FILED: NEW YORK COUNTY CLERK 12/15/ :22 PM INDEX NO /2016 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/15/2016

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1 FILED: NEW YORK COUNTY CLERK 12/15/ :22 PM INDEX NO /2016 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/15/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X ABDUL MUBAREZ, Individually and derivatively as a Shareholder of VC MANAGEMENT INC., ATM WORLD CORP., ATLAS ATM CORP. and a Member of F.A.M. CAPITAL LLC and ATM WIRELESS, LLC and on Behalf of All Other Shareholders of VC MANAGEMENT INC., and Members of F.A.M. CAPITAL LLC and ATM WIRELESS, LLC, who are Similarly Situated, Plaintiff, Index # /16 Filed: 6/22/16 Plaintiff Designates NEW YORK County as Place of Venue Basis of Venue: CPLR 503(c) AMENDED SUMMONS - against EHAB ZIAD RABAH, Individually and d/b/a ATM EXCHANGE, ANNA RABAH, TARIK RABAN and MAS CAPITAL GROUP INC., Defendants, VC MANAGEMENT INC., F.A.M. CAPITAL LLC and ATM WIRELESS, LLC, Nominal Defendants X To The Above Named Defendants: YOU ARE HEREBY SUMMONED to answer the Amended Complaint in this action and to serve a copy of your answer, or, if the Amended Complaint is not served with this Amended Summons, to serve a Notice of Appearance, on the Plaintiff s attorney within 20 days after the service of this Amended Summons, exclusive of the day of service (or within 30 days after the service is complete if this summons is not personally delivered to you within the State of New York); and in the case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the Complaint. 1 1 of 46

2 Dated: New York, New York December 8, 2016 Yours, etc. /s/ Michael Konopka MICHAEL KONOPKA & ASSOCIATES, P.C. Attorneys for Plaintiff By: Michael Konopka, Esq. 277 Broadway, Suite 810 New York, New York (212) TO: WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP Attorneys for Defendants 1201 RXR Plaza Uniondale, New York (516) of 46

3 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X ABDUL MUBAREZ, Individually and derivatively as a Shareholder of VC MANAGEMENT INC., ATM WORLD CORP., ATLAS ATM CORP. Index No.: /16 and a Member of F.A.M. CAPITAL LLC and ATM WIRELESS, LLC and on Behalf of All Other Shareholders of VC MANAGEMENT INC., AMENDED and Members of F.A.M. CAPITAL LLC VERIFIED COMPLAINT and ATM WIRELESS, LLC, who are Similarly Situated, - against - Plaintiff, EHAB ZIAD RABAH d/b/a ATM EXCHANGE, ANNA RABAH, TARIK RABAN and MAS CAPITAL GROUP INC., Defendants, VC MANAGEMENT INC., F.A.M. CAPITAL LLC and ATM WIRELESS, LLC, Nominal Defendants X Plaintiff ABDUL MUBAREZ (the Plaintiff ), in his individual capacity and derivatively as a shareholder of VC Management Inc. and a member of F.A.M. Capital LLC and ATM Wireless, LLC, by his attorneys, Michael Konopka & Associates, P.C., as and for his Amended Verified Complaint, respectfully sets forth and alleges the following, upon information and belief: 1 3 of 46

4 THE PARTIES 1. Plaintiff Abdul Mubarez ( Mubarez ) is and all times relevant herein was an individual shareholder of ATM World Corp., Atlas ATM Corp., and nominal defendant VC Management Inc. ( VC ) and a member of nominal defendants F.A.M. Capital LLC ( F.A.M ) and ATM Wireless, LLC ( Wireless ) and resides at th Street, Long Island City, New York Plaintiff ATM World Corp. is and at all times relevant herein is a domestic corporation duly authorized and existing pursuant to the laws of the State of New York and maintains an office and principal place of business in the County of Queens, in the State of New York. 3. Plaintiff Atlas ATM Corp. is and at all times relevant herein is a domestic corporation duly authorized and existing pursuant to the laws of the State of New York and maintains an office and principal place of business in the County of Queens, in the State of New York. 4. At all times relevant herein, defendant Ehab Rabah ( Rabah ) was and is President, Chief Executive Officer and controlling shareholder of VC and a member of F.A.M. and Wireless. Rabah maintains his office and principal place of business at 30 Wall Street, 8 th Floor, New York, New York At all times relevant herein, defendant Tarik Mohammed Rabah ( Mohammed ) is Rabah s brother and was named by resolution of the incorporator of VC as the sole director of VC s Board of Directors, and upon information and belief, constitutes VC s Board of Directors. Upon information and belief, Mohammed maintains an office and principal place of business in the County of New York, in the State of New York. 2 4 of 46

5 6. Nominal defendant VC is a domestic corporation duly authorized and existing pursuant to the laws of the State of New York and maintains an office and principal place of business in the County of New York, in the State of New York. 7. At all times relevant herein, defendant Anna Rabah ( Anna ) is Rabah s wife, and has held and currently holds herself out as the owner of VC and does exercise dominion and control over VC s business operations. Anna maintains her office and principal place of business in the County of New York. 8. Defendants Rabah, Tarik, and Anna are hereinafter collectively referred to as the Individual Defendants. 9. Defendant MAS Capital Group Inc. ( MAS ) is and was at all times relevant herein a domestic corporation duly authorized and existing pursuant to the laws of the State of New York and maintains an office and principal place of business in the County of New York, in the State of New York, and is wholly owned, operated and controlled by Rabah. 10. Upon information and belief, ATM Exchange is a wholly owned entity through which Rabah was and is doing business. 11. At all times relevant herein, Rabah was and is President, Chief Executive Office and sole shareholder of MAS and ATM Exchange, and has engaged in the business activities complained of herein by and through his own actions, his agents, and that of MAS and ATM Exchange. 12. The Individual Defendants and MAS and ATM Exchange are hereinafter collectively referred to as the Defendants. 3 5 of 46

