Академический Документы
Профессиональный Документы
Культура Документы
_______________________________________________________________
v. PLAINTIFF'S OPPOSITION
TO DEFENDANTS'
Phillip Frost, OPKO Health, Inc., Brian MOTION TO DISMISS
Keller, CoCrystal Pharma, Inc., and J. PLAINTIFF'S
Does 1–50, AMENDED COMPLAINT
Defendants.
_______________________________________________________________
1
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 2 of 28
CONTENTS
3 Table of Authorities
8 Jurisdiction
19 Personal jurisdiction
21 Due Process
25 Standing
27 Florida Law
2
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 3 of 28
TABLE OF AUTHORITIES
Cases:
Johnson v. Arden
614 F.3d 785, 796 (8th Cir. 2010) ……………………………………………...21
3
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 4 of 28
Plaintiff brings two Minnesota state law claims against Defendants. Both
claims are adequately and sufficiently pleaded, and this case should be allowed to
proceed to trial.
Defendant Frost and his agents and co-conspirators went into FrostZone
with the intention of fraudulently taking control of BioZone, looting the company's
assets, and using the entity for a pump and dump securities fraud. It took three
years, but that is exactly what the Frost gang did. Frost gang members and
associates made tens of millions of dollars in illegal profits as a result. They also
committed numerous other frauds along the way, including frauds against
Pederson. The pump and dump securities fraud is described in detail in the
complaint to provide context and support for Plaintiff's state law claims.
his fraudulent goals at BioZone. Defendant Keller was co-opted into becoming an
agent for and co-conspirator with Frost. Cooperation from BioZone team members
Pederson, Wu and Fisher was obtained by a long series of lies, deceits and false
promises. Frost's agents Keller and Maza were used to help manipulate Plaintiff
Pederson and others. The "big lie" was that Frost and others promised to invest
4
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 5 of 28
promise was repeatedly used to manipulate Pederson and others. The promised
There were four members of the original BioZone strategy team. Of the
four: (1) Dan Fisher has sued the Frost gang in Federal court for fraud. (2) Nian
Wu resigned because of broken promises. (3) Defendant Keller joined the Frost
gang, but has admitted to the fraud. (4) Pederson is now bringing this action for
fraud.
One result of the deception was that Pederson believed that Frost was going
believed that his long-term relationship with BioZone would continue and expand,
Because of these false beliefs, Pederson was induced to take many actions
that were harmful to himself and others. These actions included using his
influence with Nian Wu so that Frost and Opko could essentially steal Wu's patent
rights.
The specific lies, deceits and false promises took place over the course of a
year, and are too numerous to list them all here. Similarly, there are many specific
actions that Pederson was induced to take or refrain from because of the lies. This
5
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 6 of 28
table shows how some of the Frost gang's lies radically differed from reality, and it
on Defendants'
misrepresentations
Frost and others Frost gang would The Frost gang fraudulently
would invest $8 fraudulently take over took over BioZone, and there
million initially, and BioZone with the false was never any meaningful
$15 M
BioZone's R&D and BioZone's R&D and Opko received some patent
patent programs patent programs would rights from BioZone. The rest
scrap heap
6
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 7 of 28
With the investment, Frost and Opko would Frost and Opko looted
grow rapidly as a and then BioZone would BioZone was used for a pump
profitable operating be used for a pump and and dump securities fraud
between BioZone
and Frost
This list could go on and on, but the pattern is the same, as follows: The
Defendants have a secret agenda. The Defendants use lies and deceit to
manipulate Pederson and others. The Defendants carry out their secret agenda to
the detriment of Pederson and others. Similar tables could be constructed for Dan
Fisher and Nian Wu, showing how the Frost gang manipulated them by creating
7
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 8 of 28
All the Defendants are intertwined. Frost is the head of the gang. Frost used
his agents Keller and Maza to lie to and manipulate Pederson. All of the other
(a) Defendant Opko is the alter ego of Frost. Frost founded Opko. Frost is
the CEO. Frost is the Chairman of the BOD. Frost is by far the largest shareholder
benefited from the pump and dump through the sale of BZNE stock. Through
Frost, Opko used its agents Keller and Maza to manipulate Pederson.
