David Bergstein vs. David Molner
I had an exclusive phone interview with former Los Angeles District Attorney Steve Cooley and when I asked him what he knew about Bergstein vs Molner this is what he said:
“From what I know and I know quite a bit, David Bergstein has been victimized in a multitude of ways and I'm happy to help advance his cause, it's very just and I admire the fact that he has shown the strength of character and commitment to respond to his litigation opponents and others who have tried to do him so much harm. Genuine admiration for someone who had to fight some very serious battles on many fronts”
During my exclusive interview with David Bergstein the following article, the first in a series, represent what I learned.
The ongoing legal battle between David Bergstein and David Molner has recently heated up with a string of legal victories for Bergstein and his affiliates. Bergstein’s recent legal wins span state and federal courts in New York and California. Desperate after 3 years and an estimated more than $20 million spent with nothing but mounting losses to show for the effort, Molner and his co-conspirators have proven the adage that desperate times call for desperate measures. Unable to win in the courtroom, Molner and crew have apparently joined in an effort to extort Bergstein and embarrass, pressure and perhaps extort the Federal Judge who is now ruling against them and dismissing all of their lawsuits. This is consistent with Molner's overall plan to use the media to achieve his goals.
Although Bergstein faces even greater pressures as the victim of an extortion campaign led by Molner and his accomplices (details in the complaint filed by Bergstein in May, case #BC508916,) Bergstein told us that he welcomes these developments because they will hopefully finally bring to the light of day the conduct of Molner and his associates.
Molner’s Attacks On David Bergstein
Beginning in early 2010, Molner and entities with which he is affiliated (including Aramid Entertainment Fund Limited and Screen Capital International Corp.) filed scores of litigation around the world against David Bergstein and his affiliates. These actions include the initiation of five involuntary bankruptcy proceedings in Los Angeles against Bergstein-affiliated entities, well over 50 separate adversary proceedings in the bankruptcy court against Bergstein and his affiliates, as well as lawsuits in New York and California State and Federal court. In fact, Molner and his affiliates have brought more than 100 actions around the world against Bergstein and related parties in just the past few years.
Molner pursued litigation against Bergstein as part of a multi-prong attack designed to destroy him and cover up Molner’s own wrongdoing. Molner’s plan was to deliver a knock-out blow, a “shock and awe” onslaught of litigation and negative press so overwhelming that Bergstein could never recover from the cumulative effect. Molner’s assault was designed to not just win in the Courtroom but rather to isolate Bergstein from his friends and family and ensure that he did not just go down, but stayed there. The plan included efforts by Molner to create criminal charges or incarcerate David Bergstein.
Molner waged this war against Bergstein using money from investors in the Aramid Fund. It is estimated that he has spent the staggering sum of more than $20 million of investor funds on his war against Bergstein. This money has been spent paying lawyers, on press and even spending millions on purchasing claims from third parties so that he could file as many lawsuits against David Bergstein as possible. Remarkably, it appears as if Aramid never had any of its own legitimate claims against Bergstein or his affiliated entities – they were all just made up or bought from third parties. A review of the volume of lawsuits initiated by Molner reveals that soaking wet, the most that Molner can muster of Aramid’s actual claims are claims for approximately $5 million.
Bergstein denies that Aramid is owed any money – pointing among other things, to a release and settlement agreement Aramid signed in 2009 settling all claims against Bergstein in exchange for $3 million (which was paid in full). Molner, however, needed to pin tens of millions of dollars on Bergstein to conceal his own malfeasance. Molner, who is the subject of a lawsuit brought by two of the largest investors in the Aramid Fund, is alleged to have looted or mismanaged in excess of $60 million from the Fund (aside from the tens of millions he has spent as part of his jihad against Bergstein.) Molner even appears to have paid to commission a phony audit report to support the scheme where the auditor reported that Bergstein and his affiliates not only owed $45 Million to Aramid, but that this amount was going to be collected. Using Aramid Funds, Molner paid another law firm a reported $1 Million to tell the investors that he did not do anything wrong.
Why go to all this trouble?
Why would Molner spend more than $20 Million and engage in such an elaborate plan against David Bergstein? Molner’s plot was to pin the losses on a scapegoat and then bury his problems with Bergstein’s corpse.
