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First Amended Complaint
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FITZGERALD KNAIER LLP Keith M. Cochran, Esq. (SBN: 254346) [email protected] 402 West Broadway, Suite 1400 San Diego, California 92101 Tel: (619) 241-4810 Fax: (619) 955-5318
SANFORD HEISLER SHARP, LLP Charles H. Field, Esq. (SBN: 189817) [email protected] 655 West Broadway, Suite 1700 San Diego, California 92101 Tel: (619) 577-4251 Fax: (619) 577-4250 Attorneys for Plaintiff Marieme Bouguerba
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN DIEGO
Marieme Bouguerba, an individual; Plaintiff, vs. Mark Bernier, an individual; VentureMoney Management Co., a Delaware corporation; VMC Holdings, LLC, a Delaware Limited Liability Company; Casco Bay Capital, LLC, a Delaware Limited Liability Company, Paul Turino; Alan Maiss; James Jalil; John Zoraian; Greg Zoraian; Greg Doyle; Paul Roben; Roger Rappoport; Nishal Mohan; Mario Diez, individuals; and Does 1 through 25, inclusive, Defendants.
Case No.: 37-2019-00010619-CU-BC-CTL First Amended Complaint For: 1. Securities Fraud 2. Sale of Unregistered Securities 3. Operating as Unlicensed Broker 4. Operating as Unlicensed Investment
Adviser 5. Fraud - Intentional Misrepresentation 6. Fraud - Concealment 7. Fraud - False Promise 8. Aiding and Abetting a Fraud 9. Conversion 10. Breach of Fiduciary Duty 11. Aiding and Abetting a Breach of
Fiduciary Duty 12. Breach of Contract Demand For Jury Trial
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First Amended Complaint
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Plaintiff Marieme Bouguerba (“Plaintiff”) alleges the following:
Introduction
1. Defendant Mark Bernier (“Bernier”) trolls dating websites for vulnerable,
high net worth women as part of his investment scams. Bernier advertises himself as a
licensed investment professional, targets wealthy women, attempts to build trust and
confidence, and then aggressively seeks to separate the women from their money through
purported “investments.” In implementing this fraudulent scheme, Bernier directly violates
state securities laws. In the past two years, Bernier has exchanged over 29,000 messages
with over 3,000 women through the dating website MillionaireMatch.com, in an effort to
sell them worthless securities.
2. Here, Bernier targeted Plaintiff on MillionaireMatch.com and immediately
solicited the sale of securities before ever meeting Plaintiff in person. Bernier and his
venture capital fund, VentureMoney Management Co., fraudulently-induced Plaintiff to
purchase $600,000 of unregistered, non-exempt securities by, among other things, falsely
representing his investment credentials to gain Plaintiff’s trust, falsely promising to return
Plaintiff’s money at any time to induce the sales, and refusing to show Plaintiff any of the
investment terms and conditions embedded in the transactional documents to keep her in
the dark.
3. Then, instead of investing Plaintiff’s $600,000 as promised, Bernier pocketed
the money in the form of salary/management fees. From the outset, Bernier had no
intention of investing Plaintiff’s money as he had represented; his sole intention was to
peddle worthless securities so that he could he take Plaintiff’s money for himself and for
VentureMoney Management Co., leaving Plaintiff holding nothing but “blue sky.”
4. Defendants Paul Turino, Alan Maiss, James Jalil, John Zoraian, Greg
Zoraian, Greg Doyle, Paul Roben, Roger Rappoport, Nishal Mohan, Mario Diez were
officers and directors of companies that Bernier either owned or controlled (“D&O
Defendants”). Each of them lent credibility to Bernier’s unlawful scheme to lure-in
unsuspecting investors by authorizing him to exploit their names, faces, and investment
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First Amended Complaint
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expertise in pitch materials used by Bernier to solicit sales of securities. These pitch
materials contained materially false and misleading information.
5. The D&O Defendants knew Bernier was using these false pitch materials to
offer and solicit the sale of unqualified securities in VMC Holdings, LLC and
VentureMoney Management Co. to members of the public, knew that Bernier was
providing investment advice and knew his investment recommendations were both reckless
and imprudent for unsophisticated investors such as Plaintiff. The D&O Defendants also
knew that VMC Holdings, LLC, VentureMoney Management Co., and Bernier were selling
securities and soliciting investment business on behalf of VentureMoney Management Co.
without being duly licensed as either a securities broker-dealer or investment adviser, as is
required under California law.
6. Rather than exercise due care and act in good faith to control Bernier’s
conduct, the D&O Defendants turned a blind eye and allowed Bernier to exploit their
likenesses and reputations, which aided and abetted his illegal securities and investment
advisory transactions. The D&O Defendants stood to benefit from any money that
Bernier raised through VentureMoney Management Co.
7. Defendants’ fraudulent investment scheme is on-going. Defendants
continue to advertise and promote their investment scheme on a website sponsored by
VentureMoney Management Co. and Bernier continues to promote his investment
expertise on dating websites despite having no valid industry credentials.
8. By reasons of these activities and the conduct described below, the
Defendants have violated and, unless enjoined, will continue to violate the securities laws
of California.
9. Before filing this lawsuit, Plaintiff requested the return of her money, but
Bernier and VentureMoney Management Co. adamantly refused. Plaintiff brings this
action for securities fraud, securities violations, conversion, breach of fiduciary duty, aiding
and abetting, and breach of contract.
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First Amended Complaint
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Parties
10. Plaintiff Marieme Bouguerba is an individual residing in San Jose, California.
11. Defendant Mark Bernier is an individual residing in the County of San
Diego. Bernier is the Chairman of the Board of Directors and Chief Executive Officer of
VentureMoney Management Co. Bernier previously served as the CEO of Thornton
Americas Holdings, an unsuccessful consumer debt collection company that was ultimately
liquidated. Bernier later worked as a vitamin water salesman. He has never been duly
licensed with the State of California as either an investment adviser or securities
broker/dealer.
