IN THE UNITED STATES DISTRICT COURT DALLAS DIVISION …media.litigation.mockingbirdfilms.com/Doc. 171 -- Pla Prpsd' Order...in the united states district court northern district of

IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

R. LANCE FLORES,VICKI CLARKSON,

Plaintiffs,

vs.

SCOTT ANTHONY KOSTER, et. al,Defendants.

))))))))

No. 3:11-cv-0726-M-BH

Referred to U.S. Magistrate Judge

ORDER OF DEFAULT JUDGMENTFOR EQUITABLE & MONETARY RELIEF PURSUANT TO 18 U.S.C. § 1962 et seq.,

PERMANENT INJUNCTION AND OTHER ANCILLARY RELIEF AGAINSTRICO DEFENDANT FRANCIS E. WILDE

Before the Court is Plaintiffs R. Lance Flores’ and Vicki Clarkson’s (the

“Plaintiffs”) motion for default judgment and order for compensatory and equitable

relief pursuant to 18 U.S.C. § 1962 et seq., permanent injunction and ancillary relief

against RICO Defendant FRANCIS E. WILDE (the “Defendant”).

I. INTRODUCTION

1. Plaintiffs filed their Original Complaint, petitioning for equitable and other

relief in this matter on April 8, 2011. Plaintiffs amended same with their First Amended

Complaint (the “Complaint”) on March 19, 2012, in behalf of themselves, and the

Nation’s Economic System in the Public interest under 18 U.S.C. § 1962 et seq., the

Racketeering Influenced and Corrupt Organizations Act (RICO) (the “Act”) citing Pub. L.

No. 91-452, 84 Stat., at 922, 923 and Lewis v. United States, 445 U.S. 55, 61 (1980) .

Their amended complaint was entered changing the suit status, removing and adding

defendants, seeking compensatory relief under the provisions 18 U.S.C. § 1962,

injunctive relief in behalf of the public interest pursuant to the congressional intent and

purpose of the Act, and for other ancillary relief on pendant claims for equitable relief.

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Case 3:11-cv-00726-M-BH Document 171 Filed 08/15/12 Page 1 of 37 PageID 2603

2. The Plaintiffs allege that the Defendants in their suit have engaged in

violations of 18 U.S.C. § 1962 (a), (c), and (d), further alleging two-hundred and one

predicate crimes; other overt criminal acts in furtherance of the conspiracy and

racketeering, 18 U.S.C. § 1962 et seq.; and pendant claims.

3. The Plaintiffs allege that Francis E. Wilde, Jon Divens, Steven E. Woods, Mark

Gelazela, Bruce H. Haglund and others through the Matrix Holdings LLC, iBalance LLC,

Alicorn Capital Management LLC, and other enterprises raised more than

eleven-million dollars from investors for “prime bank” and/or “high- yield” investment

programs. , including interest monies from Consolidated Mortgage Obligation

securities, none of which belonged to any of the Defendants. Plaintiffs also allege that

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

others stole a large amount of the assets including the monies raised in a number of

initial schemes, helping themselves to more than a combined $2.1 million in

undisclosed “fees” during their theft of funds that they alleged to have used to purchase

various financial instruments. These activities were initiated during the period in which

RICO Defendants Wilde, Divens, and Woods had stolen three Collateralized mortgage

obligations (CMOs), a type of mortgage-backed security (MBS), with total face values in

excess of One and one-half Billion Dollars (> $1,500,000,000 USD) and eventually

purchased numerous other bond and financial instruments for themselves using the

monies from investors and assets they had stolen .

4. Plaintiffs further allege that the RICO Defendants using the various Nominal

Defendants, engaged, are engaging and continue to engage in fraudulent acts,

racketeering and practices in connection with the solicitation, brokering, sale,

promotion, management and handling of client funds acquired through subscriptions to

Profit Sharing Agreements (PSA) secured by fraudulent Irrevocable Corporate Pay

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Order and Fee Protection Agreements (FPA), where “the profit for this program, based

on these instruments is 15% weekly or better, guaranteed in writing by the platform”

(doc. 1-3 at 7, PID 221). These client funds were then used in the transactional funding

platform whereby related financial instruments were created within various

association-in-fact business enterprises in which RICO Defendants Woods, Linder,

Gelazela, Reynolds, Koster, Childs, Emre and others delivered the funds to, after

skimming a portion of those funds from their clients, to RICO Defendant Francis Wilde

and others in his organization. Francis Wilde, in turn, used these funds to purchase

foreign standby letters of credit (SBLCs) to acquire nine medium term notes (MTNs)

and two currency bonds (CBs) from Bank of America Corporation and KFW Bank, the

aggregate having a total estimated face value in excess of Eighteen Billion Dollars. (See,

“Affidavit of R. Lance Flores,” doc. 153-1, 154-1, 155-1).

5. Plaintiffs were able to trace two of the instruments, one to Bank of America

Corporation and another to KFW Bank in Germany with maturity (face) values of Three

Billion and Five Billion respectively (doc. 36 at 42-43). They were also able to trace the

confirmation to the Defendants’ use of Plaintiffs funds to the Five Billion Dollar KFW

Bank instrument, through the mostly redacted MT999, SBLC information from the

HSBC confirmation transmittal document. The document was provided by RICO

Defendant Koster who delivered the document on February 4, 2010 to the Plaintiffs. (Ct.

Rec. doc. 1-4 at 21, PID 246).

6. Plaintiffs allege that the RICO Defendants and each associated Nominal

Defendant, “including those that later joined the founding membership, including the

identified RICO actors,” lied to them through false and misleading telephone

conversations, email messages, electronic documents and conferences (doc. 36 at 40).

