Christopher Mallick Ordered to Pay $12 Million in Fraud Suit

LOS ANGELES—A Los Angeles judge has granted a motion to enforce a settlement agreement filed by the plaintiff in Fire Glow Holdings Inc. v. Christopher Mallick. Friday, Los Angeles Superior Court Judge Maureen Duffy-Lewis entered a final consent judgment against the former Epoch/Paycom and ePassporte principal in the amount of $12 million.

According to Law360, "The trust company's managing director, Greg Elias, alleged Christopher Mallick had lied about the purpose of a $15 million loan and the value of his own holdings, including defunct electronic transfer company ePassporte, before blowing the loan on a botched film project."

That project, according to the article, was the "notorious flop Middle Men, a fictionalized telling of his rise to fortune through the creation of an online payments processing company, ePassporte, which became ubiquitous as a method of payment for pornography websites." (In point of fact, ePassporte was not a consumer service, but a B-to-B payment service).

The Law360 article continues, "In Fire Glow's complaint, filed in September 2011, investor Greg Elias alleges that Mallick solicited the loan from Elias by saying that he needed the money to pay off a divorce settlement with his ex-wife. The defendant said he would give Elias a cut of ePassporte's cash flow while the loan remained outstanding, and that the potential sale of the company — which Mallick claimed had been valued by a potential buyer at $80 million — would cover Mallick's debt, Elias alleged.

"But the plaintiff said media reports in September 2010 showed that Visa Inc. had severed its relationship with ePassporte, with Mallick's company dissolving the next month," it added.

According to Fire Glow's motion, Mallick in March 2013 agreed to settlement terms that included a $12 million promissory note, but "the producer failed to make the payments due under the arrangement."

Contesting those claims, Mallick, in an opposition to the motion to enforce the settlement, "argues that Fire Glow 'surreptitiously interjected' language into the consent judgment that contradicts their express agreement not to find him liable for wrongdoing, and thus allow Fire Glow to recover judgment on its fraud charge—rending the debt nondischargeable in bankruptcy."

That argument went nowhere, however, and on Friday Judge Duffy-Lewis granted the Fire Glow motion and "entered the consent judgment requiring Mallick to pay the $12 million."

Law360 also reported that Mallick has another trial to look forward to next year, one even more directly associated with his role in the disintegration of ePassporte, which officially shuttered its doors in October 2010, leaving in its wake innumerable embittered webmasters.

Mallick, the legal resource reported, is "scheduled to appear in Los Angeles Court for a 2015 trial for failing to abide by the terms of a promissory note made to an alleged ePassporte victim, whereby the plaintiff's family member is alleged to have died due to lack of medication, as a direct or proximate cause of Christopher Mallick's negligence."