FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`NYSCEF DOC. NO. 32
`
`INDEX NO. 654948/2018
`
`RECEIVED NYSCEF: 01/10/2019
`
`Exhibit 4
`
`

`

`11/02/2018
`CLERK
`COUNTY
`NEW YORK
`07:02
`FILED:
`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`PM)
`NYSCEF
`1
`DOC.
`NO.
`NYSCEF DOC. NO. 32
`
`INDEX
`655482/2018
`NO.
`INDEX NO. 654948/2018
`RECEIVED
`NYSCEF:
`11/02/2018
`RECEIVED NYSCEF: 01/10/2019
`
`SUPREME
`COUNTY
`
`OF THE STATE
`COURT
`OF NEW YORK
`
`OF NEW YORK
`
`BALLYBEG
`
`ENTERTAINMENT
`
`LLC,
`
`Index
`
`Number
`
`-against-
`
`Plaintiff,
`
`SUMMONS
`
`ADVANCE
`ENTERTAINMENT
`and KID
`
`SHELLEEN,
`
`MELI,
`
`LLC,
`
`JOSEPH
`
`LLC,
`
`Defendants.
`
`To
`
`the
`
`above-named
`
`Defendants:
`
`YOU ARE HEAREBY
`
`SUMMONED
`
`to
`
`answer
`
`the
`
`complaint
`
`in
`
`this
`
`action
`
`and
`
`to
`
`serve
`
`a
`
`copy
`
`of
`
`your
`
`answer,
`
`or,
`
`if
`
`the
`
`complaint
`
`is not
`
`served
`
`with
`
`this
`
`summons,
`
`to
`
`serve
`
`a notice
`
`of
`
`on
`
`the
`
`Plaintiff's
`
`attorneys
`
`within
`
`20
`
`days
`
`after
`
`the
`
`service
`
`of
`
`this
`
`appearance,
`
`summons,
`
`exclusive
`
`of
`
`the
`
`day
`
`of
`
`service
`
`(or within
`
`30 days
`
`after
`
`the
`
`service
`
`is complete
`
`if
`
`this
`
`summons
`
`is
`
`delivered
`
`to you
`
`within
`
`the State
`
`of New York).
`
`In
`
`case
`
`of
`
`your
`
`failure
`
`to appear
`
`judgment
`
`will
`
`be
`
`taken
`
`against
`
`you
`
`by
`
`default
`
`for
`
`the
`
`relief
`
`demanded
`
`in
`
`the
`
`not
`
`or
`
`personally
`
`answer,
`
`complaint.
`
`Dated:
`
`November
`New York,
`
`2, 2018
`New York
`
`ENGEL
`
`THORNBURGH
`
`& McCARNEY
`
`LLP
`
`E. Engel
`57th
`
`16th
`
`Street,
`New York
`10019
`546-6215
`
`(212)
`for
`Plaintiff
`Entertainment
`
`LLC
`
`Thomas
`152 West
`New York,
`Telephone:
`Attorneys
`
`Ballybeg
`
`By:
`
`1
`
`1 of
`
`18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`
`
`TO: ADVANCE ENTERTAINMENT LLC
`
`c/o New York Secretary of State
`
`One Commerce Plaza, 99 Washington Avenue
`
`Albany, NY 12231
`
`
`
`
`
`
`
`
`
`
`
`
`JOSEPH MELI
`c/o United States Penitentiary, Lewisburg
`2400 Robert F. Miller Drive
`Lewisburg, PA 17837
`
`KID SHELLEEN, LLC
`c/o The Corporation Trust Company
`1209 Orange Street, Corporate Trust Center
`Wilmington, DE 19801
`
`
`
`
`2
`
`2 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`
`
`BALLYBEG ENTERTAINMENT LLC,
`
`
`
`
`-against-
`
`Plaintiff,
`
`
`ADVANCE ENTERTAINMENT LLC, JOSEPH
`MELI, and KID SHELLEEN, LLC,
`
`
`Defendants.
`
`
`
`Index Number ____________________
`
`
`VERIFIED COMPLAINT
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff Ballybeg Entertainment LLC, through its undersigned counsel, alleges the
`
`following for its Complaint against defendants Advance Entertainment LLC, Joseph Meli, and
`
`Kid Shelleen, LLC (collectively “Defendants”).
