Note: For undisclosed reasons, Brian Rubin (Victim) sought to obtain a standby letter of credit. For assistance, he was referred to Defendant, Michael Briscoe, a member of Unity Bankcard Service, LLC (UBS), as well as Hilary Whitfield and Tom Okeyo, controlling members of BDP Worldwide, LLC (BDP). Victim came to an agreement with BDP that it would procure the standby LC and Victim would contribute USD 200,000 towards the USD 500,000 fee supposedly required to participate in a "SBLC funding program". Attorney Jon Divens (Attorney) drafted the funding agreement signed by Victim and BDP representatives and Victim wired USD 200,000 directly into Attorney's escrow account.

BDP then entered a second funding agreement, this one with UBS, providing that they would each advance USD 500,000 toward the cost of the standby LC. Victim alleged that, while not expressly party to this agreement or named in its provisions, his USD 200,000 was to be included in the USD 500,000 from BDP. At the same time, BDP and UBS entered into an escrow agreement with Attorney, making him the escrow agent for the funds they would each contribute and deposit into his escrow account. Victim was not a party to or mentioned in the escrow agreement.

Victim did not receive the standby LC, and at some point the funds in Attorney's escrow account were released to a third party without Victim's knowledge. When requesting information about the standby LC, representatives of BDP and UBS as well as Attorney gave Victim a series of excuses as to why his funds were not accessible. Eventually, Attorney offered to work for Victim to assist him in obtaining the standby LC and a return of his USD 200,000. Attorney and Victim entered into a contract whereby Attorney would procure and share in the funds of the standby LC. Attorney asked Victim to contribute USD 210,000. Attorney also said that he was then in possession of Victim's USD 200,000 so Victim paid a USD 10,000 balance. A year later, when the standby LC had failed to materialize, Victim demanded that Attorney return his money. Attorney then informed Victim that the USD 210,000 was in a client trust account and that he would not be able to return the funds to Victim.

Victim sued Attorney and others for civil Racketeer Influenced and Corrupt Organization ("RICO") violations, fraud, breach of contract, and negligence. Attorney and his firm moved to dismiss. The United States District Court for the Central District of California, Pregerson, J. granted the motion.

The Judge dismissed all RICO claims against Attorney, his firm, and all alleged fraudsters for failure to state a claim. The Judge also declined to exercise supplemental federal jurisdiction over the state law claims of fraud, breach of contract, and negligence against defendants under the "SBLC [standby letter of credit] funding program". The Judge stated that Victim needed "to plead the factual circumstances of the alleged fraud with the requisite level of particularity" to support a RICO claim which was the basis for federal jurisdiction. Those claims, as to all defendants including Attorney and his firm, were dismissed with prejudice for failure to state a claim in the original complaint or in the supplemental Federal Claims Case Statement.

However, the Judge seemed to recognize the fraudulent nature of the transaction. He dismissed the remaining claims of fraud, breach of contract and negligence on technical grounds without prejudice, even particularly noting that "any relevant statutes of limitations are likely subject to equitable tolling" so that plaintiff might refile and pursue his claims in state court.



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.