20120303102646 1stAmd'Cmplnt RICO - Complaint_ECF

UNITED STATES DISTRICT COURT

for the

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

R. Lance Flores, and Vicki Clarkson,individually and in behalf of the Nation’sEconomic 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 UnknownParties 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, ChinaIbalance LLC,Idlyc Holdings Trust LLC (USA),Idlyc Holdings Trust (New Zealand),Interlink Global Messaging,Larry J. Busch, Jr.,Matrix Holdings LLC (“Matrix”),Maureen O’Flanagan Wilde,

§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§

Cause m 3:11-cv-00726-M -BH

FIRST AMENDED COMPLAINT

before the

Hon. Barbara M.G. Lynn,Presiding Judge,

Hon. Irma Carrillo Ramirez,Referring Judge.

CIVIL ACTIONRacketeer 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 activityin connection with identificationdocuments;18 U.S.C. §1028A. Aggravated identitytheft, &c.; 18 U.S.C. §1341. Frauds and swindles 18 U.S.C. §1343. Fraud by Wire, &c.;18 U.S.C. §1344. Financial InstitutionFraud; 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 awitness, victim, or an informant; 18 U.S.C. §1951. (Hobbs Act) Interferencew/ commerce by threats or violence;18 U.S.C. §1952. Interstate and foreigntravel or transportation in aid ofracketeering enterprises;18 U.S.C. §1956. Laundering of MonetaryInstruments;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, andThomas P. Harlan,

Un-named RICO Co-conspirators(Non-defendant violators).

Alicorn Capital Management LLCBerea Inc.,BMW Majestic LLC,Bush Law Center LLC,Colker-Childs-IGM,Law Offices of Jon Divens & Assoc. LLC,Matrix Holdings LLC,Success Bullion LLC,Wiseguy’s Investments LLC, and the

Amenpenofer Syndicate, aggregateInternational Association-In-Fact,

consolidating, inter alios :the Wilde Mob, the Milaca Gang,the Atlanta Family, andthe Contra Costa Family,

the “RICO Enterprises.”

§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§§

transactions in property derived fromspecified unlawful activity;18 U.S.C. §1960. Prohibition of unlicensedmoney transmitting businesses;18 U.S.C. § 2314. Transportation of stolengoods, securities, moneys, &c.,18 U.S.C. § 2315. Sale or receipt of stolengoods, 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 TaxEvasion; 26 U.S.C. § 7206(4) Tax - Removalor Concealment with Intent to Defraud;26 U.S.C. § 7206(5) Tax - Compromises &Closing Agreements; 15 U.S.C. §§ 45(a) and52 (§§ 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 predicativeelements of the Defendants’ RICO violations.Predicate Crimes; e.g., United States v. Pepe, 747F.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

LEGENDAnnotation Keys, Notation & Terms

Key Statue/Code Description

RICO Federal Predicate Crimes

†1 18 U.S.C. §1028 Fraud and related activity in connection with identification documents

†2 18 U.S.C. §1028A Aggravated identity theft, authentication features, and information

†3 18 U.S.C. § 1341 Frauds and swindles (Mail Fraud)

†4 18 U.S.C. §1343 Fraud by wire, radio, or television (Wire Fraud)

†5 18 U.S.C. §1344 Financial Institution Fraud

†6 18 U.S.C. §1503 Obstruction of Justice

†7 18 U.S.C. §1512 Tampering with a witness, victim, or an informant

†8 18 U.S.C. §1513 Retaliating against a witness, victim, or an informant

†9 18 U.S.C. §1951 Interference w/ commerce by threats or violence (Hobbs Act)

†10 18 U.S.C. §1952Interstate and foreign travel or transportation in aid of racketeeringenterprises

†11 18 U.S.C. §1956 Laundering of Monetary Instruments

†12 18 U.S.C. §1957Engaging in monetary transactions in property derived from specifiedunlawful activity

†13 18 U.S.C. §1960 Prohibition of unlicensed money transmitting business

†14 18 U.S.C. § 2314 Transportation of stolen goods, securities, moneys, fraudulent State taxstamps, or articles used in counterfeiting

†15 18 U.S.C. § 2315Sale or receipt of stolen goods, securities, moneys, or fraudulent State taxstamps

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 Fictitious name or address (Mail Fraud)

†18 Tex. P.C. § 32.21 Forgery - Chapter 32. Fraud, Subchapter B. Forgery (Tex. Penal Code )

†19 Tex. P.C. § 31.03 Conversion* - Tex. P.C. § 31.03. Theft

†20 18 U.S.C. § 1342 Fictitious name or address - Mail Fraud

†21 26 U.S.C. § 7201 Tax Evasion

†2226 U.S.C. §7206(4) Tax Fraud - Removal or Concealment with Intent to Defraud

†2326 U.S.C.§ 7206(5)

Tax Fraud - Compromises & Closing Agreements

†24 15 U.S.C. § 45(a) FTC Act

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd Page ii

Key Statue/Code Description

†2515 U.S.C. 52 (§§5(a) and 12

FTC Act

Legal/Equitable Doctrines

‡

EquitableEstoppel (use inthis complaintrelating 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 toComplainant, and 11-by Clear, Concise, Unequivocal Proof of Actus.

Annotation

doc. document # Document citation from Records of the Court, e.g.: Ct. Rec. doc 10-1 at 2

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

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd Page iii

COURT RECORDS CROSS-REFERENCE

Document Title Court RecordDocument 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc .

Consent to Proceed Before a United States Magistrate Judge. . . . . . . . . . . . . . . doc. 2

Plaintiffs' Certificate of Interested Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . doc. 3

Plaintiffs' Submission of Summons.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 AMENDED 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 Nation’s economic system and public

interest. 1

Whence the Plaintiffs infer in support thereof:

The Congressional Statement of Findings and Purpose underlying RICO explains that, among1

other things, RICO was designed to combat activities that “weaken the stability of the Nation’seconomic system, harm innocent investors and competing organizations, interfere with freecompetition, seriously burden interstate and foreign commerce, threaten the domestic security, andundermine 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 theAmerican 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 revealedby Congress' express findings and declarations.").

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

§ I 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 Plaintiff’s 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 DEFENDANTS2

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, BMW2

MAJESTIC LLC, IDLYC HOLDINGS TRUST LLC, AND IDLYC HOLDINGS TRUST and NominalDefendant IBALANCE LLC are defendants or relief defendants in a complaint filed in the UnitedStates 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 anindirectly related cases of similar nature initiated prior to the events of the instant action; the SEC'sRule 9 pleading deficiencies preclude determination certainly of the SEC’s substantive connection tothe Plaintiffs' claim in toto.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § I 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 the3

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

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

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

Cf. In re Burzynski, at 733, 743.4

See, e.g., Salinas v. United States, 522 U.S. 52 (1997) at 62-65; United States v. Delgado, 4015

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.


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.6

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 and7

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 victims8

See, e.g., Pipkins, 378 F.3d at 1294-95 (members of the enterprise: (1) used instrumentalities of6

interstate commerce – pagers, telephones, cell phones and the internet to conduct the enterprise’saffairs; (2) used automobiles and interstate highways to transport underage prostitutes across statelines; (3) recruited prostitutes from states outside the forum state; and (4) provided prostitutes withcondoms manufactured out of state), vacated on other grounds, 544 U.S. 902 (2005)

Later incorporating the services, activities, and confederacy of the other named Defendants.7

Newmyer v. Philatelic Leasing, Ltd., F.2d 385, 396 (6th Cir.1989). 8


assets. Further, there is an incontrovertible nexus between the alleged RICO9

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. ), that the11

Defendants’ activity began years prior to their nexus established between the12

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 5849

particularly.

Crowe v. Henry, 43 F.3d 198, 205 (5 Cir.1995). i.e., Establishing a viable § 1962(a) claim byth10

Plaintiffs.

“Since at least April 2008, Defendant Francis E. Wilde ("Wilde") through Defendant Matrix11

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 RICOEnterprise]

Prior to or least in March/April of 2008. Id. at 2 ¶1, 6 ¶22. Also alleged, on or about July 2007,12

Wilde, inter alios, engaged in a number of frauds involving a securities sale in which he intentionallymisrepresented financial information in a merger transaction of Riptide Worldwide Inc. f/k/a SheaDevelopment Corp. (See, Watson, et al. v. Riptide Worldwide Inc., et al., 1:11-cv-00874-PAC (USDC SDNY 2/8/2011) at 4, § III ¶A 14.

Overt Criminal Acts - Crimes perpetrated by Defendants i.) in furtherance of enterprise13

activities establishing actus reus and mens rea attaching to RICO predicate acts; ii.) in interstatecommerce; iii.) in the criminal operation in the zone of interests protected by RICO for fraudperpetrated upon the United States; and, iv.) and, establishing Defendants' culpable intent, scienter,and malice aforethought throughout their pattern of racketeering.


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. Following, though not every RICO Defendant may have been15

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

Defendant’s 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.16

Cf. discussion Abraham, et al. v. Singh, 480 F.3d 351 (5 Cir. 2007).th14

See Fleischhauer v. Feltner, 879 F.2d 1290, 1301 (6th Cir. 1989) (joint and several liability15

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 concludedthat the nature of both civil and criminal RICO offenses requires imposition of joint and severalliability because all defendants participate in the enterprise responsible for the RICO violations” andsummarizing cases.

See, e.g., United States v. Oreto, 37 F.3d 739, 752 (1st Cir. 1994) at 751-53 (finding that16

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 ofleaders 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 notmerely providing peripheral advice, but participated in the core activities that constituted the affairs ofthe firm), cert. denied, 513 U.S. 1110, reh'g granted, 45 F.3d 680, 683 (2d Cir.) (upholding convictionsof law firm investigators who were “lower-rung participants” whose racketeering activities wereconducted “under the direction of upper management”), cert. denied, 514 U.S. 1084 (1995); UnitedStates 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 byupper management but also by lower-rung participants in the enterprise who are under the directionof upper management’”; and holding that Reves liability encompassed city employees who performedplumbing inspections and related work for the city’s Construction Services Department, the allegedenterprise) (internal quotation marks and citations omitted); Delgado, 401 F.3d at 297-98 (same); FirstCapital Asset Mgmt. v. Satinwood, Inc., 385 F.3d 159, 176 (2d Cir. 2004) (“‘RICO liability is not limitedto those with primary responsibility for the enterprise’s 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


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 limitedto those with primary responsibility” or “to those with a formal position in the enterprise,” and findingthat there was sufficient evidence to satisfy the Reves test where the defendant instructed others tofacilitate commission of racketeering activity) (internal quotation marks and citations omitted); UnitedStates v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) (finding that Reves does not require that thedefendant have decision-making power, only that defendant “take part in” the operation of theenterprise, and holding that the defendant was liable under Reves since he bought multi-kilogramamounts 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 andcarried out a robbery with other members of an Asian crime gang that committed a series of robberiestargeting Asian-American business owners and managers).


