Norman M. Valz, Esq.

Law Office of Norman M. Valz, P.C.

PA I.D. No. 61338
434 N. 38th Street
Philadelphia, PA 19104
Tel. (215) 756-2424
Fax (215) 827-5758

Filed and Attested by the

Office of Judicial Records
03 APR 2016 11:30 pm
J. OSTROWSKI

Attorney for the Plaintiff

COMPLETE BUSINESS SOLUTIONS

GROUP, INC. (D/B/A PAR FUNDING)
141 N. 2nd Street
Philadelphia, PA 19106
Plaintiff
vs.
CAPITAL STACK, LLC
11 Broadway
Suite 814
New York, NY 10004:
Defendants

:
:
:
:
:
:
:
:
:
:

PHILADELPHIA COUNTY
COURT OF COMMON PLEAS

Docket No.:00166

CIVIL ACTION
NOVEMBER TERM 2015

COMPLAINT
Plaintiff, Complete Business Solutions Group, Inc. by and through its attorney,
Norman M. Valz hereby avers the following causes of action and averments in support thereof
against Defendant, Capital Stack, LLC.
PARTIES
1.

Plaintiff, Complete Business Solutions Group, Inc., is a corporation formed under

the laws of the State of Delaware with its principal place of business in Philadelphia,
Pennsylvania specifically at 141 N. 2nd Street, Philadelphia, Pennsylvania 19106.
2.

Defendant, Capital Stack, LLC is a limited liability company with its primary

place of business being 11 Broadway, Suite 814, New York, New York 10004.
3.

Defendant, Capital Stack, LLC has been formed under both the laws of the State of

New York and also the State of Nevada.

As of this filing, Plaintiff has not ascertained whether

the active entity known as Capital Stack is either the New York (Capital Stack NY) or Nevada

Case ID: 151100166

(Capital Stack Nevada) entity.

4.

Upon information and belief, Capital Stack Nevada and Capital Stack NY

(interchangeably and collective referred to as Capital Stack) are mere alter egos and are
comingled and intertwined financially and operationally.
5.

The sole member of both Capital Stack, LLC entities is David Rubin, a New York

resident.
6.

Upon information and belief, David Rubin legally changed his name from David

Rubinov at a point in time presently unknown to Plaintiff.

7.

Defendant solicited participation from third parties to invest in a portfolio of

purchased merchants cash receivables.

8.

On or about December 12, 2013, Plaintiff became a passive investor in a portfolio

of merchants cash receivables, managed and formed by Defendant (See Exhibit A for
Syndication Agreement attached herewith).
9.

Plaintiff invested $4,095,474.57 in this portfolio and has not received $808,262.99

on its promised RTR (Rights to Return).

10.

In this portfolio over 75.9% of the Rights to Return have not been paid to Plaintiff

by Defendant due to an allegedly, but unverified high rate of defaults.(See Exhibits B-D attached
herewith for lists of non-performing participations).
11.

Defendant promised Plaintiff and other investors real-time access to the

performance of each merchant account in which Plaintiff chose to participate through Defendants
Syndicate by providing access to an online portal.
12.

Plaintiffs confidence in Defendants accounting and ability to accurately distribute

investor participations through the syndicate was severely shaken when Plaintiff began to

Case ID: 151100166

regularly receive participation payments for several deals for which it had not ever purchased a
participation.

Plaintiff promptly notified Defendant of this error and was told not to worry, that

the difference would be made up in future distributions however the errors persist to this day.
13.

Plaintiff avers that Defendant, until the time only subsequent to the filing of the

Writ of Summons in this actions, failed to provide access to said portal either through technical
negligence or a purposeful act.
14.

Plaintiff avers that the information available through the abovementioned portal

is incomplete, often contradictory, and fails to give Plaintiff or other investors any meaningful
information regarding the performance of the portfolio.
15.

A large proportion of accounts in the aforementioned portal and other reports

given to Plaintiff by Defendant merely list allegedly non-performing assets as having been sent to
Legal with no further explanation.
16.

In noting this Legal designation, said files are really not sent to an independent

third-party law firm, but RUBIN LAW, which is managed and owned by David Rubins wife,
Anna Rubin (n Zhigun).
17.

Rubin Law shares the physical office with Defendant and all of Rubin Laws

attorneys are listed on the promotional materials for Defendant Capital Stack as if both entities are
operating as a single entity (See Exhibit E ).
18.

Plaintiff avers that the day to day business operations of Defendant and Rubin Law

are inextricably intertwined and that they in no way act as separate entities.
19.

