Opposition to Motion to Dismiss

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Raoul Barrie Clymer14150 Grant St., Suite 33Moreno Valley, CA 92553(951) [email protected]

Propria persona

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

RAOUL BARRIE CLYMER;

Plaintiff,

vs.

KEVIN ELDER; RICHARD ELDER; SCOTT WOODSIDE; PIMLICO RANCH LLC; DRAKE DEVOLOPMENT, LLC,; GOWIRELESS, INC.; ALLIANCE BANK; MARK COHEN;

Defendants.

CASE NO. 11-CV1414-VAP (OPx)

PLAINTIFF’S OPPOSITION TO DEFENDANT KEVIN ELDER & GoWIRELESS, INC.’s MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT, AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

DATE: November 26, 2012TIME: 2:00 p.m.CTRM.: 2JUDGE: Hon. Virginia A. Philips

Action Filed: September 7, 2011Trial Date: None Set

Opposition to Elder & GoWireless Motion to Dismiss 1

mailto:[email protected]

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TABLE OF CONTENTSI. INTRODUCTION

STATEMENT OF THE CASELEGAL STANDARDASSIGNMENTSSTANDING


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STATEMENT OF THE CASE

In 2005 Kevin Elder was the sole owner of GoWireless, Inc.

[and a plethora of other businesses]. GoWireless was “cash poor”

however had a monthly income of 80 stores providing Verizon

wireless phone service. From 1995 to 2005 Kevin Elder was able to

open a average of 8 stores per year.

In fall of 2005 Michael Murray introduced Kevin Elder to Scott

Woodside a managing member of Pimlico Ranch LLC [a stalled real

estate project of 26 middle class homes in Murrieta, California].

Scott Woodside informed Elder that there was an $11.9 million

construction loan issued by Alliance bank secured by the property.

Kevin also found out that Alliance Bank issued said construction

loan without regard for performance. Woodside informed Elder that

the Project could be purchased from Randall Haskins for $3.8

million. A Deed of Trust was recorded for Diversified Builders

[owned by Randell Haskins or associates?] for $3.8 million dollars.

Kevin made an agreement with Haskins to pay the $3.8 with the

proceeds from the construction loan. With this knowledge Kevin

Elder created a ponzi scheme to finance his GoWireless corporation.

Elder and Woodside met with the VP of Alliance Mark Cohen who had

issued the first construction loan on the Pimlico Ranch project.


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The terms agreed 1were that Kevin Elder would deposit $3.5 mil

in escrow in Alliance’s bank and they would issue a money purchase

loan with an unbridled line of credit in the disguise of a

construction loan. With these terms set, Elder needed $3.5 million.

Murray informed Elder that his Father-in-law’s brother, Ben Clymer

[hereinafter Clymer], was interested in getting into real estate

and that he could convince Clymer to invest. Murray explained that

Clymer had full faith and confidence in him. Elder agreed that he

would pay $70,000.00 to Murray if Murray could deliver.

Murray, a specialist in sub-prime mortgage loan preparation,

was at the time a licensed real estate broker. Murray made the

initial presentation prefaced by informing Clymer that Elder was

the sole shareholder of GoWireless, Inc., and Murray’s Brother-in-

law was the CFO for GoWireless. Murray endorsed Elder’s

credibility, honesty and integrity. With the alleged possibility of

making almost 100% profit on a 2 year investment Clymer agreed and

Murray scheduled a meeting with Elder in Clymer’s office in

Riverside California.

Kevin Elder flew in from Las Vegas, Nevada, in November of

2005 to meet with Clymer in Riverside, California. Kevin Elder

confirmed that he was the sole shareholder of GoWireless, Inc and

1 It is unknown how the Deed of Trust recorded by Alliance for $11.9 million construction loan was satisfied, however, said deed was removed from the Official Records to give the appearance of clear title.


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that he would give his personal guarantee backed by the 80

GoWireless, Inc. stores that the project would be completed in a

timely fashion. Elder said he needed $3.5 mil to purchase the

Pimlico Ranch LLC project with clear title to property. Elder

assured Clymer his investment would be secured. However, when Elder

explained that Clymer would have to subordinate his secured loan on

title to the bank for the construction loan Clymer balked. Elder

immediately sweetened the deal by providing three of the homes to

be built at cost for Clymer and his sons. Clymer then agreed.

At the direction of Elder on December 23, 2005, Clymer began

to wire transfer $3.5 million dollars into Elder’s personal bank

account. Prior to recording on December 31, 2005, of the Loan

Contract, Promissory Note, and Deed of Trust Murray presented said

documents to Clymer for signing. Murray assured Clymer the terms

were recorded as represented and Clymer signed without reading.

Thereafter, Elder continued to purchase stalled real estate

projects. Etiwanda Arbors LLC is another project that was financed

by Alliance Bank, same bank agent, Mark Cohen, and Richard Elder,

Scott Woodside, and Kevin Elder as managing members. Turtle Rock 29

Enterprises LLC, Mesquite 55 LP, Juniper Tree LLC, Cajalco Road

LLC, all had the same managing members and are a few that are

currently known that are all stalled. Pimlico Ranch LLC and

Etiwnada Arbors LLC are suspended entities by the California


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Secretary of State. It is interesting to note that Etiwanda Arbors

LLC and Juniper Tree LLC have attorney, Kevin Bagley, of Duckor,

Spradling, Metzer and Wynne, listed as Agent for Service of

Process.

