Sunteți pe pagina 1din 222

UNITED STATES DISTRICT COURT

for the

NORTHERN DISTRICT OF TEXAS DALLAS DIVISION R. Lance Flores, and Vicki Clarkson, individually and in behalf of the Nations Economic System & the Public Interest, Plaintiffs, v. Scott Anthony Koster, Francis E. Wilde a/k/a Frank Wilde, Steven E. Woods a/k/a Stevie Lee Woods, Jon Divens, Bruce H. Haglund, Mark Alan Gelazela a/k/a Mark Zella, William Chandler Reynolds, Kerim S. Emre, John T. Childs, Richard D. Hall, Winston Jerome Cook, any and all additional Unknown Parties as John/Jane DOE(s), Defendants. Alicorn Capital Management LLC, Bank of America, Berea Inc, BMW Majestic LLC, Brandon Colker, Busch Law Center LLC, Cook Business Services LLC, Deutsche Bank, & Deutsche Bank AG London Branch, Gregory Botolino, Hongkong and Shanghai Banking Corp. Ltd., Ti, (HSBC) Hong Kong, China Ibalance LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), Interlink Global Messaging, Larry J. Busch, Jr., Matrix Holdings LLC (Matrix), Maureen OFlanagan Wilde, Cause m 3:11-cv-00726-M -BH

FI RST A MEN DED C O MPLA I N T


before the

Hon. Barbara M.G. Lynn, Presiding Judge, Hon. Irma Carrillo Ramirez, Referring Judge.

CIVIL ACTION Racketeer Influenced and Corrupt Organizations Act (RICO) FEDERAL PREDICATE CRIMES

18 U.S.C. 1962 (a), (c), (d); 18 U.S.C. 1028. Fraud and related activity in connection with identification documents; 18 U.S.C. 1028A. Aggravated identity theft, &c.; 18 U.S.C. 1341. Frauds and swindles 18 U.S.C. 1343. Fraud by Wire, &c.; 18 U.S.C. 1344. Financial Institution Fraud; 18 U.S.C. 1503. Obstruction of Justice; 18 U.S.C. 1512. Tampering with a witness, victim, or an informant; 18 U.S.C. 1513. Retaliating against a witness, victim, or an informant; 18 U.S.C. 1951. (Hobbs Act) Interference w/ commerce by threats or violence; 18 U.S.C. 1952. Interstate and foreign travel or transportation in aid of racketeering enterprises; 18 U.S.C. 1956. Laundering of Monetary Instruments; 18 U.S.C. 1957. Engaging in monetary

Shillelagh Capital, Corp., Success Bullion USA LLC, TCF Bank, Thomas P. Harlan, Trask and Affiliates Ltd, Vladimir Pierre-Louis, Wachovia Bank (Los Angeles, CA), Ozark Mountain Bank, Wells Fargo Bank, William Chandler Reynolds, Nominal Defendants.

In the interest of a fully pled complaint: Brandon Colker, Eugene Fletcher, Hing Teik Choon, James Linder, Larry J. Busch, Jr., Melissa Shapiro, and Thomas P. Harlan, Un-named RICO Co-conspirators (Non-defendant violators). Alicorn Capital Management LLC Berea Inc., BMW Majestic LLC, Bush Law Center LLC, Colker-Childs-IGM, Law Offices of Jon Divens & Assoc. LLC, Matrix Holdings LLC, Success Bullion LLC, Wiseguys Investments LLC, and the Amenpenofer Syndicate, aggregate International Association-In-Fact, consolidating, inter alios : the Wilde Mob, the Milaca Gang, the Atlanta Family, and the Contra Costa Family, the RICO Enterprises.

transactions in property derived from specified unlawful activity; 18 U.S.C. 1960. Prohibition of unlicensed money transmitting businesses; 18 U.S.C. 2314. Transportation of stolen goods, securities, moneys, &c., 18 U.S.C. 2315. Sale or receipt of stolen goods, securities, moneys, &c. STATE PREDICATE CRIMES 18 U.S.C. 1961 (1)(A) Extortion* - Tex. Penal Code 31.03 Theft OVERT CRIMINAL ACTS IN FURTHERANCE OF THE CONSPIRACY & RACKETEERING 18 U.S.C. 1342 Fictitious name or address - Mail Fraud; 26 U.S.C. 7201 Tax Evasion; 26 U.S.C. 7206(4) Tax - Removal or Concealment with Intent to Defraud; 26 U.S.C. 7206(5) Tax - Compromises & Closing Agreements; 15 U.S.C. 45(a) and 52 ( 5(a) and 12 of the FTC Act); Forgery* - Tex. P.C. 32.21. Ch. 32 B; Conversion* - Tex. P.C. 31.03. Theft. * 31.02 Consolidated Theft Offenses. PENDANT CLAIMS DECLARATORY JUDGMENT INJUNCTIVE RELIEF RICO DISGORGEMENT, DIVESTITURE & CLAWBACK

Predicate Crimes Acts identified in 18 U.S.C. 1961 Definitions, which establish the predicative elements of the Defendants RICO violations. Predicate Crimes; e.g., United States v. Pepe, 747 F.2d 632, 645 (11th Cir. 1984); United States v. Ruggiero, 726 F.2d 913, 918 (2d Cir.), 469 U.S. 831 (1984).

TABLE OF CONTENTS

PAGE

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i LEGEND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii COURT RECORDS CROSS-REFERENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv I PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

II JURISDICTION, VENUE & CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . 23 IV SUMMARY OF THE FACTS AND ALLEGATIONS. . . . . . . . . . . . . . . . . . . . . . 32 VI THE ENTERPRISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 VII CONSOLIDATED RICO PREDICATE ACTS. . . . . . . . . . . . . . . . . . . . . . . . . . 169 VIII CAUSES OF ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 IX OTHER PLEAS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 X DAMAGES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 XI PRAYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page i

LEGEND
Annotation Keys, Notation & Terms
Key Statue/Code Description

RICO Federal Predicate Crimes 1 2 3 4 5 6 7 8 9 18 U.S.C. 1028 18 U.S.C. 1028A 18 U.S.C. 1341 18 U.S.C. 1343 18 U.S.C. 1344 18 U.S.C. 1503 18 U.S.C. 1512 18 U.S.C. 1513 18 U.S.C. 1951 Fraud and related activity in connection with identification documents Aggravated identity theft, authentication features, and information Frauds and swindles (Mail Fraud) Fraud by wire, radio, or television (Wire Fraud) Financial Institution Fraud Obstruction of Justice Tampering with a witness, victim, or an informant Retaliating against a witness, victim, or an informant Interference w/ commerce by threats or violence (Hobbs Act) Interstate and foreign travel or transportation in aid of racketeering enterprises Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Prohibition of unlicensed money transmitting business Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps

10 18 U.S.C. 1952 11 18 U.S.C. 1956 12 18 U.S.C. 1957 13 18 U.S.C. 1960 14 18 U.S.C. 2314 15 18 U.S.C. 2315

RICO State Predicate Crimes 18 U.S.C. 1961 (1)(A) 16 Tex. P.C. 31.03 Extortion ( 31.02 Consolidation of Theft Offenses)

Overt Criminal Acts in Furtherance of the Conspiracy & Racketeering 17 18 U.S.C. 1342 18 Tex. P.C. 32.21 19 Tex. P.C. 31.03 20 18 U.S.C. 1342 21 26 U.S.C. 7201 26 U.S.C. 22 7206(4) 26 U.S.C. 7206(5) Fictitious name or address (Mail Fraud) Forgery - Chapter 32. Fraud, Subchapter B. Forgery (Tex. Penal Code ) Conversion* - Tex. P.C. 31.03. Theft Fictitious name or address - Mail Fraud Tax Evasion Tax Fraud - Removal or Concealment with Intent to Defraud

23

Tax Fraud - Compromises & Closing Agreements FTC Act

24 15 U.S.C. 45(a)

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page ii

Key

Statue/Code

Description

25

15 U.S.C. 52 ( 5(a) and 12

FTC Act

Legal/Equitable Doctrines Equitable Estoppel (use in this complaint relating to): 1-Estoppel by Non-disclosure, 2-by Acquiescence, 3-by Silence, 4-by Conflict, by Misrepresentation, 5-by Record or Judicial Estoppel, 6-by Facts Misrepresented or Concealed, 7-by Knowledge of True Facts, 8-by Fraudulent Intent, 9-by Inducement and Reliance, 10-by Injury to Complainant, and 11-by Clear, Concise, Unequivocal Proof of Actus. Annotation doc. document # F Document citation from Records of the Court, e.g.: Ct. Rec. doc 10-1 at 2

exhibit locus mark Reference Mark e.g.,: Ex. 170, annot. , at 45; Reference Target:

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page iii

COURT RECORDS CROSS-REFERENCE

Document Title

Court Record Document No.

Original Complaint i-56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1 Original Complaint 57-126. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-1 Original Complaint 127-198. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-2 Exhibits Volume 1 Exhibits 1-7.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-3 Exhibits Volume 1 Exhibits 8-26.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-4 Exhibits Volume 2 Exhibits 27-52.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-5 Exhibits Volume 3 Exhibits 53-78.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-6 Exhibits Volume 4 Exhibits 79-100.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-7 Exhibits Volume 5 Exhibits 101-104.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-8 Exhibits Volume 6 Exhibits 105-128.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-9 Exhibits Volume 7 Exhibits 130-132.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 1-10 Exhibits Volume 7A Exhibits 130-150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 27 Under Seal Exhibits Volume 8 Exhibits 151-172.. . . . . . . . . . . . . . . . . . . . . . . doc. 10-1 Exhibits Volume 9 Exhibits 173- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. Exhibits Volume 10 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consent to Proceed Before a United States Magistrate Judge. . . . . . . . . . . . . . . Plaintiffs' Certificate of Interested Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plaintiffs' Submission of Summons.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc . doc. 2 doc. 3 doc. 4

Order - Referral for Pretrial Management to Magistrate Judge.. . . . . . . . . . . . . doc. 5 FRCP Rule 4 Summons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 5-2 Under Seal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 10 Under Seal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 11 Under Seal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 12

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page iv

FIRST A MENDED COMPLAINT

TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, the Plaintiffs, R. Lance Flores and Vicki Clarkson, to amend their Original Complaint and file their First Amended Complaint (hereinafter the Complaint) to include additional Defendants and further plead and advance a pattern of racketeering. This complaint is a quintessential RICO action in that it comports with congressional intent for which 18 U.S.C. 1962 et seq., was enacted. It further conforms to the dictum and interpretations of law exacted by the several Circuits and exceeds minimum requirements set forth by our Circuit and those of the Supreme Court. This action is also brought in behalf of the Nations economic system and public interest.
1

Whence the Plaintiffs infer in support thereof:

The Congressional Statement of Findings and Purpose underlying RICO explains that, among other things, RICO was designed to combat activities that weaken the stability of the Nations economic system, harm innocent investors and competing organizations, interfere with free competition, seriously burden interstate and foreign commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens Pub. L. No. 91-452, 84 Stat., at 922, 923. Congress found that "organized" criminal "activity" used "fraud" to "drain" "dollars" from the American economy [*248] and to "harm innocent investors." Lewis v. United States, 445 U.S. 55, 61 (1980) ("obvious breadth of the language may well reflect the expansive legislative approach revealed by Congress' express findings and declarations.").
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 1

PARTIES

1.1 PLAINTIFFS 1.1.1 Plaintiff, Rudolph Lance Flores (Flores), individually (a sole proprietor having no legal existence apart from Plaintiff and having all assets, consideration and rights related thereto), having domiciliary location in Texas, U.S. citizen, with Plaintiffs principal place of business operation and activity in the City of Dallas, Dallas County, Texas, USA. 1.1.2 Plaintiff, Vicki Clarkson (Clarkson), individually. She is an individual who residence is Alberta, Canada, and is a Canadian citizen, with her principal place of business operation and activity in the City of Calgary, Alberta, Canada.

1.2 DEFENDANTS

At all relevant times to this Complaint each and every Defendant named herein was a "person" within the meaning of 18 U.S.C. 1961(3), because each defendant was capable of holding a legal or beneficial interest in property. Further, each and every Defendant i.) engaged in a pattern of racketeering activity connected

Presently, RICO Defendants Francis E. Wilde, Steven E. Woods, Mark A. Gelazela, BMW MAJESTIC LLC, IDLYC HOLDINGS TRUST LLC, AND IDLYC HOLDINGS TRUST and Nominal Defendant IBALANCE LLC are defendants or relief defendants in a complaint filed in the United States District Court for the Central District of California, Los Angeles Division, on February 24, 2011, Case No. SACV11-00314, by the United States Securities & Exchange Commission ("SEC") (SEC v. Wilde, et al., 8:11-cv-00315-DOC -AJW (CD Cal. 2/24/2011)) in what appears, at this time, to be an indirectly related cases of similar nature initiated prior to the events of the instant action; the SEC's Rule 9 pleading deficiencies preclude determination certainly of the SECs substantive connection to the Plaintiffs' claim in toto.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 2

to the acquisition, establishment, conduct, and/or control of one or more enterprises, as elucidated in Word of Faith; ii.) is separate and clearly distinguished from the charged Enterprise(s) described below; and iii.) in the course of racketeering activity, directly engaged or conspired in, or otherwise participated in not less than two predicate criminal acts that were related over a period of less than ten years, each act maintaining course and temporal continuity that poses a threat of continued criminal activity.
4 3

At all relevant times to this Complaint each and every Defendants, individually, and through their agents, alter egos, subsidiaries, divisions, or parent companies, materially participated in the Enterprises described herein. Moreover, in their participations, Defendants conspired, assisted, encouraged, and otherwise aided and abetted one or more of the other defendants in the unlawful, misleading, and fraudulent conduct alleged herein. Each RICO Defendant knowingly agreed that a conspirator, which could have included the Defendant himself, would commit a violation of 18 U.S.C. 1962(c).
5

Ensuant therefrom, by and through their criminal conduct, Defendants adversely affected foreign and interstate commerce in the United States. In furtherance, of their interstate and foreign commerce activities, Defendants effectuated i.) the

3 4 5

Word of Faith, 90 F. 3d at 122 (quoting In re Burzynski, 989 F.2d 733, 741-42 (5th Cir.1993)). Cf. In re Burzynski, at 733, 743.

See, e.g., Salinas v. United States, 522 U.S. 52 (1997) at 62-65; United States v. Delgado, 401 F.3d 290, 297 (5thCir. 2005) at 296; United States v. Pipkins, 378 F.3d 1281, 1294-95 (11th Cir. 2004), at 1288; United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) at 857.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 3

transportation of stolen securities and moneys, ii.) interstate and foreign travel or transportation in aid of their racketeering enterprises, iii.) the laundering of monetary instruments, and iv.) the engagement of monetary transactions in property derived from specified unlawful activity throughout the globe, specifically, in and amongst Canada, the Philippines, the United Kingdom, Ghana, Russia, Switzerland, South Africa, People's Republic of China, New Zealand, and Germany. At all relevant times to this Complaint, Defendants actions were intentional, committed with malice aforethought, and perpetrated with scienter and reckless disregard of the law, where their acts were the proximate or direct cause of the related damages and injuries to the Plaintiffs. Through their course of acts, each is trustee ex maleficio arising from their individual wrongdoings and misdeeds thereby, as alleged herein. Historically, the RICO Defendants, inter alios, Wilde, Woods, Linder, Gelazela and Co-conspirators have continually engaged in patterns of fraud, deception and theft in numerous fraud schemes exhibiting a common method and pattern to their victimizations. The evidence shows that their victims have been injured through the use of funds from a series of racketeering income, including the use of their victims
8 7 6

See, e.g., Pipkins, 378 F.3d at 1294-95 (members of the enterprise: (1) used instrumentalities of interstate commerce pagers, telephones, cell phones and the internet to conduct the enterprises affairs; (2) used automobiles and interstate highways to transport underage prostitutes across state lines; (3) recruited prostitutes from states outside the forum state; and (4) provided prostitutes with condoms manufactured out of state), vacated on other grounds, 544 U.S. 902 (2005)
7 8

Later incorporating the services, activities, and confederacy of the other named Defendants. Newmyer v. Philatelic Leasing, Ltd., F.2d 385, 396 (6th Cir.1989).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 4

assets. Further, there is an incontrovertible nexus between the alleged RICO violations and predicate crimes perpetrated by each of the Defendants and the Plaintiffs injuries.
10

Plaintiffs allege, as has the United States (SEC v. Wilde, et al. ), Defendants activity began years prior
12

11

that the

to their nexus established between the

Plaintiffs. The RICO Defendants assimilated their on-going criminal racketeering activities into the events that lead to Plaintiffs suit. Defendants and Co-conspirators racketeering activity is characterized by their sepulcarchy and contiguous predation embodied by a plethora of RICO predicate crimes, and overt criminal acts in furtherance of the conspiracy and that racketeering activity.
13

The aforementioned activity, when temporally viewed with the events described in Plaintiffs facts and allegations, substantiated and warrants the expectation of

Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580, 584 (5th Cir.1992), at 584 particularly. Crowe v. Henry, 43 F.3d 198, 205 (5th Cir.1995). i.e., Establishing a viable 1962(a) claim by Plaintiffs. Since at least April 2008, Defendant Francis E. Wilde ("Wilde") through Defendant Matrix Holdings LLC ("Matrix"), orchestrated two fraudulent investment schemes. SEC v. Wilde, et al., 8:11-cv-00315-DOC -AJW (USDC CD Cal. 13/5/2011) at 2, 1. [In the instant cause Matrix is a RICO Enterprise] Prior to or least in March/April of 2008. Id. at 2 1, 6 22. Also alleged, on or about July 2007, Wilde, inter alios, engaged in a number of frauds involving a securities sale in which he intentionally misrepresented financial information in a merger transaction of Riptide Worldwide Inc. f/k/a Shea Development Corp. (See, Watson, et al. v. Riptide Worldwide Inc., et al., 1:11-cv-00874-PAC (USDC SD NY 2/8/2011) at 4, III A 14. Overt Criminal Acts - Crimes perpetrated by Defendants i.) in furtherance of enterprise activities establishing actus reus and mens rea attaching to RICO predicate acts; ii.) in interstate commerce; iii.) in the criminal operation in the zone of interests protected by RICO for fraud perpetrated upon the United States; and, iv.) and, establishing Defendants' culpable intent, scienter, and malice aforethought throughout their pattern of racketeering.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 13 12 11 10

Page 5

Defendants continued criminal activity, particularly, their involvement in racketeering, well into the future.
14

The Defendants liability to the Plaintiffs for the damages described herein is joint and several.
15

Following, though not every RICO Defendant may have been

directly involved in the planning or design of each act, nor involved in each and every decision made by Enterprises control group(s), each RICO Defendant is, however, liable for the substantive RICO violations of the others. It is ample, that by each Defendants conscience participation in the performance of acts with scienter, that are related to, and foster, the operation or management of any of the enterprises, that each is civilly and criminally liable for the acts of the others.
14 15 16

Cf. discussion Abraham, et al. v. Singh, 480 F.3d 351 (5th Cir. 2007).

See Fleischhauer v. Feltner, 879 F.2d 1290, 1301 (6th Cir. 1989) (joint and several liability appropriate for civil RICO violation); United States v. Philip Morris USA, 316 F. Supp. 2d 19, 27 (D.D.C. 2004) (stating that "[e]very circuit in the country that has addressed the issue has concluded that the nature of both civil and criminal RICO offenses requires imposition of joint and several liability because all defendants participate in the enterprise responsible for the RICO violations and summarizing cases. See, e.g., United States v. Oreto, 37 F.3d 739, 752 (1st Cir. 1994) at 751-53 (finding that Congress intended to reach all who participated in the conduct of the enterprise, whether they were generals or foot soldiers and holding that the Reves test (Reves v. Ernst & Young, 507 U.S. 170 (1993) was satisfied by evidence that the defendant collected extortion payments under the direction of leaders of an extortion collection enterprise); Napoli v. United States, 32 F.3d 31, 36 (2d Cir. 1994) (overwhelming evidence that attorneys, although of counsel to the law firm enterprise, were not merely providing peripheral advice, but participated in the core activities that constituted the affairs of the firm), cert. denied, 513 U.S. 1110, reh'g granted, 45 F.3d 680, 683 (2d Cir.) (upholding convictions of law firm investigators who were lower-rung participants whose racketeering activities were conducted under the direction of upper management), cert. denied, 514 U.S. 1084 (1995); United States v. Urban, 404 F.3d 754 (3d Cir. 2005) at 769-70 (stating that the operation or management test does not limit RICO liability to upper management because an enterprise is operated not just by upper management but also by lower-rung participants in the enterprise who are under the direction of upper management; and holding that Reves liability encompassed city employees who performed plumbing inspections and related work for the citys Construction Services Department, the alleged enterprise) (internal quotation marks and citations omitted); Delgado, 401 F.3d at 297-98 (same); First Capital Asset Mgmt. v. Satinwood, Inc., 385 F.3d 159, 176 (2d Cir. 2004) (RICO liability is not limited to those with primary responsibility for the enterprises affairs (citation omitted)); Baisch v. Gallina, 346 F.3d 366, 376 (2d Cir. 2003) (same and adding that [o]ne is liable under RICO if he or she has discretionary authority in carrying out the instructions of the [enterprises] principals) (citations
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 16

Page 6

Since December 18, 2009, the Defendants transferred some of their illicit proceeds to others in the course of their frauds. Further Plaintiffs aver: 1.2.1 RICO Defendant Scott Anthony Koster (Koster or Scott Koster or Scott A. Koster), is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Koster is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. Scott Koster is a resident of Mille Lacs County, Minnesota, whose business address is listed as 14391 80TH Street, Milaca, Minnesota 56353. 1.2.2 Koster, like other Defendants, took a portion of the monies raised, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. He also transferred some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre.

omitted); DeFalco v. Bernas, 244 F.3d (2d Cir. 2001) at 309 (ruling that RICO liability is not limited to those with primary responsibility or to those with a formal position in the enterprise, and finding that there was sufficient evidence to satisfy the Reves test where the defendant instructed others to facilitate commission of racketeering activity) (internal quotation marks and citations omitted); United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) (finding that Reves does not require that the defendant have decision-making power, only that defendant take part in the operation of the enterprise, and holding that the defendant was liable under Reves since he bought multi-kilogram amounts of cocaine from the drug enterprise on a regular basis); United States v. To, 144 F.3d 737, 747 (11th Cir. 1998) (holding that Reves test was satisfied by evidence that the defendant planned and carried out a robbery with other members of an Asian crime gang that committed a series of robberies targeting Asian-American business owners and managers).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 7

1.2.3 RICO Defendant Francis E. Wilde a/k/a Frank Wilde (Wilde), circa 54, is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Wilde is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. Wilde, U.S.A. Passport # 133949048, resides at 316 Ridgehaven Place, Richardson, TX 75080. At all material to this Complaint: 1.2.3.1 Wilde was the owner and principal of Matrix Holdings LLC.
6

Wilde was also the CEO of Riptide Worldwide, Inc., a public company whose stock is currently quoted on OTC Markets Group Inc.'s OTC Pink quotation system. Wilde, who absconded with large portions of the amounts raised, conspired and acted with the aid of a number of other individuals, including, inter alios, Defendants Steven E. Woods, Mark Gelazela, and Bruce H. Haglund, an attorney, along with entities they controlled, or participated in a number of schemes, lying to investors and potential investors. 1.2.3.2 Wilde, stole a large portion of the monies raised, conspired and

acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously

Chase Courts Findings of Fact and Conclusions of Law, October 14, 2010, Chase Investment Services Corp., et al. v. Law Offices of Jon Divens & Assoc. LLC, et al., CV 09-9152 MANx (USDC CD Cal. 10/14/2010), Cf. JS6 (PACER/ECF Case 2:09-cv-091S2-SVW-MAN, Document 120 Filed 10/14/10); Newport Titan LC v. Matrix Holdings LLC, 2:09-cv-00797-BSJ (USDC Utah 9/4/2009) Default Judgement (PACER/ECF Case 2:09-cv-00797-BSJ Document 17 Filed 11/04/09)
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 8

and intentionally misleading investors and potential investors. He also transferred some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre. 1.2.4 RICO Defendant Steven E. Woods a/k/a Steve Woods, a/k/a Stevie Lee Woods, circa 50, is the song writer/performer of Country/Western vocal Its Only Money, and, is as well, a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Woods is liable under RICO for his participation in conducting the affairs of the association in fact as well as other enterprises, and is the owner and principal of BMW Majestic LLC. Woods is not registered as, or associated with, a broker-dealer. 1.2.5 Woods, like other Defendants, stole a large portion of the monies raised, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. He also transferred some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre. Woods resides at 140 Rocky Point Loop, Branson, MO 65616. 1.2.6 Jon Divens, is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 9

purposes. Divens is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. 1.2.7 Divens, aided and abided other Defendants and stole a portion of the money brought in, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors.(SBN 145594), 9663 Santa Monica Blvd., Suite 948,Beverly Hills, CA 90210, Tel: (310) 601-3168, Fax: (866) 381-3227, Email: attorneydivens@yahoo.com Website: http://www.jondivens.net/ 1.2.8 Linder, aided and abided other Defendants and stole a portion of the money brought in, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. 1.2.9 RICO Defendant Bruce H. Haglund (Haglund), circa 60, is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Haglund is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. He is an attorney licensed to practice law by the State Bar of California, License #92683, 20 Foxboro, Irvine, CA 92614, Tel: 714-801-3000, FAX: 949-266-8426.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 10

1.2.10 Haglund, aided and abided other Defendants, stole a large amount of the money raised, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. He also transferred some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre. 1.2.11 RICO Defendant Mark Alan Gelazela (Gelazela), 39, a/k/a Mark Zella, defendant is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Gelazela is liable under RICO for his participation in conducting the affairs of the association in fact as well as other enterprises. Service may be had upon Gelazela , a natural person, d/b/a SPIN Entertainment d/b/a Godspeeds Entertainment at his office for IBalance LLC, IDLYC Holding Trust LLC, Godspeeds Initiative LLC, and Godspeeds Endeavors located at Florida Secretary of State registered business address: 26 Marlwood Lane, Palm Beach Gardens, FL 33418. Gelazela appears also to do business as an actor-producer-screenwriter, pornography filmmaker, in Marina del Rey, California. At all times material to this Complaint: 1.2.11.1 Gelazela was, Managing Member and the Registered Agent of

Idlyc Holdings Trust LLC, USA (IDLYC) 01/07/2010, FL FEI/EIN # 271651047;

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 11

1.2.11.2

Founder/Agent/Producer-Actor-Screenwriter of Godspeeds

Entertainment, 8577 SW 137 Ave., Miami, FL 33183 USA; 1.2.11.3 Gelazela was a Registered Agent and a Managing Member of

Godspeeds Initiative LLC, 26 Marlwood Lane, Palm Beach Gardens, FL 33418; 1.2.11.4 Gelazela was the Registered Agent and a Managing Member of

Godspeeds Endeavors LLC located at 26 Marlwood Lane, Palm Beach Gardens, FL 33418, Godspeeds Endeavors LLC is co-managed by Idlyc Holdings Trust of New Zealand, 9 Melody Lane, Ruakura Road, Hamilton, New Zealand; 1.2.11.5 Gelazela was a Managing Member of IBalance LLC, located at

26 Marlwood Lane, Palm Beach Gardens, FL 33418; 1.2.11.6 Gelazela was a Principal of SPIN Entertainment (SPIN) located

at 3677 Jasmine Ave., #10, Los Angeles CA 90034, USA. 1.2.12 William Chandler Reynolds (Reynolds), 39, at times material to this Complaint, Reynolds was a Managing Member of Idlyc Holdings Trust LLC, USA (IDLYC); 01/07/2010, FL; FEI/EIN # 271651047, 3677 Jasmine Ave, # 10., Los Angeles CA 90034, USA whose last known address is 26 Marlwood Lane, Palm Beach Gardens, FL 334185. At times material to this Complaint Reynolds was the registered agent of IBalance LLC, located at 26 Marlwood Lane, Palm Beach Gardens, FL 33418. 1.2.13 RICO Defendant Kerim S. Emre (Emre), is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 12

establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. Emre is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. Emres present residence and business addresses are unknown. His last resided at 206 Baltimore Ave., Huntington Beach, CA 92648, business telephone numbers are 714-408-8777, 714-408-4695, Fax # 951-231-9804. Emre was an agent and intermediary for Koster and Alicorn Capital Management LLC and was the primary agent and contact to Koster's/Alicorn's Profit-Sharing Partnership. Emre, as well, performed as account manager, defacto Investment Advisor, and/or associated with Investment Advisor Koster, within the meaning and contemplation of the securities laws of the United States. received income from a pattern of racketeering activity and invested that income in one or more criminal and/or enterprises. 1.2.14 Emre, like other Defendants, participated in the theft of a large portion of the monies procured, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. He also participated or aided in the transfer some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre. 1.2.15 RICO Defendant John T. Childs d/b/a Interlink Global Messaging (Childs), is a culpable individual who engaged in a pattern of racketeering activity

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 13

connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes. At all times material to this Complaint, Childs was the Managing Member/Partner of Interlink Global Messaging, Childs was an agent and intermediary for Koster and Alicorn Capital Management LLC and was a primary agent and contact to Kosters/Alicorns Profit-Sharing Partnership. He, as well, performed as an account manager, defacto Investment Advisor, and/or associated with Investment Advisor Koster, within the meaning and contemplation of the securities laws of the United States. received income from a pattern of racketeering activity and invested that income in one or more criminal and/or enterprises Childs is liable under RICO for his participation in conducting the affairs of the association in fact as well as through other enterprises. 1.2.16 Childs, participated in the theft of a large portion of the monies procured, conspired and acted with the aid of a number of other Defendants along with entities they controlled, and participated in a number of schemes, lying and/or maliciously and intentionally misleading investors and potential investors. He also participated or aided in the transfer some of the illicit proceeds to some of the Nominal Defendants and/or others and made personal use of the illegitimate lucre. 1.2.17 RICO Defendant Richard D. Hall (Hall) d/b/a is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 14

associated in fact for criminal purposes. Hall is liable under RICO for his participation in conducting the affairs of the association in fact as well as other enterprises. At times pertinent to this Complaint, Hall was the CEO of Berea Inc., #500, 3330 Cumberland Blvd., Atlanta, GA; he and other corporate officers of Berea Inc. supervised the Alicorn PSP Gold Buy/Sell transaction and subscribed investors in the profit sharing of the gold purchases and its sale, financed by the investors for use of their bank guarantee, and initiated the removal of the Plaintiffs one-third (a) interest in that transaction. 1.2.18 RICO Defendant Winston Jerome Cook (Cook) is a culpable individual who engaged in a pattern of racketeering activity connected to the acquisition, establishment, conduct, and/or control of more than one enterprise where he was associated in fact for criminal purposes; and liable under RICO for his participation in conducting the affairs of the association in fact as well as other enterprises. Cook was the CEO of Cook Business Services LLC, 5710 Melanie Trail, Atlanta, GA, 30349-2853. At times material to this Complaint, Cook of Cook Business Services LLC managed or supervised the Alicorn PSP Gold Buy/Sell transaction investors in the profit sharing of the gold purchases and its sale, financed by the investors through the debt funds owed to the Plaintiffs from nonperformances and damages of the ALICORN/IDLYC/BMW tranaction for use of their bank guarantee, and initiated the removal of the Plaintiffs one-third (a) interest in that transaction. 1.2.19 John/Jane Doe(s).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 15

1.3 NOMINAL DEFENDANTS 1.3.1 Alicorn Capital Management, LLC (Alicorn), Scott A. Koster CEO, no Agent listed, is a Minnesota limited liability company and the management company for the subject financial transaction by and between, inter alia, the Idlyc Holdings Trust LLC. Alicorn has its principal place of business located at 14391 80TH Street, Milaca, Minnesota 56353. 1.3.2 Bank of America, Bank of America Corporation, 100 N. Tryon St. Charlotte, NC 28255 1.3.3 Berea Inc., #500, 3330 Cumberland Blvd., Atlanta, GA 30339 and may be served through Richard Hall, CEO. 1.3.4 BMW Majestic LLC, (BMW) is a Missouri limited liability company with its principal place of business in Branson, Missouri, is owned and controlled by Woods. BMW Majestic LLC is registered as a Missouri restaurant and entertainment company, and is not registered with the Securities and Exchange Commission in any capacity and it has not registered any offering of securities under the Securities Act nor any class of securities under the Exchange Act. Woods signed up investors for the bank guarantee scheme through BMW. 1.3.5 Brandon Colker (Colker) d/b/a Interlink Global Messaging, published address is fraudulent. 1.3.6 Busch Law Center LLC (BLC), 3611 Anthem Way, Anthem, AZ 85086

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 16

1.3.7 Cook Business Services LLC (CBS), is a Georgia limited liability company whose service may be had by companys registered agent Winston Jerome Cook at 5710 Melanie Trail, Atlanta, GA, 30349-2853. Tel: (770) 9692217. 1.3.8 Deutsche Bank, & Deutsche Bank AG, London Branch (Deutsche Bank), thru Deutsche Bank USA, 60 Wall Street, New York, NY 10005 USA 1.3.9 Gregory Botolino (Botolino), CFO of Berea LLC, #500, 3330 Cumberland Blvd., Atlanta, GA. 1.3.10 IBalance LLC, a Florida limited liability company with its principal place of business in Palm Beach Gardens, Florida, is partially owned and controlled by Gelazela. Gelazela received his fees for the bank guarantee scheme in a bank account held in the name of IBalance. The company is located at 26 Marlwood Lane, Palm Beach Gardens, FL 33418. 1.3.11 HSBC - Hongkong and Shanghai Banking Corp. Ltd., Ti, (HSBC) Hong Kong, China Bank Address USA, N.A., One HSBC Center, Buffalo, NY 14203 FIASB: Hing Teik Choon / BMWT / Falcon International 1.3.12 Idlyc Holdings Trust LLC (IHTUSA), a Florida limited liability company with its principal place of business in Palm Beach Gardens, Florida, is partially owned and controlled by Gelazela. It is not registered with the Securities and Exchange Commission in any capacity and it has not registered any offering of securities under the Securities Act nor any class of securities under the

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 17

Exchange Act. Gelazela created this entity in the United States so that he could open a domestic bank account under the IDLYC name. 1.3.13 Idlyc Holdings Trust (IHTNZ), is a New Zealand foreign trust for which Gelazela is the settlor and a trustee. It is not registered with the United States Securities and Exchange Commission in any capacity and it has not registered any offering of securities under the Securities Act nor any class of securities under the Exchange Act. 1.3.14 Interlink Global Messaging (IGM), published mail address is fraudulent. 1.3.15 Larry J. Busch, Jr., Busch Law Center LLC, 3611 Anthem Way, Anthem, AZ 85086 1.3.16 Matrix Holdings LLC, Matrix Holdings LLC, a Minnesota limited liability company with its principal place of business in new York, New York, is owned and controlled by Wilde. Address: 590 Park Stre #6 Capitol Prof Bldg St. Paul, MN, 55103 1.3.17 Maureen Wilde, 60, is a resident of Richardson, Texas, and the wife of Francis (Frank) Wilde. A bank account held in her name received approximately $800,000 in investor funds from the bank guarantee scheme. 1.3.18 Shillelagh Capital Corporation, a Nevada corporation, is owned and controlled by Frank Wilde. Shillelagh has never had a class of securities registered with the SEC. Wilde instructed Haglund to send approximately $323,500 in investor funds from the bank guarantee scheme to Shillelagh.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 18

1.3.19 Success Bullion USA LLC (Success Bullion), fr. California Secretary of State - Registered Agent for Service of Process is Chris Jann, 580 California St. Ste 1200, San Francisco CA 94104, 125 Cambon Drive San Francisco, CA 94132-2558. Chris Jann is also the published principal Success Bullion. 1.3.20 TCF Bank, 19270 Freeport St NW, Elk River, MN55330 Account Scott Koster 1.3.21 Trask and Affiliates Ltd, address and contact information unknown. 1.3.22 Wachovia Bank (Los Angeles, CA), (Part of Wells Fargo Bank), 11601 Wilshire Blvd Los Angeles, CA 90025 1.3.23 Ozark Mountain Bank, 400 South Business 65, Branson, Missouri 65616 1.3.24 Wells Fargo Bank, Head Office, 420 Montgomery Street, San Francisco, CA 94104, USA

1.4 CO-CONSPIRATORS NOT NAMED AS DEFENDANTS The following persons, along with others whose names are both known and unknown , are named as co-conspirators, but not defendants, for the reasons indicated below: 1.4.1 Thomas P. Harlan (Harlan), at times material to this Complaint, Harlan, whom Koster declares was his legal counsel that advised Koster throughout the racketeering enterprise scheme, working hand-in-hand with Harlan throughout the racketeering enterprise scheme creating the written

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 19

instruments used in the fraud process. Harlan is an attorney licensed to practice law by the State Bar of Minnesota and is one of the founding shareholders of Madigan, Dahl & Harlan, P.A. (herein after the Firm). His last known address at Madigan, Dahl & Harlan, P.A., Campbell Mithun Tower, 222 South Ninth Street South, Suite 3150, Minneapolis, Minnesota 55402, Tel: 612-604-2589 (direct); 612-604-2000 (main), 612-604-2599 (fax), harlan@mdh-law.com . 1.4.2 Larry J. Busch, Jr., (cf. 1.3.15, supra) 1.4.3 James Linder (Linder). 1.4.4 Melissa Shapiro, address unavailable, Business Office Ph. 401-667-0560, Business Cell 860-751-2215 1.4.5 Eugene Fletcher, address unavailable, Business Ph. 678-732-6234, tstorm2010@aol.com 1.4.6 Brandon David Colker, 376 Vernal Drive Alamo, CA 94507, Business Ph. 925-482-6084.