6 13. At all times relevant herein, F.A.M. is and was a limited liability company duly organized and existing pursuant to the laws of the State of New York and maintains a principal place of business in the County of Queens, in the State of New York. 14. At all times relevant herein, Wireless is and was a limited liability company duly organized and existing under the laws of the State of New York and maintains its office and principal place of business in the County of Queens, in the State of New York. 15. The various parties herein are involved in the ATM industry, which requires multiple contractual and operational relationships merchants and industry service providers. These providers provide essential operational services, such as the maintenance and restocking of machines, armored transport, and back-end IT support. Such service providers include, among other entities, ATM owners and operators which link their ATMs to networks by enrolling with an ATM program. 16. F.A.M. is an independent company in the business of selling and providing ATM products and comprehensive cash services to ATM owners, operators and independent distributers. 17. Wireless is an independent company which owns and operates wireless modems and specialized ATM locks and operates a network which facilitates wireless electronic transmission of ATM transactions. 18. VC is an independent company that sells and places ATM machines to distributors and merchants. 19. MAS is an independent company, owned and operated by Rabah, that sells and places ATM machines to distributors and merchants. 20. ATM Exchange is an independent company, owned and operated by Rabah, that sells and places ATM machines to distributors and merchants. 4 6 of 46

7 21. Non-party Abed Ayesh ( Ayesh ) is and at all times relevant herein was an individual shareholder of nominal defendant VC, and a member of nominal defendants F.A.M. and Wireless and resides at th Street, Long Island City, New York RELEVANT FACTS The Domestic Bank Portfolio 22. On or about March 29, 2010, VC and Domestic Bank, F.S.B. ( Domestic ) entered into a letter agreement (the Domestic Agreement ) in which VC acquired all of Domestic ATM network which Domestic had in service at the time. Domestic s network included approximately 1,300 ATMs located in the States of New York, Connecticut, Massachusetts, Rhode Island, New Hampshire, Vermont and Maine (Hereinafter referred to as the Domestic Portfolio ). During its operation of its ATM network, Domestic provided the currency for its machines, which was retrieved and loaded by a Mount Vernon Money Center Corp., a private cash management service provider. 23. Pursuant to the terms of the Domestic Agreement, VC agreed, by and through Rabah, to obtain its own source of currency to be placed into the ATMs and armored car or other transportation services via a subcontractor. 24. Upon information and belief, Rabah and VC was unable to secure the necessary bank clearances to acquire a source of currency because Rabah had a criminal record. The Partnership Agreement 25. In order to fulfill his obligations under the Domestic Agreement, Rabah solicited non-parties Fred Wich ( Wich ) and Ayesh in or about March of Ayesh, along with Wich and Mubarez, each owned a one-third interest in F.A.M. Rabah solicited Wich and Ayesh about using F.A.M. s currency supply and cash services network to supply the currency needed to 5 7 of 46

8 operate the Domestic Portfolio. Rabah never disclosed his criminal record to the Plaintiff or any of the shareholders of F.A.M. during the negotiations. 26. As an inducement for F.A.M. s provision of cash services to the Domestic Portfolio as required by the Domestic Agreement, Rabah offered to make F.A.M. an equal partner in owning and operating the Domestic Portfolio. 27. On or about March , VC, by and through Rabah, and F.A.M., by and through Ayesh, executed an agreement entitled Cash Services and Transfer of 50% Ownership Interest Agreement (the Partnership Agreement ). Pursuant to the terms of the Partnership Agreement, VC agree to assign to F.A.M. fifty (50%) percent of all VC s ownership interest in and title in to the Domestic Portfolio, including all merchant leases, ATMs, share of the net revenue and all other rights obtained by VC in the Domestic Agreement. 28. Additionally, VC agreed that F.A.M. would serve as the exclusive provider of cash services for so long as the parties own the Domestic Portfolio, for which F.A.M. would receive the standard service fee, as set forth in F.A.M. standardized fee schedule which was annexed to the Partnership Agreement. 29. Moreover, under the Partnership Agreement, the parties further agreed that each party would have the right to demand from the other party all information relating to revenues and costs for the Domestic Portfolio and each party shall have access to all processing and network reports and/or websites relating to the Domestic Portfolio. 30. The Partnership Agreement further provides that no party shall cause the Domestic Portfolio to be encumbered nor shall any party have the right to sell, pledge, assign or otherwise transfer its ownership interest without the other party s written consent. 6 8 of 46