12. Defendant VentureMoney Management Co. (“VentureMoney”) is a
Delaware corporation with its principal place of business at 8910 University Center Lane,
4th Floor, San Diego, CA 92122. VentureMoney is a purported venture capital firm that
advertises itself as an investor in “early-stage ventures.” However, VentureMoney has no
proven track record of successful investing and fails to list any assets under management.
It has never been duly licensed with the State of California as either an investment adviser,
investment company, or securities broker/dealer.
13. Defendant VMC Holdings, LLC (“VMC Holdings”) is a Delaware Limited
Liability Company, with its principal place of business at 8910 University Center Lane, 4th
Floor, San Diego, CA 92122. VMC Holdings is the holding company of VentureMoney;
VentureMoney is the operating company of VMC Holdings. Bernier is the sole director
and member of VMC Holdings. It has never been duly licensed with the State of
California as either an investment adviser, investment company, or securities broker/dealer.
14. Defendant Casco Bay Capital, LLC (“Casco Bay Capital”) is a Delaware
Limited Liability Company, with its principal place of business at 7660 Fay Avenue, Suite
H531, La Jolla, CA 92037. Bernier is the sole member and controls the company. Casco
Bay Capital does not engage in any legitimate business, but is merely a conduit for Bernier’s
investment scam.
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First Amended Complaint
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15. Defendant Paul Turino (“Turino”) is a director of VentureMoney, who
conducts business out of VentureMoney’s office located at 8910 University Center Lane,
4th Floor, San Diego, CA 92122. Turino is a statutory control person of VentureMoney
and Bernier within the meaning of California Corporations Code § 25504.
16. Alan Maiss (“Maiss”) is a director of VentureMoney, who conducts business
out of VentureMoney’s office located at 8910 University Center Lane, 4th Floor, San Diego,
CA 92122. Maiss is a statutory control person of VentureMoney and Bernier within the
meaning of California Corporations Code § 25504. In the 1990s, Maiss was involved in a
casino scandal and criminal investigation that resulted in a guilty plea to a federal
misprision charge. Maiss was later pardoned by President George W. Bush in 2008 based
on his personal connections.
17. Defendant James Jalil (“Jalil”) is a director of VentureMoney, who conducts
business out of VentureMoney’s office located at 8910 University Center Lane, 4th Floor,
San Diego, CA 92122. Jalil is a statutory control person of VentureMoney and Bernier
within the meaning of California Corporations Code § 25504. Jalil is also a partner at the
law firm Thompson Hine, advertising himself as “an extensive authority on securities and
corporate transactions.”
18. Defendant John Zoraian (“J. Zoraian”) is the Chief Compliance Officer of
VentureMoney, who conducts business out of VentureMoney’s office located at 8910
University Center Lane, 4th Floor, San Diego, CA 92122. J. Zoraian is a statutory control
person of VentureMoney and Bernier within the meaning of California Corporations Code
§ 25504. John Zoraian is also the Chief Financial Officer of Lemelson Capital
Management, advertising himself as “a seasoned hedge fund professional with thirty-five
years of experience in the alternative investment industry.”
19. Defendant Greg Zoraian (“G. Zoraian”) is the Chief Accounting Officer of
VentureMoney, who conducts business out of VentureMoney’s office located at 8910
University Center Lane, 4th Floor, San Diego, CA 92122. G. Zoraian is a statutory control
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First Amended Complaint
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person of VentureMoney and Bernier within the meaning of California Corporations Code
§ 25504.
20. Defendant Greg Doyle (“Doyle”) is a “Venture Partner” of VentureMoney,
who conducts business out of VentureMoney’s office located at 8910 University Center
Lane, 4th Floor, San Diego, CA 92122. Doyle is a statutory control person of
VentureMoney and Bernier within the meaning of California Corporations Code § 25504.
21. Defendant Paul Roben (“Roben”) is a director of ThinkTank Innovation,
Inc., an affiliate of VentureMoney. Roben is a statutory control person of ThinkTank and
Bernier within the meaning of California Corporations Code § 25504.
22. Defendant Roger Rappoport (“Rappoport”) is a director of ThinkTank
Innovation, Inc., an affiliate of VentureMoney. Rappoport is a statutory control person of
ThinkTank and Bernier within the meaning of California Corporations Code § 25504.
23. Defendant Nishal Mohan (“Mohan”) is a director of ThinkTank Innovation,
Inc., an affiliate of VentureMoney. Mohan is a statutory control person of ThinkTank and
Bernier within the meaning of California Corporations Code § 25504.
24. Defendant Mario Diez (“Diez”) is a director of ThinkTank Innovation, Inc.,
an affiliate of VentureMoney. Diez is a statutory control person of ThinkTank and Bernier
within the meaning of California Corporations Code § 25504.
25. Plaintiff is unaware of the true names and capacities of the defendants Does
1 to 25, who are therefore sued by such fictitious names. Plaintiff will amend this First
Amended Complaint to allege their true names and capacities when ascertained.
26. Plaintiff alleges on information and belief that in performing the acts and
omissions hereinafter alleged to have been done, each of the defendants was the agent and
employee of each of the other defendants and was at all times acting within the course and
scope of such agency and employment.
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First Amended Complaint
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Jurisdiction and Venue
27. This Court has jurisdiction over all causes of action asserted herein under the
California Constitution, Article VI, § 10, because this case is a cause not given by statute to
other trial courts, and the amount sought exceeds the jurisdictional minimum of this Court.
28. This Court has personal jurisdiction over the defendants because the
defendants maintain sufficient minimum contacts with California to render jurisdiction by
this Court permissible under the traditional notions of fair play and substantial justice.
29. Venue is proper because some or all of the parties reside and/or conduct
business in this county, and some or all of the events giving rise to Plaintiff’s claims
occurred in this county.
