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848300.01/SD
LAW OFFICES
Allen Matkins Leck Gamble Mallory & Natsis LLP
ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP DAVID R. ZARO (BAR NO. 124334) TIM C. HSU (BAR NO. 279208) 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: [email protected]
[email protected] EDWARD G. FATES (BAR NO. 227809) 501 West Broadway, 15th Floor San Diego, California 92101-3541 Phone: (619) 233-1155 Fax: (619) 233-1158 E-Mail: [email protected] Attorneys for Receiver KRISTA L. FREITAG
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
WORLD CAPITAL MARKET INC.; WCM777 INC.; WCM777 LTD. d/b/a WCM777 ENTERPRISES, INC.; and MING XU a/k/a PHIL MING XU,
Defendants,
KINGDOM CAPITAL MARKET, LLC; MANNA HOLDING GROUP, LLC; MANNA SOURCE INTERNATIONAL, INC.; WCM RESOURCES, INC.; AEON OPERATING, INC.; PMX JEWELS, LTD. TOPACIFIC INC.; TO PACIFIC INC.; VINCENT J. MESSINA; and INTERNATIONAL MARKET VENTURES,
Relief Defendants.
Case No. CV-14-2334-JFW-MRW DECLARATION OF KRISTA L. FREITAG IN SUPPORT OF OMNIBUS REPLY TO OPPOSITIONS TO MOTION FOR ORDER:
(A) SUSTAINING OMNIBUS AND SPECIFIC OBJECTIONS TO CLAIMS;
(B) APPROVING PROPOSED ALLOWED AMOUNTS OF CLAIMS;
(C) APPROVING DISTRIBUTION PLAN AND AUTHORIZING RECEIVER TO MAKE INTERIM DISTRIBUTIONS Date: November 28, 2016 Time: 1:30 p.m. Ctrm: 7A – 1st Street Courthouse Judge: Hon. John F. Walter
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 1 of 25 Page ID #:10914
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848300.01/SD -1-
LAW OFFICES
Allen Matkins Leck Gamble Mallory & Natsis LLP
I, Krista L. Freitag, declare:
1. I am the permanent receiver for Defendants World Capital Market Inc.
("WCM"), WCM777 Inc. ("WCM777"), and WCM777 Ltd. d/b/a WCM777
Enterprises, Inc. ("WCM777 Enterprises"), and Relief Defendants Kingdom Capital
Market, LLC ("KCM"); Manna Holding Group, LLC ("MHG"); Manna Source
International, Inc. ("MSI"); WCM Resources, Inc. ("WCM Resources");
To Pacific, Inc.; ToPacific; and their subsidiaries and affiliates (collectively,
"Receivership Entities").
2. This declaration is made in support of my Omnibus Reply to
Oppositions to Motion for Order: (A) Sustaining Omnibus and Specific Objections
to Claims; (B) Approving Proposed Allowed Amounts of Claims; and
(C) Approving Distribution Plan and Authorizing Receiver to Make Interim
Distributions ("Motion"). I have personal knowledge of the facts set forth herein
and, if called as a witness, could and would testify to such facts under oath.
I. ADJUSTMENTS TO PROPOSED ALLOWED CLAIM AMOUNTS
3. Epiq, my staff and I have received hundreds of telephone calls and
emails from claimants in response to the Motion. With respect to those calls and
emails received prior to the November 7, 2016 deadline to respond to the Motion,
my staff and I are reviewing any and all new information provided and in many
cases have communicated with claimants by telephone and email regarding the
additional information provided. Some of these claimants have provided sufficient
additional documentation and information for me to be able to verify their claims.
Accordingly, I have made adjustments to the schedules of Allowed, Partially
Allowed, and Disallowed Claims filed with the Motion and will continue to do so as
I work through the remaining responses received on or before November 7, 2016. I
will submit revised schedules of Allowed, Partially Allowed, and Disallowed claims
on or before November 21, 2016, and will ask that the Court approve the revised
schedules.
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 2 of 25 Page ID #:10915
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Allen Matkins Leck Gamble Mallory & Natsis LLP
II. HANDWRITTEN OPPOSITIONS FROM FIVE CLAIMANTS
4. On November 4, 2016, Claimant Alexandra Munoz filed a handwritten
opposition to the Motion. On November 7, 2016, Claimants Linda Mejia, Mayra
Hernandez, Nicole Villegas, Carlos Esquivel, and German Velasquez also filed
handwritten oppositions to the Motion. Per their handwritten oppositions, Linda
Mejia is the mother of Mayra Hernandez, Nicole Villegas, and Alexandra Munoz,
and Carlos Esquivel states that Linda Mejia is his friend.
