Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 1 of 32
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
`MIAMI DIVISION
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`Case No.
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`AARON SILBERMAN, an individual, and
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`AMJ MISIL AB LLC, a Florida limited liability
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`company
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`Plaintiffs,
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`vs.
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`PREMIER BEAUTY AND HEALTH LLC, a
`Florida limited liability company, JORGE HANE, )
`an individual, and FLORENCIA HANE, an
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`individual, jointly and severally,
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`Defendants.
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`__________________________________________/
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`COMPLAINT
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`Plaintiffs, Aaron Silberman (“Silberman”) and AMJ Misil AB LLC (“AMJ”), by and
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`through their undersigned counsel, bring this action against Defendants, Jorge Hane (“Jorge”),
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`Florencia Hane (“Florencia”), and Premier Beauty and Health LLC (“Premier”) (Jorge, Florencia,
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`and Premier shall hereinafter be collectively referred to as “Defendants”), and state as follows:
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`NATURE OF THE ACTION
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`1.
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`This action arises out of Defendants’ intentional misrepresentations of material
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`fact, untrue statements of material fact, and omissions of material fact made for the purpose of
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`inducing Plaintiff AMJ’s investment of Four Hundred Fifty Thousand Dollars ($450,000) (the
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`“Investment Funds”) in Defendant Premier through Defendants’ offering and sale of unregistered
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`securities issued by Defendant Premier (the “Securities”).
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`Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 2 of 32
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`2.
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`When Defendants offered to sell the Securities to Plaintiffs, they represented to
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`Plaintiffs that Defendant Premier: (i) marketed and sold CBD1 products containing proprietary
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`chemical formulas formulated and developed by Defendant Premier (“CBD Blends”); (ii) was the
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`sole owner of the intellectual property rights in and to the CBD Blends; (iii) hired Dr. Jeffrey Lin
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`- a medical doctor trained at Harvard University and Yale University - to personally create and
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`develop the proprietary CBD Blends; (iv) secured exclusive rights to be the first and only company
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`to market and sell CBD products on TV home shopping networks; (v) was directed and managed
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`by Defendant Jorge, an industry expert with over thirty (30) years of experience in marketing and
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`selling consumer products via infomercials and TV home shopping networks, whose status as a
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`co-founder of the National Infomercial Marketing Association and whose relationship with the
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`owner and CEO of ShopHQ2 guaranteed that Defendant Premier’s sales would exceed Twelve
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`Million Dollars ($12,000,000) in the first year alone; (vi) already had a special agreement, as a
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`result of Defendant Jorge’s relationship with the owner and CEO of ShopHQ, pursuant to which
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`ShopHQ would deviate from its standard business practice by purchasing rather than consigning
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`Defendant Premier’s CBD products, thereby assuring Defendant Premier of guaranteed sales and
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`revenue; (vii) would receive its first purchase order from ShopHQ no later than September of 2019,
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`and would be selling its CBD products live on ShopHQ by October of 2019; (viii) would be selling
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`other products in addition to its CBD products, including a hi-tech reliever and protein bars that
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`Defendant Jorge had originally planned to sell through a different entity but would instead do so
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`through Defendant Premier (the “Additional Products”), thereby raising Defendant Premier’s
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`1 CBD is the abbreviation for cannabidiol, one of the chemical compounds found in hemp.
`2 ShopHQ is a digital retailer with a television home shopping network that showcases products
`throughout the United States. ShopHQ’s live television programming reaches over 87 million
`homes in the country via cable affiliates and satellite, and is also streamed live on select mobile
`devices and on Facebook.
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`valuation; (ix) had sufficient cash reserves to operate Defendant Premier’s business without
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`financial constraints; and (x) would employ Plaintiff Silberman, a member of Plaintiff AMJ, and
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`provide him with the opportunity to develop and advance his career.
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`3.