1.5 RICO DEFENDANTS SOUGHT UNDER DELAYED DISCOVERY 1.5.1 Eugene Fletcher, address unavailable, 678-732-6234, tstorm2010@aol.com 1.5.2 Christine Wong-Sang; President, Berea Inc., #500, 3330 Cumberland Blvd., Atlanta, GA 30339. 1.5.3 Maureen Wilde, 60, (cf. 1.3.17, supra).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 20

1.5.4 Vladimir Pierre-Louise, CFO/Secretary, Berea Inc., #500, 3330 Cumberland Blvd., Atlanta, GA 30339.

1.6 NOMINAL DEFENDANTS SOUGHT UNDER DELAYED DISCOVERY 1.6.1 Bank of America FIASB: James Linder 1.6.2 Barclays Bank (London) 5 The North Colonnade, Canary Wharf, London E14 4BB United Kingdom Barclays Capital (US division of Barclays Bank Dallas), 200 Crescent Court, Suite 400, Dallas TX 75201 USA FIASB: Baker McKenzie LLP, 2001 Ross Ave., Dallas, TX 75201 (214) 978-3000 1.6.3 Citizens Bank FIASB: Falcon International Holdings 1.6.4 Citibank, 399 Park Ave.,New York, NY 10022 FIASB: OMelveny & Myers 1.6.5 Eugene Fletcher, address unavailable, 678-732-6234, tstorm2010@aol.com 1.6.6 Falcon Bank FIASB: Francis Wilde 1.6.7 Madigan, Dahl & Harlan P.A., (herein after the Firm), may be served at Madigan, Dahl & Harlan, P.A., Campbell Mithun Tower, 222 South Ninth Street South, Suite 3150, Minneapolis, Minnesota 55402, Tel: 612-604-2589 (direct); 612-604-2000 (main), 612-604-2599 (fax). 1.6.8 M & T Bank FIASB: MM5 LLC 1.6.9 OCBC Bank, 1700 Broadway, 18/F, New York, NY 10019 FIASB: James Wan & Company

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 21

1.6.10 Rosbank (Ojsc Jscb) Societe Generale, 11 Masha Poryvaeva Str., P.O. Box 208, Moscow 107078 Russia FIASB: Francis Wilde 1.6.11 Thomas P. Harlan (Harlan), (cf. 1.4.1, supra). 1.6.12 Vladimir Pierre-Louise; CFO/Secretary, Berea Inc., Unknown Address 1.6.13 Wegelin Bank (Switzerland) Private Bank Zurich Switzerland FIASB: Francis Wilde 1.6.14 Wells Fargo Bank FIASB: Dale Briggs & Associates IOLTA Account 1.6.15 Whistler Energy Offshore LLC, j National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York, 10001

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 22

II JURISDICTION, VENUE & CONDITIONS PRECEDENT ORIGINAL & NATIONWIDE JURISDICTION 2.1 This Court has original jurisdiction under 28 U.S.C. 1331 because this action arises under the Constitution, laws, or treaties of the United States. Specifically, this action arises under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961 et seq. and is subject to this Courts jurisdiction.
7

SUPPLEMENTAL JURISDICTION 2.2 This Court also has supplemental jurisdiction under 28 U.S.C. 1367, because all other claims are so related to those claims over which the Court has original jurisdiction as to form part of the same case or controversy under Article III of the United States Constitution.

PERSONAL JURISDICTION 2.3 Notwithstanding the Courts Nationwide Jurisdiction over the nonresident RICO Defendants, this Courts Personal Jurisdiction over the Defendants comports with due process under the United States Constitution and the long-arm statutes of Texas. Defendant Wilde resides in Richardson, Dallas County, Texas, and is one of the prime movers behind numerous nationwide conspiracies and fraud schemes

Most courts interpret 1965(b) as conferring nationwide jurisdiction over nonresident defendants if the plaintiff can establish personal jurisdiction over at least one defendant under 1965(a). This Court in Allstate Ins. Co. v. Plambeck, 2009 U.S. Dist. LEXIS 10302 (N.D. Tex. Jan. 30, 2009) asserted personal jurisdiction over a single resident defendant, and held that In a RICO action, the ends of justice require nationwide service of process to further the Congressional intent of allowing plaintiffs to bring all members of a nationwide conspiracy before a court in a single trial.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

II

Page 23

promulgated by him and other co-conspirators RICO violations and associated predicate crimes. Those Defendants that are not residents of Texas, either directly or through agents, far exceed a requisite minimum of contacts with Texas such that, under the following circumstances, (1) the individual is the alter ego of the corporation, (2) the individual has a substantial interest in the corporation, limited liability company, partnership, or doing business as alter ego, and (3) the basis for personal jurisdiction over the individual arises under the Texas Long-Arm statute. It is fair and reasonable to require Defendants to come to this Court to defend this action. The Due Process Clause permits this Court to exercise personal jurisdiction over the nonresident Defendants because the Defendants have purposefully and willfully availed themselves of the benefits and protections of the State of Texas by clearly establishing minimum contacts with the State through selective and continuous and substantial communications, and particularly the aforementioned circumstances (1) to(3). Defendant purposefully established minimum contacts with Texas such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. Intl Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Put differently, the court must consider whether Markss contacts with Maryland are substantial enough that he should reasonably anticipate being haled into court []here. WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The United States Court of Appeals for the Fourth Circuit has distilled these somewhat abstract concepts into three basic prongs: (1) the extent to which the defendant[s] purposefully avail[ed]

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

II

Page 24

[him]self of the privilege of conducting activities in the State; (2) whether the plaintiff[s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable. ALS Scan, 293 F.3d at 712.

AMOUNT-IN-CONTROVERSY 2.4 With regard to the amount-in-controversy requirement, Plaintiffs' amount-in-controversy requirement is determinable to a "legal certainty" by evidence presented to the Court that Plaintiffs meet the threshold amount. Accepting the amount pled as true, Plaintiffs jurisdictional allegations satisfy the requirements of 28 U.S.C. 1332. Thusly, the exercise of jurisdiction by this Court over Defendants does not offend "traditional notions of fair play and substantial justice."
10 8 9

The issue of

personal jurisdiction is prima facie evident there is no need for evidentiary hearing as the court must accept as true all uncontroverted allegations in the complaint, and any factual conflicts must be resolved in favor of the Plaintiffs.
11

8 9 10

passim, Plaintiffs Exhibits Volumes 1 through 7A. See St. Paul Reinsurance Co., 134 F.3d at 1253.

the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice. Latshaw, 167 F.3d at 211 (quoting International Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945).
11

Bullion v. Gillespie, 895 F.2d 213,217

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

II

Page 25

VENUE

2.5 The venue is proper in that the vast majority of the events giving rise to the claims iterated herein occurred in Dallas County, Texas. The balance of the business relationship has been established in Calgary, Alberta, Canada to which the Canadian plaintiff asserts her venue preference to be the U.S. District Court, Northern District of Texas, Dallas Division located in Dallas County, Texas.

STATEMENT OF CONDITIONS PRECEDENT 2.6 All conditions precedent to the Plaintiffs suit have been performed or have occurred.

LOCUS STANDI & ZONE OF INTERESTS 2.7 Plaintiffs were injured by reason of RICO violations, and therefore may recover, on showing that the Defendants violated 18 U.S.C. 1962, et seq., where Defendant's violations were the direct or "proximate cause" cause of Plaintiffs having suffered injury-in-fact. "any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee." 18 U.S.C. 1964(c).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

II

Page 26

2.7.1 Congress, by including a private right of action in RICO intended to bring the pressure of private attorneys general on the serious national problem of racketeering for which public prosecutorial resources were deemed inadequate. Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 151, 107 S.Ct. 2759, 2764, 97 L.Ed.2d 121 (1987). The role to sue as an appropriate "private attorney general," are articulated in the civil action provisions of 1964(c), for which Plaintiffs have alleged injury in their businesses or property by reason of RICO violations. 2.7.2 Plaintiffs cause distinctly meets the zone-of-interests test for which their action is based, as the alleged predicate acts consist of different criminal offenses, and the Plaintiffs claims are within the degree of proximate causality and within the zone of interests of all articulated 18 U.S.C. 1962, et seq. claims pled herein.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

II

Page 27

III

BACKGROUND

The Internet has given rise to a modern form of organized crime that has made significant departures from the conventional gang. The evolution is comparative to differences between the Russian Mafia and the Italian Mafia styles of criminal employment. The modern Internet racketeering form is far more global reaching and behavior more akin to the Russian Mafia which is more dynamic and amorphous than is the well-established Italian Mafia which adheres to an astringent hierarchy. This difference makes the Internet-based gangster more effective and illusive to track without the use of sophisticated digital and network forensic tools.

3.1 PROSECUTION OF MOBSTERS IN THE FLOURISHING MODERN ORGANIZED CRIME INDUSTRY AND THOSE OF THE INSTANT CAUSE

3.1.1 The modern Internet gangster are aware of the difficulty of mounting a successful civil suit or even criminal action against them. Likewise, they have even less fear of state or federal authorities assisting their victims. They know well that complainants will rarely get past the intake officer of any agency. The indifference to individual citizen complaints to officials in federal agencies, assures the modern criminal their crimes will pay off. A recent example, is, after the many red flags that might have tipped officials off to Bernie Madoffs fraud, and eight SEC investigations
12 12

over sixteen years, Madoff was not caught; it took

Madoff Chasers Dug for Years, to No Avail Regulators Probed at Least 8 Times Over 16 Years; Congress Starts Review of SEC Today; http://online.wsj.com/article/SB123111743915052731.html
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

III

Page 28

essentially, a national financial catastrophe before Madoff was caught and prosecuted. 3.1.2 Money laundering has increased over the last ten years. As a result, global efforts to combat this crime have increased. While it is extremely difficult to estimate the amount of worldwide money laundering, one model estimated that in 1998 it was near $2.85 trillion. Identity takeover can also affect online banking, as new accounts can be taken over by identity thieves, thus raising concerns regarding the safety and soundness of financial institutions.
13

3.1.3 Chairman Arthur Levitt stated in testimony to the Senate Subcommittee on Commerce, Justice, State and the Judiciary on March 21, 2000, that Internet securities fraud is on the rise, stating that there will be over $5.5 million online brokerage accounts by end of that year. Since then, the SEC has seen a rapid rise in Internet fraud in this area, with most of it occurring in the past years. Since that time securities fraud which takes the form of stock manipulation, fraudulent offerings, and illegal touts conducted through newspapers, meetings, and cold calling, among others has exploded. These same frauds are now being conducted electronically, become ever more sophisticated, and include momentum-trading web sites, scalping recommendations, message boards posted by imposters, web sites for day trading recommendations, and

Financial institutions are defined in the Gramm-Leach-Bliley Act as, Any institution the business of which is engaging in financial activities as described in section 4(k) of the Bank Holding Company Act of 1956. 15 U.S. C. 6805 (3) (A). The allowed financial activities of such institutions are set forth in 12 U.S.C. 1843 (4)
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

13

III

Page 29

misdirected messages. Investors are suffering large losses due to these cyber crimes. 3.1.4 The Federal Bureau of Investigation report
15 14

that corporate fraud

remains one of the highest priorities in CID . Field offices by the end of FY 2011 had taken on well over seven-hundred corporate fraud cases. A number of cases the agency is pursuing throughout the country have resulted in inventor losses that each exceed $1 billion.

3.1.5 FBI ONGOING CORPORATE FRAUD INVESTIGATIONS

3.1.5.1

Falsification of financial information of public and private


16

corporations, including:

False accounting entries and/or misrepresentations of financial condition; Fraudulent trades designed to inflate profit or hide losses; and Illicit transactions designed to evade regulatory oversight. Corporate insiders leaking proprietary information; Attorneys involved in merger and acquisition negotiations leaking info; Matchmaking firms facilitating information leaks; Traders profiting or avoiding losses through trading; and Payoffs or bribes in exchange for leaked information, Misuse of corporate property for personal gain, and Individual tax violations related to self-dealing, Obstruction of justice designed to conceal any of the above-noted types of criminal conduct, particularly when the obstruction impedes the inquiries of the SEC, FBI, Secret Service, Homeland Security, FTC, other regulatory agencies, and/or law enforcement agencies.
14

Financial Crimes Report to the Public - Fiscal Years 2010-2011 (October 1, 2009 September 30, 2011). http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011
15 16

Criminal Investigative Division Financial Crimes Report to the Public, supra.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

III

Page 30

3.1.6 IDENTITY THEFT

Identity theft is not an industry specific crime. It can appear in any industry where personal information is used to gain credit or acquire customers. In years past, this type of crime was not prevalent, but the influx of technology has caused it to grow at a rapid pace and become a significant issue in the public eye, as its insidious nature poses real trauma to consumers. Statistics reflect its growth, with estimates of 500,000 to 700,000 victims of identity theft in 2000. The growth of identity theft has reached epidemic proportions, and is quickly becoming the crime of the new millennium. The cost of investigating identity theft cases in 1997 was reported to be $745 million. The cost to individuals, which the National Fraud Center conservatively estimates to be $50 billion a year, has prompted Travelers Property Casualty Corp. to launch the first-ever insurance coverage for victims of identity theft. The coverage offers policyholders as much as $15,000 to cover expenses incurred in clearing their name. Id. at 21
17

3.1.7 FBI OVERALL ACCOMPLISHMENTS

During FY 2011, cases pursued by the FBI resulted in 242 indictments/informations and 241 convictions of corporate criminals. Numerous cases are pending plea agreements and trials. During FY 2011, the FBI secured $2.4 billion in restitution orders and $16.1 million in fines from corporate criminals. The chart below reflects corporate fraud pending cases from FY 2007 through FY 2011. Id.

17

Ibid.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

III

Page 31

IV SUMMARY OF THE FACTS AND ALLEGATIONS CONTINUUM OF ONGOING RACKETEERING & CRIMINAL ENTERPRISES

4.1 From a mutual and reciprocal interaction of various independent legally formed and association-in-fact enterprises, an international crime syndicate evolved over a period of about five years. The aggregate engaged in a continuous and overlapping pattern of racketeering whose purpose was to generate money for its members and associates. This purpose was initially implemented and executed by Francis Frank E. Wilde who would remain aloof and undertook the assumed role as the Godfather of the developing crime organization. After Wilde began recruiting individuals, and members and associates of various crime families
18

(organizations)

he directed operations from deep in the background of activities much like the Godfather of the Commission
19

until a crisis rose in a project. This usually

occurred after investors discovered their assets has been stolen, or fraudulently used, or that the earnings from the use of their assets were being withheld or stolen; at which time Wilde would reveal himself and attempting to pacify the investor with false promises or false information about an investment or its status. 4.1.1 Wilde conscripted other RICO actors and the use of their respective enterprises or associations-in-fact then directed the operation of the Wilde Mobs

Although not blood related, the various memberships behave much like those of the La Cosa Nostra families which, as well, are not always blood related entities. The term family is used in its various denotations in the recent case U.S. - against - Vincent Dragonetti, U.S. Dist. Ct. ED New York, Case 1:11-cr-00003-0Ll -JO *SEALED* Document 1 Filed 01/05/11.
19

18

Similarly used as the term The Commission which is the governing body of the American

Mafia
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 32

loosely associated crime organizations. Wilde constructed essentially a criminal franchise, offering various financial products, including private placement programs (PSPs), domestic and foreign platform trading, and the brokering and sales of financial instruments such as CMOs. His concessions usually involved the theft of financial instruments, extortion, money laundering, wire fraud and other illegal activities. The members of the crime families or independent agents Wilde subscribed, furthered the Enterprise's criminal influence by expanding Wildes reach into the financial market having associated enterprises Bosses, Underboss or their merchants use Wildes business maneuvers. These tactics often incorporated false and misleading information and reprisals including threatening economic injury, withholding of investors assets or earnings, and especially threatening the clients wholesale loss of his investment when clients became contentious about delays of their earnings or return of their investment. Threats of total loss of entire investment is often used to dissuade investors from speaking with or contacting state or federal authorities such as the Securities and Exchange Commission, Federal Bureau of Investigation, Secret Service, or other law enforcement or investigative bodies. 4.1.2 The primary purpose of the Wilde Mob was to generate money for itself and the members and associates, the members and associates. From before or at least since the Spring of 2008, Francis E. Wilde, through Defendant Matrix Holdings LLC ("Matrix"), orchestrated a number of fraudulent investment schemes and financial thefts. Wilde was able to conceal offshore assets, investments and bank accounts during the investigations by criminal authorities.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 33

It appears Wilde initiated his criminal campaigns after his publicly traded company, Riptide Worldwide, Inc. ("Riptide") for which he serves as CEO, experienced severe financial difficulties. Wilde attempted to repair the companys financial trouble by creating financial programs falsely promising returns he could not make good. Wilde through his Matrix Holdings company raised more than eleven-million dollars from investors for his delusory "prime bank" and/or "high- yield" investment programs. Wilde, along with three other individuals, Steven E. Woods, Mark Gelazela, and Bruce H. Haglund, an attorney, stole a large amount of the assets they raised in a number of initial schemes, helping themselves to a combined $2.1 million in undisclosed "fees" during their theft of funds. 4.1.3 Prior to the collaboration of the Gelazela-Reynolds-IDLYC and WoodsBMW Majestic enterprises with the Kosters Alicorn Enterprise, both Reynolds and Gelazela had created a number of companies and networks of their own. Koster forming the Milaca Gang with individuals he had previously associated in other business transactions, collaborated with IDLYC and BMW using his attorney to handle the Gangs or Kosters issues. Nevertheless, all the RICO Defendants, including those that later joined the founding membership, including the identified RICO actors, lied to investors and potential investors through false and misleading telephone conversations and conferences and e-mail communications, and fraudulent and forged documents throughout the course of their financial transactions. Most investors lost their entire investment in the schemes.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 34

4.1.4 The international private placement program incorporated financial transactional funding
20

with an estimated twenty or more principals according to

Koster. The said transactional funding platform and related financial instruments were created within an association-in-fact business enterprises in which Defendants Woods, Linder, Gelazela, Reynolds, Koster, Childs, Emre and others including Melissa Shapiro presented security for investment funds based on a stated written bank guarantee on a Deutsche Bank SBLC instrument and monetization of that SBLC through HSBC Hong Kong. Kosters Alicorn Capital Management LLC company was used as a funneling tool overseen by Koster to move funds into the IDLYC/BMW investment platform. The Defendants used a complex network of their companies and other indirect network resources to accomplish their theft of money, frauds and criminal activities. 4.1.5 The Defendants promised returns on the investment trades that were alleged to have been scheduled trades with subscribed associated buyers. The SBLC instrument was reportedly transmitted to and receive by HSBC Hong Kong and returns paid to a New Zealand company and reported to have been paid to certain U.S. principals. The balance which was due to the Plaintiffs and others, was not paid and was alleged to have remained in Hong Kong or transmitted

Transactional funding Essentially, this is a type of service where investors are given the opportunity to use a type of loan called the bridge loan, that allows you to undertake the simultaneous closings safely and with the backing of money provided by the loan. With transactional funding and the bridge loan under it, you are already conducting valid closings that give you the opportunity to make money out of opportunities in the form of simultaneous closings. Source: Duncan Wierman Author.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

20

IV

Page 35

elsewhere to avoid paying investors and thereby effecting a laundering scheme of the Defendants ill-gotten funds. 4.1.6 Plaintiffs had relentlessly given Koster and the Defendants legal notice of civil and criminal law, including Kosters duties as a fiduciary, and the liabilities from the damages that resulted by his flagrant disregard for regulations, statutes, and obligations. Defendants were given legal warnings based on clearly asserted facts or legal principle over a period in excess of fifteen months to which Koster responded only by silence. Legal warning provided wellsupported citations of law and precedent so that Koster, Harlan, and their associates would be fully informed and have complete cognisance and understanding of their actions. Koster, Childs and Emre, in behalf of themselves and their associates remained arrogant and unresponsive, refusing to alter their otherwise unlawful or illegal behavior. 4.1.7 From the time Plaintiffs had given legal notice to Koster, Childs, and Emre as well as the Wilde Mob by way of the Milaca Gang, the Plaintiffs initiated information gathering effort. The Plaintiffs pre-discovery investigation uncovered that RICO Defendants used the Plaintiffs cash assets to acquire at least one of ten or more financial instruments including bonds, of which one

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 36

domestically acquired $3 billion bond and a European $5 billion bond

21

with a

total face value equal to or exceeding eight-billion dollars ($8 billion USD).

4.2 MILACA GANGS NEXT FRAUD SCHEME

4.2.1 A separate diversionary scheme was devised by Koster and his Milaca Gang involving business organizations he claimed were highly experienced solid investment/trade companies hed worked with and had very successful outcomes from investments. The scheme focused and primarily operated around a Gold Buy/Sell program (the constructed ALICORN-HALL-BEREA-CBS Enterprise), which was purportedly substituted for the apparent and ongoing performance failure of the first private placement/profit-sharing program the Alicorn Enterprise had originally subscribed the Plaintiffs. This next scheme, in hindsight, actually appears to have been used to dissuade, delay or otherwise disrupt Plaintiffs investigation, pursuit of litigation and eventual criminal complaint. The second motive for the delay was to allow time for the moving of assets, and to give members of the Wilde Mob and Milaca Gang time for covering up and purging of physical and other circumstantial evidence.

Bank of America and KFW Bank - Financial services Headquarters Frankfurt, Germany. KfW banking group is a German government-owned development bank, based in Frankfurt. Its name originally comes from Kreditanstalt fr Wiederaufbau, meaning Reconstruction Credit Institute. It was formed in 1948 after World War II as part of the Marshall Plan. It is owned by the Federal Republic of Germany (80%) and the States of Germany (20%). It is led by a five-member Managing Board headed by Ulrich Schrder, which in turn reports to 37-member Supervisory Board chaired by Philipp Rsler, Federal Minister of Economy and Technology, since May 2011.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

21

IV

Page 37

4.2.2 After months of continuous inquiries and demands of the Plaintiffs for verifiable documentation of the transactions concerning the ALICORN-IDLYCBMW transaction, Koster, Childs and Emre only replied with phone calls and email intimating that the funds would be delivered, maintaining their position not to produce any verifiable documents or information. These tactics would persist for both the IDLYC/BMW transaction, which Koster eventually, some how, on his own accord, dissociated and the substituted Richard Hall/Berea Gold Buy/Sell transaction until a demand for production of documents, as fully set forth in the recital of the facts below. 4.2.3 Koster was continually informed of the substantial damages being accrued as a result of failures to perform and the continued delay of those performances resulting in lost revenues and losses related to missing critical marketing windows. As well, Koster had full knowledge of the potential loss to Flores of his original $100MM funding instrument for which Flores, relying on Emres and Kosters assurances and statements of the bank guarantees, released his collateral for the primary funding instrument which was lost at the end of February of 2010. Again, when the PSP defaulted the second time, Flores lost a second funding source of $165MM in March because of the Defendants performance default. Though Flores castigated the Defendants concerning the harm they were inflicting upon communities, crews, casts production people, the City of San Antonio, and other communities by their unconscionable conduct, Defendants remained unmoved and unconcerned by the damages and harm their actions had inflicted. To this, Defendants responded that these people would come
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 38

crawling back later, intentionally affronting Flores personal and professional responsibility concerns and sensibilities from which the collective damages, and further ensuing harm and malice of the Defendants, brought about this litigation.

4.3 RICO Defendant Richard Hall Used the Stolen Identity of Attorney Hendrickx Toussaint Name as Escrow Attorney for Gold Buy/Sell Agreement

4.3.1 Further factual exploration of these events, unveil Defendants deceptive intent and outcome that were intentional, willful and contrived and executed by interstate wires over the telephone and Internet and is proof of intended detrimental reliance being among the sine qua non requirements of satisfying the proximate cause of Defendants fraud. Hall used the stolen identity of attorney Hendrickx Toussaint, identifying him as the escrow attorney and paymaster (funds distribution) in the Berea Inc, CBS-Berea Gold Asset Management Agreement. 4.3.2 ULTIMATE FAILURE AND FRAUD OF THE GOLD BUY/SELL SOLUTION. Even after all that had transpired, Koster attempted to sneak through a measure to take Plaintiffs out of the direct returns of the Gold Buy/Sell transaction which Defendants promised and Plaintiffs agreed upon. Defendants stealthily replaced the initial understanding and agreement with only a loan payoff for an Intermediary who would take the profits instead. In response, Flores and Gary Grab, attorney at law, representing Clarkson, jointly demanded production of the
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 39

Gold Buy/Sell transaction partnership agreement, a copy of the SBLC instrument, and the Gold Buy/Sell contract. Koster insisted the documents were being generated by Richard Hall and would be delivered shortly thereafter. 4.3.3 Though copies of several documents were delivered to Plaintiffs, no copies of the requested financial instruments with the information requested by Flores and Clarksons attorney Gary Grab were delivered. It is factually apparent, given the evidence at hand, that the acts of the Defendants, relating to the Gold Buy/Sell transaction (the "Gold Transaction"), were made with malice aforethought and the willful intent of constructive fraud, by and through Defendants' breach of fiduciary duty, their fraud in the factum, fraud in the inducement, fraud in law, and actual fraud. 4.4 The RICO Defendants transferred some of the illicit proceeds to the Relief Defendants and much more to offshore bank accounts, or levered and maintained large financial instruments and secreted them offshore as well. By engaging in the conduct described herein, the Defendants violated, or aided and abetted violations of, inter alia, the RICO statutes, 18 U.S.C. (a), (c), and (d). 4.4.1 Plaintiffs have made every effort to resolve this issue to no avail and have no alternative but to bring this action before the Court for resolution of the issues presented herein.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 40

4.5 Plaintiffs Statement of RICO Claims.

4.5.1 Plaintiffs RICO claims, are not entirely predicated on alleged acts of Defendants securities fraud. The RICO claims are solely brought on their acts of fraud and predicate crimes for which the Defendants are liable both criminally and civilly. The fact that Defendants later and consequently engaged in any type of securities fraud is ex post facto. 4.5.2 The former notwithstanding, the injured Plaintiffs may, though Defendants incidently may have committed securities fraud, or that such was their goal, have an express private right of action under the provisions of the RICO Act. Even if the Plaintiffs had or have incidently alleged ordinary securities fraud, they may maintain a RICO action against investment firms and other corporate defendants who have no apparent connection with organized crime. Moreover, the federal courts in this matter, have been unwilling to limit the scope of civil RICO positions on organized crime and their liberal interpretation of RICO subject corporate defendants to possible RICO penalties for securities violations.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IV

Page 41

V STATEMENT OF FACTS AND ALLEGATIONS ONGOING RICO ACTIVITIES INITIATED PRIOR TO AND OPERATING IN CONCERT WITH THE INSTANT CAUSE OF ACTION

5.1 NEWPORT TITIAN FRAUD & THEFT SCHEME

22

5.1.1 4//2008 - Francis E. Wilde Sells a Security for a Fraudulent Private Placement Program.
23

Wilde obtained a U.S. Treasury bond (the Treasury

Bond) with a market value of about $4.8 million (investors purchase cost) with a face value of $18.8 million from an investor through Newport Titan LLC (collectively Newport Titan) in exchange for large returns from a private placement program (the Private Placement Scheme or PSP). 5.1.2 4/10/2008 Wilde advanced a fraud through various communications made through false and misleading promises about the performance of the PSP, which was wholly fraudulent. Upon receiving the Bond in the Matrix account, Wilde, through Matrix, applied for and obtained a portfolio loan, or line of credit, using the Treasury Bond as collateral.
SUMMARY: Since at least April 2008, Defendant Francis E. Wilde ("Wilde"), through Defendant Matrix Holdings LLC ("Matrix"), orchestrated two fraudulent investment schemes. Wilde started the schemes when the public company for which he serves as CEO, Riptide Worldwide, Inc. ("Riptide"), experienced severe financial difficulties. By falsely promising outsized returns, Wilde and Matrix raised more than $11 million from investors for phantom "prime bank" or "high-10 yield" investment programs. Wilde, who absconded with large portions of the amounts raised, did not act alone. Three other individuals, Defendants Steven E. Woods, Mark Gelazela, and Bruce H. Haglund, an attorney, along with entities they control, participated in the larger of the two schemes, helping themselves to a combined $2.1 million in undisclosed "fees" along the way. Defendants lied to investors and potential investors throughout the course of the schemes and their subsequent unraveling. Most investors lost their entire investment in the schemes. The Defendants transferred some of the illicit proceeds to the Relief Defendants. SEC v. Wilde, et al., supra, FN11 (COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS, at 2) Extracts from SEC v. Wilde, et al.; Also, Newport Titan LC v. Matrix Holdings LLC, 2:09-cv-00797-BSJ (USDC Dist. of Utah 09/22/09).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 23 22

Page 42

5.1.3 4/10/2008 Matrix was approved for a credit facility in the amount of $4,700,000 on April 10, 2008. Wilde immediately began to transfer money from the $4.7 million credit line to another Matrix account at a retail bank in New York (the "Matrix Bank Account")5, 14, 15, and to make wire transfers to Riptide's debt holders 14, investors 14 and creditors 14, as well as to other purported "brokers"14 and "business consultants"14 allegedly assisting Matrix.
24

5.1.4 Wilde transferred over $100,000 from the credit line to the Matrix Bank Account for his personal use. On the following day, he wired $82,500 from the credit line to one of Riptide's preferred shareholders 14. Over the next five months, Wilde continued to transfer money from the credit line to the Matrix Bank Account for his personal use. He also indirectly transferred money from the credit line to another preferred shareholder of Riptide 14, to a law firm that represented Riptide 14, and other sums Riptide hid from Newport Titan. 5.1.5 Wilde also claims he dissipated over $2.5 million of the credit line in failed attempts to obtain a $100 million bank guarantee and to become part of "joint venture" groups using distressed Collateralized Mortgage Obligations (CMOs) that he asserted were to be used in "high yield" investment programs.

Wilde received income derived, directly from a pattern of racketeering activity through the collection of an unlawful debt (the $4.7 million credit facility) in which he had participated as a principal within the meaning of 2, Title 18, United States Code. He made use or invested a part of that income, or the proceeds from that income in the operation of the enterprises (namely, Matrix-BMWMaj-Idlyc-Alicorn Enterprise, Matrix-Wiseguys-JDA Enterprise, the Matrix Enterprise, and the Amenpenofer Syndicate, an aggregate International Association-In-Fact inclusive of the Wilde Mob, and the Koster-Milaca Gang which all engaged in activities affecting, interstate or foreign commerce. See also, 18 U.S.C. 1962(a), see definition FN31, supra.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

24

Page 43

Wilde claimed he failed to ever acquire the purported bank guarantee(s), further claiming the CMOs in which he purportedly obtained an interest, were lost. 5.1.6 9/3/2008 By September 3, 2008, the Matrix Enterprise had drawn down a total of over $3.722 million from the $4.7 million line of credit. 5.1.7 9//2008 In early September 2008, Wilde attempted to deposit a fraudulent "Negotiable Master Certificate" of $l billion into the Matrix account at a Major Financial Services Firm (the MFS Firm)5, 11, 12. 5.1.8 The MFS Firm rejected this attempt and soon after called in the portfolio loan, requiring Wilde to repay the millions he had spent from the line of credit. Wilde was unable to pay the balance due, ordered the MFS Firm to sell the Treasury Bond that he did not own. The Treasury Bond was unlawfully sold for approximately $5.9 million on October 29, 2008 5, 14, 15. Wilde then transferred almost $2.1 million from the sale on the same day. This was the approximate residual balance from the illegal sale of the Treasury Bond and the debt balance on the credit line. The funds were moved from the Matrix account at the MFS Firm to the Matrix Bank Account in New York 5, 14, 15. 5.1.9 From the Matrix Enterprise bank (the Matrix New York Bank Account) Wilde immediately began transferring money to Riptide creditors and debt holders, then to brokers and partners that were working with Matrix, and to his relatives as well as payment of his personal debts. Wilde then made the purchase of a new $90,000 automobile from Land Rover of Dallas 14, 15, then paid for his parents' living expenses 14 at an assisted living facility.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 44

5.1.10 On or about February 28, 2009, following the distribution of funds, only about five hundred dollars remained of the nearly $2.1 million that had been transferred into the Matrix Bank Account. In just four months Francis E. Wilde has spent just over two million dollars of stolen money. Wilde did not reveal the Bond sale until April 2010, when he testified in a deposition 11, 12.

5.2 THE COBALT CMO FRAUD & THEFT (WILDE & DIVENS)

In short, the Court finds that [Jon] Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their assets. His [Divens] testimony is not credible. 25 (Chase Investment Services, Corp., supra.).

5.2.1 2//2009 Prior to February 2009, Betts and Gambles purchased and owned a collateralized mortgage obligation issued by CW Capital, referred to as CW Capital Cobalt Series 2007-C3 CL, CUSIP number 19075DAG6 (the Cobalt CMO).
26

5.2.2 2/3/2009 On or about February 3, 2009, Betts and Gambles transferred the Cobalt CMO from its securities account at Pension Financial Services to the

Divens [along with co-conspirators Wilde and Woods] acquired the CMOs under the false promise that he would act solely as an escrow agent with regard to the CMOs. Once the CMOs were in Divens's possession, he absconded with the assets, moving them to different accounts at different institutions so they could not be located and stealing the interest generated from the CMOs for his own personal use. In short, the Court finds that Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their assets. His testimony is not credible. Chase Invmt Serv. Corp., at 6. Emphasis added. Face value of the Cobalt CMO was $1,008,402,393 (USD). Face value of Amedraas FNMA Series CMO was $305,000,000 (USD).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 26

25

Page 45

Business Services Account at UBS

27

(hereinafter, "the JDA UBS Account") of Law


28

Offices of Jon Divens and Associates LLC (JDA).

Divens controlled JDA.

Divens's duty and only obligation was to hold the Cobalt CMO escrow pending the sale of the asset through Jaime Williams
29

("Williams") to Up Right Holdings.

5.2.3 3/6/2009 On or after March 6, 2009, Divens unlawfully transferred the Cobalt CMO to accounts in JDA's name at five different financial institutions: Smith Barney
5, 11, 12, 14, 15,

Capstone 5, 11, 12, 14, 15, Asset Enhancement

Management 5, 11, 12, 14, 15, Matrix 5, 11, 12, 14, 15, and CISC 5, 11, 12, 14, 15. Each of these transfers was made after Divens had notice of Betts and Gambles's adverse claim.
30

5.2.4 2//20009-10//2009 DIVENS STEALS BETTS AND GAMBLES CMO INTEREST. From February 2009 to the end of October 2009, Divens received a total of $241,980.43 in interest from the Cobalt CMO. Divens admitted that he never paid any of this interest to Betts and Gambles. Divens further testified that at various points between February and October 2009, he transferred the interest earned on

UBS AG (SIX: UBSN, NYSE: UBS) is a Swiss global financial services company headquartered in Basel and Zrich, Switzerland. Law Offices of Jon Divens & Associates LLC, 9663 Santa Monica blvd suite 948, Beverly Hills, CA 90210 Phone: (310) 601-3168 Email: attroneydivens@yahoo.com Website: http://www.jondivens.net/ The principal of Up Right Holdings controlling the proposed purchase of financial instrument from Betts and Gambles.
30 29 28

27

Chase Invmt Serv. Corp., at 36.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 46

the Cobalt CMO out of the various securities accounts where the Cobalt CMO was held and into his business account
31

at Bank of America [emphasis added].

