USA V Harris Doc 317 Filed 03 Jun 13

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 1 of 135
FILED IN C L E R K ' S O F F I C E
U . S . D . C . Atlanta
MAY 3 1 2013
UNITED STATES COURT OF APPEALS FOR THE ELEVENTR CIRCUIT 56 F o r s y t h S t r e e t N.W. A t l a n t a , GA 30303 OTITED STATES OF AMERICA, Appellee. ( ( ) Case:
4 P & S - , N , H A T T E N , C L E R I C
-versus
12-11126-DD 12-11178-DD l:09-cr-00406-TCB-JFK
) ) ;KTifTis P a u l H a r r i s , Benjamin S t a n l e y , ^ Appellants.
MOTION TO VACATE, SET-ASIDE, CORRECT OR REMAND FOR DISMISSAL A JURY GUILTY VERDICT UNDER F.R.Civ.P 6 0 ( b ) .
Res i n t e r a l i o s a c t a t o c e r t a i n p a r t i e s . P e t i t i o n e r / A p p e l l a n t Benjamin S t a n l e y ( h e r e i n a f t e r A p p e l l a n t ) i s f i l i n g t h i s M o t i o n i n accordance w i t h Atendment I t o t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s o f America t h e r e i n e x e r c i s i n g mj a u t h o r i t y t o r e d r e s s t h e c o u r t f o r g r i e v a n c e s because A p p e l l a n t d i d n o t have a fair trial; was prevented because A p p e l l a n t , due t o f r a u d by h i s a c c u s e r s and Respondent, from h a v i n g a f a i r t r i a l ; and because o f v i o l a t i o n o f A p p e l l a n t ' s prevented from p r e s e n t i n g e v i d e n c e
r i g h t s under t h e S i x t h Amendment, he was and and and
A p p e l l a n t ' s s i d e o f t h e case; because o f I n e f f e c t i v e A s s i s t a n c e o f Counsel; because o f a p p l i c a t i o n o f c r i m i n a l l a w where due t o t h e Laws o f O b l i g a t i o n s C o n t r a c t s , C o n t r a c t l a w s h o u l d have been u t i l i z e d because i t r e q u i r e d exami-
n a t i o n o f t h e c o n t r a c t i n g p a r t i e s , n o t A p p e l l a n t and a c t o r s . T h i s M o t i o n i s t r u e , c o r r e c t , n o t meant t o m i s l e a d and f i l e d under p e n a l t y o f p e r j u r y f o r d e l i v e r a n c e o f t h e a c t u a l f a c t s as needed f o r d e p o r t a t i o n and i n c o r p o r a t i o n i n t o t h i s r e c o r d o f c o u r t proceedings Its f o r case numbered above.
i n t e n t i s meant t o c o r r e c t , bear w i t n e s s t o e r r o r s i n t h e charges and t o separate
show A p p e l l a n t S t a n l e y i s n o t a p a r t y t o t h e f e d e r a l c h a r g e s ,
A p p e l l a n t f r o m f a l s e s t a t e m e n t s by A p p e l l e e t o i n c l u d e i n v e s t i g a t o r y p e r s o n n e l ; f a l s e s t a t e m e n t s by t h e SEC a t t o r n e y A l a n a B l a c k and o t h e r s a s raay a p p l y . Com V. M a n g i n i , 478 Pa. 147, 386 A.2d 482, 490 S. C t . 78, 90L.Ed 30 (1945). P e r j u r y undermines t h e f u n c t i o n and p r o v i n c e o f t h e l a w and t h r e a t e n s i n t e g r i t y o f judgments t h a t a r e t h e b a s i s o f t h e l e g a l system. 1 the
See U.S. v.
Dunnigan, 507 U.S. 87, 97, 113 S. C t . 1111, 122L.Ed,2d 445 (1993) " t o uphold t h e
i n t e g r i t y o f our t r i a l system...the c o n s t i t u t i o n a l i t y o f p e r l u r y . s t a t u t e s i s
u i i q u e s t i o n e d ) U n l i k e speecli i n other c o n t e x t s , testimony
under o a t h has t h e
f o x ' i i i a l i t y and g r a v i t y necessary t o iêrriind the w i t n e s s
that h i s or her statements
w i l l be t h e b a s i s f o r o f f i c i a l governmental a c t i o n t h a t o f t e n a f f e c t s the r i g h t s
and
l i b e r t i e s of others.
Sworn testimony
i s q u i t e d i s t i n c t from l i e s not spoken
under o a t h and s i m p l y intended
t o p u f f up o n e s e l f . "
U,S. v, X a v i e r A l v a r e z , S,
C t . 132 S, C t . 2537; 183 L, Ed. 2d 574; 2012 U.S. L e x i s 4879; 80 US. L.W. 4634;
40 Media L. Rep. 1953; 23 F l a L. Weekly Fed. S, 468 No.11-210, Feb 22, 2012
Argued; June 28, 2012.
Decided.
"The
federal statute prohibiting
[183 L. Ed. 2d 5891 f a l s e statements t o
government o f f i c i a l s p u n i s h e s " whoever, i n any matter w i t h i n the j u r i s d i c t i o n of
t h e e x e c u t i v e , l e g i s l a t i v e or j u d i c i a l branch o f t h e government...makes any
m a t e r i a l l y f a l s e , f i c t i t i o u s , o r f r a u d u l e n t statement o r m i s r e p r e s e n t a t i o n , "
18
use lC01s p r o h i b i t i o n on f a l s e statements made t o Government o f f i c i a l s , i n
communications c o n c e r n i n g
o f f i c i a l matters,
does not l e a d t o the broader
p r o p o s i t i o n t h a t f a l s e statements a r e u n p r o t e c t e d
when made t o any person, a t any
t i m e , i n any c o n t e x t . " 2
Key Elements t o E l i m i n a t e BENJAMIN F. STANLEY FROM THE CASE
The key element " m i s r e p r e s e n t a t i o n
i n the r a d i o b r o a d c a s t and l y i n g t o
i n v e s t o r s " P e t i t i o n e r p r o v i d e s t h a t h i s statement was not a m i s r e p r e s e n t a t i o n
and t h e t r u t h i s d i s c l o s e d h e r e i n .
Prosecutors
accused P e t i t i o n e r S t a n l e y of
l y i n g t o i n v e s t o r s about bonds i n a r a d i o announcement.
The t r u e f a c t s a r e t h a t
P e t i t i o n e r was on t h e t e l e p h o n e w i t h the r a d i o s t a t i o n coimnentator and CEO Rufus
P a u l H a r r i s t o p a r t i c i p a t e i n r e s o l v i n g a naked s h o r t , and t h e r e l e a s i n g o f
r e s t r i c t i v e shares i n r o t h e market p l a c e .
I n response t o t h e commentator,
P e t i t i o n e r responded based upon overbreadth
and r e l i e d upon t h e f a c t s t h a t the
bonds had been a u t h e n t i c a t e d by t h e p a r t i e s t o t h e c o n t r a c t and approved by
a t t o r n e y s , before t h e merger, t h a t a l l the necessary i n f o r m a t i o n was r e l e a s e d
to t h e p u b l i c and h i s statement being overbreadth
r e p l i e d t h a t , '"the company
owned t h e bonds and m u l t i p l e s i g n e d c o n t r a c t u r a l p r o j e c t s p r i o r t o merger and
the i n f o r m a t i o n had been p u b l i s h e d i n m u l t i p l e p u b l i c a t i o n s p r i o r t o h i s
statements.
Further prosecutors
a l l e g e d " S t a n l e y had p a r t i c i p a t e d i n a s i m i l a r pump and
dump'' scheme a t a company c a l l e d Broadband W i r e l e s s . "
That statement i s a scheme
and
a l l e g a t i o n t o deceive the j u r i s t and eioud the c u r r e n t f r a u d a g a i n s t A p p e l l a n t
There i s no known court or t r i a l evidence or i n f o r m a t i o n t o prove such a statement
P e t i t i o n e r S t a n l e y i s accused o f A i d i n g and A b e t t i n g i n the p r e p a r a t i o n o f
f i n a n c i a l statements done by CEO H a r r i s ,
F i r s t I d e f i n e a i d and abet as
" i n t e n t i o n a l l y h e l p or encourage another person t o commit a crime.