Plaintiff has direct contact with one merchant whose accounts receivable were

purchased through the Capital Stack syndicate in which Plaintiff participated and which
Defendant has designated as non-performing.

Case ID: 151100166

20.

Plaintiffs direct conversations with said merchant, said merchant represented that

said account was / or had been performing and had been paid off.
21.

Presently, there is litigation in New York wherein a person formerly associated

with Defendant alleges that Defendants reporting of portfolio performance was misleading
and/or inaccurate. (Raharney vs. Capital Stack, NY Supreme Court Index No. 160175/2014).
22.

Plaintiff initiated the lawsuit at hand through the filing of a Writ of Summons and

seeking accounting information through pre-litigations discovery which Defendant fought seeking
a protective Order from Court.
23.

To date, Defendant has effectively evaded any attempts by Plaintiff to provide it

with solid, factual, comprehensive information regarding its portfolio of accounts which
Defendant has reported as having suffered tremendous losses, which to date cannot be verified.
24.

Subsequent to Plaintiffs investment with Defendant, Plaintiff uncovered

significant fact, which had they been known to Plaintiff may have thwarted its participation in
investments through Defendant.

Foremost amongst said misrepresentations is the fact that the

sole principal of Defendant, David Rubin in fact changed his name from David Rubinov in an
apparent attempt to thwart investors from discovering the fact that the Securities and Exchange
Commission had labeled him as a securities law recidivists having brought no less than three
actions against him for fraudulent stock offerings. (SECURITIES AND EXCHANGE
COMMISSION, Litigation Release No. 18222/ July 10, 2003; Securities Exchange Act of 1934,
Release No. 46158 / July 2, 2002, Administrative Proceeding File No. 3-10821; and
http://nypost.com/1999/08/04/sec-charges-82-in-micro-cap-fraud/).
25.

Rather than building industry recognition and value through its tradename

Capital Stack, Defendant has instead consistently created and modified the name(s) under

Case ID: 151100166

which it conducts business.

Said names include, but are not limited to eProdegy and

IWorkforce.
COUNT I
BREACH OF FIDUCIARY DUTY
26.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

27.

Defendant maintains a fiduciary obligation to Plaintiff for the sound management,

effective communication, and upholding the beneficiaries of said relationships interests above
Defendants own interests.
28. As previously detailed in this Complaint, Defendant failed to uphold its fiduciary
duties to the Plaintiff:
-by allowing or conspiring to see that Plaintiffs interests as an investor were abridged;
and
-by self-dealing and attempting to profit at the expense of the Plaintiff over whom said
Defendant holds a fiduciary duty.
29. Plaintiff avers that the aforementioned actions of Defendant were carried out in a
manner which was willful, wanton and reckless as well as being calculated to harm Plaintiff for
the benefit of Defendant.
30.

But for Defendants failure to uphold its fiduciary responsibilities owed to

Plaintiff, Plaintiff would not have suffered damages to the extent to which it has suffered
damages.
WHEREFORE, the Plaintiff respectfully requests that this Court find in its favor and
against Defendant in an amount exceeding $50,000.00 and award it:
_some or all of the equitable relief sought so as to protect and determine Plaintiffs interest
5

Case ID: 151100166

in its syndicate participations;

_Court costs;
_Attorneys fees and expert witness costs due to bad faith;
_and any other remedy which this Court is empowered to grant in order to make the
Plaintiff whole from the damages suffered.
COUNT II
BREACH OF CONTRACT
31.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

32.

Defendant has written obligations to Plaintiff as contained in the Master

Syndication Agreement where is Defendant is bound to maintain prompt and accurate

communications with Plaintiff regarding the status of its investment participations and to
promptly transmit Plaintiffs investment participation receipts managed by Defendant.
33.

Plaintiff avers that Defendant has failed to uphold the aforementioned contractual

obligations.
34. Plaintiff avers that the aforementioned actions of Defendant were carried out in a
manner which was willful, wanton and reckless as well as being calculated to harm the Plaintiff
for the benefit of Defendant.
35.

But for Defendants failure to uphold its contractual obligations owed to Plaintiff,

Plaintiff would not have suffered damages to the extent to which it has suffered damages.
WHEREFORE, Plaintiff respectfully requests that this Court find in its favor and against
Defendant in an amount exceeding $50,000.00 and award it:
_some or all of the equitable relief sought so as to protect and determine Plaintiffs interest
in its syndicate participations;
6

Case ID: 151100166

_Court costs;
_Attorneys fees and expert witness costs due to bad faith;
_and any other remedy which this Court is empowered to grant in order to make the
Plaintiff whole from the damages suffered.
COUNT III
CONVERSION OF INVESTOR ASSETS/SELF DEALING
36.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

37.