5. These six claims fall into the same category as thousands of other
disallowed claims, i.e., claimants who state they gave money (primarily cash) to a
Leader, but have provided either no bank record support or insufficient bank record
support to trace the claimed transfers (either from their accounts or to their Leader's
account). Each of these claims was initially analyzed and determined to be
deficient. As such, a deficiency notice was issued to the claimant, but the claims
still could not be verified. Specifically:
Carlos Esquivel – submitted a claim in the amount of $2,000 with
only a copy if his identification card. Mr. Esquivel provided no
documents (bank or otherwise) in response to the deficiency notice
issued to him or with his objection to the Motion.
Mayra Hernandez – submitted a claim in the amount of $4,000 with
no documents. Ms. Hernandez provided no documents in response
to the deficiency notice that was issued to her and with her objection
to the Motion, she provided only email correspondence (no bank
documentation).
Nicole Villegas – submitted a claim in the amount of $2,000 with
only a copy of her identification card. No documents were provided
in response to the deficiency notice issued to her and with her
objection, she provided her bank statement showing only a $1,000
cash withdrawal and other non-bank documents with handwritten
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 3 of 25 Page ID #:10916
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notes and email correspondence. There are no bank records
indicating what was done with the funds after they were withdrawn
from her account.
Alexandra Munoz – submitted a claim in the amount of $16,000
with a copy of her identification card and her "binary leader tree."
No documents were provided in response to the deficiency notice
issued to her and with her objection, she claimed only $12,000 was
invested and provided a $10,000 certificate of deposit account
statement, a cashier’s check written to herself in the amount of
$10,009.18, and email correspondence. Ms. Munoz provided no
bank records indicating what was done with the cashier’s check
funds.
Linda Mejia – submitted a claim in the amount of $10,400 with a
copy of her identification card and a Word document with
Receivership Entity bank account information (with no
corresponding deposit). Ms. Mejia provided no documents in
response to the deficiency notice issued to her and with her
objection, she provided one $4,000 deposit slip into a non-
Receivership Entity bank account and email correspondence. There
are no further bank records indicating whose funds were deposited
or whose account said funds were deposited into.
German Velasquez – submitted a claim stating he invested $40,000
on October 4, 2013, with pages of his bank statements highlighting
three $10,000 cash withdrawals on October 4, 2013, October 8,
2013, and December 3, 2013, plus a $5,500 withdrawal on
December 4, 2013, which (per his objection) does not appear to be
claim related. No documents were provided in response to the
deficiency notice issued to him, and with his objection, he claimed
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 4 of 25 Page ID #:10917
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only $30,000 and provided the same bank statements reflecting only
the three aforementioned $10,000 cash withdrawals. There are no
further bank records indicating whose account said funds were
deposited into.
6. These six claimants effectively ask that bank records which do not
indicate where funds ultimately went (i.e., to the upline/leader) and/or ancillary,
non-bank records be taken into account in determining whether claims are allowed.
These and other claimants ask that “contemporaneous” handwritten notes on
documents, deposit slips for unknown accounts or documents showing withdrawals
from their account be accepted as proof of investment. For a variety of reasons, the
primary of which are noted below, I believe there are significant flaws and have
concerns in allowing incomplete or ancillary, non-bank records as sufficient
evidence of payment (claimed losses) for the numerous claimants which fall into
this category:
Many cash claimants who have provided no or insufficient bank
record support do not delineate between actual funds paid versus
those believed to be earned.
ο There are countless examples of this, all of which I believe are
relevant and some of which I believe are material (investor
claimed $96,000, but paid $48,000). If I accepted ancillary
records proving such claimant was in the system without
confirming with bank records what was actually paid, this
sample claimant’s proposed allowed claim would be overstated
by $48,000 – a specific example of this exists within the 139
claimants represented by Mr. Adams (see footnote number 3
below and attached).
ο Furthermore, as noted in the subject objections, these six
claimants believed they were earning $16/day per unit
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 5 of 25 Page ID #:10918
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purchased. On a $1,999 investment, $16/day translates to a
nearly 300% annual return. Often, said “earnings” were then
used to “buy” more units (for example, see Ms. Munoz’s
objection – she originally claimed $16,000 and now states she
actually paid only $12,000, but used $4,000 of “earnings” to buy
more units).
ο Investors could have invested as little as $300 and received
access to the system (and then, in addition to the daily “earnings”
discussed in the prior bullet point, earned additional voluminous
points, by, for example, signing up downline investors).
There are instances where the exact same deposit slip into a non-
Receivership Entity account was used to support multiple claims.
Manually keeping track of what deposit slips (date, amount,
account, etc.) were used for each claim would require a significant
amount of time and expense.
7. As a result of these (and other previously discussed) flaws, if I rely on
incomplete or non-bank data, my recommendations as to which of these claims
should be allowed and disallowed would be inherently subjective; if there are no
bank records showing the transfer of funds, decisions would necessarily turn on
various other ancillary documents and information. Considering the innumerable
variations in the documentation and circumstances, I believe it would not be
possible to apply one set of objective criteria to all claims. Difficult and subjective
lines would have to be drawn between allowed and disallowed claims and I believe
that such lines would inevitably seem arbitrary and unfair to those who were
disallowed, resulting in more disputes and oppositions from claimants.