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7. Plaintiffs pled the following cause of actions:

1. Count 1 Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.

1962(c) (Against the RICO Defendants)


1962 (a) (Against the RICO Defendants)


1962 (d) (Against the RICO Defendants)

4. Count 4 Fraud in the Inducement (Against all Defendants except Cook

and Divens)

5. Count 5 Common Law Fraud (Against all Defendants)

6. Count 6 Negligent Misrepresentation and Deceit (Against all

Defendants)

7. Count 7 Fraud by Non-disclosure (Against all Defendants)

8. Count 8 Aiding and Abetting Fraud (Against all Defendants)

9. Count 9 Breach of Confidential or Special Relationship (Against all

Defendants)

10. Count 10 Promissory Estoppel (Against all Defendants)

11. Count 11 Intentional Infliction of Emotional Distress (Against all

Defendants)

12. Count 12 Civil Conspiracy (Against all Defendants)

8. Plaintiffs pled the following relief:

1. 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, and that the amount of said damages be treble, and that

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Plaintiffs be awarded prejudgment interest, costs, and such other relief as is just

and proper, all pursuant to 18 U.S.C. §1964(c);

2. with regard to all claims of common law fraud, Plaintiffs pray for

compensatory damages, and that Plaintiffs be awarded prejudgment interest,

punitive damages, costs, and such other relief as is just and proper;

3. with regard to all claims of civil conspiracy, Plaintiffs pray for



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



5. with regard to all claims of statutory conversion, Plaintiffs pray for

three times actual damages, and that Plaintiffs be awarded, costs, and such other

relief as is just and proper;

6. with regard to all claims of negligence, Plaintiffs pray for compensatory

damages, and that Plaintiffs be awarded prejudgment interest, costs, and such

other relief as is just and proper;

7. 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;

8. that Plaintiffs be awarded prejudgment interest, costs, and such other

relief as is just and proper; and for

9. injunctive relief preventing the sale or disposition of Defendants’ assets

acquired through the diversion of funds from the Plaintiffs;

10. finding of alter ego status of all Defendants, if any;

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11. costs incurred in prosecuting this action;

12. additional and/or alternative relief as the Court may deem to be just,

equitable and appropriate, and

13. that an ORDER be immediately issued against destruction or

spoliation of evidence herein as set forth in the Plaintiffs’ attachment First Notice

- Demand for Preservation of Evidence (doc. 37), and

14. a permanent injunction against further abuse be issued;

15. that Plaintiffs have judgment against Defendants, jointly and severally,

for damages described;

16. that Defendants be cited to appear and affirmatively answer;

17. that Plaintiffs have judgment against Defendants for all these actual

damages, special damages (including incidental damages), prejudgment and

post-judgment interest, costs of the suit, and all other relief in law and in equity

to which Plaintiffs may be entitled.

9. Plaintiffs seek a finding that the Defendant FRANCIS E WILDE be found liable

for each cause of action alleged in the Complaint because of his participation in the

conspiracy and predicate crimes, that Nominal Defendants be found liable for receipt of

ill-gotten gains from the RICO Defendants to which they have no legitimate entitlement

and for the assessed joint and several damage amounts against the related RICO

Defendant; and

10. that Defendant should be permanently enjoined from involvement further

violations of the RICO Act and prohibited from engaging in the brokering, sales,

origination, or promotion of financial instruments, securities, or any related private or

public investment services.

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11. Further, the Plaintiffs requested that the Court enter an order holding each

of the Defendants jointly and severally liable for damages and RICO disgorgement, and

permanent injunction from engaging in commercial financial activities with the public.

12. Plaintiffs seek RICO monetary judgment of three times Plaintiffs pled actual

damages of not less than Two-hundred twenty million dollars ($220,000 USD) nor

more than Three hundred fifty seven million, fourteen thousand five hundred fifty eight

dollars ($357,014,558), actual damages prove-up by affidavit. Plaintiffs also seek

recovery against RICO Defendants’ assets in all forms, including recovery from Nominal

Defendants holding assets of RICO Defendants through turn-over orders, and orders of

disgorgement, divestiture, and clawback.

13. Plaintiffs’ allege that their facts and allegations, substantiate and warrant the

expectation that all Defendant’s will continue their involvement in criminal activity and

racketeering well into the future.

FOR THE REASONS STATED HEREIN, and after considering the evidence

adduced from the records of the court, and the Court after being fully advised in this

matter, GRANTS the motion for default judgment and FINDS, CONCLUDES AND

ORDERS:

II. FINDINGS

1. The Court has nationwide jurisdiction over the subject matter of this case and

personal jurisdiction over defendants in this action pursuant to 18 U.S.C. 1964.

2. Venue in the United States District Court for the Northern District of Texas is

proper under 18 U.S.C. § 1965.

3. Plaintiffs’ First Amended Complaint conforms to FRCP Rule 9(b).

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4. Plaintiffs’ filed ten (17) volumes of exhibits1 containing one-hundred

eighty-six (261) verified exhibits in evidence to support their complaint and

subsequent motions. Additionally, Plaintiffs filed a motion to take judicial notice of facts

which included three additional exhibits (docs. 93-1, 93-2, 93-3) for which the Court

has taken judicial notice.

5. The evidence in exhibit to the Court upon which it has made its

determinations and conclusions meets or exceeds the necessary standard or proof

required by the Act.

6. The Complaint states claims upon which relief may be granted against

Defendant.

7. The Court issued summons for the Defendant to appear which the Plaintiffs

served upon Defendant.

8. The Clerk of the Court entered default on August 9, 2012.

9. The activities of the Defendant affect interstate commerce, as described in the

definitions of predicate acts enumerated in 18 U.S.C. § 1961 and so pled by Plaintiffs.

10. The facts, evidence and allegations pled to the Court by the Plaintiffs’ prove

to be within the legislative intent of the Act which was “intended to provide new

weapons of unprecedented scope for an assault upon organized crime and its economic

roots.” See, Russello v. United States, 464 U.S. 16, 26 (1983). The primary purpose of

RICO is to address the “infiltration of legitimate business by organized crime,” whereas

the statute was designed to reach both “illegitimate” and “legitimate” enterprises.

United States v. Turkette, 452 U.S. 576, 590-91 (1981). The Supreme Court observes, the

1 Plaintiffs’ Exhibits: Vol. 1 (doc. 1-3, 1-4); Vol. 2 (doc. 1-5); Vol. 3 (doc. 1-6); Vol. 4 (doc. 1-7); Vol. 5

(doc. 1-8); Vol. 6 (doc. 1-9); Vol. 7 (doc. 1-10); Vol. 7A (doc. 27); Vol. 8 (doc. 10-1- under seal); Vol. 9 (doc. 57);

Vol. 10 (doc. 111); Vol. 11 (doc. 112); Vol. 12 (doc. 113); Vol. 13 (doc. 114); Vol. 14 (doc. 115); Vol. 15

(doc. 116); Vol. 16 (doc. 117).

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intellection that RICO is limited to “organized crime,” however defined, though it “finds

no support in the Act’s text, and is at odds with the tenor of its legislative history.” H.J.

Inc. v. Northwestern Bell Telephone Co. 492 U.S. 229, 244 (1988). Accordingly, the

conduct and culpability of the RICO Defendant, and the actions, responsibility and

liability of the associated Nominal Defendant(s), fit well into a pattern of racketeering of

the legislation enacted by Congress over the years as general reform, aimed at a specific

target, but not limited to the specific target.