On information and belief, Plaintiff avers that Defendant converted assets and

profits to its benefit in a manner concealed from investors with the intent to enrich itself and its
principals at the expense of investors and Plaintiff.
38.

Plaintiff avers that the aforementioned actions of the Defendants was carried out in

a manner which was willful, wanton and reckless as well as being calculated to harm the Plaintiff
for the benefit of said defendants.
WHEREFORE, Plaintiff respectfully requests that this Court find in its favor and against
Defendant in an amount exceeding $50,000.00 and awarding Plaintiff:
_full compensatory damages;
_Punitive (Treble) or Exemplary damages;
_Court costs;
_Attorneys fees and expert witness costs;
_and any other remedy which this Court is empowered to grant in order to make the
Plaintiff whole from the damages suffered.

Case ID: 151100166

COUNT IV
FRAUDULENT MISREPRESENTATION

39.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

40.

On information and belief, Plaintiff avers Defendant knowingly made

misrepresentation to investors and Plaintiff meant to enrich Defendant at the explicit expense of
investors and Plaintiff.
41.

Said misrepresentations include, but are not limited to:

the returns historically enjoyed by the syndicate;

the rate of defaults suffered by the syndicate subsequent to Plaintiffs participation

therein;

the history and reputation of principal David Rubin (Rubinov); and

the accuracy and comprehensiveness of information regarding the returns

enjoyed by the syndicate.

42.

Plaintiff avers that the aforementioned actions of Defendant were carried out in a

manner which was willful, wanton and reckless as well as being calculated to harm Plaintiff for
the benefit of Defendant.
WHEREFORE, Plaintiff respectfully requests that this Court find in its favor and against
Defendant awarding Plaintiff:
_full compensatory damages in excess of $50,000.00;
_Punitive (Treble) or Exemplary damages;
_Court costs;

Case ID: 151100166

_Attorneys fees and expert witness costs;

_and any other remedy which this Court is empowered to grant in order to make Plaintiff
whole from the damages suffered.
COUNT V
NEGLIGENCE
43.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

44.

On information and belief, Plaintiff avers that Defendants management of the

investment syndicate, its distribution of payments to investors, and its accounting practices in
general were conducted in a negligent manner not comporting with industry standards.
WHEREFORE, Plaintiff respectfully requests that this Court find in its favor and against
Defendant award the following damages:
_full compensatory damages in excess of $50,000.00;
_Punitive (Treble) or Exemplary damages;
_Court costs;
_Attorneys fees and expert witness costs;
_and any other remedy which this Court is empowered to grant in order to make the
Plaintiff whole from the damages suffered.
COUNT VI
EQUITABLE RELIEF JUDICIAL INTERVENTION
45.

The allegations of all of the preceding paragraphs are to be incorporated herein as

if set forth length.

Case ID: 151100166

46.

Plaintiff avers that the actions and inactions of Defendant requires Judicial

intervention from this Court as allowed under the laws of Pennsylvania and New York, and thus
Plaintiff seeks the following specific Court interventions:

A Court Order allowing Plaintiff and its representative and/or expert to inspect

and study all financial and accounting records associated with the syndicate;

Plaintiff would request that this Court take action to determine the fair and full

value of Plaintiffs investment participation through Defendants syndicate.

47.

Plaintiff seeks a Court Ordered and Judicially Supervised involuntary dissolution

of Defendants syndicate due to the following:

The acts of the managers, officers and representatives of Defendant are

oppressive and not in the beneficial interests of the investors, but meant solely to
shield the interests of Defendant and its principal; and

The business assets of the syndicate are being misapplied and it is in the

beneficial interests of the investors that these business syndicates be wound up and
dissolved.

WHEREFORE, Plaintiff respectfully requests that this Court find in its favor and against
Defendant and award it the flowing damages;
_full compensatory damages;
_Punitive (Treble) or Exemplary damages;
_Court costs;
_Attorneys fees and expert witness costs;
_and any other remedy which this Court is empowered to grant in order to make Plaintiff
whole from the damages suffered.
10

Case ID: 151100166

RESPECTFULLY SUBMITTED

________________________
Norman M. Valz, Esq.
PA I.D. No. 61338
Attorney for the Plaintiff
434 N. 38th Street
Philadelphia, PA 19104
Tel. (215) 756-2424

April 2, 2016

11

Case ID: 151100166