32

Betts and Gambles has pled claims against both Divens and JDA; however, the testimony received at trial (through the Declaration of Mr. Betts) indicates that the oral escrow agreement pursuant to which Betts and Gambles transferred the Cobalt CMO to Divens was made with Divens personally - that is, Jon Divens was to act as the escrow agent. Further, Divens personally misappropriate the interest earned on the Cobalt CMO for his own use. Thus, the claim appears to be against 33 Divens in his individual capacity. Although Betts and Gambles has not pleaded a cause of action for conversion, the facts proved at trial are sufficient to meet all the 34 elements of a conversion claim as well. See infra Section III.3.C.

5.2.5 While the Cobalt CMO was in the CISC Account, the incoming interest payments generated by the CMO were automatically reinvested in a money market mutual fund in the CISC Account 5, 11, 12, 14, 15. (Divens's Tr. Exh. 28 [Declaration of Michele Fanner 9].) Divens frequently instructed Michele E. Fanner, a Financial Advisor and Vice President of Investments at ClSC, to liquidate the money market funds and wire the cash balance to Divens's outside

Divens placed illicit monies fraudulently acquired into the enterprise in violation 18 U.S.C. 1962(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce
32 33 34

31

Chase Invmt Serv. Corp., at 10. Ibid., at 39 [fn 28]. Id., 39 [fn 29]

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 47

account at Bank of America. (Id.) The last of such wire transfers took place on October 27, 2009. (Id.)
35

5.2.6 Divens testified use.

36

that he used these interest payments for his personal

5.3 AMEDRAA FNMA37 SERIES CMO SWINDLE (WOODS, DIVENS AND WILDE)

5.3.1 //2008 Amedraa LLC (Amedraa) was formed in 2008 for the purpose of investing in and owning securities, including Collateralized Mortgage Obligations (CMOs) 5.3.2 7/29/2008 On or about July 29, 2008, Amedraa purchased a CMO issued by the Federal National Mortgage Association and identified as FNMA Series 2003-W19, Class 1-10-1 0.33048% 11/25/2043 GTD Remic Pass Thru CTF Whole Loan, CUSIP 31393UA86, with a face value of Three-hundred Five Million Dollars ($305,000,000 USD). Amedraa held the FNMA Series CMO as a book entry with Pension Securities Transworld Financial in Dallas, Texas 5.3.3 Amedraa entered into a Joint Venture Agreement with LNJ Enterprise, LLC ("LNJ"). The Joint Venture Agreement authorized LNJ and its Vice president, James Savor (Savor), to act as Amedraa's agent for purposes of

35 36 37

Chase Invmt Serv. Corp., at 10 fn.5. Chase Invmt Serv. Corp., at 10. Federal National Mortgage Association (FNMA; OTCBB: FNMA), commonly known as Fannie

Mae.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 48

placing the FNMA Series CMO in an investment or trade. Prior to December 2008, Savor, speaking with others Savor was forewarned not to do business with a man named Frank Wilde or Matrix Holdings.
38

5.3.4 12//2008 LNJ AND WISEGUYS INVESTMENTS LLC (WGI) ASSET MANAGEMENT AGREEMENT. In December 2008, Savor negotiated with Steve Woods, the principal of Wiseguys Investments LLC ("WGI"), regarding entering the FNMA Series CMO into an investment program.
39

Woods represented to

Savor that WGI had established credit lines and relationships with various financial institutions that would allow WGI to use the value of FNMA Series CMO combined with other assets to buy bank debt, which debt could then be sold for a greater value than the book value of the CMO. The strategy was to use the CMO in a "managed buy-sell program" whereby the trader, WGI, would use the value of the CMO along with other assets to buy bank debt at a wholesale rate, for example 60 cents on the dollar, and then resell the debt to a third party for a

38 39

Chase Invmt Serv. Corp., at 11.

The Asset Management Agreement was signed by Steve Woods of WGI [WGI LLC Wise Guys Investment Private Placement Program] and Linda Starr, the President of LNJ. Id at 12, emphasis added. The Asset Management Agreement made some mention of the name Matrix Holdings/WGI. When Savor noticed this name in the contract, he questioned Woods extensively as to whether Frank wilde had any involvement with the Asset Management Agreement. Savor told Woods that he wanted nothing to do with Wilde. Bethel Harris ("Harris"), counsel for LNJ, also questioned Woods to make sure that Wilde was not involved in the transaction. Woods unequivocally told Savor and Harris that Wilde was not involved. Id. at 12-13. In connection with the Asset Management Agreement, Woods suggested to Savor that LNJ transfer the FNMA Series CMO to the escrow account of the Law Offices of Jon Divens & Associates LLC pending WGI's payment of the 1% advance payment. Divens is the sole member of JDA and is a licensed California attorney. Savor had never done business with Divens or JDA in the past. On December 31, 2008, LNJ, WGI and JDA entered into an Escrow Agreement. Id. at 13.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 49

higher rate, for example 65 cents on the dollar. WGI would then split the profit from the sale with LNJ. 5.3.5 12/8/2008 On December 8, 2008, LNJ Management entered into a written Financial Consulting and Asset Management Agreement (the Asset Management Agreement) with Wiseguys Investments. The Asset Management Agreement provided that LNJ would deliver the FNMA Series CMO (along with two other CMOs controlled by LNJ) to WGI, and they would then identify and manage the entry of (the CMOs) into one or more investment opportunities 5.3.6 1//2009-3//2009 Divens testified that the FNMA Series CMO was transferred to the JDA UBS Account in January 2009. Between February and March 2009, Divens transferred the FNMA Series CMO to an account in JDA's name at JP Morgan 5, 11, 12, 14, 15. 5.3.7 3-4//2009 In March or April 2009, Divens once again transferred the FNMA Series CMO to an account at Smith Barney 5, 11, 12, 14, 15. 5.3.8 2/4/2009 February 4, 2009, Woods responded to Savor via email and told him that, your CMOs remain in the account of Jon Divens unencumbered. Woods suggested that Savor contact Divens and Wilde about their offer to enter the CMOs into trade. 5.3.9 2/4/2009 On February 4, 2009, Divens sent Savor an unsolicited purchase agreement on JDA/Divens letterhead, which Divens had already executed. The purchase agreement stated that Savor was to sell the FNMA Series CMO to an entity identified as PM Management Services, and that Divens would act as the escrow agent for the sale. Savor had never heard of PM Management
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 50

Services and had not authorized any sale of the FNMA Series CMO. Savor did not sign the sale agreement. 5.3.10 2/17/2009 Divens responded to Harris and Savor via email sent over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud on February 17, 2009. The email stated in its entirety: per the instructions of the contracted parties the cmo package address (sic) in email was sent out to a trade program. Please contact mr. frank wilde (sic) for further details. 4 Cf. 5.3.15 at annot. . 5.3.11 2/18/2009 On February 18, 2009, Wilde emailed Savor and told him that Wilde and Divens had placed the CMOs in a trade program. Wilde also sent Savor a draft agreement that would authorize Wilde and Divens to place the FNMA Series CMO into a trading program, thereby memorializing what Wilde claimed he had already done. Savor refused to sign the February 18, 2009 agreement. 5.3.12 3//2009 Jon Divens testified that he moved the FNMA Series CMO to different accounts in connection with various trade opportunities that he had secured. Divens contends that in March 2009 both the Cobalt Series CMO owned by Betts and Gambles and the FNMA Series CMO were placed with a trade group called MST and remained there for three months. Afer Divens unsubstantiated claims that the trade opportunity failed, he then argued that he moved the CMOs

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 51

in July 2009 to place them with a trade group called AEG. Divens contends that he had negotiated a third trading opportunity for the CMOs in September 2009.
40

5.3.13 Summer//2009 In the summer of 2009, Divens transferred the FNMA series CMO twice more; first to a Capstone account 5, 11, 12, 14, 15, and shortly thereafter, to an account with a brokerage firm called Matrix 5, 11, 12, 14, 15. Finally, in or about September 2009, Divens transferred the FNMA Series CMO to the CISC Account 5, 11, 12, 14, 15. (Trial, 06/25/10, at 95:18-97:5.)
41

5.3.14 1//2009-10//2009 Divens and his law firm engaged in numerous predicate crimes by unlawfully moving LJNs FNMA Series CMO out of the law firms UBS Account into five different financial institutions in order to conceal the whereabouts, use and status of the financial instrument from its owner. LNJ Enterprise LLC was therefore unable to locate the CMO. 5.3.15 The Chase Court found the Law Offices of Jon Divens & Associates, LLC (JDA) and Attorney Jon Divens, jointly and severally liable for converting the interest income earned on LNJ Enterprise, LLCs FNMA Series CMO 5, 11,
12, 14, 15,

a savoir:

While LNJ entrusted the FNMA Series CMO to JDA, and not to Divens personally, Divens actively participated in and directed the acts of conversion ! Divens directed the specific acts of conversion. Divens testified that he received several demands from Savor, Harris, and Evelyn Amedraa that the FNMA Series CMO be returned to LNJ. In

40 41

Id. Id., at 21 fn.11.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 52

response to these demands, Divens lied to Savor and told him that the FNMA Series CMO had already been entered into trade, when in fact the CMO was never successfully entered into any trade programs. Divens then authorized the transfer of the FNMA Series CMO out of the JDA UBS Account in which it was originally held to five different financial institutions so that LNJ could not locate the CMO. From January 2009 to October 2009, Divens personally gave instructions to the securities intermediaries managing these accounts to transfer the interest income generated by the FNMA Series CMO into JDA's Bank of America business account. Divens used all of this interest income for his own personal needs. On this record, Divens is personally liable for conversion of the FNMA Series CMO. Emphasis added. Chase Invmt Serv. Corp., at 48.

5.4 THE AMENPENOFER SYNDICATE WILDE MOB INCORPORATES THREE COMMERCIAL ENTERPRISES, THE ASSOCIATION-IN-FACT MILACA GANG AND MORE RICO ACTORS

5.4.1 10//2009 In October 2009, Francis E. Wilde individually using Matrix Holdings LLC (the Matrix Enterprise),
42

Steven E. Woods individually

using BMW Majestic LLC (the BMW Mag), and Gelazela (through IDLYC) devised

Matrix Holdings LLC is Limited Liability Company and at all times material to this Complaint was a legal enterprise whose body corporate was employed by Wilde as a vehicle for illegitimate activities rendering its primary purpose and structure as a criminal enterprise herein identified as the Matrix Enterprise. The enterprise functioned separately, as well as a member of the Association-inFact Enterprise identified as the Wilde Mob. The Wilde Mob expanded by incorporating transient entities, illegitimate enterprises, and other existing RICO association-in-fact enterprises with the Matrix Enterprise. The Wilde Mob has evolved into a highly complex and functionally diversified network of criminal enterprises. These networks themselves, evolving into an even larger dynamic crime industry, identified as the Amenpenofer Syndicate whose metamorphism adjusts its structure to accommodate the function and purpose of the various designed and orchestrated criminal schemes.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

42

Page 53

another fraudulent scheme, in the form of a bank guarantee "funding program" (the "Bank Guarantee Scheme") 5.4.2 12/7/2006 Since Corporate Registration filing, December 7, 2006, of BMW Majestic LLC, Woods has used the stolen identity and continued the use of the stolen identity of Gary W. Allman, Esq. (Allman), by having secured the execution of a government document by deception, namely the Missouri Secretary of State Certificate of Organization No. LC0781139 document, whereupon, was affixed, the identity of Gary Allman located 2849 Gretna Rd., Branson, Missouri 65616. Both the Plaintiffs is this case and the Plaintiff Securities and Exchange Commission in their case
43

against Wilde and Woods, attempted to locate Woods

and the Registered Agent for BMW Majestic for the purpose of service of summons. Plaintiffs Clarkson and Flores found that the identification of the Registered Agent had been falsified
44

in the Secretary of States records and


45

informed John Amberg, the Lead Attorney for the SEC v. Wilde et al. case.

Woods and those associated in falsification, in doing so to promote Allmans identity as the legitimate Registered Agent of BMW Majestic LLC, intentionally violated 18 U.S.C. 1028A 2.

43 44 45

SEC v. Wilde, et al., supra. See, Affidavit of Gary W. Allman, Exs Vol. 8 Ex 161 {Ct. Rec. doc. 10-1}

Flores and Clarkson had also provided Amberg the means to locate Gelazela including a confidential cell phone number along with other information about Mark Gelazela.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 54

5.4.3 The Wilde Mob Engages Bruce H. Haglund, Atty at Law

46

into the

Association-in-Fact as Money Man. Wilde engaged the services of Haglund as escrow attorney for a trust account. Woods and Gelazela were offered the opportunity to bring clients into the program and arranged for Haglund's involvement.

5.5 The Syndicate Expands and the Wilde Mob Enrolls the Milaca Gang into the Syndicate What young men will do, sometimes, to ruin themselves and break their friends hearts, said Sergeant Dornton, its surprising!
Dickens. III. The Sofa - Three Detective Anecdotes. Dickens, Charles. Three Detective Anecdotes. London: Household Words (14 September 1850).

5.5.1 Mark A. Gelazela after accepting Wildes offering of the opportunity to engage in the operations and rewards of his organizations, Gelazela subscribed Koster, Childs and Emre, the Milaca Gang, into the criminal fold. 5.5.2 At all time material to this case Koster, Childs, and Emre were engaged in illegal activities internationally and within this District. Defendants operate, promote, facilitate and sell financial instruments and services on their, and others Internet websites existing under their various Domain Names in direct

http://workface.com/e/jondivens About Me - Jon Divens: Influential Tax and Entertainment Attorney, Hollywood Producer Jon Divens, Esq., is a highly gifted attorney with extensive, specialized experience in tax law, including secure notes such as bank guarantees (BGs), standby letters of credit, (Sblc), collateralized mortgage obligations, (CMOs), mid term notes (MTNs), and other secured bonds. Jon Divens is also a talented entertainment lawyer, and Jon Divens has been active in Hollywood circles as a producer for several studios; among them, Warner Brothers, Walt Disney Television, New Line Cinema and Sony. Jon Divens is also a member of the Producers Guild in Hollywood.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

46

Page 55

telemarketing and e-mail marketing activities acquiring prospect information through intelligence gathering efforts in various industries that use the same or similar financial instrument and services which are promoted and marketed by the Defendants.

5.6 THE SYNDICATES $MILLIONS RAISED THROUGH EXPLICIT MATERIAL MISSTATEMENTS AND OMISSIONS

5.6.1 Autumn//2009 During or prior to the Fall of 2009, RICO Defendants Koster, Childs and Emre
47

operated through Kosters company, Alicorn Capital

Management LLC, a Legal Entity and RICO Enterprise, referred also as the Alicorn Enterprise. The association of Alicorns principal, Scott Koster
48

and

non-principals/non-employees Childs, Emre, and legal counsel, the Consigliere, formed the Association-in-Fact Enterprise, or otherwise the Milaca Gang. The group used the legal entity Alicorn Enterprise as their operational vehicle for confederating with the Wild Mob and entry into the Syndicate for purpose of profiting from their participation in the Syndicates ongoing activities by extending and continuing the fraud, predicate crimes and overt criminal acts in furtherance of the conspiracy and racketeering.

47 48

Defendants being separate and distinct from the enterprises. Koster-Milaca Gang Boss.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 56

5.6.2 10//2009-3/mid/2010 Between October 2009 and mid-March 2010, at least twenty-our investors sent over $6.3 million to a trust account set up by Bruce Haglund, the Wilde Mobs Consigliere and Money Man, for this scheme. 5.6.3 Gelazela and IDLYC signed contracts titled "Memorandum of Agreement of Bank Guarantee Funding" with eighteen or more investors who delivered over $5,265,000 to the trust account. 5.6.4 Woods and BMW Majestic signed similar contracts with six investors who delivered $1,100,000 to the trust account. The contracts contained false promises typically associated with prime bank schemes. The contracts stated that a "bank guarantee" with a denomination of at least $100 million would be leased "for the purpose of Private Placement Program enhancements" and fifteen percent of "the credit line value" would be paid weekly to the investor for a term of 40 weeks. 5.6.5 BMW (Woods) and IDLYC (Gelazela) each warranted that it had "the necessary knowledge, capability and banking relationships to fund BG [bank guarantees] from top first class International Financial Institutions/Prime Banks." Each also promised to "cause the issue of a Fresh Cut BG from an acceptable prime bank" and to provide the investor "a copy of the SWIFT MT760 BG $100,000,000 (USD) from the issuing bank." 5.6.6 Woods and Gelazela made material misrepresentations to investors by promising these unattainable returns on fictitious financial instruments. They also failed to disclose to most investors that Wilde and Matrix were behind the

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 57

program, that Wilde would be in control of their money, and that the success of the investment was contingent upon the ability of Wilde to acquire the purported prime bank guarantees. Likewise, investors were not provided with any information about Wilde's past failures with similar investments. 5.6.7 In addition, investors were not informed that hefty "fees" would be taken from investor funds by Woods, Gelazela, Wilde and/or Haglund. 5.6.8 Gelazela and Woods used intermediaries such as Linder, and members of the Milaca Gang to counter-sign contracts with investors. Wilde was the architect and director of the Bank Guarantee Scheme, engaging in conduct that furthered the scheme, keeping strict control and oversight of the Scheme and its progress. 5.6.9 For example, Wilde signed a series of separate one-page letter agreements with Woods and Gelazela concerning "escrow services" and the use of each investor's funds (the "Letter Agreements"). The Letter Agreements, which were not provided to investors, stated that Matrix would arrange for attorney escrow services to accept payment from the investors, and would arrange for contracting and delivery of an MTN (medium term note) or "bank guarantee" with a denomination in the hundreds of millions to be placed into the "BMW Majestic Project funding program" or the "BMW Majestic/Trask Project funding program." 5.6.10 Many of the Letter Agreements also specified certain payments to be made, including payments or "fees" to Woods and Gelazela (through IBalance LLC, a corporate entity for which Gelazela serves as a managing member) and

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 58

payments for "legal and leasing services." In addition, Wilde received copies of every investor contract from Woods and Gelazela and, after signing the Letter Agreements, forwarded copies of every contract and letter agreement to Haglund. 5.6.11 Wilde engaged attorney Bruce Haglund and a "trust account" in order to establish the perception legitimacy to the Bank Guarantee Scheme and provide investors with a purported trust account where investors believed their money would remain in escrow until a bank guarantee was issued or obtained. 5.6.12 Many of the contracts also stated that if BMW or IDLYC failed to provide the "BG [bank guarantee] or any part of this joint venture," then BMW or IDLYC "will within 60 days upon written demand refund all fees collected less hard cost [sic] paid to third parties." 5.6.13 Instead, each investor's money was wired out of the trust account soon after it arrived, often to pay the undisclosed fees to certain RICO Defendants and for other purposes unrelated to the investment. 5.6.14 Wilde controlled and made the decisions concerning the money in the trust account and instructed Haglund about when and where to wire money from the account.

5.7 DEFENDANTS MISINFORM INVESTORS AND GO ABOUT SELLING THE INVESTMENT FRAUD

5.7.1 After money was raised, the lies continued. No trading or buy/sell program involving prime bank guarantees ever existed, and Wilde never V Page 59

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

successfully acquired or "leased" a bank guarantee. Gelazela, Woods, and Wilde nevertheless made numerous material misrepresentations to investors about the progress of the program, either directly or through communications forwarded by intermediaries. 5.7.2 11/8/2009 A letter dated November 8, 2009 on BMW Majestic letterhead (forwarded to investors and signed by Woods) stated "[please find attached a copy of the fax or SWIFT MX 199 that was sent on behalf of the MOA joint venture for our mutual benefit confirming the contracted Bank Guarantee has been reserved as agreed by the issuing bank."

5.8 EMRE SOLICITS AND OFFERS FINANCIAL SOLUTIONS

5.8.1 12/2/2009 On December, 2, 2009 4:16 PM CST,

49

based on information

acquired from David Svec, a film executive producer out of Las Vegas and Hollywood, Kerim Emre contacted, proposed and offered, by wire over the Internet, a Forty-million dollar ($40,000,000) SBLC financial instrument whose lower costs would provide an economic advantage over Flores having to spend his equity and using his factored Michigan Tax Rebate, saving Flores $1,128,600 in factoring fees.
50

Unless otherwise noted all time references indicated are North America Central Standard Time or show offset adjustment to GMT standard time for North American Central Standard Time (CST).
50

49

Exs. Vol. 1, Ex. 3 {Ct. Rec. doc. 1-3}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 60

5.8.2 12/3/2009 On December 3, 2009 9:23 AM, Kerim Emre notified Flores, by e-mail over the Internet, that he would have the SBLC paperwork shortly and was also trying to get the escrow paperwork at the same time. Emre provided instruction, advice and stated his belief that the instrument would satisfy Flores requirements for his negotiated senior financing from a large Financial Concern. Later on 12/3/2009 at 12:45 PM, 3:16 PM, 4:05 PM and other times by telephone Kerim Emre inquired on information and metrics needed to satisfy the amount of the letter-of-credit to satisfy the project financing specifications.
51

5.8.3 12/8/2009 On December 8, 2009 at 11:48 AM, 2:00 PM, and 3:34 PM, Kerim Emre, by wire over the Internet, completed the transaction documents, managed the execution of the purchase for Flores of an irrevocable and assignable Bank Guarantee (BG) for fifty-five million dollars ($55,000,000.00) from a Top World Bank. Emre stated the BG would be delivered through a separate agreement from the source of the collateral providing the BG under the basic terms. 5.8.4 12/9/2009 On December 9, 2009, at 3:33 PM, Kerim Emre provided the escrow service information that would be used for the bank guarantee payment transfers to the Financial Concern (the Concern) and related fees. Later at 6:07 PM, Emre sent wire instructions that a bank guarantee (BG) would be executed as soon as the Financial Concern was ready to fund. Kerim requested bank coordinates where the BG was to be delivered to the Concerns

51

Exs. Vol. 1, Ex. 4 {Ct. Rec. doc. 1-3}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 61

account and how the Bank Irrevocable Commercial Payment Order or MT103.23 would issue.

5.9 KOSTER, CHILDS AND EMRE JOIN THE SYNDICATE THROUGH THE ALICORN ENTERPRISE IN THE WILDE/HAGLUND WOODS/LINDER/GELAZELA FRAUD SCHEME

5.9.1 12/10/2009 The Solicitation & Alicorn Introduction Koster/Idlyc Offer. On December 10, 2009 Kerim Emre called Flores by telephone from a domestic phone number (951) 719-4819 to solicit and present an additional opportunity in which his business partner would provide the P&A cash flow for his Canadian picture at Voice Pictures, Inc.
52

(Voice Pictures) film Randall.

5.9.2 12/10/2009 From Friday, December 10, 2009 through December 14th, Kerim Emre and his business partner Scott A. Koster at Alicorn Capital Management LLC initiated conference calls by wire from phone number indicated on caller ID as (951) 719-4819 to discuss their program.

5.9.3 Emre and Koster promoted IDLYC as a well established private placement fund institution whose principal, Mark A. Gelazela, had close personal relations and strong business ties with Scott Koster and Alicorn. IDLYC purportedly used a "proprietary strategy pre-negotiated and secure " involving an active, controlled and complex investment structure whereby PSPs monies would
52

Voice Pictures Inc., Goose Pictures Canada Inc. B8, Suite 111, 2526 Battleford Ave. SW. Calgary, AB T3E 7J4; Wendy Hill-Tout (Principal)
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 62

be secured by a letter of credit or standby letter of credit issued by Deutsche Bank and monetize by HSBC Hong Kong in a written guarantee by the Platform in order to protect the PSPs funds, stabilize returns and protect against dramatic trading market fluctuations. 5.9.4 Koster, and Emre advanced the IDLYC principals as highly experienced in international banking having established business relationships with top banks including HSBC Holdings PLC, Deutsche Bank and Credit Suisse Group. Defendants represented that IDLYC purchased bank guarantees and other financial instruments, including Mid Term Notes (MTN's) from the banks in very large blocks on behalf of a large collection of investor/lenders for substantial discounts. 5.9.5 Koster stated that the platforms program was guaranteed in writing by Deutsche Bank. Emre and others, as well, would in turn, take a substantial portion of the weekly proceeds from the beneficiary Flores, in addition to Emres broker fee. The consensus by the Defendants was that the IDLYC payment would pay for the SBLC and Flores could release his equity from the Michigan film projects. Flores could then use another instrument to increase the financing size, since the Deutsche Bank letter of credit was purchased and the HSBC Hong Kong funds were in place. The PSP payout funds arrival should occur on January 4, 2010 and be distributed by the escrow attorney on or about January 12, 2010, depending on the wire transfers to and from the escrow account paymaster.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 63

5.9.6 Koster and Emre articulated they would place the Plaintiffs money in the PSP and Flores, would in turn, own a proportional interest in the IDLYC PPP platform which was guaranteed in writing by a secured financial instrument. Flores asked Koster to provide the due diligence report to him, and Koster pledged that my friend Mark, Mark Gelazela,
53

had a successful financial

trading company which Koster had substantial knowledge, experience and had previously obtained successful results with Mark Gelazelas transactions for other clients.

5.10 MILACA GANG DEFENDANTS USE STOLEN IDENTITY OF ATTORNEY DAVID KAPLAN NAME, STATE BAR LICENSE, AND IOLTA BANK ACCOUNT NUMBERS 55 TO ADVANCE FRAUD SCHEME, TAX EVASION54 AND MONEY LAUNDERING

5.10.1 At sometime before June 16, 2009, Kerim S. Emre secured an unauthorized copy of the identity information of David B. Kaplan and his company, Global Paymasters LLC. RICO Defendants Koster, Emre, and Childs later used the stolen identity of attorney David Kaplan whose practice includes escrow attorney services and paymaster (funds distribution) services, and

Idlyc Holdings Trust LLC (IDLYC); 01/07/2010, FL; FEI/EIN # 271651047: Address: a. Mark A. Gelazela, Title MGRM (Registered Agent), b. William Chandler Reynolds, Title MGRM, 26 Marlwood Lane, Palm Breach Gardens, FL 33418 USA; Idlyc Holdings Trust, Head Office, Melody Lane 9, Ruakura Road, 3216 Hamilton, New Zealand 26 U.S.C. 7201 (Evasion), 26 U.S.C. 7206(4) (Removal or Concealment with Intent to Defraud), and 26 U.S.C. 7206(5) (Compromises & Closing Agreements); as well as 18 U.S.C. 152(6) (Extortion and Bribery)18 U.S.C. 152(7) (Fraudulent Transfer or Concealment)18 U.S.C. 371 (Conspiracy)18 U.S.C. 1001 (False Statements)
55 54

53

18 U.S.C. 1956 (Laundering of Monetary Instruments)

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 64

unlawfully imbedded Kaplans identity into their Irrevocable Corporate Pay Order and Fee Protection Agreement (ICPO/FPA) and represented him therein as the escrow attorney and paymaster for the private placement program profit sharing joint venture, when in fact, David B. Kaplan was not, nor had ever been or agreed to be, an escrow agent or paymaster for in said transaction of the Koster Milaca Gangs Alicorn Enterprise.
56

5.10.2 The Gangs aggravated identity theft, wire fraud, and their knowledge that the property involved in their financial transaction represents the proceeds their unlawful activity that they were conducting and/or attempting to conduct their financial transactions which in fact involved the proceeds of specific unlawful activity by its members included the thieving and fraudulent use of Mr. Kaplans: Name, State Bar License I.D., IOLTA Account Bank Name, Bank Address, Account Holder Name, Iolta Bank Account Number, Bank Officer Name, Bank Telephone, Bank Fax, Swift Code, Bank ABA Routing #, Beneficiaries, Special Wire Instructions.
57

5.10.3 The Milaca Gang RICO Defendants and co-conspirators used Mr. Kaplans stolen identity information
56 57 58

to: i.) fraudulently give credibility to

Exs. Vol. 8, Ex. 155-159 {Ct. Rec. doc. 10-1}

Exs. Vol. 8, Ex. 159 9 at 21 (Declaration of David B. Kaplan, Esq.), Ex. 160 10 at 24 (Declaration of Hendrickx Toussaint, Esq.), Ex. 161 11 at 28 (Declaration of Gary W. Allman, Esq.), {Ct. Rec. doc. 10-1} 18 U.S.C. 1028, federal identity fraud statute, prohibits the unlawful production, possession, transfer or use of a means of identification of another person to commit or abet any federal crime or state felony crime or to defraud the federal government. The statute defines a means of identification as any name or number used to identify an individual, including an access device. It also includes devices such as credit card account numbers, professional and trade license identifications. The crime of identity fraud encompasses the use of another persons credit card account number, as
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 58

Page 65

transactions and documents; ii.) fraudulently fulfill transaction or contract requirements; and iii.) create a mechanism to evade taxes; money laundering scheme..
59

and iv.) run their

5.11 MILACA GANG INITIATES A FRAUD THAT WOULD PERSIST - REINFORCED BY ENDLESS WIRE FRAUD, ACCUMULATED RICO PREDICATE CRIMES AND CONCEALMENT OF THE RICO CONSPIRACY

5.11.1 12/11/2009 On 12/11/2009 at 5:40 PM CST, Kerim Emre sent an e-mail over the Internet by use of interstate wire communications initiating a scheme with specific intent to defraud
60

with two attached documents,

P Profit Sharing Agreement of Alicorn Capital Management P Irrevocable Corporate Pay Order and Fee Protection Agreement.
61

5.11.2 Emre in behalf of the Milaca Gangs Alicorn Enterprise, transmitted over the wires the afore e-mail to Flores, caused the delivery of fraud instruments

opposed to use of the plastic card itself. The statute also includes other devices as means of identification, including a passport, birth certificate, drivers license, social security number, taxpayer identification number, law/medical/etc. licenses and other identification, unique electronic identification number (e.g., user ID or password), and unique biometric data, such as a fingerprint, voice print, retina or iris image. While carrying on of specified unlawful activity certain Defendants violated 26 U.S.C. 7201 (Evasion) Felony, 26 U.S.C. 7206(4) (Removal or Concealment with Intent to Defraud) Felony, 26 U.S.C. 7206(5) (Compromises & Closing Agreements) Felony, 18 U.S.C. 152(6) (Extortion and Bribery) Felony, 18 U.S.C. 152(7) Fraudulent Transfer or Concealment) Felony, 18 U.S.C. 371 (Conspiracy) Felony, 18 U.S.C. 1001 (False Statements) Felony and 18 U.S.C. 1956 (Laundering of Monetary Instruments) Felony.
60 61 59

(Exhibit 151 {Ct. Rec. doc. 10-1}

Initial Digital Electronic Forensic examination reveals the FPA document was authored by Larry Braun and typist was Kerim S. Emre.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 66

of their own making 4, by electronic mail for purpose of advancing, extending, and executing the Wild Mobs ongoing fraud and theft schemes. The Milaca Gangs document fraudulently identified David Kaplan as that escrow attorney, including his bar number, and the IOLTA bank account where funds would be placed.
62

5.11.2.1

Each member of the Milaca Gang (Koster, Childs, Emre and

Kosters counsel), acting with scienter in the promulgation and implementation of their private placement scheme, benefitted with scienter from the deceit embedded into their Profit Sharing Joint Venture Agreement by means of the Fee Pay Agreement. Using these fraud instruments, the Milaca Gang members unlawfully engaged in various financial transgressions employing these and other devices, schemes, and artifices to deceive, and to further engage in acts, practices, in a course of business with, inter alios, the Wilde Mob, Atlanta Little Dixie Family and the Contra Costa Family that, in turn, operate as Frauds in connection with the purchase or sale of financial services, instruments and securities. 5.11.2.2 From the moment of the transmittal of the aforementioned

message and its attached fraudulent Fee Pay Agreement, the members of the Milaca Gang engaged in their first instance of identity theft, wire fraud, and attempt to launder money, said Defendants established the existence of a fraudulent scheme whereupon their continued wire fraud furthered a scheme

62

See, 5.10.1, supra.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 67

such as described in Schmuck.

63

The Gangs e-mail sole purpose is the element

of deception is unquestionably calculated for effecting their devised schemes through an artifice or artifices designed to defraud and obtain money by the false or fraudulent pretenses, representations, and promises by Milaca Gang RICO Defendants wire communications. Those wire communication involved substantial fraudulent misrepresentations and omissions reasonably calculated to deceive persons of ordinary prudence and comprehension and intended to deceive the Plaintiffs and other victims. Plaintiffs aver that their wire fraud claims against the Defendants comport with the opinions of this Circuit (U.S. Fifth Circuit Court of Appeals): To prove wire fraud pursuant to 18 U.S.C. 1343 , the government must prove (1) a scheme to defraud and (2) the use of, or causing the use of, wire communications in furtherance of the scheme. United States v. Gray , 96 F.3d 769, 773 (5th Cir. 1996). [F]or purposes of the federal fraud statutes, the term scheme to defraud is not readily defined, but it includes any false or fraudulent pretenses or representations intended to deceive others in order to obtain something of value, such as money. United States v. Caldwell , 302 F.3d 399, 414 (5th Cir. 2002) (quotation marks and brackets omitted). The requisite intent to defraud is established if the defendant acted knowingly and with the specific intent to deceive, ordinarily for the purpose of causing some financial loss to another or bringing about some financial gain to himself. United States v. Saks, 964 F.2d 1514, 1518 (5th Cir. 1992).

Schmuck v. United States, 489 U.S. 705, 712, 109 S.Ct. 1443, 1448, 103 L.Ed.2d 734 (1989). Cf. also, See Schmuck, 489 U.S. at 710-11 (It is sufficient for the [use of the wires] to be incident to an essential part of the scheme, or a step in [the] plot.) (internal citations omitted). The Court thus finds that the charge as a whole fairly and adequately submit[ed] the issues to the jury, and will deny the motion. Fonseca , 274 F.3d at 769 (quotations and citations omitted) U.S. v. John J. Keller, No. 07-CR-51 (USDC E.D. Pennsylvania 5/19/2008) Motion for New Trial.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

63

Page 68

5.11.3 RICO DEFENDANTS COLLECTIVE RESPONSIBILITY FOR MAIL FRAUD ACT: There was requirement that the other RICO Defendants personally e-mail or mail the letters and documents. The defendants in the Milaca Gang
64

and/or the Wilde

Mob caused the mailing to be made and that mailing was incidental to an essential part of the fraud schemes engineered by Wilde Mob boss Francis E. Wilde and his co-conspirators, activity. 5.11.3.1 Plaintiffs had placed funds into the Wilde Mobs private
65

in order to continue a pattern of racketeering

placement program through the Milaca Gang financial offering a participation in private placement program trading which the Alicorn Enterprise had marketed to a number of investors. Plaintiffs have shown that the RICO Defendants of the Wilde Mob were acting in concert since 2007 and entered the conspiracy at different points over the past of five years with the Milaca Gang members entering some time around the Summer of 2009, birthing the Syndicate. The Wilde Mob and Milaca Gang had defrauded dozens of individuals, many of them prior to the Plaintiffs' own deception. In furtherance of their scheme, the RICO Defendants committed mail and/or wire fraud, which constitute a pattern of racketeering activity. As well, the Wilde Mobs income was derived from earlier racketeering activity against other

Particularly Koster who was the Milaca Gang boss and Alicorn Enterprise executive managing member. See e.g., United States v. Bortnovsky, 879 F.2d 30, 36 (2d Cir.1989)(quoting Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954)
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 65

64

Page 69

victims and used to continue, expand, extend and operate their criminal schemes into which the Plaintiffs placed their own money. These events and criminal conduct of the RICO Defendants establish a temporal continuity, the advancement of a common purpose, and the objectives and goals of the Enterprises emerging into a larger Syndicate. Such demonstrates a 1962(a) cause for Plaintiffs injury, inclusive of the RICO Acts that yet follow. 5.11.3.2
66

Because each and every racketeering predicate crime violated by

the Defendants was dependant, or relied, or ensued from (a) prior related predicate crime(s), all are directly or proximately related for RICO purposes. Further, the predicate crimes enure and accumulate in collective responsibility attaching to each and every RICO Defendant and co-conspirator for criminal and civil purposes for each and every predicate crime violation by any one RICO Defendant or co-conspirator.