8. Verifying the thousands of claimed investments in this category would
require additional manual, claim-by-claim review of ancillary documents submitted
to determine if there is sufficient circumstantial evidence to make a subjective
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 6 of 25 Page ID #:10919
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decision that supports a specific amount of a WCM investment. I estimate this
review would have and could take another nine months to complete and would have
and could cost an additional $750,000 in fees, possibly more depending on the rate
of responses from claimants.1
9. As discussed in the Motion, supplemental testing was run in an attempt
to objectively capture claimants who paid leaders in cash but did not provide bank
record support.
10. Accordingly, after careful consideration while formulating my Phase II
Recommendation, I determined that the substantial time and expense associated
with a claim-by-claim review of ancillary documents associated with "paid leaders
in cash" claims with no or insufficient bank record support would be inherently
subjective and would not be cost effective. After additional review of the flaws and
concerns originally raised with accepting insufficient or no bank records, I
recommend these six claims (and the thousands of others like these) remain
disallowed. That said, if these six claimants (like the other claimants who have
emailed and/or called prior to November 7, 2016) provide documentation showing
that the funds were received by their respective leaders prior to November 21, 2016,
I will review such documentation and, if appropriate, make an adjustment to the
proposed allowed amounts of their claims.
III. OPPOSITION OF LAURA BACINICH
11. Laura Bacinich filed an objection to the Motion on November 7, 2016.
Ms. Bacinich's claim was partially allowed in the proposed amount of $8,000. This
is because she provided bank records supporting transfers to the company and a
Leader totaling $13,000. Ms. Bacinich also claimed to have received $5,000 from
1 Based on review of an estimated 20,000 claimed investments out of a total of
approximately 69,000 claimed investments that were partially allowed or disallowed.
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 7 of 25 Page ID #:10920
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WCM. Accordingly, Ms. Bacinich’s total claim was partially allowed in the net
amount of $8,000. The remaining transfers claimed by Ms. Bacinich, however, had
no or insufficient bank record support (e.g., canceled check made payable to “Cash”
with no bank records regarding the ultimate deposit of said funds) and could not be
verified. Therefore, the disallowed portion of Ms. Bacinich's claim falls into the
same category as the six claims discussed above (i.e., claimed cash transfers to a
Leader with no or insufficient supporting bank records), and should be disallowed
for the same reasons. However, if, prior to November 21, 2016, Ms. Bacinich
provides documents showing that her remaining transfers were received by the
company or a Leader, I will review such documents, and, if appropriate, make an
adjustment to the proposed allowed amount of her claim.
IV. OPPOSITION OF 139 CLAIMANTS REPRESENTED
BY ATTORNEY MICHAEL ADAMS
12. The 139 claimants represented by attorney Michael Adams ("Adams
Claimants") filed a partial opposition to the Motion on November 7, 2016. Dkt. No.
483. Without identifying which of their claims are in the proposed Allowed,
Partially Allowed, and Disallowed categories, the Adams Claimants contend that
disallowing claims for cash paid to Leaders because such cash transfers lack bank
record support or the claimant could not be found in the Actual Deposit File or SQL
Database is flawed. Instead, the Adams Claimants suggest there should be "more
finely-tuned supplemental testing that invites claimants to submit additional
evidence in support" including to "give claimants the opportunity to appear before
the court (or a designated hearing officer) to testify in support of their claims." Id.
at p. 3. I understand that the Adams Claimants are simply advocating for additional
claims review work they believe would make the process more inclusive of those
who paid cash to other individuals, but I respectfully disagree with their proposal
primarily due to the reasons discussed above (delay, cost, and subjectivity).
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 8 of 25 Page ID #:10921
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13. They suggest the Court should delay the entire claims process and hold
a hearing for them (and thousands of other claimants like them) to appear one by
one and testify to the Court. Considering the vast number of claimants who claim
they paid cash to a Leader but have not provided any bank record support, I believe
this hearing could take weeks or even months to complete, would favor claimants
located in California due to travel expenses over those located in other states and
countries, and would necessarily involve a massive consumption of receivership
estate and judicial resources. Furthermore, to do so would be unfair to the investors
who submitted sufficient supporting documentation, who have Allowed or Partially
Allowed claims, and who have been waiting to receive distributions since I was
appointed in March 2014.
14. Some of the Adams Claimants did provide sufficient bank record
support for the claims, which enabled me and my staff to verify their claims. Some
were also captured through the supplemental testing performed. I have proposed
that these claims be Allowed or Partially Allowed, as the case may be. Attached
hereto as Exhibit A is the same (recreated) spreadsheet2 of claimants attached as
Exhibit 1 to the Declaration of Michael Adams (Dkt. No. 482), but with gray-shaded
columns added on the right side showing the claimants’ tracking numbers and my
proposed allowed amount for each claim. As the right hand columns reflect, many
of the claimants have Allowed or Partially Allowed claims totaling more than
$860,000 as determined by the initial, secondary, and supplemental testing
performed by myself, my staff and my claims administrator.
