchase a put option
22 from defendant and two corporate entities that defendant controlled
23 (the “March 2020 put option”). The March 2020 put option
24 contractually required defendant to pay $55 million to INVESTOR FUND
25 A if Sanberg defaulted on the $55 million loan and acted as a form of
26 a financial guarantee on the $55 million loan from INVESTOR FUND A to
27 Sanberg by mitigating the risk to INVESTOR FUND A if Sanberg
28 defaulted on the loan. Specifically, in the event of Sanberg’s
11
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1 default on the loan, defendant was obligated to purchase the
2 approximately 10.3 million shares of Aspiration Partners stock that
3 Sanberg pledged against the $55 million loan as collateral.
4 Defendant knew that INVESTOR FUND A’s $55 million loan to Sanberg was
5 contingent on INVESTOR FUND A entering into the March 2020 put option
6 agreement with defendant.
7 The terms of the March 2020 put option also required that
8 defendant and the two co-signing entities he controlled maintain a
9 collective total net worth of $137,500,000 and a liquid net worth of
10 $68,750,000 to have sufficient assets to pay $55 million to INVESTOR
11 FUND A if Sanberg defaulted. At all relevant times, defendant did
12 not have, and Sanberg knew that defendant did not have, a liquid net
13 worth or sufficient assets to satisfy those requirements. At
14 Sanberg’s direction, defendant made untrue statements of material
15 fact to INVESTOR FUND A about defendant’s personal wealth, and
16 defendant provided INVESTOR FUND A with falsified account statements
17 for defendant’s brokerage accounts at BROKER 1 and defendant’s
18 personal bank accounts. Defendant and Sanberg knew that the
19 falsified statements inflated the value of the assets in defendant’s
20 accounts by tens of millions of dollars.
21 For example, on or about March 10, 2020, defendant sent a
22 document by email to INVESTMENT ADVISER 1 that defendant falsely
23 claimed was his true and accurate securities brokerage account
24 statement with BROKER 1 as of December 31, 2019. Defendant’s
25 falsified account statement stated that defendant held more than $86
26 million in securities in accounts at BROKER 1. In reality,
27 defendant’s BROKER 1 accounts held a total of approximately
28 $4,390.10. Defendant also sent a document that he falsely claimed
12
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1 was a true and accurate statement of his personal bank accounts as of
2 February 20, 2020. Defendant’s falsified bank account statement
3 stated that defendant held more than $25 million in those bank
4 accounts. In reality, as of February 20, 2020, defendant’s bank
5 accounts held a total of approximately $43,267.74.
6 On or about March 16, 2020, INVESTOR FUND A purchased the March
7 2020 put option from defendant. Under the terms of the March 2020
8 put option, defendant received approximately $6 million of the $55
9 million loan at the time of the loan’s execution as consideration
10 (also known as a “premium payment”) for guaranteeing Sanberg’s
11 repayment of the loan.
12 On or about November 4, 2021, Sanberg refinanced the loan
13 against his 10.3 million shares of Aspiration Partners stock. Under
14 the refinanced loan, INVESTOR FUND B loaned $145 million to Sanberg,
15 and Sanberg pledged approximately 10.3 million shares of Aspiration
16 Partners stock as collateral. INVESTMENT ADVISER 1 negotiated for
17 INVESTOR FUND B to purchase a new put option from defendant, in which
18 defendant was obligated to pay $65 million to INVESTOR FUND B if
19 Sanberg defaulted on the $145 million loan (the “November 2021 put
20 option”). Defendant knew that INVESTOR FUND B’s $145 million loan to
21 Sanberg was contingent on INVESTOR FUND B entering into the November
22 2021 put option agreement with defendant.
23 On or about November 3, 2021, defendant caused his agent in
24 California, to send an interstate wire communication, specifically an
25 email, to INVESTMENT ADVISER 1, located in New York, and others, that
26 contained documents that defendant falsely claimed were a true and
27 accurate account statement as of September 30, 2021, of defendant’s
28 investment portfolio with BROKER 1, and a true and accurate
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1 statement, as of September 22, 2021, of defendant’s personal bank
2 accounts. The falsified BROKER 1 account statement stated that
3 defendant held more than $199 million in securities in accounts at
4 BROKER 1. In reality, defendant’s BROKER 1 account statements show
5 that as of September 30, 2021, defendant’s BROKER 1 accounts held a
6 total of approximately $2,693.63. The falsified personal bank
7 account statements stated that, as of September 22, 2021, defendant
8 held more than $21 million in his accounts. In reality, defendant’s
9 personal bank account statements show that as of September 22, 2021,
10 his personal bank accounts held a total of approximately $11,556.89.
11 The next day, INVESTOR FUND B purchased the November 2021 put option
12 from defendant. The terms of the November 2021 put option similarly
13 required that defendant have sufficient assets to pay $65 million to
14 INVESTOR FUND B in the event of Sanberg’s default. Under the terms
15 of the November 2021 put option, defendant received approximately
16 $6.3 million at the time of execution as a premium payment in
17 consideration for guaranteeing Sanberg’s repayment of the loan.
18 To maintain and conceal defendant’s deception of INVESTMENT
19 ADVISER 1, INVESTOR FUND A, and INVESTOR FUND B, defendant submitted
20 or caused to be submitted falsified brokerage and personal bank
21 account statements to INVESTMENT ADVISER 1 on at least 24 occasions
22 between in or around April 2020 and in or around February 2023.
23 Defendant caused the falsified statements to be altered at Sanberg’s
24 direction and with Sanberg’s assistance and then submitted or caused
25 his agent to submit the statements to INVESTMENT ADVISER 1. Nearly
26 all of these transmissions were accompanied by a certificate of
27 compliance, in which defendant affirmed by electronic signature that
28 the brokerage and personal bank account statements, among other
14
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1 statements, were “in each case true, correct and complete copies.”
2 The falsified brokerage statements represented that defendant’s
3 brokerage account held highly liquid and publicly tradeable
4 securities that were, depending on the month and year, worth between
5 approximately $80 million to $200 million. In fact, defendant’s
6 brokerage account during this period held between approximately
7 $2,000 and $15,000. The falsified personal bank statements
8 represented that defendant’s bank accounts were worth between
9 approximately $21 million to $25 million. In fact, defendant’s
10 personal bank accounts during this period held between approximately
11 $11,000 and $500,000.
12 On or about November 2022, Sanberg defaulted on the loan to
13 INVESTOR FUND B, and to secure a forbearance, defendant signed a
14 December 5, 2022, amendment with INVESTOR FUND B that raised the put
15 option price to $75 million. On or about June 27, 2023, after
16 Sanberg defaulted on the $145 million loan, INVESTOR FUND B exercised
17 the November 2021 put option that contractually required defendant to
18 pay INVESTOR FUND B $75 million in exchange for approximately 10.3
19 million shares of Aspiration Partners stock. Defendant admits that
20 INVESTOR FUND B had losses of approximately $145 million, and
21 defendant personally received approximately $12.3 million in put
22 premium payments.
23 SENTENCING FACTORS
24 15. Defendant understands that in determining defendant’s
25 sentence the Court is required to calculate the applicable Sentencing
26 Guidelines range and to consider that range, possible departures
27 under the Sentencing Guidelines, and the other sentencing factors set
28 forth in 18 U.S.C. § 3553(a). Defendant understands that the
15
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1 Sentencing Guidelines are advisory only, that defendant cannot have
2 any expectation of receiving a sentence within the calculated
3 Sentencing Guidelines range, and that after considering the
4 Sentencing Guidelines and the other § 3553(a) factors, the Court will
5 be free to exercise its discretion to impose any sentence it finds
6 appropriate up to the maximum set by statute for the crime of
7 conviction.
8 16. Defendant and the United States agree to the following
9 applicable Sentencing Guidelines factors:
10 Base Offense Level: 7 [U.S.S.G. § 2B1.1(a)(1)]
11 Loss more than $65,000,000 +24 [U.S.S.G. § 2B1.1(b)(1)(M)]
12 At the time of sentencing, the government will recommend that the
13 Court apply a four-level downward departure/variance pursuant to 18
14 U.S.C. § 3553(a) because the Sentencing Guidelines calculation of
15 loss in the amount of $145 million overstates the seriousness of the
16 offense as it relates to defendant ALHUSSEINI. Defendant and the
17 United States reserve the right to argue that additional specific
18 offense characteristics, adjustments, and departures under the
19 Sentencing Guidelines are appropriate.
20 17. Defendant understands that there is no agreement as to
21 defendant’s criminal history or criminal history category.
22 18. Defendant and the United States reserve the right to argue
23 for a sentence outside the sentencing range established by the
24 Sentencing Guidelines based on the factors set forth in 18 U.S.C.
25 § 3553(a)(1), (a)(2), (a)(3), (a)(6), and (a)(7).
26 WAIVER OF CONSTITUTIONAL RIGHTS
27 19. Defendant understands that by pleading guilty, defendant
28 gives up the following rights:
16
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1 a. The right to persist in a plea of not guilty.
2 b. The right to a speedy and public trial by jury.
3 c. The right to be represented by counsel – and if
4 necessary have the Court appoint counsel - at trial. Defendant
5 understands, however, that, defendant retains the right to be
6 represented by counsel – and if necessary have the Court appoint
7 counsel – at every other stage of the proceeding.
8 d. The right to be presumed innocent and to have the
9 burden of proof placed on the government to prove defendant guilty
10 beyond a reasonable doubt.
11 e. The right to confront and cross-examine witnesses
12 against defendant.
13 f. The right to testify and to present evidence in
14 opposition to the charges, including the right to compel the
15 attendance of witnesses to testify.
16 g. The right not to be compelled to testify, and, if
17 defendant chose not to testify or present evidence, to have that
18 choice not be used against defendant.
19 h. Any and all rights to pursue any affirmative defenses,
20 Fourth Amendment or Fifth Amendment claims, and other pretrial
21 motions that have been filed or could be filed.
22 WAIVER OF APPEAL OF CONVICTION
23 20. Defendant understands that, with the exception of an appeal
24 based on a claim that defendant’s guilty plea was involuntary, by
25 pleading guilty defendant is waiving and giving up any right to
26 appeal defendant’s conviction on the offense to which defendant is
27 pleading guilty. Defendant understands that this waiver includes,
28 but is not limited to, arguments that the statute to which defendant
17
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1 is pleading guilty is unconstitutional, and any and all claims that
2 the statement of facts provided herein is insufficient to support
3 defendant’s plea of guilty.
4 LIMITED MUTUAL WAIVER OF APPEAL OF SENTENCE
5 21. Defendant gives up the right to appeal all of the
6 following: (a) the procedures and calculations used to determine and
7 impose any portion of the sentence; (b) the term of imprisonment
8 imposed by the Court, including, to the extent permitted by law, the
9 constitutionality or legality of defendant’s sentence, provided it is
10 within the statutory maximum; (c) the fine imposed by the court,
11 provided it is within the statutory maximum; (d) to the extent
12 permitted by law, the constitutionality or legality of defendant’s
13 sentence, provided it is within the statutory maximum; (e) the amount
14 and terms of any restitution order, provided it requires payment of
15 no more than $145 million; (f) the term of probation or supervised
16 release imposed by the Court, provided it is within the statutory
17 maximum; and (g) any of the following conditions of probation or
18 supervised release imposed by the Court: the conditions set forth in
19 Second Amended General Order 20-04 of this Court; the drug testing
20 conditions mandated by 18 U.S.C. §§ 3563(a)(5) and 3583(d); and the
21 alcohol and drug use conditions authorized by 18 U.S.C. § 3563(b)(7).
22 22. The United States agrees that, provided (a) all portions of
23 the sentence are at or below the statutory maximum specified above
24 and (b) the Court imposes a term of imprisonment within or above the
25 range corresponding to an offense level of 22 and the criminal
26 history category calculated by the Court, the United States gives up
27 its right to appeal any portion of the sentence, with the exception
28
18
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1 that the United States reserves the right to appeal the amount of
2 restitution ordered if that amount is less than $145 million.
3 WAIVER OF COLLATERAL ATTACK
4 23. Defendant also gives up any right to bring a post-
5 conviction collateral attack on the conviction or sentence, including
6 any order of restitution, except a post-conviction collateral attack
7 based on a claim of ineffective assistance of counsel, a claim of
8 newly discovered evidence, or an explicitly retroactive change in the
9 applicable Sentencing Guidelines, sentencing statutes, or statutes of
10 conviction. Defendant understands that this waiver includes, but is
11 not limited to, arguments that the statute to which defendant is
12 pleading guilty is unconstitutional, and any and all claims that the
13 statement of facts provided herein is insufficient to support
14 defendant’s plea of guilty.
15 RESULT OF WITHDRAWAL OF GUILTY PLEA
16 24. Defendant agrees that if, after entering a guilty plea
17 pursuant to this agreement, defendant seeks to withdraw and succeeds
18 in withdrawing defendant’s guilty plea on any basis other than a
19 claim and finding that entry into this plea agreement was
20 involuntary, then (a) the United States will be relieved of all of
21 its obligations under this agreement, including in particular its
22 obligations regarding the use of Cooperation Information; (b) in any
23 investigation, criminal prosecution, or civil, administrative, or
24 regulatory action, defendant agrees that any Cooperation Information
25 and any evidence derived from any Cooperation Information shall be
26 admissible against defendant, and defendant will not assert, and
27 hereby waives and gives up, any claim under the United States
28 Constitution, any statute, or any federal rule, that any Cooperation
19
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1 Information or any evidence derived from any Cooperation Information
2 should be suppressed or is inadmissible; and (c) should the United
3 States choose to pursue any charge that was either dismissed or not
4 filed as a result of this agreement, then (i) any applicable statute
5 of limitations will be tolled between the date of defendant’s signing
6 of this agreement and the filing commencing any such action; and
7 (ii) defendant waives and gives up all defenses based on the statute
8 of limitations, any claim of pre-indictment delay, or any speedy
9 trial claim with respect to any such action, except to the extent
10 that such defenses existed as of the date of defendant’s signing this
11 agreement.
12 RESULT OF VACATUR, REVERSAL OR SET-ASIDE
13 25. Defendant agrees that if the count of conviction is
14 vacated, reversed, or set aside, both the United States and defendant
15 will be released from all their obligations under this agreement.
16 EFFECTIVE DATE OF AGREEMENT
17 26. This agreement is effective upon signature and execution of
18 all required certifications by defendant, defendant’s counsel, and an
19 Assistant United States Attorney.
20 BREACH OF AGREEMENT
21 27. Defendant agrees that if defendant, at any time after the
22 signature of this agreement and execution of all required
23 certifications by defendant, defendant’s counsel, and an Assistant
24 United States Attorney, knowingly violates or fails to perform any of
25 defendant’s obligations under this agreement (“a breach”), the United
26 States may declare this agreement breached. For example, if
27 defendant knowingly, in an interview, before a grand jury, or at
28 trial, falsely accuses another person of criminal conduct or falsely
20
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1 minimizes defendant’s own role, or the role of another, in criminal
2 conduct, defendant will have breached this agreement. All of
3 defendant’s obligations are material, a single breach of this
4 agreement is sufficient for the United States to declare a breach,
5 and defendant shall not be deemed to have cured a breach without the
6 express agreement of the United States in writing. If the United
7 States declares this agreement breached, and the Court finds such a
8 breach to have occurred, then:
9 a. If defendant has previously entered a guilty plea
10 pursuant to this agreement, defendant will not be able to withdraw
11 the guilty plea.
12 b. The United States will be relieved of all its
13 obligations under this agreement; in particular, the United States:
14 (i) will no longer be bound by any agreements concerning sentencing
15 and will be free to seek any sentence up to the statutory maximum for
16 the crime to which defendant has pleaded guilty; (ii) will no longer
17 be bound by any agreements regarding criminal prosecution, and will
18 be free to criminally prosecute defendant for any crime, including
19 charges that the United States would otherwise have been obligated to
20 dismiss pursuant to this agreement; and (iii) will no longer be bound
21 by any agreement regarding the use of Cooperation Information and
22 will be free to use any Cooperation Information in any way in any
23 investigation, criminal prosecution, or civil, administrative, or
24 regulatory action.
25 c. The United States will be free to criminally prosecute
26 defendant for false statement, obstruction of justice, and perjury
27 based on any knowingly false or misleading statement by defendant.
28
21
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1 d. In any investigation, criminal prosecution, or civil,
2 administrative, or regulatory action: (i) defendant will not assert,
3 and hereby waives and gives up, any claim that any Cooperation
4 Information was obtained in violation of the Fifth Amendment
5 privilege against compelled self-incrimination; and (ii) defendant
6 agrees that any Cooperation Information and any Plea Information, as
7 well as any evidence derived from any Cooperation Information or any
8 Plea Information, shall be admissible against defendant, and
9 defendant will not assert, and hereby waives and gives up, any claim
10 under the United States Constitution, any statute, Rule 410 of the
11 Federal Rules of Evidence, Rule 11(f) of the Federal Rules of
12 Criminal Procedure, or any other federal rule, that any Cooperation
13 Information, any Plea Information, or any evidence derived from any
14 Cooperation Information or any Plea Information should be suppressed
15 or is inadmissible.
16 28. Following the Court’s finding of a knowing breach of this
17 agreement by defendant, should the United States choose to pursue any
18 charge that was either dismissed or not filed as a result of this
19 agreement, then:
20 a. Defendant agrees that any applicable statute of
21 limitations is tolled between the date of defendant’s signing of this
22 agreement and the filing commencing any such action.
23 b. Defendant waives and gives up all defenses based on
24 the statute of limitations, any claim of pre-indictment delay, or any
25 speedy trial claim with respect to any such action, except to the
26 extent that such defenses existed as of the date of defendant’s
27 signing this agreement.
28
22
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1 COURT AND UNITED STATES PROBATION AND PRETRIAL SERVICES
2 OFFICE NOT PARTIES
3 29. Defendant understands that the Court and the United States
4 Probation and Pretrial Services Office are not parties to this
5 agreement and need not accept any of the United States’ sentencing
6 recommendations or the parties’ agreements to facts or sentencing
7 factors.
8 30. Defendant understands that both defendant and the United
9 States are free to: (a) supplement the facts by supplying relevant
10 information to the United States Probation and Pretrial Services
11 Office and the Court, (b) correct any and all factual misstatements
12 relating to the Court’s Sentencing Guidelines calculations and
13 determination of sentence, and (c) argue on appeal and collateral
14 review that the Court’s Sentencing Guidelines calculations and the
15 sentence it chooses to impose are not error, although each party
16 agrees to maintain its view that the calculations in paragraph 18 are
17 consistent with the facts of this case. While this paragraph permits
18 both the United States and defendant to submit full and complete
19 factual information to the United States Probation and Pretrial
20 Services Office and the Court, even if that factual information may
21 be viewed as inconsistent with the facts agreed to in this agreement,
22 this paragraph does not affect defendant’s and the United States’
23 obligations not to contest the facts agreed to in this agreement.
24 31. Defendant understands that even if the Court ignores any
25 sentencing recommendation, finds facts or reaches conclusions
26 different from those agreed to, and/or imposes any sentence up to the
27 maximum established by statute, defendant cannot, for that reason,
28 withdraw defendant’s guilty plea, and defendant will remain bound to
23
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1 fulfill all defendant’s obligations under this agreement. Defendant
2 understands that no one –- not the prosecutor, defendant’s attorney,
3 or the Court –- can make a binding prediction or promise regarding
4 the sentence defendant will receive, except that it will be within
5 the statutory maximum.
6 NO ADDITIONAL AGREEMENTS
7 32. Defendant understands that, except as set forth herein,
8 there are no promises, understandings, or agreements between the
9 United States and defendant or defendant’s attorney, and that no
10 additional promise, understanding, or agreement may be entered into
11 unless in a writing signed by all parties or on the record in court.
12 //
13 //
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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2/7/2025
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Exhibit E
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1 BILAL A. ESSAYLI
Acting United States Attorney
2 CHRISTINA T. SHAY
Assistant United States Attorney
3 Chief, Criminal Division
NISHA CHANDRAN (Cal. Bar No. 325345)
4 Assistant United States Attorney
Major Frauds Section
5 JENNA G. WILLIAMS (Cal. Bar No. 307975)
Transnational Organized Crime Section
6 1100 United States Courthouse
312 North Spring Street
7 Los Angeles, California 90012
Telephone: (213) 894-2429
8 Facsimile: (213) 894-0241
E-mail: Nisha.Chandran@usdoj.gov
9
LORINDA I. LARYEA
10 Acting Chief, Fraud Section
Criminal Division, U.S. Department of Justice
11 THEODORE M. KNELLER (D.C. Bar No. 978680)
ADAM L.D. STEMPEL (D.C. Bar No. 1615015) 8/20/25
12 Trial Attorneys, Fraud Section MRV
Criminal Division, U.S. Department of Justice
13 1400 New York Avenue, NW
Washington, DC 20530
14 Telephone: (202) 514-5799
Facsimile: (202) 514-3708
15 Email: Theodore.Kneller@usdoj.gov
16 Attorneys for Plaintiff
UNITED STATES OF AMERICA
17
UNITED STATES DISTRICT COURT
18
FOR THE CENTRAL DISTRICT OF CALIFORNIA
19
UNITED STATES OF AMERICA, No. 2:25-cr-00200(A)-SVW
20
Plaintiff,
21
v. PLEA AGREEMENT FOR DEFENDANT
22 JOSEPH NEAL SANBERG
JOSEPH NEAL SANBERG,
23
Defendant.
24
25 1. This constitutes the plea agreement between JOSEPH NEAL
26 SANBERG for the
27 Central District of California (the and the Fraud Section of
28
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1 above-captioned case. This agreement is limited to the USAO and DOJ
2
3 bind any other federal, state, local, or foreign prosecuting,
4 enforcement, administrative, or regulatory authorities.
5
6 2. Defendant agrees to:
7 a. Give up the right to indictment by a grand jury and,
8 at the earliest opportunity requested by the United States and
9 provided by the Court, appear and plead guilty to counts one and two
10 of the first superseding information in United States v. Joseph Neal
11 Sanberg, CR No. 2:25-cr-00200(A)-SVW, in the form attached to this
12 agreement as Exhibit A or a substantially similar form, which charges
13 defendant with a wire fraud, in violation of 18 U.S.C. § 1343.
14 b. Not contest facts agreed to in this agreement.
15 c. Abide by all agreements regarding sentencing contained
16 in this agreement.
17 d. Appear for all court appearances, surrender as ordered
18 for service of sentence, obey all conditions of any bond, and obey
19 any other ongoing court order in this matter.
20 e. Not commit any crime; however, offenses that would be
21 excluded for sentencing purposes under United States Sentencing
22 § 4A1.2(c) are not
23 within the scope of this agreement.
24 f. Be truthful at all times with the United States
25 Probation and Pretrial Services Office and the Court.
26 g. Pay the applicable special assessments at or before
27 the time of sentencing unless defendant has demonstrated a lack of
28 ability to pay such assessments.
2
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1 h. Agree that any and all criminal debt ordered by the
2 Court will be due in full and immediately. The United States is not
3 precluded from pursuing, in excess of any payment schedule set by the
4
5 payment of the full financial obligation, including referral to the
6 Treasury Offset Program.
7 i. Complete the Financial Disclosure Statement on a form
8 provided by the United States
9 entry of a guilty plea, deliver the signed and dated statement, along
10 with all of the documents requested therein, to the United States by
11 either email at usacac.FinLit@usdoj.gov (preferred) or mail to the
12 USAO Financial Litigation Section at 312 North Spring Street, 11th
13 Floor
14 ability to pay criminal debt shall be assessed based on the completed
15 Financial Disclosure Statement and all required supporting documents,
16 as well as other relevant information relating to ability to pay.
17 j. Authorize the United States to obtain a credit report
18 upon returning a signed copy of this plea agreement.
19 k. Consent to the United States inspecting and copying
20
21 by the United States Probation and Pretrial Services Office.
22 3. Defendant further agrees:
23 a. To forfeit all right, title, and interest in and to
24 any and all monies, properties, and/or assets of any kind, derived
25 from or acquired as a result of, or used to facilitate the commission
26 of, or involved in the illegal activity to which defendant is
27 pleading guilty, specifically including, but not limited to, the
28 following:
3
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1 i. $138.50 seized from Bank of America account 3251-
2 5678-8058 25-FBI-
3 003506);
4 ii. $605.91 seized from Bank of America account 3830-
5 2602-6099 (CATS ID 25-FBI-003502);
6 iii. $2,187.68 seized from Bank of America account
7 3940-0164-7725 (CATS ID 25-FBI-003504);
8 iv. $9,190.53 seized from Bank of America account
9 0094-5480-1102 (CATS ID 25-FBI-003505); and
10 v. All funds, securities, or negotiable instruments,
11 seized from Bank of America Account 41-01-100-0166771 (CATS ID 25-
12 FBI-003501, collectively Property
13 b.
