FILED: KINGS COUNTY CLERK 12/14/2016 05:28 PM
`NYSCEF DOC. NO. 97
`
`INDEX NO. 509504/2016
`
`RECEIVED NYSCEF: 12/14/2016
`
`Index No.: 509504/2016
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF KINGS
`-------------------------------------------------------------------------x
`MORDECHAI ITZKOWITZ; JEFFREY EDELMAN;
`YISROEL GRAFSTEIN; MICHAEL GREENFIELD;
`YISHAI HECHT; NATHAN UNGAR; ASHER
`FRIED; CHARLES KLEIN; CHAIM NEGER;
`MOSHE WEIL; ELI SEGEL; MURRAY
`PUDERBEUTEL; AMARPREET SINGH; SHMUEL
`LAUFER; PAN TRANSPORT, LLC; REMMI
`SERVICES, LLC; GREENISH, LLC; DADS GREEN,
`LLC; NP GREEN, LLC; RH GREEN, LLC;
`BAMBAH GAMBA CORP; AFFW FLEET I, LLC;
`RSAAC FLEET, LLC; CREASK FLEET, LLC; NLK
`FLEET, LLC; BSDGEE FLEET, LLC; GEEGEE
`FLEET, LLC; GREEN MEDALLION ONE, LLC;
`YCD, 1760, LLC; TP GREEN, LLC; GORN, LLC;
`MM MMGT, LLC; SN S&N, LLC; SS N&S, LLC; YM
`1875, LLC; SC BSD, LLC; BALR ENTERPRISES,
`LLC; MKGT, LLC; 17B, LLC; MUNIT, LLC; RJ
`CAPITAL, LLC; ALL BORO TRANSIT; POWDER
`BAG, LLC; SAM EXPRESS, LLC; 50P, LLC; 307P,
`LLC; SAHAILI PARTNERS, LLC,
`
`Plaintiffs,
`
`-against-
`
`ALAN J. GINSBURG “aka” A.J.; MEGA FUNDING,
`LLC; GREEN APPLE CAB COMPANY “aka” GREEN;
`APPLE CABS, LLC; GLS TRANS, INC.; YITZCHOK
`MATTIS SWERDLOFF “aka” MATT “aka”
`RIVERDALE; DALE & CRUE, LLC; RYDER
`PARTNERS, LLC; and JUDAH LANGER,
`
`
`Defendants.
`-------------------------------------------------------------------------x
`
`MEMORANDUM OF LAW
`
`JACOB LAUFER, P.C.
`65 Broadway, Suite 1005
`New York, NY 10006
`Tel. (212) 422-8500
`Attorneys for Plaintiffs
`
`1 of 46
`
`

`

`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
`
`PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
`
`STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`
`1. Leave to File the Proposed Amended Complaint Should be Granted . . . . . . . . . . . . . . . 11
`
`2. The Defendants’ Motion to Dismiss Should be Denied . . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`A. The Legal Standard in Deciding a Motion to Dismiss . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`B. The RICO Claims Are Legally Sufficient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`a. Elements of a RICO claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`i. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`ii. The Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`iii. The Enterprise; Conduct of the Enterprise . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`iv. The Pattern of Racketeering Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
`
`b. The RICO Standard Was Met
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
`
`c. The RICO Causation of Injury Requirement Was Met . . . . . . . . . . . . . . . . . . . . . 22
`
`C. The Fraud Claims Are Legally Sufficient and Not Duplicative . . . . . . . . . . . . . . . . 23
`
`D. The Breach of Contract Claims Are Legally Sufficient
`
`. . . . . . . . . . . . . . . . . . . . . . 27
`
`E. The Unjust Enrichment Claims Are Legally Sufficient and
`Not Duplicative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
`
`F. The Rescission Claims are Legally Sufficient and not
`Duplicative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`G. The Causes of Action Are Not Improperly Intermingled . . . . . . . . . . . . . . . . . . . . . 30
`
`2 of 46
`
`

`

`3. The Claims of Plaintiff Chaim Neger and Green Medallion
`One, LLC Should Not Be Dismissed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
`
`4. The Plaintiffs’ Claims Should Not Be Severed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`5. Swerdloff and Dale’s Motion to Dismiss Is Equally Inapplicable . . . . . . . . . . . . . . . . . 34
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
`
`ii
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`3 of 46
`
`