9 31. In reliance on and as a consequence of the aforesaid representations, solitications and inducements, Plaintiff and non-party Wich and Ayesh, each as members and owners of F.A.M., accepted VC s offer and caused F.A.M. to execute the Partnership Agreement. VC, by and through its CEO Rabah, executed the Partnership Agreement. The VC Stock Exhange Agreement 32. On or about July 1, 2010, Plaintiff and non-parties Wich and Ayesh, individually and on behalf of F.A.M., non-party Ramesh Mahajan ( Mahajan ) individually, and Rabah, individually and on behalf of VC, executed an agreement entitled Stock Exchange Agreement Relating to VC Management, Inc (the Stock Exchange Agreement ). 33. Pursuant to the Stock Exhange Agreement, the parties agreed that, in exchange for consideration, the sufficiency of which was recited and duly acknowledge, F.A.M. would convert its 50% economic interest in the Domestic Portfolio into 50% direct stock ownership interest in VC. F.A.M. agreed to transfer this direct stock ownership to Plaintiff and non-parties Wich and Ayesh individually, in equal amounts. 34. Rabah, who held 100% of the 200 outstanding VC shares, agreed to transfer, convey and assign all of this right, title and ownership interest in 46.5% of the outstanding stock to Plaintiff, Wich and Ayesh, to be divided equally among them, pursuant to the terms of the Stock Exchange Agreement. Pursuant to a separate employment, 7% of VC shares was to be transferred to Mahajan. 35. Upon execution of the Stock Exchange Agreement, the 200 outstanding shares of VC stock were divided and owned as follows: Rabah owned 93 shares (46.5%); Ayesh owned 31 shares (15.50%); Mubarez owned 31 shares (15.50%); Wich owned 31 shares (15.50%), and Mahajan owned 14 shares (7%). 7 9 of 46

10 36. Following the stock exchange, Plaintiff, Wich and Ayesh worked together with Rabah to operate the Domestic Portfolio through VC. F.A.M. invoiced VC for its cash and armored car services. 37. Encouraged by their joint efforts, and seeing opportunity for growth, the parties began negotiations to expand their joint operations in or about December of During the course of these negotiations, Rabah claimed for the first time that he personally held an exclusive interest in certain Domestic ATMs (The Merchant Machines ) that VC had acquired in the Domestic Bank Agreement. According to Rabah, he was entitled to 100% of the income from the Merchant Machines, pursuant to an undisclosed agreement. Rabah offered no proof of his purported exclusive interest, nor were the parties given notice or given consent to Rabah to obtain an encumbrance on the Merchant Machines. 39. Contrary to defendant Rabah's assertion, no exclusive undocumented agreement between Rabah and Domestic Bank ever existed. At all relevant times, VC owned the entire Domestic Portfolio, which included all of the ATMs, including the Merchant Machines, income from all of the ATMs and any other rights, title and interests acquired pursuant to the Domestic Agreement, which are exclusively held by VC, unencumbered by any ownership interest or entitlement by Rabah. 40. In an effort to deceive and induce Plaintiff into making Rabah an equal member in F.A.M. and Wireless, Rabah offered to relinquish his purported entitlement to 100% of the Merchant Machines income, increase the amount of business ATM Exchange would cause its agents to transfer to F.A.M., and would increase Plaintiff s, Wich s and Ayesh s ownership in VC of 46

11 41. The alleged entitlement was completely fabricated by Rabah in order to secure an ownership interest in F.A.M. and Wireless. Rabah would not have held an interest in either of the two entities otherwise. The Expanded Partnership Agreement 42. Because of the Rabah s fabricated and fraudulent claims of an exclusive interest to the Merchant Machine income and the offer of additional business from ATM Exchange to F.A.M., the parties orally agreed to expand the parties joint business operations to include F.A.M. and Wireless (The Expanded Partnership Agreement ). Pursuant to the terms agreed upon in this oral agreement, Rabah acquired 20% of F.A.M. and Wireless, and Plaintiff, Wich and Ayesh acquired an additional 7.66% interest in VC. The parties agreed that each partner would have unfettered access to VC s books and records on all of its accounts, including VC s operating account through ACH (i.e., the account into which the fees associated with any ATM transaction are processed, allocated, and deposited by ACH (the "Account"). 43. Effective December 1, 2010, Plaintiff, Wich and Ayesh redistributed their respective membership interests in F.A.M. and Wireless in order to transfer to Rabah 25% of the outstanding ownership interest in F.A.M. and Wireless. In exchange, Rabah: (1) transferred to Plaintiff, Wich and Ayesh, individually, an additional 7.66% of VC s outstanding stock; (2) extinguished his purported interest in the Merchant Machines; and (3) transferred to F.A.M. certain additional business from ATMs owned and operated by agents of ATM Exchange, as further consideration for Rabah's 25% stake in F.A.M. and Wireles. 44. As a result of the Expanded Partnership Agreement, the shareholders respective ownership interests in F.A.M., Wireless and VC are as follows: 9 11 of 46

12 Number of Shares or Units Percentage of Ownership Company Owner F.A.M. Wich % Ayesh % Mubarez % Rabah % Wireless Wich 25 25% Ayesh 25 25% Mubarez 25 25% Rabah 25 25% VC Rabah 46.5' 23.25% Wich % Ayesh % Mubarez % Mahajan % 45. The shareholders have operated the three entities in accordance with the Expanded Partnership Agreement from December of 2010 to August of Rabah managed VC s daily operations, which Plaintiff managed F.A.M. and Wireless. The three entities shared office space, personnel and an accounting system, yet each entity maintained separate books and records and carried a proportional share of operational costs and expenses on their respective ledgers, each sharing equally in the profits and losses and receiving distributions in the form of salaries commensurate with their respective 23.25% interest in VC and 25% interest in F.A.M. and Wireless. Each partner also had real-time access to inspect and review the ACH Account and reports for all ATMs owned, operated or serviced by VC, F.A.M. and Wireless. 46. While Plaintiff had access to VC s books and records, between December 2010 and August 2013, Rabah was acting as the Chief Executive Officer of VC. Rabah and, upon information and belief, Mohammed, as the sole members of the VC Board of Directors, and Anna, Rabah's wife, as the purported owner of VC, managed the daily operations and books and records 1 Upon information and belief. Rabah now contends that he owns an additional 7% ownership interest in VC which he allegedly acquired from Mahajan. There is no evidence of this alleged transfer of 46

