UNITED STATES

v.

KHAN

On December 14, 2023, the Undersigned held the preliminary injunction hearing. [ECF No. 29]. The Government’s counsel, the Temporary Receiver and her counsel, and attorneys for Defendants RSC LLC, RSC of Florida LLC, YO! Inc., Christopher Foufas,

and Brandon Hahn attended the hearing. Defendants Farhan Khan, Melinda Petithomme, and Jeremy Todd Briley did not attend the hearing and no attorney appeared on their behalf. Moreover, no corporate representative or attorney appeared for Altitude Processing, Inc. (the Florida corporation) and Altitude Processing, Inc. (the

Delaware corporation). Judge Williams’ Order [ECF No. 11] permitted, but did not require, Defendants to attend today’s hearing.¹ During the hearing, the Government and counsel for those Defendants who attended the hearing (RSC LLC, RSC of Florida LLC, YO! Inc., Christopher Foufas, and Brandon Hahn) reached a tentative consensus on the entry of an agreed preliminary injunction which requires approval from supervisors and officials at the Department of

For these reasons, the Undersigned respectfully recommends that Judge Williams: (1) extend the TRO [ECF No. 11] until at least Tuesday, December 19, 2023, to allow the Government sufficient time to obtain the necessary approvals from the Department of

Justice and (2) approve the agreement between the Temporary Receiver and Defendants Christopher Foufas, RSC LLC, RSC of Florida LLC and YO! Inc. In the interim, the evidentiary hearing on the Government’s request for a preliminary injunction [ECF No. 4] and the motion to dissolve or modify the TRO [ECF

No. 28] is re-set to Tuesday, December 19, 2023 at 1:30 PM before the Undersigned. The parties and the Undersigned hope that the December 19, 2023 hearing will be timely cancelled because we anticipate that there will be a resolution between the Government and Defendants who were present on issues which would otherwise be addressed at the preliminary injunction hearing.

I. Background2

The Government initiated the instant action by filing a Complaint against Farhan

Khan (“Khan”), in his individual capacity and as de facto owner of Altitude Processing, Inc.; Melinda Petithomme (“Petithomme”), in her individual capacity and as an officer of Altitude Processing, Inc.; Altitude Processing, Inc. (a Florida corporation); Altitude Processing, Inc. (a Delaware corporation); Jeremy Todd Briley (“Briley”); RSC LLC, RSC of Florida LLC; YO! Inc., Christopher Foufas (“Foufas”), in his individual capacity and as an officer of RSC LLC and YO! Inc.; and Brandon Hahn (“Hahn”), in his individual capacity and as an officer of RSC and YO! Inc., (collectively, “Defendants”). [ECF No. 1].

The Complaint seeks a “temporary restraining order, [a] preliminary and permanent injunction, and other equitable relief pursuant to 18 U.S.C. § 1345 in order to enjoin the [alleged] ongoing commission of criminal wire fraud and bank fraud in violation of 18 U.S.C. §§ 1343, 1344, and 1349.” Id. at ¶ 1. It alleges that “Defendants operate and conspire to operate a bank and wire fraud scheme that preys upon individuals and small businesses across the United States. The scheme involves obtaining victims’ banking information without their consent and making recurring, unauthorized withdrawals from their bank accounts.” Id. at ¶ 2.

small businesses charged by Altitude Processing never signed up for-or received any services from Altitude Processing.” Id. at ¶ 3. Defendant Petithomme purportedly allows Khan to operate this business under her name. Id. at ¶ 4.

The Complaint further alleges that “Briley seeks out relationships with banks and third-party payment processors to process victims’ unauthorized charges for Altitude Processing.” Id. at ¶ 5. Defendants Foufas and Hahn, executives of RSC LLC and YO! Inc.,

purportedly “opened bank accounts used for the scheme and have knowingly processed unauthorized withdrawals from victims’ bank accounts on behalf of Altitude Processing since at least September 2021.” Id. at ¶ 6. In conjunction with the filing of its Complaint, the Government filed the instant

Motion [ECF No. 4] seeking a TRO and other relief and, upon the expiration of the TRO, a preliminary injunction. As noted above, the Court granted the TRO. [ECF No. 11].

II. Applicable Legal Standard

Federal Rule of Civil Procedure 65 provides that “[t]he [C]ourt may issue a preliminary injunction only on notice to the adverse party.” Fed. R. Civ. P. 65(a)(1).3 “The

395, 101 S. Ct. 1830, 1834, 68 L. Ed. 2d 175 (1981). Ordinarily, to obtain a preliminary injunction, a party seeking the relief must make the following four showings: (1) it has a substantial likelihood of success on the merits;