Factual Allegations
A. Bernier Solicits Plaintiff Through An Online Dating Service
30. Bernier uses online dating services to prospect for vulnerable, high net worth
women like Plaintiff. Between October 2017 and May 2019, and as part of his investment
scams, Bernier exchanged over 29,000 messages with over 3,000 women through
MillionaireMatch.com, an Internet dating site designed for successful and attractive singles
to meet one another. Bernier targets women in Canada and all over the United States,
including California, Nevada, Florida, Texas, and New York. He routinely tells the women
that he owns a global venture capital firm and that his partner is Paul Turino, who founded
Citi Ventures on behalf of Citibank. Bernier also tells women online that he founded a
company with over 10,000 employees in 7 countries (which is false). Bernier’s objective is
to sell the unsuspecting women worthless securities.
31. In October 2018, Bernier contacted Plaintiff through MillionaireMatch.com.
At the time, Plaintiff was a single mother with a six-figure salary. Bernier and Plaintiff
exchanged several messages through the MillionaireMatch.com online platform and then
exchanged phone numbers. Within a week of finding Plaintiff on MillionaireMatch.com,
Bernier began an aggressive solicitation campaign to target Plaintiff’s money and sell her
worthless securities for his own personal gain.
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First Amended Complaint
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32. Bernier took advantage of Plaintiff’s trust and confidence to separate her
from her money. Bernier first represented to Plaintiff that he was an accomplished
securities broker and investment adviser – professional designations for which he is not
qualified. Next, Bernier extolled the reputations and investment expertise of his
investment management team and directed Plaintiff to the VentureMoney website to see
for herself the backgrounds of those with whom Bernier was associated. The website
prominently displayed the faces and the investment expertise of each of the D&O
Defendants. See Exhibit B. Bernier also told Plaintiff that his partner was Paul Turino, the
founder of Citi Ventures on behalf of Citibank. To Plaintiff, Bernier and his prominent
investment team appeared completely legitimate and trustworthy.
33. Upon securing Plaintiff’s trust, Bernier persuaded Plaintiff to reveal her
investment portfolio so that he could prepare a living will and trust for her. At the time,
Plaintiff’s portfolio, which was custodied in different retirement accounts, was both
diversified and liquid, with investment holdings that included a 2045 target date, assorted
exchange traded funds (ETFs), diversified mutual funds, a publicly traded limited
partnership, and publicly traded stock. Plaintiff’s entire securities portfolio was less than $1
million and represented her entire life savings.
34. Bernier deceived Plaintiff by assuring her he was an experienced and trusted
securities broker and investment adviser, despite having no valid industry credentials.
Bernier then pressured Plaintiff to give him access to her online brokerage accounts,
including her passwords. Plaintiff trusted that Bernier would exercise due care with her
investments and be loyal to her interests. Instead, Bernier betrayed her trust in the worst
way. Bernier used the log-in information to access Plaintiff’s brokerage accounts and
began selling her investment holdings. In liquidating Plaintiff’s holdings, Bernier also had
several calls with Charles Schwab in an attempt to consolidate her accounts. During those
calls, Bernier represented to Charles Schwab that he was Plaintiff’s financial adviser “here
to help her with her investment portfolio.”
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First Amended Complaint
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B. Bernier Persuades Plaintiff To Transfer Half Her Life Savings To A Private Equity Investment He Owns And Controls
35. In October 2018, before ever meeting in person, Bernier recommended that
Plaintiff sell her holdings in retirement accounts and transfer $400,000 to purchase
unregistered Series A Preferred Shares in VMC Holdings, LLC, a company with only one
board member – Bernier. This investment was illiquid and represented about half of
Plaintiff’s investment portfolio. Plaintiff had never before invested in illiquid, private
equity securities. Bernier knew Plaintiff was not a sophisticated investor with strong
financial resources, and that his investment recommendation to concentrate half of
Plaintiff’s assets in private equity was imprudent. Indeed, investment experts universally
condemn this type of reckless, overconcentrated portfolio construction. Bernier’s
imprudent recommendation was not in Plaintiff’s best interest. Rather, Bernier and
VentureMoney were the intended beneficiaries of this fraudulent transaction; unbeknownst
to Plaintiff, Bernier intended to pocket the money as salary/management fees.
36. Bernier misled Plaintiff into believing an investment in VMC Holdings was
safe and secure. Bernier told Plaintiff the stock market was “horrible” and would crash.
He told her the investment returns in VMC Holdings would likely be ten-fold. Bernier also
told Plaintiff VMC Holdings was his company, that Plaintiff could trust him, and that
Bernier would return Plaintiff’s money upon request whenever she wanted. Bernier knew
these statements were either false or had no reasonable basis in fact.
37. On October 25, 2018, Bernier emailed Plaintiff a VMC Holdings Series A
Preferred Shares pitch book (the “Pitch Book”). According to the Pitch Book, the sole
investment objective of VMC Holdings was to invest in VentureMoney which, in turn,
would “provide all investors with access to the same strategies previously only available to
institutional investors and are a liquid secondary alternative to the venture capital
investment community.” See Exhibit A, p. 3. VentureMoney intended to pursue its
strategy by “invest[ing] in major technology themes supported by our experience &
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First Amended Complaint
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venture/ business/military ecosystem strengths of the Cali Baja, bi-national, mega-region.”
Id. at p. 14
38. Page 29, which is entitled “Capital Plan and Milestones,” indicates that
VentureMoney’s Series A $5 million capital raise will close in December 2018. The Pitch
Book also indicates that ThinkTank was set to close a $10 million capital raise in
November 2018. These statements were nothing but illusory promises with no basis in
fact, as VentureMoney did not close a $5 million capital raise in December 2018 and
ThinkTank did not close a $10 million capital raise in November 2018.
39. Further, the Pitch Book failed to disclose the risk to Plaintiff’s investment
should these capital raises fail or the adverse financial effect of such an outcome. Because
these deals never came to fruition, VentureMoney remains nothing but an empty shell. Yet
despite VentureMoney’s failed efforts and Bernier’s promise to return Plaintiff’s money on
demand, Bernier has steadfastly refused to return Plaintiff’s $400,000 investment.
40. The Pitch Book goes on to exaggerate management’s investment expertise:
“We are disciplined investors utilizing systematic processes that allow us to quickly screen
potential company investments prior to entering the diligence phase.” Id. at p. 20. This
claim was false as VentureMoney has yet to implement a systematic investment process to
screen and invest in any company.