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`Contrary to Defendants’ representations, Defendant Premier: (i) neither formulated
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`nor developed the CDB Blends, and instead purchased the chemical formulas contained in its CBD
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`products from a company by the name of Cosmetic Solutions; (ii) did not own any intellectual
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`property rights in and to any CBD Blends; (iii) had not secured any exclusive rights to be the first
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`and only company to market and sell CBD products on TV home shopping networks; (iv) did not
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`have any agreement with ShopHQ under which ShopHQ would purchase rather than consign
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`Defendant Premier’s CBD products; (v) did not receive any purchase orders from ShopHQ by
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`September of 2019, nor did it get any air time on ShopHQ by October of 2019; (vii) never offered
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`for sale or sold the Additional Products; (viii) did not have sufficient cash reserves to properly
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`operate its business; and (ix) did not have any intention of employing Plaintiff Silberman, and
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`solely promised Plaintiff Silberman long-term employment to induce Plaintiff AMJ’s investment.
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`4.
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`As part of and in furtherance of their fraudulent scheme, Defendants embezzled
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`part of the Investment Funds and knowingly and intentionally presented financial documents to
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`Plaintiff AMJ and other potential investors of Defendant Premier, which documents
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`misrepresented and/or omitted critical and material information about Defendant Premier.
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`5.
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`In addition, Defendants failed to disclose information material to Plaintiff AMJ’s
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`purchase of the Securities.
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`6.
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`Defendant Premier, at the direction and control of Defendants Jorge and Florencia,
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`employed Plaintiff Silberman on August 19, 2019. Upon Plaintiffs’ discovery of Defendants’
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`fraudulent scheme, and twelve (12) days after Defendant Premier’s full receipt of the Investment
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`Funds, Defendants swiftly terminated Plaintiff Silberman’s employment with Defendant Premier,
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`without cause, and cut off Plaintiff Silberman’s access to his business emails and Plaintiff AMJ’s
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`access to Defendant Premier’s books and records.
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`7.
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`Defendant Premier breached its employment agreement with Plaintiff Silberman
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`by failing to make wage payments due thereunder.
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`8.
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`In order to both induce investments such as the one made by Plaintiff AMJ, and
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`market and sell Defendant Premier’s products to prospective consumers, Defendants Jorge and
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`Florencia – motivated by personal financial gain – consistently make deceitful and intentional
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`misrepresentations about Defendant Premier and its CBD products.
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`JURISDICTION AND VENUE
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`9.
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`Subject matter jurisdiction exists pursuant to 28 U.S.C. §1331 over Plaintiffs’ cause
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`of action founded upon 15 U.S.C. § 77l, 15 U.S.C. § 77o, 15 U.S.C. § 78j(b), and 17 C.F.R.
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`§ 240.10b-5 promulgated thereunder, and 15 U.S.C. § 77t.
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`10.
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`This Honorable Court has supplemental jurisdiction over Plaintiffs’ pendent state
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`claims pursuant to 28 U.S.C §1367 because they are directly related to Plaintiffs’ federal claims
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`and form part of the same case or controversy.
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`11.
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`Pursuant to Section 27 of the Securities and Exchange Act of 1934 (“Exchange
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`Act”), 15 U.S.C. § 78aa, venue for this action properly lies in this Honorable Court because the
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`transactions, acts, practices, and course of business giving rise to Plaintiffs’ claims took place in
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`Miami-Dade County, Florida, and because at all material times hereto, Defendants conducted
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`business, maintained their principal place of business, and resided in Miami-Dade County, Florida.
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`12.
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`Defendants, directly or indirectly, used the means or instruments of interstate
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`commerce or the mails in connection with the acts described in this Complaint.
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`13.
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`All conditions precedent to the initiation of the claims set forth in this Complaint
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`have been performed, satisfied, excused, or waived.
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`14.
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`Plaintiffs have retained the undersigned attorneys to represent them in this action
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`and have agreed to pay reasonable attorneys’ fees and costs for such legal services.
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`15.
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`Plaintiff Silberman is an individual residing in Miami-Dade County, Florida and is
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`PARTIES
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`sui juris.
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`16.
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`Plaintiff AMJ is a Florida limited liability company with its principal place of
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`business in Miami-Dade County, Florida.
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`17.
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`Defendant Jorge is an individual residing in Miami-Dade County, Florida, and is
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`sui juris.
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`18.
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`Defendant Florencia is an individual residing in Miami-Dade County, Florida, and
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`is sui juris.
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`19.
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`Defendant Premier is a Florida limited liability company with its principal place of
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`business in Miami-Dade County, Florida.
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`20.
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`21.