`

`TABLE OF AUTHORITIES
`
`Aliev v. Borukhov,
`2016 WL 3746562, at *12 (E.D.N.Y. July 8, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`Alkhatib v. New York Motor Group LLC,
`2015 WL 3507340 (E.D.N.Y. June 3, 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`Allen v. General Electric Co.,
`11 A.D.3d 993, 994 (4th Dept. 2004)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
`
`Automated Teller Mach. Advantage LC v. Moore,
`2009 WL 2431513, at *5 (S.D.N.Y. Aug. 6, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 20
`
`Baliotti,
`134 A.D.2d at 555, 521 N.Y.S.2d 453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
`
`Bd. of Managers of Soundings Condo. v. Foerster,
`138 A.D.3d 160, 164 (1st Dept. 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`Black v. Chittenden,
`69 N.Y.2d 665, 669 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 26
`
`Blank v. Becker,
`50 A.D.2d 418, 419 (3d Dept. 1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`Brescia v. Silberman,
`2009 N.Y. Slip Op. 30597[U], 2009 WL 803426
`[Sup. Ct., New York County 2009] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
`
`Citibank, N.A. v. Plapinger,
`66 N.Y.2d 90 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
`
`Cofacredit, S.A. v. Windsor Plumbing Supply Co., Inc.,
`187 F.3d 229, 242 (2d Cir. 1999)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 19, 22
`
`Danann Realty Corp. v. Harris,
`5 N.Y.2d 317, 320 (1959) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
`
`D’Angelo v. Bob Hastings Oldsmobile, Inc.,
`89 A.D.2d 785, 785 (4th Dept. 1982), aff’d, 59 N.Y.2d 773 (1983) . . . . . . . . . . . . . . . . . . . 29
`
`iii
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`4 of 46
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`

`

`DDJ Mgt., LLC v. Rhone Group LLC,
`15 N.Y.3d 147, 156 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
`
`DeFalco v. Bernas,
`244 F.3d 286, 305 (2d Cir. 2001)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 20
`
`Derouin’s Plumbing & Heating, Inc. v. City of Watertown,
`71 A.D.2d 822 (4th Dept. 1979)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`DNJ Logistic Group, Inc. v. DHL Express (USA), Inc.,
`2010 WL 625364, at *6 (E.D.N.Y. Feb. 19, 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`Dyer v. Broadway Cent. Bank,
`252 N.Y. 430, 432-33 (1930) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
`
`Fasig Tipton Co., Inc. v. Jaffe,
`87 A.D.2d 835, 836 (2d Dept. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
`
`First Capital Asset Mgmt., Inc. v. Satinwood, Inc.,
`385 F.3d 159, 178 (2d Cir. 2004)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
`
`Fuji Photo Film U.S.A., Inc. v. McNulty,
`640 F. Supp. 2d 300, 312 (S.D.N.Y. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
`
`GFRE, Inc. v. U.S. Bank, N.A.,
`130 A.D.3d 569, 570 (2d Dept. 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
`
`Gosmile, Inc. v. Levine,
`81 A.D.3d 77, 82 (1st Dept. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`Gruen v. County of Suffolk,
`187 A.D.2d 560 (2d Dept. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`Grumman Allied Inds. v. Rohr Inds., Inc.,
`748 F.2d 729, 734 (2d Cir. 1984)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
`
`GTE Automatic Elec. Inc. v. Martin’s Inc.,
`127 A.D.2d 545, 546 (1st Dept. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
`
`Hecht v. Commerce Clearing House, Inc.,
`897 F.2d 21, 23–24 (2d Cir. 1990)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`H.J., Inc. v. Northwestern Bell Tel. Co.,
`492 U.S. 229, 249 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 16, 20
`
`iv
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`5 of 46
`
`