`
`NATURE OF THE COMPLAINT
`
`1)
`
`This action arises out of a classic Ponzi scheme orchestrated by Defendant Joseph
`
`Meli (“Meli”) and furthered by the knowing assistance and participation of Meli’s company
`
`defendant Advance Entertainment LLC
`
`(“Advance”).
`
` By means of Defendants’
`
`misrepresentations, lies, forged agreements, and bogus due diligence, Defendants defrauded
`
`investors of more than $95 million for a purported high-end live event ticket resale business
`
`which did not, in fact, exist.
`
`2)
`
`In January 2017, Ballybeg invested $500,000, purportedly to be used by Meli’s
`
`company, Advance, towards the purchase of ticket blocks for an upcoming national tour of the
`
`music group Metallica and a series of scheduled live events at the newly renovated Nassau
`
`Coliseum. According to the investment agreements, the tickets purchased by Advance and Meli
`
`
`
`1
`
`3 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
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`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
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`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
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`would then be resold to the public, and Ballybeg, as an investor, would receive 10% annualized
`
`return on its investment from proceeds of the ticket re-sales.
`
`3)
`
`In determining whether or not to fund these investments, Ballybeg relied on
`
`Meli’s relationship with Advance and the blessing and participation of third parties CVC Capital
`
`Partners and DTI Management LLC, a well-known player in the live event ticket resale industry.
`
`By reason of DTI’s appointment of Meli as a director and top executive, along with DTI’s status
`
`as a portfolio company of global private equity firm CVC, Ballybeg was led to believe that Meli
`
`and Advance, a relatively unknown entity in the industry, were: (1) authorized to solicit
`
`investments on behalf of DTI; (2) thoroughly vetted by CVC; and (3) backed by the financial
`
`capital necessary to be a major player in the industry.
`
`4)
`
`Ultimately, however, after investing $500,000 with Meli and Advance, Ballybeg
`
`discovered that Meli had no agreements in place for the purchase of Metallica or Nassau
`
`Coliseum tickets. Instead, Ballybeg’s $500,000 investment apparently was used to pay off
`
`previous investors, including defendant Kid Shelleen, LLC (“Kid Shelleen”), in furtherance of
`
`the Ponzi scheme and in direct violation of the investment agreements between Ballybeg,
`
`Advance, and Meli.
`
`5)
`
`On January 27, 2017, just two days after Ballybeg invested with Meli and his
`
`company Advance, Meli was arrested for violations of federal wire and securities fraud crimes
`
`used to perpetuate the Ponzi scheme. The United States Securities and Exchange Commission
`
`(“SEC”) filed civil claims against Meli, and the United States Department of Justice (“DOJ”)
`
`initiated an investigation into Meli’s fraudulent scheme and filed a criminal complaint.
`
`6)
`
`Following his arrest, Meli was indicted by the United States Department of
`
`Justice for conspiracy to commit securities fraud and wire fraud. In October 2017, Meli pled
`
`
`
`2
`
`4 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
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`guilty to securities fraud and ultimately was sentenced on April 3, 2018 to 6.5 years
`
`imprisonment and payment of $58.8 million in restitution.
`
`THE PARTIES
`
`7)
`
`Plaintiff Ballybeg is a Delaware limited liability company formed in 2010 and
`
`located at 630 Ninth Avenue, Suite 610, New York, New York.
`
`8)
`
`Defendant Advance is a Delaware limited liability company organized in 2011
`
`and controlled by Joseph Meli, its sole and managing member, with its principal place of
`
`business located at 95 Horatio Street, Apartment 701, New York, New York.
`
`9)
`
`Defendant Meli is a resident of New York, New York, is the managing member
`
`and 100% owner of Defendant Advance and, at all material times, was a director, senior
`
`executive and the head of the Entertainment Division of defendant DTI.
`
`10) Defendant Kid Shelleen is a Delaware limited liability company organized and
`
`controlled by Paul Tudor Jones and Tudor Investment Corporation, with its principal place of
`
`business in the state of Connecticut.