(b) Defendant Brian Keller acted as an agent for Frost in the frauds against
Pederson and others. Defendant Keller acted as an agent for Frost in the pump and
during the pump and dump. Keller acted as an agent for BZNE to manipulate
Pederson.
COCP. COCP is the successor to BZNE. Frost exerted control over BZNE.
BZNE used its agents Keller and Maza to manipulate Pederson. At times
BZNE/COCP acted as an agent for Frost through Keller, Maza and Prego-Novo.
JURISDICTION
by phone and email with Pederson while Pederson was in Minnesota. Keller
transacted business within the state, and caused acts within the state causing injury.
Through its agents Keller and Maza, Defendant COCP (then BioZone) was
in regular and frequent contact by phone and email with Pederson while Pederson
was in Minnesota. COCP transacted business within the state, and caused acts
Through his agents Keller and Maza, Defendant Frost was in regular and
frequent contact by phone and email with Pederson while Pederson was in
Through its agents Keller and Maza, Defendant Opko was in regular and
frequent contact by phone and email with Pederson while Pederson was in
through direct contact with Minnesota or under the Minnesota "long-arm" statute.
past or present material fact; (2) knowledge by the person making the false
assertion that it is false or ignorance of the truth of the assertion; (3) an intention to
induce the Plaintiff to act or to justify the claimant to act; (4) the Plaintiff must
have been induced to act or justified in acting in reliance on the representation; and
(5) the Plaintiff must suffer damage proximately caused by the misrepresentation.
Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 747 (Minn. 2000). All
intentions for the future of BioZone's business and technology, especially the
promised funding for R&D, i.e., the "big lie." (2) Defendant Frost and the other
Defendants knew the falsity of the assertions that Frost would provide funding to
10
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 11 of 28
expand BioZone's R&D programs. (3) The Defendants intended to induce certain
actions by Pederson, including (a) causing Pederson to use his influence with Nian
compensation when the promised funding came through and (d) causing Pederson
taking these actions. Since Frost is reported to be worth several billion dollars,
Plaintiff reasonably believed that Frost and others would provide the promised
funding. (5) All the Defendants acted in concert to cause Pederson financial
Conducting normal science and business in this false environment was impossible,
and Pederson was induced to do many things that caused harm to himself and/or
11
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 12 of 28
Pederson became aware that FrostZone was a series of frauds in early 2012
when an Opko press release announced the fraudulent transfer of propofol rights
was left in a situation where he suffered financial losses, reputational harm, and
damage to his career. All these damages were proximately caused by the
Defendants' misrepresentations.
This claim is brought against Frost, Opko and Keller. This claim is not
claim in Minnesota requires the Plaintiff to show: (1) the existence of a reasonable
statute or regulation; (4) in the absence of the wrongful act of the Defendant, it is
reasonably probable that Plaintiff would have realized his economic advantage or
12
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 13 of 28
benefit; and (5) the Plaintiff sustained damages. Gieseke ex rel. Diversified
Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 219 (Minn. 2014). Again,
(1) Pederson began work with BioZone in about 2000, ten years before the
Frost gang got involved. Pederson had unique scientific and legal expertise and
experience suited for BioZone's needs. Keller and BioZone had promised
Pederson continuing, expanding, and financially rewarding work before the Frost
Keller knew first hand. Frost and Opko knew from Pederson's presence at the
(3) Frost and the other Defendants intentionally interfered with Plaintiff’s
relationship with BioZone with their frauds. This caused economic damage to
being Frost's alter ego and benefiting from the frauds. Defendants' acts of
13
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 14 of 28
Plaintiff were part of the process of the Frost gang's looting of BZNE's assets. The
and other companies. This racketeering scheme involves violations of Federal law,
probable that Plaintiff would have realized his economic advantage or benefit
Pederson had about 100 active patent files with BioZone as well as numerous other
projects. This work would have continued if not for the acts of Frost, Opko and
Keller. Instead, the frauds committed by the Defendants caused Pederson to resign
damages.