14 before sentencing with respect to the Forfeitable Property and to the
15 forfeiture of the property.
16 c. That the Preliminary Order of Forfeiture shall become
17 final as to the defendant upon entry.
18 d. To take whatever steps are necessary to pass to the
19 United States clear title to the Forfeitable Property, including,
20 without limitation, the execution of a consent decree of forfeiture
21 and the completing of any other legal documents required for the
22 transfer of title to the United States.
23 e. Not to contest any administrative forfeiture
24 proceedings or civil judicial proceedings commenced against the
25 Forfeitable Property. If defendant submitted a claim and/or petition
26 for remission for all or part of the Forfeitable Property on behalf
27 of himself or any other individual or entity, defendant shall and
28 hereby does withdraw any such claims or petitions, and further agrees
4
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1 to waive any right he may have to seek remission or mitigation of the
2 forfeiture of the Forfeitable Property. Defendant further waives any
3 and all notice requirements of 18 U.S.C. § 983(a)(1)(A).
4 f. Not to assist any other individual in any effort
5 falsely to contest the forfeiture of the Forfeitable Property.
6 g. Not to claim that reasonable cause to seize the
7 Forfeitable Property was lacking.
8 h. To prevent the transfer, sale, destruction, or loss of
9 the Forfeitable Property to the extent defendant has the ability to
10 do so.
11 i. To fill out and deliver to the United States a
12
13 provided by the USAO.
14 j. That forfeiture of Forfeitable Property shall not be
15 counted toward satisfaction of any special assessment, fine,
16 restitution, costs, or other penalty the Court may impose.
17 k.
18 personal money judgment of forfeiture against defendant in the amount
19 of $6,650,000.00, which sum defendant admits was derived from
20 proceeds traceable to the violations described in the factual basis
21 of the plea agreement. Defendant understands that the money judgment
22
23 any fines or restitution that may be imposed by the Court.
24 l. That with respect to any criminal forfeiture ordered
25 as a result of this plea agreement, defendant waives: (1) the
26 requirements of Federal Rules of Criminal Procedure 32.2 and 43(a)
27 regarding notice of the forfeiture in the charging instrument,
28 announcements of the forfeiture at sentencing, and incorporation of
5
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1 the forfeiture in the judgment; (2) all constitutional and statutory
2 challenges to the forfeiture (including by direct appeal, habeas
3 corpus or any other means); and (3) all constitutional, legal, and
4 equitable defenses to the forfeiture of the Forfeitable Property and
5 the money judgment of forfeiture in any proceeding on any grounds
6 including, without limitation, that the forfeiture of the Forfeitable
7 Property or the money judgment of forfeiture constitute an excessive
8 fine or punishment. Defendant acknowledges that the forfeiture of
9 the Forfeitable Property and the money judgment of forfeiture are
10 part of the sentence that may be imposed in this case and waives any
11 failure by the Court to advise defendant of this, pursuant to Federal
12 Rule of Criminal Procedure 11(b)(1)(J), at the time the Court accepts
13 s.
14 THE OBLIGATIONS
15 4. The United States agrees to:
16 a. Not contest facts agreed to in this agreement.
17 b. Abide by all agreements regarding sentencing contained
18 in this agreement.
19 c. At the time of sentencing, move to dismiss the
20 underlying indictment as against defendant. Defendant agrees,
21 however, that at the time of sentencing the Court may consider any
22 dismissed charges in determining the applicable Sentencing Guidelines
23 range, the propriety and extent of any departure from that range, and
24 the sentence to be imposed. Defendant further agrees that he may be
25 treated as if he had been convicted of the dismissed charges for
26 purposes of U.S.S.G. § 1B1.2(c), regardless of whether the factual
27 basis below would be sufficient to satisfy all elements of each
28
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1 charge. Defendant waives the right to challenge the sufficiency of
2 the factual basis as to any element of any dismissed charge.
3 d. At the time of sentencing, provided that defendant
4 demonstrates an acceptance of responsibility for the offenses up to
5 and including the time of sentencing, and the conditions set forth in
6 paragraph 2 through 3 are met and defendant has not committed, and
7 refrains from committing, acts constituting obstruction of justice
8 within the meaning of U.S.S.G. § 3C1.1, as discussed below,
9 recommend a two-level reduction in the applicable Sentencing
10 Guidelines offense level, pursuant to U.S.S.G. § 3E1.1, and recommend
11 and, if necessary, move for an additional one-level reduction if
12 available under that section.
13 e. Not seek a sentence of imprisonment above the high end
14 of the applicable Sentencing Guidelines range corresponding to an
15 offense level of 36 and the criminal history category calculated by
16 the Court. For purposes of this agreement, the high end of the
17 Sentencing Guidelines range is that defined by the Sentencing Table
18 in U.S.S.G. Chapter 5, Part A. The parties also agree that the
19 government may respond to a request by defendant for a sentence below
20 .
21
NATURE OF THE OFFENSES
22
5. Defendant understands that for defendant to be guilty of
23
the crime charged in counts one and two in the first superseding
24
information, that is, wire fraud, in violation of Title 18, United
25
States Code, Section 1343, the following must be true for each count:
26
(1) defendant knowingly devised a scheme or plan to defraud, or a
27
scheme or plan for obtaining money or property by means of false or
28
fraudulent pretenses, representations, or promises, or omitted facts;
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1 (2) the statements made, or facts omitted, as part of the scheme were
2 material, that is, they had a natural tendency to influence, or were
3 capable of influencing, a person to part with money or property;
4 (3) defendant acted with the intent to defraud, that is, the intent
5 to deceive and cheat; and (4) defendant used, or caused to be used,
6 an interstate wire communication to carry out or attempt to carry out
7 an essential part of the scheme.
8 PENALTIES AND RESTITUTION
9 6. Defendant understands that the statutory maximum sentence
10 that the Court can impose for each violation of Title 18, United
11 States Code, Section 1343, is: 20 years imprisonment; a 3-year period
12 of supervised release; a fine of $250,000 or twice the gross gain or
13 gross loss resulting from the offense, whichever is greatest; and a
14 mandatory special assessment of $100.
15 7. Defendant understands, therefore, that the total maximum
16 sentence for all offenses to which defendant is pleading guilty is:
17 40 years imprisonment; a 3-year period of supervised release; a fine
18 of $500,000 or twice the gross gain or gross loss resulting from the
19 offenses, whichever is greatest; and a mandatory special assessment
20 of $200.
21 8. Defendant understands that defendant will be required to
22 pay full restitution to the victim(s) of the offenses to which
23 defendant is pleading guilty. Defendant agrees that, in return for
24
25 agreement, the Court may order restitution to persons other than the
26 victim(s) of the offenses to which defendant is pleading guilty and
27 in amounts greater than those alleged in the counts to which
28 defendant is pleading guilty. In particular, defendant agrees that
8
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1 the Court may order restitution to any victim of any of the following
2 for any losses suffered by that victim as a result: any relevant
3 conduct, as defined in U.S.S.G. § 1B1.3, in connection with the
4 offenses to which defendant is pleading guilty. The parties
5 currently believe that the applicable amount of restitution is
6 approximately $248,703,886.00, but recognize and agree that this
7 amount could change based on facts that come to the attention of the
8 parties prior to sentencing.
9 9. Defendant understands that supervised release is a period
10 of time following imprisonment during which defendant will be subject
11 to various restrictions and requirements. Defendant understands that
12 if defendant violates one or more of the conditions of any supervised
13 release imposed, defendant may be returned to prison for all or part
14 of the term of supervised release authorized by statute for the
15 offense that resulted in the term of supervised release, which could
16 result in defendant serving a total term of imprisonment greater than
17 the statutory maximum stated above.
18 10. Defendant understands that, by pleading guilty, defendant
19 may be giving up valuable government benefits and valuable civic
20 rights, such as the right to vote, the right to possess a firearm,
21 the right to hold office, and the right to serve on a jury. Defendant
22 understands that he is pleading guilty to a felony and that it is a
23 federal crime for a convicted felon to possess a firearm or
24 ammunition. Defendant understands that the convictions in this case
25 may also subject defendant to various other collateral consequences,
26 including but not limited to revocation of probation, parole, or
27 supervised release in another case and suspension or revocation of a
28 professional license. Defendant understands that unanticipated
9
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1 collateral consequences will not serve as grounds to withdraw
2 s.
3 11. Defendant and his counsel have discussed the fact that, and
4 defendant understands that, if defendant is not a United States
5 citizen, the convictions in this case make it practically inevitable
6 and a virtual certainty that defendant will be removed or deported
7 from the United States. Defendant may also be denied United States
8 citizenship and admission to the United States in the future.
9 Defendant understands that while there may be arguments that
10 defendant can raise in immigration proceedings to avoid or delay
11 removal, removal is presumptively mandatory and a virtual certainty
12 in this case. Defendant further understands that removal and
13 immigration consequences are the subject of a separate proceeding and
14 that no one, including his attorney or the Court, can predict to an
15 absolute certainty the effect of his convictions on his immigration
16 status. Defendant nevertheless affirms that he wants to plead guilty
17 regardless of any immigration consequences that his pleas may entail,
18 even if the consequence is automatic removal from the United States.
19 FACTUAL BASIS
20 Defendant admits that defendant is, in fact, guilty of the
21 offenses to which defendant is agreeing to plead guilty. Defendant
22 and the United States agree to the statement of facts provided in the
23 factual basis included as Attachment A to this plea agreement and
24 agree that this statement of facts is sufficient to support pleas of
25 guilty to the charges described in this agreement and to establish
26 the Sentencing Guidelines factors set forth in paragraph 13 below,
27 but is not meant to be a complete recitation of all facts relevant to
28
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1 the underlying criminal conduct or all facts known to either party
2 that relate to that conduct.
3 SENTENCING FACTORS
4 12.
5 sentence the Court is required to calculate the applicable Sentencing
6 Guidelines range and to consider that range, possible departures
7 under the Sentencing Guidelines, and the other sentencing factors set
8 forth in 18 U.S.C. § 3553(a). Defendant understands that the
9 Sentencing Guidelines are advisory only, that defendant cannot have
10 any expectation of receiving a sentence within the calculated
11 Sentencing Guidelines range, and that after considering the
12 Sentencing Guidelines and the other Section 3553(a) factors, the
13 Court will be free to exercise its discretion to impose any sentence
14 it finds appropriate up to the maximum set by statute for the crimes
15 of conviction.
16 13. Defendant and the United States agree to the following
17 applicable Sentencing Guidelines factors:
18 Base offense level: 7 U.S.S.G. § 2B1.1(a)(1)
19 Loss greater than $150
million: +26 U.S.S.G. § 2B1.1(b)(1)(N)
20
10 or more victims: +2 U.S.S.G. § 2B1.1(b)(2)(A)(i)
21
Offense involved
22 sophisticated means: +2 U.S.S.G. § 2B1.1(b)(10)(C)
23 Defendant derived more than
$1 million in gross receipts
24 from a financial institution
as a result of the offense: +2 U.S.S.G. § 2B1.1(b)(17)(A)
25
26
The United States will agree to a two-level downward adjustment for
27
acceptance of responsibility (and, if applicable, move for an
28
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1 additional one-level downward adjustment under U.S.S.G. § 3E1.1(b))
2 only if the conditions set forth in paragraph 2 through 3 are met and
3 if defendant has not committed, and refrains from committing, acts
4 constituting obstruction of justice within the meaning of U.S.S.G.
5 § 3C1.1, as discussed below. The parties agree that defendant did
6 not use violence or credible threats of violence in connection with
7 the offense. Subject to paragraph 28 below, defendant and the United
8 States agree not to seek, argue, or suggest in any way, either orally
9 or in writing, that any other specific offense characteristics,
10 adjustments, or departures relating to the offense level be imposed,
11 except that either party may seek or oppose, and argue for or against
12 the applicability of a zero-point offender adjustment under U.S.S.G.
13 § 4C1.1. If, however, the U.S. Probation Office finds in preparing
14 the Presentence Report that the zero-point offender adjustment does
15 not apply for any reason including because (i) the defendant
16 personally caused substantial financial hardship, or (ii) defendant
17 should receive an adjustment for aggravating role under U.S.S.G. §
18 3B1.1, the United States
19 asked by the Court. Defendant agrees, however, that if, after
20 signing this agreement, but prior to sentencing, defendant were to
21 commit an act, or the United States were to discover a previously
22 undiscovered act committed by defendant prior to signing this
23 agreement, which act, in the judgment of the United States,
24 constituted obstruction of justice within the meaning of U.S.S.G.
25 § 3C1.1, the United States would be free to seek the enhancement set
26 forth in that section and to argue that defendant is not entitled to
27 a downward adjustment for acceptance of responsibility under U.S.S.G.
28 § 3E1.1.
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1 14. Defendant understands that there is no agreement as to
2
3 15. Subject to paragraph 4(e) above, defendant and the United
4 States reserve the right to argue for a sentence outside the
5 sentencing range established by the Sentencing Guidelines based on
6 the factors set forth in 18 U.S.C. § 3553(a)(1), (a)(2), (a)(3),
7 (a)(6), and (a)(7).
8 WAIVER OF CONSTITUTIONAL RIGHTS
9 16. Defendant understands that by pleading guilty, defendant
10 gives up the following rights:
11 a. The right to persist in a plea of not guilty.
12 b. The right to a speedy and public trial by jury.
13 c. The right to be represented by counsel - and if
14 necessary have the Court appoint counsel -- at trial. Defendant
15 understands, however, that, defendant retains the right to be
16 represented by counsel - and if necessary have the Court appoint
17 counsel - at every other stage of the proceeding.
18 d. The right to be presumed innocent and to have the
19 burden of proof placed on the United States to prove defendant guilty
20 beyond a reasonable doubt.
21 e. The right to confront and cross-examine witnesses
22 against defendant.
23 f. The right to testify and to present evidence in
24 opposition to the charges, including the right to compel the
25 attendance of witnesses to testify.
26 g. The right not to be compelled to testify, and, if
27 defendant chose not to testify or present evidence, to have that
28 choice not be used against defendant.
13
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1 h. Any and all rights to pursue any affirmative defenses,
2 Fourth Amendment or Fifth Amendment claims, and other pretrial
3 motions that have been filed or could be filed.
4 WAIVER OF APPEAL OF CONVICTION
5 17. Defendant understands that, with the exception of an appeal
6
7 pleading guilty defendant is waiving and giving up any right to
8 t is
9 pleading guilty. Defendant understands that this waiver includes,
10 but is not limited to, arguments that the statutes to which defendant
11 is pleading guilty are unconstitutional, and any and all claims that
12 the statement of facts provided herein is insufficient to support
13
14 WAIVER OF APPEAL AND COLLATERAL ATTACK
15 18. Defendant gives up the right to appeal all of the
16 following: (a) the procedures and calculations used to determine and
17 impose any portion of the sentence; (b) the term of imprisonment
18 imposed by the Court, including, to the extent permitted by law, the
19
20 within the statutory maximum; (c) the fine imposed by the Court,
21 provided it is within the statutory maximum; (d) the term of
22 probation or supervised release imposed by the Court, provided it is
23 within the statutory maximum; and (e) any of the following conditions
24 of probation or supervised release imposed by the Court: the
25 conditions set forth in Second Amended General Order 20-04 of this
26 Court; the drug testing conditions mandated by 18 U.S.C.
27 §§ 3563(a)(5) and 3583(d); and the alcohol and drug use conditions
28 authorized by 18 U.S.C. § 3563(b)(7).
14
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1 19. Defendant also gives up any right to bring a post-
2 conviction collateral attack on the convictions or sentence,
3 including any order of restitution, except a post-conviction
4 collateral attack based on a claim of ineffective assistance of
5 counsel, a claim of newly discovered evidence, or an explicitly
6 retroactive change in the applicable Sentencing Guidelines,
7 sentencing statutes, or statutes of conviction. Defendant
8 understands that this waiver includes, but is not limited to,
9 arguments that the statutes to which defendant is pleading guilty are
10 unconstitutional, and any and all claims that the statement of facts
11
12 guilty.
13 20. This agreement does not affect in any way the right of the
14 United States to appeal the sentence imposed by the Court.
15 WAIVER OF RIGHTS CONCERNING PLEA COLLOQUY AND FACTUAL BASIS
16 21. Defendant agrees that: (i) any statements made by
17 defendant, under oath, at the guilty plea hearing; (ii) the agreed to
18 factual basis statement in this agreement; and (iii) any evidence
19 derived from such statements, shall be admissible against defendant
20 in any action against defendant, and defendant waives and gives up
21 any claim under the United States Constitution, any statute, Rule 410
22 of the Federal Rules of Evidence, Rule 11(f) of the Federal Rules of
23 Criminal Procedure, or any other federal rule, that the statements or
24 any evidence derived from the statements should be suppressed or are
25 inadmissible.
26 22. Defendant further agrees that this paragraph of the
27 agreement is severable.
28
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1 defendant declines to plead guilty, the Court declines to accept his
2 guilty plea, or, if this agreement is of the type described in
3 Federal Rule of Criminal Procedure 11(c)(1)(A) or (c)(1)(C), the
4 Court rejects this agreement. Defendant also agrees that his waivers
5 are binding and effective even if some other portion of this
6 agreement is found to be invalid by this Court or the Ninth Circuit.
7 RESULT OF WITHDRAWAL OF GUILTY PLEAS
8 23. Defendant agrees that if, after entering guilty pleas
9 pursuant to this agreement, defendant seeks to withdraw and succeeds
10
11 claim and finding that entry into this plea agreement was
12 involuntary, then the United States will be relieved of all of its
13 obligations under this agreement and should the United States choose
14 to pursue any charge that was either dismissed or not filed as a
15 result of this agreement, then (i) any applicable statute of
16 lim
17 this agreement and the filing commencing any such action; and
18 (ii) defendant waives and gives up all defenses based on the statute
19 of limitations, any claim of pre-indictment delay, or any speedy
20 trial claim with respect to any such action, except to the extent
21
22 agreement.
23 EFFECTIVE DATE OF AGREEMENT
24 24. This agreement is effective upon signature and execution of
25
26 attorney for the United States.
27
28
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1 BREACH OF AGREEMENT
2 25. Defendant agrees that if defendant, at any time after the
3 effective date of the agreement, knowingly violates or fails to
4
5 United States may declare this agreement breached. All
6
7 agreement is sufficient for the United States to declare a breach,
8 and defendant shall not be deemed to have cured a breach without the
9 express agreement of the United States in writing. If the United
10 States declares this agreement breached, and the Court finds such a
11 breach to have occurred, then:
12 a. If defendant has previously entered guilty pleas
13 pursuant to this agreement, defendant will not be able to withdraw
14 the guilty pleas.
15 b. The United States will be relieved of all its
16 obligations under this agreement; in particular, the United States:
17 will no longer be bound by any agreements (i) concerning sentencing
18 and will be free to seek any sentence up to the statutory maximum for
19 the crimes to which defendant has pleaded guilty; and (ii) regarding
20 criminal prosecution, and will be free to criminally prosecute
21 defendant for any crime, including charges that the United States
22 would otherwise have been obligated to dismiss pursuant to this
23 agreement.
24 c. The United States will be free to criminally prosecute
25 defendant for false statement, obstruction of justice, and perjury
26 based on any knowingly false or misleading statement by defendant.
27 26.
28 agreement by defendant, should the United States choose to pursue any
17
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1 charge that was either dismissed or not filed as a result of this
2 agreement, then:
3 a. Defendant agrees that any applicable statute of
4
5 this agreement and the filing commencing any such action.
6 b. Defendant waives and gives up all defenses based on
7 the statute of limitations, any claim of pre-indictment delay, or any
8 speedy trial claim with respect to any such action, except to the
9
10 signing this agreement.
11 COURT AND UNITED STATES PROBATION AND PRETRIAL SERVICES
12 OFFICE NOT PARTIES
13 27. Defendant understands that the Court and the United States
14 Probation and Pretrial Services Office are not parties to this
15 agreement and need not accept any of the United States
16
17 factors.
18 28. Defendant understands that both defendant and the United
19 States are free to: (a) supplement the facts by supplying relevant
20 information to the United States Probation and Pretrial Services
21 Office and the Court, (b) correct any and all factual misstatements
22
23 determination of sentence, and (c) argue on appeal and collateral
24
25 sentence it chooses to impose are not error, although each party
26 agrees to maintain its view that the calculations in paragraph 13 are
27 consistent with the facts of this case. While this paragraph permits
28 both the United States and defendant to submit full and complete
18
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1 factual information to the United States Probation and Pretrial
2 Services Office and the Court, even if that factual information may
3 be viewed as inconsistent with the facts agreed to in this agreement,
4
5 obligations not to contest the facts agreed to in this agreement.
6 29. Defendant understands that even if the Court ignores any
7 sentencing recommendation, finds facts or reaches conclusions
8 different from those agreed to, and/or imposes any sentence up to the
9 maximum established by statute, defendant cannot, for that reason,
10
11
12 understands that no one -
13 or the Court - can make a binding prediction or promise regarding
14 the sentence defendant will receive, except that it will be within
15 the statutory maximum.
16 NO ADDITIONAL AGREEMENTS
17 30. Defendant understands that, except as set forth herein,
18 there are no promises, understandings, or agreements between the
19 United States
20 additional promise, understanding, or agreement may be entered into
21 unless in a writing signed by all parties or on the record in court.
22 //
23 //
24 //
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PLEA AGREEMENT PART OF THE GUILTY PLEA HEARING
31. The parties agree that this agreement will be considered
part of the record of defendant’s guilty plea hearing as if the
entire agreement had been read into the record of the proceeding.
AGREED AND ACCEPTED
UNITED STATES ATTORNEY’S OFFICE
FOR THE CENTRAL DISTRICT OF
CALIFORNIA
BILAL A. ESSAYLI
Acting United States Attorney
DEPARTMENT OF JUSTICE
CRIMINAL DIVISION
LORINDA I. LARYEA
Acting Chief, Fraud Section
\LI—~.
August 20, 2025
NISHA CHANDRAN
JENNA G. WILLIAMS
Assistant United States Attorneys
THEODORE M. KNELLER
ADAM L.D. STEMPEL
Trial Attorneys, Fraud Section
Department Of Justice
Criminal Division
Signed by:
—
ABZAZA,
Date
August 15, 2025
JOSEPH NEAL SANBERG
ee" Bee
Date
August 18, 2025
BRIAN R. MICHAEL
MARC L. MUKASEY
Attorneys for Defendant JOSEPH NEAL
SANBERG
20
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CERTIFICATION OF DEFENDANT
I have read this agreement in its entirety. I have had enough
time to review and consider this agreement, and I have carefully and
thoroughly discussed every part of it with my attorney. I understand
the terms of this agreement, and I voluntarily agree to those terms.
I have discussed the evidence with my attorney, and my attorney has
advised me of my rights, of possible pretrial motions that might be
filed, of possible defenses that might be asserted either prior to or
at trial, of the sentencing factors set forth in 18 U.S.C. § 3553(a),
of relevant Sentencing Guidelines provisions, and of the consequences
of entering into this agreement. No promises, inducements, or
representations of any kind have been made to me other than those
contained in this agreement. No one has threatened or forced me in
any way to enter into this agreement. I am satisfied with the
representation of my attorney in this matter, and I am pleading
guilty because I am guilty of the charges and wish to take advantage
of the promises set forth in this agreement, and not for any other
reason.
August 15, 2025
Date
Defendant
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CERTIFICATION OF DEFENDANT’ S ATTORNEY
I am JOSEPH NEAL SANBERG’s attorney. I have carefully and
thoroughly discussed every part of this agreement with my client.
Further, I have fully advised my client of his rights, of possible
pretrial motions that might be filed, of possible defenses that might
be asserted either prior to or at trial, of the sentencing factors
set forth in 18 U.S.C. § 3553(a), of relevant Sentencing Guidelines
provisions, and of the consequences of entering into this agreement.
To my knowledge: no promises, inducements, or representations of any
kind have been made to my client other than those contained in this
agreement; no one has threatened or forced my client in any way to
enter into this agreement; my client’s decision to enter into this
agreement is an informed and voluntary one; and the factual basis set
forth in this agreement is sufficient to support my client’s entry of
guilty pleas pursuant to this agreement.
Pilee August 18, 2025
BRIAN R. MICHAEL Date
MARC L. MUKASEY
Attorneys for Defendant JOSEPH NEAL
SANBERG
22
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1 ATTACHMENT A – FACTUAL BASIS
2 Defendant acknowledges that if this case proceeded to trial, the
3 United States would prove the following facts, among others, which
4 defendant acknowledges to be true, beyond a reasonable doubt.