P e t i t i o n e r S t a n l e y was h i r e d by c o n t r a c t i n t o a company t h a t a l r e a d y e x i s t e d .
I t had i t s c o r p o r a t i o n documents, CEO, c o r p o r a t e a t t o r n e y , s e c r e t a r y , t r e a s u r e r
and numerous i n v e s t o r s .
The company had i t s a s s e t s .
The a s s e t s / f i n a n c i a l
records
were a l r e a d y i n p l a c e when P e t i t i o n e r was h i r e d a t Waatle I n c .
Waatle I n c . merged w i t h C o n v e r s i o n
Solutions.
A l l shareholders,
officers,
and
f i n a n c i a l r e c o r d s were merged i n t o Conversion
S o l u t i o n s as w e l l .
W i t h Rufus
P a u l K a r r i s being the CEO, he h i r e d by c o n t r a c t Sabra Dabbs, Ismet Paez, and
Romeo V e n d e t t i .
Sabra Dabbs and Ismet Paez brought Venezula and F i n n i s h Bond
C o n t r a c t s t o Conversion
S o l u t i o n s . Raieo Vandetti was hired to authenticate and apothe-
cate the bonds. The a t t o r n e y s and p a r t i e s to, the c o n t r a c t s , t h e c e r t i f i e d p u b l i c
a c c o u n t s and t h e c h i e f f i n a n c i a l o f f i c e r s a u t h e n t i c a t e d t h e V e n e z u l a and F i n n i s h
Bonds t h e n o b v i o u s l y c r e d i t e d C o n v e r s i o n
S o l u t i o n w i t h t h e A s s e t s per c o n t r a c t
thereby res
c a u s i n g a change t o t h e f i n a n c i a l statement.
P e t i t i o n e r S t a n l e y was
i n t e r a l i o s acta.
SABRA DABBS CONTRACT Next, t h e a l l e g e d i l l e g a l d e v i c e supposedly p e r p e t r a t e d by A p p e l l a n t S t a n l e y never e x i s t e d . On March 14, 2006 Ms. Sabra Dabbs i n s t r u c t e d Mr. H a r r i s on t h e
procedures f o r e x e c u t i n g t h e VB-1 Bond t r a n s a c t i o n which i n c l u d e d payment o f $400,000 w i t h i n 72 hours a f t e r t r a n s f e r of t h e bond. The i n s t r u c t i o n s t o H a r r i s
were f o l l o w e d by a "Deal Memo" which s p e c i f i e d employment o f Sabra D. Dabbs, That document f o l l o w s . Behind t h a t document i s a B i n d i n g L e t t e r of I n t e n t (4
pages) dated March 15, 2006 a u t h e n t i c a t e d by Rufus P a u l H a r r i s ; Sabra Dabbs, and Ott G i r a ( P a r t i e s t o t h e c o n t r a c t ) . soever i n t h e c o n t r a c t . A p p e l l a n t S t a n l e y had no involvement what-
He was Res i n t e r a l i o s a c t a .
4a
Tuesday, March 14,2006

125 Town Park Drive Suite 300 Kennesaw, GA 3Q144 (P) 770-420-B270 (F) 404-393-9824
Deal Memo
www.cvsu.us
Members of management of our respective company wouid lilce to offer the possibility of a strategic transaction in which Conversion Solutions, Inc. ("CVSU") would like to extend to you the followiag offer in the form of this Deal M e m o .
Position:
Executive Vice President of Global Investments $ 2 0 0 , 0 0 0 . 0 0 Annually plus Investment Agreements
Salary:
Other Compensation: 2 , 0 0 0 , 0 0 0 (Two Million) shares of CVSU stock Terms of this letter are as follows; 1 .) Confidentiality. The parties t o this Merrlo agree that all confidential information that such party or any of their respective officers, directors, employees, counsel, accountants, or other representatives may now possess or may hereafter obtain relating to the other party shaU be held in confidence. Special Transaction. The transaction to b e known as Investment Number 20061403 and referencedfromthis point forward as (VB-1). The company upon acceptance of this letter hereby grants ftill authority to act on the behalf of CVSU with a limited signature authority to Sabra Dabbs as Executive Vice President of Global Investments. The signature authority and any additional personal compensation will be TBD and defmed per Investment agreement.
2 .)
We look forward to working together and ifyou have any questions or would like to discuss the contents of this letter fiirther, please feelfreeto contact me at (678) 2557650. AGREED TO AND ACCEPTED AS OF THE DATE OF TfflS LETTER: Conversion Solutions, Inc.; Title: Chairman and CEO
By: Sabra Dabbs 3 9 3 3 Pine Hurst Way Duluth, GA 30096

Confidential
Page 1 ofl
4b
3/15/2m6
BINDING LEHER OF INTENT

This Binding Letter of Intent ('BLCH") is made and entered into by and among the foHowing named "Parties" effecfive as of the 15th Day of March 2006.
PARVES:
CONVERSION SOLUTIOMSINC. and its subsidiaries and affiliated companies ("CVSU") CVSU is located at 125 TownParis Drive Suite 300, Kennâw, GA 30144. CVSU is a diversified holdings corporation, which was formed to originate, iiind and source funding for asset-basedfransactionsin the private market CVSU's main SKvice wii be to acquire, flind and provide insurance to target companies In Sie cun-ently undeserved $15,000,000 to $100,000,000 asset ftiance market CVSU funding will enable our businesses to compete more effectively, improve operatiwis and increase valua S A B t ^ D ^ B S . individual or her assign ('SD1 SD is located at 3933 PineHurst Way, Duluth GA, 30096. OTT GIRA. individual or his assign COG'^ OG is located al 10662 Frontenac Woods, St Louis, MO 53131.
1.
BINDING LETTER OF INTENTi
The Parlies agree to forni this Bincfing Letter of intent {'BLOt") to jdntiy develc^s business in orda to strategically and mutually l)enefitfromthe unique services of mdt par^.
2.
DUTIES OF PARTIES;
Each Party, having been selected to provide unique abilities to the team, agrees to bring to the BLOl its knowledge and abilities as heran setforlh, nam^y: CVSU: originate, fund and source funding for asset-based transadons in the private mari<et SD & OQ: global investments, global business development
3.
MANAGEMENT OF THE BLOl:
CVSU Mil bs aie manager of ali mutually agreed to transactions. A B. Each party shall have full control over its proposed fees for services to be rendered on each of tbe projecfe. No party shall ma!<e dedsions or statements to a third party in regard to Bie other party's prtêct responsibiMes to include but not limited to fees unless it is agreed upon and with witten consent
INITIALS ovau I SD
OG
4c
Sabra-VB-000006
Since the management and operation of each patty is s t l sdely the responsibility of each of the respective parfy, the respective parly shal! s d in good faitti and s o M the recommendations of the other party but retain ihe exclusive control over operational dedsions and setting of profit margins within industry norms.
D.
All Parties shall act in good faith to protect the interests of the other strategic aliiance member in the execution of Sieir respective responsibilities. Neither party shall, intaitionally or unintenfion^, influence or misdirect the prqect against fhe other party.
E.
All dient con-espondenoes, legal or othetvwse, to indude but not limited to, contracte and agreements, shall be made available to all parties of the BLOl upon request
4. A.
COMPENSATION AND AUTHORITY CVSU will extendttiefollowing to SD: Position: Executive Vice President of Global Invesbnents Salary: US$200,000.00 Annually plus Inveshnent Agreements TBD on projeAby preyed case basts. Other Compensation: Upon shares release date 2,000,000 (Two Million) shares of CVSU stock to SD or her assign. Tlie signature mifeori^ and any additional perstaial compensation wiH be TBD and defined per Investmwit agreement
B.