13 of VC. The Individual Defendants made all decisions regarding the hiring of personnel, managing the company's income and its operating expenses, without a vote of the shareholders, maintaining to themselves complete and absolute control of the monies and affairs of VC. 47. In or around 2013, Plaintiff learned that the Individual Defendants were mismanaging VC by, among other things, dissipating the corporation's income on excessive salaries and commissions; by improperly accounting for revenue and expenses; by diverting income from VC to a secret account; by failing to pay the corporate debts; and by carrying an undocumented high-interest rate loan on VC books and records which Rabah allegedly made to VC. 48. From December of 2010 to the present, VC operated and continued to operate at a significant loss due to its mismanagement by its Board of Directors. According to the Individual Defendants, VC s revenue was insufficient to meet operating expenses, despite the corporation s ability to pay out shareholder distributions and commissions. 49. In our about October of 2013, Rabah asserted that he purported made personal loans to cover for VC s operating losses. He claimed to have made a total of $1.1 million in loans at an interest rate of 24.99% per annum. None of these loans were documented in VC s books and records. Upon information and belief, no efforts were made by the Individual Defendants to secure a loan on behalf of VC at a competitive market rate. 50. Allegedly to pay down these loans, Rabah demanded that each partner pay $238,000 in additional capital, which he assessed based on the Plaintiff s 23.5% interest in VC. 51. The Individual Defendants further harmed VC and caused significant losses and waste by, acting as VC s Board of Directors and on behalf of the corporation, causing VC to hire friends and family members as employees. These employers (i) served no useful purpose; (ii) of 46

14 earned salaries disproportionate to the services, if any, that they provided to VC; and/or (iii) were paid to perform services that were not being rendered to VC, but were instead being rendered to Rabah, personally, or to his wholly owned entities, MAS or ATM Exchange. 52. On numerous occasions, Plaintiff demanded of Rabah that he disclose the amounts of salaries, bonuses, remunerations, income, and other consideration and things of value diverted or taken from VC, a right specifically agreed to by all parties in the Expanded Partnership Agreement but Rabah repeatedly and continuously refused, and refuses, to supply same. 53. By and through Rabah, upon information and belief, the Individual Defendants have misappropriated to themselves, their families and friends VC monies and assets of at least $639, by disbursing unlawful and excessive commissions and salaries from VC while the company showed a negative cash flow. 54. In addition to the Individual Defendants ransacking of VC s monies and assets, Plaintiff discovered in or around June of 2013, that beginning in or around November of 2012, Rabah causes a portion of VC s income, in the form of its Interchange Fee 2 to be diverted from VC s Account. 55. The Individual Defendants caused PAI ATM Strategies, LLC ( PAI ), the processing company that processes and settles all of VC s ATM fees, to divert VC s monthly Interchange Fee to an undisclosed account (the Secret Account ). 56. The location of the Secret Account is currently unknown. 57. Upon information and belief, from November 2012 to the present, the Individual Defendants caused a total sum of $775, in Interchange Fees to be diverted. Further, the Individual Defendants are continuing to cause approximately $39, of monthly Interchange 2 This fee represents income received based upon the total number of transactions completed by its ATM portfolio of 46

15 Fees generated from the Merchant Machines to be diverted from VC s main Account to the Secret Account. 58. In addition to the theft of the Interchange Fee, the Individual Defendants have been improperly accounting for VC s revenue and expenses by allocating all of VC's general operating expenses away from income earned in connection with the Merchant Machines such that virtually none of VC's operating expenses are paid from income on the Merchant Machines. The Individual Defendants have done this because Rabah purportedly asserts an exclusive interest in the income on the Merchant Machines. By this accounting maneuver, Rabah has improperly inflated his profits, while deflating VC s profits. 59. In October of 2013, in light of Plaintiff s discovery of rampant corporate waste, theft, and mismanagement by the Individual Defendants as VC s Board of Directors, Plaintiff rejected Rabah s demand for additional capital to pay down his alleged loans. 60. In response, Rabah threatened to, and in some instances, stopped paying salaries, invoices and bills due and owing to VC s creditors and ceased paying rent. Rabah also threatened to unilaterally unwind the Expanded Partnership Agreement and reclaim the 22.98% interest conveyed pursuant to the Expanded Partnership Agreement. Rabah also threatened to reclaim his fictitious personal interest in the Merchant Machines and the Interchange Fees earned on them, even though there is no evidence of his purported exclusive entitlement, and Rabah had, years prior, agreed to relinquish this purported and unsupported claim. 61. Additionally, Rabah demanded to be made a member of a fourth unrelated entity, ATM World without any additional consideration. 62. Despite negotiations, the parties were unable to reach a suitable resolution of 46

