Kyko Global Seek A Temporary Restraining Order To Enjoin Defendants Prithvi Information Solutions

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 1 of 25
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
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AT SEATTLE
KYKO GLOBAL, INC., a Canadian
corporation, and KYKO GLOBAL GMBH, a
Bahamian corporation,
Plaintiffs,
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v.
Case No.
PLAINTIFFS MOTION FOR
TEMORARY RESTRAINING ORDER
AND EXPEDITED DISCOVERY
PRITHVI INFORMATION SOLUTIONS,

LTD., a Pennsylvania corporation, PRITHVI
CATALYTIC, INC., a Delaware corporation,
PRITHVI SOLUTIONS, INC., a Delaware
corporation, PRITHVI INFORMATION
SOLUTIONS INTERNATIONAL, LLC, a
Pennsylvania limited liability company,
INALYTIX, INC., a Nevada corporation,
INTERNATIONAL BUSINESS
SOLUTIONS, INC., a North Carolina,
corporation, AVANI INVESTMENTS, INC., a
Delaware corporation, ANANYA CAPITAL
INC., a Delaware corporation, MADHAVI
VUPPALAPATI AND ANANDHAN
JAGARAMAN, husband and wife and the
marital community composed thereof, GURU
PANDYAR AND JANE DOE PANDYAR,
husband and wife and the marital community
composed thereof, and SRINIVAS SISTA
AND JOHN DOE SISTA, husband and wife
and the marital community composed thereof,
DCGS, INC., a Pennsylvania company, EPP,
INC., a Washington corporation, FINANCIAL
OXYGEN, INC., a Washington corporation,
HUAWEI LATIN AMERICAN SOLUTIONS,
INC., a Florida corporation, L3C, INC., a
PAGE 1 PLAINTIFFS MOTION FOR TEMPORARY

RESTRAINING ORDER AND EXPEDITED DISCOVERY
SLINDE NELSON STANFORD

601 Union Street, Suite 4400
Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
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Washington corporation.
Defendants.
I.
INTRODUCTION
Plaintiffs Kyko Global, Inc. and Kyko Global GmbH (collectively, hereinafter Kyko)
seek a temporary restraining order to enjoin Defendants Prithvi Information Solutions, Ltd.
(PISL) and its affiliates, officers, directors and certain individuals acting in concert from
moving, transferring or otherwise dissipating assets subject to Kykos secured claims.
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Defendants have engaged in a calculated scheme of deception and subterfuge to defraud, deceive
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and/or misrepresent the existence of certain customer account receivables pledged or sold to
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Plaintiffs as security for certain advances made to PISL under a factoring arrangement.
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Defendants collective conspiracy to defraud Plaintiffs out of over $17 million involved the
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creation of fictitious, counterfeit customers and associated verifications of accounts receivable,
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which, in turn, induced Kyko to advance the funds. As a result of such wrongful conduct and by
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misrepresenting the true nature of their counterfeit operations, Defendants concealed the fact that
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the customer accounts receivables did not exist, and, more significantly, hid the fact that Kyko
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would never be paid back more than $17 million.

Plaintiffs seek a temporary restraint on transfer of assets without prior notice to
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Defendants because Defendants have engaged in a pattern of deception and prior schemes to
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transfer assets among multiple shell entities formed by Defendants (both in the United States and
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foreign countries). Not only have Defendants admitted to transfer of assets to evade creditors in
the past, but Defendants have also admitted to doing so with respect to some customer account
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receivables pledged to Kyko. And, with respect to existing customer account receivables that are
not counterfeit, Defendants are diverting these funds from payment to Kyko as required under


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the parties factoring agreement and the guarantees. Therefore, there is ample evidence that
Defendants will likely transfer, dissipate or hide the assets again if given the chance to do so.
Plaintiffs seek a temporary injunction pending a hearing on a preliminary injunction in
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order to safeguard monies derived from legitimate accounts receivables and any other assets
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where they are located. Plaintiffs seek to maintain the status quo of Defendants assets in order
to protect any ability to recover pending the Courts adjudication on the merits.
II.
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A.
FACTUAL BACKGROUND
Kykos Business Relationship for Factoring Services with Defendant PISL,

Security for Monies Advanced, and the Verification Process on the Accounts
Receivable.
Kyko and PSIL entered into a factoring agreement in November 2012. Declaration of
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Kiran Kulkarni (Kulkarni Decl.) at 2-4. PISL and its officer and directors represented that
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PISL was a growing, vibrant and successful information technology (IT) services company
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that served many large, brand-name customers based in the United States, including customers
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such as Microsoft, Huawei, Dicks Sporting Goods, Enterprise, and many more. Id. at 3.
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The business relationship between Kyko and PISL, which is typical of such factoring
arrangements, had multiple steps in order to ensure Kyko would receive payment on legitimate
customer accounts receivables directly from the customer. Id. First, PISL would identify certain
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customer accounts receivable for IT services and would authorize direct payment on these
customer accounts receivable to be made to Kyko in exchange for a portion of the amount
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outstanding from its customers to be paid immediately by Kyko. Id. Then, before advancing the
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monies to PISL, Kyko would send the invoice to the actual customer, and obtain the customers
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signed acknowledgement back by email verifying that the services were provided by PISL and
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that the invoices were both legitimate and accurate. Id. Kyko would also confirm with the
customer that payments should be made to Kyko rather than PISL. Id.
After the verification process with the customer was complete, Kyko would then advance
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PISL a portion of the invoice amount by transferring the money via wire transfer to PISL. Id.
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When the invoice became due, PISLs customers would make payment directly to Kyko. Id.
Kyko would then pay the balance of the invoiced amount to PISL less Kykos interest and
certain fees. Id. If the customer did not ultimately pay Kyko, PISL remained obligated to repay
Kyko for the total amount of the customer account receivable. Id. at 5. In other words, Kyko
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was financing PISLs business, but was not agreeing to provide insurance to PISL or in any way
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taking on the risk for a customers nonpayment. Id..
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B.
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Guarantees Are Executed by Defendants to Secure PISLs Obligations to