11. Because of Defendant’s default, the allegations in the Plaintiffs’ First

Amended Complaint filed in this action shall be taken as true.

12. Mark Alan Gelazela and William Chandler Reynolds are the managing

members of Idlyc Holdings Trust LLC, a Florida limited liability company. (doc. 1-9 at

66, PID 479) Idlyc Holdings Trust LLC registered agent is Mark Alan Gelazela who is

located at 26 Marlwood Lane, Palm Beach Gardens, Florida 33418. (doc. 1-9 at 65,

PID 478)

13. Gelazela and Reynolds are also the managing members of iBalance LLC

which is a Florida limited liability company. (doc. 1-9 at 75, PID 488)

14. Gelazela received his fees for the bank guarantee scheme in a bank account

held in the name of iBalance. (doc. 36 at 23, PID 821)

15. William Chandler Reynolds is the registered agent of iBalance LLC, located at

26 Marlwood Lane, Palm Beach Gardens, Florida 33418. (doc. 1-9 at 75, PID 488)

16. Idlyc Holdings Trust (IHTNZ) is located at 9 Melody Lane, Ruakura Road,

Hamilton 3216, New Zealand [Hamilton, NZ], is a New Zealand foreign trust for which

Gelazela is the settlor and trustee. (doc. 36 at 24, PID 822) Idlyc Holding Trust (NZ) and

Mark Alan Gelazela are the managing members of Godspeeds Endeavors LLC. (doc. 1-9

at 78, PID 491).

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17. A memorandum of agreement for a bank guarantee for One-hundred Million

Dollars ($100,000,000 USD) and/or more up to $/€ 110,000,000,000 with rolls and

extensions, was proffered by Scott Koster as proof of the contract between Alicorn

Capital Management LLC and Idlyc Holdings Trust (NZ) on December 3, 2009. (doc. 1-4

at 5, PID 230).

18. [4.1.4] Defendants Woods, Linder, Gelazela, Reynolds, Koster, Childs, Emre,

Melissa Shapiro and others presented security for investment funds based on a written

bank guarantee on a Deutsche Bank SBLC instrument and monetization of that SBLC

through HSBC Hong Kong (doc. 1-4 at 21, PID 246). Scott Anthony Koster’s Alicorn

Capital Management LLC company was used as a funneling tool overseen by Koster to

move funds into the Idlyc Holdings Trust/BMW Majestic investment platform. The RICO

Defendants used a complex network of their companies and other indirect network

resources to accomplish their theft of money, frauds and criminal activities. [415] 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 elsewhere to avoid paying investors and thereby

effecting a laundering scheme of the Defendants ill-gotten funds. The primary purpose

of the RICO Defendants and the enterprises related to the Defendant was to generate

money for themselves and enterprise members and associates. (doc. 36 at 41, PID 839).

19. Scott Koster, whose then legal counsel was Thomas P. Harlan, on March 15,

2010, stated "Myself [sic] and my attorney have seen proof with our own eyes of this

working, and where the holdup is, so its [sic] not an issue of nonperformance, or

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deliberate delays" ( doc. 1-5 at 5, PID 252).

20. Koster follows, though a message distributed by John Childs, on March 26,

2010, Koster:

"… As some of you know, for several weeks there have beenrampant rumors going around that funds for this program have been sentto the US and to NZ, that funding has taken place for clients in Australia,that the program had closed, and several others. Only one of those has anytruth to it. Funds have been received here in the US for the purpose of ourprogram through IDLYC, as well as several others. This has been 100%confirmed to be true directly by the head trader at HSBC HK, as well as bythe CEO's of IDLYC, the two bodies transacting this program for all of theprincipals" (doc. 1-5 at 7, PID 254).

21. The Court finds that a significant number of the RICO Defendants' financial

transactions that the Plaintiffs were able to identify between the time of the Original

Complaint filing and their filing of their First Amended Complaint, were primarily

located offshore. This includes Wilde's Swiss bank accounts at Wegelin Bank and Falcon

Bank, and an account at Rosbank in Moscow; Gelazela's bank in New Zealand for Idlyc

Holding Trust; as well as the purchases of eleven financial instruments identified above,

only one of which is a domestic instrument.

22. The Court having found that a substantial amount of identified financial

institutions offshore where the Defendant, now a Judgment Debtor, may control the

majority of the assets accumulated in the various racketeering activities, further finds

that the Court' ability to enforce its Order is in jeopardy. The Court authority and power

to enforce its Order threatened if the Judgment Debtor subject to the order,

demonstrates a risk of flight because (I) a large amount of assets lie outside the Courts

jurisdiction and control, (ii.) the Court is faced with a Judgment Debtor who has

previously transacted large financial operations, captured and controlled client funds,

and had established procedures for "receiving SWIFT MT 760 BG [bank guarantee] for

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$100 Million or ‘INS VALUE' …"from abroad, ( doc. 1-4 at 6, PID 231), for which, (iv.) all

of the funds are now subject to the Court's Order, and (v.) the Defendants involved in

this scheme have demonstrated a collusion to coordinate and act in unison to conceal

information and the accurate reporting of financial transactions, that would have

revealed the transfers of Plaintiffs' earnings. The Plaintiffs' First Amended Complaint is

replete with examples of concealment, vagueness, and refusal to provide information

lawfully due the Plaintiffs by Koster and Gelazela.

23. The Court finds that the extra-territorial location of the funds threaten its

ability to enforce the production order of the Court take substantial effort to enforce the

Order if it were possible at all. In that limited circumstance, a concomitant order

exercising some minimal control, in the form of a passport seizure, is permissible and

necessary.

24. The Northern District of Texas Dallas Division have take steps of such

measures before, for example in SEC v. W Financial Group, LLC, et al., 3:08-cv-00499-N,

issuing passport seizure as part of contempt sanctions. (Case 3:08-cv-00499-N doc.

347, 01/22/2010) However, this Court needn't await an act of contempt to force the

surrender of Defendant's passport, when such a proceeding in this case would be far

too late once the flight has been taken.