Aramid’s corporate structure and Cayman Islands base gave Molner complete control over Aramid’s investment operations without any meaningful oversight. A Cayman Islands structure such as the one used by Molner is often setup for the very purpose it appears to have been used here – to raise money from US investors and avoid both SEC and other regulations. In August 2010 (6 months after Molner’s litigation campaign against Bergstein began), an Aramid director began to investigate potential wrongdoing by Molner. The director produced a report detailing Molner’s theft of an estimated $60 million from Aramid – giving light to what was motivating Molner to attack Bergstein so inexplicably. Beginning in at least 2007, Molner looted over $60 million from Aramid’s investment operations. For example, Molner made loans to himself which he forgave on behalf of the Aramid Fund, took ownership in investments made by the fund at the funds expense, took kickbacks on deals, and engaged in a series of illegal activities. Aramid’s investors were kept in the dark about Molner’s activities and true financial condition. A subsequent investigation shows that the legitimate investments made by the Aramid Fund under Molner’s control were failing and that Aramid was suffering significant losses. Despite this, Molner reported glowing results to the Aramid Investors.
The allegations against Molner are reminiscent of Bernie Madoff. While the looting and losses were taking place, Molner was also out there trying to raise a new fund on the purported success of the Aramid Fund. However, by the end of 2008, nearly 100% of the Aramid Investors demanded a return of their capital, but Molner was unable and unwilling to honor the demands. Molner refused to allow his investors any access to Aramid’s financials or other corporate documents. For good reason.
By the end of 2009 (and even for years afterwards), Aramid was not able to obtain an audit, its auditors citing Molner’s failure to write off bad assets. After struggling to come up with a legitimate reason for denying his investors proper access to financial records, Molner devised and hatched his plan calculated to solve his woes. In 2009, amidst of growing pressure from his investors to provide transparency, desperate to cover up his wrongdoing, Molner searched for an adversary upon whom he could blame Aramid’s losses. Molner ultimately focused on Bergstein – a choice that Bergstein’s former General Counsel turned double agent traitor Susan Tregub (discussed herein) recently admitted was made by Molner attorney Schuyler Moore of the prominent law firm of Stroock & Stroock & Lavan LLP. Moore was even quoted in the press as admitting that his patron’s goal (and apparently his own idea) was to do anything and everything they could to destroy Bergstein on all fronts.
Molner and his lawyers devised a plan designed to shift attention away from Molner and blame Aramid’s losses on Bergstein. Initially, Molner approached Bergstein and encouraged him to be a willing participant in the plan. Molner gave Bergstein a plan he called the “Global Deal.” The “Global Deal” called for Bergstein to accept responsibility for $75 million in Aramid losses that were actually Molner’s fault. Molner’s “Global Deal” called for Bergstein to purchase $75 million in bad investments which the Fund made so that Molner would not have to simply write them off and explain them to his investors. Molner explained to Bergstein that he could either cooperate and make it easy on himself or decline and face the consequences. Molner and his lawyers believed it would be credible to Aramid’s investors to attack Bergstein in this manner because Bergstein had done significant business with Aramid and Molner believed certain Bergstein-affiliated entities were having financial difficulties at the time. The assault on Bergstein included the commencement of involuntary bankruptcy proceedings and other litigation.
Molner Recruits And Exploits David Bergstein’s Lawyer
The lynchpin of Molner’s attack on Bergstein involved Molner’s recruitment of Susan Tregub, who was Bergstein’s general counsel and had been for many years. Tregub worked for Bergstein through March 2010 and had access to all of Bergstein’s personal, privileged, and confidential information of Bergstein, his family and his affiliated entities. Tregub oversaw the creation and inner workings of many of Bergstein’s affiliated entities.
Molner aggressively recruited Tregub. Molner knew Tregub because of his prior business relationship with Bergstein and because Tregub was overseeing ongoing litigation between Bergstein and Aramid. In mid-2009, while Tregub continued to handle all of Bergstein’s matters, including the then ongoing litigation with Aramid, Molner hired Tregub to work for Aramid.
Soon after Molner recruited Tregub, she began to work for Molner in furtherance of Molner’s plan to destroy Bergstein and pin Aramid’s losses on him. Molner enticed Tregub by paying her and ultimately seduced her into an intimate physical relationship – all with the goal of securing her allegiance.
Molner and his lawyers used Tregub to work as a mole inside of Bergstein’s organization.
Molner’s plan was to separate Bergstein from his funding sources, compromise him in his existing litigations, have him smeared in the press, alienate him from his family, and render him ostracized and unable to defend himself. Evidence obtained and information recently provided by Tregub to Bergstein recently explained that this was to be executed by Molner by filing a series of carefully planned lawsuits filed by Molner and hiring a member of the trade press to destroy Bergstein’s credibility.
