COMPASS MARKETING ASSERTS WHITE DEFENDANTS COMMITTED RICO CRIMES, ACTION TO DISMISS SHOULD BE DENIED

WHITE DEFENDANTS WITH BLACK HEARTS

SEASON 3 EPISODE 4 WHITE DEFENDANTS WITH BLACK HEARTS

COMPASS MARKETING ASSERTS WHITE DEFENDANTS COMMITTED RICO CRIMES, AND ACTION TO DISMISS SHOULD BE DENIED

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BY KEN ROSSIGNOL

THE CHESAPEAKE TODAY

There is no way to better explain the response from Compass Marketing to the absurd legal claims of Orphans Court Judge Michael White, St. Mary’s Deputy States Attorney Daniel White, and Maryland State Police Forestville Barrack Commander Lt. George White when they filed motions to dismiss the action brought by Compass Marketing than to simply provide the reader the beginning of that response which is printed below and the complete response is included as a pdf file in this article.  

To read the pdf file, simply scroll down or download it to your computer.

The points made in the answer to the motion to dismiss deal with the following main points:

  1. Compass has adequately laid out the causation of the RICO Enterprise.  Even Tony Soprano would be nervous with this section.
  2. Compass has adequately alleged and laid out a pattern of criminal racketeering on the part of the White Defendants that would make Al Capone jealous.

Michael White’s assertion that the beef between brothers is just a “garden variety” feud among a family brought this response from the attorneys for Compass:

“This is no “garden variety” dispute or family squabble; it concerns a decades-long criminal undertaking, whose participants went so far as to employ government instrumentalities in furtherance of their fraudulent acts.”

George White’s response was that he was only accused of one crooked deal and that doesn’t make a ‘pattern of criminality.  The Compass Marketing response to that was simply baloney, George committed a Troika of wrongdoing, though it was stated in legal terms, it still added up to being packaged processed meat products.

Daniel White’s response said he only did one bad act and apparently didn’t think the rest of his antics rose above the level of giving someone a wedgie. Daniel White’s misdeeds and alleged felonious acts are befitting of a Carousel of Crime including a Horse of Shareholder Loan Scheme, a Giraffe of Secret Bank Accounts, a revolving Hog of Ghost Employees including his Ghost Bestie from next door, and up to a total of nine with the Grand Carriage Ride where Daniel made monkeys of the IRS with a scheme of alleged fraud which may go down in the history books.

The Response of Compass Marketing

INTRODUCTION

The Complaint filed by Plaintiff Compass Marketing Inc. (“Compass”) pled, in overwhelming detail, allegations setting out actionable claims for relief against Defendants Michael White, Daniel White, and George White (collectively referred to as “the White Defendants”). Those detailed allegations set forth nine separate schemes undertaken by the White Defendants to misappropriate funds, enrich themselves, advantage Compass’s competitors (including Defendants Ascential plc and Flywheel Digital LLC, along with Defendants DiPaula and Miller), and – after they were terminated from Compass – inflict devastating harm on Compass and sabotage Compass’s relationships with its remaining clients. With regard to the claims sounding in fraud, the Complaint alleges the “who, what, when, where, and how” of dozens of fraudulent acts committed by the White Defendants. The Complaint also sets forth the specific actions the White Defendants took to conceal their wrongdoing and the measures that Compass had to undertake in order to discover the White Defendants’ historic and ongoing malfeasance.

It is a fundamental principle of civil procedure that, at this stage in the proceedings, the Court must accept all these allegations as true, and draw all reasonable inferences in Compass’s favor.

The White Defendants invite this Court, in the most conclusory terms, to disregard that principle. They ask the Court to assume that Compass could have discovered the White Defendants’ illegal activities earlier, even though Compass has pled in intricate detail how the White Defendants used their control of Compass’s books and records to prevent that from happening.