CVSU win extend the following to OG: Position; President Salary: US$200,000.00 Annually plus Investment Agreements TBD on project by prqect case basis. Other Compensafion: Upon shares release date 2000,000 (Two Million) shares of CVSU stock to OG or his assign. The signature authonty and any additional personal compensation will be TBD and defined per Investment agreement
Spedal Transaction. The transaction to be known as Investment Number 20061403 and referenced from this point forward as {VB-1). CVSU upon acceptance of Ihis letter hereby grants full authority to act on the behalf of CVSU with a limited signature authority to Sabra Dabbs as Executive Vice Presidenl of Global Investments. SD Signature Authority. SD wiilhave Coîghature authority over Funding Agreement Number 252455770-03142006 and any other deal procured by SD. SD will have Co-signature auShorfly m any offehore account eurodKff account and any other agreements, bank accounts in relafion to this transaction. Exit Strategy: SD will be permitted to transfer spedal transaction VB-1 in fhe event of nonferformance, defined as not achieving a milestone of a minimum 50% ROI per week. Bond is fo be released to SD within 72 hours of written notice of non-perfomiance. PowertHouse Funding Payment Tenns: PHF or ite assign will receive biweekly 25% of all profits originated from Notes purchases and sale,fayfhe date (the "Due Date" which is expected to be 42 weeks wiftt rdls and extensions) on which any payment becomes due in respect ofthe Notes seixired by Funding Agreement Number. 252455770-03142006. CVSU will arrange and bear the cost of establishing PHF's offshore account in (Nation to this transaction. Trade involvemait SD and 0 6 will have full a c c ^ s to any mutually agreed trade invdvements, funding agreemente, business opportunity and any other deal procured by SD or 00.
2
\ IN!T!.AL,-S
1 uvsu 1 SD
OG
4d
Sabra-VB-00 0007
5.
NON-COMPETE, NON-CIRCUMVENT, NON-EXCLUSIVE:
All parties vwll still retain ownership of each customer it introduced to CVSU. Any new customer acquired as Ihe result of the BLOl will be considered as the property of the BLOL All parties will not compete and circumvent each oBier and offw each other's customers the same products and servicesfromfhe other company. All parlies will have the right to conSnue doing its business with dher companies outside e BLOl. Any public representaficm of anotha- party's products and sei>nces wiil have to be approved by all parties in writing^ _
6.
COSTS:
CVSU vwll bear arry costs pertaining to this BLOL
7.
CONFIDENTIAUTY-BUSINESS OPPORTUNITIES:
The parties to this BLOl agree that aB confidential information that such party or any of their respective officers, diredors, emptoyees, couns^ accountants, or other representafives may now possess or may hereafter obtain relating tottiecfflier party shall be held in confidence. The Parties agree that they and their affifetes MR keep confidential all discussions and infomiafion that pertain tottieBLOl, and WiB not disdosettieexistence andtiienature ofttiediscussions, disdose any Part/s idaitily or divulge any non-public infomiaflon to any third party isithisitttieotiier Party's consent No Party shall issue press rdeases, adverfising, or puWidfy conceming ttie BLOl wittiout prior written approval ofttieottier Party except as may be required by law. The Parties agreettiatthey w i not seek to tê advantage ofttiebusiness opportunifles to which any Party inb-oduces to another Party other thanttiroughpartidpaHon in the proposed BLOl unless ottietwise agreed byttieottier Party. The parties agree to procurettiecompliance by their affiliates wittittiisdause.
8.
TERMINATION:
This BLOl can be temiinated at any given date (upon 30-calendar days nofice), which Uie Parttes may mutually agree in writing. Any termination hereunder shall not affectttieaccmedrightsand obligatiwis ofttieParties, induding without Hmitation ttie Parties' respecttve ofarigafions with rârd to exdusivity, business opportunities, and confidrntiaiiiy. Any and all hransacfions produced by SD or OG, including all instrumaits v w D be retumed. Any related proceals during flie 30 day notice will be payable. Upon taniinafion, no party nll have any oMgafions towards flie ottisr parties however, ttie dauses of damages (artide 12), Mnfidenfialily (artide 7), costs (artide 6) and non-compete iton-drcumvent and non- exclusive (artide 5), w i surwve flie tenminaSon for 5 (five) years fromttiefimettieagreement is temiinated or any of flie parties no longer in business.
9,
AUTHORITY:
No Party has any auBiority whatsoever to assume, represent or create any obSgatioo on behalf of any ottier Party wittiout such other Party's express written consent
3
IMITIALS
4e
Sabra-VB-000008

A P P R O V E D 3/15/06
10.
ASSIGNMENT:
This BLOl may not be assigned by any of fhe Parties vsithout prior witten consent of Bte other Party.
11.
DISPUTES AND GOVERNING U W :
If disaissiffiis, negofiations, and/or mediation do not adrieve a mutually satisfactory resolution, the Parties agree their sde remedy w i be binding artiitraSon. Such art)itratiQn sh^l be hdd in Cartersville, GA, USA, in accordance w/ittittieInternational Artjitration rijles. Ail documente and evidence shall be in EngEsh. The award shall befinaland binding upontiiedispulanls, and shall be enforceable in any court having jurisdicfion. The laws ofttieState erf Georgia, USA wittiout regard to confflcts of law prindples shall govemttiisBLOl.
12.
DAMAGES:
h no event swll Bie Parties be Bable, eadi tottieoflier, for direct or consequenBal damages of any nature induding, vinfliout limitation, loss of antidpaled profits or any dher spedal or indirect losses or damages.
13.
SEVERABILITY;
if any single aspect oftfiisenfire agreemenf becomes null, void, or unenforceable,ttieremainder of flie entire agreement will remain valid, enforceable, and in full effect
AGREED TO AND ACCEPTED AS OF THE DATE OF THIS LETTER:
Rufus Paul Harris Cliairman and CEO, Conversion Solutions, Inc.
Sabra Dabbs
Ott Gira
4f
Sabra-VB-000009
March 14, 2006 Sabra Dabbs 3933 Pinehurst way, Duluth, Ga, 30096
Mr. Harris, Please find attached modified agreement. Upon return signature please execute contract for VB-1 transaction. Per our verbal agreement a contract will be issued for VB-1 transaction as 50/50 split of the gross proceeds (after 5 0 % is paid to client) between C V S U and myself for transfer of bond to C V S U . Specifics to be addressed in contract are to include fee agreement, signatory authority, length of contract, trade involvement, exit strategy for non-performance, and any other contract obligations and agreements that need to be addressed. After completion of contract I will give C V S U full disclosure to issue procedure proposal and contract for transfer of bond to C V S U . Client has requested $400,000.00 to be trahsfen'ed within 72 hdu(-s after transfer of bond and 5 0 % of the proceeds from bond transaction for the length ofthe contract. Guidelines for performance must be stated in dient contract. P l e a s e contact me with any further questions and concerns you may have at 678-886-1932. Thank you,
S A B R A DABBS
4g
Sabra-VB-000001
AUDI TOE'S REPORT TESTIIIONY PROVIDED BY THOMAS BENSON, A u d i t o r
Tlomas Benson, 30 Years e x p e r i e n c e as an A u d i t o r w i t h t h e S t a t e of M i c h i g a n was c o n t r a c t e d by C o n v e r s i o n S o l u t i o n s t o perform an independent a u d i t on t h e company assets.
Q. H a r r i s :
Has anyone approached you i n r e f e r e n c e t o your a u d i t and the s u c c e s s f u l
r e p o r t i s s u e d t o Conversion S o l u t i o n s ? Thomas Benson: I'm n o t sure i n terms o f has anyone approached me.
Q . H a r r i s : E a r l i e r when you f i r s t s t a r t e d o f f you s t a t e d t h a t t h i s was t h e one and o n l y P u b l i c Company t h a t you a u d i t e d . S i r ? Thomas Benson: Y e s . Q.Harris: Why i s t h a t ? Because my major employment i s w a s w i t h t h e S t a t e o f M i c h i g a n , and That's where
Thomas Benson:
I was a government a u d i t o r f o r t h e S t a t e o f M i c h i g a n f o r 30 y e a r s . I spent the b u l k o f my time doing my work.(TT698:7-) Q.Harris: Could we p l e a s e s t a r t w i t h E x h i b i t 310? Q. by H a r r i s :
Do you r e c o g n i z e
t h i s document, S i r ? Thomas Benson: Y e s . Q.Harris: T h i s i s i s t h i s t h e o n l y document f o r agreement between y o u r s e l f and Corporation?