`

`Hochman v. LaRea,
`14 A.D.3d 653, 654 (2d Dept. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
`
`Holmes v. Secs. Inv’r Prot. Corp.,
`503 U.S. 258, 268 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`Janssen v. Incorporated Vil. of Rockville Ctr.,
`59 A.D.3d 15, 27, 869 N.Y.S.2d 572 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12
`
`JP Morgan Chase v. J.H. Elec. of N. Y, Inc.,
`69 A.D.3d 802, 803 (2d Dept 2010)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
`
`Justice v. King,
`2015 WL 1433303, at *11 (W.D.N.Y. Mar. 27, 2015),
`aff’d, 628 Fed Appx 58 (2d Cir. 2016)
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`Knight Sec. v. Fiduciary Trust Co.,
`5 A.D.3d 172, 173 (1st Dept. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
`
`Lerner v. Fleet Bank, N.A.,
`318 F.3d 113, 124 (2d Cir. 2003)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`Mandarin Trading Ltd. v. Wildenstein,
`16 N.Y.3d 173, 178 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-35
`
`Marini v. D’Apolito,
`162 A.D.2d 391 (1st Dept. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`MBIA Ins. Corp. v. J.P. Morgan Sec., LLC,
`2016 WL 6465453, at *4 (2d Dept. Nov. 2, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`Moshan v. PMB, LLC,
`141 A.D.3d 496, 497 (1st Dept. 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`Mukhailova v. Kings Plaza and Vornado Realty Trust,
`26 A.D.3d 420, 421 (2d Dept. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
`
`Neder v. United States,
`527 U.S. 1, 20 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`New York Univ. v. Continental Ins. Co.,
`87 NY2d 308, 318 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
`
`v
`
`6 of 46
`
`

`

`Northwestern National Ins. Co. of Milwaukee v. Alberts,
`717 F.Supp. 148, 154 (S.D.N.Y. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
`
`Pacheco v. 32-42 55th St. Realty, LLC,
`139 A.D.3d 833 (2d Dept. 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
`
`Physicians Mut. Ins. Co. v. Greystone Servicing Corp.,
`2009 WL 855648, at *7 (S.D.N.Y. Mar. 25, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
`
`Pier Connection, Inc. v. Lakhani,
`907 F.Supp. 72, 78 (S.D.N.Y. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
`
`Podraza v. Carriero,
`212 A.D.2d 331, 335 (4th Dept. 1995)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`Polycast Tech. Corp. v. Uniroyal, Inc.,
`728 F. Supp. 926, 948 (S.D.N.Y. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21
`
`Pramer S.C.A. v. Abaplus Intern. Corp.,
`76 A.D.3d 89, 100 (1st Dept. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29
`
`Quiroz v. Beitia,
`68 A.D.3d 957, 960 (2d Dept. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`Rabos v. R & R Bagels & Bakery, Inc., 100
`A.D.3d 849, 853 (2d Dept. 2012), as amended (Apr. 15, 2013) . . . . . . . . . . . . . . . . . . . . . . 11
`
`R&R adopted in part,
`2016 WL 5660372 (E.D.N.Y. 2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`RJR Nabisco, Inc. v. European Cmty.,
`136 S. Ct. 2090, 2104–05 (2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
`
`Rose Lee Mfg., Inc. v. Chem. Bank,
`186 A.D.2d 548, 550 (2d Dept. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
`
`S & A Realty Mgt. Corp. v. Mario Prestigiacomo, Senack Realty,
`306 A.D.2d 339, 340 (2d Dept. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
`
`Schneider v. OG & C Corp.,
`684 F.Supp. 1269, 1273 (S.D.N.Y. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
`
`Sedima, S.P.R.L. v. Imrex Co.,
`473 U.S. 479, 496 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`vi
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`