`
`JURISDICTION AND VENUE
`
`11)
`
`This Court has jurisdiction over the Defendants because the Defendants transacted
`
`business within this state under CPLR 302(a)(1) and are located in New York such as to be
`
`subject to general jurisdiction under CPLR 301.
`
`12) Venue is proper in the Supreme Court of the State of New York, New York
`
`County, because defendants Advance and Meli are located in the County and State of New York,
`
`conduct business in the County and State of New York, and because the fraudulent actions
`
`described herein involve events in and communications to and from New York. Moreover,
`
`plaintiff Ballybeg delivered the payments to fund its investments by wire transfer to defendant
`
`
`
`3
`
`5 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`Advance’s Bank of America/Merrill Lynch account in New York, New York, and by check to
`
`defendant Meli individually in New York, New York.
`
`STATEMENT OF FACTS
`
`I.
`
`The Ponzi Scheme
`
`13) As detailed in the complaints filed on January 27, 2017 by the DOJ and the SEC,
`
`and in the indictment filed on September 5, 2017 (the “Superseding Indictment”), from January
`
`2015 through January 2017, Meli orchestrated a Ponzi scheme intended to lure individual and
`
`institutional investors into a purported ticket resale business for widely popular Broadway
`
`shows, concerts, and other live entertainment events.
`
`14)
`
`In reality, however, the funds invested by these investors—including plaintiff
`
`Ballybeg—were not used to purchase tickets for resale as promised in Meli’s funding agreements
`
`but instead were funneled to prior investors to create the illusion of profitable returns, as well as
`
`to Meli and his co-conspirators for their own personal use.
`
`15) Meli enticed his investors by claiming to have exclusive access to bulk premium
`
`tickets to some of the most popular live entertainment events in the United States. Additionally,
`
`Meli knowingly misrepresented to investors that he had developed a unique model for
`
`purchasing block tickets to live events, in most cases from an event sponsor or promoter, in
`
`advance of an event, and then being repaid when those tickets were sold to the secondary market
`
`at a profit. Investors then entered into written contracts that promised full repayment of principal
`
`plus a 10% annualized profit. In addition, investors were promised 50% of any profits from the
`
`ticket re-sales that remained after investors received their return of principal and return.
`
`16) As detailed in the SEC and DOJ complaints, in total, Meli and his co-conspirators
`
`offered and sold a total of over $95 million from investors between January 2015 and January
`
`
`
`4
`
`6 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
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`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
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`2017. Those investments were spread across four different entities, including Meli’s company,
`
`Advance. At least $48 million of incoming funds from apparent investors was used to repay and
`
`provide purported investment returns to other investors—not to purchase blocks of tickets as
`
`Meli had represented. Meli and his co-conspirators also diverted investor funds for their own
`
`personal use, including lavish jewelry and automobile purchases, extravagant vacations, and
`
`private school tuition.
`
`17) On January 26, 2017, Meli was indicted for conspiracy to commit securities fraud
`
`and wire fraud (Count I), securities fraud (Count II), and wire fraud under 18 U.S.C. § 1343
`
`(Counts III and IV). See, U.S. v. Steven Simmons and Joseph Meli, Case No. 1:17-cr-00127-
`
`KMW (S.D.N.Y).
`
`18) On January 27, 2017, the SEC filed a complaint against Meli for (1) fraud in the
`
`offer or sale of securities under Section 17(a)(1)-(3) of the Securities Act, and (2) fraud in
`
`connection with the purchase of sale of securities under Section 10(b) of the Exchange Act and
`
`Rules 10b-5(a)-(c). See, SEC v. Meli, et al., Case No. 17-cv-632-LLS (S.D.N.Y.).
`
`19) On September 5, 2017, the DOJ filed a Superseding Indictment amending the
`
`criminal charges to include an additional count of securities fraud against Meli (Count V) for:
`
`“(a) employing devices, schemes and artifices to defraud; (b) making untrue statements of
`
`material fact and omitting to state material fact necessary in order to make the statements made,
`
`in light of the circumstances under which they were made, not misleading, and (c) engaging in
`
`acts, practices and courses of business which operated and would operate as a fraud and deceit
`
`upon persons, to wit, MELI, utilizing false representations, obtained funds from investors and
`
`then utilized those funds to make payments to earlier investors and otherwise misappropriated
`
`those funds for his personal benefit.” See, Superseding Indictment (Dkt. 58) at pp. 12-13, U.S. v.
