Earlier this week BehindMLM reported on Brian Shuster’s RICO fraud lawsuit, filed against Josh Denne, his company Blockchain Alliance and Jeremy Roma.

In the article we noted Denne had filed an earlier state-level Californian suit against Shuster. Unfortunately California does not provide public access to state-level court filings.

A reader has since provided BehindMLM with a copy of Denne’s November 6th, 2024 filed Complaint. As such, today we’re able to report on the case.

In addition to Denne (right), a resident of Arizona, named plaintiffs in the case include:

  • Nima Momayez (California)
  • Blockchain Funding Inc. (Delaware)
  • MasterNode Partners LLC (Wyoming) and
  • Blockchain Alliance LLC (Wyoming)

Named defendants in the suit are:

  • Brian Suster (Vancouver, BC)
  • Utherverse Inc. (Nevada)
  • Utherverse Digital Inc. (Vancouver, BC)
  • Utherverse Gaming (New York)
  • Peter Gantner (Arizona)
  • Nexus Venture LLC (Arizona)
  • Ari Good (Florida) and
  • Gary Shuster (California)

In the Complaint Denne and co-Plaintiffs accuse the Utherverse defendants of running an “orchestrated a scheme to defraud investors, including the Plaintiffs.”

Since at least 2022 and continuing through the present, the Defendants engaged in a systematic and intentional pattern of fraudulent conduct, misappropriating investor funds, concealing material facts, and making multiple false statements about the nature and profitability of their investments.

The Defendants unlawfully induced Plaintiffs to invest in Utherverse by promising outsized returns, misrepresenting the state of Utherverse’s financial health, and touting fictitious market success.

Plaintiffs were deceived into believing that their investments would be used to develop virtual metaverse technologies and secure monetization opportunities through blockchain-based products.

In reality, the Defendants misappropriated investor funds for personal gain and undisclosed purposes, including payments to non-licensed brokers, personal travel, and unrelated business ventures.

Defendants further misrepresented key financial metrics such as user numbers, transaction volume, and proprietary technology. Their fraudulent conduct has caused significant financial harm to the Plaintiffs.

To keep things simple, we’ll refer to the Plaintiff’s through Denne unless otherwise denoted. Defendants will be grouped as UI under the same terms.

In a nutshell, Denne’s Complaint is an “Uno reverse” of the collapse of Blockchain Alliance, as alleged by Shuster (right).

Whereas Shuster blames Denne, Momayez and Gantner for the collapse, Denne’s complaint alleges the opposite.

Denne’s Complaint begins by referencing an April 2022 Promissory Note agreement between Momayez and UI;

On or about April 11, 2022, Defendant Brian Shuster, on behalf of Defendant Utherverse., executed a Senior Secured Convertible Promissory Note with Plaintiff Nima Momayez.

This agreement was executed by Plaintiff Nima Momayes [sic] in Newport Beach, California.

Pursuant to this agreement, Plaintiff Nima Momayez transferred $1,350,000 to Defendant Utherverse.

Denne alleges Shuster didn’t repay back the note and instead “stole the funds”.

Therefore, on information and belief, Plaintiff Nima Momayez alleges that Defendant Brian Shuster never intended to honor the Promissory Note or repay the funds, but always intended to defraud and steal the money from Plaintiff Nima Momayez.

Denne then alleges breach of a “SAFT Agreement” (sale of tokens that don’t exist) for $12,000.

This agreement was executed by Plaintiff Joshua Denne in Huntington Beach, California. Plaintiff Blockchain Funding, Inc. fulfilled its obligations and made payment to Defendant Utherverse in accordance with the SAFT Agreement.

However, Defendant Brian Shuster now takes the position that Plaintiff Blockchain Funding, Inc. does not own any tokens whatsoever.

Therefore, on information and belief, Plaintiff Blockchain Funding, Inc. alleges that Defendants Brian Shuster and Utherverse never intended to fulfill their obligations under the SAFT Agreement and instead intended to defraud Plaintiff Blockchain Funding, Inc. of the money paid.

Denne claims, as of September 2024, the 360 million tokens he purchased through Blockchain Funding are worth $684 million.

A similar agreement through Masternode Partners, another company Denne owns, is alleged to have been executed in May 2022 for 150 million tokens for $5000.

Denne claims those tokens, again as of September 2024, are worth $285 million.

Through his company Blockchain Funding, Denne also claims to have purchases 2.8 million Utherverse Inc. shares for $350,000.

