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This case was last updated from PACER on 05/01/2021 at 09:45:46 (UTC).

Securities and Exchange Commission v. Airborne Wireless Network et al

Case Summary

On March 2, 2021, the Securities and Exchange Commission (“SEC”), represented by David Misler, attorney with the Securities and Exchange Commission (DC), filed a civil enforcement action against Airborne Wireless Network (“Airborne”), Kalistratos “Kelly” Kabilafkas, also known as Mark McKinney (“Kabilafkas”), Timoleon Kabilafkas (“Tim Kabilafkas”), Chrysilios Chrysiliou (“Chrysiliou”), Panagiotis Bolovis (“Bolovis”) and others (collectively, “Defendants”) seeking injunctive relief, disgorgement of ill-gotten gains among other reliefs in connection with an alleged fraudulent scheme to gain control of Airborne Wireless Network, promote its stock, and defraud investors. This case was filed in U.S. District Court in the Southern District of New York. 

 

In its complaint, the SEC alleged that “Between August 2015 and at least May 2018, Kelly Kabilafkas orchestrated a scheme to defraud market participants, including retail investors in this district, using a publicly traded company, Airborne Wireless Network, which he secretly controlled. Kabilafkas launched the scheme by covertly acquiring millions of Airborne shares, then arranging to deceive brokers and a transfer agent so he and his associates could deposit those shares in their brokerage accounts and sell them. The fraud culminated when Kabilafkas, Daniels, and Airborne inflated the company’s stock price through multi-million dollar promotional campaigns, allowing Kabilafkas and his associates to reap $23 million by dumping the shares, obtained for a small fraction of that amount, on an unsuspecting market. During the same time, Airborne also raised over $22 million from investors while its public filings contained numerous material misstatements and omissions. Together, Defendants netted over $45 million in illicit proceeds.”

 

The SEC further alleged that “In October 2015, Kabilafkas bought all the issued and outstanding stock in the public shell company, Ample-Tee, Inc. (“Ample-Tee”), which ultimately became Airborne. More specifically, Kabilafkas bought both the control block of about 84.1 million restricted shares (“Restricted Shares”) and about 30 million shares that had purportedly been issued to about 30 residents of Thailand (“Thai Shareholders”) in a 2013 distribution submitted on Form S-1 (“S-1 Shares”). In fact, the Thai Shareholders were simply nominees who never owned the stock and did not interact with the Defendants. The S-1 Shares did not bear restrictive legends, meaning that, unlike the Restricted Shares, these shares could be deposited and sold more easily.” and even further that “Kabilafkas repeatedly made false and misleading statements and engaged in additional deceptive conduct to conceal his involvement with, and controlling interest in, Ample- Tee. Among other things, Kabilafkas funneled the funds he used to purchase Ample-Tee’s shares through a bank account in the name of a charitable religious organization, and he placed the Restricted Shares in the name of his nominee CEO, Daniels.”

 

There are five claims for relief laid down by the SEC. The first claim is for alleged violations of Section 17(a)(1) and (3) of the Securities Act, other claims are for violations of Section 17(a)(2) of the Securities Act against Airborne Wireless Network, Kabilafkas, Tim Kabilafkas, Chrysiliou, Bolovis, and Scheffey, Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder, Control Person Liability Under Exchange Act Section 20(A) for Violations of Exchange Act Section 10(B) and Rule 10B-5 Thereunder against defendant Kalistratos Kabilafkas and Unjust Enrichment Liability.

 

In its prayer for relief, the SEC has requested the court to order injunctive relief against Defendants, barring Defendants from participating in an offering of penny stock, ordering Defendants to disgorge all ill-gotten gains with pre-judgment interest. The SEC further requested the court to order Defendants to pay civil penalties along with costs of litigation.  

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-01772

  • Filing Date:

    03/02/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Court:

    U.S. District Courts

  • Courthouse:

    New York Southern District

Judge Details

Presiding Judge

Colleen McMahon

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

Kalistratos Kabilafkas

Timoleon Kabilafkas

Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001

Airborne Wireless Network

Kelly Kabilafkas

Chrysilios Chrysiliou

Tim Kabilafkas

Mark McKinney

Jack Edward Daniels

Magdaline Kabilafkas, in her capacity as trustee of the Magdaline Kabilafkas 1989 Trust Dated May 27, 1989

Panagiotis Bolovis

Eric Scheffey

Moshe Rabin

Attorney/Law Firm Details

Plaintiff Attorneys

David Misler

Attorney at Securities and Exchange Commission (DC)