15. Finally, as discussed above, my staff and I have corresponded with
many claimants who state they invested large sums, only to find out what they
2 I recreated this spreadsheet; however, the totals do not tie to the Adams
Claimants' Exhibit 1 as the sum of the numbers in the rows on the Adams schedule do not equal the totals shown at the bottom of their schedule.
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 9 of 25 Page ID #:10922
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contend is a cash investment is really fictitious "points" or “earnings” they received
that had no actual value (see discussion above). While a claimant’s existence in the
SQL Database gives me reasonable assurance of a claimant’s involvement with the
scheme, there is no way to determine which accounts/order numbers/points/units
reflected in the SQL database were paid for versus those which were “earned.”
Furthermore, various individuals were propagating their own scheme of sorts by
selling earned points and never submitting such funds to the Receivership Entities.
For the various reasons discussed previously and herein, I have reason to doubt the
veracity of some of the Disallowed claims listed on the spreadsheet. Many of the
claims listed indicate the claimants gave upwards of $10,000, $20,000, or even
$50,000 to a Leader and retained no record of it whatsoever. On its face, it is hard
to believe so many people would not be more prudent with such large sums of
money.
16. Finally, as is common in this case, many of the amounts listed on the
spreadsheet differ significantly from amounts the same claimants stated on their
claim forms.3 As such, there are good reasons to believe many of the disallowed
claims listed may not represent actual cash transfers to Leaders related to WCM.
V. OPPOSITION OF AMALASOTHY CROOS
17. Amalasothy Michael Croos submitted a claim to me in the amount of
$20,000. The claim could not be verified and was therefore disallowed. On
November 7, 2016, in response to the Motion, Mr. Croos, through an attorney
located in Kansas, emailed a "Pro Se Objection" to my counsel and the Court's
Courtroom Deputy Clerk, a copy of which is attached hereto as Exhibit B. The Pro
3 For example, claimant Kasey G. Chi submitted a claim in the amount of $96,000.
I was able to verify that $48,000 was received by Mr. Chi, and therefore recommended the claim be partially allowed in that amount. Then the Adams Claimants filed their list of claimants, on which Mr. Chi is listed as having made an investment of $48,000, the exact amount the Receiver proposed be allowed (see # 137 on list). Exhibit A attached hereto.
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 10 of 25 Page ID #:10923
EXHIBIT A
Exhibit A, Page 11
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 12 of 25 Page ID #:10925
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
1 Maria Aguirre 8,000.00 (1,500.00) Elida Tinajero 6,500.00 146124 8,000.00 2 Rigoberto Vasquez - 100,000.00 Agape Tec LTD 100,000.00 137065 100,000.00 3 Maria Albaregna 10,000.00 Ezequiel Dureo 10,000.00 137163 10,000.00 4 Samuel Velazquez 2,000.00 Daniel Cruz 2,000.00 142058 1,999.00 5 Antoni Yanez 24,000.00 Pedro Bahena 24,000.00 142051 24,000.00 6 Maria Najera 6,000.00 Rogelio Fierro 6,000.00 142047 6,000.00 7 Alejandro Aguilar 6,000.00 Miguel Rodriguez 6,000.00 142224 6,000.00 8 Rogelio Fierro - 14,020.00 14,020.00 141583 14,020.00 9 Favio Barrita 6,000.00 Isabel Benitez 6,000.00 146149 6,000.00 10 Erica Barrita 14,000.00 Agape Tec LTD 14,000.00 146281 14,000.00 11 Pastor Barrita 30,000.00 Isabel Benitez 30,000.00 147034 30,000.00 12 Magaly Barrita 8,000.00 Isabel Benitez 8,000.00 145978 8,000.00 13 Eduardo Soria 22,000.00 Juan Castillo 22,000.00 137766 22,000.00 14 Victor Cabezas 14,000.00 Hilda Martinez 14,000.00 137073 14,000.00 15 Juan Ramirez- Morales 14,000.00 Ana Victoria 14,000.00 154494 14,000.00 16 Roxana Frias 3,000.00 Martha Martinez 3,000.00 137532 3,000.00 17 Luz M. Barron 2,000.00 Jose Rodgriguez 2,000.00 144493 2,000.00 18 Ricardo Hernandez 14,000.00 Agapito Torrez 14,000.00 137720 14,000.00 19 Blanca Medina 10,000.00 Hilda Martinez 10,000.00 137170 10,000.00 20 Isreal Ortega 14,000.00 Agapito Torrez 14,000.00 137921 14,000.00 21 Gricelda Flores 4,000.00 Rosa Flores 4,000.00 137927 4,000.00 22 Alvaro Sarceno 14,000.00 Dureo Ezequiel 14,000.00 136931 14,000.00 23 Herbert Penate 10,000.00 Ezequiel Dureo 10,000.00 136919 10,000.00 24 Ramon Hernandez 4,000.00 Fierro Rogelio 4,000.00 141742 4,000.00 25 Orlando Gutierrez 2,000.00 Juan Vasquez 2,000.00 137172 1,999.00 26 Inosencio Sanchez 2,000.00 Agape Tec LTD 2,000.00 137174 2,000.00
27 Elias Loza 1,000.00 10,000.00 Rosa M. Flores 11,000.00 137176 10,000.00 10,000.00
Amount listed here does not match claim. Claim submitted was for $20,000. Of that amount, $10,000 was verified and allowed. No bank record support was provided for remaining $10,000 claimed and payment could not be matched to company account records through supplemental testing.
