UNITED STATES DISTRICT COURT DISTRICT OF...

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

) SECURITIES AND EXCHANGE COMMISSION, ) ) Plaintiff, ) ) v. ) Civil Action No. ) 3:17-cv-00155-VAB MARK J. VARACCHI and ) SENTINEL GROWTH FUND ) MANAGEMENT, LLC, ) ) Defendants, ) and ) ) RADAR ALTERNATIVE FUND LP and ) RADAR ALTERNATIVE MASTER FUND SPC, ) ) Relief Defendants. ) )

RECEIVER’S THIRD QUARTERLY STATUS REPORT

Case 3:17-cv-00155-VAB Document 44 Filed 02/02/18 of 31

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Contents I. NATURE OF THE PROCEEDINGS...................................................................................... 3

II. REPORT FOR THE PERIOD OF OCTOBER 1ST TO DECEMBER 31ST, 2017 .............. 6

A. Summary of the Operations of the Receiver .................................................................... 6

B. Cash on Hand and Administrative Expenses ................................................................... 9

C. A Schedule of Receiver’s Receipts and Disbursements ................................................. 11

D. Status of the Receivership Estate’s Investment Interest in Private Companies ............. 11

i. Entourage Funding ......................................................................................................... 11

ii. Greenhouse ..................................................................................................................... 12

iii. Invigilio .......................................................................................................................... 12

iv. Kizzang ........................................................................................................................... 13

v. Roots Athletics ............................................................................................................... 14

vi. StereoCast and Related Entities ..................................................................................... 14

vii. STRV .......................................................................................................................... 16

viii. Zipway ........................................................................................................................ 16

ix. Gravy .............................................................................................................................. 17

E. Litigation of Causes of Action Held by the Receivership Estate ................................... 18

i. TAM Litigation .............................................................................................................. 18

ii. Sarroff Litigation ............................................................................................................ 20

iii. Rajo Litigation ................................................................................................................ 22

iv. Kostiner Tolling Agreements ......................................................................................... 24

v. Investigation of Other Potential Litigation Claims ........................................................ 25

F. Other Receivership Assets ................................................................................................. 25

G. List of All Known Creditors........................................................................................... 26

H. Status of the Creditor Claims Proceeding ...................................................................... 26

I. Receiver’s Recommendation ............................................................................................. 28

III. CONCLUSION .................................................................................................................. 29


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RECEIVER’S THIRD QUARTERLY STATUS REPORT

Jed Horwitt, Esq., the Court-appointed receiver in this action (the “Receiver”), by and

through his counsel, Zeisler & Zeisler, P.C. (“Z&Z”), submits his Third Quarterly Status Report

(the “Report”) for the period from October 1, 2017, through and including December 31, 2017 (the

“Report Period”), pursuant to the Order Appointing Receiver (the “Receivership Order”) entered

by this Court on May 1, 2017.

I. NATURE OF THE PROCEEDINGS

1. On February 2, 2017, the plaintiff, the Securities and Exchange Commission (the

“Commission”) commenced this action by filing its Complaint against the defendants, Mark J.

Varacchi (“Varacchi”) and Sentinel Growth Fund Management, LLC (“Sentinel,” and together

with Varacchi, the “Defendants”), and the relief defendants, Radar Alternative Fund LP (“Radar

LP”) and Radar Alternative Master Fund SPC (“Radar SPC,” and together with Radar LP, the

“Relief Defendants,” and together with Sentinel, the “Receivership Defendants”).

2. The Commission’s Complaint alleges that the Defendants engaged in a fraudulent

scheme to misappropriate the assets of certain individuals and businesses who sought to invest in

the Relief Defendants (collectively, the “Investors”), and that in the course of their scheme, the

Defendants commingled their assets with the Investors’ funds. According to the Complaint,

between at least December, 2015, and November, 2016, the Defendants misappropriated at least

$3.95 million of investor assets intended for or held by the Relief Defendants, which were two

private funds that the Defendants advised. The Defendants commingled their assets with

Investors’ assets and made withdrawals from the Relief Defendants that Investors did not

authorize, which the Defendants used for personal and business expenses and to pay prior

Investors. Sentinel’s bank account included funds that Sentinel and Varacchi had obtained from


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their Investors or the Relief Defendants’ Investors for purposes of investment as well as deposits

from the Relief Defendants. Withdrawals from Sentinel’s bank account included payments to

Investors and payments for Varacchi’s personal expenses.

3. While the Complaint specifically alleged a narrower fraud of at least $3.95 million,

the Complaint further alleged that Sentinel received $42.6 million in third-party deposits between

August, 2013, and December, 2016, and transferred only $24.8 million to the Relief Defendants,

and that the Relief Defendants received another $21.1 million directly from third parties. Based

upon this and the Receiver’s independent investigation, it appears to the Receiver that a more far-

reaching scheme had been perpetrated.

4. Early in this receivership proceeding, it appeared to the Receiver that, upon

information and belief, approximately 25 Investors who deposited funds with Sentinel or the Relief

Defendants have unredeemed principal investments totaling over $19.6 million. Six Investors who

deposited funds with Sentinel or the Relief Defendants received redemptions of their original

investment amount or more. The Defendants also commingled the proceeds of purported “loans”

with investor funds, by depositing such “loan” proceeds into Sentinel’s account or the Relief

Defendants’ accounts.

5. The Commission moved to freeze all of the Receivership Defendants’ assets, and

on February 3, 2017, the Court entered such an order (the “Asset Freeze Order”). The Asset Freeze

Order provided that all funds and assets of the Receivership Defendants were frozen, including the

Receivership Defendants’ equity or fixed income interests in Entourage Funding, LLC

(“Entourage Funding”), Green Lantern Industries, Inc. (“Green Lantern Industries”), Greenhouse

Solutions, Inc. (“Greenhouse Solutions”), Kizzang, LLC (“Kizzang”), Roots Athletics, LLC

(“Roots Athletics”), StereoCast, Inc. (“StereoCast”), and Zipway, LLC (“Zipway”), as well as


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funds held with Bank of America, N.A., Weeden Prime Services, LLC (“Weeden”), and Industrial

and Commercial Bank of China Financial Services, LLC (“ICBC”). (Doc No. 7, ¶ VI. A., the

“Asset Freeze Order”)

6. The Court also ordered “[a]ll banks, brokerage and other financial institutions…,

the companies in which Defendants hold an equity or fixed income interest…, and all other persons

or entities that receive actual notice of [the Asset Freeze Order]” to “hold and retain within their

control” and prohibit” the “transfer” of “any such funds or other assets,” and ordered further that

“such funds and assets are hereby frozen.” (Id., § VI. B.)

