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Fcm Capital Partners LLC v. Regent Corporate Consulting Limited

United States District Court, C.D. California

January 30, 2015



OTIS D. WRIGHT, II, District Judge.


John R. Miller and John Grice convinced Chris Miller, President of FCM Capital Partners LLC ("FCM"), to invest $500, 000 on behalf of FCM in a carbon credit business with a "guaranteed" return of $5, 395, 000 within three months. (Compl. ¶ 53.) Near the end of the three month period, the Defendants asked to extend the end date an additional five months. ( Id. ¶ 61.) When the new deadline arrived, Defendants were nonresponsive and FCM received no money. ( Id. ¶ 68.) FCM filed suit against Miller, Grice, Regent Corporate Consulting Limited, and Regent Trust for fraud in the inducement, conspiracy to commit fraud, and multiple violations of the Racketeer Influenced and Corrupt Organizations Act. (ECF No. 1.) When Miller failed to respond to the Complaint, default was entered and FCM moved for entry of default judgment. (ECF No. 19.) For the reasons discussed below, the Court GRANTS FCM's Motion.


1. Background

Plaintiff, FCM, is a California financial services company that connects investors to high-growth investment opportunities. (Compl. ¶ 19.) FCM was founded in 2009 by Chris Miller ("Chris"), the company's current President.[1] ( Id. ) FCM specializes in film financing and assisted-living projects. ( Id. )

In early 2012, FCM was looking for investors for a biofuel project and was referred to Defendants John R. Miller ("Miller") and John Grice ("Grice"). ( Id. ¶ 20.) It is unclear who referred Miller and Grice. FCM's officers researched Grice's background and were impressed by his professional experience. ( Id. ¶ 21.) Grice's experience included serving as a Partner and Managing Director of PricewaterhouseCoopers in Singapore, and nearly two decades with Her Majesty's Customs & Excise in the United Kingdom. ( Id. ) FCM's officers received this information through an email sent by Chris from what appears to be an online work profile. (Compl. Ex. 1.)

2. Formation of the Fraud

In January 2012, Chris, [2] on behalf of FCM, met with Miller and Grice in Las Vegas, Nevada to pitch the biofuel project as an investment opportunity. ( Id. ¶ 22.) Both Miller and Grice portrayed themselves as wealthy and powerful business partners who had access to, and control of, billions of dollars of potential investment capital. ( Id. ) Grice verified his and Miller's "wealth" by logging into the banking website for Standard Chartered Bank in front of Chris showing he had access to a bank account with a balance of over five hundred million dollars. ( Id. ¶ 23.)

FCM presented the biofuel project to Miller and Grice, but they were not interested. ( Id. ¶ 25.) FCM then presented the investment opportunities that FCM specializes in: the "Summer Place Living" and film financing projects. ( Id. ) Miller and Grice were not interested in either project at that time. ( Id. )

After the meeting in Las Vegas, FCM did not speak to Miller or Grice until Miller called FCM in April. ( Id. ¶ 26.) Miller indicated over the phone that he really enjoyed meeting Chris, and that he and Grice were interested in working with FCM on a film financing project. ( Id. ¶ 27.) Miller then stated that he wanted to meet in person with FCM to further discuss projects. ( Id. )

In April 2013, Miller emailed FCM a Proof of Funds to assure FCM that he and Grice were capable of funding the film transactions. ( Id. ¶ 28.) The Proof of Funds was dated April 22, 2013 and indicated that Miller and Grice had access to a bank account with a balance of one billion dollars. ( Id. ) The Proof of Funds was issued on HSBC Letterhead and signed by two HSBC managers: Victor C. Chen and Steve Chow. ( Id. ) FCM believed the Proof of Funds document was legitimate. ( Id. ¶ 30.) However, FCM later discovered that Victor C. Chen stopped working for HSBC in 2011. ( Id. ¶ 29.)

In April 2013, Miller and Grice scheduled several in-person meetings with FCM for the summer of 2013 to discuss the film financing project as well as assisted-living housing projects. ( Id. ¶ 31.)

