Boxing manager Moses Heredia has been awarded approximately $9.7 million in damages against wanted international criminal Daniel Kinahan and various Kinahan-controlled entities under the MTK corporate umbrella. The underlying dispute concerns Kinahan and MTK stealing of Heredia's boxing client, former 130-pound champion Joseph “JoJo” Diaz Jr. It was a default judgment issued in United States federal court in California, and the court adopted most of Heredia's claims as facts. Since Kinahan's whereabouts are unknown (he is definitely not in the United States), and MTK has no domestic assets, it seems unlikely Heredia will be able to collect any of the money he has been awarded. However, the court's analysis on the facts of the dispute and the calculation of damages will be of interest to boxing fans, so here it is:
This case involves a dispute between plaintiff Moses Heredia, a professional boxing manager who represented boxer Joseph “JoJo” Diaz Jr., and Defendants who allegedly interfered with that representation. Heredia accuses Defendants MTK Global Sports Management, LLC (MTK Global); Paul D. Gibson; Daniel Kinahan; and MTK Global USA, LLC (MTK USA) of engaging in racketeering, which interfered with Heredia’s contractual relationship with Diaz.
The facts as alleged by Heredia, andnow adopted by the court, are as follows:
Heredia managed Diaz’s professional boxing career for eightyears, beginning in 2012. Heredia and Diaz entered into a five-year-boxer-manager contract on February 23, 2017. While under this contract, Diaz signed a lucrative promotion agreement with Golden Boy Promotions, Inc. that ran from March 22, 2017 to March 21, 2022. In the promotion agreement, Diaz listed Heredia and his brother, Ralph Heredia, as his representatives.
During this time, Kinahan was the co-founder and operator of MTK Global and MTK USA, and Gibson acted as MTK Global’s Chief Strategy Officer. Kinahan also ran the day-to-day operations of the Kinahan Organized Crime Group, which “is believed to be one of Europe’s biggest criminal cartels.” Kinahan created legitimate businesses, including MTK Global and MTK USA, to launder proceeds from criminal activity.
On August 4, 2020, while under contract with Heredia, Diaz signed a business-advisory agreement with MTK USA, which was facilitated by MTK Global. Pursuant to the advisory agreement, MTK USA advanced Diaz $100,000, funds Heredia believes to have been generated through criminal activity by Kinahan and the Kinahan Organized Crime Group and laundered through MTK Global. Although the agreement between Diaz and MTK USA purported to be for the purpose of business advisement, in actuality it was a boxing-management contract. The advisory agreement with Diaz was not the only one of its sort, as Kinahan and MTK Global engaged in a pattern of racketeering activity by entering into advisory agreements with multiple boxers in the United States for the purpose of laundering money.
After signing the advisory agreement with MTK USA, Diaz stopped communicating with the Heredia brothers and, through MTK Global, MTK USA, and Gibson, negotiated to engage in fights without Heredia’s authorization. Diaz engaged in fights after he stopped communicating with Heredia, which, under the 2017 boxer manager contract, should have resulted in payment to Heredia of his 18% fees for each fight.
Heredia did not receive any payment from Diaz until 2021 when he received an arbitration award in his favor. During the arbitration proceedings, the remainder of the 2017 boxer-manager contract was canceled because the relationship between Heredia and Diaz was irreconcilable, an action that further damaged Heredia.
On April 11, 2022, the United States Department of Treasury’s Office of Foreign Assets Control designated KOGC as a Transnational Criminal Organization. The Treasury Department has further designated Kinahan as a Specially Designated National and has imposed sanctions prohibiting United States persons or businesses from doing business with Kinahan or the Kinahan Organized Crime Group.
Given these circumstances, the advisory agreement between Diaz and Defendants, which involved laundered racketeering income, caused the breach and disruption of the contractual relationship between Heredia and Diaz, and, but for Defendants’ interference, Diaz would have performed his obligations to Heredia through the entirety of the 2017 boxer-manager contract. Not only has Heredia been damaged by being denied his owed benefit under the 2017 boxer-manger contract between himself and Diaz, he has been further damaged by “Defendants[’] . . . years-long campaign to ruin Mr. Heredia’s reputation in the community through lies, surrogates, and blatantly false allegations, and frivolous/ legally unsupportable complaints,” resulting in Heredia’s inability to recruit future clients.
