Team Systems International LLC, No. 22-10066, Motion to Vacate due to Fraud on the Court Rule 60(d)(3)

 For almost three years, I have battled the Delaware bankruptcy court and the local lawyers who have often displayed a lack of candor with the court and used fraudulent evidence. This motion will hopefully end that for us. I am working on a proposal to change the Bankruptcy Code to end the system that foments this like of abuse. See tuned!

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

 

In re: TEAM SYSTEMS INTERNATIONAL, LLC,     Debtor.

Chapter 7 Case No. 22-10066 (CTG)   Re: D.I. 146, 300

George L. Miller, solely in his capacity as the Chapter 7 Trustee of Team Systems International, LLC,     Plaintiff,   -against-   Deborah Evans Mott, Steven M. Acosta, Christopher Mott, John S. Maciorowski, Addy Road LLC, Brent Road LLC, Benjamin P. Smith, Jessica M. Smith, TSI Gulf Coast, LLC, TSI Education & Training, Inc., and Team Systems International Southeast LLC, and John Does 1-100,   Defendants.

Adv. Proc. No. 23-50004 (CTG)   Response due:                   , 2026 Hearing date:                    , 2026

MOTION OF DEFENDANTS TO VACATE (I) THE CONVERSION TO A CHAPTER 7 CASE AND (II) THE PRELIMINARY INJUNCTION ORDERS PURSUANT TO RULE 60(D)(3)

Pursuant to Fed. R. Bankr. P. 9024(a) and Fed. R. Civ. P. 60(d)(3) (“Rule 60(d)(3)”), Defendants Deborah Evans Mott, Steven M. Acosta, Christopher Mott, and John S. Maciorowski (collectively, “TSI Members”), and Addy Road LLC (collectively with TSI Members, “Defendants”), by and through their undersigned counsel, hereby move to (1) vacate the Court’s

Memorandum Opinion regarding Motions to Dismiss or Convert and for Sanctions, see D.I. 146, and (2) vacate the Court’s Order Granting the Motion of the Chapter 7 Trustee for Entry of an Order (I) Extending the Freeze and Granting Preliminary Injunctive Relief, and (II) Granting Related Relief, Pursuant to 11 U.S.C. § 105(a) and Fed. R. Bankr. P. 7065 with Respect to Defendant TSI Gulf Coast, LLC, see D.I. 300, (collectively, the “Conversion and Preliminary Injunction Orders”). GDPEV LLC and Simons Exploration (“Creditors”) and their counsel (“Creditors’ Counsel”) and George L. Miller, solely in his capacity as the Chapter 7 Trustee (the “Trustee”) of the bankruptcy estate of Team Systems International, LLC (“TSI” or the “Debtor”), and his counsel (“Trustee’s Counsel”) intentionally deceived the Court, to a level rising to fraud within the meaning of Rule 60(d)(3). The Court is therefore entitled to set aside its Conversion Order and Preliminary Injunction Order, which the Defendants request pursuant to Fed. R. Civ. P. 60(d)(3), Fed. R. Bankr. P. 9024(a). Defendants request an evidentiary hearing on this Motion. In support of this Motion, Defendants respectfully state as follows:

PRELIMINARY STATEMENT

 

1.                  This Motion is made due to efforts by Creditors’ Counsel and Trustee’s Counsel to introduce documents by grossly misrepresenting their contents and history and actually forging documents. This Motion is not subject to the one-year limitation period. All the requirements for Rule 60(d)(3) are met.

2.                  The proceedings have included at least four critical pieces of “evidence” that were grossly misrepresented by counsel in their presentation to this Court: the black-out bank documents, the “Florida record,” the white-out bank redactions, and Exhibit A with the “monthly transaction reports.”

3.                  Details on the use of this “evidence” and the Court’s reliance upon the same are set on the following table. The “fraud category” is described in column one; the specific misrepresentation in column two, the “Court’s Reliance” on the fraud in column three; and the evidence that discloses the fraud in column four. There is no material factual dispute on any of these facts. These are detailed in the sections below.

Fraud Category	Misrepresentation	Court’s Reliance	Contradictory Facts
“Florida record”1	Represented documents were “in the record” in the N.D. Fla. proceedings.	Conversion Opinion, see D.I. 146 at 27: “strong and wholly unrebutted.”	N.D. Fla. Order and Stipulation, see D.I. 423-1. See also Ex. 1A, 1B & 1C.
Black Redactions2	TSI obscured a $2.5M transaction. See D.I. 456-10; Ex. 17.	Conversion Opinion, see D.I. 146: $2.5M transaction as evidence of bad faith.	Ms. Kasen’s confession, see D.I. 191 at 136. Clean $2.5 M transaction, see D.I. 453-6.
White-Out Redactions3	TSI altered Robinson & Cole’s bank documents.	Preliminary Injunction Opinion, see D.I. 304 at 12-15: TSI concealed information.	Mr. Hardisty’s email (Ex. 5); metadata report (Ex.7).
Exhibit A and the Monthly Transaction Reports4	TSI failed to properly account for certain transactions, see Exhibit A (Summary Chart), using “Monthly Transaction Reports.”	Preliminary Injunction Opinion, see D.I. 304 at 16-17; see also D.I. 338- 1 at 5-7.	Mr. Hall, Adv. D.I. 419 at 9; Index D.I. 489-14; MCT billing (D.I. 390-1); Mr. Homony’s testimony (DI 507 at 129-130).

1 Exhibits 1A, B and C set out the metadata and origin of the documents. The key exchange in the proceedings in Florida illustrates that they were ruled inadmissible as stipulated by the same Creditors who got them admitted in this case. See Ex. 2 (Transcript of April 27, 2021, hearing).

2 Done by Jennifer Kasen, counsel for the Creditors and attributed by the Court to TSI Members. “Exhibit 17” was the key exhibit (showing a $2.5 million transaction) blacked out while Creditors had a clean copy and lied. See D.I. 191 at 136.

3 Robinson & Cole’s document production team internally admitted these were “not authentic copies” months before their introduction to the hearing before the Court and metadata expert report subsequently verified they were not the originals. See Ex’s 5 & 7. These documents can be tracked by the “confidential” stamp on each file added by Robinson & Cole. The chain of custody detailed herein shows these were the documents that had white out redactions.

4 These documents were falsely labelled by the Trustee’s Counsel, and their purpose and effect were misrepresented to the Court. Counsel for the Trustee used strawman incomplete work

JURISDICTION AND VENUE

 

4.                  This Court has subject matter jurisdiction over this matter pursuant to Fed. R. Bankr. P. 9024 and Fed. R. Civ. P. 60(d), which authorize and empower this Court to provide relief from its earlier judgments and to ensure the accurate and equitable administration of justice, including to correct and rectify the fraud on the court as documented herein. See Fed. R. Bankr. P. 9024; see also Fed. R. Civ. P. 60(d)(3).

5.                  Venue of this Chapter 7 Case and this Motion is proper in this District pursuant to 28 U.S.C. §§1408 and 1409.

6.                  Pursuant to Del. Bankr. L.R. 9013-l(f), the Defendants hereby consent to the entry of a final order by this Court in connection with this Motion if it is later determined that this Court, absent consent of the parties, cannot enter final orders or judgments in connection therewith consistent with Article III of the United States Constitution.

STANDARD OF PROOF

 

7.                  The Third Circuit has adopted a four-element test for establishing fraud on the court, requiring: “(1) an intentional fraud; (2) by an officer of the court; (3) which is directed at the court itself; and (4) that in fact deceives the court.” Herring v. United States, 424 F.3d 384, 390 (3d Cir. 2005). All the predicate elements are present in this case.

8.                  The court emphasized that this is a “demanding standard” limited to “egregious misconduct … judge or jury or fabrication of evidence by counsel[,]” and it must be proven “by clear, unequivocal, and convincing evidence.” Id. at 387, 390 (quoting In re Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, 538 F.2d 180, 195 (8th Cir.1976)); see also

 

sheets to claim transactions were improper, when the Trustee’s Counsel and witness had found full support for the transactions in other debtor documents months before.

In re Bressman, 874 F.3d 142, 150-153 (3d Cir. 2017) (holding “clear, unequivocal, and convincing” support for fraud on the court, using the Herring standard). This is in line with other federal circuits. See, e.g., id. at n. 1 (collecting cases on the standard for fraud on the court, with other circuits also listing one example as “fabrication of evidence by a party in which an attorney is implicated”); see also Booker v. Dugger, 825 F.2d 281, 283 (11th Cir. 1987) (same standard); Harris v. Lesko, No. 24-2604, 2025 WL 88835, at *2 (3d Cir. Jan. 14, 2025); .⁵

9.                  The modern standard applied to the impact of the fraud under Rule 60(d)(3) does not require that the fraud is the decisive element in the challenged order: the issue is whether the “misconduct was directed to the judicial machinery itself and substantially interfered with the

plaintiff’s ability fully and fairly to prepare for and proceed at trial.” In re Dey, No. ADV 13-01138, 2015 WL 669788, at *7 (10th Cir. BAP (Colo.) Feb. 17, 2015) (emphasis added). In the case in front of the Court now, the fraud had much more pronounced effects, as it lead to the introduction of key “evidence” throwing the case from Chapter 11 to Chapter 7 and destroying the company in the process. Then, the aforementioned evidence precipitated a sweeping injunction.

10.              This Motion seeks to set aside the Conversion and Preliminary Injunction Orders pursuant to Rule 60(d)(3) and the standard explained above. It addresses actions by the Creditors’ and Trustee’s Counsel who introduced fraudulent documents both misrepresenting

5 “[T]ampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society. Surely it cannot be that preservation of the integrity of the judicial process must always wait upon the diligence of litigants. The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud.” Hazel-Atlas Glass Co. v. Hartford Empire Co., 322

U.S. 238, 246 (1944).

their contents and history and actually forging major and material documents. These actions precipitated the entire string of subsequent litigation and no other action other than this Motion can fully and adequately address the injury to the parties and the system of justice this caused.

ARGUMENT & BASIS FOR RELIEF REQUESTED

 

I.                  THE CONVERSION ORDER IS TAINTED BY FRAUD ON THE COURT.

 

11.              The conversion order taking the case from Chapter 11 to Chapter 7 is fatally tainted by fraudulent evidence presented by the Creditors and allowed by this Court. See generally D.I. 146.