3. First Meeting

In June 2013, Miller attended the first summer meeting with FCM in Los Angeles, California. ( Id. ¶ 39.) During this meeting, Miller and Grice's involvement with a carbon credit business came up. ( Id. ¶ 40.) The company was called Regent Corporate Consulting Limited ("RCC"). ( Id. ) Carbon credits are permits that allow the holder to emit one ton of carbon dioxide and can be traded in the international market. ( Id. ) Miller explained that RCC bought and sold carbon credits, and arranged purchases of carbon credits by third parties. ( Id. )

Miller represented that the return on investment in the carbon credits were astronomical. ( Id. ¶ 41.) FCM believed Miller and Grice based on seeing financial records showing access and control of billions of dollars. ( Id. ) Miller then showed FCM documents relating to a $16 billion transfer from UBS to a Standard Chartered Bank account controlled by Miller and Grice. ( Id. ¶ 42.)

4. Standby Letter of Credit

Miller continued to actively engage in business dealings with FCM involving various projects during the summer of 2013. (Mot. 4.) On June 7, 2013, FCM entered into an agreement with Miller and Grice concerning FCM's film-financing projects. (Compl. ¶ 33.) FCM agreed to contribute $100, 000 to be paid in two installments toward the cost of Defendants' due diligence for film financing and housing projects. ( Id. ¶ 34.) It is unclear from the Complaint what activities Plaintiff classifies as "due diligence." In exchange, Miller and Grice agreed to send FCM a Standby Letter of Credit for $1 million to ensure that they were financially capable of funding the projects. ( Id. )

On June 10, 2013, FCM paid its first installment of $50, 000 through wire transfer to a bank account belonging to "Better Run Holding Ltd." with Standard Chartered Bank in Singapore. ( Id. ¶ 37.) FCM then requested the Standby Letter of Credit before transferring the second installment. ( Id. ¶ 38.) Over one month later on July 16, 2013, FCM received the Standby Letter of Credit, but the letter was refused by FCM's bank. ( Id. ¶¶ 45-46.) FCM notified Defendants that the Standby Letter of Credit was rejected. ( Id. ¶ 47.)

On July 18, 2013, Miller emailed FCM and explained that the rejection was due to document formatting issues. ( Id. ) Miller and Grice then persuaded FCM to transfer the remaining $50, 000 even though FCM's bank rejected the Standby Letter of Credit. ( Id. ¶ 48.)

In August 2013, Miller and Grice again presented FCM with an opportunity to invest in RCC. ( Id. ¶ 49.) Miller and Grice represented that if FCM invested $500, 000, FCM would see a guaranteed return of $5, 395, 000 within three months. ( Id. ) This calculation was based on the representation that 100 credits sold for $1, and that RCC already had agreements lined up to sell 539, 500, 000 credits. ( Id. ) Miller and Grice then told FCM that if RCC was unable to fulfill any of the 539, 500, 000 sales, RCC would pay FCM for any loss suffered by December 31, 2013. ( Id. ¶ 50.) Defendants then represented that if FCM agreed to invest in RCC's carbon credit business, Defendants would transfer the $100, 000 from the June 7, 2013 contract- already earmarked for Defendants' due diligence-to be put towards FCM's total investment of $500, 000. ( Id. ) On August 30, 2013, FCM entered an agreement with RCC to invest in carbon credits. ( Id. ¶ 53.) Under the terms of the agreement, the carbon credit sales were to conclude by December 31, 2013. ( Id. ¶ 54.) FCM made a wire transfer of $400, 000 to an account held by RCC. ( Id. ¶ 55.)

5. Second and Third Meetings

Miller continued to meet with FCM in August and September of 2013. ( Id. ¶¶ 56-57.) In late August, Miller went to FCM's office in Roseville, California for a week to attend the second summer meeting with FCM, and to conduct due diligence on FCM's "SummerPlace Living" assisted-living projects. ( Id. ¶ 56.)

On September 4, 2013, and September 5, 2013, Miller and Grice attended the third summer meeting with FCM in Los Angeles, California. ( Id. ¶ 57.) At this meeting, Miller and Grice again showed FCM documents that indicated they had access to billions of dollars sitting in one account. ( Id. )

After the September 2013 meeting in Los Angeles, Miller traveled with FCM to Orange County, California, as Miller wanted to meet with a financial partner of FCM. ( Id. ¶ 58.) After the Orange County meeting, Miller and Chris went together to the John Wayne Airport in Santa Ana, California where Miller used a two-hour flight delay to further sell FCM on investing in the carbon credit business. ( Id. ¶ 59.) Miller also sent an email to Chris on September 13, 2013, in which Miller further explained the carbon credit business, and provided documentation regarding enforceable sales agreements that Grice, Miller, and RCC already had ...

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