Plaintiff Blockchain Funding, Inc. fulfilled its obligations and provided $350,000.00 to Defendant Utherverse in accordance therewith; and Plaintiff Blockchain Funding, Inc. understood that ownership of the shares had been transferred accordingly.

However, Defendant Brian Shuster now takes the position that Plaintiff Blockchain Funding, Inc. does not own any shares whatsoever.

Therefore, on information and belief, Plaintiff Blockchain Funding, Inc. alleges that Defendants Brian Shuster and Utherverse never intended to transfer the shares, but instead intended to defraud Plaintiff Blockchain Funding, Inc. of the
$350,000.00.

Denne claims, as of September 2024, the purchased shares are worth $7 million.

An angle not brought up in Shuster’s Complaint is, after the Denne Plaintiffs allegedly spent $1.37 million to further the “business and operations of Utherverse”, Shuster

used Utherverse in a way that tied it to the pornography industry, which was severely detrimental to its reputation.

Denne doesn’t elaborate on the alleged use of Utherverse. I ran a search for “utherverse porn” and while a bunch of seemingly related utherverse porn links came up…

…I’m unclear on what specifically Denne is referring to.

In any event, Denne alleges he spent another $65,000 on a PR agency and $165,000 on “social media promotions” after Shuster’s alleged porn use of Utherverse.

Denne also claims UI’s ties to porn made it difficult to acquire “banking relationships”.

Prior to Plaintiff Joshua Denne’s involvement, Utherverse was experiencing difficulty securing a banking relationship due to Defendant Brian Shuster’s participation in the pornography industry.

However, Plaintiff Joshua Denne aided Utherverse in securing a reputable banking relationship with Fresno Bank, where Utherverse still banks to this day.

Denne reiterates the “disgruntled former employee spoils a $25 million investment” story, which Shuster claims is fictitious (Shuster claims the employee doesn’t exist).

Details of Shuster allegedly not cooperating with “experts” and executives Denne brought to Utherverse are also detailed.

First we have Todd Pritcher, who Denne cites as ” an expert on taking the necessary steps to make a company investable”;

Mr. Pritcher was unable to verify ownership of numerous patents that Defendant Brian Shuster had represented were owned by himself and Utherverse.

This realization was alarming, as Defendant Brian Shuster’s misrepresentations were relied upon by investors and left Utherverse with potential liabilities. Ultimately, despite this understanding, Defendant Brian Shuster refused to disclose these misrepresentations.

Then there’s Rob Hackett, an “accomplished CEO in the Web3 space”;

After four months, the CEO refused to continue working with Defendant Brian Shuster and resigned due to a lack of payment for his work, a lack of effective corporate governance, and a legitimate fear of liabilities.

Mr. Hackett is still owed $75,000 for his work on behalf of Defendants Brian Shuster and Utherverse.

Joseph Ramelli, Utherverse’s proposed CEO;

Brian Shuster refused to hire Mr. Ramelli, in an effort to maintain control over, and conceal, his misappropriation
of investor funds.

PCAOB accounting firm “to produce audited financial statements to enable the company to participate in crowdfunding”;

This initiative was accomplished; however, it was discovered that the company’s revenue was not $8-10 million per year—as Defendant Brian Shuster had previously represented, and which was relied upon by the parties in becoming involved with Utherverse and providing significant investment funding.

Rather, Utherverse’s revenue was less than $1.5 million per year. Additionally, the accounting firm was unable to confirm in any way that Defendant Brian Shuster had invested $45 million of his own funds—as he had previously represented, and which was relied upon by the parties in becoming involved with Utherverse and providing investment funding.

As to Shuster’s own hires, Denne alleges a developer was hired for $30,000 a month;

It was later discovered that this “Pro-Developer” was outsourcing the work overseas for $1,500 per month, submitting the work as his own, and keeping the remaining $28,500.

After allegedly missing “over twenty significant developmental deadlines … and over a dozen “launch dates”, Denne claims he “parted ways” with Shuster in April 2024.

During the separation process, Defendant Brian Shuster provided written acknowledgment of Plaintiff Joshua Denne’s efforts to further the development and success of Utherverse—including the monies spent on behalf of Utherverse, as well as Plaintiff Joshua Denne’s ownership of 510,000,000 tokens and 2,800,000 shares of Utherverse Inc.

Defendant Brian Shuster and Plaintiff Joshua Denne engaged in detailed discussions, both oral and in writing, regarding this separation, and Plaintiff Joshua Denne provided an additional $160,000 in furtherance of these efforts—which was paid to promotion groups in order to create the necessary settlement liquidity.