They also ask the Court to disregard well-pled allegations in the Complaint in order to dismiss Compass’s Racketeer Influenced and Corrupt Organizations Act (“RICO”) and state law claims, which the Court may not do. Accepting the allegations in the Complaint as true, and drawing all reasonable inferences in Compass’s favor, it is plain that the Complaint more than adequately pleads timely, viable claims against each of the White Defendants, and that the White Defendants’ motions to dismiss must be denied in their entirety.

FACTS PLEADED IN THE COMPLAINT

For more than 20 years, Michael and Daniel White took advantage of their roles as officers and directors of Compass to embezzle funds, enrich themselves and their family members, and directly assist the wrongful competitive efforts and trade secret theft by the other corporate and individual Defendants, in a multitude of ways. Among other acts of wrongdoing described in the Complaint, they stole monies that were intended for Compass and deposited them into personal checking accounts (Compl. ¶¶ 99-107); directed company salaries and benefits to family members who were never actually employed by Compass (id. ¶¶ 108-18); paid millions of dollars of Compass funds to the IRS under the guise of “tax withholding,” then claimed those millions back as personal tax refunds (id. ¶¶ 119-25); paid millions of dollars directly to themselves from Compass’s accounts disguised as loan repayments for what they privately described as “BS loan[s]” (id. ¶¶ 126-43); used company credit cards for personal expenses, including lavish vacations and outside business interests (id. ¶¶ 171-82); conspired with individual Defendants DiPaula and Miller, and other departing employees, to misappropriate trade secrets from Compass in support of a competing venture (id. ¶¶ 76, 89-90, 94, 202-08); and materially supported that unfairly competing venture (id.).

Michael and Daniel White used their executive influence over Compass’s payroll systems and internal controls – especially the influence that Michael White had as Vice President of Operations, and that Daniel White had as a lawyer and the company’s acting General Counsel – to doctor Compass’s books and records and conceal their wrongful activities from other executives of Compass. See, e.g., id. ¶¶ 118, 119-43, 172-178; see also id. ¶¶ 81, 89. It was only after Michael and Daniel White were removed from Compass’s Board of Directors on February 14, 2019, and Compass retained the services of a forensic fraud examiner and a separate criminal investigator, that Compass first learned of the injuries that Michael and Daniel White had inflicted on Compass during their years as directors. See id. ¶¶ 95-97.

The wrongful conduct did not cease after Michael and Daniel White left the company.

Michael and Daniel White continued to misappropriate funds belonging to Compass. See id. ¶ 182.

They also commenced an illegal campaign of retribution against their former employer, attempting to sabotage Compass’s client relationships and its reputation in the marketplace (id. ¶¶ 165-70) and initiating sham legal proceedings to disrupt Compass’s business operations (id. ¶¶ 158-64).

Moreover, in an illegal scheme spearheaded by Compass’s former Information Technology (“IT”) administrator, George White, the White Defendants sought to extort funds from Compass and – when the attempt at extortion was unsuccessful – locked Compass out of its own web domain, including all of the employee email accounts and business records that were maintained using that domain. See id. ¶¶ 144-57. George White, the specific individual with the means and access to implement this IT lockout, did so in collusion with Daniel and Michael White. See id.

The Complaint avers evidence that Michael White is financially supporting the IT lockout, the IT lockout has facilitated further misappropriation of trade secrets, and the White Defendants have been using their control of Compass’s historical data to spoliate evidence that could further expose Michael and Daniel White’s criminal wrongdoing. See id. ¶¶ 156-57, 226.

The IT lockout – which continues to this day – has not only had a devastating impact on Compass’s business operations and client relationships but has also impaired Compass’s ability to uncover the full extent of the White Defendants’ wrongdoing because Compass has limited access to its communications and business records from the time period when the White Defendants were officers, directors, and employees.

On February 14, 2022, three years after the removal of Michael and Daniel White from Compass’s Board of Directors, and just under three years from when the White Defendants first blocked Compass from accessing its own email accounts and business records, Compass filed the Complaint initiating this action.

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