August 27, 2024

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Public Response to the Malice of Flamengo Supporter and Journalist Mr. Lucio de Castro

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The below information is provided in response to a series of four articles, written by investigative journalist Mr. Lucio de Castro, which are clearly written with malicious intent to damage the reputation of Mr. Textor, and the work that he and his company are doing to bring positive changes to football in Brazil. 

 

Mr. Textor has chosen to challenge powerful forces in Brazil, to improve standards of governance, and to end practices of corruption, while also reestablishing Botafogo among the leading clubs in Brazil and South America. It is clear that a large majority of football enthusiasts, from all parts of Brazil, are supportive of the SAF law that invited Mr. Textor and others to contribute to the modernization of Brazilian football – but it is equally clear that defenders of the status quo are willing to do just about anything to prevent Mr. Textor, and others like him, from being successful in Brazil.

 

It is unclear whether the smear campaign launched by Mr. de Castro comes from his perspective as an emotional and fanatic supporter of Flamengo, or if it comes from a darker place, inspired by the targets of Mr. Textor’s public crusade against corruption. The only thing we can be sure of, is that Mr. Castor did not act as an independent journalist in this project, in search of the truth. He made no reasonable effort to interview his subject, Mr. Textor, who is among the most accessible leaders in the world of football. He managed to write a four-part series, claiming to have discovered bombshell evidence of the dark side of his subject, all without alerting any of the public relations people in Mr. Textor’s organization that such an expose was in preparation – proof positive that Mr. de Castro had malicious intent.

 

Mr. de Castro does have a credible reputation, as much as any over-zealous investigative reporter might have – but it would appear that his reputation for honest investigative reporting has come to an end. His decision to manufacture a four-part ‘hit piece’, heavy on character assassination and stories of Russian oligarchs, will surely be a defining moment in his career. The motivation for this career limiting choice may never be known.

 

What is known is that he will be invited to explain himself, in courts of law, both in Brazil and in the United States. As of today, August 27, he has been sued in court for criminal defamation and libel.  Similar measures of justice will be commenced in the United States in the coming weeks. Defendants in these matters will include Mr. de Castro, as author, as well as his publishers and editors. The publishers and a number of journalists at UOL will also be held accountable, for their coordinated efforts (fueled by repeated false and defamatory statements) to discredit anti-corruption efforts, 

 

 

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FAIR WARNING: 

In light of the serious inaccuracies and malicious intent of the articles published by Mr. de Castro, and the ease with which irresponsible journalists (in the future) will simply re-publish this misinformation without independent sourcing and journalistic balance, all media companies, journalists, bloggers and social media influencers should be mindful that they will be held directly accountable for their involvement in the propagation of defamation and libel. 

 

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Mr. de Castro’s work is Intentionally Deceptive

 

Mr. Castor claims to have set out to tell the true story of ‘John Textor’, as he exposes a history of corporate litigation and business ‘ups and downs’ - but when he speaks of litigation, he deceptively chooses to showcase the allegations, even though he must also know from the court dockets that such allegations were proven false. Mr. Castor has, therefore, chosen to conceal from his readers that such lawsuits were resolved in Mr. Textor’s favor.

 

Mr. Castor has also shown that he has done enough research on Mr. Textor to know that Mr. Textor has long been engaged in the ‘high-risk, high-return’ world of tech startups, where business failures are as common as business successes - but Mr. Castor chooses to ignore a lifetime of business successes and philanthropic contributions to re-write history, using every slanderous statement he can find, from any anonymous or indicted source, and inflict as much damage as possible on his subject, Mr. Textor. Everyone knows what a ‘hit piece’ looks like, and Mr. de Castro, through his dishonest and unethical four-part exposé, has now sacrificed his reputation in favor of his sinister and questionable motives. Quite simply, he has lost his Flamengo-head, and he will now be held legally held accountable.

 

 

What did Mr. de Castro find?

 

Nothing that wasn’t already disclosed, debated and reconciled in the U.S. court system, or on Mr. Textor’s public Wikipedia page, over many years. Mr. de Castro literally discovered nothing, and he proved nothing, other than his ability to conduct shallow searches on Google, also proving his incredible lack of interest in the truth. He recycled old news, that led to nothing, that was sitting in plain sight for years, and published this recycled the in a manner that would appear like a new investigation.