`

`Selechnik v. Law Off. of Howard R. Birnbach,
`82 A.D.3d 1077, 1079 (2d Dept. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
`
`Sergeants Benev. Ass’n Annuity Fund v. Renck,
`19 A.D.3d 107, 110 (1st Dept. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
`
`Shanley v. Callanan Inds.,
`54 N.Y.2d 52, 57 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`Simpson Elec. Corp. v. Leucadia, Inc.,
`72 N.Y.2d 450 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`Sir Partners, LLC v. Tolentino,
`2016 WL 4529042, at *2 (Sup. Ct. Kings Co. Aug. 30, 2016) . . . . . . . . . . . . . . 13, 23, 26, 27
`
`Sumitomo Corp. v. Chase Manhattan Bank,
`2000 WL 1616960 (S.D.N.Y. Oct. 30, 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
`
`Tafflin v. Levitt,
`493 U.S. 455, 458–460 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`Tiffany at Westbury Condominium v. Marelli Dev. Corp.,
`40 A.D.3d 1073, 1076-1077 (2d Dept 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
`
`United States v. Autuori,
`212 F.3d 105, 115 (2d Cir. 2000)
`
`United States v. Daidone,
`471 F.3d 371, 376 (2d Cir. 2006)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
`
`United States v. Ferriero,
`2015 WL 7737341, at *21 (D.N.J. Dec. 1, 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`United States v. Fumo,
`2009 WL 1688482, at *8 (E.D.Pa. June 17, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`United States v. Pomerico,
`2008 WL 4469465, at *3 (E.D.N.Y. Oct. 30, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`United States v. Trapilo,
`130 F.3d 547, 550 n.3 (2d Cir. 1997)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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`