`
`
`
`5
`
`7 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`Steven Simmons and Joseph Meli, case no. 1:17-cr-00127-KMW (S.D.N.Y). The Superseding
`
`Indictment also added a sixth count against Meli for identity theft. Id. at pp. 13-14.
`
`20) According to the Superseding Indictment, Meli defrauded approximately 130
`
`investors of at least $95 million and utilized a “substantial portion” of those funds for personal
`
`expenses, including a $3 million house in East Hampton, New York, a 2017 Porsche convertible,
`
`and expensive watches and jewelry. He also made payments “in a Ponzi-like manner” to
`
`previous investors in his ticket fraud scheme and in his other fraudulent investment schemes.
`
`21) On October 31, 2017, Meli appeared before a United States Magistrate Judge in
`
`the District Court for the Southern District of New York and entered a plea of guilty to Count V
`
`of the Superseding Indictment. In his statement, Meli admitted that:
`
`Starting in about 2015, I misled investors, and I took inappropriate
`business by soliciting their investments with false documents. I
`represented to certain investors that I had formal written contracts
`to purchase bulk tickets to live events. Those formal contracts did
`not always exist as I represented. In some cases, I showed
`investors contracts that appeared to be signed by people who had
`not signed them. And in some cases, those contracts did not
`accurately reflect the true agreements related to my bulk purchases
`of live events. I knew what I was doing was wrong . . .
`
`See, Transcript (Dkt. 89-1) at p. 22, U.S. v. Steven Simmons and Joseph Meli, case no.
`
`
`
`1:17-cr-00127-KMW (S.D.N.Y).
`
`22)
`
`In his guilty plea, Meli agreed to accept up to 97 months of imprisonment,
`
`$5,000,000 in fines, and $65,000,000 in forfeitures. On April 3, 2018, Meli was sentenced by
`
`the Honorable Kimba Wood, Senior United States District Judge of the United States District
`
`Court for the Southern District of New York, to 6 ½ years imprisonment and payment of $58.8
`
`million in restitution.
`
`
`
`
`
`6
`
`8 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`II. Meli’s Pitch to Ballybeg
`
`23)
`
`Since its formation in 2010, Ballybeg has been in the business of investing in
`
`strategic investments and projects, primarily in the entertainment industry.
`
`24)
`
`In or around April 2016, Meli set his sights on Ballybeg as the next target in his
`
`Ponzi scheme. Meli requested a meeting in person with executives from Ballybeg where he
`
`described how he and his company Advance were in the business of buying blocks of tickets for
`
`popular live entertainment events and re-selling them in the secondary market.
`
`25) Meli misrepresented that the business was already profitable and that Ballybeg
`
`had an opportunity to participate. Meli explained that he was expanding his business into
`
`Broadway ticket sales and would like Ballybeg and its CEO, Jeremiah Harris, to help him to
`
`assist in breaking into the Broadway ticket market.
`
`26)
`
`To sweeten the deal, Meli explained that he had a close and successful
`
`relationship with DTI. DTI is one of the largest suppliers of live event ticket inventory to online
`
`ticket marketplaces in the country. DTI streamlines live event ticket distribution and facilitates a
`
`secondary market environment for sports teams, event producers and promoters, music artists,
`
`venues, and ticket brokers to conduct ticket sales across secondary marketplaces. DTI also
`
`supplies ticket inventory to popular online re-sale platforms such as StubHub, SeatGeek, and
`
`Ticketmaster.
`
`27) On June 10, 2016, Meli sent an e-mail to Ballybeg entitled “It’s On,” attaching for
`
`Ballybeg’s review a term sheet dated June 10, 2016, and addressed to Curtis Cheng, CEO of DTI
`
`(the “DTI Term Sheet”). The DTI Term Sheet was an agreement between Meli and DTI
`
`proposing that Advance purchase DTI for $63 million in cash and $15 million in Advance stock.
`
`Meli intended that the DTI Term Sheet would defraud Ballybeg into believing that his company,
`
`
`
`7
`
`9 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`Advance, which had no real history or track record in the industry, was legitimate and financially
`
`capable of purchasing all or part of DTI.