Tregub worked closely with Aramid’s litigation and bankruptcy lawyers on the planned litigation and bankruptcy filings against Bergstein and his affiliated entities. Molner ordered Tregub to deliver all of Bergstein’s information going back ten years. While continuing to represent Bergstein including in matters against Aramid, Tregub delivered the most personal of information and provided detailed information and reports as to how Bergstein conducted his business.
Additionally, Tregub actively solicited parties with whom Bergstein conducted business to join Molner’s efforts. Tregub, at Molner’s direction and in coordination with the other members of his team then systematically contacted anyone they could find in Bergstein’s rolodex and that they thought might be tempted into Molner’s scheme.
Tregub, at the direction of Molner and his other lawyers, also removed original files from Bergstein’s offices and permanently deleted information from her computer and from Bergstein’s servers. Tregub also enlisted the help of others within Bergstein’s organization who were loyal to Tregub to help with her and Molner’s plans.
Tregub also worked to execute Molner’s plan by compromising Bergstein’s position in ongoing litigation where she was his lawyer. For instance, in a case in which Bergstein and one of his affiliated entities were sued, Tregub answered on the entity’s behalf but not on Bergstein’s behalf. She also dismissed Bergstein’s and the entity’s claims without Bergstein’s knowledge or consent. The result was a judgment against Bergstein in the amount of $900,000. The judgment against Bergstein was dismissed after these facts came to light. Hayes Michael of Baker Hofstadter represented the opposing party and worked with Tregub to engineer the loss. After Molner, Michael and Tregub masterminded throwing the case to create a judgment against David Bergstein, Molner went on to pay Michael to represent Tregub. Documents confirm that Michael was paid hundreds of thousands of dollars by Aramid.
At the direction of Molner, Tregub attempted to arrange Bergstein’s incarceration in civil court proceeding where she was representing Bergstein as well as through other means. Tregub also arranged to create judgments against Bergstein-affiliated entities that were later acquired by Aramid in connection with their filing of the involuntary bankruptcy proceedings. At Molner’s direction, Tregub sought out parties which she calculated would be willing to make false creditor claims against Bergstein in exchange for money. Two parties came forward and provided sworn testimony. Aramid bought other claims for the express purpose of filing the involuntary bankruptcies. Aramid did not have any of its own legitimate claims against Bergstein so instead it went shopping to buy them. The scheme is not only bizarre and evidence of some ulterior motive by Molner, it is also illegal under Federal Bankruptcy law.
Molner Manipulates The Press To Harm Bergstein
Since the judgment against her, Tregub has now started to reveal some of the extent of her participation in Molner’s scheme. She explained that Molner wanted to comb through David Bergstein’s life to find people who would be particularly susceptible to Molner’s advances. They targeted anyone who was desperate for money, had prior disputes with Bergstein, or exhibited weaknesses. Indeed Tregub has testified under oath that while she was working for Molner she was having mental issues and was being heavily medicated.
In seeking out the right press contact to participate in Molner’s plan, Tregub recently informed Bergstein that Molner carefully selected Alex Ben Block. At that time, Ben Block was a freelance writer for The Hollywood Reporter.
According to Tregub, Molner believed that the negative press would build up industry support for Molner’s activity and create negative sentiment towards Bergstein in advance of his planned litigation filings, which would sway the judges. Additionally, Tregub told Bergstein that Molner’s view was that the judges had “low grade intellect” and could be easily swayed. Indeed, in email exchanges between David Neale (Molner’s bankruptcy counsel) and others Neale stated that the judge assigned to the Bergstein involuntary cases “never reads anything” and Tregub stated that the judge would simply “look at [my] boobs and legs.”
Bergstein’s allegations seem to be supported by what followed. There appears to be no legitimate rhyme or reason to Ben Block’s campaign against Bergstein. Beginning in February of 2010 (before the involuntary bankruptcies were filed), Ben Block wrote and The Hollywood Reporter published scores of articles that smear Bergstein and report as facts things that were factually untrue. In a February 2010 article, prior to the time of the involuntary filings against Bergstein, Molner scripted a story claiming that there were nearly 90 judgments against a Bergstein-affiliated entity, and that the entity had defaulted on a $70 million loan to Comerica Bank. The article was timed to cause maximum damage to Bergstein as it was published while Bergstein had a large contingent at the Berlin Film Festival there to license the company’s extensive film rights. The article was conceived by Molner, scripted with Tregub, delivered to Ben Block and was designed to destroy Bergstein’s ability to make sales at the Festival, as well as interfere with Bergstein’s other ongoing business. Tregub also explained to Bergstein that this was the perfect time to begin the negative sentiment campaign that Molner was also putting into play in advance of the planned litigation filings. Email exchanges between Molner and Tregub that occurred the day before the article was published contain the discussions between them of the intended effect of the article. Indeed, the article was published the next day. This article also claimed that a Bergstein-affiliated entity did not have rights to films it was attempting to sell at an important industry film festival. None of it was true. Even cursory research would have proven that none of the reporting was even remotely accurate.