 

He also proved that he would discard and conceal from his readers, any information that supported a different narrative, even when false allegations were proven false. One great example is seen in his heavy reliance on a lawsuit that made sensational claims of ‘Ponzi Schemes’. When Mr. de Castro realized that such lawsuit ended with the plaintiff (who made such false claims) having to pay-out nearly $10 million in cash to Textor, and even more in assets, Mr. de Castro tried to suggest that Textor gamed the system, unethically, and “got even richer”. The fact is, in the United States, that the U.S. courts do not force state governments to pay out multi-million dollar settlement payments to people that did something wrong. 

 

As Mr. de Castro must have read in the lawsuit filings, even the lawyer that unethically accepted money to file the false claims said, to Mr. Textor, only a few months earlier when asking Textor to hire his firm, “…In my view, this case is both about vindication of your [Mr. Textor’s] professional reputation, as well the an opportunity to have those truly responsible answer for their wrongful conduct.”

 

 

Litigation Immunity (and Abuse of Process) in the United States

 

It is well-known to all international observers that litigation in the United States can be extremely aggressive and the filing of frivolous claims is quite common. What is not known by most people is that basic protections against slander, defamation and libel, which prevent malicious attacks on the reputations of people in public settings, do not apply in litigation. In fact, because of something called ‘litigation immunity’, slanderous and defamatory statements that cannot legally be said or written about a person in a public forum are allowed to be written in lawsuits, regardless of whether or not there is any truth to such claims. As a result, defamation has become a legally allowable weapon of extortion, used by unethical attorneys and plaintiffs, to coerce defendants into paying settlement monies, simply because they want to avoid the embarrassment of false claims in lawsuits.

 

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Mr. de Castro’s Discovery: Dishonest Lawsuits weaponized for Political and Financial Gain

 

In Part One of his series, Mr. de Castro chose to highlight two separate lawsuits that were filed by lawyers that knew their lawsuits could not be won, making sensational and false claims that were designed to get headlines, embarrass the defendants, and achieve political wins or induce financial settlement payments. What these lawyers did not expect is that Mr. Textor would fight back, prove their allegations false and force their clients to pay for their extortive tactics. 

 

• State of Florida vs Digital Domain

  • Lawsuit filed by Governor Rick Scott, after Florida Inspector General already issued a final report and “found no apparent violations of law, rule or regulation in the award of $20 million economic incentive funds to Digital Domain in 2009.”  NOTE:  Mr. Castro made reference to elements of the Inspector General Report, but he deceptively omitted the above conclusion that confirmed no wrong-doing by Mr. Textor.

  • Lawsuit was filed purely to achieve a political advantage over prior Governor Charlie Crist, who approved the grant award to Digital Domain, and who was also previously tied to donor Scott Rothstein, a convicted ‘Ponzi Scheme’ criminal – thus, the dishonest use of the word Ponzi Scheme, introduced into a discussion of the valid, established business of Digital Domain. Even Governor Scott’s lawyers had previously said “the facts would vindicate Textor”

  • Mr. de Castro knows that the plaintiffs were forced to pay a multi-million dollar settlement to Textor, but again he chose to conceal (or obscure) this truth from his readers.

 

Important Omission: Mr. de Castro chose not to share with you important language from the presiding judge’s final report of the ‘all parties’ mediation, mainly because it completely exonerated Mr. Textor from all claims of wrongful acts. See below an excerpt from the final report of Judge Bruce Greer, filed April 15, 2016:

 

“As the global mediator, I heard from the parties present or their counsel, sometimes in joint sessions but often in individual sessions. The parties who participated in mediation sessions with me submitted extensive mediation statements setting forth their respective positions on the various claims and defenses and counterclaims, and I also read pertinent court filings and other documents relating to DDMG. Based on those communications and activities, and my review of the facts and circumstances surrounding DDMG’s bankruptcy, I can confirm that there has been no finding of fact that the DDMG Directors and Officers, or any other party, violated the law or otherwise misled investors, creditors, or governmental agencies and entities. This is consistent with the report by Florida’s Chief Inspector General who conducted a six-month investigation to review the process that led to the DDMG grants and business incentives. At the end of the investigation, the Inspector General issued a report in which she declared that her office “found no apparent violations of law, rule or regulation in the award of $20 million economic incentive funds to Digital Domain in 2009.” Florida’s Office of the Chief Inspector General’s Report, at pg. 16 (Mar. 26, 2013).