41. To lend credibility to this claim, the Pitch Book prominently displayed the
names, faces, and investment expertise of Bernier and D&O Defendants Torino, Maiss,
Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez as “Our Team.”
Id., pp. 3, 24-26. The VentureMoney logo is emblazoned on every page. Plaintiff reviewed
both the Pitch Book and the internet profiles of the D&O Defendants on the
VentureMoney website and reasonably relied on the claims and promises in these materials
as part her investment decision.
42. On the weekend of October 27, 2018, Plaintiff flew to San Diego to meet
Bernier in person for the first time. That weekend, Bernier made dinner at his condo and
served Plaintiff alcohol. After Plaintiff became intoxicated, Bernier then placed a
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First Amended Complaint
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voluminous stack of paper in front of Plaintiff at the kitchen table, which Plaintiff believes
to have been a Series A Preferred Shares Term Sheet (the “Term Sheet”), a Series A
Preferred Share Purchase Agreement, and an Amended Operating Agreement.
43. The skeletal Term Sheet indicated VMC Holdings would be engaged in the
business of investing in securities of another company, VentureMoney, which holds itself
out as investing, owning, holding, or trading in securities of other companies. The Term
Sheet was void of any discussion of the business operations of VMC Holdings or
VentureMoney, the executive management of these companies, the specific risks of
investing in these intertwined companies, and any financial statements of these companies.
44. The Term Sheet indicated that the company would pay Casco Bay Capital
LLC, a company owned and controlled by Bernier, $50,000 to cover preparation and
drafting of documents and payment of regulatory fees. A review of the databases of both
the SEC’s EDGAR and the California Department of Business Oversight reveals that
VMC Holdings did not file any documents or pay any fees. Since Bernier is the sole
operator and manager of Casco Bay Capital, he pocketed the $50,000.
45. The Term Sheet also indicated Bernier intended to keep $500,000 to cover
operating expenses and management fees related to the company. Since Bernier is the sole
operator and manager, Bernier stood to receive compensation from Plaintiff in the form of
these management fees.
46. Bernier, as VentureMoney’s Chairman and CEO, was acting on
VentureMoney’s behalf and attempting to raise money for VentureMoney when he sold
Plaintiff unregistered Series A Preferred Shares in VMC Holdings, LLC.
47. The Term Sheet used to solicit Plaintiff disclosed that “conditions to
Closing, which shall include, among other things, satisfactory completion of financial and
legal due diligence, and the qualification of the shares under applicable Blue Sky laws.” As
VMC Holdings never qualified its shares in California, this statement was false. As Bernier
had drafted the Term Sheet, he knew this statement was false.
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First Amended Complaint
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48. As for the Amended Operating Agreement and the Series A Preferred Share
Purchase Agreement, Bernier would not allow Plaintiff to review any of the arcane
documents. Bernier only showed Plaintiff a signature page and aggressively pressured her
to provide her signature, without explaining what she was signing. Because Bernier had
earned Plaintiff’s trust by misrepresenting that he was an experienced securities broker and
accomplished financial adviser, she signed without question even though she was not able
to review or see any of the documents. To the extent that the documents contained any of
Plaintiff’s information, Plaintiff did not fill out the documents; rather, Bernier provided the
information and completed the documents without Plaintiff’s knowledge.
49. Plaintiff’s signature was procured through fraud. In coercing Plaintiff to
provide a signature, Bernier lied about being a licensed securities broker and financial
adviser, misrepresented that VentureMoney would be closing a $5 million capital raise in
December 2018, and concealed that he would not be investing Plaintiff’s money but rather
that he would be keeping Plaintiff’s investment for himself and VentureMoney. Bernier
also failed to disclose to the Plaintiff the high risk of loss associated with this investment
and lied about his promise to return Plaintiff’s money upon request.
50. Bernier never furnished Plaintiff with copies of the signed documents. In
fact, when Plaintiff requested signed copies – which is her legal and contractual right as a
Member of the company – Bernier refused although he later gave her copies of unsigned
documents that he claims she purportedly signed. Just a cursory review of the unsigned
agreements reveals paperwork riddled with inconsistencies and false statements. As
Bernier had drafted or caused the agreements to be drafted, he was responsible for these
inconsistencies and false statements.
51. By way of example, the language of Section 2.6 of Series A Preferred Share
Purchase Agreement is both inconsistent with the Term Sheet language above and
completely false. The language says that:
“no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local
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First Amended Complaint
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governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for . . . (ii) filings pursuant to Regulation D of the Securities Act, and applicable state securities laws, which have been made or will be made in a timely manner.” (emphasis added)
52. A review of the databases of both the SEC’s EDGAR and the California
Department of Business Oversight reveals that VMC Holdings made no such filings. The
language also contradicts the Term Sheet which assures investors that the shares would be
qualified under applicable Blue Sky laws.
53. The false statements continue. Section 4.2 of the Amended Operating
Agreement states:
“As soon as practicable after the execution of this Agreement with respect to each Member, the Board shall cause to be issued a certificate of membership to each Member acknowledging his, her or its status as a Member and the number of shares owned by such Member.”
VMC Holdings issued no certificates evidencing Plaintiff’s ownership. In fact, Plaintiff has
no record of being a Member.
54. Further, Bernier failed to disclose to Plaintiff the following material facts
about Plaintiff’s investments:
• Neither Bernier, VMC Holdings, nor VentureMoney were licensed to sell securities in California;
• Neither Bernier, VMC Holdings, nor VentureMoney were licensed to provide investment advice in California;
• Neither VMC Holdings nor VentureMoney were registered as investment companies; and
• That Bernier personally would be receiving compensation from Plaintiff’s investment in the form of management and other fees.
55. On October 29, 2018, Plaintiff wire transferred $250,000 to Bernier’s
personal bank account for the VMC Holdings securities. On November 13, 2018, Plaintiff
transferred an additional $150,000 to Bernier for the VMC Holdings securities. From the
outset, Bernier intended to keep Plaintiff’s $400,000 for himself and VentureMoney.