Kyko And Kyko Seeks Verification of Five Large Customer Account
Receivables.
To further secure PISLs obligations to Kyko under the factoring agreement, Kyko
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requested and obtained certain guarantees from PISL and its affiliated companies, officers and
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directors. Id. at 6. PISL, its affiliated U.S. company, Prithvi Catalytic, Inc. (Catalytic), and
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Madhavi Vuppalapati (Madhavi) executed separate guarantees in November and December

2011 promising that:
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[T[he Guarantor, absolutely, irrevocably and unconditionally, guarantees as

the primary obligor and not merely as a surety, to the Trade Financier [Kyko
Global, Inc.] the punctual and complete payment and satisfaction when due
(whether at stated maturity, by acceleration or otherwise), and at all times
thereafter, of each of the Obligations.
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Id. at Exs. A, B & C, 1.1 at p. 1. Madhavi is an officer and/or director of a number of PISL
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affiliated companies located in the United Sates, including PISL, Prithvi Information Solutions
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International, LLC (PISI), and Prithvi Solutions, Inc. Id. at 7.


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Throughout late 2011 and early 2012, PISL and its officers, including Madhavi,
Defendant Guru Pandyar (Pandyar) and other representatives, represented to Kyko that it had
substantial relationships with several multi-billion dollar US-based customers. Id. at 8. PISL
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over the next few months offered five specific customers whose receivables it wanted to factor
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with Kyko: (i) Dicks Sporting Goods, a national retailer with over 600 stores, (b) Enterprise
Products Partners, a publicly listed U.S energy asset company, (c) Financial Oxygen, a large U.S.
financial services company, (d) Huawei, a global networking and telecommunications company,
and (e) L3 Communications, a U.S. publicly listed defense contractor (the Five Customers).
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Id.; see also id. at Ex. D.

As part of the verification process the parties had agreed upon, Kyko requested
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acknowledgements signed by each of the Five Customers verifying that each customer would
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make payments directly to Kyko. Id. at 9. Kyko also requested from Madhavi, Pandyar, and
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other PISL representatives that Kyko be put in touch directly with each of the Five Customers to
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verify the accounts receivables were legitimate. Id. In response, Madhavi, Pandyar, and other
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representatives of PISL specifically represented that this should not be done because it might
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jeopardize their ongoing IT services relationships with these customers. Id. Instead, Madhavi,
Pandyar and other PISL representatives offered to obtain and provide whatever documents that
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would be required by Kyko to verify the legitimacy of the accounts receivable for these Five
Customers. Id. PISL then presented Kyko with signed acknowledgements from the Five
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Customers. Id. at Ex. E. Once these Five Customers had been verified through the signed
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acknowledgment process, PISL then issued invoices to each customer and sent a copy to Kyko
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for review. Id. at Ex. F. Kyko then sought acknowledgment using the email addresses provided
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to Kyko by PISL for each of the Five Customers to verify that the Five Customers had actually
approved the PISL invoices. Id. at 10, Ex. G.
Defendants also provided Kyko with security agreements and UCC-1 registrations to
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secure their obligations. Id. at Ex. H. Pursuant to the UCC-1 registrations, Kyko was secured in
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the debtors property, including: all present and future acquired assets of debtor, including,
without limitation, all inventory, accounts, equipment chattel paper, documents and
instruments. Id. at p. 1.
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In February 2012, as part of an expansion of the parties existing relationship with Kyko
Global GmbH, further guarantees were entered by Catalytic, PISL and Madhavi with Kyko
Global GmbH, each again promising to irrevocably and unconditionally guarantee certain
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obligations to Kyko Global GmbH. Id. at Ex. I, J & K.
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C.
PSILs Purported Five Customers Stop Making Payments to Kyko on the

Accounts Receivables.
PISLs purported Five Customers made payments on the revolving balance owed for
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accounts receivables up until February 15, 2013. Id. at 13. After that date, each of the Five
Customers stopped making payments to Kyko. Id. In response, Kyko contacted PISL and was
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told that PISL had been sued by a Japanese company, Sojitz Corporation (Sojitz), which had
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led to garnishment of PISLs bank accounts, and that Sojitz had instructed the Five Customers to
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stop making payments. Id. However, in late February 2013, Madhavi, Pandyar and other PISL
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representatives personally assured Kyko that the matter related to Sojitz would be resolved, that
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PISL intended to resume providing services to the Five Customers in a short time period, and
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that payments would again be made within a few weeks time by these customers. Id.
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After a few weeks passed and no further payments had been made, Kyko advised
Madhavi, Pandyar and PISLs other representatives that Kyko intended to contact the legal
departments of each of the Five Customers in order to confirm whether or not they were going to
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pay the monies owed to Kyko and to offer that such payments be made into a lawyers trust
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account to avoid any concerns such customers might have regarding collection on a judgment
entered against PISL by Sojitz. Id.
On March 9, 2013, Kyko met with representatives of PISL, Satish Vuppalapati
(Satish), Madhavis brother and the Managing Director of the Indian parent company of PISL,
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regarding the outstanding $17 million owed to Kyko and the fact that payments on the customer
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accounts receivables had not resumed. Id. at 15. At this meeting, PISL informed Kyko that it
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was in the process of transferring customer contracts from PISL to other affiliated companies it
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controlled in the U.S. so that Sojitz would not be able to find the assets in the U.S., or collect on
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its judgment. Id. PISLs representative, Satish, explained that we had frustrated Sojitz with its
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efforts to collect through the Indian court system but we did not realize that they will go to the
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United States to enforce the judgment. Id. Kyko refused to participate in further discussions of
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how to divert contracts or assets from a judgment entered against PISL. Id. PISL then offered to
replace the receivables of the Five Customers that suddenly stopped paying with other customer
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accounts receivables from its other affiliated U.S. companies. Id. According to PISL, the
assignment of replacement customers (Replacement Customers) would eliminate the need to
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make contact with any of the Five Customers. Id., see also id. at Ex. M (identifying affiliated
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companies).
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At that point in time, to further secure PISLs obligations to Kyko, Defendants offered
and executed additional guarantees to Kyko, Id. at Ex. N. Defendants irrevocably promised and