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 Court’s Findings of Fact and Conclusions of Law, October 14, 2010, Chase Investment6

Services Corp., et al. v. Law Offices of Jon Divens & Assoc. LLC, et al., CV 09-9152 MANx (USDC CDCal. 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) DefaultJudgement (PACER/ECF Case 2:09-cv-00797-BSJ Document 17 Filed 11/04/09)


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 “It’s Only

Money,” and, is as well, a culpable individual who engaged in a pattern of



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




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:

[email protected] 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



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.


http://www.jondivens.net/

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



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 film-

maker, 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;


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,


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. Emre’s 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



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


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

Koster’s/Alicorn’s 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,



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,


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 non-

performances 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).


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


1.3.7 Cook Business Services LLC (“CBS”), is a Georgia limited liability

company whose service may be had by company’s registered agent Winston

Jerome Cook at 5710 Melanie Trail, Atlanta, GA, 30349-2853. Tel: (770) 969-

2217.

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


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.


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


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), [email protected] .

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,

[email protected]

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,

[email protected]

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).


mailto:[email protected]


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 – Barclay’s Capital (US division of Barclay’s

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 Citizen’s Bank – FIASB: Falcon International Holdings

1.6.4 Citibank, 399 Park Ave.,New York, NY 10022 –

FIASB: O’Melveny & Myers

1.6.5 Eugene Fletcher, address unavailable, 678-732-6234,

[email protected]

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



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


§ 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 Court’s 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 Court’s 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 nonresident7

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 ofallowing ‘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.” Int’l 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 Marks’s contacts with Maryland are substantial enough that

he “should reasonably anticipate being haled into court []here.” World–Wide

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]’


[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 the8 9

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." The issue of10

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

passim, Plaintiffs’ Exhibits Volumes 1 through 7A.8

See St. Paul Reinsurance Co., 134 F.3d at 1253.9

“…the exercise of jurisdiction over that defendant does not offend “traditional notions of fair10

play and substantial justice.” Latshaw, 167 F.3d at 211 (quoting International Shoe Co. v. State ofWashington, 326 U.S. 310, 316 (1945).

Bullion v. Gillespie, 895 F.2d 213,21711


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 reasonof a violation of section 1962 of this chapter may suetherefor in any appropriate United States district courtand shall recover threefold the damages he sustains andthe cost of the suit, including a reasonable attorney's fee."18 U.S.C. 1964(c).


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.


§ 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 Madoff’s fraud,

and eight SEC investigations over sixteen years, Madoff was not caught; it took12

Madoff Chasers Dug for Years, to No Avail Regulators Probed at Least 8 Times Over 16 Years;12

Congress Starts Review of SEC Today; http://online.wsj.com/article/SB123111743915052731.html

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § III Page 28

http://online.wsj.com/article/SB123111743915052731.html

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 the13

business of which is engaging in financial activities as described in section 4(k) of the Bank HoldingCompany Act of 1956.” 15 U.S. C. § 6805 (3) (A). The allowed financial activities of such institutionsare set forth in 12 U.S.C. § 1843 (4)


misdirected messages. Investors are suffering large losses due to these cyber

crimes.

3.1.4 The Federal Bureau of Investigation report that corporate fraud14

remains one of the highest priorities in CID . Field offices by the end of FY 201115

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

corporations, including:16

• 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 ofthe SEC, FBI, Secret Service, Homeland Security, FTC, other regulatoryagencies, and/or law enforcement agencies.

Financial Crimes Report to the Public - Fiscal Years 2010-2011 (October 1, 2009 – September14

30, 2011). http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011

Criminal Investigative Division15

Financial Crimes Report to the Public, supra.16


3.1.6 IDENTITY THEFT

“Identity theft is not an industry specific crime. It can appear in anyindustry where personal information is used to gain credit or acquirecustomers. In years past, this type of crime was not prevalent, but theinflux of technology has caused it to grow at a rapid pace and become asignificant issue in the public eye, as its insidious nature poses real traumato consumers. Statistics reflect its growth, with estimates of 500,000 to700,000 victims of identity theft in 2000. The growth of identity theft hasreached epidemic proportions, and is quickly becoming the crime of thenew millennium. The cost of investigating identity theft cases in 1997 wasreported to be $745 million. The cost to individuals, which the NationalFraud Center conservatively estimates to be $50 billion a year, hasprompted ‘Travelers Property Casualty Corp. to launch the first-everinsurance coverage for victims of identity theft. The coverage offerspolicyholders as much as $15,000 to cover expenses incurred in clearingtheir name.’” Id. at 21

3.1.7 FBI OVERALL ACCOMPLISHMENTS17

“During FY 2011, cases pursued bythe FBI resulted in 242indictments/informations and 241convictions of corporate criminals.Numerous cases are pending pleaagreements and trials. During FY2011, the FBI secured $2.4 billion inrestitution orders and $16.1 million infines from corporate criminals. Thechart below reflects corporate fraudpending cases from FY 2007 throughFY 2011.” Id.

Ibid.17


§ 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 (organizations)18

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

Godfather of the “Commission” until a crisis rose in a project. This usually19

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 Mob’s

Although not blood related, the various memberships behave much like those of the La Cosa18

Nostra families which, as well, are not always blood related entities. The term family is used in itsvarious 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.

Similarly used as the term “The Commission” which is the governing body of the American19

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 Wilde’s

reach into the financial market having associated enterprises Bosses, Underboss

or their merchants use Wilde’s business maneuvers. These tactics often

incorporated false and misleading information and reprisals including threatening

economic injury, withholding of investor’s assets or earnings, and especially

threatening the client’s 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.


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 company’s

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 Woods-

BMW Majestic enterprises with the Koster’s 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 Gang’s or Koster’s “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.


4.1.4 The international private placement program incorporated financial

transactional funding with an estimated twenty or more principals according to20

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. Koster’s 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 the20

opportunity to use a type of loan called the bridge loan, that allows you to undertake the simultaneousclosings safely and with the backing of money provided by the loan. … With transactional funding andthe bridge loan under it, you are already conducting valid closings that give you the opportunity tomake money out of opportunities in the form of simultaneous closings.” Source: Duncan Wierman -Author.


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 Koster’s 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 well-

supported 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


domestically acquired $3 billion bond and a European $5 billion bond with a21

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

4.2 MILACA GANG’S 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 he’d 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. KfW21

banking group is a German government-owned development bank, based in Frankfurt. Its nameoriginally comes from Kreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute. Itwas formed in 1948 after World War II as part of the Marshall Plan. It is owned by the FederalRepublic of Germany (80%) and the States of Germany (20%). It is led by a five-member ManagingBoard headed by Ulrich Schröder, which in turn reports to 37-member Supervisory Board chaired byPhilipp Rösler, Federal Minister of Economy and Technology, since May 2011.


4.2.2 After months of continuous inquiries and demands of the Plaintiffs for

verifiable documentation of the transactions concerning the ALICORN-IDLYC-

BMW transaction, Koster, Childs and Emre only replied with phone calls and e-

mail 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

Emre’s and Koster’s 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


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 ofAttorney 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


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 Clarkson’s 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.


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.


§ 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 SCHEME22

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

Placement Program. Wilde obtained a U.S. Treasury bond (the “Treasury23

Bond”) with a market value of about $4.8 million (investor’s 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"), through22

Defendant Matrix Holdings LLC ("Matrix"), orchestrated two fraudulent investment schemes. Wildestarted 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 andMatrix 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 actalone. 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, helpingthemselves to a combined $2.1 million in undisclosed "fees" along the way. Defendants lied to investorsand potential investors throughout the course of the schemes and their subsequent unraveling. Mostinvestors lost their entire investment in the schemes. The Defendants transferred some of the illicitproceeds to the Relief Defendants.” SEC v. Wilde, et al., supra, FN11 (COMPLAINT FORVIOLATIONS OF THE FEDERAL SECURITIES LAWS, at 2)

Extracts from SEC v. Wilde, et al.; Also, Newport Titan LC v. Matrix Holdings LLC,23

2:09-cv-00797-BSJ (USDC Dist. of Utah 09/22/09).

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § V 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

†5, †14, †15York (the "Matrix Bank Account") , and to make wire transfers to Riptide's

†14 †14 †14debt holders , investors and creditors , as well as to other purported

†14 †14"brokers" and "business consultants" 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

†14credit line to one of Riptide's preferred shareholders . 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

†14credit line to another preferred shareholder of Riptide , to a law firm that

†14represented Riptide , 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 the24

collection of an unlawful debt (the “$4.7 million credit facility) in which he had participated as aprincipal within the meaning of § 2, Title 18, United States Code. He made use or invested a part ofthat income, or the proceeds from that income in the operation of the enterprises (namely,Matrix-BMWMaj-Idlyc-Alicorn Enterprise, Matrix-Wiseguy’s-JDA Enterprise, the Matrix Enterprise,and the Amenpenofer Syndicate, an aggregate International Association-In-Fact inclusive of the WildeMob, and the Koster-Milaca Gang which all engaged in activities affecting, interstate or foreigncommerce. See also, 18 U.S.C. § 1962(a), see definition FN31, supra.


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

†5, †11, †12a Major Financial Services Firm (the “MFS Firm”) .

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

†5, †14, †15approximately $5.9 million on October 29, 2008 . 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

†5, †14, †15MFS Firm to the Matrix Bank Account in New York .

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

†14, †15of a new $90,000 automobile from Land Rover of Dallas , then paid for his

†14parents' living expenses at an assisted living facility.


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

†11, †12Bond sale until April 2010, when he testified in a deposition .

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

“… In short, the Court finds that [Jon] Divens created a schemeto defraud Betts and Gambles and Amedraa and to steal theirassets. His [Divens] testimony is not credible.”

(Chase Investment Services, Corp., supra.).25

5.2.1 ² 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 false25

promise that he would act solely as an escrow agent with regard to the CMOs. Once the CMOs were inDivens's possession, he absconded with the assets, moving them to different accounts at differentinstitutions so they could not be located and stealing the interest generated from the CMOs for his ownpersonal use. In short, the Court finds that Divens created a scheme to defraud Betts and Gambles andAmedraa and to steal their assets. His testimony is not credible.” Chase Invm’t Serv. Corp., at 6.Emphasis added.

Face value of the Cobalt CMO was $1,008,402,393 (USD). Face value of Amedraa’s FNMA26

Series CMO was $305,000,000 (USD).