There is an ongoing pattern of racketeering activity amongst

an association-in-fact enterprise comprised of the same

individuals. The real estate projects are suspended, the bank

bankrupted, meanwhile Defendants, Kevin Elder [ as sole

shareholder] and Gowireless, have grown by leaps and bounds from 80

stores the first ten years [ 8 stores per years average] to 385

stores in the last 7 years [ over 43 stores a year average]. The

successor to Alliance Bank continues to conduct business with the

instant defendants. According to defendants it is purely

circumstantial that a “cash poor” enterprise in 2005 suddenly found

funding in the middle of the worst depression in history. They

claim there is nothing illegal with absconding with investment

funds intended for real estate projects, or commingling funds

between fictitious entities in interstate commerce as long as said

entities are owned by the same sole shareholder. They purport that

the complaint sub judice is nothing more than a real estate

investment that went bad and Plaintiff is only harassing the poor

Defendants. They claim the wrongdoing alleged is “patently

frivolous and immaterial.” Is it only happenstance that the real


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estate projects that Kevin Elder was sole shareholder of are

suspended and insolvent and that GoWireless flourishes in the midst

of an economic depression?

Plaintiff is the brother of the former real party in interest and

a member of the family whose “family assets” were liquidated to

fund the Pimlico Ranch LLC real estate project. Inasmuch as the

Plaintiff has a real interest in the family business, which has

been damaged by the loss of title to real property and saddled with

monthly payments of approximately $50,000.00 per month as a direct

result of Defendants predicate acts, Plaintiff has standing to seek

redress for said damages.

The Plaintiff’s Family business once flourishing has been holding

its own in an effort to avoid laying off dedicated employees. The

Defendant, Kevin Elder, knew the sensitive financial condition of

the Family Business and made his power play. There is no question

as to the costs of litigating a cause of action such as the instant

case and the costs would be an overbearing burden upon the

Plaintiffs’ Family Business. It was for this reason that Clymer

ultimately made the Assignment of Deed of Trust to Plaintiff with

the intent to transfer 100% of real interest in the attached Note

to enforce it. In this manner Plaintiff contends that he can avoid

the cost of joining Clymer; inasmuch as receiving consent from the

debtors is not an option. The aforesaid Assignment is subject to


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the “one satisfaction rule” and bestows standing upon Plaintiff

with the “right to enforce” the note as noteholder.

CONDUCT

After being introduced to Scott Woodside, the managing member of

Pimlico Ranch LLC, and learning of the working relationship Pimlico

Ranch LLC had with Alliance Bank wherein the Bank would lend a

Construction Loan without regard for paying out according to

performance, the Defendant, Kevin Elder, as the sole shareholder of

GoWireless, Inc., devised a Ponzi Scheme or artifice to defraud in

order to acquire funding for investing in GoWireless [in

preparation of a public offering] and other businesses in

interstate commerce.

Kevin Elder deliberately made false misrepresentations to private

investors and financial institutions, seeking capital for purchase

of non-performing notes on multiple home real estate projects, and

the construction thereof, which he never intended to complete on

schedule.

Once the Defendant, Kevin Elder, obtained the real estate

projects Kevin Elder would present his sole ownership of

GoWireless, Inc., and the earned income therefrom the 80 [then

existing; now 385] stores as verifiable income and guarantee for a

construction loans to build the projects.

Defendant, Richard Elder, as managing member of Drake


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Development, and R L Elder Construction Company, Pimlico Ranch LLC,

and, Scott Woodside, as accountant of and managing member of

Pimlico Ranch LLC, Etiwanda Arbor LLC, would also give their

personal guarantees on the construction loans.

Defendant, Richard Elder, in his managerial capacity for Drake

Development, and R L Elder Construction Company, would sign

”Guaranty of Completion and Performance” guaranteeing a timely

completion of construction as per contract, knowing that the money

would not be utilized for the stalled real estate project.

Once the Construction loan was procured Scott Woodside, as

Pimlico Ranch LLC accountant and managing member, would falsify

Release Documents claiming completion of Phase I construction and

submit said documents to Mark Cohen, Vice President and acting

agent of Alliance Bank for release of the Construction Loan knowing

that the claimed performance required for release of funds was

never started much less completed.

Thereafter, defendant VP Mark Cohen, in his managerial capacity

for Defendant, Alliance Bank, did release the Construction Loan in

the form an unbridled line of credit for Defendant, Kevin Elder,

knowing that in so doing he was breaching the Construction Loan

Agreement contract mandating performance [completion of Phase I]

and violating Alliance Bank’s fiduciary duty to Plaintiff.

Thereafter Defendant, Kevin Elder, would invest the money


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fraudulently procured as a construction loan into opening new

businesses and Go Wireless, Inc. throughout North America as a

means of laundering the ill-gotten gains. Said defendant would

make several interest payments with funds diverted from one of his

wholly owned businesses and then refuse to pay investors the

interest or reimburse the principal of the financing borrowed

claiming insolvency. [It should be noted that Alliance Bank had to

sue Kevin Elder for non-payment on the second construction loan in

question. Request for Judicial Notice, infra, of Alliance Bank v.