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guaranteed to pay up to $30,000,000 U.S., further attempting to provide Kyko with assurances
that its relationship with PISL remained secure and that the financing advanced to PISL would
be repaid via certain replacement customers in a short period of time. Id. Additionally, in March
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2013, Defendants issued Kyko a series of ten Guarantee Cheques, written for $2,000,000 U.S.
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each. Id. at Ex. O. Defendants and their representatives also provided Kyko with written
Certificates verifying the amounts outstanding on specific customer account receivables. Id. at
Ex. P. Defendants signed sworn affidavits that the Five Customers accounts receivable were
properly owed and not in dispute. Id. at Ex. Q.
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D.
Kyko Discovers PISLs Customer Account Receivables Pledged or Sold to

Kyko Were Fictitious, Counterfeit Entities Set-Up and Controlled by
Defendants in Order to Deceive Kyko into Advancing Additional Monies.
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While attempting to collect on the amounts outstanding, in March 2013, Kyko also began
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further investigating PISL and its customers. Id. at 18. Kyko directed its lawyer, Sonal
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Thomas, to begin investigating the Five Customers pledged under the factoring agreement with
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PISL. Id.; see also Declaration of Sonal Thomas (Thomas Decl.) at 5. What she found was
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not only surprising, but also demonstrated the calculated intentional manipulation by Defendants
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of email, websites, entity-formation, and customer contact information provided by PISL to
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further build up the faade set-up by Defendants that the account receivables were legitimate
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customer invoices owed for PISLs IT services. Kulkarni Decl. at 18. Kyko discovered that
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PISLs relationships with each of the Five Customers and several other businesses were a
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complete sham. Id.
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Kykos counsel conducted a search of corporate records and discovered that PISL had
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created fictitious invoices designed to make their purported business relationships with each of
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the Five Customers appear legitimate. Id. at 20. Kyko learned that for each of the Five
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Customers, Defendants had set up a phantom corporation made to look like that real company.


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a.
Instead of Dicks Sporting Goods, Defendants had created DCGS, Inc., which
sent funds by wire transfer to Kyko using a bank account registered to Madhavis address set
forth on the personal guarantee checks. Thomas Decl., Ex. 1.
b.
Instead of Enterprise Property Partners, Defendants had created EPP, Inc., which
was formed by Madhavi in July 2012. Id. at Ex. 2.

c.
For Financial Oxygen, Defendants had created Financial Oxygen, Inc., a
Washington Company registered to Defendant Srinivas Sista (Sista), who was also listed as the
president of the company. Id. at Ex. 3.
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For making payments under the name Huawei, Defendants created a Florida
company called Huawei Latin American Solutions, Inc., and Sista was the president of that
company as well. Id. at Ex. 4. Kyko received payments from Huawei Latin American Solutions,
Inc., which used the same address as Defendant Sistas address for its bank account. Id.
e.
Instead of L3 Communications, Defendants had created L3C Inc., which was
formed by Defendant Pandyar in July 2012. Id. at Ex. 6. Payments that Kyko supposedly
received from the billion-dollar company L3 Communications actually came from Defendant
Pandyars company, L3C. Id.
Kykos counsel also contacted three of the Five Customers through their legal
departments, and concluded that Defendants had instead set-up five companies and related bank
accounts, which were intended to look like the Five Customers that purportedly did business
with PISL, but were actually counterfeit, fake accounts. Id.
On March 8, 2013, Kykos counsel directly contacted a lawyer from the Dicks Sporting
Goods legal department to follow up on unpaid invoices from Dicks Sporting Goods and to
investigate its business relationship with Defendants. Id. at 6. Dicks Sporting Goods counsel
informed Kykos counsel that PISL had not done work for Dicks Sporting Goods since 2004
and that there was no current or former company employees with the names provided by PISL to
Kyko associated with the account receivable. Id. Ex. 7.


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On March 8, 2013, Kykos counsel also spoke with L-3 Communications legal
department. Id. at 7. L-3 Communications counsel told Kykos counsel that there was no one
by the name of PISLs purported customer contact given to Kyko for that company and further
advised that there was no record of any money owed to Defendants. Id.
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On March 19, 2013, Kykos counsel spoke with Enterprise Property Partners legal
department, providing her with the invoice numbers of the outstanding invoices owed to Kyko.
Id. at 8. However, Enterprise Property Partners counsel also advised that she also had no
record of any outstanding invoices. Id.
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Kykos investigation of the customers websites provided by PISL also revealed that each
of the Five Customers websites were designed and registered domain names to look like it
belonged to one of the real entities identified as the Five Customers as follows:
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a.
The sham website is www.dcsginc.com. The sham domain name for that site was registered on
January 12, 2012. Kulkarni Decl. at 28
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b.
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The legitimate website of Enterprise Product Partners is
www.enterpriseproducts.com. The sham website is www.eppcorporate.com. The sham domain

was registered on March 28, 2012. Id.
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The legitimate website Dicks Sporting Goods is www.dickssportinggoods.com.
c.
The legitimate website of Financial Oxygen is www.financialoxygen.com. The
sham website is financialoxygen.net. This sham domain name was registered on July 14, 2011.
Id.
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The legitimate website for Huawei is www.huawei.com. The sham website is
www.huawei.com.ag. Id.
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The legitimate website of L3 Communications is www.l3com.com. The sham
website is www.lthreecommunications.com. That sham domain name was registered on March