`United States v. Turkette,
`452 U.S. 576, 583 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15
`
`Veritas Capital Mgmt. L.L.C. v. Campbell,
`22 Misc. 3d 1107(A) (Sup. Ct. N.Y. Co. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
`
`Wallace v. Perret,
`28 Misc. 3d 1023, 1030–31 (Sup. Ct. Kings Co. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
`
`Wernham v. Moore,
`77 A.D.2d 262 (1st Dept. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
`
`WIT Holding Corp. v. Klein,
`282 A.D.2d 527, 528 (2d Dept 2001)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
`
`Other Authorities
`
`18 U.S.C. § 1341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`18 U.S.C. § 1956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
`
`18 U.S.C. § 1961(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`
`18 U.S.C. § 1961(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`18 U.S.C. § 1961(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
`
`18 U.S.C. § 1962 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`
`18 U.S.C. § 1964(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
`
`CPLR § 601(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`CPLR § 603 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
`
`CPLR § 3025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`
`CPLR § 3211(a)(1)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`CPLR § 3211(a)(7)
`
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 12
`
`CPLR § 3211(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`
`viii
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`9 of 46
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`CPLR § 3016(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
`
`New York City TLC Rules and Local Laws (“TLC”) § 62-0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
`
`TLC § 82-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`TLC § 82-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`TLC § 82-06(a)(2)-(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`TLC § 82-06(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`TLC § 82-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`http://www.nyc.gov/html/tlc/downloads/pdf/rule_book_current_chapter_62.pdf
`and Title 35_ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
`
`https://data.cityofnewyork.us/Transportation/Street-Hail-Livery-Permits/yhuu-4pt3 . . . . . . . . . 7
`
`ix
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF KINGS
`---------------------------------------------------------------x
`MORDECHAI ITZKOWITZ; JEFFREY EDELMAN;
`YISROEL GRAFSTEIN; MICHAEL GREENFIELD;
`YISHAI HECHT; NATHAN UNGAR; ASHER
`FRIED; CHARLES KLEIN; CHAIM NEGER;
`MOSHE WEIL; ELI SEGEL; MURRAY
`PUDERBEUTEL; AMARPREET SINGH; SHMUEL
`LAUFER; PAN TRANSPORT, LLC; REMMI
`SERVICES, LLC; GREENISH, LLC; DADS GREEN,
`LLC; NP GREEN, LLC; RH GREEN, LLC;
`BAMBAH GAMBA CORP; AFFW FLEET I, LLC;
`RSAAC FLEET, LLC; CREASK FLEET, LLC; NLK
`FLEET, LLC; BSDGEE FLEET, LLC; GEEGEE
`FLEET, LLC; GREEN MEDALLION ONE, LLC;
`YCD, 1760, LLC; TP GREEN, LLC; GORN, LLC;
`MM MMGT, LLC; SN S&N, LLC; SS N&S, LLC; YM
`1875, LLC; SC BSD, LLC; BALR ENTERPRISES,
`LLC; MKGT, LLC; 17B, LLC; MUNIT, LLC; RJ
`CAPITAL, LLC; ALL BORO TRANSIT; POWDER
`BAG, LLC; SAM EXPRESS, LLC; 50P, LLC; 307P,
`LLC; SAHAILI PARTNERS, LLC,
`Plaintiffs,
`
`
`
`
`
`Case No: 509504/2016
`Hon. Sylvia G. Ash
`
`MEMORANDUM OF
`LAW IN OPPOSITION
`TO DEFENDANTS’
`MOTIONS TO DISMISS,
`AND TO SEVER;
`AND IN SUPPORT OF
`CROSS-MOTION TO
`AMEND THE
`COMPLAINT
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`
`
`
`
`
`
`-against-
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`
`
`ALAN J. GINSBURG “aka” A.J.; MEGA FUNDING,
`LLC; GREEN APPLE CAB COMPANY “aka” GREEN;
`APPLE CABS, LLC; GLS TRANS, INC.; YITZCHOK
`MATTIS SWERDLOFF “aka” MATT “aka”
`
`RIVERDALE; DALE & CRUE, LLC; RYDER
`PARTNERS, LLC; and JUDAH LANGER,
`
`
`
`
`
`
`
`
`
`
`
`Defendants.
`---------------------------------------------------------------x
`PRELIMINARY STATEMENT
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`We respectfully submit this memorandum of law on behalf of Plaintiffs1 in opposition to
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`the motion by Defendants Alan J. Ginsburg (“Ginsburg”), Mega Funding, LLC (“Mega
`
`
`1 The Plaintiffs represented herein include: Mordechai Itzkowitz, Jeffrey Edelman, Yisroel Grafstein, Michael
`Greenfield, Yishai Hecht, Nathan Ungar, Asher Fried, Charles Klein, Chaim Neger, Moshe Weil, Eli Segel, Murray
`Puderbeutel, Amarpreet Singh, and Shmuel Laufer (the “Individual Plaintiffs”) and Pan Transport, LLC, Remmi
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`Funding”), Green Apple Cabs, LLC (“Green Apple”) and GLS Trans, Inc. (“GLS Trans”), and
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`the separate motion filed by Defendants Yitzchok Mattis Swerdloff (“Swerdloff”) and Dale &
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`Crue, LLC (“Dale”) (collectively “Moving Defendants”) to dismiss under CPLR §§3211(a)(1),
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`3211(a)(7) and 3016(b), and alternatively, seeking severance of each of Plaintiffs’ claims against
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`each Defendant.
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`This memorandum is also submitted in support of the within cross-motion for leave to
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`file an Amended Complaint. Based upon the allegations in the Complaint (“Compl.”), and in the
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`proposed Amended Complaint (“Amen. Compl.”), the Defendants’ motion should be denied, and
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`the Plaintiffs’ cross-motion to file an amended complaint should be granted.
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`STATEMENT OF FACTS
`
`
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`Ginsburg and his accomplices participated in a fraudulent enterprise (the “Enterprise” or
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`the “Green Cab Scam”) to extract money from unwitting investors. Ginsburg induced investors
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`to “purchase” Boro Taxi permits (“Permits”) from initial Permit-holders (that had been issued
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`under the New York City Taxi & Limousine Commission’s (“TLC”) Street Hail Livery
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`program), ostensibly to earn money through rental of the taxis, a series of tax incentives, and
`
`