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First Amended Complaint
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56. As gleaned from the offering documents, VMC Holdings is merely a link in a
daisy chain from which Bernier and VentureMoney take money from the investing public.
VMC Holdings and VentureMoney share the same management, directors, and office space
at a WeWork office facility in San Diego. In fact, the Pitch Book for VMC Holdings is a
VentureMoney PowerPoint presentation. The VentureMoney logo was prominently
displayed on the cover page of the VMC Holdings Amended Operating Agreement. Thus,
there is a unity of interest and ownership between VMC Holdings and VentureMoney that
the separate personalities of the entities do not in reality exist.
57. When viewed as a whole, Defendants are liable for (i) selling unregistered
non-exempt securities (ii) selling securities and furnishing investment advice without the
requisite securities licenses, (iii) making false and misleading statements; and (iv) failing to
disclose certain adverse facts and material risks known to them about VMC Holdings and
VentureMoney. Defendants’ fraudulent scheme and course of business that operated as a
fraud and deceit upon Plaintiff was a success, as it (i) deceived Plaintiff regarding Bernier’s
investment credentials, (ii) inflated VMC Holdings and VentureMoney’s prospects and
business, and (iii) permitted Bernier to sell $400,000 in worthless securities to Plaintiff.
C. D&O Defendants Aided Bernier’s Illegal Activities
58. As officers and/or directors of VentureMoney and ThinkTank – both
investment companies in need of seed capital - Defendants Torino, Maiss, Jalil, J. Zoraian,
G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez knew or should have known that
Bernier was seeking to raise $5 million and $10 million respectively from investors in 2018.
The D&O Defendants knew or should have known that California law required the
securities being offered and sold by VMC Holdings and Venture Money be qualified for
sale or exempt from qualification. As noted in ¶ 2, the securities that Bernier sold to
Plaintiff were neither qualified for sale nor exempt from qualification.
59. The D&O Defendants knew or should have known that VMC Holdings and
Venture Money were engaged in the business of selling securities for the accounts of others
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and furnishing investment advice for compensation. The D&O Defendants knew or
should have known that California law requires VMC Holdings and Venture Money to
hold a securities broker dealer license to engage in the business of selling securities and an
investment adviser license to furnish investment advice for compensation. As noted in ¶¶
5, 12, and 13, neither VMC Holdings nor Venture Money held the requisite securities
licenses required under California law.
60. The D&O Defendants also knew or should have known that Bernier did not
possess the requisite securities licenses to engage in solicitation and sales activities on
behalf of VMC Holdings and Venture Money.
61. The D&O Defendants knew or should have known that to raise $5 million
and $10 million capital, Bernier need to solicit sales of securities through use of term
sheets, pitchbooks and other solicitation materials. Accordingly, they saw or should have
seen the Term Sheet, Pitch Book, and the various investor agreements before use in the
public domain.
62. With respect to the Pitch Book used by Bernier to solicit investors, each
D&O Defendant knew or should have known that that the Pitch Book identified each of
them as integral participants in the investment scheme. Each D&O Defendant knew or
should have known that the Pitch Book contained false and misleading statements,
including false statements about VentureMoney and ThinkTank’s fundraising efforts, and
the viability of their respective investment objectives and strategies.
63. Each D&O Defendant knew or should have known that the Term Sheet
contained false and misleading statements.
64. The D&O Defendants knew or should have known that the securities
Bernier sold to Plaintiff were illiquid with no readily available market and subject to a high
risk of loss, such that a sale of $400,000 was neither proper nor suitable for a person with
Plaintiff’s limited investment experience and financial means.
65. Rather than exercise due care and act in good faith to control Bernier’s
conduct, the D&O Defendants turned a blind eye and allowed Bernier to exploit their
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likenesses and extensive reputations to aid and abet his engagement in illegal securities and
investment advisory transactions. The D&O Defendants stood to benefit from any money
that Bernier and VentureMoney raised.
D. Bernier Sells Plaintiff A $200,000 Note Without Having a Valid Securities License
66. On December 24, 2018, Bernier persuaded Plaintiff to invest $200,000 in
Casco Bay Capital, LLC. 9.75% Collateralized Medium Term Notes (the “Note”). Bernier
told Plaintiff that Casco Bay Capital, LLC was his company, that this was a great
investment not available to the public, and that Casco Bay would use the proceeds to
purchase securities in other companies, and that Casco Bay had already purchased $5
million of General Electric debt. Bernier reiterated to Plaintiff that he would return her
money at any time upon request. These statements were all false.
67. On January 3, 2019, Bernier emailed Plaintiff a copy of the Note. Plaintiff
signed the note and transferred $200,000 to Casco Bay’s bank account.
68. According to the Note Purchase Agreement, the collateral for the loan was
the shares of Casco Bay Capital, LLC another company Bernier owned and controlled. See
Exhibit C. Like the Series A Preferred Shares, Bernier had not qualified the Note for sale
under the applicable California securities law before selling them to Plaintiff. And like the
Series A Preferred Shares transaction, Bernier sold Plaintiff the Note without being duly
licensed as a securities broker dealer as is required under California law.
69. On information and belief, Bernier merely pocketed for himself Plaintiff’s
$200,000 investment in Casco Bay Capital, LLC. 9.75% Collateralized Medium Term
Notes. After Plaintiff retained legal counsel, filed this lawsuit, and incurred legal fees to
make a demand for the return of her investment, Bernier returned the $200,000.
E. Bernier Attempts to Steal Another $80,000 From Plaintiff
70. On January 4, 2019, Bernier logged into Plaintiff’s brokerage account, and
attempted to transfer another $80,000 to himself. Plaintiff learned of the attempted
transfer when she received a security code by text message from the brokerage firm.
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Because Plaintiff had not authorized Bernier to make any such transaction, she did not
provide him with the security code. Instead, she confronted Bernier about the proposed
transfer and the prior $600,000 he took from her. She requested that he return all her
money. In response, he refused to return any of the money, threatening that if Plaintiff
brought a lawsuit against him, Plaintiff would suffer a 100% loss on her investments.