5.11.4 12/21/2009 On Monday, December 21, 2009 at 4:48 PM CST Kerim Emre sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud: Subject: Updated CIS Date: Mon, 21 Dec 2009 14:48:55 -0800 From: Kerim Emre <kerim.emre@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Hi Lance,
67

66 67

See Newmyer v. Philatelic Leasing, Ltd., 888 F.2d 385, 396 (6th Cir.1989). Exs. Vol. 8, Ex. 152 {Ct. Rec. doc.10-1} Kerim S. Emre Msg. 12/21/2009 4:48 PM

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 70

I updated your CIS with Global Paymaster, LLC banking coordinates as they will be acting as our paymaster. This email is your CIS with that information included in it. Best, Kerim kerim.emre@gmail.com P: 951-719-4819 F: 951-224-6844 5.11.4.1 The afore Monday, December 21st e-mail constituted a second

wire fraud act; the Milaca Gang members (Koster 2, 4, 11, Childs 2, 4, 11, and Emre 2, 4, 11) and co-conspirators, having collective responsibility for predicate crimes 18 U.S.C. 1028A, 18 U.S.C. 1343 and 18 U.S.C. 1956. Cf. 5.11.3, supra.

5.12 THE EMERGING SYNDICATE CONTINUES THE SUBSCRIPTION OF INVESTORS

5.12.1 1//2010 On or about early January of 2010, without verification or confirmation that Wilde had acquired any bank guarantee(s), Mark A. Gelazela secured contracts with new investors and collected and placed an additional $2.5 million into the trust account. 5.12.2 Gelazela also knew that money was being collected from new investors to pay back earlier investors in the scheme. For example, in late March 2010, after a discussion with Wilde about a difficult client, the first investor with whom Gelazela had signed a contract, Gelazela transferred approximately $150,000 of the fees that he had received to pay back the investor. 5.12.3 Haglund also knew that prime bank investments did not exist. V Page 71

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

5.12.4 3/25/2010 In an e-mail sent to over the Internet by use of interstate wire communications on March 25, 2010 and forwarded to investors in furtherance of a scheme with specific intent to defraud 4,
68

Gelazela attributed

delays in the program to the Chinese New Year and banks trying to keep their balance sheet as high as possible. He added that the contract states that IDLYC Holdings Trust will return initial funds upon written demand. 5.12.5 4/18/2010 On an April 18, 2010 conference call with an investor, his attorney, and Gelazela, Wilde stated that they were close to a transaction paying an "advance payment" with the first full payment close behind it. 5.12.6 4/6-7,23/2010 During April of 2010 in numerous e-mail messages and phone calls including communications on April 6 4, 7 4, and 23 4, by use of interstate wire communications in furtherance of a scheme with specific intent to defraud, Woods represented to an investor that the investor's initial deposit would be returned and payments under the program would begin shortly. 5.12.7 In early May 2010, after receiving a subpoena from the SEC, Gelazela called his clients and told them they would receive their initial funds back, plus a fee or interest for the inconvenience, despite knowing that a large portion of investors' funds had already been wired from the trust account. 5.12.8 Defendants knew or were reckless in not knowing that these postinvestment statements, like the statements made to procure the investments, were false.
68

The total number of all acts of wire frauds related to this e-mailing is yet undetermined and can be attributed to this instance following discovery.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 72

5.13 DEFENDANTS MISAPPROPRIATE INVESTOR FUNDS FOR UNAUTHORIZED AND UNDISCLOSED PURPOSES

5.13.1 Wilde exhausted all $6.3 million of the investors' funds through attempts to acquire "bank guarantees," brokers' fees paid to Gelazela and Woods, fees to Haglund for "legal services," some Ponzi-like payments to prior investors, and personal expenses. 5.13.2 Each investor's money was wired out of the trust account soon after it arrived. In some instances, fees to Wilde, Gelazela, Woods and/or Haglund equaled a majority of the associated investment, and each of the individual Defendants personally profited from the scheme. 5.13.3 The majority of investors' funds in the trust account were transferred on direction by Wilde and executed by Haglund as follows: Approximately $2,170,000 was claimed to be paid to over thirty different intermediaries, advisors, and business consultants for the purpose of acquiring purported bank instruments. Over $1,500,000 went to pay for Wilde's personal expenses, including: Approximately $800,000 to the bank account of Wilde's wife, Maureen Wilde 11,
12, 14, 15;

$323,500 to Shillelagh Capital Corporation 11, 12, 14, 15, another corporate entity under Wilde's control; $200,000 to Wilde's bank account in Europe 11, 12, 14, 15;

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 73

$152,500 to law firms that represented Wilde and/or other Defendants 11, 12,
14;

$55,000 to the assisted living facility of Wilde's parents 11, 14; $1,150,000 in fees to Gelazela (to a bank account in the name of IBalance LLC
11, 12, 14, 15,

a corporate entity for which Gelazela serves as a managing member);

$565,000 in fees to Woods, which equaled roughly half of the total investor money Woods brought in to the scheme 11, 12, 14, 15; and $472,500 in fees to Haglund 11, 12, 14, 15.

5.13.4 Relief Defendants Maureen Wilde, Shillelagh Capital Corporation, and IBalance LLC had and have no right or legitimate claim to any investor funds that they received. 5.13.5 In early May 2010, less than $200 (two hundred dollars) of the $6.3 million raised for the Bank Guarantee Scheme remained in the trust account.

5.14 DEFENDANTS SCIENTER AND ACTS OF MALUM IN SE

5.14.1 After Wilde claimed he had failed in a number of attempts to acquire prime bank instruments, he was investigated by criminal authorities because of his attempts to use stolen instruments as collateral for loans. Federal authorities continue their investigation.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 74

5.14.2 Wilde, Haglund, Woods, Linder, and Gelazela knew that their receipt of hefty fees from investor funds was not disclosed to investors and that the investment contract clause concerning the refund of investor funds was false. 5.14.3 12/5/2009 Woods also knowingly attempted to payoff the pyramid fund to old investors with new investor money 12. In a December 5, 2009 e-mail sent by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, for example, Woods expressly acknowledged he was (unsuccessfully) seeking new investor deposits to "pay back long standing clients initial deposit balance [sic]" rather than waiting for the profits from any purported investment strategy. 5.14.4 Gelazela had reviewed the SEC's warnings about prime bank schemes on the Commission's website and knew that his receipt of hefty fees from investor funds was not disclosed to investors and that the investment contract clause concerning the refund of investor funds was false. He also knowingly made false statements about the security of the investments to pacify investors who began to suspect a problem. 5.14.5 In 2007, Haglund served as an escrow attorney for another prime bank investment scheme that failed and resulted in nearly all investors losing their money. As a result of his involvement in that investment program, an investor filed a complaint against Haglund with the State Bar of California. 5.14.6 Between the time of his work on this 2007 project and his involvement in the Wilde-directed fraud, Haglund also became aware of the Commission's

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 75

warnings about prime bank investment schemes. And instead of disassociating himself with such activities, Haglund collaborated with Wilde and used much of the $472,500 he took from the trust account in 2009 and 2010 to repay investors from the failed 2007 scheme that had led to the lodging of the State Bar complaint against him. 5.14.7 Further, Haglund knew that amounts representing a substantial portion of the investments flowing into the trust account were being paid out in fees, not for purchases of financial instruments. 5.14.8 Haglund was aware that his own $472,500 take, purportedly for "legal fees," bore no rational relationship to the value of services he was rendering (setting up an account and wiring funds from it). 5.14.9 For instance, Haglund transferred $35,000 in fees to himself for sending out seven wire transfers (mostly to Wilde, Woods and Gelazela) on a single day (October 30, 2009). 5.14.10 Wilde knew he was being paid to give an attorney's imprimatur to the program, helping the Defendants to mask the fraud. 5.14.11 Haglund has admitted he knowingly wired funds to old investors 12 using new investor money in March 2010, a practice he conceded was typically called, in his words, "[a] Ponzi scheme." Haglund made these transfers even after having received a subpoena from the SEC in connection with the investigation that led to their Complaint.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 76

5.15 FIRST SOLICITATION FOR PROFIT SHARING PROGRAM

5.15.1 12/2/2009 Shortly before December 2, 2009, FLORES was contacted in Dallas on his telephone by Mr. Kerim Emre. Emre stated he had become aware that Flores was searching for an additional letter-of-credit (LOC) or standbyletter-of-credit (SBLC) to purchase. Flores informed Emre he required the financial instrument be able to supplement an increase of a loan for a motion picture production slate in order to accommodate the cash flow for a completed film requiring prints and advertisement.
69

During the telephone conversation

Emre assured Flores that he and his business partners, including Scott Koster, could solve Flores immediate needs with a high quality private placement program, allowing Flores to enlarge his loan instrument and affording the immediate cash flow requirements for the new film slate addition and insure the March-release of the completed film. 5.15.2 Flores explained to the Defendants the critical nature of changing the funding mechanism by incorporating their proposed instruments. Flores further elucidated upon this need to maintain his obligations and responsibilities to the producers, crews, talent, involved in his slate of films as well as other commitments to humanitarian documentaries and production commitments to the City of San Antonio, Texas. Flores stated the Defendants would have to assure him that their financial product would not interfere with his ability to
69

Increase to accommodate P&A high cash flow needs of the film (Randall) that was scheduled for theatrical release in March of 2010.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 77

maintain the funding commitments of senior funding resources, more specifically, Prosperity International.

5.16 Profit Sharing Program (PSP) & Joint Venture Agreement

5.16.1

12/11/2009 On 12/11/2009 10:22 AM, Kerim Emre, by wire over the


70

Internet, delivered a Joint Venture Agreement for the trade program.

In

essence, the metrics of the PSP was summarized in the PSP Agreement Overview. 5.16.2 12/11/2009 On December 11, 2009 5:40 PM, Kerim Emre sent the following message by wire over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud, summarizing the payout terms, PSP payout summary, his fees and attached the fraudulent Fee Pay Agreement.
71

5.17 12/14/2009 - FIRST REQUEST FOR DISCLOSURE 5.17.1 12/14/2009-12/30/2009 Throughout the period from about 12/14/2009 through 12/30/2009 Flores made numerous telephone calls to Emre (phone number 951-719-4819 and 951-224-6844) demanding full verification of associated contracts including information of the partners in the PSP. Flores further demanded that he be copied on the banking and financial transactions related to

70 71

Exs. Vol. . 1 Ex 5 {Ct. Rec. doc. 1-3} Exs. Vol. . 8 Ex 151 {Ct. Rec. doc. 10-1}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 78

the PSP transactions, the IDLYC and partnerships revenues. In that period, Flores executed a non-disclosure agreement (NDA) in order that he could maintain due diligence on the integrity of Alicorn and IDLYC transactions. 5.17.2 Emre as agent for Koster insured Flores that full disclosure and transparency would be afforded to Flores upon execution of the NCND (NonCircumvention Non-Disclosure Agreement) and as each contract was completed. Shortly thereafter the mutual non-disclosure was executed. 5.17.3 12/14/2009 On 12/14/2009 11:27 AM, Kerim Emre acting in behalf of the Alicorn Enterprise, sent and email by use of interstate wire communications in furtherance of a scheme with specific intent to defraud instructions for the PSP.
73 72

4,

sent wiring

5.17.4 12/14/2009 On 12/14/2009 3:43 PM, Kerim Emre, by wire over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, sent wire instructions for Flores to John T. Childs. At 1:02 PM, Kerim Emre delivered a non-circumvention non-

The extensive use of RICO in the civil context is almost solely attributable to the inclusion of mail and wire fraud as predicate acts. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 500 (1985). The mail and wire fraud statutes essentially make it criminal for anyone to use the mails or wires to advance a scheme to defraud. Note that the fraudulent statements themselves need not be transmitted by mail or wire; it is only required that the scheme to defraud be advanced, concealed or furthered by the use of the U.S. mail or wires. See 18 U.S.C. 1341, 1343, emphasis added; In order to convict a defendant for wire fraud, the evidence must establish beyond a reasonable doubt (1) the defendants knowing and willful participation in a scheme or artifice to defraud, (2) with the specific intent to defraud, and (3) the use of the mails or interstate wire communications in furtherance of the scheme. United States v. Antico, 275 F.3d 245, 261 (3dCir. 2001)
73

72

Exs. Vol. . 1 Ex 7 {Ct. Rec. doc. 1-3}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 79

disclosure agreement to Flores, in order to receive full disclosure of the partnerships structure, finances, transactions and the operations of the PSP.

5.18 12/15/2009 - SYNDICATES COMPULSION TO SOLICIT FUNDS FOR PSP 5.18.1 On 12/15/2009 2:51 AM, Kerim Emre sent a message by wire over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud with instruction for funds wiring advancing the wire fraud 4. At 10:18 AM, Kerim Emre instructed: please make sure that the wire goes directly into to [sic] Scott's account rather than into John's account. This should speed things up and get us in by the deadline. 5.18.2 On 12/16/2009 1:26 PM, Kerim Emre sent an e-mail message over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, stating that he was [g]etting calls from Scott's people [Woods and Gelazela] to find out where we are with sending the wire 5.18.3 On 12/17/2009 9:42 AM, Kerim Emre, by wire over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, established a number to send wiring information to the Syndicate: (925) 407-8440 is the fax number we need to use. [Interlink Global Messaging] 5.18.4 At 3:13 PM, Kerim Emre inquired by e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, again, about the deposit of funds for the Alicorn PSP; and

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 80

5.18.5 at 4:05 PM, Kerim Emre wrote again in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, that the funds hadnt arrived and they moved ahead without us. 5.18.6 12/18/2009 On Fri, Dec 18, 2009 at 9:31 AM, Flores informed Kerim Emre that the funds would be delivered that day. 5.18.7 12/18/2009 At 11:43 AM, Kerim Emre in and e-mail sent over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, acknowledged the Flores message, and stated that the information would be forwarded; and 5.18.8 at 10:15 PM, Kerim Emre wrote in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, Here is the copy of the wire confirmation message confirming the receipt of the funds with bank confirmation attached.
74

For the purposes of

18 U.S.C. 1962(a), the foregoing demonstrates investment into a RICO enterprise for which precedent dictates
75

that the Plaintiffs need prove only that

illegally derived funds flowed into the enterprise.

74 75

Exs. Vol. 1, Ex. 8 {Ct. Rec. doc. 1-4}

Cf. United States v. Cauble, 706 F.2d at 1342; cf. United States v. Vogt, 910 F.2d 1184, 1199 & n. 7 (4th Cir.1990) (applying a broad definition of "use" and acknowledging as sound the government's contention that the depositing of funds into an enterprise constituted a use to operate in violation of 1962(a)); United States v. McNary, 620 F.2d 621, 628 (7th Cir.1980) (finding that 1962(a) does not require direct or immediate use of illicit income).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 81

5.18.9 On 12/21/2009 4:48 PM, Kerim Emre, sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, informs Flores that he updated Flores banking coordinates with Global Paymaster, LLC, the PSPs paymaster (for PSP escrow account). 5.18.9.1 Fraudulent Inducement. The inducement is constructed by

1) locating legitimate or seemingly legitimate financial products, 2) identifying prospective clients and propose the financial product by presenting credible entities, 3) offering transaction security through written bank guarantees from credible sources, 4) requiring legitimate financial industry and government disclosure conformance of the client through Client Information Summary (CIS) containing confidential information and 5) requiring execution of a stringent Non-Disclosure so that Defendants can effectuate their standard procedures and policies with full disclosure and transparency of the PSP business affairs. The foundation of the Defendants solution begins with the solicitation of clients through personal business networking connections and relationships,
76

thus, substantiating their assertions using

associations with large institutions and their diverse network of Internet presence demonstrating Defendants numerous relationships with legitimate resources.
77

; such as Emres then ongoing due diligence and offerings by Flores business colleagues and associates involved and working on unrelated projects.
77

76

e.g. Exhibit 16, Exhibit 17, Exhibit 18, Exhibit 19, Exhibit 20, Exhibit 21

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 82

5.18.9.2

A Catalyst for the Fraud. It is the next part of the fraud formula

that contains extensive fraud. The Plaintiffs challenges to the Defendants conduct that is well outside ordinary business and financial industrys standards and practices. This would include the demand for proof by bona fide verifiable documentation of the PSP-IDLYC performance was the catalyst that initiated the Defendants reaction. This was the condition where each time a challenge or demand for proof was made, the Defendants initiated an extensive plan of deceit through their actions that follow.

5.19 KOSTER INITIATES A PATTERN OF CAMOUFLAGED ARTIFICES

5.19.1 12/14/2009 -12/30/2009 The First Straw Man. Following Flores demands for authentication from the period of 12/14/2009 through 12/30/2009, Emre responded using interstate wire communications in furtherance of a scheme with specific intent to defraud 4, on 1/4/2010 1:17 PM, writing: Here are the redacted contracts of the trade that Scott is using for the buy/sell trade we got you in. [sic] (emphasis added). 5.19.1.1 The document proffered as authentic documentation of the PSP

and verification of the IDLYC PPP execution of the Deutsche Bank Hong Kong SBLC instrument, the HSBC Hong Kong or Standard Chartered Hong Kong monetization of the SBLC, and the documentation to verify the performance of the Platform and related transactions was completely defaced

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 83

by redaction. This rendered the document unreliable, devoid of authenticity and without any verifiable substance that the IDLYC PPP was executed or that the PPP was genuine.
78

Clearly, the document was unaccommodating to

the accepted disclosure understanding and obligations of the Defendants. In an overtly fraudulent method of responsibility and compliance to producing material documents of critical and substantive import to Flores, the Defendants produced with incontrovertible scienter, an unverifiable completely discreditable copy of the alleged contracts of the trade that was intended to mislead with a reckless disregard for the truth. 5.19.1.2 Plaintiff, in turn, responded by calling Emre demanding

disclosure of the information so that the transaction could be verified by the Plaintiff. No response to Plaintiffs demand for verification or correction of Defendants of non-disclosure defects have been forthcoming to date.

5.20 THE SECOND STRAW MAN

5.20.1 On 1/5/2010 8:08 PM, the next day, Kerim Emre wrote in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4: Kerim Emre Email - BG ISIN number
79

78 79

Exs. Vol. 1, Ex. 9 {Ct. Rec. doc. 1-4} Exs. Vol. 1, Ex. 10 {Ct. Rec. doc. 1-4}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 84

-------- Original Message -------Subject: BG ISIN number Date: Tue, 5 Jan 2010 18:08:14 -0800 From: Kerim Emre <kerim.emre@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Bond/BG ISIN number XS0205433377 that the instrument is going to be issued on. Best, Kerim kerim.emre@gmail.com P: 951-719-4819

5.20.2 1/7/2010 - PAYOUT AND DEPOSIT SCHEDULE Kerim Emre wrote in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4. Kerim Emre Email
80

Payout Schedule

-------- Original Message -------Subject: Fwd: Update Date: Thu, 7 Jan 2010 10:52:42 -0800 From: Kerim Emre <kerim.emre@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Update on trade Sent from my iPhone Begin forwarded message: I spoke to Scott Koster yesterday and he gave me some new information, all good news. Scott should be following up with his own email no later then close of business today. Here is my understanding of what was said: 1. Settlement is Friday. 2. This Friday will be the first settlement. So there will be 39 more. 3. Money will be wired on Monday. 4. This wire will hit scotts paymaster then be distributed from there. 5. Future wires will go direct to JV principals not through Scott.
80

Exs. Vol. 1, Ex. 12 {Ct. Rec. 1-3}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 85

6. Scott should have a hard copy of the actual BG early to mid week next week that will be provided to the JV partners.

5.20.3 1/13/2010 - EMRE TAKES A 16.7% CUT OF FLORES PSP EARNINGS Kerim Emre wrote in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, Exs. Vol., Ex. 13 {Ct. Rec. doc. 1-4} Emre 13 Jan 2010 12:17:16 -0800 Subfee Agreement -------- Original Message -------Subject: SubFee Setup Date: Wed, 13 Jan 2010 12:17:16 -0800 From: Kerim Emre <kerim.emre@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Hi Lance, Here is the subfee agreement for Global Paymasters. I filled out my information, but I'll need you to fill out the header, as well as yours so we can be setup for disbursement. Please sign/date/etc and then send back to me. I will then sign my portion and and send it back to you as a PDF. Best, Kerim kerim.emre@gmail.com P: 951-719-4819

5.21 1/13/2010 - FRAUD BEGINS WITH DELAYS, DECEIT, AND MORE ARTIFICES

5.21.1 1/13/2010 - DEFENDANTS LONG SILENCE. On or about 1/13/2010 Flores began numerous inquiries about why there had been no deposit to his bank account. Koster had reaffirmed his previous schedule ( 5.9.5, supra) for the

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 86

deposit, however provided no prior notice or explanation when the deposits for the PSP partners did not arrive. Flores received no verifiable answer nor credible explanation other that there had been some delay in the transaction due to the holiday of a banker (the HSBC HK Banker-John Doe) in Hong Kong. After telephone calls placed to Emre, Flores insisted on a direct follow-up with Mark Gelazela at IDLYC and identification of the HSBC HK Banker with no response. Defendants were unresponsive until 1/26/2010 when Flores received a forwarded message from Koster through Emre.

5.21.2 1/13/2010 1/25 2010 - LEGAL NOTICE: LEGAL RIGHT TO RELY ON INTEGRITY AND HONESTY. During that period of twelve days that began about 1/13/2010, Plaintiff restated to Emre that he and Koster had a fiduciary duty that vests in Plaintiffs (the Entrustors), the legal right to rely on the integrity and honesty of Koster, Emre and their partners as well as the quality of the services Fiduciaries are required to provide . 5.21.3 Further, Flores reiterated to Emre the jeopardy their performance failure has placed on his slate funding
81

and the mounting damages along with

the increasing cost of delaying crews, talent, and affecting location availability. Plaintiff also informed the Defendants he had suffered irreversible damage to his reputation, and loss of credibility and trust with the A List crews and talent,

Motion picture production funding from Prosperity International for a slate of productions scheduled for YR 2010 (this is a temporal bound reference relative to the period in which the terms and availability of the funding were limited).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

81

Page 87

and that would extend into the industry including unions, and local government officials who were working to create incentives for employment and education for their constituents and the economic welfare of their communities anticipating the arrival of the slate productions . 5.21.4 With the scheduled funds delivery date nearing two weeks in the arrear and inquiries seeking explanation, Koster began a credibility damage control campaign by creating a ruse. Koster embarked on a plan to first create a false trust and a sense of legitimacy using decoys by where he presents faithless corroboration for his claims. 5.21.5 Defendants first device was the use of disguised or altered replicas of documents. The devices form may or may not have been initially authentic, but its intended purpose was to solicit Plaintiffs trust and quell Flores due diligence inquiries while intentionally misrepresenting and omitting the true condition and status of the IDLYC/PSP transactions. As well, the deceit was intended to hide any information that Flores could use to explore the state of those transactions. 5.21.6 The Defendants second device was staged to fill in the evidentiary voids in Defendants physical artifices, i.e. Defendants altered or defaced documents. Koster would next convey unverifiable accounts to the Plaintiffs of his meetings between himself and inferred administrators of the high-level international banking transaction events. Koster related to Plaintiff that he had this access by virtue of his unique liaison with official financial industry operatives. Defendants intended the use of these reports along with the sanitized documents to

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 88

established a collective inferential credibility of Defendants claims, and to sustain genuineness of the documents Koster had in his possession and was about to produce to the Plaintiffs.

5.22 1/26/2010 - THE THIRD MAN OF STRAW

5.22.1 1/26/2010 - FIRST SELF-JUSTIFICATION FOR THE DELAY. On 1/26/2010 6:32 PM, Kerim Emre forwarded an e-mail message over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, originally sent to him that afternoon by Scott Koster in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, to explain the state of the PSP and IDLYC financial transactions. Koster cites an e-mail message sent to him over the Internet through the use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, by Mark Gelazela with the trade platform at IDLYC setting up the first excuse for the delay of the funds delivery due fifteen days prior to this point . 5.22.2 2/3/2010 - NOTICE TO DEFENDANTS OF ACCUMULATING DAMAGES. On 2/3/2010 12:04 PM, one week after Kerim Emres 1/26/2010 6:32 PM message, Emre forwarded an update via e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 89

from Scott Koster whose e-mail was sent over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, concerning Bank Guarantee
82

Preadvice .

83 84

5.22.3 On 2/3/2010 2:49 PM, John Childs in an e-mail, sent over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4,
85

wrote that he was expecting another update tonight or

tomorrow morning and presented an e-mail message from Scott Koster, sent use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, stating he was going to provide more recent information and that he had attached a non-disclosure agreement, so that [Koster] may without worry, forward on the items that I am in receipt of, to provide to our PSA clients proof of performance. Koster then attempts to misrepresent and memorialize the state-of-mind in an expression of common knowledge to our clients by declaring [a]s all of our clients are aware, there have been numerous setbacks and holdups, when actually, the only awareness was that from personal knowledge,

A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. Preadvice. Preliminary information about a letter of credit (L/C) sent by the issuing bank to the advising bank where time is short. It notifies the recipient that the named buyer has opened an L/C of a specified amount for a named seller (beneficiary), and usually includes the statement "the credit will follow" or words to the effect. Depending on the jurisdiction, a preadvice may or may not irrevocably commit the issuing bank to actually issue the said L/C. Therefore, the advising bank generally does not issue an advice of credit but only notifies the beneficiary of the receipt of preadvice so that he or she (if willing) may proceed with the processing of the buyer's order. Also called preliminary advice. (source: BusinessDictionary.com)
84 85 83

82

Exs. Vol. 1, Ex 14 {Ct. Rec. doc. 1-4} Exs. Vol. 1, Ex. 15 {Ct. Rec. doc. 1-4}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 90

that Kosters delivery of the funds were in arrearage, and nothing more. Koster attempts to place his words into [his] clients mouths. 5.22.4 DEFENDANTS CREATE A FACADE TO ELUDE PROOF. John T. Childs forwarded an in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, from an e-mail originally sent to him by Scott A. Koster whose interstate wire communication which also was intended to defraud, 4, stating that [a] direct request by a partner of mine, as well as myself [sic] for proof of this was directed towards IDLYC, as well as their attorneys. See, Exs. Vol. 1, Ex. 15 {Ct. Rec. doc. 1-3}. 5.22.5 ESTABLISHING PSEUDO-LEGITIMATE RESOURCES. The term for this deceptive practice is referred to as authentication by association and used by Koster continually to construct each man of straw. In retrospect, the modus operandi of the Defendants, was obviously formulated at the onset or prior to the instant event as a standing procedure and business formula. It was implemented for the RICO Actors and the enterprises of the Wilde Mobs and Milaca Gangs and co-conspirators collective transaction by advancing the established investment and trade. 5.22.5.1 Koster, the authority apparent, of the Milaca Gangs and the

financial transactions, responded to challenges to his arrogating and unequivocal authority and the operations of the PSP, constructed a crudely developed squad of straw men to support his plan to unleash a contrived

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 91

deception. Each Straw Man was fashioned to distract, dissuade, confute or avert challenges to the legitimacy Milaca Gangs PSP financial performance claims, credibility of status reports, and demands made by the Plaintiff for proof for the delays. Koster would use a facsimile of an official document or form and deface any information that would allow independent verification or establish any genuineness to the article, continuing to create of one-man-ofstraw after another. When Kosters straw man collapsed after forensic examination by the Plaintiffs, he resorted back to his fallacy messaging, by distracting from the truth, using vague and inexact wording in his rebuttals. Kosters argument would always be extremely deceptive because he carefully crafted his responses, disregarding the possibility that there was any alternative explanation except his. Reexamination of the foregoing facts and those that next follow, reveal Kosters pattern and use of disjunctive syllogisms to develop his maze of misleading information and deceptive business practices.

5.23 2/4/2010 - FALSE PROOF OF PERFORMANCE

5.23.1 2/4/2010 NOTICE OF DELIVERY OF PROMISED PROOF OF PERFORMANCE. On 2/4/2010 6:43 PM, Kerim Emre wrote in an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4,:

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 92

Exs. Vol. 1, Ex. 22 {Ct. Rec. 1-4} 4 Feb 2010 Emre msg - Update - Notice Proof of Performance Information -------- Original Message -------Subject: Update Date: Thu, 4 Feb 2010 16:43:45 -0800 From: Kerim Emre <kerim.emre@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Hi Lance, Just wanted to keep you in the loop. Scott has received all of the NDAs back from all of the principals involved. It should be fairly quick that you receive the proof of performance information that was promised. We are also going to be getting a full update outside of this soon. Best, Kerim kerim.emre@gmail.com P: 951-719-4819

5.23.2 Flores responded to Kosters request for a second non-disclosure agreement and received acknowledgment from Koster by his transmittal, an attached copy in his 2/4/2010 11:20 PM message, below, and his attachment of the signed NDA. See, Exs. Vol. 1, Ex 24 {Ct. Rec. 1-4}

5.24 2/4/2010 - KOSTER DELIVERS THE THIRD STRAW MAN & DEFENDANTS BEGIN A LONG CAMPAIGN OF DELAY AND DECEIT

5.24.1 DEFENDANTS ARE CONTINUALLY INFORMED OF FILM SLATE DETERIORATING FINANCIAL CONDITIONS. Throughout the course of events since early December of 2009 Flores had been diligent in informing the Defendants of the state of reliance upon the Defendants candor and fiduciary duty through V Page 93

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

news and reports of liabilities and damages they had caused. For example, the candid and timely dialog relating to the Defendants fraud, and the goodwill losses and economic jeopardy Defendants had placed upon the Plaintiffs, in the activities with the City of San Antonio concerning the production facility.
86

Defendants

were well aware that the Plaintiffs would endure continued economic burdens and damages resulting from the intended detrimental reliance they had calculated and induced. This intended reliance was willful and wholly predicated on their wire frauds. It will be from this vantage that Defendants fraud formulations would further evolve their complex fraud scheme. 5.24.2 From mid-February, 2010 until about mid-March, consisted of inquiry of the status and complaints from Flores about the accumulating harm the Defendants delay and deceptions were causing the Plaintiffs. Emre insisted he was not assuming any responsibility as a fiduciary and dismissed the Defendants inducements of written guarantee from the financial resources and Defendants promises, inferring the Defendants shouldnt have been trusted.

86

See Exs. Vol. 1, Ex 26 {Ct. Rec. doc. 1-4}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 94

5.25 3/15/2010 3/16/2010 - KOSTER & ATTORNEY CLAIM WITNESS TO PRIVATE PLACEMENT PROGRAM PERFORMANCE. There hadnt been any progress in meaningful information until after John Childs response to Flores
87

when Koster, whose legal

counsel was Thomas P. Harlan, a lawyer representing himself to be of high qualified and substantial experience,
88

followed on 3/15/2010 12:13 PM and on 3/16/2010 10:24

AM, the next day stating that he and his attorney had first-hand proof, having visually confirmed performance and no intentional delays of the Alicorn PSP/IDLYC transaction. Koster suggested a short-term alternative was possible, but made assurances of his trust and the viability of the Syndicates transaction.
89

5.25.1 The April 2nd Scheduled Payout & Default. On Thursday, March 18, 2010 1:59 PM, Scott Koster in a message Stated he had received an update from one of his partners on another instrument who spoke to the trader, and it appeared that the first payout was on track for the April 2nd [2010]
90

and would

be out of the country and providing current updates by e-mail. Koster noted he had spoken to the trader that Monday, who stated that if there were any delays, they would be SWIFT related delays, and would only hold things up for a few days.
91

Kosters assurances fail, no payout ever occurred.

87 88

Exs. Vol. 2, Ex. 27 {Ct. Rec. doc. 1-5}

I have been involved in hundreds if not thousands of lawsuits, including a number in Texas. (Exs. Vol. 5, Ex. 123 at 1)
89 90

Exs. Vol. 2, Ex. 28 at {Ct. Rec. doc. 1-5} Exs. Vol. 2, Ex. 29 at {Ct. Rec. doc. 1-5} See, Exs. Vol. 2, Ex. 29 {Ct. Rec. doc. 1-5}

91

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 95

5.25.2 Defendants Exhibit Conscious Indifference to Silence, Concealment & Non-disclosure. Koster had knowledge of the true facts and circumstances, stated above, and had fiduciary duty including the duty to speak, inform and provide documentary verification to the Plaintiffs, as that duty of care had arisen in this instance. However, they did not, and by fraudulent inducement, coerced reliance and fraudulent intent, instead maintained and continued the various frauds, fully aware of the consequences of their tortuous acts which they knew would injure the Plaintiffs. Defendants, but particularly Koster who knew that by concealing information of grave consequential import, it would likely cause great harm to the Plaintiffs.

5.26 DEFENDANTS EXTRINSIC FRAUD ATOP DETRIMENTAL RELIANCE

5.26.1 Defendants used and continued to use that same detrimental reliance as a weapon to threaten Plaintiffs with their contract non-performance. The threat were intended to subvert and deter the Plaintiffs continued pressure on Defendants to seek proof of performance, and to as well prevent criminal complaint, or civil litigation. Defendants threats were clearly intended to shift responsibility of any financial transaction failure to the Plaintiffs continued due diligence efforts or legal action. 5.26.2 Of far greater import, is the malice aforethought and criminal intent of the Defendants fraud scheme. In addition to the continual fraud perpetrated over

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 96

the wires to this point in time, Koster decisively decided to risk criminal liability by instituting coercion, duress and criminal extortion in threatening to terminate investors returns from the PSP for attempting to verify Koster and members of the conspiracys veracity. 5.26.3 3/26/2010 In an e-mail from John T. Childs sent by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, forwarding an e-mail message from Koster sent use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, delivering a message to the investors,
92

wherein Koster threatened the Plaintiffs

and ostensibly the investors in behalf of himself and the co-conspirators in the Enterprises, with retaliation and withholding Plaintiffs funds and/or earnings, etc. Koster threatened that the retaliatory sanctions would be enforced if the Plaintiffs sought or even made an insinuation about seeking criminal or civil action against the RICO Defendants through civil law suits or as a criminal complainant, witness , victim or informant. By and through Kosters threat made over the wires he and the members of the Wilde Mob, the Milaca Gang, their associates, and co-conspirators violated 18 U.S.C. 1512 7 tampering with a witness, victim, or an informant, 18 U.S.C. 1513 8 retaliating against a Witness, victim or an informant, 18 U.S.C. 1951 (Hobbs Act) 9. 5.26.4 Undoubtedly, Koster felt he was above the law and could unilaterally terminate all contractual rights or claims of a partner in these circumstances. The

92

See, Exs. Vol. 2, Ex. 30 at {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 97

Defendants clear intent was to instill the fear of losing everything, in the minds of the Plaintiffs and others, to assure Defendants control and continued detrimental reliance of the Plaintiffs on the Enterprises. The Defendants executed these actions through the use of the public communications wires over the Internet in the furtherance of their fraud.

5.27 KOSTER DECLARES 100% CONFIRMATION FUNDS ARRIVAL IN U.S.

5.27.1 3/26/2010 On Friday, March 26, 2010 at 12:43 PM, Scott Koster, representing the Syndicate , sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, to the Plaintiffs stating: Exs. Vol. 2, Ex. 30 at {Ct. Rec. 1-5 } John Childs Fri, 26 Mar 2010 w/fwd msg fr Koster Mar 26, 2010 at 12:43 PM: As some of you know, for several weeks there have been rampant rumors going around that funds for this program have been sent to the US and to NZ, that funding has taken place for clients in Australia, that the program had closed, and several others. Only one of those has any truth to it. Funds have been received here in the US for the purpose of our program through IDLYC, as well as several others. This has been 100% confirmed to be true directly by the head trader at HSBC HK, as well as by the CEO's of IDLYC, the two bodies transacting this program for all of the principals.
93

Inclusively, the members of the Wilde Mob, the Milaca Gang, their associates, and coconspirators.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

93

Page 98

5.28 SYNDICATE/KOSTER BLAME HSBC FOR DELAYS.

5.28.1 Koster, speaking for the Syndicate, through an e-mail message sent over the Internet by means of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, then blames HSBC Hong Kong for the delay by inferring fraud on the part of the bank through their intentional delay to unjustly make a profit, yet provide no proof. Thus, if untrue they have purposely made written defamatory representation that conveys an unjustly unfavorable impression about HSBC Hong Kong: HSBC is has been more than difficult in moving the funding along, as they continue to collect interest on the funds the longer they hold them in their hands Our bankers have expressed that funds are eminent nearly every day for at least a week and a half. We did have an issue after the Chinese new year, but that was handled and we were not expecting further delays. Exs. Vol. 2, Ex. 30 at , {Ct. Rec. 1-5 }

5.28.2 Monday, March 29, 2010 16:07:36 GMT Three days later, on Monday at 4:07 PM, after receiving no credible response from the Defendants, Flores sent a message to Koster: Scott, I'd like to get through the riddles and vagueness; perhaps get some clarification (about Kosters previous message). Exs. Vol. 2, Ex. 32 {Ct. Rec. doc. 1-5}

5.28.3 After phone calls place to the Defendants, they refused to produce any verifiable documentation or information. Defendants, particularly Koster, continued their conscious indifference to Defendants fiduciary duty through Silence, Concealment, Breach of Contract for Nonperformance, Breach of V Page 99

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Common Law Duty of Good Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment legally due Plaintiffs. Koster knew they would be prohibited by equitable estoppel, particularly, Promissory Estoppel, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. It is evident, given the aforementioned facts, Koster took into account their tortious and/or illegal acts, their reckless and wanton disregard of the law, and the harm they had, or would continue to inflict upon others, and with scienter, weighed the risks of their deeds . 5.28.4 The Elements Of Equitable Estoppel were satisfied and are asserted against the Defendants in that (1) The Defendants were advised of the facts; (2) The Defendants intend that their conduct be acted upon by the Plaintiffs, or the Defendants acted in such a way that the Plaintiffs had a right to believe it was so intended; (3) The Plaintiffs were ignorant or were previously misinformed of the true facts by the Defendants; and (4) The Defendants had by their frauds and coercions forced or induced the Plaintiffs into a detrimental reliance.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 100

5.29 3/30/2010 - 4/14/2010 91ST DAY IN DEFAULT - 116TH TRANSACTION DAY DISCLOSURE REQUEST

5.29.1 4/13/2010 On Tuesday, April 13, 2010 7:55 PM (Wed, 14 Apr 2010 01:55:42 GMT) Flores sent a message notifying Koster that the ALICORNIDLYC-BMW transaction was about 40% in arrearage (no revenue paid out) and Flores wanted a documented answer from Gelazela. Flores also noted again to Koster, the damages to him from the transaction nonperformance.
94

5.30 Koster's Reinforce Previous Threat of Retaliation

5.30.1 4/13/2010 9:55 PM CST On 4/13/2010 9:55 PM, Scott Koster sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, writing: Lance, I have not heard anything new. Please understand that when I do get updates, I try my best to verify them prior to issuing them out to profit share members. I too am behind on my own projects due to this transaction, but as this funding has been delayed, I have continued to push forward with other avenues of obtaining funds until this program either pays out, or I am issued a refund. Also, regarding the ... report, there are always two sides to every story. One client who I brokered in requested a refund, and it was granted to him pending he signed a release of liability. The ... report screwed himself, in that all of us signed a ncnd, as well as an agreement to not purposely attempt to disrupt the funding process by going to external sources prior to exhausting all provisions in the contract. Read 95 through the sanitized doc, and you will understand what I am refering [sic.] to.