28, 2012. Id.
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The sham websites were designed to incorporate information from the real companys
website, making it look like the sham website is that of the legitimate business. Id. at 22. This
allowed Defendants to send and receive email correspondence from email accounts associated
with the sham web domains, further misleading Kyko into believing that Defendants purported
business relationships with the Five Customers were real. Id. For example, Kyko wrote to Alves
Oilveira at alves.oilveira@huawei.com.ag requesting confirmation of Defendants invoices,
which Oilveira then provided through the same email address. Id. at Ex. R. Kyko has since
confirmed that no such person at Huawei in Brazil existed and thus, it is likely one of the
Defendants were operating the email address and website the entire time. Id. at 23.
Kyko also discovered that many of the servers that hosted the various sham websites
were located in the same place. Id. The server locations are determined by Internet Protocol
Address (IP Address) which is a unique four-part number which identifies the precise location of
the server. Id. Based on an investigation by an internet consultant retained by Kyko, Kyko
discovered the IP address for the sham websites associated with each of the Five Customers, as
well as sham websites associated with proposed Replacement Customers, were the same three
server locations. Id. Thus, servers hosting the sham sites for Dicks Sporting Goods and
Enterprise were at the same location, and also hosted 12 other sham customer websites. Id.
Similarly, the servers hosting the sham websites for Huawei and L3C also shared a location, and
hosted six other sham websites. Id.
After the Five Customers stopped paying, Defendants provided Kyko with an additional
estimated forty customers (the Replacement Customers) for assignment and verification of
accounts receivable. Id. at 28, Exs. U & V. While Kyko was still in search of payment and
still in the process of uncovering Defendants scheme, Defendants were pitching Kyko with
several potential Replacement Customers. Id. at 26. More specifically, by late May, 2013,
Defendants sent Kyko email correspondence regarding a potential Replacement Customer called
Process Map, Inc. Id. at Ex. S. PISL had represented that it had collected the entire outstanding


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receivable for Process Map before PISLs representatives (Madhavi, Pandyar, and Satish) were
deposed in the Sojitz matter. Id. at Ex. S. PISL advised that it had moved the contract from PISL
to one of the companies owned by Madhavi, Prithvi Information Solutions International, LLC,
obviously in order to avoid judgment. Id. at 26. PISL represented that the receivable was
$1.24 Million, and provided a breakdown of invoices. Id. To verify, Kyko contacted Mr. Jagan
Garimella of Process Map, requesting an acknowledgement that the amounts owing to Prithvi
Information Solutions International, LLC, would be paid to Kyko. Id. at 27, Ex. T. However,
Mr. Garimella reported that Process Map had not worked with PISL since 2003, and did not owe
the company any money. Id.
In addition to its investigation of the Five Customers, Kyko investigated email addresses
and corporate identities of the Replacement Customers and found that, although some of the
Replacement Customers, such as Agadia and Microsoft were likely real customers, the rest of the
Replacement Customers were also fake accounts dressed up to look like legitimate businesses
that would provide Kyko reliable receivables. Id. at 29.
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E.
Defendants Wrongful Acts Have Defrauded Other Companies and Financial

Institutions and Demonstrates that Defendants Have and Likely Will in this
Case Transfer and Hide Assets in an Effort to Evade Recovery.
Defendants fraudulent scheme of creating and corresponding as fictitious customers with
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accounts receivable and transferring monies to avoid collection is not a new one -- Defendants
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have been sued previously and subject to judgment for similar conduct. See Declaration of
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Christina Haring-Larson (Haring-Larson Decl.), 6-7, Exs 1-2. This includes a lawsuit
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filed by international finance companies Sojitz Corporation (Sojitz) and a legal proceeding by
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Deutsche Bank AG in India. Id. at Exs 1-2. These lawsuits show that Defendants not only have
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the ability, but the actual intent and wherewithal to quickly transfer assets to new entities in order
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to avoid paying their creditors.


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The Order entered in the proceeding filed by Deutsche Bank in December 2011 reflects
that PISLs Indian parent company has a history of defrauding companies in exchange for
financial services:
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As the petitioner [Deutsche Bank] did not receive any payments on the respective
due dates from the foreign purchasers, it addressed letters to T-Mobile USA,
Johns Hopkins Hospital, [and] Starpoint Solutions LLC, calling upon them to
make payments in respect of the invoices raised by the company. The petitioner
[Deutsche Bank] received letter dated 24-4-2009 from Starpoint Solutions LLC,
wherein it is stated that the documentation produced by the company is fraudulent
and that it never entered into the business relationship with the respondent
company [PISL]. M/s. Johns Hopkins under [sic] letter dated 7-5-2009 denied
of entering into contract with the respondent-company [PISL]. T-Mobile USA
orally informed to Deutsche Bank AG, New York office that is has not executed
any notice of assignment as projected by the representatives of the respondentcompany.
Haring-Larson Decl. at Ex. 2 at p. 2 2. Because PISL obtained the financing by producing
forged and fabricated documents in respect to various foreign transactions, PISL admitted
liability. Id. The Court also stated that PISL has been declared a willful defaulter and attached
the accounts of PISL, finding that PISL had defrauded the petitioner [Deutsche Bank] by
assigning bogus receivables. Id. at Ex. 2. p. 6 (c)-(d).
In another case, Sojitz brought suit and attached prejudgment certain assets in
anticipation of an arbitration award against PISL. Id. at Ex. 1. However, when payments were
not made, Sojitz entered its judgment in the amount of $33.7 million for enforcement against
PISL. Id. Thereafter, in May 2013, Sojitz unsuccessful sought to garnish the PNC Bank account
(one of the same banks used by PISL for payments on the guarantee checks to Kyko): Sojitz is
now left to try and enforce that judgment against any assets of Prithvi it can find, a task that
Prithvi is making extremely difficult by its failure to fully and timely respond to Sojitzs postjudgment discovery requests. Id. (See Pltfs Reply in Support of Motion to Compel Discovery in
Aid of Execution at p. 2, 1 (W.D. Pa. Dkt. 28 dated May 6, 2013)). PISLs actions in that
proceeding show it has a history of evading discovery on its banking and financial information