28 Marco Estrella 6,000.00 Dinora Salguero 6,000.00 137188 6,000.00 29 Carlos Sarat 14,000.00 Adan Lopez 14,000.00 137189 14,000.00
30 Emmanuel Narvaez, Jr. 8,000.00 Rosa Flores 8,000.00 137542 18,000.00
Amount listed here does not match claim. Claim submitted was for $18,000. Claim may have included $10,000 invested by Emmanuel Narvaez, Sr., who did not submit a claim, but is listed as Claimant # 68 on this list.
31 Christopher Narvaez 4,000.00 Rosa Flores 4,000.00 137550 4,000.00 32 Norma Cuenca 12,000.00 Fernando Toribio 12,000.00 137555 12,000.00
33 Sergio Godoy 13,500.00 16,500.00 Rosa Flores 30,000.00 137539 30,000.00
No check or written evidence of payment provided for $16,500 claimed. Payment could not be matched to company account records through supplemental testing.
Exhibit A, Page 12
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 13 of 25 Page ID #:10926
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
34 Antonio Baltazar 2,000.00 Javier Ponce 2,000.00 137558 2,000.00 35 Arnoldo Natareno 4,000.00 Alfaro Lucio 4,000.00 137714 4,000.00 36 Roberto Alfaro - 14,000.00 Agape Tec LTD 14,000.00 137729 14,000.00 37 Clara Rivera 4,000.00 Daniel Cruz 4,000.00 137898 3,998.00 38 Santa Saldivar-Luna - 30,065.00 Agape Tec LTD 30,065.00 137931 30,065.00
39 Jesus Padilla 12,000.00 40,000.00 38,000.00 Agape Tec LTD 90,000.00 142068 26,000.00 64,000.00
The $38,000 wire to company was not received and appears to have failed. The two $6,000 paid leader claimed investments and $14,000 investment paid directly to company were verified and allowed. No bank record support was provided for the remaining amount claimed and payment could not be matched to company account records through supplemental testing.
40 Marlon Hernandez 14,000.00 Lemny Hernandez 14,000.00 137333 14,000.00 41 Armando Espinosa 14,000.00 Lucy Aguirre 14,000.00 137771 14,000.00 42 Ricardo Ramirez 24,000.00 Francisco Figueroa 24,000.00 137773 24,000.00 43 Roberto Andrade 10,000.00 Daniel Cruz 10,000.00 137794 9,995.00 44 Maria E. Estrada 2,000.00 Santana Saldivar 2,000.00 144396 2,000.00
45 Nicolas Herrera - 2,000.00 Agape Tec LTD 2,000.00 134048 4,000.00 2,000.00
Amount listed here does not match claim. Claim submitted was for $6,000. Of that amount, $4,000 was verified and allowed. No bank record support was provided for the remaining $2,000 claimed and payment could not be matched to company account records through supplemental testing.
46 Norma Morales 14,000.00 Oralia Gutierrez 14,000.00 144642 14,000.00 47 Maria E. Camacho 38,000.00 Jose Cuevas 38,000.00 147171 38,000.00 48 Brian G. Duarte 4,000.00 Hector Martinez 4,000.00 144640 4,000.00 49 Evelia Serrano 8,000.00 Alberto Muniz 8,000.00 144653 8,000.00 50 Julio P. Perez - 10,000.00 Agape Tec LTD 10,000.00 144659 10,000.00 51 Maria A. Torres 18,000.00 Jorge Roa 18,000.00 144347 18,000.00 52 Saul Estevez 14,000.00 Fernando Toribio 14,000.00 148759 14,000.00 53 Minerva Castillo 12,000.00 Francisco Castillo 12,000.00 145060 12,000.00 54 Octavio Lua 4,000.00 4,000.00 Agape Tec LTD 8,000.00 145299 8,000.00 55 Carmela Miranda 6,000.00 Lemny Hernandez 6,000.00 145301 6,000.00
56 Fernando Toribio - 36,500.00 Agape Tec LTD 36,500.00 145306 45,500.00 Amount listed here does not match claim. Claim submitted was for $45,500, all of which was verified and allowed.