100 F Street, N.E.

Washington, DC 20549

Stephan Jacob Schlegelmilch

Attorney at Securities and Exchange Commission

100 F Street, N.W.

Washington, DC 20549

Defendant Attorneys

Pamela Lauren Schoenberg

Attorney at Reed Smith LLP

599 Lexington Ave.

New York, NY 10128

Charles Hyun

Attorney at Reed Smith

1901 Avenue Of The Stars, Suite 700

Los Angeles, CA 90067

James Sanders

Attorney at Reed Smith LLP

7Th Floor, 1901 Century Park East

Los Angeles, CA 90067

Robert Norman Knuts

Attorney at Sher Tremonte LLP

90 Broad Street

New York, NY 10004

Eugene I. Goldman

Attorney at McDermott Will & Emery LLP

500 North Capitol Street Nw

Washington, DC 20001

Michael Robert Huttenlocher, Jr.

Attorney at McDermott, Will & Emery, LLP (NY)

340 Madison Avenue

New York, NY 10173

Matthew E. Beck

Attorney at Chiesa Shahinian & Giantomasi PC

One Boland Drive

West Orange, NJ 07052

 

Court Documents

#22

No Description Available

#1

(#1) COMPLAINT against Airborne Wireless Network, Panagiotis Bolovis, Chrysilios Chrysiliou, Jack Edward Daniels, Kalistratos Kabilafkas, Timoleon Kabilafkas, Magdaline Kabilafkas, in her capacity as trustee of the Magdaline Kabilafkas 1989 Trust Dated May 27, 1989, Moshe Rabin, Eric Scheffey, Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/02/2021)

#43

(#43) CONSENT LETTER MOTION for Extension of Time to File Answer addressed to Judge Colleen McMahon from Robert Knuts dated April 29, 2021. Document filed by Airborne Wireless Network..(Knuts, Robert) (Entered: 04/29/2021)

#40

(#40) ORDER FOR ADMISSION PRO HAC VICE OF JAMES L. SANDERS granting #38 Motion for James L. Sanders to Appear Pro Hac Vice. (As further set forth in this Order.) (Signed by Judge Colleen McMahon on 4/29/2021) (cf) (Entered: 04/29/2021)

#36

(#36) ORDER granting #34 Letter Motion for Leave to File Excess Pages. OK. (Signed by Judge Colleen McMahon on 4/19/2021) (cf) (Entered: 04/19/2021)

#35

No Description Available

#34

(#36) ORDER granting #34 Letter Motion for Leave to File Excess Pages. OK. (Signed by Judge Colleen McMahon on 4/19/2021) (cf) (Entered: 04/19/2021)

#32

No Description Available

#31

No Description Available

#27

No Description Available

#19

No Description Available

#18

No Description Available

#9

No Description Available

#6

(#6) WAIVER OF SERVICE RETURNED EXECUTED. Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001 waiver sent on 3/2/2021, answer due 5/3/2021. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/03/2021)

#5

(#5) WAIVER OF SERVICE RETURNED EXECUTED. Timoleon Kabilafkas waiver sent on 3/2/2021, answer due 5/3/2021. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/03/2021)

30 More Documents Available
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Docket Entries

  • 04/30/2021
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  • Docket(#44) ORDER granting #43 CONSENT LETTER MOTION for Extension of Time to File Answer addressed to Judge Colleen McMahon from Robert Knuts dated April 29, 2021. OK. Airborne Wireless Network answer due 5/10/2021. (Signed by Judge Colleen McMahon on 4/30/2021) (mml) (Entered: 04/30/2021)

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  • 04/29/2021
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  • Docket(#43) CONSENT LETTER MOTION for Extension of Time to File Answer addressed to Judge Colleen McMahon from Robert Knuts dated April 29, 2021. Document filed by Airborne Wireless Network..(Knuts, Robert) (Entered: 04/29/2021)

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  • 04/29/2021
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  • Docket(#42) NOTICE OF APPEARANCE by Robert Norman Knuts on behalf of Airborne Wireless Network..(Knuts, Robert) (Entered: 04/29/2021)

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  • 04/29/2021
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  • Docket(#41) ORDER FOR ADMISSION PRO HAC VICE OF CHARLES P. HYUN granting #39 Motion for Charles P. Hyun to Appear Pro Hac Vice. (As further set forth in this Order.) (Signed by Judge Colleen McMahon on 4/29/2021) (cf) (Entered: 04/29/2021)

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  • 04/29/2021
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  • Docket(#40) ORDER FOR ADMISSION PRO HAC VICE OF JAMES L. SANDERS granting #38 Motion for James L. Sanders to Appear Pro Hac Vice. (As further set forth in this Order.) (Signed by Judge Colleen McMahon on 4/29/2021) (cf) (Entered: 04/29/2021)