Scott Woodside, Richard Elder, Kevin Elder, Superior Court for

Riverside County, case no. RIC496198, filed March 26, 2008.]

The illegal retention and embezzlement by the Defendant, Kevin

Elder, of the entire portion of Plaintiff’s investment, interests,

and profits which was spent on the devised scheme resulted in tens

of millions of dollars of illegal gains invested in new businesses

in interstate commerce and damages to Plaintiff‘s business and

property as set forth in the Complaint.

From the year 2004 to the present, in furtherance of the Ponzi

Scheme to defraud investors and financial institutions, the

Defendant, Kevin Elder, and his willing co-conspirators caused, and

continues to cause, the United States mails to be used to send

brochures, flyers, negotiable instruments, and communications in

support of his scheme. Each of these mailings is an act that is


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indictable as mail fraud, together with wire transfers, wire

communications, and filing of fraudulent documents with private

investors and banks, in support of the ponzi scheme which all

constitute a pattern of racketeering activity. By conspiring to

conduct, and in fact conducting, the affairs of their ASSOCIATED IN

FACT ENTERPRISE, as defined hereunder, through this pattern of

racketeering activity, the Defendants violated RICO, 18 U.S.C. §§§

1962 (a),1962(C) & 1962(d). As a result, the Plaintiff and the

others unknown were injured in their business and property as set

forth infra. Said ASSOCIATION IN FACT ENTERPRISE is ongoing as will

be established subject to discovery.

Defendants now attempt to evade responsibility for their

dishonest acts, claiming that the First Amended complaint against

them is insufficient to put them on notice of the particulars of

the fraud they have committed. This argument is as disingenuous as

it is meritless, as is the defendants’ baseless contention that

their fraudulent scheme has not directly caused Plaintiff any harm.

Plaintiffs’ allegations set forth, in great detail, the defendants’

fraudulent ponzi scheme for which the defendants must now be held

accountable. The defendants’ motion to dismiss Plaintiffs’ FAC is

unfounded and should therefore be denied.

ASSIGNMENTS

In December of 2005, Clymer invested $3.5 million with Kevin


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Elder to purchase the Pimlico Ranch LLC project with property

outright. This investment was memorialized by contract, Promissory

Note, and secured by a Deed of Trust on title to the real property

the Project was to be built upon.

Upon default by Pimlico Ranch LLC, and Kevin Elder as sole

owner, Plaintiff was given an “Assignment of Interest by B&D Real

Estate A Trust LLC” as follows:

THIS ASSIGNMENT is made, by and between, Randolph Ben Clymer, the sole proprietor of B&D Real Estate A Trust, LLC, Assignor, and Raoul Barrie Clymer, Assignee.

WITNESSETH, that for valuable consideration in hand paid by the Assignee to the Assignor, receipt of which is hereby acknowledged, the Assignor hereby assigns and transfers to the Assignee one half of the interest in the Promissory Note, Contingent Interest Loan Agreement, and Deed of Trust secured by the Pimlico Ranch Property and any of his/her rights, including but not limited to chose of [sic] action, title, and interest in said property commonly known as TRACT 29981, City of Murrieta, California; Parcel number 906-250-017. [Emphasis added.]

The intent of both parties was [and is] clear, however, an

assignment of 50%, as the Court correctly pointed out, was

insufficient to establish standing. Notably, there were also the

issues that B&D was a Trust, not an LLC and that Plaintiff was not

an original party to the action.

Notwithstanding the aforesaid assignment, to legalize the

parties intent, an Assignment of Deed of Trust was recorded in the

Official Records of Riverside County, California, on January 30,

2012, naming Plaintiff as Assignee.


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The language of the Assignment of Deed of Trust exhibited to

the FAC states that Clymer “assigns and transfers to Raoul Barrie

Clymer all beneficial interest….TOGETHER with the note or notes

therein described and secured thereby, the money due and to become

due thereon, with interest, and all rights accrued or to accrue

under said Deed of Trust including the right to have reconvened, in

whole or part, the real property described therein.” [Emphasis

ADDED.]

ASSIGNABILITY OF R.I.C.O. CLAIM

Defense Counsel sets forth an argument claiming that “FAC

fails to allege facts showing how the Assignment could also

transfer Ben’s individual tort claims.“ [MTD, page 9, ¶ 1, ln 10-

11] However, said claim lacks any argument and/or case precedent

to support this proposition.

In a case of first impression in the Central District of

California addressing the issue of whether a RICO cause of action

was assignable, Judge Tashima rendered a most articulate opinion

specifically on assignment of RICO claims wherein he held:

“While it is true that Congress did not intend to import all of existing antitrust law into RICO, it appears that Congress’ intent in this regard was to keep from restricting RICO’s reach by burdening private RICO litigants with antitrust concepts of standing and proximate cause. Permitting the assignment of RICO claims, on the other hand, would not restrict RICO’s scope, but would serve to effectuate RICO’s ‘broad remedial purposes[]‘…… Therefore, the Court holds that RICO treble damage claims are assignable.” In re


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NATIONAL MORTGAGE EQUITY CORPORATION MORTGAGE POOL CERTIFICATES SECURITIES LITIGATION, 636 F. Supp. 1138 @ 1156 [C.D. Cal. May 29, 1986]