`Services, LLC, Greenish, LLC, Dads Green, LLC, NP Green, LLC, RH Green, LLC, Bambah Gamba, LLC, AFFW
`Fleet I, LLC, RSAAC Fleet, LLC, Creask Fleet, LLC, NLK Fleet, LLC, BSDGee, LLC, GeeGee Fleet, LLC, Green
`Medallion One, LLC, TP Green, LLC, YCD 1760, LLC, BALR Enterprises, LLC, RJ Capital, LLC, All Boro
`Transit, LLC, Powder Bag, LLC, Sam Express, LLC, and Sahaili Partners, LLC (“Company Plaintiffs”). In the
`proposed Amended Complaint, Plaintiffs represented herein are modified as follows: Mordechai Itzkowitz; Remmi,
`Inc., individually and derivatively on behalf of Remmi Services, LLC; Yisroel Grafstein; YCD, 1760, LLC; Nathan
`Ungar; Bamba Gamba, Corp.; Murray Puderbeutel; Podwer Bag, LLC; Eli Segel; BALR Enterprises, LLC; All Boro
`Transit, LLC; Asher Fried; AFFW Fleet I, LLC; RSAAC Fleet, LLC; Charles Klein; Creask Fleet, LLC; NLK Fleet,
`LLC; BSDGEE Fleet, LLC; GEEGEE Fleet, LLC; Jeffrey Edelman, individually and derivatively on behalf of RJ
`Capital, LLC; Moshe Weil, individually, and derivatively on behalf of TP Green, LLC; Amarpreet Singh,
`individually and derivatively on behalf of Sahaili, LLC; Shmuel Laufer, individually and derivatively on behalf of
`Sam Express, LLC; Michael Greenfield; Pessel Sharon Feldheim, derivatively on behalf of Pan Transport, LLC;
`Rivka Hecht, derivatively on behalf of RH Green, LLC; Ischa Hecht a/k/a “Yishai”, individually, and derivatively
`on behalf of Greenish, LLC; Ischa Hecht, derivatively on behalf of Dads Green, LLC; Ischa Hecht, derivatively on
`behalf of NP Green, LLC; Chaim Neger, individually and derivatively on behalf of Green Medallion One, LLC.
`2
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`ultimately, to resell the Permits for profit. However, the Enterprise was fraudulent from the start
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`and was merely an artifice to maximize the amount of money extracted from investors (and third
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`party entities). (Compl. ¶¶ 61-91).
`
`
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`Ginsburg was the architect of the Enterprise. He planned it, enlisted its members (the
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`Defendants), assigned them roles, and then supervised the members. (Compl. ¶¶ 61,68. Ginsburg
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`located initial Permit holders and solicited potential investors to purchase these Permits. (Compl.
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`¶¶ 62-63). While Ginsburg claims to have acted as a mere broker, (i) his asserted “brokerage” fee
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`vastly exceeded the sums received by the initial Permit holders; (ii) he didn’t actually broker
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`anything, as the proposed transfer of the Permits to the Plaintiffs (and others) was illusory; the
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`Plaintiffs were not even lawfully entitled to the Permits, as they were not TLC-licensed drivers;
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`(iii) he assured many individual investor Plaintiffs that he would maintain control over their
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`investment; (iv) from the outset (as part of his brokerage fee), he became a partner in each Permit
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`ownership LLC; (iv) he received a significant salary (of approximately $100,000 annually) from
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`GLS Trans and Green Apple (“the Management Companies”) that he co-founded to manage the
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`taxis; (v) he fielded many communications over the course of the Enterprise wherein he acted as
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`management of the Enterprise; and (vi) he ultimately fired Langer (the titular head of the
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`Management Companies) in March 2016. (Compl. ¶¶ 61-91; Amen. Compl. ¶¶ 76-81).
`
`
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`Ginsburg owns Mega Funding and used it to funnel the money from the Enterprise to his
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`account, and to attempt to shield himself from potential liability. Ginsburg also used Mega
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`Funding to partner with investors on ownership of their individual Permits and vehicles. (Compl.
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`¶¶ 70,105).
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`Ginsburg also used Swerdloff to entice new investors. Ginsburg instructed Swerdloff to
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`make the specific misrepresentations Ginsburg devised to defraud the Plaintiffs, and then
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`essentially supervised Swerdloff in recruiting new investors. Swerdloff added his own
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`misrepresentations (by artificially increasing the amount of money available drivers would pay
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`per week) to make the offer more enticing. (Compl. ¶¶ 62-64, 74-76, 91,94). Swerdloff used his
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`closely held company, Dale as a tool to funnel the investors’ money from the Enterprise into his
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`account and shield himself from liability. Swerdloff also used Dale to partner with investors on
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`ownership of their individual Permits and vehicles. (Compl. ¶¶ 105). Ginsburg, Mega Funding,
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`Swerdloff, and Dale benefitted from propelling the Green Cab Scam forward.
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`Ginsburg also recruited and supervised Langer in the Enterprise. Langer was charged
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`with the day to day operations and management of the investors’ vehicles and Permits. (Compl.
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`¶¶ 68-73). Langer used his own closely held company, Ryder Partners, as a tool to funnel the
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`investors’ money from the Enterprise into his account and to shield himself from liability.
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`Langer also used Ryder Partners to partner with investors on ownership of their individual
