Defendants allegedly lie about merger during litigation

Quick Take

  • Ball and Toth v. DG Rollins, et al.
  • Ball and Toth ordered 43 bitcoin miners for $200K in 2014 and never received the miners or the reimbursement promised in the purchase agreement
  • Plaintiffs bring a lawsuit against Miner Hosting, which is ordered to pay $263k, but the company doesn’t have any money
  • The earlier dismissal of DG Rollins was allegedly fraudulently obtained by hiding the merger of DG Rollins and Miner Hosting
  • The owners of DG Rollins and Miner Hosting allegedly put together a straw buyer, the deliciously named Snickers #1, LLC, to attempt to hide their corporate merger

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP".

[related id=1]Ball and Toth v. DG Rollins, et al., 3:19-cv-00242 (D. Ore., C19–92-RAJ, 2/18/2019) [NMR]

Lying is bad. Everyone knows it, and we talk about lying here all the time, but the context surrounding your lies can be very important. For example, you really do not, under any circumstances whatsoever, unless you’ve lost your mind, want to lie during litigation. And yet…

This lawsuit involves some alleged lies in litigation to get a defendant dismissed from a lawsuit. There are a lot of players in this lawsuit, but thankfully it is not super necessary to lay out all of the various actors in this drama. What you should know is that the plaintiffs, Ball and Toth, pre-ordered 43 bitcoin miners in 2014 from a now defunct crypto mining company, Miner Hosting, for $200,000. Those miners were never delivered, because Miner Hosting encountered funding problems. As part of the purchase agreement the plaintiffs were due a full refund, which was, no surprise, never honored.

Consequently, the plaintiffs filed a lawsuit in 2016 to get compensated for the pre-ordered miners that never arrived. That lawsuit was resolved with the plaintiffs “obtain[ing] a judgment against Miner Hosting in the amount of $263,504.62.” Since Miner Hosting was declared bankrupt the plaintiffs were unable to collect that judgment.

During the previous litigation, the plaintiffs dismissed another company, DG Rollins, from the lawsuit. That dismissal was predicated on the defendants, the owners of Miner Hosting (the Carsons) and DG Rollins (the Murthas), denying that they had merged Miner Hosting with DG Rollins. Turns out that denial may have been a lie.


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