The article was not just false, it seemed to have been written with the goal of not merely reporting the news but rather smearing David Bergstein. The article, scripted by Molner for Ben Block and published by The Hollywood Reporter, had its intended effects on Bergstein, destroying the ability of Bergstein’s team to sell films at the Festival. This article became the first of an onslaught of negative press initiated by Ben Block, often containing what appears to be knowingly false information.
In the 18 months following the February 2010 article, Ben Block wrote over 60 derogatory articles about Bergstein, time and again containing false or misleading information. Bergstein’s numerous legal victories were ignored by Ben Block. Good news for David Bergstein, such as legal or business victories, were either ignored by Ben Block entirely or spun to sound negative. For example, Ben Block’s coverage of the $50 million verdict rendered against Tregub was portrayed as a horrible loss for Bergstein that would result in terrible consequences.
In the Tregub litigation, Bergstein alleged that Ben Block was on Molner’s payroll, and he told us that Tregub recently substantiated this allegation. Sworn testimony from another attorney involved in the scheme admitted that Ben Block was fixated with Bergstein. Ben Block also told Bergstein’s lawyers he intended to sue Bergstein. Ordinarily, a reporter is protected by broad first amendment rights that prohibit them from being deposed. However, the presiding judge in the Tregub litigation ordered Ben Block to be deposed based on the extraordinarily large number of articles written by Ben Block about David Bergstein containing so much false information. The judge recognized that whether or not Ben Block was on the payroll, a reporter is not entitled to target a party based on malice and there was no rational explanation provided by Ben Block. During the deposition, Ben Block denied being on Molner’s payroll, but had no explanation as to why he published so many negative articles about Bergstein and why he did not bother to fact check series allegations that were easily disproven. In fact, when questioned about how many articles Ben Block ever wrote about any person other than Bergstein, he answered “28” – those articles being about Harvey Weinstein (the actual number was 22.)
The recent article published by Ben Block seems to support Bergstein’s allegations. Before publication of the most recent article, Ben Block had exchanges with Bergstein’s attorney, Alex Weingarten. Weingarten provided Ben Block copies of a court order prohibiting the dissemination of the illegally recorded tapes and other evidence proving that they had been sealed. Weingarten was ignored and Ben Block published the article. Ben Block once again included facts in the article that he knew to be untrue, stating that a New Jersey court ordered the tapes released when he had already been provided evidence to the contrary.
David Bergstein Racks Up Wins And Molner Piles Up Losses In The Bankruptcy Proceedings
Beginning in March 2010, Molner made scandalous claims about Bergstein, representing to the bankruptcy court that this was “the Enron of the Entertainment Industry” and making claims of large scale investor fraud. Aramid and its attorneys were fully aware that all of the claims they were making were untrue and impossible to substantiate. Tregub explained to Bergstein that this was not important to Molner or his lawyers. Molner and his attorneys believed they would never have to prove anything because Bergstein would simply collapse under the immense pressure of public humiliation and the overwhelming amount of litigation. This was a realistic assumption given what was planned and based on the legal system. In the early stages of litigation, which can take years, a plaintiff who files a lawsuit does not have to prove anything. All they need are clever lawyers who can state a claim. Molner’s plan was to delay having to prove anything until Bergstein collapsed. In fact, in the involuntary cases which were filed well over 3 years ago, Aramid is now only getting to the point where they have to come up with proof. Bergstein explained that is why they are now losing.
In 2013, Bergstein having unexpectedly surviving three years of Molner’s onslaught, Molner was finally forced to back up his allegations in numerous adversary proceedings commenced by his affiliated entities in connection with lawsuits he filed around the country, including the involuntary bankruptcy proceedings. When forced to come forward with actual facts, Molner has repeatedly and consistently lost. Case after case which Molner brought against Bergstein and his affiliated entities ended up getting dismissed with prejudice, both in the bankruptcy and other courts.
Thus far, in those matters adjudicated to conclusion, both in the bankruptcy court and elsewhere, including in New York, Bergstein and his affiliates have been vindicated.
