Federal lawsuit filed against Piazza | Local news


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A federal lawsuit has been filed against Cody’s businessman Nick Piazza alleging that he and his co-conspirators implemented an elaborate ploy to prevent hedge fund Gramercy Management LLC from recovering more than $ 100 million investments in a Ukrainian agricultural enterprise with which Piazza is associated.

Gramercy accuses Piazza of helping Oleg Bakhmatyuk, founder and majority shareholder of UkrLandFarming, one of Ukraine’s largest egg producers, illegally transfer company assets to shell companies in Wyoming as part of the of an effort to “exploit” the laws of the Cowboy State. He is accused of having committed and coordinated acts of aiding and abetting postal fraud, electronic fraud and fraudulent inducement to travel.

Piazza said her legal counsel, Kristen Mueller, advised her not to comment on the lawsuit, which she confirmed. Mueller drafted a statement on Friday, filled with appeals for state pride and entrepreneurship, which was handed out to Sleeping Giant employees and forwarded by Piazza to the Cody Company.

“(The) 105-page complaint looks more like a work of fiction than a legal document,” Mueller wrote. “Many of his claims are blatantly false, while others have a loose grip on reality. We’ll be taking a close look at this lawsuit to see if a counter-lawsuit could hold hedge fund managers accountable for the damage done to the business reputation of Nick and his partners. “

Mueller said she will not be portraying Piazza in the costume.

The lawsuit was filed as a civil case in Wyoming U.S. District Court on December 7 under the Racketeer Influenced and Corrupted Organizations Act. In addition, the lawsuit alleges allegations of fraud, tort interference, aiding and abetting and civil conspiracy.

The Sleeping Giant ski area is never mentioned in the prosecution file. The ski area, known as “Community Mountain LLC” to the Wyoming Secretary of State’s office, has a listed agent of Cody Business Services LLC. Cody Business Services is linked to SP Capital Management and TNA Corporate Solutions in their Wyoming LLC cases, two companies which are both listed in the lawsuit. Oleksandr Yaremenko, who is also listed as a defendant in the lawsuit, has filed tax returns for Community Mountain and Cody Business Services for the past two years and is the COO of SP Capital, according to the company’s website. .

Another Cody-based company with Ukrainian connections is Globberry LLC. According to its website, Globberry provides applications and infrastructure for the telecommunications industry and has offices in Cody and Ukraine. Although Piazza is not mentioned on the website, Globberry has a contact number that matches Piazza’s phone number.

This company was registered with Jackson’s attorney Scott Seedall, who also registered Community Mountain (Sleeping Giant), Cody Business Services, TNA and SP Capital with the state.

“Wyoming presents itself as the new [financial center] – it’s going to attract customers, ”said Allison Tait, a law professor at the University of Richmond, a trust and estate expert who has studied Wyoming’s financial laws, in a recent Washington Post article.

Wyoming has exceptionally lenient asset privacy laws, requiring little public information to be provided with filing documents for limited liability companies and beneficiaries of trusts. In addition, families can own assets through a Wyoming limited liability company, which is then owned by the trust.

“It’s like a gift wrapped in a wrapped gift,” Tait said. “The more wrapping you put, the more difficult it is to determine whether there has been tax avoidance or evasion or even financial crime. Very few people know what you’re doing, basically.

Wyoming is one of the few states that allows private companies to be the only party associated with a trust.

“I can’t tell you how many times I’ve taken a continuing legal education course here in New York City and I’m proud that my old playground is THE FIRST STATE to be mentioned by business lawyers like The State to move or create your LLCs, trusts, and other legal entities, ”Mueller wrote in the release.

Piazza, a graduate of Cody High School, took over the management of the Sleeping Giant Ski Resort outside of Cody in the fall of 2020. Although he is not considered the official owner of the mountain, he invested hundreds of thousands of dollars in the ski resort. since taking charge.

Piazza is also the CEO of SP Capital, a business consultancy firm with offices in Ukraine and Cody. Its website describes the company as an investment farm for “multiple debt and equity investments in agriculture, retail, foodservice, insurance, IT development, outdoor recreation and construction. shipping, as well as troubled government debt investments in Ukraine and Georgia, “according to its website. The website mentions ULF as one of its business partners, as well as its purchase of Sleeping Giant.

The lawsuit accuses Piazza of having “connections that allow him to present himself and his companies as fixers for wealthy Ukrainians and Eastern Europeans.”

“Given his contacts, his profile and his” expertise “in the protection of foreign assets by the creation of fictitious companies, Piazza was an integral part of the Bakhmatyuk project from the start”, alleges the lawsuit.