12.              TSI filed for Chapter 11 protection when GPDEV and Simons obtained a jury verdict against it in Florida based on a claim for a commission on a federal contract. See generally GPDEV, LLC et al. v. Team Sys. Int’l, LLC, 4:18-cv-00442-RH-MAF (N.D. Fla. 2021) (the “Florida Case” or, referring to the judge therein, the “Florida Court”); see also id. ECF 343 (executing the writ of garnishment). GDPEV and Simons’ claim was based on their assistance solely in finding sources of bottled water for a Federal Emergency Management Agency (“FEMA”) contract to supply water in a disaster area after Hurricane Maria. The contract was for a consulting fee to help identify “sources” of bottled water, they were paid for that service and then sued to modify the contract to include a commission (it did not allege breach of contract). They did not buy or provide any bottled water themselves. Payment of this commission claim is illegal under federal law, among others, and is currently on appeal to the Third Circuit. See generally In re Team Sys. Int'l LLC v. George L. Miller, No. 24-3365, D.I. No’s 21 & 35 (3d Cir. 2025) (explaining the issue further).

13.              The judgment Creditors filed for writ of garnishment on a national security-related Defense Logistics Agency contract. TSI was advised by their counsel at the time that this

would put TSI and its members at risk for non-performance which triggered filing for Chapter 11, although TSI had approximately $20 million in accounts receivable and $ 5.0 million ongoing defense contracts at the time. See D.I. 443-1 – D.I. 443-11. This Court conducted the conversion proceedings, see D.I. No’s 140, 142, 191, wrote an opinion on the conversion, see

D.I. 146, and issued the conversion order. See D.I. 151.

 

A.                Fraud through the “Florida Records” Produced by the Creditors’ Counsel

 

14.              This Court found “bad faith” actions by the Debtor that became the decisive factor in the conversion order. See D.I. 146; see also D.I. 304.

15.               To support this finding, this Court devoted three pages of the opinion, see D.I.

 

304 at 7-8, to allegedly improper conduct relying upon alleged “evidence” from the Florida Case, including an “All Aqua” document that suggested that a private swimming pool expense was charged as a FEMA contract expense.

16.               The bankruptcy court made it clear that the “Florida records” were “purported” to be business records, “produced in the Florida litigation.” In the March 9, 2022, conversion hearing, the Court commented: “Mr. Moody, to the extent there’s something that is of record in the District Court, you can admit that.” See D.I. 140 at 176:14-16.

17.               There was no evidence presented that records on this subject have been fabricated by the Defendants in the bankruptcy case, only an allegation about the Florida Case. The opinion concluded: “This strong and wholly unrebutted evidence suggesting that TSI presented fabricated evidence to the district court in the Florida litigation is the type of prepetition misconduct that, under the caselaw described above, counsels against a finding of good faith.” See D.I. 146 at 27.

18.               The Court went on to find this, as well as other documents, were problematic.

 

Accepting the Creditors’ allegation that TSI had fabricated these documents, the Court found “[t]he circumstances of the transfers at issue here, and the misleading testimony and records relating to those transfers, at least raise questions about the propriety of the Debtor’s conduct.” See D.I. 146 at 28; see also D.I. 74-78.⁶

19.              The problem with the above allegations and conclusions is that there was no evidence presented in Florida that TSI introduced or created these documents. See Ex. 1A. Absolutely none. The PDF “Florida documents” entered into this case have no metadata. See Ex. 1B.⁷ The PDF documents from Florida show that they were created by a paralegal in the Orlando office of Mr. Collins’ law firm. See Ex. 1C. No other versions of the documents were produced, until the “scrubbed” copy in this Court. See Ex. 1B.

20.              The only finding by the Florida Court was to declare the documents inadmissible hearsay. See Ex. 2. That conclusion was jointly proposed by counsel for the Creditors and TSI at the time. Lead counsel for these same Creditors in that case noted “that document should be not allowed, stricken. It should not be in the case whatsoever, and parties should not be allowed to testify about that document. I mean, that’s -- I just want to know it’s out of the case. It’s not part

6 This ignored the fact that she sought to amend the testimony through her counsel at the time. See D.I. 456-5. The Tunnel & Raysor transaction was also correctly recorded as a K-1transaction in the TSI books. The Court overlooked the fact that the Debtor was without counsel for most of the period between that deposition and the conversion hearing. The abrupt withdrawal of counsel later in February 2022 impacted TSI’s defense.

7 This required a conscious action to delete metadata. The original Florida version of the documents shows they were created by Lisandra Acosta, an Orlando office Gray Robinson paralegal. Metadata can authenticate electronic evidence under Fed. R. Evid. 901(b)(4) (Ex. 1C). See Amfosakyi v. Frito Lay, Inc., 496 Fed. Appx. 218 (3^rd Cir. 2012). Its deletion may constitute spoliation of evidence. Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010).

of the records here.” D.I. 423-1. The Florida Court it inadmissible. Id. Mr. Collins was present at that proceeding as co-counsel.

21.              The alleged transaction does not appear on the actual bank records for that date and account. The document is also not the actual transaction form used by that bank. See, e.g., Ex.17 (example of transaction forms used by the bank in question). The fake document was

among over one hundred pages of “Florida records” stricken from the Florida Case as unsubstantiated and inadmissible hearsay by stipulation of counsel (including the same Creditors’ Counsel present in the bankruptcy conversion proceedings). To date, no evidence has been submitted on its authorship.⁸ See Ex. 1B (metadata properties of the Florida document which were “scrubbed” on the exhibit used by Creditors in this Court).

22.              Counsel for Creditors at several points represented these documents in the bankruptcy case as coming “from the Court record” in the Florida Case, despite knowing that they were actually excluded from the record and never met any requirements of the Federal Rules of Evidence. See Footnote 10 infra. The evidence was being offered as to the author of the documents (attributing this to TSI in the Chapter 11 case in the conversion hearing on March 16, 2022, see D.I. 191), with Trustee’s Counsel knowing that the document did not come from TSI. Mr. Moody, on behalf of the Creditors, made this false representation to the Court in the conversion hearing (while his co-counsel knew that it was not accurate):

“THE COURT: do I have in the record what was said to the District Court? MR. MOODY: Yes, Your Honor, you do.⁹

8 It made no sense for TSI to create a fake document that created the impression that its members engaged in wrongdoing. This observation is borne out by the fact that the Florida PDFs in question have metadata indicating that they were created by one of Mr. Collins’ paralegals.

9 In reality, the document was “not part of the records here.” D.I. 423-1; see also Ex. 2 at 7-8 (Mr. Collins appearing as co-counsel, Mr. Turner for the Creditors in the U.S. District Court for the Northern District of Florida).

THE COURT: Okay. That’s -- those are exhibits that are among the exhibits that you’ve moved into evidence and have been admitted?

MR. MOODY: Yes, Your Honor.” D.I. 191 at 43.

 

23.              “And that swimming pool purchase was characterized in the District Court as a maritime expense relating to the transfer of water.” D.I. 191 at 42. Mr. Collins told this Court that this was one of many “fabricated bank records” by TSI. See D.I. 191 at 70-71 (note, to the contrary, the metadata on the document indicated it was created by his paralegal); Ex.1C.¹⁰

24.              The cited “All Aqua” document along with about one hundred other pages of junk was represented to be in “the Florida record.” This Court erroneously claimed “All Aqua” was claimed as a FEMA expense by TSI, based on a false and inadmissible document. See D.I. 146 at 25-26 (citing that document). The actual TSI business records reviewed by the Trustee accountants show that it was accounted for as a K-1 draw to TSI Member Deborah Mott. See D.I. 281-8 at 2; D.I. 390-1; D.I. 328-8 at 145 (accurately describing this transaction).

25.              Every allegation of a questionable charge to the business comes from the inadmissible transaction documents,¹¹ yet those same expenses are correctly recorded in the TSI business records. There was never any improper treatment of the funds nor any evidence that TSI Members created fake records that raised the questions of improprieties over their own conduct. The documents from other sources were turned over in February 2022 and all business records and clean bank statements were produced, again, in July 2022 by Mr. Mann.

 

 

10 They appear twice in the Florida Case, for the most part, once as the exhibits discussed in the exchange with Mr. Turner, and once in documents placed under seal in the Northern District of Florida (see Florida Case ECF No’s 123, 124, and 125). The “All Aqua” document did not have TSI Bates numbers when introduced in Florida. See Ex. 1A.

 

11 See Section II.B. infra (discussion of the improper and fraudulent use of the work sheets herein; see also Ex. 14.

26.              Mr. Collins was present in Florida when the documents were ruled inadmissible and his side stipulated as such. See Ex. 2. He was also present in this Court on March 16, 2022, when his so-called expert relied upon the same false records.¹² See D.I 191. It is obvious from the transcript that Mr. Collins and Mr. Moody deliberately withheld mentioning that the Florida Court’s order excluded the documents from evidence, that they were never authenticated, and that they were not in “the record.” Counsel deliberately induced this Court to admit them with the false impression that they had been admitted into evidence in Florida and had been already proven to have been created by TSI Members knowing this was false. Reliance on Creditors’ false characterization is further evidenced by this Court’s failure to require any authentication other than this representation.

27.              Mr. Collins was present when his co-counsel misrepresented the documents to this Court: “THE COURT: Mr. Moody, to the extent there’s something that is of record in the District Court, you can admit that.” D.I. 140 at 176. The Creditors’ Counsel in Florida contradicts Mr. Moody: “[those documents are] not part of the records here.” D.I. 423-1; see also Ex. 2 at 7-8 (Mr. Turner as co-counsel with Mr. Collins in Florida).

28.              Ms. Kasen further misrepresented to this Court on April 29, 2024:

“...the Florida Court held hearings about those documents, and the Debtor ultimately withdrew them and then chose not to put their expert on the stand because they knew that they would be subject to cross-examination relating to those documents” D.I. 507 at 55.

 

 

 

 

 

 

12 Mr. Orner testified he based his conclusions on “documentation in the Florida case.” D.I. 140 at 70. He referred to “a number of different you know transfers and representations of -- of expenses, it goes back to the Florida case.” Id at 82. On the other hand, KPMG did a forensic examination of the FEMA contract CLIN 002 and financial records and found no issues.

