Contract analysis

I. Executive Summary On January 10, 2024, the Honorable Eleanor Vasquez, J.S.C., entered judgment in the Supreme Court of the State of New York, County of New York, Commercial Division, in favor of our client, Driftwood Absolute Return Fund Ltd. ("Driftwood" or "DARF"), and against Meridian Prime Capital LLC ("Meridian Prime" or "MPC"), Viktor Andreyevich Zelenko ("Zelenko"), Irene Maria Carvallo ("Carvallo"), and Dm

II. Background A. The Fraud Scheme and Judgment Debtor Structure Meridian Prime Capital LLC is a New York limited liability company formed on March 14, 2019, with a registered address at 140 Broadway, Suite 3510, New York, NY 10005. Its Employer Identification Number is 84-3217659. From its formation through the period of the fraudulent scheme, Meridian Prime held itself out as a foreign exchange trading and investme

III. Recovery Target 1: Meridian Prime Accounts at Bridgemont Bank NA A. Description of Assets Bridgemont Bank NA is a national banking association with its principal office at 383 Madison Avenue, New York, NY 10179. Meridian Prime maintained its primary operating account and one or more client accounts at Bridgemont throughout the fraud period. These accounts were used to receive Driftwood's margin deposits and sett

IV. Recovery Target 2: Zelenko Family Irrevocable Trust at Marlowe Asset Management Trust Company of Delaware A. Description of Assets The Zelenko Family Irrevocable Trust was established by Viktor Zelenko as settlor on April 8, 2021, and bears Tax ID 86-6092411. The trust is administered by the Marlowe Asset Management Trust Company of Delaware, located at 1201 North Market Street, Suite 1600, Wilmington, DE 19801.

1. Information Subpoena. Serve an information subpoena under CPLR § 5224 on Marlowe Asset Management Trust Company of Delaware to obtain complete documentation regarding the trust, including: the trust instrument and all amendments thereto; all account statements from inception; all transaction records reflecting deposits, withdrawals, transfers, and distributions; the identity of all beneficiaries and any persons wi

2. Fraudulent Conveyance Action. File a fraudulent conveyance action under NYDCL §§ 273–276 against the Zelenko Family Irrevocable Trust and Marlowe Asset Management Trust Company of Delaware, in its capacity as trustee. The action should seek: (a) a declaration that the transfers to the trust are void as to Driftwood; (b) an order directing the trustee to turn over the trust assets to Driftwood; and (c) a money judg

3. CPLR § 5227 Turnover Motion. Simultaneously with the fraudulent conveyance action, file a turnover motion under CPLR § 5227 directed at Marlowe Asset Management Trust Company, compelling the trustee to turn over trust assets as property in which the judgment debtor Zelenko holds an interest.

4. Continued Freeze. Seek an order from the court confirming that the existing preliminary injunction and restraining notices extend to the trust assets, or, if necessary, obtain a supplemental restraining order specifically directed at the trust. Ensure that Marlowe Asset Management Trust Company is on notice and has acknowledged the restraint. D. Potential Obstacles Several obstacles may complicate enforcement agai

V. Recovery Target 3: Stellaris Trading Ltd. Accounts at Palmetto International Bank Ltd. (Offshore) A. Description of Assets Stellaris Trading Ltd. is a British Virgin Islands business company bearing Registration No. 2043871, incorporated on February 22, 2021. It is controlled by Viktor Zelenko. Stellaris has no apparent business purpose other than to serve as a vehicle for receiving and holding funds diverted from

VI. Recovery Target 4: Real Property Held Through Castellan Realty Holdings LLC A. Description of Assets Castellan Realty Holdings LLC is a Delaware limited liability company bearing EIN 87-1548203. Its registered address is c/o Viktor Zelenko, 425 East 58th Street, Apartment 32F, New York, NY 10022. Like Stellaris Trading and the Zelenko Family Irrevocable Trust, Castellan Realty appears to be a Zelenko-controlled e

1. Petition for Appointment of Receiver. File a petition for the appointment of a receiver over both Meridian Prime Capital LLC and Castellan Realty Holdings LLC, with authority to marshal, manage, and liquidate assets including both real properties. The receivership should encompass all assets of both entities, including any bank accounts, receivables, or other property not yet identified. We propose nominating Barr

2. Receiver's Powers. The proposed receivership order should empower the receiver to: (a) take immediate possession of both properties and all books and records of Castellan Realty; (b) manage and maintain the properties pending sale, including engaging property management services and collecting any rents or other income; (c) engage licensed real estate brokers and conduct marketing of the properties for sale; (d) s

3. Lis Pendens. File notices of pendency (lis pendens) against both properties with the New York County Clerk's Office. The lis pendens will provide constructive notice to all prospective purchasers, lenders, and other parties that the properties are subject to pending litigation and enforcement proceedings, and will effectively prevent any sale or encumbrance of the properties without court knowledge and approval.

4. Fraudulent Conveyance Action. Include Castellan Realty Holdings LLC as a party defendant in the fraudulent conveyance action filed under NYDCL §§ 273–276 (which will also name the Zelenko Family Irrevocable Trust and its trustee, as discussed in Section IV.C above). Seek a declaration that the transfers to Castellan Realty are void as to Driftwood and that Driftwood is entitled to the imposition of a constructive

5. Title Search. Commission a full title search for both properties to identify any existing encumbrances, including mortgages, mechanics' liens, tax liens, or other claims that may have priority over Driftwood's interests. This information is critical to accurately estimating the net recovery available from the properties. D. Potential Obstacles • Encumbrances. The properties may be subject to existing mortgages or

VII. Recovery Target 5: Potential Cryptocurrency Holdings A. Basis for Suspicion The Kelvantis Report identified $5.1 million in cash withdrawals and personal expenditures by the defendants that were not traced to identifiable asset repositories. A portion of these funds may have been converted to cryptocurrency or other digital assets. Several factors support this suspicion: • Zelenko's Sophistication. Zelenko's bac

1. CPLR § 5223 Post-Judgment Disclosure Examination. Schedule post-judgment disclosure examinations of Zelenko, Carvallo, and Sobchak. Include detailed questions and interrogatories regarding: all cryptocurrency holdings, including Bitcoin, Ethereum, stablecoins, and any other digital assets; all cryptocurrency wallets, whether custodial or self-custodied (hardware wallets, software wallets, paper wallets); all accou

2. Subpoenas to Cryptocurrency Exchanges. Serve subpoenas under CPLR § 5224 on major cryptocurrency exchanges and custodians — including Northpoint Corporation, Stonefield & Co., Hollowell Industries (Cobalt Ridge Group), and Marlowe Holdings (Kestrel & Co.) — for records associated with the defendants' names, known email addresses, phone numbers, Social Security numbers, and any other identifying information. These

4. Turnover Orders. If cryptocurrency holdings are identified — whether held at exchanges, in custodial wallets, or in self-custodied wallets — seek turnover orders under CPLR § 5225. For exchange-held cryptocurrency, a turnover order directed at the exchange will be effective. For self-custodied cryptocurrency, enforcement will depend on obtaining the private keys or compelling the judgment debtor to transfer the as

VIII. Recovery Target 6: Other Personal Assets of Individual Defendants A. Viktor Andreyevich Zelenko Zelenko is the primary architect of the fraud and the individual against whom the greatest recovery potential exists. In addition to the assets held through his controlled entities (Stellaris, the Zelenko Family Irrevocable Trust, and Castellan Realty) and any cryptocurrency holdings, Zelenko may have substantial per