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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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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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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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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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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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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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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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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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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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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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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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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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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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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,


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,


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)



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)




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)




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.


113. Bernier’s concealment was a substantial factor in causing Plaintiff’s harm.

Seventh Cause of Action (Fraud – False Promise)




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.


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)



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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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.


Doyle, Roben, Rappoport, Mohan, and Diez’s conduct was a substantial factor in causing

harm to Plaintiff.

Ninth Cause of Action (Conversion)

(Against Bernier)



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.


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)



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)



137. As alleged herein, Bernier breached his fiduciary duties to Plaintiff.


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.


and Diez encouraged Bernier to engage in fundraising efforts for VentureMoney.


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)



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.


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

uperior ourt of alifornia ounty of an iego · inc., an affiliate of venturemoney. roben is a...

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