Conversion S o l u t i o n s Holding Thomas Benson; Q. H a r r i s :
The o n l y agreement t o conduct t h e a u d i t . Yes. (TT677:12-19).
E x h i b i t 105. P l e a s e Tab 2, Tab 3. P l e a s e zoom i n t o t h e bottom p a r t of I s t h i s t h e t e x t o f t h e Report of Independent
t h e page. Ma'am. Q. H a r r i s :
R e g i s t e r e d P u b l i c A c c o u n t i n g F i r m Report t h a t you p r o v i d e d t o C o n v e r s i o n S o l u t i o n s Holdings Corporation? Could you r e p e a t t h a t q u e s t i o n . P l e a s e .
Thomas Benson: Q. H a r r i s :
I s t h i s t h e t e x t o f t h e r e p o r t t h a t you p r o v i d e d w e l l , o f t h e
Independent R e g i s t e r e d P u b l i c A c c o u n t i n g F i r m Report t h a t you p r o v i d e d t o Conversion S o l u t i o n s Holdings Thomas Benson: Y e s . Q.: Harris: E x h i b i t 311, P l e a s ma'am . Q. H a r r i s : 5 Mr. Benson, what i s an Corporation?
independent o u t s i d e a u d i t o r t o w h a t does an independent o u t s i d e a u d i t o r mean t o a P u b l i c Company? Thom.as Benson: I t means i t ' s independent from any undue i n f l u e n c e by management
of t h e company.(TT677:21-25 t h r o u g h 678:1-13). Q.Harris: Could you p l e a s e read 1 ( a ) ? The f i n a n c i a l s t a t e m e n t s a r e drawn up i n accordance w i t h t h e (United
Thomas Benson:
a u d i t i n g s t a n d a r d s of t h e p u b l i c a c c o u n t i n g A c c o u n t i n g O v e r s i g h t Board States). Q.Harris:
When you prepared t h i s document, do you c o n s i d e r t h a t statement as t r u e When I p r e p a r e d t h a t document?
Thomas Benson: Q.Harris:
Uh-huh . That's your company's r e p r e s e n t a t i o n o f t h e
To you.
Thomas Benson:. Yes Q,Harris: Next Tab, p l e a s e , zoom i n a t t h e top p l e a s e . Q.Harris: A l l financial
r e c o r d s o f l e g a l o p i n i o n s , i n t e r n a l a u d i t r e p o r t s , a l l documents p r o v i d e d t o youMr. Harris: P l e a s e go down t o t h e bottom o f the page. Next t a b , P l e a s e . Q . H a r r i s : Events o c c u r r i n g a f t e r
r e p o r t i n g data. Defendant Ben
So t h i s document i s where m y s e l f and
S t a n l e y p r o v i d e d a l l s u p p o r t i n g documentation t o you t h a t you
r e q u e s t e d t o perform your a u d i t and c e r t i f i e d i t t o b e t o t h e b e s t t r u t h f u l t o t h e b e s t o f our a b i l i t i e s Thomas Benson: Q.Harris That's w h a t That's what t h i s d o c u m e n t
i n accordance t o a l l t h e s e r e g u l a t i o n ? That's what t h a t r e p r e s e n t s .
Thank you v e r y much. (TT679:l-25 t o TT680:l-2).
A p p e l l a n t Benjamin S t a n l e y never p r o v i d e d any i n f o r m a t i o n t o Thom.as Benson or ever ask t o p r o v i d e i n f o r m a t i o n t o Mr. Benson.
Q.Harris:
So, these a r e from t h e document r e q u e s t t o t h e o f f i c e r s o f t h e company? They were g o i n g t o be document r e q u e s t s t o t h e company. Y e s .
D i d you r e q u e s t t h e s e documents from the company? I requested some o f them. I don't t h i n k I r e q u e s t e d a l l o f them.
Thomas Benson:
And i n j u s t l o o k i n g a t t h a t , I c a n ' t t e l l you which ones I r e q u e s t e d and which ones t h a t I d i d n ' t .
Q.Harris:
Can you perform a s u c c e s s f u l independent o u t s i d e a u d i t w i t h o u t t h e list? you know, w i t h this
docaments on t h i s Thomas Benson: list Iere.
Oh I'm not s a y i n g I d i d n ' t g e t them d u r i n g
Q.Harris:
D i d you g e t them. P e r i o d ? Oh. I I got a l l t h a t I needed.
Yeah Okay. Okay. And e v i d e n t l y you were s a t i s f i e d w i t h what you needed
to p r o v i d e a s u c c e s s f u l a u d i t o f the Note, t h e UCC and t h e company's f i n a n c i a l ? Thomas Benson: I got a l o t of documentation and I f e l t , some adequate e x p l a n a t i o n comfortable TT696:l-6).
from E r . Horton. And a g a i n t a k i n g a l l t h a t i n f o r m a t i o n t o g e t h e r , I f e l t i n t h e i n f o r m a t i o n t h a t was p r o v i d e d Q.Harris: (TT694:8-25 through TT695:125,
D i d you attempt t o c o n t a c t anyone on t h e UCC Note? I d i d speak w i t h Mr, Hawkins. t h a t s i g n e d t h e c o n t r a c t w i t h Conversion Solutions
The a c t u a l i n d i v i d u a l
p r o v i d i n g t h e UCC Note, David Hawkins? Thomas Benson: Q.Harris: requested As f a r as I know, yes (TT685:13-25 t o TT686:1)
D i d you r e c e i v e w e l l , huh I take i t t h a t you r e c e i v e d e v e r y t h i n g t o s a t i s f y your c u r i o s i t y and t h e r e q u i r e m e n t s of t h e P u b l i c Accounting
O v e r s i g h t Board o r you wouldn't have s i g n e d t h e a u d i t e d f i n a n c i a l s f o r t h e corporation? Thomas Benson: The b e s t o f my knowledge, Yes.(TT685:1-5).
Q.Harris:
I don't guess you would know I was going t o t h e t o p where i t says "see
a t t a e l i e d work paper, but I don't see any bond document or commercial notes attached to t h i s , so I'm s o r r y i n t h a t . Thom.as Benson: were d e f i n i t e l y Okay, As you went through t h e documents I was l o o k i n g through, those questions t h a t I had based on i n f o r m a t i o n t h a t was p r o v i d e d and
t h o s e responses were from a n d those q u e s t i o n s I prepared f o r Mr. Horton, and those are h i s responses i n the dark b o l d Q.Harris: type.
Do you f e e l you r e c e i v e d an answer t o each q u e s t i o n t h a t you asked? P r e t t y adequate f o r t h e most p a r t , and t h i n g s t h a t were not, I would
Thomas Benson:
follo-up w i t h other q u e s t i o n s so I thought Mr. Horton d i d t h e best he c o u l d i n t e r m s o f responding t o me w i t h c o r r e c t i n f o r m a t i o n or t h e i n f o r m a t i o n t h a t he f e l t was c o r r e c t f o r what I was a s k i n g him. Q.Harris: E a r l i e r L e t ' s t h i n k o f how t o do t h i s . You're h e r e t e s t i f y i n g i n the
c a p a c i t y o f t h e o u t s i d e independent a u d i t o r of Conversion S o l u t i o n s Company f o r t h e s t a t e and c o r r e c t ? Thomas Benson: Q.Harris: That's c o r r e c t .
Holdings
What's your u n d e r s t a n d i n g
o r have you come t o a c o n c l u s i o n or has the
c o n c l u s i o n been d i s c l o s e d t o you about the v a l i d i t y or whether o r not t h e u n i f o r m commercial code note i s r e a l o r not? Thomas Benson: Based on t h e i n f o r m a t i o n t h a t was provided t o me, t h e support I felt
documentation r e v i e w i n g a l l o f t h a t and my d i s c u s s i o n w i t h Mr. Horton, I comfortable t h a t t h e UCC Note was l e g i t i m a t e . (TT697:l-25 t o 698:1-4). t o Waatle H o l d i n g s , A p r i l 15, 2004.
