Executive Summary: Key Legal and Evidentiary Issues

• Mareva injunction sought to freeze $6.1 million in settlement funds amid allegations of fraud and risk of dissipation.

• Plaintiffs allege misuse of investor funds through a complex network involving 1PLUS12, Curah Capital, and 2455655 Ontario Corporation.

• Ownership and control of Curah and 245 Co. are disputed, with evidence of shifting explanations and lack of transparency.

• Serious concerns raised over preferential treatment in the proposed distribution of settlement funds, including payments to associates and family.

• Defendant’s refusal to produce key financial records and trust ledgers led to adverse inferences regarding the flow and ownership of funds.

• Court found a strong prima facie case for fraud, knowing assistance, and knowing receipt, justifying the preservation of assets pending trial.

Facts of the case

Roman Turlo and 2384419 Ontario Inc., along with Sohail Shah and several related companies, brought proceedings against 2455655 Ontario Corporation (“245 Co.”) seeking to preserve settlement funds they allege are rightfully theirs. The plaintiffs had invested significant sums—Turlo approximately $700,000 and Shah about USD $3.4 million—into real estate ventures promoted by individuals associated with “1PLUS12,” including Glen Estrabillo, Jonathane Ricci, and Sai Mohammed. These investments were funneled through Curah Capital Corporation (“Curah”) and ultimately into entities controlled by Arash Missaghi, who later became notorious for defrauding investors and was killed in a murder-suicide in 2024. The plaintiffs’ funds were paid into the trust account of Jonathane Ricci, a lawyer whose license was permanently suspended for professional misconduct and who is now an undischarged bankrupt.

Disputed ownership and control of settlement funds

The $6.1 million in settlement funds at issue were paid to 245 Co., with Estrabillo claiming to control their disposition. However, the plaintiffs argued that Ricci is the ultimate controlling party of 245 Co., and that Curah is its sole shareholder. The evidence regarding ownership of Curah and 245 Co. was inconsistent and opaque, with Estrabillo and Ricci providing shifting explanations and refusing to disclose key documents. Notably, an email from Ricci purporting to resign as trustee for Curah shares was found insufficient to clarify ownership, and subsequent affidavits from Estrabillo were given little weight due to contradictions.

Concerns over distribution and preferential treatment

The proposed distribution of the settlement funds raised further concerns. Several intended recipients were closely related to Estrabillo, including family members and associates, and the amounts allocated did not correspond rateably to the original investments. Plaintiffs alleged that the distribution was arbitrary, favoring friends and family while excluding those who had raised complaints about the scheme. Attempts by the plaintiffs to examine recipients and obtain further details were largely unsuccessful, with most refusing to cooperate.

Legal analysis and application of Mareva injunction principles

The court applied the established criteria for granting a Mareva injunction, finding that the plaintiffs had established a strong prima facie case of fraud and knowing assistance. The evidence suggested that 245 Co., Curah, and their principals had disregarded corporate formalities and used investor funds as they saw fit, making tracing difficult. The court drew adverse inferences from the defendants’ refusal to produce trust ledgers and other financial records. There was a clear risk that the settlement funds would be dissipated or moved offshore before judgment, and the balance of convenience favored the plaintiffs, who would suffer irreparable harm if the funds were not preserved.

Outcome and orders of the court

Justice Koehnen granted the Mareva injunction, ordering that the $6.1 million in settlement funds be paid into court pending resolution of the action or further order. The court also addressed post-hearing motions, declining to extend the injunction to a property owned by Curah due to insufficient information. The defendant was permitted to use up to $250,000 from its assets to pay for legal expenses, but only if those funds were not proprietary to the plaintiffs or others with competing claims. The overall outcome favored the plaintiffs, with the successful party being those seeking to preserve the settlement funds. The exact amount awarded is the preservation of the $6.1 million in court, with $250,000 potentially available for the defendant’s legal fees, subject to further challenge by other claimants.