Business Services Account at UBS (hereinafter, "the JDA UBS Account") of Law27

Offices of Jon Divens and Associates LLC (“JDA”). Divens controlled JDA.28

Divens's duty and only obligation was to hold the Cobalt CMO escrow pending the

sale of the asset through Jaime Williams ("Williams") to Up Right Holdings.29

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:

†5, †11, †12, †14, †15 †5, †11, †12, †14, †15Smith Barney , Capstone , Asset Enhancement

†5, †11, †12, †14, †15 †5, †11, †12, †14, †15 †5, †11, †12, †14, †15Management , Matrix , and CISC .

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 headquartered27

in Basel and Zürich, Switzerland.

Law Offices of Jon Divens & Associates LLC, 9663 Santa Monica blvd suite 948, Beverly Hills,28

CA 90210 • Phone: (310) 601-3168 • Email: [email protected] • Website: http://www.jondivens.net/

The principal of Up Right Holdings controlling the proposed purchase of financial instrument29

from Betts and Gambles.

Chase Invm’t Serv. Corp., at 36.30



http://www.jondivens.net/

the Cobalt CMO out of the various securities accounts where the Cobalt CMO was

held and into his business account at Bank of America” [emphasis added].31 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 Bettsand Gambles transferred the Cobalt CMO to Divens was made withDivens personally - that is, Jon Divens was to act as the escrow agent.Further, Divens personally misappropriate the interest earned on theCobalt CMO for his own use. Thus, the claim appears to be againstDivens in his individual capacity.

33

“Although Betts and Gambles has not pleaded a cause of action forconversion, the facts proved at trial are sufficient to meet all theelements of a conversion claim as well. See infra Section III.3.C.”

34

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

†5, †11, †12, †14, †15market mutual fund in the CISC Account . (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. §31

1962(a) “It shall be unlawful for any person who has received any income derived, directly orindirectly, from a pattern of racketeering activity or through collection of an unlawful debt in whichsuch person has participated as a principal within the meaning of section 2, title 18, United StatesCode, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, inacquisition 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 …”


Ibid., at 39 [fn 28].33

Id., 39 [fn 29]34


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 that he used these interest payments for his ‘personal36

use.’”

5.3 AMEDRAA FNMA SERIES CMO SWINDLE37

(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

Chase Invm’t Serv. Corp., at 10 fn.5.35


Federal National Mortgage Association (FNMA; OTCBB: FNMA), commonly known as Fannie37

Mae.


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 WISEGUY’S INVESTMENTS LLC (WGI) ASSET

MANAGEMENT AGREEMENT. In December 2008, Savor negotiated with Steve

Woods, the principal of Wiseguy’s Investments LLC ("WGI"), regarding entering

the FNMA Series CMO into an investment program. Woods represented to39

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


“… The Asset Management Agreement was signed by Steve Woods of WGI [WGI LLC Wise39

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 Frankwilde had any involvement with the Asset Management Agreement. Savor told Woods that he wantednothing to do with Wilde. Bethel Harris ("Harris"), counsel for LNJ, also questioned Woods to makesure that Wilde was not involved in the transaction. Woods unequivocally told Savor and Harris thatWilde was not involved.” Id. at 12-13.

“… In connection with the Asset Management Agreement, Woods suggested to Savor that LNJtransfer the FNMA Series CMO to the escrow account of the Law Offices of Jon Divens & AssociatesLLC pending WGI's payment of the 1% advance payment. Divens is the sole member of JDA and is alicensed 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.


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 Wiseguy’s 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

†5, †11, †12, †14, †15name at JP Morgan .

5.3.7 3-4//2009 – In March or April 2009, Divens once again transferred the

†5, †11, †12, †14, †15FNMA Series CMO to an account at Smith Barney .

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


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)

†4for further details.” Cf. ¶ 5.3.15 at annot. Î.

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


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

†5, †11, †12, †14, †15series CMO twice more; first to a Capstone account , and shortly

†5, †11, †12, †14, †15thereafter, to an account with a brokerage firm called Matrix .

Finally, in or about September 2009, Divens transferred the FNMA Series CMO

†5, †11, †12, †14, †15to the CISC Account . (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 LJN’s FNMA Series CMO out of the law

firm’s UBS Account into five different financial institutions in order to conceal

the whereabouts, use and status of the financial instrument from it’s 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

†5, †11,the interest income earned on LNJ Enterprise, LLC’s FNMA Series CMO

†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 …

Î! “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

Id.40

Id., at 21 fn.11.41


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 Invm’t 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”), Steven E. Woods individually42

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 Complaint42

was a legal enterprise whose body corporate was employed by Wilde as a vehicle for illegitimateactivities 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-in-Fact Enterprise identified as the “Wilde Mob.”

The Wilde Mob expanded by incorporating transient entities, illegitimate enterprises, and otherexisting RICO association-in-fact enterprises with the Matrix Enterprise. The Wilde Mob has evolvedinto a highly complex and functionally diversified network of criminal enterprises. These networksthemselves, evolving into an even larger dynamic crime industry, identified as the “AmenpenoferSyndicate” whose metamorphism adjusts its structure to accommodate the function and purpose of thevarious designed and orchestrated criminal schemes.


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 against Wilde and Woods, attempted to locate Woods43

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 in the Secretary of States’ records and44

informed John Amberg, the Lead Attorney for the SEC v. Wilde et al. case.45

Woods and those associated in falsification, in doing so to promote Allman’s

identity as the legitimate Registered Agent of BMW Majestic LLC, intentionally

†2violated 18 U.S.C. § 1028A .

SEC v. Wilde, et al., supra.43

See, Affidavit of Gary W. Allman, Exs Vol. 8 Ex 161 {Ct. Rec. doc. 10-1}44

Flores and Clarkson had also provided Amberg the means to locate Gelazela including a45

confidential cell phone number along with other information about Mark Gelazela.


5.4.3 The Wilde Mob Engages Bruce H. Haglund, Atty at Law into the46

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 Enrollsthe Milaca Gang into the Syndicate

“‘What young men will do, sometimes, to ruin themselves and break

their friends hearts,’ said Sergeant Dornton, ‘it’s 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 Wilde’s 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

46http://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, specializedexperience 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 Hollywoodcircles as a producer for several studios; among them, Warner Brothers, Walt Disney Television, NewLine Cinema and Sony. Jon Divens is also a member of the Producers Guild in Hollywood.”


http://workface.com/e/jondivens

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 SYNDICATE’S $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 operated through Koster’s company, Alicorn Capital47

Management LLC, a “Legal Entity” and RICO Enterprise, referred also as the

“Alicorn Enterprise.” The association of Alicorn’s principal, Scott Koster and48

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 Syndicate’s ongoing activities by

extending and continuing the fraud, predicate crimes and overt criminal acts in

furtherance of the conspiracy and racketeering.

Defendants being separate and distinct from the enterprises.47

Koster-Milaca Gang Boss.48


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 Mob’s 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


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


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


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, based on information49

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 Time49

or show offset adjustment to GMT standard time for North American Central Standard Time (CST).

Exs. Vol. 1, Ex. 3 {Ct. Rec. doc. 1-3}50


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 Concern’s



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. (“Voice Pictures”) film “Randall”.52

5.9.2 12/10/2009 – From Friday, December 10, 2009 through December 14 ,th

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 PSP’s monies would

Voice Pictures Inc., Goose Pictures Canada Inc. B8, Suite 111, 2526 Battleford Ave. SW.52

Calgary, AB T3E 7J4; Wendy Hill-Tout (Principal)


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 PSP’s 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 platform’s 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 Emre’s

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.


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, had a successful financial53

trading company which Koster had substantial knowledge, experience and had

previously obtained successful results with Mark Gelazela’s 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

TO ADVANCE FRAUD SCHEME, TAX EVASION AND MONEY LAUNDERING54 55

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. Mark53

A. Gelazela, Title MGRM (Registered Agent), b. William Chandler Reynolds, Title MGRM, 26Marlwood Lane, Palm Breach Gardens, FL 33418 USA; Idlyc Holdings Trust, Head Office, MelodyLane 9, Ruakura Road, 3216 Hamilton, New Zealand

26 U.S.C. § 7201 (Evasion), 26 U.S.C. § 7206(4) (Removal or Concealment with Intent to54

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)

18 U.S.C. 1956 (Laundering of Monetary Instruments)55


unlawfully imbedded Kaplan’s 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 Gang’s Alicorn Enterprise.56

5.10.2 The Gang’s 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. Kaplan’s: 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.

Kaplan’s stolen identity information to: i.) fraudulently give credibility to58

Exs. Vol. 8, Ex. 155-159 {Ct. Rec. doc. 10-1}56

Exs. Vol. 8, Ex. 159 § 9 at 21 (Declaration of David B. Kaplan, Esq.), Ex. 160 § 10 at 2457

(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,58

transfer or use of a “means of identification” of another person to commit or abet any federal crime orstate felony crime or to defraud the federal government. The statute defines a “means ofidentification” as any name or number used to identify an individual, including an access device. It alsoincludes devices such as credit card account numbers, professional and trade license identifications.The crime of identity fraud encompasses the use of another person’s credit card account number, as


transactions and documents; ii.) fraudulently fulfill transaction or contract

requirements; and iii.) create a mechanism to evade taxes; and iv.) run their59

money laundering scheme..

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 with two attached documents, 60

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 Gang’s 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 ofidentification,” including a passport, birth certificate, driver’s license, social security number, taxpayeridentification number, law/medical/etc. licenses and other identification, unique electronicidentification 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. § 720159

(Evasion) Felony, 26 U.S.C. § 7206(4) (Removal or Concealment with Intent to Defraud) Felony, 26U.S.C. § 7206(5) (Compromises & Closing Agreements) Felony, 18 U.S.C. § 152(6) (Extortion andBribery) 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 ofMonetary Instruments) Felony.

(Exhibit 151 {Ct. Rec. doc. 10-1}60

Initial Digital Electronic Forensic examination reveals the FPA document was authored by61

Larry Braun and typist was Kerim S. Emre.


†4of their own making , by electronic mail for purpose of advancing, extending,

and executing the Wild Mob’s ongoing fraud and theft schemes. The Milaca

Gang’s 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

Koster’s 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

See, ¶ 62

5.10.1, supra.


such as described in Schmuck. The Gang’s e-mail sole purpose is the element63

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 mustprove (1) a scheme to defraud and (2) the use of, or causing the use of, wirecommunications in furtherance of the scheme.” United States v. Gray , 96F.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 anyfalse or fraudulent pretenses or representations intended to deceive othersin order to obtain something of value, such as money.” United States v.Caldwell , 302 F.3d 399, 414 (5th Cir. 2002) (quotation marks and bracketsomitted). “The requisite intent to defraud is established if the defendantacted knowingly and with the specific intent to deceive, ordinarily for thepurpose of causing some financial loss to another or bringing about somefinancial gain to himself.” United States v. Saks, 964 F.2d 1514, 1518 (5thCir. 1992).