16 63. During these negotiations, and unbeknownst to Plaintiff at the time, Rabah had began to strip VC of its assets and business, diverting customers and income from VC to himself personally, the Individual Defendants, and to MAS and ATM Exchange, companies Rabah wholly owns. 64. By April of 2014, Rabah had unilaterally and wrongfully declared the Expanded Partnership Agreement unwound, named himself as the controlling shareholder, and caused VC to stop paying salaries, bills, and rent. Additionally, Rabah and the Individual Defendants caused VC to stop paying distributions on income to Plaintiff, and prevented Plaintiff from access to VC s books and records, including access to information regarding the location of the income earned from the Interchange Fee from the Merchant Machines and the Secret Account to which those funds were diverted. 65. From 2010 to the date of this Complaint, the Individual Defendants have been and continue to allocate all of VC s general operating expenses away from income earned in connection with the Merchant Machines, such that none of VC s operating expenses are paid from income on the Merchant Machines. In addition to diverting VC s income, the Individual Defendants have been and continue to divert VC's customers to MAS and ATM Exchange. Specifically, the Individual Defendants instruct and cause VC s employees to divert VC customers by directing the customers to use non-vc accounts and telephone numbers. These actions have prejudiced and harmed VC by depriving the company of business, to the benefit of MAS and ATM Exchange, companies wholly owned by Rabah. 66. By reason of the aforesaid actions, VC has been, and is being, deprived of large sums of monies and assets belonging to it, the particular amount of which Plaintiff does not know of 46

17 67. Plaintiff did not make any demand upon VC through Rabah, as its officer, or Mohammed, as the sole member of the Board of Directors, or Anna, as its purported owner, that VC commence an action for the wrongful and improper acts alleged above, for the reason that Mohammed and Rabah are brothers, Anna is Rabah's wife, and they maintain exclusive control over VC's Board of Directors and management, so that it would be futile and useless to demand that they bring an action against themselves. Rabah s conversion of F.A.M. s ATMs 68. On or about May 31, 2011, F.A.M. and Barnes & Noble College Booksellers, LLC ( B&N ) entered into an ATM Full Placement & Processing Agreement for placement and servicing of certain ATMs (the B&N Agreement ). Under the B&N Agreement, F.A.M. agreed to provide and install 137 ATMs (the B&N ATMs ) at various college and university bookstores owned and operated by B&N. 69. In carrying out the terms of the B&N Agreement, F.A.M. purchased, acquired and installed the B&N ATMs, which F.A.M., at all times, held an exclusive right, title and interest in. 70. By April 2012, F.A.M determined that its operational costs in connection with the B&N ATMs exceeded revenue generated by the B&N ATMs. Despite price reductions and the parties retooling the service agreement, all parties mutually agreed that the B&N arrangement was unprofitable and should be terminated. They agreed that F.A.M. would remove and reclaim all of the B&N ATMs. 71. As the B&N ATMs were being physically removed from the B&N locations, Rabah, using his apparent authority as a member of F.A.M., instructed F.A.M. movers to of 46

18 deliver the B&N ATMs to an undisclosed location, diverting delivery of the B&N ATMs to F.A.M. s warehouse. 72. To date, the whereabouts of the B&N ATMs are unknown. Upon information and belief, the Defendants have custody, possession, and control of the B&N ATMs or have converted them for their own use and benefit. 73. Plaintiff made repeated demands on behalf of F.A.M. for Rabah to disclose the location of the B&N ATMs and to cause the Defendants to return them to F.A.M. s warehouse. Despite Plaintiff s demands, to and through Rabah, Defendants have refused to return the B&N ATMs, and continue to wrongfully prevent F.A.M. from its rightful custody, possession and control of the B&N ATMs. 74. Defendants conversion of the B&N ATMs has been to F.A.M. s loss, expense and detriment. 75. By reason of the aforesaid actions, F.A.M. was and has been deprived of valuable assets belonging to it, the particular amount of which Plaintiff does not know, except that Plaintiff does state that the said monies and property unlawfully taken was in excess of $500, VC s Default on F.A.M. s Service Agreement 76. At all times relevant herein, F.A.M. held an exclusive right to provide cash services to all of the Domestic Portfolio, pursuant to the terms of the Partnership Agreement. 77. In or about May 2010, F.A.M. began providing cash services to VC, pursuant to the Partnership Agreement. F.A.M. sent VC monthly invoices which initially VC promptly paid. Under the terms of the Partnership Agreement, VC agreed to pay F.A.M. its standard service charge of 46

19 78. From May 2010 through to the date of this Complaint, F.A.M. provided cash services to VC. 79. VC owes F.A.M. the sum of $553, as of April 30, 2016 plus applicable interest. 80. Despite Plaintiff s numerous demands for payment on behalf of F.A.M., the Individual Defendants have caused VC to fail to pay its outstanding invoices due and owing to F.A.M. 81. Plaintiff also made demands upon F.A.M. through Rabah and Wich as members of F.A.M. that F.A.M. commence an action against the Individual Defendants for conversion, tortious interference with a contract, breach of fiduciary duty and aiding and abetting tortious interference herein alleged. Rabah is not going to sue himself regarding his wrongful actions. Wich is also fatally conflicted because he jointly holds other interests with Rabah in other various unrelated business activities. Because of these conflicts, Plaintiff s demands were rejected and this action was not commenced by them. Any additional demands would be equally futile and useless. VC s Default on Wireless s Service Agreement 82. In or about May of 2010, Wireless offered to provide VC with ATM wireless services, locks and wireless modems, and VC agreed to purchase and/or lease such wireless services for a service charge which VC orally agreed to pay (the Wireless Agreement ). 83. From the beginning of 2013 to date, Wireless provided ATM wireless services to VC. 84. VC owes Wireless the sum of $450, as of June 15, 2016 plus applicable interest of 46

