1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

VICTOR STANLEY, INC. )
)
Plaintiff, ) Civil Action No. MJG 06-2662 (PWG)
)
v. )
)
CREATIVE PIPE, INC., et al, )
)
Defendants. )


PLAINTIFFS MOTION FOR ISSUANCE OF AN ORDER TO SHOW CAUSE

Victor Stanley Inc. (VSI) moves that Defendants Mark Pappas (Pappas) and Creative
Pipe, Inc. (CPI) be held in contempt of Court for their deliberate violations of the Order
Releasing Mark T. Pappas with Conditions (Document 563). These Defendants have brazenly
violated 6 and 7 of that Order by refusing to pay even one cent of the monies that Pappas had
taken out of his United States accounts and placed in accounts in Belize.
In order to get released and purge himself of contempt, Pappas made very specific
commitments to Judge Garbis to promptly use all of those monies in the Belizean accounts to
pay towards the balance of the Sanctions Award. Those commitments were then incorporated
into 6 and 7 of the August 17, 2012 Order conditionally releasing Pappas. VSI requests that
the Court address this matter promptly because Pappas - - in open defiance of this Courts Order
- - is dissipating the funds in the Bank of Belize that were ordered by Judge Garbis to be paid to
VSI promptly. Pappas has paid VSI nothing from those accounts, but has already removed over
$100,000 of those funds and this illegal dissipation is on-going.



Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 1 of 10

2

The grounds for this Motion are as follows:
1. During the Contempt Hearing of August 17, 2012 Pappas confirmed that he had
moved substantial sums of his money and CPI funds to accounts in Belize when he fled to Belize
to avoid the various orders of this Court.
1
Pappas identified two accounts at the Bank of Belize,
and Pappas estimated that these accounts together contained as much as $350,000. Hearing of
August 17, 2012, attached as Exh. A, at Tr. 64.
2
In order to sound remorseful and to secure his
release from jail, Pappas promised to, inter alia, use all the funds in the Bank of Belize accounts
towards payment of the Sanctions Award. Pappas counsel committed that Pappas could make
arrangements mechanically to close those accounts, get those funds back, and again utilize them
for the payment. Exh. A, at Tr. 9.
2. Pappas was then called to testify as to the commitments he was making to purge
himself of contempt. Id. at Tr. 61-62. Pappas stated that in a very short time after he was
released he would access the Belize accounts and pay the contents towards the Sanctions Award.
Id. at Tr. 63. Pappas testified that he could access those accounts either telephonically and via
fax for a wire transfer, if he was released. Id. at Tr. 63. Pappas stated that he would be willing
to execute whatever documents were necessary to assure that those funds were delivered to the
court or the proper party to satisfy the sanctions. Id. at Tr. 64. Pappas further added that
whatever it would take to make the funds available, I would be willing to do. Id.

1
The amounts moved to Belize exceed $750,000. See Document 580 (under seal), at pp.8-9.
Pappas failure to produce the relevant records prevents VSI from discovering the full extent to
which Pappas has moved funds off-shore.

2
Pappas estimated that the personal account had somewhere in the neighborhood of $50,000
and that the corporate account was between $100,000 and $300,000. Exh. A, at Tr. 64. As set
forth below, the estimate of $50,000 for the personal account was right on and the high estimate
of $300,000 for the other account was right.
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 2 of 10

3

3. In order to purge himself of contempt and secure his release, Pappas further
promised:
Q If you were at your office, if you were at large and able to do that, would
you promptly, as soon as possible, undertake to get to the Belize accounts
and get any available funds released?
A Yes, I would.
Exh. A, at Tr. 70 (emphasis supplied). Pappas, however, requested a cushion of $50,000 to
remain in those two accounts to pay for personal expenses. Id. at Tr. 65.
3