The UCC Note was assigned
Waatle H o l d i n g s was
a p r i v a t e company (TT634:4-14). The next seven (7) pages a r e a c t u a l pages from t h e T r i a l T r a n s c r i p t . Auditor
Benson i s t e s t i f y i n g TT599-600.
t o t h e a u t h e n t i c i t y o f the R e p u b l i c a de Venezuela Bond at Payments were due t w i c e a year.
The bond had a 13.625 i n t e r e s t r a t e .
The next page 681 the government's q u e s t i o n i s answered as t o how can any one c o u l d o b t a i n a bond of t h i s t y p e w i t h o u t i t without "after" paying fori t . paying f o r i t or how they c o u l d obtain
Page 5, i t e m 6 showed $400,000 was due and payable by t h e banking institution.
r e c e i p t o f t h e v a l i d a t i o n of t h e instrument
TT596-598 r e v e a l s t h a t t h e bonds ownership was t r a n s f e r r e d t o C o n v e r s i o n S o l u t i o n s from R e p u b l i c o f Venezuela on March 15, 2006.
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FROM: Stanley, Shrina TO: 61491018 SUBJECT: Ttomas starting at 599 stopping at 607 DATE: 05/01/^013 02:51:04 PM 599 1 A. That's correct. 2 Q. Okay. Ard the second paragraph, can you just read the second 3 paragrapin that I'm outlining with the laser pointer? 4 A. Starting vith "That the Government"? That the Government of 5 the Bolivarian Republic of Venezuela (Republica de Venezuela) 6 extends and grants full ownership to Conversion Solution, Inc., 7 125 Tow Park, Suite 300, Kennesaw, Georgia, 30144, ofthe 8 following Global Bonds here below stated. 9 Q. And, then, of course below that, is there details provided as 10 to the specific bond? 11 A. Yes. 12 Q. With a code known as a CUSIP; is that right? 13 A. That's correct. 14 Q. Do you know what that is? 15 A. I don't recall. I did look it up during the time I was doing 16 the audit, but I can't tell you right now what that stands for. 17 Q. And amount of value of half - is that half a billion 18 dollars? 19 A. Yes. 20 Q. With 13.625 percent fixed semiannually; is that right? 21 A. That's correct. 22 Q. What's /our understanding of 13.625 percent semiannually? 23 A. That means that interest on that bond will be paid out twice 24 a year. 25 Q. So, twice a year 13 percent or half of that? Let me maybe ELISE SMITH EVANS, RMR, CRR 600 1 clarify. 13.625, did you understand, was that the annual 2 interest rate? 3 A. I don't recall. 4 Q. Okay. Okay.. But some amount would be paid every six months? 5 A. Yes. 6 Q. Okay, in the bottom ofthe page, is there an individual 7 who's the individual whose name is listed on the right-hand side 8 of the page for the Banco Central de Venezuela? 9 A. Looks like a Eddy Reyes Torres. 10 Q. And what's - what's his position? 11 A. A Second Vice President at the Bank Central of Venezuela. 12 Q. Okay. And is there a date on this document? 13 A.. The date right there says the certificate is issued this day 14 March 15th of 2006. 15 Q. Okay. And the other individual on the page, I'm not even 16 going to try to pronounce the name, but what's the title, the 17 person's title? 18 A. Treasury Manager. 19 Q. Okay. Let me ask you 20 MR. ANAND: Ms. Goldring, can we turn to the next page? 21 Q. (BY MR. ANAND): So, that document we just looked at was 22 called Certificate of Ownership. This one's entitled 23 Declaration. Did you have an understanding ofthe difference 24 between these documents? 25 A. I don't recall. ELISE SMITH EVANS, RMR, CRR 9
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^ 8 1
5 the same thing? 6 MS. GOL DRING: We don't have a 346. 7 MR. HARRIS: Electronically you don't have a 346? 8 MS. GOLDRING: No, sir. 9 MR. HARRIS: Exhibit 302, please, ma'am. Next tab. 10 Item 1, Deposit 11 Q. (BY MR. HARRIS); Mr. Benson, I believe you stated earlier 12 that when being questioned by the Government, that you didn't 13 understand why someone ~ was the words you didn't understand why 14 someone could obtain a bond ofthis type without paying for it or 15 how they could obtain it without paying for it? 16 A. I thought that was pretty unusual. 17 Q. Could you please read item 1? 18 A. Deposit. Conversion Solutions, Inc., agrees to accept, and 19 the Agreement Holder agrees to pay or cause to be paid to 20 Conversion Solutions, Inc., for value on the effective day 21 date, the net deposit (as specified in the Annex). All funds 22 received by Conversion Solutions, Inc., under this agreement 23 shall become the exclusive property of Conversion Solutions, 24 Inc., and remit ~ and remain a part of Conversion Solutions, 25 Inc.'s general account without any duty or requirement of ELISE SMITH EVANS, RMR, CRR 682 1 segregation or separate investment. This agreement shall become 2 effective only upon the receipt by Conversion Solutions, inc., or 3 its designee of the net deposit. 4 Q. As the auditor that audited this document, as the outside 5 independent auditor for Conversion Solutions, the publicly traded 6 company under CS ~ symbol CSHD, what does that mean to you? 7 A. I asked that question several times to - when I reviewed 8 this docunnent. I ' m sure 1 asked that question to Mr. Horton. I 9 was not quite sure what the net deposit meant. 10 MR. HARRIS: Can we go down to page 5, item 6, please? 11 Q. (BY MR. HARRIS): I believe we ~ you referred to this in 12 your notes, was brought up earlier, ofthe $400,000. Could you 13 please read the very first line? 14 A. Conversion Solution, Inc., shall pay upon receipt and 15 validation of the instruments by the banking institution; fees of 16 $400,000. 17 Q. You stated that the $400,000 wasn't paid and - in your audit 18 and whatever it was. What does that first line mean to you, sir? 19 A. it means that what ~ basically what it says, upon the 20 receipt of the validation of the instruments by the banking 21 institution, the fees should be ~ 400,000 be paid. 22 Q. So ~ 23 A. I think I'd take that document in total in terms of looking 24 at that is what the agreement holder ~ one ofthe things the 25 agreement holder was going to be doing is executing these ~ ELISE SMITH EVANS, RMR, CRR 683 1 getting these instruments out there, and upon that these fees 2 were going to be paid to that agreement holder. 3 Q. Does it not mean that once the instrument is receipt ~ 4 received and validated by the bank, the fees are due? 5 A. Yeah, I agree with that. I agree. 6 Q. Okay. 7 A. Yes. 8 Q. In your opinion as the auditor, did that happen? 9 A. I ' m not sure. ,n
10 Q. Did you ever see any documentation from a banl<ing institution 11 that liad received and validated that instrument? 12 A. No, I didn't. 13 Q. Okay. 14 MR. HARRIS: Gould we please go to Exhibit 341 now, 15 TB 259? Next tab. TB 259 at the bottom. Next tab. Please zoom 16 into item 6 . 17 Q. (BY MR. HARRIS): Is that your handwriting, sir? 18 A. No, it isn't. 19 Q. Do yoo know whose handwriting that is? You claim this was 20 your working document. 21 A. I believe that is Mr. Horton's handwriting. 22 Q. Okay. 23 MR. HARRIS: Please zoom out. 24 Q. (BY MR. HARRIS): 1 through 5 ofthis document, do you 25 recognize it? ELISE SMITH EVANS, RMR, CRR 684 1 MR. HARRIS: Could you please zoom in on 1 through 5? 2 MS. GOLDRING: I ' m sorry? 3 MR. HARRIS: Could you please zoom in on 1 through 5 at 4 the top of the page? 5 Q. (BY MR. HARRIS): Do you recognize this? 6 A. Oh, I recognize the document, but that document isn't a 7 document that I generated. 8 Q. Where did it come from? 9 A. Mr. Horton. 10 Q. This is Mr. Horton's notes of what needs to be? 11 A. Yes.. 12 Q. Okay. 13 MR. HARRIS: Exhibit 344, please. 14 Q. (BY MR. HARRIS): Do you recognize this document, sir? 15 A. Yes. 16 Q. What is this document? 17 A. Just questions that I posed that I wanted to have answered 18 about the bond verification. 19 Q. So, in other words, you asked who is the issuer, the ~ you 20 asked this of who? 21 A. Those were questions I was going to ask of Mr. Horton and 22 of ~ 23 Q. Conversions? 24 A. Conversions, yes. 25 Q. This is what you asked of us? ELISE SMITH EVANS, RMR, CRR 685 1 Did you receive - well, huh. I take it that you 2 received everything requested to satisfy your curiosity and the 3 requirements of the Public Accounting Oversight Board or you 4 wouldn't have signed the audited financials for the corporation? 5 A. The best of my knowledge, yes. 6 Q. Did you interview anyone in relationship to the bond outside 7 of the company? 8 A. No. 9 Q. Did you attempt to interview anyone? 10 A. I tried to make a phone call down to Venezuela, but I didn't 11 get through to anybody. I made one or two attempts and that was 12 IL 13 Q. Did you attempt or prepare a document of this type for the 14 UCC-1, also? You stated this is an internal working document.