Bank of America, NA v. Veluchamy, 643 F. 3d 185 (CA 7th Cir. 2011):

"… the power to order a party to produce funds includes the power toexercise some minimal control over the party subject to that order—but onlywhen doing so is necessary to protect the court's ability to enforce theunderlying order and prevent the loss of assets. Cf. Herbstein v. Bruetman,241 F.3d 586, 588-89 (7th Cir. 2001) (contempt power includes the powerto seize a party's passport); SEC v. Lauer, 52 F.3d 667, 671 (7th Cir. 1995)(injunction power reaches orders "essential to prevent the dissipation ofassets"). Whether such controls are necessary will depend upon the

12


circumstances of the case, but it will be a rare case where any extraordinarysteps are needed …

"The district court found that this was the rare case where such an order wasjustified, and we agree. The bases for findings of necessity and flight riskwere clear and largely uncontested. The district court was faced with debtorswho had previously transferred abroad all of the funds now subject to theorder and were simultaneously hesitant to disclose information that wouldhave revealed those transfers. The district court found that theextra-territorial location of the funds threatened its ability to enforce theproduction order; in other words, it found that the only way it could accessthe funds at issue was through the Veluchamys. The court also found that theVeluchamys had minimal assets in the United States, what appeared to besignificant assets abroad, and a reluctance to disclose those facts, all of whichestablished some flight risk. We see no clear error with those findings, andbelieve they are adequate to support the minimal seizure imposed. Cf. UnitedStates v. Shaheen, 445 F.2d 6, 11-12 (7th Cir. 1971) (suggesting that a districtcourt's seizure of a party's passport is permissible when a judgment hasbeen entered, when there have been significant transfers abroad, and whendomestic funds would be inadequate to satisfy the judgment). Nor do we seeany fatal flaw in the form those findings took; while a district court shouldenter findings to support an injunction, a lack of findings does not necessitateremand where—as here— there is "a sufficient record from which we canrender a decision." Dexia Credit Local v. Rogan, 602 F.3d 879, 885 (7th Cir.2010)."

Herbstein v. Bruetman, 241 F. 3d 586 (CA 7th Cir. 2001):"Just as a litigant held in civil contempt has the keys in his own pocket — forhe will be released as soon as he cooperates — so Bruetman can get hispassport back whenever he pleases. All he need do is complete theexamination, fully disclosing all of his assets. Then the proceedings will endand Bruetman will be free to travel (though his assets must stay behind).Bruetman's enduring refusal to cooperate — first by failing to appear forexamination, then by leaving the country, next by concealing his return to theUnited States, and now by using bankruptcy as the excuse for refusing toundergo more questioning — amply justifies restricting his ability to skip thecountry yet again …

"Nonetheless, Bruetman insists, the collection proceeding should bedismissed without taking any further evidence. He gives two reasons: thebankruptcy proceeding and the long duration of the collection proceeding.Neither carries the day. A bankruptcy court does not attempt to enforcejudgments; the court determines creditors' entitlements, but after these have

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been fixed it remains essential to lay hands on the debtor's assets, so thereis room for collection proceedings such as this. Even if the default judgmentwere treated as creating an ordinary unsecured debt subject to discharge,Bruetman still would have to surrender all of his assets (other than thosecovered by an exemption). Bruetman has fought tooth and nail to avoidrevealing his assets; we cannot imagine why an asset-discovery proceedingunder way for eight years should be dismissed and Herbstein forced to startfrom scratch in the bankruptcy — especially when the bankruptcy mightitself be dismissed as filed in bad faith. The collection proceeding hasoutlasted the six-month line in Ill. S.Ct.R. 277(f), but that rule adds: "Thecourt may, however, grant extensions beyond the 6 months, as justice mayrequire." Justice requires an extension, so that Bruetman's shenanigans donot defeat his creditor's rights. Herbstein is entitled to six months ofcooperation from Bruetman. See RTC v. Ruggiero, 994 F.2d 1221, 1228 (7thCir.1993). So far as we can see, however, he has received only one day ofcooperation in an eight-year period. This citation proceeding will continueuntil Herbstein has received his due."

25. The Court finds that Plaintiffs' have alleged, with supporting evidence,

numerous predicate crimes committed by the Defendant and other RICO actors, a sum

of two-hundred and one predicate crimes against the aggregate RICO Defendants, and

have yet begun discovery. (doc. 36 at 175-182)

26. The Court finds itself faced with preserving its authority and must account

for, given the Plaintiffs' virtually unanswered two-hundred page complaint and the

history of this case, the apparent inevitable. This Court responds in kind with an order

designed to assure Defendant's compliance. The Plaintiffs' complaint is consumed with

the wrought their labours and frustration with the Defendants, and they deserve

answers to their queries. This Court will not allow for the continuation of such abuse

into its province and undermine its authority and duties. Finding this to be one of those

rare instances where it is necessary for the Court to extend the full extent of its

authority and reach, the surrender of the Defendant's passport should be taken into the

district court's care.

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Further the Court finds:

27. Defendant was served on June 30, 2012, proof of service was subsequently

filed with the Clerk of the Court;

28. Defendant was notified of Plaintiff's motion for a default judgment on August

8, 2012.

29. Pursuant to Fed. R. Civ. P. 55(a), the Clerk of the Court properly entered

Defendant's default on August 9, 2012. Clerk's Entry of Default ( doc. 157-2 at 1, PID

2330)

30. The Defendant has failed to timely plead or otherwise defend as to the

Plaintiffs' First Amended Complaint within the time permitted by FED. R. CIV. P.

12(a)(I).

31. Entry of a default judgment under Federal Rule of Civil Procedure 55 against

Defendant is appropriate because the Defendant is not an infant or an incompetent

person, a minor and is not otherwise exempt from default judgment under the Soldiers'

and Sailors' Civil Relief Act of 1940.

III. DEFINITIONS

For purposes of this Order (“Order”), the following definitions shall apply:

1. “Business venture” means any written or oral business arrangement, however

denominated, or that consists of the payment of any consideration for:

1. the right or means to offer, sell, trade or distribute financial goods,

instruments or services (whether or not identified as registered, private, or by a

trademark, service mark, trade name, advertising, or other commercial symbol);

and

2. more than nominal assistance to any person or entity in connection

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with or incident to the establishment, maintenance, or operation of a new

business or the entry by an existing business into a new line of business.

2. “Asset” or “Assets” means any legal or equitable interest in, right to, or claim

to, any real or personal property, including, but not limited to, “goods,” “instruments,”

“equipment,” “fixtures,” “general intangibles,” “inventory,” “checks,” or “notes” (as these

terms are defined in the Uniform Commercial Code), lines of credit, chattels, leaseholds,

contracts, mail or other deliveries, shares of stock, lists of consumer names, accounts,

credits, premises, receivables, funds, and all cash, wherever located.

3. “Assisting others” includes, but is not limited to:

1. performing customer service functions, including, but not limited to,

receiving or responding to consumer complaints;

2. formulating or providing, or arranging for the formulation or provision

of, any sales script or other marketing material;

3. providing names of, or assisting in the generation of, potential

customers;

4. performing or providing marketing or billing services of any kind;

5. acting as an officer or director of a business entity; or

6. providing telemarketing services.