5 At times relevant to this factual basis:
6 I. Background
7 Relevant Entities and Individuals
8 1. JOSEPH NEAL SANBERG (“defendant”) was the co-founder of
9 Company A, and, at various times, was Company A’s largest shareholder
10 and served on Company A’s board of directors.
11 2. Company A maintained its principal office in Los Angeles
12 County, California.
13 3. Investor Fund A was a private credit fund that made a loan
14 to defendant.
15 4. Investor Fund B was a private credit fund that made a loan
16 to defendant.
17 5. Co-Schemer Ibrahim Ameen AlHusseini was a resident of Los
18 Angeles, California and served on the board of directors of
19 Company A.
20 6. Investment Adviser 1 was an investment adviser to Investor
21 Fund A and Investor Fund B.
22 7. Individual 1 solicited potential investors and lenders on
23 behalf of defendant.
24 8. Investment Manager 1 managed one or more investment funds
25 that made a loan to defendant.
26 9. Sanberg Entity 1 was a closely held legal entity, which had
27 one or more bank accounts controlled by defendant.
28
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1 10. Sanberg Entity 2 was a closely held legal entity, which had
2 one or more bank accounts controlled by defendant.
3 11. LOI Customer 1 was an entity that defendant presented to
4 Company A as a bona fide customer.
5 12. Employee 1 was an officer of Company A.
6 Overview of Scheme to Defraud
7 13. Beginning no later than in or around January 2020, and
8 continuing through in or about February 2025, in Los Angeles County,
9 within the Central District of California, and elsewhere, defendant
10 and others knowingly and with intent to defraud, devised, intended to
11 devise, and participated in a scheme to defraud lenders and investors
12 and to obtain money and property from those lenders and investors by
13 means of material false and fraudulent pretenses, representations,
14 and promises, and the concealment of material facts.
15 II. False and Fraudulent Representations to Lenders
16 14. Beginning no later than in or around January 2020,
17 defendant negotiated terms for a loan from Investor Fund A of
18 approximately $55 million (the “Investor Fund A Loan”) for the
19 benefit of defendant and others. Under the terms of the Investor
20 Fund A Loan, defendant pledged approximately 10.3 million shares of
21 Company A stock as collateral.
22 15. To secure the Investor Fund A Loan, defendant and co-
23 schemer Ibrahim Ameen AlHusseini arranged a separate financial
24 transaction (a put option agreement) between co-schemer AlHusseini
25 and Investor Fund A. The put option agreement purported to act as a
26 type of financial guarantee by obligating co-schemer AlHusseini to
27 purchase the Company A stock posted as collateral from Investor
28
2
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1 Fund A for tens of millions of dollars if defendant defaulted on the
2 loan.
3 16. Defendant and co-schemer AlHusseini knowingly and
4 intentionally made, and caused to be made, materially false and
5 fraudulent representations to Investor Fund A and Investment
6 Adviser 1 that co-schemer AlHusseini had sufficient liquid assets to
7 pay tens of millions of dollars for the shares of Company A stock in
8 the event of defendant’s default. In truth and in fact, co-schemer
9 AlHusseini did not have sufficient liquid assets to cover the
10 obligations in the put option agreement if defendant defaulted on the
11 loan. Defendant knew that the put option agreement was a material
12 term of the Investor Fund A Loan.
13 17. But at relevant times, defendant knew that co-schemer
14 AlHusseini did not have sufficient assets to pay tens of millions of
15 dollars to Investor Fund A in co-schemer AlHusseini’s bank and
16 brokerage accounts that were identified to Investor Fund A and
17 Investment Adviser 1.
18 18. Defendant and co-schemer AlHusseini prepared, or caused to
19 be prepared, materially false and fraudulent bank and brokerage
20 account statements that overstated the liquid assets in co-schemer
21 AlHusseini’s bank and brokerage accounts by tens of millions of
22 dollars.
23 19. Defendant and co-schemer AlHusseini sent, or caused to be
24 sent, the false and fraudulent bank and brokerage account statements
25 showing co-schemer AlHusseini’s purported assets, by means of wire
26 communications in interstate commerce, to Investment Adviser 1 and
27 Investor Fund A to obtain the $55 million loan for defendant.
28
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1 20. In or around November 2021, defendant negotiated with
2 Investment Advisor 1 to refinance the terms of the Investor Fund A
3 Loan by taking out a new loan from Investor Fund B for $145 million.
4 21. In or around November 2021, defendant and co-schemer
5 AlHusseini sent, or caused to be sent, falsified bank and brokerage
6 account statements, by means of interstate wires, containing
7 materially false and fraudulent statements regarding co-schemer
8 AlHusseini’s purported assets to Investment Adviser 1 and Investor
9 Fund B to obtain the $145 million loan for defendant.
10 22. From in or around February 2020 and continuing until at
11 least in or around October 2024, defendant concealed the scheme to
12 defraud from Investment Adviser 1, Investor Fund A, and Investor
13 Fund B.
14 23. Additionally, beginning in or around October 2024,
15 defendant negotiated the terms of a loan with Investment Manager 1,
16 to be collateralized by defendant’s shares in Company A. In
17 furtherance of the scheme and artifice to defraud lenders, defendant
18 made and caused to be made materially false and fraudulent
19 representations to Investment Manager 1 regarding the financial
20 condition of Company A, including by providing and causing to be
21 provided a copy of a letter purportedly signed by Company A’s Audit
22 Committee that falsely overstated Company A’s available cash by
23 hundreds of millions of dollars.
24 24. Specifically, in furtherance of the scheme to defraud and
25 to carry out an essential part of the scheme, on or about June 5,
26 2024, defendant sent an email via interstate wire from within the
27 Central District of California to Individual 1 in Florida, attaching
28 a letter purporting to be written and signed by members of
4
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1 Company A’s Audit Committee (the “Audit Committee Letter”). The
2 Audit Committee Letter contained materially false representations
3 that defendant knew to be false. Among other things, the Audit
4 Committee Letter stated that Company A had “a balance of cash and
5 equivalents of at least $250,000,000.” In truth and in fact, Company
6 A had a cash balance of less than $1,000,000 in June 2024.
7 25. Defendant knowingly and intentionally sent the Audit
8 Committee Letter to Individual 1 for the purpose of obtaining money
9 or property by means of materially false or fraudulent pretenses and
10 misrepresentations and with the intent to deceive and cheat.
11 Defendant knew that the letter contained materially false
12 representations and intended that the materially false
13 representations would fraudulently influence others to part with
14 money or property.
15 26. The materially false and fraudulent statements in the Audit
16 Committee Letter were capable of influencing, intended to influence,
17 and did in fact influence Investment Manager 1’s decision to loan
18 defendant approximately $16,000,000 in or around January 2025.
19 III. False and Fraudulent Representations to Investors
20 27. Defendant also sent and caused to be sent false and
21 fraudulent representations to investors seeking to invest in various
22 assets related to Company A, including purchasing shares of Company A
23 stock and making pooled investments to acquire debt securities issued
24 by Company A through defendant. In furtherance of the scheme,
25 defendant caused Company A’s revenue to be falsely inflated and
26 misrepresented Company A’s revenue and assets to induce those
27 investments.
28
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1 A. Revenue Fraud
2 28. Beginning no later than January 2021, Company A established
3 a business line, known as “enterprise sustainability services,” in
4 which Company A sold tree planting services to individuals and
5 companies interested in reducing their environmental impact.
6 29. Beginning no later than January 2021, defendant solicited
7 small businesses and individuals, directly and through
8 intermediaries, to sign “Letters of Intent” with Company A. The
9 Letters of Intent stated that each small business or individual
10 (collectively, the “LOI Customers”) would pay for tens of thousands
11 of trees to be planted on a recurring monthly or quarterly basis at a
12 price of $1 per tree.
13 30. Certain LOI Customers paid Company A for the tree planting
14 services described in the Letters of Intent with funds received from
15 defendant. Defendant concealed from Company A investors that
16 defendant was the source of funds for the payments under the Letters
17 of Intent. These certain LOI Customers were not bona fide purchasers
18 of the tree planting services from Company A.
19 31. Between in or about March 2021 and November 2022, defendant
20 paid millions of dollars to LOI Customers, who then paid Company A.
21 At times, defendant paid the LOI Customers using money he received
22 from Company A. For example, in or around January 2022, as a result
23 of defendant’s actions, Company A entered into a 12-month, $8 million
24 advisory contract for business development services with one of
25 defendant’s closely held entities, Sanberg Entity 1.
26 32. On or about January 31, 2022, Company A paid Sanberg
27 Entity 1 $8 million. The $8 million payment to Sanberg Entity 1 was
28 made using funds of investors in Company A.
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1 33. On or about March 14, 2022, defendant:
2 a. Made two transfers of approximately $350,000 each from
3 the prepaid $8 million from the bank account of Sanberg Entity 1 to
4 defendant’s personal checking account;
5 b. Made two subsequent transfers of approximately
6 $350,000 each from defendant’s personal checking account to an
7 account for another one of defendant’s closely held entities, Sanberg
8 Entity 2; and
9 c. Made two more subsequent transfers to Company A for
10 $350,000 each from the Sanberg Entity 2 bank account and listed the
11 name of LOI Customer 1 and an invoice number in each wire
12 instruction.
13 34. Defendant also made or caused to be made additional
14 payments to Company A directly from bank accounts held in the names
15 of Sanberg Entity 2 and other closely held entities that defendant
16 controlled. To conceal from Company A’s investors that defendant was
17 in fact was the source of these funds, defendant made these payments
18 to Company A purportedly on behalf of LOI Customers through the
19 Sanberg Entity 2 bank account, and through other accounts in the
20 names of other entities that defendant controlled. Defendant
21 concealed from Company A investors that he controlled Sanberg
22 Entity 2 and the other closely held entities that defendant used to
23 make payments to Company A on behalf of LOI Customers.
24 35. On or about March 21, 2022, defendant knowingly sent
25 encrypted messages via interstate wires using a smartphone
26 application called “Signal” from within the Central District of
27 California to Employee 1 of Company A in Arizona to carry out an
28 essential part of the scheme. Defendant informed Employee 1 via the
7
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1 messages that the March 14, 2022 payments of $350,000 to Company A
2 from Sanberg Entity 2 should be credited to LOI Customer 1.
3 36. To conceal the scheme to defraud from Company A’s
4 investors, defendant’s March 21, 2022 text messages to Employee 1
5 contained deceitful statements of half-truths, and statements that
6 omitted material facts. Defendant made such statements to Employee 1
7 with the intent to deceive and cheat Company A investors.
8 37. At relevant times and to further conceal the scheme to
9 defraud, defendant also instructed Company A not to contact the LOI
10 Customers to conceal from Company A’s investors and creditors that
11 certain payments for tree planting services pursuant to Letters of
12 Intent were made by or indirectly funded by entities controlled by
13 defendant and not from the LOI Customers.
14 38. From in or around March 2021 through in or around November
15 2022, Company A recognized as revenue the anticipated monthly and
16 quarterly payments from each of the LOI Customers in the amounts
17 specified in the Letters of Intent. Company A recognized that
18 revenue from the LOI Customers as being from arms-length third
19 parties and not as related-party revenue from Company A’s co-founder,
20 defendant.
21 39. The revenue booked from the LOI Customers materially
22 misstated the recognized revenue of Company A such that Company A’s
23 financial statements were materially inaccurate.
24 40. At relevant times, defendant knew Company A’s financial
25 statements materially misstated revenue from LOI Customers. Knowing
26 that Company A’s financial statements materially misstated
27 Company A’s revenue, defendant knowingly and intentionally, through
28 the use of interstate wires, solicited investors to purchase
8
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1 securities to invest in Company A by means of materially false and
2 fraudulent representations, and statements that omitted material
3 facts.
4 B. Inflated Assets Fraud
5 41. In furtherance of the scheme to defraud, defendant also
6 made, and caused to be made, materially false and fraudulent
7 representations that materially overstated Company A’s value and
8 assets, including Company A’s available cash, to multiple investors
9 for the purpose of influencing their decision to purchase Company A
10 stock or to make pooled investments to acquire debt securities issued
11 by Company A.
12 42. From at least in or around June 2024 to in or around
13 January 2025, defendant knowingly and intentionally made, and caused
14 to be made, materially false and fraudulent representations that
15 overstated Company A’s available cash by hundreds of millions of
16 dollars to investors for the purpose of influencing their decisions
17 to invest in securities related to Company A.
18 IV. Conclusion
19 43. From in or around August 2024 to at least in or around
20 February 2025, defendant accepted and received, directly or
21 indirectly, criminal proceeds of the wire fraud scheme. Defendant
22 transferred at least approximately $6,650,000 to an account held in
23 defendant’s name at a financial institution, account number 41-01-
24 100-0166771, knowing that the deposits were the proceeds of some form
25 of unlawful activity, namely proceeds of the victim-lenders’ and
26 victim-investors’ funds that defendant obtained from the wire fraud
27 scheme.
28
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1 44. In accepting and receiving those victim-lenders’ and
2 victim-investors’ funds, defendant deposited millions of dollars in
3 unlawful proceeds from the scheme to defraud in an account with a
4 financial institution. The financial institution later loaned
5 defendant more than $1 million because defendant posted the millions
6 of dollars deposited to the account as collateral for the loan.
7 Accordingly, defendant derived more than $1 million in gross receipts
8 from a financial institution as a result of the offense.
9 45. Defendant’s scheme to defraud lenders and investors
10 involved sophisticated means as described above, including the use of
11 sophisticated loan and investment structures, and multiple corporate
12 entities, and defendant intentionally engaged in or caused the
13 conduct constituting sophisticated means.
14 46. In total, defendant’s scheme to defraud lenders and
15 investors involved 10 or more victims who sustained actual pecuniary
16 harm, and victim losses are at least approximately $248,703,886.
17
18
19
20
21
22
23
24
25
26
27
28
10
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1 DANIEL S. LIM (Cal. Bar No. 292406)
Email: limda@sec.gov
2 DOHOANG T. DUONG (Cal. Bar No. 219127)
Email: duongdo@sec.gov
3 MATTHEW T. MONTGOMERY (Cal. Bar No. 260149)
Email: montgomerym@sec.gov
4
5 Attorney for Plaintiff
Securities and Exchange Commission
6 Brent W. Wilner, Associate Director
Douglas M. Miller, Supervisory Trial Counsel
7 444 S. Flower Street, Suite 900
Los Angeles, California 90071
8 Telephone: (323) 965-3998
Facsimile: (213) 443-1904
9
10 UNITED STATES DISTRICT COURT
11 CENTRAL DISTRICT OF CALIFORNIA
12 Southern Division
13
14
SECURITIES AND EXCHANGE Case No.
15 COMMISSION,
COMPLAINT
16 Plaintiff,
17 DEMAND FOR JURY TRIAL
vs.
18
JOSEPH NEAL SANBERG,
19
Defendant.
20
21
22 Plaintiff Securities and Exchange Commission (“SEC” or the “Commission”)
23 alleges:
24 JURISDICTION AND VENUE
25 1. The Court has jurisdiction over this action pursuant to Sections 20(b),
26 20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§
27 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), and 27(a) of the
28 Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1),
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1 78u(d)(3)(A), 78u(e) & 78aa(a).
2 2. Defendant Joseph Sanberg (“Defendant” or “Sanberg”) has, directly or
3 indirectly, made use of the means or instrumentalities of interstate commerce, of the
4 mails, or of the facilities of a national securities exchange in connection with the
5 transactions, acts, practices, and courses of business alleged in this complaint.
6 3. Venue is proper in this district pursuant to Section 22(a) of the Securities
7 Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a),
8 because certain of the transactions, acts, practices and courses of conduct constituting
9 violations of the federal securities laws occurred within this district. In addition,
10 venue is proper in this district because Defendant resides in this district.
11 SUMMARY
12 4. Between in or about January 2021 and December 2022, Sanberg, the co-
13 founder, board member, and shareholder of an environmental sustainability services
14 company, Aspiration Partners, Inc. (“Aspiration”), engaged in a scheme to artificially
15 inflate the company’s revenue in order to attract investors and increase the value of
16 its stock. To carry out the scheme, Sanberg made materially false and misleading
17 statements to investors and engaged in other deceptive acts.
18 5. To make it appear as though Aspiration’s business was rapidly growing,
19 Sanberg recruited friends, associates, small businesses, and religious organizations
20 and presented them to Aspiration as bona fide customers who were fully committed
21 to paying large sums of money for Aspiration’s services. These purported customers
22 signed “letters of intent” or other one-to-two-page agreements (“LOIs”) promising to
23 pay $25,000 to $750,000 on a recurring basis in return for the company’s
24 reforestation services.
25 6. In reality, however, these LOIs were a sham because the purported
26 customers (the “LOI Customers”) had no intention of paying for the sustainability
27 services they received from Aspiration. In fact, Sanberg made it clear to the LOI
28 Customers that they did not actually have to pay for the services Aspiration provided.
2
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1 7. Sanberg just needed the LOI Customers to sign the sham LOIs so that
2 Aspiration could recognize the amounts in them as revenue, creating the false
3 appearance that Aspiration was experiencing “explosive growth” and allowing
4 Sanberg to tout Aspiration’s performance to investors looking to buy its stock.
5 8. To add apparent legitimacy to these sham LOIs and ensure that
6 Aspiration would continue recognizing the amounts on the LOIs as revenue, Sanberg
7 paid the initial payment obligations of the LOI Customers by either sending funds to
8 LOI Customers directly or sending funds to an entity that would then transfer those
9 funds to Aspiration. Sanberg made these payments in a way to avoid detection by
10 Aspiration.
11 9. Even as Sanberg stopped paying LOI Customer obligations, and
12 Aspiration was left with a ballooning uncollected and aging receivable LOI balance,
13 the company continued to recognize the amounts on the LOIs as revenue.
14 10. Sanberg took several steps in furtherance of this fraudulent scheme.
15 Using his influence as a co-founder, large shareholder, and board member of the
16 company, he limited the access that Aspiration employees had to the LOI Customers
17 to avoid detection and continue his secret payments on their behalf. Sanberg also
18 vouched for the LOI Customers and pushed for the amounts in the LOIs to be
19 recognized as revenue, even though the LOI Customers had no intention of making
20 payments and large portions of the purported revenue went uncollected. In addition,
21 Sanberg made false and misleading statements about Aspiration’s revenue to
22 investors, saying things like the LOI Customers were “recurring, sticky and value-
23 add” when, in fact, the LOI Customers had no intention of paying for the
24 sustainability services they received from Aspiration. Sanberg also led certain
25 investors to believe—falsely—that Aspiration’s revenue projections for fiscal year
26 2022 were over $100 million higher than what the company had stated publicly.
27 11. The purported LOI Customer revenue artificially increased Aspiration’s
28 revenue by approximately $44 million for fiscal year 2021, even though
3
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1 approximately $33,875,000 of that amount remained uncollected by December 31,
2 2021, and the rest had been paid by Sanberg.
3 12. In total, Sanberg’s scheme resulted in his recruiting approximately 27
4 LOI Customers between 2021 and 2022, all of whom were ostensibly required to pay
5 between $25,000 and $750,000 to Aspiration on a recurring basis.
6 13. Through his fraud, Sanberg raised more than $300 million from
7 investors who falsely believed Aspiration had a thriving environmental sustainability
8 services business.
9 14. By engaging in this conduct, Sanberg violated Section 17(a) of the
10 Securities Act, 15 U.S.C. § 77q(a)(3), and Section 10(b) of the Exchange Act, 15
11 U.S.C. § 78j(b), and Rule 10b-5 thereunder.
12 15. Accordingly, the SEC seeks an order against Defendant: permanently
13 enjoining him from future violations of these provisions and from participating in the
14 issuance, purchase, offer, or sale of any security other than for his own personal
15 accounts; requiring him to pay disgorgement of ill-gotten gains and prejudgment
16 interest; requiring him to pay civil monetary penalties; and imposing an officer-and-
17 director bar against him.
18 THE DEFENDANT
19 16. Joseph Neal Sanberg, age 46, resides in Anaheim, California. He is a
20 co-founder and, until March 2025, was a member of the board of directors of
21 Aspiration. Sanberg also controls several other entities. Sanberg and his entities held
22 29.82% of Aspiration’s shares as of September 2021.
23 RELATED ENTITIES
24 17. Aspiration Partners, Inc. (n/k/a CTN Holdings, Inc.), a Delaware
25 corporation based in Marina del Rey, California, was formed in 2013 to provide
26 consumer banking services to consumers focused on environmental sustainability. In
27 early 2024, Aspiration sold its financial services business and rebranded its carbon
28 business as Catona Climate Solutions LLC (“Catona”). In or about March 2025,
4
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1 CTN Holdings, the parent company of Catona, filed for bankruptcy. Neither
2 Aspiration nor its securities have been registered with the Commission in any
3 capacity.
4 18. InterPrivate Financial Partners III (“InterPrivate”), a Delaware
5 corporation based in New York, New York, was formed as a blank check company,
6 or Special Purpose Acquisition Company (“SPAC”), to pursue a business
7 combination. InterPrivate’s securities are registered under Section 12(b) of the
8 Exchange Act and its common stock is quoted on the New York Stock Exchange
9 (ticker symbol: IPVF). Starting in around August 2021, InterPrivate sought to
10 acquire Aspiration through a merger agreement that was ultimately terminated.
11 THE ALLEGATIONS
12 A. The Fraudulent Scheme
13 1. Sanberg’s Influence and Control Over Aspiration
14 19. In 2013, Sanberg co-founded Aspiration, a privately held financial
15 services company focused on environmental sustainability.
16 20. Sanberg was a large shareholder in and board member of Aspiration, and
17 exercised decision-making authority over its business operations and fund-raising
18 activities.
19 21. Sanberg was also personally and financially tied to the success of
20 Aspiration.
21 22. From March 2020 through at least November 2021, Sanberg obtained
22 more than $100 million in loans by pledging over ten million Aspiration shares as
23 collateral.
24 23. Sanberg made clear to others that maintaining and increasing the value
25 of Aspiration’s shares was important to him personally, and would also benefit
26 Aspiration.
27 24. For example, on November 29, 2020, Sanberg texted Aspiration’s co-
28 founder and Chief Executive Officer (“CEO”): “Figure out how to get me the money
5
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1 tomorrow or I’ll be in default. It’s your turn to do what needs to be done. . . . But if
2 you don’t get me the money tomorrow we are all f…ed. Get me the money. Your
3 turn to figure it out like I have for so long. Wire it to the [Sanberg-entity] account. If
4 you don’t then [the lender] will foreclose. This will give you a good taste of what I
5 have to experience every day. I hate you and I hate this company and I don’t want to
6 work anymore with you [ ]. You are so oblivious to what you’ve forced me to have
7 to do.”
8 2. Sanberg Takes Advantage of a New Line of Business
9 25. In late 2020, Aspiration began offering environmental sustainability
10 services directly to individual and corporate customers under a wholly owned
11 subsidiary called Aspiration Sustainable Impact Services, LLC (“ASIS”).
12 26. This new line of business offered carbon offsets and reforestation
13 services, i.e., tree-planting, where customers would pay Aspiration, which in turn
14 would pay a third party to plant trees.
15 27. Starting in or around December 2020, Sanberg began to recruit the LOI
16 Customers, including those friends and associates he directly communicated with and
17 those who heard about the opportunity from those friends and associates.
18 28. Sanberg made it clear to the LOI Customers he communicated with
19 directly that they could receive reforestation and carbon footprint reduction services
20 from Aspiration at no charge, through subsidies or “sponsorships.”
21 29. Specifically, Sanberg told them that he or his entities would pay
22 Aspiration, or provide the LOI Customers funds to pay Aspiration, for these services.
23 30. As a result of Sanberg’s representations, the LOI Customers believed
24 that they did not have to pay for Aspiration’s reforestation services, and had no
25 intention of paying for them.
26 3. Sanberg Has His Customers Sign Bogus “Letters of Intent”
27 31. Despite his verbal assurances to the LOI Customers that they need not
28 pay for the services they received from Aspiration, starting in or around January
6
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1 2021, Sanberg prepared, or caused others to prepare, LOIs that made it appear like
2 those customers were financially obligated to purchase a certain number of “trees per
3 month” in return for a monthly/quarterly fee to Aspiration.
4 32. These LOIs were illusory because they did not indicate that customers
5 were not actually obligated or expected to pay the monthly/quarterly fees.
6 33. The LOI Customers signed the LOIs, and Aspiration’s CEO counter-
7 signed them on behalf of Aspiration.