More recently the United States Supreme Court held “[a]n

assignee of a legal claim for money owed has standing to pursue

that claim in federal court, even when the assignee has promised to

remit the proceeds of the litigation to the assignor. Sprint

Communications Co., L.P., et al. v. APCC Services, Inc., et al.,

128 S.Ct. 2531 (June 23, 2008). @2534

INJURY IS ASSIGNABLE

In Sprint, id, as here, the defendants claimed Plaintiffs, as

assignees, did not suffer an injury and that assignments do not

transfer the assignors injuries. However, the Supreme Court quoted

a precedent case, Vermont Agency of Natural Resources v. United

States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d

836, and rendered:

But the operators assigned their claims lock, stock, and barrel, and precedent makes clear that an assignee can sue based on his assignor’s injuries. Sprint Communications Co., L.P., et al. v. APCC Services, Inc., et al., 128 S.Ct. 2531 (June 23, 2008). @ 2533

STANDING

The Ninth Circuit recently determined “Standing in Mortgage

Cases” and applying the Uniform Commercial Code held that “Under

the UCC, a “transfer” of a negotiable instrument [Promissory Note]


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“vests in the transferee any right of the transferor to enforce the

instrument.” UCC § 3–203(b).” In re Veal, 450 B.R. 897, @ 911

(B.A.P. 9th Cir. 2011); in accord, In re Jackson, 451 B.R. 24, @ 29

(Bankr. E.D. Cal. 2011). [Emphasis added.] Plaintiff contends that

any right of the transferor includes the right to pursue RICO

claims against the defendants.

Plaintiff contends that he has established both Constitutional

and Prudential standing to pursue his RICO claims. In the event the

Court holds otherwise Plaintiff would ask for leave to amend.

STANDARD OF REVIEW

In evaluating a defendants’ motion to dismiss pursuant to

Federal Rule of Civil Procedure 12(b)(6), all facts alleged in the

complaint must be accepted as true and construed in the light most

favorable to the plaintiff. Lee v. City of Los Angeles, 250 F.3d

668, @677 (9th Cir. 2001) Rule 12(b)(6) motions are “viewed with

disfavor” and “rarely granted.” Hall v. Santa Barbara, 883 F.2d

1270, @ 1274 (9th Cir. 1986). Review is based strictly on the

contents of the complaint. Buckey v. County of Los Angeles, 968

F.2d 791, @ 794 (9th Cor. 1992). Dismissal is inappropriate “unless

it appears beyond doubt that the plaintiff can prove no set of

facts in support of the claim entitling plaintiff to relief. Livid

Holdings Ltd. V. Salomon Smith Barney, Inc., 416 F.3d 940, @ 946


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(9th Cir. 2005).

CONSPIRACY

Title 18 U.S.C. § 1962(d) provides that "[i]t shall be

unlawful for any person to conspire to violate any of the

provisions of subsection (a), (b), or (c) of [Section 1962]." "A

conspiracy may exist even if a conspirator does not agree to commit

or facilitate each and every part of the substantive offense."

Salinas v. U.S., 522 U.S. 52, 63, 118 S.Ct. 469, 139 L.Ed.2d 352

(1997) (citing U.S. v. Socony-Vacuum Oil Co., 310 U.S. 150, 253-54,

60 S.Ct. 811, 84 L.Ed. 1129 (1940)). Thus, "[i]t makes no

difference that the substantive offense under § 1962(c) requires

two or more predicate acts." Id. at 65, 118 S.Ct. 469. "The

interplay between [18 U.S.C. § 1962](c) and (d) does not permit

[the court] to excuse from the reach of the conspiracy provisions

an actor who does not himself commit or agree to commit two or more

predicate acts requisite to the underlying offense." Salinas, 522

U.S. at 65, 118 S.Ct. 469.

In the Ninth Circuit, a defendant may be held liable for

conspiracy to violate Section 1962(c) if he "'knowingly agree[d] to

facilitate a scheme which includes the operation or management of a

RICO enterprise.'" U.S. v. Fernandez, 388 F.3d 1199, 1230 (9th

Cir.2004) (quoting Smith v. Berg, 247 F.3d 532, 538 (3rd

Cir.2001)). Plaintiff has plead that each defendant knowingly and


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willing at some point and time took control of the association-in-

fact enterprise in a concerted effort that ultimately facilitated

funding for Kevin Elder, GoWireless, and themselves. [FAC, pages

16-18, ¶¶ 67-73].

DEFENDANTS’ SIX GROUNDS FOR DISMISSAL

Defendants raise the following 6 [six] issues in support of their

motion to dismiss, Plaintiff will address each issue seriatim:

1. Plaintiff RAOUL BARRIE CLYMER has not, and cannot, allege facts sufficient to support his RICO claim under 18 U.S.C. § 1962, and because Plaintiff’s RICO claim is patently frivolous and immaterial, Plaintiff cannot establish federal question jurisdiction by alleging such a claim: [Rule 12(b)(1)]

To state a claim under RICO section 1962(c), a party must

allege: (1) conduct; (2) of an enterprise; (3) through a pattern;

(4) of racketeering activity. Odom v. Microsoft Corp., 486 F.3d

541, @ 547 (9th Cir. 2007). The defendants’ contend that Plaintiff

has failed to plead any of the aforesaid elements, and in addition,

Plaintiff has not alleged a proximate causal connection between the

acts alleged and damages Plaintiff suffered. For the reasons set

forth below, none of these contentions support dismissal of

Plaintiffs RICO complaint. Accordingly, the defendants’ motion to

dismiss Plaintiffs’ RICO complaint should be denied.