7. On April 18, 2017, the Commission filed its Assented to Motion for Appointment

of a Receiver seeking the appointment of Jed Horwitt, Esq. (Doc No. 10). On May 1, 2017, this

Court entered its Order appointing Jed Horwitt, Esq. to serve as receiver over the Receivership

Defendants and the Receivership Assets, as defined herein. (Doc No. 12, the “Receivership

Order”).

8. “Receivership Assets” and the “Receivership Estate” are defined in the

Receivership Order as “all property of whatever kind of Sentinel and the Relief

Defendants…including the Radar Funds’ remaining assets, the Private Investments, and any

additional assets of the Receivership Defendants that may be recovered….” (Id., ¶ 1).

9. The Receivership Order defined “Private Investments” as the investments made in

companies (the “Private Companies”) that “were made in the name of Sentinel or Varacchi with

funds from Sentinel or the Radar Funds.” The aggregate amount expended to make such Private

Investments appears to exceed $4.4 million.

10. The Receiver is authorized to assume control of, marshal, pursue, and preserve the

Receivership Assets with the objective of maximizing the recovery of assets, and, to the extent


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that assets recovered are inadequate to make defrauded Investors whole, ensuring that the

distribution of those assets is as just and equitable as practicable (id., ¶ 2.), to take custody, control,

and possession of all Receivership Assets and relevant records from the Receivership Defendants

(id., ¶ 5. A.), to engage and employ persons in his discretion to asset him in carrying out his duties

and responsibilities, including accountants, attorneys, securities traders, registered representatives,

financial or business advisers, liquidating agents, real estate agents, forensic experts, brokers,

traders, or auctioneers (id., ¶ 5. B.), to take necessary and appropriate actions for the preservation

of Receivership Assets or to prevent the dissipation or concealment of those Assets (id., ¶ 5. C.),

and to issue subpoenas, bring legal actions, and pursue, resist, and defend all suits and legal

proceedings concerning the Receivership Assets (id., ¶ 5. D.-G.).

II. REPORT FOR THE PERIOD OF OCTOBER 1ST TO DECEMBER 31ST, 2017

11. In accordance with the Paragraph 31 of the Receivership Order, the Receiver

submits this Report and account of the Receivership Assets reflecting, to the best of the Receiver’s

knowledge and for the Report Period, the existence, value, and location of all Receivership Assets,

and the extent of liabilities. The facts presented in this Report may be amended and changed as

the Receiver’s investigation continues. This Report further includes the various assessments of the

Receiver’s counsel, as well as the advisers retained by the Receiver.

A. Summary of the Operations of the Receiver

12. Since his appointment, and specifically during the Report Period, the Receiver,

utilizing Z&Z as his legal professionals and Verdolino & Lowey, P.C. (“V&L”) as his accountants

and financial advisors, has undertaken numerous steps and made progress towards fulfilling his

objectives.


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13. The Receiver, through his attorneys, has communicated with the Commission’s

enforcement agents to obtain information concerning, inter alia, the following: the scheme and

scheme participants; the Investors; creditors of the Receivership Defendants; assets of or subject

to the Receivership Proceeding (including the Private Investments); documents (including

electronically stored information) possessed by the Commission that would assist the Receiver in

carrying out his mandate; and the investigation conducted and determinations made to date by the

Commission.

14. As part of this investigation, the Receiver and Z&Z attorneys continue to review

extensive documents and records obtained from the Commission and various third parties relevant

to the Receivership Proceeding.

15. Z&Z attorneys also spoke and e-mailed with Varacchi and his counsel during the

Report Period in order to obtain further information about the Receivership Proceeding and the

assets of the Receivership Estate including various causes of action that have been commenced or

are being investigated. At the same time, and in order to vet Varacchi’s representations, Z&Z

conducted a review of Varacchi’s correspondence and other relevant documents as it related to the

subjects of the Receiver’s investigations.

16. V&L’s professionals, in close contact with the Receiver and Z&Z, reviewed and

analyzed extensive records and financial information from the Commission concerning the

Receivership Estate’s assets (including various causes of action). Items of particular investigation

and analysis by the Receiver and his professionals, as discussed below, were the Private

Investments and Funded Entities, as well as causes of action held by the Receivership Estate

against third parties.


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17. The Receiver has during the Reporting Period continued to investigate the Private

Investments as more fully set forth below in Section D. The Receiver has researched and analyzed

numerous entities that have been identified as potentially constituting Private Investments which

the Receiver may liquidate or otherwise realize a recovery from for the benefit of the Receivership

Estate. The Receiver has also continued to investigate and, to some extent, commenced actions to

enforce various causes of action held by the Receivership Entities as more fully described herein,

Section E.

18. The Receiver has maintained a website – http://jedhorwittreceiver.com – that has

provided information to the public concerning the Receivership Proceeding, in addition to the more

particular notices provided to parties-in-interest.

19. The website identifies the Receiver and describes his role, provides access to filings

in the Receivership Proceeding, and contains contact information such that interested parties may

contact Z&Z attorneys by e-mail or telephone with questions, concerns or information that will

hopefully lead to meaningful distributions to investors in this Receivership Proceeding.

20. Z&Z’s professionals, on behalf of the Receiver, have fielded and effectively

responded to inquiries from Investors in order to ensure that they are educated concerning the

Receivership Proceeding and the claims management procedures discussed herein.

21. As more fully explained in Section G below, during the Report Period, the Receiver

moved for the approval of his proposed claims procedure, form of notice and form of proof of

claim, which this Court ultimately approved. The original bar date for the submission of such

proofs of claim imposed by this Court has since passed. The Receiver received thirty-three (33)

claims aggregating in excess of $32 million.1

1 The Receiver’s previously filed Second Quarterly Status Report (Doc. No. 31) and Second Interim Fee Application (Doc No. 33) mistakenly reported 39 claims filed totaling approximately $32 million.


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22. The Receiver and Z&Z also prepared and, on October 27, 2017, filed the Second

Quarterly Status Report. (Doc. No. 31). In drafting the Second Quarterly Status Report, the

Receiver and Z&Z compiled comprehensive information to update this Court, the Commission

and any other parties in interest as to the Receiver’s operations, the Receivership Estate’s assets,

and claims against the Receivership Estate.

B. Cash on Hand and Administrative Expenses

23. Shortly after his appointment, pursuant to the Receivership Order, the Receiver

opened an account at a financial institution experienced in servicing court-appointed receivers (and

bankruptcy trustees), which account (the “Receivership Account”) has since held funds marshaled

by the Receiver for the benefit of the Receivership Assets.

24. Pursuant to the Court’s orders, the Receiver and Z&Z previously undertook to

assume control and possession over the funds held in certain frozen accounts and to transfer them

to the Receivership Account. In doing so, the Receiver obtained $2,127,665.76 in cash, which was

deposited and has at all times since been held in the Receivership Account.