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`Defendant Premier has two (2) members – Defendant Florencia and Plaintiff AMJ.
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`At all times material hereto, Defendant Jorge exercised operational and financial
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`control over Defendant Premier’s day-to-day operations, including control over the offering and
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`sale of securities to Plaintiff AMJ, by virtue of his position as manager, senior officer and/or
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`authorized representative of Defendant Premier and Defendant Florencia in her capacity as a
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`member and manager of Defendant Premier.
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`Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 6 of 32
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`FACTUAL BACKGROUND
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`22.
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`Defendant Premier was organized on July 23, 2018, for the alleged purpose of
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`operating a business engaged in the sale of consumer products related to beauty and health on TV
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`via infomercials and home shopping networks.
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`23.
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`Initially, Defendant Florencia was the sole member of Defendant Premier.
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`However, at all material times hereto, Defendant Jorge, Defendant Florencia’s husband, exercised
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`operational and financial control over Defendant Premier’s major decisions and day-to-day
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`operations. Plaintiffs eventually discovered that Defendant Florencia was listed as Defendant
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`Premier’s sole member because Defendant Jorge was a defendant in at least one (1) bankruptcy
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`action in which he, upon information and belief, was accused of making misrepresentations
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`regarding his financial condition, and because Defendant Jorge did not want his creditors to be
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`able to collect against any of Defendant Premier’s assets or cash reserves.
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`24.
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`Upon information and belief, Defendant Jorge is or has been a named defendant in
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`other lawsuits in which he is and/or has been accused of fraud.
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`25.
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`Defendant Jorge’s aforementioned legal issues, including his bankruptcy, were
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`never disclosed to Plaintiffs prior to Plaintiff AMJ’s investment in Defendant Premier.
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`26. Within one (1) year of Defendant Premier’s organization, Defendants began
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`soliciting investors, one of which was Plaintiff AMJ. Commencing in June of 2019, Defendants
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`solicited numerous meetings with Plaintiffs in an attempt to induce Plaintiff AMJ’s investment.
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`Defendant Jorge has a familial relationship with Plaintiff Silberman’s wife, and at all times
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`material hereto, knew that Plaintiff Silberman’s wife came from a wealthy family that was willing
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`and eager to assist Plaintiff Silberman in the development of his young career. Accordingly,
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`Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 7 of 32
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`Defendant Jorge promised Plaintiff Silberman long-term employment and career growth with
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`Defendant Premier in order to secure the Investment Funds.
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`27.
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`On or about July 2, 2019, Defendants met with Plaintiffs and offered Plaintiff AMJ
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`the Securities for the first time (the “First Investor Meeting”). At the First Investor Meeting,
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`Defendants told Plaintiffs that Defendant Premier would be the first and only company to sell CBD
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`products on TV via home shopping networks and that it would be directed and operated by
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`Defendant Jorge, who had over thirty (30) years of experience selling consumer products via
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`infomercials and on TV home shopping networks. Defendants told Plaintiffs that Defendant
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`Premier was seeking to offer long-term employment to a young professional with access to capital,
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`like Plaintiff Silberman, who was willing to work the business with and learn from Defendant
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`Jorge. Defendant Jorge told Plaintiffs that Defendant Premier had a valuation of Three Million
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`Dollars ($3,000,000) (the “Initial Valuation”), and that other investors had already offered Three
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`Hundred Thousand Dollars ($300,000) in exchange for ten percent (10%) of Defendant Premier’s
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`equity interest.
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`28.
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`On or about July 8, 2019, Plaintiffs held a second meeting with Defendants (the
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`“Second Investor Meeting”). At the Second Investor Meeting, Defendants further discussed the
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`investment opportunity being presented to Plaintiff AMJ, but in this instance, also extended an
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`offer of employment to Plaintiff Silberman. In response, Plaintiff Silberman asked Defendants
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`whether the employment offer was conditioned on Plaintiff AMJ’s potential investment in
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`Defendant Premier, which prompted Defendant Florencia to retract the offer of employment and
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`to state, instead, that if Plaintiff AMJ invested in Defendant Premier, Plaintiff Silberman could
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`work for Defendant Premier for a period of three (3) months without compensation to determine
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`whether he was a good fit for the business. Defendant Florencia further stated that if Defendant
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`Premier determined Plaintiff Silberman to be a good fit at the conclusion of the three (3) month
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`period, Defendant Premier would then offer a paid position to Plaintiff Silberman. Plaintiffs
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`rejected Defendant Florencia’s offer outright.