94 95

Exs. Vol. 2, Ex. 32 {Ct. Rec. doc. 1-5} Exs. Vol. 2, Ex. 34 {Ct. Rec. doc. 1-5} referring to Exs. Vol. 2, Ex. 33 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 101

5.30.1.1

There is little doubt that Kosters message was a veiled threat


96

intended to reinforce his previous threat of retaliation

should he become

aware of any kind of legal [criminal] or civil action; as he deemed criminal or civil action, profane.

5.30.2 4/14/2010 On Wednesday, April 14, 2010 11:42 AM (17:42:59 GMT) Flores sent a message to Koster to get a yes or no answer whether or not the revenue funds were going to be sent; resolving the next action by Flores to resolve the financial and damages issues.
97

5.30.3 4/16/2010 118TH DAY NOTICE. Friday, April 16, 2010 5:00 AM, Flores sent a message to Koster noting that it was over 118 days into the financial transaction, the last day in the 2 to 4 week period following the payout of the principals and looking to confirm that the PSP would be paid this day. As in many other messages previously, Flores again, reinformed Koster of the status of the accumulating damages and harm Koster and his friend Gelazela were inflicting upon Flores and a host of others.

96 97

Compare, Exs. Vol. 2, Ex. 30 at {Ct. Rec. doc. 1-5} Exs. Vol. 2, Ex. 35 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 102

KOSTER ACKNOWLEDGES FILM PROJECT DAMAGES AND SUGGESTS MOVE TO COMMODITIES TRADE

5.30.4 4/16/2010 On 4/16/2010 10:15 AM, Scott Koster wrote through an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, acknowledging film project losses resulting from his failure to perform, aware that Flores is anticipating civil litigation and federal agency criminal complaints, next suggests moving funds into a Gold Buy/Sell as a direct principal. Though it seems to just work into Kosters delay scheme, this message will play a significant role in clarifying the fraudulent intent and act in an entirely new program substituted for the IDLYC transaction later on. 5.30.4.1 4/16/2010 Koster Fri, 16 Apr 2010 response to Flores Wed, 14
98

Apr 2010 Msg.

(Friday, April 16, 2010 10:15 PM CST)

-------- Original Message -------Subject: Re: Status/Schedule Date: Fri, 16 Apr 2010 10:15:10 -0500 From: Scott Koster <koster.scott@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com>, John Childs <jchilds3@gmail.com>, Kerim Emre <kerim.emre@gmail.com> Lance, I understand where you are coming from with all of this. I too have commitments to make, but fortunately, I did not make any serious financial obligations on my own behalf, as I did not have my funds under my own control I 100% see where your coming from, but am also aware of your situation and past issues prior to coming into this program.
98

Exs. Vol. 2, Ex. 36 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 103

5.31 KOSTER/EMRE REPORT SEC INVESTIGATOR SAYS IDLYC CHECKS OUT THEN INITIATES AN OBSTRUCTION OF JUSTICE SAYS FUNDING IS IMMINENT

5.31.1 4/22/2010 On 4/22/2010 1:10 PM CST, Kerim Emre wrote through an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, restating Kosters telephone conversation that Koster was told by an SEC investigator
99

that the IDLYC

transaction was legitimate, and that he was advised that the PSP funding was imminent. Neither Emre nor Koster would provide any verifiable documentation of the SEC report, the name of the investigator, or SEC district investigating IDLYC to Flores, though Plaintiffs knew that there was an ongoing investigation. It was the clear intent by the Milaca Gang, inter alios, Koster 6, Emre 6, and Childs 6 to keep the Plaintiffs away from any federal investigations conceal Plaintiffs from investigators.
100

5.31.2 Following, in later telephone conversations with Koster, Flores maintained that IDLYC was engaging in fraudulent actions and that Koster had to be aware of those frauds. Flores continued informing Koster that he had first hand information and both he and Harlan had an obligation and were required by law to report the frauds, and that the only reason that Koster could possibly have
Koster had mentioned in several telephone conversations with Flores that he was contacted on a number of occasions by an investigator from the Securities and Exchange Commission looking into IDLYC, each time reporting that there appeared no wrongdoing by Mark Gelazela and William Chandler Reynolds.
100 99

Exs. Vol. 2, Ex. 38 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 104

to gain, not to produce that evidence to the SEC investigator, would be to conceal his, Harlans, Childs, and Emres involvement in the unlawful and/or illegal activities with IDLYC and BMW Majestic. Koster would not respond, and remained silent on this challenge, knowing full well they were obstructing justice by interfering with a government investigation and not being forthcoming with evidence of criminal or regulatory violations.

5.32 KOSTER OFFERS GOLD BUY/SELL VALUE EQUIVALENCY SUBSTITUTION FOR IDLYC PERFORMANCE IN DEFAULT

5.32.1 4/16/2010 On Friday, April 16, 2010, Scott Koster, sent a message to Flores, copying John Childs and Kerim Emre concerning the Gold Buy/Sell settlement offer. 5.32.2 4/16/2010 10:15:10 CST In the period following Kosters Friday, April 16, 2010 10:15 PM message, Flores and Koster engage in telephone conversations in which Koster further explained the process and procedure of Richard Halls (and partners) Gold Transaction as a settlement for the performance failure of the Plaintiffs interest in the non-performing Alicorn PSP. In those phone conversations Koster reiterated, proposed, assuring the reliability of the program, and offered the commodity buy/sell to Flores. 5.32.3 Koster made additional promises and reassurances to that which he stated in his April 16TH message that Flores would be taken out of IDLYC

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 105

transaction, and placed into the buy/sell program, not as a 4th party to the transaction, but as a direct principal. 5.32.4 Promissory Estoppel. Defendant, the promisor, made a promise, in fact a gratuitous promise that he should reasonably have expected to induce action or forbearance of the Plaintiffs by a definite and substantial character on the part of the Defendant, whom a promise has been made. The Plaintiffs, promisees, justifiably relied on the Defendants' promise for which Plaintiffs suffered harm and substantial detriment, that was an economic loss and other damages that ensued to the Plaintiffs from action or forbearance. Thus, injustice can be avoided only by enforcing the promise.

5.32.5 4/26/2010 KOSTERS APRIL RESPONSE TO FLORES REPLY TO IMMINENT PAYOUT ANNOUNCEMENT AND KOSTERS CONCERN OF PLAINTIFFS PURSUIT OF CIVIL AND CRIMINAL ACTIONS On Monday, April 26, 2010 at 11:25 AM CST (11:25:18 -0500 GMT) Scott A. Koster wrote then you send me, after our talks about holding off,
101

emails about litegation [sic.] and other talks of

pursuing legal means of forcing hand, it makes me un-nerved, and slightly concerned of your true intentions. I am being open and honest regarding these

Relating to phone conversations and e-mail concerning the Plaintiffs' intention to pursue civil litigation and criminal complaints with U.S. Dept. of Justice, which Koster urged Plaintiffs to hold off their these pursuits.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

101

Page 106

matters in this particular forum, as we are all in this together, and I feel that not just you and I need to be on the same page, but John and Kerim as well.
102

5.33 EMRE'S REQUEST FOR IRS W9 FORM DEFENDANTS ADVANCE FRAUD SCHEME THROUGH SECOND VIOLATION OF 18 U.S.C. 1028A AGGRAVATED IDENTITY THEFT

5.33.1 From 4/27/2010 11:08 PM though 4/29/2010 Kerim Emre sent three messages, Tuesday, 27 April 2010 at 21:08:52 CST 4, 2, Wednesday, 28 April 2010 at 09:06:53 CST 4, 2 and on Thursday, 29 April 2010 08:06:59 CST 4, 2 through an e-mail over by use of interstate wire communications in furtherance of a scheme with specific intent to defraud, requesting Flores W9 IRS form, exchanging information and acknowledging procedures for Flores submission to escrow attorney (paymaster) David B. Kaplan Attorney-at-Law JOLTA Trust Account, Chase Bank, 270 Park Avenue, New York, NY 10017, Bank Officer: Fery Sabouri.
103

102 103

Exs. Vol. 2, Ex. 40 {Cr. Rec. doc. 1-5} Exs. Vol. 2, Ex. 41 {Cr. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 107

5.34 LEGAL NOTICE AND DEFINITION GIVEN DEFINING AND GOVERNING FIDUCIARY DUTIES ARISING OUT OF THE LAW OF EQUITY

5.34.1 4/22/2010-6/24/2010 FLORES INFORMS IDLYC PRINCIPALS & KOSTER


OF THEIR INTRINSIC FIDUCIARY DUTY.

From April 22nd through June 24, 2010,

Flores informed Koster and IDLYC principals through Koster, of their fiduciary duties and that their clients have a right to information given the real and potential damages to everyone involved in the transaction.
104

5.34.2 Non-disclosure & Silence. The Defendants refused to produce any verifiable documentation or information. Defendants, particularly Koster, continued their conscious indifference to their fiduciary duty through silence, concealment and non-disclosure of information legally due Plaintiffs. Koster knew they would be prohibited or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. It is evident, given the aforementioned fact , Koster took into account their tortious and/or illegal acts, their reckless and wanton disregard of the law, and the harm they had, or would continue to inflict upon others, and with scienter, weighed the risks of their deeds. 5.34.3 Koster would not provide any documentation his advisory of the imminent funding though urged in subsequent telephone conversations with Emre, Childs and Koster.

104

Exs. Vol. 2, Exs. 39, 40 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 108

5.34.4 The Defendants refused to produce any verifiable documentation or information. Defendants, particularly Koster, continued their conscious indifference to Defendants fiduciary duty through Silence, Concealment, Breach of Contract for Nonperformance, Breach of Common Law Duty of Good Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment legally due Plaintiffs. Koster knew they would be prohibited by equitable estoppel particularlyPromissory Estoppel, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. 5.34.5 Defendants, specifically Koster, continued their acquiescence to Flores' legal notifications arising after Flores gave legal warning to Defendants based on clearly asserted facts and specification of related legal principle, where after Koster, did not respond within a reasonable period of time. By acquiescing, the Defendants lost the legal right to assert the contrary and would be prohibited or otherwise estopped from later making certain related arguments, defenses or claiming certain related rights. It is evident, given the aforementioned facts, Defendants, particularly Koster, took into account their tortious and/or illegal acts, their reckless and wanton disregard of the law, and the harm they had, or would continue to inflict upon others, and with scienter, weighed the risks of their deeds.The Defendants refused to produce any verifiable documentation or information. Defendants, particularly Koster,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 109

continued their conscious indifference to Defendants' fiduciary duty through Silence, Concealment, Breach of Contract for Nonperformance, Breach of Common Law Duty of Good Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment legally due Plaintiffs. Koster knew they would be prohibited by equitable estoppel particularly Promissory Estoppel, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. 5.34.6 The Elements Of Equitable Estoppel were satisfied and are asserted against the Defendants in that (1) The Defendants were advised of the facts; (2) The Defendants intend that their conduct be acted upon by the Plaintiffs, or the Defendants acted in such a way that the Plaintiffs had a right to believe it was so intended; (3) The Plaintiffs were ignorant or were previously misinformed of the true facts by the Defendants; and (4) The Defendants had by their frauds and coercions forced or induced the Plaintiffs into a detrimental reliance. 5.34.7 On 4/26/2010 11:25 AM, Scott Koster replied
105

to Flores response to

Emres Imminent payout schedule message of April 22nd. Koster responded in an interleaved form. 5.34.8 Koster had knowledge of the true facts and circumstances, states above, and had fiduciary duty including the duty speak, inform and provide documentary verification to the Plaintiffs, as that duty of care had arisen in this

105

Exs. Vol. 2, Ex. 40 {Ct. Rec. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 110

instance. However, they did not, and maintained and continued the various frauds, fully aware of the consequences of their tortuous acts which they knew would injure the Plaintiffs. Defendants, but particularly Koster, also knew that they were concealing information of grave consequential import to the Plaintiffs, and as well maintained the fraudulent concealment of their fraudulent acts. 5.34.9 Estoppel by Acquiescence. Defendants, specifically Koster, continued their acquiescence to Plaintiffs legal notifications arising after Flores gave legal warning to Defendants based on clearly asserted facts and specification of related legal principle, where after Koster did not respond within a reasonable period of time. By acquiescing, the Defendants lost the legal right to assert the contrary and would be prohibited or otherwise estopped from later making certain related arguments, defenses or claiming certain related rights. It is evident, given the aforementioned facts, Defendants, particularly Koster, took into account their tortious and/or illegal acts, their reckless and wanton disregard of the law, and the harm they had, or would continue to inflict upon others, and with scienter, weighed the risks of their deeds.3

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 111

5.35 FLORES JUNE 13TH DEMAND FOR PERFORMANCE 106 & PRODUCTION OF DOCUMENTS

5.35.1 6/13/2010 On Sunday, June 13, 2010, Flores gives Koster notice that the PSP has entered into its 177TH day of the transaction (152ND day in default) 5.35.2 The Defendants refused to produce any verifiable documentation or information. Defendants, particularly Koster, continued their conscious indifference to Defendants fiduciary duty through Silence, Concealment, Breach of Fiduciary Duty, Fraud in the Factum, Fraud in the Inducement, Constructive Fraud, Fraud in Law, Actual Fraud, Fraud by Concealment, Breach of Contract for Nonperformance, Breach of Common Law Duty of Good Faith, Intentional Misrepresentation, Negligent Misrepresentation, Bad Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment legally due Plaintiffs. Koster knew they would be prohibited by equitable estoppel particularly, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later.

106

Exs. Vol. 2,Ex. 46 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 112

5.36 CLARKSONS DEMAND FOR VERIFICATION OF 107 KOSTERS PURPORTED DEMAND LETTER TO IDLYC

5.36.1 6/29/2010 CLARKSONS 1ST REQUEST FOR A COPY OF KOSTERS PURPORTED IDLYC DEMAND LETTER. On June 29, 2010 4:44 PM MST, Plaintiff Vicki Clarkson wrote requesting copy of Koster demand to Gelazela, following her telephone call voice message to Koster. 5.36.2 6/30/2010 - CLARKSONS 2ND CALL FOR A COPY OF KOSTERS PURPORTED IDLYC DEMAND LETTER. On Wednesday, June 30, 2010 2:23 PM, Vicki Clarkson reminded Koster of her request for a copy of his purported demand letters he claimed to have sent to Mark Gelazela at IDLYC. (Exhibit 45 at ) 5.36.3 6/30/2010 - CLARKSONS 3ND REQUEST FOR A COPY OF KOSTERS PURPORTED IDLYC DEMAND LETTER. On Wednesday, June 30, 2010 2:23 PM, Vicki Clarkson reminded Koster of her request for a copy of his purported demand letters he claimed to have sent to Mark Gelazela at IDLYC. (Exhibit 45 at ) 5.36.4 KOSTER FAILS TO PRODUCE DOCUMENTS CONCEALING THE INTERNAL ACTIVITIES OF THE SYNDICATE. Koster never responded to the Clarkson request for Kosters purported demand letters to IDLYC, neither to Clarkson nor Flores. This information was critical to their financial interests and was information lawfully due the Plaintiffs; as of the date of the filing of this instant action, no document of any sort, verifiable or not, related in this section ( 5.35.2), has been produced to either of the Plaintiffs.
107

Exs. Vol. 2, Ex. 45 at , , {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 113

5.37 KOSTER & BMW MAJESTIC ATTEMPT TO ESTABLISH PLAUSIBLE DENIABILITY USING THEIR OWN STRAW MAN108

5.37.1 [Ex. 47 at ] On June 14, 2010, Koster received a document [bmwmajesticUpdateletterJune142010.pdf] from BMW Majestic, presumably from Woods, the same being received by IDLYC, presumably from Gelazela, and stated by Koster to be confirmed by the tracking number as well as a phone call and email from Mark Gelazela. 5.37.2 [Ex. 47 at ] Koster stated, I had my contract with his [Gelazelas] bank. He [Kosters contact at bank] felt very strongly that they [Gelazela/IDLYC] had both the ability, and the commitment to all parites [sic] to issue the refunds within the timeline stated in the document that was sent. Thus, Koster committed that it was highly probable that he would receive a refund for the Alicorn PSP. 5.37.3 [Ex. 47 at ] I feel, as does my attorney [Thomas P. Harlan], that we are at the point of escelation [sic]. Koster infers that he and Harlan intended to escalate the recovery of funds by stronger measures, presumably litigation.5 5.37.4 [Ex. 47 at ] Koster commits funding to restoring the ALICORNIDLYC-BMW MAJESTIC transaction performance failure with a (Gold) Buy/Sell transaction.

108

Exs. Vol. 2, Ex. 47 {Ct. Rec. doc. 1-5}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 114

5.37.5 [Ex. 47 at ] Koster introduces the purported evidence of BMW Majestics confirmation to refund investment including a 10% fee and return all moneys by June 30, 2010 or sooner . The document appears to be completely fraudulent, showing issuance without a signatory appearing on no letterhead. 5.37.6 [Ex. 47 at ] Koster, after stating that he and Harlan were going to escalate the recovery of funds now make a conflicting statement at in which they change position concerning escalation of the funds recovery, stating it is not time to escelate [sic].

5.38 KOSTER WITHHOLDS EVIDENCE FROM SECURITIES & EXCHANGE COMMISSION INVESTIGATOR CONTINUING HIS OBSTRUCTION OF JUSTICE

5.38.1 7/5/2010 On Tuesday, July 5, 2010 at 19:12:09 GMT -0500 (7:12: 09 PM CST) Koster sent a message to Flores concerning, inter alia, his interview by a United States Security and Exchange Commission investigator.
109

5.38.2 Koster came into conflict with Flores after Koster stated he was questioned by SEC authorities and later withheld information concerning wire and telephone communications with Woods and Gelazela. Flores, again admonished, Koster on several occasions about Kosters intentional obstruction of justice and pressed Koster to cease aiding and abetting the other members of the Syndicate operation and their commission of crimes. Flores, stated to Koster, that

109

Exs. Vol. Ex. 53 at {Ct. Rec. doc. 1-6}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 115

Koster had first hand information and other evidence, which he withheld from the Plaintiffs, the U.S. Securities and Exchange Commission and should had turned over to the Justice Department (FBI) in Minneapolis. 5.38.3 Koster was well aware of the demands for production of documents, and had failed to produce evidence of the Syndicate activities. He was also aware of the numerous legal notices he had received from Flores which he failed to act upon. Given this, Koster failed to inform and provide the SEC investigator with that information and from whom it had been demanded. Flores expressed that he would inform the SEC if Koster would provide to him the evidence, but he couldnt approach the SEC or Justice Department with only heresy. By all accounts, Koster, Harlan and Emre were aware of the criminal objectives of the Syndicate and refused to provide same to the federal authorities. 5.38.4 Koster corruptly influenced, obstructed, and impeded, or endeavored to influence, obstruct, or impede, the due administration of justice, thereby may have violated the crime of obstruction of justice, and the due administration of justice. His conduct interfered with the judicial process by concealment. 5.38.5 7/8/2010 - LEGAL NOTICE GIVEN TO KOSTER AND HARLAN - FLORES URGES KOSTER NOT TO WITHHOLD EVIDENCE FROM SEC.
110

5.38.6 [Exs. Vol. 3, Ex. 54 at {Ct. Rec. doc. 1-6}] On Thursday, July 8, 2010 at 15:42:39 GMT (10:42 AM CST) Flores sent a message to Koster inquiring,

110

Exs. Vol. 3, Ex. 54 {Ct. Rec. doc. 1-6}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 116

inter alia, urging Koster not to continue concealing the mail fraud and potential RICO violation of the Syndicate. 5.38.7 The defendant's endeavor to obstruct justice is sufficient to prove obstruction. Kosters endeavor may constitute a lesser threshold of purposeful activity than a criminal attempt. 5.38.8 7/8/2010 - KOSTER ADMITS TO WITHHOLDING EVIDENCE FROM FEDERAL INVESTIGATION.
111

5.38.9 On Thursday, July 8, 2010 1:40 PM, Scott Koster wrote within hours of Flores inquiry of Kosters disclosure of evidence of the fraud and criminal activities related to the Syndicate:
112

3. [Flores] Did you give the SEC a copy of that BMW Majestic phony-baloney refund response letter from their Board of Directors? This has got to be fraudulent as hell; thus, a act of mail fraud (probably just one among many wire/mail frauds that have gone on) which could held as one of the minimum two predicate acts for the feds to move on RICO (racketeering) charges against BMW. [Koster] I did not. I am meeting with my attorney next week to go over the course of action from here. I do not want to spend too much money on it, as Im already out 150k if they lost/spent the money, and are selling their stake house. I want to see what my attorney can accomplish, prior to going too much farther into my pocket to deal with it. 5.38.10 7/9/2010 2ND LEGAL NOTICE TO KOSTER OF FEDERAL CRIMES & OBSTRUCTION OF JUSTICE. Fri, 09 Jul 2010 09:27:38 AM CST Flores again sends legal notice to Koster concerning the apparent civil fraud, felonies including wire

111 112

Exs. Vol. 3, Ex. 55 {Ct. Rec. doc. 1-6} Id. at message 3

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 117

fraud, obstruction of justice and other racketeering related activities which he and the Syndicate may be engaged. 5.38.11 Incorporating by reference the above 5.38.4, pg. 116, 5.38.4, pg. 116, as if fully set forth hereto, the Plaintiffs aver that the Defendants and particularly Koster, and Emre never responded to the Plaintiffs legal notices. The only response from Koster is his admission that he withheld evidence from the United States Securities and Exchange investigating officer, and otherwise did not produce the evidence or information thereto related in Flores notices, and has continued to withhold critical information legally due the Plaintiffs, as well as the United States government. Koster, Harlan, and the other members of the Milaca Gang ever refused to provide all of the evidence they had at hand nor did they make referral to the Plaintiffs in violation of 18 U.S.C. 1503. 5.38.12 Defendants Were Fully Informed of Governing Laws. It cannot be claimed by Defendants, particularly Scott A. Koster and Thomas P. Harlan that they were uninformed or were ignorant of the law of torts, legal and equitable doctrines, the common law, federal and state civil and criminal law, nor the Defendants lawful duties related thereto. Plaintiffs aver equitable estoppel .

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 118

5.39 ACKNOWLEDGMENT OF DAMAGES AND HARM BY SILENCE

5.39.1 The allegations and facts informing Defendants of damages and harm to the Plaintiffs incurred by and through Defendants non-performance, fraud, maleficence and/or crimes contained in Exs. Vol. 2 Exhibit 52 {Ct. Rec. doc. 1-5}, incorporated by reference hereto, and on pages 87, 93, 101, 102, 199 of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 5.39.2 Flores July 29TH Msg., 222ND Day of Transaction - Notice of Damages & Non-Performance. The Defendants by the two-hundred and twenty-second day of the Alicorn-IDLYC-BMW Majestic investment transaction had been fully informed and aware of the amount of damages and the harm they had inflicted upon the Plaintiffs. 5.39.3 By the Defendants own non-disclosure they had deprived the Plaintiffs of critical information in which they could have understood the degree of fraud being perpetrated. Further, the Defendants made material misrepresentations of the facts of nearly all the transactions and processes in the PSP, and investment. The facts provided the Plaintiffs by the Defendants were misrepresented information that was intentionally ambiguous. And by Defendants silence they maliciously allowed the Plaintiffs damages to accumulate thorough that silence when they had a fiduciary duty to speak with candor and honesty. The Defendants did not. Defendants silence and all the foregoing prevented the

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 119

Plaintiffs effective engagement of federal and state law enforcement, and other agencies which may have been able to cause the cessation of fraud and criminal activity of the Syndicate.

5.40 ALICORN ENTERPRISE-BEREA-HALL GOLD BUY/SELL FRAUD SCHEME GENESIS113

5.40.1 7/29-8/16/2010 Conditions & Agreement. Flores Sets Conditions for Richard Hall Gold Buy/sell Substitution as settlement for damages. In the period between July 29, 2010 to August 16, 2010 Flores, in telephone conversations with Koster, expressed that he wanted assurances that Richard Hall and his company including Vladimir Pierre-Louise and Christine Wong-Sang would provide complete transparency to the Richard Hall Gold Transaction, accessability to Richard Hall and a committed understanding to maintain regular communications with verifiable frequent status reports, copies of the assay information, and that the documents moving the Plaintiffs over to the Gold Transaction be simultaneously executed by all parties on the same day. Koster stated that could be done as soon as Richard had the exit plan in place. 5.40.2 Plaintiffs Plan for Use of Gold Buy/Sell Funds for Critical Short-Term Damage Recovery from the ALICORN/IDLYC/BMW Non-performance. Plaintiffs plan was to initiate the purchase of a Hong Kong bank instrument to secure a loan to recover what was left of the severely damaged film slate, and financial

113

Exs. Vol. 3, Ex. 60 {Ct. Rec. doc. 1-6}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 120

damages to film production crews and talent commitments. It was critical that Flores move quickly with no delays to use the Gold Buy/Sell revenues to recover, and it was essential for funds to move directly to a Hong Kong bank to secure the collateral for a loan. The Plaintiff could then bring the balance of the revenue to help Clarkson recover from the losses in her real-estate business and damages from lost investment opportunities. 5.40.3 Koster Delivers Partnership Termination and Wind-up Agreement and Mutual Release &c.
114

5.40.4 Contract Executed under Coercion and Duress. Because of the delayed funding from the Alicorn PSP failure to perform, and because Plaintiffs had incurred substantial liabilities and damages in reliance on Emres and Koster's representations, the Plaintiffs were forced to endure significant financial distress and emotional anguish as a result. Koster, Harlan, Childs and Emre were fully aware of those damages and the harm they had dispensed
115

and intended to

exploit the Plaintiffs anguish as a tool of malice they had forged through detrimental reliance of the Plaintiffs to Defendants extortive ends. Koster exploited Plaintiffs condition to coerce their submission to an onerous and punitive agreement,
116

(the "First Settlement Agreement").

9, 23

114 115 116

Exs. Vol. 3, Ex. 63 {Ct. Rec. doc. 1-6} See 5.39, pg. 119 "Partnership Termination Agreement and Wind-up Agreement and Mutual Release"

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 121

5.40.5 8/18/3010 FLORES SIGNATURE WITHDRAWAL. On August 18, 2010 2:44:30 PM CST, Flores sent a message informing Koster of his signature withdrawal from the Partnership Termination Agreement.

5.40.6 8/24/2010 - KOSTER ESTABLISHES EARLIEST OPPORTUNITY TO SIGN THE 1ST WIND-UP AGREEMENT - EVIDENCE OF AUGUST 16TH DOCUMENT FORGERY. On August 24, 2010 11:18:36 AM, Koster explains the document he sent should have had his signature, which, in fact, it did not.
117

Koster indicates that he would sign

the document when he later returned and is at his desk at the office.

5.41 Koster Delivers Forged Document in Violation of Overt State Crime of Forgery in Furtherance of the Conspiracy and Racketeering

5.41.1 Koster never delivered the counter-signed document until after he responded to Flores and Clarksons attorney Gary Grabs demand for production of Documents letter. The counter-signed document arrived November 17, 2010 at 1:13 AM CST to Flores. It was then discovered by Vicki Clarkson that Flores signature had been forged onto a non-original signature page which didnt bear the embedded watermark seal
118

of the original document

119

whereupon Flores

had signed. Not only had Koster forged Flores signature on a fraudulent

117 118 119

See, Exs. Vol. 3, Ex. 63 at , {Ct. Rec. doc. 1-6} Exs. Vol. 6, Ex. 108 {Ct. Rec. doc. 1-9} Exs. Vol. 6, Ex. 107 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 122

signature page, but had backdated the signature date of his signature to reflect that he executed the agreement on August 17, 2010. 5.41.2 Koster penned the fraudulent signature date to have it appear as though he had inscribed his signature on August 17TH. In fact, Koster hadnt signed the document or given any notion to sign it. It wasnt until one week after Flores informed Koster of his signature withdrawal of August 18TH that Koster had even given thought to signing the document, as Koster said he would sign the agreement when he returned back to [his] desk on August 24th.
120

5.41.3 Koster sent documents, falsified by forgery, affecting a monetary transaction value exceeding millions of dollars, directly in the offer and sale of securities. He did so through the use of interstate commerce and by use of the public wire over the Internet. This action is a violation of State and federal crimes including felony Forgery 18,
121

and felony federal Wire Fraud 4.

122

5.42 SCHEDULE FOR TELEPHONE CONFERENCE CALL W/GOLD TRADE COMPANY PRINCIPAL RICHARD HALL TO INITIATE GOLD BUY/SELL PROGRAM

120 121 122

Exs. Vol. 3, Ex. 66 {Ct. Rec. doc. 1-6} Texas P. C. 32.21 Forgery - felony 18 U.S.C. 1343 Wire Fraud

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 123

5.42.1 9/1/2010 10:43 AM On September 1, 2010 10:43:18 AM CST Scott Koster sends an e-mail message to inform Flores of the conference call with Richard Hall.

5.43 KOSTER INITIATES AN EXTORTION KICKBACK PLOT FOLLOWING THE SETTLEMENT ARRANGEMENTS

5.43.1 9/1/2010 12:01 AM - Richard Hall/Gold Buy/Sell Telephone Conference. On September 1, 2010 21:01 CST, Flores joined a conference call on conference line number 218-844-8230 access code 380262# already in progress. 5.43.2 9/4/2010 8:24 AM Flores Raises Issues with Koster Concerning the Eugene Fletchers Control of the Payout Stream Raised During the Teleconference. In a message on September 4, 2010 8:24:17, Flores queries Koster about the due diligence on Richard Halls group and Fletchers involvement in taking unlawful and illegal control of Plaintiffs assets. 5.43.3 9/6/2010 11:10 AM THE SHAKEDOWN. Koster Reveals the Shakedown and his bait and switch Eventual Take it or Loose Everything settlement deal. On Saturday, September 4, 2010 7:11:33 PM, Koster laid out the extortion kickback for his front man Kerim S. Emre, relating the payoff he wanted as Kerims initial agreement. What Koster was referring to as the initial agreement, was the 16.7% piece of the action, the investment returns, required by

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 124

the Syndicate, out of the Plaintiffs earnings from the Alicorn PSP investment with IDLYC and BMW.
123

5.43.4 9/9/2010 - Childs Defines Procedures for the Richard Hall Gold Buy/sell Instrument Transactions Koster to Fund Escrow Account.
124

5.44 9/6/2010 JOHN CHILDS EMERGES AS AN ACTOR IN THE SHAKEDOWN

125

5.44.1 John Childs Acknowledges Emre Had No Entitlement to Fee -- But Would Aid in the Kickback for Emre. Childs acknowledges that Emre had an agreement FPA (Fee Payment Agreement), only for the PSP ALICORN-IDLYCBMW Majestic deal, not the substituted Richard Hall Gold Transaction intended as a settlement for the Plaintiffs damages and the lost revenues resulting from the transactions non-performance. However, Childs stated he intended to get the payoff for Emre anyway, and threaten 9, 23 to make the PSP partners pay Emre for his part in resolving the Plaintiffs restitution. Childs affirms his threat by raising the stakes threatening further to increase the cost to the PSP partners to One-Million Dollars ($ 1,000,000). 5.44.2 9/7/2010 2:05 PM - Flores Demand for Agreement Verification. Tuesday, September 7, 2010 2:05 PM, Flores demanded the agreement information which affected the cost to the Plaintiffs settlement transaction.
126

On

123 124 125 126

Exs. Vol. 3, Ex. 74 {Ct. Rec. doc. 1-6} Exs. Vol. 3, Ex. 76 {Ct. Rec. doc. 1-6} Exs. Vol. 3, Ex. 74 at {Ct. Rec. doc. 1-6} Exs. Vol. 3, Ex. 74 at {Ct. Rec. doc. 1-6}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 125

5.44.3 9/7/2010 6:20 AM - John Childs Continues Extortion Sham Asserting Claim to a Nonexistent Emre Agreement He Had Already Acknowledge Didnt Exist.
127

5.44.4 9/7/2010 10:17 AM - Koster Continues Extortion

9, 23

Referring to a

Nonexistent Agreement or commitment to take a kickback on the settlement of the ALICORN/IDLYC/BMW transaction nonperformance and damages. 5.44.4.1 Arsonist Analogy: It is well established by Childs that Emre was

not entitled to compensation from the Alicorn settlement for the damages and harm to the Plaintiffs, which Emre had a hand in. Yet, both were determined to get a kickback out of the settlement for Emre. Such would be akin to the arsonist who burned ones house down to cover up a robbery then returning to the residents home after the insurance check arrives to demand a piece of the insurance claim. 5.44.5 9/7/2010 11:05 AM, John Childs Advances a New Extortion and Strikes out to kill the Richard Hall-Berea Gold Transaction. 9, 23 Fifty-two minutes following Kosters 10:17 AM message, Childs sends a message to Flores exhorting his own kickback extortion of Three-hundred Fifty-thousand Dollars U.S. ($350,000 USD).
128

5.44.6 9/22/2010 9:54 PM CST - Flores Gives Notice to Koster and Emre That Emre Has No Wavier. The Defendants particularly Koster, Emre and Childs,

127 128

Exs. Vol. 3, Ex. 74 at {Ct. Rec. doc. 1-6} Exs. Vol. 3, Ex. 74 at {Ct. Rec. doc. 1-6}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 126

continued their conscious indifference to Defendants fiduciary duty through , Breach of Common Law Duty of Good Faith legally due Plaintiffs. Childs and Koster, knew the consequences of their action to extort the Emre Kickback from the Plaintiffs and wilfully with malice aforethought, conspired in an act of Coercion and Tortious Interference with Prospective Contracts over the wires, elements of Racketeering.