4. This Court relied on the representations and commitments of Pappas in shaping its
Order which allowed for Pappas release with conditions. Indeed, the preamble to the Order
expressly states that the terms of that Order are with the agreement of Defendants Creative Pipe,
Inc. and Mark T. Pappas Document 563. The Order explicitly incorporated Pappas
commitments to promptly pay to VSI the amounts in the two Bank of Belize accounts as follows:
6. Defendants shall, as promptly as feasible, take all steps necessary to pay
to Plaintiff . . . . all funds in bank accounts in Belize subject to their
authority except that Defendants may, upon advising the Court of the full
amounts available in said accounts, ask leave of the Court to exempt from
this payment obligation a portion (not to exceed $50,000) of such funds.
Document 563 (emphasis supplied).
5. In order to ensure that Pappas was promptly moving to secure the funds in
the accounts in Belize and paying those sums to VSI immediately, this Court added the
following obligations:

3
Separate from this commitment to pay the funds in the Bank of Belize, was the commitment to
pay $120,000 immediately or within a few day from other sources and then to pay $50,000 by
the following Monday and $30,000 by the end of the month, to be followed by $20,000 per
month payments. Exh. A., at Tr. 62-63. That separate commitment was incorporated into
Paragraph 5 of the Order of August 17, 2012. Document 563. Mr. Pappas made clear that his
commitment to pay from the Belize accounts was in addition to the above-referenced immediate
payments totaling $200,000 and the $20,000 per month payments. Id. at 63.
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 3 of 10

4

7. Defendants shall promptly provide to Plaintiffs counsel all documents
relating to the establishment of the Bank of Belize accounts and the
deposit of funds therein. Defendants thereafter shall provide copies of all
subsequent documents regarding compliance with 6 of the Order as they
are received by Defendants or their agents.
Id. (emphasis supplied).
6. Despite the clear terms of 6 of that Order and his promise to Judge Garbis,
Pappas did not promptly (or otherwise) take any steps to pay to VSI the funds that were in the
Bank of Belize accounts after he was released. Rather, Pappas, once released, resorted to his
usual form of thumbing his nose at the Court. He has not paid to VSI even one cent from those
accounts, even though all Pappas had to do was make a phone call or send a fax to get those
funds released to VSI. Even worse, Pappas has dissipated the Belizean funds by over $100,000
since the August 17, 2012 Order.
7. Bank of Belize Account -006 had $51,358 and that Bank of Belize Account -956
had $300, 317 when Pappas committed to pay those funds promptly after his release. Exhs. B
and C. See also Plaintiffs Opposition to Defendant Mark Pappas Request to Increase the
Amount Exempt from the Bank of Belize Accounts for Payment of the Sanctions Award
(Document 580 under seal), at pp. 4-5.
8. Rather than pay VSI a penny, Pappas instead has dissipated those two accounts
from $351,675 to $239,096. Exhs. D and E. See also Document 580, at pp. 4-5. There is no
dispute that $32,344 was removed from Account -006
4
and that $80,235 was removed from
Account -956 after August 17, 2012. Id. That money was supposed to be have been paid to VSI
and promptly, not later removed by Pappas for some other use. The Order is clear on that issue

4
At the time VSI filed its Opposition to Pappas Request for Relief, the documents showed that
$29,021 had been removed from Account -006. Document 580, at pp. 4-5. Since then VSI has
been provided with a November 30, 2012 statement which shows that the account balance is
down to $19,014. Pappas paid a $3,323 Visa bill on November 7, 2012 from this account. Exh.
D.
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 4 of 10

5

and this substantial dissipation of those accounts reflects a willful violation by Pappas of the
clear terms of 6 of the Order.
9. VSI has made a good faith effort to get Pappas and CPI to comply with the Court
Order, but Defendants, in a repeat of history, are inexcusably refusing to comply with 6 and
7 of the Order. They are steadfastly and defiantly refusing to make any commitments to honor
6 and 7 of the Court Order. Instead, they have stalled on this matter and, while stalling, they
have continued their improper dissipation of the funds in the Bank of Belize accounts to the
substantial prejudice of VSI.
5