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  • 04/29/2021
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  • Docket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #39 MOTION for Charles P. Hyun to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number BNYSDC-24467462. Motion and supporting papers to be reviewed by Clerk's Office staff., #38 MOTION for James L. Sanders to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-24467420. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (wb) (Entered: 04/29/2021)

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  • 04/28/2021
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  • Docket(#39) MOTION for Charles P. Hyun to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number BNYSDC-24467462. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Kalistratos Kabilafkas, Timoleon Kabilafkas, Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001. (Attachments: #1 Affidavit in Support, #2 Certificate of Good Standing (CA), #3 Text of Proposed Order).(Hyun, Charles) (Entered: 04/28/2021)

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  • 04/28/2021
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  • Docket(#38) MOTION for James L. Sanders to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-24467420. Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Kalistratos Kabilafkas, Timoleon Kabilafkas, Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001. (Attachments: #1 Affidavit in Support, #2 Certificate of Good Standing (CA), #3 Certificate of Good Standing (IL), #4 Text of Proposed Order).(Sanders, James) (Entered: 04/28/2021)

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  • 04/26/2021
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  • Docket(#37) ORDER SCHEDULING AN INITIAL PRETRIAL CONFERENCE: It is hereby, ORDERED asfollows: Counsel receiving this order shall contact all counsel of record (or where a party is not yet represented, such party) and, if necessary, provide them with a copy of this order. If a conforming case management plan is submitted at least two business days prior to the scheduled initial conference and subsequently approved by the Court, the initial conference will be canceled automatically. If a motion has been filed either before or after the case management plan is approved, and the parties desire a conference, a letter must be submitted to the Court via fax specifically asking that the initial conference not be canceled. If the parties fail to agree upon such a plan or fail to submit the plan to the Court within the time provided (at least two business days before the conference date), the parties must participate in a telephone conference on 7/15/2021 at 10:30 a.m. Parties should dial in at 1(888)363-4749, access code (9054506) to join the conference. ( Initial Conference set for 7/15/2021 at 10:30 AM before Judge Colleen McMahon.) (Signed by Judge Colleen McMahon on 4/26/21) (yv) (Entered: 04/26/2021)

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  • 04/19/2021
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  • Docket(#36) ORDER granting #34 Letter Motion for Leave to File Excess Pages. OK. (Signed by Judge Colleen McMahon on 4/19/2021) (cf) (Entered: 04/19/2021)

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33 More Docket Entries
  • 03/03/2021
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  • Docket(#6) WAIVER OF SERVICE RETURNED EXECUTED. Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001 waiver sent on 3/2/2021, answer due 5/3/2021. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/03/2021)

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  • 03/03/2021
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  • Docket(#5) WAIVER OF SERVICE RETURNED EXECUTED. Timoleon Kabilafkas waiver sent on 3/2/2021, answer due 5/3/2021. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/03/2021)

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  • 03/03/2021
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  • Docket(#4) WAIVER OF SERVICE RETURNED EXECUTED. Kalistratos Kabilafkas waiver sent on 3/2/2021, answer due 5/3/2021. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/03/2021)

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  • 03/03/2021
  • DocketCase Designated ECF. (gp) (Entered: 03/03/2021)

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  • 03/03/2021
  • DocketMagistrate Judge Gabriel W. Gorenstein is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (gp) (Entered: 03/03/2021)

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  • 03/03/2021
  • DocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Colleen McMahon. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(gp) (Entered: 03/03/2021)

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  • 03/02/2021
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  • Docket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #3 MOTION for David Misler to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (wb) (Entered: 03/02/2021)

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  • 03/02/2021
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  • Docket(#3) MOTION for David Misler to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Securities and Exchange Commission. (Attachments: #1 Affidavit, #2 Text of Proposed Order, #3 Exhibit Certificate of Good Standing (DC), #4 Exhibit Certificate of Good Standing (MD)).(Misler, David) (Entered: 03/02/2021)

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  • 03/02/2021
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  • Docket(#2) CIVIL COVER SHEET filed..(Misler, David) (Entered: 03/02/2021)

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  • 03/02/2021
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  • Docket(#1) COMPLAINT against Airborne Wireless Network, Panagiotis Bolovis, Chrysilios Chrysiliou, Jack Edward Daniels, Kalistratos Kabilafkas, Timoleon Kabilafkas, Magdaline Kabilafkas, in her capacity as trustee of the Magdaline Kabilafkas 1989 Trust Dated May 27, 1989, Moshe Rabin, Eric Scheffey, Timoleon Kabilafkas, in his capacity as trustee of the Tim Kabilafkas Revocable Trust Dated July 24, 2001. Document filed by Securities and Exchange Commission..(Misler, David) (Entered: 03/02/2021)

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