8 34. In 2021, Aspiration entered into approximately 27 LOIs and each of the
9 LOI Customers purportedly agreed to pay amounts ranging from $25,000 to $750,000
10 to Aspiration on a monthly/quarterly basis.
11 35. The chart below contains the initials of the LOI Customers, the effective
12 dates of the LOIs, and the purported monthly or quarterly payment obligations:
13 INITIALS DATES AMOUNT
14 A.P.M. 1/1/2021 $500,000
D. 1/1/2021 $250,000
15 G.P.M.S. 1/1/2021 $50,000
16 G.B. (assigned to 1/1/2021 $350,000
S.B.)
17 3.E. 2/1/2021 $250,000
18 C.M. 2/1/2021 $50,000
C.E. 2/1/2021 $100,000
19 E.L.F. 2/1/2021 $50,000
20 F.A.V.R. 2/1/2021 $50,000
F.A. 2/1/2021 $50,000
21
J.M. 2/1/2021 $50,000
22 Y.I.N.B.H. 2/1/2021 $25,000
E.P. 3/1/2021 (amended from $425,000
23
2/1/2021 LOI)
24 M.E. 3/1/2021 (amended from $100,000
25 2/1/2021 LOI)
5.N.A.V. 3/1/2021 $50,000
26 D.D.C. 3/1/2021 $150,000
27 G.R. 3/1/2021 $50,000
N.C. 3/1/2021 $25,000
28 O.C. 3/1/2021 $50,000
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1 O. 3/1/2021 $50,000
2 S.S.E. 3/1/2021 $75,000
V. 3/1/2021 $50,000
3 W. 3/1/2021 $50,000
4 W.P. 3/1/2021 $50,000
A.C.D. 6/1/2021 $750,000
5 H.L.I. 6/1/2021 $300,000
6 S.I. 6/1/2021 $50,000
7 4. Sanberg Limits Access to the LOI Customers
8 36. Sanberg tightly controlled Aspiration’s communications with the LOI
9 Customers, preventing Aspiration from conducting onboarding procedures designed
10 to, inter alia, ensure that Aspiration’s customers could meet their financial
11 obligations.
12 37. Sanberg even had to approve the process by which invoices were sent to
13 LOI Customers.
14 38. For example, on February 17, 2021, when Aspiration’s CEO emailed
15 Sanberg asking for an LOI Customer’s address to send an invoice, Sanberg replied:
16 “You should send it to me. And for all my relationships with [the LOI Customers]
17 please email me the invoices to pass on.”
18 39. Similarly, on March 26, 2021, when Aspiration’s CEO asked Sanberg
19 for his permission to send February and March 2021 invoices to an LOI Customer,
20 Sanberg permitted the executive to send only one of the two invoices.
21 5. Sanberg Secretly Makes Payments for the LOI Customers
22 40. Despite the purportedly binding payment obligations imposed on LOI
23 Customers, Sanberg made any and all payments on their behalf.
24 41. Sanberg did this by sending funds from bank accounts he controlled to
25 either the LOI Customer or Aspiration.
26 42. As one example, Sanberg paid the LOI Customer obligations by sending
27 funds to the LOI Customer, as follows:
28
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1 a. On June 4, 2021, Aspiration emailed the March invoice to E.P. for
2 $425,000;
3 b. On June 14, 2021, Aspiration emailed the April invoice to E.P. for
4 $425,000;
5 c. On June 14, 2021, Sanberg wired $450,000 from a bank account
6 he controlled to E.P.;
7 d. On June 15, 2021, E.P. wired $425,000 to Aspiration;
8 e. On June 15, 2021, Sanberg wired $450,000 from a bank account
9 he controlled to E.P.; and
10 f. On June 15, 2021, E.P. wired $425,000 to Aspiration.
11 43. As another example, Sanberg paid the LOI Customer obligations by
12 sending funds first to a separate entity, which would then send those funds to
13 Aspiration, as follows:
14 a. On March 19, 2022, Aspiration emailed a September 2021
15 invoice to S.B.;
16 b. On March 22, 2022, Sanberg wired $350,000 from a bank account
17 he controlled to a separate entity affiliated with Sanberg;
18 c. On March 22, 2022, that entity transferred the $350,000 to
19 Aspiration, with a description indicating that the funds were for
20 S.B.’s invoice.
21 44. In these ways, Sanberg provided and sent the funds for every payment
22 that was made by an LOI Customer to Aspiration from 2021 to 2022. These
23 payments totaled approximately $33,575,000.
24 6. Aspiration’s Artificially Inflated Revenues Are Recognized
25 and Disseminated to the Public
26 45. In or around March 2021, Aspiration sought to become a public
27 company through a SPAC merger. In pursuit of this goal, Aspiration hired KPMG to
28 conduct an audit of Aspiration’s finances.
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1 46. KPMG considered Aspiration’s expected revenue stream from LOI
2 Customers an important factor in its audit.
3 47. With Sanberg’s support, Aspiration recognized the revenue purportedly
4 generated by the LOI Customers as actual revenue, despite the fact that Sanberg had
5 agreed to cover their payments and despite concerns among Aspiration’s finance
6 department regarding the collectability of such payments.
7 48. The revenue recognized from LOI Customers represented a significant
8 portion of Aspiration’s overall revenue for fiscal year 2021.
9 49. Specifically, for fiscal year 2021, LOI Customer revenue accounted for
10 approximately $44 million of Aspiration’s $100.6 million in recognized revenue.
11 Aspiration recognized this approximate $44 million in LOI Customer revenue, even
12 though approximately $33,875,000 million remained uncollected as of December 31,
13 2021.
14 50. On August 18, 2021, Aspiration announced the proposed SPAC merger
15 with InterPrivate in a joint press release that was attached to a publicly filed Form
16 8-K.
17 51. In an August 2021 investor presentation, which was attached to
18 Aspiration’s Form 8-K filed on August 18, 2021, Aspiration titled a slide “Explosive
19 growth from a standing start” and noted its “Corporate ESG [or Environmental,
20 Social, and Governance] Business has Scaled Rapidly . . .”
21 52. The slide showed significant growth in Aspiration’s annual recurring
22 revenue in the first two quarters of 2021, referring to the number of “corporate
23 clients” (i.e., primarily the LOI Customers) and revenue from the same.
24 53. In a Form S-4 filed on February 15, 2022, InterPrivate included
25 Aspiration’s results of operations for the nine months ended September 30, 2021,
26 which compared to the nine months ended September 30, 2020, showing that
27 “[e]nterprise sustainability services revenue” went from $0 in 2020 to $33.7 million
28 in 2021.
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1 54. The same Form S-4 showed that Aspiration’s total revenue went from
2 $9.2 million for the nine months ended September 30, 2020 to $62 million for the
3 nine months ended September 30, 2021.
4 55. In a press release a few days later, Aspiration’s CEO stated: “Our results
5 for the fourth quarter and full year 2021 demonstrate Aspiration’s key role at the
6 forefront of driving the sustainability revolution” and “Aspiration’s strong, ongoing
7 growth in revenues and gross profits reinforces the power of our differentiated
8 business model . . . .”
9 56. In the same press release, Aspiration announced that its total revenue in
10 2021 was $100.6 million, “up 584%” from 2020 due in part to “Enterprise
11 Sustainability Services.”
12 7. Sanberg Solicits Investors by Touting the Artificially Inflated
13 Revenues
14 57. Between September and December 2021, Investor 1 purchased over $50
15 million in Aspiration stock.
16 58. Before Investor 1 made this investment, Sanberg touted Aspiration’s
17 successes and profitability in the corporate ESG sector to Investor 1’s Chief
18 Investment Officer (“CIO”) in person and over the phone, making materially false
19 and misleading statements to Investor 1 in the process.
20 59. As an example, Sanberg touted how Aspiration’s ESG business
21 “represented a large area of profitability” for the company.
22 60. Further, on February 17, 2022, shortly after the investment and as a
23 lulling tactic, Sanberg emailed Investor 1’s CIO with a subject line “analysis of
24 Aspiration 4Q results,” noting that “Aspiration produced $100mm of revenue” in
25 2021, and touting how Aspiration was “growing as fast/faster” and “a lot more
26 efficiently and profitably than projected.”
27 61. Investor 1’s CIO considered these representations about Aspiration’s
28 successes in the corporate ESG sector and rapid growth to be “extremely important”
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1 in Investor 1’s decision to purchase Aspiration stock, as it made the company look
2 “incredibly well” financially.
3 62. On December 15, 2021, Investor 2 purchased $250 million in Aspiration
4 stock through a special purpose entity.
5 63. Prior to this investment, on September 2, 2021, Aspiration shared
6 detailed financials with Investor 2, including the purported revenue from LOI
7 Customers for the first half of 2021.
8 64. On September 8, 2021, after reviewing the financials, Investor 2’s
9 managing director asked, among other things, about the average term of the
10 agreements that LOI Customers were signed up to and whether they were “one-off
11 consulting agreements.”
12 65. On the same day, Sanberg emailed a reply to Investor 2’s question,
13 saying that the agreements with LOI Customers were “definitely not one-off
14 consulting agreements” and “we are engaging our corporate clients in long term
15 relationship[s].”
16 66. In that same email, Sanberg said he “wanted to call out this point
17 because I think it’s such a big deal” and noted that Aspiration’s relationship with the
18 LOI Customers was “recurring, sticky and value-add” in nature.
19 67. In an October 12, 2021 email, Sanberg told Investor 2 about a specific
20 LOI Customer, E.P., saying that it was “carbon neutral through Aspiration” and that
21 he expected “more opportunities for deals like this.”
22 68. Investor 2 considered these representations regarding the purported
23 success, long-term relationship, and revenue generated from the LOI Customers to be
24 important in its decision to invest.
25 8. Sanberg Further Inflates the Already Inflated Revenues
26 69. At the start of 2022, Aspiration hoped to take advantage of its
27 purportedly strong 2021 financial performance, based in large part on “revenue”
28 generated by the LOI Customers, and use it to attract even more investors.
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1 70. InterPrivate included in its February 15, 2022 Form S-4 that Aspiration
2 expected an estimated $254 million in total revenue for fiscal year 2022. The Form
3 S-4 also contained a “Letter from the Co-Founders” of Aspiration—identified as the
4 CEO and Sanberg—to “Prospective Shareholders,” stating that the enterprise
5 sustainability services revenue for the nine months ended September 30, 2021
6 “represents a significant avenue for future growth.”
7 71. Despite these estimates in the Form S-4, Sanberg wanted to separately
8 present much higher projections (i.e., $385-to-$386 million) to select, potential
9 investors who had signed confidentiality agreements.
10 72. Aspiration’s Chief Financial Officer (“CFO”) disagreed with Sanberg on
11 this approach, due to issues with recognizing and collecting LOI Customer revenue,
12 and expressed a preference for sharing the publicly disclosed, lower projection.
13 73. Specifically, on March 14, 2022, the CFO informed Sanberg: “We do
14 have some revenue recognition risk that I wanted to outline for you. . . . As such, we
15 may not be able to recognize all the revenues outlined [in Sanberg’s higher
16 projections].”
17 74. In that same email, the CFO told Sanberg: “There is also risk with the
18 existing Enterprise business.[] Our collection has been poor and KPMG may push us
19 to reverse or write off some revenue. But our main challenge today is revenue
20 recognition. . . . Considering the revenue recognition risk, my recommendation is to
21 go out with one set of projections ($255M).”
22 75. On March 31, 2022, the Aspiration board, which included Sanberg,
23 received the company’s 2022 budget, which forecasted the lower $255 million in
24 revenue for fiscal year 2022, largely driven by a forecast of $150 million in
25 “[e]nterprise sustainability revenue.”
26 76. However, Sanberg still insisted on showing select investors the higher
27 projections.
28
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1 77. After the March 31, 2022 email to Aspiration’s board with the lower
2 forecast, Sanberg went forward with circulating the higher projections to prospective
3 investors who had signed confidentiality agreements.
4 78. On April 6, 2022, Sanberg emailed a prospective investor this
5 confidential “Investor Addendum,” which projected that Aspiration would achieve
6 “$386 million in total revenues in 2022” and discussed “strong demand generated by
7 our Enterprise business.”
8 79. In the same April 6, 2022 email, Sanberg told the potential investor that
9 the Investor Addendum contained “internal projections” that were “substantially
10 ahead of the public projections that Aspiration disclosed to the marketplace.”
11 80. Sanberg was also copied on an April 25, 2022 email from an Aspiration
12 executive to another prospective investor containing the higher 2022 revenue
13 projections—i.e., more than $385 million in revenue for fiscal year 2022 based on
14 expected revenue of over $280 million in “Enterprise Sustainability Services”—and
15 purported actual revenue from LOI Customers in 2021. In this email, the executive
16 similarly told this prospective investor that the higher projections were “based on our
17 internal targets rather than the more conservative numbers we’ve shared publicly.”
18 81. The prospective investors who received these inflated projections
19 considered them important in deciding whether to invest in Aspiration.
20 9. Sanberg Obtained Money and Shares from Aspiration as a
21 Result of the Artificially Inflated Revenue
22 82. Sanberg received significant compensation from Aspiration between
23 2021 and 2022 for his work recruiting LOI Customers.
24 83. For example, on April 12, 2021, an Aspiration board resolution granted
25 Sanberg an option to purchase 3,338,809 shares of Aspiration stock.
26 84. Aspiration’s CEO later memorialized this grant by signing an Aspiration
27 services contract dated September 13, 2021, which stated that “in exchange for
28 Joseph Sanberg’s advisory services related to Aspiration Sustainable Impact Services
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1 LLC . . . the Company has offered 3,338,809 common stock options of the Company
2 to Joseph Sanberg [] in consideration for these services.”
3 85. In September 2021, Aspiration internally valued 3,338,809 in its
4 common stock at tens of millions of dollars.
5 86. Aspiration’s CEO signed another services contract dated July 29, 2021,
6 which obligated Aspiration to pay one of Sanberg’s entities $475,000 “in exchange
7 for Joseph Sanberg’s services related to Aspiration’s Sustainable Impact Services
8 LLC.”
9 87. Aspiration’s CEO signed another services contract dated August 30,
10 2021, which obligated Aspiration to pay one of Sanberg’s entities $550,000 and
11 specified that the payment was “related to Aspiration Sustainable Impact Services
12 LLC.”
13 88. Aspiration’s CEO signed another Aspiration services contract dated
14 September 30, 2021, which obligated Aspiration to pay one of Sanberg’s entities
15 $525,316 “in exchange for Joseph Sanberg’s services related to [Aspiration’s]
16 sustainability impact business.” An identical contract dated October 22, 2021, for
17 $512,476, was also signed by the CEO.
18 89. In all, in 2021, Aspiration paid Sanberg and his entities over $3.6 million
19 in cash.
20 90. In addition, during its January 2022 meeting, the Aspiration board
21 granted Sanberg a one-time cash bonus of $8,000,000, deeming such a grant
22 “advisable and in the in best interests of the Company.”
23 91. In the same January 2022 meeting, the Aspiration board approved the
24 grant of “9,000,000 shares of fully vested Restricted Stock to Joseph Sanberg . . . to
25 reward Mr. Sanberg for his service to the Company and in order to incent Mr.
26 Sanberg to continue his service to the Company.”
27 92. In all, in 2022, Aspiration paid Sanberg and his entities approximately
28 $8 million in cash.
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1 93. As of December 31, 2022, Sanberg and his entities owned more than 33
2 million shares of Aspiration stock, representing 24.8% of all outstanding shares of the
3 company.
4 94. Aspiration made these lucrative payouts to Sanberg despite having low
5 cash reserves and employees expressing concerns over Aspiration’s ballooning
6 accounts receivable and accounts payable balances.
7 95. Moreover, Sanberg used a portion of millions of dollars he obtained
8 from Aspiration to pay the monthly/quarterly fees owed by the LOI Customers.
9 96. For example, Sanberg used nearly $2.3 million of his aforementioned $8
10 million cash bonus from January 2022 to pay invoices for approximately five LOI
11 Customers in early February 2022.
12 10. Sanberg’s Inflated Revenue Scheme Falls Apart
13 97. In 2022, revenue from the LOI Customers accounted for over $40
14 million of Aspiration’s $216,764,449 in recognized revenue.
15 98. However, Aspiration’s accounts receivable balance had increased to
16 approximately $104 million by June 2022, higher than the entirety of the company’s
17 2021 revenue.
18 99. On March 18, 2022, an Aspiration accountant lodged an internal
19 complaint to express concerns about “related party transactions” pertaining to
20 Aspiration’s reforestation services business, lack of supporting documentation for
21 LOI Customer revenue, Aspiration’s uncollected balances, and invoicing issues.
22 100. As a result, the Aspiration board agreed to form a Special Committee to
23 investigate these concerns. By April 5, 2022, all board members, including Sanberg,
24 signed the “Action by Written Consent of the Board” establishing the Special
25 Committee.
26 101. On or about July 5, 2022, after the creation of the Special Committee,
27 KPMG resigned as Aspiration’s outside auditor, citing, among other factors, “revenue
28 transactions that had characteristics of fraud.”
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1 102. In late 2022, Aspiration’s new management launched a revenue
2 remediation project that resulted in Aspiration restating its financial statements for
3 fiscal years 2021 and 2022.
4 103. In August 2023, InterPrivate announced that it was abandoning its SPAC
5 merger with Aspiration.
6 B. Sanberg’s False and Misleading Statements
7 104. In furtherance of and in connection with the fraudulent scheme to
8 artificially inflate Aspiration’s revenue, Sanberg made various false and misleading
9 representations to investors.
10 105. Sanberg was the maker of these false and misleading statements because
11 he had ultimate authority over their content and/or approved their dissemination.
12 106. Sanberg’s false and misleading statements were material in that they
13 would have been viewed by a reasonable investor as important in making an
14 investment decision and as having significantly altered the total mix of information
15 made available to the investor.
16 107. First, Sanberg represented to investors that Aspiration’s LOI Customer
17 business—which was referred to as Aspiration’s corporate ESG business, Enterprise
18 Sustainability business, or ASIS business—was highly successful and profitable.
19 108. Second, he represented to investors that LOI Customers were long-term
20 customers.
21 109. Third, he specifically identified a few specific LOI Customers for
22 investors, to prove that they existed.
23 110. Fourth, he circulated to investors inflated 2022 projections that were
24 premised on revenue from the LOI Customers.
25 111. All of these representations were materially false and misleading
26 because Sanberg omitted the fact that he assured the LOI Customers they would not
27 have to pay for Aspiration’s services, that the LOI Customer revenue was predicated
28 on Sanberg paying the monthly/quarterly fees on behalf of the LOI Customers, that
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1 Sanberg was partially relying on money he obtained from Aspiration to cover those
2 monthly/quarterly payments, and that a significant portion of the LOI Customer
3 revenue remained uncollected.
4 112. In addition, with respect to the 2022 projections, Sanberg omitted that
5 Aspiration’s CFO expressed concerns about the collectability of the projected
6 revenue and its ability to be recognized as revenue.
7 C. Sanberg Acted with Scienter and Negligently
8 113. Sanberg acted with scienter in carrying out the scheme to defraud and in
9 making the false and misleading statements to investors. Sanberg also acted
10 negligently in carrying out his scheme and in making the false and misleading
11 statements, that is, Sanberg failed to exercise the level of care that a reasonable
12 person would have exercised under the same circumstances.
13 114. Sanberg’s scienter and failure to act reasonably under the circumstances
14 is demonstrated, in part, by the following:
15 (a) Sanberg knew, or was reckless and negligent for not knowing, that
16 the LOIs were artificially inflating Aspiration’s revenue, both internally and to the
17 public, because he assured LOI Customers they did not actually have to make the
18 payments set forth in the LOIs.
19 (b) Sanberg paid the invoices sent to the LOI Customers by either
20 paying Aspiration or by wiring money to the LOI Customers for the customers to pay
21 Aspiration.
22 (c) Sanberg limited Aspiration’s communication with the LOI
23 Customers, controlling who could send invoices to them, and how many invoices
24 could be sent at one time.
25 (d) Sanberg ensured that little to no due diligence was done on the
26 LOIs themselves, including on the identity and paying ability of the LOI Customers.
27 (e) Despite knowing that he told LOI Customers they would not have
28 to pay for Aspiration’s services, and that most of the LOI Customer
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1 monthly/quarterly payments were not actually being made, Sanberg touted the LOI
2 Customers to Aspiration investors, calling them “a big deal” and claiming they were
3 “recurring, sticky and value-add.”
4 (f) Despite knowing that his inflated 2022 projections were based on
5 LOI Customer revenue that he financed and was largely uncollected, Sanberg created,
6 advocated for, and disseminated to investors those inflated projections.
7 (g) Sanberg knew, or was reckless and negligent for not knowing, that
8 the inflated 2022 projections were riddled with revenue recognition issues, as
9 specifically outlined for him by Aspiration’s CFO, before he sent them out to
10 investors.
11 FIRST CLAIM FOR RELIEF
12 Fraud in Connection with the Purchase or Sale of Securities
13 Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
14 115. The SEC realleges and incorporates by reference paragraphs 1 through
15 114 above.
16 116. In connection with the purchase or sale of securities, Sanberg engaged in
17 a scheme to defraud and made material misstatements, false statements, and
18 omissions to investors. Specifically, Sanberg (1) recruited LOI Customers to buy
19 Aspiration’s tree-planting services and maintained exclusive relationships with them;
20 (2) had LOI Customers sign LOIs that purportedly obligated them to pay Aspiration
21 over a long period of time but assured them that they would not actually have to do
22 so; (3) made those payments himself through accounts he controlled and, in some
23 cases, with money Aspiration paid him; (4) ensured that Aspiration recognized such
24 payments and uncollected LOI Customer payments as revenue even though LOI
25 Customers did not pay the amounts due and the LOIs themselves were not properly
26 vetted; (5) made false statements to investors that such “revenue” was a sign of
27 Aspiration’s long-term success; and (6) lulled investors with financials showing such
28 purported revenue.
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1 117. By engaging in the conduct described above, Sanberg, with scienter,
2 directly or indirectly, in connection with the purchase or sale of a security, and by the
3 use of means or instrumentalities of interstate commerce, of the mails, or of the
4 facilities of a national securities exchange: (a) employed devices, schemes, or
5 artifices to defraud; (b) made untrue statements of a material fact or omitted to state a
6 material fact necessary in order to make the statements made, in the light of the
7 circumstances under which they were made, not misleading; or (c) engaged in acts,
8 practices, or courses of business which operated or would operate as a fraud or deceit
9 upon other persons.
10 118. By engaging in the conduct described above, Sanberg violated, and
11 unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange
12 Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
13 SECOND CLAIM FOR RELIEF
14 Fraud in the Offer or Sale of Securities
15 Violations of Sections 17(a) of the Securities Act
16 119. The SEC realleges and incorporates by reference paragraphs 1 through
17 114 above.
18 120. In the offer or sale of securities, Sanberg engaged in a scheme to defraud
19 and made material misstatements, false statements, and omissions to investors.
20 Specifically, Sanberg (1) recruited LOI Customers to buy Aspiration’s tree-planting
21 services and maintained exclusive relationships with them; (2) had LOI Customers
22 sign LOIs that purportedly obligated them to pay Aspiration over a long period of
23 time but assured them that they would not actually have to do so; (3) made those
24 payments himself through accounts he controlled and, in some cases, with money
25 Aspiration paid him; (4) ensured that Aspiration recognized such payments and
26 uncollected LOI Customer payments as revenue even though LOI Customers did not
27 pay the amounts due and the LOIs themselves were not properly vetted; (5) made
28 false statements to investors that such “revenue” was a sign of Aspiration’s long-term
20
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1 success; (6) lulled investors with financials showing the purported revenue; and (7)
2 disseminated false, unsupported, and inflated projections to prospective investors.
3 121. By engaging in the conduct described above, Sanberg, with scienter,
4 directly or indirectly, in the offer or sale of securities by the use of means or
5 instruments of transportation or communication in interstate commerce or by use of
6 the mails (a) employed devices, schemes, or artifices to defraud; (b) obtained money
7 or property by means of untrue statements of a material fact or by omitting to state a
8 material fact necessary in order to make the statements made, in light of the
9 circumstances under which they were made, not misleading; or (c) engaged in
10 transactions, practices, or courses of business which operated or would operate as a
11 fraud or deceit upon the purchaser.
12 122. By engaging in the conduct described above, Sanberg violated, and
13 unless restrained and enjoined will continue to violate, Section 17(a) of the Securities
14 Act, 15 U.S.C. § 77q(a).
15 PRAYER FOR RELIEF
16 WHEREFORE, the SEC respectfully requests that the Court:
17 I.
18 Issue findings of fact and conclusions of law that Defendant committed the
19 alleged violations.
