By Ryan Boysen & Kevin Penton

Law360 (March 13, 2020, 4:25 PM EDT) -- A New York federal judge on Friday agreed to allow an upcoming courtroom conference in a memorabilia fraud suit to occur via telephone instead, after several attorneys in the case noted their ties to Italy, which is dealing with an outbreak of COVID-19.

U.S. Magistrate Judge Gabriel W. Gorenstein ordered attorney Ramon de la Cabada to set up a telephone conference, a day after lawyers Curtis S. Alva and Guillermo A. Gleizer told the Southern District of New York of their Italian ties in a letter Thursday.

Gleizer was in Italy from Feb. 10 to March 3, while both Gleizer and Alva work next door to a client who returned from Italy on March 4, according to the letter. They would both otherwise need to fly to New York from Florida for the conference.

The court Monday barred entry to anyone who had recently traveled to China, South Korea, Japan, Italy or Iran in the past two weeks, or who live with or are in close contact with those who have traveled to those countries, who have been asked to self-quarantine, or who have been diagnosed with the disease, according to court documents.

Wednesday's conference is on de la Cabada's bid to depart the case and no longer represent Collector's Coffee Inc., a memorabilia seller that does business as Collector's Café and faces allegations by the U.S. Securities and Exchange Commission that it engaged in a $23 million fraud scheme, according to court documents.

The SEC sued Collector's Café, owner Mykalai Kontilai and his wife, Veronica, in May, alleging Kontilai took in $23 million from investors claiming he would use their money to create a collectible auction website backed by a television show, but neither ever materialized despite a demo reel for the show featuring Larry King.

The SEC contends that Mykalai Kontilai took the money and spent more than $6 million of it to fund a "lavish lifestyle," including "rent on an oceanfront condo in Miami, tuition at a private school in Las Vegas, expenses at gentleman's clubs, stays at a luxury resort in Miami over New Year's Eve, and various personal items at high-end stores such as Chanel, Louis Vuitton, Saks Fifth Avenue, Cartier and Rolex."

When investors began asking questions, the SEC said Mykalai Kontilai responded by forcing several of them to sign contracts that essentially prevented them from being paid back unless they agreed to stop voicing their concerns. The SEC claims that the move violated federal whistleblower protection laws.

Wednesday's conference originally was also supposed to cover bids by Alva, Gleizer and Steven Sessa to withdraw from representing Veronica Kontilai.

The SEC had blasted the withdrawal bids, arguing that it was not the first time that Collector's Café and Veronica Kontilai had sought a legal shakeup in the case.

Late last month, Judge Gorenstein told Collector's Café and Veronica Kontilai that if they didn't appear at the March 18 hearing or retain new counsel before then, he would enter a default judgment against them and possibly hit them with other sanctions.

The judge allowed Veronica Kontilai off the hook Friday, allowing her attorneys to exit because she retained new counsel in the case.

Counsel for the parties could not be reached for comment Friday.

The SEC is represented internally by Gregory Kasper, Terry Miller and Mark Williams.

Collector's Coffee Inc., doing business as Collectors Café, is represented by Ramon de la Cabada of the Law Office of Ramon de la Cabada PA.

Mykalai Kontilai is represented by Curtis S. Alva and Guillermo A. Gleizer of Alva & Glazer PLLC and by Steven C. Sessa.

Veronica Kontilai is represented by Louis Palazzo of the Palazzo Law Firm.

The case is SEC v. Collector's Coffee Inc. et al., case number 1:19-cv-04355, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Ryan Boysen and Reenat Sinay. Editing by Gemma Horowitz.

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