Plaintiff alleges that defendants' acts constitute

violations of civil RICO, 18 U.S.C. §§ 1962(c) and (d). Plaintiff


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alleges that Kevin Elder, Scott Woodside, Richard Elder, Mark

Cohen, Pimlico Ranch LLC, GoWireless Inc and Alliance Bank, acting

together pursuant to their agreement, constituted an associated-in-

fact enterprise under RICO; that their actions, involving private

and financial funding in stalled out real estate projects and

diverting the investment funds into GoWireless, constitutes a

"pattern of racketeering activity" under RICO; and that they

knowingly and willingly committed the RICO "racketeering activity"

predicate acts of wire fraud, mail fraud, bank fraud, and money

laundering.

It is well settled that a pattern of racketeering activity

must consist of at least two separate predicate acts. Sun Sav. &

Loan Ass’n v. Dierdorff, 825 F.2d 187, @ 191 (9th Cir. 1987)

Plaintiff has plead the perpetrators name, the predicate acts, and

when committed. [FAC, pages 19-24, ¶¶ 74-98]

In determining whether Plaintiff has alleged a pattern of

racketeering activity, the court may only consider predicate acts

attributable to defendants. Blake v. Dierdorff 856 F.2d 1365, @

1371 (9th Cir. 1988)

Plaintiff has plead that Kevin Elder, as alter ego to

GoWireless, Inc., and Pimlico Ranch LLC, Etiwanda Arbors LLC,

created a Ponzi Scheme and did: (1) deceitfully and fraudulently

cause investment money for Pimlico Ranch LLC project to be wire


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transferred in interstate commerce into his personal account [FAC,

pages 9-15 ,¶¶ 47-65 ], (2) conceal the fact Pimlico Ranch LLC was

to be paid off with the Construction loan obtained months later

[Alliance Opt2mtd, exhibit ], (3) commingled money by paying

interest payments with a Drake Construction LLC check by

mail[Original Complaint, Exhibit 10], (4) cause Richard Elder and R

L Elder Construction Company to submit a fraudulent Guaranty of

Completion and Performance on Pimlico Ranch LLC to Alliance Bank,

(5) cause Scott Woodside to submit a fraudulent Release Price

Schedule by Lot on Pimlico Ranch LLC to Alliance Bank, (6) sign as

Guarantor for the Pimlico Ranch LLC Construction Loan and

fraudulently submitted same to the Bank knowing the loan would not

be utilized to build the Pimlico Ranch LLC project, (7) cause Mark

Cohen and Alliance Bank to release the Construction Loan without

regard for performance and completion of Stage I construction; AND

THE FACT THAT (8)Scott Woodside fraudulently applied for two

construction loans for Pimlico Ranch LLC from the same Alliance

bank and not one home was ever built, (9) Mark Cohen and Alliance

Bank issued two construction loans to Pimlico Ranch LLC without

regard for performance [especially after there was no construction

pursuant to the first loan], one could interpret this pattern of

racketeering activity as reveling an Association-in-fact Enterprise

comprised of the named defendants.


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PREDICATE ACT IS PROXIMATE CAUSEOF DAMAGE TO PLAINTIFF’S BUSINESS

Kevin Elder made fraudulent representations knowing Plaintiff

would rely upon same to induce Plaintiff to invest in a

predetermined Ponzi scheme. Kevin Elder had no intent of completing

the project in a timely fashion. There is evidence that Plaintiffs

investment money was not used to purchase the Pimlico Ranch LLC

project inasmuch as the Construction Loan clearly evidences the

purchase payoff of $3.8 million for the Pimlico Ranch LLC Project.

The seven (7) predicate acts by Kevin Elder causing

Plaintiff’s investment money to be wire transferred into Elder’s

personal account in interstate commerce, in lieu of an escrow

account, is the proximate cause of Plaintiff’s damage. Kevin Elder

misappropriated Plaintiff’s investment money which has resulted in

damage to Plaintiff’s business to the tune of $50,000.00 per month

for the last six (6) years with loss of title to real property.

ENTERPRISE

The U.S. Supreme Court has held that a sole share holder and

his closely held corporation can be an “enterprise” as defined by

Tile 18 USC section 1962(c). See Cedric Cushner Promotions v.

King, 533 U.S. 158, 121 S. Ct. 2087, 150 L. Ed 2d 198 (2001) In the

instant case Kevin Elder is the admitted sole share holder of

GoWireless, Inc., and Pimlico Ranch LLC. It was Kevin Elder’s

representation of being sole share holder of Go Wireless, Inc.,


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that induced Clymer to invest in Pimlico Ranch LLC. Kevin Elder is

the impetus and catalyst of the association-in-fact enterprise.