20 II.
21 Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
22 Civil Procedure, permanently enjoining Defendant and his agents, servants,
23 employees, and attorneys, and those persons in active concert or participation with
24 any of them, who receive actual notice of the judgment by personal service or
25 otherwise, and each of them, from violating Sections 17(a) of the Securities Act [15
26 U.S.C. § 77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and
27 Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
28
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1 III.
2 Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
3 Civil Procedure, permanently enjoining Defendant from directly or indirectly,
4 including, but not limited to, through any entity he owns or controls, participating in
5 the issuance, purchase, offer, or sale of any security, provided, however, that such
6 injunction shall not prevent him from purchasing or selling securities for his own
7 personal accounts.
8 IV.
9 Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
10 Civil Procedure, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. §
11 78u(d)(2)] and/or Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], prohibiting
12 Defendant from acting as an officer or director of any issuer that has a class of
13 securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or
14 that is required to file reports pursuant to Section 15(d) of the Exchange Act [15
15 U.S.C. § 78o(d)].
16 V.
17 Order Defendant to disgorge all funds received from his illegal conduct,
18 together with prejudgment interest thereon, pursuant to Exchange Act Sections
19 21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3); 78u(d)(5) and 78u(d)(7)].
20 VI.
21 Order Defendant to pay civil penalties under Section 20(d) of the Securities
22 Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
23 78u(d)(3)] for their violations of the federal securities laws.
24 VII.
25 Retain jurisdiction of this action in accordance with the principles of equity and
26 the Federal Rules of Civil Procedure in order to implement and carry out the terms of
27 all orders and decrees that may be entered, or to entertain any suitable application or
28 motion for additional relief within the jurisdiction of this Court.
22
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1 VIII.
2 Grant such other and further relief as this Court may determine to be just and
3 necessary.
4
5 Dated: August 21, 2025 /s/ Daniel S. Lim
6 Daniel S. Lim
Attorney for Plaintiff
7 Securities and Exchange Commission
8
9 Jury Demand
10 The SEC demands trial by jury on liability.
11
12 Dated: August 21, 2025 /s/ Daniel S. Lim
Daniel S. Lim
13 Attorney for Plaintiff
14 Securities and Exchange Commission
15
16
17
18
19
20
21
22
23
24
25
26
27
28
23
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Complaints and Other fnitiating Do uments
8:25-cv-01848 Securities and Exchange Commission v. Sanberg
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Notice of Electronic Filing
The following transaction was entered by Lim, Daniel on 8/21/2025 at 7:33 AM PDT and filed on 8/21/2025
Case Name: Securities and Exchange Commission v. Sanberg
Case Number: 8:25-cv-01848
Filer: Securities and Exchange Commission
Document Number: |
Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and Exchange
Commission. (Attorney Daniel S. Lim added to party Securities and Exchange
Commission(pty:pla))(Lim, Daniel)
8:25-cv-01848 Notice has been electronically mailed to:
Daniel S. Lim _limda@sec.gov, haackk@sec. gov, irwinma@sec.gov, LAROfiling@sec.gov, LeungG@SEC.GOV
8:25-cv-01848 Notice has been delivered by First Class U. S. Mail or by other means BY THE FILER to :
The following document(s) are associated with this transaction:
Document description: Main Document
Original filename:C:\fakepath\2025.08.21 Complaint (FINAL).pdf
Electronic document Stamp:
[STAMP cacdStamp ID=1020290914 [Date=8/2 1/2025] [FileNumber=40772802-0
] [3bf7£c498f4ad779 1b2£6706 1 7c6ff579e6f7875503d6be7675 fd6cefl 1d02629ce
afdc44c63361749ba9953b267edc297 1 df9177e5d27185261150df8fc212b]]
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Exhibit H
Case 2:21-ap-01034-BB
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Fill in this information to identify the case:
United States Bankruptcy Court for the:
DISTRICT OF DELAWARE
Case number (if known) Chapter 11
Check if this is an
amended filing
Official Form 201
Voluntary Petition for Non-Individuals Filing for Bankruptcy 06/24
If more space is needed, attach a separate sheet to this form. On the top of any additional pages, write the debtor's name and the case number (if
known). For more information, a separate document, Instructions for Bankruptcy Forms for Non-Individuals, is available.
1. Debtor's name CTN Holdings, Inc.
2. All other names debtor
used in the last 8 years
Include any assumed FKA Aspiration Partners, Inc
names, trade names and
doing business as names
3. Debtor's federal
Employer Identification 47-5059122
Number (EIN)
4. Debtor's address Principal place of business Mailing address, if different from principal place of
business
548 Market Street,
PMB 72015
San Francisco, CA 94101-5401
Number, Street, City, State & ZIP Code P.O. Box, Number, Street, City, State & ZIP Code
San Francisco Location of principal assets, if different from principal
County place of business
Number, Street, City, State & ZIP Code
5. Debtor's website (URL) www.catona.com
6. Type of debtor Corporation (including Limited Liability Company (LLC) and Limited Liability Partnership (LLP))
Partnership (excluding LLP)
Other. Specify:
Official Form 201 Voluntary Petition for Non-Individuals Filing for Bankruptcy page 1
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Debtor CTN Holdings, Inc. Case number (if known)
Name
7. Describe debtor's business A. Check one:
Health Care Business (as defined in 11 U.S.C. § 101(27A))
Single Asset Real Estate (as defined in 11 U.S.C. § 101(51B))
Railroad (as defined in 11 U.S.C. § 101(44))
Stockbroker (as defined in 11 U.S.C. § 101(53A))
Commodity Broker (as defined in 11 U.S.C. § 101(6))
Clearing Bank (as defined in 11 U.S.C. § 781(3))
None of the above
B. Check all that apply
Tax-exempt entity (as described in 26 U.S.C. §501)
Investment company, including hedge fund or pooled investment vehicle (as defined in 15 U.S.C. §80a-3)
Investment advisor (as defined in 15 U.S.C. §80b-2(a)(11))
C. NAICS (North American Industry Classification System) 4-digit code that best describes debtor. See
http://www.uscourts.gov/four-digit-national-association-naics-codes.
5239
8. Under which chapter of the Check one:
Bankruptcy Code is the
Chapter 7
debtor filing?
Chapter 9
Chapter 11. Check all that apply:
Debtor’s aggregate noncontingent liquidated debts (excluding debts owed to insiders or affiliates)
are less than $3,024,725 (amount subject to adjustment on 4/01/25 and every 3 years after that).
The debtor is a small business debtor as defined in 11 U.S.C. § 101(51D). If the debtor is a small
business debtor, attach the most recent balance sheet, statement of operations, cash-flow
statement, and federal income tax return or if all of these documents do not exist, follow the
procedure in 11 U.S.C. § 1116(1)(B).
The debtor is a small business debtor as defined in 11 U.S.C. § 101(51D), and it chooses to
proceed under Subchapter V of Chapter 11.
A plan is being filed with this petition.
Acceptances of the plan were solicited prepetition from one or more classes of creditors, in
accordance with 11 U.S.C. § 1126(b).
The debtor is required to file periodic reports (for example, 10K and 10Q) with the Securities and
Exchange Commission according to § 13 or 15(d) of the Securities Exchange Act of 1934. File the
Attachment to Voluntary Petition for Non-Individuals Filing for Bankruptcy under Chapter 11
(Official Form 201A) with this form.
The debtor is a shell company as defined in the Securities Exchange Act of 1934 Rule 12b-2.
Chapter 12
9. Were prior bankruptcy No.
cases filed by or against Yes.
the debtor within the last 8
years?
If more than 2 cases, attach a
separate list. District When Case number
District When Case number
10. Are any bankruptcy cases No
pending or being filed by a Yes.
business partner or an
affiliate of the debtor?
List all cases. If more than 1,
attach a separate list Debtor See Annex A attached Relationship
Official Form 201 Voluntary Petition for Non-Individuals Filing for Bankruptcy page 2
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Debtor CTN Holdings, Inc. Case number (if known)
Name
District When Case number, if known
11. Why is the case filed in Check all that apply:
this district?
Debtor has had its domicile, principal place of business, or principal assets in this district for 180 days immediately
preceding the date of this petition or for a longer part of such 180 days than in any other district.
A bankruptcy case concerning debtor's affiliate, general partner, or partnership is pending in this district.
12. Does the debtor own or No
have possession of any
real property or personal Yes. Answer below for each property that needs immediate attention. Attach additional sheets if needed.
property that needs
immediate attention? Why does the property need immediate attention? (Check all that apply.)
It poses or is alleged to pose a threat of imminent and identifiable hazard to public health or safety.
What is the hazard?
It needs to be physically secured or protected from the weather.
It includes perishable goods or assets that could quickly deteriorate or lose value without attention (for example,
livestock, seasonal goods, meat, dairy, produce, or securities-related assets or other options).
Other
Where is the property?
Number, Street, City, State & ZIP Code
Is the property insured?
No
Yes. Insurance agency
Contact name
Phone
Statistical and administrative information
13. Debtor's estimation of . Check one:
available funds
Funds will be available for distribution to unsecured creditors.
After any administrative expenses are paid, no funds will be available to unsecured creditors.
14. Estimated number of 1-49 1,000-5,000 25,001-50,000
creditors 50-99 5001-10,000 50,001-100,000
100-199 10,001-25,000 More than100,000
200-999
15. Estimated Assets $0 - $50,000 $1,000,001 - $10 million $500,000,001 - $1 billion
$50,001 - $100,000 $10,000,001 - $50 million $1,000,000,001 - $10 billion
$100,001 - $500,000 $50,000,001 - $100 million $10,000,000,001 - $50 billion
$500,001 - $1 million $100,000,001 - $500 million More than $50 billion
16. Estimated liabilities $0 - $50,000 $1,000,001 - $10 million $500,000,001 - $1 billion
$50,001 - $100,000 $10,000,001 - $50 million $1,000,000,001 - $10 billion
$100,001 - $500,000 $50,000,001 - $100 million $10,000,000,001 - $50 billion
$500,001 - $1 million $100,000,001 - $500 million More than $50 billion
Official Form 201 Voluntary Petition for Non-Individuals Filing for Bankruptcy page 3
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Debtor CTN Holdings, Inc. Case number (if known)
Name
Request for Relief, Declaration, and Signatures
WARNING -- Bankruptcy fraud is a serious crime. Making a false statement in connection with a bankruptcy case can result in fines up to $500,000 or
imprisonment for up to 20 years, or both. 18 U.S.C. §§ 152, 1341, 1519, and 3571.
17. Declaration and signature
of authorized The debtor requests relief in accordance with the chapter of title 11, United States Code, specified in this petition.
representative of debtor
I have been authorized to file this petition on behalf of the debtor.
I have examined the information in this petition and have a reasonable belief that the information is true and correct.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on March 30, 2025
MM / DD / YYYY
X /s/ Miles Staglik Miles Staglik
Signature of authorized representative of debtor Printed name
Title Chief Restructuring Officer
18. Signature of attorney X /s/ William F. Taylor, Jr. Date March 30, 2025
Signature of attorney for debtor MM / DD / YYYY
William F. Taylor, Jr.
Printed name
Whiteford, Taylor & Preston LLC
Firm name
600 North King Street
Suite 300
Wilmington, DE 19801
Number, Street, City, State & ZIP Code
Contact phone 302-353-4144 Email address wtaylor@whitefordlaw.com
2936 DE
Bar number and State
Official Form 201 Voluntary Petition for Non-Individuals Filing for Bankruptcy page 4
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ANNEX A
Pending Bankruptcy Cases Filed by the Debtor and Affiliates of the Debtor
On the date hereof, each of the entities below (collectively, the “Debtors”) filed a Petition in the
United States Bankruptcy Court for the District of Delaware for relief under chapter 11 of title 11
of the United States Code. The Debtors have moved for joint administration of these cases under
the case number assigned to the chapter 11 case of CTN Holdings, Inc.
• CTN SPV Holdings, LLC
• Catona Climate Solutions, LLC
• Make Earth Green Again, LLC
• Aspiration QFZ, LLC
• Zero Carbon Holdings, LLC
• Aspiration Fund Adviser, LLC
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Fill in this information to identify the case:
Debtor name CTN Holdings, Inc.
United States Bankruptcy Court for the: DISTRICT OF DELAWARE Check if this is an
Case number (if known): amended filing
Official Form 204
Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 30 Largest Unsecured Claims and
Are Not Insiders 12/15
A list of creditors holding the 20 largest unsecured claims must be filed in a Chapter 11 or Chapter 9 case. Include claims which the
debtor disputes. Do not include claims by any person or entity who is an insider, as defined in 11 U.S.C. § 101(31). Also, do not
include claims by secured creditors, unless the unsecured claim resulting from inadequate collateral value places the creditor
among the holders of the 20 largest unsecured claims.
Name of creditor and complete mailing Name, telephone number and Nature of claim Indicate if Amount of claim
address, including zip code email address of creditor (for example, claim is If the claim is fully unsecured, fill in only unsecured
contact trade debts, bank contingent, claim amount. If claim is partially secured, fill in
loans, unliquidated, total claim amount and deduction for value of
professional or disputed collateral or setoff to calculate unsecured claim.
services, and Total Deduction for Unsecured claim
government claim, if value of
contracts) partially collateral or
secured setoff
1 LA Clippers LLC ap@clippers.com Unsecured $30,047,222.00
1212 Flower Street (213) 204-2800 trade payable
Los Angeles, CA 90015 and
Contracted
Carbon
Credits
2 Forum Entertainment, LLC ron.bleiweiss@thelaforum. Contracted $10,999,414.00
3900 W. Manchester Avenue com Carbon Credit
Inglewood, CA 90305 (310) 862-6200 Value
3 Interprivate III Financial info@interprivate.com Unsecured $7,000,000.00
Partners Inc. (212) 920-0125 trade payable
1350 Avenue of the Americas
2nd Floor
New York, NY 10019
4 KL2 Aspire LLC mitchfrankel.sports@gmail Unsecured $7,000,000.00
12220 Westerly Trail .com trade payable
Moreno Valley, CA 92557
5 Boston Red Sox Baseball Club ar@redsox.com Unsecured $4,974,903.40
Limited Partnership (617) 226-6000 trade payable
Fenway Park
2 Jersey Street
Boston, MA 02215
6 Socure, Inc. billing@socure.com Unsecured $4,140,120.39
330 7th Ave (866) 932-9013 trade payable
New York, NY 10001
7 Noble People accounting@noblepeople. Unsecured $3,889,494.50
96 Morton Street com trade payable
New York, NY 10014 (646) 234-8746
Official form 204 Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 30 Largest Unsecured claims page 1
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Debtor CTN Holdings, Inc. Case number (if known)
Name
Name of creditor and complete mailing Name, telephone number and Nature of claim Indicate if Amount of claim
address, including zip code email address of creditor (for example, claim is If the claim is fully unsecured, fill in only unsecured
contact trade debts, bank contingent, claim amount. If claim is partially secured, fill in
loans, unliquidated, total claim amount and deduction for value of
professional or disputed collateral or setoff to calculate unsecured claim.
services, and Total Deduction for Unsecured claim
government claim, if value of
contracts) partially collateral or
secured setoff
8 Slalom, LLC billing@slalom.com Unsecured $2,617,224.85
821 2nd Avenue (206) 438-5700 trade payable
Suite 1900
Seattle, WA 98104
9 Eden Reforestation Projects shosie@hosielaw.com Mediated $1,726,042.97
and Compassionate (415) 247-6000 Judgment
Carbons, LLC Balance
Spencer Hosie
Hosie Rice, LLP
149 New Montgomery Street
4th Floor
San Francisco, CA 94102
10 Clear Link Tehnologies, LLC knate@rqn.com Litigated $1,049,598.26
d/b/a The Penny Hoarder (801) 323-3354 Judgement
(Taylor Media Corp)
Kennedy D. Tate
36 South State Street
Suite 1400
Salt Lake City, UT 84111
11 Feedzai Inc ana.lima@feedzai.com Unsecured $930,000.00
1875 South Grant Street (650) 260-8924 trade payable
Suite 950
San Mateo, CA 94402
12 Sidley Austin LLP mdayton@sidley.com Unsecured $911,129.18
955 California Street (212) 839-5300 trade payable
Chicago, IL 60603
13 Impact Tech, Inc breena.beckett@impact.c Unsecured $851,549.00
223 East De La Guerra Street om trade payable
Santa Barbara, CA 93101 (805) 324-6021
14 Mission Financial Partners tnewell@aspitation.com Future $750,011.00
1 Embarcadero Center Suite 800 (800) 683-8529 Carbon
San Fancisco, CA 94111 Credits
15 Facebook, Inc. ar@fb.com Unsecured $740,892.95
15161 Collections Center Drive (650) 308-7300 trade payable
Chicago, IL 60693
16 Donnelley Financial Solutions Accounts-Receivable@dfi Unsecured $667,120.52
35 W Wacker Drive nsolutions.com trade payable
Chicago, IL 60601 (800) 823-5304
Official form 204 Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 30 Largest Unsecured claims page 2
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Debtor CTN Holdings, Inc. Case number (if known)
Name
Name of creditor and complete mailing Name, telephone number and Nature of claim Indicate if Amount of claim
address, including zip code email address of creditor (for example, claim is If the claim is fully unsecured, fill in only unsecured
contact trade debts, bank contingent, claim amount. If claim is partially secured, fill in
loans, unliquidated, total claim amount and deduction for value of
professional or disputed collateral or setoff to calculate unsecured claim.
services, and Total Deduction for Unsecured claim
government claim, if value of
contracts) partially collateral or
secured setoff
17 Performcb LLC Unsecured $626,834.39
2389 E Venice Avenue accountsreceivable@perf trade payable
#410 ormcb.com
Venice, FL 34292 (866) 867-6333
18 Clarity AI billing@clarity.ai Unsecured $600,000.00
609 Greenwich Street (929) 581-1230 trade payable
5th Floor
New York, NY 10014
19 Trees for the Future tim@trees.org Contract $590,628.00
10770 Columbia Pike #300 (301)565-0630 Obligation
Silver Spring, MD 20901
20 Gibson Dunn & Crutcher LLP RPerez@gibsondunn.com Unsecured $571,939.88
333 South Grand Avenue (212) 351-4000 trade payable
Los Angeles, CA 90071
21 Deloitte Services, LP ekiaer@deloitte.com Prepaid $500,000.00
30 Rockefeller Plaza (212) 492-4000 Carbon
New York, NY 10122 Credits
22 Laurel Strategies, Inc jvalic@laurelstrategies.co Unsecured $492,977.00
4A Oxford Street m trade payable
Chevy Chase, MD 20815 (202) 776-7776
23 Davis Wright Tremaine LLP ach@dwt.com Unsecured $451,933.73
920 Fifth Avenue, Suite 330 (212) 489-8230 trade
Seattle, WA 98104 payable
24 Sandline Discovery LLC Unsecured $433,767.59
105 North Virginia Avenue, Suite ar@sandlineglobal.com trade
302 (571) 888-3366 payable
Falls Church, VA 22046
25 Bank of America lisa.shpritz@bofa.com Prepaid $360,000.00
Corprate Center (800) 432-1002 Carbon
101 South Tyron Street Credits
Charlotte, NC 28255
26 Bartko Zankel Bunzel & Miller carthur@bartkolaw.com Unsecured $328,868.43
One Embarcadero Center (415) 956-1900 trade
Suite 800 payable
San Francisco, CA 94111
27 Prodege, LLC ar@prodege.com Unsecured $220,000.00
100 N. Pacific Coast Highway, (310) 294-9599 trade
8th Floor payable
Pasadena, CA 91185-4252
Official form 204 Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 30 Largest Unsecured claims page 3
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Debtor CTN Holdings, Inc. Case number (if known)
Name
Name of creditor and complete mailing Name, telephone number and Nature of claim Indicate if Amount of claim
address, including zip code email address of creditor (for example, claim is If the claim is fully unsecured, fill in only unsecured
contact trade debts, bank contingent, claim amount. If claim is partially secured, fill in
loans, unliquidated, total claim amount and deduction for value of
professional or disputed collateral or setoff to calculate unsecured claim.
services, and Total Deduction for Unsecured claim
government claim, if value of
contracts) partially collateral or
secured setoff
28 APT 304, LLC james@apt304.io Unsecured $195,033.44
5000 Birch Street, Suite 300 (714) 386-9923 trade
Newport Beach, CA 92660 payable
29 Dechert LLP kathleen.fenton@dechert. Unsecured $183,244.85
2929 Arch Street com trade
Philadelphia, PA 19104 (212) 698-3500 payable
30 PricewaterhouseCoopers LLP geoffrey.b.husted@pwc.c Unsecured $167,000.00
P.O. Box 952282 om trade
Dallas, TX 75395-2282 (214) 999-1400 payable
Official form 204 Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 30 Largest Unsecured claims page 4
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Fill in this information to identify the case:
Debtor name CTN Holdings, Inc.
United States Bankruptcy Court for the: DISTRICT OF DELAWARE
Case number (if known)
Check if this is an
amended filing
Official Form 202
Declaration Under Penalty of Perjury for Non-Individual Debtors 12/15
An individual who is authorized to act on behalf of a non-individual debtor, such as a corporation or partnership, must sign and submit this
form for the schedules of assets and liabilities, any other document that requires a declaration that is not included in the document, and any
amendments of those documents. This form must state the individual’s position or relationship to the debtor, the identity of the document,
and the date. Bankruptcy Rules 1008 and 9011.
WARNING -- Bankruptcy fraud is a serious crime. Making a false statement, concealing property, or obtaining money or property by fraud in
connection with a bankruptcy case can result in fines up to $500,000 or imprisonment for up to 20 years, or both. 18 U.S.C. §§ 152, 1341,
1519, and 3571.
Declaration and signature
I am the president, another officer, or an authorized agent of the corporation; a member or an authorized agent of the partnership; or another
individual serving as a representative of the debtor in this case.
I have examined the information in the documents checked below and I have a reasonable belief that the information is true and correct:
Schedule A/B: Assets–Real and Personal Property (Official Form 206A/B)
Schedule D: Creditors Who Have Claims Secured by Property (Official Form 206D)
Schedule E/F: Creditors Who Have Unsecured Claims (Official Form 206E/F)
Schedule G: Executory Contracts and Unexpired Leases (Official Form 206G)
Schedule H: Codebtors (Official Form 206H)
Summary of Assets and Liabilities for Non-Individuals (Official Form 206Sum)
Amended Schedule
Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 20 Largest Unsecured Claims and Are Not Insiders (Official Form 204)
Other document that requires a declaration Corporate Ownership Statement and List of Equity Security Holders
I declare under penalty of perjury that the foregoing is true and correct.
Executed on March 30, 2025 X /s/ Miles Staglik
Signature of individual signing on behalf of debtor
Miles Staglik
Printed name
Chief Restructuring Officer
Position or relationship to debtor
Official Form 202 Declaration Under Penalty of Perjury for Non-Individual Debtors
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
Chapter 11
CTN Holdings, Inc., et al.,1
Case No. 25- (_________) (__)
Debtors.
(Joint Administration Requested)
CONSOLIDATED CORPORATE OWNERSHIP
STATEMENT AND LIST OF EQUITY SECURITY HOLDERS
PURSUANT TO FED. R. BANKR. P. 1007(a)(1), 1007(a)(3), and 700.1
Pursuant to rules 1007(a)(1), 1007(a)(3), and 7007.1 of the Federal Rules of Bankruptcy
Procedure, the above-captioned debtors and debtors-in-possession (each a “Debtor” and,
collectively, the “Debtors”), to the best of their knowledge, information, and belief, hereby state
as follows:
1. The holders of equity in Debtor CTN Holdings, Inc. (“CTN”), are set forth below.
Debtors CTN SPV Holdings, LLC; Catona Climate Solutions, LLC; Make Earth Green Again,
LLC; Aspiration QFZ, LLC; Zero Carbon Holdings, LLC; and Aspiration Fund Adviser, LLC are
owned 100% by CTN.
2. A list of Debtor CTN’s equity holders appears below:
[Remainder of page intentionally left blank.]
1
The Debtors in these chapter 11 cases, along with the last four digits of the Debtors’ federal tax identification
numbers, are CTN Holdings, Inc. (9122), CTN SPV Holdings, LLC (8689), Make Earth Green Again, LLC (4441),
Aspiration QFZ, LLC (1532), Aspiration Fund Adviser, LLC (4214), Catona Climate Solutions, LLC (3375) and Zero
Carbon Holdings, LLC (1679). The mailing address for the Debtors is 548 Market Street, PMB 72015, San Francisco,
CA 94101-5401.
