Evil Angel has announced several recent actions it has taken to combat alleged piracy of its DVDs. The actions until now had been kept under seal due to various legal and tactical reasons.
On September 15, 2005, John Stagliano, Inc. and Evil Angel Productions, represented by their attorney Allan Gelbard, filed suit, under seal, in the United States District Court for the Central District of California against three Canadian individuals, Alain Elmaleh, Jacky Elkeslassy and Gerald Ouzzan, and five corporate entities, 144942 Canada Inc. dba Kaytel Video Distribution, Leisure Time, Canada, Inc., Transworld Sales Agency Ltd., Jacky's One Stop Distribution and Sylnet Distribution, Inc.
The complaint alleges numerous federal and state causes of action, including copyright and trademark infringement, asserting that defendants knowingly engaged in the manufacture and distribution of counterfeit copies of Evil Angel DVDs. The complaint includes additional causes of action under the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO) alleging mail fraud, wire fraud and money laundering. The complaint seeks unspecified damages and injunctive relief.
Evil Angel’s attorney filed this case under seal, and obtained an ex-parte Temporary Restraining Order including seizure provisions, which authorized Evil Angel’s attorneys and representatives to enter various locations in Canada, to seize counterfeit products and to seize relevant computer data, documents and other related electronic records.
Elmaleh, owner of the Montreal-based Kaytel Video Distribution, told AVN.com all of Evil Angel’s allegations are completely false.
“They came to my company with a big, huge van and they left with a box of invoices under their arm,” Elmaleh said. “I’ve been a reputable company for 22 years. I own about 4200 licenses. I contract everything and I submit everything to a government censor board so there is no margin for error. I buy 40 to 50 licenses every month. We bought all that product from their own duly authorized Canadian distributors."
He continued, “The RICO thing is a very, very serious accusation. We intend to not only contest that vigorously, but we have also served them with a countersuit in Canada. On the legal advice of my attorney here in Canada I am now handing the file over to my U.S attorney to counter-sue Evil Angel in the States and the lawyer who drafted that document based on the RICO law.”
On October 17, 2005, Evil Angel, through Canadian counsel, filed an action in Canadian Federal Court in Montreal, Quebec seeking to effectuate the Seizure Order and to further enjoin the defendants’ Canadian activities. This action was also filed under seal. Canadian counsel, accompanied and assisted by Evil Angel’s U.S. counsel, were granted an ex-parte Anton Piller Order which authorized Evil Angel's representatives, their U.S. and Canadian attorneys, forensic information technology experts and Canadian bailiffs to enter and search defendants’ premises, to seize counterfeit goods, masters and evidence and to copy physical and electronic records. Ex-parte means "without notice."
On October 18, 2005 multiple coordinated searches were commenced in Canada pursuant to the U.S. and Canadian Orders. Evil Angel is seeking leave from the Canadian court to use the seized evidence in the U.S. action.
On November 1, 2005, the parties agreed to convert the Temporary Restraining Order in the U.S. action into a Preliminary Injunction.
A preliminary injunction is a temporary court order commanding or preventing a specific action. U The purpose is to prevent major injury or damage from occurring while the court is deciding the case.
On November 23, 2005, the United States District Court lifted the seal on the U.S. proceedings.
"We’ll be proceeding in Canada to obtain the right to use any evidence seized in Canada and the U.S. actions," Gelbard said. "We'll be proceeding in the U.S. action commencing discovery. I anticipate there will be some heavy discovery and heavy motions practices going on. I think any trial is about a year out."
Kaytel’s defense in the federal court of Canada alleges that all the affidavits provided in the lawsuit brought by Evil Angel are false, said Elmaleh’s Canadian attorney, Serg Segal.
“Mr. Elmaleh maintains that these are totally fabricated and false charges and they shall be vigorously contested here in Canada,” Segal said. “We are confident the plaintiffs shall fail. We have no way of losing this case.
“... The RICO allegation is absolutely abusive, negligent, and totally false with not one iota of documents in support.”
Segal continued, “In their suit, they have for example alleged that Kaytel has an overseas account. There is no such thing. They did not provide one account number. They are full of shit in plain English. ... They accuse Kaytel of racketeering. They have not one iota of proof. They got an order and came to his warehouse surreptitiously without telling them ahead of time. This is a huge place. It is not a fly-by-night operation. There are real human beings who built this thing over 21 years. There are 4,000 films here he bought and paid for from U.S distributors. These people came in this building and didn’t find one single copied DVD.”
Segal said that the identification numbers that authorities were searching for during the raid actually corresponded with VHS tapes, and not DVDs.
Segal added, “They have introduced one single invoice that would appear it was initiated here on the premises that was faxed to DVD Concepts in California. Why did they produce that? To obtain some jurisdiction. It was a single sheet of paper that looked like a kindergarten child’s work. It looked like a collage. … We have the proof that [the invoice] was sent to another company in New York. We traced back the telephone fax report of that particular invoice, and it was never sent to California.”
