lucrazon-logoLucrazon Global was a Ponzi scheme launched in late 2013.

By late 2014 the scheme had begun to collapse, leaving most investors out of pocket.

One of those investors was Josef Kofman, a seventy-one year old resident of California.

Over the course of three years, Kofman invested over $1.3 million dollars into Lucrazon Global and other ventures operated by owner Alexy Pitt.

Despite “revenue-sharing” promises made by Lucrazon, Kofman has nothing to show for his investment.

In a few short years he has lost everything and is facing creditor collections, is about to be homeless, and owes the IRS substantial sums.

In addition, instead of being able to retire, Mr. Kofman has had to continue working even though he is in his 70s.

He owes more than $100,000 on credit cards with no ability to repay.

Under California’s “elder financial abuse” law, Kofman is now suing Pitt and Lucrazon Global.

For those unfamiliar with California’s financial elder abuse law;

In California, elders are defined as persons 65 years and older. Under California law, elder abuse can be both criminal and civil.

Kofman’s financial elder abuse lawsuit is civil in nature.

Civil law defines civil elder financial abuse as when a person or entity does any of the following:

1. Takes, secretes, appropriates, obtains, or retains real or personal property of an elder for a wrongful use or with intent to defraud, or both.

2. Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder for a wrongful use or with intent to defraud, or both.

3. Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an by undue influence. Undue influence means excessive persuasion that result in inequity.

Kofman’s lawsuit alleges his Lucrazon Global losses are ‘one of the most egregious examples of financial elder abuse imaginable‘.

alex-pitt-alexy-ceo-founder-lucrazonAlthough the MLM industry knows Pitt (right) through Lucrazon Global, Kofman alleges he’s been scamming Russians in the US ‘for over a decade‘.

Over the years the name of Mr. Pitt’s corporate ventures has changed; however, they are based on an “endless chain scheme” as that term is defined under California law by offering sales of “accounts” sold in a multi-level marketing format.

They involved a complicated scheme of transfers upstream and downstream between investors, and to make money investors had to recruit more people to buy into the pyramid scheme.

Kofman’s complaint claims Pitt has been at it for fifteen years, with ‘a series of failed business ventures‘ wreaking ‘destruction on employees and investors alike‘.

Kofman got involved in Pitt’s business ventures in mid 2012, although he first spoke to Pitt over the phone in 2001.

Kofman was introduced to Pitt ‘through another member of the Russian American community‘.

It wasn’t until June 2012 that Kofman met Pitt in person. It was after this meeting that Koman claims he was ‘systematically drained of every penny of savings, retirement funds, home equity and credit‘.

Mr. Pitt even persuaded Mr. Kofman to borrow money from family.

As the scheme progressed, Mr. Pitt created a sense of urgency in Mr. Kofman that if Mr. Kofman did not find more money the funds he previously provided would be lost.

To keep investors like Kofman strung along, Pitt claimed his companies were ‘always on the verge of success … and were always on the verge of being able to repay‘ them.

For his part in playing the victim, Kofman’s attorney alleges he was an “easy mark”.

Given his lack of business acumen and his advanced age, Mr. Kofman was manipulated by Mr. Pitt and his companies.

Mr. Kofman was easily molded by Mr. Pitt to comply with his constant stream of demands for money.

At one point Mr. Pitt presented Mr. Kofman with a business card that listed Mr. Kofman as a “Vice President”.

Mr. Kofman was not Lucrazon’s Vice President – at no point in time was Mr. Kofman ever employed by Mr. Pitt or any of Mr. Pitt’s network of companies.

Instead Mr. Pitt gave Mr. Kofman the business card as part of his scheme to convince Mr. Kofman that he had a personal stake in the success of Lucrazon.

Business dealings between Kofman and Pitt saw Kofman request “something in writing”. Pitt complied only once, signing a written agreement ‘for a small amount of the total‘ Kofman invested.

Mr. Pitt gave endless excuses. He would tell Mr. Kofman that he was too busy or it was too late in the day to prepare anything.

Whether realized in retropect or at the time, deception played a large role in Kofman and Pitt’s dealings.