71. On February 5, 2019, Plaintiff’s counsel sent Bernier a letter requesting the
return of her money. Bernier refused to return Plaintiff’s money, leaving Plaintiff no
choice but to file this lawsuit.
First Cause of Action (Securities Fraud – Violation Cal. Corp. Code § 25401)
(Against All Defendants)
72. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
73. Cal. Corp. Code § 25401 provides that “[i]t is unlawful for any person to
offer or sell a security in this state or buy or offer to buy a security in this state by means of
any written or oral communication which includes an untrue statement of material fact or
omits to state a material fact necessary in order to make the statement made, in the light of
the circumstances under which they were made, not misleading.”
74. Bernier and VentureMoney offered to sell and sold securities to Plaintiff in
the State of California, by means of untrue statements of material fact and through the
omission of material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading. Among other things, Bernier
and VentureMoney misrepresented that:
a. VentureMoney had robust investment processes and viable
investment objectives and strategies;
b. Plaintiff’s money would be invested in venture, start-up companies;
c. VentureMoney would be closing a $5 million capital raise in
December 2018;
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d. ThinkTank would be closing a $10 million capital raise in November
2018;
e. The Series A Preferred Shares would be qualified for sale in
California;
f. VMC Holdings would issue certificates evidencing ownership of the
Series A Preferred Shares; and
g. Bernier would return Plaintiff’s full investment at any time upon
request.
75. In addition, Bernier and Venture Money failed to disclose that:
a. Neither Bernier, VMC Holdings, nor VentureMoney were licensed to
sell securities in California;
b. Neither Bernier, VMC Holdings nor VentureMoney, were licensed to
provide investment advice in California;
c. Neither VMC Holdings nor VentureMoney, were registered as
investment companies; and
d. Bernier personally would be receiving compensation from Plaintiff’s
investment in the form of management and other fees.
76. Plaintiff relied on Bernier and VentureMoney’s written and oral
misrepresentations and omissions of material facts in deciding to invest in Series A
Preferred Shares in VMC Holdings, LLC.
77. As a result of Bernier and VentureMoney’s misrepresentations, Plaintiff
sustained damages. Under California Corporations Code § 25501, Plaintiff is entitled to
either rescind the transaction or recover damages.
78. As directors and officers of VentureMoney and ThinkTank, Defendants
Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez
are liable as “control persons” under California Corporations Code § 25504, and therefore
liable to the same extent as Bernier and VentureMoney. Defendants Turino, Maiss, Jalil, J.
Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez also directly and/or
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indirectly controlled Bernier and VentureMoney, and knew that the statements were false
and/or that there was an omission of material facts. They also materially aided in the
transaction because they knew that Bernier and VentureMoney were raising assets through
the holding company VMC Holdings and selling shares in VentureMoney, and encouraged
those sales.
Second Cause of Action (Sale of Unregistered Securities – Violation of Cal. Corp. Code 25110)
(Against All Defendants) 79. Plaintiff incorporates by reference each and every allegation set forth above,
as though fully set forth herein.
80. California Corporations Code § 25110 provides in pertinent part: “It is
unlawful for any person to offer or sell in this state any security in an issuer transaction …
unless such sale has been qualified under Section 25111, 25112, or 25113 … or unless such
security or transaction is exempted or not subject to qualification under Chapter 1
(commencing with section 25100) of this part.”
81. Series A Preferred Shares in VMC Holdings, LLC are “securities” within the
meaning of California Corporations Code § 25019.
82. Bernier and VentureMoney “offered and sold” the securities within the State
of California within the meaning of California Corporations Code §§ 25008 and 25017.
The California Corporations Commissioner has not issued a permit or other form of
qualification authorizing Bernier or VentureMoney to offer and sell the subject securities in
the State of California.
83. Series A Preferred Shares in VMC Holdings, LLC were unregistered,
nonexempt securities. There was no exemption, and Bernier and VentureMoney solicited
the sales of the securities to Plaintiff via an internet dating website, before Bernier ever met
Plaintiff in person. See California Corporations Code §25102(f)(2)
84. Plaintiff has been damaged by the conduct of Bernier and VentureMoney as
set forth herein. Under California Corporations Code § 25503, Plaintiff is entitled to
recover the purchase price ($400,000) of the securities, along with interest at the legal rate.
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85. California Corporations Code § 25504 provides in pertinent part that
“[e]very person who directly or indirectly controls a person liable under Section 25501 or
25503, every partner in a firm so liable, every principal executive officer or director of a
corporation so liable, every person occupying a similar status or performing similar
functions, every employee of a person so liable who materially aids in the act or transaction
constituting the violation, and every broker-dealer or agent who materially aids in the act or
transaction constituting the violation, are also liable jointly and severally with and to the
same extent as such person.”
86. As directors and officers of VentureMoney and ThinkTank, Defendants
Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez
are liable as “control persons” under California Corporations Code § 25504, and therefore
liable to the same extent as Bernier and VentureMoney. Defendants Turino, Maiss, Jalil, J.
Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez directly and/or
indirectly controlled Bernier and VentureMoney, and knew that the securities sold to
Plaintiff were neither registered nor exempt. They also materially aided in the unlawful sale
of unregistered, nonexempt securities because they knew that Bernier and VentureMoney
were raising assets through the holding company VMC Holdings and selling shares in
VentureMoney, and encouraged those sales. Indeed, Defendants Turino, Maiss, Jalil, J.
Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez encouraged Bernier to
engage in fundraising efforts for VentureMoney and helped prepare the VentureMoney
PowerPoint presentation, which was shown to Plaintiff to solicit her investment.
Third Cause of Action (Operating As An Unlicensed Broker – Violation of Cal. Corp. Code § 25210)
(Against Bernier)
87. Plaintiff incorporates by reference each and every allegation set forth above,
as though fully set forth herein.