20 85. The Individual Defendants have caused VC to fail to pay the invoices in breach of the Wireless Agreement, despite being duly demanded by the Plaintiff. 86. Plaintiff also made demands upon Wireless through Rabah and Wich as members of Wireless that Wireless commence an action against the Individual Defendants for conversion, tortious interference with a contract, breach of fiduciary duty and aiding and abetting tortious interference herein alleged. Rabah is not going to sue himself regarding his wrongful actions. Wich is also fatally conflicted because he jointly holds other interests with Rabah in other various unrelated business activities. Because of these conflicts, Plaintiff s demands were rejected and this action was not commenced by them. Any additional demands would be equally futile and useless. ATM Exchange s Default on F.A.M. Services 87. In or about May 2010, F.A.M. offered to provide ATM Exchange cash services for a service charge which VC orally agreed to pay. 88. From May 2010 through to the date of this Complaint, F.A.M. provided cash services to ATM Exchange. 89. ATM Exchange owes F.A.M. the sum of $256, as of April 30, 2016 plus applicable interest. 90. Despite Plaintiff s numerous demands for payment on behalf of F.A.M., the Individual Defendants have caused VC to fail to pay its outstanding invoices due and owing to F.A.M. 91. Plaintiff also made demands upon F.A.M. through Rabah and Wich as members of F.A.M. that F.A.M. commence an action against the Individual Defendants for conversion, tortious interference with a contract, breach of fiduciary duty and aiding and abetting tortious of 46

21 interference herein alleged. Rabah is not going to sue himself regarding his wrongful actions. Wich is also fatally conflicted because he jointly holds other interests with Rabah in other various unrelated business activities. Because of these conflicts, Plaintiff s demands were rejected and this action was not commenced by them. Any additional demands would be equally futile and useless. ATM Exchange s Default on Wireless s Agreement 92. In or about May of 2010, Wireless offered to provide ATM Exchange with ATM wireless services, locks and wireless modems, and VC agreed to purchase and/or lease such wireless services for a service charge which VC orally agreed to pay (the Wireless Agreement ). 93. From the beginning of 2013 to date, Wireless provided ATM wireless services to ATM Exchange. 94. ATM Exchange owes Wireless the sum of $228, as of April 30, 2016 plus applicable interest. 95. The Individual Defendants have caused ATM Exchange to fail to pay the invoices in breach of the Wireless Agreement, despite being duly demanded by the Plaintiff. 96. Plaintiff also made demands upon Wireless through Rabah and Wich as members of Wireless that Wireless commence an action against the Individual Defendants for conversion, tortious interference with a contract, breach of fiduciary duty and aiding and abetting tortious interference herein alleged. Rabah is not going to sue himself regarding his wrongful actions. Wich is also fatally conflicted because he jointly holds other interests with Rabah in other various unrelated business activities. Because of these conflicts, Plaintiff s of 46

22 demands were rejected and this action was not commenced by them. Any additional demands would be equally futile and useless. Plaintiff Mubarez s Lawsuit and Subsequent Memorandum of Understanding 97. On or about July 10, 2014, Mubarez commenced an action by the purchase of an index number filing a Summons and Complaint with the New York County Clerk. The action bore the Index Number /2014 and was captioned as follows: ABDUL MUBAREZ, Individually and derivatively as Shareholder of VC MANAGEMENT INC. and Member of F.A.M. CAPITAL LLC and ATM WIRELESS, LLC and on Behalf of All Other Shareholders of VC MANAGEMENT INC., and Members of F.A.M. CAPITAL LLC and ATM WIRELESS, LLC, who are Similarly Situated, -against- EHAB ZIAD RABAH a/k/a MIKE RABAH a/k/a MIKE MILANO a/k/a MIKE FLORIO and d/b/a ATM EXCHANGE, ANNA RABAH, TARIK RABAN a/k/a TARIK RABAH a/k/a TARIK MOHAMMED RABAH a/k/a MOHAMMED RABAH and MAS CAPITAL GROUP INC., Defendants, VC MANAGEMENT INC., F.A.M. CAPITAL LLC and ATM WIRELESS, LLC, Nominal Defendants. 98. During the course of settlement negotiations, Mubarez agreed to discontinue the action without prejudice. 99. In consideration for the action s discontinuance, the parties entered into a Memorandum of Understanding on or about October 31, Pursuant to the Memorandum of Understanding, Plaintiff, Wich, Ayesh, Rabah, individually and on behalf of F.A.M., Wireless, ATM World Corp., Atlas ATM Corp. VC, and MAS, respectively, agreed to effectuate a reallocation of ownership interests (the Ownership Exchange ), form a new limited liability company in the State of New York (referred to as of 46

23 Newco ), of which the ownership interest was to be allocated as follows: 59% to Rabah, 17% to Mubarez, 7% to Ayesh, and 17% to Wich Pursuant to the terms of the Memorandum of Understanding, the parties were to each contribute and transfer to Newco all of their ownership interest in the Domestic Portfolio within 15 days. No such contribution occurred Pursuant to the terms of the Memorandum of Understanding, Rabah was to use commercially reasonable best efforts to cause all of the ATM owners associated with Rabah s personal portfolio to enter into ATM Processing and Vault Cash Agreements with Plaintiff s companies, including F.A.M., ATM World, and Atlas ATM Corp., by June 30, Rabah has failed to comply with this provision of the Memorandum of Understanding Pursuant to the terms of the Memorandum of Understanding, the parties were to settle the Interchange Issue, as described in paragraphs 51 to 54 herein, by June 30, Upon information and belief, Rabah has failed to negotiate in good faith and has failed to comply with this provision of the Memorandum of Understanding Upon information and belief, no corporate entity has been formed to date by and between the parties, as required by the Memorandum of Understanding Upon information and belief, no assets or property has been transferred to date to any neutral corporation to which the parties have a joint interest in Upon information and belief, Rabah agreed to enter the Memorandum of Understanding for the sole purpose of securing a discontinuance of the aforementioned action, and never intended to abide by its terms of 46