Schmuck v. United States, 489 U.S. 705, 712, 109 S.Ct. 1443, 1448, 103 L.Ed.2d 734 63

(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). TheCourt 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.


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 and/or the Wilde64

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, in order to continue a pattern of racketeering 65

activity.

5.11.3.1 Plaintiffs had placed funds into the Wilde Mob’s private

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

Mob’s income was derived from earlier racketeering activity against other

Particularly Koster who was the Milaca Gang boss and Alicorn Enterprise executive managing64

member.

See e.g., United States v. Bortnovsky, 879 F.2d 30, 36 (2d Cir.1989)(quoting Pereira v. 65

United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954)


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.66

5.11.3.2 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:67

Subject: Updated CISDate: Mon, 21 Dec 2009 14:48:55 -0800From: Kerim Emre <[email protected]>To: Lance @ MFI <[email protected]>Hi Lance,

See Newmyer v. Philatelic Leasing, Ltd., 888 F.2d 385, 396 (6th Cir.1989).66

Exs. Vol. 8, Ex. 152 {Ct. Rec. doc.10-1}— Kerim S. Emre Msg. 12/21/2009 4:48 PM67


I updated your CIS with Global Paymaster, LLC banking coordinates as they will beacting as our paymaster. This email is your CIS with that information included in it.Best,[email protected]: 951-719-4819F: 951-224-6844

5.11.4.1 The afore Monday, December 21 e-mail constituted a secondst

†2, †4, †11 †2, †4, †11wire fraud act; the Milaca Gang members (Koster , Childs , and

†2, †4, †11Emre ) 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.


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

†4furtherance of a scheme with specific intent to defraud , Gelazela attributed68

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

†4 †4 †4phone calls including communications on April 6 , 7 , and 23 , 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 post-

investment statements, like the statements made to procure the investments,

were false.

The total number of all acts of wire frauds related to this e-mailing is yet undetermined and68

can be attributed to this instance following discovery.


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:

†11,• Approximately $800,000 to the bank account of Wilde's wife, Maureen Wilde

†12, †14, †15;

†11, †12, †14, †15• $323,500 to Shillelagh Capital Corporation , another corporate

entity under Wilde's control;

†11, †12, †14, †15• $200,000 to Wilde's bank account in Europe ;


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

†14;

†11, †14• $55,000 to the assisted living facility of Wilde's parents ;

• $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

†11, †12, †14, †15money Woods brought in to the scheme ; and

†11, †12, †14, †15• $472,500 in fees to Haglund .

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.


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

†12fund to old investors with new investor money . In a December 5, 2009 e-mail

sent by use of interstate wire communications in furtherance of a scheme with

†4specific intent to defraud , 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


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.

†125.14.11 Haglund has admitted he knowingly wired funds to old investors

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.


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 standby-

letter-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. During the telephone conversation69

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

Increase to accommodate P&A high cash flow needs of the film (“Randall”) that was scheduled69

for theatrical release in March of 2010.


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

Internet, delivered a Joint Venture Agreement for the trade program. In70

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

Exs. Vol. . 1 Ex 5 {Ct. Rec. doc. 1-3}70



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 (Non-

Circumvention 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

†4in furtherance of a scheme with specific intent to defraud , sent wiring72

instructions for the PSP.73

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

†4with specific intent to defraud , 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 of72

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 toadvance a scheme to defraud. Note that the fraudulent statements themselves need not be transmittedby mail or wire; it is only required that the scheme to defraud be advanced, concealed or furthered bythe 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 defendant’s knowing and willful participation in a scheme or artifice to defraud, (2) with thespecific intent to defraud, and (3) the use of the mails or interstate wire communications infurtherance of the scheme.” United States v. Antico, 275 F.3d 245, 261 (3dCir. 2001)



disclosure agreement to Flores, in order to receive full disclosure of the

‡partnership’s structure, finances, transactions and the operations of the PSP.

5.18 12/15/2009 - SYNDICATE’S 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


with specific intent to defraud with instruction for funds wiring advancing the

†4wire fraud . 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


†4with specific intent to defraud , 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

†4to defraud , 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


†4defraud , again, about the deposit of funds for the Alicorn PSP; and


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

†4intent to defraud , that the funds hadn’t 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


†4with specific intent to defraud , 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


†4to defraud , “… Here is the copy of the wire confirmation message” confirming

the receipt of the funds with bank confirmation attached. For the purposes of74

18 U.S.C. § 1962(a), the foregoing demonstrates investment into a RICO

enterprise for which precedent dictates that the Plaintiffs “need prove only that75

illegally derived funds flowed into the enterprise.”


Cf. United States v. Cauble, 706 F.2d at 1342; cf. United States v. Vogt, 910 F.2d 1184, 1199 &75

n. 7 (4th Cir.1990) (applying a broad definition of "use" and acknowledging as sound the government'scontention 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 notrequire direct or immediate use of illicit income).


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

†4intent to defraud , informs Flores that he updated Flores’ banking coordinates

with Global Paymaster, LLC, the PSP’s 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, thus, substantiating their assertions using76

associations with large institutions and their diverse network of Internet

presence demonstrating Defendants’ numerous relationships with legitimate

resources.77

… ; such as Emre’s then ongoing due diligence and offerings by Flores’ business colleagues and76

associates involved and working on unrelated projects.

e.g. Exhibit 16, Exhibit 17, Exhibit 18, Exhibit 19, Exhibit 20, Exhibit 2177


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 industry’s

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

†4with specific intent to defraud , 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


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. Clearly, the document was unaccommodating to78

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 Plaintiff’s 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

†4scheme with specific intent to defraud :

– Kerim Emre Email - BG ISIN number79


Exs. Vol. 1, Ex. 10 {Ct. Rec. doc. 1-4} 79


-------- Original Message --------

Subject: BG ISIN numberDate: Tue, 5 Jan 2010 18:08:14 -0800From: Kerim Emre <[email protected]>To: Lance @ MFI <[email protected]>Bond/BG ISIN number XS0205433377 that the instrument is going to be issued on.Best,[email protected]: 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

†4communications in furtherance of a scheme with specific intent to defraud .

Kerim Emre Email Payout Schedule80


Subject: Fwd: UpdateDate: Thu, 7 Jan 2010 10:52:42 -0800From: Kerim Emre <[email protected]>To: Lance @ MFI <[email protected]>Update on tradeSent from my iPhoneBegin 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.

Exs. Vol. 1, Ex. 12 {Ct. Rec. 1-3}80


6. Scott should have a hard copy of the actual BG early to mid week next week thatwill 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

†4communications in furtherance of a scheme with specific intent to defraud ,

Exs. Vol., Ex. 13 {Ct. Rec. doc. 1-4} – Emre 13 Jan 2010 12:17:16 -0800 Subfee

Agreement


Subject: SubFee SetupDate: Wed, 13 Jan 2010 12:17:16 -0800From: Kerim Emre <[email protected]>To: Lance @ MFI <[email protected]>Hi Lance,Here is the subfee agreement for Global Paymasters. I filled out my information, butI'll need you to fill out the header, as well as yours so we can be setup fordisbursement. Please sign/date/etc and then send back to me. I will then sign myportion and and send it back to you as a PDF.Best,[email protected]: 951-719-4819

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

5.21.1 1/13/2010 - DEFENDANT’S 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


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” and the mounting damages along with81

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 productions81

scheduled for YR 2010 (this is a temporal bound reference relative to the period in which the terms andavailability of the funding were limited).


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 device’s 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


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


†4defraud , 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

†4with specific intent to defraud , 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

†4scheme with specific intent to defraud , 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 Emre’s 1/26/2010 6:32 PM message,

Emre forwarded an update via e-mail over the Internet by use of interstate wire



from Scott Koster whose e-mail was sent over the Internet by use of interstate

†4wire communications in furtherance of a scheme with specific intent to defraud ,

concerning Bank Guarantee Preadvice .82 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

†4intent to defraud , wrote that he was “expecting another update tonight or85

tomorrow morning” and presented an e-mail message from Scott Koster, sent use


†4to defraud , 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. In82

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 to83

the advising bank where time is short. It notifies the recipient that the named buyer has opened anL/C of a specified amount for a named seller (beneficiary), and usually includes the statement "thecredit will follow" or words to the effect. Depending on the jurisdiction, a preadvice may or may notirrevocably commit the issuing bank to actually issue the said L/C. Therefore, the advising bankgenerally does not issue an advice of credit but only notifies the beneficiary of the receipt of preadviceso that he or she (if willing) may proceed with the processing of the buyer's order. Also calledpreliminary advice. (source: BusinessDictionary.com)

Exs. Vol. 1, Ex 14 {Ct. Rec. doc. 1-4}84



that Koster’s 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


from an e-mail originally sent to him by Scott A. Koster whose interstate wire

†4communication which also was intended to defraud, , 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 Mob’s and Milaca Gang’s

and co-conspirators’ collective transaction by advancing the established

investment and trade.

5.22.5.1 Koster, the authority apparent, of the Milaca Gang’s 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


deception. Each Straw Man was fashioned to distract, dissuade, confute or

avert challenges to the legitimacy Milaca Gang’s 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-of-

straw after another. When Koster’s 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.

Koster’s 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 Koster’s 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


†4defraud ,:


Exs. Vol. 1, Ex. 22 {Ct. Rec. 1-4} – 4 Feb 2010 Emre msg - Update - Notice Proof of

Performance Information


Subject: UpdateDate: Thu, 4 Feb 2010 16:43:45 -0800From: Kerim Emre <[email protected]>To: Lance @ MFI <[email protected]>Hi Lance,Just wanted to keep you in the loop. Scott has received all of the NDAs back from allof the principals involved. It should be fairly quick that you receive the proof ofperformance information that was promised. We are also going to be getting a fullupdate outside of this soon.Best,[email protected]: 951-719-4819

5.23.2 Flores responded to Koster’s 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


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. Defendants86

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 shouldn’t have been trusted.

See Exs. Vol. 1, Ex 26 {Ct. Rec. doc. 1-4}86


5.25 3/15/2010 — 3/16/2010 - KOSTER & ATTORNEY CLAIM WITNESS TO PRIVATE

PLACEMENT PROGRAM PERFORMANCE. There hadn’t been any progress in meaningful

information until after John Childs response to Flores when Koster, whose legal87

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

and substantial experience, followed on 3/15/2010 12:13 PM and on 3/16/2010 10:2488

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 Syndicate’s transaction.89

5.25.1 The April 2 Scheduled Payout & Default. On Thursday, March 18,nd

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 2 [2010]” and wouldnd 90

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.” Koster’s assurances fail, no payout ever occurred.91


“I have been involved in hundreds if not thousands of lawsuits, including a number in Texas.” 88

(Exs. Vol. 5, Ex. 123 at ¶ 1)

Exs. Vol. 2, Ex. 28 at Î {Ct. Rec. doc. 1-5}89


See, Exs. Vol. 2, Ex. 29 {Ct. Rec. doc. 1-5}91


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


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 conspiracy’s veracity.

