On Friday, September 4, 2026, Judge Lewis A. Kaplan of the US District Court for the Southern District of New York granted motions to dismiss filed by defendants Michael Pearson and BCube Tech, LLC, in a case involving an alleged cryptocurrency fraud. The ruling also dismissed unjust enrichment and civil RICO claims against all defendants.
The lawsuit was initiated by plaintiff Joseph Mercola, who claims he was defrauded of approximately $10 million worth of Ethereum (ETH). Mercola alleges that John Edward Gliha, also known as John J. Singleton, introduced him to Viji Varghese in April 2024, vouching for Varghese’s expertise in finance and cryptocurrency. Varghese then offered to manage Mercola’s Ethereum in exchange for a percentage of profits and proposed converting some of the cryptocurrency into gold.
Mercola transferred 3,353.4 ETH, valued at around $10 million at the time, to Varghese on April 17 and June 7, 2024. The amended complaint asserts that Varghese absconded with the funds, converting some to gold but holding it under his sole control. After Mercola demanded his assets back in October 2024, Varghese and Singleton allegedly became evasive and ceased communication.
A forensic investigation, utilizing blockchain tracing, purportedly revealed that Mercola’s Ethereum was dissipated through multiple wallets and laundered through cryptocurrency exchanges including OKX, FalconX, Bybit, FortressTrust.com, and Kraken. Further investigation into Fortress Trust indicated that Varghese jointly controlled a wallet with Michael Pearson for BCube Tech, LLC, and that Pearson controlled another wallet for Amparo North, LLC.
The amended complaint alleges that BCube is jointly owned by Pearson and Varghese, and Amparo North is affiliated with or controlled by them. Based on these findings, Mercola alleged that Varghese and Pearson used the Fortress Trust account to route his crypto assets, demonstrating their coordinated involvement in the dissipation of his funds.
Mercola filed the lawsuit against Varghese in May 2025, and after expedited discovery, filed an amended complaint naming Singleton, Pearson, and several entities allegedly associated with Varghese and/or Pearson as additional defendants. To date, only Pearson and BCube have appeared in the action, while default certificates have been issued against Varghese, Singleton, Amparo North, Royal Amparo, and Alpha Yield Capital.
In granting the motions to dismiss, Judge Kaplan found that the amended complaint failed to establish personal jurisdiction over Pearson and BCube, as it did not sufficiently allege facts connecting them to New York or to Mercola’s specific Ethereum transfer. The court also dismissed fraud claims against Pearson and BCube, noting they were not alleged to have made any false statements or omissions directly to Mercola. The conversion claim was dismissed for lack of specificity regarding Pearson and BCube’s misconduct.
The unjust enrichment claim was dismissed as duplicative of other claims under New York law, as it arose from the same facts and did not allege distinct damages. Finally, the civil RICO claims were dismissed for failure to state a claim, as the amended complaint did not adequately plead a pattern of racketeering activity, nor did it sufficiently allege violations of RICO subsections related to the use of racketeering income or the acquisition/maintenance of an enterprise.
The court denied a request for jurisdictional discovery, stating it was academic unless a legally sufficient claim could be stated. Mercola has been granted thirty days to file a proposed second amended complaint.
Please contact BlockTribune for access to a copy of this filing.
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