`
`28) Approximately two weeks later, on or around June 22, 2016, Meli sent to
`
`Ballybeg a presentation entitled “Project Takedown” which included a full review of DTI’s
`
`business activities and strategies and misrepresented that DTI would be a fully integrated and
`
`operational division of Advance following the acquisition contemplated in the DTI Term Sheet.
`
`III. CVC and the DTI/Advance Reorganization
`
`29) On or around July 11, 2016, Meli sent another presentation to Ballybeg, again
`
`misrepresenting the supposed “merger strategy of DTI and AE [Advance]”. This time, however,
`
`Meli represented that he was waiting to receive a term sheet (the “CVC Term Sheet”) from
`
`Christopher Stadler, Managing Partner at CVC, a globally known private equity firm managing
`
`capital of approximately $80 million on behalf of over 300 institutional, governmental, and
`
`private investors worldwide.
`
`30) According to Meli, the prospect for the acquisition of by Advance had changed,
`
`but for the better. On July 18, 2016, Meli forwarded to Ballybeg the CVC Term Sheet via an e-
`
`mail entitled “Check it out.” Rather than Meli’s company, Advance, simply purchasing DTI as
`
`previously contemplated by the DTI Term Sheet, CVC would now make a substantial investment
`
`in DTI (the “CVC Investment”), and Advance would receive an equity interest in that entity
`
`through its position in CVC’s new investment vehicle. Meli represented, falsely, that he would
`
`now be “in charge of DTI” with $75 million of capital backing from CVC and New Amsterdam
`
`Growth Capital.
`
`31)
`
`From approximately July 18 to August 25, 2016, Meli continued to update
`
`Ballybeg on the status of these transactions. Meli forwarded to Ballybeg the draft purchase
`
`
`
`8
`
`10 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`agreements prepared by CVC’s lawyers, Fried, Frank, Harris, Shriver & Jacobson LLP, which
`
`outlined the method by which Advance would acquire its equity interest in DTI (the
`
`“DTI/Advance Reorganization”).
`
`32)
`
`Following the completion of the DTI/Advance Reorganization on August 25,
`
`2016, Meli shared with Ballybeg the news of Advance’s new equity stake in DTI along with a
`
`copy of his services agreement as an employee and co-CEO with Cheng of CVC’s new
`
`investment vehicle, NAGC DTI LLC (“NAGC DTI”).
`
`33)
`
`The $75 million CVC Investment was completed and closed in October 2016.
`
`CVC’s managing partner, Christopher Stadler, became a director of DTI and, it would later be
`
`discovered, personally invested—and was immediately repaid—approximately $200,000 in one
`
`of Meli’s ticket investments.
`
`34) Meli now apparently possessed the authority, resources, and financial capital of
`
`DTI and CVC necessary to persuade the previously reluctant Ballybeg to invest in his Ponzi
`
`scheme. As a result of the CVC Investment and the assurances of Meli and Advance, Ballybeg
`
`was satisfied that Meli and Advance were operating in a manner consistent with the standards of
`
`a CVC portfolio company and that the new investment vehicle had been properly vetted.
`
`IV.
`
`Ballybeg’s Investment
`
`35)
`
`Throughout December 2016, Meli was in discussions with Ballybeg regarding
`
`two investment opportunities—one involving tickets for an upcoming, unannounced national
`
`tour of the music group Metallica, and another involving tickets for a series of live events
`
`scheduled to take place at the newly renovated Nassau Coliseum over the next two years.
`
`36) On January 25, 2017, Ballybeg executed an agreement with Advance and Meli by
`
`which Ballybeg invested $500,000 towards the purchase of the Metallica and Nassau Coliseum
`
`
`
`9
`
`11 of 18
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`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`tickets in exchange for 10% return on its investment (the “Ballybeg Investment”). The Ballybeg
`
`Investment was structured in two parts (collectively, the “Agreement”): (1) a Funding
`
`Agreement dated January 16, 2017 (the “Funding Agreement”)(Exhibit A); and (2) a promissory
`
`note personally guaranteed by Meli (the “Note”)(Exhibit B).