24 107. To date, Rabah and the Individual Defendants still exercise exclusive control of VC, and continue their wasteful, fraudulent, and harmful mismanagement of the company, to the detriment of the other shareholders. AS AND FOR A FIRST CAUSE OF ACTION Declaratory Judgment Pursuant to CPLR Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 107 as is set forth in full herein Rabah and the Individual Defendants have used and continue to use fraudulent and illegal means to induce Plaintiff to surrender valuable ownership interests without due consideration. Equity demands that Rabah not profit from his fraudulent and illicit practices The Memorandum of Understanding, executed by Plaintiff in a failed attempt to settle a previous action, amount to nothing more than an agreement to agree Moreover, the conduct of the parties clearly indicates that the Memorandum of Understanding was never intended to be a binding agreement By reason of the foregoing, a justiciable dispute exists between the parties Plaintiff has no adequate remedy at law Plaintiff accordingly demands judgment declaring the rights, duties and obligations of the parties one unto the other, and in particular, that the Memorandum of Understanding, executed by the parties on October 31, 2015, is a nullity and unenforceable as a matter of law. AS AND FOR THE SECOND CAUSE OF ACTION Common Law Right to Inspect VC s Books and Records 115. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 114 as if set forth in full herein of 46

25 116. Plaintiff is entitled, as a shareholder of said corporation, to inspect all of said corporate records of every nature Plaintiff has requested and demanded though Rabah that the Individual Defendants produce for inspection to them as shareholders of VC all record books, minute books, share certificate records, and other records of every nature of said corporation, and the Individual Defendants have neglected, refused, and failed to comply with said requests Plaintiff has a common-law right to inspect corporate books and records where the request is made in good faith and for a proper purpose Investigating alleged misconduct by management and obtaining information that may aid legitimate litigation are proper purposes for purposes of inspection of the corporate books and records The failure to grant such access to all corporate books and records will result in irreparable injury to VC and Plaintiff, as a shareholder. records Plaintiff has no other adequate remedy at law Plaintiff accordingly demands access to inspect all VC s corporate books and AS AND FOR A THIRD CAUSE OF ACTION Plaintiff s Claim for Judgment, Under BCL 508, for the Issuance and Delivery of 46.5% of VC s Shares Against the Individual Defendants and VC Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 122 as if set forth in full herein Pursuant to the Stock Transfer and the Expanded Partnership Agreement, Rabah agreed to transfer to Plaintiff a total of 23.25% of the outstanding shares in VC of 46

26 125. Upon information and belief, nowhere in the articles of incorporation or bylaws of VC does it provide, by board resolution or otherwise, that any class or classes of VC shares shall be uncertificated shares As consideration, Plaintiff transferred a portion of his interest in Wireless and F.A.M. to Rabah for his acquisition of 23.25% interest in VC Despite the terms of the Agreements between Plaintiff and Rabah, Plaintiff has never received any shares of VC, although they have, from time to time since the parties agreement, requested and demanded, through Rabah, that the Individual Defendants cause VC to issue Plaintiff s 23.25% of the shares of said corporation, and said Individual Defendants have failed, neglected, and refused to comply with the demands and requests of the Plaintiff for the issuance and delivery of said shares In or about October 2013, Rabah threatened to unwind the Partnership unless he received shares in ATM World, an unrelated company owned by Plaintiff, Wich and Ayesh, for no additional consideration When the parties refused to transfer an interest in ATM World to Rabah, in or about April 2014, Rabah unilaterally declared that; (i) Plaintiff and Ayesh were not the owners and holders of 46.5%, but instead held 31% of the issued and outstanding shares of VC; and (ii) that as the purported holder of 53.50% of said shares he was the controlling shareholder of VC. All of the foregoing was in breach of the Expanded Partnership Agreement Any alleged or purported unilateral rescission of the Expanded Partnership Agreement was wholly unauthorized, wrongful and constitutes a breach of the Expanded Partnership Agreement of 46

27 131. By reason of the breach of the Expanded Partnership Agreement, as hereinbefore alleged, the Individual Defendants now claim to be in full and complete charge and control of all of the business and affairs of the VC. With such control they have been in a position to waste and squander the assets of said corporation, to appropriate its assets to their own use and benefit, and to irreparably damage the business and affairs of said corporation Plaintiff has been damaged in that he does not have a 23.25% share interest in VC and is unable to exercise his proper share in the control and conduct of the business and affairs of said corporation Plaintiff is entitled to the immediate issuance and possession of 23.25% of the issued and outstanding shares of VC Unless said shares are issued forthwith and delivered to Plaintiffs, Plaintiff will be subjected to monetary damages, the amount of which cannot be presently ascertained, but will be determined at trial Plaintiff has no adequate remedy at law. AS AND FOR A FOURTH CAUSE OF ACTION Conversion of VC Shares against Rabah 136. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 135 as if set forth in full herein From in or about December 2010, until the date of this Complaint, Rabah, without Plaintiff s consent or authorization, has wrongfully and intentionally converted to his own use Plaintiff s 23.25% interest in VC and the proceeds thereof belonging to Plaintiff, causing Plaintiff to incur losses in the aggregate amount to be determined at trial of 46