25. Certain other cash and securities were held in an account with ICBC (the “ICBC

Account”), which the Receiver sought to liquidate during the Report Period. As of June 30, 2017,

the Receiver understood that the ICBC Account held $495,729.57 in cash and securities.

26. The Receiver demanded the transfer of the entire balance of the ICBC Account.

ICBC disputed the Receiver’s right to possess a portion of these funds.

27. ICBC responded by asserting that the ICBC Account held less funds than

previously represented, which higher balance ICBC alleged was the result of an accounting error

caused by a “busted trade.” The Receiver has not agreed to ICBC’s position.


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28. In order to liquidate and marshal the Receivership Estate’s assets as expeditiously

as possible, and while preserving all of the Receiver’s rights and remedies against ICBC on account

of any withheld funds, the Receiver directed ICBC to transfer, a least, the undisputed portion of

the amounts held in the ICBC Account. Accordingly, on or about August 7, 2017, ICBC wired

$371,111.46 to the Receivership Account.

29. On October 11, 2017, ICBC wired one more interest payment credit in the amount

of $180.53 to the Receiver, which was deposited into the Receivership Account.

30. ICBC now asserts that no balance remains due the Receivership Estate on account

of the ICBC Account. The Receiver is investigating this matter.

31. During the Report Period, the Receivership Account accrued interest at a rate of

0.33% monthly, amounting to total interest payments of $1,628.97 (including the $180.53 received

from ICBC) for the Report Period.

32. During the Report Period, the Receiver’s First and Second Interim Fee Applications

were granted by the Court. (Doc. Nos. 29 and 41).

33. Pursuant to the terms of the Court’s Orders, the Receiver made the following

distributions to Z&Z and V&L:

Date Recipient Amount Reason Authority 10/16/17 Z&Z and

V&L $69,043.30 80% of Fees and

100% of Expenses from May 1, 2017 to June 30, 2017

Order Approving First Interim Fee Application (Doc. No. 29)

12/29/17 Z&Z and V&L

$65,006.60 80% of Fees and 100% of Expenses from July 1, 2017 to September 30, 2017

Order Approving Second Fee Application (Doc. No. 41)

34. As of December 31, 2017, the balance held in the Receivership Account was

$2,366,356.32. This constitutes a decrease of $132,420.93 during the Report Period.


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35. Upon information and belief based in part upon a search of UCC Financing

Statements and Federal Tax Lien filings, this cash on hand is not encumbered by any security

interest.

C. A Schedule of Receiver’s Receipts and Disbursements

36. In accordance with Paragraph 32C of the Receivership Order, the Receiver’s

schedule of all his receipts and disbursements is appended hereto as Exhibit A. In summary, the

Receiver received $1,628.97 and made disbursements of $134,049.90 during the Report Period.

As of December 31, 2017, the Receiver held a balance of $2,366,356.32 in the Receivership

Account.

D. Status of the Receivership Estate’s Investment Interest in Private Companies

37. The Receiver has continued to investigate the Private Investments and, in particular,

whether value may be realized from them for the benefit of the Receivership Estate and its

creditors.

38. The Receiver has identified stock ownership interests acquired by Varacchi in the

following entities: Kizzang, Greenhouse and StereoCast. Varacchi and/or the Receivership

Entities also engaged in various transactions with the following entities: Zipway, STRV, LLC

(“STRV”), Gravy, Inc. (“Gravy”), Roots Athletics, Invigilio, LLC (“Invigilio”), Entourage

Funding, Live Music Sales, LLC (“Live Music Sales”), Satin Bros. Entertainment, Green Lantern

Industries, StereoCast, and Adam Jacobs Music (“AJM”).

39. The following is the status of the Receiver’s investigation with respect to the

corresponding Private Investment:

i. Entourage Funding

40. The Receiver has determined that Varacchi used $500,000 of funds in Sentinel’s

account to make transfers to Entourage Funding.


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41. The Receiver made an informal written request upon Entourage Funding for the

production of certain records and information about the nature of Varacchi’s dealings with

Entourage Funding. The Receiver did not receive a response by the deadline set for compliance.

The Receiver then served a subpoena on Entourage Funding to compel the production of

documents. The Receiver has been in communication with Entourage Funding’s counsel with

respect to the documents requested and anticipates receiving them soon.

ii. Greenhouse

42. Varacchi used $25,000 of funds in Sentinel’s account to acquire an interest in

Greenhouse. Greenhouse is a nutraceutical company. The company engages in the development,

marketing, production, and sales of hemp oil products for both the personal health and companion

pet markets. It serves the functional beverage and nutraceutical supplements industry.

43. Varacchi held 250,000 shares of Greenhouse, and the Receiver has since taken

possession of a certificate evidencing this interest.

44. Greenhouse is traded over the counter, and its share price as of January 29, 2018,

was less than one penny per share. Greenhouse’s most recently file Form 10-Q for the quarter

ending December 31, 2016, shows that its shareholders have negative equity and that its assets of

approximately $31,000 equal its liabilities.

45. The Receiver has attempted to contact Greenhouse based on the contact information

that he developed through his investigation and has not received a response. Thus, the Receiver

served a subpoena on Greenhouse in Colorado, but Greenhouse did not comply by the response

date in the subpoena. The Receiver is evaluating his next steps with respect to Greenhouse.

iii. Invigilio

46. Varacchi caused Sentinel to transfer $34,000 from its account to Invigilio.


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47. The Receiver, through Z&Z, sent a letter to Invigilio demanding the production of

certain financial information and information about the nature of Varacchi’s dealings with the

company at several addresses on file for Invigilio. No one has yet responded to the Receiver’s

requests for documentation. The Receiver is evaluating his next steps with respect to this transfer.

iv. Kizzang

48. Varacchi used approximately $2.3 million of funds in Sentinel’s account to acquire

for himself various interests in Kizzang. Kizzang provides sweepstakes and fantasy sports

entertainment services online in the United States. It also provides online lottery, poker, slots, and

bingo.

49. Varacchi held 3,600,000 Class C shares and 5,400,000 Class D shares in Kizzang.

Kizzang is a privately-owned company.

50. Through his team’s investigation, the Receiver has learned that Kizzang was a

defendant in a federal lawsuit, Time, Inc. v. Kizzang LLC and Robert Alexander, in the United

States District Court, Southern District of New York. Time, Inc., publisher of Sports Illustrated,

partnered with Kizzang on the 2016 Sports Illustrated Swimsuit Launch Week. Under the terms

of their contract, Kizzang agreed to pay Sports Illustrated fees in three separate installments of

$500,000.

51. Kizzang never defended the lawsuit, and on March 15, 2016, the Hon. Alvin K.

Heelerstein entered a default judgment in the amount of $1,025,348.62 against Kizzang and Robert

Alexander. Upon information and belief, this judgment debt remains unpaid.