For instance, the $190 Million New York lawsuit which Molner and Aramid filed against Bergstein and his affiliates was dismissed. Aramid’s subsequent appeal was denied. Thus far, Bergstein and his affiliates have obtained early complete victories in all eleven actions that have been decided this year in the Molner orchestrated involuntary bankruptcies. Specifically, the Court ruled in ten of these eleven actions that Molner had not even alleged sufficient facts to state any type of claim despite the numerous depositions taken in the bankruptcy proceedings and Molner’s access to a mountain of Bergstein’s business and financial records. Additionally, in all eleven actions, the bankruptcy court ruled that Aramid and its affiliated entities had released all of their claims against Bergstein and Bergstein affiliates through a contractual release entered into in 2009 under which Aramid was paid $3 million.
Molner Retaliates In An Attempt To Distract From The Mounting Bankruptcy Losses
Molner and Aramid are desperate to reverse the tide of debilitating losses in the bankruptcy court and otherwise distract from their flailing litigation efforts. As such, Molner has attempted to exploit another former Bergstein affiliate – Paul Parmar – by obtaining illegal recordings Parmar made of his conversations with Bergstein.
As Molner and his team searched for vulnerable targets of their recruitment efforts against Bergstein, they came upon Paul Parmar. According to public records, Parmar has judgments against him or is in default for over $50 Million. His house is in foreclosure and his fall from financial grace has even been chronicled by the New York Times. Tregub had admitted that in early 2010, she recommended that Molner work to recruit Parmar. Parmar initially informed Bergstein of these approaches, delivering to Bergstein copies of email solicitations from Molner and reports of their conversations. Parmar delivered to Bergstein a signed declaration detailing bribes which Molner offered to Parmar in exchange for his cooperation.
At that time, Parmar vowed to David Bergstein that he would not participate with Molner. However, at some point, Parmar yielded to Molner’s bribes. Over the past several years, Molner conspired with Parmar to secretly record conversations Parmar had with Bergstein without Bergstein’s knowledge or consent. Parmar and Bergstein had ongoing business and spoke frequently. Parmar later revealed that he recorded each and every conversation he had with Bergstein. Molner and Parmar had elaborate plans for use of the tapes, including extorting Bergstein and his business associates, entrapping Bergstein, and ultimately disclosing the recordings to the press.
In 2012, Parmar (with Molner’s encouragement and assistance) threatened Bergstein with release of the secret recordings if David Bergstein did not pay millions of dollars. Specifically, Parmar approached Bergstein and demanded $5 million in exchange for the secretly recorded conversations. Parmar represented to Bergstein that no one had yet heard the tapes. By that time, as alleged in Bergstein’s extortion complaint filed against Parmar and Molner in May of this year, Bergstein had already succumbed to Parmar’s extortionate demands and paid millions on promises by Parmar that he would leave Bergstein alone. But, time and again, Parmar was back for more money. Bergstein realized that Parmar would never stop asking for money. Therefore, Bergstein finally refused to pay the $5 million demanded by Parmar.
After Bergstein refused to pay Parmar’s extortionate demands, Parmar delivered the tapes to Aramid’s lawyers purportedly in response to a subpoena Aramid’s lawyer issued to Parmar. Bergstein later discovered that the subpoena was a ruse aimed at trying to insulate their illegal nature and that Parmar had already played the tapes to Molner. The subpoena process was simply another scheme to provide cover for the illegal recordings and extortion demands.
How Molner’s lawyers learned about the tapes is not yet clear (did Parmar play them for the lawyers as well or was the information just relayed by Molner) but what is clear is that they were aware of their contents before Parmar had “produced” them. Foremost, Molner’s lawyers knew that recordings of Parmar’s conversations with Bergstein existed as they issued a subpoena to specifically obtain them. Moreover, before Parmar “produced” the tapes, Molner’s lead litigation attorney, Daniel Rozansky of Stroock & Stroock & Lavan LLP, slipped during Parmar’s deposition and asked questions that proved that he had heard the tapes. Specifically, Rozansky asked Parmar whether he knew if Bergstein had ever spoken of a federal judge patronizing prostitutes or conducting surveillance on the judge. Under oath and penalty of perjury Parmar told Rozansky that this did not occur.
Accordingly, Molner and his lawyers already had access to Parmar’s illegally recorded tapes before they were “produced” as part of the subterfuge created to shield themselves from the fact that the tapes were illegally recorded and were being used to extort Bergstein.
