Sunday, January 18, 2009

Defendant withdraws motion to dismiss $2.1 million fraudulent transfer case

In Goldberg v. Malik, the $2.1 million fraudulent transfer case brought against Michael J. Malik, Sr., by a Florida court appointed Receiver Michael I. Goldberg, the Defendant Malik filed a Notice on 1.16.09 withdrawing his previous 1.02.09 Motion to Dismiss the case.

Malik had sought to have the case dismissed on administrative and procedural grounds. Among other things, Malik's attorneys argued the court had no jurisdiction over Malik, that Malik did not have any business relationship with any of the Receivership Entities, and that Malik, a resident of Michigan did not have any Florida business interests nor did he own any property in Florida.

According to Malik's attorneys, the Complaint against their client:
alleges that Defendant, Michael J. Malik, Sr. ("Mr. Malik"), invested in the business affairs of the Receivership Entities and ultimately received back more than he invested. The Receiver alleges that any "profits" that Mr. Malik earned are unlawful because, over time, the Receivership Entities became nothing more than a Ponzi scheme.
Goldberg v. Malik is one of dozens of cases related to a larger $300 million fraud case brought by the Securities and Exchange Commission (SEC) against one-time entertainment mogul Jack Utsick (John P. Utsick), his business partners and their affiliates. The SEC alleges Utsick was running a ponzi scheme used to produce Broadway shows, concerts and other entertainment events and festivals. Receiver Goldberg has also sued Paris Hilton as part of his recovery efforts.

With a value of $2.1 million, Goldberg's fraudulent transfer case against Malik is likely the most substantial recovery attempt he's made to date. Goldberg alleges Malik received so-called "profit payments" in addition to a return of his original investments and that the "profit payments" were funded via the ponzi scheme.

In an earlier court document Malik says he never received so-called "profit payments."

U.S. District Court Judge Paul C. Huck has set the trial for Malik's case to begin the week of 4.20.09 in Miami Federal Court. He has previously ordered parties to exchange documents in order to faciliate discovery and keep the case moving forward.

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