November 5, 2020
By Lois Weiss
Prop tech building intercom entrepreneur, Ari Teman, invented a winning security system that was so good, clients stole the device, copied it and may have even conspired to avoid paying their bills – with some filing false affidavits with the police and lenders and even lying in court.
To allow him to keep running his business, in the days before Passover in March and April 2019 and following his corporate attorney’s advice, Teman deposited contractually authorized Remotely Created Checks, known as RCCs, and collected around $300,000 owed by three clients.
After one client with an undisclosed financial arrangement with a competitor complained to the police and his bank, Teman was arrested.
If his motion to dismiss is not granted, Teman is expected to ask President Trump to pardon him for his conviction in Federal court for the “crime” of collecting money due from his clients.
Supporters that have participated in a unique video calling for his pardon include numerous prominent rabbis, attorney Ron Coleman — who is currently aiding President Trump’s voting integrity legal efforts — and dozens of others.
The evidence now shows the real crime was committed by overzealous prosecutors who had charged Teman with counterfeiting and wire fraud. After realizing Teman had actually not counterfeited any checks, they decided to prosecute anyway but claim the the checks were “unauthorized.” At the same time, these prosecutors nudged along the testimony of GateGuard’s building clients who were trying to dodge their payment obligations.
Teman’s conviction occurred after a major client, creditor and then witness against him, Joseph Soleimani, secretly aligned his company, ABJ Properties, with a competitor and tried to get out of paying his bills.
During a discussion with regard to a patent lawsuit against the competitor, MVI Systems, Teman’s attorneys in that matter have now discovered that Southern District Assistant US Attorney Kadar Bhatia spoke to MVI’s attorney prior to the trial but never advised Teman’s trial counsel. Since Bhatia did not call MVI’s attorney as a witness, a legal source says he was able to skirt the Brady evidence rules that would have otherwise required him to reveal the contact.
MVI’s attorney, Simcha Schoenfeld, said Bhatia never mentioned Soleimani or his company ABJ, and he was unaware of them until “moments ago” when questioned by this reporter.
On November 4, Justice Paul Engelmayer filed an Order stating, “The Court has received a letter from new counsel for defendant Ari Teman seeking additional Brady disclosures from the Government relating to trial witness Joseph Soleiman. [sic] The Court directs the Government to respond by Tuesday, November 10, 2020.”
The Order also said that since Teman now has New York-based post-conviction defense counsel, the Justice intends to sentence Teman on December 1, 2020. “Counsel should treat that date as firm,” the order states.
Teman’s troubles began in 2018 and 2019 when three clients, including Soleimani, refused to pay Teman what they owed, despite many bills and requests for payment. Evidence has since surfaced that two clients allegedly sabotaged the devices to avoid paying.
Additionally, evidence revealing the business ties between Soleimani and the competitor, MVI, should have been provided to the defense by prosecutors.
When Teman finally collected the funds due him by using RCC’s as allowed under their contracts, the clients allegedly filed fraudulent statements with the police, banks and court saying they not only didn’t owe him, but despite the devices having been installed in their buildings, also never signed or didn’t read the payment clauses in their online contracts.
One client later admitted to the court his company’s statement to the bank was a lie.
Since Teman was originally charged with bank fraud and wire fraud for submitting counterfeit checks and forging signatures – but none of that was true – his out-of-town defense lawyers were not fully prepared for the January 2020 trial. That’s because after realizing their mistakes, the prosecutors suddenly shifted the trial to focus on the clients stating they either never read or did not recall the terms of their contracts.
Evidence was stacked against Teman from the beginning as his expert RCC witness was not allowed to testify; other witnesses appear to have lied or misled the court; an exculpatory witness never showed up to testify; his own bank’s officer admitted she never tried to call him before bouncing checks; and prosecutors later admitted withholding certain evidence — but even more has now come to light.
Additionally, in a prejudicial and shocking development within the court system, during the last few months, numerous Southern District Assistant Attorneys have been chastised by the court’s justices for a pattern of illegally withholding evidence in several cases, including in US v Nejad, US v Ahuja and US v Quintero.
The U.S. Attorney himself, Geoffrey Berman, was also fired by Attorney General William Barr. In a Constitution Day speech at Hillsdale College in September, Barr also noted, “We should not prosecute someone for wire fraud in Manhattan using a legal theory we would not equally pursue in Madison or in Montgomery…“
In October, an astonishing six terabytes of illegally withheld information was released by Southern District prosecutors on just one criminal matter — wherein that defendant changed his plea to “not guilty.”
At Teman’s trial, two of the clients, the board president of a Mercer St. co-op and another multi-building owner client, admitted they read the main page of the online terms, asked questions about them to Teman via email, clicked to accept the contract terms and even copied and pasted the paragraph stating their individualized payment terms on a following linked page into other emails to Teman.
The other client, Soleimani, a sophisticated real estate investor with dozens of properties under his management at that time, said he did not recall whether or not he signed up online but admitted he had previously paid invoices that included a statement that the payor accepts the terms at the specific URL relating to their contract.
After months of attempts to collect their debts and following his attorney’s advice, Teman deposited RCCs in March and April of 2019 that totaled $264,000 for Soleimani’s ABJ Management, $51,000 for the other multi-building client and $18,000 for the co-op.
After Teman’s guilty verdict was rendered in January 2020 and his attorneys, by then including Alan Dershowitz, made numerous motions for a dismissal or a new trial, Justice Paul Engelmayer wrote in essence that Teman had structured the multi-page online contracts to confuse people, (even though his attorney at a major law firm structured them).