88. A broker is one who effect transactions in securities for compensation.
89. California Corporations Code § 25210(a) provides that “no broker-dealer
shall affect any transaction in, or induce or attempt to induce the purchase or sale of, any
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security in this state unless the broker-dealer has first applied for and secured from the
commissioner a certificate, then in effect, authorizing that person to act in that capacity.”
90. Here, Bernier operated as an unregistered broker-dealer. Bernier holds
himself out as being an investment professional. Bernier sold Plaintiff securities without
being duly qualified as a securities broker dealer, and is collecting money from management
and other fees.
91. Bernier sold Plaintiff securities in companies that he owns and controls.
Indeed, Bernier is the sole member and director of both VMC Holdings, LLC and Casco
Bay Capital, LLC. All membership interests sold in VMC Holdings were Bernier’s. All
money loaned to Casco Bay Capital, LLC went directly to Bernier. There is a unity of
interest between VMC Holdings, LLC and Bernier that the separate personalities of the
company and the member do not in reality exist. There is also a unity of interest between
Casco Bay Capital, LLC and Bernier that the separate personalities of the company and the
member do not in reality exist.
92. Bernier’s conduct as described herein required him to be licensed as a
securities broker dealer. His unlicensed activities as a broker dealer violates California
securities laws. Plaintiff has incurred damages as a proximate result of Bernier’s actions, as
set forth herein.
93. Under California Corporations Code § 25501.5, Plaintiff may either rescind
the purchase or recover damages, and is entitled to an award of reasonable attorneys’ fees.
Fourth Cause of Action (Unlicensed Investment Adviser – Violation of Cal. Corp. Code § 25230)
(Against Bernier, VentureMoney, and VMC Holdings)
94. Plaintiff incorporates by reference each and every allegation set forth above,
as though fully set forth herein.
95. California Corporations Code § 25009 defines an investment adviser as “any
person who, for compensation, engages in the business of advising others, either directly or
indirectly through publications or writings, as to the value of securities or as to the
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advisability of investing in, purchasing or selling securities, or who, for compensation and
as a part of a regular business, publishes analyses or reports concerning securities.”
96. California Corporations Code § 25230(a) provides: “It is unlawful for any
investment adviser to conduct business as an investment adviser in this state unless the
investment adviser has first applied for and secured from the commissioner a certificate,
then in effect, authorizing the investment adviser to do so or unless the investment adviser
is exempt by the provisions of Chapter 1 (commencing with Section 25200) of this part or
unless the investment adviser is subject to Section 25230.1”
97. Bernier was employed by VentureMoney and was the agent of
VentureMoney in raising money. Bernier, on behalf of VentureMoney, furnished
investment advice to Plaintiff for compensation as to the advisability of investing in Series
A Preferred Shares in VMC Holdings, LLC. By his actions described herein, Bernier and
VentureMoney operated as an unregistered investment adviser under California law in
violation of California Corporations Code § 25230.
98. Plaintiff has incurred damages as a proximate result of Bernier and
VentureMoney’s actions, as set forth herein.
Fifth Cause of Action (Fraud – Intentional Misrepresentation)
(Against Bernier, VentureMoney, and VMC Holdings)
99. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
100. Bernier, on behalf of himself and VentureMoney, represented to Plaintiff
that he was a licensed broker and licensed investment adviser, that he would be investing
Plaintiff’s money, and that VentureMoney would be closing a $5 million capital raise in
December 2018.
101. Bernier’s representations were false as he is neither a licensed broker nor
licensed investment adviser. He did not invest Plaintiff’s money but rather pocketed it for
himself and VentureMoney. VentureMoney did not close a $5 million capital raise in
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December 2018 and Bernier had no basis to make this statement orally or in the Pitch
Book.
102. Bernier knew that the representations were false when he made them and/or
that he made the representations recklessly and without regard for the truth.
103. Bernier intended that Plaintiff rely on the representations in order to effect
the sale of the securities.
104. Plaintiff reasonably relied on Bernier’s representations.
105. Plaintiff was harmed.
106. Plaintiff’s reliance on Bernier’s representations was a substantial factor in
causing her harm.
Sixth Cause of Action (Fraud – Concealment)
(Against Bernier, VentureMoney, and VMC Holdings)
107. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
108. In effecting the sales of the securities, Bernier acted on behalf of himself and
VentureMoney. Bernier intentionally failed to disclose certain facts that were known only
to him and that Plaintiff could not have discovered. Bernier concealed the following:
a. Neither Bernier, VMC Holdings, VentureMoney, nor Casco Bay were
licensed to sell securities in California;
b. Neither Bernier, VMC Holdings, VentureMoney, nor Casco Bay were
licensed to provide investment advice in California;
c. Neither VMC Holdings, VentureMoney, nor Casco Bay were registered as
investment companies; and
d. Bernier personally would be receiving compensation from Plaintiff’s
investment in the form of management and other fees.
e. Bernier had no intention of investing Plaintiff’s money, and would be
keeping the money for himself and VentureMoney.
109. Plaintiff did not know of the concealed facts.
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110. Bernier intended to deceive Plaintiff by concealing the facts.
111. Had the omitted information been disclosed, Plaintiff reasonably would have
behaved differently and would not have purchased the securities.
112. Plaintiff was harmed.
113. Bernier’s concealment was a substantial factor in causing Plaintiff’s harm.
Seventh Cause of Action (Fraud – False Promise)
(Against Bernier, VentureMoney, and VMC Holdings)
114. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
115. In order to induce the sales of the securities, Bernier promised Plaintiff that
he would give Plaintiff’s money back immediately upon request because he owned the
companies. Bernier acted on his own behalf and on behalf of VentureMoney.
116. Bernier did not intend to perform this promise when he made it.
117. Bernier intended that Plaintiff rely on the promise.
118. Plaintiff reasonably relied on Bernier’s promise
119. Bernier did not perform the promised act, and has not returned Plaintiff’s
investment despite her request for the money.
120. Plaintiff was harmed.
121. Plaintiff’s reliance on Bernier’s promise was a substantial factor in causing
her harm.