Tregub explained to Bergstein that the first tape they would release would be a portion of a recording whereby Bergstein was insulting a federal judge and that this would be followed by a demand from Parmar for the $5 Million. If Bergstein refused, Parmar would then play the second portion of the tape where Bergstein stated that he had a federal judge under surveillance. Molner and Parmar were certain that this would result in Bergstein paying the $5 Million, and would trigger an investigation. Parmar has released the first tape and reiterated his demand for the $5 million.
Tregub and a close confidant of hers told Bergstein and his attorneys that Molner played the contents of several of the tapes for Tregub back in July of 2012. Tregub explained that Parmar spent a considerable amount of time sorting through and editing the tapes, engaging a professional service to perform the work. Parmar carefully edited out key portions of the tapes to maximize their impact.
Tregub explained that in subsequent tapes that Parmar recorded, Bergstein told Parmar he was providing this misinformation to Parmar in order to see if Parmar would run back with this information to Molner. Around the time of the recordings, Parmar was constantly threatening David Bergstein that he would assist Molner in his efforts (and use his law enforcement contacts) if Bergstein did not help Parmar resolve Parmar’s financial issues.
Parmar told Bergstein that he was in a desperate situation and would use all of his resources and say whatever he needed to say and do in order to motivate Bergstein. Parmar claimed to have a close affiliation with law enforcement, and claimed to be employed as part of a group to counter terrorism. In order to demonstrate this to Bergstein, Parmar identified a specific FBI agent in the Bay area of California and provided Bergstein with his contact information. In later 2010, shortly after providing the sworn declaration about Molner, Parmar reported to Bergstein that the particular FBI agent sent a contingent to Parmar’s house as part of an investigation initiated pursuant to claims from Molner and the Trustee in the involuntary cases. Parmar told Bergstein that he told the agents the truth, and “vowed” for Bergstein, but that he could easily say whatever he wanted.
Parmar used the threat of exploiting his FBI relationship again and again, ultimately extracting millions from Bergstein. When Bergstein grew tired, Parmar flexed his muscle. In early 2012, Parmar told Bergstein that he was going to have the FBI Agent contact the VP of an International Investment Bank which was in litigation with Parmar over $24 Million which Parmar was in default on. Parmar told Bergstein that even through the Bank had done nothing wrong, he would be able to utilize his FBI relationship to muscle a result. Indeed, that is what happened. The VP of the bank provided sworn testimony detailing the call of the FBI Agent, who questioned the VP about the “potential wrongful conduct” of the Bank against Parmar. Pursuant to the Extortion case filed by Bergstein, Bergstein engaged a former US Marshall who contacted the FBI Agent which was identified and confirmed the calls made to the VP and the relationship with Parmar. However, the FBI Agent also stated that there was never any open investigation into the Bank. In addition, the Agent confirmed that Bergstein was never under investigation and that the interview which Parmar told Bergstein took place in 2010 in fact never took place.
At the time, Parmar continuously reminded David Bergstein about his ability to enlist his FBI contact at will. Parmar reminded Bergstein that his mortgage lender did nothing illegal, but that Parmar was still able get the FBI involved. Given what he had already endured at the hands of Molner, his cronies and others (like the bankruptcy trustee, also a former FBI agent who had taken Bergstein’s confidential information improperly obtained from Tregub and reveled in making it public), combined with Parmar’s claimed connections, Bergstein took the threat extremely seriously. Parmar promised Bergstein that if Bergstein solved Parmar’s legal issues and paid him millions, that Parmar would remain loyal. On occasion, it seemed to Bergstein that Parmar was not being true to his word and it appeared to Bergstein that Parmar was working in the background with Molner. In order to see if this was the case, Bergstein provided several pieces of misinformation that he felt Molner would use if Parmar had actually given it to him. Two months after the recording posted on the Reporter was made, after one of Parmar’s significant legal problems was solved by Bergstein, Parmar sent Bergstein several effusive emails pledging his allegiance, and repeatedly telling Bergstein that he would never have to worry. At that time, Bergstein told Parmar about the instances of misinformation he gave Parmar, including about the surveillance.
Parmar then explained to Bergstein that at the time, Parmar was indeed fishing on those calls for information and had planned to give that information to Molner if things did not work out, but that he actually never violated the confidence.
Last week, Parmar leaked a recording to the press in an attempt to embarrass David Bergstein, damage Bergstein in his ongoing litigation with Molner, and force Bergstein to pay additional money to Parmar. Specifically, Parmar leaked a portion of one of his secretly recorded conversations with Bergstein to The Hollywood Reporter in which Bergstein made negative comments about the personal affairs of the judge presiding over the involuntary bankruptcy proceedings. An article and a portion of the recording were subsequently published by The Hollywood Reporter.