Unsurprisingly, after agreeing in writing on a detailed exit strategy for Plaintiffs, Defendant Brian Shuster reneged and took the position that Plaintiffs own nothing with regard to Utherverse.

Denne then alleges Shuster informed Utherverse investors that Denne has “committed fraud”.

In or about September 2024, Defendant Brian Shuster, as President and Chairman of Utherverse, Inc., sent formal letters to several of the investors …

In these letters, Defendant Brian Shuster falsely states that Plaintiff Joshua Denne committed fraud on the investors
of Utherverse.

Defendant Brian Shuster falsely claims that Plaintiff Joshua Denne fraudulently altered documents, stole investor funds, and stole Utherverse money and stock.

Defendant Brian Shuster implored recipients of these letters to keep it a secret and to “undertake any investigation, criminal reporting, and civil litigation against the fraudsters.”

Defendant Brian Shuster claims that he has all evidence of this alleged fraud and theft. Plaintiff Josua Denne denies the truth of these defamatory statements and alleges that Defendant Brian Shuster knew the falsity of these claims and the harm they would cause at the time he made them.

Denne further alleges Shuster

has used investor funds for his own personal gain, for purposes entirely unrelated to the business of Utherverse or the purposes for which the funds were provided.

Specific allegations of securities fraud by Shuster include

Defendant Brian Shuster is currently selling pre-sale tokens on a United States based non-SEC compliant and unregistered platform, which is owned by a US corporation and an individual.

Defendant Brian Shuster is currently taking token investments from nonaccredited US investors.

Defendant Brian Shuster is paying a commission and referral fees to US-based individuals for sales of Utherverse tokens.

Defendant Brian Shuster has taken equity investment from non-accredited US investors and also paid commissions to unlicensed individuals for investments.

One such non-accredited investor is Jennifer Chen, who has repeatedly requested that her $100,000 investment be returned for well over a year.

Defendant Brian Shuster continues to take investments in cash and cryptocurrency, but is not reporting the investments to the SEC, the IRS, or local tax authorities.

Defendant Brian Shuster is using Utherverse as a tool to launder money for himself and other criminal associates.

[These] fraudulent activit[ies] brings significant liability on Utherverse and its investors.

As part of our own research, BehindMLM noted Utherverse was seemingly committing securities fraud post business activities detailed in both lawsuits;

Defendant Ari Good is cited as a Florida attorney who allegedly

aided and conspired with Defendant Brian Shuster to defraud, and conceal and withhold funds obtained from, Plaintiffs.

Defendant Peter Gantner (right) is cited as another accomplice who

created a non-licensed platform to illegally and fraudulently sell tokens and receive commissions.

On multiple occasions Defendant Brian Shuster paid Defendant Peter Gantner commissions for selling Utherverse tokens and shares to non-accredited US investors.

On information and belief, Defendant Peter Gantner knowingly received funds fraudulently obtained from Plaintiffs.

Gantner’s company Nexus Venture is cited as a vehicle Shuster allegedly used to “launder money and misappropriate or hide funding from investors.”

Gary Shuster, Brian Shuster’s brother, is a third cited accomplice.

Defendant Gary Shuster is the brother of Defendant Brian Shuster, was the Chief Intellectual Property Officer of Defendant Utherverse Digital, Inc., and was General Counsel of Defendant Utherverse, Inc. Additionally, at all times relevant herein, on information and belief, Defendant Gary Shuster acted as a board member or manager of Defendant Utherverse Gaming.

Causes of action the Denne Plaintiffs are suing the UI defendants for are:

  1. fraud and deceit (all defendants);
  2. a civil claim violation of Penal Code Section 496(c) (all defendants);
  3. breach of fiduciary duty (all defendants); and
  4. defamation (all defendants)

The Denne Plaintiffs are seeking an injunction to freeze Shuster’s funds, appointment of a Utherverse Receiver, disgorgement of ill-gotten gains, damages and legal costs.

Looking at the case docket since November 8th, a Case Management Conference has been scheduled for April 8th, 2025.

It should be noted Shuster filed his Nevada case in an attempt to shift proceedings to federal court. In his Nevada Complaint Shuster indicated he didn’t intend to meaningfully participate in Denne’s California proceedings.

BehindMLM is tracking both dockets on our case calendar. Not that while we can track case updates, BehindMLM doesn’t have native access to Californian filings.