4. “Defendant” means the person Francis E. Wilde

5. “Individual Defendants” means:

1. RICO Defendants 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 d/b/a Interlink Global Messaging (“IGM”), Richard D. Hall, Winston

Jerome Cook, any and all additional Unknown Parties as John/Jane DOE(s), and

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2. Nominal Defendants Alicorn Capital Management LLC, Bank of

America, Defendant, BMW Majestic LLC, Brandon Colker, Busch Law Center LLC,

Cook Business Services LLC, Deutsche Bank, & Deutsche Bank AG London

Branch, Gregory Botolino, Hongkong and Shanghai Banking Corp. Ltd., Ti,

(HSBC) Hong Kong, China, Ibalance LLC, Idlyc Holdings Trust LLC (USA), Idlyc

Holdings Trust (New Zealand), Interlink Global Messaging, Larry J. Busch, Jr.,

Matrix Holdings LLC ("Matrix"), Maureen O’flanagan Wilde, 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, and by whatever other

names each may be known.

6. “Corporate Defendants” means any of the Individual Defendants that are not

natural persons, whether they are a Corporation, Limited Liability Company, Private

Company, or a partnership of any type including any form of business identified as

“doing business as” (e.g., Interlink Global Messaging (“IGM”)). The term Corporate

Defendants shall include successors and assigns, as well as any subsidiaries, and any

fictitious business entities or business names created or used by these entities, or any

of them.

7. “Defendants” means all of the Individual Defendants and the Corporate

Defendants, individually, collectively, or in any combination.

8. “Document” or “Documents” means any materials listed in Federal Rule of

Civil Procedure 34(a) and includes writings, drawings, graphs, charts, photographs,

audio and video recordings, computer records, and other data compilations from which

intonation can be obtained and translated, if necessary, into reasonably usable form

through detection devices. A draft or nonidentical copy is a separate Document within

17


the meaning of the term.

9. “Financial Institution” means any bank, savings and loan institution, credit

union, or any financial depository of any kind, including, but not limited to, any

brokerage house, trustee, broker-dealer, escrow agent, title company, commodity

trading company, or precious metal dealer.

10. “Material” means likely to affect a person’s choice of, or conduct regarding,

goods or services.

11. “Person” means a natural person, an organization or other legal entity,

including a corporation, partnership, sole proprietorship, limited liability company,

association, cooperative, or any other group or combination acting as an entity.

12. “Plaintiff” or “Plaintiffs” means the Plaintiff R. Lance Flores or Vicki Clarkson

as specifically identified, or collectively, both Plaintiffs.

13. “Telemarketer” means any person who, in connection with telemarketing,

initiates or receives telephone calls to or from a customer.

14. “Telemarketing” means a plan, program, or campaign which is conducted to

induce the purchase of goods or services or a charitable contribution by use of one or

more telephones.

15. “Receivership Defendants” means any Defendant holding or controlling an

IOLTA or other escrow account or an financial instruction account of similar nature, and

their successors and assigns, as well as any subsidiaries, and any fictitious business

entities or business names created or used by these entities, or any of them.

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ORDER

IV. PROHIBITED BUSINESS ACTIVITIES

1. It is hereby ORDERED that Defendant, and his agents, servants, employees,

attorneys and all other persons or entities in active concert or participation with them

who receive actual notice of this Order by personal service or otherwise, whether acting

directly or through any corporation or other entity, are hereby restrained and enjoined

from:

2. Making or assisting others in making, expressly or by implication, orally or in

writing, any false or misleading statement in connection with the advertising,

marketing, promotion, offering for sale, sale, or distribution of any financial product or

service in the concerns of Defendant and any assigns, agents, successors, subsidiaries,

holding companies, and related entities, and any other persons or entities under their

control or in concert or participation with them:

3. Defendant and any assigns, agents, successors, subsidiaries, holding

companies, and related entities, and any other persons or entities under their control or

in concert or participation with them, now or in the future, shall be permanently

enjoined in the United States, and its territories, from engaging, assisting, or otherwise

participating directly or indirectly in the trading, brokerage, sales, advertising,

promotion, publication, distribution, or disseminating any information, including written,

oral, or video, directly or indirectly, in exchange for money or anything of value, relating to

commercial or private financial instruments, including treasury bonds, corporate

bonds, government bonds, registered or unregistered securities, collateralized

mortgage obligations (CMOs), mortgage loans, private placement financial instruments,

medium term notes (MTNs), standby letters of credit (SBLC), letters of credit (LC),

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mortgage loan origination, mortgage brokerage activity, mortgage assistance, mortgage

relief, principal reductions, mortgage purchases or negotiations, foreclosure consulting,

loan modifications, residential real estate, appraisals, title services, underwriting,

lending, or loan or forensic audits.

V. CORPORATE OFFICERS LIST

1. Defendant shall provide to Plaintiffs or to an assigned government agency if so

assigned, a list of Defendant’s Corporate Officers and their complete contact

information including telephone and telephonic facsimile numbers, electronic mail

address(s), and business and residential domiciliary address where U.S. Postal Service

mail can be delivered.

VI. CUSTOMER LISTS

IT IS FURTHER ORDERED that Defendant and any assigns, agents, successors,

subsidiaries, holding companies, and related entities, and any other persons or entities

under their control or in concert or participation with them, now or in the future, shall

be permanently enjoined in the United States, and its territories, employees, attorneys,

and all other persons or entities in active concert or participation with them who

receive actual notice of this Order by personal service or otherwise, are permanently

restrained and enjoined from selling, renting, leasing, transferring, or otherwise

disclosing the name, address, telephone number, credit card number, bank account

number, email address, or other identifying information of any person who paid any

money to Defendant, at any time prior to entry of this order, in connection with the

marketing and sale of any investment opportunity. However, Defendant shall disclose

such identifying information to Plaintiffs for discovery purposes in this case, and any

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law enforcement agencies or as required by any law, regulation, or court order.

VII. MONETARY RELIEF

1. IT IS FURTHER ORDERED that Defendant is JOINTLY AND SEVERALLY

LIABLE (inclusive of Defendants and Nominal Defendants added in Plaintiffs First

Amended Complaint yet served) for monetary relief in a treble amount of the actual

damages pled being {RICO Compensatory Damage Award} Million Dollars

($NNN,NNN,NNN USD).

2. The total amount of damages pursuant to 18 U.S.C. §1962 et seq., assessed

against the Defendant, inclusively, jointly and severally, is {3 × RICO Compensatory

Damage Award} Million Dollars ($NNN,NNN,NNN USD) and any other damages so

determined by the Court.