52. National Collegiate Athletic Association (“NCAA”) also sued Kizzang in the

United States District Court for the Southern District of Indiana, in March 2017 for allegedly

infringing NCAA’s trademarks. This litigation remains pending.


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53. The Receiver continues to evaluate what impact the default judgment and still-

pending litigation by the NCAA will have on the value of Varacchi’s investment in Kizzang.

54. Nevertheless, the Receiver believes that Kizzang may have valuable assets in the

form of intellectual property that could counterbalance the potential negative impact of the default

judgment and pending NCAA litigation.

55. The Receiver, though his counsel, has attempted to contact Kizzang directly based

on the contact information that he developed through his investigation and that he received from

Varacchi. Kizzang has not responded. The Receiver located a process server in Nevada who

attempted to serve a subpoena on both the entity and the principal, Robert Alexander. However,

Kizzang has vacated its business address, and Mr. Alexander appears to have vacated his home in

Las Vegas, Nevada. Upon information and believe, Mr. Alexander has relocated to New York

State. The Receiver is attempting to obtain a new address to serve a subpoena on Kizzang.

v. Roots Athletics

56. The Receiver has determined that Varacchi used $110,000 of funds in Sentinel’s

account to make transfers to Roots Athletics.

57. The Receiver has requested that Roots Athletics produce certain financial

information and information about the nature of Varacchi’s dealings with the company. A Z&Z

attorney spoke to a lawyer who represents Roots Athletics and later sent that attorney a demand

letter, to which Roots Athletics did not respond by the deadline of August 24, 2017.

58. The Receiver served a subpoena on the company but Roots Athletics did not

respond by the response date in the subpoena. The Receiver is evaluating next steps with respect

to Roots Athletics.

vi. StereoCast and Related Entities


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59. Varacchi caused $31,500 of funds in Sentinel’s account to be transferred to

StereoCast. StereoCast is a private company that has developed an app that permits a concertgoer

to download live recordings of a musician’s performance shortly after the concert ends.

60. Varacchi held 150,000 shares of StereoCast in his name. The Receiver has

requested and is waiting to receive a duplicate copy of this stock certificate from StereoCast.

61. Upon information and belief, StereoCast has valuable assets in the form of

intellectual property. The Receiver continues to collect information to determine the value of

Varacchi’s StereoCast shares.

62. Z&Z has had several calls and exchanged numerous emails with Adam and Randall

Satin, brothers who owned, among others, and managed StereoCast and its related entities, Green

Lantern Industries, Live Music Sales and Satin Bros. Entertainment. Through these efforts, the

Receiver has determined that Green Lantern Industries was the development company for

StereoCast and Varacchi provided it funds, allegedly to pay for some of StereoCast’s operational

costs. In total, Varacchi caused Sentinel to pay Green Lantern Industries approximately $272,000.

63. Varacchi also caused Sentinel to pay Adam Satin approximately $75,000, which

Adam Satin has stated was compensation for services he rendered to StereoCast. Live Music Sales

was the initial name of the business that eventually became StereoCast and, according to the Satins,

the money that Varacchi paid to this company--$10,000 from Sentinel’s account—went to

operations.

64. Satin Bros. Entertainment was the Satin brothers’ entity that paid Varacchi $21,000

as a reimbursement for expenses that Varacchi claimed he or Sentinel paid on behalf of StereoCast.

65. Varacchi also caused Sentinel to transfer $63,000 to AJM. Based on conversations

with Adam and Randall Satin, the Receiver understands that AJM was a vendor that provided


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proof of concept services to StereoCast for the StereoCast app. The Receiver is waiting for the

production of certain financial and other documentation from StereoCast to verify these payments

and services.

66. As for StereoCast itself, the Receiver is waiting for the production of certain

financial and other documentation concerning the company and the foregoing related entities and

will follow up on such production with the Satin brothers shortly. StereoCast, however, has

suspended its operations, and both Satins have moved on to other employment. Absent significant

value in any intellectual property, which may not constitute an asset of StereoCast, or a near-term

infusion of capital, it appears that no value can be realized from StereoCast.

vii. STRV

67. Varacchi used $340,000 of funds in Sentinel’s account to make transfers to STRV.

68. The Receiver sent a letter to STRV demanding the production of certain financial

information and information about the nature of Varacchi’s dealings with STRV. STRV

responded, through counsel, and has been cooperating with the Receiver. STRV has provided a

copy of a stock certificate showing an investment made by StereoCast (discussed above) in STRV

and the company’s counsel has agreed to produce further information. Subject to verification, the

Receiver believes that Varacchi used the Receivership Defendants’ funds to pay STRV for debts

owed by StereoCast to STRV.

69. During the Report Period, STRV provided documentation of Varacchi’s payments

from Sentinel to STRV on behalf of debts owed by StereoCast and Live Music Sales. STRV

alleges that it is still owed $400,000 from StereoCast. The Receiver is investigating whether these

transfers may be recovered from STRV.

viii. Zipway


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70. The Receiver has determined that Varacchi cause $540,000 of funds in Sentinel’s

account to be transferred to Zipway.

71. The Receiver sent a letter to Zipway demanding the production of certain financial

information and information about the nature of Varacchi’s dealings with Zipway. Zipway

responded through counsel and has been cooperating with the Receiver. To date, the Receiver has

received tax returns from Zipway from the last four years as well as a list of inventory and

information regarding non-insider creditors of Zipway. Initially, at least, it appears that Varacchi

held an equity interest in Zipway based upon the tax return documents that the Receiver obtained

from Zipway. In addition, it appears from the tax and other information provided by Zipway that

it is winding up its affairs and that its liabilities exceed its assets. The Receiver continues to

investigate whether value may be realized from Zipway for the benefit of the Receivership Estate.

ix. Gravy

72. Varacchi caused Sentinel to transfer $145,000 to Gravy.

73. The Receiver sent a letter to Gravy demanding the production of certain financial

information and information about the nature of Varacchi’s dealings with Gravy. The Receiver

has been provided by one of Gravy’s officers with information regarding Gravy’s involvement

with Varacchi and is reviewing that information. Further documents will be requested as needed

to verify the nature of the transactions between Varacchi and Gravy as well as Gravy’s present

financial condition. However, it initially appears that there was at least a proposed transaction in

which Varacchi would purchase an equity interest in Gravy—a closely held company. Gravy’s

officer has claimed that the entity is insolvent, and the Receiver is working on verifying that

assertion.


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74. In summary, the Receiver continues to investigate the above Private Investments,

including whether Varacchi and/or the Receivership Entities acquired equity interests, made loans,

or engaged in some other transaction, and whether and to what extent the Receiver can recover

value for the benefit of the Receivership Estate on account of these Private Investments. To the

extent some of these investments constitute loans made to entities with some ability to repay them,

the Receiver seek to recover such amounts due for the benefit of the Receivership Estate for

distribution to Investors and creditors. Some of these transfers may also constitute avoidable

fraudulent transfers or otherwise give rise to causes of action that may lead to monetary recoveries.

