Las Vegas Sun

December 14, 2017

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Nevada real estate investment firm receives $2.2 billion judgment

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Steve Marcus

District Court Judge Kenneth Cory, shown in 2014, issued a $2.2 billion judgment Tuesday for a Nevada company, First 100 LLC, against Cambodian-born billionaire Raymond Ngan who defaulted on $160 million in promised funding.

Updated Wednesday, March 29, 2017 | 11:38 a.m.

A Nevada company that purchased and foreclosed on homeowners association liens has won a $2.2 billion judgment in Clark County District Court against a Cambodian-born billionaire who defaulted on $160 million in promised funding.

Filed Tuesday, the massive summary judgment ruling against Las Vegas-based investor Raymond Ngan by District Court Judge Kenneth Cory is believed to shatter the previous state record of $524 million for a single civil case. That mark was set in a 2013 case against Health Plan of Nevada stemming from the Hepatitis C outbreak caused by Dr. Dipak Desai’s facility five years earlier.

According to court records, Ngan largely ignored for months a civil suit brought in June by First 100 LLC alleging he reneged on multiple agreements to provide backing to grow the company into a national outfit. Ngan’s continued lack of engagement ultimately led Cory to grant First 100’s default motion.

“Allowing such conduct to continue would render courts of justice meaningless in Nevada,” Cory wrote in his decision.

Click to enlarge photo

Jay Bloom, a director of First 100

The multibillion-dollar award was one of several dramatic elements in the case, including the personal history of Ngan. He purports to be a child refugee to the United States from Cambodian concentration camp who attended the prestigious Massachusetts Institute of Technology at 14 years old, according to sources familiar with the case.

Ngan claims to have amassed billions of dollars managing funds for Middle Eastern foreign governments and helping to found a major Asian retail business.

In his ruling to strike Ngan’s answer to the suit and enter judgment, Cory called Ngan’s behavior “egregious” and admitted his own “exasperation.” Ngan missed multiple scheduled depositions on dates he chose and failed to pay a $108,000 sanction for his repeated failure to participate that would have held off a default judgment award until the case could be heard fully. Cory characterized the award as “fairly breathtaking.”

“Defendants have repeatedly violated the orders of the court, as well as refused to appear for depositions and participate in discovery in good faith, all of which clearly (is) evidence (of) defendants’ disinterest in actually having this matter adjudicated on the merits,” Cory wrote.

Plaintiffs in the suit contended Ngan agreed to three separate funding agreements totaling $160 million to help scale up First 100. Starting in 2012, the company bought delinquent liens levied by Nevada HOAs at a discount. They then either collected on the full amount of the assessments or used a little-known “superpriority” provision in state law to foreclose on the homes and take ownership while eliminating the lender’s mortgage. Essentially, First 100 could buy a past-due lien on a $300,000 home for a few thousand dollars and eventually own the house for a tiny fraction of its value.

Introduced to First 100 directors Jay Bloom and Chris Morgando by mutual business acquaintances in April 2015, Ngan negotiated at separate times in the following months to buy a majority stake in First 100 for $100 million and to purchase a pool of delinquent liens in Florida for $50 million.

Despite dozens of assurances of his commitments via text message to Bloom and Morgando from July 2015 to April 2016, Ngan never produced any money. First 100 eventually sued Ngan and two shell companies, Ngan Global Ventures and Pi Global Holdings, LLC, in June.

Neither Ngan nor attorneys responded to any requests or orders in the suit for months, and Cory was prepared to enter a default judgment in favor of First 100 in October. Despite not having been retained officially by Ngan, attorney Elliot Blut phoned in to an October prove-up hearing and requested a chance to stop the default. Cory granted that opportunity on the condition Ngan pay in four installments a $108,000 sanction to cover First 100’s costs to that point, which Ngan ultimately failed to do.

“This court bent over to give defendants every possible opportunity to participate in this case,” Cory wrote.

First 100 and its attorney, Joseph Gutierrez, earlier provided expert analysis showing that Ngan’s original $100 million commitment would have yielded profits of $932 million. Cory doubled that amount as punitive damage and added interest and attorney’s costs to reach the $2.2 billion figure.

“We are pleased with the judgment validating our claims that Raymond Ngan’s failure to fulfill his obligations caused irreparable harm to the company,” Bloom said in a statement. “Everyone suffered as a result of Mr. Ngan’s broken promises, and this judgement allows us to work to move forward and do right by all those who placed their faith in First 100 and its management.”

First 100 eventually lost a large lien pool after a promised $10 million bridge loan from Ngan in November never materialized.

“As a result of Raymond Ngan’s intentional and malicious refusal to fulfill his contractual commitment as an exclusive investor, First 100 was prohibited from raising additional capital and expanding its business,” Gutierrez said in a statement.

Ngan appeared Thursday in front of Cory for the first time during the nine-month proceeding, but only after the judge threatened to issue a civil bench warrant to force him to do so. When Cory asked him to explain his side of the story, Ngan offered few details.

“What can I say that hasn’t already been covered, right, that is trying to address what you’re asking me versus being all over the place,” Ngan said, according to court transcripts. “Because this is the first time you’re hearing me and this is the first time that potentially I get to share my side of the story of what transpired over the past two years. So I’m trying to cover two years of conversations in a one-minute explanation or response …”

Cory then backed away from his question and continued questioning attorneys.

Ngan can appeal the judgment. Gutierrez said he was unclear on if or when First 100 would be able to collect the $2.2 billion.

“It’s premature now,” Gutierrez said. “We’ll know down the line once we gauge the judgment better.”

Before his involvement in First 100, Bloom developed and served as managing partner of the Mob Experience, a retrospective display that operated for 2 ½ years at the Tropicana before failing during the recession.