5.26.3 3/26/2010 – In an e-mail from John T. Childs sent by use of interstate


forwarding an e-mail message from Koster sent use of interstate wire


delivering a message to the investors, wherein Koster threatened the Plaintiffs92

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 Koster’s threat made

over the wires he and the members of the Wilde Mob, the Milaca Gang, their

†7associates, and co-conspirators violated 18 U.S.C. 1512 tampering with a

†8witness, victim, or an informant, 18 U.S.C. 1513 retaliating against a Witness,

†9victim or an informant, 18 U.S.C. 1951 (Hobbs Act) .

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

See, Exs. Vol. 2, Ex. 30 at Ó {Ct. Rec. doc. 1-5}92


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 interstate93


to the Plaintiffs stating:

Exs. Vol. 2, Ex. 30 at Î {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 goingaround that funds for this program have been sent to the US and to NZ, that fundinghas taken place for clients in Australia, that the program had closed, and severalothers. Only one of those has any truth to it. âº Funds have been received here inthe 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, aswell as by the CEO's of IDLYC, the two bodies transacting this program for all of theprincipals.”

Inclusively, the members of the Wilde Mob, the Milaca Gang, their associates, and co-93

conspirators.


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

†4scheme with specific intent to defraud , 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, asthey continue to collect interest on the funds the longer they hold themin their hands … Our bankers have expressed that funds are eminentnearly every day for at least a week and a half. We did have an issueafter the Chinese new year, but that was handled and we were notexpecting further delays.” Exs. Vol. 2, Ex. 30 at Ð, Ò {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; perhapsget some clarification (about Koster’s 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


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.


5.29 3/30/2010 - 4/14/2010 – 91 DAY IN DEFAULT - 116 TRANSACTION DAY –THST

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 ALICORN-

IDLYC-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

†4of a scheme with specific intent to defraud , writing:

“Lance, I have not heard anything new. Please understand that when I do getupdates, I try my best to verify them prior to issuing them out to profit sharemembers. I too am behind on my own projects due to this transaction, but as thisfunding has been delayed, I have continued to push forward with other avenues ofobtaining 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 clientwho I brokered in requested a refund, and it was granted to him pending he signed arelease of liability. The ... report screwed himself, in that all of us signed a ncnd, aswell as an agreement to not purposely attempt to disrupt the funding process bygoing to external sources prior to exhausting all provisions in the contract. Readthrough the sanitized doc, and you will understand what I am refering [sic.] to.”

95


Exs. Vol. 2, Ex. 34 {Ct. Rec. doc. 1-5} referring to Exs. Vol. 2, Ex. 33 {Ct. Rec. doc. 1-5}95


5.30.1.1 There is little doubt that Koster’s message was a veiled threat

intended to reinforce his previous threat of retaliation should he become96

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 – 118 DAY NOTICE. Friday, April 16, 2010 5:00 AM,TH

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.

Compare, Exs. Vol. 2, Ex. 30 at Ò {Ct. Rec. doc. 1-5}96



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


†4of a scheme with specific intent to defraud , 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

Koster’s 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

Apr 2010 Msg. (Friday, April 16, 2010 10:15 PM CST)98


Subject: Re: Status/ScheduleDate: Fri, 16 Apr 2010 10:15:10 -0500From: Scott Koster <[email protected]>To: Lance @ MFI <[email protected]>, John Childs<[email protected]>,Kerim Emre <[email protected]>

Lance,“I understand where you are coming from with all of this. … I too have commitmentsto make, but fortunately, I did not make any serious financial obligations on my ownbehalf, 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 pastissues prior to coming into this program.”



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


†4of a scheme with specific intent to defraud , restating Koster’s telephone

conversation that Koster was told by an SEC investigator that the IDLYC99

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.

†6 †6It was the clear intent by the Milaca Gang, inter alios, Koster , Emre , and

†6Childs 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 on99

a number of occasions by an investigator from the Securities and Exchange Commission looking intoIDLYC, each time reporting that there appeared no wrongdoing by Mark Gelazela and William Chandler Reynolds.



to gain, not to produce that evidence to the SEC investigator, would be to conceal

his, Harlan’s, Childs’, and Emre’s 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 Koster’s 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 Hall’s

(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 16 message that Flores would be taken out of IDLYCTH


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 – KOSTER’S APRIL RESPONSE TO FLORES’ REPLY TO IMMINENT

PAYOUT ANNOUNCEMENT AND KOSTER’S 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, emails about litegation [sic.] and other talks of101

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 civil101

litigation and criminal complaints with U.S. Dept. of Justice, which Koster urged Plaintiffs to hold offtheir these pursuits.


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

†4, †2messages, Tuesday, 27 April 2010 at 21:08:52 CST , Wednesday, 28 April 2010

†4, †2 †4, †2at 09:06:53 CST and on Thursday, 29 April 2010 08:06:59 CST 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

Exs. Vol. 2, Ex. 40 {Cr. Rec. doc. 1-5}102

Exs. Vol. 2, Ex. 41 {Cr. Rec. doc. 1-5}103


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 22 through June 24, 2010,nd

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


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.

Exs. Vol. 2, Exs. 39, 40 {Ct. Rec. doc. 1-5}104


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


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



weighed the risks of their deeds.The Defendants refused to produce any



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


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 to Flores response to105

Emre’s “Imminent payout schedule” message of April 22 . Koster responded innd

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

Exs. Vol. 2, Ex. 40 {Ct. Rec. 1-5}105


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



weighed the risks of their deeds.‡3


5.35 FLORES’ JUNE 13 DEMAND FOR PERFORMANCETH

& PRODUCTION OF DOCUMENTS106

5.35.1 6/13/2010 – On Sunday, June 13, 2010, Flores gives Koster notice that

the PSP has entered into its 177 day of the transaction (152 day in default)TH ND



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.

Exs. Vol. 2,Ex. 46 {Ct. Rec. doc. 1-5}106


5.36 CLARKSON’S DEMAND FOR VERIFICATION OF

KOSTER’S PURPORTED DEMAND LETTER TO IDLYC107

5.36.1 6/29/2010 – CLARKSON’S 1 REQUEST FOR A COPY OF KOSTER’SST

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 - CLARKSON’S 2 CALL FOR A COPY OF KOSTER’S PURPORTEDND

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 Ð)

5.36.3 6/30/2010 - CLARKSON’S 3 REQUEST FOR A COPY OF KOSTER’SND

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 Ð)

5.36.4 KOSTER FAILS TO PRODUCE DOCUMENTS CONCEALING THE INTERNAL

ACTIVITIES OF THE SYNDICATE. Koster never responded to the Clarkson request

for Koster’s 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.

Exs. Vol. 2, Ex. 45 at Ï, Ð, Ñ {Ct. Rec. doc. 1-5}107


5.37 KOSTER & BMW MAJESTIC ATTEMPT TO ESTABLISH

PLAUSIBLE DENIABILITY USING THEIR OWN STRAW MAN108

5.37.1 [Ex. 47 at Îö] 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 e-

mail from Mark Gelazela.

5.37.2 [Ex. 47 at Ïö] Koster stated, “I had my contract with his [Gelazela’s]

bank. He [Koster’s 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 Ðö] 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 Ñö] Koster commits funding to restoring the ALICORN-

IDLYC-BMW MAJESTIC transaction performance failure with a (Gold) Buy/Sell

transaction.



5.37.5 [Ex. 47 at Òö] Koster introduces the purported evidence of BMW

Majestic’s 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 Óö] Koster, after stating that he and Harlan were going to

escalate the recovery of funds now make a conflicting statement at Ó 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 Koster’s 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

Exs. Vol. Ex. 53 at Î {Ct. Rec. doc. 1-6}109


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

couldn’t 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 Îö {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,



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. Koster’s 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 Koster’s 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 Majesticphony-baloney refund response letter from their Board of Directors?This has got to be fraudulent as hell; thus, a act of mail fraud (probablyjust one among many wire/mail frauds that have gone on) which couldheld as one of the minimum two predicate acts for the feds to move onRICO (racketeering) charges against BMW.

“[Koster] I did not. I am meeting with my attorney next week to goover the course of action from here. I do not want to spend too muchmoney on it, as Im already out 150k if they lost/spent the money, andare selling their stake house. I want to see what my attorney canaccomplish, prior to going too much farther into my pocket to deal withit.”

5.38.10 7/9/2010 – 2 LEGAL NOTICE TO KOSTER OF FEDERAL CRIMES &ND

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


Id. at message ¶ 3112


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 .


‡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 29 Msg., 222 Day of Transaction - Notice of Damages &TH ND

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


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



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 Emre’s 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 and intended to115

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

†9, †23punitive agreement, (the "First Settlement Agreement").116


See ¶ 115

5.39, pg. 119

"Partnership Termination Agreement and Wind-up Agreement and Mutual Release"116


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

1 WIND-UP AGREEMENT - EVIDENCE OF AUGUST 16 DOCUMENT FORGERY. OnST TH

August 24, 2010 11:18:36 AM, Koster explains the document he sent should have

had his signature, which, in fact, it did not. Koster indicates that he would sign117

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 ofForgery in Furtherance of the Conspiracy and Racketeering

5.41.1 Koster never delivered the counter-signed document until after he

responded to Flores and Clarkson’s attorney Gary Grab’s 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 didn’t bear

the embedded watermark seal of the original document whereupon Flores118 119

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

See, Exs. Vol. 3, Ex. 63 at Ð, Ñ {Ct. Rec. doc. 1-6}117




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 17 . In fact, Koster hadn’tTH

signed the document or given any notion to sign it. It wasn’t until one week after

Flores informed Koster of his signature withdrawal of August 18 that KosterTH

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 24 . th 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

†18 †4crimes including felony Forgery , and felony federal Wire Fraud .121 122

5.42 SCHEDULE FOR TELEPHONE CONFERENCE CALL W/GOLD TRADE COMPANY

PRINCIPAL RICHARD HALL TO INITIATE GOLD BUY/SELL PROGRAM


Texas P. C. § 32.21 Forgery - felony121

18 U.S.C. § 1343 Wire Fraud122


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 Fletcher’s 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 Hall’s group and Fletcher’s

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

Kerim’s “initial agreement.” What Koster was referring to as the initial

agreement, was the 16.7% piece of the action, the investment returns, required by


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 SHAKEDOWN125

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-IDLYC-

BMW Majestic deal, not the substituted Richard Hall Gold Transaction intended

as a settlement for the Plaintiffs’ damages and the lost revenues resulting from

the transaction’s non-performance. However, Childs stated he intended to get the

†9, †23payoff for Emre anyway, and threaten 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. On126

Tuesday, September 7, 2010 2:05 PM, Flores demanded the agreement

information which affected the cost to the Plaintiffs’ settlement transaction.