28 138. By reason of the foregoing, Plaintiff has sustained damages in an aggregate amount to be determined at trial, no part of which Rabah has paid By reason of the forgoing, Plaintiff has sustained damages including punitive and exemplary damages in an amount to be determined at trial. AS AND FOR THE FIFTH CAUSE OF ACTION Constructive Trust and Permanent Injunction against Rabah 140. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 139 as if set forth in full herein Rabah is not entitled in good conscience to retain any direct or indirect benefit resulting from the ownership or possession of the 23.25% VC shares owned by Plaintiff without restoring Plaintiff s as a 23.25% owner of VC and accounting to him for the present value of his 23.25% interest in VC Rabah would be unjustly enriched if he kept or received any benefit from the wrongful possession of the Plaintiff s 23.25% of VC shares To prevent and correct such unjust enrichment by Rabah, Plaintiff is entitled to a declaration by this Court that these VC shares and or their present value have been held, ab initio, in a constructive trust for the benefit of Plaintiffs as the 46.5% beneficial owner of VC As a result of the imposition of such a constructive trust, Rabah should be enjoined as a matter of law, from transferring, selling, acquiring, assigning, diluting, voting, valuing, replacing, conveying, using, removing from the jurisdiction or otherwise disposing of, encumbering or hypothecating legal or beneficial title to any portion of Plaintiff s 23.25% shares of VC of 46

29 to Plaintiff The failure to grant such permanent injunction will result in irreparable injury 146. Plaintiff has no adequate remedy at law. AS AND FOR A SIXTH CAUSE OF ACTION Inspection of VC s Books and Records Pursuant to BCL 624(a) Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 146 as if set forth in full herein Plaintiff has requested and demanded through Rabah that the Individual Defendants produce for inspection to them as shareholders of VC all record books, minute books, share certificate records, and other records of every nature of said corporation, including the minutes of all meetings or purported meetings of said corporation, and the Individual Defendants have neglected, refused, and failed to comply with said requests Plaintiff has no recourse but to engage a certified public accountant to assist them in inspecting all of the correct and complete books of account and records of VC required to be kept by the mandate of N.Y. Bus. Corp. Law 624(a) The failure to grant such access to all corporate books and records will result in irreparable injury to VC and Plaintiff There is no adequate remedy at law. AS AND FOR THE SEVENTH CAUSE OF ACTION Plaintiff s Derivative Claim for Waste of VC s Assets Against All Individual Defendants 152. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 151 as if set forth in full herein The Individual Defendants have mismanaged VC by, among other things, diverting and failing to properly account for VC s income, causing VC to pay the Individual of 46

30 Defendants and their family members and friends unearned salaries and commissions to which they were not entitled or for which VC received no measurable benefit during a time when VC was operating at a loss, by diverting VC s customers to MAS and ATM Exchange and by binding VC to a high-interest loan By reason of the foregoing, the Individual Defendants have wrongfully taken from VC for their own personal use and that of MAS and ATM Exchange, and without any business or other benefit to VC, in excess of $1.5 million per year over the past six years, which sums have been taken in increasing amounts in the later years, and it appears that the said Individual Defendants shall continue to divert the corporate assets of VC to their personal use until the corporation is bankrupted thereby or until enjoined by this Court By reason of the above-described wrongful acts of the Individual Defendants, VC and its shareholders have suffered damages in an amount to be determined at trial Plaintiff, individually and on behalf of other VC shareholders, is entitled to an accounting from the Individual Defendants for their misconduct and wrongful disposition of the funds and property of VC To prevent and correct such disposition of assets, the Individual Defendants should be restrained and enjoined during the pendency of this action and permanently from causing directly or authorizing VC to advance, disburse or pay any further amounts to or for the benefit of any of the defendants and to account for and pay over and restore to VC with interest thereon, from the date of the wrongful taking thereof, all amounts wrongfully diverted and taken from VC There is no adequate remedy at law of 46

31 AS AND FOR THE EIGHTH CAUSE OF ACTION Breach of Fiduciary Duty, Aiding and Abetting Breach of Fiduciary Duty and Conspiracy to Breach Fiduciary Duty Against the Individual Defendants 159. Plaintiff repeats and realleges each and every allegation contained and paragraphs 1 through 158 as if set forth in full herein Rabah, individually and as an officer of VC, and as a fellow shareholder in a close corporation, owes a fiduciary duty of trust, confidence and loyalty to Plaintiff and VC and every other shareholder because, among other things, (i) he was entrusted to manage VC and properly account for its profits and losses, and (ii) as a partner under the Partnership Agreement, Rabah owed a duty of trust, fidelity and undivided loyalty to his partners to protect VC s assets and income to the exclusion of his other competing business entities and activities Mohammed, individually and as the sole member of the board of directors, owed a fiduciary duty to Plaintiff, and to other similarly situated shareholders and to VC Upon information and belief, Anna, individually and as a purported owner of VC, owed a fiduciary duty of trust, confidence and loyalty to Plaintiff, and to other similarly situated shareholders and to VC Rabah, Mohammed and Anna each breached their respective fiduciary duties as a result of the conduct set forth in the allegations of this Complaint, including but not limited to their respective conduct in connection with: (i) the diversion of income earned from the Merchant Machines; (ii) the waste and dissipation of assets on salaries and commissions; and (iii) the diversion of customers and business opportunities from VC to ATM Exchange and MAS of 46