29.              This is a gross misrepresentation on several levels: the initiative to remove them was done by Creditors’ Counsel. See Footnote 15 infra. Ms. Kasen failed to do anything to examine the record, while accusing a party of fraud.

30.              She omitted the fact that the documents were not simply withdrawn and no evidence of authorship was ever provided, but they were ruled inadmissible hearsay.¹³ There was a pretrial hearing in the Florida Case and the documents were withdrawn on agreement by both sides as inadmissible hearsay, lacking any authentication, as per the Florida Court’s order. See Ex. 2.

31.              The Creditors created an elaborate fabrication in their story about the documents and withheld the information that they were never in evidence, and their source was never proven. They apparently scrubbed the metadata in this Court to remove the tracking to Mr. Collins’ law firm. See Ex. 1B. This behavior continued for over one year from the conversion hearing to the Rule 60(B)(3) hearing.

 

 

 

 

 

 

13 The documents were excluded from the record due to the failure to meet admissibility standards, in an appearance where Mr. Collins was present: “MR. TURNER: I just want to know that those records that were tendered, those bank summary records -- I don’t know if the Court has a copy of what I’m referring to. I think we gave you part of it, but it’s a thick document listing a bunch of expenses, like an extrapolation or summary of underlying bank documents.

We’ve never seen the underlying bank documents or the invoices that would support them, but I don’t -- I mean, any -- that document should be not allowed, stricken. It should be not in the case whatsoever, and parties should not be allowed to testify about that document. I mean, that’s -- I just want to know it’s out of the case. It’s not part of the records here. THE COURT: Well, I think that’s what Mr. Smith just said. That leaves it up to you to ignore it entirely or to try to make some hay out of it as a false document. But I think from what Mr. Smith just told me, that he agrees with what you just said. That documents’s [sic] out of the case. Mr. Smith, is that right? MR. SMITH: That is correct.” D.I. 423-1 at 2-3.

32.              What Creditors’ Counsel omitted was vital information that suggests a scheme to commit fraud on the court.¹⁴ The Florida Court excluded them from evidence because there was no verification of any of the authorship, figures or comments therein. That was true in Florida, and it remained true in this Court (the first evidence of their origin is the enclosed metadata properties, see Ex. 1B).

33.              The documents were excluded from the record due to a failure to meet admissibility standards, as set forth at an appearance for which Mr. Collins was also present. Creditors were also estopped from claiming that they became admissible in the bankruptcy case. The documents were offered by Mr. Collins in both cases for the same purpose.

34.              Lawyers in the bankruptcy case at that point (and the Court) relied upon counsel’s representation that the documents were admitted as part of the record in Florida.¹⁵ TSI LLC’s new lawyer only had the case for a few days before the conversion hearing and was in no position to assume the representation was inaccurate.

35.              These documents were also used in the preliminary injunction opinion of the court. See D.I. 304. The Court explicitly argued on behalf of the document that one “could make the case that the evidence before me goes beyond prior bad acts and gets to custom or habit.”

D.I. 291 at 260 (referring to the use of the “Florida records” at the January 23, 2023, hearing).

 

 

 

 

 

14 The scheme was furthered by Creditors’ opposition to TSI retaining the attorneys they proposed during this period as well as their opposition to an extension of time for the conversion hearing. See D.I. 51; see also D.I. 136.

15 The Court also acknowledged reliance on these “Florida” documents on January 30, 2024: “I did write an opinion in which I largely accepted your explanation for what happened here, and I believe that the records were falsified.” This was also a result of the fraud. See D.I. 427 at 52.

36.              This Court did not require any evidence authenticating the “Florida records” or their authorship, all of which had already been ruled and stipulated as inadmissible in Florida (incorrectly assuming that they were in evidence in Florida).¹⁶

37.              The pattern of conduct on the “Florida records” was deliberate and a conscious effort to defraud this Court.

B.                 Fraud through the “Black Redactions” in the Conversion Proceedings

 

38.              The conversion hearing also involved bank transactions that had been blacked out to obscure details on transfers. This was a key issue to this Court in its opinion to order the case converted to Chapter 7:

“The Court will note that of all the (various) allegations of impropriety the judgment Creditors have leveled at the Debtor, the one that the Court views as the most substantial involves the claim that the Debtor had secretly redacted certain information from the documents it produced.” See D.I. 146 at 42.

 

39.              When redactions appeared in the case, the TSI Members protested to the Trustee via email, see D.I. 512-10, as well as in testimony: “I had the opportunity to review bank statements, and I do not recall seeing any redactions that we produced. I did see the redactions that you guys did on production,” D.I. 140 at 243.

40.              Mr. Acosta previously brought the redactions to the attention of Mr. Richard Shepacarter from the Trustee’s office, see Ex. 3, which included a tamper table and multiple examples of progressive redactions from Creditors’ Counsel between February 7, 2022,

16 There were over a hundred other pages of transaction notations that both sides agreed had not been authenticated. These same documents have been entered in this Court by Creditors without any evidentiary review of their admissibility. See D.I. 74-78 (re-numbered DO22482-22504),

D.I. 74-79 (DO22505-22524), D.I.74-80 (DO22525-22547) filed by Creditors on February 7, 2022. They were admitted by misrepresenting their status. No authentication was offered for any of these exhibits (D.I. 74-77 – D.I.74-80). Their DO Bates numbers were higher than the documents produced by TSI. See D.I. 390-1 (Miller Coffey Tate confirming TSI’s production stopped at D022481). TSI’s transmittal of the documents indicated that these higher numbers were not TSI business records.

production and February 16, 2022. Mr. Shepacarter replied that there was nothing he could do about the redacted documents, instead advising Mr. Acosta to email all the documentation to the Creditors’ Counsel. See Ex. 4.

41.              These same documents, redacted by Ms. Kasen, were even attached to the Creditors’ Rule 37 sanctions motion accusing members of making redaction on bank statements.¹⁷ In short, Trustee’s Counsel tried to sanction TSI Members for documents Trustee’s Counsel redacted.

42.              In February 2022, the Creditors introduced multiple exhibits that were bank statements with black and white redactions that included obscured transactions details. They argued that these redactions were done by TSI Members to conceal transactions that involved improper movement of funds and sought Rule 37 sanctions. See generally D.I. 87.

43.              The redaction that was seized by the Court involved the $2.5 million transfer:

“The production of an altered document (other than where a redaction is conspicuously labeled) could, without doubt, be the basis for the imposition of sanctions. And the judgment creditors make a colorable case that the Debtor engaged in precisely this conduct. They point to a check for $2.5 million, written from one TSI account to another in July 2019, in which information that one might expect to present that identifies the transferee account is absent. Indeed, it remains uncertain what became of this $2.5 million. That is a serious matter, and one that a chapter 7 trustee may well choose to pursue. The Court does not believe, however, that the actual evidence of misconduct is (on the current record) sufficient to justify the imposition of sanction….” D.I. 146 at 43.

 

 

17 On February 28, 2022, Mr. Acosta emailed U.S. Trustee Trial Attorney Richard L. Schepacarter attaching a detailed spreadsheet and side-by-side exhibits documenting Creditors’ Counsel’s alteration of 90+ pages of bank statements (including unauthorized redactions, contrast manipulation, and added black boxes not present in the original Robinson + Cole production). See D.I. 512-10. This constituted notice to the United States Trustee of potential fraud on the court in violation of 18 U.S.C. § 152(4) (knowingly and fraudulently presenting altered documents in a bankruptcy proceeding) and 18 U.S.C. § 157 (bankruptcy fraud scheme). Mr. Schepacarter responded the same morning stating only that the U.S. Trustee “is not an arm of the U.S. Bankruptcy Court” and “does not act as a debtor’s counsel or agent,” taking no investigative or remedial action despite the statutory duty to report suspected violations under 28

U.S.C. § 586(a)(3)(F).

44.              Every factual predicate of this finding is erroneous. All of the documents providing every detail of this transaction were in the possession of the Creditors when they made these false representations to the Court.¹⁸ See D.I. 453-10; see also D.I. 453-6 (pre-hearing email from debtor’s counsel to all of the Creditors’ attorneys with clean attachments). Among several other documents, TSI’s counsel has previously produced the below images to Trustee’s Counsel:

See D.I. 453; D.I. 453-6.

 

 

18 At one point, Ms. Kasen confused the number on the cashier’s check with a new bank account number (leading to more wild and inaccurate accusations).

45.              Ms. Jennifer Kasen, counsel to the Creditors, had admitted in the March 16, 2022 transcript: “I just have one very brief comment that I’d like to make because there’s been talk about, you know, the black redactions versus the white redactions. I wanted to let the Court know that I personally did every single black redaction.” D.I. 191 at 136.

46.              “And Exhibit 17, which is all the email communications, that was that $2.5 million check and a deposit slip. There are black redactions on there and those were done by me, as well.” Id. at 36. The image of the document forged by Trustee’s Counsel and subsequently presented as Exhibit 17 below.

47.              Perhaps the most significant allegation was the redaction of a $2.5 million transaction on Exhibit 17, see D.I.456-10, pictured below, which was the blackout redaction referred to in the conversion opinion (see D.I. 146):

48.              The Creditors’ Counsel attributed this key redaction to TSI in that same conversion hearing, id. at 77,¹⁹ when they had been given a clean copy by TSI a month before. See D.I. 453-6. The image shown above (including a blue arrow) is the transmittal of the clean transaction documents (Exhibit 17 unredacted), sent to the Creditors’ Counsel weeks before that hearing. The Creditors tried to hide their redaction on the key Exhibit 17 by describing it as a “white out” redaction and falsely claimed that they never saw the clean document (provided to them a month before the hearing). This was a purposeful “smoke screen” and willful fraud on this Court. Today, the Trustee still uses these blacked-out documents against TSI in the adversary case. See Adv. D.I. ¶ 148.