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61491019 - STANLEY, BENJAMIN - Unit: BUF-V-B
10 Q. Okay, So, the company acquired full ownership of Global 11 Bonds throygh the Republic of Venezuela on March 15th, 2006. Was 12 that your understanding? 13 A. Yes. 14 Q. And theprincipal amount of those bonds, 500,000,000, 15 interest rate of 13.6 percent, and certain codes identifying what 16 the bonds were, is that all your understanding? 17 A. That's correct. 18 Q. Okay. Wlnat is interest ~ what do you understand that to 19 mean? 20 A. That's th9 rate that's paid out on the bonds. If I was ~ 21 for instance, if 1 bought some bonds on the open market, there's 22 usually a coupon or interest rate on that bond. And that tells 23 me the interest that will be paid to me over certain periods of 24 time. 25 Q. Is that similar to like a CD at a bank? ELISE SMITH EVANS, RMR, CRR 597 1 A. CD at a bank, that's ~ that's pretty simplified version of 2 it. 3 Q. Okay. The next paragraph talks about the applicable 4 declaration ownership documentation specifies the transfer of 5 full ownership to the company. Do you see that? 6 A. Yes. 7 Q. What are you referring to, what documents are you referring 8 to there? 9 A.. There was some documents provided to me that ~ between 10 Conversion Solutions and Venezuela that purported to transfer the 11 ownership of the bonds from them to the company. 12 Q. And who gave you those documents? 13 A. Mr. Horton. 14 Q. Let me ask you to look at what's been marked for 15 identification purposes as Government's Exhibit No. 302, which 16 should be among the pile of stuff you have. Do you see that? 17 A. Yes. 18 Q. And let me ask you to look through it. My question will be 19 whether you've seen this document before. 20 A. (Witness reviewing exhibit.) 21 Yes. 22 Q. Okay. I mean, is it more than one document or is this a 23 collection of documents? 24 A. A collection of documents. 25 Q. But was this all presented to you by Mr. Horton relating to ELISE SMITH EVANS, RMR, CRR 598 1 these bonds? 2 A. Yes. 3 MR. ANAND: Your Honor, move to admit Government 4 Exhibit No. 302. 5 MR. WALDROP: No objection. 6 THE COURT: It's admitted. 7 Q. (BY MR. ANAND): Now, I want to ~ 1 want to skip to the back 8 for a minute. Do you recognize this document? 9 A. Yes. 10 Q. And what is it? 11 A. Let me ~ 12 Q. 1 mean, to your understanding, what did you understand this 13 to be? 14 A. It was a certificate of ownership which detailed a 12
15 transferring the ownership ofthat bond from Venezuela to the 16 company Conversion Solutions. 17 Q. Okay. And who told you that's what this meant? 18 A. Well, based on what I read and discussions with IVIr. Horton. 19 Q. And when you say based on what you read, are you saying 20 actually just 21 A. Read, yes. 22 Q. From the document itself? 23 A. Yes. 24 Q. Okay. There's nothing else that you read about this document 25 other than the document itself?
13

10 Q. Is this a financial ~ is this a financial for the company? 11 A. It's an agreement between the company and the agreement 12 holder. 13 Q. But it's not a financial document? 14 A. It's an agreement. 15 Q. It's a giobai ~ a global fund agreement. 16 MR. HARRIS: Next tab, please. Yes. Item 1 again. 17 Q. (BY MR. HARRIS): So, in this document, looking at item 1 of 18 the deposit, and not ~ we've established it's not a financial, 19 how did you derive as an independent outside auditor that this 20 $500,000,000 was an asset of Conversion Solutions Holdings Corp? 21 A. Because that was the information that I was provided by your 22 company, one. And documentation supported the fact that there's 23 a transfer of bonds from Venezuela to your company. You have an 24 agreement like this that has some financial implications in it in 25 terms of executing that bond and doing some things in the private ELISE SMITH EVANS, RMR, CRR 703 1 market. So, there was documentation that supported the fact 2 that, you know, you ~ 3 Q.. The agreement; is that what you're saying? The agreement is 4 the documentation that supported it? 5 MR. ANAND: Objection, Your Honor. We're starting to 6 ask and answer here. We're also starting to talk over each 7 other. He was in the middle of answering a question and Mr. 8 Harris interposed something else. 9 MR. HARRIS: All right. Withdrawn. 10 MR. ANAND: And I think we've plowed through this 11 ground already. 12 THE COURT: I think you've already covered this 13 territory, sir. 14 MR. HARRIS: Sir? 15 THE COURT: I think you've already covered most ofthis 16 territory. 17 MR. HARRIS: Okay. I'd like to flip through this 18 agreement, please. Next page. 19 MS. GOLDRING; The exhibit number, please? 20 MR. HARRIS: 302. 21 MS. GOLDRING: What page would you like? 22 MR. HARRIS; Can you bring it up and we go to the next 23 tab? Tab 3. Let's start with tab 3. Next tab. Next one, 24 please. I ' m sorry. There we go. Next page.. 25 Q. (BY MR. HARRIS); Off of a instrument of this type, you book ELISE SMITH EVANS, RMR, CRR 704 1 the interest into the financials ofthe company as a receivable; 2 correct, the coupon as we established? it-3 A. Your - your CFO booked that as a receivable, and 1 confirmed 4 that. 5 Q, So, you didn't complete an independent outside audit? 6 A. Yes. 7 MR. ANAND: Objection, Your Honor. Asked and answered. 8 He's explained the concept ~ 9 THE COURT: I ' m going to sustain that. Move on. 10 MR.. HARRIS: All right. No further questions. 11 THE COURT; Ms. King? 12 MS. KING: Thank you. Your Honor 13 CROSS EXAMINATION 14 BY MS. KING: 14

15 Q. Good afternoon, Mr. Benson. 16 A. Good afternoon. 17 Q. I just have a couple of questions for you about, I guess, the 18 business expense portion of your testimony on Direct. I think 19 we've already established or you've testified that you've been 20 doing this for a very long time, at least auditing private 21 companies; is that correct, and government entities? 22 A. I've audited some private companies and government entities. 23 Not ~ I did more government work ~ 24 Q.. Okay. 25 A. - versus private entities connected with government.