The facts as pled in the Compliant are to be taken as true. Northern States
Power Co. v. Franklin, 265 Minn. 391, 122 N.W.2d (1963). Dismissal is
14
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 15 of 28
appropriate only if the facts as pled do not sustain the claims made. Wiegand v.
Walser Automotive Groups, Inc., 683 N.W.2d 807 (Minn. 2004). In the present
Phillip Frost and his gang are in the "business" of securities fraud. They
make illegal profits through the sale of stock to the public, insider transactions
between companies they control, and looting corporate treasuries for their own
gain. Along the way, they commit other frauds. They have defrauded not only
public awareness of the Frost gang's actions and methods. For several years, the
internet has had lots of articles and message board postings discussing the
many stories that came before them, the following publications reflect this growing
awareness.
On February 9, 2017 journalist Teri Buhl published a story that can be seen
at:
http://www.teribuhl.com/2017/02/09/california-doj-investigating-honig-and-the-
frost-group-2/
15
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 16 of 28
This story is about the SEC and DOJ investigating the "investing and trading
activities" of Phillip Frost, Barry Honig, and Michael Brauser. After Teri Buhl
posted this article, Frost gang member Barry Honig hired "superlawyer" Charles
Harder to try to silence her. However, Buhl fought back and Honig abandoned that
litigation.
Information about the Frost gang became more prominent with the
publication in the Wall Street Journal of an article on a Frost gang company called
Riot Blockchain (RIOT) on January 31, 2018. The article was written by Ianthe
Dugan.
https://www.wsj.com/articles/investor-who-rode-pivot-from-biotech-to-bitcoin-
sells-big-stake-1517403600
The Wall Street Journal article was soon followed by a televised CNBC
16, 2018:
https://www.cnbc.com/2018/02/16/public-company-changes-name-to-riot-
blockchain-sees-shares-rocket.html
Some effects of the CNBC TV segment and accompanying written article have
News and the Denver Post, a sharp decline in RIOT's share price, and the filing of
16
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 17 of 28
exposé on one aspect of the Frost gang's frauds. Carey's article details a network
of illegally paid "pumpers" who try to artificially inflate the share price of many
Frost gang companies. Frost is named 30 times in the article. Opko is named 29
times. This article also includes a section on John Ford, who played an important
part in the BioZone pump and dump. Part of Ford's role in the BioZone pump and
http://sharesleuth.com/
I expect that there will be much more press coverage to come as the Frost
It is a matter of public record that at least three companies where Frost was
directly involved are under investigation by the SEC: MSLP (disclosed in SEC
filings), BZNE/COCP (disclosed in SEC filings), and MBVX (January 30, 2018
announcement at
https://www.mabvax.com/news-media/press-releases/detail/111/mabvax-receives-
notice-of-sec-investigation-and-examination).
https://www.scribd.com/doc/313912773/Joe-Noel-DOJ-Plea-Agreement-June-
17
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 18 of 28
https://www.scribd.com/document/338889092/SEC-Subpoena-MGT-Capital-
September-2016#from_embed).
way contact with specific agents of the FBI, SEC, and U.S. Attorney's Office
Defendants Frost and Keller, as well as other members and associates of the
Frost gang, are in real legal jeopardy - and not just from the present case. Since
they have no real arguments to support their motion, their strategy is to throw a
bunch of stuff against the wall and see if any of it sticks. Their arguments range
from lame (lack of jurisdiction) to lamer (failure to state a claim) to lamest (Florida
statute of limitations).
Frost's big lie is at the heart of this fraud case. In February of 2011, Pederson
and others traveled to Florida to obtain funding for expanding BioZone's R&D
programs. Frost fraudulently promised that funding would be provided when his
real intention was to take control of the company, loot its assets, and then use the
entity for a pump and dump securities fraud. Frost's agents Keller and Maza used
the big lie to manipulate Pederson for over a year to take actions that hurt Pederson
18
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 19 of 28
and others until a fraudulent asset transfer from BioZone to Opko in February of
Personal jurisdiction.
Pederson worked out of an office in Minnesota during the 13-month big lie
period. During this time Keller was in regular, frequent, systematic and continuous
contact with Pederson by telephone and email while Pederson was in Minnesota.