Defendants have not responded to the lawsuit, which was filed by Heredia in 2020. Since the filing, except for counsel for MTK USA filing a motion to withdraw and a statement of non-opposition to motions filed by Golden Boy Promotions, Inc., neither Defendants nor their counsel have appeared in this action in any manner. Specifically, as to MTK USA, when the District Judge granted counsel’s motion to withdraw, he noted that counsel had advised MTK USA that it could not appear in this action pro se, directed this defendant to engage new counsel and cause new counsel to file a Notice of Appearance no later than September 23, 2022, and directed relieved counsel to give notice to MTK USA of the Court’s order.
On December 14, 2022, Heredia applied for entry of default and it was granted last week. Heredia's damages were calculated as follows:
Regarding contractually obligated compensation, Heredia has provided sufficient proof to support an award for $270,000... [this is] based upon the [earnings that] Diaz allegedly owed him from three fights Diaz participated in, minus $90,000 that Diaz has already paid to Heredia pursuant to an arbitration decision. The three fights at issue were between Diaz and (1) Shavkat Rakhimov on February 13, 2021; (2) Javier Fortuna on July 9, 2021; and (3) Devin Haney on December 4, 2021. Heredia alleges that Diaz’s purses for these fights were $500,000, $500,000, and $1,500,000, respectively. Heredia's management fee was 18%, which worked out to $90,000, $90,000, and $270,000, respectively, for the three fights. However, Heredia has not sufficiently proven the amount of Diaz’s purse, and Heredia’s corresponding 18% share, for the Rakhimov fight, or that Heredia has not already been paid the fees owed him for the Rakhimov and Fortuna fights. [...] Regardless of whether Heredia was owed $72,000 or $90,000 for the Rakhimov fight, he has not proven that he is entitled to recover the funds in this action. The arbitrator ordered Diaz to pay Heredia’s share for these fights. Heredia contends that he is entitled to collect the balance from these Defendants instead because he is not able to collect this amount from Diaz, who has filed for bankruptcy. [...] While Heredia has not shown entitlement to an award based on the Rakhimov and Fortuna fights, he has shown an entitlement to the contractually obligated fee of $270,000 for the Haney fight.
Regarding his claim for lost anticipated income, Heredia has provided sufficient proof to support an award of $1,080,000 [...] in lost future earnings from a contemplated fight between Diaz and Gervonta Davis. The affidavits of Stephen Espinoza and Steven Bash support a finding that the deal for a Diaz-Davis fight had been in negotiations at the time Defendants interfered with the contract and that it would have resulted in a total revenue of at least $15,000,000. Heredia has shown that a potential Diaz-Davis fight would have resulted in $15,000,000 in revenue, 40% of which, or $6,000,000, would have been paid to Diaz. In turn, Heredia would have been entitled to 18% of Diaz’s purse, or $1,080,000. Heredia is thereby entitled to $1,080,000 from Defendants as damages for their interference with Heredia’s ability to negotiate a fight between Diaz and Davis.
Although the relationship between Heredia and Diaz soured before the end of the contractual period at issue here, the allegations in the FAC, taken as true, show that the cause of the animosity was the interference by Defendants. The evidence in the record shows that, before Defendants’ interference, the parties intended to maintain their relationship into the future. Specifically, Heredia and Diaz had already extended their contractual relationship once, at least one third-party recognized their relationship as strong and likely to have continued absent Defendants’ interference.
Regarding lost compensation from the anticipated renewal of a five-year contract with Diaz, these damages border on speculative. Still, Heredia has shown $1,282,500 in damages [for this claim].
Regarding lost compensation for unrealized clients due to diminished reputation, this too borders on speculative. Nevertheless, the Court finds that Heredia has met the minimal evidence standard for default judgment damages. Heredia has provided sufficient proof to support a damages award for $540,000 in potential proceeds attributed
to the potential signing of future clients.
As detailed above, Heredia has provided sufficient proof to support an award of $3,172,500 in actual damages, for a total of $9,517,500 in treble damages under the RICO statute. These damages should be awarded jointly and severally against all Defendants. As to attorney’s fees, the Court finds Heredia is entitled to $171,000 [and] As for Heredia’s request for costs, he is entitled to $19,798.61.