 

I also note that of the various lawsuits that have been filed after DDMG’s bankruptcy, only one of them proceeded far enough for the court to rule on the adequacy of the claims and allegations; the remaining lawsuits were stayed while the parties engaged in settlement negotiations. That case was filed in New York State Court by two investors who alleged they had been misled and were seeking to recover their investments. See Iroquois Master Fund Ltd. et al. v. John C. Textor et al., Case No. 651788-2013 (N.Y. Sup. Ct.). The defendants, which included Mr. Textor and the DDMG Directors and Officers, moved to dismiss all of the claims asserted by the two investors.  In a lengthy order signed on January 9, 2015, the court granted their motion and dismissed the claims against the DDMG Directors and Officers. The court explained that the investors had not asserted a viable claim because they “concede[d] the accuracy of DDMG’s financial reporting.” The court also remarked that “no misrepresentations of material facts may here be attributed to the Inside Directors. Therefore, plaintiffs have failed to state a cause of action for fraud against them.”

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Link to Publication of Supreme Court Findings

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Question: If Mr. de Castro is trying to educate his readers on an important episode in the past of Mr. Textor, why would he heavily emphasize the sensational claims of litigation, without reporting the final outcome and determination of two different judges involved in the matter, which confirmed the integrity and truthfulness of the Textor-led management team. Why would Mr. de Castro not highlight the reasons that Mr. Textor was paid a multi-million dollar settlement. Why would he not mention, as all SEC documents in the Facebank/fuboTV matter reveal, that Mr. Textor recovered from this difficult episode, and used the award of technology that he recived in settlement, to create a new company that would ultimately be worth more than $9 billion. It is clear that Mr. Textor’s integrity and determination, which led to a positive outcome, were not of interest to Mr. de Castro and his malicious intent.

 

 

• Holotrack vs Pulse Evolution

  • Lawsuit filed by billionaire Swiss investors as part of a strategy to take-over the ABBA human animation / hologram project

  • 100% of financial transactions of Pulse Evolution were audited and proven to be legitimate business payments

  • Mr. de Castro dishonestly points to payments from the business to Textor personal accounts, all of which were proven as proper, since Textor family served as primary financiers of (lenders to) the company. Mr. de Castro only publishes false allegations and does not publish detailed responses in the publicly filed motion to dismiss. Mr. de Castro also, without knowledge, implies that the lawsuit was settled with payments, when no payments were made by either party, as the matter was dismissed. All Holotrack shareholders, upon better understanding the facts, converted their Pulse Evolution shares into Mr. Textor's new company, ultimately realizing significant profits from Mr. Textor's success with Facebank/fuboTV.

  • Mr. de Castro claims there was no Michael Jackson hologram, ignoring the globally obvious evidence that the Michael Jackson hologram was a huge success.

  • Mr. de Castro claims there was no ABBA holographic show, clearly ignoring the fact that the ABBA Voyage, launched first by the visual effects leadership of Mr. Textor and Pulse Evolution, still performs nightly in London, as one of the most successful theatre shows in London.

  • Mr. de Castro ignores U.S. Securities and Exchange public filings showing that Pulse Evolution (well after his resignation for Pulse in 2017) was ultimately acquired by Mr. Textor’s new company, Recall Studios, in 2018, and Mr. Textor developed the technology of Pulse Evolution further, ultimately leading to the successful Facebank/fuboTV, which reached a peak valuation of more than $9 billion. Dozens of Pulse Evolution investors, who chose to follow Mr. Textor, earned more than $1 billion in exchange for their initial investment of less than $40 million.

  • Mr. Castro fails to properly research the outcome of this litigation, ignoring the responses by Mr. Textor, and also ignoring that this lawsuit was, yet again, another frivolous lawsuit that resulted in Mr. Textor being paid monies, as compensation for the plaintiff's wrongful claims.