VIII. DUTIES OF THIRD PARTIES HOLDING DEFENDANT’S ASSETS

IT IS FURTHER ORDERED that,

1. any financial institution, business entity, or person maintaining or having

custody or control of any account or other asset of the Defendant, or any corporation,

partnership, or other entity directly or indirectly owned, managed, or controlled by, or

under common control with the Defendant, which is served with a copy of this Order,

or otherwise has actual or constructive knowledge of this Order, shall:

2. Hold and retain within his/their/its control and prohibit the withdrawal,

removal, assignment, transfer, pledge, hypothecation, encumbrance, disbursement,

dissipation, conversion, sale, liquidation, or other disposal of any other assets, funds,

documents, or other property held by, or under his/their/its control:

1. on behalf of, or for the benefit of, the Defendant or any other party

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subject to the above;

2. in any account maintained in the name of, or for the benefit of, or

subject to withdrawal by, the Defendant or other party subject to the above; and

3. that are subject to access or use by, or under the signatory power of,

the Defendant or other party subject to the above.

3. Deny Defendant’s access to any safe deposit boxes or storage facilities that are

either:

1. titled in the name, individually or jointly, of the Defendant, or other

party subject to the above; or

2. subject to access by the Defendant or other party subject to the above.

4. Provide the Plaintiffs, within five (5) days of the date of service of this Order, a

sworn statement setting forth:

1. the identification number of each account or asset titled in the name,

individually or jointly, of the Defendant, or held on behalf of, or for the benefit of,

the Defendant or other party subject to Section II above, including all trust

accounts managed on behalf of the Defendant or subject to the Defendant’s

control;

5. The balance of each such account, or a description of the nature and value of

such asset;

6. The identification and location of any safe deposit box, commercial mail box,

or storage facility that is either titled in the name, individually or jointly, of the

Defendant, or is otherwise subject to access or control by the Defendant or other party

subject to above, whether in whole or in part; and

7. If the account, safe deposit box, storage facility, or other asset has been closed

or removed, the date closed or removed and the balance on said date.

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8. Allow representatives of Plaintiffs immediate access to inspect and copy, or

upon Plaintiffs’ request, within five (5) business days of said request, provide the

Plaintiffs with copies of all records or other documentation pertaining to each such

account or asset, including, but not limited to, originals or copies of account

applications, account statements, corporate resolutions, signature cards, checks, drafts,

deposit tickets, transfers to and from the accounts, all other debit and credit

instruments or slips, currency transaction reports, 1099 forms, and safe deposit box

logs; and

9. This Section shall apply to existing accounts and assets, assets deposited or

accounts opened after the effective date of this Order, and any accounts or assets

maintained, held or controlled two years prior to the effective date of this Order. This

Section shall not prohibit transfers in accordance with any provision of this Order, any

further order of the Court, or by written agreement of the parties.

IX. REPATRIATION OF ASSETS AND DOCUMENTS LOCATED IN FOREIGN COUNTRIES

IT IS FURTHER ORDERED that Defendant shall:

1. Within three (3) business days following service of this Order, take such steps

as are necessary to repatriate to the territory of the United States of America all

Documents and Assets that are located outside such territory and are held by or for the

Defendant or are under Defendant’s direct or indirect control, jointly, severally, or

individually. Defendant shall provide to Plaintiffs within twenty-four hours by

overnight mail or courier, or email with read receipt, of the proof of transactions for the

repatriation of each account including all transmittal documents, and the contact

information including telephone number of the financial officer overseeing the

repatriation transaction of each transaction of each financial institution.

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2. Within three (3) business days following service of this Order, Defendant shall

provide to Plaintiffs within twenty-four hours by overnight mail or courier, or email

with read receipt, with a full accounting of all Documents and Assets that are located

outside of the territory of the United States of America or that have been transferred to

the territory of the United States of America and are held by or for the Defendant or are

under the Defendant’s direct or indirect control, jointly, severally, or individually,

including the addresses and names of any foreign or domestic financial institution or

other entity holding the Documents and Assets, along with the account numbers and

balances;

3. Hold and retain all such Documents and Assets and prevent any transfer,

disposition, or dissipation whatsoever of any such Documents or Assets; and

4. Within three (3) business days following service of this Order, provide

Plaintiffs access to Defendant’s records and Documents held by Financial Institutions or

other entities outside the territory of the United States of America, by signing and

delivering to Plaintiffs or Plaintiffs’ counsel the Consent to Release of Financial Records

attached to this Order as Attachment "B."

5. Defendant shall attach to these completed financial statements copies of all

local, state, provincial, and federal income and property tax returns, with attachments

and schedules, as called for by the instructions to the financial statements.

X. SURRENDER OF PASSPORT AND TRAVEL RESTRICTION

1. The Defendant, now a Judgment Debtor, is hereby ordered to forthwith

temporarily turn over his passport(s) of any kind and any other documents that would

permit international travel (whether United States-issued or otherwise) to this Court's

Courtroom Deputy, by personal or U.S.P.S. Certified Express Mail. The passport shall

24


remain in the Courtroom Deputy's possession until the earlier of (a) Defendant’s

compliance with the provisions of this Order and completion of Plaintiffs’ discovery, (b)

the Defendant’s/Judgment Debtor’s repatriation of monies or financial instruments

created or transferred outside the United States since June 1, 2009 and deposit thereof

into the Plaintiffs’ accounts per their direction, (c) the Defendant’s/Judgment Debtor’s

provision of evidence satisfactory to the Court that the monies were transferred for

legitimate reasons other than to remove assets from the jurisdiction of the Court or

hide it from Plaintiffs, (d) satisfaction of Plaintiffs, or (e) further order or direction of

the Court.

2. The Defendant/Judgment Debtor may not leave the United States before

complying with the Court’s judgment, nor may he travel outside the Unities States while

his passport(s) and other travel documents are held by the Court.