49.              Creditors’ Counsel repeatedly falsely represented to the Court that the details of the $2.5 million transaction were deliberately obscured by TSI Members. This was a $2.5 million transaction described by Mr. Collins: “there was additional information about who the recipient of the transfer was. Here, what we saw was, number one, the redaction; and then, number two, we asked, where did this money go?” D.I. 191 at 79. He continued: “We were provided this document from TD Bank, drawn 7/19/19, to an account that I can’t tell when this document was redacted, but ending in 3053. We don’t have that; we don’t know anything about that.” Id. at 80

(emphasis added). This was a willful false representation to this Court.

 

50.              Creditors’ Counsel further claimed that they never received a clean copy of the

 

$2.5 million transaction that figured so prominently in the Court’s conversion opinion, another willful and inaccurate statement:

19 Mr. Orner also opined about the $2.5 million internal transfer that became so important in the Court’s conversion opinion on bad faith. See D.I. 140 at 89-90. He identified the redaction of the account information as suspicious. But apparently the Creditors did not provide Mr. Orner the full unredacted documents on the transaction provided to Creditors on February 10, 2022, and did not inform him that those blacked-out redactions were actually performed by the Creditors’ own counsel.

“[T]hat two and a half million-dollar transfer was whited out [actually, blacked out] . . . so that we couldn’t see where the money went… We asked counsel for Robinson & Cole to produce these records, they tried, and they withdrew…We don’t know where this is.

As we sit here today, we don’t know what account that is; that has never been produced.”

D.I. 191 at 76-77 (emphasis added).

 

The misrepresentation, along with a redacted Exhibit 17, were provided to the Court by counsel at the same time that they had in their possession unredacted clean copies of the transaction sent by Jamie Edmondson, debtor’s counsel, almost a month

                   earlier. See D.I. 453-6; D.I. 453-10. Mr. Collins is copied on that February 10, 2022, email which transmitted clean copies of the transaction. Id. There has not been a clearer deliberate and fraudulent submission of a document to a federal court than Exhibit 17.

2.                  In a futile effort to continue the fraud, the Creditors continued to misrepresent the facts months later:

“‘Creditors’ counsel never used the black redactions as part of their argument for bad faith. And the Court never relied upon the black redactions on the $2.5 million deposit slip and cashier’s check as proof of bad faith.” D.I. 453 ¶ 45.²⁰

 

3.                  The Creditors’ Counsel simply doubled down on their fraudulent scam on the Court, trying to confuse the issue by the misstatement in the record that Exhibit 17 had a “white out” redaction. It was a blackout redaction to which Ms. Kasen had confessed. Contrary to all of the counsel’s representations to the Court, the transaction was never obscured by TSI Members.

4.                  Cementing their efforts at fraud, Creditors’ Counsel claimed that the Court never relied upon redactions on the $2.5 million transaction, trying to cover up their consistent misrepresentations. This was a conscious, elaborate and continuing fraud on the Court.

 

 

20 The transcript inaccurately refers to the redaction as a whiteout and the Creditors’ Counsel try to dodge the bullet by that reference, ignoring the fact that they also argued strenuously that the transaction was obscured and they did not receive the information redacted (a lie). See D.I. 191 at 79-80.

5.                  Creditors GPDEV, LLC and Simons Exploration, Inc. were also present, observed or subsequently were aware of the use of the black redactions, as well as Ms. Kasen’s confession that she did them. Counsel for the Trustee, though not present at the time, later possessed all of this information, and still used the $2.5 million as evidence against TSI Members.

I.                     THE PRELIMINARY INJUNCTION OPINION LIKEWISE RESULTED FROM INTENTIONALLY FRAUDULENT EVIDENCE.

6.                  The preliminary injunction opinion of this Court continued to rely upon the allegations described above. See D.I. 304. at 6-9, 29-30. Creditors’ Counsel and Trustee’s Counsel made no attempt to correct the Court a year later, knowing that the prior statements and documents were fraudulent.

7.                  The preliminary injunction opinion also added other critical pieces of “evidence” that were equally fraudulent: whited-out bank documents provided by Robinson & Cole and “Exhibit A” along with “monthly transactions reports” that were grossly misrepresented to the Court.

A.                Fraud in the Preliminary Injunction Proceedings via the White-Out Redactions

 

8.                  This Court received into evidence documents from the Trustee’s Counsel that claimed to show white out redactions done by TSI Members to obscure transactions:

“The information obtained in that discovery suggests that the Debtor’s fabrication of business records and concealment of transfers to insiders was more prevalent than the Court had previously appreciated based on the prior hearings.” D.I. 304 at 12.

 

9.                  These redactions became a key factor in weighing the criteria for the preliminary injunction:

“Defendants attempted to conceal the transfers by redacting the name of the recipient of various transfers and by falsifying business records to suggest that these transfers were actually payments for business expenses.” Id. at 27.

10.              Based on discovery provided by Robinson & Cole to the Creditors, the Trustee’s Counsel introduced several transactions which included whited-out information obscuring some key information.²¹ Both the Creditors and Robinson & Cole attested that the copies which included the “CONFIDENTIAL” language inserted on the bank document came from Robinson & Cole’s document production done while they represented the Debtor.²² See D.I. 453-2 ¶¶ 7-14; see also D.I. 436-8, Attachment D (“Declaration of Bradford S. Babbitt”).

11.              Extensive evidence proves that the white outs were not in the TSI records subsequently produced to the Trustee by Mr. Mann.²³ The Trustee’s accountant used the documents produced by Mr. Mann that had no such redactions. See D.I. 390-1. TSI Members contacted Robinson & Cole to demand copies of the documents produced by the law firm when they learned of the redactions. See D.I. 512-7; Ex. 13.

12.              Based on the declaration from Robinson & Cole their firm transmitted the three pages of white-out bank transferee information to the Creditors. See D.I. 436-8. Robinson & Cole knew at the time of transmittal that the documents were not “authentic” copies as they were on notice by their own litigation manager of that fact as detailed below, those documents were not the TSI original source documents. See D.I. 512-4.

21 The bank statements produced by the TSI Members directly to Robinson & Cole did not have these redactions nor did the bank records produced by Mr. Mann to the Trustee.

22 After he no longer represented the TSI LLC, it appears that Mr. Gellert received Robinson & Cole documents, which he or the Creditors passed on to the Trustee.

23 Only documents produced by Robinson & Cole were stamped “Confidential” and those were the exhibits used in the preliminary injunction hearing. The Court has completely missed this point, flipping the source of the “CONFIDENTIAL” language. See D.I. 256 at 2. All of the evidence contradicts this assertion. As discussed herein, Robinson & Cole’s litigation manager wrote internally that they were not producing the original documents or authentic copies. See Ex.

5. Defendants’ metadata expert verified this by the empirical evidence in the documents themselves. See Ex. 6; Ex. 7.

13.              The Trustee relies upon white outs – contrary to prior testimony and the evidence.

 

All claims of whiteout redactions from the Trustee were initially lodged when he received the documents from Robinson & Cole, documents that the law firm’s litigation manager described as “not authentic copies,” even suggesting that they receive new Bates numbers. See Ex. 5.

14.              No testimony supports that redactions were done by TSI Members.²⁴ The evidence, when fully examined, shows that this is not only totally implausible: there is absolutely no possible motive (since other clean documents were simultaneously produced on the same transactions) but impossible (the empirical evidence proves it).

15.              The TSI Members’ documents produced to the Trustee directly through Kevin Mann and the documents produced to counsel for TSI and its members are all from the original file. See Ex. 9 (Mr. Mann’s email). Print-outs from this file have always shown clean documents, to the Trustee, to TSI Members’ counsel, and to others. None of these documents have redactions (black or white) or the “confidential” stamp.

16.              On February 21, 2022, Robinson & Cole’s litigation manager, Jeffrey Hardisty, in charge of managing the discovery for the TSI documents, wrote:

24 The sworn testimony in this case provides no basis for the inclusion of the redactions as evidence. The proponent of the documents, Mr. Homony, testified under oath he did not know how the redactions got there, and the Defendants’ witness testified that they did not come from TSI: “I had the opportunity to review bank statements, and I do not recall seeing any redactions that we produced. I did see the redactions that you guys did on production,” D.I. 140 at 243. Mr. Homony’s sworn testimony: “Q: Do you know who made these redactions? A: I don’t know who made any of the marks reflected on the – on this exhibit other than the arrow on the right.” D.I.

291 at 138. Mr. Homony further provided each document he used “upon information and belief, was produced by the Debtor to counsel for GPDEV and Simons during the Chapter 11 Case.”

D.I. 273 at 3. He used a copy of the records provided by the Creditors originally from Robinson & Cole. That was the only copy of the bank records turned over before July 2022. See Ex. 13. Note that none of the inadmissible Bates numbered documents that went beyond the TSI Members production were used by MCT, despite their production before the MCT review. See

D.I. 390-1.

“I can provide you with the images used for these docs in the original production (see attached docs with TSI prefix) but they do not represent the original file provided to us. They all show a generic error screen instead of an image of the original document (see other 3 non-Bates numbered docs attached), and I suspect the client feels the docs are corrupt because of the generic error. They are opening correctly; they just never perfectly represented images of the original files provided.” D.I. 512-4; see also Ex. 5.

 

17.              The creation of the new file was not successful in transferring the stored source images and a good deal of effort had to be made to create new documents. “[w]hat Relativity processed in didn’t accurately represent the source file.” See D.I. 512-4; Ex. 5 at 1.²⁵

18.              The documents described in paragraphs 14-16 of Mr. Babbitt’s declaration, see

 

D.I. 436-8 at 3, are not true and correct copies of the original upload of the TSI records provided to Robinson Cole, which they could not actually transfer without manually “reconstructing” the files. See Ex. 5.

19.              The Defendants’ data expert, Mr. Davidson from Atlas Protection Solutions (“Atlas”), performed a forensic examination of the metadata of the files used by Robinson & Cole for the document production to the Creditors: “The data within these archives were subjected to a series of analytical procedures, including metadata extraction, checksum verification, and visual content examination, to establish their veracity and provenance.” Ex. 7 (Atlas report). The expert has worked for many years in the IT field and software design for the US Government. See Ex. 8 (Mr. Davidson’s resumé). The metadata proves that they were not the same documents uploaded from TSI on February 1, 2022, but were created a day later as a new document on February 2, 2022. Then the two key bank account statements were scrubbed of all

25 Significantly, this is not the software that Robinson & Cole described in their declaration (“LiquidFiles”). See D.I. 436; D.I. 436-8. The litigation support manager at Robinson & Cole reported historical problems with using their software for the production of documents. Nor is exhibit A to Mr. Babbit’s declaration a report of successful extraction of the files, reporting only “if this works.” D.I. 436-8 at 8. The record shows that it did not work. See D.I. 512-7; see also Ex. 5.

metadata. And the other digital files of bank accounts without whiteouts at Robinson & Cole contained no altered metadata. See Ex. 7.