 

 

The Fake Russian Connection and Mr. de Castro’s Greatest Deception

 

Mr. de Castro’s indictment of anyone Russian is racist and reprehensible, and his attempt to tie Mr. Textor to nefarious Russian people is irresponsible, slanderous and actionable in both U.S. and Brazilian courts.  

 

• Sergey Skaterschikov:  All of this is based on Mr. Textor's relatively recent relationship with Mr. Skaterschikov, who Textor believes to be a good person and an extremely capable investment banker. Mr. Textor is not aware of his entire past, though Mr. Skaterschikov was extremely helpful to Textor's business, principally as an investment banking advisor. Mr. de Castro knows full well that there are many fine people, of Russian background, that have ties to multiple Russian leaders. It is a disgusting practice to paint them all with the same brush, and an even worse practice to indict an American investor in a smear campaign for ties to Russia that do not exist.

 

• Mr. de Castro, if he were actually reading his own research, he would see that Mr. Skaterschikov was actually an adversary of Mr. Textor in the original Holotrack lawsuit. In fact, when he realized that the allegations made by the Swiss billionaire were false, he willingly formed a positive relationship with Mr. Textor, leading to significant future success for thousands of Facebank/fuboTV investors.

 

• Mr. Textor may continue to use IndexAtlas as a financial advisor whenever and wherever appropriate, without concern for the fact that Mr. Skaterschikov is originally from Russia.

 

• Facebank AG: Mr. de Castro may have proven that he is not qualified to read legal or financial documents. The relationship between Mr. Textor’s Facebank and Facebank AG is clear and distinct. Facebank/fuboTV acquired a company in Europe that included multiple respected payment processing business, Asknet and Nexway, along with a few other failing businesses (like Paddle8). That business was known by a different name, and the choice was made to rename that to Facebank AG, in anticipation of the acquisition of that Europe company by Facebank/fuboTV. It’s that simple. It’s explained and audited, as a part of the SEC filings of Facebank/fuboTV, and there has never been a controversy associated with this transaction (other than Mr. de Castro’s racist accusations)

 

• Bernhard Burgener: Mr. de Castro fails to recognize that Mr. Burgener was for many years, and still is, a respected businessman that owns Team Marketing, which for 20-years was responsible (globally) for the incredible marketing growth and revenue haul of UEFA Champions League, and UEFA Europa League. He still controls these rights across Europe, in addition to his ownership of many other businesses. Mr. Textor and Mr. Burgener had a very brief falling-out, in connection with the Holotrack confusion, but they amicably re-united in Facebank/fuboTV and remain friends today.

 

• Alexander Studhalter: Mr. de Castro merely throws mud, in this case, as he has no evidence that Textor has ever met, or had anything to do with Mr. Studhalter. In fact, Mr. Textor has no connection with Mr. Studhalter, who is merely an investor in one of Mr. Burgener’s businesses. Mr. Castor also failed to mention that Mr. Studhalter (whoever he is) successfully removed himself from the ‘sanctions list’.

 

 

In the U.S., there is a game called “Six degrees of Kevin Bacon”, where virtually every person in the country can be connected to actor Kevin Bacon, with only 6 linked relationships. Well, Mr. de Castro seems to have played the same game with Mr. Textor’s fabricated links to Russia oligarchs.

 

 

Conclusion

 

It’s a shame that football can be taken so seriously that the politics of personal destruction are at play in sport. There are many people like Mr. de Castro, so desperate for relevance, and so wounded as to be distrustful of good intentions, that they care not who they attack. This type of behavior will never cease, but Mr. de Castro and his publishers will be given the opportunity to justify their actions, and hopefully think twice before behaving in similar fashion in the future. Today, they have been sued in criminal court, and they will have an opportunity to defend themselves.

 

Mr. Textor’s work to improve football in Brazil, and elsewhere, will not stop. Only a person who has faced great challenges in life, experiencing both success and failure, while dealing with the good and the bad of our global society, may be qualified to bring about real change. It will take much more than the work of a misguided investigative journalist to dampen Mr. Textor’s enthusiasm and love for the people of Brazil.

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As Mr. Textor's work will continue, expect the hits to keep coming. It's Time to Set Fire.

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