One example is checks Pitt allegedly gave to Kofman, which Kofman claims gave him a sense of protection.

Mr. Pitt provide(d) Mr. Kofman with a stack of signed checks; however, they were provided with strict instructions that Mr. Kofman did not have permission to deposit the checks until Mr. Pitt gave the go ahead.

As to one stack of checks Mr. Pitt later told Mr. Kofman that the account was closed. Mr. Kofman still has the stacks of worthless checks.

This was just another part of Mr. Pitt’s scam against a trusting senior citizen.

At Kofman and Pitt’s first meeting at Pitt’s offices in 2012,

Mr. Pitt showed Mr. Kofman around and told him that he had more than 60 software engineers working for him.

Mr. Pitt told Mr. Kofman that his company was groundbreaking and allowed anyone to quickly and easily open a merchant account to conduct online business.

Mr. Pitt told Mr. Kofman that things were tight but his company was on the verge of making it big.

Mr. Pitt told Mr. Kofman that he had invested $22 million dollars of his own money.

During the initial meeting, Mr. Pitt specifically and falsely stated that his business was not multi-level marketing.

Mr. Kofman fell for Mr. Pitt’s fast talking and transferred money to Mr. Pitt and his company.

Over June and July 2012, Kofman transferred $115,000 to Pitt’s Wells Fargo bank account.

By the end of 2012, Kofman had transferred $625,000 to Pitt and his various companies.

After (Pitt and Lucrazon Global) identified Mr. Kofman as a malleable mark, representatives of the companies began calling on a daily basis – sometimes they called multiple times a day.

Usually it was Mr. Pitt or his associate “Gena” Friedman that called.

In 2013, Kofman transferred another $478,351 to Pitt.

In 2013 (Pitt and Lucrazon) started targeting Mr. Kofman’s retirement accounts.

Mr. Kofman was worried to take money out of his retirement accounts because he would incur penalties if it was not paid back quickly.

Mr. Pitt assured Mr. Kofman that the money was only needed for a couple of weeks and the deadline would be met.

The money was not repaid and Mr. Kofman incurred penalties. He currently owes the IRS money that he cannot pay.

In 2014 Alex Pitt worked hard to create the illusion of Lucrazon Global doing well.

businessforhome-promoting-lucrazon-global

In April, 2014 Lucrazon held a “huge conference” at the Los Angeles Convention Center. Speakers included Mitt Romney and Hector V. Barreto (administrator of the U.S. Small Business Administration under President George W. Bush).

Barreto was appointed President of Lucrazon Global later that month.

Pitt also paid Kofman back $95,000.

Mr. Pitt used the partial repayment to argue that the business was doing extremely well and Mr. Kofman should give him more money for his business.

Mr. Pitt relied heavily on the involvement of Mitt Romney and Hector V. Barreto.

Mr. Kofman fell for the tactic. Transfers from Mr. Kofman to (Pitt and Lucrazon) started up again in June 2014.

Pitt’s $95,000 gamble paid off, with Kofman transferring $187,000 back to him in 2014.

Particularly painful to Mr. Kofman were three checks funded with money from Mr. Kofman’s brother Greg.

The checks totaled $47,000 and were dated June 16, 2014, June 25, 2014 and August 14, 2014.

Mr Pitt promised that he would make sure they were repaid no later than the end of August. Mr. Pitt broke his promise.

In October of 2014 Pitt continued the ruse of Lucrazon Global’s success.

Mr. Pitt told Mr. Kofman that the company was doing well and he was in active negotiations to sell the company for a huge profit.

Mr. Pitt told Mr. Kofman the sale was going to take place in October.

The sale never materialized and Pitt continued to hound Kofman for money.

Despite “teetering on the edge of financial ruin”, In 2015 Kofman transferred a further $33,860 to Pitt.

On or about June 24, 2015, Mr. Pitt and Mr. Kofman spoke by telephone and Mr. Kofman told him he was suffering from serious depression because he had not been repaid and was in dire straits financially.