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and somehow successfully managed to transfer or conceal significant sums of money from
collection efforts. See id. at p. 7, 1 ([T]he bank statements reveal that approximately $120
million has passed through one of Prithvis accounts with PNC Bank in the past two years,
despite Prithvis consistent refrain that it is suffering financial troubles.).
These unsuccessful efforts to collect by other parties supports the conclusion that PISL
transferred such funds to evade its lawful creditor, just as PISL had initially informed Kyko that
it would do at their meeting in March 2013. See Kulkarni Decl. 15. Thus, there is a pattern of
fraudulent conduct and a history of diverting assets to avoid collection efforts if notice of
litigation is provided to Defendants.
III.
A.
LEGAL ARGUMENT
Standard for Temporary Restraining Order And Preliminary Injunctive

Relief.
The purpose of preliminary injunctive relief is to preserve the status quo and to protect
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the rights of the parties pending trial on the merits. Chalk v. United States Dist. Ct. Cent. Dist. of
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Calif., 840 F.2d 701, 704 (9th Cir. 1988). The standards governing issuance of a temporary
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restraining order are substantially the same as for issuance of a preliminary injunction. Stuhlbarg
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Intl Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001).
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Under Federal Rule of Civil Procedure 65, a party may be granted preliminary injunctive
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relief if the party shows that: (1) it is likely to succeed on the merits of its claims; (2) it is likely
21
to suffer irreparable harm if an injunction is not granted; (3) the balance of equities tips in its
22
favor; and (4) an injunction is in the public interest. Winter v. Natural Res. Def. Council, 129 S.
23
24
Ct. 365, 374 (2008); Am. Trucking Assns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th
Cir. 2009). As a corollary to this test, the Ninth Circuit has also found that serious questions
25
26
going to the merits and a hardship balance that tips sharply toward the plaintiff can support


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
issuance of an injunction, assuming the other two elements of the Winter test are also met.
Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 113132 (9th Cir. 2011).
A federal court has inherent power to grant an asset freeze order for purposes of
4
preserving the federal courts ability to grant effective final equitable relief. See Reebok
5
6
International Ltd. v. Marnatech Enterprises, Inc., 970 F. 2d 552, 559. (9th Cir. 1992).
Moreover, in In re Estate of Ferdinand Marcos, Human Rights Litig., 25 F.3d 1467 (9th Cir.
1994), the Ninth Court concluded the district court did not abuse its discretion in granting
temporary injunction, even though case sought only money damages. In determining whether
10
to grant a preliminary injunction which freezes assets against a potential recovery, we apply the
11
12
standard test used in this circuit to evaluate claims for preliminary injunctive relief. FTC v.
Evans Products Co., 775 D. 2d 1084, 1088 (9th Cir. 1995).
13
14
A temporary restraint on the transfer or disposing of the Defendants assets is appropriate
15
under Rule 65. See e.g. FTC v. H.N. Singer, Inc., 668 F. 2d 1107, 1111 (9th Cir. 1982); FTC v.
16
JK Publications, Inc., 99 F. Supp. 2d 1176, 1179 (C.D. Cal. 2000) (district court granted
17
temporary restraining order that froze the defendants assets and required, inter alia, that the
18
19
defendants be temporarily enjoined from conducting certain business practices and [that] the
defendants disclose all assets held by them, for their benefit or under their direct or indirect
20
21
22
control.) In In Republic of Philippines v. Marcos, 862 F. 2d 1355, 1358 (9th Cir. 1988), the
Ninth Circuit affirmed a preliminary injunction that enjoined the defendants from disposing of
23
any of their assets save for the payment of attorney fees and normal living expenses pending a
24
trial on the merits of plaintiffs claim. The Ninth Circuit upheld the preliminary injunction
25
entered to prevent Marcos (and subsequently, his Estate) from transferring or dissipating assets.
26
Similar to the claims in this case, the Republic of the Philippines had brought a RICO suit and


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
fraud claims against the Marcoses, claiming that the Marcoses had converted public property to
their own use. Id.at 1364.
Here, Kyko easily satisfies the four elements for a temporary restraining order under Rule
4
65 and there is ample evidence that Defendants may transfer assets outside the jurisdiction or to
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
other shell companies to evade Plaintiffs recovery. There is also an imminent risk of dissipation
of assets from which Plaintiffs can recover and, therefore, an asset freeze is appropriate.
B.
Plaintiffs Are Likely to Succeed on the Merits.
Kyko is likely to succeed on the merits of its claims because Defendants conspiracy
went to great lengths to commit fraudulent, intentional acts to deceive Plaintiffs. Defendants not
only created false acknowledgments that the accounts receivable were legitimate and due, but
also went to great lengths to verify the receivables on behalf of the sham customer by creating
and propagating sham websites as well as customer emails and contact information for customers
who did not exist. Kulkarni Decl., 16-26. When Kyko contacted three of the Five Customers
via their legal department, the companies responded that they did not have any dealings with
PISL for many years and did not owe PISL any monies on existing accounts receivables. Thomas
Decl., 6-8. Defendants are engaged in a massive and brazen fraud. Defendants have
repeatedly impersonated multi-billion dollar businesses to induce Kyko and other businesses to
provide them factoring services, knowing all along that the money would never be repaid.
Defendants have created an elaborate web of shell companies across multiple states and
countries and are capable of making money disappear very quickly. Defendants have even told
Kyko directly about their intentions of hiding money from other judgment creditors. Kulkarni
Decl. at 15, 26. Thus, Plaintiffs are likely to succeed on their fraud, RICO, misrepresentation,
conversion and unjust enrichment claims against all Defendants.
Likewise, Plaintiffs are likely to succeed on the merits of the breach of the guarantee
claim asserted against the Defendant-Guarantors. Each of the Defendant-Guarantors promised