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`29.
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`On July 30, 2019, Defendant Premier filed an application with the United States
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`Patent and Trademark Office to register Green MD Revolution (“Green MD”), a trademark
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`designated to market and sell its CBD products.
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`30.
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`In August of 2019, Defendants informed Plaintiffs that Defendants were launching
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`the CBD product line under Green MD and requested a meeting with Plaintiffs to further discuss
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`Plaintiff AMJ’s potential investment in Defendant Premier.
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`31.
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`On or about August 13, 2019, Plaintiffs again met with Defendants (the “Third
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`Investor Meeting”). At the Third Investor Meeting, Defendant Jorge told Plaintiffs about his
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`relationship with the CEO and founder of ShopHQ. Defendant Jorge represented that he could
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`guarantee Defendant Premier’s success because of his experience and lofty status in the industry
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`and his history of selling successful products on TV networks such as ShopHQ, whose customary
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`business practice is to work with vendors on a consignment basis. However, Defendant Jorge
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`represented that he had a special agreement with ShopHQ pursuant to which ShopHQ would
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`guarantee payment of purchase orders (“PO”) to Defendant Premier instead of working with
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`Defendant Premier on a consignment basis. Specifically, Defendant Jorge represented that he had
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`this special agreement with ShopHQ for a product he sold on ShopHQ through a company doing
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`business as “Because it Works” (“BIW”), and that he had incorporated Defendant Premier’s
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`products onto said agreement. Defendant Jorge emphasized to Plaintiffs that his personal
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`relationship with the owner and CEO of ShopHQ ensured that Defendant Premier would have no
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`problem getting its sales guaranteed by ShopHQ. In fact, he stated that he had already spoken to
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`the CEO and the owner of ShopHQ, and they agreed that the first PO for Defendant Premier’s
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`products would be placed by the end of September of 2019, and Defendant Premier’s first
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`appearance on the ShopHQ network would take place by October of 2019.
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`32.
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`Furthermore, Defendants represented to Plaintiffs that Defendant Premier did not
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`need investors because it had enough capital and its success was all but certain. Notwithstanding,
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`Defendants indicated to Plaintiffs that because of Defendant Jorge’s familial ties with Plaintiff
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`Silberman’s wife, Defendant Premier would provide long term employment to Plaintiff Silberman
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`if Plaintiff AMJ invested in Defendant Premier, and as a result, not only would Plaintiff AMJ be
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`buying into a “once-in-a-lifetime” business opportunity, but Plaintiff Silberman would also be
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`getting a great education and work experience under Defendant Jorge’s tutelage. Thereafter, while
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`assuring them that their investment in Defendant Premier would be an enormous success,
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`Defendants presented financial projections to Plaintiffs reflecting between Twelve Million Dollars
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`($12,000,000) and Thirty Million Dollars ($30,000,000) in sales by Defendant Premier within one
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`(1) year of Plaintiff AMJ’s investment. Defendant Jorge further represented that BIW was getting
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`five (5) to six (6) POs totaling approximately Two Hundred Fifty Thousand Dollars ($250,000)
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`per year from ShopHQ, and explained that BIW was a company that only sold one product, insoles,
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`which product was far more difficult to sell than Defendant Premier’s CBD products. Defendant
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`Jorge represented to Plaintiffs that if BIW was receiving large POs while only offering one (1)
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`product that was difficult to sell, Defendant Premier would sell many times that amount,
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`considering that Defendant Premier would be offering at least ten (10) products for sale in
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`ShopHQ’s highest grossing category, beauty and health. As a comparable, Defendant Jorge told
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`Plaintiffs that the best skin care brands on ShopHQ, like Consult Health and Serious Skincare,
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`were each selling between Thirty Million Dollars ($30,000,000) and One Hundred Million Dollars
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`($100,000,000) per year.
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`33.