Exs. Vol. 3, Ex. 74 at Ñ {Ct. Rec. doc. 1-6}125

Exs. Vol. 3, Ex. 74 at Ò {Ct. Rec. doc. 1-6} 126


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 Didn’t

Exist.127

†9, †235.44.4 9/7/2010 10:17 AM - Koster Continues Extortion 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 one’s house down to cover up a robbery then returning to

the resident’s 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

†9, †23out to kill the Richard Hall-Berea Gold Transaction. Fifty-two minutes

following Koster’s 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,

Exs. Vol. 3, Ex. 74 at Ó {Ct. Rec. doc. 1-6}127

Exs. Vol. 3, Ex. 74 at à {Ct. Rec. doc. 1-6}128


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.”129

5.44.8 Flores responds to Koster’s agreement being full of holes and weak,

noting it would be unlikely to be upheld in a court of law.130

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 (the “Management131

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


Exs. Vol. 4, Ex. 81 at à {Ct. Rec. doc. 1-7}130



Toussaint Law Group, without his knowledge, consent, or permission132

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.

†2, †4 †2, †4Cook, thereby Hall and Wong-Sang each engaging in the commission133

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 11 . In the message KosterTH

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,132

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,' or133

‘a step in the plot where Wong-Sang knew that the purpose of the fraudulent document would bedistributed to investors or participants by e-mail or U.S. Postal System mail facilities.


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

Koster’s 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.

See, e-mail and attachment at Exs. Vol. 4, Ex. 80 {Ct. Rec. doc. 1-7}134



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

†4communications in furtherance of a scheme with specific intent to defraud , in

†9 †23order to extort 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 Mob’s and

Milaca Gang’s criminal activities, follows in part:136

“Beneficiary 116.7% of 100% of proceeds from each payoutBeneficiary Name: Kerim S EmreBank Nam e/Address: US Bank, 40473 Murrieta Hot Springs Rd, Murrieta, CA 92563Account Number: 153462847523Swift Codes: USBKUS44CALRouting Number: 122235821Account Name: Kerim S EmreBank Officer & Title: Erica Acosta, Assistant ManagerBank Telephone/Fax: (951) 894-1823

Please notify of transfer: [[email protected]]

Beneficiary 2

Extract from Exs. Vol. 4, Ex. 83 {Ct. Rec. doc. 1-7}136


A one-time fee of 188,850.00 USD will be paid to Vicki Clarkson, from Lance Floresof Mockingbird Films International, LLC portion of proceeds after Beneficiary 1 ispaid.

Beneficiary Nam e: Vicki ClarksonBank Nam e/Address: TD Canada Trust, 5680 Signal Hill Centre SW , Calgary,Alberta CanadaT3H 3P8Account Num ber: 7114174Sw ift Codes: TDOMCATTTORRouting Num ber: 026009593Account Name: Vicki ClarksonBank Officer & Title: Leigh-Anne EastmanBank 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" <[email protected]>To: "John Childs" <[email protected]>Cc: "Vicki Clarkson" <[email protected]>; "Wendy Hill-Tout"<[email protected]>Sent: Tuesday, October 19, 2010 7:11 PMSubject: 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


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 theFraudulent Representation of Clarkson and Implicates Emre in the Extortion


From: "John Childs" <[email protected]>To: "Lance @ MFI" <[email protected]>Cc: "Kerim Emre" <[email protected]>; "Vicki Clarkson"<[email protected]>; "Scott Koster" <[email protected]>Sent: Thursday, October 21, 2010 2:00 PMSubject: Sub FPA

Lance,

I am sending this so that you are aware that the sub fee agreement i emailed you isKerim'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.


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 somesort of agreement in regards to this SFPA. If the two of you need me to mediate Iwill jump on a conference call with the both of you. The details of this transactionwere nearly worked out yesterday. I will not allow the dispute between the two ofyou 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 an e-mail137

over the Internet by use of interstate wire communications in furtherance of a

†4scheme with specific intent to defraud :

Subject: Lets get this settled now.From: koster.sco @gmail.comDate: 10/21/2010 11:08 PMTo: "Lance @ MFI" <[email protected]>, Kerim Emre<[email protected]>CC: John Childs <[email protected]>

Lance, as I have told you in the past, while I appreciate and understand your legalbackground, putting all that out there for everyone to see does nothing but putpeople on the defensive. Rather than point out where you see the liability is withKerim, lets focus on one thing, which is what is holding us back from moving thisforward.

Lance, do you agree that because you came into this transaction through yourrelationship with Kerim, that Kerim deserves some level of compensation for helpingus get all the pieces together for this instrument?



If so, please respond with what you feel is a fair % for Kerim to receive, and lets startthere. I am just doing this as a friend to both of you, but more so because I want thisto move forward.

Kerim, if Lance makes a fair offering, whatever that be, will you be willing to workwith that, and accept it as a sort of settlement in place of the previous agreementthat you had in place with Lance?

Please let me know guys. We have this and then logistical stuff to work out on theinstrument, 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 Emre’s 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 Harlan’s 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.


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 25 and November 1 Flores calledTH ST

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


Id. at Ï139


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 2 at 3:38 AM CST, Flores,ND

in an e-mail message sent an impassioned plea to Koster from the Plaintiffs to

show them their settlement funds.140


From: Lance @ MFITo: Scott KosterSent: Tuesday, November 02, 2010 3:38 AMSubject: 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 ]

5.51.2 Following Flores’ effusive demand for performance on the settlement

Koster responds later that day with several messages establishing excuses for

Exs. Vol. 4, Ex. 85 at Ð {Ct. Rec. doc. 1-7}140


http://www.youtube.com/watch?v=mBS0OWGUidc&feature=related

http://www.youtube.com/watch?v=mBS0OWGUidc&feature=related

more delays to come because of gold seller’s 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 Ò)

5.52 CLARKSON’S NOVEMBER 2 MSG. – DEMAND FORND

VERIFIABLE DOCUMENTATION OF GOLD TRANSACTION

5.52.1 11/2/2010 – On Tuesday, November 2, 2010, Clarkson sent a message

to Koster complaining about Koster’s 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


†4defraud . RICO Defendant Scott A. Koster, infuriated by Flores’ conversation with,

and information collection, from another investor Flores and Clarkson had located in

id. at Ñ141


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.”

(Thursday, November 11, 2010 1:23 PM CST)142


Subject: Re: Gold Buy/SellDate: Thu, 11 Nov 2010 13:23:18 -0600From: Scott Koster <[email protected]>To: Lance @ MFI <[email protected]>

Lance,

âºAs john told you on the phone, you more than ruffled feathers with yourcomments regarding the feds to winston and dr fletcher. This email is icing on thecake.

ãºEverything that has been done to this point can be proven and defended in acourt of law.Please tread carefully, as we are very aware of the lies you have told about yourinvolvement with myself, as well as how you passed money through your family toget back to you.

äºAgain, issues between you and vicki are between you and vicki. You did not makeanyone aware of her involvement until mid this year.

åºIf 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 twopartners to find a replacement for your 1/3rd, as richard does not need that kind ofdrama in his world, and neither do the other two.

Exs. Vol. 4, Ex. 89 {Ct. Rec. doc. 1-7} Exhibit annotation included.142


Lance, I see you, and who you are. I understand your back is against a wall from thedecisions you have made. I have not shut you out, and continue to try to help you. Ido not understand your constant need to be combative, when all you have been told isthe truth.

Lance, all of us, kerim, john, wendy, richard and myself, want to help you, but notone of us belive [sic.] that your intentions are true or just. We all feel that you areplaying 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.


5.53.1 KOSTER IMPLICATES RICHARD HALL, AND TWO PARTNERS IN

CONVERSION , THEFT, AND CONSPIRACY OF PLAINTIFFS’ ONE-THIRD (a)143

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

†9Transaction Agreement in violation of the Hobbs Act . Koster’s 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 Fletcher’s 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 group’s activities to federal

authorities. id. at Î.

Conversion is the wrongful exercise of dominion or control over the property of another in143

denial of, or inconsistent with, the other's right to the property. AIG Life Ins. Co. v. Federated MutualIns. Co., 200 S.W.3d 280, 285 (Tex.App.Dallas 2006, pet. denied). A claim lies for conversion of moneywhen identification of the money is possible and there is an obligation to deliver the money inquestion. Id. The factual allegations in Plaintiff's amended complaint are sufficient to state a claim forconversion. Defendants also contend that Plaintiff has failed to allege "demand and refusal." A demandfor property and refusal to return the property may be necessary when the possession is initiallylawful, because the refusal is what makes the possession unlawful, and a cause of action may thenaccrue. Hofland v. Elgin-Butler Brick Co., 834 S.W.2d 409, 413 (Tex.App.-Corpus Christi 1992, nowrit). A demand and refusal is not necessary for every conversion cause of action to accrue.


5.53.3 Koster’s 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.



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


and all his duplicitous pursuits; notwithstanding the production of all of the

associated information and documents related to the ALICORN-IDLYC-

BMW 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 from pursuing the Milaca Gang, the145

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

Exs. Vol. 4, Ex. 89 at Ï {Ct. Rec. doc. 1-7}144

e.g., “… I considered the FBI but I was embarressed [sic] and I didn't want to tarnish my own145

name by lodging an investigation with the FBI. I talked with other brokers that brought their clientsto Mark [Mark A. Gelazela] and Chandler [William Chandler Reynolds] to see if they had been paidand they were in the same boat … Finally, I contacted a friend that has conections [sic] in the FBI andasked if he could look into these two guys. He simply said RUN! If you can get your money... you'dbetter grab it and RUN! After another month, I asked for proof of the BG that I had bought and if theycouldnt [sic] prove it I wanted my money back or I was going to the FBI.”Exs. Vol. 7A, Ex. 133 {Ct. Rec. doc. }


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


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 Clarkson’s referral of counsel’s questions.