XI. MAINTENANCE OF RECORDS AND REPORTING OF NEW BUSINESS ACTIVITY

IT IS FURTHER ORDERED that Defendant, and (officers, agents, servants, employees,

and attorneys, and all other persons in active concert or participation with any of them,

who receive actual notice of this Order by personal service or otherwise, whether acting

directly or through any trust, corporation, subsidiary, division, or other device, or any of

them, are hereby restrained and enjoined from:

1. Failing to create and maintain books, records, accounts, bank statements,

current accountants’ reports, general ledgers, general journals, cash receipt ledgers,

cash disbursement ledgers and source documents, documents indicating title to real or

personal property, and any other data which, in reasonable detail, accurately, fairly and

completely reflect the incomes, disbursements, transactions, dispositions, and uses of

25


the Defendant’s assets;

2. Destroying, erasing, mutilating, concealing, altering, transferring, or otherwise

disposing of, in any manner, directly or indirectly, any Documents, including

electronically-stored materials, that relate in any way to the business practices or

business or personal finances of Defendant; to the business practices or finances of

entities directly or indirectly under the control of Defendant; or to the business

practices or finances of entities directly or indirectly under common control with any

other Defendant; and

3. Creating, operating, or exercising any control over any new business entity,

whether newly formed or previously inactive, including any partnership, limited

partnership, joint venture, sole proprietorship, or corporation, without first providing

Plaintiff with a written statement disclosing: (I) the name of the business entity; (2) the

address and telephone number of the business entity; (3) the names of the business

entity's officers, directors, principals, managers, and employees; and (4) a detailed

description of the business entity's intended activities.

XII. EXPEDITED DISCOVERY

IT IS FURTHER ORDERED that:

1. To determine the appropriate total amount of equitable monetary relief in this

matter, and in lieu of the time periods, notice provisions, and other requirements of

Federal Rules of Civil Procedure 26, 30, 33, 34, 36 and 45, the Plaintiffs are granted

leave to conduct discovery at any time after service of this Order. The Plaintiffs may

depose witnesses upon notice of three (3) business days. The Plaintiffs may require

that all responses to subpoenas duces tecum be served within five (5) calendar days of

the service of such discovery.

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2. In addition, and in lieu of the time periods, notice provisions, and other

requirements of Rules 26, 30, 33, 34, 36 and 45, the Defendant shall respond to

interrogatories, requests for production of documents, or requests for admissions,

within ten (10) calendar days after service of the interrogatories or requests.

Deposition transcripts that have not been signed by a witness may be used at any

hearing on equitable monetary relief;

3. The limitations and conditions set forth in Rules 30(a)(2)(B) and 31(a)(2)(B)

of the Federal Rules of Civil Procedure regarding subsequent depositions of an

individual shall not apply to depositions taken pursuant to this Section.

4. Any such depositions shall not be counted toward any limit on the number of

depositions under the Federal Rules of Civil Procedure or the local rules of procedure

for the United States District Court for the Northern District of Texas, including those

set forth in Rules 30(a)(2)(A) and 31(a)(2)(A) of the Federal Rules of Civil Procedure.

Any interrogatories served pursuant to this Section shall not be counted toward any

limit on the number of interrogatories under the Federal Rules of Civil Procedure or the

local rules of procedure for the District Court for the Northern District of Texas,

including that limit set forth in Rule 33(a) of the Federal Rules of Civil Procedure; and

5. Service of discovery, including subpoenas pursuant to this Section, may be

accomplished by any of the following means: facsimile transmission, courier service,

electronic mail, or by hand.

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XIII. FINANCIAL STATEMENTS AND ACCOUNTING

IT IS FURTHER ORDERED that, within ten (10) business days following the service of

this Order, Defendant shall provide Plaintiffs or their counsel:

1. A completed financial statement accurate as of the date of service of this

Order upon Defendant on the form attached to this Order as Attachment A1;

2. For all financial products or financial services marketed, promoted, offered for

sale, distributed, or sold by Defendant, a detailed accounting, verified under oath, of:

1. All gross revenues obtained from the sale of each such product or

service (broken down by month) from inception of sales through the date of the

issuance of this Order;

2. The total amount of each such product or service sold; and

3. The full names, addresses, and telephone numbers of all clients, or

purchasers of each such product or service; and

4. A completed and signed Consent To Release Financial Records form,

Attachment B, permitting Defendant’s banks and financial institutions to make

records available to Plaintiff upon request. The release shall be returned to

Plaintiff within three (3) business days after service of this Order.

XIV. WITHHELD MAIL


1. Within ten (10) days after the date of entry of this Order, Defendant shall

direct all Commercial Mail Receiving Agencies (“CARA”) where they have maintained an

account relating to the subject matter of this Order to:

2. Close such account(s);

3. Mark any mail that is addressed to him or to any name under which he has

28


done business, “Return to Sender” or a similar designation;

4. Return the mail to the sender; and

5. Within ten (10) days after the date of entry of this Order, Defendant shall

provide to the Plaintiffs the names, if any, of the CERAS instructed subsection of this

Section.

XV. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring and investigating

compliance with any provision of this Order:

1. Within ten (10) days of receipt of written notice from the Plaintiffs, their

attorney, or a representative accountant for the Plaintiffs, Defendant shall submit

additional written reports, which are true and accurate and sworn to under penalty of

perjury; produce documents for inspection and copying; appear for deposition; and

provide entry during normal business hours to any business location in each Defendant

possession or direct or indirect control to inspect the business operation;

2. In addition, the Plaintiffs are authorized to use all other lawful means,

including but not limited to:

1. obtaining discovery from any person, without further leave of court,

using the procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, 45 and 69;

2. posing as consumers and suppliers to Defendant, his employees, or any

other entity managed or controlled in whole or in part by Defendant, without the

necessity of identification or prior notice; and

3. Defendant shall permit Plaintiffs, Plaintiffs’ attorney(s), accountant or

Certified Public Account, licensed private investigator, or representatives of the

Plaintiffs to interview any employer, consultant, independent contractor,

29


representative, agent, or employee who has agreed to such an interview, relating

in any way to any conduct subject to this Order. The person interviewed may

have counsel present. Provided however, that nothing in this Order shall limit

the Plaintiffs’ lawful use of compulsory process, to obtain any documentary

material, tangible things, testimony, or information relevant to unfair or

deceptive acts or practices in or affecting commerce (within the meaning of 18

U.S.C. § 1962 et seq.)

XVI. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that, in order that compliance with the provisions of this

Order may be monitored:

1. For a period of five (5) years from the date of entry of this Order, Defendant,

shall notify the Plaintiffs of the following:

1. Any changes in Defendant’s business locations, domiciliary residence,

mailing addresses, and telephone numbers, within ten (10) days of the date of

such change;

2. Any changes in Defendant’s corporate status (including dissolution),

and any change in Defendant’s ownership in any business entity, within ten (10)

days of the date of such change. In the case of dissolution, the officers of the

dissolved Francis E. Wilde corporation shall each be encumbered with the

stipulations and requirements of this Order. Notice shall include the name and

address of each business that Defendant is affiliated with, engaged for services,

creates or forms, or performs services for; a detailed description of the nature of

the business; and

3. a detailed description of a Defendant’s duties and responsibilities in

30


connection with the business or service; and

4. any changes in a Defendant’s name or use of any aliases or fictitious

names;

5. Defendant shall notify the Plaintiffs of any changes in structure of any

business entity that a Defendant directly or indirectly controls, or has an

ownership interest in, that may affect compliance obligations arising under this

Order, including but not limited to: incorporation or other organization; a

dissolution, assignment, sale, merger, or other action; the creation or dissolution

of a subsidiary, parent, or affiliate that engages in any acts or practices subject to

this Order; or a change in the business name or address, at least thirty (30) days

prior to such change, provided that, with respect to any proposed change in the

business entity about which a Defendant learns less than thirty (30) days prior

to the date such action is to take place, the Defendant shall notify the Plaintiffs as

soon as is practicable after obtaining such knowledge.