The Receiver intends to move expeditiously to maximize the value realized from these Private

Investments for the benefit of the Receivership Estate.

E. Litigation of Causes of Action Held by the Receivership Estate

75. The Receiver believes that the Receivership Assets include causes of action against

certain third parties. The status of these claims in summary is as follows:

i. TAM Litigation

76. During the Report Period, the Receiver and Z&Z investigated causes of action that

the Receiver believes exist against Taran Asset Management, LLC (“TAM”), Christopher Gleason

(“Gleason”), and Baseline Advisors, LLC (“Baseline” and, collectively, the “TAM Defendants”),

including causes of action for fraudulent transfer to recover the $1,080,000 that Varacchi caused

Sentinel to pay to TAM in settlement of TAM’s fraud and embezzlement claims against Varacchi

personally.

77. The alleged fraudulent transfer arose out of prior litigation between the parties. On

April 5, 2016, Gleason caused TAM to sue, among other defendants, Varacchi in the U.S. District


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Court for the Northern District of Illinois. The case was captioned Taran Asset Management, LLC

v. Mark Varacchi, et al., Civil Action No.: 1:16-cv-04011 (the “N.D. Il. Action”).

78. Shortly thereafter, Varacchi, among others, entered into that certain Confidential

Settlement Agreement (the “Settlement Agreement”) to resolve the N.D. Il Action for Varacchi’s

own personal benefit. Pursuant to the Settlement Agreement, Varacchi caused Sentinel to pay

TAM $1,080,000 (the “Settlement Payment”) in settlement of the N.D. Il. Action. The Settlement

Agreement provided Varacchi with a release of TAM’s and Gleason’s claims of fraud and

embezzlement based on conduct that he engaged in primarily (if not entirely) prior to the Ponzi

scheme he orchestrated through the Receivership Entities.

79. The Settlement Agreement allowed Varacchi to avoid TAM’s and Gleason’s

scrutiny of his Ponzi scheme. The source of Sentinel’s funds used by Varacchi to make this

Settlement Payment had been the investments made by investors defrauded by Varacchi in

furtherance of his Ponzi scheme.

80. The Receiver believes the Settlement Agreement and the Settlement Payment

constitute intentional and constructive fraudulent transfers pursuant to the Connecticut Uniform

Fraudulent Transfer Act, Conn. Gen. Stat. § 52-552 et seq. (“CUFTA”). The Receiver also

believes that the Settlement Agreement and the Settlement Payment give rise to a claim for unjust

enrichment against the TAM Defendants because the TAM Defendants unjustly failed to pay the

Receivership Entities for the benefits received for the Settlement Agreement and the Settlement

Payment, and equity and good conscience require the full restitution of the Settlement Payment

paid by Sentinel to the TAM Defendants so they may be distributed by the Receiver to the creditors

of the Receivership Estate.


20

81. On October 26, 2017, the Receiver filed his Consensual Motion to Commence

Litigation against the TAM Defendants, (Doc. No. 30), which the Court granted on October 31,

2017. (Doc. No. 32.)

82. On November 2, 2017, the Receiver filed his complaint in the TAM Action, Jed

Horwitt Esq., Receiver v. Taran Asset Management, LLC et al., (Civil Action No.: 3:17-cv-01840-

VLB) in the United States District Court for the District of Connecticut.

ii. Sarroff Litigation


the Receiver believes exist against Alan L. Sarroff (“Sarroff”) and A.L. Sarroff Management, LLC

(“Sarroff, LLC”, and collectively, the “Sarroff Defendants”), including causes of action for

fraudulent transfer to recover over $14 million that Varacchi caused Sentinel to pay to or for the

benefit of the Sarroff Defendants.

84. Sarroff’s initial involvement with Varacchi concerned a three-day loan for $7.3

million made by him to Varacchi and Sentinel, so Varacchi and Sentinel could cover a margin call

and preserve their securities trading platform with their prime broker, Weeden Prime Services,

LLC (“Weeden”). Because of Varacchi’s desperate circumstances, Sarroff was able to extract a

“fee” in the amount of $125,000 for this three-day, virtually risk-free, loan. Varacchi caused

Sentinel to repay the $7.3 million and the $125,000 fee on November 15, 2013. Further evidencing

the lack of bona fides, Sarroff requested and received an additional $25,000 ten days after the loan

was repaid. (The $7.425 million and $25,000 amounts paid to Sarroff in exchange for the loan are

collectively referred to herein as the “Sarroff Loan Transfers.”)

85. Following these payments, Sarroff sought to participate in what appeared to him to

be an extremely lucrative investment platform offered by Varacchi—later admitted by Varacchi,


21

in civil and criminal proceedings, to be a Ponzi scheme. In the following months, they discussed

Sarroff’s participation and, ultimately, reached a short-term arrangement for Sarroff which proved

to be very profitable. This demonstration led to a more formal Investment Management Agreement

where Sarroff, LLC initially invested $1.2 million, received buying power of $4.8 million (being

extended 4 times margin), and became entitled to receive 60% of the net profits realized on the

investment platform.

86. Sarroff, LLC reaped the benefits of Varacchi’s Ponzi scheme in the following two

years never engaging in the slightest bit of due diligence to ensure the legitimacy of Varacchi’s

trading platform and appropriate use of its and other investors’ funds—such as obtaining third-

party confirmation of the investments.

87. Ultimately, in November, 2015, Sarroff, LLC’s auditors requested verification of

capital from Varacchi and Sentinel. After evading numerous requests, on or about December 1

2015, Varacchi confessed to Sarroff, LLC’s President, Lawrence Smith, that Sarroff, LLC’s funds

had been commingled with other investors’ funds and funds from other sources, that he had used

these amounts for other purposes including for his personal use, and that he did not have, readily

available, all of Sarroff, LLC’s principal.

88. In response, Sarroff, LLC, first accused Varacchi of obvious and numerous criminal

acts and other wrongdoing, and threatened to go to the Commission to report him and Sentinel.

Over the course of the following weeks, Sarroff, LLC used the perceived leverage over Varacchi

to extract paydowns totaling $2,225,000, which Varacchi caused Sentinel to obtain from other

sources then to pay Sarroff, LLC during the month of December, 2015. Sarroff, LLC thereafter

negotiated even better investment terms on the $1,200,000 that it decided to keep on the platform

with Varacchi and Sentinel.


22

89. In total, from February 19, 2014, through November 16, 2016, Varacchi, in

furtherance of his Ponzi scheme, caused Sentinel to make a series of transfers to Sarroff and

Sarroff, LLC in the aggregate amount of $7,767,409 (collectively, along with all other transfers of

property made by Varacchi or the Receivership Entities to Sarroff and Sarroff, LLC, other than

the Sarroff Loan Transfers, the “Sarroff Investment Transfers”).