`
`37)
`
`In the Funding Agreement, Meli and Advance represented to Ballybeg that:
`
`Meli has an opportunity to purchase tickets in bulk to an upcoming
`(but as of yet unannounced) tour of Metallica in the United States
`currently anticipated to take place in up to 25 North American
`cities between May and October of 2017 as set forth in greater
`detail below (the “Tour”), such tickets to the Tour referred to
`herein as the “Tickets”;
`
`Upon receipt of the Funds, Meli hereby agrees to use the Funds
`exclusively to purchase the Tickets for a price per Ticket that does
`not exceed the face value of the tickets either individually or in the
`aggregate.
`
`
`Pursuant to the Funding Agreement, on January 25, 2017, Ballybeg wired
`
`
`and that,
`
`
`38)
`
`$300,000 for the Metallica tickets to Advance’s Bank of America/Merrill Lynch account in New
`
`York. Additionally, $200,000 was paid by check to Meli personally in exchange for the Note.
`
`39)
`
`The following day, January 26, 2017, Advance wired $1,250,000, including the
`
`proceeds of Ballybeg’s $500,000 investment, to Kid Shelleen.
`
`40) Only two days after execution of the Agreement and payment of Ballybeg’s
`
`$500,000 investment, Meli was arrested and indicted, and Ballybeg learned that it, like Meli’s
`
`other investors, had been swindled by Meli’s Ponzi scheme. Meli never purchased—nor did he
`
`ever intend to purchase—the Metallica or Nassau Coliseum tickets. Ballybeg had fallen victim
`
`not only to Meli’s persistent lies and promises, but also to CVC’s endorsement of Meli and his
`
`Ponzi scheme.
`
`
`
`10
`
`12 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`41)
`
`Ballybeg has received no return on its investment or evidence that its funds will
`
`be returned.
`
`42)
`
`Two similar and related actions have been filed and consolidated previously and
`
`are currently pending in this Court: TGT, LLC v. Advance Entertainment LLC, et al., (Index no.
`
`650633/2017); and Vincent V. Hodes Family Irrevocable Trust v. Advance Entertainment LLC,
`
`et al., (Index no. 151712/2017) (collectively, the “Related Actions”). These Related Actions
`
`involve different victims but arise from the same or similar events and make similar allegations
`
`against Meli and Advance as does the instant action.
`
`43)
`
` On April 5, 2018, following oral arguments heard on November 28, 2017, the
`
`Honorable Andrea Masley of the Supreme Court of the State of New York, County of New
`
`York, issued an order in the Related Actions (the “April 5 Order”) denying in part defendants’
`
`motions to dismiss and upholding the plaintiffs’ claims for fraud, aiding and abetting fraud, and
`
`breach of contract. See, Order dated April 5, 2018, TGT, LLC v. Advance Entertainment LLC, et
`
`al., (Index No. 650633/2017, Dkt. #126).
`
`44) Additionally, the April 5 Order held that “[t]he Proposal for the CVC transaction
`
`contemplated reorganizing DTI with ‘ongoing execution’ of Advance deals devised by Meli,
`
`which further ‘baited’ [plaintiff] and other investors into placing funds into Advance’s ticket
`
`schemes,” and that “the allegations in both [Related Actions] are sufficient to infer general
`
`knowledge and substantial assistance in a manner beyond just performing routine business
`
`services.” Id. at p. 13.
`
`
`
`
`
`
`
`
`
`11
`
`13 of 18
`
`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`FIRST CAUSE OF ACTION
`Fraud against Defendants Advance and Meli
`
`Ballybeg incorporates by reference the averments contained in the preceding
`
`45)
`
`paragraphs above, as if set forth fully herein.
`
`46) Defendants Meli and Advance committed fraud against Ballybeg by falsely
`
`representing the investment opportunities in the Metallica tour and Nassau Coliseum events. In
`
`fact, Meli and Advance did not have options or agreements in place to purchase tickets for those
`
`events and did not use Ballybeg’s investment to purchase tickets as promised under the
`
`Agreement. Instead, they used Ballybeg’s investment for their own benefit.
`
`47) Additionally, Meli and Advance falsely represented to Ballybeg that Meli was
`
`acting on behalf of DTI and that DTI had approved and authorized the proposed investments in
`
`the Metallica and Nassau Coliseum tickets.
`
`48) Meli and Advance knew the falsity of their material representations and of the
`
`documents presented to obtain Ballybeg’s investment.