20.              The Atlas findings were conclusive: “Checksums: The checksums, serving as unique identifiers, did not align with those of any original documents, suggesting the files were not merely reproduced but newly created. Visual Inspection: Examination of TSI00034.pdf, TSI000138.pdf, and TSI000180.pdf, both before and after R/C’s submission, revealed alterations in the PDF content, including redactions and data removal. Metadata Abnormalities: Four PDF documents from the May 8th ‘Source Files’ exhibited metadata irregularities: Metadata was missing or not generated for BBVA_2888_2019.pdf, BBVA_2888_2020.pdf, and BBVA_2888_2021.pdf. The data and metadata details for BBVA_8953_2019.pdf were significantly different. The creation date for BBVA_9759_2020.pdf stood out as distinct from the other files.” Id. at 4. Atlas goes on to conclude that “the files within the provided Zip archive, represented by TSI Bates numbered documents, are not original documents. They were created anew on February 2, 2022, using ‘PDF Creator.’ The lack of matching metadata or checksums with any original documents indicates that these are not authentic copies but rather newly generated files. The analysis of the May 8th R/C ‘Source Files’ revealed metadata anomalies and visual content changes, further supporting this conclusion.” Id.

21.              The metadata analysis completely supports the Robinson & Cole litigation manager’s statements. The copies produced to the Creditors marked “Confidential” were not authentic copies of the original documents. Some even had the metadata scrubbed.

22.              Specifically, the emails confirm that February 2nd file could not be used in their software to print out clean images of the TSI source files. See D.I. 51-6; see also Ex. 7.²⁶ All of

26 Metadata, often described as “data about data,” can be used to authenticate electronic evidence under Fed. R. Evid. 901(b)(4). Metadata is the gold standard in establishing document

this contradicts the facts represented by Mr. Babbit. See D.I. 436-8. Mr. Babbit never directly testified.

23.              Mr. Collins volunteered to the Court in the March 16, 2022 hearing that metadata could be used to prove the date a document was created (while he simultaneously introduced the Florida documents with no metadata): MR. COLLINS: “And I would suggest to the Court that if we were to have an opportunity to obtain the metadata for this document that it would -- it would establish conclusively when this document was created.” D.I. 191 at 74.²⁷

24.              Robinson & Cole never notified this problem to TSI Members or provided an opportunity to retransmit the source files.²⁸ After they withdrew from representing TSI Members, the members checked the docket and discovered exhibits submitted by Ms. Kasen from Robinson & Cole that contained black and white redactions.

25.              The TSI Members questioned Robinson Cole on February 20, 2022, about what Robinson Cole had actually produced in discovery. See Ex. 13. TSI Members checked the metadata in the produced files created by Robinson & Cole and noticed the “creation date” on all of them was February 2, 2022, or later, including the three whiteout documents. Mr. Babbit states that they “modified” the “TSI uploaded document”; however, the metadata shows they “created” a new document on February 2, 2022. See Ex. 5; Ex. 7. That document could have

 

 

authenticity. It can distinguish between an original document and one that has gone through third-party alteration. Courts have now gone to great lengths to use metadata as a tool to determine the authenticity of a document and whether the original has been tampered with.

27 Mr. Collins seems well-aware that the Florida version of the “All Aqua” documents would have his footprint on them, so the metadata disappears in the bankruptcy court.

28 Almost everyone who regularly uses a computer has their own personal experience downloading a file that is “corrupted” and going back to replace it. Robinson & Cole was silent and simply processed the file they had with software that did not work.

been subsequently modified, as indicated by Mr. Babbit, but not in the way he implies. See D.I. 436-8 at 8.

26.              As the law firm’s litigation support manager observed, the documents “do not represent the original file provided to us.” D.I. 512-4; Ex. 5.

27.              These Robinson & Cole documents unaccountably have white redactions on them (added after the files were obtained by Robinson & Cole) that do not appear in the original document coming from the TSI source files. Robinson & Cole submitted the documents in discovery and then provided the Babbit affidavit with knowledge that they were not accurate copies of the originals. There is no explanation for how the redactions ended up on the documents, but they were not in the TSI source files. The burden of proof in this instance is on the party alleging that TSI did white redactions on those documents. It is not met in any manner on this record. The fact that the documents were not authentic copies was known when they were passed on and introduced to the Court.

28.              In fact, the Creditors’ Counsel and Trustee’s Counsel continued to rely on these documents even after they were aware that they were altered and not in the original documents transmitted from TSI. By adopting the evidence after they knew it was fraudulent, Creditors’ Counsel and Trustee’s Counsel committed fraud on the court.

29.              In an effort to try to create some evidence that the white outs came from TSI Members,²⁹ the Trustee’s Counsel in the April 29, 2024, hearing took a document out of his

29 TSI counsel objected to attributing the white and black redactions to the TSI Members from the beginning. “MR. MANN: And, Your Honor, I don’t believe there was any evidence then as to who put those redactions on those papers -- THE COURT: But they’ve been produced by the Debtor in response to the creditors’ discovery requests. MR. MANN: And then they were presented to the Court by the creditors -- THE COURT: Okay. MR. MANN: -- is our position, Your Honor.” D.I. 291 at 231. Mr. Acosta testified early in the conversion hearing that none of the bank documents produced by TSI Members had any redacted transactions (the documents produced in response to the Creditors, as described by this Court, were from Robinson & Cole).

exhibit folder that was offered under the previous attestation of Mr. Homony, see D.I. 273, claiming it was provided to him by the Creditors. See D.I. 507 at 100. Trustee’s Counsel Bryan Hall then directed Mr. Homony to swear that it came from directly TSI Members, potentially suborning perjury.³⁰ Removing the document in question from an earlier affidavit which correctly described the chain of custody, i.e. that they were from Robinson & Cole, see D.I. 273, suggests Mr. Hall certainly knew that the documents in question came from Robinson & Cole.

He also had in his possession the law firm’s internal emails indicating that the documents were not authentic copies. See Ex. 5; see also D.I. 507 at 136 (transmittal of Robinson & Cole emails to the Trustee).

30.              The Robinson & Cole emails were later provided to the Trustee’s Counsel in April 2022. See D.I. 507. Those emails contained emails from Mr. Hardisty that acknowledged the failure to produce authentic copies of the original TSI documents. See D.I. 512-4. Creditors’ Counsel first introduced the white out redactions, see D.I. 191 at 91, and certified that they came from Robinson & Cole (notably, months before the TSI Members provided copies to the Trustee). See Ex. 9. Ms. Kasen attested in April 2024: “7. On February 2, 2022, Debtor’s then counsel, Robinson Cole (“R+C”), emailed me a link with certain documents. 8. I downloaded the files from the link, and stored them in K+K’s computer system, where they still remain today.” Adv. D.I. 147 at 28. This is the same electronic file obtained by Defendants’ counsel from Robinson & Cole under subpoena and provided to their metadata expert for analysis.

31.              Despite having the emails that proved the white-out redactions could not be attributed to TSI’s original documents, the Trustee’s Counsel predicated a major part of their

30 This testimony is contradicted by Homony’s own sworn statement, see D.I. 273, Ms. Kasen’s affidavit, see Adv. D.I. 147 at 28, and Mr. Babbit’s affidavit. His testimony is also physically impossible, since the document referred to included the Robinson & Cole “CONFIDENTIAL” language. The Court flipped this fact in its sanctions opinion. See Adv. D.I. 256 at 2.

case in the preliminary injunction hearing on these white-outs months later. See D.I. 273; D.I. 272 ¶ 24c, 46; D.I. 291 at 207, 231. These allegations then became a key finding of this Court in the preliminary injunction opinion. Those findings are incompatible with the actual evidence the Trustee’s Counsel possessed when they introduced the documents. See Ex. 5. Moreover, the Trustee moved to exclude the subsequent metadata expert report, proving that the documents were not authentic, furthering their conspiracy. Nothing could reflect a clear deliberate effort to obscure the truth and to hold out the false allegations more than this conduct.

32.              While the Trustee’s Counsel might try to excuse their overlooking the Robinson & Cole emails in their possession proving that the white-outs were “not authentic copies” of the bank records produced by TSI Members, they cannot excuse their continued use of the white-outs in this case after learning of both the Robinson & Cole emails, see D.I. 512-4, and the meta-data that confirmed those were not authentic copies. See D.I. 512-6; see also Ex’s 5 & 7. The fact that the Trustee’s Counsel, along with the Creditors’ Counsel, continued to use this evidence with the Court after clearly knowing it is false is still fraud on the Court. See generally Model Rules of Pro. Conduct. R. 3.3 (A.B.A. 2023); see also Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1116-1122 (1st Cir. 1989) (affirming dismissal for fraud on the court, including through continuance to rely on a fraudulent document after the fraud became known); Pope v. Federal Express Corp., 138 F.R.D. 675, 681-683 (W.D. Mo. 1990) (finding fraud on the court); Est. of Adams By & Through Adams v. Fallini, 132 Nev. 814, 819-822 (2016) (upholding a decision to set aside judgment for fraud on the court through counsel’s omission of pertinent information).

B.                 Fraud in the Preliminary Injunction Proceedings via the Monthly Transaction Reports

 

33.                          The Court in the preliminary injunction hearing relied upon the Trustee’s Counsel’s Exhibit A, referring to “the incomplete business records and uncertainty about what

became of the transferred funds.” D.I. 304 at 23. The Court referred to a “summary chart” as to the alleged fraudulent transfers (referred to as “Exhibit A” in the relevant hearing, see D.I. 291 at 14, 79-80, 87, 159), while attributing that “evidence” to Mr. Homony. Id. at 17. This was a thinly veiled effort by Mr. Hall to admit Homony’s expert opinion without having to comply with Fed.