Legally a number of “enterprises” may be interpreted from the

pleading in the complaint. Although counsel cavalierly claims in

this conspiracy that GoWireless committed no act, “[l]ogic dictates

that a corporation, receiving income from a pattern of racketeering

in which it has participated as a principal, can invest that income

in its own operations. Pennsylvania v. Derry Construction Co., 617

F.Supp. 940, 943 (W.D.Pa.1985). Thus, we hold that where a

corporation engages in racketeering activities and is the direct or

indirect beneficiary of the pattern of racketeering activity, it

can be both the "person" and the "enterprise" under section

1962(a).” Scheiber Distributing Co. v. Serv-Well Furniture

Company, Inc., 806 F.2d 1393 (9th Cir. 1986). It is a fact that

GoWireless, Inc., now has 385 subsidiaries which is 305 more than

at the time of Plaintiff’s cash infusion when Kevin Elder claimed

to be “cash poor.”

“[I]f the enterprise was a corporation, the fact that there was

but one stockholder would not shield that individual from suit,

because such a corporate ‘one-man’ band does receive some legal

protections…., [a] legal shield for illegal activity that Congress

intended RICO to pierce.” Sever v. Alaska Pulp Corp., 978 F.2d 1529

@ 1534 (9th Cir. 1992)


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2. The Complaint as a whole fails as a matter of law because - despite amendment - Plaintiff lacks standing to pursue the claims against the moving defendants; [Rule 12(b)(6)]

ALTER EGO DOCTRINE

Request for Judicial Notice:

Plaintiff requests this Court to take Judicial Notice of records in

the (1) Riverside Municipal Court Three Lakes District, Temecula,

California, civil case no. TES01592 where defendants, Kevin Elder

AKA K Elder, individually and DBA GoWireless, are sued for default

of payment, filed 09/22/97; (2) Riverside Municipal Court Three

Lakes District, Temecula, California, civil case no.043991, where

defendants Robey & Associates Inc., a California Corporation dba GO

WIRELSS; Kevin Elder, individually and as guarantor, are sued for

default of payment, filed 06/19/98; and (3) Riverside Superior

Court, Unlimited, Alliance Bank v. Scott Woodside, Richard Elder,

Kevin Elder, Case no. RIC 496198, sued as guarantor for default of

payment, filed on March 2008.

In the first two non related cases Kevin Elder signed as

personal guarantor for GoWireless. In the third Kevin Elder signed

as personal guarantor for Pimlico Ranch LLC.

In doing business Kevin Elder has continually represented

himself as personal guarantor for GoWireless since 1997 in all

accounts of record. [See Request for Judicial Notice]

This Court defined the “alter ego doctrine” in Nielson v. Union


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Bank of California, N.A. 290 F. Supp 2d 1101 @ 1116 and stated:

“Before the doctrine may be invoked, two elements must be alleged: "First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone." Sonora Diamond Corp. v. Superior Court, 83 Cal.App.4th 523, 526, 99 Cal.Rptr.2d 824 (2000); Mesler, supra, 39 Cal.3d at 300, 216 Cal.Rptr. 443, 702 P.2d 601 ("There is no litmus test to determine when the corporate veil will be pierced; rather the result will depend on the circumstances of each particular case. There are, nevertheless, two general requirements: (1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow,'" quoting Automotriz Del Golfo De California S. A. De C. V. v. Resnick, 47 Cal.2d 792, 796, 306 P.2d 1 (1957)). See also AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir.1996).”

Taking the facts pled as true, Plaintiff contends that he has

established there is “such unity of interest and ownership that the

separate personalities of the corporation and the individual no

longer exist.” Kevin Elder, continually represented himself as

“sole shareholder” of his numerous companies and commingles funds

between said companies and his person. This Court held that “the

commingling of corporate and non-corporate assets; the diversion of

assets from the corporation to the detriment of creditors; and the

failure of an individual to maintain an arm's length relationship

with the corporation… [are] factors the courts consider in

determining whether the corporate veil should be pierced …“ U.S. v.


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Healthwin Midtown Convalescent Hosp. 511 F. Supp. 416, @419 (C.D.

Cal. 1981)

It is a fact that K. Elder gave his “personal guarantee” as

sole shareholder of GoWireless, Inc., to procure the fourth Pimlico

Ranch LLC loan [second from Alliance Bank] to secure $13.9 million

line of credit. Kevin Elder gave his personal guarantee as the

sole shareholder of GoWireless, Inc., to Clymer to secure the $3.5

million necessary for the Alliance $13.9 million guaranteed loan.

Plaintiff believes that the ”alter ego doctrine” applies to

Kevin Elder, GoWireless, Inc., Drake Development LLC, and Pimlico

Ranch LLC. It would be an inequitable result to allow K. Elder to

hide behind the shell companies that he manipulates to his personal

benefit.

“[I]f the enterprise was a corporation, the fact that there

was but one stockholder would not shield that individual from suit,

because such a corporate ‘one-man’ band does receive some legal

protections…., [a] legal shield for illegal activity that Congress

intended RICO to pierce.” Sever v. Alaska Pulp Corp., 978 F.2d 1529

@ 1534 (9th Cir. 1992)

3. Plaintiff has not, and cannot, allege claims for Promissory Fraud and Fraudulent Concealment against moving defendants because the facts underlying the alleged fraud and alleged concealment were fully disclosed to Plaintiff’s predecessor in May of 2006; the claims are therefore untimely, the claims continue to lack specificity as against each moving defendant despite Plaintiff’s attempt to amend; and Plaintiff suffered no


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damages as a result of the alleged conduct; [Rule 12(b)(6)]

PROMISSORY FRAUD

“Promissory fraud is a subspecies of the action for fraud.”