57 Emilio Ruelas 15,000.00 Luz Gonzalez 15,000.00 145309 5,000.00 10,000.00
Exhibit A, Page 13
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 14 of 25 Page ID #:10927
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
58 Amelia Godinez 30,000.00 Jorge Roa 30,000.00 145318 10,000.00 20,000.00
Claimant provided bank record support for two $5,000 payments, which were verified and allowed. No bank record support was provided for the remaining $20,000 claimed and payment could not be matched to company account records through supplemental testing.
59 Victor Centeno 6,000.00 Guadalupe Jimenez 6,000.00 145964 6,000.00 60 Ruben Martinez 4,000.00 Hector Martinez 4,000.00 145415 4,000.00 61 Luis A. Bustamante 6,000.00 Claudio E. Garay 6,000.00 146164 6,000.00 62 Leon Estrada 6,000.00 Guadalupe Jimenez 6,000.00 146136 6,000.00 63 Santiago Gasper 2,000.00 Guadalupe Jimenez 2,000.00 145949 2,000.00 64 Martin Centeno 2,000.00 Guadalupe Jimenez 2,000.00 145960 2,000.00 65 Victor Centeno 2,000.00 Guadalupe Jimenez 2,000.00 145964 2,000.00 66 Maria Elena Felix 12,000.00 Reynaldo Pacheco 12,000.00 156404 12,000.00 67 Hermilla B. Esquivez 30,000.00 Celiflora Thompson 30,000.00 146291 30,000.00
68 Emmanuel Narvaez, Sr. 10,000.00 Rosa Flores 10,000.00 137542 10,000.00
This person did not submit a claim. As discussed above (See Claim # 30 on this list), Emmanuel Narvaez, Jr. submitted a claim that may have included $10,000 for Emmanuel Narvaez, Sr. No bank record support was provided for $10,000 claimed and payment could not be matched to company account records through supplemental testing.
69 Jorge Toribio 4,000.00 Francisco Figueroa 4,000.00 156397 4,000.00
70 Ma Guadalupe Escodedo Vargas 18,000.00 Bertha Miranda 18,000.00 155454 18,000.00
71 Magdalena Barron 6,000.00 Jose Rodgriguez 6,000.00 145049 6,000.00
72 Manuel Ponce - 22,000.00 Agape Tec LTD 22,000.00 156394 2,000.00 20,000.00
Claimant provided bank record support for $2,000 payment, which was verified and allowed. No bank record support was provided for remaining $20,000 claimed and payments could not be matched to company account records through supplemental testing.
73 Fausto G. Murillo 23,000.00 Alberto Muniz 23,000.00 145419 28,000.00 9,000.00
Amount listed here does not match claim. Claim submitted was for $37,000. Of that amount, $28,000 was verified and allowed. No bank record support was provided for remaining $9,000 claimed and payments could not be matched to company account records through supplemental testing.
74 Hector Martinez 8,000.00 Oralia Gutierrez 8,000.00 144649 8,000.00 75 Jose Guardado 14,000.00 Adan Lopez 14,000.00 144496 14,000.00 76 Luis Pacheco 6,000.00 Isabel Benites 6,000.00 137072 6,000.00
Exhibit A, Page 14
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 15 of 25 Page ID #:10928
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
77 Felipe Wences 20,000.00 Juan Castillo 20,000.00 137062 24,400.00 Amount listed here does not match claim. Claim submitted was for $24,400.
78 Enrique De Haro - 5,400.00 10,000.00 Agape Tec LTD 15,400.00 137077 15,400.00
79 Tomasa Martinez 4,000.00 Fierro Rogelio 4,000.00 135793 14,000.00 Amount listed here does not match claim. Claim submitted was for $14,000.
80 Ana VictoriaSandoval Romo 6,000.00 Ivan Perez 6,000.00 155465 6,000.00
81 Juan O. Nulia 4,000.00 Betty Gomez 4,000.00 160719 4,000.00 82 Francisco Chavez - 10,510.00 Agapito Torrez 10,510.00 153138 10,510.00 83 Maria C. Rubio 13,920.00 13,920.00 144503 4,720.00 9,200.00 84 Roberto Sambranis 18,000.00 Rosa Flores 18,000.00 168100 18,000.00 85 Artemio Robledo 6,000.00 Fabian Pulido 6,000.00 147196 6,000.00 86 Maria D. Ramirez 4,000.00 Rosa Flores 4,000.00 168373 4,000.00
87 Jorge Rodriguez 20,001.00 1,000.00 1,999.00 Reynaldo Pacheco 23,000.00 168609 2,300.00 22,700.00
Amount listed here does not match claim. Claim submitted was for $25,000. Of that amount, $2,300 was verified and allowed. No bank record support was provided for remaining $22,700 claimed and payments could not be matched to company account records through supplemental testing.