R. Civ. P. 26. He had no personal knowledge of any of the documents and examined them in his professional supervisory capacity at Miller Coffey Tate (also certifying the time records of their team). See, e.g., United States v. Ganier, 468 F.3d 920, 925-927 (6th Cir. 2006) (holding proposed witness offered expert testimony, therefore should have resulted in proper disclosure of written expert report); see also Adv. D.I. 449.

34.                          The Court entered Exhibit A as evidence, on the motion of Trustee’s Counsel Bryan Hall. But Mr. Hall now admits he created Exhibit A, not Mr. Homony. See D.I. 419 at ¶

20. The actual evidence was Mr. Homony’s testimony, which was an expert opinion,³¹ but based on a very limited subset of documents examined by Miller Coffey Tate LLP (“MCT”), namely the worksheets, not the final ledger entries. The entirety of the documents actually contradicted his testimony in many instances. See Ex. 16.

 

 

31 See, e.g., United States v. Ganier, 468 F.3d 920, 927 (6th Cir. 2006) (“witnesses who performed after-the-fact investigations [are] generally not allowed to apply specialized knowledge in giving lay testimony”). Lacking any firsthand knowledge of the transactions, Mr. Homony could only be allowed to testify as to his conclusions as an expert. See, e.g., Richardson

v. Consol. Rail Corp., 17 F.3d 213, 218 (7th Cir. 1994) (upholding classification of doctors as lay witnesses when the court “excluded what it considered to be ‘expert’ testimony by the doctors, and only allowed them to testify as to matters within their personal knowledge”); see also Certain Underwriters at Lloyd’s, London v. Sinkovich, 232 F.3d 200, 203 (4th Cir. 2000) (“Rule 701 permits lay witnesses to ‘offer an opinion on the basis of relevant historical or narrative facts that the witness has perceived.’” (quoting MCI Telecomms. Corp. v. Wanzer, 897 F.2d 703, 706 (4th Cir.1990))); Teen-Ed, Inc. v. Kimball Int'l, Inc., 620 F.2d 399, 403 (3d Cir. 1980) (same). Mr. Homony has no such knowledge, and indeed supervised experts doing the examination. See D.I. 390-1 (certification by Mr. Homony).

35.                          A detailed analysis of the record shows that all of the fraudulent transaction allegations were based on fraudulent documents that were falsely used as a “ledger” but was merely work sheets done by part-time help. See D.I. 328-8 at ¶ 23. This occurred at the same time when all or most of those same transactions had already been examined by MCT, who found support for them, contrary to Mr. Homony’s testimony. See D.I. 390-1; see also Ex. 16.

36.                          The evidence presented by the Trustee’s Counsel consisted, in its entirety, of the following: (1) a summary chart of transactions (the aforementioned “Exhibit A”), labelled “fraudulent transactions,” and; (2) Mr. Homony’s misleading testimony that various transactions did not show up on something the Trustee labelled “monthly transaction reports.” See D.I. 291 at 41-47, 66-69, 125, 128, 133.³²

37.                          Counsel for TSI Members objected at the time to these documents and accurately stated to the Court that “as far as the monthly reports, there was no testimony as to who prepared them, why they were prepared, whether they’re actually something that the Trustee should be relying on.” Id. at 242.

38.                          Despite the total lack of authentication of the documents as actual ledger entries, they have been used several times by the Trustee and were the sole predicate for Mr. Homony’s expert testimony.³³ The difficulty with the Trustee’s position is that these documents are not “monthly transaction reports” (a title added by the Trustee’s Counsel), which would wrongly imply that they are the actual final accounting classification of the items described. These expert

32 Mr. Hall has acknowledged creating Exhibit A and that it was not properly in evidence. See

D.I. 419 at 20.

33 Most recently in their opposition to the Rule 60(b)(3) motion. See D.I. 436-1, 436-4, 436-10 – 436-14. The same inaccurate description of the evidence is used throughout their Adversary case pleadings.

conclusions by Mr. Homony were also contradicted by the main body of MCT’s expert forensic analysis (also certified by Homony). See Ex’s 12 & 16; see also D.I. 390-1.

39.                          These are incomplete “bank reconciliation” work sheets, prepared by part-time help, and not the final classification of the items used in the ledger of TSI. See D.I. 489-14 (index of the documents produced to Trustee); D.I. 507 at 129 (Homony retracting his testimony).

40.                          The deposition testimony that the Trustee originally tried to use to legitimize their characterization now fails for multiple reasons: (1) Homony withdrew the allegation when crossed-examined (supra); (2) the person creating the entries used by the Trustee as “ledger” entries was a part-time employee not authorized or trained to make any such decision; (3) the deposition testimony cited by the Trustee was ambiguous at best, and TSI Member Ms. Mott never received an actual copy of the document flashed on Zoom. She was never given the documents involved.³⁴ There is no way to determine what document was shown to her in the deposition that was described as a “monthly transaction report” or whether she actually saw the entire document.³⁵

41.                          The Trustee was on notice of the purpose of these documents by their transmittal from the TSI Members who provided a Bates-numbered document index that correctly described these documents. See Ex. 6 (cover letter from Mr. Mann to Mr. Homony transmitting the files,

 

 

 

34 “No exhibits were actually marked during the deposition.” Ex. 10. “Without anyone showing her the documents, not --without the exhibits being numbered, and without the exhibits being presented to her after the deposition. It was a scam deposition that, in my opinion, was very unprofessional.” D.I. 507 at 242-243.

34 The document was produced as a “bank reconciliation statement” and later described in the same deposition as being prepared by a part-time employee. Any inconsistency can readily be explained by the fact that she was never given the document.

along with this Index). This was known to the Trustee’s Counsel months before the preliminary injunction hearing.

42.                          In fact, contrary to Mr. Homony’s testimony, the MCT tasks described in their billing reported support for the transactions listed by Mr. Homony and Mr. Hall. See D.I. 491-1 at 74, 75 (describing support for the transactions on August 30, 2022, months before Mr. Homony’s testimony); see also D.I. 390-1; Ex. 11. Mr. Homony testified to this Court that there was no support found on the bank reconciliation worksheets, omitting that MCT had found support in other documents.³⁶ See Ex’s 12 & 16. Mr. Hall and Mr. Homony knowingly used the incomplete worksheets from a part-time employee as a strawman.

43.                          These are worksheets prepared by part-time, untrained help. See D.I. 328-8 at 23 (“[a]n administrative person that helps with admin work.”). They are not the final classification of the items used in the ledger, and there is no evidence that these documents are actual ledger entries. See Hertz v. Luzenac Am., Inc., 370 F.3d 1014, 1020 (10th Cir. 2004) (describing how a business purpose, inexperience of the preparer, and lack of the preparer’s neutrality can render documents untrustworthy for use in litigation). These were facts known to the Trustee’s Counsel.

44.                          The fact that these are not actual “monthly transaction reports”³⁷ or the actual ledger designations is clear since they are also incomplete (many items are not classified), while

36 Mr. Homony testified on cross as follows, seemingly offering an expert opinion: “Q: What is missing? A… And I would suggest to you that there is virtually no evidence or any support for the transfers identified on Exhibit KK and in the complaint.” D.I. 291 at 133. He made this statement after he met with MCT accountants who reconciled and found support for virtually every transaction. See Ex’s 12 & 16; see also D.I. 390-1 at 30.

37 Relying on casual reference to them as “monthly transaction reports” in Ms. Mott’s deposition does not change their substance or reality. This is especially true since her testimony was improperly taken by the complete failure to provide her with the documents used in the questioning either before, during or after the deposition. See Ex. 10.

others are inconsistent with how items were actually entered into the final ledger and tax filings.³⁸ Mr. Homony falsely described the document as a “ledger” at the preliminary injunction hearing, see D.I. 291 at 42, then admitted a year later it was not a ledger that represented the final treatment of each item in the TSI business records. See D.I. 507 at 129 (“There’s no general ledger entries anywhere in the documents I just described to you.”).

45.                          The final ledger and tax details have been provided to the Trustee and Creditors.³⁹ MCT billing records prove that they had those documents and reviewed them. See D.I. 390-1; see also Ex’s 12 & 16. Yet the Trustee ignored the real record in this case in his possession prior to the preliminary injunction hearing.

46.                            Miller Coffey Tate billed the estate more than $340,000 for what it repeatedly described in its own sworn fee applications as a comprehensive forensic reconstruction and audit of TSI’s books and records, from 2016 through 2022. See, e.g., D.I. 390; D.I. 390-1. Every dollar of that compensation was approved by this Court only because William Homony, who is also a U.S. panel trustee and MCT’s principal, certified under penalty of perjury that the time entries were “true and correct” and that the work described was actually performed.

47.                            Professional accountant billing descriptions of work performed are admissible as to their work product, as well as their conclusions as experts. Accountants’ hourly task descriptions, typically found in billing records, invoices, or time sheets, have been admitted into

38 Mr. Homony indicated in his subsequent testimony: “you described it pretty well in the motion to vacate, the motion to strike documents, where you described it reconciles the difference between a cash balance and the ledger balance.” D.I. 507 at 129.

39 See D.I. 456-2 (index of documents provided to the Trustee: chart of accounts and income statements). The Court noted in the March 16, 2022, conversion hearing that there were obvious inconsistencies in these documents which contradicted the tax filings. See D.I. 191 70-71. They therefore could not have been the actual ledger entries as submitted by the Trustee’s Counsel.

evidence across U.S. federal courts, including the U.S. Tax Court, to prove the nature of a financial item.⁴⁰

48.                          Those certified billing records establish that MCT: (1) Reconciled every K-1 disbursement for tax years 2018–2021 to the Debtor’s bank statements (6.2 hours, April 22, 2022, Kyle Andres, CPA/CFE), see D.I. 390-1; (2) Prepared complete receipt-and-disbursement schedules for all eight TSI bank accounts covering 2016–2022 (over 20 hours, August 2022, Victor Scotte, CPA), see id.; (3) Spent 8.0 hours days before Homony’s January 2023 testimony “gathering support,” “obtaining support,” “compiling support,” and “analyzing support” for transfers to every defendant in this adversary proceeding (January 4-5, 2023, Kelly Kurtz, CPA), id.; and (4) Performed dozens of additional forensic tasks over nine months that directly contradict Homony’s later testimony that the Debtor’s records were “haphazard” and that there was “virtually no evidence or support” for the transfers. Id.; see also Ex. 16.