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
1HMR, LLC 0.009%
205 Burr Oak Investment LLC 0.005%
Adam Taub 0.013%
Adel Davidyan 0.006%
Adrem X LLC 0.019%
AGO II GP, LLC 0.004%
AGO II, LP 0.742%
AGO III, LP 0.227%
AGO Special Situations Credit LP 1.555%
AGO Special Situations II LP 0.418%
Ahya Kurdi 0.001%
Albert S Liu 0.004%
Albert Y. Kim Living Trust 0.032%
Alejandro Francisco Cano Gutierrez 0.005%
Alex Pomeroy 0.054%
Alexandra Horigan 0.179%
Alexis Maybank 0.087%
Allan Hammock 0.000%
Allen & Company, LLC 0.064%
Alon Nelson 0.002%
Alpha Edison A, L.P. 0.429%
Alpha Edison Westwood II A LLC 0.378%
Alpha Edison Westwood II LLC 0.711%
Alpha Edison, L.P. 2.965%
Alvaro Boulet Alonso 0.195%
Andrei Cherny 0.000%
Andrew L. Sandler Revocable Trust 0.047%
Angelica Lomeli 0.000%
Anna Dukor 0.002%
AOG INSTITUTIONAL DIVERSIFIED
FUND 0.129%
APOGEE Pacific LLC 0.001%
Ari Martirosyan 0.001%
Arie Arik Betesh and Yamit Betesh 0.008%
Arie Arik Betesh and Yamit Betesh 0.062%
2
Consistent with the Debtors’ Motion for Entry of an Order (I) Authorizing Debtors to Seal Certain Personally
Identifiable Information for Individuals and (II) Granting Related Relief, filed contemporaneously herewith, contact
information for each equity holder is on file with the Debtors and may be made available upon proper request.
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Arioan ScoopSA - Aspiration 0.040%
Arjuna Rajasingham 0.018%
Arlene Waclawek 0.004%
Arthur and Peta Klitofsky 0.002%
Aspiration Holdings II SPE, LLC 0.786%
Aspiration Holdings SPE, LLC 0.000%
BANSBACH CAPITAL GROUP, LLC 0.235%
Barry Donner 0.001%
Ben Jealous 0.000%
Benjamin Rafii 0.005%
Benjamin S Heldfond Family Trust 0.006%
Benjamin Sherman 0.003%
Bingaman Family Irrevocable Trust 0.032%
BPCCInc., LLC 7.754%
BPCCInc., LLC 0.124%
Brandee Busch 0.000%
Brian Weinstein 0.003%
Brittany Johnson 0.001%
Budoff Billit Living Trust 0.015%
Carmen Gutierrez Smith 0.011%
Casa Teresa 0.005%
Casey Weinstein 2018 Family Trust 0.008%
Cecilia Martinez del Solar 0.031%
Cecilia Saez 0.000%
Charles A. Tharnstrom 0.025%
Charles W McElfresh 0.000%
Chicago Carbon Holdings LLC 4.193%
Christina Margot Ross 0.000%
Christopher Calvert 0.000%
Christopher Coleman 0.004%
Clayton Bourne 0.025%
Clear Link Technologies, LLC 0.000%
Clover Private Credit Opportunities
Origination (Levered) II LP 11.883%
Commerce Investment Group LLC 0.012%
Craig Randall Johnson 0.020%
Crawford/Gerber Living Trust dtd
10/7/2009 0.009%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Crestone Capital Partners LLC 0.072%
DAM Birdie LLC (Daniel Murillo) 0.012%
Damavandi 2021 Ins Trust 0.068%
Damien Varron 0.000%
Danette Eilenberg 0.017%
Daniel Duran 0.000%
Daniel Nir 0.185%
Daniel Shurey 0.000%
Daniel Zakowski 0.006%
Danielle Gopen 0.002%
Danielle Wolf 0.006%
Darwin Capital Advisors II LLC 0.097%
Darwin Capital Advisors II LLC 0.051%
Darwin Capital Advisors LLC 0.105%
Darwin Capital Advisors LLC 0.058%
David Flusberg 0.015%
David Goldsmith 0.000%
David Jacobs 0.002%
David Keyes 0.001%
David Wolpe 0.022%
DBD Family Trust 0.012%
DCM Labs 0.034%
DEA 88 INVESTMENTS LP 0.072%
Deep Field Opportunities Fund, L.P. 0.369%
Deepak Kumar 0.000%
Delph Enterprises, Inc. 0.002%
Derris & Company LLC 0.045%
DMC (PED) Limited 0.024%
DNS-Aspire, LLC 1.629%
Doha Venture Capital LLC 0.285%
Don Karr 0.006%
Double Chase Investments LP 0.006%
Double Chase Management LLC 0.008%
Double Chase Management, LLC 0.032%
Double Diamond Investment Holdings, LP 0.040%
Dylan Blaty 0.002%
E3 Asset Management, LLC 0.064%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Edwin (Tate) Mill 0.000%
Ellen Wilson 0.000%
Elliot Brandt 0.012%
Emerald Asset Management, Inc. 0.023%
EQUITYZEN GROWTH TECHNOLOGY
FUND LLC - SERIES 1145 0.005%
Eric Johnson 0.005%
Eugene Sperling 0.060%
Evelina Pivavarava 0.004%
Eyal Bilgrai 0.003%
Eyal Gutentag 0.000%
FABFOUR SCSp 0.040%
Fabian Andres Vargas Rivera 0.006%
Fabio Montauti 0.009%
Faisal AlHusseini 0.369%
Flourish Ventures Fund LLC 0.159%
FootPrint Coalition Ventures Late Stage
Fund, LP - A1 0.051%
FP Ventures ASP LP Inc. 0.967%
Frank A. Cuenca Living Trust Dated May
19, 2005 0.058%
Frank Berrin 0.003%
Frank Yeary 0.000%
FWPE Fund 1, LLC 0.160%
GAM Investments LLC 0.006%
George abou Joudi 0.003%
GL Family Trust 0.004%
Glenn Anton Rivers 0.000%
Global Media Fund LLC 0.003%
GLUCK/GLADDEN FAMILY TRUST
Dtd DECEMBER 15, 2003 0.020%
Goodbank Irrevocable Trust 0.006%
Gordon Crawford 0.013%
Gregory Shadwick 0.000%
GSV Capital Corp. 0.453%
Hamid and Nahid Rafii 0.001%
Hammerman Children Irrevocable Trust 0.009%
Hannah Vanguilder 0.000%
Helen Mullish 0.000%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Ian Wentzell 0.000%
Ibrahim AlHusseini 0.000%
Ibrahim AlHusseini 0.162%
IGSB Internal Venture Fund III, LLC 0.573%
Ilya Holdings Limited 0.088%
Inherent Aspiration, LLC 1.749%
Inspira Financial, FBO Lev Moltyaner 0.011%
IRA Club FBO Ruben Gallego Roth IRA
2001404 0.003%
Irfan Kamal 0.000%
Jabez Dewey 0.001%
Jack Oliver 0.025%
Jaguar Acquisition Limited 0.313%
Jaguarundi Partners, LLC 0.573%
James Katz 0.004%
James M. Cannon 0.002%
James R. Gates Separate Porperty
Revocable Trust 0.049%
Jason Gupta 0.018%
Jedi Capital 0.241%
JeeAnn Whitney Petrina 0.000%
Jeffrey Denight 0.000%
Jeffrey Harris 0.001%
Jeffrey Susskind 0.012%
Jess Brown 0.036%
Jessica Berrin 0.008%
Jessica McMillin 0.002%
Jim Meeks 0.038%
Joe Carney 0.006%
John B. Emerson and Kimberly K.
Marteau, Trustees of the Emerson-Marteau
Trust dated 10/9/2003 0.008%
Johnson Revocable Trust 0.021%
Jon Barnwell 0.091%
Jon Feigelson 0.030%
Jonathan Alter 0.003%
Joseph A Jolson 1991 Trust 0.016%
Joseph Besecker 0.082%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Joseph Chen 0.861%
Joseph Chen Irrevocable Family Trust 1.096%
Joseph Mulkey 0.012%
Juan David Borrero 0.008%
Junius Holding GmbH 0.098%
Justin Kuok 0.006%
Justin Meltzer Investment 0.001%
Kaia Gerber 0.009%
Katherine Lay 0.001%
Kathleen Emmett 0.000%
Kathleen Schier 0.013%
KC Partners LLC 0.013%
Kenneth Choi 0.002%
Kfir Gavrieli 0.322%
Koh Boon Hwee 0.010%
Lauren Rocheleau 0.009%
Lawrence Berrin 0.004%
Leah Grace Hunt-Hendrix Trust 0.003%
Leslie Morton 0.013%
Long Live Bruce, LLC 2.867%
Lorraine D. Berrin 0.028%
Luke Clauson 0.007%
Majid El Solh 0.167%
MALI H. KINBERG REVOCABLE
LIVING TRUST 0.006%
Manzanita Ventures LLC 0.062%
Marc Stad 0.006%
Marilyn J Goens Rev Liv Trust U/A DTD
11/16/06 0.010%
Mark Corentin Cot-Magnas 0.013%
Mark J. Silverman Living Trust U/A
7/27/95 0.009%
Mark Villanueva 0.002%
Martin Alejandro Bedoya Benavides 0.006%
Martin Gedalin 0.003%
Mary Dent 0.000%
Matthew Giles 0.009%
Matthew Lee 0.681%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Matthew Russo 0.003%
Megan Holmes 0.005%
Mendonca Family Trust 0.015%
Metropolitan Levered Partners Fund VII,
LP 0.002%
Metropolitan Partners Fund VI (3C1), LP 0.000%
Metropolitan Partners Fund VI, LP 0.003%
Metropolitan Partners Fund VII, LP 0.003%
MF Partners, LLC 0.033%
MF Partners, LLC 0.009%
Michael Christenson 0.032%
Michael O'Mary 0.201%
Michael Shuckerow 0.000%
Michael Smith 0.012%
Micharn Pollock 0.002%
Michel Bayoud 0.003%
Milena Davidson 0.001%
Miller Family Legacy, LLC 0.062%
Miranda Brouwer Living Trust 0.009%
Mission and Market Fund I, LLC 0.035%
Mohammad Khaja 0.004%
Moran Davidyan 0.003%
MUURAMASA LLC 0.012%
MX of Kuok Family 0.010%
Nano Financial Holdings, Inc 0.000%
Nascent Line LLC 0.062%
Nate Redmond 0.000%
Nathan and Emily Kane Miller 0.009%
Nathaniel Malka 0.006%
NEV Alternatives LLC 0.046%
Nikki Murphy 0.001%
Nikolaos Nomikos 0.003%
No. 4 LP 0.101%
Oberndorf Enterprises/OEL Venture
Investments LLC 0.012%
OCM Aspiration Holdings, LLC 23.290%
OREN ABRAHAM LAZAR 0.003%
OS PETEIROS INVESTMENTS, S.L. 0.040%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Pacific Sequoia Holdings LLC 0.993%
Palmer Murray Living Trust 0.006%
Paradox Capital 0.058%
Paul Eisenstein 0.027%
Paul Soros 2010 Family Trust A 0.031%
Peter Early 0.000%
Petr Averianov 0.030%
Philip Remmele 0.003%
Philippe von Stauffenberg 0.120%
Pilpel Ltd. 0.043%
Plummer Schnabel Family Trust UAD
8/6/07 0.015%
Pohlad Investments, LLC 0.123%
Pohlad Investments, LLC 0.200%
Polpat LLC 1.981%
Praesumo Holdings, LLC 0.985%
PWM Alternatives LLC 0.046%
Quail Hill Holdings LLC 0.025%
RA Perdue Family Trust 0.009%
Rachel Sheinbein 0.009%
Rachelle Higgins 0.000%
Ravi Sarin 0.015%
Raycrown AG 0.040%
Reisner Millenium Investments LLC (Jeff
Reisner) 0.072%
Remember Bruce, LLC 0.056%
Renren Lianhe Holdings 3.171%
REYL & CIE S.A. 0.031%
RG Family Investments LLC 0.009%
Richard Shu 0.001%
Rick Hess 0.014%
Ricki Seidman 0.011%
RJB Partners LLC 4.921%
Rob Cherun 0.009%
Robert Choi 0.001%
Robert Downey Jr. 0.000%
Robert J Abernethy 0.006%
Robert Lee 0.000%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Robert M. Pomeroy 0.189%
Roman Micevic 0.000%
Ron and Liraz Harari Living Trust 0.008%
Ron and Liraz Harari Living Trust 0.011%
Ron Ben Yosef 0.005%
Ronald Paz 0.003%
Rosensweig Family Revocable Trust 0.023%
Roslyn K Berrin 0.003%
RPR Gravitas LTD Kfir 0.043%
Russell Acar 0.001%
RxR Rocksolid LP 0.038%
Ryan Graves 0.039%
Sam Yebri 0.005%
Samuel Murray 0.000%
Satya Yenigalla 0.002%
Selena C. Bryce Trust 0.000%
Shahak Maimon 0.006%
Shoham Nicolet 0.003%
Silas Holdings III LLC 0.068%
Silversea Chartering SA 0.053%
SIPI VENTURES PTE LTD 0.015%
SMR Capital Holdings LP 0.006%
Social Impact Finance II LLC 0.623%
Social Impact Finance III LLC 0.415%
Social Impact Finance IV LLC 0.720%
Social Impact Finance LLC 2.286%
Social Impact Finance LLC 0.233%
Spencer Rascoff 0.000%
Stephan Klee 0.000%
Stephan Lobmeyr 0.016%
Stephen Pomeroy 0.038%
Steve Bush 0.034%
Steven Glickman 2.202%
Strategic Business Management Co (Vivek
Singhal) 0.002%
SuRo Capital Corp. 0.021%
Susskind Family Trust 0.030%
SVB Financial Group 0.000%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
SVV GmbH 0.080%
Synergy Wealth Management Sa 0.346%
Tara Watumull 0.001%
Taylor Media Corp 0.000%
Taylor Vigil 0.000%
Technology Stock Holding Master Trust /
Series Sinay 2021 Trust 0.029%
Technology Stock Holding Master
Trust/Series Brown 2021 Trust 0.222%
TECHNOLOGY STOCK HOLDING
MASTER TRUST/SERIES COSTIGAN
2021 TRUST 0.024%
Technology Stock Holding Master
Trust/Series Morison 2021 Trust 0.029%
Technology Stock Holding Master
Trust/Series Ransom 2021 0.042%
The Dunner Family Trust 0.002%
The Emerson Marteau Trust 0.009%
The Glenn A. Rivers Revocable Trust UA
September 28, 2000 0.033%
The Gordon and Dona Crawford Trust
UTD 8/23/77 0.177%
The Hugely Successful Company, LLC 0.002%
The Husseini Group 0.032%
The Joseph Todd Lonsdale Trust dated
March 4, 2015 0.023%
The Kit Stone Trust 0.006%
The Kristin Rivers Revocable Trust UA
September 28, 2000 0.033%
The Mark Murrel Revocable Trust
Established 1/16/2009 0.000%
The Mark Murrel Revocable Trust,
Established January 16, 2009 0.002%
The R L Gopen Trust 0.006%
The Thomas and Janet Unterman Living
Trust 0.019%
Three Cats Consulting LLC 0.001%
Timothy Broas 0.002%
To Ventures LLC 0.056%
Todd Baker 0.000%
Todd Koren 0.050%
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EQUITY HOLDER2 PERCENTAGE OF EQUITY HELD
Todd Tappin 0.000%
Tom Unterman 0.000%
Tracy Bain 0.000%
TriGen Investments, LP 0.037%
True North Group LLC 4.402%
Victoria Velasquez 0.003%
Victoria Velazquez 0.050%
Vikas Singhal 0.003%
Voras Navigation SA 0.004%
Walid Gardezi 0.038%
Wayne Klitofsky 0.006%
Weinstein Family Trust 0.013%
Wesley Jew 0.000%
West investments IV, LLC 0.006%
William E. Oberndorf 0.007%
Yuval Grill 0.031%
Zack Exley 0.004%
Zion Consulting and Advisory LLC 0.006%
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RESOLUTIONS OF ACTION
OF CTN HOLDINGS, INC.
WHEREAS, the Directors of CTN Holdings, Inc. (the “Company”) have determined that it
is desirable and in the best interest of the Company, its creditors, stockholders, and/or members and
other interested parties, that the Company file a voluntary petition for relief under chapter 11 of
Title 11 of the United States Code (the “Bankruptcy Code”).
NOW, THEREFORE, BE IT RESOLVED, that the filing by the Company of a
voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware, or such other appropriate venue (the “Bankruptcy
Court”), be, and it hereby is, authorized and approved; and it is further
RESOLVED, that Miles Staglik (the “Designated Representative”) be, and hereby is,
authorized and empowered, in the name of the Company, to execute and verify a petition for
relief under chapter 11 of the Bankruptcy Code and to cause the same to be filed with the
Bankruptcy Court at such time as the Designated Representative shall determine; and it is further
RESOLVED, that the Designated Representative, and such other Agent(s) as the
Designated Representative and/or the Directors of the Company shall from time to time
designate (each a “Representative”), be, and each of them hereby is, authorized to execute and
file on behalf of the Company all petitions, schedules, lists, documents, pleadings and other
papers and to take any and all action that they may deem necessary or proper in connection with
the bankruptcy case of the Company; and it is further
RESOLVED, that each Representative be, and each of them hereby is, authorized and
directed to retain the law firm Whiteford, Taylor & Preston L.L.P. to render legal services to and
to represent the Company in connection with such bankruptcy case and other related matters in
connection therewith, upon such terms and conditions as such Agent shall approve; and it is
further
RESOLVED, that each Representative be, and each of them hereby is, authorized to
retain such other professionals as they deem necessary and appropriate to represent, assist, or
consult with the Company during the bankruptcy case; and it is further
RESOLVED, that each Representative be, and each of them hereby is, authorized and
directed to take any and all further actions and to execute and deliver any and all further
instruments and documents and pay all expenses (subject to Bankruptcy Court approval, where
required), in each case as in their judgment shall be necessary or desirable in order to fully carry
out the intent and accomplish the purpose of the resolutions adopted herein; and it is further
RESOLVED, that all acts lawfully done or actions lawfully taken by any and each
Representative, which are necessary to effectuate the intent of the resolutions adopted herein, are
hereby in all respects ratified, confirmed, and approved.
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This 30th day of March, 2025, the Directors of the Company have set their hand adopting
the foregoing resolutions.
/s/ Nate Redmond
By: Nate Redmond
Title: Chairman of the Board of Directors, CTN Holdings, Inc.
/s/ Tate Mill
By: Tate Mill
Title: Director, CTN Holdings, Inc.
/s/ Rob Lee
By: Rob Lee
Title: Chief Executive Officer & Director, CTN Holdings, Inc.
/s/ Jeffrey T. Varsalone
By: Jeffrey T. Varsalone
Title: Director, CTN Holdings, Inc.
2
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Exhibit I
ase 2:21- “ap- -01034-BB_ Doc 377 _Filed 04/20/26. , Entered 04/20/26 23:05:07 Desc
B2570 (Form eas Subpoena to Produce Documents, Inigypaiio eaeypicy Case or Adversary Proceeding) (12/ ay
UNITED STATES BANKRUPTCY COURT
Central District of California
Inre Kfir Gavrieli
Debtor
Case No. 2:21-bk-10826-BB
(Complete if issued in an adversary proceeding)
11
Dikla Gavrieli a/k/a Dikla Gavrieli Unatin Chapter __'* __
Plaintiff
V. 2:21-ap-01034
Kfir Gavrieli and Gavrieli Brands, LLC Adv. Proc. No. ap-0103
Defendant
SUBPOENA TO PRODUCE DOCUMENTS, INFORMATION, OR OBJECTS OR TO PERMIT
INSPECTION OF PREMISES IN A BANKRUPTCY CASE (OR ADVERSARY PROCEEDING)
To: GAVRIELI BRANDS, LLC d/b/a TIEKS BY GAVRIELI
(Name of person to whom the subpoena is directed)
[=] Production. YOU ARE COMMANDED to produce at the time, date, and place set forth below the following
documents, electronically stored information, or objects, and to permit inspection, copying, testing, or sampling of the
material: See Exhibit A.
PLACE DATE AND TIME
Latham & Watkins LLP, 10250 Constellation Blvd. Ste 1100, Los Angeles, CA 12/05/23 5:00 pm
[_] Inspection of Premises: YOU ARE COMMANDED to permit entry onto the designated premises, land, or
other property possessed or controlled by you at the time, date, and location set forth below, so that the requesting party
may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.
PLACE DATE AND TIME
The following provisions of Fed. R. Civ. P. 45, made applicable in bankruptcy cases by Fed. R. Bankr. P. 9016, are
attached — Rule 45(c), relating to the place of compliance; Rule 45(d), relating to your protection as a person subject to a
subpoena; and Rule 45(e) and 45(g), relating to your duty to respond to this subpoena and the potential consequences of not
doing so.
CLERK OF COURT
Signature of Clerk or Deputy Clerk Attorney ’s signature
The name, address, email address, and telephone number of the attorney representing (name of party)
Dikla Gavrieli , who issues or requests this subpoena, are:
Daniel Scott Schecter, Latham & Watkins LLP, 10250 Constellation Blvd. Ste 1100, daniel.schecter@Ilw.com, (424) 653-5500
Notice to the person who issues or requests this subpoena
If this subpoena commands the production of documents, electronically stored information, or tangible things, or the
inspection of premises before trial, a notice and a copy of this subpoena must be served on each party before it is served on
the person to whom it is directed. Fed. R. Civ. P. 45(a)(4).
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B2570 (Form 2570 — Subpoena to Produce Documents, UVP Wet ivetevatua’=Yatmas Ppa e dye Pongncy Case or Adversary Proceeding) (Page 2)
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 45.)
I received this subpoena for (name of individual and title, if any):
on (date)
of served the subpoena by delivering a copy to the named person as follows:
on (date) > or
[| I returned the subpoena unexecuted because:
Unless the subpoena was issued on behalf of the United States, or one of its officers or agents, I have also tendered to the
witness the fees for one day’s attendance, and the mileage allowed by law, in the amount of $
My fees are $ for travel and $ for services, for a total of $
I declare under penalty of perjury that this information is true and correct.
Date:
Server's signature
Printed name and title
Server ’s address
Additional information concerning attempted service, etc.:
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1 EXHIBIT A
2 INSTRUCTIONS
3 1. Comply with the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy
4 Procedure, and the Local Rules of the United States Bankruptcy Court for the Central District of
5 California.
6 2. Produce all responsive DOCUMENTS in YOUR possession, custody, or control,
7 and in the possession, custody, or control of any agents, representatives, or advisors to YOU.
8 3. Produce the original of each responsive DOCUMENT, together with all non-
9 identical copies and drafts of that DOCUMENT.
10 4. If YOU object to the production of any DOCUMENT in response to the Requests,
11 state with specificity the reasons for YOUR objection.
12 5. If YOU object to any portion of a Request, produce DOCUMENTS responsive to
13 any portion(s) of the Request to which YOU do not object.
14 6. DOCUMENTS shall be produced in full and complete form. If any responsive
15 DOCUMENTS cannot be produced in full, produce such DOCUMENTS to the extent possible,
16 and specify the reason for the inability to produce the remainder.
17 7. DOCUMENTS shall be produced in the manner that they are kept in the ordinary
18 course of business or organized and labeled to correspond to the Request to which they are
19 responsive.
20 8. If any responsive DOCUMENT is not produced because of a claim of privilege or
21 work product, provide an appropriate privilege log.
22 DEFINITIONS
23 1. “YOU,” “YOUR” and the “COMPANY” shall mean GAVRIELI BRANDS,
24 LLC and any PERSON acting on its behalf, including, without limitation, any past or present
25 parent, division, subsidiary, affiliate, joint venture, associated organization, partner, attorney,
26 financial advisor, accountant, agent, representative, employee, consultant, independent
27 contractor, or affiliated entity, as well as any other PERSON acting on GAVRIELI BRANDS,
28 LLC’s behalf.
1
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 2. “PERSON(s)” shall mean all natural persons and all entities, including any
2 organizations, sole proprietorships, associations, companies, partnerships, joint ventures,
3 corporations, legal entities, governmental entities, legal representatives, trusts, or estates.
4 3. “ISSA” shall mean J. Michael Issa, and any PERSON acting on his behalf,
5 including, without limitation, any past or present parent, attorney, affiliated entity, representative,
6 employee, consultant, or independent contractor, as well as any other PERSON acting on Mr.