88 Clemencia Gaitan 20,000.00 28,000.00 Hilda Martinez 48,000.00 160578 28,000.00 20,000.00 89 Raudel Renteria 8,000.00 Agapito Torrez 8,000.00 147180 8,000.00 90 Juan P. Castillo 6,000.00 Hilda Martinez 6,000.00 149548 6,000.00
91 Lozaro Morales - 3,000.00 18,000.00 Renato Rodriguez 21,000.00 149088 4,500.00 19,500.00
Amount listed here does not match claim. Claim submitted was for $24,000. Of that amount, $4,500 was verified and allowed. No bank record support was provided for remaining $19,500 claimed and payments could not be matched to company account records through supplemental testing.
92 Carlos A. Quijada 6,000.00 Herbert Penate 6,000.00 156410 6,000.00 93 Rosa Flores 8,000.00 Daniel Cruz 8,000.00 156420 8,000.00 94 Jorge Aguilar 4,000.00 Renato Rodriguez 4,000.00 160995 4,000.00 95 Praxedez Beltran 4,000.00 Fabian Pulido 4,000.00 161107 4,000.00 96 Karla Valdez 2,000.00 Alberto Muniz 2,000.00 161156 1,999.00 97 Diego Lupercio 24,000.00 Joel Cruzado 24,000.00 167889 24,000.00
98 Jose Cisneros 22,000.00 Ma Guadalupe Escobedo 22,000.00 158742 22,000.00
99 Javier Ponce 34,200.00 Daniel Cruz 34,200.00 160915 27,200.00 7,000.00
This claimant had a joint bank account with claimant 122. The $7,000 came from said account and was claimed in full by both claimants.After conferring with both, the $7,000 investment was agreed to be allocated to claimant 122 below.
100 Jose Manuel Moya 99,900.00 70,000.00 Agape Tec LTD 169,900.00 160641 70,000.00 99,900.00
Exhibit A, Page 15
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 16 of 25 Page ID #:10929
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
101 Alberto Muniz 61,000.00 14,000.00 Agape Tec LTD 75,000.00 143301 28,000.00 61,000.00
Amount listed here does not match claim. Claim submitted was for $89,000. Of that amount, $28,000 was verified and allowed. No bank record support was provided for remaining $61,000 claimed and payments could not be matched to company account records through supplemental testing.
102 Emilio A. Perez 10,800.00 3,200.00 6,000.00 Reynaldo Pacheco 20,000.00 168432 9,200.00 10,800.00 103 Edgar A. Navas 10,000.00 Hilda Martinez 10,000.00 160810 2,000.00 8,000.00 104 Marcos Serrano 12,000.00 Fernando Toribio 12,000.00 168587 12,000.00 105 Rosendo Islas 4,000.00 Reynaldo Pacheco 4,000.00 153814 1,000.00 3,000.00 106 Fernando Vazquez 12,000.00 Reynaldo Pacheco 12,000.00 153085 12,000.00 107 Rosalio Rodriguez - 18,000.00 Jose Rodgriguez 18,000.00 154499 18,000.00 108 Jamie Torres 2,000.00 Francesco A. Aguiar 2,000.00 154495 2,000.00 109 Alvara Gomez 4,000.00 Agapito Torress 4,000.00 154490 4,000.00 110 Ignacio Llames 4,000.00 Hilda Martinez 4,000.00 154487 4,000.00 111 Gloria E. Gomez 10,000.00 Hilda Martinez 10,000.00 153822 10,000.00 112 Maria M. Fernandez 16,000.00 Oralia Gutierrez 16,000.00 150440 16,000.00
113 Jose Arellano - 14,000.00 Agape Tec LTD 14,000.00 137596 40,000.00 Amount listed here does not match claim. Claim submitted was for $40,000.
114 Juan Martinez 12,000.00 Rogelio Fierro 12,000.00 148762 12,000.00
115 Salvador Rodriguez - 14,000.00 Agapito Torress 14,000.00 147607 36,000.00 Amount listed here does not match claim. Claim submitted was for $36,000, all of which was verified and allowed.
116 Maria Cabrera 14,000.00 Ivan Tiempo 14,000.00 149095 14,000.00 117 Lucrecia M. Noriega 12,000.00 Luz Gonzalez 12,000.00 149079 6,000.00 6,000.00 118 Jacinto Silva 16,000.00 (3,800.00) Felipe Wences 12,200.00 147326 16,000.00 119 Fidel Catalan 28,000.00 Fernando Toribio 28,000.00 168506 28,000.00 120 Juan A. Solano 12,000.00 Rosa Flores 12,000.00 158302 12,000.00 121 Martha De Pantoja 12,000.00 Fidel Tinoco 12,000.00 158350 12,000.00
122 Epifanio Gutierrez 10,000.00 7,000.00 Rosa Flores 17,000.00 158324 7,000.00 19,000.00
Amount listed here does not match claim. Claim submitted was for $26,000. This claimant had a joint bank account with claimant 99. The $7,000 came from said account and was claimed in full byboth claimants. After conferring with both, the $7,000 investment was agreed to be allocated to claimant 122.