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`Defendants proceeded to present Plaintiffs with a list of the products allegedly
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`containing the CBD Blends that would be branded and sold under the Green MD trademark (the
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`“Green MD Products”), and in an effort to finally secure Plaintiff AMJ’s investment in Defendant
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`Premier, Defendants represented that:
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`a. The CBD Blends contained in the Green MD Products were proprietary, and
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`formulated and developed by Dr. Lin for Defendant Premier;
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`b. Defendant Premier had spent over Twenty-Five Thousand Dollars ($25,000)
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`developing the CBD Blends;
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`c. Defendant Premier was the sole owner of the intellectual property rights in and to
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`the CBD Blends contained in the Green MD Products;
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`d. Defendant Jorge, acting on behalf of Defendant Premier, had secured exclusive
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`rights for Defendant Premier to be the first and only company to market and sell consumer CBD
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`products on TV shopping networks;
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`e. Defendant Jorge had over thirty (30) years of experience in the industry of
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`marketing and selling consumer products on TV via infomercials and home shopping networks,
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`that he co-founded the National Infomercial Marketing Association, and in addition to his
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`knowledge and expertise, he knew all the relevant people in the industry to successfully market
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`and sell the Green MD Products;
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`f. Defendant Premier could easily be sold to ShopHQ by the end of Defendant
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`Premier’s third (3rd) year in business. Defendant Jorge told Plaintiffs that he could easily sell
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`Defendant Premier to ShopHQ because of his great relationship with its owner and CEO and said
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`the home shopping networks tend to purchase successful brands like Green MD. In addition,
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`Defendant Jorge told Plaintiffs that companies like Defendant Premier generate great interest from
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`the public, and that he would consider taking Defendant Premier public after the third (3rd) year.
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`34.
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`At the conclusion of the Third Investor Meeting, Defendants offered Plaintiff AMJ
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`Securities representing ten percent (10%) of Defendant Premier’s equity interest in exchange for
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`Four Hundred Thousand Dollars ($400,000) (the “First Offer for Investment”), and an employment
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`position for Plaintiff Silberman with a monthly salary of Ten Thousand Dollars ($10,000) (the
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`“Employment Offer”).
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`35.
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`To justify the discrepancy between the Initial Valuation and Defendant Premier’s
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`valuation under Defendants’ First Offer for Investment, Defendant Jorge and Defendant Florencia
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`represented that they had the Additional Products which they had previously planned to sell
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`through other companies in which Defendant Premier’s investors did not own any equity, but
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`would instead do so through Defendant Premier, thereby increasing Defendant Premier’s
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`valuation. Defendants Jorge and Florencia told Plaintiffs that these Additional Products were
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`already developed and would be introduced quickly and very successfully.
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`36.
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`Defendants Jorge and Florencia failed to disclose the fact that they had already tried
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`to market and to sell the Additional Products, had failed, and were simply looking to try again,
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`using a different brand and Plaintiff AMJ’s Investment Funds to do so.
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`37.
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`On or about August 14, 2019, relying on Defendants’ representations, Plaintiff
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`AMJ accepted Defendants’ First Offer for Investment, and Plaintiff Silberman accepted the
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`Employment Offer (the “Employment Agreement”). Pursuant to the First Offer for Investment,
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`Plaintiff AMJ agreed to invest Four Hundred Thousand Dollars ($400,000) in Defendant Premier
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`in exchange for ten percent (10%) of Defendant Premier’s equity interest (the “First Investment
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`Agreement”).
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`38.
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`On or about August 19, 2019, Plaintiff Silberman began his employment with
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`Defendant Premier. By September 15, 2019, Plaintiff AMJ had deposited the full amount owed
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`under the First Investment Agreement in Defendant Premier’s bank account. Upon receipt thereof,
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`Defendants Jorge and Florencia withdrew an amount exceeding One Hundred Twenty-Five
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`Thousand Dollars ($125,000), a portion of which they falsely alleged was used to reimburse them
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`for the costs of formulating the allegedly proprietary CBD Blends. The remaining balance, by their
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`own admission, was taken and used by Defendants Jorge and Florencia for their own personal use.
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`39.
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`Throughout his employment with Defendant Premier, whenever Plaintiff
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`Silberman attempted to contribute to Defendant Premier’s decision-making, Defendant Jorge
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`routinely and dismissively called him a “rookie” who “did not know what he was doing.” Indeed,
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`as part of their fraudulent scheme, Defendants targeted young and unsophisticated investors,
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`hoping to embezzle their funds through false promises of employment and investment returns
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`which Defendants supported with documents and/or verbal representations containing fabricated
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`and/or manipulated information, and which documents and/or verbal representations otherwise
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`failed to disclose material information.