Although the hedge fund, Gramercy Funds Management LLC, has an office in Connecticut, it owns numerous funds based in the Cayman Islands. He is represented by the law firm Cheyenne Hirst Applegate LLP in the lawsuit. Hirst Applegate’s attorneys did not respond to the firm’s follow-up questions in time for the publication.

“Civilian RICO complaints are notoriously misused by opportunistic and aggressive complainants,” Mueller wrote. “I find it insulting that some hedge fund managers in the Cayman Islands are trying to create a problem with the business opportunities available to Wyoming and its residents.”

According to its website, Gramercy was founded with the aim of “investing in distressed credit opportunities in emerging markets where value could be realized through active involvement and practical restructurings.” Tax returns show the company has 49 clients and discretionary assets totaling $ 4.9 billion.

Gramercy is one of ULF’s largest creditors, but its loans were unsecured, meaning ULF did not have to offer it collateral when borrowing funds. In the event of bankruptcy, Gramercy would be the last to recover its share of the company’s assets.

But due to his over 25% stake in the business, Gramercy maintains he had the right to block certain Bakhmatyuk moves with Piazza’s help he was not told about. Specifically, Gramercy accuses Piazza of helping “house assets in Wyoming beyond Gramercy’s reach.”

“Nick and his business partners take pride in doing business in Wyoming,” Mueller wrote. “They pride themselves on bringing business opportunities to a state that has become the new frontier for businesses seeking a home base that is not only business-friendly, but also user-friendly. Wyoming is that state. Wyoming is that opportunity. There is nothing illegal or unconstitutional about the Wyoming LLC Articles of Incorporation, and there is nothing wrong with Nick or any person / entity forming a business under these Articles.

A relationship that slowly deteriorates

In 2010, Bakhmatyuk turned to global stock markets to help raise capital for ULF. In 2015, Gramercy was ULF’s largest creditor with a $ 123 million stake in the company.

Russia’s annexation of Crimea in 2014 triggered a supply chain crisis for ULF, a crisis that company officials say led to its downfall, Gramercy said.

Gramercy said that this fall, and an open investigation against Bakhmatyuk over another matter, sparked a campaign to distort the value of the company, orchestrated by Bakhmatyuk and Piazza by offering misinformation to the media and through the production of fraudulent financial statements, painting a grim picture of the company’s future that did not match market conditions.

A report by the National University of Life and Environmental Sciences of Ukraine found that data provided to an ULF news site in 2015 was “extremely inaccurate” and suggested that ” Data inconsistencies could be the result of agreements between the portal’s editorial staff and companies to include inaccurate data in the information space.

In 2015 and 2016, Gramercy agreed to restructure the reimbursement of ULF tickets. At the end of 2016, a more stringent restructuring was requested by Gramercy, which put an end to any productive negotiations between the companies. In January 2019, agricultural giant Cargill entered negotiations and offered to buy out Gramercy’s debt, but the two companies were unable to come to an agreement on terms.

Piazza is accused of requisitioning ULF debt through other creditors from 2017 to 2018 in order to isolate Gramercy in negotiations.

Gramercy said it ultimately paid for an independent ULF audit that found at least 100 of the company’s subsidiaries moved to Piazza’s TNA Corporate Solutions from November 2019 to May 2020, a decision it never disclosed. . The total value of those transfers was $ 872 million and represented at least 66% of the business, according to Gramercy.

Gramercy assumes that the TNA was created just for these transfers, as it was created two months after ULF defaulted in debt negotiations with Gramercy and other creditors. He said those transfers followed an exact “road map” that Piazza explained during a webinar in 2020 when discussing one of his other Wyoming companies, SP Advisors.

Gramercy also accused Piazza of impersonating a third party and making a low-cost offer to buy out his debt.

“Bakhmatyuk and Piazza, along with their allies, fraudulently induced Gramercy to waive the enforcement of its contractual rights, and such action will no longer provide Gramercy with any relief or remedy due to the company’s plan to misappropriate assets. Company to Shell Wyoming Companies, ”the lawsuit alleges.

By the spring of 2020, negotiations had become uncooperative between the companies, Bakhmatyuk was reportedly emboldened by the successful divestment of funds.

Gramercy was attempting to enter into negotiations with Bakhmatyuk while Bakhmatyuk was under investigation by the National Bank of Ukraine and as he transferred his Austrian villa to the property of his minor children, a house in which he s ‘settled down definitively shortly after.

In 2017, Gramercy said so and another investment group was approached by a third bondholder who said they should all unite in “restructuring negotiations to increase pressure on Bakhmatyuk and the company”. That offer was turned down due to Gramercy’s faith still in Bakhmatyuk, he said on the file.

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