Drofa v. RocketSell, LLC et al

Drofa v. RocketSell, LLC et al

Plaintiff:Anastassia Drofa
Defendant:RocketSell, LLC, Zane Investment Co., Brite Solutions, Inc., SmartRezi Realty, LLC, StreetDivvy Inc., Joshua Jackson, Arnold Todd Yarger and Passive Wealth Builders, LLC
Case Number:2:2022cv02191
Filed:March 28, 2022
Court:US District Court for the Western District of Tennessee
Presiding Judge:Annie T Christoff
Referring Judge:Charmiane G Claxton
2 Judge:John T Fowlkes
3 Judge:Samuel H Mays
Nature of Suit:Contract: Other
Jury Demanded By:Plaintiff

Case Summary: Drofa v. Passive Wealth Builders, LLC, et al.
United States District Court – Western District of Tennessee
Case No.: 2:22-cv-02191-JTF-atc

Overview:

This case involves Anastassia Drofa, a New York investor, who brought legal action against Passive Wealth Builders, LLC (PWB) and several related entities and individuals, including Joshua Jackson, RocketSell, LLC, Zane Investment Co., Brite Solutions, Inc., SmartRezi Realty, LLC, StreetDivvy, Inc., and Arnold Todd Yarger. Drofa alleges that these entities operated a complex real estate investment fraud scheme resulting in significant financial losses.

Allegations:

  1. Fraudulent Misrepresentation:
    • Drofa was promised that her loans would be invested in real estate properties, generating profits to be shared.
    • Loans totaling $430,000 were issued under false pretenses.
  2. Misuse of Funds:
    • Funds were allegedly diverted for personal expenses, including luxury cars, travel, and credit card payments.
    • Multiple entities falsely claimed ownership of properties, particularly 714 Westmount Ave., Dallas, Texas, to secure overlapping loans from different investors.
  3. Corporate Veil Piercing:
    • Drofa seeks to hold Brite Solutions, Inc. and Arnold Todd Yarger personally liable by “piercing the corporate veil,” arguing they controlled PWB and facilitated the fraud.
  4. Securities Act Violations:
    • Cited violations of the Tennessee Securities Act of 1980, including fraudulent securities offerings and unlawful corporate practices.

Court’s Ruling:

  1. Denial of Motion to Dismiss (Brite Solutions & Yarger):
    • The Court denied the Motion to Dismiss filed by Brite Solutions, Inc. and Arnold Todd Yarger, finding that Drofa sufficiently alleged their involvement.
    • The Court determined that Tennessee law supports liability under Tenn. Code Ann. § 48-1-122(g), holding corporate officers responsible if they failed to prevent fraud despite having the power to do so.
  2. Next Steps:
    • The Court allowed Drofa’s claims to proceed, including allegations of fraudulent misrepresentation, securities fraud, corporate veil piercing, and breach of contract.

Key Legal Takeaways:

  • Fraudulent Misrepresentation & Securities Violations: Drofa presented enough evidence to suggest intentional fraud by multiple business entities.
  • Corporate Veil Piercing Justification: The Court supported looking beyond the corporate structure to hold individuals personally liable.
  • Expanded Defendant List: Unlike related cases, this case includes Brite Solutions, Inc. and Arnold Todd Yarger, expanding liability to additional corporate actors.
Drofa v. RocketSell, LLC et alDownload