90. The Receiver believes the Sarroff Loan Transfers and the Sarroff Investment

Transfers constitute intentional and constructive fraudulent transfers pursuant to CUFTA. The

Receiver also believes that the Sarroff Loan Transfers and the Sarroff Investment Transfers

constitute a claim for unjust enrichment against the Sarroff Defendants because the Sarroff

Defendants unjustly failed to pay the Receivership Entities for the benefits received for the Sarroff

Loan Transfers and the Sarroff Investment Transfers, and equity and good conscience require the

full restitution of the Sarroff Loan Transfers and the Sarroff Investment Transfers paid by Sentinel

to the Sarroff Defendants so they may be distributed by the Receiver to the creditors of the

Receivership Estate.

91. On November 8, 2017, the Receiver filed his Motion on Consent for Leave to

Commence Litigation against the Sarroff Defendants (Doc. No. 37), which the Court granted on

November 9, 2017. (Doc. No. 38.)

92. On November 13, 2017, the Receiver filed his complaint, Jed Horwitt Esq.,

Receiver v. Alan Sarroff et al., (Civil Action No.: 3:17-cv-01902-VLB) in the United States

District Court for the District of Connecticut (the “Sarroff Action”).

iii. Rajo Litigation


the Receiver believes exist against Rajo Corp. d/b/a Rajo Capital Management (“Rajo”), Victor J.


23

Danilevics (“Danilevics”), and Tobyn Ingebrigtson (“Ingebrigtson”, and collectively, the “Rajo

Defendants”), including causes of action for fraudulent transfer to recover the $204,627 that

Varacchi caused Sentinel to pay to or for the benefit of Rajo.

94. Rajo originally became involved with Varacchi and Sentinel on or about October,

2013, and on October 23, 2013, Rajo made its initial investment in the amount of $100,000. In

total, from December 16, 2013, through November 11, 2016, Varacchi, in furtherance of his Ponzi

scheme, caused Sentinel to make a series of transfers to Rajo or for Rajo’s benefit in the aggregate

amount of $204,627 (together with all other transfers by Varacchi and Sentinel to Rajo or for

Rajo’s benefit, the “Rajo Transfers”).

95. The excess transferred to Rajo in the amount of $104,627 represents Rajo’s “net

winnings” from the Ponzi scheme. As part of the Rajo Transfers, Varacchi caused Sentinel to make

certain transfers to Ingebrigtson or Danilevics which were, upon information and belief, for the

benefit of Rajo.

96. The Receiver believes the Rajo Transfers constitute intentional and constructive

fraudulent transfers pursuant to CUFTA. The Receiver also believes that the Rajo Transfers give

rise to a claim for unjust enrichment against the Rajo Defendants because the Rajo Defendants

unjustly failed to pay the Receivership Entities for the benefits received for the Rajo Transfers,

and equity and good conscience require the full restitution of the Rajo Transfers paid by Sentinel

to the Rajo Defendants so they may be distributed by the Receiver to the creditors of the

Receivership Estate.

97. On December 7, 2017, the Receiver filed his Consensual Motion to Commence

Litigation against the Rajo Defendants, (Doc. No. 39), which the Court granted on December 11,

2017. (Doc No. 40).


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98. On December 13, 2017, the Receiver filed his complaint in the Rajo Action, Jed

Horwitt Esq., Receiver v. Rajo Corp. d/b/a Rajo Capital Management et al., (Civil Action No.:

3:17-cv-02077-JCH) in the United States District Court for the District of Connecticut.

iv. Kostiner Tolling Agreements


the Receiver believes exist against Shay Kostiner (“Kostiner”),

100. From November 18, 2013, through April 1, 2014, Varacchi, in furtherance of his

Ponzi scheme, caused Sentinel to make a series of transfers to Kostiner in the aggregate amount

of $7,142,082 (collectively, the “Kostiner Transfers”).

101. The Receiver believes that the Kostiner Transfers constitute intentional and

constructive fraudulent transfers pursuant to CUFTA. The Receiver also believes that the Kostiner

Transfers give rise to a claim for unjust enrichment against Kostiner because Kostiner unjustly

failed to pay the Receivership Entities for the benefits received for the Kostiner Transfers, and

equity and good conscience require the full restitution of the Kostiner Transfers paid by Sentinel

to Kostiner so they may be distributed by the Receiver to the creditors of the Receivership Estate.

102. Furthermore, Kostiner invested only $5,700,000 in exchange for these Kostiner

Transfers. The excess ($1,442,082) represents fictitious profits from the Ponzi scheme.

103. On November 8, 2017, the Receiver and Kostiner executed a tolling agreement (the

“First Tolling Agreement”) which provided, in relevant part, that:

Any and all applicable statutes and periods of limitations and other lapse of time based claims and/or defenses, legal or equitable, which Kostiner might otherwise be or become entitled to assert with respect to the Claims including, without limitation, any and all agreements, statutes, regulations, and other rules of law which may limit the period in which the Receiver may commence a civil action or other proceeding asserting any Claims (all of the above, collectively, the "Timing Defenses") against Kostiner shall be, and hereby are, tolled, suspended, and extended through January 14, 2018 (the "Extended Limitation Date").


25

104. On January 4, 2018, the Receiver and Kostiner executed another tolling agreement

(the “Second Tolling Agreement), in substantially the same form as the First Tolling Agreement,

which further extended the Extended Limitation Date to March 14, 2018.

105. The Receiver continues to evaluate the Receivership Estate’s potential claims

against Kostiner. The Receiver has also engaged in discussions with Kostiner’s counsel and

voluntarily provided them with documents to facilitate an analysis of the merits of the Receiver’s

claims and a possible consensual resolution.

106. Prior to commencing litigation against Kostiner and any other potential defendants

in the contemplated action, the Receiver will request leave from this Court to commence such

litigation.

v. Investigation of Other Potential Litigation Claims

107. While reviewing the submitted claims, Z&Z discovered a number of questionable

transactions between Varacchi, the Receivership Entities, and the holders of various Disputed

Claims including, but not limited to, personal loans from Varacchi to the officers of holders of

Disputed Claims and excessive interest payments made on short-term loans which may be

avoidable under CUFTA and Second Circuit precedent.

108. The Receiver continues to evaluate these additional potential claims and has not yet

determined whether to initiate separate lawsuits to liquidate them or to use them as grounds to

further reduce Disputed Claims. The Receiver will move to sue the subjects of the Potential

Litigation Claims prior to commencing litigation against them.

F. Other Receivership Assets


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109. Additionally, the Receivership Assets include miscellaneous personal property

consisting primarily in office equipment and computers. The Receiver at this time believes such

property has de minimis value.