6. One hundred eighty (180) days after the date of entry of this Order and

annually thereafter for a period of five (5) years, Defendant shall provide a

written report to the Plaintiffs, which is true and accurate and sworn to under

penalty of perjury, setting forth in detail the manner and form in which he has

complied and is complying with this Order. This report shall include, but not be

limited to:

7. The Defendant’s then-current residence address, mailing addresses,

and telephone numbers;

8. Defendant’s then-current services status (including subcontracting

services), including the name, addresses, and telephone numbers of each

business that Defendant is affiliated with, employed by, or performs services for;

31


a detailed description of the nature of the business; and a detailed description of

Defendant’s duties and responsibilities in connection with the business or

employment;

9. A copy of each acknowledgment of receipt of this Order, obtained

pursuant to the Section titled “Distribution of Order;” and

10. Any other changes required to be reported under any subsection of

this Section.

2. Defendant shall notify the Plaintiffs of the filing of a bankruptcy petition

within fifteen (15) days of filing. Defendant shall inform the Bankruptcy Court of this

Order.

3. For the purposes of this Order, Defendant shall, unless otherwise directed by

the Plaintiffs’ or Plaintiffs attorney(s), authorized representatives, send by overnight

courier all reports and notifications required by this Order to the Plaintiffs addresses

identified in their First Amended Complaint or as may be later directed by Certified

Mail through the U.S. Postal Service, Certified E-mail, courier, or electronic telephonic

facsimile to the Defendant.

4. A Defendant may send such reports or notifications by first-class mail, but

only if Defendant contemporaneously sends an electronic version of such report or

notification to the Plaintiffs’ designated e-mail address provided to a Defendant upon

request to the Plaintiff.

5. For purposes of the compliance reporting and monitoring required by this

Order, the Plaintiffs are authorized to communicate directly with the Defendant.

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XVII. RECORD KEEPING PROVISIONS


1. for a period of five (5) years from the date of entry of this Order, in connection

with any business where Defendant is the majority owner or directly or indirectly

controls another business or the business of another company that engages in, the use

of commercial instruments, sales, trade, or promotion, or assists others engaged in,

business of financial instruments or securities, Defendant and his agents, employees,

officers, corporations, and those persons in active concert or participation with them

who receive actual notice of this Order by personal service or otherwise, are hereby

restrained and enjoined from failing to create and retain the following records:

1. Accounting records that reflect the cost of goods or services sold,

revenues generated, and the disbursement of such revenues;

2. Personnel records accurately reflecting: the name, address, and

telephone number of each person employed in any capacity by such business,

including as an independent contractor; that person’s job title or position; the

date upon which the person commenced work; and the date and reason for the

person’s termination, if applicable;

3. Customer files containing the names, addresses, phone numbers, dollar

amounts paid, quantity of items or services purchased, and description of items

or services purchased, to the extent such information is obtained in the ordinary

course of business;

4. Complaints and refund requests (whether received directly, indirectly,

or through any third party) and any responses to those complaints or requests;

5. Copies of all sales scripts, training materials, advertisements, or other

marketing materials, including newspaper advertisements and Internet web

33


pages; and

6. All records and documents necessary to demonstrate full compliance

with each provision of this Order, including but not limited to, copies of

acknowledgments of receipt of this Order required by the Sections titled

“Distribution of Order” and “Acknowledgment of Receipt of Order” and all

reports submitted to the Plaintiffs pursuant to the Section titled “Compliance

Reporting.

XVIII. DISTRIBUTION OF ORDER

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of

this Order Defendant shall deliver copies of the Order as directed below:

1. For any business that a Defendant controls, directly or indirectly, or in which

an officer of the Defendant has a majority ownership interest, the Defendant must

deliver a copy of this Order to:

1. all principals, officers, directors, and managers of that business;

2. all employees, agents, and representatives of that business who engage

in conduct related to the subject matter of the Order; and

3. any business entity resulting from any change in structure set forth in

the subsections of the Section titled “Compliance Reporting.” For current

personnel, delivery shall be within five (5) days of service of this Order upon

Defendant. For new personnel, delivery shall occur prior to them assuming their

responsibilities. For any business entity resulting from any change in structure

set forth in the subsection of the Section titled “Compliance Reporting,” delivery

shall be at least ten (10) days prior to the change in structure.

2. For any business where Defendant is not a controlling person of a business

34


but otherwise engages in, or assists others engaged in, the advertising, marketing,

promotion, offering for sale, sale, or distribution of any financial product or security,

employment opportunity, business venture, or investment opportunity, must deliver a

copy of this Order to all principals and managers of such business before engaging in

such conduct.

3. A Defendant must secure a signed and dated statement acknowledging receipt

of the Order, within thirty (30) days of delivery, from all persons receiving a copy of the

Order pursuant to this Section.

XIX. ACKNOWLEDGMENT OF RECEIPT OF ORDER

IT IS FURTHER ORDERED that Defendant within five (5) business days of receipt of this

Order as entered by the Court, must submit to the Clerk of the Court and the Plaintiffs a

truthful sworn statement acknowledging receipt of this Order. (Attachment C2)

XX. NOTICE TO HOMELAND SECURITY

IT IS FURTHER ORDERED that Clerk of the Court mail an abstract of section

X. SURRENDER OF PASSPORT AND TRAVEL RESTRICTION of this Order to:

Office of the Principal Legal Advisor, U.S. Immigration and Customs Enforcement, U.S.

Department of Homeland Security 500 12th Street SW, Washington, D.C. 20536.

XXI. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for

purposes of construction, modification, and enforcement of this Order.

IT IS SO ORDERED.

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SIGNED on ______________________, 2012.

_______________________________________

UNITED STATES DISTRICT JUDGE

36


APPROVED & ENTRY REQUESTED:

s/________________________________

VICKI CLARKSON, Plaintiff

s/________________________________

R. LANCE FLORES, Plaintiff

37