123 Raquel Perez 14,000.00 Reynaldo Pacheco 14,000.00 166454 14,000.00 124 Martha Martinez 65,000.00 Hilda Martinez 65,000.00 166526 65,000.00 125 Adan Lopez 10,000.00 Oralia Gutierrez 10,000.00 141560 10,000.00 126 Mirna Diaz 8,000.00 Oralia Gutierrez 8,000.00 160554 1,999.00 6,001.00 127 Kaylin M. Kim - 52,500.00 Grace Chang 52,500.00 135898 40,500.00 12,000.00 128 Joseph K. Park 30,000.00 Grace Chang 30,000.00 135896 30,000.00 129 Hee B. Park 30,000.00 8,000.00 Grace Chang 38,000.00 135895 8,000.00 30,000.00 130 Jay Song 5,000.00 5,000.00 Grace Chang 10,000.00 135757 5,000.00 5,000.00
Exhibit A, Page 16
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 17 of 25 Page ID #:10930
ClaimantNumber Name
Amt PdTo
IndividualLeader
WithoutWritten
Evidenceof
Payment(UsuallyCash inHand)
Amt PdTo
IndividualLeaderWith
WrittenEvidence
ofPayment(Such AsCashiersCheck orDeposit
Slip FromLeader's
Bank)
Any OtherAmount(s)Paid (Such
As ToWCM777's
Bank)
Amount(If Any)Received
Back
Name ofIndividual
Leaderor Entity
TotalClaim
TrackingNumber
AmountAllowed
AmountPartiallyAllowed
AmountDisallowed Notes
131 Young M. Kim 4,000.00 6,000.00 Grace Chang 10,000.00 135645 10,000.00
Claimant provided no bank record support for either claimed transfer and only a handwritten note regarding the claimed $6,000 transfer, which could not be verified or matched to company account records through supplemental testing.
132 Young O. Kim 10,000.00 14,600.00 Kaylin Kim 24,600.00 135510 31,600.00 Amount listed here does not match claim. Claim submitted was for $31,600, all of which was verified and allowed.
133 Young C. Chang 6,000.00 6,100.00 Kaylin Kim 12,100.00 135516 12,100.00 134 Kwang S. Park 14,000.00 6,000.00 Kim O. Young 20,000.00 135399 6,000.00 14,000.00
135 Jong M. Lee - 10,000.00 Grace Chang 10,000.00 135367 8,000.00 2,000.00
$6,000 confirmed received into co. bank accounts, $2,000 paid leader confirmation. No bank record support was provided for remaining $2,000 claimed and payments could not be matched to company account records through supplemental testing.
136 Christine H. Choi 900.00 8,300.00 Grace Chang 9,200.00 135053 9,200.00 Checks written to self and cash. Check written to co., but not traceable to co. bank accounts.
137 Kasey G. Chi - 48,000.00 Agape Tec LTD 48,000.00 135042 48,000.00 48,000.00
Amount listed here does not match claim. Claim submitted was for $96,000. Of that amount, $48,000 (the amount listed here) was verified and allowed.
138 Chong IM - 14,000.00 Agape Tec LTD 14,000.00 135035 13,112.66
This claimant's $14,000 transfer was verified and allowed, but the proposed allowed claim amount was reduced by $887.34 distributed to claimant, for a net total of $13,112.66.
139 Francesca A. Aguiar 11,200.00 2,800.00 Santa Saldivar 14,000.00 137759 2,800.00 11,200.00
This claim was initially placed in disallowed category, but the Receiver has since made and adjustment based on the documentation provided to allow $2,800 of the claim and disallow the remaining $11,200, for which no bank record support was provided and which could not be matched to any deposits reflected in company account records through supplemental testing.
TOTALS 1,513,421.00 302,910.00 439,584.00 (5,300.00) 2,250,615.00 TOTALS 457,185.00 404,331.66 1,584,901.00
Exhibit A, Page 17
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 18 of 25 Page ID #:10931
EXHIBIT B
Exhibit B, Page 18
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 19 of 25 Page ID #:10932
Exhibit B, Page 19
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 20 of 25 Page ID #:10933
Exhibit B, Page 20
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 21 of 25 Page ID #:10934
Exhibit B, Page 21
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 22 of 25 Page ID #:10935
Exhibit B, Page 22
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 23 of 25 Page ID #:10936
Exhibit B, Page 23
Case 2:14-cv-02334-JFW-MRW Document 500-1 Filed 11/14/16 Page 24 of 25 Page ID #:10937