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Alicia A. Baiardo

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Ali, a partner in the San Francisco office of McGuireWoods, is a commanding commercial litigator trusted by three of the largest U.S. banks and numerous Fortune Global 500 companies to defend multimillion-dollar class actions and other complex litigation. She defends nationwide consumer class actions brought on behalf of millions of class members, California-wide cases alleging unfair competition, fraud, and violation of various consumer protection statutes, and complex Ponzi-scheme matters brought against banks.

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On August 31, 2022, Plaintiff Melanie E. Damian, in her capacity as the Court-Appointed Receiver for Today’s Growth Consultant, Inc. d/b/a The Income Store (“TGC”) (the “Receiver”) filed a complaint against Defendant Core Financial Outsourcing of Chicago (“Core Financial”) in the Northern District of Illinois (“Damian II”) seeking damages, injunctive relief, interest, and attorneys’ fees and costs. The complaint alleges five claims for professional negligence, aiding and abetting breach of fiduciary duty, unjust enrichment, and two violations of the Illinois Uniform Fraudulent Transfer Act.

This action stems from a prior enforcement action seeking civil penalties and injunctive relief filed by the Securities and Exchange Commission (“SEC”) against TGC and its founder, Kenneth D. Courtright, III (“Courtright”), based upon TGC and Courtright’s alleged violation of federal securities laws and operation of a website services Ponzi scheme.

We previously wrote about PLB Investments LLC et al v. Heartland Bank and Trust Co. et al., a related case initiated by various defrauded investors of TGC against two bank defendants that
Continue Reading… New Complaint – Damian as Receiver of Today’s Growth Consultant, Inc. v. Core Financial Outsourcing of Chicago, LLC

On May 27, 2022, Plaintiff Melanie E. Damian, in her capacity as the Court-Appointed Receiver for Today’s Growth Consultant, Inc. d/b/a The Income Store (“TGC”) (the “Receiver”) filed a complaint against Defendant SmithAmundsen, LLC (“Defendant”) in the Northern District of Illinois seeking damages, restitution, interest, and costs.  Specifically, the complaint alleges two claims for legal malpractice and aiding and abetting breach of fiduciary duty.

This action stems from a prior action filed by the Securities and Exchange Commission (“SEC”) against TGC and its founder, Kenneth D. Courtright, III (“Courtright”), wherein the SEC alleged TGC and Courtright violated federal securities laws and sought civil penalties and injunctive relief to halt their wrongful activity.

We previously wrote about PLB Investments LLC et al v. Heartland Bank and Trust Co. et al., a related case initiated by various defrauded investors of TGC against two bank defendants concerning TGC’s website services Ponzi scheme.

Continue Reading… New Complaint – Damian, as Receiver of Today’s Growth Consultant, Inc. v. SmithAmundsen, LLC

Backed by unrealistically ambitious owners, well-intentioned business ideas that fail to meet expectations or become unsustainable regrettably often become full-fledged Ponzi schemes.  Today’s Growth Consultant, Inc. (“TGC”) represents an entity that faced the same fate.

TGC advertised to potential investors its expertise in building, acquiring, and monetizing online websites.  Investors paid an upfront fee to TGC to purchase, host, maintain, and market the investors’ websites in exchange for TGC’s guarantee that investors would receive a minimum rate of return in perpetuity on the revenues TGC generated from those websites.  TGC raised at least $75 million during a nearly three year period, but its business model proved unsuccessful—it failed to timely purchase and build the promised websites or generate the promised revenue to cover the guaranteed returns to investors.  Instead, TGC turned into a Ponzi scheme to sustain its failing business by paying early investors with money it raised from later investors.

TGC maintained its business bank accounts at Defendants Heartland Bank and Trust Company (“Heartland”) and PNC Bank, N.A. (“PNC”) (collectively, “Defendants”).  TGC banked with Heartland until October 2018, and with PNC thereafter until December 2019.  Defendants provided TGC with typical banking services, including deposit accounts, commercial loans and revolving lines of credit, ACH capabilities, and transfers into, out of, and among TGC’s accounts.

In a recent decision in PLB Investments LLC et al. v. Heartland Bank and Trust Co. et al., the Northern District of Illinois decided that various defrauded investors of TGC (“Plaintiffs”) did not set forth sufficient allegations to show actual knowledge of a Ponzi scheme or bad faith in support of various Illinois state law claims against PNC.  No. 20 C 1023, 2021 WL 5937152 (N.D. Ill. Dec. 15, 2021).  While different jurisdictions set varying thresholds for adequately alleging actual knowledge or bad faith, PLB Investments emphasizes the importance of analyzing these elements early on to determine whether a plaintiff has alleged sufficient facts on the pleadings.

Continue Reading… Illinois Federal Court Carves Up Plaintiffs’ Ponzi Scheme Claims For Lack of Actual Knowledge or Bad Faith