(2) irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued, the injunction would not be adverse to the public interest. Wreal, LLC v. Amazon.Com, Inc., 840 F. 3d 1244, 1247 (11th Cir. 2016); Siegel v. LePore, 234 F. 3d 1163, 1176 (11th Cir. 2000) (en banc); accord Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F. 3d 982, 985 (11th Cir. 1995). But, in certain instances where the injunction concerns a statutory violation:

the Government does not have to show irreparable harm or balance the parties’ interests. Instead, “the requirements for injunctive relief are met ‘when the government establishes that defendants have violated the statute and . . . [there] exists some cognizable danger of recurrent violation.’” [United States v. Medina, 718 F. Supp. 928, 930 (S.D. Fla. 1989)] (quoting United States v. Sene X Eleemosynary Corp., 479 F. Supp. 970, 981 (S.D. Fla. 1979) (internal quotations omitted)). United States v. Am. Therapeutic Corp., 797 F. Supp. 2d 1289, 1291 (S.D. Fla. 2011). In those instances, “[o]nce illegal activity is clearly demonstrated by a plaintiff under 18 U.S.C. [§] 1345, [then] the remaining equitable factors of continuing irreparable injury, the balance of hardships to the parties, and the public interest are presumed to weigh in favor of granting injunctive relief.” United States v. Williams, 476 F. Supp. 2d 1368, 1377 (M.D. Fla. 2007); see also United States v. Aid Med. Equip., Inc., No. 05-21461-CIV,

2006 WL 8433161, at *1 (S.D. Fla. Mar. 29, 2006) (“Because the United States’ motion is based upon 18 U.S.C. § 1345, which expressly authorizes injunctive relief to protect the public interest, no specific finding of irreparable harm is necessary, no showing of the inadequacy of other remedies at law is necessary, and no balancing of the interests of the parties is required prior to the issuance of a preliminary injunction[.]”). At the December 14, 2023 hearing, the Government and counsel for those

Defendants who were present (Defendants Christopher Foufas, RSC LLC, RSC of Florida LLC, YO! Inc. and Brandon Hahn) agreed that the lower legal standard outlined above applies to the preliminary injunction sought by the Government in this case. “If a party establishes the right to a preliminary injunction, its scope ‘must be narrowly tailored to fit specific legal violations, because the district court should not impose unnecessary burdens on lawful activity.’” United States v. Bacaner, No. 8:21-CV- 0391-T-VMC-SPF, 2021 WL 3508135, at *5 (M.D. Fla. Aug.³, 2021), report and recommendation adopted, No. 8:21-CV-391-VMC-SPF, 2021 WL 4948149 (M.D. Fla. Sept.¹, 2021) (quoting Cumulus Media, Inc. v. Clear Channel Commc’ns, Inc., 304 F. 3d 1167, 1178 (11th Cir. 2002)).

III. Discussion

As noted above, the Government and counsel for Defendants RSC LLC, RSC of

Florida LLC, YO! Inc., Christopher Foufas, and Brandon Hahn negotiated the terms of an anticipated agreed preliminary injunction. However, those terms must be reviewed and approved by supervisors and officials at the Department of Justice. In order to allow sufficient time for that process, the Government and those Defendants who were present at today’s hearing (Defendants RSC LLC, RSC of Florida LLC, YO! Inc., Christopher Foufas, and Brandon Hahn) agreed to a short extension of the TRO until at least Tuesday, December 19, 2023. On that day, if the parties have not finalized their agreement, then the Undersigned will hold a preliminary injunction hearing at 1:30 PM. Additionally, unless cancelled because of an agreement, I will also hold a hearing on Defendants RSC LLC, RSC of Florida LLC, YO! Inc., and Christopher Foufas’ motion to dissolve or modify the TRO [ECF No. 28]. At the December 14, 2023 hearing, the Temporary Receiver and Defendants RSC LLC, RSC of Florida LLC, YO! Inc., and Christopher Foufas placed the following agreement on the record: The Temporary Receiver agrees to contact American

Commercial Bank & Trust to reduce the number of accounts that have been frozen by the TRO. Additionally, the Temporary Receiver agrees to ensure that payroll is timely made for employees of The Payment Shop, LLC. Attorney Brian Barakat will provide to the

Temporary Receiver later today the information necessary for the payroll.

IV. Conclusion

Based on the foregoing, the Undersigned respectfully recommends that the

District Court extend the TRO [ECF No. 11] until at least Tuesday, December 19, 2023 to allow the parties to finalize their agreement or, if necessary, to permit the Undersigned to hold a preliminary injunction hearing (if an agreement is not finalized). The Undersigned also respectfully recommends that the District Court approve the agreement reached between the Temporary Receiver and Defendants RSC LLC, RSC of Florida LLC, YO! Inc., and Christopher Foufas, as outlined above. The Government will provide copies of this Report and Recommendations to all

Defendants who did not appear (either in person or through counsel) at the hearing and file a notice of compliance on CM/ECF by no later than 10:00 AM on Friday, December 15, 2023.

V. Objections

The parties will have one (1) day⁴ from the date of being served with a copy of this Report and Recommendations within which to file written objections, if any, with United States District Judge Kathleen M. Williams. Each party may file a response to the other party’s objection within one (1) day of the objection. Failure to file objections timely shall bar the parties from a de novo determination by the District Judge of an issue covered in

Jdnathan Goodman

UNITED STATES MAGISTRATE JUDGE

Copies furnished to: The Honorable Kathleen M. Williams All Counsel of Record