10. VSI wrote to Defendants counsel about VSI receiving no payments from the
Belize accounts and no documents about compliance efforts (as required by 7 of the Order).
Exh. F, at. pp. 1, 6. Defendants initial response was the pure sophistry - - Defendants claimed
they no longer had to comply with the August 17, 2012 Court Order because of Local Rule
104.8. Exh. G. Local Rule 104.8 is a rule relating to discovery responses. It has absolutely
nothing to do with Defendants duties under 6 and 7 of the August 17, 2012 Court Order. See
Exh. H. After further stalling on this issue, on November 27, 2012, Defendants counsel claimed
that they could not address VSIs complaints about the failure to pay any funds from the Belize
accounts until December 10, 2012. Exh. I. Then, when Defendants counsel finally replied,
Defendants response completely ignored the issue -- the failure to comply with 6 and 7 of
the August 17, 2012 Court Order.
6
Exh. J. When this was pointed out, Defendants response

5
On October 12, 2012 Pappas transferred $14,425 of the funds in Account -006 to his Elite
Real Estate, Ltd. account in Belize. See Exh. 2 to Document 577. On November 7, 2012 Pappas
paid a Visa bill with funds in Account 006. See footnote 3. We do not know what further
withdrawals have been made from that account since November 31, 2012.

6
Defendants response to the issue was simply that they had fully complied with 5 of the Court
Order. Exh. J. The response ignored the failure to pay from the accounts in Belize, as required
by 6, and ignored the failure to provide the documents required under 7.
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 5 of 10

6

was, yet again, that they were too busy to address the issue and would get back later. Exh. K.
This Motion follows Defendants failure commit to as little as a cessation in the dissipation of
the funds in the interim. Id.
11. After VSI pressed for compliance with 6 and 7 of the Order, Pappas responded
by filing his Request to Increase in which he offers to pay VSI $41,081 from the accounts
instead of the sum the Court Order obligated in August to pay promptly to VSI. Document 577,
at p. 2. Pappas response treats the Court Order as if it was an offer about which he was free to
reject and then made a counter-offer to VSI instead. This is a repeat of a practice which this
Court soundly condemned earlier as manifestly inappropriate. Last year, when Pappas was
ordered to pay the full Sanctions Award by December 15, 2011 and did not comply, Pappas
responded by offering, instead, to pay $100,000 with a payment plan of $20,000 per month. This
Court condemned that tactic, stating that:
It is manifestly inappropriate for Defendant Pappas to treat the outstanding Court
Order as if it were an invitation for him to engage in a negotiation. He was subject to
an Order to make the required payment. He is not going to proceed to negotiate a
reduction of that obligation.
Document 516, Order Re: Contempt Proceedings, December 21, 2011 (at page 2). Here, after
failing to make the required payment from the Belizean accounts and then pressed to make that
payment, Pappas resorted to his old form -- he is treating the [Order of August 17, 2012] as if it
were an invitation for him to engage in a negotiation.
12. The Request to Increase recently filed by Pappas (falsely) states that
Defendant Pappas has offered to pay the sum of $41,081.63 to VSI immediately Document
577, at p. 2 (emphasis added). The acknowledgment that Pappas has $41,081.63 immediately
available to offer to VSI constitutes an admission by Pappas that he has deliberately not
complied with 6 of the Order and is in contempt of court, at a minimum, as to that amount.
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 6 of 10

7

That statement confirms that Pappas had in his hands at least $41,081.63 from those accounts
which he could have paid to VSI and has deliberately failed to do without just cause.
13. The Request to Increase also falsely claims that there had been a development
since August 17, 2012 -- the possibility that Pappas may have an increased 2008 tax liability
because of an amended return he allegedly recently filed. Document 577, at p. 2. Pappas
statement is calculated to mislead the Court. This tax liability is nothing new and is not a
development. For two years, Pappas and his counsel in this matter have been aware of the
$481,912 in unreported income that led to this amendment. This fraudulent reporting of
$481,912 in customer payments on the CPI books as a customer deposit instead of the income
it actually was and was pointed out in a December 27, 2010 report by VSIs expert, Jeffrey
Barsky. Exh. L, at p. 20. Indeed, the matter was so significant that Mr. Rothschild had his expert
accountant, Michelle Riley, look into the matter, and Ms. Riley addressed it during her January
10, 2011 deposition. Exh. M, at Tr. 216-223. Then, in a January 20, 2012 letter from Robert
Greer (Pappas agent) to Pappas bank (Anchor Bank), Mr. Greer states that those accounting
issues were being reviewed by Pappas and CPIs accountant. Exh. N, at p. 2. Mr. Greer adds
that it must be now determined the amount of income that should be the reported in previous
years. Id. In fact, the accountants did the calculations before the August 17, 2012 hearing -- the
amended return which reflects the increased income was sent to Pappas on August 9, 2012. See
Exh. 3 to Document 577 under seal. Indeed, Mark Pappas testified to this very issue during his
examination of August 15, 2012. Transcript of Examination of Mark T. Pappas, attached hereto
as Exh. O, at Tr. 143-153.
14. The substantial under-reporting of income and hence the substantial
underpayment of taxes was known by Pappas (and his attorneys and accountants) long before
August 17, 2012 when Pappas committed to pay all the funds in the Belize accounts to purge
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 7 of 10