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

5.55 11/12/2010 – KOSTER’S 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 Clarkson’s 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 Clarkson’s involvement since December 18, 2009, elucidated below:


I ALWAYS TELL THE TRUTH - PSEUDOLOGIA FANTASTICA.147

“I ALWAYS tell the truth, because it can be proven. Its easy toremember, and it does not come back to bite you. My integrity is one ofthe 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 withmy platforms, providers, and lenders. Im finding it difficult to continueto feel compassion about this situation, while it risks to affect my otherclients in an adverse way.” Scott A. Koster

148

Given Koster’s statement in light of the evidence provided in the Exhibits

more explanation is unneeded. However, Koster’s statements do shed light

upon the man’s veracity and that of his colleagues. Moreover, it demonstrates

the credibility of Koster’s 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 Hall’s “group” and can prove the

“offering” is 100% … something.

“… The paperwork is real, the SBLC offering is real, and I canprove what my company is offering to you 100%.

149

Dike CC, Baranoski M, Griffith EE (2005). "Pathological lying revisited". The Journal of the147

American Academy of Psychiatry and the Law 33 (3): 342–9. PMID 16186198.http://www.jaapl.org/cgi/pmidlookup?view=long&pmid=16186198.; also, Hardie TJ, Reed A (July1998). "Pseudologia fantastica, factitious disorder and impostership: a deception syndrome". Medicine,Science, and the Law 38 (3): 198–201. 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): 89–95. doi:10.1016/S0010-440X(99)90111-6. PMID 10080254.

See, exhibit enclosed documents 1-7 at 28, Exh. Vol. 4 Ex. 91 at Ï {Ct. Rec. doc. 1-7})148

id. at Ð149


http://www.jaapl.org/cgi/pmidlookup?view=long&pmid=16186198.;

“… Richards group is also very real. I cannot comment on whatthey will be willing to offer.

150

“… I can however request a copy of the buy/sell agreement fromMr. Cook [Winston J. Cook], which I actually believe John[Childs] has a copy of.”

151

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 didn’t 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.

id. at Ñ150

id at Ò151


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 GRAB’S LETTER NOTICE OF INTENT TO JOIN & PARTICIPATE IN

SUIT AND DEMAND FOR PRODUCTION

{Flores’ Tuesday, November 16 Message Inquiring On Koster’s LegalTH

Counsel and Clarifying Legal Status of He and Clarkson. Emre Is GivenOpportunity 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

Exs. Vol. 9, Ex. 173152


GARY W. GRAB LAW OFFICESuite 200, 816 – 7 Avenue SWth

Calgary, Alberta T2P 1A1Phone: (403) 819-7757

Facsimile: (403) 295-8021Email: [email protected]

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 Clarkson’s Classics Inc., respectively. Ms. Clarkson is a Director and an authorized representative of Clarkson’s Classics Inc. (collectively, Vicki Clarkson and Clarkson’s 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 litigation 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 VC’s minimum


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 deemed 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:


• Cook Business Services LLC & Alicorn Capital Management LLC,

ENGAGEMENT LETTER153

• Cook Business Services LLC & Alicorn Capital Management LLC

ESCROW & WIRE INSTRUCTIONS TO BUSCH LAW CENTER )154

• Cook Business Services LLC FEE PROTECTION AGREEMENT OF

10/14/2010155

• Interlink Global Messaging & Cook Business Services LLC SBLC

TRANSMITTAL SERVICE156

• Cook Business Services LLC STANDBY LETTER OF CREDIT

APPLICATION & October 19, 2010 FEE PROTECTION AGREEMENT157

• Winston Cook $10,000,000 USD SBLC TRANSMITTAL VIA MT760

Facilitated by Interlink Global Messaging158

• Winston Cook SBLC TEMPLATE & MT760 SBLC TEMPLATE159

• BEREA FINANCIAL CONSULTING & MANAGEMENT

AGREEMENT, COOK BUSINESS SERVICES LLL/Winston J. Cook -

INVESTOR & Berea Inc/Christine Wong-Sang - PRINCIPAL160

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










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. The documents do not show Flores participation161

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 fiduciary’s duties go beyond mere fairness and honesty; they obliged

¶ 161

5.53, ?, annot. åº at 138, 152,


Koster, Hall and Cook to further the beneficiary’s best interests. Thus, the

fiduciaries of the ALICORN-HALL-BEREA-CBS Enterprise’s Gold Transaction

were not entitled to the profits from their bad faith and breach of fiduciary

duty. Richard Hall, Christine Wong-Sang, Vladimir Pierre-Louise, Eugene162

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).162

Fiduciaries who breach their duty forfeit all right to compensation, even if they did not profit from thebreach of fiduciary duty.

It is beside the point for either Turner or Corbett to say that Kinzbach suffered no damages because itreceived full value for what it has paid and agreed to pay. A fiduciary cannot say to the one to whom hebears such relationship: You have sustained no loss by my misconduct in receiving a commission froma party opposite to you, and therefore you are without remedy. It would be a dangerous precedent forus to say that unless some affirmative loss can be shown, the person who has violated his fiduciaryrelationship with another may {138 Tex. 574} hold on to any secret gain or benefit he may havethereby acquired. It is the law that in such instances if the fiduciary "takes any gift, gratuity, or benefitin violation of his duty, or acquires any interest adverse to his principal, without a full disclosure, it isa betrayal of his trust, and a breach of confidence, and he must account to his principal for all he hasreceived." United States v. Carter, 217 U.S. 286, 30 Sup. Ct. 520, 54 L. Ed. 775, 19 Am. Cas. 594. Seealso Ash v. A. B. Frank Co., 142 S. W. 42; Armstrong v. O'Brien, 83 Texas 635, 19 S. W. 268. [emphasisadded]


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 16 & OCTOBER 18 DOCUMENT FORGERIES INTH TH

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) {1 } PARTNERSHIP TERMINATION AND WIND-UPST

AGREEMENT AND MUTUAL RELEASE (August 16 Original SignedTH

& Sealed Document – “1 Wind-up Agreement”)ST 164

See, Texas Supreme Court, International Bankers Life Insurance Co., supra, FN 163

162

Exs. Vol. 6, Ex.107 {Ct. Rec. doc. 1-9}164


(2) {1 } WIND-UP AGREEMENT SOLO PAGE FORGERY (AugustST

16 “1 Wind-up Agreement Page 4 Document Forgery”)TH ST 165

(3) {2 } PARTNERSHIP TERMINATION AND WIND-UPND

AGREEMENT AND MUTUAL RELEASE ATTACHMENT "A" STRUCTURE

OF FINANCIAL INSTRUMENT (October 18 “2 Wind-upTH ND

Agreement Document Forgery”)166

†255.58.2 The August 16 document forgery is fully described at ¶ TH 5.40.6, pg.

122, although the August 16 document forgery was not discovered until KosterTH

delivered all three of the document forgeries in two separate e-mails, 17 Nov 2010

†4 †4at 01:13:20 CST and 24 Aug 2010 11:18:36 CST , over the Internet by use167 168


. †4to defraud

†255.58.3 The October 18 Document Forgery . Upon examination of theTH

October 18 document forgery the Plaintiff discovered that document’s thirdTH 169

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,

Exs. Vol. 6, Ex. 108 {Ct. Rec. 1-9}165

id., Ex. 109166

Exs. Vol. 6, Ex. 106 {Ct. Rec. 1-9}167

Exs. Vol. 3, Ex. 66 {Ct. Rec. 1-6}168

Exs. Vol. 6, Ex. 109 {Ct. Rec. 1-9}169


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 19 of October in Manila, Republic of the PhilippinesTH

where Ivan Santos resides. Yet, Mr. Santos’ signature shows he signed the170

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 Koster’s forgeries of both the August 16 “1 Wind-up AgreementTH ST

Page 4 Document Forgery” and the October 18 “2 Wind-up AgreementTH ND

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


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 1 Examination of the RICOST

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 1 Examination of theST

Evidence rendered in the records of the Court by Plaintiffs’ Exhibits Volume 5,

Exhibit 115 and Exhibit 116 respectively. The facts and allegations contained172

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


{Ct. Rec. doc. 1-9}172

See, Exs. Vol. 6, Ex. 116 {Ct. Rec. doc. 1-9}, Texas DTPA Notice Certificate of Service173


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 oflawsuits, including a number in Texas …

“… Finally, please be advised that while you have sent out therequired noticed under Texas' Deceptive Trade Practices Act, youhave not negotiated in good faith to settle this matter. We are notgoing to work with or sign anything remotely like the "SettlementAgreement" or other items that you have created. We will have asimple, straightforward settlement agreement that is customarilyused in cases like this. Again, if there is an offer, please put it outthere. We are more than willing to work with you to bring thismatter to a reasonable conclusion.” (emphasis added)

174

5.60.2 On Friday, January 21, 2011 2:14 PM CST, Flores responded to

Harlan’s 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 abroker in any capacity. The "$10k" which you reference, is no part of theKoster/Alicorn et al. transaction and pre-discovery fishing will not providecredible facts.

As far as criminal actions, such is not in our sphere to prosecute, and iswholly in the hands of appropriate authorities to effect responsive actions thatwhich may be appropriate to the evidence at hand or result from ongoing



investigations. Further related inferences neither warrant nor meritadditional response. Unfortunately, we have experienced agreements with your client, but ifyou have something that would be acceptable to the Court, then certainlypresent it to us. Our demands have remained the same:

1) We want consideration for damages, knowing well that your client doesnot have the wherewithal to make us whole, but we would accept astructured settlement on a portion of direct and collateral damages wouldallow us to create financial mechanisms to recover a portion of the damagesyour client is liable.

2) In damage recovery for the IDLYC transaction and the promisedreplacement by means of an alternative financial mechanism of equivalentworth 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 Harlan’s

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 1 Examination of the Evidence with such utterST

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


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 anyperson, a consumer shall give written notice to the person at least 60days before filing the suit advising the person in reasonable detail of theconsumer's specific complaint and the amount of economic damages,damages for mental anguish, and expenses, including attorneys' fees, ifany, reasonably incurred by the consumer in asserting the claim againstthe defendant …



5.61 Richard Hall’s 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 <[email protected]> an e-mail over the Internet by use


†4 †2to defraud and use the stolen identity of Hendrickx Toussaint 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

<[email protected]> an e-mail over the Internet by use of


†4 †2defraud and use the stolen identity of Hendrickx Toussaint 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


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 code and176

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.

Exs. Vol. 1, Ex. 25, {Ct. Rec. doc. 1-4} 176


5.63.2 It further appears that there were, or still are, at least nine MTN177

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'177

“1. Notes range in maturity from one to 10 years. By knowing that a note is medium term, investorshave an idea of what its maturity will be when they compare its price to that of other fixed-incomesecurities. All else being equal, the coupon rate on medium-term notes will be higher than thoseachieved 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 itsdebt issuance; it allows a company to tailor its debt issuance to meet its financing needs. Medium-termnotes allow a company to register with the SEC only once, instead of every time for differingmaturities.”