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
1
2
3
4
5
6
7
8
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12
13
irrevocably and unconditionally to pay Kyko upon demand for the amounts outstanding, but
failed to do so when demand for approximately $17 million was made.
Finally, not only are Defendants on the hook for breach of the guarantees, but many of
the Defendants have also granted Plaintiffs a security interest in all of their assets. See Kulkarni
Decl, Ex. H. Plaintiffs request for an injunction against transfer of these same assets is in effect,
duplicative of the rights under the General Security Agreements, which provide that Plaintiffs, as
a Secured Party, may take possession of, collect, demand, sue on, enforce, recover and receive
Collateral . [and] may sell, lease, or otherwise dispose of Collateral. . . . see e.g. Id. at Ex. H,
p. 20, 12(c) (General Security Agreement at p. 9). In other words, Plaintiffs are simply asking
the Court to maintain the status quo for the very assets that Plaintiffs have the clear legal right to
take possession of and otherwise recover against.
C. Irreparable Harm is Inevitable in the Absence of a Temporary Restraining
Order and Preliminary Injunction.
Kyko can show that it will certainly suffer immediate, irreparable harm if there is no
14
injunctive relief because the Defendants have already stated their intent to evade, deplete or
15
dissipate assets owed to their creditors through transfers to multiple, inter-affiliated companies
16
which defendants have created or formed to facilitate their fraudulent conspiracy on Plaintiffs.
17
Kulkarni Decl. at 15, 26. Defendants have also likely done so in the past to evade a judgment
18
by Sojitz and efforts to collect by Deutsche Bank. Defendants cannot be trusted to act in good
19
faith and any amount of delay will allow them further opportunity to hide and abscond with
20
Kykos money, and victimize other companies like Kyko in the future. The likelihood of
21
recovery against those assets upon notice to the Defendants would be very minimal, given
22
Defendants pattern of wrongful conduct. Plaintiffs face a very real inability to recover any
23
monetary damages whatsoever if temporary injunctive relief is not granted and there is a very
24
real threat of irreparable harm given the various shell entities set up by defendants to perpetrate
25
their fraud. Any funds will likely be transferred immediately outside of the jurisdiction if there
26
is no injunction in place.


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
1
2
1.
Defendants Fraudulent Acts to Transfer Funds Through a Series of

Shell-Entities Will Likely Occur in the Absence of Temporary
Injunctive Relief and Kyko Will Immediately Lose Any Chance of
Recovery.
4
Kyko has direct familiarity with Defendants pattern and practice of hiding money from
5
6
their judgment creditors. Specifically, as stated in the Kulkarni declaration, Defendants
previously approached Kulkarni, asking for his cooperation in a scheme to transfer assets and
conceal them from Sojitz Corporation. Kulkarni Decl. at 15. Defendants then attempted to bait
Kulkarni into participating by providing him assurances that it would help accelerate
10
11
Defendants payments to Kyko. Yet, Defendants continued to offer yet again new Replacement
Customers and even more recently, with respect to Process Map, Inc., Defendants have shown
12
their intent to transfer customer account receivables to new entities and to fabricate that such
13
14
receivables exist. Id. at 17-18, 26. In the absence of injunctive relief, Defendants fraudulent
15
scheme will continue as it moves monies from some legitimate customer account receivables,
16
such as Agadia and Microsoft, in order to avoid collection efforts by Kyko. Id. at Ex. X.
17
18
19
2.
Monies will Likely Be Transferred Overseas Outside the U.S.

Jurisdiction to Avoid Collection.
Kyko will also be irreparably harmed if a temporary restraining order is not entered that
20
freezes Defendants assets because Defendants are more than likely to transfer or dissipate the
21
millions of dollars owed to Kyko outside of the jurisdiction and/or to other unknown, recently
22
formed entities. PISLs parent company is in India and PISL has demonstrated its intent to avoid
23
collection whenever possible by making sure the monies are not subject to collection. See
24
25
26
Haring-Larson Decl., Exs. 1-2; Kulkarni Decl. at 15-26. Kyko has legitimate reason to fear
that any notice to Defendants will only assist them in concealing their assets and ensuring that a


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
judgment will be unrecoverable. Not only have most of the entities identified thus far been
formed recently, but it seems unlikely that these Defendant shell-entities have any real tangible
assets from which to collect from other than customer accounts receivable and monies derived
4
from legitimate customers in exchange for IT services. Moreover, Defendant Madhavi is a
5
6
citizen of India and appears to reside in a rented apartment in Bellevue, Washington. Therefore,
Madhavi could quickly leave the jurisdiction to India or elsewhere if necessary. And, if the
experience of Sojitzs collection efforts on its judgment is any indication, any cash flow, such as
$120 million that flowed through PISLs PNC account, can be quickly transferred outside of the
10
11
existing bank account and jurisdiction. See Haring-Larson Decl. at Ex. 1. Defendants own
stated willingness to transfer assets to avoid collection in its dealings with Kyko also indicate
12
that Defendants are able and likely to quickly transfer monies to new entities or accounts when
13
14
15
legal action is commenced to preclude any recovery. Kulkarni Decl. at 15, 26. To avoid such
irreparable harm, injunctive relief must be granted.
16
D.
17
The balance of hardships also tips decidedly in Kykos favor. Without an injunction,
18
19
The Balance of Equities Tips in Plaintiffs Favor.
Kyko will likely lose any customer revenues that provided Kyko status as secured creditor on the
millions of dollar it advanced. Kyko loses not only the security provided through legitimate
20
21
22
customer account receivables, but also any chance to recover against any other assets on the
Guarantees or otherwise. Defendants, on the other hand, will not be harmed if an injunction is
23
issued. Defendants will continue to be able to receive payments from customers in the ordinary
24
course of business and deposit such funds in their existing accounts. The only change is that
25
those monies will be safeguarded and Defendants will be prevented from dissipating any funds
26