15
Conclusion
r4r. Thomas Benson, an A u d i t o r f o r the S t a t e of M i c h i g a n p r o v i d e d
a r e p o r t of years and
independent R e g i s t e r e d P u b l i c A c c o u n t i n g F i r m Report based upon h i s 30 of experience. As h i s t e s t i m o n y c o n f i r m s , I t was
he worked w i t h Rufus P a u l H a r r i s
D a r r y l Horton, not A p p e l l a n t . Bond ; F i n n i s h Bond and the UCC
confirmed by him t h a t the a s s e t s , Venezuelan that at a specified
Note were v a l i d i n s t r u m e n t s and
t r a n s a c t i o n , a f t e r c l e a r i n g t h r o u g h a f i n a n c i a l i n s t i t u t i o n , the $400,000 would have been p a i d . But f o r i n t e r v e n t i o n by the SEC, C o n v e r s i o n S o l u t i o n s was unable the
t o f u l f i l l the terms of the c o n t r a c t which was government and others.
n u l l i f i e d by the a c t i o n s of
Under oath of the c o u r t , Mr.
Thomas Benson t e s t i f i e d a t TT702 t h r o u g h TT704 the Agreement Holder the infor-
t h a t the f i n a n c i a l i s an Agreement between the company and and t h a t the $500,000,000 was
an a s s e t of Conversion because t h a t was
m a t i o n p r o v i d e d by Conversion S o l u t i o n and second t h a t the documentation supported t h e f a c t t h a t t h e r e ' s a t r a n s f e r of bonds from Venezuela t o your company. have an Agreement t h a t has some f i n a n c i a l i m p l i c a t i o n s i n i t i n terms of t h a t bond and d o i n g some t h i n g s i n the p r i v a t e market. t h a t supported t h e f a c t t h a t , you know, y o u " The e n t i r e t e s t i m o n y of Mr. Thomas Benson shows a working r e l a t i o n s h i p w i t h Ben S t a n l e y was Res i n t e r a l i o s acta to Agreements. by the So, t h e r e was "You executing
documentation
D a r r y l Horton, and p a r t i e s and he was
Rufus P a u l H a r r i s .
not i n v o l v e d i n the company f i n a n c i a l s and
Further, anything
whatsoever s t a t e d . a b o u t the company f i n a n c i a l r e p o r t s p r o t e c t i o n under the F i r s t Amendment.
A p p e l l a n t w i l l be Overbreadth and
15a
"The
same p o i n t can be made about what the c o u r t has confirmed
i s the
'anquestionable c o n s t i t u t i o n a l i t y o f p e r j u r y s t a t u t e s " both the f e d e r a l s t a t u t e ,
18
L'SC 1623, and i t s s t a t e - l a w e q u i v a l e n t . U,S, v. Grayson, 438U,S, 41, 54. 98
S.
Ct. 2610,
57L, Ed.2d 582 (1978).
See a l s o Konigsberg v. S t a t e B a r o f C a l . ,
366 U.S. 35, 5 1 , n. 10, 81 S. C t . 997, 6L Ed. 2d 105 (1961).
I t i s n o t simply
because p e r j u r e d statements are f a l s e t h a t they l a c k F i r s t Amendment p r o t e c t i o n .
Perjured testimony
" i s a t war w i t h j u s t i c e . " because i t can cause a c o u r t t o I n r e M i c h a e l , 326 U.S, 224, 227, 66.
render a "judgment n o t r e s t i n g on t r u t h . "
The f o l l o w i n g i n d i v i d u a l s are c o n s i d e r e d Res i n t e r a l i o s a c t a t o P e t i t i o n e r
Benjamin S t a n l e y due t o the nature o f t h e i r n o n - c o n t r a c t i n g work r e l a t i o n s h i p .
Res i n t e r a l i o s a c t s i s d e f i n e d as a t h i n g done among s t r a n g e r s .
Describes the
p r i n c i p l e t h a t a p a r t y t o a law s u i t should not be a f f e c t e d by the words o r deeds
of persons w i t h whom the p a r t y has no c o n n e c t i o n and f o r whom the p a r t y has no
legal responsibility,
Oran's D i c t i o n a r y o f the Law, 2d. ed.:
T r a n s f e r Agent Don Maddalon Erxc Deneault, Broker
Dave P e r l e y Randy Moseley Michael Alexander
Sabra Dabbs Ismet Paez 16
Eomeo Vandetta, Mitch Sepantiack
The Caracas Group
D a r r y l Shore Duwayne Woods Toy Morgan
G e r a l d Shore Ann Nelkin
Ott Gira D a v i d Hawkins S t e v e n Kennedy C r a i g Casson A l l bankers a s s o c i a t e d w i t h t h e p r o j e c t s , Bonds, and UCC Note.
A c r i m i n a l i n d i c t m e n t numbered above a l l e g e s a c o n s p i r a c y f o r count one
a g a i n s t defendants Rufus P a u l H a r r i s ( K a r r i s ) , Benjamin S t a n l e y ( A p p e l l a n t ) and
D a r r y l Horton; Count two a l l e g e s a scheme t o commit S e c u r i t i e s F r a u d , and Count
t h r e e a l l e g e s f a l s e c e r t i f i c a t i o n o f f i n a n c i a l statement ( a g a i n s t Defendant
Harris),
The c r i i n i n a l i n d i c t m e n t l a b e l e d a t r u e b i l l was a u t h e n t i c a t e d by B i l l y
A, ilorne., Foreperson and A u t h o r i z e d by S a l l y Q u i l l i a n Y a t e s , A c t i n g U.S. A t t o r n e y
and two A s s i s t a n t U.S. A t t o r n e y s J u s t i n S. Anand, B a r 016116 and J a m i l a M. H a l l ,
B a r 319053, 500 U.S, Courthouse, 75 S p r i n g S t r e e t , S.W.
A t l a n t a , GA 30303
Telephone (404) 581-6332, 6031, Fax 6131.
A p p e l l a n t f i r s t addresses c e r t a i n e r r o r s when c o r r e c t e d w i l l d i s c l o s e t h e
B i l l o f Indictment
i s f r a u d u l e n t and A p p e l l a n t never p a r t i c i p a t e d i n a c o n s p i r a c y
or a crime.
F i r s t A p p e l l a n t i s not a co-founder o f C o n v e r s i o n 17
S o l u t i o n Holding
Corporation.
Second Waatle H o l d i n g C o r p o r a t i o n was
not c o n t r o l l e d by A p p e l l a n t .
A p p e l l a n t was
h i r e d under c o n t r a c t as the C h i e f Operations
O f f i c e r (COO)
for a
special project.
T h i s p o s i t i o n had n o t h i n g t o do w i t h c o n t r o l l i n g V/aatle H o l d i n g
or Conversion
Solutions.
T h i r d ; A p p e l l a n t d i d not d i r e c t l y or i n d i r e c t l y
solicit
numerous i n d i v i d u a l s t o i n v e s t or l e n d money t o the company i n exchange f o r
s e c u r i t i e s s t a t e d as " c o n v e r t i b l e n o t e s , " because i t was not w i t h i n , , nor was i t
a p a r t of h i s c o n t r a c t t o perform such a c t s .
Fourth. Appellant Stanley,
being
a Board Member was
knowledgeable of f i n a n c i a l t r a n s a c t i o n s but he was
Res
inter
a l i o s a c t a t o p a r t i e s of the c o n t r a c t s and s t a t e d "those i n s t r u m e n t s
b e t t e r be
r e a l or someone's going t o be i n t r o u b l e " showing he f u l l y l a c k e d knowledge to
determine the a u t h e n t i c i t y of any o f the f i n a n c i a l i n s t i u m e n t s as i t was
not h i s
duty t o make such d e t e r m i n a t i o n s when c o r p o r a t e a t t o r n e y M a u r i c e B e n n e t t ; C h i e f
F i n a n c i a l O f f i c e r D a r r y l Horton, CPA,
the C o n t r a c t i n g p a r t i e s and owners had
d i r e c t r e s p o n s i b i l i t y f o r such m a t t e r s and d e t e r m i n a t i o n s
i n accordance w i t h
A r t i c l e 1, S e c t i o n 10, paragraph 1 t o f u l f i l l i n d i v i d u a l r i g h t s t o c o n t r a c t .