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`40.
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`For example, Defendants deceitfully and intentionally used Plaintiff Silberman’s
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`naivete against him and abused his trust by requiring Plaintiff Silberman to sign the lease for the
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`office space Defendant Premier used, and all of the accounts related to said lease (such as the ADT
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`alarm system account and FPL) (collectively, the “Premier Accounts”), in his personal capacity.
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`Although Defendants assured Plaintiff Silberman that Defendant Premier would assume all
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`responsibility for the Premier Accounts, they failed to do so following their termination of Plaintiff
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`Silberman’s employment, leaving Plaintiff Silberman to fend for himself as he was personally
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`liable for the Premier Accounts.
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`41.
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`In addition, after Plaintiff AMJ paid for the Securities purchased under the First
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`Investment Agreement, Plaintiff Silberman discovered the following through his employment with
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`Defendant Premier:
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`a. the CBD Blends contained in Green MD Products were not proprietary;
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`b. the Green MD Products contained chemical formulas purchased by Defendants
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`from a company by the name of Cosmetic Solutions;
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`c. Dr. Lin did not personally formulate or develop the CBD Blends. Instead, he solely
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`acts as an actor and advertising agent for Defendant Premier. Dr. Lin, at Defendants’ instruction,
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`knowingly lies to an audience of millions by stating that he personally developed the CBD Blends
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`using unique ingredients handpicked by him. Defendant Florencia, who also appears live on air to
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`market the Green MD Products, routinely deceives the public about the Green MD Products and
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`their efficacy by, among other things, lying about her age and Dr. Lin’s involvement in the
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`development of the Green MD Products. Defendants and Dr. Lin use Dr. Lin’s academic
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`credentials, which include degrees from Harvard and Yale, to attempt to give the Green MD
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`Products credibility and to perpetrate their fraud. When Plaintiff Silberman confronted Defendants
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`about their fraud, Defendant Jorge dismissively responded by saying that “there was nothing
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`wrong with that because it was a marketing tactic, one that is used by all the brands selling in home
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`shopping networks and infomercials.”
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`d. Defendants actively encourage Dr. Lin to appear on TV networks and advertise
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`undeniably false facts about Green MD Products, and Defendant Jorge and Defendant Florencia
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`provide close guidance and tips to Dr. Lin regarding the manner in which the misrepresentations
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`of fact about Green MD Products should be made to the public in order to maximize their
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`effectiveness;
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`e. Defendants had not spent Twenty-Five Thousand Dollars ($25,000) formulating or
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`developing the CBD Blends. Instead, Defendants used Fifteen Thousand Dollars ($15,000) to
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`purchase the right to manufacture products using the formulas owned by Cosmetic Solutions, and
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`Ten Thousand Dollars ($10,000) to pay for their credit card debt;
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`f. Defendant Jorge did not have an agreement with the CEO and owner of ShopHQ
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`pursuant to which ShopHQ would guarantee its purchase of Green MD Products, thereby assuring
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`Defendant Premier’s sales and revenue.
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`g. Defendants had neither secured exclusive rights for Green MD Products to be the
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`only CBD Products sold on TV via home shopping networks nor the right to be the first company
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`to do so;
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`42.
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`Contrary to Defendants’ representations, Defendant Premier did not receive a PO
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`from ShopHQ by the end of September 2019, nor did it make an appearance on their network by
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`October of 2019. The foregoing resulted in Defendant Premier’s failure to generate sufficient
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`revenue to adequately carry on its business. Accordingly, on or about February 1, 2020,
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`Defendants requested that Plaintiff AMJ make an additional investment of Fifty Thousand Dollars
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`($50,000) and presented Plaintiffs with documents purporting to be Defendant Premier’s financial
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`statements (“Premier’s Fraudulent Financial Statements”) in support of their request. In addition,
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`Defendant Jorge represented that ShopHQ would provide him with the highlights of Defendant
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`Premier’s presentations on ShopHQ, which Defendant Jorge would then utilize to create
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`infomercials that would be broadcast globally using Defendant Jorge’s special connections in the
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`industry. To date, Defendant Premier has not aired a single infomercial.