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`Permits and vehicles. (Compl. ¶¶ 70).
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`In mid-2014, Ginsburg and Langer formed the Management Companies to manage the
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`vehicles and Permits in furtherance of the Enterprise. Langer was the titular head of the
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`Management Companies. Ginsburg encouraged Langer to make fraudulent misrepresentations to
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`investors, which Langer made, in order to lull existing investors, and in order to continue to lure
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`new victims into the Green Cab Scam. Both Ginsburg and Langer earned substantial salaries
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`from Green Apple. (Compl. ¶¶ 70,105,117). Thus, Ginsburg, Langer, Ryder Partners, Green
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`Apple, and GLS Trans were all members of the Green Cab Scam.
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`Throughout the existence of the Enterprise, the Defendants committed acts of
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`racketeering conduct, in violation of the federal wire fraud and money laundering statutes in
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`furtherance of the Enterprise. Ginsburg made regular misrepresentations to investors, including
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`Plaintiffs, to fraudulently induce investment and perpetuate the Enterprise. Swerdloff made
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`similar misrepresentations that were apparently scripted by Ginsburg’s misrepresentations to new
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`investors (with some intentional deviations). Ginsburg, Langer, Green Apple, and GLS Trans
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`participated in the Enterprise by making fraudulent misrepresentations to the investors to quell
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`their growing concerns. (Compl. ¶¶ 94-115). And finally, Mega Funding, Dale, and Ryder
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`Partners were all participants as co-owners of the investors’ vehicles and recipients of the
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`investors’ money to funnel money towards the Individual Defendants.
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`
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`The Defendants were involved in racketeering activity commencing in late 2013, and
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`continuing until their fraudulent activities collapsed for lack of substance in April 2016. (See
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`Compl. ¶¶ 73,80; Amen. Compl. ¶¶ 64,109). The Enterprise affected interstate commerce.
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`Among other things, the Enterprise involved the purchase of vehicles from Chrysler
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`manufactured outside of New York, retrofitting the vehicles in Maryland, and securing investors
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`(Plaintiffs) from various states, including New York, New Jersey, and Maryland, and by making
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`misrepresentations to these investors, including by emails and interstate telephone calls. (Compl.
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`¶¶ 3,9,108,112; Amen. Compl. ¶¶ 64,109).
`
`
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`In exchange for a series of payments and outlays2, Ginsburg and Swerdloff promised
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`2 The payments and outlays included: (1) payment to Ginsburg (or Swerdloff) for the Permits, (2) the purchase of
`new vehicles (through financing), (3) payment to Defendants to make the vehicles wheelchair-accessible, (4)
`payment to Defendants for the transformation of the vehicles into (road-ready) green taxicabs, and (5) payment of an
`operating fee to Defendants’ management company.
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`investors, including the Plaintiffs, the following: (a) the transfer of Permit ownership from the
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`original Permit-holder to the investor after one year, (b) current availability of drivers who would
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`pay a weekly rental fee for the taxicab (sufficient to cover the operating fees and expenses
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`related to the vehicle and Permit), (c) a $15,000 government rebate for making the taxicab
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`wheelchair-accessible, (d) a $10,000 tax credit for purchasing a new vehicle and rendering it
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`wheelchair accessible, and (e) management services, including but not limited to the furnishing
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`of drivers for the taxicabs, vehicle parking/storage, keeping the Permits in good standing,
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`securing and payment of proper registration and insurance, payment of any fines, collection of
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`rental fees from drivers, and mechanical maintenance of the vehicles. (Compl. ¶¶ 65-66).
`
`Based upon those misrepresentations, more specifically discussed below, the Plaintiffs
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`were induced to pay for multiple Permits and corresponding vehicles (approximately five per
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`Individual Plaintiff). The Individual Plaintiffs entered into an agreement with Ginsburg or
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`Swerdloff, forming a limited liability company funded by monies paid by the Individual
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`Plaintiffs to Ginsburg and/or Mega Funding for the rights to the Permits, and in which Ginsburg
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`and/or Swerdloff and/or Langer (through Mega Funding, Dale, Ryder Partners, and/or Green
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`Apple) would own a portion of that company. (Compl. ¶¶ 67-70).
`
`The Enterprise, from its very outset, was illegitimate in multiple ways, none of which
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`was disclosed to the Plaint