(declaration of Lee Pederson at paragraphs 1 and 11) Keller would often initiate
these contacts. Frost's promise of funding was a frequent topic, as BioZone needed
the money to further its research programs. During these interactions, Keller
purposely used the big lie to manipulate Pederson. (declaration of Lee Pederson at
intended to induce action within the state, and resulted in harm within the state.
19
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 20 of 28
"the only connection between Minnesota and the allegations in the Complaint is
the fact that Plaintiff now happens to reside here." This is not true. The big lie
was directed at Pederson and used to manipulate Pederson while Pederson was in
furtherance of the claimed fraud were directed at Plaintiff." Again untrue. The big
lie was directed at Pederson and was used to manipulate Pederson. (3) Defendants
say that Pederson's withdrawal was "voluntary." Again untrue. Upon realizing the
fraudulent nature of the propofol license, Pederson could have continued to work
for a fraudulent company where the officers and directors answered to Frost and
not their own shareholders. However, Pederson knew that would be unethical so
he withdrew.
Defendants only reach a conclusion that personal jurisdiction does not exist
by distorting and ignoring the facts as alleged in the complaint. The facts alleged
in the complaint support a finding that personal jurisdiction exists for all
Defendants.
Defendants argue that " Once jurisdiction has been challenged, it is the
Plaintiff who bears the burden of proving facts demonstrating that jurisdiction
exists. Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 259 (8th Cir. 1974)."
Pederson does not believe that is the standard in this case, but Pederson included a
20
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 21 of 28
declaration attesting to the facts with his first Opposition to Defendants Motion to
Due process.
Defendant have such “minimum contacts” with the forum state that the exercise of
personal jurisdiction does not “offend traditional notions of fair play and
substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The
test is whether a Defendant’s acts were “substantial enough to give clear notice that
Let's start this analysis with an analogy. Let's suppose that there is an
agents. They use telephone and email to contact their targets in other states. They
defraud a person in Minnesota. Are the principal and agents subject to Minnesota
law and the jurisdiction of Minnesota courts? If the fraud involves the sale of
essentially the same situation, except that the frauds of FrostZone are far more
21
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 22 of 28
The Eighth Circuit has established five factors that must be considered in
determining whether sufficient contacts exist for personal jurisdiction: (1) the
nature and quality of Defendant’s contacts with the forum state; (2) the quantity of
contacts; (3) the source and connection of the cause of action with those specific
contacts; (4) the interest of the forum state; and (5) the convenience of the parties.
(1) The nature and quality of Defendant’s contacts with the forum state.
Keller's and BioZone's contacts with Minnesota go back to 2007, when Pederson
began work for BioZone as a solo patent attorney. During the big lie period, Keller
regarding BioZone's patent and other legal issues while acting as an agent for
BioZone, Frost and Opko. Also during the entire big lie period, Keller regularly
(2) The quantity of contacts. During the big lie period, Keller had many
(3) The source and connection of the cause of action with those specific
contacts. The causes of action are fraud and tortious interference. After a decade
of trusted communication with Pederson, Keller joined with the Frost gang to
defraud Pederson. Amid normal business, Keller used the big lie to manipulate
22
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 23 of 28
Pederson to help Frost loot BioZone's corporate assets. This in turn led to the end
(4) The interest of the forum state. Minnesota has an interest in providing a
forum for its residents that are harmed by out-of-state persons and entities that
Further, Defendants seem to contend that Plaintiff should have to chase each
interest in providing a forum for its residents that are harmed by conspiracies of
(5) The convenience of the parties. Defendants and their attorneys come
from many jurisdictions: California, Delaware, Georgia, Florida, New York and
jurisdiction in Minnesota.
Minnesota court does not “offend traditional notions of fair play and substantial
justice.”
Again the Defendants have misstated and/or distorted some of the facts. (1)
Defendant had continuous and systematic contacts with the State of Minnesota."