Parmar repeatedly texted Bergstein and asked him if he was now ready to pay Immediately following The Hollywood Reporter’s publication of the article and the posting of the portion of the tape. Similarly, Parmar’s counsel contacted Bergstein’s counsel and asked if we were ready to “settle.” Bergstein understands that if he does not pay what Parmar is demanding, Parmar intends to leak more illegally obtained recordings. Parmar has made clear that there are more recordings and that unless he gets his price, he will release them.
Attached to the article, The Hollywood Reporter provided a link to the illegal recording, with full knowledge of the court order prohibiting their actions. Attorneys for Bergstein sent a demand to the service hosting the tape, demanding that the tape be taken down as it was a flagrant violation of California Penal Code section 632 and multiple Federal laws. Recognizing the illegal nature of the recordings and wanting to avoid liability itself, the service immediately took down the recording.
Before it was taken down, I listened to the recording several times. It sounded like it was a prank phone call that one could hear on a wacky morning radio program. Parmar was clearly fishing for information, asking questions with a contrived intonation and in an exaggerated manner. When asked about the veracity of the claims made on the tape, Bergstein explained that he was giving Parmar outlandish misinformation in order to see if it would be leaked to Molner. Bergstein also confirmed that shortly after this conversation, he told Parmar that he was telling tall tales to make sure that Parmar was true to his word and was not betraying Bergstein’s confidence.
Bergstein Sues Molner And Parmar
David Bergstein sued Parmar and Molner for extortion in May 2013. That case is pending.
As is detailed in the extortion complaint, Parmar claimed to have strong ties with law enforcement. Although reports by Alex Ben Block and The Hollywood Reporter at the time mocked the allegations in this lawsuit, evidence presented by Bergstein confirms their veracity. Parmar allegedly used an FBI agent to help him muscle Bergstein and others in his disputes. Parmar frequently boasted that he was a counterterrorism asset used by Federal law enforcement officials and that as a result, he had extensive FBI connections that he could marshal at his whim. Parmar even had one of his supposed FBI connections attempt to intervene on his behalf when faced with his mortgage lender foreclosing on his house. Independent witnesses and investigation by reputable sources have corroborated that Parmar was able to have an FBI agent speak to his creditors and when the FBI agent in question was interviewed, he emphatically denied that Bergstein was ever an FBI target – despite Parmar’s best efforts and threats to the contrary. In fact, the FBI agent in question explained emphatically, “David Bergstein has nothing to worry about when it comes to the FBI.”
Molner’s Problems Continue To Mount
No Bergstein investor has ever supported any of Molner’s accusations. None have ever sued Bergstein for the outlandish claims being asserted and no bona fide creditors ever stepped forward in the involuntary bankruptcies engineered by Molner. Moreover, the records published in the involuntary bankruptcies indicate some $40 million of transfers by Bergstein or his affiliates into the entities that were put into companies dragged into bankruptcy by Molner. Bergstein filed proofs of claims for advances he made to the entities in bankruptcy in excess of $25 million. Aramid originally filed objections to Bergstein’s claims in the bankruptcy but, when forced to substantiate its claims, dismissed them. In layman’s terms, faced with a decision to put up or shut up, Aramid did the latter. Given that Aramid chose to voluntarily dismiss its claims, the only logical conclusion is that there was never any evidence to support what Aramid was claiming. It seems that there was never any basis for Molner’s involuntary bankruptcies, it was nothing more than a fraud on the court.
Meanwhile, a Los Angeles jury found Tregub liable for more than $50 million in damages she caused to Bergstein through her work for and at the direction of Molner. Her conduct was so reprehensible that the jury awarded punitive damages against Tregub and an ethics expert, a former lead prosecutor for the California State Bar, testified that Tregub had committed the most egregious ethical violations she has seen in her 25 years of practice. Tregub herself is now in bankruptcy following the judgment against her.
Tregub and the other attorneys involved in Molner’s scheme are currently being investigated by the California State Bar for ethics violations. Severe disciplinary action, including possible disbarment, is expected.
Molner promised the Aramid investors the instant collapse of Bergstein and recovery of the “missing money” immediately after the filing to the March 2010 litigation onslaught against Bergstein. However, Molner miscalculated. Eventually, Aramid’s investors growing tired after years of hide-the-ball, started to learn of Molner’s wrongdoing. As a result, Aramid’s investors began to understand that Molner was falsely reporting Aramid’s performance. They filed suit and the litigation, which is currently pending, followed. As he has done in the Bergstein case, Molner used the Aramid Fund’s money to delay the prosecution of this case, but this has run its course. If tried, Molner will be forced to deliver the information and if the allegations are correct, Molner could face severe personal consequences.