§ VI THE ENTERPRISES

6.1 The members and associates of the Wilde Mob, the Milaca Gang, the178 179

Contra Costa Family, and the Atlanta Family, include: the Alicorn Capital180 181

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 Wiseguy’s Investments LLC (the “Wiseguy’s Enterprise” or

“Wiseguy’s” 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

Francis E. Wilde, Jon Divens, Steven E. Woods, Bruce H. Haglund, Mark A. Gelazela, William178

Chandler Reynolds, James Linder and Maureen O’Flanagan Wilde and other John Does.

Scott A. Koster, John T. Childs, Kerim S. Emre, Melissa Shapiro, Koster/Milaca Attorney, and179

other John/Jane Does.

John T. Childs, Brandon Colker, and their alter ego Interlink Global Messaging (IGM) and180

other officers of related subsidiaries and associates not named in this action.

Richard D. Hall, Winston Cook, Eugene Fletcher, Christine Wong-Sang, and Vladimir Pierre-181

Louis. Hall and former officers of Berea Inc. were sole contacts to Success Bullion, purported Goldtransaction company and purported intermediary of the alleged gold trade.

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § 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 Wilde’s


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 Wilde’s associates received part of the illegal earnings

generated by the Wilde Mob and the Syndicate.

6.5 Subordinate to Francis Wilde’s and the Wilde Mob’s 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


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,


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. They establish182

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 is182

defined as "crimes that may adversely affect or fraudulently use the U.S. Mail, the postal system orpostal 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. 7:183

Exs. 133-150.


§ VII CONSOLIDATED RICO PREDICATE ACTS

ActCrime

KeyStatue Federal Predicate Crime Description RICO Actor(s)

Page#

Instances

1 5 18 USC 1344 Financial Institution Fraud Francis E Wilde 44 1

2 14 18 USC 2314Transportation of stolen goods, securities,moneys, fraudulent State tax stamps, or articlesused in counterfeiting

Francis E Wilde 44 1

3 15 18 USC 2315Sale or receipt of stolen goods, securities,moneys, or fraudulent State tax stamps



















13 11 18 USC 1956 Laundering of Monetary Instruments Francis E Wilde 45 1

14 12 18 USC 1957Engaging in monetary transactions in propertyderived from specified unlawful activity












20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § VII Page 169

ActCrime


Page#

Instances







24 11 18 USC 1956 Laundering of Monetary Instruments Francis E Wilde 46 2



26 5 18 USC 1344 Financial Institution Fraud Jon Divens 47 5

27 11 18 USC 1956 Laundering of Monetary Instruments Jon Divens 47 3


Jon Divens 47 3


Jon Divens 47 14


Jon Divens 47 5




Jon Divens 47 4


Jon Divens 47 15


Jon Divens 47 6




Jon Divens 47 5


Jon Divens 47 16


Jon Divens 47 7




Jon Divens 47 6


Jon Divens 47 17


Jon Divens 47 8



ActCrime


Page#

Instances



Jon Divens 47 7


Jon Divens 47 18


Jon Divens 47 9




Jon Divens 48 8


Jon Divens 48 19


Jon Divens 48 10




Jon Divens 51 9


Jon Divens 51 20


Jon Divens 51 11




Jon Divens 51 10


Jon Divens 51 21


Jon Divens 51 12

66 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Jon Divens 52 1




Jon Divens 53 11


Jon Divens 53 22


Jon Divens 53 13




ActCrime


Page#

Instances


Jon Divens 53 12


Jon Divens 53 23


Jon Divens 53 14




Jon Divens 53 13


Jon Divens 53 24


Jon Divens 53 15


18 USC 1344 - Sub Total: 16



Jon Divens 53 14


Jon Divens 53 25


Jon Divens 53 16

87 2 18 USC 1029AAggravated identity theft, authenticationfeatures, and information

Steven E Woods 55 1

88 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Kerim Emre 68 2


Kerim Emre 72 2

90 11 18 USC 1956 Laundering of Monetary Instruments Kerim Emre 72 15


92 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) John T Childs 72 4


John T Childs 72 3

94 11 18 USC 1956 Laundering of Monetary Instruments John T Childs 72 16

95 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Scott A Koster 72 5


Scott A Koster 72 4

97 11 18 USC 1956 Laundering of Monetary Instruments Scott A Koster 72 17

98 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Mark A Gelazela 73 6

99 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Steven E Woods 73 7




ActCrime


Page#

Instances

102 11 18 USC 1956 Laundering of Monetary InstrumentsFrancis E Wilde -Haglund-MaureenWilde

74 18


Francis E Wilde -Haglund-MaureenWilde

74 15



74 26



74 17

106 11 18 USC 1956 Laundering of Monetary Instruments Wilde -Haglund 74 19


Wilde -Haglund 74 16




















119 11 18 USC 1956 Laundering of Monetary InstrumentsWilde - Haglund-Gelazela

75 23


Wilde - Haglund-Gelazela

75 19



75 31



75 20

123 11 18 USC 1956 Laundering of Monetary InstrumentsWilde-Haglund-Woods

75 24


ActCrime


Page#

Instances


Wilde-Haglund-Woods

75 20


Wilde-Haglund-Woods

75 32


Wilde-Haglund-Woods

75 21

127 11 18 USC 1956 Laundering of Monetary Instruments Wilde - Haglund 75 25



Wilde - Haglund 75 21






18 USC 2315 - Sub Total : 22


Steven E Woods 76 22



Haglund 77 23


















150 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Mark A Gelazela 91 27





ActCrime


Page#

Instances







160 7 18 USC 1512Tampering with a witness, victim or aninformant

Scott A Koster 98 1


161 8 18 USC 1513Retaliating against a witness, victim, or aninformant

Scott A Koster 98 1


162 9 18 USC 1951Interference w/commerce by threats orviolence (Hobbs Act)

Scott A Koster 98 1






168 6 18 USC 1503 Obstruction of Justice Scott A Koster 105 1

169 6 18 USC 1503 Obstruction of Justice Kerim Emre 105 2

170 6 18 USC 1503 Obstruction of Justice John T Childs 105 3




Kerim Emre 108 5



Kerim Emre 108 6



Kerim Emre 108 7


Scott A Koster 122 2

178 23 Texas PC 31.03 Extortion Scott A Koster 122 1



John T Childs 126 3

181 23 Texas PC 31.03 Extortion John T Childs 126 2



183 23 Texas PC 31.03 Extortion Scott A Koster 127 3


John T Childs 127 5



ActCrime


Page#

Instances


Richard Hall 129 8

187 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Richard Hall 129 46


Christine Wong Sang 129 9

189 4 18 USC 1343 Fraud by wire, radio, or television (wire fraud) Christine Wong Sang 129 47


John T Childs 131 6


Texas PC 31.03 Sub Total: 5






18 USC 1343 - Sub Total 7




Richard Hall 162 10



Richard Hall 162 11

18 USC 1029A - Sub Total 11



Instances of all Predicate Acts Total: 201


§ 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 re-

alleged, 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

20120303102646 1stAmd'Cmplnt RICO - Complaint.wpd § VIII Page 177

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 three-

billion 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 Wiseguy’s 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 Syndicate’s

affairs, as described in this Complaint, through a pattern of racketeering activity,


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,


engage in a fraudulent contractual instruments or such instruments that would

be used for the Syndicate’s 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

Syndicate’s 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.


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.


8.2 COUNT 2

Racketeer Influenced and Corrupt Organizations Act (“RICO”)18 U.S.C. §§ 1962 (a)






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.


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.


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)






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


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.


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.


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)




8.5.2 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


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)




8.6.2 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


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)




8.7.2 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 Defendant’s 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


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)




8.8.2 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.


8.9 COUNT 9

Breach of Confidential or Special Relationship(Against all Defendants)




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;


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:


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;


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


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 Fund’s exposure to loss,

additionally, 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;” .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)




8.10.2 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,

See International Bankers Life Insurance Co., ibid. at FN 184

162 pg. 153


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.". The elements of a185

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.185

Appx. 338 (5th Cir. 2003) (quoting Aquila Southwest Pipeline, Inc. v. Harmony Exploration, Inc., 48S.W.3d 225, 235 (Tex. App. – San Antonio 2001, pet. denied))


have also established a fourth requirement of a definite finding that injustice can

be avoided only by the enforcement of the promise,” and for such breach of186

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)




8.11.2 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.186

denied, 519 U.S. 1078 (1997) (internal quotation marks and citation omitted).

See International Bankers Life Insurance Co., ibid. at FN 187

162 pg. 153


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 Clarkson’s 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.


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)




8.12.2 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


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.


§ IX OTHER PLEAS

9.1 PLAINTIFFS’ PLEA OF AGENCY & AUTHORITY




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.


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




9.2.2 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


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




9.3.2 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




9.4.2 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


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




9.5.2 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, 274188

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 exclusivecontrol of the defendant, the Court should make a second determination as to whether the claim aspresented warrants the allowance of discovery and if so, thereafter provide an opportunity to amendthe defective complaint") (citing Feinstein v. Resolution Trust Corp., 942 F.2d 34, 43 (1st Cir.1991)).


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,


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




9.6.2 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


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




9.7.2 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).


9.8 PLAINTIFFS PLEA OF DELAYED DISCOVERY FOR BREACH OF FIDUCIARY DUTY,

INCLUDING THE DUTY TO DISCLOSE




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




9.9.2 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).


9.10 PLAINTIFFS’ PLEA OF DELAYED DISCOVERY FOR INCLUSION OF NOMINAL

DEFENDANTS




9.11 PLAINTIFFS’ PLEA OF PRECLUSION FROM CLAIMING A BAR BY LIMITATIONS.




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.


§ X DAMAGES


paragraphs from § I through § IX of this Complaint are hereby re-averred and re-



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 Court’s

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 § X Page 213

11.5 with regard to all claims of aiding and abetting fraud, Plaintiffs pray for


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


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;


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 be immediately issued against destruction or spoliation189

of evidence herein as set forth in the Plaintiffs’ attachment First Notice - Demand for

Preservation of Evidence, and 190

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.

Plaintiffs have pled same in their 4/8/2011 Original Complaint.189

20120223172150 First Notice - Demand for Preservation of Evidence_ECF.pdf190


s/

R. LANCE FLORESLead Attorney

3314 Pleasant DriveDallas, Texas 75227 USATel. (Dallas): +1 (214) 272-0349Tel. (Fax): +1 (210) 519-6528ECF & Case Management E-mail:[email protected]

Attorney for the Plaintiff

s/

VICKI CLARKSON

2416 - 36 Street SWCalgary, AB T3E 2Z5Tel. (Calgary): +1 403-244-9980Tel. (Fax:) +1 (403) 246-3331ECF & Case Management E-mail:[email protected]

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/