49.                          Because these representations were made in fee applications approved by the Court, they are judicial admissions that bind both MCT and the Trustee. See In re Teleglobe Commc’ns Corp., 493 F.3d 345, 377 (3d Cir. 2007) (noting that statements in billing records can be judicial admissions); In re Lincoln Nat’l COI Litig., 620 F. Supp. 3d 235, 245 (E.D. Pa. 2022) (discussing the admissibility of an actuarial expert’s testimony). The Trustee and MCT are

 

 

40 This is most common in tax disputes where such records are used to substantiate the business purpose, ordinary and necessary character, or deductibility of expenses under IRC Sec. 162(a) (allowing deductions for ordinary and necessary business expenses). See, e.g., Sherman v.

Comm'r of Internal Revenue, T.C.M. (RIA) 2023-063 (T.C. 2023); see also Kohout v. Comm'r of Internal Revenue, 123 T.C.M. (CCH) 1193 (T.C. 2022) (noting that original, detailed records, like billing entries or invoices, carry probative value if properly maintained and authenticated). An accountants’ billed tasks descriptions are also admitted in other contexts like fee award determinations, bankruptcy proceedings, or fraud cases to characterize services rendered or financial transactions.

therefore judicially estopped from taking any position inconsistent with the work they swore was performed and for which they received an interim payment of over $340,000 of estate funds.

50.                          In effect, they imply, without any evidence, that the ledger and final documents must be “fake” since they contradict these worksheets, although these were prepared for a different purpose by part-time help. The records are not the final ledger entries because they are incomplete, prepared by part-time help for a different purpose.

51.                          These are not intended or produced within a company for the purpose that the Trustee is attempting.⁴¹ It is inaccurate and highly misleading to mislabel them “Monthly Transaction Reports” and to use them to try to represent the final accounting entries on the ledger. This does not change the reality of their creation, purpose and use (especially when the actual records accurately account for their creation, use and purpose).⁴²

52.                          Mr. Homony, when pressed in cross-examination on April 29, 2024, conceded that these same records were not monthly transaction reports:

“Q: And are you aware that by Bates numbers from the documents you just read for, all of them were produced to the Trustee under the title ‘Itemized Bank Reconciliation?’ A: I’m aware that there was an index produced at the same time contemporaneous with these documents.

Q: And you’re aware that that characterized them as a bank reconciliation?

41 “[A]s a general rule, the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records … However, such records may be admitted into evidence if the recipient can establish personal knowledge of the maker’s business practices and procedures, or establish that

the records provided by the maker were incorporated into the recipient’s own records and routinely relied upon by the recipient in its own business[.]” Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 209 (N.Y. App. Div. 2d Dep't 2019) (international quotations omitted). Contrary to the Trustee’s allegations, the records here were not relied upon for classification of expenses. See Fed. R. Evid. 803(6).

42 Counsel for the TSI Members objected to the lack of proof of the purpose and nature of the bank reconciliation documents labelled by the Trustee as “Monthly Transaction Reports.” As Mr. Mann pointed out, “as far as the monthly reports, there was no testimony as to who prepared them, why they were prepared, whether they’re actually something that the Trustee should be relying on.” See D.I. 291 at 242.

A: I’m aware of how it’s identified. Yes.”

See D.I. 507 at 128; see also Ex. 14 (bank reconciliation).

 

53.                          The Trustee’s Counsel misrepresented the documents by replacing their real title with the term “Monthly Transaction Report,” creating a falsity to fit the narrative used to create their strawman argument. See D.I. 291 at 42-46. Mr. Homony testified later that he did not have any evidence that the notations on these sheets were the actual ledger entries or that they represented how the individual items were treated in the final TSI financials. See D.I. 507 at 128.

54.                          Despite Mr. Homony’s use of the incomplete worksheets, the internal Miller Coffey Tate professional task records indicate that final classification of expenses was reconstructed and that there is no indication that “monthly transaction reports” (as labelled by the Trustee) were actually used. See D.I. 390-1. Mr. Homony and Mr. Hall were aware of this before the testimony. See Ex. 16.

55.                          The evidence cited above clearly indicates that the Trustee used bank reconciliation worksheets as a strawman to create the false impression that transactions were not properly accounted for in the TSI business records.

56.                          The MCT examination of all the documents contradicts Mr. Homony’s testimony that the transactions were not accounted for and were therefore fraudulent. This was known to the witness and counsel before the hearing. That information was provided to him before his testimony. MCT found support for the transactions that was not included by the part-time employee who created the worksheets for an entirely different purpose. See D.I. 390-1; Ex. 11.

57.                          This is striking since the billing records of tasks by Mr. Homony show him asking the professionals at MCT for evidence of fraud repeatedly. See D.I. 390-1. No certified examination report was produced, in violation of the duty to disclose under Fed. R. Civ. P. 26. The transactions that Mr. Homony claimed were not supported by the worksheets were actually

supported by the forensic examination by accountants at Miller Coffey Tate. See D.I. 390-1. The false documents were introduced with knowledge that they were inaccurate and misleading.

58.                          Counsel for the Trustee knew the strawman documents he used in the preliminary injunction hearing were not submitted by TSI Members as “monthly transaction reports” and that they were both incomplete and contradicted by TSI’s other, unaltered business records. The testimony was designed to avoid providing the full forensic examination results, which contradicted the very selective and misleading approach used by Mr. Homony and put on the stand by Trustee’s Counsel.

59.                          Falsely presenting his own document as an accounting report (Exhibit A), see D.I.

 

271-1, Trustee’s Counsel made the decision on whether to ask the expert in this case for a written and certified report and declined to do so, knowingly violating the federal rules of evidence, civil procedure, and bankruptcy that govern the proceedings. The omission of such a report, the substitution of his own document and the use of the worksheets as if they were a final ledger was willfully misleading to the Court, demanding that the court use its long-standing power “to set aside fraudulently begotten judgments.” Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 245 (1944).

II.               OFFICERS OF THE COURT INTENTIONALLY AND SUCCESSFULLY PRESENTED FRAUDULENT EVIDENCE ON THE COURT.

60.                          The above facts clearly and convincingly establish that lawyers as officers of the court presented false evidence with the intent to deceive the court and had the effect of doing so. See generally Herring v. United States, 424 F.3d 384, 386 (3d Cir. 2005) (setting out the elements for establishing fraud on the court).

A.                Trustee’s Counsel’s Actions were Calculated to Interfere with this Court’s Ability to Impartially Adjudicate this Case and Hampered Defendants’ Ability to Present a Defense.

61.                          In the above instances, Defendants contend that the fraudulently submitted “evidence” was critical to the Court’s rulings (as even noted in the opinions). But this is not necessary to find “fraud on the court” under Rule 60(d)(3). A “fraud on the court” occurs where it can be demonstrated, clearly and convincingly, that a party has knowingly set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party’s claim or defense. See, e.g., Alexander v. Robertson, 882 F.2d 421, 424 (9th Cir. 1989); Pfizer, Inc. v. International Rectifier Corp., 538 F.2d 180, 195 (8th Cir. 1976); England v. Doyle, 281 F.2d 304, 309-310 (9th Cir. 1960); United Business Communications, Inc.

v. Racal-Milgo, Inc., 591 F. Supp. 1172, 1186-1187 (D. Kan. 1984).

 

62.                          There is no doubt whatsoever that the above actions by both the Creditors’ Counsel and Trustee’s Counsel improperly influenced this Court and hampered the fair presentation of the TSI Members’ defense.

63.                          At every juncture in the conversion matter and preliminary injunction matter, Trustee’s Counsel knowingly used inadmissible and deliberately misleading evidence to the severe prejudice of Defendants rights to a fair adjudication. The timesheet for Archer & Greiner, P.C., see D.I. 334-1, reflects that Mr. Collins met or communicated with the Trustee’s Counsel on several occasions regarding the evidence that was misrepresented. All counsel that introduced and used the above fake evidence did so repeatedly after all the facts on their true, false nature were obvious in the record. No one can argue it was an honest mistake: it was a calculated scheme to defraud the Court. Unfortunately, it also did, in fact, successfully defraud the Court.

B.                 The Fraudulent Evidence was Knowingly Submitted and Repeatedly Used by Trustee’s Counsel after Knowledge of its Fraudulent Nature.

64.                          The scope of Rule 60(d)(3) is clearly met by the above facts. “The party seeking relief under Rule 60(d)(3) must establish fraud by clear and convincing evidence which involved

an unconscionable plan or scheme designed primarily to improperly influence the court in its

 

decision.” In re Marinari, 596 B.R. 809, 824 n. 23 (E.D. Pa. 2019) (emphasis added); see also Hobbs v. Pennell, Civ. No. 87-285-GMS, 2009 WL 1975452, at *3 (D. Del. 2009) (“It is well established that a court has the inherent power to grant relief from a judgment which is secured by a fraud on the court.”).

65.                          Counsel for the Creditors and Trustee have consistently misrepresented key documents relied upon by this Court with the knowledge that they were making false statements and submitting false documents. Creditors, and later the Trustee, engaged in “a deliberately planned and carefully executed scheme[.]” Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322

U.S. 238, 245 (1944).

 

66.                          This is precisely the conduct that justifies action under Rule 60(d)(3). The Third Circuit noted in Herring v. United States, 424 F.3d 384, 390 (3d Cir. 2005) that actions alleging fraud on the court must demonstrate “(1) an intentional fraud; (2) by an officer of the court; (3) which is directed at the court itself; and (4) that in fact deceives the court.” TSI Members agree that the fraud on the court must constitute “egregious misconduct … such as bribery of a judge or jury or fabrication of evidence by counsel.” Id. at 387 (quoting In re Coordinated Pretrial Proc. in Antibiotic Antitrust Actions, 538 F.2d 180, 195 (8th Cir. 1976)).