8

himself of contempt. Thus, Pappas claim of a material post-Order development is specious
and is another example of Pappas resort to his old attitude of feeling free to mislead the Court.
Moreover, Pappas cites no authority for the proposition that being caught in a tax fraud and then
later having to address that liability in an amended return is a change of circumstances which
justifies ignoring the obligation to promptly pay to VSI the funds in the two accounts in Bank of
Belize.
15. 6 of the Order gave Pappas an opportunity to promptly to seek leave of Court to
exempt up to $50,000 from his immediate payment obligation. 6 did not authorize Pappas to
ignore the Order for four months, pay VSI nothing from the two accounts, dissipate over
$100,000 from the accounts and then months after the Order seek a $150,000 exemption on a
bogus claim of changed circumstances, which is what Pappas has done here.
16. Apparently Pappas learned no lesson from his incarceration, and immediately
after his release returned to his prior mode of disrespect towards the orders of this Court. The
speed and extent to which he disregarded 6 and 7 of this Courts August 17, 2012 Order rivals
only the speed and extent to which he had previously disregarded Judge Grimms discovery and
preservation orders and this Courts later orders to pay the Sanctions Award or appear for
hearings.
Conclusion
Defendants have willfully violated the Courts August 17, 2012 Order - - Pappas plainly
admits that he has money in the Belize accounts available to pay the Sanctions Award which he
has not paid to VSI, even though all he had to do was make a telephone call to comply the
Courts Order. Pappas has not purged himself of his contempt of the Order to pay the Sanctions
Award and he has not complied with 6 and 7 of the Order of August 17, 2012 which imposed
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 8 of 10

9

conditions on Pappas to comply with in order to maintain his release from custody. Under the
circumstances, VSI moves that this Court:
1. Dissolve that part of the Order of August 17, 2012 which conditionally released
Mark T. Pappas from custody;
2. Order Defendants to forthwith pay to VSI all funds in Bank of Belize Accounts -
006 and -956;
3. Order Defendants to pay to VSI all other funds removed by Defendants from
Bank of Belize Accounts -006 and -956 since August 17, 2012;
4. Issue an order for Defendants to show cause why they should not be held in
contempt of court for violations of 6 and 7 of the August 17, 2012 Order and further
sanctioned; and
5. Order Defendants to pay to VSI the attorney fees and costs associated with the
bringing of this Motion and the prior motions that VSI had to bring regarding its violation of the
Sanctions Award Order and this Courts subsequent Orders relating to those violations.
Respectfully submitted,
_/s/___________
Randell C. Ogg, MD Bar No. 22623
Law Offices of Randell C. Ogg
1150 Connecticut Avenue NW, 9
th
Floor
Washington, DC 20036
Tel. (202) 862-4323
Fax (202) 828-4130
rogg@bode.com

and

Robert Wolinsky (Bar No. 26839)
HOGAN & HARTSON L.L.P.
555 Thirteenth Street
Washington, D.C. 20004
Telephone: (202) 637-5600
Fax: (202) 637-591
Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 9 of 10

10


CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the foregoing was served in accordance with the ECF
procedures of this Court.
Randell C. Ogg_/s/________
Randell C. Ogg

Case 8:06-cv-02662-MJG Document 582 Filed 12/17/12 Page 10 of 10