Shockingly Mr. Pitt’s response was that Mr. Kofman should get a prescription for “Diazepam (valum) [sic] 10mg” and/or “Escitalopram 10 mg” (also known by the brand name Lexapro – an SSRI anti-depressant).

Mr. Pitt texted the names of the prescription medications to Mr. Kofman.

Lucrazon Global had well and truly collapsed by this point. Pitt had moved on and launched a new scheme, NetVence.

Mr. Pitt told Mr. Kofman that he was restructuring the business to take advantage of bitcoin and to avoid high processing fees from the major credit card brands.

Mr. Pitt assured Mr. Kofman that he would still be repaid when he finished getting NetVence up and running.

On or about March 25, 2015, Mr. Pitt called Mr. Kofman to share the “great news” that the new company was up and running.

Over the next couple of weeks Mr. Pitt largely ignored Mr. Kofman’s attempts to get information, however in brief conversations he said there were slight delays but to hold tight.

On or about April 14, 2015, Mr. Pitt told Mr. Kofman that the Lucrazon system was being transferred to NetVence’s system and that things were almost up and running.

During this phone call, Mr. Pitt said the money will be coming in a few days.

On or about May 4, 2015, Mr. Pitt told Mr. Kofman that there were problems that were affecting money flow and more money was needed.

Consequently, Kofman’s financial situation continued to deteriorate.

By September 2015 things became so dire that Mr. Kofman often had insufficient money to pay for food.

Mr. Kofman repeatedly reached out to Mr. Pitt. Mr. Pitt was alternatively unresponsive or dismissive.

He also gave various excuses – he was in presentations, he had a dislocated shoulder, he was sick, he had a virus.

Mr. Pitt ignored countless of Mr. Kofman’s pleas for help, including ones where he told Mr. Pitt that he was in an emergency situation and needed money to eat.

July 16th, 2015 – “Alex, the week is coming to and end. I need you to make deposit as promises. Let me know when, need to buy food, pls call when you read this message.”

August 22nd, 2015 – “Alex, Alex can you make some deposit need to buy food pls call.”

December 10th, 2015 – “Alex, I know you making money I need to buy food, can you help.”

December 11th, 2015 – “Alex, Alex, you not calling, I don’t have money to go out, staying in bed, can you deposit some money that I can have food.”

Pitt finally responded to Kofman’s text messages on New Years Day, 2016.

Josef, I wish you Happy New Year!

I also wish you to be healthy & happy, recuperate all your money and make much, much more! Alex

On January 3rd, 2016 Pitt sent another message:

Josef, I am sick I will call today in the afternoon.

Pitt never called and Kofman’s subsequent communications were ignored.

January 4th, 2016 – “Alex, are you angry, no call, no sms, alone no one to talk, no food.”

February 2nd, 2016 – “Alex, what are you doing to me. Pls respond, didn’t have food for 3 days.”

Pitt didn’t respond to Kofman’s pleas for help. Ignoring the fact that Kofman was starving, Pitt instead later sent Kofman links to YouTube videos featuring Donald Trump.

When the prospect of legal action was finally aired, Pitt falsely told Kofman ‘he has won every lawsuit brought against him‘.

Mr. Kofman last spoke to Mr. Pitt on May 14, 2016 when Mr. Pitt called Mr. Kofman in the middle of the night.

Mr. Kofman reiterated to Mr. Pitt that he was in dire circumstances and needed to be re-paid.

Mr. Pitt responded that ‘I told you I am working on it … I need a few more days.’

As in past discussions Mr. Pitt was dismissive. He told Mr. Kofman that ‘Donald Trump says you need to withstand pressure to be successful in business‘.

Josef Kofman’s lawsuit against Alex Pitt and Lucrazon Global lists four counts of action:

  1. Financial Elder Abuse
  2. Fraud and Deceit – Misrepresentation
  3. Fraud and Deceit – Concealment
  4. Breach of Oral Contract

Kofman is asking for general damages, special damages, exemplary and punitive damages, treble damages and legal costs.

The lawsuit was filed on June 21st, 2015, with Alex Pitt and Lucrazon Global yet to file a reply.