See Behnke v. State Farm General Ins. Co., 196 Cal. App. 4th 1443,

1453 (2011). "A promise to do something necessarily implies the

intention to perform; hence, where a promise is made without such

intention, there is an implied misrepresentation of fact that may

be actionable fraud." Id. The elements of promissory fraud are [1]

a promise made regarding a material fact without any intention of

performing it; [2] the existence of the intent not to perform at

the time the promise was made; [3] intent to deceive or induce the

promisee to enter into a transaction; [4] reasonable reliance by

the promisee; [5] nonperformance by the party making the promise;

[6] and resulting damage. Id. “

[1] A promise made regarding a material fact without any intention

of performing it.

Kevin Elder promised two facts: (1) The investment money was

to be used to purchase the Pimlico Ranch LLC project and property

with free title, and, (2) The project would be completed on time.

[2] The existence of the intent not to perform at the time the

promise was made.

Kevin Elder knew when he made those promises they were not

going to be kept. He had already planned to and indeed caused the


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investment funds to be transferred into his personal account for

his personal benefit and investment in Go Wireless.

Kevin Elder also had prearranged a portion of the Construction

Loan to pay off the purchase of Pimlico Ranch LLC and that Clymers

investment was not going to be used to purchase the Pinlico Ranch

LLC project.

[3] Intent to deceive or induce the promisee to enter into a

transaction.

When Clymer balked at taking second position on title to

effectuate the Construction Loan Kevin Elder induced Clymer with

the bonus promise of 3 homes at cost for him and his two sons and

his personal guarantee backed by his GoWireless stores.

[4] Reasonable reliance by the promise.

Clymer reasonably relied upon Kevin Elder assurances based on

Murray’s [a family member] intertwined relationship with Kevin

Elder and Kevin Elder’s assurances were backed by his GoWireless

stores.

[5] Nonperformance by the party making the promise.

There is proof in the record that the Pimlico Ranch LLC

project was not purchased with the Clymer’s investment loan. And

there were no homes built and there has never been one piece of

heavy equipment of the Pimlico Ranch LLC property.

FRAUDULENT CONCEALMENT


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Defendants claim that the Subordination of Deed of trust is

proof that Clymer was notified there was an existing loan at the

time of signing. This is not what said document states. In said

document, prepared by defense counsels law firm, it plainly states

in bold and capital letters at the very top of the document:

NOTICE: THIS SUBORDINATION OF DEED OF TRUST RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. [OC, Exhibit 7, page 1, ¶ 1]

Taking the facts plead as true Plaintiff has stated that it was not

revealed that defendant had consummated the loan [FAC, page 7, ¶

36] and that every time Plaintiff would ask the status of the loan

Kevin Elder or his agent would state “the bank was dilatory with

the financing. [FAC, page 7, ¶ 35] Taken the pleadings as true the

Subordination document does not controvert the pleadings in the

complaint. In most subordination documents it usually states the

loan and amount being subordinated to. However, since Defendants

counsel drafted this document it raises a question “why doesn’t it

state the loan?”

3. Plaintiff has not, and cannot, allege facts establishing a fiduciary relationship with either of the moving defendants; [Rule 12 (B)(6)]

The unrefuted facts are as follows. Kevin Elder gave his personal

guarantee backed by his GoWireless stores for Plaintiffs’

investment. [FAC, page 6, ¶ 28] Kevin Elders’ personal invitation


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is memorialized in the Pimilico Ranch LLC prospectus:

“DRAKE DEVELOPMENT, LLC is offering to a select entity or individual the opportunity to participate in the development of the property. The highlights of this financial opportunity are as follows:

1. Home sale revenue; $33,645,000 2. Total Projected Profits: $7,908,000 3.Preferred Return: 10% plus 35% of Project Profits): $3,100,000 4. Required Equity:$3,500,000.” [Original Complaint, Exhibit 1, page 5, THE

OPPORTUNITY]

The majority of the investment money was wired on December 23,

2005, directly into Kevin Elders’ personal bank account as directed

by Kevin Elder himself. [FAC, page 6, ¶ 31] The alleged contracts

with Pimlico Ranch LLC that Kevin Elder attempts to shield himself

with were signed on December 31, 2005. [OC, Exhibit 2; Loan

Agreement, Exhibit 3; Secured Promissory Note, Exhibit 4; Deed of

Trust] At the time that Plaintiff invested with Kevin Elder it was

purely a partnership agreement and the fiduciary duties of a

partnership apply. At the time the Loan Agreement, Promissory Note,

and Deed of Trust were signed Kevin Elder was not even registered

as a Managing Member of Pimlico Ranch LLC with the California

Secretary of State as required by California Corporation code

17060(a)(5). Therefore, Kevin Elder cannot invoke the protection of

the LLC inasmuch as he signed in his personal capacity.

There is documentary evidence in the record that Kevin Elder

was doing business as GoWireless Inc and willing to sign as


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personal guarantor to procure the money necessary to build his

GoWireless stores. [Original Complaint, Exhibit 9, Promissory Note,

last page, Commercial Guaranty] Defendants have not denied Kevin

Elder gave his personal guaranty to Plaintiff and as such there is

an admission of a fiduciary duty to Plaintiff.

