On December 15, 2023, in Washington, the United States, former New York Mayor Rudy Giuliani left the U.S. District Court after being ordered to pay $148 million in a defamation case.
Bonnie Cash | Reuters
One of Rudy Giuliani’s Law Firm’s Largest Donations defense fund are at the center of a new lawsuit arguing that the $100,000 donation rightfully belongs to victims of alleged cybercrime Fraud plan.
Martorano’s donation in September represented nearly 13% of all the money raised in the fund by New York City Mayor Giuliani, Donald Trump’s former lawyer.
The fund was intended to help Giuliani pay for attorneys in a Georgia election interference case in which Trump was a co-defendant, as well as a civil defamation case that Giuliani lost, brought by two Georgia election workers.
But in a new civil lawsuit filed after CNBC reported on Martorano’s donation earlier this year, plaintiffs allege Martorano participated in an alleged online skin care scam that netted him $100,000. They are seeking to “cancel” donations to Giuliani.
There is no public evidence that Giuliani and Martorano knew each other. CNBC has asked a spokesman for Giuliani if he did so.
Still, the allegation adds another layer of legal trouble to the competition for Giuliani’s remaining assets. The former mayor filed for bankruptcy protection in December, and a judge ordered him to pay $146 million to election workers.
Giuliani “should return” all the money he received from Martorano, said Kevin Kneupper, who filed the lawsuit against Martorano in Fulton County on behalf of his client LeAnne Tan No, his wife and business entities in fraudulent transfer litigation.
“This is a lawsuit that has nothing to do with us,” Giuliani spokesman Ted Goodman said in an email to CNBC. He had no immediate further comment.
CNBC asked for comment from attorneys for Martorano, his wife and other defendants involved in the Georgia lawsuit and a federal civil racketeering and fraud lawsuit in California related to the alleged skin cream scam. None of them responded.
scam
In early January, a San Diego judge overseeing the federal lawsuit certified the nationwide lawsuit class in a lawsuit against alleged skin care product sales scammers, as well as against Martorano, his wife, Kathryn Martorano, their company, Konnektive LLC, and other related entities (collectively, the Konnektive Defendants).
The judge wrote in the ruling that the plaintiffs “proved through overwhelming evidence that the Konnektive defendants defrauded banks and credit card companies.”
The lawsuit alleges that many people across the country were defrauded and signed up for so-called “free trials” of La Pura brand skin cream products.
“The scammers’ sole goal is to fraudulently obtain a victim’s credit card or bank account information,” the lawsuit states. “Once they have it, they begin charging victims fees they never signed up for, never consented to, and never agreed to.” Subscription charges were correctly informed.”
According to the complaint, Martorano’s company, Konnektive, sold payment software to scammers that acted as “load balancers” for entities selling La Pura products and began charging people even though they were told it was a free trial.
It is said that the load balancer can help sellers hide the number of customer chargebacks from Visa and Mastercard. The lawsuit states that Visa and Mastercard view large chargebacks — or reversals of charges on customer accounts — as signs of potential fraud.
“Konnektive software was specifically designed to facilitate automated bank fraud,” the federal lawsuit states. The complaint also alleges that the software was marketed specifically to “‘free trial’ scammers at conferences attended by scammers.”
Knopper, who was appointed class counsel in the class action lawsuit, told CNBC that the question of whether the Konnektive defendants are civilly liable for fraud “ultimately will be decided by a jury.”
“But I think the evidence is compelling,” Knupper added.
Knepper’s new lawsuit filed in Fulton County Superior Court in Georgia names Martoranos, Konnektive LLC and two other corporate entities as defendants. Giuliani was not named as a defendant.
The new complaint says that because of the San Diego judge’s ruling against Martorano and the other Konnektive defendants, “it is likely that … the harmed consumer class will prevail on the merits and obtain a favorable judgment, which could easily exceed $30 million.” .”
Asset transfer
The Georgia lawsuit alleges that Martorano and other Konnektive defendants “realized this,” and therefore began a series of asset transfers “in a blatant attempt to avoid paying potential eight-figure judgments in federal RICO lawsuits” to consumers they had injured as a result of the fraud. “
Martorano “has also recently begun making high-dollar political donations,” including $100,000 to Giuliani’s legal defense fund, the lawsuit said.
On November 20, 2016, then-President-elect Donald Trump met with former New York Mayor Rudy Giuliani at the Trump National Golf Club clubhouse in Bedminster, New Jersey.
Don Emmert | AFP | Getty Images
Martorano also donated $5,000 to the Trump Save America joint fundraising committee last year, $3,330 to Trump’s presidential campaign and donated to Trump’s Save America PAC, according to Federal Election Commission records $1,700.
The lawsuit states that last November, Martorano and his wife also transferred a house and two properties on 135 acres in Georgia to a limited liability company, with each purchase price being $ $0. The combined assessed and estimated value of the three properties is $4.1 million.
Two of the property transactions occurred on Nov. 14, the same day Kathryn Martorano was deposed in a federal racketeering lawsuit. Another transaction occurred five days before the deposition, the lawsuit said.
Knupper questioned Matthew Martorano’s motives for donating to Giuliani, whose former client Trump is the Republican presidential candidate.
“You ask, why did this guy donate 13 percent of the (legal defense) fund?” Knupper said. “People don’t do this for no reason.”
Michigan woman Nancy Simonick echoes Knupper’s point about Giuliani’s donation from Martorano, being criticized for La Pura’s services despite offering ‘free trial’ accusation.
“Oh, yes, if he knew it was money obtained through a scam, he should definitely return it,” said Simonik, who has signed up as a class member in the California lawsuit against the Martoranos and other defendants.
Holly Pierson, one of Martorano’s attorneys in the Georgia case, also represents former Georgia Republican Party Chairman David Shafer in a pending criminal case in Fulton County.
Schafer is a co-defendant along with Giuliani, Trump and more than a dozen others in the criminal case, which accuses them of conspiring to try to overturn Trump’s defeat in the state’s 2020 presidential election.
The defendants have pleaded not guilty.
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