E-wallet company says credit card processor defrauded it.
E-wallet company says credit card processor failed to pay millions owed.
- Case Name: MH Pillars, Ltd. v. Payment World, LLC, et al.
- Court and Case Number: American Arbitration Association, International Centre for Dispute Resolution Case No. 01-16-0004-6934
- Date of Verdict or Judgment: Wednesday, May 02, 2018
- Date of Arbitration Award : Wednesday, May 02, 2018
- Date Action was Filed: Friday, January 15, 2016
- Type of Action: Breach of Contract, Fraud
- Judge or Arbitrator(s): M. Scott Donahey
- Plaintiffs: MH Pillars, Ltd.
- Defendants: Payment World, LLCRoman Balanko
- Type of Result: Arbitration Award
- Gross Verdict or Award: $20,733,285
- Net Verdict or Award: $20,733,285
- Award as to each Defendant:
Joint and several.
- Trial or Arbitration Time: 4 days.
- Attorney for the Plaintiff:
Pivtorak Law Firm by David Pivtorak, Los Angeles.
- Attorney for the Defendant:
Gabriel Law Group PC by Jonathan Gabriel, Encino.
Alpert Law Group, APC by Jeffrey Alpert, Encino.
Facts and Background
- Facts and Background:
M.H. Pillars, Ltd. (“MHP”) is an e-wallet company which runs a website similar to PayPal. E-wallet companies normally can’t process customers’ credit card transactions directly for regulatory reasons so they have to contract with third parties that have existing connections to Visa/MasterCard approved banks.
MHP agreed to utilize a company named PaymentWorld in Orange County as its processor. After more than $20 million owing to MHP had accumulated in overseas bank accounts, PaymentWorld stopped sending the funds owed to MHP under their agreement. MHP demanded their funds and this dispute arose. For the first time, PaymentWorld asserted that it never had a contractual relationship with MHP. Apparently, the contracts signed by MHP were purportedly with foreign entities also bearing the PaymentWorld name which were owned by Russian and Moldovan nationals.
- Plaintiff's Contentions:
That PaymentWorld and its owner, Balanko, knew that MHP would not entrust its customers’ money to Russian businessmen who had no ties to North America and could disappear into the lawless fog of Eastern Europe. So he concealed their true identities by giving these various entities the same PaymentWorld name and used the same logo and markers for all of them, making them indistinguishable to anyone unfamiliar with the scheme. MHP was deceived long enough for the relevant bank accounts to be drained and the alleged perpetrators to vanish.
Further, defendant's claim that it was also a victim was contradicted by the carefully arranged structure of the various PaymentWorld entities and the repeated representations by PW-USA and Balanko himself throughout their dealings with MHP that these were all the same entity.
- Defendant's Contentions:
PaymentWorld claimed it was also a victim that was left holding the bag.