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
received from legitimate customers. The magnitude of the Defendants fraudulent plan and the
significant $17 million dollars outstanding also weigh heavily in Plaintiffs favor.
E.
Issuing an Injunction is in the Publics Interest.
4
An injunction also serves the public interest. There is a significant risk to others of
5
6
further fraudulent acts if the injunction is not granted based on the fraudulent acts of Defendants.
Defendants actions are difficult to detect and the perceived liabilities being created by these
false companies could result in defrauding other companies, governments, and financial
institutions in Washington, the United States and other foreign countries. Moreover, with
10
11
regards to the other sham customers referenced throughout Defendants dealings with Kyko,
many of those customers exist as public companies, but simply have no existing relationship
12
with PISL or its affiliated entities (e.g. Dicks Sporting Goods). See e.g. Thomas Decl., Ex. 7.
13
14
Thus, there is a very real public interest in ending the misconception and danger of further fraud
15
created by Defendants brazen acts of creating false and fictitious customers in order to obtain
16
financing. Defendants actions of creating, impersonating and corresponding to obtain monies
17
from Plaintiffs, as well as other financial institutions, should put to a stop now before others are
18
19
entrapped in the fraudulent scheme.

It is also in the public interest that Defendant be held accountable for such deceptive and
20
21
22
wrongful acts and not permitted to further their fraudulent acts by transferring monies to evade
creditors lawful enforcement of their rights, either outside this jurisdiction or overseas. The
23
public is benefited by an injunction that maintains the status quo and preserves any remaining
24
funds are held for the benefit of satisfying the debts guaranteed by Defendants.
25
F.
An Asset Freeze is Necessary to Preserve Funds for Plaintiffs Recovery.
26


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
In addition to the standards for an injunction under Rule 65, [a] party seeking an asset
freeze must show the likelihood of dissipation of the claimed assets, or other inability to recover
monetary damages, if relief is not granted. Johnson v. Coururier, 572 F. 3d 1067, 1085 (9th Cir.
2009) (citing Conn. Gen. Life Ins. v. New Images of Beverly Hills, 321 F. 3d 878, 881 (9th Cir.
5
6
2003). Even where the ultimate relief sought is money damages, federal courts have found
equitable injunctions appropriate where it has been shown that the defendant intended to frustrate
any judgment on the merits by transferring assets. Walczak v. EPL Prolong, Inc., 198 f. 3d 725
(1999); In re Estate of Marcos, 25 F. 3d 1467, 1479 (1994) (in RICO, fraud, and conversion
10
11
cases, federal courts have found preliminary injunctions appropriate where defendant intended to
frustrate any judgment on merits by transferring assets out of jurisdiction) (citing cases therein).
12
In Johnson, the Ninth Circuit upheld an asset freeze because plaintiffs had established
13
14
15
16
17
18
19
that they were likely to succeed in proving that [defendant] impermissibly awarded himself tens
of millions of dollars, and because:
Such an individual is presumably more than capable of placing assets in
his personal possession beyond the reach of a judgment. Accordingly,
[defendants] own prior conduct establishes a likelihood that in the
absence of an asset freeze and accounting, Plaintiffs will not be able to
recover the improperly diverted funds and will thus be irreparably harmed.
Johnson, 572 F.3d at 1085. Further, where defendants business activities are permeated by
20
21
22
fraud, the Court may conclude that the defendants are likely to attempt to dissipate or conceal
assets while the action is pending and, to avoid this, grant an asset freeze. See e.g. SEC v. Manor
23
Nursing Centers, Inc., 458 F. 2d 1082, 1106 (2d Cir. 1972); SEC v. R.J. Allen & Assocs., Inc.,
24
386 F. Supp. 866, 881 (S.D. Fla. 1974). A defendants transfer of assets to offshore accounts
25
establishes a likelihood that without an asset freeze, the plaintiff will be unable to recover the
26
funds. SEC v. Affordable Media, 179 F. 3d at 1236 (likelihood of dissipation existed [g]iven the


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
[defendants] history of spiriting their commissions away to a Cook Islands trust.); FTC v.
Willms, 2011 WL 4103542 * 11-12 (W.D. Wa. Sept. 13, 2011) (unreported decision) (granting
preliminary injunction for asset freeze involving deceptive website marketing practices where
4
defendant moved substantial funds offshore through corporate holding company defendants and
5
6
7
their bank accounts).

Plaintiffs have demonstrated that Defendants assets would likely be dissipated or
transferred to one of Defendants related affiliated entities and that Plaintiffs would not
otherwise be able to recover if the injunction were not issued. Based on the over $17 million in
10
11
monies owed to Defendants and Defendants pattern of fraudulent conduct, including but not
limited to their express statements to Kyko about defrauding other judgment creditors by
12
transferring assets to affiliated companies, Kyko has ample good cause to seek a temporary
13
14
restraining order that freezes Defendants assets without allowing Defendants any more time to
15
transfer or dissipate the millions of dollars owed to Kyko by transferring assets out of the
16
jurisdiction and/or to other unknown, recently formed entities. Kyko has good cause and
17
legitimate reason to fear that any notice to Defendants will only assist them in concealing their
18
19
assets and ensuring that a judgment will be unrecoverable. Accordingly, no notice to Defendants
prior to issuance of Kykos requested temporary restraining order should be required.
20
21
22
Furthermore, due to the large number of entities created to propagate the fraud of sham
customers and accounts receivables in the past and Defendants self-professed ability to transfer
23
customer accounts to affiliated entities to avoid collection of judgments previously, there is a
24
likelihood that Defendants will engage in the same conduct here if Plaintiffs motion for
25
temporary relief to freeze assets is not granted. Defendants have engaged in a pattern of
26
improperly transferring corporate assets from one shell entity to another to evade judgments by