23
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 24 of 28
This is clearly false. (2) Defendants have said, "In short, Plaintiff’s principle
performed legal services for BioZone in Minnesota. Again this is false. Repeating
the same misstatement several times in the memo does not make it true. (3)
Defendants have said, "Thus, even if the Court considered the quantity of
Defendants’ contacts - which approximates zero - this factor would weigh heavily
in favor of the Court lacking personal jurisdiction." False. (4) Defendants have
said, "the Complaint is devoid of any allegations that any Defendant directed any
of the conduct that is the subject of this Complaint toward Minnesota." False. (5)
Defendants have said, "Put simply, no Defendant has purposely availed himself or
False. (6) Defendants have said, "The present dispute has no connection
whatsoever to Minnesota other than the fact that Plaintiff is a resident of the state.
He was not even providing services under Minnesota law." False. (7) Defendants
have said, "none of the “facts” in the Complaint point to any allegedly wrongful
showing by Plaintiff to the contrary, it is logical to assume that all of the witnesses,
documents, and other information relevant to the case are located outside of
Minnesota." Defendants have seen my Rule 26 disclosures under the MRCP, and
24
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 25 of 28
they know that their statement is false. (9) Defendants have said, "having
False. (10) Defendants have said, "there is no reason why Defendants should be
Minnesota." False. The reason Defendants must defend this lawsuit in Minnesota
Calder test.
Under the Calder effects test, a Defendant’s tortious acts can serve as a
source of personal jurisdiction if the Plaintiff makes a prima facie showing that the
Defendant’s acts (1) were intentional, (2) were uniquely or expressly aimed at the
forum state, and (3) caused harm, the brunt of which was suffered and which
Defendant knew was likely to be suffered in the forum state. Johnson v. Arden, 614
F.3d 785, 796 (8th Cir. 2010). Under the Calder effects test, all Defendants are
Standing.
Establishing standing requires three elements: First, the Plaintiff must have
(a) concrete and particularized; and (b) actual or imminent, not conjectured or
25
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 26 of 28
hypothetical. Second, there must be a causal connection between the injury and
Defenders of Wildlife, 504 U.S. 555 (1992). Custody of D.T.R. v. Reiter, 796
All three elements of the standing test are met. First, Plaintiff suffered an
losses. Second, the Defendants caused this economic harm to Plaintiff. Third, a
favorable decision on Plaintiff's case will redress the economic harm to Plaintiff.
Defendants have said, "Complaint establishes that Plaintiff - ostensibly upset that
promises of earning large future fees for legal work did not come to fruition - took
it upon himself to “monitor” BioZone and related entities and persons." It is true
Defendants, but Pederson has other reasons to be upset about FrostZone besides
Defendants used the big lie to manipulate Pederson for about 13 months.
26
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 27 of 28
By joining with the Frost gang, Keller hurt long-time friends and associates
including Pederson, Wu, Fisher and Dan Lasic's widow Alenka. Keller
technology development program for the purpose of a pump and dump fraud
is pathologically wrong.
Florida law.
Frost's big lie was a misrepresentation directed at Minnesota. Frost and the
other Defendants committed torts in Minnesota. The Defendants are all subject to
Minnesota law and the jurisdiction of this court. Florida law does not apply.
With both the law and the facts against them, Defendants have taken the
route of distorting both in their arguments. Most of Defendants' arguments are such
coming right out and saying it, Defendants seem to be implying that Plaintiff's
27
CASE 0:17-cv-05580-WMW-BRT Document 65 Filed 04/01/18 Page 28 of 28
might be, "Frost is a billionaire. If I was a billionaire, I certainly wouldn't lie and
cheat and steal. Therefore, Pederson's claims are implausible." However, with
increasing revelations of the Frost gang's frauds by the media, Federal law
enforcement, and other civil litigation, it is completely clear that any doubt about
the plausibility of Plaintiff's case is unfounded. Plaintiff's claims are not only
denied.
28
CASE 0:17-cv-05580-WMW-BRT Document 65-1 Filed 04/01/18 Page 1 of 1
produced with a proportional font. The length of this Opposition is 5,180 words.
This Opposition was prepared using Microsoft Word 2010 and the word processing
program has been applied specifically to include all text, including headings,
footnotes, and quotations for word count purposes. I further certify that this