7 Issa’s behalf.
8 4. “KFIR GAVRIELI” shall mean Kfir Gavrieli, and any PERSON acting on his
9 behalf, including, without limitation, any past or present parent, attorney, affiliated entity,
10 representative, employee, consultant, or independent contractor, as well as any other PERSON
11 acting on Mr. Gavrieli’s behalf.
12 5. “COMMUNICATION(s)” shall have the broadest meaning allowable under the
13 Federal Rules of Civil Procedure and Federal Rules of Bankruptcy Procedure, and includes the
14 transmission, sending, and/or receipt of information of any kind, or the attempt to elicit information
15 of any kind, by and/or through any means, including, but not limited to, speech, discussion,
16 meeting, conversation, writing, language (machine, foreign, or otherwise), electronic mail,
17 computer electronics of any kind, videotape, photograph, graph, symbol, sign, sound, radio,
18 telephone, telecommunication, film, or media of any kind.
19 6. “DOCUMENT(s)” shall have the broadest meaning allowable under the Federal
20 Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure, and includes, but is not
21 limited to, the following items, whether printed or recorded or reproduced by any mechanical or
22 electronic process, or written or produced by hand: agreements; contracts; communications,
23 including intra-company communications; correspondence; telegrams; telexes; teletypes;
24 memoranda; record books; notes; reports; opinions; electronic mail (including any primary or
25 back-up file); real-time or instant messages; SMS, MMS, or other text messages; postings on the
26 Internet or World Wide Web; computer disks; videotapes; audio tapes; summaries, notes,
27 memoranda or other records of personal conversations or interviews; diaries; forecasts; statistical
28 statements; cost summaries; accountants’ or bookkeepers’ work papers, graphs, charts or accounts;
2
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 logs; analytical records; minutes, notes, summaries, memoranda, or other records of investigations;
2 audit reports; internal audit reports; opinions or reports of consultants’ appraisals; trade letters;
3 notes; projections; drafts of any documents; working papers; or any other documents or writing of
4 whatever description, including, but not limited to, any information contained in any computer
5 although not yet in printed form in YOUR possession, custody or control.
6 7. “EXPERT” refers to any PERSON who is not an employee of the COMPANY,
7 who has expertise in a particular field and provides that expertise to assist companies (for example,
8 a consultant, financial advisor, or investment banker).
9 8. “RELEVANT PERIOD” means and refers to July 22, 2019 through the date of
10 YOUR responses to these Requests.
11 9. The term “any” shall be construed to include and encompass “all,” and vice versa.
12 10. The terms “any,” “all,” and “each” shall be construed as broadly as possible to bring
13 within the scope of the Request any information that might be deemed outside its scope by any
14 other construction.
15 11. The terms “and” and “or” shall be construed either conjunctively or disjunctively,
16 as required by the context, to bring within the scope of the Request any information that might be
17 deemed outside its scope by any other construction.
18 12. The term “including” shall mean including but not limited to.
19 13. The past tense of a verb herein includes the present tense and vice versa.
20 The use of the singular of any word herein includes the plural and vice versa.
21 DOCUMENT REQUESTS
22 1. All DOCUMENTS evidencing changes or improvements made to the
23 COMPANY’s product line (such as new styles or designs) during the RELEVANT PERIOD.
24 2. All DOCUMENTS specifically discussing or summarizing any contemplated or
25 implemented changes made to the COMPANY’s website during the RELEVANT PERIOD
26 which are meaningful or material in YOUR view (such as meaningful or material changes to the
27 website’s design, functionality, user interface/experience, and/or back-end/administrative
28 features).
3
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 3. All DOCUMENTS that relate to or evidence any analysis the COMPANY
2 performed as to whether or not to enter new geographic markets during the RELEVANT
3 PERIOD.
4 4. All DOCUMENTS that relate to or evidence any analysis the COMPANY
5 performed as to whether to sell or market its products through new channels or on new
6 platforms.
7 5. All DOCUMENTS that relate to or evidence any analysis the COMPANY
8 performed as to whether to modify its marketing or advertising strategy in an effort to enhance
9 sales.
10 6. All DOCUMENTS which specifically discuss or describe the COMPANY’s
11 inventory management practices during the RELEVANT PERIOD.
12 7. All DOCUMENTS prepared during the RELEVANT PERIOD to reflect the total
13 amount of inventory that the COMPANY had on hand (including finished products and product
14 components) at the time the document was prepared. (In other words, this Request seeks copies
15 of inventories of inventory levels during the RELEVANT PERIOD).
16 8. All DOCUMENTS specifically discussing any decline in the COMPANY’s
17 sales and profits during the RELEVANT PERIOD.
18 9. All DOCUMENTS evidencing any payments, transfers, purchases or
19 reimbursements made from COMPANY funds or on a COMPANY credit card to or for the
20 benefit of KFIR GAVRIELI or any of KFIR GAVRIELI’S family members during the
21 RELEVANT PERIOD that were not for operating expenses of the COMPANY or ordinary
22 business expenses of the COMPANY.
23 10. All DOCUMENTS evidencing payments, transfers or reimbursements made by
24 the COMPANY to KFIR GAVRIELI during the RELEVANT PERIOD.
25 11. All DOCUMENTS evidencing the business purpose of any payments, transfers or
26 reimbursements made by the COMPANY to KFIR GAVRIELI during the RELEVANT
27 PERIOD.
28
4
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 12. All DOCUMENTS evidencing payments, transfers or reimbursements made by
2 KFIR GAVRIELI to the COMPANY during the RELEVANT PERIOD.
3 13. All DOCUMENTS evidencing the nature or purpose of any payments, transfers or
4 reimbursements made by KFIR GAVRIELI to the COMPANY during the RELEVANT
5 PERIOD.
6 14. All DOCUMENTS evidencing efforts made by KFIR GAVRIELI or the
7 COMPANY during the RELEVANT PERIOD to measure the performance of the COMPANY
8 by examining such metrics as return on advertising spend, average order value, average time
9 spent on website, page-views per visit on website, etc.
10 15. All DOCUMENTS which specifically discuss or describe any actual or
11 contemplated change in the pricing of any product the COMPANY offered for sale during the
12 RELEVANT PERIOD, including without limitation any sales promotions, discounts, or other
13 sales incentives contemplated or implemented by the COMPANY.
14 16. All DOCUMENTS evidencing any consideration or analysis by KFIR
15 GAVRIELI or the COMPANY during the RELEVANT PERIOD as to whether the COMPANY
16 should begin marketing its products through channels, platforms or distributors other than the
17 COMPANY’s website.
18 17. All DOCUMENTS evidencing any potential business development opportunities
19 presented to the COMPANY during the RELEVANT PERIOD, including without limitation any
20 potential business opportunities that were directed to the COMPANY at the email address
21 inquiries@tieks.com.
22 18. All DOCUMENTS evidencing how KFIR GAVRIELI or the COMPANY
23 responded to any potential business development opportunities presented to the COMPANY
24 during the RELEVANT PERIOD.
25 19. All DOCUMENTS specifically discussing any actual or contemplated
26 agreements, business dealings, or exchange of anything of value between the COMPANY and
27 Aspiration Partners, Inc. (and/or any of Aspiration Partners, Inc.’s affiliates) during the
28 RELEVANT PERIOD).
5
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 20. Copies of each complaint and docket sheet RELATED TO all litigation in which
2 the COMPANY is a party, or for which the COMPANY has received a subpoena.
3 21. All DOCUMENTS specifically discussing or involving David Fu during the
4 RELEVANT PERIOD which refer or relate to any financial matters or transactions, including
5 but not limited to KFIR GAVRIELI, manufacturing, or inventory.
6 22. All DOCUMENTS specifically reflecting, documenting, or referencing any food,
7 dining, beverage, or catering expenses totaling over $250 and paid for using COMPANY funds
8 during the RELEVANT PERIOD.
9 23. All DOCUMENTS evidencing actions taken, contemplated, and/or proposed by
10 KFIR GAVRIELI or the COMPANY during the RELEVANT PERIOD to expand the
11 COMPANY’s sales and marketing channels.
12 24. All DOCUMENTS sufficient to identify each EXPERT who has rendered
13 services to the COMPANY during the RELEVANT PERIOD, including but not limited to
14 attorneys, bankers, consultants, and financial advisors, as well as the services each such
15 EXPERT provided to the COMPANY during the RELEVANT PERIOD.
16 25. DOCUMENTS sufficient to identify and provide contact information for each
17 PERSON who: (a) has been employed by the COMPANY at any time during the RELEVANT
18 PERIOD; (b) has provided any services to the COMPANY in exchange for compensation (e.g.,
19 an independent contractor) during the RELEVANT PERIOD; and/or (c) has reported to KFIR
20 GAVRIELI at any time during the RELEVANT PERIOD and received compensation of any
21 kind. [Note: In lieu of producing documents, YOU may satisfy this Request by providing a
22 declaration identifying each PERSON who falls within the scope of the Request, their contact
23 information, title, the scope of any work or services they performed for the COMPANY, and the
24 dates during which such PERSON performed the work or services.]
25 26. DOCUMENTS sufficient to identify and provide contact information for each
26 PERSON responsible for the following functions at the COMPANY at any time during the
27 RELEVANT PERIOD: (a) finance/accounting (e.g. chief financial officer or equivalent); (b)
28 operations (e.g. chief operating officer or equivalent); (c) marketing (e.g., chief marketing officer
6
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 or equivalent); (d) sales (e.g. chief revenue officer or equivalent); (e) technology (e.g., chief
2 technology officer/chief information officer or equivalent); (f) legal (e.g., general counsel/chief
3 legal officer or equivalent); (g) customer privacy (e.g., chief privacy officer or equivalent); (h)
4 customer service (e.g., chief customer service officer or equivalent); and (i) human resources
5 (e.g., chief human resource officer or equivalent); and (j) chief executive officer or equivalent.
6 [Note: In lieu of producing documents, YOU may satisfy this Request by providing a
7 declaration identifying each PERSON who falls within the scope of the Request, their contact
8 information, title, the scope of any work or services they performed for the COMPANY, and the
9 dates during which such PERSON performed the work or services.]
10 27. All DOCUMENTS evidencing the existence of supply chain disruptions during
11 the RELEVANT PERIOD.
12 28. All DOCUMENTS evidencing steps taken by KFIR GAVRIELI or the
13 COMPANY to address or remedy supply chain disruptions during the RELEVANT PERIOD.
14 29. All DOCUMENTS related to or evidencing steps taken by KFIR GAVRIELI
15 and/or the COMPANY to address rising costs during the RELEVANT PERIOD.
16 30. All business plans, strategic plans, budgets, forecasts and projections relating to or
17 prepared during the RELEVANT PERIOD.
18 31. All DOCUMENTS evidencing increased competition during the RELEVANT
19 PERIOD.
20 32. All DOCUMENTS evidencing steps taken by KFIR GAVRIELI and/or the
21 COMPANY to respond to or remedy the effects of increased competition during the
22 RELEVANT PERIOD.
23 33. All appraisals or other valuations prepared during the RELEVANT PERIOD to
24 reflect how much the COMPANY was worth.
25 34. All DOCUMENTS evidencing plans or efforts made by KFIR GAVRIELI or the
26 COMPANY during the RELEVANT PERIOD to improve the customer experience.
27
28
7
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 35. All DOCUMENTS evidencing plans or efforts made by KFIR GAVRIELI or the
2 COMPANY during the RELEVANT PERIOD to enhance or improve the effectiveness of the
3 COMPANY’s advertising and/or marketing campaigns.
4 36. All DOCUMENTS evidencing any consideration or analysis by KFIR
5 GAVRIELI or the COMPANY during the RELEVANT PERIOD as to whether to expand the
6 marketing and advertising of the COMPANY’s products into international markets.
7 37. All DOCUMENTS evidencing how KFIR GAVRIELI or the COMPANY used
8 credit card rewards, including points, miles and discounts, during the RELEVANT PERIOD that
9 accrued on credit card accounts for which credit card charges were paid by the COMPANY.
10 38. All DOCUMENTS related to any payments, transfers, purchases, or
11 reimbursements involving COMPANY funds made by or to Mira Gavrieli, including
12 DOCUMENTS substantiating any purported business purpose of such payments or transfers.
13 39. All COMMUNICATIONS between YOU and ISSA (including
14 COMMUNICATIONS between YOUR and ISSA’s attorneys) during the RELEVANT PERIOD
15 which refer or relate to any of the following: (a) this Adversary Proceeding; (b) Plaintiff’s claims
16 and allegations set forth in this Adversary Proceeding; (c) any defenses asserted by KFIR
17 GAVRIELI or ISSA in this Adversary Proceeding; (d) Dikla Gavrieli a/k/a Dikla Gavrieli
18 Unatin; and/or (e) Dean Unatin.
19 40. All COMMUNICATIONS between YOU and KFIR GAVRIELI (including
20 COMMUNICATIONS between YOUR and KFIR GAVRIELI’s attorneys) during the
21 RELEVANT PERIOD which refer or relate to any of the following: (a) this Adversary
22 Proceeding; (b) Plaintiff’s claims and allegations set forth in this Adversary Proceeding; (c) any
23 defenses asserted by KFIR GAVRIELI or ISSA in this Adversary Proceeding; (d) Dikla Gavrieli
24 a/k/a Dikla Gavrieli Unatin; and/or (e) Dean Unatin.
25 41. All DOCUMENTS provided by YOU (or any PERSON acting on YOUR behalf)
26 to any of the following during the RELEVANT PERIOD (including any of their attorneys and/or
27 financial advisors): (a) ISSA; (b) Robert Kors; (c) the Official Committee of Unsecured
28 Creditors; and/or Joe Sanberg.
8
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
ase 2:21- “ap- -01034-BB_ Doc 37th. _filed 04/20/26. Entered 04/20/26 23:05:07 Desc
B2570 (Form Sas Subpoena to Produce Documents, Inigymatio q ata sa picy Case or Adversary Proceeding) (12/15)
UNITED STATES BANKRUPTCY COURT
Central District of California
In re Kfir Gavrieli
Debtor
Case No. _2:21-bk-10826-BB
(Complete if issued in an adversary proceeding)
11
Dikla Gavrieli a/k/a Dikla Gavrieli Unatin Chapter __1' __
Plaintiff
Vv. . _ _ _
Kfir Gavrieli Adv. Proc. No. 2:21-ap-01034-BB
Defendant
SUBPOENA TO PRODUCE DOCUMENTS, INFORMATION, OR OBJECTS OR TO PERMIT
INSPECTION OF PREMISES IN A BANKRUPTCY CASE (OR ADVERSARY PROCEEDING)
To: KFIR GAVRIELI
(Name of person to whom the subpoena is directed)
[=] Production. YOU ARE COMMANDED to produce at the time, date, and place set forth below the following
documents, electronically stored information, or objects, and to permit inspection, copying, testing, or sampling of the
material: S¢¢ Exhibit A.
PLACE DATE AND TIME
Latham & Watkins LLP, 10250 Constellation Blvd. Ste 1100, Los Angeles CA 12/06/2023 5:00 pm
[_] Inspection of Premises: YOU ARE COMMANDED to permit entry onto the designated premises, land, or
other property possessed or controlled by you at the time, date, and location set forth below, so that the requesting party
may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.
PLACE DATE AND TIME
The following provisions of Fed. R. Civ. P. 45, made applicable in bankruptcy cases by Fed. R. Bankr. P. 9016, are
attached — Rule 45(c), relating to the place of compliance; Rule 45(d), relating to your protection as a person subject to a
subpoena; and Rule 45(e) and 45(g), relating to your duty to respond to this subpoena and the potential consequences of not
doing so.
CLERK OF COURT
OR
Signature of Clerk or Deputy Clerk Attorney's signature
The name, address, email address, and telephone number of the attorney representing (name of party)
Dikla Gavrieli , who issues or requests this subpoena, are:
Daniel Scott Schecter, Latham & Watkins LLP, 10250 Constellation Blvd. Ste 1100, daniel.schecter@lw.com, (424) 653-5500
Notice to the person who issues or requests this subpoena
If this subpoena commands the production of documents, electronically stored information, or tangible things, or the
inspection of premises before trial, a notice and a copy of this subpoena must be served on each party before it is served on
the person to whom it is directed. Fed. R. Civ. P. 45(a)(4).
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Main Document Page 185 of 202
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 45.)
I received this subpoena for (name of individual and title, if any): ______________________________________________
on (date) __________ .
I served the subpoena by delivering a copy to the named person as follows: ____________________________________
___________________________________________________________________________________________________
__________________________________ on (date) ___________________ ; or
I returned the subpoena unexecuted because: ____________________________________________________________
___________________________________________________________________________________________________
Unless the subpoena was issued on behalf of the United States, or one of its officers or agents, I have also tendered to the
witness the fees for one day’s attendance, and the mileage allowed by law, in the amount of $ _______________________ .
My fees are $ _________ for travel and $_________ for services, for a total of $_________ .
I declare under penalty of perjury that this information is true and correct.
Date: _______________
________________________________________________
Server’s signature
________________________________________________
Printed name and title
________________________________________________
Server’s address
Additional information concerning attempted service, etc.:
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1 EXHIBIT A
2 INSTRUCTIONS
3 1. Comply with the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy
4 Procedure, and the Local Rules of the United States Bankruptcy Court for the Central District of
5 California.
6 2. Produce all responsive DOCUMENTS in YOUR possession, custody, or control,
7 and in the possession, custody, or control of any agents, representatives, or advisors to YOU.
8 3. Produce the original of each responsive DOCUMENT, together with all non-
9 identical copies and drafts of that DOCUMENT.
10 4. If YOU object to the production of any DOCUMENT in response to the Requests,
11 state with specificity the reasons for YOUR objection.
12 5. If YOU object to any portion of a Request, produce DOCUMENTS responsive to
13 any portion(s) of the Request to which YOU do not object.
14 6. DOCUMENTS shall be produced in full and complete form. If any responsive
15 DOCUMENTS cannot be produced in full, produce such DOCUMENTS to the extent possible,
16 and specify the reason for the inability to produce the remainder.
17 7. DOCUMENTS shall be produced in the manner that they are kept in the ordinary
18 course of business or organized and labeled to correspond to the Request to which they are
19 responsive.
20 8. If any responsive DOCUMENT is not produced because of a claim of privilege or
21 work product, provide an appropriate privilege log.
22 DEFINITIONS
23 1. “YOU,” and “YOUR” shall mean Kfir Gavrieli, and any PERSON acting on
24 YOUR behalf, including, without limitation, any past or present parent, attorney, affiliated entity,
25 representative, employee, consultant, or independent contractor, as well as any other PERSON
26 acting on YOUR behalf.
27 2. The “COMPANY” shall mean GAVRIELI BRANDS, LLC and any PERSON
28 acting on its behalf, including, without limitation, any past or present parent, division, subsidiary,
1
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 affiliate, joint venture, associated organization, partner, attorney, financial advisor, accountant,
2 agent, representative, employee, consultant, independent contractor, or affiliated entity, as well
3 as any other PERSON acting on GAVRIELI BRANDS, LLC’s behalf.
4 3. “PERSON(s)” shall mean all natural persons and all entities, including any
5 organizations, sole proprietorships, associations, companies, partnerships, joint ventures,
6 corporations, legal entities, governmental entities, legal representatives, trusts, or estates.
7 4. “ISSA” shall mean J. Michael Issa, and any PERSON acting on his behalf,
8 including, without limitation, any past or present parent, attorney, affiliated entity, representative,
9 employee, consultant, or independent contractor, as well as any other PERSON acting on Mr.
10 Issa’s behalf.
11 5. “COMMUNICATION(s)” shall have the broadest meaning allowable under the
12 Federal Rules of Civil Procedure and Federal Rules of Bankruptcy Procedure, and includes the
13 transmission, sending, and/or receipt of information of any kind, or the attempt to elicit information
14 of any kind, by and/or through any means, including, but not limited to, speech, discussion,
15 meeting, conversation, writing, language (machine, foreign, or otherwise), electronic mail,
16 computer electronics of any kind, videotape, photograph, graph, symbol, sign, sound, radio,
17 telephone, telecommunication, film, or media of any kind.
18 6. “DOCUMENT(s)” shall have the broadest meaning allowable under the Federal
19 Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure, and includes, but is not
20 limited to, the following items, whether printed or recorded or reproduced by any mechanical or
21 electronic process, or written or produced by hand: agreements; contracts; communications,
22 including intra-company communications; correspondence; telegrams; telexes; teletypes;
23 memoranda; record books; notes; reports; opinions; electronic mail (including any primary or
24 back-up file); real-time or instant messages; SMS, MMS, or other text messages; postings on the
25 Internet or World Wide Web; computer disks; videotapes; audio tapes; summaries, notes,
26 memoranda or other records of personal conversations or interviews; diaries; forecasts; statistical
27 statements; cost summaries; accountants’ or bookkeepers’ work papers, graphs, charts or accounts;
28 logs; analytical records; minutes, notes, summaries, memoranda, or other records of investigations;
2
EXHIBIT A
ATTORNEYS AT LAW
CENTURY CITY
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1 audit reports; internal audit reports; opinions or reports of consultants’ appraisals; trade letters;
2 notes; projections; drafts of any documents; working papers; or any other documents or writing of
3 whatever description, including, but not limited to, any information contained in any computer
4 although not yet in printed form in YOUR possession, custody or control.
5 7. “EXPERT” refers to any PERSON who is not an employee of the COMPANY,
6 who has expertise in a particular field and provides that expertise to assist companies (for example,
7 a consultant, financial advisor, or investment banker).
8 8. “RELEVANT PERIOD” means and refers to July 22, 2019 through the date of
9 YOUR responses to these Requests.
10 9. The term “any” shall be construed to include and encompass “all,” and vice versa.
11 10. The terms “any,” “all,” and “each” shall be construed as broadly as possible to bring
12 within the scope of the Request any information that might be deemed outside its scope by any
13 other construction.
14 11. The terms “and” and “or” shall be construed either conjunctively or disjunctively,
15 as required by the context, to bring within the scope of the Request any information that might be
16 deemed outside its scope by any other construction.
17 12. The term “including” shall mean including but not limited to.
18 13. The past tense of a verb herein includes the present tense and vice versa.
19 The use of the singular of any word herein includes the plural and vice versa.
20 DOCUMENT REQUESTS
21 1. All DOCUMENTS evidencing changes or improvements made to the
22 COMPANY’s product line (such as new styles or designs) during the RELEVANT PERIOD.
23 2. All DOCUMENTS specifically discussing or summarizing any contemplated or
24 implemented changes made to the COMPANY’s website during the RELEVANT PERIOD
25 which are meaningful or material in YOUR view (such as meaningful or material changes to the
26 website’s design, functionality, user interface/experience, and/or back-end/administrative
27 features).
28
3
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1 3. All DOCUMENTS that relate to or evidence any analysis YOU performed as to
2 whether or not to cause the COMPANY to enter new geographic markets during the
3 RELEVANT PERIOD.
4 4. All DOCUMENTS that relate to or evidence any analysis YOU performed as to
5 whether to sell or market the COMPANY’s products through new channels or on new platforms.
6 5. All DOCUMENTS that relate to or evidence any analysis YOU performed as to
7 whether to modify the COMPANY’s marketing or advertising strategy in an effort to enhance
8 sales.
9 6. All DOCUMENTS which specifically discuss or describe the COMPANY’s
10 inventory management practices during the RELEVANT PERIOD.
11 7. All DOCUMENTS prepared during the RELEVANT PERIOD to reflect the total
12 amount of inventory that the COMPANY had on hand (including finished products and product
13 components) at the time the document was prepared. (In other words, this Request seeks copies
14 of inventories of inventory levels during the RELEVANT PERIOD).
15 8. All DOCUMENTS specifically discussing any decline in the COMPANY’s
16 sales and profits during the RELEVANT PERIOD.
17 9. All DOCUMENTS evidencing any payments, transfers, purchases or
18 reimbursements made from COMPANY funds or on a COMPANY credit card to or for YOUR
19 benefit or any of YOUR family members during the RELEVANT PERIOD that were not for
20 operating expenses of the COMPANY or ordinary business expenses of the COMPANY.
21 10. All DOCUMENTS evidencing payments, transfers or reimbursements made by
22 the COMPANY to YOU during the RELEVANT PERIOD.
23 11. All DOCUMENTS evidencing the business purpose of any payments, transfers or
24 reimbursements made by the COMPANY to YOU during the RELEVANT PERIOD.
25 12. All DOCUMENTS evidencing payments, transfers or reimbursements made by
26 YOU to the COMPANY during the RELEVANT PERIOD.
27 13. All DOCUMENTS evidencing the nature or purpose of any payments, transfers or
28 reimbursements made by YOU to the COMPANY during the RELEVANT PERIOD.