5.44.7 10/11/2010 - KOSTER ANNOUNCES READY TO EXECUTE GOLD TRANSACTION - IDENTIFIES THE THREE PARTNERS. On Monday, October 11, 2010 2:06 PM, Scott Koster announced ready to execute live by end of the week. 5.44.8 Flores responds to Kosters agreement being full of holes and weak, noting it would be unlikely to be upheld in a court of law.
130 129

5.44.9 10/14/201 On October 14, 2010, Christine Wong-Sang, then President, and Principal of Berea Inc. did sign and execute a fraudulent document entitled Financial Consulting & Management Agreement
131

(the Management

Agreement also known as the Asset Management Agreement) upon which she under and by the direction of, and under the supervision, and oversight of Richard D. Hall, Chief Executive Officer of Berea Inc., affixed upon the aforementioned Management Agreement, the identity of Hendrickx Toussaint, an Attorney of the

129 130 131

Exs. Vol. 3, Ex. 74 at {Ct. Rec. doc. 1-6} Exs. Vol. 4, Ex. 81 at {Ct. Rec. doc. 1-7} Exs. Vol. 6, Ex. 105 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 127

Toussaint Law Group,

132

without his knowledge, consent, or permission

identifying Toussaint as the Paymaster for the fraudulent use and purposes of committing fraud by e-mail transmitted over the interstate wires and/or U.S. Postal System. 5.44.10 10/13/2010 On October 13, 2010, Richard D. Hall did send through an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud the attached Management Agreement constructed under his direction by Christine Wong-Sang to Winston J. Cook, thereby Hall 2, 4 and Wong-Sang 2, 4
133

each engaging in the commission

of the federal crimes 18 U.S.C. 1343 (wire fraud) and 18 U.S.C. 1028A (aggravated identity theft). 5.44.11 10/18/2010 On Monday, October 18, 2010, at 11:37:36 Koster sent a message to Flores, copying Childs and Emre. At this time, there had been no verification of the execution of the Gold Transaction having been executed as had been stated by Koster earlier ( 5.44.7) on October 11TH. In the message Koster states that the three partners (MFI a.k.a. R. Lance Flores, Winston J. Cook, and Ivan Arcadio Santos identified in the attachment have equal ownership thus

The Toussaint Law Group was dissolved by Hendrickx Toussaint September 18, 2010. See, Declaration of Hendrickx Toussaint Exs. Vol. 8, Ex. 160 {Ct. Rec. doc. 10-1} It was sufficient for the use of the wires to be incident to an essential part of the scheme,' or a step in the plot where Wong-Sang knew that the purpose of the fraudulent document would be distributed to investors or participants by e-mail or U.S. Postal System mail facilities.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 133

132

Page 128

rights, in the interests of the financial instrument which Winston J. Cook would execute.
134

5.44.12 On Monday, October 18, 2010 12:03:06 PM CST, Flores responds to Kosters 11:37 AM message and amends, signs and sends the Partnership Termination and Wind-Up &c. document to Scott Koster.
135

5.44.13 Just over three hours later at 3:26 PM, Koster sends a message with an attached document appearing similar to the one he had sent earlier at 11:37 AM that morning. The 3:26 PM document had, what appeared to be, the signature of Ivan Santos, however, it had been altered from the original 11:37 AM document at the signature page, previously showing Arcadio Ivan Santos III under the signature, whereas, the 3:36 PM document sent to Flores, originally was typewritten with Ivan Arcadia Santos at the signature location for Mr. Santos.

134 135

See, e-mail and attachment at Exs. Vol. 4, Ex. 80 {Ct. Rec. doc. 1-7} Exs. Vol. 4, Ex. 81 {Ct. Rec. doc. 1-7}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 129

5.45 10/19/2010 5:45 PM THE RANSOM NOTE. 5.45.1 On Tuesday, October 19, 2010 5:45:07 PM, Subject: Your final Piece, John Childs sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, in order to extort 9 23 16% of Plaintiffs settlement to Kerim S. Emre, for whom the Plaintiffs had no contractual arrangement to broker the settlement nor was he entitled to any portion of the settlement money as reward for the fraud and numerous crimes committed by the RICO Defendants in and during the events of the fraudulent Profit Sharing Program private placement program. The portion of the settlement agreement that the Milaca Gang attempted and continued to force their extortion by threats ultimately interfering with interstate commerce, and continued wire fraud of as part of the settlement for the Wilde Mobs and Milaca Gangs criminal activities, follows in part: Beneficiary 1 16.7% of 100% of proceeds from each payout Beneficiary Name: Kerim S Emre Bank Nam e/Address: US Bank, 40473 Murrieta Hot Springs Rd, Murrieta, CA 92563 Account Number: 153462847523 Swift Codes: USBKUS44CAL Routing Number: 122235821 Account Name: Kerim S Emre Bank Officer & Title: Erica Acosta, Assistant Manager Bank Telephone/Fax: (951) 894-1823 Please notify of transfer: [kerim.emre@gmail.com] Beneficiary 2
136

136

Extract from Exs. Vol. 4, Ex. 83 {Ct. Rec. doc. 1-7}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 130

A one-time fee of 188,850.00 USD will be paid to Vicki Clarkson, from Lance Flores of Mockingbird Films International, LLC portion of proceeds after Beneficiary 1 is paid. Beneficiary Nam e: Vicki Clarkson Bank Nam e/Address: TD Canada Trust, 5680 Signal Hill Centre SW , Calgary, Alberta Canada T3H 3P8 Account Num ber: 7114174 Sw ift Codes: TDOMCATTTOR Routing Num ber: 026009593 Account Name: Vicki Clarkson Bank Officer & Title: Leigh-Anne Eastman Bank Telephone/Fax: 403-292-2747 ext. 233/403-292-2943

5.45.2 10/19/2010 6:11 PM CST FLORES RESPONDS TO THE EXTORTION DEMAND FOR THE EMRE KICKBACK: ----- Original Message ----From: "Lance @ MFI" <lance@mockingbirdfilms.com> To: "John Childs" <jchilds3@gmail.com> Cc: "Vicki Clarkson" <vickiclarkson@shaw.ca>; "Wendy Hill-Tout" <whilltout@voicepictures.com> Sent: Tuesday, October 19, 2010 7:11 PM Subject: Re: Your final Piece

Provide all background information and the signed agreement between Kerim & Mockingbird Films. Provide all notification information of this subject matter that was delivered to Mockingbird Films prior to 10/19/2010 5:45 PM message sent to mockingbirdfilms.com mail from John Childs. Please provide a contact phone number which you can be contacted by my legal team and I; or provide your legal counsel's name and contact information. Thank You, Lance Flores

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 131

5.45.2.1

The Defendants particularly Koster, Emre and Childs, not only

had breached their fiduciary common law duty of good faith legally due the Plaintiffs, but Childs and Koster, were informed of, and well aware of the criminal nature of their actions and the consequences of their action and to extort the Emre Kickback from the Plaintiffs. The Milaca Gang members with scienter, wilfully with malice aforethought, conspired in an act of State Predicate Crime Coercion and Extortion in violation of Texas Penal Code 3103 consolidated under criminal theft provisions, and RICO predicate crimes 18 U.S.C. 1951 (the Hobbs Act) and 18 U.S.C. 1343 (Wire Fraud) used in the furtherance of the aforementioned criminal acts and furtherance of the Defendants fraud and racketeering.

5.46 Childs Identifies Emre as Author of Extortion Document and of the Fraudulent Representation of Clarkson and Implicates Emre in the Extortion

----- Original Message ----From: "John Childs" <jchilds3@gmail.com> To: "Lance @ MFI" <lance@mockingbirdfilms.com> Cc: "Kerim Emre" <kerim.emre@gmail.com>; "Vicki Clarkson" <vickiclarkson@shaw.ca>; "Scott Koster" <koster.scott@gmail.com> Sent: Thursday, October 21, 2010 2:00 PM Subject: Sub FPA Lance, I am sending this so that you are aware that the sub fee agreement i emailed you is Kerim's not mine. From what I am gathering there are two things going on here: 1. The lines of communication between Kerim and yourself are degraded. V Page 132

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

2. You are not in 100% agreement with the percentages on the FPA. If there are other points please elaborate.. In any case the entire group needs for you two to communicate and come to some sort of agreement in regards to this SFPA. If the two of you need me to mediate I will jump on a conference call with the both of you. The details of this transaction were nearly worked out yesterday. I will not allow the dispute between the two of you to affect the other involved. So please work it out ASAP. Thanks in advance. Sent from my iPhone

5.47 KOSTER ADVANCES THE EXTORTION AND HOBBS ACT CRIME BY WIRE FRAUD

5.47.1 10/21/2010 On 10/21/2010 11:08 PM, Scott Koster sent

137

an e-mail

over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4 :

Subject: Lets get this settled now. From: koster.sco @gmail.com Date: 10/21/2010 11:08 PM To: "Lance @ MFI" <lance@mockingbirdWlms.com>, Kerim Emre <kerim.emre@gmail.com> CC: John Childs <jchilds3@gmail.com>
Lance, as I have told you in the past, while I appreciate and understand your legal background, putting all that out there for everyone to see does nothing but put people on the defensive. Rather than point out where you see the liability is with Kerim, lets focus on one thing, which is what is holding us back from moving this forward. Lance, do you agree that because you came into this transaction through your relationship with Kerim, that Kerim deserves some level of compensation for helping us get all the pieces together for this instrument?

137

Exs. Vol. 4, Ex. 84 at {Ct. Rec. doc. 1-7}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 133

If so, please respond with what you feel is a fair % for Kerim to receive, and lets start there. I am just doing this as a friend to both of you, but more so because I want this to move forward. Kerim, if Lance makes a fair offering, whatever that be, will you be willing to work with that, and accept it as a sort of settlement in place of the previous agreement that you had in place with Lance? Please let me know guys. We have this and then logistical stuff to work out on the instrument, and its a live instrument to be delivered. Scott 5.47.2 Beyond question, Koster was extorting a kickback that would be funneled to Emre taking a large portion of funds from damages settlement. Koster then advanced to Flores in the message solicitation for Flores to make a counteroffer for Emres kickback amount.

5.48 KOSTER WANTS A STOP TO LEGAL NOTICES FOR EVERYONE TO SEE

5.48.1 On 10/21/2010 11:08 PM, Scott Koster wrote as I have told you in the past, while I appreciate and understand your legal background, putting all that out there for everyone to see does nothing but put people on the defensive. Harlan and Koster were uncomfortably aware that Flores had been providing legal notice and warning throughout the course of their fraud actions and posed potential criminal activity of the Defendants. Given Harlans legal training, long experience, FN 88 and understanding of his professional duties it is evident Defendants Harlan and Koster needed Flores to cease and desist from his lawful warnings, in order that they might attempt a defense of their tortious actions. V Page 134

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Harlan and Koster with full cognisance and understanding of related and prevailing law and doctrine, and knowing the risks of Defendants acquiesce, thus far, and with expectation of their need to continue, the anticipated continuance of Flores legal notices and warnings, attempted with scienter, to coerce Flores into ceasing his disciplined procedure.

5.49 PLAINTIFFS DEMAND STATUS TERMS AND TIME-LINE OF GOLD TRANSACTION

5.49.1 10/25/2010 On Monday, October 25, 2010 at 2:30 PM, Flores demanded from Koster and Childs the status of the Gold Transaction by 5:00 PM that day.
138

5.49.2 In the period between October 25TH and November 1ST Flores called Koster to have him respond to the Plaintiffs numerous demand for the status and time-line of the Gold Transaction. 5.49.3 On November 1, 2010 12:54 PM, Koster responded to the Plaintiffs messages stating I will call you later on today. In and out of meetings for most of the day regarding local business.
139

5.50 WINSTON J. COOK IS LOCATED AND QUARRIED ABOUT IDLYC AND GOLD TRANSACTION

138 139

Exs. Vol. 4, Ex. 85 at {Ct. Rec. doc. 1-7} Id. at

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 135

5.50.1 10/28/2010 After numerous inquires to Koster and his refusal to relinquish information requests for the names and contact information of the PSP partners and those involved in the Gold Transaction, Flores locates Winston Jerome Cook. Cook was either a partner or a business associate of Eugene Fletcher.

5.51 PLAINTIFFS MAKE IMPASSIONED DEMAND FOR PERFORMANCE ON THE GOLD BUY/SELL SETTLEMENT

5.51.1 11/2/2010 Early on Tuesday, November 2ND at 3:38 AM CST, Flores, in an e-mail message sent an impassioned plea to Koster from the Plaintiffs to show them their settlement funds. ----- Original Message ----From: Lance @ MFI To: Scott Koster Sent: Tuesday, November 02, 2010 3:38 AM Subject: Re: in case you did not get my text back to you And you never called. So .. the last few words ... [ http://www.youtube.com/watch?v=mBS0OWGUidc&feature=related ]
140

5.51.2 Following Flores effusive demand for performance on the settlement Koster responds later that day with several messages establishing excuses for

140

Exs. Vol. 4, Ex. 85 at {Ct. Rec. doc. 1-7}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 136

more delays to come because of gold sellers increased requirements for a larger purchase.
141

5.51.3 Koster provided the assay results of the barreled gold stating the results as 93.44% pure. However, he did not provide any verifiable proof. (id. at )

5.52 CLARKSONS NOVEMBER 2ND MSG. DEMAND FOR VERIFIABLE DOCUMENTATION OF GOLD TRANSACTION

5.52.1 11/2/2010 On Tuesday, November 2, 2010, Clarkson sent a message to Koster complaining about Kosters promises of greater transparency and improved communications from him, after numerous inquires to Koster. Clarkson quarried about the status of the Gold Transaction, and verifiable evidence. Cf. Winston J. Cook Is Located and Quarried , at 5.50.1

5.53 MILACA GANG FEATHERS RUFFLED OVER PLAINTIFFS INITIATING LITIGATION PROCESS AND INFORMATION GATHERING FOR THE JUSTICE DEPARTMENT

11/11 1:23 PM Koster Msg. - Ruffled Feathers - Prove & Defend Everything in Court of Law. On November 11, 2010, Koster sent an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4. RICO Defendant Scott A. Koster, infuriated by Flores conversation with, and information collection, from another investor Flores and Clarkson had located in

141

id. at

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 137

their pre-litigation investigation. The Plaintiffs had been seeking out and speaking with other victims of the frauds and business associates and members of the Wilde Mob, Milaca Gang, and the other Enterprises. Koster became angry concerning Flores request of Winston J. Cook to provide evidence for a criminal investigation the Plaintiffs would provide to the U.S. Department of Justice and information for civil litigation. Koster noted John Childs agitation about Plaintiff communicating with the feds.
142

(Thursday, November 11, 2010 1:23 PM CST) -------- Original Message --------

Subject: Re: Gold Buy/Sell Date: Thu, 11 Nov 2010 13:23:18 -0600 From: Scott Koster <koster.scott@gmail.com> To: Lance @ MFI <lance@mockingbirdfilms.com> Lance, As john told you on the phone, you more than ruffled feathers with your comments regarding the feds to winston and dr fletcher. This email is icing on the cake. Everything that has been done to this point can be proven and defended in a court of law. Please tread carefully, as we are very aware of the lies you have told about your involvement with myself, as well as how you passed money through your family to get back to you. Again, issues between you and vicki are between you and vicki. You did not make anyone aware of her involvement until mid this year. If you wish to proceed in either this transaction, or just back out, let me know. After your comments to winston, it was requested by both richard, and the other two partners to find a replacement for your 1/3rd, as richard does not need that kind of drama in his world, and neither do the other two.
142

Exs. Vol. 4, Ex. 89 {Ct. Rec. doc. 1-7} Exhibit annotation included.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 138

Lance, I see you, and who you are. I understand your back is against a wall from the decisions you have made. I have not shut you out, and continue to try to help you. I do not understand your constant need to be combative, when all you have been told is the truth. Lance, all of us, kerim, john, wendy, richard and myself, want to help you, but not one of us belive [sic.] that your intentions are true or just. We all feel that you are playing a game, and that we will end up hurting ourselves in the long run. Let me know your thoughts. Scott P.S. happy veterans day.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 139

5.53.1 KOSTER IMPLICATES RICHARD H ALL, AND TWO PARTNERS IN CONVERSION143 , THEFT, AND CONSPIRACY OF PLAINTIFFS ONE-THIRD (a) INTEREST IN THE GOLD TRANSACTION IN RETALIATION FOR INVOLVING THE FEDERAL COURT AND EXPOSURE TO THE DEPARTMENT OF JUSTICE AND SECURITIES
AND EXCHANGE COMMISSION.

5.53.2 Koster threatens and acts to intentionally interfere with the Gold Transaction Agreement in violation of the Hobbs Act 9. Kosters suggests in his message, that following Winston J. Cook and Flores conversation, Cook had apparently informed Eugene Fletcher of the details of that phone call. Plaintiffs had never met or been given Fletchers contact information and were unable question him about his insistence in taking control of Plaintiffs funds. In his message, Koster infers that the Plaintiffs demands and their decision to litigate aggravated Cook, Fletcher, Koster and others, and angered some so much, that the group deemed Clarkson and Flores too unsafe to be involved in the transaction. Further, the group would not tolerate Plaintiffs constant demands for proof, legal notice, and menace of exposure of the groups activities to federal authorities. id. at .

Conversion is the wrongful exercise of dominion or control over the property of another in denial of, or inconsistent with, the other's right to the property. AIG Life Ins. Co. v. Federated Mutual Ins. Co., 200 S.W.3d 280, 285 (Tex.App.Dallas 2006, pet. denied). A claim lies for conversion of money when identification of the money is possible and there is an obligation to deliver the money in question. Id. The factual allegations in Plaintiff's amended complaint are sufficient to state a claim for conversion. Defendants also contend that Plaintiff has failed to allege "demand and refusal." A demand for property and refusal to return the property may be necessary when the possession is initially lawful, because the refusal is what makes the possession unlawful, and a cause of action may then accrue. Hofland v. Elgin-Butler Brick Co., 834 S.W.2d 409, 413 (Tex.App.-Corpus Christi 1992, no writ). A demand and refusal is not necessary for every conversion cause of action to accrue.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

143

Page 140

5.53.3 Kosters threat of [i]f you wish to proceed in either this transaction, or just back out, let me know, is his ultimatum, to either pay the extortion and stay away from the feds or Plaintiffs would pay dearly and loose everything and intentionally interfere with an existing contract. 5.53.4 The Defendants refused to produce any verifiable documentation or information. Defendants, particularly Koster, continued their conscious indifference to Defendants fiduciary duty through Silence, Concealment, Breach of Contract for Nonperformance, Breach of Common Law Duty of Good Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment legally due Plaintiffs. Koster knew they would be prohibited by equitable estoppel particularly Promissory Estoppel, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. Further, the Defendant did so with malice and executed their torts and intentionally interfered with the Gold Transaction agreement.

5.53.5 KOSTER DECLARES HE CAN PROVE AND DEFEND EVERYTHING IN A COURT


OF LAW LITIGATE OR GO AWAY.

Koster makes a declaration that he can prove

and defend [e]verything, which would include, inter alia, all his criminal conduct and fraud, his breach of contract, breach of good faith, breach of fiduciary duty, misrepresentations, bad faith, intentional misstatements, deception, non-disclosure, willful omissions, tortious interference with prospective contract

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 141

and all his duplicitous pursuits; notwithstanding the production of all of the associated information and documents related to the ALICORN-IDLYCBMW Majestic transaction and the ALICORN-HALL-BEREA-CBS Enterprise Gold Transaction.
144

5.53.6 FEDERAL COURT DARE. Koster to the date of the filing of this Complaint, has extended a pattern of breaches of fiduciary duty, concealment of activities, including alleged criminal activities, and the withholding of information directly affecting the financial welfare of the Plaintiffs and substantially harming numerous members of the communities involved in the Plaintiffs business activities. Defendants, but particularly Koster are fully aware of the substantial cost, and emotional distress they would inflict, as well as the difficulty of litigating a fraud case such as this. 5.53.7 Koster, who declared his legal counsel and/or legal advisor was Thomas P. Harlan, had effectively disaffected or conspired with others, or by knowledge of the activities in the Syndicate, or the Gold Transaction were aware of other Defendants that have dissuaded victims
145

from pursuing the Milaca Gang, the

Wilde Mob in the courts. They have taken their proven ability to deter action

144 145

Exs. Vol. 4, Ex. 89 at {Ct. Rec. doc. 1-7}

e.g., I considered the FBI but I was embarressed [sic] and I didn't want to tarnish my own name by lodging an investigation with the FBI. I talked with other brokers that brought their clients to Mark [Mark A. Gelazela] and Chandler [William Chandler Reynolds] to see if they had been paid and they were in the same boat Finally, I contacted a friend that has conections [sic] in the FBI and asked if he could look into these two guys. He simply said RUN! If you can get your money... you'd better grab it and RUN! After another month, I asked for proof of the BG that I had bought and if they couldnt [sic] prove it I wanted my money back or I was going to the FBI. Exs. Vol. 7A, Ex. 133 {Ct. Rec. doc. }
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 142

taken against the Syndicate and the collective RICO Actors and co-conspirators into account, have weighed the risks of potential civil and criminal prosecution, and have chosen a posture of forcing Plaintiffs into a standoff. Here, Koster maintains the standoff in his course of holding hostage the critical information due the Plaintiffs, and their earning, essentially daring the Plaintiffs to litigate by his statement, "[e]verything that has been done to this point can be proven and defended in a court of law.
146

5.53.8 Defendants and Koster had that opportunity to prove and defend [e]verything that has been done to this point at that moment in time. Moreover, each time Flores or Clarkson demanded production of verifiable documentary evidence, and each time they asked for disclosure, Defendants should have disclosed and defended each time. Defendants, specifically Koster, Emre, Harlan, and Childs, could have taken those opportunities, and this instant opportunity, to provide what they claim they could do in a court of law. Instead, they chose not to do so, and chose to risk everything on their bluff. 5.53.9 Koster Cannot Now Present Evidence and Seek a Defense as Koster forewent that opportunity to speak long ago and is estopped from doing so by equitable estoppel. Koster, et al., foreswore that duty and opportunity to produce verifiable documentary evidence before the Plaintiffs suffered accumulating irrevocable damage; this, notwithstanding non-performance of neither the

146

5.53 at 138 annot , supra; also, Exs. Vol. 4, Ex. 89 at annot. {Ct. Rec. doc. 1-7}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 143

ALICORN-IDLYC-BMW transaction nor the ALICORN-HALL-BEREA-CBS Gold Buy/Sell substitution. 5.53.10 The Defendants have far exceeded any reasonable period to respond and produce, and are barred by equitable tolling to now respond to Plaintiffs demands or effect their fiduciary duty. Defendants, particularly Koster, continued their conscious indifference to their fiduciary duty through silence, concealment and non-disclosure of information legally due Plaintiffs. Koster knew they would be prohibited or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. 5.53.11 It is evident, given the aforementioned fact , Koster took into account their tortious and/or illegal acts, their reckless and wanton disregard of the law, and the harm they had, or would continue to inflict upon others, and with scienter, weighed the risks of their deeds.

5.54 FLORES CALLS OUT KOSTER AND CONFRONTS EVERYTHING CAN BE PROVEN AND DEFENDED IN A COURT OF LAW CLAIM

5.54.1 11/11/2010 On November 11, 2010 2:56 PM CST, Flores affords Koster an opportunity to correct and/or recant his declaration implicating Richard [Hall] and two other partners in a conspiracy to remove Plaintiffs ownership of their one-third interest in their earnings from the Gold Transaction. Further, Flores asks Koster to point out any inaccuracies of Flores answers or statements to Clarksons referral of counsels questions. V Page 144

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Je hais les mensonges qui vous ont fait tant de mal.


Emmanuel Berl

5.55 11/12/2010 KOSTERS PATHOLOGICAL LYING AND PSEUDOLOGIA FANTASTICA. 5.55.1 On Friday, November 12, 2010 10:40:04, Koster responds to Flores November 11, 2010 2:56 PM message ( 5.54.1) giving Koster an opportunity to recant or substantiate his claims in his November 11, 2010 at 1:23 PM message ( 5.53.5): 5.55.2 Koster, instead of recanting or affirming Flores request to substantiate his claims, Koster initiates an ad hominem attack declaring that Flores did not make anyone aware of Clarksons involvement until the middle of the year 2010. It is clear and incontestable that Koster lied and had made an intentionally false statement in his e-mail. His perjured statement is wholly contradicted by incontrovertible evidence which shows Koster, Emre and Childs, all, had full knowledge of Clarksons involvement since December 18, 2009, elucidated below:

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 145

I ALWAYS TELL THE TRUTH - PSEUDOLOGIA FANTASTICA.

147

I ALWAYS tell the truth, because it can be proven. Its easy to remember, and it does not come back to bite you. My integrity is one of the things that has always set me apart from other brokers out there, and its what has moved me forward into the position I am in today with my platforms, providers, and lenders. Im finding it difficult to continue to feel compassion about this situation, while it risks to affect my other 148 clients in an adverse way. Scott A. Koster

Given Kosters statement in light of the evidence provided in the Exhibits more explanation is unneeded. However, Kosters statements do shed light upon the mans veracity and that of his colleagues. Moreover, it demonstrates the credibility of Kosters continual misrepresentations of the truth and facts, if not all he may give tongue to in future assertions he may make in the course of litigation. 5.55.2.1 Koster embellishes upon his veracity by asserting the credibility

of the financial instrument, Richard Halls group and can prove the offering is 100% something. The paperwork is real, the SBLC offering is real, and I can 149 prove what my company is offering to you 100%.

Dike CC, Baranoski M, Griffith EE (2005). "Pathological lying revisited". The Journal of the American Academy of Psychiatry and the Law 33 (3): 3429. PMID 16186198. http://www.jaapl.org/cgi/pmidlookup?view=long&pmid=16186198.; also, Hardie TJ, Reed A (July 1998). "Pseudologia fantastica, factitious disorder and impostership: a deception syndrome". Medicine, Science, and the Law 38 (3): 198201. PMID 9717367; Newmark N, Adityanjee, Kay J (1999). "Pseudologia fantastica and factitious disorder: review of the literature and a case report". Comprehensive Psychiatry 40 (2): 8995. doi:10.1016/S0010-440X(99)90111-6. PMID 10080254.
148 149

147

See, exhibit enclosed documents 1-7 at 28, Exh. Vol. 4 Ex. 91 at {Ct. Rec. doc. 1-7}) id. at

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 146

Richards group is also very real. I cannot comment on what 150 they will be willing to offer.

I can however request a copy of the buy/sell agreement from Mr. Cook [Winston J. Cook], which I actually believe John 151 [Childs] has a copy of.

5.55.2.2

Koster asserts that Cook and Childs both possess a copy of the

Gold Buy/Settlement. Thus, because the Plaintiffs own a one-third interest and both Cook and Childs have control of those financial instruments and the Gold Buy/Sell contract, each has a fiduciary duty to the Plaintiffs, begging the questions: Why didnt Hall, Cook and Childs fulfill their duty to inform the Plaintiffs of their status, and maintain communications with the Plaintiffs prior to the initiation of litigation? AND

Why have they not produced for the Plaintiffs all the relevant documents legally due them?

To the date of the filing of this First Amended Complaint, Hall, Cook, Emre and Childs have produced little of truthful substance but much of fraudulent information and instruments.

150 151

id. at id at

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 147

As to what of the Defendants paperwork is real, or whether the SBLC offering is real, or if [Koster] can prove what [his] company is offering to [the Plaintiffs] 100%, we leave such determination and inferences as to the composition of the Defendants 100%, to the wisdom and determination of the Court.

5.56 ATTORNEY GARY GRABS LETTER NOTICE OF INTENT TO JOIN & PARTICIPATE IN SUIT AND DEMAND FOR PRODUCTION {Flores Tuesday, November 16TH Message Inquiring On Kosters Legal Counsel and Clarifying Legal Status of He and Clarkson. Emre Is Given Opportunity to Provide Proof of the Gold Buy/sell Legitimacy.}

5.56.1 11/15/2010 On November 15, 2010, Clarkson delivered an attached letter from her attorney, Gary Grab, in and e-mail to Flores which was intended to be presented to Koster in order to make him aware of their intent to join Flores litigation against the Syndicate inclusive of all actors, and enterprises involved in the litigation. Mr. Grab included in his letter the demand for specific information from Koster, et al.
152

152

Exs. Vol. 9, Ex. 173

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 148

GARY W. GRAB LAW OFFICE


Suite 200, 816 7 Avenue SW Calgary, Alberta T2P 1A1 Phone: (403) 819-7757 Facsimile: (403) 295-8021 Email: garygrab@shaw.ca
th

November 15, 2010 Mockingbird Films International LLC 3314 Pleasant Drive Dallas Texas USA 75221 Attention: Lance Flores Executive Managing Partner In the matter of: United States District Court, Northern District of Texas, Dallas Division - R. Lance FLORES, MOCKINGBIRD FILMS INTERNATIONAL LLC, Vicki CLARKSON and CLARKSON'S CLASSICS INC. (Plaintiffs) v. Scott KOSTER, ALICORN CAPITAL MANAGEMENT, and Kerim EMRE, (Defendants) Dear Mr. Flores, As you are aware, I represent Ms. Vicki Clarkson and Clarksons Classics Inc., respectively. Ms. Clarkson is a Director and an authorized representative of Clarksons Classics Inc. (collectively, Vicki Clarkson and Clarksons Classics Inc. being hereinafter referred to as VC). Upon reviewing with VC the issues in the above-styled cause of action and the circumstances related thereto, VC hereby wishes to hereby confirm its intention to join and participate in the abovementioned cause of action as a plaintiff alongside Mockingbird Films International LLC (Mockingbird), et al. In the event VC does not receive by close of business (5:00 pm MST) on Tuesday, November 16, 2010 verifiable documents unconditionally evidencing that certain Gold Buy / Sell transaction entered into with, inter alia, Scott Koster, Alicorn Capital Management and Kerim Emre, respectively, hereby expresses its desire to proceed to lit igation and/or to pursue such other remedies available at law. VC further hereby confirms its intentions to participate with Mockingbird, et al, in the settlement stipulations, agreement(s) and other documentation being drafted at this time and in any subsequent proceedings in the federal complaint action against Scott Koster / Alicorn Capital Management et al. In connection with the verifiable documents unconditionally evidencing that certain gold buy / sell transaction entered into with, inter alia, Scott Koster, Alicorn Capital Management and Kerim Emre, respectively, as referred to above, please note that VCs minimum
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 149

satisfactory requirements for such verifiable documents include, but are not necessarily limited to: a) a verifiable copy of the bank-to-bank MT transmission vehicle such as MT 760 of the SBLC or the financial instrument to which Lance Flores / Mockingbird has been assigned ownership in the partnership of the Gold Buy / Sell transaction ? such shall be deem ed valid upon verification by Lance Flores law firm or banker. b) a verifiable copy of the partnership document to which the aforementioned SBLC has been proportionally assigned to Lance Flores or Mockingbird, Winston J Cook and Ivan Arcadia Santos. c) a verifiable copy of the signed gold purchase / sell contract. d) a verifiable copy of the instruments directing the proceeds for the sale of the gold sale benefits to be transmitted to the account of Lance Flores or Mockingbird. e) a verifiable copy of the payment schedule outlining the schedule of funds transfer pertaining to the Gold Buy / Sell transaction. Please be advised that in the event the above mentioned documents are not provided to VC by close of business (5:00 pm MST) on Tuesday, November 16, 2010 VC hereby confirms that it will pursue all available remedies, including, but not limited to, immediate injunctive relief from the Court and to proceed expeditiously to discovery and trial. Please do not hesitate to contact the undersigned if you require anything further. Yours truly, Gary W. Grab Law Office

Gary W. Grab

5.57 KOSTER RESPONSE TO PLAINTIFFS ATTORNEYS DEMAND FOR PRODUCTION OF DOCUMENTS

5.57.1 11/16/2010 4:26 PM On Tuesday, November 16, 2010, Koster delivered by attachments to his e-mail the following documents:
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 150

Cook Business Services LLC & Alicorn Capital Management LLC, 153 ENGAGEMENT LETTER Cook Business Services LLC & Alicorn Capital Management LLC 154 ESCROW & WIRE INSTRUCTIONS TO BUSCH LAW CENTER ) Cook Business Services LLC FEE PROTECTION AGREEMENT OF 155 10/14/2010 Interlink Global Messaging & Cook Business Services LLC SBLC 156 TRANSMITTAL SERVICE Cook Business Services LLC STANDBY LETTER OF CREDIT 157 APPLICATION & October 19, 2010 FEE PROTECTION AGREEMENT Winston Cook $10,000,000 USD SBLC TRANSMITTAL VIA MT760 158 Facilitated by Interlink Global Messaging Winston Cook SBLC TEMPLATE & MT760 SBLC TEMPLATE BEREA FINANCIAL CONSULTING & MANAGEMENT AGREEMENT, COOK BUSINESS SERVICES LLL/Winston J. Cook 160 INVESTOR & Berea Inc/Christine Wong-Sang - PRINCIPAL 5.57.2 11/16/2010 4:26 PM - The documents Koster produced revealed breaches of fiduciary duties, bad faith, and extensive fraud and criminal activities conducted by Koster, Hall, Cook and others related in the Gold Buy/Sell transactions. The documents demonstrate the management and control over Plaintiffs property or property rights through Alicorn, Berea, CBS, their
159

153 154 155 156 157 158 159 160

Exs. Vol. 4, Ex. 98 {Ct. Rec. doc. 1-7} Exs. Vol. 4, Ex. 99 {Ct. Rec. doc. 1-7} Exs. Vol. 4, Ex. 100 {Ct. Rec. doc. 1-7} Exs. Vol. 5, Ex. 101 {Ct. Rec. doc. 1-8} Exs. Vol. 5, Ex. 102 {Ct. Rec. doc. 1-8} Exs. Vol. 5, Ex. 103 {Ct. Rec. doc. 1-8} Exs. Vol. 5, Ex. 104 {Ct. Rec. doc. 1-8} Exs. Vol. 6, Ex. 105 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 151

principals and agents, clearly establishing fiduciary duty, obligations, criminal acts including but not limited to forgery, aggravated identity theft, etc. The documents further reveal Flores as a beneficiary of the SBLC acquired through Success Bullion being negotiated for the Gold Buy/Sell transaction. From those documents, it appears the principals and/or individuals having influence and control of the Gold Transaction removed the Plaintiffs as beneficiaries from the transactions, whom they had previously requested removal from the transaction in retaliation for Plaintiffs pursuit of litigation and engagement of federal officials, according to Koster.
161

The documents do not show Flores participation

in the final Gold Transaction. Instead it appears Koster, had with the cooperation of Richard Hall and Winston J. Cook, removed Flores from the actual benefits of the gold profit part of the Gold Transaction. Rather, they had conspired to pay the Plaintiffs only a rebate on one-third of the SBLC face value instead of the revenues of the gold sale. Moreover, what the documents divulged, is that both Richard Hall and Winston J. Cook supervised, managed, controlled or otherwise oversaw the entire Gold Transaction, fully aware that Flores was a client/investor. Hall, and Cook never provided any status either verbally or by written communication of the proceedings of the business enterprise. They both had a fiduciary duty as did Koster to inform and maintain and disclose information critical to the Plaintiffs, but their fiduciarys duties go beyond mere fairness and honesty; they obliged

161

5.53, ?, annot. at 138, 152,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 152

Koster, Hall and Cook to further the beneficiarys best interests. Thus, the fiduciaries of the ALICORN-HALL-BEREA-CBS Enterprises Gold Transaction were not entitled to the profits from their bad faith and breach of fiduciary duty.
162

Richard Hall, Christine Wong-Sang, Vladimir Pierre-Louise, Eugene

Fletcher, Winston J. Cook, Scott A. Koster, Kerim Emre, John Childs, Thomas P. Harlan, their related agents, partners, companies, &c. are not entitled to any of the revenues or earnings ensuing out of the Gold Transaction. 5.57.3 Richard Hall, Christine Wong-Sang, Vladimir Pierre-Louise, Eugene Fletcher, Winston J. Cook, Scott A. Koster, Kerim Emre, John Childs, breached their fiduciary duties through Silence, Concealment, Breach of Contract for Nonperformance, Breach of Common Law Duty of Good Faith, Intentional Misrepresentation, Willful Omissions, Fraud by Concealment, and Conspiracy to enact their tortious conduct and depriving that which was legally due Plaintiffs. They are not entitled to any of the earning, profits, or otherwise any revenues from the Gold Transaction Koster knew they would be prohibited by equitable

International Bankers Life Insurance Co. v. Holloway, 368 S.W.2d 567, 576-77 (Tex. 1963). Fiduciaries who breach their duty forfeit all right to compensation, even if they did not profit from the breach of fiduciary duty. It is beside the point for either Turner or Corbett to say that Kinzbach suffered no damages because it received full value for what it has paid and agreed to pay. A fiduciary cannot say to the one to whom he bears such relationship: You have sustained no loss by my misconduct in receiving a commission from a party opposite to you, and therefore you are without remedy. It would be a dangerous precedent for us to say that unless some affirmative loss can be shown, the person who has violated his fiduciary relationship with another may {138 Tex. 574} hold on to any secret gain or benefit he may have thereby acquired. It is the law that in such instances if the fiduciary "takes any gift, gratuity, or benefit in violation of his duty, or acquires any interest adverse to his principal, without a full disclosure, it is a betrayal of his trust, and a breach of confidence, and he must account to his principal for all he has received." United States v. Carter, 217 U.S. 286, 30 Sup. Ct. 520, 54 L. Ed. 775, 19 Am. Cas. 594. See also Ash v. A. B. Frank Co., 142 S. W. 42; Armstrong v. O'Brien, 83 Texas 635, 19 S. W. 268. [emphasis added]
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

162

Page 153

estoppel particularly Promissory Estoppel, Estoppel by Non-disclosure, Estoppel by Silence, Estoppel by Misrepresentation, or otherwise be estopped from later making certain related arguments, defenses or claiming certain related rights later. By their breach of fiduciary duty, Richard Hall, Christine Wong-Sang, Vladimir Pierre-Louise, Eugene Fletcher, Winston J. Cook, Scott A. Koster, Kerim Emre, and John Childs, forfeit all right to compensation from the Gold Transaction or any other financial transaction that proceeded, including the previous Profit Sharing private placement joint venture, nor may they benefit from the SBLC instrument(s) identified or unidentified or related in any way to the transaction .
163

5.58 DISCOVERY OF AUGUST 16TH & OCTOBER 18TH DOCUMENT FORGERIES IN SECOND DOCUMENT SET DELIVERY

5.58.1 11/17/2010 1:13 AM On Wednesday, November 17, 2010 1:13 AM, Koster, early Wednesday morning, delivered a second set of documents that included: (1) {1ST } PARTNERSHIP TERMINATION AND WIND-UP AGREEMENT AND MUTUAL RELEASE (August 16TH Original Signed & Sealed Document 1ST Wind-up Agreement)
164

163 164

See, Texas Supreme Court, International Bankers Life Insurance Co., supra, FN 162 Exs. Vol. 6, Ex.107 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 154

(2) {1ST } WIND-UP AGREEMENT SOLO PAGE FORGERY (August 16TH 1ST Wind-up Agreement Page 4 Document Forgery) (3) {2ND } PARTNERSHIP TERMINATION AND WIND-UP AGREEMENT AND MUTUAL RELEASE ATTACHMENT "A" STRUCTURE
OF FINANCIAL INSTRUMENT (October
165

18TH 2ND Wind-up

Agreement Document Forgery)

166

5.58.2 The August 16TH document forgery 25 is fully described at 5.40.6, pg. 122, although the August 16TH document forgery was not discovered until Koster delivered all three of the document forgeries in two separate e-mails, 17 Nov 2010 at 01:13:20 CST 4
167

and 24 Aug 2010 11:18:36 CST 4,

168

over the Internet by use

of interstate wire communications in furtherance of a scheme with specific intent to defraud. 4 5.58.3 The October 18TH Document Forgery 25. Upon examination of the October 18TH document forgery
169

the Plaintiff discovered that documents third

page, the signature page had been forged. The original document had Flores initials inscribed on the first two pages, and Flores had placed a type written series of vertical bars, | , in the blank space at the bottom of the second page,
165 166 167 168 169

Exs. Vol. 6, Ex. 108 {Ct. Rec. 1-9} id., Ex. 109 Exs. Vol. 6, Ex. 106 {Ct. Rec. 1-9} Exs. Vol. 3, Ex. 66 {Ct. Rec. 1-6} Exs. Vol. 6, Ex. 109 {Ct. Rec. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 155

which overflowed two additional vertical bars onto the original third page, the original signature page. Plaintiffs discovered the forged signature of Ivan Santos beneath Flores signature on the third page. Next, Plaintiffs noted that, that Flores had not even sent his signed copy to Koster until 12:03 PM CST (18:03 GMT) on October 18TH which was 1:03 AM, the 19TH of October in Manila, Republic of the Philippines where Ivan Santos resides.
170

Yet, Mr. Santos signature shows he signed the

same original document on the same day. Either Koster forged Santos signature, or Koster is the first person to accomplish the unraveling of the unknown laws of physics, and accomplished backward time travel to have Santos sign on the same day in Manila. 5.58.4 Kosters forgeries of both the August 16TH 1ST Wind-up Agreement Page 4 Document Forgery and the October 18TH 2ND Wind-up Agreement Document Forgery affected a monetary transaction value of millions of dollars that was made in a direct offer and sale of a commodity security. These forged financial contract instruments were transmitted by the use of the public regulated communications wires in interstate commerce over the Internet, and are violations of State and federal crimes, and predicate acts, elements of racketeering.

