ML-Implode Author Files Devastating “anti-SLAPP” Against Hedge Fraudster Gilabert

After about a year’s hiatus, Implode readers are privileged to be entertained by further drama in the saga of Keith Gilabert vs. Implode.  (The impatient may grab the anti-SLAPP motion filed against Gilabert and skip the remainder of this post).

For starters, it’s interesting to note that Gilabert’s collaborator (in a “feeder” capacity), Justin Paperny, has come completely clean, admitted to his part in and the overall fraud, and totally reformed himself.   Yet, despite pleading guilty in the same scheme, Gilabert is still running around denying that the whole thing ever happened.

Regulars may remember that towards the end of 2011, Gilabert awoke from his “slumber” (that is, 5 years in federal prison for hedge fund Ponzi fraud) and went ballistic when he noticed a “squib” about his case on HF-Implode.com. He threatened Implode founder Aaron Krowne by email, demanding the piece be taken down, despite it consisting of nothing more than a basic description of his case from the federal filings and press releases (Gilabert was punished not only by the Department of Justice but the SEC as well).  (This sort of frivolous libel threat is called a “SLAPP“.)

Not having the financial resources for a fight after four previous frivolous SLAPP suits from various mortgage industry offenders and neer-do-wells (see here, here, and here), Krowne did take down the post, but in its place, put a copy of Gilabert’s outlandish take-down letter and an explanation so readers would know why the piece was gone (and maybe learn a little bit about the lack of practical free speech available to small-time publishers in our country).  Logue re-posted the “squib” on her site, and Krowne linked to that instead.

Logue then wrote additional text underscoring the veracity of her original piece on Gilabert.

In other words, Gilabert’s efforts at intimidation had completely backfired.

(That’s the thing about SLAPP suits — when they work (perhaps most of the time) to silence free speech, they work great, but when they fail, they fail big, and they may very well backfire horribly publicly-wise, and even bury the plaintiff permanently).

Infuriated by the sites’ refusal to completely censor themselves at his whim, Gilabert threatened to file suit. Nothing was done for a year (as it turns out, past California’s statute of limitations for libel), and then belatedly, Gilabert filed suit against Logue, Krowne, and a semi-legible smattering of web site domain names.

Notably, Gilabert filed a self-serving wire press release at the same time as filing his complaint (we won’t link to it and help his cause of “astroturfing” to create a fake positive reputation for himself), portraying himself as a victim merely “trying to clear his good name” from the mean ol’ bloggers (somehow) profiting from defaming him.

While Gilabert never properly served either Krowne or Logue, the defendants were serious about pushing back against Gilabert’s blatant anti-free speech, financial fraud-burying harassment. Logue hired an excellent free speech lawyer, and Krowne (currently a law student and appreciative for the “internship” opportunity) helped put together the filings.

Logue, not a California resident, filed a reply and “removed” the suit to federal court. Gilabert’s outlandish claim of “$10 million” in emotional distress injuries actually assisted this move, since federal courts require a dispute of at least $75,000 to assert diversity jurisdiction (big tactical error, frivolous libel plaintiffs!)

Seeing that the defendants were serious (and presumably, cr*pping his pants thereupon), Gilabert quickly filed a voluntary motion for dismissal without prejudice.  (Besides, he had already achieved his goal of having a filed complaint upon which to base his self-serving press release).

What Gilabert did not realize is that courts (especially federal courts) do not like their time wasted on patently frivolous suits, especially from incorrigible felons like Gilabert (e.g., Gilabert violated his own conditions of bond by ham-handedly attempting to hide assets from the FBI while his case was pending) and have created a variety of tools to disincentivize and punish frivolous litigation behavior.

One of these is California’s “anti-SLAPP” law, which creates a special type of dismissal for frivolous libel suits. This dismissal is with prejudice (which means the plaintiff cannot re-file) and, importantly, awards costs to the defendants.

The defendants, via Logue, have now filed a California anti-SLAPP motion to strike, and you, dear readers, now get the privilege of reading this very informative, and entertaining document.