Declaring them “fabricated” and “outsized checks,” Justice Engelmayer found that despite these sophisticated clients testifying they chose not to read, didn’t recall reading, and maybe clicked through but did not read the “hyperlinked” payment terms of their particular online contracts, Teman was still guilty because they hadn’t “authorized” the payments.
“Buried within the Payment Terms…was a clause purporting to grant GateGuard the authority to withdraw funds from the Customers’ account to pay debts owed to GateGuard by the Customer,” the Justice wrote in a 107-page decision on June 6, denying Teman’s motions. The customers said they “had never seen the Payment Terms, had never discussed such terms with Teman, and had not granted GateGuard that authority, and would not have done so had they been given the opportunity.”
This reasoning is contrary to case law precedents for online contracts including one Engelmayer decided in June 2019, Porcelli v. JetSmarter, which sent the case to arbitration based on its online contract. In JetSmarter, Justice Engelmayer cited an Uber case and wrote: ‘The Second Circuit has made clear that such “clickwrap” agreements can serve as valid consent to arbitrate because in checking the box, the user must affirmatively assent to the terms of the agreement.”
Other Federal cases involving Verizon, Amazon and Facebook also uphold multi-page online contracts based on the Federal Uniform Electronic Transactions Act.
Justice Engelmayer’s opposite ruling in the U.S. v. Teman, would negate the contracts of, and create criminals of most tech company CEO’s when they attempted to collect debts, including Airbnb, on which Teman’s attorney modeled GateGuard’s contracts.
In a non-payment dispute with another GateGuard client, a New York State Supreme Court judge found the online contract terms were valid and ordered its client, Big City Realty, into arbitration.
BCR’s attorney also represents GateGuard competitor, MVI – My Video Intercom, with regard to some of its contracts and business.
A different attorney is representing MVI in a lawsuit in Federal Court initiated by GateGuard and accusing MVI of stealing confidential information and trade secrets. In that lawsuit, MVI is also claiming online contracts are valid so it can use an arbitration clause.
MVI Systems, LLC was incorporated in August 2016, the same year another entity owned by Samuel Taub signed an agreement to become a GateGuard distributor.
In this separate ongoing Federal civil case, GateGuard is accusing Taub and MVI of taking its confidential information to file a patent, copy the device and then founding “My Video Intercom” aka MVI Systems, LLC, now a Delaware corporation, MVI Industries, LLC, as a competitor.
It was during a recent conference that MVI’s corporate attorney disclosed that AUSA Bhatia had called and interviewed him. This was also never disclosed to Teman’s attorneys for his criminal trial as Bhatia conveniently did not call MVI’s attorney as a witness.
Documents in the MVI lawsuit and screen shots of its website in 2018 revealed that Soleimani’s company, ABJ Properties, was listed as an MVI “Certified Dealer” and could be in line for free devices, plus a 5 percent royalty.
GateGuard estimates Soleimani’s business arrangement with MVI could have also resulted in an estimated savings of $5.4 million that would have otherwise been due to GateGuard over its ten-year contract for ABJ’s managed buildings.
None of this was disclosed to Teman’s defense team.
In her Nov. 2, 2020 letter to the court, Teman’s post-conviction defense counsel, Justine Harris, writes about a meeting between prosecutors and Soleimani on January 7, 2020: “At that meeting, various topics were discussed, including Soleimani’s decision to replace ABJ’s GateGuard intercoms with those from MVI Systems, Inc., a GateGuard competitor.”
During the Southern District trial against Teman, AUSA Bhatia told the jury Soleimani stopped using GateGuard because it did not work and never mentioned any business relationship between Soleimani and MVI. It is unclear if Soleimani purposefully withheld this information or shared it with prosecutors.
Additionally, by initiating the criminal proceedings against Teman, Soleimani filed what allegedly could have been a false police report and an allegedly false affidavit with his bank to avoid the GateGuard bill. Bhatia conceded in post-trial motion replies that Soleimani may have even perjured himself at trial.
In her letter to the court, Teman’s attorney Harris has also questioned why more information about Soleimani’s personal interactions in a key Housing Court matter with elderly tenant Stanley Howell were not revealed to the court by Bhatia as required by a court order, and is the thrust of Justice Engelmayer’s new order for further disclosure.
(For more information about Soliemani’s personal interactions with Howell read: https://betweenthebricks.com/2020/05/31/dershowitz-calls-out-sdny-prosecutorial-misconduct-against-prop-tech-ceo/)
Additionally, emails and texts among the shareholders and managers of the Mercer Street co-op should have been supplied to the defense. Some of this correspondence discussed the destruction and physical removal of the intercom system, allegedly by residents, along with GateGuard’s fee of $18,000 for the destruction of the equipment – which was the amount of the RCC that Teman deposited upon advice from his attorney. This check bounced as the co-op did not have the funds in its account.
An accounting representative of the co-op’s management company also filled out an affidavit with their bank, stating she was unaware of GateGuard and that the co-op did not owe them money, yet was copied on emails with the board discussing the GateGuard fees, as was the building’s direct manager.
At trial, the head of the third client company admitted his brother-in-law filed a false affidavit with their bank stating they did not know of GateGuard.
The recently revealed evidence that was kept from the defense and other possible Brady violations are more reasons why Teman’s criminal conviction should be dismissed and why if it is not, President Trump should pardon Teman, who is still under house arrest and will be sentenced on December 4.