`
`49) Meli and Advance knew
`
`that Ballybeg was relying on
`
`the material
`
`misrepresentations and documents presented to them by Meli and Advance when deciding to
`
`invest $500,000 under the Agreement.
`
`50) Had defendants Meli and Advance not made the false representations set forth
`
`herein, Ballybeg would not have entered into the Agreement and would not have made its
`
`investment.
`
`51) As a direct and proximate result of the fraud committed by Advance and Meli,
`
`plaintiff Ballybeg has suffered and/or incurred economic damages in the amount of $500,000.
`
`
`
`12
`
`14 of 18
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`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`52) Defendants acted at all times in furtherance of their Ponzi scheme willfully,
`
`wantonly, and maliciously, and their conduct against Ballybeg does not appear to be their first
`
`fraudulent scheme of this type. Advance and Meli will continue to engage in such conduct until
`
`they are deterred in the form of the most severe civil and criminal remedies available.
`
`53)
`
`By reason of the foregoing, Ballybeg requests that the Court award punitive
`
`damages against Advance and Meli in an amount to be determined at trial but believed to be in
`
`excess of $4.5 million.
`
`SECOND CAUSE OF ACTION
`Breach of Contract against Defendants Advance and Meli
`
`Ballybeg incorporates by reference the averments contained in the preceding
`
`54)
`
`paragraphs above, as if set forth fully herein.
`
`55)
`
`Ballybeg entered into the Agreement, consisting of a Funding Agreement with
`
`Advance and a Promissory Note with Meli, both valid and enforceable contracts, whereby
`
`Advance and Meli agreed to utilize Ballybeg’s funds to purchase tickets for the Metallica concert
`
`tour and Nassau Coliseum events described herein.
`
`56)
`
`Ballybeg performed its obligations under the Agreement by wiring $300,000 to
`
`Advance’s Bank of America/Merrill Lynch account, in accordance with the Funding Agreement,
`
`and by delivering a check for $200,000 to Meli under the Promissory Note.
`
`57) Advance and Meli materially breached the Agreement by failing to use
`
`Ballybeg’s funds to purchase the described tickets or to re-sell them to the secondary ticket
`
`market as required under the Agreement. Instead, Advance and Meli diverted those funds, along
`
`with funds from other defrauded investors, for their own purposes and in furtherance of their
`
`Ponzi scheme.
`
`
`
`13
`
`15 of 18
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`

`

`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`FILED: NEW YORK COUNTY CLERK 11/02/2018 07:02 PM
`NYSCEF DOC. NO. 32
`NYSCEF DOC. NO. 1
`
`
`INDEX NO. 654948/2018
`INDEX NO. 655482/2018
`
`RECEIVED NYSCEF: 01/10/2019
`RECEIVED NYSCEF: 11/02/2018
`
`58) As a result of Advance’s breach of the Funding Agreement and Meli’s breach of
`
`the Promissory Note, plaintiff Ballybeg has been damaged in the amount of $300,000.
`
`THIRD CAUSE OF ACTION
`Conversion against All Defendants
`
`Ballybeg incorporates by reference the averments contained in the preceding
`
`59)
`
`paragraphs above, as if set forth fully herein.
`
`60) Defendants Advance and Meli have taken the $500,000 invested by Ballybeg
`
`through the Agreement and converted it for their own benefit and use rather than the use
`
`contracted for.
`
`61)
`
`Ballybeg’s right to possession of the invested funds is indisputable as the funds
`
`paid by Ballybeg to Advance and Meli are clearly traceable through bank records to wired funds
`
`Advance sent to Kid Shelleen on January 26, 2017, just one day after Ballybeg’s payment. By
`
`receiving and retaining those funds, Kid Shelleen converted those funds to its own use and
`
`benefit.
`
`62)
`
`The conversion of Ballybeg’s investment by Advance, Meli, and Kid Shelleen
`
`was carried out by means of intentionally wrongful fraudulent misrepresentations.
`
`63) As a direct and proximate cause of the conversion committed by Advance, Meli,
`
`and Kid Shelleen, Ballybeg has suffered and/or incurred economic damages in the amount of
`
`
`
`$500,000.