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
Sojitz and collection efforts by Deutsche Bank. Thus, Defendants have already shown they are
more than capable of placing assets beyond the reach of a judgment and establishing new or
affiliated companies to transfer assets outside the reach of their creditors is likely based on
4
Defendants pattern of conduct. If injunctive relief is denied herein, Plaintiffs ability to recover
5
6
on their claims against the Defendant-Guarantors and the related PISL affiliated U.S. entities will
more than likely be completely frustrated. Like the bad actor in Johnson, Plaintiffs will not be
able to recover any improperly diverted funds in which they have a security interest. See
Johnson, 572 F. 3d at 1085; see also Kulkarni Decl. at Ex. H. By granting a preliminary
10
11
injunction, plaintiffs would be protected from the possible further dilution of assets.
G.
12
Plaintiffs Seek Expedited Discovery From Defendants and Their Banking

Institutions To Identify Where the Customer Receivables Monies in Which It
Has an Interest Are Located.
13
14
PISL has a history of providing late and deficient banking information and will likely
15
delay in providing its financial information if sought in the usual process of discovery. Such a
16
delay in discovery of Defendants banking and other financial information will aid Defendants in
17
any efforts to transfer assets outside the United States and this jurisdiction in order to evade
18
19
collection efforts. Defendants will likely hide their funds -- if not pinned down with the
expedited discovery requested -- by transferring assets to newly formed or unknown shell
20
21
22
entities. Thus, Plaintiffs seek an order to obtain complete bank account statements and financial
information from Defendants on an expedited basis as well as a response from Defendants
23
banking and other financial institutions directly. The information will directly provide
24
information on where the funds are going and if and where they have been already transferred.
25
H.
The Bond Should Be Minimal, if Not Zero.
26


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
Little or no bond should be required for the issuance of a temporary restraining order.
This is because Defendants would continue to receive payments under the existing status quo
into their accounts - only payments or transfers going out of Defendants accounts and sales or
4
transfers of assets would be limited. If Plaintiffs are unable to prevail on the ultimate merits of
5
6
their claims (which is unlikely), the Defendants will have the same assets available as they would
before this action was filed. Moreover, Defendants will not be harmed by the requested
temporary restraining order because they will be able to continue its business of providing IT
services, regardless of whether the Court grants Plaintiffs motion to freeze assets pending
10
11
resolution of the claims in this case. Plaintiffs are seeking to maintain the status quo by an asset
freeze in order that they can recover to the extent legitimate customers funds are being deposited
12
for IT services and improperly diverted from payment to Kyko.
13
IV.
14
15
CONCLUSION
Based on the foregoing, Kykos request for temporary restraining order enjoining
16
transfers or sales of assets and seeking expedited discovery should be granted. Defendants
17
created an elaborate network of shell corporations with bank accounts, websites, email addresses,
18
19
and phantom representatives, which were designed to look like legitimate, successful businesses
that owed money to PISL. However, in reality, Defendants forged invoices, contacts, emails and
20
21
22
responses from those sham corporations as part of a scheme to convince Kyko to advance them
additional monies, knowing full well that there were no actual services provided to these
23
counterfeit customers, and hence no receivable or money that would ever be paid. Thus,
24
Plaintiffs request for a Temporary Restraining Order to enjoin any transfers or sales of assets
25
and freeze the monies held in Defendants bank accounts and any other financial institutions
26
should be granted.


Seattle, WA 98101
p. 206-237-0020; f. 503.417.4250
1
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Dated this 16th day of June, 2013.

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By:
/s/ Christina Haring-Larson

____
Christina Haring-Larson, WSBA No. 30121
Of Attorneys for Plaintiffs
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p. 206-237-0020; f. 503.417.4250

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Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 1 of 25

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

PRITHVI INFORMATION SOLUTIONS,

PAGE 1 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 2 of 25

moving, transferring or otherwise dissipating assets subject to Kykos secured claims.

creation of fictitious, counterfeit customers and associated verifications of accounts receivable,

would never be paid back more than $17 million.

PAGE 2 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 3 of 25

Plaintiffs seek a temporary injunction pending a hearing on a preliminary injunction in

Kykos Business Relationship for Factoring Services with Defendant PISL,

PAGE 3 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 4 of 25

taking on the risk for a customers nonpayment. Id..

Guarantees Are Executed by Defendants to Secure PISLs Obligations to

Madhavi Vuppalapati (Madhavi) executed separate guarantees in November and December

[T[he Guarantor, absolutely, irrevocably and unconditionally, guarantees as

International, LLC (PISI), and Prithvi Solutions, Inc. Id. at 7.

PAGE 4 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 5 of 25

Id.; see also id. at Ex. D.

PAGE 5 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 6 of 25

approved the PISL invoices. Id. at 10, Ex. G.

PSILs Purported Five Customers Stop Making Payments to Kyko on the

PAGE 6 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 7 of 25

PAGE 7 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 8 of 25

properly owed and not in dispute. Id. at Ex. Q.

Kyko Discovers PISLs Customer Account Receivables Pledged or Sold to

of email, websites, entity-formation, and customer contact information provided by PISL to

complete sham. Id.

PAGE 8 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 9 of 25

was formed by Madhavi in July 2012. Id. at Ex. 2.

For Financial Oxygen, Defendants had created Financial Oxygen, Inc., a

Instead of L3 Communications, Defendants had created L3C Inc., which was

PAGE 9 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 10 of 25

The legitimate website of Enterprise Product Partners is

www.enterpriseproducts.com. The sham website is www.eppcorporate.com. The sham domain

The legitimate website Dicks Sporting Goods is www.dickssportinggoods.com.

The legitimate website of Financial Oxygen is www.financialoxygen.com. The

The legitimate website for Huawei is www.huawei.com. The sham website is

The legitimate website of L3 Communications is www.l3com.com. The sham

website is www.lthreecommunications.com. That sham domain name was registered on March

PAGE 10 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD

Case 2:13-cv-01034 Document 2 Filed 06/17/13 Page 11 of 25

PAGE 11 PLAINTIFFS MOTION FOR TEMPORARY

SLINDE NELSON STANFORD