4
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1 14. All DOCUMENTS evidencing efforts made by YOU during the RELEVANT
2 PERIOD to measure the performance of the COMPANY by examining such metrics as return on
3 advertising spend, average order value, average time spent on website, page-views per visit on
4 website, etc.
5 15. All DOCUMENTS which specifically discuss or describe any actual or
6 contemplated change in the pricing of any product the COMPANY offered for sale during the
7 RELEVANT PERIOD, including without limitation any sales promotions, discounts, or other
8 sales incentives contemplated or implemented by the COMPANY.
9 16. All DOCUMENTS evidencing any consideration or analysis by YOU during the
10 RELEVANT PERIOD as to whether the COMPANY should begin marketing its products
11 through channels, platforms or distributors other than the COMPANY’s website.
12 17. All DOCUMENTS evidencing any potential business development opportunities
13 presented to the COMPANY during the RELEVANT PERIOD, including without limitation any
14 potential business opportunities that were directed to the COMPANY at the email address
15 inquiries@tieks.com.
16 18. All DOCUMENTS evidencing how YOU responded to any potential business
17 development opportunities presented to the COMPANY during the RELEVANT PERIOD.
18 19. All DOCUMENTS specifically discussing any actual or contemplated
19 agreements, business dealings, or exchange of anything of value between the COMPANY and
20 Aspiration Partners, Inc. (and/or any of Aspiration Partners, Inc.’s affiliates) during the
21 RELEVANT PERIOD).
22 20. Copies of each complaint and docket sheet RELATED TO all litigation in which
23 the COMPANY is a party, or for which the COMPANY has received a subpoena.
24 21. ALL invoices/bills received from counsel for the COMPANY in any such
25 litigation.
26 22. All DOCUMENTS specifically discussing or involving David Fu during the
27 RELEVANT PERIOD which refer or relate to any financial matters or transactions, including
28 but not limited to YOU, manufacturing, or inventory.
5
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1 23. All DOCUMENTS specifically reflecting, documenting, or referencing any food,
2 dining, beverage, or catering expenses totaling over $250 and paid for using COMPANY funds
3 during the RELEVANT PERIOD.
4 24. All DOCUMENTS evidencing actions taken, contemplated, and/or proposed by
5 YOU during the RELEVANT PERIOD to expand the COMPANY’s sales and marketing
6 channels.
7 25. All DOCUMENTS sufficient to identify each EXPERT who has rendered
8 services to the COMPANY during the RELEVANT PERIOD, including but not limited to
9 attorneys, bankers, consultants, and financial advisors, as well as the services each such
10 EXPERT provided to the COMPANY during the RELEVANT PERIOD.
11 26. DOCUMENTS sufficient to identify and provide contact information for each
12 PERSON who: (a) has been employed by the COMPANY at any time during the RELEVANT
13 PERIOD; (b) has provided any services to the COMPANY in exchange for compensation (e.g.,
14 an independent contractor) during the RELEVANT PERIOD; and/or (c) has reported to YOU at
15 any time during the RELEVANT PERIOD and received compensation of any kind. [Note: In
16 lieu of producing documents, YOU may satisfy this Request by providing a declaration
17 identifying each PERSON who falls within the scope of the Request, their contact information,
18 title, the scope of any work or services they performed for the COMPANY, and the dates during
19 which such PERSON performed the work or services.]
20 27. DOCUMENTS sufficient to identify and provide contact information for each
21 PERSON responsible for the following functions at the COMPANY at any time during the
22 RELEVANT PERIOD: (a) finance/accounting (e.g. chief financial officer or equivalent); (b)
23 operations (e.g. chief operating officer or equivalent); (c) marketing (e.g., chief marketing officer
24 or equivalent); (d) sales (e.g. chief revenue officer or equivalent); (e) technology (e.g., chief
25 technology officer/chief information officer or equivalent); (f) legal (e.g., general counsel/chief
26 legal officer or equivalent); (g) customer privacy (e.g., chief privacy officer or equivalent); (h)
27 customer service (e.g., chief customer service officer or equivalent); (i) human resources (e.g.,
28 chief human resource officer or equivalent); and (j) chief executive officer or equivalent. [Note:
6
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1 In lieu of producing documents, YOU may satisfy this Request by providing a declaration
2 identifying each PERSON who falls within the scope of the Request, their contact information,
3 title, and the scope of any work or services they performed for the COMPANY, as well as the
4 dates during which such PERSON performed the work or services.]
5 28. All DOCUMENTS evidencing the existence of supply chain disruptions during
6 the RELEVANT PERIOD.
7 29. All DOCUMENTS evidencing steps taken by YOU to address or remedy supply
8 chain disruptions during the RELEVANT PERIOD.
9 30. All DOCUMENTS related to or evidencing steps taken by YOU to address rising
10 costs during the RELEVANT PERIOD.
11 31. All business plans, strategic plans, budgets, forecasts and projections relating to or
12 prepared during the RELEVANT PERIOD.
13 32. All DOCUMENTS evidencing increased competition during the RELEVANT
14 PERIOD.
15 33. All DOCUMENTS evidencing steps taken by YOU to respond to or remedy the
16 effects of increased competition during the RELEVANT PERIOD.
17 34. All appraisals or other valuations prepared during the RELEVANT PERIOD to
18 reflect how much the COMPANY was worth.
19 35. All DOCUMENTS evidencing plans or efforts made by YOU during the
20 RELEVANT PERIOD to improve the COMPANY’s customer experience.
21 36. All DOCUMENTS evidencing plans or efforts made by YOU during the
22 RELEVANT PERIOD to enhance or improve the effectiveness of the COMPANY’s advertising
23 and/or marketing campaigns.
24 37. All DOCUMENTS evidencing any consideration or analysis by YOU during the
25 RELEVANT PERIOD as to whether to expand the marketing and advertising of the
26 COMPANY’s products into international markets.
27
28
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1 38. All DOCUMENTS evidencing how YOU used credit card rewards, including
2 points, miles and discounts, during the RELEVANT PERIOD that accrued on credit card
3 accounts for which credit card charges were paid by the COMPANY.
4 39. All DOCUMENTS related to any payments, transfers, purchases, or
5 reimbursements involving COMPANY funds made by or to Mira Gavrieli, including
6 DOCUMENTS substantiating any purported business purpose of such payments or transfers.
7 40. All COMMUNICATIONS between YOU and ISSA (including
8 COMMUNICATIONS between YOUR and ISSA’s attorneys) during the RELEVANT PERIOD
9 which refer or relate to any of the following: (a) this Adversary Proceeding; (b) Plaintiff’s claims
10 and allegations set forth in this Adversary Proceeding; (c) any defenses asserted by YOU or
11 ISSA in this Adversary Proceeding; (d) Dikla Gavrieli a/k/a Dikla Gavrieli Unatin; and/or (e)
12 Dean Unatin.
13 41. All DOCUMENTS provided by YOU (or any PERSON acting on YOUR behalf)
14 to any of the following during the RELEVANT PERIOD (including any of their attorneys and/or
15 financial advisors): (a) ISSA; (b) Robert Kors; (c) Joe Sanberg; and/or (d) the Official
16 Committee of Unsecured Creditors which refer or relate to any of the following: (a) this
17 Adversary Proceeding; (b) Plaintiff’s claims and allegations set forth in this Adversary
18 Proceeding; (c) any defenses asserted by YOU or ISSA in this Adversary Proceeding; (d) Dikla
19 Gavrieli a/k/a Dikla Gavrieli Unatin; (e) Dean Unatin; (f) the COMPANY (including its
20 valuation and financial performance).
21
22
23
24
25
26
27
28
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1 LATHAM & WATKINS LLP
Daniel Scott Schecter (Bar No. 171472)
2 daniel.schecter@lw.com
Tara A. McCortney (Bar No. 334942)
3 tara.mccortney@lw.com
Alexandra N. Ibrahim (Bar No. 340972)
4 alexandra.ibrahim@lw.com
10250 Constellation Blvd., Suite 1100
5 Los Angeles, California 90067
Telephone: +1.424.653.5500
6 Facsimile: +1.424.653.5501
7 Attorneys for Plaintiff Dikla Gavrieli
a/k/a Dikla Gavrieli Unatin
8
9 UNITED STATES BANKRUPTCY COURT
10 CENTRAL DISTRICT OF CALIFORNIA
11 In re Case No. 2:21-bk-10826-BB (Chapter 11)
12 KFIR GAVRIELI, Adversary No. 2:21-ap-01034-BB
13 Debtor. PLAINTIFF’S SECOND SET OF REQUESTS
FOR PRODUCTION TO POST-EFFECTIVE
14 DATE TRUSTEE J. MICHAEL ISSA
15
DIKLA GAVRIELI a/k/a DIKLA Judge: Hon. Sheri Bluebond
16 GAVRIELI UNATIN, on behalf of
GAVRIELI BRANDS, LLC, a California
17 limited liability company,
18 Plaintiff,
19 v.
20 KFIR GAVRIELI, an individual,
21 Debtor,
22 - and -
23 GAVRIELI BRANDS, LLC, a California
limited liability company,
24
Nominal Defendant.
25
26
27
28
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CENTURY CITY
PLAINTIFF’S SECOND SET OF REQUESTS FOR
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1 PLEASE TAKE NOTICE that, pursuant to Rules 26 and 34 of the Federal Rules of Civil
2 Procedure, made applicable here under Rules 7026, 7033, and 7034 of the Federal Rules of
3 Bankruptcy Procedure, Plaintiff Dikla Gavrieli a/k/a Dikla Gavrieli Unatin, by and through her
4 undersigned counsel, hereby serves these Requests for Production of Documents (the
5 “Requests”) to Michael J. Issa. Documents responsive to the Requests shall be produced on a
6 rolling basis, but not later than thirty days after receipt of these Requests.
7 DEFINITIONS
8 For purposes of these Requests, the following definitions shall apply. These definitions
9 are to be construed in the broadest sense with reference to the Federal Rules of Bankruptcy
10 Procedure and the Federal Rules of Civil Procedure.
11 1. “YOU,” “YOUR,” and “DEFENDANT” shall mean J. Michael Issa and any
12 PERSON acting on his behalf, including, without limitation, any of his partners, attorneys,
13 financial advisors, accountants, agents, representatives, employees, consultants, independent
14 contractors, or affiliated entities, as well as any other PERSON acting on any of their behalf.
15 2. “PERSON(s)” shall mean all natural persons and all entities, including any
16 organizations, sole proprietorships, associations, companies, partnerships, joint ventures,
17 corporations, legal entities, governmental entities, legal representatives, trusts, or estates.
18 3. “COMMUNICATION(s)” shall have the broadest meaning allowable under the
19 Federal Rules of Civil Procedure and Federal Rules of Bankruptcy Procedure, and includes the
20 transmission, sending, and/or receipt of information of any kind, or the attempt to elicit information
21 of any kind, by and/or through any means, including, but not limited to, speech, discussion,
22 meeting, conversation, writing, language (machine, foreign, or otherwise), electronic mail,
23 computer electronics of any kind, videotape, photograph, graph, symbol, sign, sound, radio,
24 telephone, telecommunication, film, or media of any kind.
25 4. “COMPANY” shall mean Gavrieli Brands, LLC and all of its current and former
26 members, agents, representatives, attorneys, employees, consultants, independent contractors,
27 affiliated entities, and any other PERSON acting on its behalf.
28
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1 5. “DOCUMENT(s)” shall have the broadest meaning allowable under the Federal
2 Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure, and includes, but is not
3 limited to, the following items, whether printed or recorded or reproduced by any mechanical or
4 electronic process, or written or produced by hand: agreements; contracts; communications,
5 including intra-company communications; correspondence; telegrams; telexes; teletypes;
6 memoranda; record books; notes; reports; opinions; electronic mail (including any primary or
7 back-up file); real-time or instant messages; SMS, MMS, or other text messages; postings on the
8 Internet or World Wide Web; computer disks; videotapes; audio tapes; summaries, notes,
9 memoranda or other records of personal conversations or interviews; diaries; forecasts; statistical
10 statements; cost summaries; accountants’ or bookkeepers’ work papers, graphs, charts or accounts;
11 logs; analytical records; minutes, notes, summaries, memoranda, or other records of investigations;
12 audit reports; internal audit reports; opinions or reports of consultants’ appraisals; trade letters;
13 notes; projections; drafts of any documents; working papers; or any other documents or writing of
14 whatever description, including, but not limited to, any information contained in any computer
15 although not yet in printed form in YOUR possession, custody or control.
16 6. “RELATED TO” shall mean all information, facts, or documents that directly,
17 indirectly, or in any other way support, concern, negate, bear upon, touch upon, incorporate, affect,
18 include, pertain to, or are otherwise connected with the subject matter referenced.
19 7. “LAW ENFORCEMENT” shall mean any federal, state, or other law enforcement
20 individual, agency, or regulator, and includes, without limitation, any investigation or regulatory
21 proceeding overseen or initiated by the U.S. Department of Justice, the Securities and Exchange
22 Commission, and/or the Commodity Futures Trading Commission.
23 8. “MEDIA” shall mean any reporter, journalist, publication, blog, news organization,
24 or other news or fact gathering or investigative action by any PERSON of any type whether or not
25 the results of that work was published.
26 9. “ASPIRATION” shall mean Aspiration Partners, Inc., and any PERSON acting on
27 its behalf, including, without limitation, any past or present parent, division, subsidiary, affiliate,
28
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1 joint venture, associated organization, partner, attorney, financial advisor, accountant, agent,
2 representative, employee, consultant, independent contractor, founder, or affiliated entity.
3 10. “APOGEE” shall refer to Apogee Pacific, LLC, and any PERSON acting on its
4 behalf, including, without limitation, any past or present parent, division, subsidiary, affiliate, joint
5 venture, associated organization, partner, attorney, financial advisor, accountant, agent,
6 representative, employee, consultant, independent contractor, founder, or affiliated entity.
7 11. “SUSTAINABILITY SERVICES” shall mean any actual, planned, or purported
8 services or financial transactions involving tree planting, carbon credits, reforestation, or any
9 related type activities or transactions.
10 12. “ECONOMIC NEXUS LAWS” shall mean laws adopted by any jurisdiction
11 following the decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc., 138 S. Ct.
12 2080 (2018) regarding the collection of sales tax and other taxes from the sale of good and services
13 by parties located outside of the state, as summarized at
14 https://www.salestaxinstitute.com/resources/economic-nexus-state-guide and
15 https://www.thetaxadviser.com/issues/2023/jun/south-dakota-v-wayfair-five-years-later.html.
16 13. “RELEVANT PERIOD” means and refers to July 22, 2019 through the date of
17 YOUR responses to these Requests.
18 14. The term “any” shall be construed to include and encompass “all,” and vice versa.
19 15. The terms “any,” “all,” and “each” shall be construed as broadly as possible to bring
20 within the scope of the Request any information that might be deemed outside its scope by any
21 other construction.
22 16. The terms “and” and “or” shall be construed either conjunctively or disjunctively,
23 as required by the context, to bring within the scope of the Request any information that might be
24 deemed outside its scope by any other construction.
25 17. The term “including” shall mean including but not limited to.
26 18. The past tense of a verb herein includes the present tense and vice versa.
27 19. The use of the singular of any word herein includes the plural and vice versa.
28
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1 INSTRUCTIONS
2 1. Comply with the Federal Rules of Civil Procedure, the Federal Rules of Bankruptcy
3 Procedure, and the Local Rules of the United States Bankruptcy Court for the Central District of
4 California.
5 2. Produce all responsive DOCUMENTS in YOUR possession, custody, or control,
6 and in the possession, custody, or control of any agents, representatives, or advisors to YOU.
7 3. Produce the original of each responsive DOCUMENT, together with all non-
8 identical copies and drafts of that DOCUMENT.
9 4. If YOU object to the production of any DOCUMENT in response to the Requests,
10 state with specificity the reasons for YOUR objection.
11 5. If YOU object to any portion of a Request, produce DOCUMENTS responsive to
12 any portion(s) of the Request to which YOU do not object.
13 6. DOCUMENTS shall be produced in full and complete form. If any responsive
14 DOCUMENTS cannot be produced in full, produce such DOCUMENTS to the extent possible,
15 and specify the reason for the inability to produce the remainder.
16 7. DOCUMENTS shall be produced in the manner that they are kept in the ordinary
17 course of business or organized and labeled to correspond to the Request to which they are
18 responsive.
19 8. If any responsive DOCUMENT is not produced because of a claim of privilege or
20 work product, provide an appropriate privilege log.
21 REQUESTS FOR PRODUCTION
22 REQUEST FOR PRODUCTION NO. 22:
23 All DOCUMENTS, including without limitation all COMMUNICATIONS, RELATED TO
24 any litigation, investigation, or inquiry by LAW ENFORCEMENT or MEDIA, which is
25 RELATED TO ASPIRATION or any SUSTAINABILITY SERVICES, including any subpoenas
26 received by the COMPANY or any of its managers, members, or employees. This request
27 includes any sums paid by the COMPANY for legal or other expenses in connection with any
28 such litigation or investigation.
5
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CENTURY CITY
PLAINTIFF’S SECOND SET OF REQUESTS FOR
PRODUCTION TO POST-EFFECTIVE DATE TRUSTEE
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1 REQUEST FOR PRODUCTION NO. 23:
2 All DOCUMENTS, including without limitation all COMMUNICATIONS, RELATED
3 TO any litigation, investigation, or inquiry by LAW ENFORCEMENT or MEDIA of the
4 COMPANY, any of its members, employees, or family members, regarding any
5 SUSTAINABILITY SERVICES, ASPIRATION, APOGEE, or any creditor or other party
6 named in the Kfir Gavrieli bankruptcy action, Case No. 2:21-bk-10826-BB.
7 REQUEST FOR PRODUCTION NO. 24:
8 All DOCUMENTS, including without limitation all COMMUNICATIONS, RELATED
9 TO Miller Ink, including with any of its principals or employees such as Nathan Miller,
10 regarding: (1) any services provided to the COMPANY or to any of its employees (including
11 Kfir Gavrieli or any of his family members); (2) any funds provided by the COMPANY to Miller
12 Ink; or (3) ASPIRATION, any SUSTAINABILITY SERVICES, or any litigation, investigation,
13 or inquiry by LAW ENFORCEMENT or MEDIA.
14 REQUEST FOR PRODUCTION NO. 25:
15 All DOCUMENTS, including without limitation all COMMUNICATIONS, between Kfir
16 Gavrieli and Yamit Betesh, Guy Davidyan, Joseph Sanberg, Nathan Miller, any other
17 COMPANY employee, or any of Kfir Gavrieli’s family members, RELATED TO
18 ASPIRATION, APOGEE, SUSTAINABILITY SERVICES, or LAW ENFORCEMENT.
19 REQUEST FOR PRODUCTION NO. 26:
20 All DOCUMENTS which reflect the earliest date the COMPANY became aware of the
21 following: (a) the decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc., 138 S.
22 Ct. 2080 (2018); (b) the adoption of ECONOMIC NEXUS LAWS in any jurisdiction.
23 REQUEST FOR PRODUCTION NO. 27:
24 All DOCUMENTS RELATED TO the COMPANY’s collection, calculation, or remittance
25 of any taxes from consumers (including sales or use taxes) from the sales of goods or services by
26 the COMPANY for the RELEVANT PERIOD, including but not limited to any sales tax returns
27 filed, prepared, or contemplated for any jurisdiction, and supporting documents thereto.
28
6
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CENTURY CITY
PLAINTIFF’S SECOND SET OF REQUESTS FOR
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1 REQUEST FOR PRODUCTION NO. 28:
2 All DOCUMENTS RELATED TO the COMPANY’s adoption of policies, practices, and
3 procedures in response to: (a) the decision of the U.S. Supreme Court in South Dakota v.
4 Wayfair, Inc., 138 S. Ct. 2080 (2018); (b) the adoption of ECONOMIC NEXUS LAWS in any
5 jurisdiction.
6 REQUEST FOR PRODUCTION NO. 29:
7 All DOCUMENTS RELATED TO any funds received, reserved, or remitted by the
8 COMPANY for the collection, remittance, and/or payment of any taxes to any state other than
9 California (including sales or use taxes).
10 REQUEST FOR PRODUCTION NO. 30:
11 All DOCUMENTS RELATED TO any advice or services the COMPANY sought or
12 obtained from any lawyers, accountants, or other professionals RELATED TO any of the
13 following: (a) the decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc., 138 S.
14 Ct. 2080 (2018); (b) the adoption of ECONOMIC NEXUS LAWS in any jurisdiction; (c) the
15 COMPANY’s adoption of policies, practices, and procedures in response to any ECONOMIC
16 NEXUS LAWS; (d) the COMPANY’s financial and accounting practices in response to any
17 ECONOMIC NEXUS LAW; and (e) potential civil or criminal liability or exposure for Kfir
18 Gavrieli or the COMPANY, its members, or its employees.
19
20 Dated: December 10, 2024 LATHAM & WATKINS LLP
Daniel Scott Schecter
21 Tara A. McCortney
Alexandra N. Ibrahim
22
23 By
Daniel Scott Schecter
24 Attorneys for Plaintiff Dikla Gavrieli
a/k/a Dikla Gavrieli Unatin
25
26
27
28
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ATTORNEYS AT LAW
CENTURY CITY
PLAINTIFF’S SECOND SET OF REQUESTS FOR
PRODUCTION TO POST-EFFECTIVE DATE TRUSTEE
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1 PROOF OF SERVICE
2 I am employed in the County of Los Angeles, State of California. I am over the age of 18
years and not a party to this action. My business address is Latham & Watkins LLP, 355 South
3 Grand Avenue, Suite 100, Los Angeles, CA 90071. My email address is
tara.mccortney@lw.com.
4
On December 10, 2024, I served the following document described as:
5
PLAINTIFF’S SECOND SET OF REQUESTS FOR PRODUCTION TO POST-
6 EFFECTIVE DATE TRUSTEE J. MICHAEL ISSA
7 by serving a true copy of the above-described document in the following manner:
8 BY ELECTRONIC MAIL
9 The above-described document was transmitted via electronic mail to the following party
on December 10, 2024:
10
HUESTON HENNIGAN LLP
11 Marshall A. Camp (SBN 231389)
mcamp@hueston.com
12 Allison L. Libeu (SBN 244487)
alibeu@hueston.com
13 523 West 6th Street, Suite 400
Los Angeles, CA 90014
14
Attorneys for J. Michael Issa,
15 the Post-Effective Date Trustee
16 I declare that I am employed in the office of a member of the Bar of, or permitted to
practice before, this Court at whose direction the service was made and declare under penalty of
17 perjury under the laws of the State of California that the foregoing is true and correct.
18 Executed on December 10, 2024, at Los Angeles, California.
19
20 Tara McCortney
21
22
23
24
25
26
27
28
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PROOF OF SERVICE
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PROOF OF SERVICE OF DOCUMENT
I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is:
Lesnick Prince Pappas & Alverson LLP, 315 W. 9th Street, Suite 705, Los Angeles, CA 90015
A true and correct copy of the foregoing document entitled COMPENDIUM OF EXHIBITS FOR MOTIONS
FOR LEAVE TO AMEND COMPLAINT RE WAYFAIR AND ASPIRATION will be served or was served
(a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below:
1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General
Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On
(date)April 20, 2026I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that
the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated
below:
Gregory K Jones gjones@stradlinglaw.com, smjohnson@sycr.com;smjohnson@stradlinglaw.com
Robert Allan Kors (TR) robertkorstrustee@gmail.com
Allison L Libeu alibeu@hueston.com, sjones@hueston.com
William N Lobel wlobel@tocounsel.com, mmason@tocounsel.com
Kerri A Lyman klyman@steptoe.com, #-
FirmPSDocketing@Steptoe.com;nmorneault@Steptoe.com;mhernandez@steptoe.com;aodonnell@steptoe.com
Christopher E Prince cprince@lesnickprince.com,
jmack@lesnickprince.com;cprince@ecf.courtdrive.com;porpe@lesnickprince.com
United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Richard Lee Wynne richard.wynne@hoganlovells.com,
tracy.southwell@hoganlovells.com;cindy.mitchell@hoganlovells.com;rick-wynne-7245@ecf.pacerpro.com
Service information continued on attached page
2. SERVED BY UNITED STATES MAIL:
On (date) , I served the following persons and/or entities at the last known addresses in this bankruptcy
case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail,
first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the
judge will be completed no later than 24 hours after the document is filed.
Service information continued on attached page
3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method
for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) , I served the
following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to
such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration
that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is
filed.
Service information continued on attached page
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.
April 20, 2026 Christopher E. Prince /s/ Christopher E. Prince
Date Printed Name Signature
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
June 2012 F 9013-3.1.PROOF.SERVICE