67.                          In this case, the illicit actions described above went to the heart of the Court’s conversion and preliminary injunction orders. The “bad faith” finding of the Court was a key factor in the decision to convert the case. There was no issue of insolvency, so the decision to

convert weighed heavily on these factors. The key evidence in the Court’s decision (“All Aqua,” “fabricated documents” and the $2.5 million obscured transaction and “hidden” bank account) was all false.⁴³ They were known to be fake by the Creditors’ Counsel. The fraudulent evidence went on to the preliminary injunction where the same bogus documents were used, and white-out redacted bank records and a fake expert report summary were added to the mix.

68.                          These facts are more compelling than those previously affirmed by the Third Circuit as sufficient to set aside a judgment based upon fraud on the court. Baxter v. Bressman (In re Bressman), 874 F.3d 142, 150-154 (3rd Cir. 2017) (finding an attorney’s fraud on the court, including through omission of material fact, “sufficiently egregious” to vacate a default judgment in Chapter 11 bankruptcy proceedings). Falsifying a document is a classic example of fraud on the court justifying post-judgment relief. See generally Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) (holding introduction of a spurious article prepared for publication was fraud on the court in a patent case). Indeed, the fraud alleged here was so serious as “to prevent the judicial machinery from performing ‘in the usual manner its impartial task of adjudging cases that are presented for adjudication.’” Ehrenberg v. Roussos (In re Roussos), 541 B.R. 721, 725 (Bankr. C.D. Cal 2015) (quoting Anand v. CITIC Corp. (In re Intermagnetics Am., Inc.), 926 F.2d 912, 916 (9th Cir.1991)).

 

 

 

43 All the Florida documents were introduced by misrepresenting that they were exhibits admitted in the Florida Case, after counsel for the same Creditors had stipulated that they were hearsay and agreed with the Florida Court to exclude them. They repeatedly lied that TSI had “fabricated” these documents and others withdrawn by their counsel, none of which had been prepared by TSI. No testimony of their origin or source was ever taken. The key $2.5 million transaction was described as having been obscured by TSI, while the Creditors actually did the black-out and had clean copies of the same document a month before their representation. This was a pervasive scheme to perpetrate fraud on the court. See Ex. 2; D.I. 453-6; see also Ex. 1B.

69.                          The cases cited above, with even less compelling facts have been held sufficient for vacatur under Rule 60(d)(3). The same “fraud on the court” standards have also been applied under Rule 11 on less compelling facts to justify the dismissal of claims as a sanction. See, e.g., Farrar v. Ryan Paul Lapan & Rucker’s Wholesale & Serv. Co., No. 20- 10554, 2022 WL 4122043, , at *2-7 (E.D. Mich. 2022) (granting dismissal as “the only sanction that will maintain the integrity of the judicial system” due to a single edited photograph); Network Data Rooms, LLC v. Saulrealism LLC, 2023 WL 7103280, at *2-3 (2nd Cir. 2023) (affirming dismissal due to a falsified email chain); Pope v. Federal Express Corp., 974 F.2d 982, 983-984 (8th Cir. 1992) (affirming dismissal due to a forged handwritten note added to a company file).

70.                          The conversion and preliminary injunction opinions are wholly infected on key points with false evidence knowingly submitted to the Court. Federal courts generally require that the fraud materially impacts the judicial process or undermines its integrity. The focus is on whether the misconduct subverts the court’s ability to fairly adjudicate the case, rather than strictly requiring the fraud to be the sole or primary basis for the judgment. Submission of false evidence by an attorney has long been considered fraud on the court, as noted in the above cases, and there is no doubt that this occurred multiple times in this instance.

71.                          While Trustee’s Counsel may argue that the conversion and preliminary injunction orders themselves need not be overturned and that the Court should act as:

“a skilled surgeon using a scalpel, extracting only those portions of the evidence and proceedings actually touched by disease. This argument fails to recognize that his fraudulent conduct did not simply impact the tainted evidence, the damages trial, or the adversarial proceedings as a whole — it represented a direct and brazen affront to the judicial process.” Theokary v. Shay (In re Theokary), 592 Fed. Appx. 102, 107 (3rd Cir. 2015) (affirming dismissal for “fraud on the court” in a Rule 11 case due to use of false expert reports).

72.                          The law clearly applied supports the fact they used a deliberate scheme to introduce bogus documents to the Court which poisoned the ability of the Court to reach a fair

decision and hampered the Defendants in their defense. All requirements for Rule 60(d)(3) are clearly found in the undisputed facts. These four frauds were not isolated errors – they were a coordinated, persistent scheme by multiple officers of the court to subvert this Court’s fact-finding process.

73.                          Here, counsel did not simply withhold information – they affirmatively fabricated evidence, falsified documents, made knowing misrepresentations to the Court, and persisted in using evidence they knew to be fraudulent across multiple proceedings spanning more than two years.

74.                          The Supreme Court’s decision in Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), remains the touchstone for fraud on the court involving fabricated evidence. The court held that the introduction of a spurious article prepared for publication constituted fraud on the court warranting relief, even years after judgment. The court emphasized that “[t]ampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public.” Id. at 246. The systematic fabrication and misrepresentation of evidence in this case strikes at the heart of the judicial process in precisely the manner the Hazel-Atlas court condemned.

CONCLUSION & RELIEF REQUESTED

 

75.                          The facts set forth above establish, by clear and convincing evidence, that counsel for the judgment Creditors and the Chapter 7 Trustee engaged in a systematic and deliberate scheme to defraud this Court through the introduction of falsified, misrepresented, and known inadmissible evidence at critical junctures in these proceedings. This conduct satisfies all four elements required under Rule 60(d)(3) as articulated by the Third Circuit: (1) an intentional

fraud; (2) by officers of the court; (3) directed at the court itself; (4) which in fact deceived the court. See Herring v. United States, 424 F.3d 384, 390 (3d Cir. 2005).

76.                          The scope and severity of the fraudulent conduct in this case is extraordinary.

 

Trustee’s Counsel did not commit isolated errors or engage in mere aggressive advocacy. Rather, they orchestrated a calculated campaign of deception involving multiple categories of fraudulent evidence introduced across two separate proceedings, namely the conversion hearing and the preliminary injunction hearing. This fraudulent evidence formed the core factual basis for this Court’s findings of bad faith, which ultimately resulted in the conversion of TSI’s Chapter 11 case to Chapter 7 and the imposition of a sweeping preliminary injunction leading to the destruction of the Debtor LLC.

77.                          The fraudulent nature of this conduct is underscored by the fact that Trustee’s Counsel continued to use each category of fraudulent evidence even after they possessed actual knowledge that the evidence was false, fabricated, or inadmissible. This is not a case of counsel making good-faith mistakes that they corrected upon their discovery. Rather, counsel deliberately persisted in using evidence they knew to be fraudulent, made affirmative misrepresentations to conceal the fraudulent nature of the evidence, and actively opposed efforts to expose the fraud (such as moving to exclude the metadata expert report). This pattern of conduct demonstrates the intentional nature of the fraud and distinguishes this case from ordinary discovery disputes or evidentiary challenges.

***

 

78.                          Wherefore, in light of the above, as well as any and all other facts the Court may find relevant, pursuant to Fed. R. Bankr. P. 9024(a) and Fed. R. Civ. P. 60(d)(3), Defendants seek the following RELIEF:

a.                   Full evidentiary hearing on this Motion;

 

b.                  Order to vacate the Conversion and Preliminary Injunction Orders;

 

c.                   Order to compel Trustee to file complete accounting of funds, collections and payments, to date; and

d.                  Order to compel Trustee to refund all sums collected and/or advanced to third parties to Team Systems International LLC as well as filing all documents necessary to restore members’ control of the LLC.

79.                          A proposed order and exhibit list are attached.

 

 

 

Dated: January 8, 2026

 

Respectfully submitted,

 

JOHN S. MALIK, ESQ.

/s/ John S. Malik Attorney at Law 100 East 14th Street

Wilmington, DE 19801

Phone: 302-427-2247

Email: jmalik@malik-law.com

 

RANDY M. MOTT, ESQ.

/s/ Randy M. Mott DC Bar 211037

1627 K St. N.W. Suite 400

Washington, DC 20006

Phone: 202-470-0106

Email: randymott@rmottlaw.com (admitted pro hac vice)

 

Counsel to Deborah Evans Mott, Steven

M. Acosta, Christopher Mott, and John

S. Maciorowski, Addy Road LLC, and Team Systems International LLC

 

 

 

 

 

 

 

 

 

 

 

2

EXHIBIT LIST

 

Ex. #	Description	Docket
1A	Transaction detail report from a checking account ending in *7965, detailing multiple transactions.	Florida Case, ECF 230-16
1B	Transaction detail report from a checking account ending in *7965, detailing multiple transactions, labeled D022482. Missing metadata from the same document (D022482).	D.I. 74-78
1C	Properties of document titled "Exhibit 9(A).pdf," created on March 30, 2021, by an author identified as "lacosta”; LinkedIn profile of L. Acosta.	N/A
2	Excerpt from transcript in Florida Case.	Florida Case, ECF 240
3	Email from S. Acosta to R. Shepacarter.	D.I. 512-10
4	Email from L. Collins to S. Acosta.	N/A
5	Email from J. Edmonson to S. Acosta.	N/A
6	Billing excerpts from Archer & Greiner, P.C.	N/A
7	Data Forensics Report prepared by Jason Neal Davidson from Atlas.	D.I. 512-6
8	Resumé of Jason Neal Davidson.	N/A
9	Email from K. Mann to D. Carickhoff, dated August 4, 2022, regarding the provision of TSI documents.	N/A
10	Email from C. Crowther to M. Moody, L. Collins, J. Edmonson, et al., stating that no exhibits were marked during deposition.	D.I. 512-12
11	Excerpts from transcript of Jan. 23, 2023, hearing.	D.I. 291
12	Summary of time charges by Miller Coffey Tate, LLP from March 31, 2022, through August 31, 2023.	D.I. 390-1
13	Email exchange between D. Mott and J. Edmonson discussing the need for Bates-numbered documents due to redactions and the immediate termination of Robinson & Cole’s retention of TSI by court order.	D.I. 512-7
14	May and February 2021 “Monthly Transaction Report” for BBVA account ending in -2888.	D.I. 436-1; D.I. 436-4