The shuttering of Be Great’s Wilshire headquarters late last month came nine months after Miao agreed to a $150 million judgment to end a FTC lawsuit against him and several corporate defendants related to a scam run by his former company, Tatto Inc.
The FTC accused Miao and his Tatto partner Andrew Bachman in December 2013 of engaging in a scheme that involved charging cellphone consumers for unauthorized subscription text message services, such as celebrity news alerts or horoscopes.
Judge Dale S. Fischer of the U.S. District Court for the Central District of California, sitting in Los Angeles, froze Miao’s assets in January 2014. Shortly after, the court allowed him to accept a $125,000 loan from his parents to keep Be Great in business.
The court permitted Miao to repay the loan in 13 monthly installments, a period set to conclude April 1.
Because Miao was not able to pay the full $150 million judgment, it was partially suspended by the court on condition that he relinquish all his known assets.
According to the judgment, those included 14 bank accounts; a life insurance policy; a residential property in Los Angeles, one in Beverly Hills and three others in Chicago; a 2013 Mercedes SUV, a 2014 Range Rover SUV, a 2011 Audi and a 2008 Bentley; and 12 pieces of premium jewelry.
He was allowed to keep $5,000 in a lone Bank of America account.
Also taken were Miao’s stake in three companies: Skinny Bikini Swimwear, a Las Vegas online retailer, and a pair of real estate ventures, Bloc Priya Avatar I and Bloc DT 1.
Thomas McNamara, a San Diego attorney appointed by the court to receive and liquidate Miao’s assets, has until March 31 to sell the seized property, which the FTC originally valued at more than $10 million when the judgment was announced.
In a status report filed Oct. 30, McNamara wrote that Miao’s properties in Los Angeles and Chicago had sold or were in escrow for about $3.25 million. The property in Beverly Hills, on Gloaming Drive, was listed for nearly $1.9 million but had failed to attract a buyer. It remains listed for sale.
Miao, who was born in China but attended high school in Utah and graduated from Boston’s Babson College in 2008, could not be reached for comment, and it is unclear if he remains in Los Angeles.
According to court filings, the Bentley and Range Rover vehicles sold for a combined total of $121,800, but the other two cars had zero net equity as the loans exceeded market value. New York auction house Sotheby’s had scheduled the jewelry items to be included in a Dec. 9 auction with projected proceeds of between $500,000 and $800,000. McNamara did not return a request for comment, and the fate of the outstanding assets is still unclear.
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