`
`
`
`
`
`14
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`16 of 18
`
`

`

`NEW YORK
`COUNTY
`CLERK
`11/02/2018
`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`[FILED
`:
`NYSCEF DOC. NO. 32
`NYSCEF
`NO.
`DOC.
`
`1
`
`07:
`
`02
`
`PM)
`
`INDEX
`
`6 55482
`INDEX NO. 654948/2018
`NO.
`/2018
`
`RECEIVED
`
`RECEIVED NYSCEF: 01/10/2019
`11/02/2018
`NYSCEF:
`
`PRAYER
`
`FOR RELIEF
`
`WHEREFORE,
`
`Plaintiff
`
`Ballybeg
`
`requests
`
`that
`
`this
`
`Court
`
`enter
`
`judgment
`
`against
`
`the
`
`Defendants,
`
`jointly
`
`and
`
`severally,
`
`as
`
`follows:
`
`For
`
`damages
`
`in
`
`the
`
`amount
`
`of
`
`$500,000
`
`and
`
`all
`
`of
`
`plaintiff's
`
`attorneys'
`
`fees
`
`incurred
`
`in
`
`bringing
`
`this
`
`action
`
`Plaintiff's
`
`costs
`
`and
`
`disbursements
`
`incurred
`
`herein;
`
`(i)
`
`(ii)
`
`from
`
`of
`
`Ballybeg's
`
`initial
`
`(iii)
`
`(iv)
`
`(v)
`
`Pre-judgment
`
`interest
`
`running
`
`the
`
`date
`
`investment;
`
`Punitive
`
`damages
`
`against
`
`Defendants
`
`in
`
`the
`
`amount
`
`of
`
`$4,5000,000;
`
`and
`
`Such
`
`further
`
`and
`
`additional
`
`relief
`
`as
`
`the
`
`Court
`
`deems
`
`just
`
`and
`
`equitable.
`
`Dated:
`
`November
`New York,
`
`2018
`2,
`New York
`
`Respectfully
`
`submitted,
`
`ENGEL
`
`THORNBURGH
`
`& McCARNEY
`
`LLP
`
`By:
`
`Thomas
`
`E.
`
`Engel
`
`152 West
`
`57
`
`Street
`
`New York
`546-6215
`
`(212)
`
`10019
`
`(646)
`
`514-6798
`
`Floor
`16
`New York,
`Telephone:
`
`Facsimile:
`
`15
`
`17
`
`of
`
`18
`
`

`

`CLERK
`COUNTY
`: NEW YORK
`07
`018
`11/02
`[FILED
`FILED: NEW YORK COUNTY CLERK 01/10/2019 10:30 PM
`/2
`: 02
`PM|
`NYSCEF
`1
`DOC.
`NO.
`NYSCEF DOC. NO. 32
`
`INDEX
`655482/2018
`NO.
`INDEX NO. 654948/2018
`RECEIVED
`NYSCEF:
`11/02/2018
`RECEIVED NYSCEF: 01/10/2019
`
`VERIFICATION
`
`I, JEREMIAH
`
`HARRIS,
`
`of
`
`full
`
`age,
`
`verify
`
`as follõws:
`
`I am the
`
`reanaging
`
`member
`
`of Plaintiff
`
`Ballybeg
`
`Entertainment
`
`LLC,
`
`and
`
`I am fami!iar
`
`with
`
`the
`
`facts
`
`as set
`
`forth
`
`in the within
`
`Complair-t.
`
`I have
`
`read
`
`the Complaint
`
`and
`
`certify
`
`that
`
`the
`
`allegations
`
`ecstained
`
`in
`
`the Complaint
`
`are
`
`true
`
`except
`
`where
`
`made
`
`upon
`
`information
`
`belief,
`
`which
`
`allegations
`
`I believe
`
`to
`
`be
`
`true.
`
`I certify
`
`under
`
`penalty
`
`of
`
`perjury
`
`that
`
`the
`
`foregoing
`
`statements
`
`are true
`
`and that
`
`if any
`
`statement
`
`herein
`
`is willfülly
`
`false,
`
`I am subject
`
`to puni
`
`tracñt.
`
`JE
`
`ARRIS
`
`Sworn
`
`to and
`
`subsc