G. List of All Known Creditors

110. In accordance with Paragraph 32F of the Receivership Order, appended hereto as

Exhibit B is a list of all known creditors with their addresses and the amounts they assert revised

to incorporate and based solely on the written claims submitted to the Receiver by such creditors

in accordance with the Claims Procedure Order (as defined below).

111. The Receiver, Z&Z, and V&L have reviewed the submitted claims and determined

that issues exist, either wholly or in part, with respect to twenty-six (26) of the thirty-three (33)

submitted claims. Thus, the creditors and amounts listed in Exhibit B shall not in any way

constitute an affirmative representation by the Receiver and shall be used for information purposes

only.

H. Status of the Creditor Claims Proceeding

112. Prior to the Report Period, the Receiver and Z&Z drafted a comprehensive set of

procedures to permit parties with claims against the Receivership Estate to submit them for an

orderly evaluation and processing. To this end, the Receiver filed the Claims Procedure Motion

on July 27, 2017, which included, inter alia, (i) the establishment of a deadline for submitting such

claims to the Receiver, (ii) the form and manner of notice of the claims procedures, (iii) the form

and manner for the submission of such claims by investors and other creditors, and (iv) the

procedure for the adjudication of disputed claims.


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113. The Receiver filed with the Claims Procedure Motion the proposed Claims Notice.

The Claims Notice included a proof of claim form prepared by Z&Z in order to simplify and

standardize creditors’ submissions to the Receiver.

114. On July 31, 2017, the Court entered its Claims Procedure Order substantially in the

form requested by the Receiver.

115. In compliance with the Claims Procedure Order (except as noted below), the

Receiver, through Z&Z, sent copies of the Claims Notice to all then known persons (including

individuals and businesses) with claims against the Receivership Estate, within fourteen (14) days

of entry of the Claims Procedure Order. The general Bar Date for claims who received such notice

was September 29, 2017.

116. After the Court’s entry of the Claims Procedure Order, Z&Z discovered that (i)

certain creditors had actually received notice of the Bar Date and Claims Procedure Order four (4)

days later than ordered by the Court (the “Late Notice Creditors”) and (ii) the possibility of other

persons holding claims (the “New Creditors”). Upon this discovery, Z&Z promptly provided the

New Creditors with notice of the Claims Procedure Order and Claims Notice, and prepared a

motion to supplement the Claims Procedure Order to address the notice issues presented by the

Late Notice Creditors and the New Creditors.

117. On November 1, 2017, the Receiver filed his Motion to Supplement Claims

Procedure (Doc. No. 35, the “Supplemental Claims Procedure Motion”).

118. The Supplemental Claims Procedure Motion sought (i) the approval of the notice

actually provided by the Receiver to the Late Notice Creditors, (ii) the establishment of a deadline

for submitting claims to the Receiver by the New Creditors, (iii) the form and manner of notice of

the claims procedures for the New Creditors, (iv) the approval of the form and manner for the


28

submission of such claims by the New Creditors, and (v) the procedure for the adjudication of

disputed claims subsequently submitted by the Late Notice Creditors and New Creditors.

119. The Supplemental Claims Procedure Motion was not set for a hearing and is

currently pending for the Court’s consideration.

120. The general Bar Date for the submission of claims passed on September 29, 2017.

To date, the Receiver has received approximately thirty-three (33) claims in a total claimed amount

in excess of $32 million.

121. During the Report Period, the Receiver identified issues with respect to twenty-six

(26) of the thirty-three (33) submitted claims (the “Disputed Claims”).

122. The Disputed Claims total approximately $11.4 million of the $32 million claimed

against the Estate.

123. During the Report Period, the Receiver and Z&Z attorneys contacted substantially

all of the holders of the Disputed Claims for the purpose of resolving the Receiver’s objections

including any discrepancies between the submitted and disputed claim amounts. During these

conversations, eight (8) holders of Disputed Claims informally agreed to accept the Receiver’s

proposed reductions to their claims – resolving approximately $1.9 million of the Disputed Claims.

124. Discussions with the remaining holders of Disputed Claims are ongoing. After it

becomes clearer which Disputed Claims can be resolved consensually and which will require

significant additional time and possibly a formal Motion to Determine Claim to be heard by the

Court pursuant to the Claims Procedure Order, the Receiver anticipates filing an “Omnibus Motion

to Approve Resolved Disputed Claims” to formalize the resolutions reached with respect to certain

Disputed Claims.

I. Receiver’s Recommendation


29

125. The Receiver recommends the continuation of the receivership for the same reasons

he was appointed by this Court: primarily, substantial Receivership Assets exist that may be

recovered, liquidated, and distributed for the benefit of the victims of the Defendants.

III. CONCLUSION

126. The Receiver has generally focused his efforts upon initiating litigation against the

beneficiaries of Varacchi’s Ponzi scheme on behalf of the creditors of the Receivership Estate,

investigating the transactions and occurrences that preceded the receivership, and evaluating and

administering the submitted claims against the Receivership Estate. The Receiver intends to

diligently liquidate and/or enforce the Private Investments so their proceeds may enhance the

amount of funds available for distribution.

127. Once the Receiver has resolved the Disputed Claims to an extent which would

allow a meaningful distribution to be made, the Receiver anticipates filing an interim distribution

plan with the Court which will provide pro rata distribution on account of undisputed claims from

the cash assets of the Receivership Estate and establish an appropriate reserve for anticipated

administrative expenses and unresolved Disputed Claims (the “Initial Distribution”). The

Receiver anticipates that the Initial Distribution will be followed by subsequent distributions from

the sale of the Receivership Assets and any recovery from claims against third parties and potential

litigation.

128. Thus, the Receiver respectfully submits that through this process of marshalling

and liquidating the Receivership Assets, determining claims, and making distributions—subject to

further orders of this Court as required by the Receivership Order or otherwise—a fair, reasonable

and efficient resolution to the Receivership Estate will be accomplished.


30

Dated at Bridgeport, Connecticut, this 2nd day of February, 2018.

Respectfully submitted,

JED HORWITT, ESQ., RECEIVER

By: /s/Stephen M. Kindseth Stephen M. Kindseth (ct14640) Joanna M. Kornafel (ct29199) Rion M. Vaughan (ct30440) Zeisler & Zeisler, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 Telephone: 203-368-4234 X 245 Facsimile: 203-549-0903 Email: [email protected] [email protected] [email protected] His Attorneys


31

CERTIFICATE OF SERVICE

I, Stephen M. Kindseth, hereby certify that a copy of foregoing was filed electronically and

served by mail on anyone unable to accept electronic filing. Notice of this filing will be sent by

e-mail to all parties by operation of the Court’s electronic filing system or by mail to anyone unable

to accept electronic filing as indicated on the Notice of Electronic Filing. Parties may access this

filing through the Court’s CM/ECF System.