170

5.44.12 on page 129; see also Exhibit 81

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 156

5.59 DELIVERY OF TEXAS DECEPTIVE TRADE PRACTICES ACT NOTICE & EVIDENTIARY FINDINGS

5.59.1 12/1/2010 - On Wednesday, December 01, 2010 11:19 AM, Flores delivered by Certified Electronic Mail (E-mail) and a printed copy of the original Deceptive Trade Practices Notice & Findings fr 1ST Examination of the RICO Defendants documents.
171

5.59.2 Plaintiffs incorporate by reference from the Deceptive Trade Practice Act Notice for IDLYC-BMW Majestic and substitution Gold Buy/Sell Contract (DTPA Notice and December 1, 2010 Findings from the 1ST Examination of the Evidence rendered in the records of the Court by Plaintiffs Exhibits Volume 5, Exhibit 115 and Exhibit 116 respectively.
172

The facts and allegations contained

in all of the paragraphs of the aforesaid instruments in Exhibits 115 and 116 are hereby re-averred and re-alleged, for all purposes, and incorporated with the same force and effect as if set forth verbatim herein. 5.59.3 The aforementioned TEXAS DECEPTIVE TRADE PRACTICES ACT NOTICE & EVIDENTIARY FINDINGS were delivered to Scott Anthony Koster and Kerim S. Emre by certified email and U.S. Postal Service certified mail on December 1, 2010.
173

171 172 173

Exs. Vol. 6, Ex. 114 {Ct. Rec. doc. 1-9} {Ct. Rec. doc. 1-9} See, Exs. Vol. 6, Ex. 116 {Ct. Rec. doc. 1-9}, Texas DTPA Notice Certificate of Service

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 157

5.60 THOMAS HARLAN EXTOLLS HIS PROFESSIONAL EXPERIENCE AND ACKNOWLEDGES RECEIPT AND REVIEW OF TEXAS DTPT NOTICE

5.60.1 1/21/2011 On Friday, January 21, 2011 12:56 PM CST, Thomas P. Harlan, wrote to Flores copying Gary Grab, attorney for Vicki Clarkson, and Vicki Clarkson, the following: I have been involved in hundreds if not thousands of lawsuits, including a number in Texas

Finally, please be advised that while you have sent out the required noticed under Texas' Deceptive Trade Practices Act, you have not negotiated in good faith to settle this matter. We are not going to work with or sign anything remotely like the "Settlement Agreement" or other items that you have created. We will have a simple, straightforward settlement agreement that is customarily used in cases like this. Again, if there is an offer, please put it out there. We are more than willing to work with you to bring this 174 matter to a reasonable conclusion. (emphasis added)

5.60.2 On Friday, January 21, 2011 2:14 PM CST, Flores responded to Harlans 12:56 PM message. Flores: Dear Mr. Harlan -It appears you have made some false presumptions, out of conversation with your client and a unreliable source perhaps. I have not participated as a broker in any capacity. The "$10k" which you reference, is no part of the Koster/Alicorn et al. transaction and pre-discovery fishing will not provide credible facts. As far as criminal actions, such is not in our sphere to prosecute, and is wholly in the hands of appropriate authorities to effect responsive actions that which may be appropriate to the evidence at hand or result from ongoing

174

Exs. Vol. 6, Ex. 122 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 158

investigations. Further related inferences neither warrant nor merit additional response. Unfortunately, we have experienced agreements with your client, but if you have something that would be acceptable to the Court, then certainly present it to us. Our demands have remained the same: 1) We want consideration for damages, knowing well that your client does not have the wherewithal to make us whole, but we would accept a structured settlement on a portion of direct and collateral damages would allow us to create financial mechanisms to recover a portion of the damages your client is liable. 2) In damage recovery for the IDLYC transaction and the promised replacement by means of an alternative financial mechanism of equivalent worth such as Gold Buy/Sell or equivalent. Doesn't get much simpler. LF

5.60.3 Neither Harlan nor Koster have ever responded to Flores January 21, 2011 2:14 PM message and have since withdrawn into their fraud and theft scheme. Of far greater import and consequence, that brought about Harlans response in behalf of Koster, is the failure of Koster, Harlan and Emre to resolve the Deceptive Trade Practice Act Notice for IDLYC-BMW Majestic and substitution Gold Buy/Sell Contract (DTPA Notice) and December 1, 2010 Findings from the 1ST Examination of the Evidence with such utter pretermission. The gravamen that embodies this issue, is the Defendants willful and reckless disregard for the law and rights of others, their unlawful and/or illegal acts, the unconscionable harm they have intentionally inflicted, and their malice. 5.60.4 As of the filing of the Original Complaint both Koster and Emre have failed to resolve DTPA notice or attempt to resolve the demands of the December V Page 159

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

1, 2010 DTPA notice, nor have they tendered a settlement offer. Moreover, Harlan clearly stated the Defendants intractable position. Thomas P. Harlan: We are not going to work with or sign anything remotely like the Settlement Agreement or other items that you have created.
175

5.60.5 EXPIRATION OF TIME TO RESOLVE TEXAS DTPA. Pursuant to Section 17.505, Texas Business & Commerce Code, Defendants were served notice of a Deceptive Trade Practices Act claim against them on Wednesday, December 1, 2010. The requisite sixty (60) day period for Defendants to resolve this matter has since tolled without any resolution nor attempt to resolve the claim as required of the Defendants pursuant to TEX BC. CODE ANN. 17.505 : Texas Statutes Section 17.505: NOTICE; INSPECTION: (a) As a prerequisite to filing a suit seeking damages under Subdivision (1) of Subsection (b) of Section 17.50 of this subchapter against any person, a consumer shall give written notice to the person at least 60 days before filing the suit advising the person in reasonable detail of the consumer's specific complaint and the amount of economic damages, damages for mental anguish, and expenses, including attorneys' fees, if any, reasonably incurred by the consumer in asserting the claim against the defendant

175

Exs. Vol. 6, Ex. 122 {Ct. Rec. doc. 1-9}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 160

5.61 Richard Halls Complete Berea Package Continuation of Identity Theft and Wire Fraud

5.61.1 6/14/2011 On June 14, 2011 Richard Hall sent to Lance Flores at Legal <legaldeptcv@mockingbirdfilms.com> an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4 and use the stolen identity of Hendrickx Toussaint 2 falsely identifying him in the Management Agreement as the Paymaster of the Gold Buy/Sell transaction. 5.61.2 6/15/2011 On June 15, 2011 Richard Hall sent to Vicki Clarkson at <vc_legaldept@mockingbirdfilms.com> an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4 and use the stolen identity of Hendrickx Toussaint 2 falsely identifying him in the Management Agreement as the Paymaster of the Gold Buy/Sell transaction.

5.62 OPEN-ENDED CONTINUITY INVOLVING DISTINCT THREAT OF LONG-TERM ILLEGAL AND ABUSIVE ACTIVITY

5.62.1 The Defendants acts establish an open-ended continuity incorporating the related predicates themselves involving a distinct threat of long-term illegal and abusive activity, where their acts are part of an ongoing and regular way of

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 161

doing business and conducting or participating in an illegitimate ongoing enterprise, and pose a substantial threat to the public. 5.62.2 Based on the evidence presented in the certified Domestic Business Records incorporated herein contained in Exhibit Volumes 1-8 and best of Plaintiffs knowledge and upon reasonable belief the foregoing was instituted or sustained through Conspiracy, Coercion, Extortion, Receiving the Proceeds of Extortion , Forgery, Obstruction of Justice, and that the Defendants frauds and other tortious act were accomplished by the extensive wire fraud, and other racketeering activities which Defendants used in their strategic and tactical operations of the Syndicate and the ALICORN-HALL-BEREA-CBS Enterprise.

5.63 PLAINTIFFS INVESTMENT EARNINGS LOCATED IN BANK INSTRUMENT WHICH THE SYNDICATE KEPT AND NEVER PAID PLAINTIFFS

5.63.1 The European $5 billion bond referenced at 4.1.7 at 37 is directly tied to the Plaintiffs investment. The HSBC pre-advise transaction
176

code and

the bank transmission confirmation was presented to the Plaintiffs as proof and verification of the instrument that was acquired, in part, from their funds in behalf of the Plaintiffs. Since the purchase the Five-Billion Dollar instrument the Plaintiffs have located its tracking and note that the bond has matured.

176

Exs. Vol. 1, Ex. 25, {Ct. Rec. doc. 1-4}

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 162

5.63.2 It further appears that there were, or still are, at least nine MTN

177

offshore instruments, that were acquired. Their various instruments are either European or Pacific Rim financial instruments secured by the Syndicate using investors money, and never paying out their earning or returns, just as Divens had done previously in stealing the Cobolt CMO interest from Betts and Gambles. (See, 5.2.4, 46) Plaintiffs calculations estimate that the face value sum of all instruments for which they have become aware, is another four to ten billion dollars.

Investopedia explains 'Medium Term Note - MTN' 1. Notes range in maturity from one to 10 years. By knowing that a note is medium term, investors have an idea of what its maturity will be when they compare its price to that of other fixed-income securities. All else being equal, the coupon rate on medium-term notes will be higher than those achieved on short-term notes. 2. This type of debt program is used by a company so it can have constant cash flows coming in from its debt issuance; it allows a company to tailor its debt issuance to meet its financing needs. Medium-term notes allow a company to register with the SEC only once, instead of every time for differing maturities.

177

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 163

VI THE ENTERPRISES

6.1 The members and associates of the Wilde Mob, Contra Costa Family,
180

178

the Milaca Gang,

179

the

and the Atlanta Family,

181

include: the Alicorn Capital

Management LLC (the Alicorn Enterprise also Alicorn), Berea Inc. (the Berea Enterprise also Berea), BMW Majestic LLC (the BMW Enterprise also BMW), Bush Law Center LLC (BLC Enterprise), Colker-Childs IGM Enterprise (also IGM), Law Offices of Jon Divens & Assoc. LLC (also JDA), Matrix Holdings LLC (the Matrix Enterprise or Matrix), Success Bullion LLC (the Success Bullion Enterprise also Success Bullion), Cook Business Services LLC (CBS Enterprise or CBS) and the Wiseguys Investments LLC (the Wiseguys Enterprise or Wiseguys or WGI ) or otherwise the organized crime families constituted "enterprise[s]," as defined in Title 18, U.S.C. 1961(4) The aggregate Syndicate enterprise constituted an ongoing organization whose members functioned as a continuing unit for a common purpose of achieving the objectives of the separate enterprises and the Syndicate. The Syndicate or the crime families engaged in, and their activities affected, interstate and foreign commerce. The Syndicate and
178

Francis E. Wilde, Jon Divens, Steven E. Woods, Bruce H. Haglund, Mark A. Gelazela, William Chandler Reynolds, James Linder and Maureen OFlanagan Wilde and other John Does. Scott A. Koster, John T. Childs, Kerim S. Emre, Melissa Shapiro, Koster/Milaca Attorney, and other John/Jane Does. John T. Childs, Brandon Colker, and their alter ego Interlink Global Messaging (IGM) and other officers of related subsidiaries and associates not named in this action. Richard D. Hall, Winston Cook, Eugene Fletcher, Christine Wong-Sang, and Vladimir PierreLouis. Hall and former officers of Berea Inc. were sole contacts to Success Bullion, purported Gold transaction company and purported intermediary of the alleged gold trade.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 181 180 179

VI

Page 164

associated crime families is an organized criminal group that operates in the interstate commerce of the several Federal Districts including the Northern Eastern District of Texas and also operates in international commerce.

6.2 The Syndicate operated through organized crime organizations. These aforementioned crime families were headquartered in or close to Dallas, Los Angeles, Contra Costa County of California, Greater Minneapolis, Atlanta, Palm Beach, Florida, New York City, and supervised criminal activity in other areas of the United States and in other countries.

6.3 Though the ruling body of the Syndicate may be said, or appear, to be consisting of bosses from the various entities or enterprises, but in fact, Wilde directed and orchestrated virtually every activity undertaken from his home in Richardson, Texas. The Syndicate members convened in small groups of one or two individual enterprise leaders from time to time to decide particular issues or to receive certain instruction or directions affecting the various project schemes.

6.4 The Syndicate evolves and reassembles according to the strategic and tactical needs of its operations and requirements of its developing schemes. The head of the Syndicate, Wilde, is rarely identified to the investor client, nor is he usually referred to in open conversation by name or title; he essentially assumes the Godfather role. The evolvement and establishment the Syndicate grew out of Wildes

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VI

Page 165

independent activities were borne out of the association formed by Francis Wilde and Jon Divens who engaged in elaborate thefts and schemes which is referred to as the Wilde Mob that later engaged the associations of Steven Woods, James Linder, Mark Gelazela - William Chandler Reynolds and their IDLYC, iBalance and their other enterprises, and others. The Wilde Mob headed by Francis E. Wilde, was assisted by a equivalent Mafia underboss" counsel or "consigliere" and Money Man, Attorney Bruce Haglund. These two individuals administrated and supervised, and supported the associated organizations and participants in the Syndicate crime organizations. In return for their service Wildes associates received part of the illegal earnings generated by the Wilde Mob and the Syndicate.

6.5 Subordinate to Francis Wildes and the Wilde Mobs administration, were the numerous crews, or regimes or decinas consisting of the afore enterprises. Plaintiffs incorporate their averments and descriptions of the associations, relations of the enterprises, individuals, and RICO actors contained in I through VII.

6.6 Methods and Means of the Enterprise

6.6.1 The principal purpose of the Syndicate and its component crime organizations was to generate money for its members and associates. This purpose was implemented by members and associates of the Syndicate and various Enterprises and Associations-in-Fact through various criminal activities, including extortion, forgery, mail or wire fraud, and through violations of various VI Page 166

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

federal and state crimes. The members and associates of the Syndicate also furthered the enterprise's criminal activities by threatening economic injury and using and threatening entire losses of investors funds. 6.6.2 Although the primary purpose of the Wilde Mob was to generate money for its members and associates, Wilde and his close associates at times used the resources of the organized crime groups to settle personal grievances of the members and troublesome investors/clients with the approval of higher-ranking members of the crime organizations. For those purposes, members and associates of the enterprise were asked and expected to carry out, among other crimes, acts of extortion, violations of the Hobbs Act, additional fraud, deception, deceit, and misrepresentations of facts and ongoing activities of the Wilde Mob and associated organization, bank transaction, and transaction of the various financial institutions they used in perpetrating their frauds. 6.6.3 Using, inter alia, various threats, concealment, and secrecy, Wilde and the members and associates of the Syndicate and Wilde Mob crime organizations, engaged in conduct designed to prevent government detection of their identities; their illegal activities and the location of proceeds of those activities. That conduct included a commitment to destroy clients invested fortunes, as well as members or associates of the crime organizations and investors, who were perceived as potential witnesses against members and associates of the enterprise(s). 6.6.4 At all times material to this complaint, the enterprises below listed, together with their immediate associate, subordinate organizations, collectively,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VI

Page 167

constitute the various enterprises identified in this First Amended Complaint, as that term is defined in Title 18, United States Code, Section 1961(4). The enterprises (the Enterprise(s)) as they relate to this action) were engaged in, and the activities of which affected, interstate and foreign commerce, and they have been, and continue to be, captive organizations which are continuously and systematically controlled, exploited, and dominated in the conduct of the affairs by the RICO actors in the manner and means which are described herein. 6.6.5 Defendants are unlicenced broker/solicitor/advisors using direct marketing, solicitation and sales through telephone solicitations and direct contact from referrals from their direct network of association-in-fact enterprises and other sources. Through their websites, telemarketing, social networks such as LinkedIn,and e-mail marketing, Defendants are unlawfully and/or illegally advertising, soliciting, offering financial instruments and/or financial services and ponzi scheme creations using fraudulent business addresses, or falsified addresses legitimately belonging to other companies or corporations.
182

They establish

credibility and perception of legitimacy by falsely associating themselves with legitimate businesses bearing similar or identical names.
183

Subject to, inter alios, U.S. Federal Trade Commission, and U.S. Postal Service (jurisdiction is defined as "crimes that may adversely affect or fraudulently use the U.S. Mail, the postal system or postal employees) enforcement of electronic commerce by stopping Fraud on the Internet. See, e.g., Exs. Vol. 7: Exs. 133-150 {Ct. Rcd. doc. }. Vol. 8, Exs. 166-169. also(e.g., Exs. Vol. 7: Exs. 133-150.
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd 183

182

VI

Page 168

VII CONSOLIDATED RICO PREDICATE ACTS

Act 1 2 3 4

Crime Key 5 14 15 14

Statue 18 USC 1344 18 USC 2314 18 USC 2315 18 USC 2314

Federal Predicate Crime Description Financial Institution Fraud Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Financial Institution Fraud Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps

RICO Actor(s) Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde

Page Instances # 44 44 44 44 1 1 1 2

14

18 USC 2314

Francis E Wilde

44

14

18 USC 2314

Francis E Wilde

44

14

18 USC 2314

Francis E Wilde

44

14

18 USC 2314

Francis E Wilde

44

14

18 USC 2314

Francis E Wilde

44

10

14

18 USC 2314

Francis E Wilde

44

11 12 13 14 15 16 17 18 19 20

14 5 11 12 5 14 15 5 14 15

18 USC 2314 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 1344 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 2314 18 USC 2315

Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde

44 45 45 45 45 45 45 45 45 45

9 2 1 1 3 10 2 4 11 3

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 169

Act 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Crime Key 14 15 14 11 12 5 11 12 14 15 5 11 12 14 15 5 11 12 14 15 5 11 12 14 15 5

Statue 18 USC 2314 18 USC 2315 18 USC 2314 18 USC 1956 18 USC 1957 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344

Federal Predicate Crime Description Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud

RICO Actor(s) Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Francis E Wilde Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens

Page Instances # 45 45 45 46 46 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 47 12 4 13 2 2 5 3 3 14 5 6 4 4 15 6 7 5 5 16 7 8 6 6 17 8 9

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 170

Act 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73

Crime Key 11 12 14 15 5 11 12 14 15 5 11 12 14 15 5 11 12 14 15 4 5 11 12 14 15 5 11

Statue 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1343 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956

Federal Predicate Crime Description Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Fraud by wire, radio, or television (wire fraud) Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments

RICO Actor(s) Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens

Page Instances # 47 47 47 47 48 48 48 48 48 51 51 51 51 51 51 51 51 51 51 52 53 53 53 53 53 53 53 7 7 18 9 10 8 8 19 10 11 9 9 20 11 12 10 10 21 12 1 13 11 11 22 13 14 12

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 171

Act 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101

Crime Key 12 14 15 5 11 12 14 15 5 11 12 14 15 2 4 2 11 4 4 2 11 4 2 11 4 4 4 4

Statue 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1344 18 USC 1956

Federal Predicate Crime Description Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud Laundering of Monetary Instruments Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Financial Institution Fraud

RICO Actor(s) Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Jon Divens Steven E Woods Kerim Emre Kerim Emre Kerim Emre Kerim Emre John T Childs John T Childs John T Childs Scott A Koster Scott A Koster Scott A Koster Mark A Gelazela Steven E Woods Steven E Woods Steven E Woods

Page Instances # 53 53 53 53 53 53 53 53 53 53 53 53 53 55 68 72 72 72 72 72 72 72 72 72 73 73 73 73 12 23 14 15 13 13 24 15 16 16 14 14 25 16 1 2 2 15 3 4 3 16 5 4 17 6 7 8 9

18 USC 1344 - Sub Total: Laundering of Monetary Instruments Engaging in monetary transactions in property 18 USC 1957 derived from specified unlawful activity Transportation of stolen goods, securities, 18 USC 2314 moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, 18 USC 2315 moneys, or fraudulent State tax stamps Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1956 Laundering of Monetary Instruments 18 USC 1343 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1956 Laundering of Monetary Instruments 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1956 Laundering of Monetary Instruments 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud)

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 172

Act 102

Crime Key 11

Statue 18 USC 1956

Federal Predicate Crime Description Laundering of Monetary Instruments

RICO Actor(s)

Page Instances # 74 18

103

12

18 USC 1957

104

14

18 USC 2314

105 106 108 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123

15 11 12 14 15 11 12 14 15 11 12 14 11 14 11 12 14 15 11

18 USC 2315 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 1956 18 USC 2314 18 USC 1956 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1956

Francis E Wilde Haglund-Maureen Wilde Francis E Wilde Engaging in monetary transactions in property Haglund-Maureen derived from specified unlawful activity Wilde Transportation of stolen goods, securities, Francis E Wilde moneys, fraudulent State tax stamps, or articles Haglund-Maureen used in counterfeiting Wilde Francis E Wilde Sale or receipt of stolen goods, securities, Haglund-Maureen moneys, or fraudulent State tax stamps Wilde Laundering of Monetary Instruments Wilde -Haglund Engaging in monetary transactions in property Wilde -Haglund derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles Wilde -Haglund used in counterfeiting Sale or receipt of stolen goods, securities, Wilde -Haglund moneys, or fraudulent State tax stamps Laundering of Monetary Instruments Wilde -Haglund Engaging in monetary transactions in property Wilde -Haglund derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles Wilde -Haglund used in counterfeiting Sale or receipt of stolen goods, securities, Wilde -Haglund moneys, or fraudulent State tax stamps Laundering of Monetary Instruments Wilde -Haglund Engaging in monetary transactions in property Wilde -Haglund derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles Wilde -Haglund used in counterfeiting Laundering of Monetary Instruments Wilde -Haglund Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles Wilde -Haglund used in counterfeiting Wilde - HaglundLaundering of Monetary Instruments Gelazela Engaging in monetary transactions in property Wilde - Haglundderived from specified unlawful activity Gelazela Transportation of stolen goods, securities, Wilde - Haglundmoneys, fraudulent State tax stamps, or articles Gelazela used in counterfeiting Sale or receipt of stolen goods, securities, Wilde - Haglundmoneys, or fraudulent State tax stamps Gelazela Wilde-HaglundLaundering of Monetary Instruments Woods

74

15

74

26

74 74 74 74 74 74 74 74 74 75 75 75 75 75 75 75 75 75 75

17 19 16 27 18 20 17 28 19 21 18 29 22 30 23 19 31 20 24

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 173

Act 124 125 126 127 128 129

Crime Key 12 14 15 11 12 14

Statue 18 USC 1957 18 USC 2314 18 USC 2315 18 USC 1956 18 USC 1957 18 USC 2314

Federal Predicate Crime Description Engaging in monetary transactions in property derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Laundering of Monetary Instruments

RICO Actor(s) Wilde-HaglundWoods Wilde-HaglundWoods Wilde-HaglundWoods Wilde - Haglund

Page Instances # 75 75 75 75 20 32 21 25 25 21 33 33 22 22 22 10 23 23 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

18 USC 1956 - Sub Total: Engaging in monetary transactions in property Wilde - Haglund 75 derived from specified unlawful activity Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles Wilde - Haglund 75 used in counterfeiting 18 USC 2314 - Sub Total: Sale or receipt of stolen goods, securities, Wilde - Haglund 75 moneys, or fraudulent State tax stamps 18 USC 2315 - Sub Total : Engaging in monetary transactions in property Steven E Woods 76 derived from specified unlawful activity Fraud by wire, radio, or television (wire fraud) Steven E Woods 76 Engaging in monetary transactions in property Haglund 77 derived from specified unlawful activity 18 USC 1957 - Sub Total: Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Scott A Koster Mark A Gelazela Kerim Emre Scott A Koster John T Childs 80 80 81 81 81 81 82 82 82 83 84 85 86 87 90 90 91 91 91 91

130

15

18 USC 2315

131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153

12 4 12 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

18 USC 1957 18 USC 1343 18 USC 1957 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 174

Act 154 155 156 157 158 159 160

Crime Key 4 4 4 4 4 4 7

Statue 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1512

Federal Predicate Crime Description Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Tampering with a witness, victim or an informant Retaliating against a witness, victim, or an informant Interference w/commerce by threats or violence (Hobbs Act) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Obstruction of Justice Obstruction of Justice Obstruction of Justice Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication features, and information Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication features, and information Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication features, and information Interference w/commerce by threats or violence (Hobbs Act) Extortion

RICO Actor(s) Scott A Koster John T Childs Scott A Koster Kerim Emre John T Childs Scott A Koster Scott A Koster

Page Instances # 91 92 92 94 98 98 98 31 32 33 34 35 36 1 1 1 1 1 37 38 39 40 41 1 2 3 3 42 5 43 6 44 7 2 1 45 3 2 4 3 5 4

18 USC 1512 - Sub Total: 161 8 18 USC 1513 Scott A Koster 98

18 USC 1513 - Sub Total: 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 9 4 4 4 4 4 6 6 6 4 2 4 2 4 2 9 23 4 9 23 9 23 9 23 18 USC 1951 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1343 18 USC 1503 18 USC 1503 18 USC 1503 18 USC 1343 18 USC 1029A 18 USC 1343 18 USC 1029A 18 USC 1343 18 USC 1029A 18 USC 1951 Texas PC 31.03 18 USC 1343 Scott A Koster Scott A Koster Scott A Koster Scott A Koster Scott A Koster Kerim Emre Scott A Koster Kerim Emre John T Childs Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Kerim Emre Scott A Koster Scott A Koster Scott A Koster John T Childs John T Childs Scott A Koster Scott A Koster John T Childs John T Childs 98 99 100 102 104 105 105 105 105 108 108 108 108 108 108 122 122 124 126 126 127 127 127 127

18 USC 1503 - Sub Total:

Fraud by wire, radio, or television (wire fraud) Interference w/commerce by threats or 18 USC 1951 violence (Hobbs Act) Texas PC 31.03 Extortion Interference w/commerce by threats or 18 USC 1951 violence (Hobbs Act) Texas PC 31.03 Extortion Interference w/commerce by threats or 18 USC 1951 violence (Hobbs Act) Texas PC 31.03 Extortion

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 175

Act 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201

Crime Key 2 4 2 4 9 23 4 4 4 9 4 4 2 4 2 4

Statue 18 USC 1029A

Federal Predicate Crime Description

RICO Actor(s) Richard Hall Richard Hall

Page Instances # 129 129 8 46 9 47 6 5 5 48 49 50 7 7 51 52 10 53 11 11 54 54 201

Aggravated identity theft, authentication features, and information 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Interference w/commerce by threats or 18 USC 1951 violence (Hobbs Act) Texas PC 31.03 Extortion 18 USC 1343 18 USC 1343 18 USC 1951 18 USC 1343 18 USC 1343 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud) Interference w/commerce by threats or violence (Hobbs Act) Fraud by wire, radio, or television (wire fraud) Fraud by wire, radio, or television (wire fraud)

Christine Wong Sang 129 Christine Wong Sang 129 John T Childs John T Childs John T Childs Scott A Koster Scott A Koster 131 131 131 134 138

Texas PC 31.03 Sub Total:

Scott A Koster 141 18 USC 1343 - Sub Total Scott A Koster 156 Scott A Koster Richard Hall Richard Hall Richard Hall Richard Hall 156 162 162 162 162

Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Aggravated identity theft, authentication 18 USC 1029A features, and information 18 USC 1343 Fraud by wire, radio, or television (wire fraud)

18 USC 1029A - Sub Total 18 USC 1343 - Sub Total: Instances of all Predicate Acts Total:

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VII

Page 176

VIII CAUSES OF ACTION The averments, facts, allegations, and statements contained in all of the paragraphs from I through VII of this Complaint are hereby re-averred and realleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein.

8.1

COUNT 1 Racketeer Influenced and Corrupt Organizations Act (RICO) 18 U.S.C. 1962(c) (Against the RICO Defendants)

8.1.1 Plaintiffs incorporate by reference all allegations contained in this Complaint. 8.1.2 Each of the Plaintiffs is a person under 18 U.S.C. 1961(3) and 1964(c); and each of the RICO Defendants is a person under 18 U.S.C. 1961(3) and 1962(c). 8.1.3 The RICO Defendants through, and related with, the herein named Enterprises, were groups of persons associated in fact for the common purposes of subscribing and selling participations in investment contracts, trading platforms, &c., and of conducting the fraudulent schemes described in this First Amended Complaint, namely, fraudulently inducing various criminal associates to further induce the sale of investment contracts, and/or sell participations of those investments, to investors and consumers, and then siphoning away the cash to VIII Page 177

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

pay for, among other things, the costs of using stolen assets as collateral for the purchase of financial instruments such as federal securities, bonds and mid-term notes; two of, at least, ten instruments found, with face values of about threebillion dollars ($3,000,000,000 USD) and five-billion dollars ($5,000,000,000) identified thus far. As well, they also syphon off funds for personal gain and investment into the enterprise(s). As a result, such constitutes an association-in-fact enterprise within the meaning of 18 U.S.C. 1961(4) and 1962(c), previously identified, the Amenpenofer Syndicate, or simply for the purpose of this complaint, the Syndicate. During all relevant times, the Syndicate and its components the Wilde Mob, the Milaca Gang, the Contra Costa Family, the Atlanta Family, the Alicorn Enterprise, Berea Enterprise, BMW Enterprise, Colker-Childs IGM Enterprise, Divens Enterprise, Matrix Enterprise, Success Bullion Enterprise and the Wiseguys Enterprise were engaged in, and its activities affecting interstate and foreign commerce. 8.1.4 As a result the aggregate constitutes an association-in-fact enterprise within the meaning of 18 U.S.C. 1961(4) and 1962(c); i.e., the Syndicate, for which during all relevant times was engaged in, and its activities affected interstate and foreign commerce. 8.1.5 The RICO Defendants were each employed by and/or associated with the Syndicate and its coconspirators as detailed in this Complaint. The RICO Defendants each conducted and/or participated in the conduct of the Syndicates affairs, as described in this Complaint, through a pattern of racketeering activity,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 178

as that phrase is defined in 18 U.S.C. 1961(1), (5). The pattern of racketeering activity consisted of mail and/or wire fraud in violation of those predicate crimes listed and associated 18 U.S.C. 1341, 1343. Specifically, the RICO Defendants engaged in an intentional scheme to defraud the commercial institutions, investors and consumers and to obtain money or property through false or fraudulent pretenses, representations, and promises. It was reasonably foreseeable to each RICO Defendant that the mails and/or wires would be used in furtherance of the scheme, and the mails and/or wires were in fact used to further and execute the scheme to defraud. 8.1.6 For the purpose of furthering and executing the scheme to defraud, the RICO Defendants regularly transmitted or caused to be transmitted by means of wire communication in interstate or foreign commerce, writings, signs, signals, pictures, and sounds (the wirings), and/or regularly caused matters and things to be placed in any post office or authorized depository, or deposited or caused to be deposited matters or things to be sent or delivered by a private or commercial interstate carrier (the mailings). The details of the wirings are set forth above. 8.1.7 The RICO Defendants used the wires and/or mails on a daily basis for the above stated purposes to further and execute the scheme to defraud the commercial institutions, investors, and consumers. For example, every time that the Syndicate including any of its members or co-conspirators e-mailed an order to move money, or to advance any aspect of the fraud scheme, instruct or advise the commercial institutions, investors, and consumers concerning their fraud,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 179

engage in a fraudulent contractual instruments or such instruments that would be used for the Syndicates fraudulent ends they advanced and continued a pattern of racketeering. The RICO Defendants furthered the false impression that the Syndicate associated Enterprises were viable companies that had or would prudently manage the financial accounts of the commercial institutions, investors, and consumers presented, contracted or purchased a position in the Syndicates investment products, the Defendants advanced and continued their pattern of racketeering 8.1.8 The wire transfers and other predicate crimes detailed in this Complaint each constitute a predicate act of wire fraud because each wire transfer furthered and executed the scheme to defraud the customers, the commercial institutions, investors, and consumers. 8.1.9 The RICO Defendants each participated in the scheme to defraud knowingly, willfully, and with a specific intent to defraud the commercial institutions, investors, and consumers into their theft of fraudulent investment schemes and siphoning off the funds. 8.1.10 The predicate acts constitute a pattern of racketeering activity as defined in 18 U.S.C. 1961(5). The predicate acts were not isolated events but related acts aimed at the common purpose and goal of the afore mentioned and described convincing the commercial institutions, investors, and consumers. The RICO Defendants were the common participants in the predicate acts of the Syndicate.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 180

8.1.11 The RICO Defendants scheme to defraud the commercial institutions, investors, and consumers and consumers and siphon away the funds extended over at least a five-year period. The predicate acts were the Enterprises manner of conducting their business affairs and posed the threat of continuing racketeering activity throughout an International market affecting domestic and International commerce. 8.1.12 As a direct and proximate result of the RICO Defendants violation of 18 U.S.C. 1962(c), Plaintiffs have been injured in their operating and personal assets, and their business or property within the meaning of 18 U.S.C. 1964(c). 8.1.13 As a result of their misconduct, the RICO Defendants are liable to Plaintiffs for their damages and losses in the amount of Two-hundred twenty million dollars ($220,000,000), in an amount to be determined at trial. 8.1.14 245. In addition, pursuant to 18 U.S.C. 1964(c), Plaintiffs are entitled to recover threefold their damages plus costs and attorney fees from the RICO Defendants.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 181

8.2

COUNT 2 Racketeer Influenced and Corrupt Organizations Act (RICO) 18 U.S.C. 1962 (a) (Against the RICO Defendants)

The averments, facts, allegations, and statements contained in all of the paragraphs from I through VII of this Complaint are hereby re-averred and realleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.2.1 At all relevant times, the Syndicate, the associations in fact Wilde Mob, the Milaca Gang, the Contra Costa Family, and the associated Enterprises described above, constitute enterprises within the meaning of 18 U.S.C. 1961(4) and 1962(a) which are engaged in, and the activities of which affect, interstate or foreign commerce. 8.2.2 Each RICO Defendant was at all relevant times Officers and/or Directors of one or more of the enterprises or participated in the control and operations of one or more of the Enterprises. 8.2.3 RICO Defendants received income derived, directly or indirectly, from the pattern of racketeering activity described in this First Amended Complaint. Specifically, the RICO Defendants received income derived, directly or indirectly, from the scheme to defraud their clients, commercial institutions, investors, and consumers.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 182

8.2.4 RICO Defendants participated as principals within the meaning of 18 U.S.C. 2 in the pattern of racketeering activity described in this First Amended Compliant. 8.2.5 Upon information and belief, the RICO Defendants used or invested, directly or indirectly, a part of such income, or the proceeds of such income, in the acquisition of an interest in, or the establishment or operation of the Syndicate or one of its component Enterprises or subsidiaries, in violation of 18 U.S.C. 1962(a). 8.2.6 Specifically, the RICO Defendants used or invested, directly or indirectly, the funds derived from the pattern of racketeering activity described in this First Amended Complaint to acquire property ultimately owned by the Defendant and/or the Syndicate Enterprises. 8.2.7 As a direct and proximate result of RICO Defendants and their use of the Syndicate or its components, in violation of 18 U.S.C. 1962(a), Plaintiffs have been injured in loss of personal assets, and their business or property within the meaning of 18 U.S.C. 1964(c). 8.2.8 Specifically, Plaintiffs injury was directly and proximately caused by the investment of the racketeering funds into fraudulent schemes, syphoning (theft) of their investments, or theft of the returns from their investments, into assets private placement programs, or trading platform, or other investment programs.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 183

8.2.9 As a result of their misconduct, Defendants are liable to Plaintiffs for their damages and losses of Two-hundred twenty Million Dollars ($220,000,000) in an amount to be determined at trial. 8.2.10 In addition, pursuant to 18 U.S.C. 1964(c), Plaintiffs are entitled to recover threefold their damages and losses plus costs and attorney fees from Defendants.