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`Page 14 of 32
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`Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 15 of 32
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`43.
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`Plaintiff AMJ, concerned that Defendants’ were using Defendant Premier as an
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`alter ego, offered to make the additional capital contributions on a pro-rata basis with Defendant
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`Florencia, but Defendant Jorge informed Plaintiffs that Defendants Jorge and Florencia did not
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`have any more money to invest in the business. Plaintiffs reiterated their concerns regarding
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`Defendants Jorge and Florencia’s management of Defendant Premier’s operations, and told
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`Defendants that Plaintiff AMJ would only consider contributing additional capital in exchange for
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`more equity, more voting power, and an increased say in Defendant Premier’s management and
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`operation. Defendants refused, and Defendant Jorge told Plaintiff AMJ that Defendant Premier
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`would seek to raise capital elsewhere through other potential investors.
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`44.
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`While Defendants targeted other potential investors, Plaintiff AMJ and Defendants
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`had ongoing discussions and arguments about Defendant Premier’s management and its
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`operational needs. During one such discussion, Plaintiff AMJ, concerned about Defendant
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`Premier’s improper management, requested Defendant Premier’s credit card statements and bank
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`statements. Defendant Jorge indicated to Plaintiff AMJ that Defendants would never misuse
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`investor funds and expressed dismay at Plaintiffs AMJ’s mere suggestion of same. Defendant
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`Jorge denied that Defendant Premier had engaged in any wrongdoing and authorized Defendant
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`Premier to provide said statements.
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`45.
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`Plaintiff Silberman, relying on Defendant Jorge’s aforementioned authorization,
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`obtained Defendant Premier’s credit card statements and bank statements and shared them with
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`Plaintiff AMJ, including its members, managers, advisers, and agents. When Defendant Jorge
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`realized that Plaintiff Silberman had provided Defendant Premier’s credit card statements and bank
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`statements to Plaintiff AMJ, he berated Plaintiff Silberman and told him that Defendant Jorge
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`“could have explained the statements better.” Defendant Premier’s credit card statements and bank
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`Page 15 of 32
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`Case 1:20-cv-21984-DPG Document 1 Entered on FLSD Docket 05/12/2020 Page 16 of 32
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`statements unequivocally showed that Defendants Jorge and Florencia had misused the Investment
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`Funds for personal reasons. When confronted about their misuse of the Investment Funds,
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`Defendant Florencia told Plaintiffs that she “sometimes gets confused over her credit cards given
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`that they all are blue.”
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`46.
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`In fear of losing its initial investment, and not having yet discovered that Defendant
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`Premier’s Fraudulent Financial Statements had been fabricated, Plaintiff AMJ decided to
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`contribute the additional Fifty Thousand Dollars ($50,000) to Defendant Premier in exchange for
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`additional equity and only under certain conditions, including requiring Defendants Jorge and
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`Florencia to reimburse Defendant Premier for all the funds misused by them for personal reasons.
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`47.
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`Relying on Defendant Premier’s Fraudulent Financial Statements and other
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`representations about Defendant Premier’s management and operations moving forward, Plaintiff
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`AMJ agreed to invest an additional Fifty Thousand Dollars ($50,000) in Defendant Premier in
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`exchange for an additional ten percent (10%) of Defendant Premier’s equity interest (the “Second
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`Investment Agreement”) (the First Investment Agreement, Second Investment Agreement, and the
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`Employment Agreement shall hereinafter be collectively referred to as the “Investment Scheme”).
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`48.
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`It was only after Defendants terminated Plaintiff Silberman’s employment that he
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`discovered that critical and material information in Defendant Premier’s Fraudulent Financial
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`Statements had been fabricated, misrepresented, and/or omitted by Defendants, and that this
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`practice of manipulating financial documents was used by Defendants to induce Plaintiff AMJ’s
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`investment and to attempt to defraud other potential investors.
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`49.
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`In an effort to disguise the discrepancy between the price of the Securities
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`purchased by Plaintiff AMJ pursuant to the First Investment Agreement and those purchased
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`pursuant to the Second Investment Agreement, Defendants asked Plaintiff AMJ to memorialize
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`Pag