As to Bergstein, Molner has been at this for more than 3 years now and has not been able to prove any of his outlandish claims. The cases brought are being thrown out of court and the losses keep mounting. The Trustee in the involuntary case faces losing over $4 Million invested in the Bankruptcy case. If Bergstein is successful, Molner, his lawyers and other parties who joined in Molner’s scheme face losses and liability well over $100 Million. It appears as if Molner and his accomplices’ only option at this point is to go down fighting, causing as much damage as they can in the desperate hope that he can sling enough mud and do enough damage in the hopes that Bergstein’s resources will be exhausted and he will be left unable to defend himself.
David Bergstein noted that since he made the comments about the judge to Parmar over 18 months ago, the Judge has made a series of rulings against Bergstein, many particularly harsh, and has made derogatory statements about Bergstein personally in court.
Bergstein pointed out that although Molner had the tapes at least since July of 2012, that Molner has only now arranged for them to go public, and that he did so in violation of a court order. David Bergstein suggests that Molner found a way to disclose the contents of the tapes to the Judge when Molner first obtained them. A review of the decisions by the Judge reflects unusually harsh decisions against Bergstein which occurred following this date. The Judge’s decisions included a ruling by him giving Molner the exclusive rights of the Trustee to sue whomever Molner decided to within bankruptcy. By this time, it was admitted by all parties that Aramid did not have a single original claim in any of the bankruptcy cases. Nonetheless, Molner was given the exclusive rights of the Trustee and able to stand in their shoes. Despite substantiation by Bergstein and others of claims against Molner and Aramid of over $50 Million and Bergstein’s willingness to fund the litigation of the claims, the court threw them out and also fully released Molner and anyone who helped him. All of this in light of the fact that in the main involuntary cases, Bergstein, Tutor and their affiliates were in total over 80% of all the creditors and 100% of the secured creditors. The decision also gave Aramid 50% of any recovery for suits brought against anyone. That effectively meant that Molner was given the right to use Bergstein and Tutors’ money to sue Bergstein and Tutor and then keep half of whatever was recovered.
Predictably Aramid used this power only to file suits against Bergstein or his affiliates – in total filing over 80 complaints within the bankruptcy proceedings. And all of this was done despite the fact that Aramid has already previously entered into an agreement whereby they were paid $3 Million and gave up their rights to sue Bergstein or any of his affiliates.
Bergstein suggests that Molner only now released the tapes because Molner’s efforts were not successful, and that this was a last ditch attempt by Molner to try and get the judge to remove himself from the case by doing to him what Molner did to David Bergstein – making a spectacle of him.
Bergstein told us that he expects that the recent Hollywood Reporter article will almost certainly trigger a criminal investigation, and that he is relieved. Bergstein told us that any investigation will bring to the light of day what Molner and his accomplices have done not only to him, but to the Aramid investors who were victimized in the first place. Bergstein hopes that as investigation will once and for all level the playing field and put an end to all of this.
Given the situation and recent results, it is expected that Bergstein will sue Molner and his lawyers for malicious prosecution to hold them accountable for the damage they have caused. Molner has brought so many frivolous lawsuits against Bergstein and his affiliates (many of which have already been dismissed by Courts around the country) that it is only a matter of time before they will have to answer for what they have done.
The situation goes well beyond Bergstein. Molner’s scheme is a gross perversion of the judicial system and he they can do it to Bergstein and get away with it, what is to stop anyone from doing something similar to anyone else?
The final quote I got from former Los Angeles District Attorney Steve Cooley when I said it was not an easy task to defend oneself in our legal world was “Well the legal world or the journalistic world because of all the protections which are legitimate, you have litigation privilege which lets people say things in a court that are protected even though they may not be true, such is the nature of the beast, and then you have the first amendment which allows a broad range or discussions of issues and journalists and their institutions to report and we all understand that but at some point in time hopefully the truth will win out and has been wining out in the case of David Bergstein. David Bergstein’s a client of mine and I'm very very proud to be at his side. I think his cause is just and I'm happy to be part of the team advancing his cause and I truly, genuinely, admire the strength he's shown in the face of some adversity including manipulation perhaps, of some people in the media by his litigation opponents.”
Watch for more in the coming days and you can read my next installment at David Bergstein vs Molner
Published on Aug 28, 2013