Eighth Cause of Action (Aiding and Abetting a Fraud)
(Against VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez)
122. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
123. Defendants VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian,
Doyle, Roben, Rappoport, Mohan, and Diez knew that Bernier was going to defraud
investors, including Plaintiff.
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124. Defendants VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian,
Doyle, Roben, Rappoport, Mohan, and Diez gave substantial assistance or encouragement
to Bernier by permitting Bernier to use their profiles on VentureMoney’s website and in the
Pitch Book, and to exploit their expertise in order to promote VentureMoney and
encourage retail investors such as Plaintiff to invest in VMC Holdings and VentureMoney.
Defendants Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan,
and Diez encouraged Bernier to engage in fundraising efforts for VentureMoney through
the use of false and misleading statements. Defendants Turino, Maiss, Jalil, J. Zoraian, G.
Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez also helped prepare the
VentureMoney PowerPoint presentation, which Bernier used to solicit Plaintiff’s
investment (they are prominently listed in the presentation and advertised as members of
the “team”). Defendants Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben,
Rappoport, Mohan, and Diez knew that VentureMoney would not be closing a $5 million
capital raise in December 2018 and that ThinkTank would not be closing a $10 million
capital raise in November 2018.
125. Defendants VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian,
Doyle, Roben, Rappoport, Mohan, and Diez’s conduct was a substantial factor in causing
harm to Plaintiff.
Ninth Cause of Action (Conversion)
(Against Bernier)
126. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
127. Plaintiff owned the $400,000 used to purchase the VMC Holdings securities.
128. Bernier substantially interfered with Plaintiff’s property by knowingly or
intentionally taking possession of the $400,000 and refusing to return it.
129. Plaintiff did not consent to Bernier’s taking of the $400,000.
130. Plaintiff was harmed.
131. Bernier’s conduct was a substantial factor in causing Plaintiff’s harm.
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Tenth Cause of Action (Breach of Fiduciary Duty)
(Against Bernier)
132. Plaintiff incorporates by reference each and every allegation set forth above,
as though fully set forth herein.
133. Bernier established a relationship of trust and confidence with Plaintiff by
acting as Plaintiff’s broker and investment adviser. Bernier therefore owed Plaintiff a
fiduciary duty.
134. Bernier breached his fiduciary duty to Plaintiff, as alleged herein, by, among
other things:
a. Providing false information to Plaintiff regarding her investments;
b. Misrepresenting that he was a licensed broker and licensed
investment adviser;
c. Making reckless and imprudent investment recommendations in
illiquid securities that were wholly unsuitable;
d. Imprudently recommending to Plaintiff that she sell liquid securities
in order to invest in illiquid securities; and
e. Not investing Plaintiff’s money, and instead pocketing the investment
for himself.
135. As a proximate result of Bernier’s breach, Plaintiff suffered damages in an
amount to be proven at trial.
Eleventh Cause of Action (Aiding and Abetting a Breach of Fiduciary Duty)
(Against VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez)
136. Plaintiff incorporates by reference each and every allegation set forth above,
as though fully set forth herein.
137. As alleged herein, Bernier breached his fiduciary duties to Plaintiff.
138. Defendants VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian,
Doyle, Roben, Rappoport, Mohan, and Diez knew that Bernier was not a licensed broker
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or investment adviser but yet knew he was offering and soliciting the sale of unqualified
securities in VMC Holdings and VentureMoney to members of the public, including
Plaintiff. Defendants VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle,
Roben, Rappoport, Mohan, and Diez knew that Bernier’s investment recommendations in
VMC Holdings and VentureMoney – illiquid securities – were wholly unsuitable for
unsophisticated investors such as Plaintiff.
139. VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben,
Rappoport, Mohan, and Diez provided substantial assistance and/or encouragement to
Bernier in breaching his fiduciary duties to Plaintiff. Defendants Turino, Maiss, Jalil, J.
Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan, and Diez permitted Bernier to use
their faces and profiles on VentureMoney’s website and in the Series A Preferred Pitch
Book, and to exploit their expertise in order to promote VentureMoney and encourage
retail investors such as Plaintiff to invest in VMC Holdings and VentureMoney.
Defendants Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan,
and Diez encouraged Bernier to engage in fundraising efforts for VentureMoney.
Defendants Turino, Maiss, Jalil, J. Zoraian, G. Zoraian, Doyle, Roben, Rappoport, Mohan,
and Diez also helped prepare the VentureMoney PowerPoint presentation, which Bernier
used to solicit Plaintiff’s investment (they are prominently listed in the presentation and
advertised as members of the “team”).
140. The conduct by VentureMoney, Turino, Maiss, Jalil, J. Zoraian, G. Zoraian,
Doyle, Roben, Rappoport, Mohan, and Diez was a substantial factor in causing harm to
Plaintiff.
Twelfth Cause of Action (Breach of Contract)
(Against Bernier)
141. Plaintiff incorporates by reference each and every allegation set forth above
as though fully set forth herein.
142. Plaintiff and Bernier entered into an oral contract, in which Bernier agreed to
immediately refund Plaintiff’s investment upon request.
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143. Plaintiff did all, or substantially all, of the significant things that the contract
required her to do.
144. Bernier has refused to return $400,000, in breach of the parties’ oral
agreement.
145. Plaintiff was harmed.
146. Bernier’s breach of contract was a substantial factor in causing Plaintiff’s
harm.
Prayer For Relief
Plaintiff prays for relief as follows:
A. For rescission of the purchase of the securities;
B. For compensatory damages according to proof, and for prejudgment interest
thereon pursuant to California Civil Code § 3288;
C. For punitive damages pursuant to California Civil Code § 3294;
D. For attorneys’ fees and costs;
E. For injunctive relief against continuing conduct or practices by each
Defendant in connection with the purchase or sale of securities; and
F. For such other and additional relief as deemed just and proper.
Jury Demand
Plaintiff demands a trial by jury.
Dated: June 18, 2019 FITZGERALD KNAIER LLP
By: Keith M. Cochran, Esq. Attorney for Plaintiff Marieme Bouguerba