“(E)ach partner or associate occupies a fiduciary

relationship to the others in all matters pertaining to the

partnership enterprise.” Stenian v. Tashjian, 178 Cal. 623, @ 627,

174 P. 883, @ 885.

5. Plaintiff has not, and cannot, allege unjust enrichment claim against either moving defendant because Plaintiff is a stranger to the underlying loan transaction, suffered no out-of-pocket losses, and failed to bring his claim in a timely manner; [Rule 12(b)(6)]

Plaintiff as lawful “assignee” has clearly established that he

is not a “stranger to the underlying loan transaction (Assignment,

supra.)[and he has] suffered [] out-of-pocket losses…” As for the

timeliness the fraudulent concealment tolls the limitation.

Fraudulent Concealment, supra.

6. Plaintiff has not, and cannot, allege a breach of contract claim against moving defendants because the moving defendants are not parties to any alleged contract. [Rule 12(b)(6)]


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BREACH OF CONTRACT:

First and foremost, Plaintiff incorporates by reference as if

fully set forth herein the alter ego argument to establish Kevin

Elder’s personal liability for the breach of contract. The

uncontroverted facts pled in the FAC clearly states that Kevin

Elder gave his personal guarantee backed by his 80 GoWireless

stores.

In California, in order to state a claim for breach of

contract a plaintiff must plead: (1) the existence of the contract;

(2) performance by the plaintiff or excuse for nonperformance; (3)

breach by the defendant; and (4) damages. First Commercial Mortgage

Co. v. Reece, 8 9 Cal. App. 4th 731, 745 (2001).

Plaintiff has pled the existence of a contract between Pimlico

Ranch LLC and Clymer. (1) The contract was attached to the Original

Complaint as exhibit 2. (2) Plaintiff pled that Clymer wire

transferred $3.5 million to K. Elder in consideration of said

contract. (3) K. Elder refused to pay the interest on said contract

in 2010. (4) Plaintiff has pled the monthly payments of

approximately $50,000.00 for the last six years and the initial

$3.5 million issued in consideration of said contract as damages to

his business.

The elements are plead and liability has been established.

DIVERSITY JURISDICTION


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This Court may exercise jurisdiction based on diversity of the

parties. Diversity jurisdiction extends to "all civil actions where

the matter in controversy exceeds . . . $75,000 . . . and is

between . . . [c]itizens of different States." 28 U.S.C. § 1332(a)

(1). The Complaint names, Defendant, K. Elder, whom is also a

resident of Nevada and GoWireless, Inc., stating the place of

incorporation and having headquarters in Las Vegas, Nevada. The

pleadings of the said complaint also state an amount in controversy

exceeding $75,000.00. A Plaintiff must set forth affirmatively not

only the state by which these corporations have been incorporated,

but also the state where each of them has its principal place of

business. Brandt v. Bay City Super Market, D.C., 182 F.Supp. 937

(1960); and Cameron v. Hodges, 127 U.S. 322, 8 S.Ct. 1154, 32 L.Ed.

132 (1888) Recently the U.S. Supreme held “…..that the phrase

"principal place of business" refers to the place where the

corporation's high level officers direct, control, and coordinate

the corporation's activities.” Hertz.Corp. v. Friend, 130 S. Ct.

1181, @ 1186 (2009). GoWireless, Inc, headquarters are in Las

Vegas as well as the residence of CEO Kevin Elder.

CONCLUSION

The irrefutable facts are that: (1) Kevin Elder is sole

shareholder of multiple home real estate projects, Pimlico Ranch

LLC and Etiwanda Arbors LLC, which entities are stalled and


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suspended by the California Secretary of State. (2) Both said

projects were funded by Alliance Bank through their agent, and Vice

President, Mark Cohen. (3) Alliance Bank became insolvent and went

bankrupt. (4) Kevin Elder is the sole shareholder of GoWireless Inc

and 385 stores throughout North America. (5) At the time of

Plaintiff’s cause of action Go Wireless had 80 stores.

Refuted fact: For the first time defense counsel has claimed

that Kevin Elder did not divert Plaintiffs investment into

GoWireless.

Inferences derived from the aforesaid facts: Defense counsel

is mistaken.

Kevin Elder owns many other real estate projects such as,

Juniper Tree LLC, Turtle Rock LLC, Mesquite 55 LP, and many others

unknown at this time to Plaintiff. Alliance Bank’s successor, CB&T

is currently doing business with Kevin Elder.

There is the real threat of ongoing activity. Kevin Elder has

a new real estate project that he is currently utilizing wire and

mail communications seeking investment funds for Desert Vista

Village LLC. It should be noted that the California Secretary of

State has Desert Vista Village LLC suspended.

There is an ongoing pattern of racketeering activity that is

ongoing and must be stopped.

WHEREFORE, plaintiff respectfully suggests that he has plead


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a cause of action for civil RICO violations against the named

defendants and their motion to dismiss should be denied.

Should this Court determine that Plaintiff has failed to

state a cause of action for civil RICO Plaintiff requests leave to

amend.

DATE: November 14, 2012

Respectfully submitted,

Raoul Clymer