8.3

COUNT 3 Racketeer Influenced and Corrupt Organizations Act (RICO) 18 U.S.C. 1962 (d) (Against the RICO Defendants)

The averments, facts, allegations, and statements contained in all of the paragraphs from I through VII of this Complaint are hereby re-averred and realleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.3.1 Each of the RICO Defendants conspired to violate 18 U.S.C. 1962(c) by agreeing to conduct and participate, directly and indirectly, in the conduct of the affairs of the Syndicate or any one of its component Enterprises through a pattern of racketeering activity. This agreement was in violation of 18 U.S.C. 1962(d). 8.3.2 Each of the RICO Defendants also conspired to violate 18 U.S.C. 1962(a) by agreeing to use or invest income received, directly or indirectly, from a pattern of racketeering activity in the acquisition of any interest in, or the VIII Page 184

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

establishment or operation of, Defendant Forever Enterprises. This agreement was in violation of 18 U.S.C. 1962(d). 8.3.3 The RICO Defendants committed and caused to be committed a series of overt predicate acts of racketeering in furtherance of the conspiracy, including but not limited to the acts described in this Complaint. 8.3.4 As a direct and proximate result of the overt predicate acts of racketeering and of the RICO Defendants violation of 18 U.S.C. 1962(d), Plaintiffs have suffered financial loses and injured to their personal financial interests and in their business or property within the meaning of 18 U.S.C. 1964(c). 8.3.5 As a result of their conspiracy in violation of 18 U.S.C. 1962(d), the RICO Defendants are liable to Plaintiffs for their damages and losses, in an amount of Two-hundred Twenty Million Dollars ($220,000,000), in an amount to be determined at trial. 8.3.6 In addition, pursuant to 18 U.S.C. 1964(c), Plaintiffs are entitled to recover threefold their damages plus costs and attorney fees from the RICO Defendants.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 185

8.4

COUNT 4 Fraud in the Inducement (Against all Defendants except Cook and Divens)

8.4.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.4.2 Defendants made a material representation to Plaintiffs that was false, and at the time that the representation was made, they knew it was false or they made it recklessly, as a positive assertion and without knowledge of its truth. More precisely, Defendants induced or participated in the inducement of the Plaintiffs by misrepresentation which lead them to enter into a transaction with a false impression of the risks, in which, from the onset of the transaction Defendants never intended to fulfil their fiduciary duties, did breach their fiduciary duty, with the intent and foreknowledge that their fraudulent inducement was wholly a tool by which they would later introduce, exercise and continue other frauds against the Plaintiffs. The Defendants deceitful conduct raises a substantial public interest to permit tort principles to apply and remedy this wrong where: (1) all the elements of intentional misrepresentation are present; (2) that the intentional misrepresentation occurred prior to contract formation; and (3) that the fraud relates to a matter extraneous to the contract. VIII Page 186

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Moreover, Defendants directly made, or by and through their agents made, the representations with the intent that Plaintiffs act on it, and Plaintiffs did act on it in reliance on the representation. Ultimately, the said material representation caused injury and damages to Plaintiffs when Defendants failed to provide the promised earnings in a timely manner and as promised, and in fact used the fraudulent inducement to perpetrate other frauds. Such fraud in the inducement was a proximate cause of Plaintiffs damages.

8.5

COUNT 5 Common Law Fraud (Against all Defendants)

8.5.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.5.2 Defendants made a material representation to Plaintiffs that was false, and at the time that the representation was made, they knew it was false or they made it recklessly, as a positive assertion and without knowledge of its truth and/or had a duty and obligation to instruct or advise another not to do so. More specifically, Defendants represented to Plaintiffs that they could acquire funding for the acquisition funding on time and in a sufficient amount that Plaintiffs would be able to purchase financial instruments necessary to collateralize Plaintiffs loan from the primary loan funding for their film slate and related VIII Page 187

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

ancillary projects. Moreover, they made the representation with the intent that Plaintiffs act on it, and Plaintiffs did act on it in reliance on the representation, effectuating a detrimental reliance upon the Plaintiffs to the Defendants. Ultimately, the said material representation caused injury and damages to Plaintiffs when Defendants failed to provide the promised funding in a timely manner and as promised and in fact never paid out the gains, profits, earnings from Plaintiffs investment funds. Defendants fraud was a proximate cause of Plaintiffs damages.

8.6

COUNT 6 Negligent Misrepresentation and Deceit (Against all Defendants)

8.6.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.6.2 Defendants made a false representation to Plaintiffs in the course of Defendants business. Namely, that Defendants would timely and on certain terms, provide funding through secured scheduled trades to Plaintiffs. Defendants did not provide such funding in a timely manner nor on the terms promised. In making this false representation, upon which Plaintiffs relied, Defendants did not exercise reasonable care or competence in obtaining or communicating the information to Plaintiffs and/or had a duty and obligation to instruct or advise VIII Page 188

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

another to do so. Such negligent misrepresentation was a proximate cause of Plaintiffs damages.

8.7

COUNT 7 Fraud by Non-disclosure (Against all Defendants)

8.7.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.7.2 Defendants concealed from or failed to disclose certain facts to Plaintiffs, which they had a duty to disclose. These facts were material and Defendants knew that Plaintiffs were ignorant and did not have equal opportunity to discover them. As a result of Defendants deliberate silence regarding these facts, they intended to induce Plaintiffs to take some action or refrain from acting. Plaintiffs relied on the Defendants non-disclosure and were injured as a result of acting without knowledge of the undisclosed facts. 8.7.3 More particularly, Defendants concealed and/or had a duty and obligation to instruct or advise another not to conceal from Plaintiffs the following facts prior to Plaintiffs reliance: that Defendants would not or could not provide the requested funding in the time frame originally promised; that the funding would be provided on the same terms as the parties prior investment agreement; and that Defendants would be required to meet certain benchmarks VIII Page 189

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

or conditions precedent before receiving funds from their earnings. Such fraud by non-disclosure was a proximate cause of Plaintiffs damages.

8.8

COUNT 8 Aiding and Abetting Fraud (Against all Defendants)

8.8.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.8.2 Each of the Defendants knew about the schemes used to defraud the Plaintiffs and other PSP partners of the PSP and Gold Transaction as described in the Complain. 8.8.3 Each of the Defendants actively participated in the schemes to defraud by knowingly providing encouragement and substantial assistance in perpetration of the fraud, as described in this Complaint. 8.8.4 As a direct and proximate result of the Defendants encouragement and substantial assistance in perpetration of the fraud, Plaintiffs suffered injuries, damages, or losses in an amount to be determined at trial. 8.8.5 Plaintiffs are entitled to punitive damages because the Defendants conduct was malicious, willful, wanton, intentional, and outrageous, evidencing evil motive, reckless indifference to or reckless disregard for the rights of others.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 190

8.9

COUNT 9 Breach of Confidential or Special Relationship (Against all Defendants)

8.9.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.9.2 At times material to this Complaint, the aforementioned defendants identified in were Investment Advisors, and/or associated with Investment Advisors, and/or Account Managers and/or Legal Counsel having closely-held knowledge of, and intimately involved with the activities of the aforementioned Defendants; actions subject to jurisdiction and laws of the United States and the State of Texas, and therefore owing fiduciary duties to the Plaintiffs. 8.9.3 Defendants owed the Plaintiffs the following fiduciary duties, among others, which they breached: (1) duty of loyalty and utmost good faith; (2) duty of candor; (3) duty to refrain from self-dealing; (4) duty to act with integrity of the strictest kind; (5) duty of fair, honest dealing; (6) duty of full disclosure; and (7) duty of loyalty to the joint concern to, including duties to: 8.9.3.1 Not make false or misleading statements to the Plaintiffs of

material facts pertaining to their investments; 8.9.3.2 Not omit to make material statements which, under the

circumstances, were necessary to make other statements made to the Plaintiffs not misleading or deceptive; VIII Page 191

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

8.9.3.3

Correct false or misleading statements of material facts pertaining

to the Plaintiffs investments that were made by others and which the Defendants knew to be false or misleading; 8.9.3.4 Use reasonable care and the competence of a skilled Investment

Advisor when performing due diligence inquiries concerning the appropriateness of the Plaintiffs investments in the ALICORN/IDLYC/BMW Fund and the PSP Fund and any and all of those funds investments with sub-managers of Funds; 8.9.3.5 Use reasonable care and the competence of a skilled investment

advisor in managing and monitoring the Plaintiffs investments in the ALICORN/IDLYC/BMW Fund and the PSP Fund once made; 8.9.3.6 Ensure that the Plaintiffs investments in the

ALICORN/IDLYC/BMW Fund and the PSP Fund were suitable for the Plaintiffs given their circumstances; 8.9.3.7 Avoid and/or fully disclose conflicts of interests that could effect

their decisions in the management of the Plaintiffs investments; 8.9.3.8 Warn the Plaintiffs if and when their investments were subjected

to an undue risk of loss; and 8.9.3.9 Take such remedial steps as were available to them to minimize or

recover the Plaintiffs financial losses. 8.9.4 Defendants have breached their fiduciary duties owed to the Plaintiffs by, among other things:

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 192

8.9.4.1

Falsely stating to the Plaintiffs, and by confirming or acquiescing

in the making of false statements to Plaintiffs by their business partners and consultants, that the ALICORN/IDLYC/BMW Fund employed a proprietary, and scheduled purchases and sales investment strategy with a written guarantee of the underwriting Deutsche Bank SBLC and that the ALICORN/IDLYC/BMW Fund was better suited to advance Plaintiffs primary funding for film slate; 8.9.4.2 Failing to disclose to the Plaintiffs that any purported investing of

their money by the ALICORN/IDLYC/BMW Fund was being conducted solely by the principals of IDLYC and BMW and not pursuant to any investment strategy being conducted or monitored by ALICORN, and by failing to disclose to the Plaintiffs that principals of IDLYC and BMW had complete custody and control of the money they invested in the ALICORN/IDLYC/BMW PSP Fund; 8.9.4.3 Failing to correct statements made to the Plaintiffs by Scott

Anthony Koster, Kerim S. Emre, John Childs, Francis E. Wilde, Mark Alan Gelazela, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC that they knew to be false and misleading, namely, that any purported investing of the Plaintiffs money by the ALICORN/IDLYC/BMW Fund was being controlled solely by Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods and not pursuant to any propriety investment;

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 193

8.9.4.4

Failing to employ reasonable care and competence in performing

due diligence concerning the ALICORN/IDLYC/BMW Fund, and in managing or monitoring the Plaintiffs investments in the ALICORN/IDLYC/BMW PSP Fund once they were made; 8.9.4.5 Causing the Plaintiffs to pay substantial management/broker fees

of 16.7% of the investment plus 16.7% of the scheduled earnings payments relating to their investment in the ALICORN/IDLYC/BMW PSP Fund when, in fact, neither the Defendants nor Koster, Emre, Harlan and John Childs were performing any meaningful management, oversight, monitoring or control over those investments and the money purportedly invested by the Plaintiffs in the ALICORN/IDLYC/BMW PSP Fund was simply being transferred to Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC; 8.9.4.6 Failing to satisfactorily disclose to the Plaintiffs the serious

nature, scope and effect of conflicts of interest arising from their business relationships with Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC; 8.9.4.7 Failing to warn the Plaintiffs that their investments with the

ALICORN/IDLYC/BMW PSP Fund were subject to undue risk of loss, even in the face of reports questioning the legitimacy of Mark Alan Gelazela, William

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 194

Chandler Reynolds, Steven E. Woods, Scott Anthony Koster, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC purported investment strategy and the authenticity of his reported investment returns; 8.9.4.8 Failing, following the public revelations about Mark Alan

Gelazela, William Chandler Reynolds, Steven E. Woods, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC criminal conduct, to disclose to the Plaintiffs the fact that they knew that their investments in the ALICORN/IDLYC/BMW Fund had been placed entirely in the care and custody of Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC and failing to take any remedial actions against their business partners, consultants and counsel, in order to recover or minimize the Plaintiffs financial losses; and 8.9.4.9 Making false or misleading statements to the Plaintiffs about

Scott Anthony Koster, Thomas P. Harlan, Kerim S. Emre, John Childs, Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC and their criminal conduct concerning the true breadth of the ALICORN/IDLYC/BMW PSP Funds exposure to loss, additionally, and for such breach of Syndicate Defendants fiduciary duty, they

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 195

forfeit all right to compensation, even if they did not profit from the breach of fiduciary duty;
184

8.9.5 As a direct and proximate result of the Defendants numerous breaches of their fiduciary duties to the Plaintiffs, the Plaintiffs have suffered substantial monetary damages and severe emotional distress.

8.10

COUNT 10 Promissory Estoppel (Against all Defendants)

8.10.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.10.2 Plaintiffs plead, in the alternative if necessary, a cause of action against Syndicate Defendants for promissory estoppel. 8.10.3 Syndicate Defendants made promises to Plaintiffs that include, but are not limited to, the following: 8.10.3.1 representing to Plaintiffs that it would pay them earnings for

their investment; and 8.10.3.2 representing to Plaintiffs that the ALICORN/IDLYC/BMW

transaction PSP or the Berea Gold Buy/Sell trans action would pay regularly scheduled weekly earnings payments beginning on or about December 4, 2010,
184

See International Bankers Life Insurance Co., ibid. at FN 162 pg. 153

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 196

to an escrow account and on or about December 12, 2010, to Plaintiffs designated bank account. 8.10.3.3 Syndicate Defendants made these promises in order to induce

Plaintiffs to take and/or forego certain actions. The promises made by the above Defendants and/or their representatives were reasonably calculated to induce Plaintiffs to take and/or forego certain actions. Plaintiffs reliance upon Defendants' promises was reasonably foreseeable to the Defendants. 8.10.4 The Plaintiffs, in fact, relied on each and every one of Defendants' promises and has taken definite and substantial action in reliance on the promises to their detriment. 8.10.5 Defendants' promises were the proximate cause of significant damages to Plaintiff, which are in excess of the minimum jurisdictional limit of this Court. In order for injustice to be avoided, the Court must enforce the promises made to Plaintiff by Defendants and/or their agents. Under Texas law, "[t]he elements in a suit for breach of contract are: (1) a valid contract; (2) the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of that breach.".
185

The elements of a

promissory estoppel claim are "(1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to his detriment." In addition to these basic requirements for promissory estoppel, Texas courts

Godwin Gruber, P.C. v. Deuschle, 261 F.Supp.2d 682, 690 (N.D. Tex.), affirmed, 87 Fed. Appx. 338 (5th Cir. 2003) (quoting Aquila Southwest Pipeline, Inc. v. Harmony Exploration, Inc., 48 S.W.3d 225, 235 (Tex. App. San Antonio 2001, pet. denied))
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

185

VIII

Page 197

have also established a fourth requirement of a definite finding that injustice can be avoided only by the enforcement of the promise,
186

and for such breach of

Syndicate Defendants fiduciary duty, they forfeit all right to compensation, even if they did not profit from the breach of fiduciary duty.
187

8.10.6 Under the analysis, a review of Plaintiffs Original Complaint establishes that Plaintiffs have set forth allegations against Defendants that could establish all of the elements of a breach of contract claim and the alternative claim of promissory estoppel. If the allegations are proved, Plaintiff should be entitled to recover against Syndicate Defendants.

8.11

COUNT 11 Intentional Infliction of Emotional Distress (Against all Defendants)

8.11.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.11.2 The Plaintiffs reposed a high degree of trust in the Defendants with the expectation that their substantial investments in the ALICORN/IDLYC/BMW PSP Fund and the substituted ALICORN/BEREA/CBS Gold Transaction

Clardy Mfg. Co. v. Marine Midland Bus. Loans, Inc., 88 F.3d 347, 360 (5th Cir. 1996), cert. denied, 519 U.S. 1078 (1997) (internal quotation marks and citation omitted).
187

186

See International Bankers Life Insurance Co., ibid. at FN 162 pg. 153

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 198

settlement, and that they would be managed and monitored by the Defendants with reasonable care, competence and due diligence, and that the Defendants would deal with them with the utmost good faith, fairness and candor. 8.11.3 As set forth herein, the Defendants have breached their fiduciary duties owed to the Plaintiffs and have defrauded them, thereby causing them to suffer substantial financial losses in their productive professional years and at a time when they are heavily reliant on their investments, for Clarksons real-estate and property development and investment partnership with Flores, and Flores reliance to produce motion picture productions. As well, they caused Plaintiffs to suffer the mounting damages along with the increasing cost of delaying crews, talent, and affecting location availability. Plaintiffs suffered irreversible damage to their reputations, and loss of credibility and trust with the A List crews and talent, and that would extend into the industry including unions, and local government officials who were working to create incentives for employment and education for their constituents and the economic welfare of their communities anticipating the arrival of the slate productions. As a result of the tremendous emotional distress Flores suffered stresses that induced atrial flutters which required hospitalization and continuing medical treatment. The Defendants have intentionally or recklessly engaged in extreme and outrageous conduct which was intended or substantially certain to inflict severe emotional distress upon the Plaintiffs.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 199

8.11.4 As a result of the Defendants extreme and outrageous conduct, the Plaintiffs have suffered and continue to suffer severe emotional distress.

8.12

COUNT 12 Civil Conspiracy (Against all Defendants)

8.12.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 8.12.2 The Defendants combined, agreed and conspired with each other and with others to commit tortious acts against the Plaintiffs as set forth above. 8.12.3 It was an object and purpose of the conspiracy to conceal material information from the Plaintiffs and to provide them with false or misleading information concerning their investment of substantial sums of money in the ALICORN/IDLYC/BMW PSP Fund and the ALICORN/BEREA/CBS Gold Buy/Sell Fund, in violation of fiduciary duties owed by the Defendants to the Plaintiffs. It was further an object and purpose of the conspiracy to conceal material information from the Plaintiffs and to provide them with false or misleading material information concerning the extent to which the Plaintiffs were exposed to financial losses related to fraudulent conduct by the Defendants, as well as the degree to which the Defendants named and unnamed partners and business associates, including John/Jane Does were involved in that fraud, including wire VIII Page 200

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

fraud, and coercion, extortion, forgery, obstruction of justice, by and through their inextricable relationships in their association-in-fact enterprises all in violation of fiduciary duties owed by the Defendants to the Plaintiffs. 8.12.4 In furtherance of the conspiracy, the Defendants engaged in overt actions and conduct as alleged above. 8.12.5 As a direct and proximate result of the Defendants actions in committing the tortious conduct as set forth in herein, and because of their combination, agreement and conspiracy in furtherance of such tortious conduct, the Defendants are each liable for the damages thereby suffered by the Plaintiffs.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 201

IX OTHER PLEAS 9.1 PLAINTIFFS PLEA OF AGENCY & AUTHORITY 9.1.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.1.2 At all times material to this lawsuit, upon information and belief, Linder, Koster, Childs, and Emre, were agents of Wilde, Woods, Gelazela, and Reynolds, that Harlan was agent for Koster, ALICORN, and the Syndicate, and vice versa; that Koster was agent for Richard Hall, BEREA and its principals, and vice versa; that Koster was agent for Cook and CBS, and vice versa; and that Emre and Childs were agents for Koster, and vice versa. 9.1.3 Upon information and belief, Koster and Emre had actual authority to act on behalf of Wilde, Woods, Gelazela, and Reynolds and vice versa at all relevant times material to this lawsuit. More specifically, upon information and belief, Wilde, Woods, Gelazela, and Reynolds intentionally conferred upon Koster and Emre actual authority, intentionally allowed Koster and Emre to believe they had actual authority, or by a lack of due care, allowed Koster and Emre to believe they had authority to act on their behalf in dealing with Plaintiffs and vice versa. Moreover, Koster, Childs and Emre were acting within the scope of their agency when they committed the torts alleged herein, or when they reached any verbal agreement with Plaintiffs.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 202

Further, upon information and belief, Koster and Hall had actual authority to act on behalf of Cook and vice versa at all relevant times material to this lawsuit. 9.1.4 Further, upon information and belief and in the alternative, Koster, and Emre had apparent authority to act on behalf of Wilde, Linder, Woods, Gelazela, and Reynolds at all relevant times material to this lawsuit. More specifically, Wilde, Woods, Gelazela, and Reynolds knowingly permitted Koster, Childs and Emre to hold themselves out as having authority or acted with such lack of ordinary care as to clothe Koster and Emre with the indicia of authority. 9.1.5 Plaintiffs justifiably relied on the actual or apparent authority of Koster Childs, and Emre and such justifiable reliance caused damages to Plaintiffs.

9.2 PLAINTIFFS PLEA OF RATIFICATION 9.2.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.2.2 Upon information and belief, in the alternative, Koster and Emre ratified the acts and omissions of Wilde, Haglund, Linder, Woods, Gelazela, and Reynolds, either by word, act, or conduct after acquiring full knowledge of the act or omission. Moreover, the approval or ratification was given with the intention of giving validity to the acts or omissions of Koster Childs and Emre. 9.2.3 Further, upon information and belief, in the alternative, Hall and Cook ratified the acts and omissions of Koster, Emre, Childs and either by word, act, or

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 203

conduct after acquiring full knowledge of the act or omission. Moreover, the approval or ratification was given with the intention of giving validity to the acts or omissions of Koster, Emre, Childs, Hall and Cook.

9.3 PLAINTIFFS PLEA TO PIERCE THE CORPORATE VEIL/ALTER EGO 9.3.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.3.2 Upon information and belief Koster, Childs, Emre, Wilde, Woods, Gelazela, Reynolds, ALICORN CAPITAL MANAGEMENT LLC, IDLYC HOLDINGS TRUST LLC (USA), IDLYC HOLDINGS TRUST LLC (New Zealand), and BMW MAJESTIC LLC, were mere tools or business conduits of one-another, or were operated as a single business enterprise; thus, each should be liable for the liability of the other as alter egos by piercing the corporate veil.

9.4 PLAINTIFFS PLEA OF DELAYED DISCOVERY & INTENTIONAL INTERFERENCE 9.4.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.4.2 With the discovery of evidence, information due Plaintiffs by Defendants during the course of business transactions, within Defendants possession of Plaintiffs claims against Defendants despite the Plaintiffs exercise of reasonable

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 204

diligence on their part and required specificity already plead, it is difficult to imagine how Plaintiffs could plead breach of fiduciary duty, fraud and scienter with more specificity then they have thus far, before having the opportunity to conduct comprehensive discovery given the circumstances set forth in the facts.

9.5 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR RACKETEERING & PREDICATE CRIMES 9.5.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.5.2 As Rule 9(b)'s pleading requirements pending further discovery for allegations of wire fraud pursuant and discovery of co-conspirators (whom the Plaintiffs have reason to believe laundered monies to conceal the whereabouts of the Plaintiffs and others funds) to the Racketeer Influenced and Corrupt Organizations Act "because of the apparent difficulties in specifically pleading mail and wire fraud as predicate acts."
188

9.5.3 The Defendants, directly and indirectly, made use of the means and instrumentalities of interstate commerce and extensively used the domestic communication wires in connection with the Defendants acts, practices, and

New England Data Servs., 829 F.2d at 290-91.9 See North Bridge Assoc., Inc. v. Boldt, 274 F.3d 38, 44 (1st Cir. 2001)(noting that in the RICO context, where "the specific information [concerning the defendants' use of interstate telecommunications facilities] is likely in the exclusive control of the defendant, the Court should make a second determination as to whether the claim as presented warrants the allowance of discovery and if so, thereafter provide an opportunity to amend the defective complaint") (citing Feinstein v. Resolution Trust Corp., 942 F.2d 34, 43 (1st Cir.1991)).
20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

188

VIII

Page 205

courses of business alleged herein within the Northern District of Texas, Calgary Alberta, Canada, and elsewhere. 9.5.4 Plaintiffs have clearly shown violations of State and Federal criminal law and requisite predicate acts that attach to 18 U.S.C. 1961-1968 Civil RICO, including numerous counts of Coercion, Conversion, Extortion, Forgery, Obstruction of Justice, and wire fraud. 9.5.5 Plaintiffs have shown that Defendants have set up extensive structures that are not only interconnected domestically, but internationally, using influences impinging upon the public and the public fabric. Their activities are of substantial import to the public and have existed for several years. On information and belief based upon the evidence, submitted herewith, the Plaintiffs aver that the Defendants devised a schema and artifices to defraud the Plaintiffs and others to obtain monies by means of false and fraudulent pretenses, representations, or promises, and transmitted by means of wire by telephonic voice and over the Internet in both interstate and foreign commerce, writings, financial instruments and voice communications for the purpose of executing their schemes and various artifices in violation of 18 U.S.C. Sec. 1343 (1988) Wire Fraud, Coercion, Conversion, Extortion, Forgery, and Obstruction of Justice as an integral part of their schema. 9.5.6 The RICO statute creates civil liability for those who engage in a"pattern of racketeering activity." 18 U.S.C. 1962, 1964. Though limited in discovery, the Plaintiffs have nonetheless established a pattern of racketeering activity,

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 206

fulfilled the necessary predicate acts, and that the Defendants pattern of racketeering and extent of those activities will very likely continue. Clearly, Plaintiffs have reached past any challenge for failure to satisfy the specificity requirement of Federal Rule of Civil Procedure 9(b), as such, Plaintiffs should be granted the leave to amend their complaint on the ground that it would serve the interests of justice and justly serve the public interest as well. 9.5.7 Plaintiffs believe discovery will reveal further support of RICO claims and that until discovery is complete that it would be prudent to later seek leave to amend in light of newly discovered evidence; and, it is premature to plead RICO claims and file a RICO Case Statement, as the Plaintiffs are confident that the number of RICO defendants are likely to increase and the reach of racketeering activities will extend further. Wherefore, Plaintiffs assert non-waiver of RICO claims and defer to such time as discovery is completed.

9.6 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR FRAUD AND FRAUDULENT CONCEALMENT OF THIS FRAUD 9.6.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.6.2 On the part of Defendants, thus suspending the running of limitations as to all claims. Equitable tolling permits the Plaintiffs to avoid the bar of the

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 207

statute of limitations if despite the exercise of all due diligence they are unable to obtain vital information bearing on the existence of their claims. In the instant case, the doctrine of equitable estoppel becomes consequential since the Defendants have clearly established active steps to prevent or severely restrain the Plaintiffs ability to secure essential information regarding their illegal or unlawful actions with particularity.

9.7 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR FRAUDULENT CONCEALMENT OF FACTS UNDER DEFENDANTS CONTROL 9.7.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.7.2 Giving rise to this cause of action against Defendants including those unknown for which they have concealed information. Their concealment has prevented Plaintiffs from showing the extent of nexus or co-conspiracy in Defendants unlawful or illegal transgressions, thus suspending the running of limitations and reasonable relaxation of Rule 9(b).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 208

9.8 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR BREACH OF FIDUCIARY DUTY, INCLUDING THE DUTY TO DISCLOSE 9.8.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.8.2 Against Defendants, particularly Eugene Fletcher, thus suspending the running of limitations against all Defendants and reasonable relaxation of Rule 9(b). 9.9 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR CONCERT OF ACTION 9.9.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.9.2 For Defendants, Nominal Defendants, Non-Defendant Co-conspirators or Unknown Parties (John/Jane Doe(s)) engaged in conspiracy to conceal negligence, to commit fraud and to fraudulently conceal the acts and the existence of the fraud and conspiracy, thus suspending the running of limitations against all Defendants and reasonable relaxation of Rule 9(b).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 209

9.10 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR INCLUSION OF NOMINAL DEFENDANTS 9.10.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein.

9.11 PLAINTIFFS PLEA OF PRECLUSION FROM CLAIMING A BAR BY LIMITATIONS. 9.11.1 The allegations contained in all of the paragraphs of this Complaint are hereby re-averred and re-alleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. 9.11.2 Plaintiffs allege that the actions of all Defendants, because of their conduct, statements and promises, preclude them from claiming a bar by limitations to any of Plaintiffs' claims. Plaintiffs plead the doctrine of equitable estoppel.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

VIII

Page 210

X DAMAGES The averments, facts, allegations, and statements contained in all of the paragraphs from I through IX of this Complaint are hereby re-averred and realleged, for all purposes, and incorporated herein with the same force and effect as if set forth verbatim herein. COMPENSATORY DAMAGES 10.1 In Actual Damages as a direct and proximate result of the Defendants conduct, the Plaintiffs have sustained damages well in excess of this Courts minimum $75,000 jurisdictional limit. More specifically, Defendants conduct have directly or proximately caused, inter alia, the following damages, both past and future: 1) lost profits; 2) loss of credit; 3) loss of three film slate productions amounting to not less than fifteen film production, including the substantial loss of those profits and lost economic opportunities. 10.2 Damages inflicted by the RICO Defendants presently exceed an amount greater than Two-Hundred Twenty million U.S. Dollars ($220,000,000 USD).

EXEMPLARY DAMAGES DEFENDANTS HAVE EXACTED GREAT HARM TO PLAINTIFFS INDUSTRY REPUTATION The Plaintiffs defaulted on their well-placed promises, commitments and obligations as a result of Defendants frauds and thefts. Plaintiffs had originally secured other financial resources, but by Defendants malice and criminal acts, they so greatly harmed the Plaintiffs reputations as to lower them in the estimation of

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IX

Page 211

the community, and deter third persons from associating or dealing with them throughout the industry, additionally impugning their integrity and standing in society. But he that filches from me my good name Robs me of that which not enriches him And makes me poor indeed.
William Shakespeare, "Othello", Act 3 scene 3 Greatest English dramatist & poet (1564 - 1616)

PRE/POST- JUDGMENT INTEREST & ATTORNEYS FEES 10.3 Plaintiffs also seeks pre- and post-judgment interest, and attorneys fees as such may be incurred, and taxable costs of court.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

IX

Page 212

XI PRAYER WHEREFORE, with respect to Cause of Actions Counts 1 through 13 of this First Amended Complaint, Plaintiffs do hereby pray for the following relief against Defendants, jointly and severally, as follows: 11.1 without objection, Plaintiffs pursuant to 28 U.S.C. waive their right to proceed before a Judge of the United States District Court and consent to have a United States Magistrate Judge conduct any and all further proceeding in the above styled case, including the trial and order entry of a final judgement; 11.2 with regard to all claims arising under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(a), (c) and (d), Plaintiffs pray for compensatory damages in an amount to be proven at trial, that the amount of said damages be trebled, and that plaintiff be awarded prejudgment interest, attorneys fees, costs, and such other relief as is just and proper, all pursuant to 18 U.S.C. 1964(c); 11.3 with regard to all claims of common law fraud, Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, punitive damages, costs, and such other relief as is just and proper; 11.4 with regard to all claims of civil conspiracy, Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, punitive damages, costs, and such other relief as is just and proper;

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 213

11.5 with regard to all claims of aiding and abetting fraud, Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, punitive damages, costs, and such other relief as is just and proper; 11.6 with regard to all claims of statutory conversion, Plaintiffs pray for three times actual damages in an amount to be proven at trial, and that Plaintiffs be awarded attorneys fees, costs, and such other relief as is just and proper; 11.7 with regard to all claims of breach of contract, Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, costs, and such other relief as is just and proper; 11.8 with regard to all claims of negligence, Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, costs, and such other relief as is just and proper; 11.9 with regard to all other claims Plaintiffs pray for compensatory damages in an amount to be proven at trial, and that Plaintiffs be awarded prejudgment interest, costs, and such other relief as is just and proper; and 11.10 that Plaintiffs be awarded prejudgment interest, costs, and such other relief as is just and proper; 11.11 injunctive relief preventing the sale or disposition of Defendants assets acquired through the diversion of funds from the Plaintiffs; 11.12 A finding of alter ego status of all Defendants; 11.13 Attorney fees and costs incurred in prosecuting this action;

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 214

11.14 Pre-judgment and post-judgment interest as provided by law; 11.15 Additional and/or alternative relief as the Court may deem to be just, equitable and appropriate, and 11.16 that an ORDER
189

be immediately issued against destruction or spoliation

of evidence herein as set forth in the Plaintiffs attachment First Notice - Demand for Preservation of Evidence,
190

and

11.17 upon final hearing of this cause, a permanent injunction against further abuse be issued, and that Plaintiffs have judgment against Defendants, jointly and severally, for damages described herein, and 11.18 that Defendants be cited to appear and affirmatively answer, and 11.19 that Plaintiffs have judgment against Defendants for all these actual damages, special damages (including incidental damages), attorney fees, prejudgment and post-judgment interest, costs of the suit, and all other relief in law and in equity to which Plaintiffs may be entitled.

Respectfully submitted and signed on this the 9th day of March 2012.

189 190

Plaintiffs have pled same in their 4/8/2011 Original Complaint. 20120223172150 First Notice - Demand for Preservation of Evidence_ECF.pdf

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 215

s/

s/

R. LANCE FLORES Lead Attorney 3314 Pleasant Drive Dallas, Texas 75227 USA Tel. (Dallas): +1 (214) 272-0349 Tel. (Fax): +1 (210) 519-6528 ECF & Case Management E-mail: LF_legaldept@MockingbirdFilms.com Attorney for the Plaintiff

VICKI CLARKSON

2416 - 36 Street SW Calgary, AB T3E 2Z5 Tel. (Calgary): +1 403-244-9980 Tel. (Fax:) +1 (403) 246-3331 ECF & Case Management E-mail: VC_LegalDept@MockingbirdFilms.com Attorney for the Plaintiff

Certificate of Service On Monday, March 19, 2010, I electronically submitted the foregoing First Amended Complaint document with the clerk of court for the U.S. District Court, Northern District of Texas, using the electronic case filing system of the court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal rule of Civil Procedure 5 (b)(2). s/

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd

Page 216

S-ar putea să vă placă și