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Ancona v. Paragon Int'l Wealth Mgmt., Inc.

United States District Court, D. Maryland

August 19, 2019

PARAGON INT'L WEALTH MGMT., INC., et al., Defendants


          James K. Bredar, Chief Judge

         Antonio Ancona sued Paragon International Wealth Management and three of its employees-Michael Shumak, Edward Rosenberg, and James F. Gagliardini-for five counts involving fraud. Currently pending before the Court is Ancona's motion to postpone the hearing scheduled for August 22, 2019. (ECF No. 70.) For the reasons set forth below, the Court will postpone the hearing as well as dismiss all five counts as to Gagliardini.

         I. Background

         A. Procedural History

         Ancona filed suit in May 2018. (Compl., ECF No. 1.) Since that time, Paragon, Rosenberg, and Gagliardini have failed to respond to the complaint, and the Clerk entered their default. (Entry of Default, ECF No. 47; Entry of Default, ECF No. 51.) Shumak did respond to the allegations and moved to stay pending a Canadian criminal prosecution against him and his co-defendants. (Answer, ECF No. 40; Motion to Stay, ECF No. 41.) This Court granted the stay, which is set to expire on December 1, 2019. (Order, ECF No. 60.) Ancona moved for default judgment against the other three defendants. (Rule 55(b)(1) Mot., ECF No. 43; Rule 55(b)(2) Mot., ECF No. 61.) The Court requested additional briefing from Ancona and scheduled a hearing on default judgment to determine both liability and damages. (Memo. & Order, ECF No. 63.) Ancona submitted pretrial briefing as requested. (Pretrial Memo., ECF No. 67.) Then, Ancona requested that the hearing be postponed in light of forthcoming evidence. (Mot. Postpone, ECF No. 70.)

         That is how the case currently stands. In considering Ancona's request to postpone, the Court also summarizes the allegations of the complaint and resolves any issues that can be resolved without a hearing. See Local Rule 105.6 (D. Md. 2018.)

         B. Factual Allegations

         By their default, Paragon, Rosenberg, and Gagliardini are held to have admitted Ancona's well-pleaded factual allegations. Trustees of Heating, Piping & Refrigeration Pension Fund v. Clean Air Mechanical, Inc., Civ. No. JKB-17-3690, 2019 WL 2146916, at *2 (D. Md. May 16, 2019) (citing Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)).

         Ancona is a registered engineer who resides in Annapolis Maryland. (Am. Compl. ¶ 1, ECF No. 13.) Paragon purports to be a Canadian investment service and seller of colored diamonds and other jewelry, which could be sold to customers for personal use or resale by Paragon. (Id. ¶ 2.) Ancona alleges that Rosenberg, Shumak, and Gagliardini are employees and agents of Paragon. (Id. ¶ 3-5.)

         In July 2015, Paragon solicited Ancona's business, offering to sell Ancona "jewelry which was supposedly GIA certified, as to value, for both personal uses and as an investment asset." (Id. ¶ 6.) From that time forward, Ancona "became an occasional purchaser," buying jewelry from Paragon's employees, including Shumak. (Id.) In March 2016, Shumak contacted Ancona and informed him that ten diamonds worth $546, 250 were available for only $200, 000. (Id. ¶ 7.) Shumak offered to hold the jewelry for safekeeping until the jewelry could be resold at greater value. (Id.) Relying on his past purchases with Ancona and Shumak's representations, Ancona agreed and purchased the ten diamonds. (Id.)

         Approximately one year later, Rosenberg, representing himself as a Paragon employee, contacted Ancona and informed him that several pieces of diamond jewelry worth $3, 150, 000 were available for only $578, 836.51. (Id. ¶ 8.) Rosenberg proposed that Ancona purchase the jewelry and that Rosenberg would resell it at a greater cost. (Id. ¶ 9.) When Ancona questioned the price reduction, Rosenberg explained that the intended purchaser had reneged on a contract and lost the right to buy the jewelry. (Id. ¶ 8, 11.) Rosenberg also sent Ancona a picture of the jewelry and an appraisal, declaring the aggregate value to be $5, 479, 000.75. (Id. ¶ 11.) After initially saying that he did not have the funds to purchase the jewelry, Ancona decided to purchase it?-selling stock, withdrawing his savings, and charging his credit cards to make more of his funds available. (Id. ¶ 12.) In April 2017, Ancona received the jewelry in an armored truck. (Id. ¶ 13.)

         In July 2017, Shumak began evading Ancona's emails and phone calls. (Id. ¶ 14.) When Ancona asked Rosenberg about Ancona's purchases with Shumak, Rosenberg said that he knew nothing about those purchases and would not answer any other questions. (Id.) Ancona demanded that Rosenberg sell the jewelry he received in April, but Rosenberg said that resale deals kept falling through. (Id. ¶ 15.) At this time, Paragon was holding several other items of jewelry, which Ancona had purchased for $166, 170. (Id. ¶ 16.) Ancona had the Paragon jewelry that he had in his possession appraised independently and discovered that it was "costume jewelry" and that he had paid "more than $400, 000 in excess of its real value." (Id.) Ancona again attempted to contact Shumak for delivery of the jewelry in Shumak's possession, but Shumak did not respond. (Id. ¶ 18.) No. one at Paragon refunded Ancona for the items of jewelry that he purchased and never received. (Id. ¶ 20.) No. one at Paragon reimbursed Ancona for overcharging him in general, (Id.)

         Ancona alleges that Rosenberg, Shumak, and Gagliardini have been criminally indicted in Toronto, Canada for fraud perpetrated against other individuals in the United States and Canada between 2015 and 2018. (Id. ¶ 21.)

         II. ...

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