Nexus dodges questions about subversive new business entity
BOB LEWEKE: While the company Nexus has been besieged by local and federal investigations, multi-million dollar lawsuits, and property foreclosures; another strikingly similar business has popped up – Subversivo, LLC. And while Nexus has acknowledged in court that Subversivo is handling their financial transactions because they can't get any banks to work with them, they've dodged questions about whether the two companies are really one and the same. I spoke with WMRA reporter Randi B. Hagi about this. She’s been following the Nexus saga for more than a year.
RANDI B. HAGI: Just to get everyone caught up on this story, Nexus is a conglomeration of companies formerly headquartered in Verona, and anchored by the cash cow Libre by Nexus. Libre by Nexus made millions connecting immigrants in ICE detention with bonds – using an allegedly predatory, coercive business model for which they were repeatedly sued, and repeatedly settled out of court. Throughout the years, Founder Michael Donovan and his husband and former co-owner, Richard Moore, have had side endeavors in housing, game stores, and other businesses.
In one of the civil cases that we explored in our previous investigation, the RLI Insurance Company has been fighting to hunt down some of the $3.3 million – plus interest – that a federal judge said Nexus owed them in 2020. RLI also continues to spar with Nexus attorney Zachary Lawrence over business records that the court ordered Nexus to hand over. As of our last report, Nexus had delivered a bunch of documents just before a court-ordered deadline. But RLI has since come back and said the records are not complete. Among the missing items, they say, are receipts and explanations of transfers that Donovan, Moore, and Vice President Evan Ajin made to their own bank accounts beyond their salaries.
In August, RLI requested the courts appoint a third party to take possession of Nexus's books, saying, "One of the key questions … has been, where did all the revenue go?"
LEWEKE: So, Randi, where are they looking?
HAGI: One place is this new firm called Subversivo, LLC. According to state records, the business was established in Verona last year by David See, a former executive of Libre by Nexus. Their website advertises almost identical services to that of Libre by Nexus – financing bail bonds for immigrants being held by ICE.
Subversivo has an advertisement on Facebook, in Spanish, that asks: "Do you know anyone who is being held on immigration bail in the United States? Subversivo can help you!"
The company is currently registered to operate in the states of Delaware, Minnesota, and Texas; and was formerly registered in Georgia and Virginia – all states where Nexus also had a footprint.
LEWEKE: Randi, I guess my next question is, how is all of this legal?
HAGI: That’s where it gets more interesting. In one court filing, Nexus's attorney danced around the question of whether Subversivo is, in fact, just the next iteration of Nexus, in sheep's clothing.
Here’s what the filing said: "It appears that RLI believes that Subversivo is an alter-ego of Nexus, or potentially its principals, and that funds have been fraudulently transferred to Subversivo—RLI is free to think this, and can seek recourse either through a separate action, or alternative motion.”
Records provided to WMRA by one former employee, who spoke on the condition of anonymity, show that at least one person who was hired by Mike Donovan to work for Nexus was paid by Subversivo.
To learn more about the business, WMRA listened in while a native Spanish speaker called the Subversivo hotline to ask about their services. An employee – who, according to LinkedIn, used to work for Nexus, too – told the caller that Subversivo will post the bail if it's at least $5,000. If the client can pay half up front, they can pay off the rest in monthly installments of $312 – although the employee didn't say how much interest would be charged. She was explicit that the client would not be asked to wear an ankle monitor – something that Nexus came under fire for in previous lawsuits.
Now, as long as Subversivo is running this business legally – in other words, not threatening clients with deportation or forcing them to sign paperwork in English they don't understand, as Nexus is alleged to have done – that part is above board. But if the company is hiding money or assets that Nexus owes to RLI and others who have sued them, that would be illegal.
LEWEKE: So, what are the owners of Nexus saying about this?
HAGI: I reached out to both Donovan and the attorney, Lawrence, to ask about the relationship between Nexus and Subversivo. One of Donovan's email addresses responded immediately with the message [quote] "stop spamming me." Lawrence wrote back to say that he does not speak with the press about ongoing litigation.
I also contacted David See, the CEO of Subversivo. When reached by phone on Friday, he said it wasn't a good time to talk, but he would respond to my emails – which, so far, he has not.
The federal court is trying to force Nexus's hand – once again – into revealing more about its finances, including its ties to Subversivo. On October 27th, Judge Michael F. Urbanski of the U.S. District Court for the Western District of Virginia ordered Nexus to turn over the remaining documents that RLI is owed, or else Donovan and Ajin would, for the second time, be at risk of arrest by U.S. Marshals. An unaffiliated attorney has been appointed to oversee this process and give an update within 120 days, or around late February.
In this order, Urbanski said that, "Five years of misdirection and prevarication are enough. The court is extremely concerned about the serious problem of diversion of Nexus corporate revenues to its individual principals, Moore and Donovan."
LEWEKE: Randi, are there any other updates to all of the litigation surrounding Nexus?
HAGI: Richard Moore is still scheduled to go to trial next month for allegedly withholding more than $1.5 million in federal taxes. Just last week, a grand jury tacked on two additional felony charges of preparing false tax returns. A trial is also on the docket next month for both Donovan and Moore in the financial exploitation case in Augusta County, in which they're accused of bilking Zachary Cruz of his mother's life insurance money. That could end up getting rescheduled, though, if it conflicts with Moore's federal trial. And Nexus has appealed the Consumer Financial Protection Bureau's lawsuit to the U.S. Court of Appeals for the Fourth Circuit. The CFPB and its co-plaintiffs, the state governments of Virginia, Massachusetts, and New York, have until December 27th to respond.
LEWEKE: Randi, thanks again for following this complex story.
HAGI: Thanks so much for your time, Bob!