/s/Stephen M. Kindseth Stephen M. Kindseth (ct14640)


EXHIBIT A

SCHEDULE OF RECEIPTS AND DISBURSEMENTS

For Quarterly Period October 1, 2017 to December 31, 2017

This Quarter Duration of Receivership

Receipts $1,628.97 $2,500,406.19

Disbursements ($134,049.90) ($134,049.90)

Net ($132,420.93) $2,366,356.29

Case 3:17-cv-00155-VAB Document 44-1 Filed 02/02/18 Page 1 of 1

EXHIBIT B

Name Known Address Date Submitted Submitted Claim

Abacus Group Attn: Jonathan Bohrer 8/30/2017 49,091.74$

655 3rd Avenue

8th Floor

New York, NY 10017

Advanced Entertainment, LLC c/o Jeffrey R. Alexander, Esq. 9/28/2017 3,550,000.00$

Kasowitz, Benson, Torres LLP

1633 Broadway

20th Floor

New York, NY 10019

A.L. Sarroff Management LLC c/o Brian J. Neville, Esq. 9/29/2017 1,200,000.00$

Lax & Neville LLP

1450 Broadway

35th Floor

New York, NY 10018

Anchor Associates Attn: Val Schultz, President 10/3/2017 144,067.59$

950 Third Ave.

25th Floor

New York, NY 10022

Anthony Sanfilippo 911 West Village Court 9/22/2017 500,000.00$

Chicago, IL 60608

Brian J. McLaughlin 337 Engle Street Prior to 9/18/2017 100,000.00$

Tenafly, NJ 07670

Carol Ferrante 2001 Hamilton St. 9/20/2017 500,000.00$

Apt. 1415

Philadelphia, PA 19130

Cogent Communications, Inc. Attn: Bobby Barse 9/5/2017 4,887.62$

2450 N. Street, NW

Washington, DC 20037

Constantine (Dean) Generalis c/o Adam S. Miller, Esq. 9/25/2017 400,000.00$

Kauff Laton Miller LLP

950 Third Avenue

New York, NY 10022

Dartley Grandchildren, LLC c/o Matthew Carroll 10/4/2017 950,000.00$

77 Bedford Road

Katonah, NY 10536

Donald E. Foley and Barbara Long 12 Mead Mews 9/27/2017 300,000.00$

Cos Cob, CT 06807

Flatiron Partners c/o Teresa Trzaskoma, Esq. 9/28/2017 4,496,205.28$

Sher Tremonte LLP

90 Broad St.

23rd Floor

New York, NY 10004

The Receiver provides this list of all known creditors (with their corresponding addresses), the amount of the written

claims they have submitted to the Receiver, and the date of submission made by such creditors pursuant to the Order

to Approve Claims Procedure. The creditors and amounts identified in this Exhibit are provided for informational

purposes only and shall not in any way constitute an affirmative representation by the Receiver concerning the

validity of such claims. The Receiver also reserves the right to amend or supplement the information contained

herein at any time as his independent investigation progresses.



Greybox Creative Attn: Stephen Ruisi‐Boccone 8/25/2017 40,750.00$

50 Court Street

Suite 700

Brooklyn, NY 11201GRTD, LLC c/o Gary Rosenbach 9/7/2017 6,606,598.22$

103 Rockledge RoadVail, CO 81657

Attn: Oleh Wlasenko 9/29/2017 34,730.00$

1633 Broadway

New York, NY 10019

c/o Kelly Koscuiszka, Esq.

Schutle Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Edwin John Glatzel/Oak Bluff Capital, LLC 21 Ridgeway Road Prior to 9/18/2017 72,710.00$

Easton, CT 06612

Joseph Conetta 70 West 93rd Street 9/26/2017 75,000.00$

Apt. 25G

New York, NY 10025

Kristian and Yolanda Agoglia c/o Paul F. Millus, Esq. 9/29/2017 2,940,000.00$

Meyer, Suozzi, English & Klein, P.C.

990 Stewart Avenue

Suite 300

P.O. Box 9194

Garden City, NY 11530

Masotti Managed Investments, LLC c/o Joshua Cohen, Esq. 9/25/2017 1,103,663.45$

Day Pitney LLP

One Audubon Street

New Haven, CT 06511

Attn: John W. Masotti, Manager

1100 Summer Street

Suite 401

Stamford, CT 06905

Melva Construction Company Attn: Christos Batalias, President 9/22/2017 256,000.00$

36‐23 23rd Street

Long Island City, NY 11106

Neila Fortino c/o Jonathan Cannavino, Esq. 9/15/2017 4,038,000.00$

c/o David Martin, Esq.

Cummings & Lockwood LLC

Six Landmark Square

Stamford, CT 06901

Nevena Vatachka 24 Paragon Lane 9/29/2017 10,720.00$

Stamford, CT 06905

Powerplay c/o Nicholas Adamucci, Esq. 9/29/2017 100,000.00$

Law Offices of Nicholas Adamucci

270 Greenwich Ave.

Greenwich, CT 06830

Quadrant Plus Partners, LP Attn: Andrew Lydon 8/16/2017 465,430.27$

1015 Riverwalk Dr.

Phoenixville, PA 19460

Rajo Capital Management Attn: Richard Calta 9/25/2017 133,181.00$

9901 N. 50th St.

Paradise Valley, AZ 85253

Industrial and Commercial Bank of China

Financial Services, LLC

2 of 4



Recovery Fund I LLC c/o Adam Witkov, Esq. 8/29/2017 33,003.14$

Michael Best & Friedrich LLP

100 East Wisconsin Ave.

Suite 3300

Milwaukee, WI 53202

3 of 4



Recovery Fund I LLC c/o Adam Witkov, Esq. 8/29/2017 518,603.11$

Michael Best & Friedrich LLP

100 East Wisconsin Ave.

Suite 3300

Milwaukee, WI 53202

Scott K. Banerjee 60 E. 8th Street 9/29/2017 100,000.00$

Apt. 20E

New York, NY 10003

Shuhei Sato 1010 Prospect Ave. 9/26/2017 151,554.92$

Pelham Manor, NY 10803

TAM Industries LLC Attn: Thomas Milana, Jr. 9/5/2017 138,499.50$

11 Black Rock Road

Muttontown, NY 11545

Terry Gargano c/o Nicholas Adamucci, Esq. 9/28/2017 85,000.00$

Law Offices of Nicholas Adamucci

270 Greenwich Ave.

Greenwich, CT 06830

Thomas Milana, Jr. 11 Black Rock Road 9/5/2017 321,915.47$

Muttontown, NY 11545

Todd Deutsch 2 Bridle Court 9/28/2017 3,013,383.88$

Oyster Bay Cove, NY 11771

TOTAL 32,432,995.19$

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