A decision on the beef between the Digital Altitude Receivership and Paradise Media Ventures, will see owner John Souza keep $600,000 of victim funds.

The dispute can be traced back to a $515,000 clawback lawsuit filed by the Digital Altitude Receiver back in March.

As part of its fraudulent business operations, Digital Altitude ‘licensed
certain educational materials’ from Paradise Media Ventures.

According to the Receiver, Digital Altitude overpaid Paradise Media Ventures $600,000.

PMV has no legitimate entitlement to the Overpaid Funds, but nevertheless it refuses to remit them to Receiver as repeatedly demanded.

PMV has sought to take advantage of this Court’s orders of redress and imposition of a receivership over DA to keep the
Overpaid Funds for itself – all to the harm of aggrieved consumers that would benefit from the return of the Overpaid Funds.

John Souza (right), Paradise Media Ventures’ owner, counters that it entered into its agreement with Digital Altitude, on the representation the company “had only $600,000 in total merchant reserves”.

Souza also contends that Digital Altitude failed to provide him access to their financial statements, as required by their agreement.

[H]ad DA provided the viewer access to the merchant and bank account and PMV learned that there was over $1 million available to pay PMV, PMV would have never agreed to take a short payment.

Through a July 5th order, the court sided with Paradise Media Ventures Group.

Reasons cited for the decision include had Digital Altitude of pursued recovery of the overpaid amount, they’d have had to have filed a lawsuit.

The court saw the Receiver’s clawback lawsuit as an attempt to “sidestep” due process.

Although the court didn’t definitively acknowledge PMV owned the funds in question, it did recognize that in this case PMV was more than just a custodian of the funds.

That is to say in your typical clawback case a merchant is holding funds, which it is inevitably required to turn over.

In this case the court disagreed with the Receiver’s assertion that ““[t]he facts in this matter are very straightforward”, but refused to resolve

competing positions through the limited process of the (clawback) Motion would be neither appropriate nor fair.

That the Receiver was also unable to show PMV ‘actual or constructive notice of the wrongdoing of Digital Altitude when it contracted with and received payments from Digital Altitude‘, also factored into the decision.

Can’t say I agree with this decision as a whole.

The Receiver is free to pursue the matter via a separate civil lawsuit, but due to costs and time I can’t see that happening.

From a purely ethical standpoint, receiving $600,000 as an overpayment and then ghosting the payee seems pretty shady.

Remember, at the time Souza didn’t have access to Digital Altitude’s financial reports. So what PMV would or wouldn’t have entered to at the time was irrelevant.

Souza decided to just keep the money.

As for not knowing Digital Altitude was a scam; Souza selling marketing training and deceptive marketing being a core component of the FTC’s case, certainly evokes a certain level of irony.

As I myself uncovered in 2016, Digital Altitude’s business model was clearly that of a pyramid scheme.

Pending additional civil litigation, which as stated I feel is unlikely, the July 5th decision permits Souza to keep the $600,000 overpayment.

Digital Altitude’s victims miss out.


Update 20th August 2019 – Turns out this isn’t over yet.

As per the Digital Altitude Receiver’s latest August 15th Status Report, the Receivership is “preparing a complaint for filing in the (Georgia) State court.”


Update 13th March 2020 – Following cost-benefit analysis, the Digital Altitude Receivership has opted not to pursue recovery.