F i f t h , A p p e l l a n t never p a r t i c i p a t e d i n the c r e a t i o n of 10-K
or o t h e r
information
about C3HC o t h e r than the B u s i n e s s Model w i t h Transparency System w h i c h had
n o t h i n g t o do w i t h SEG
forms and documents and t h e r e f o r e he never r e l e a s e d 18
f i n a n c i a l infurraaLi.on Lo an account r e g a r d i n g a 10-K document p r e p a r a t i o n .
Sixth
based upon the Agreements between the c o n t r a c t i n g p a r t i e s (See the f o l l o w i n g
pages) the bonds and UCC Note were Vvaatle c o n t r a c t e d t o CSKC.
The c o n t r a c t s
s t i p u l a t e d the r e l a t i o n s h i p between the c o n t r a c t i n g p a r t i e s as s t i p u l a t e d by-
A r t i c l e 1, S e c t i o n 10, paragraph 1 and the Laws of O b l i g a t i o n s and C o n t r a c t s .
One s c h o o l e d
i n law s h o u l d minimumly know t h a t one does not have t o own t o Besides that,
b e n e f i t where t h e Laws o f O b l i g a t i o n s and c o n t r a c t s a r e concerned.
none of t h e i n d i s p e n s a b l e p a r t i e s t o the c o n t r a c t s and UCC Note were a v a i l a b l e
f o r cross-examination..
Seventh, altho'ugh A p p e l l a n t was p a i d a s a l a r y , the
company r e c e i v e d v e n t u r e c a p i t a l which i n c l u d e s a p p r o p r i a t e s a l a r i e s . A s t a r t - u p
company r a r e l y has income t o pay s a l a r i e s and b i l l s .
That i s the l o g i c and
importance behind Venture C a p i t a l and Seed Money: a g a i n , r e l y i n g upon the Laws
of O b l i g a t i o n s and C o n t r a c t s and A r t i c l e 1, S e c t i o n 10, paragraph 1 t o the
C o n s t i t u t i o n o f the U n i t e d
States.
19
The
U.S.
A s s i s t a n t Attorneys
falseiy s t a t e d t h a t " d u r i n g October 2006, when
he
lenew the s t o c k p r i c e of CSHC was
a r t i f i c a l l y . i n f l a t e d as a r e s u l t of the f a l s e
pu-blic s t a t e m e n t s , Defendant Benjamin S t a n l e y t r a n s f e r r e d and caused CSHC to
t r a a s f e r s u b s t a n t i a l q u a n t i t i e s of s t o c k t o c l o s e f a m i l y members who
s o l d i n the
open market a t a r t i f i c a l l y i n f l a t e d p r i c e s of between $2-$3 per s h a r e .
Defendant
Benjamin S t a n l e y subsequently r e c e i v e d a s u b s t a n t i a l p o r t i o n of the p r o f i t s of
this trading,"
Waatle H o l d i n g Company r e c o r d s c l e a r l y d i s c l o s e d shares were i s s u e d t o
A p p e l l a n t as p a r t of h i s i n i t i a l h i r i n g c o n t r a c t ,
Waatle H o l d i n g , a p r i v a t e l y
h e l d company i s s u e d shares as d e s i g n a t e d
t o A p p e l l a n t c l o s e f a m i l y members
s h o r t l y a f t e r they were i s s u e d t o him.
Since they p r o p e r l y owned the
shares,
they were f r e e t o c o n t r a c t whenever they d e s i r e d based on the Laws o f ' O b l i g a t i o s
and C o n t r a c t s and A r t i c l e 1, S e c t i o n 10, paragraph 1 a f o r e m e n t i o n e d .
Appellant
r e c e i v e d a l o a n to purchase an a s s e t f o r business usage i n promoting
the
Performing
A r t s Contracts,
which i n turn
u p l i f t e d and supported the company image.
A p p e l l a n t made a l l but $60,000 of the
l o a n repayments.
The
government w r o n g f u l l y c o n f i s c a t e d t h i s
property.
F u r t h e r , i t must be d i s c l o s e d as evidence has c l e a r l y shown, A p p e l l a n t ' s f a m i l y members worked through t h e i r l i c e n s e d brokers and f o l l o w e d t h e i r 20 brokers'
advice.
E r i c D e n e a u l t , a P o i n t C a p i t a l Broker t e s t i f i e d i n c o u r t he c o n t a c t e d
A p p e l l a n t ' s f o r m e r w i f e t o a d v i s e her when t o s e l l h e r shares.
T h e r e f o r e U.S.
A t t o r n e y s committed p e r j u r y m u l t i p l e times throughout t h e p r e p a r a t i o n o f these
charges i n an e f f o r t t o i m p l i c a t e A p p e l l a n t i n a c o n s p i r a c y : a i d i n g and a b e t t i n g
a c o n s p i r a c y scheme and a pump and dump scheme when they knew
the a l l e g a t i o n s to
be
false.
P r o s e c u t o r s , Jury Foreman and t h e U,S. A t t o r n e y v i o l a t e d t h e law when they
f a i l e d t o examine A p p e l l a t e d u r i n g t h e Grand J u r y h e a r i n g so he c o u l d
present
matters i n m i t i g a t i o n .
T h i s f a i l u r e r e s u l t e d i n v i o l a t i o n of C i v i l R i g h t s under
Amendments V, V I and XIV; r i g h t t o due p r o c e s s , r i g h t t o be r e p r e s e n t e d
by a
competent a t t o r n e y , and e q u a l p r o t e c t i o n o f t h e law.
Here, t h e p r o s e c u t o r s and
grand j u r y foremen v i o l a t e d A r t i c l e 6, paragraph 3 which i s t h e i r Oath o f
A f f i r m a t i o n o r Oath t o uphold t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s .
By
v i o l a t i n g A p p e l l a n t ' s C o n s t i t u t i o n a l R i g h t s , they v i o l a t e d 18 USC 1001.
And by
randomly w r i t i n g A p p e l l a n t ' s name on D e p o s i t documents w i t h o u t h i s p e r m i s s i o n and
knowledge t o c r e a t e an i l l u s i o n t h a t he was i n v o l v e d i n monetary t r a n s a c t i o s of
the company, t h e p r o s e c u t i n g a t t o r n e y s along w i t h M i c h a e l A l e x a n d e r ,

tf"
Sabra Dabbs,
Ann N e l k i n , Don Maddalon and o t h e r s unknown t o A p p e l l a n t entered i n t o a 21
c o n s p i r a c y t o o r c h e s t r a t e h i s involvement
f i r s t i n a share i s s u i n g scheme of
W a a t l e H o l d i n g s Company, a p r i v a t e company l e g a l l y a u t h o r i z e d t o i s s u e i t s shares
to
I t s o f f i c e r s w i t h o u t the i n t e r f e r a n c e of the SEC, knowing A p p e l l a n t was
not
in^volved i n i s s u a n c e of Waatle H o l d i n g s C o r p o r a t i o n
shares.
The c o n s p i r a c y a g a i n s t A p p e l l a n t was m a n i f e s t e d when A p p e l l a n t was
wrongfully
a c c u s e d of communicating company p r i v i l e d g e d s t o c k / s h a r e i n f o r m a t i o n t o f a m i l y
memters encouraging
them t o s e l l shares when Broker E r i c Deneault of P o i n t
C a p i t a l t e s t i f i e d under Oath and p e n a l t y of p e r j u r y t h a t "he p e r s o n a l l y a d v i s e d
P e t i t i o n e r S t a n l e y ' s e x - w i f e t o s e l l her
shares,"
Here, the f a c t s e x h i b i t t h r e e d i f f e r e n t o c c a s i o n s of v i o l a t i o n of Oath or
A f f i r m a t i o n t o uphold A p p e l l a n t ' s c o n s t i t u t i o n a l R i g h t s under Amendments V., V I ,
and XIV but because of c o l o r o f law, A p p e l l a n t was accused,
t r i e d , c o n v i c t e d and
imprisoned
f o r a c o n s p i r a c y which he was not a p a r t y t o , had no agreement,
d e r i v e d no b e n e f i t from and was
unaware of i t s e x i s t a n c e .
I n s t e a d , i t i s the
government o f f i c i a l s , A t t o r n e y A l a n a B l a c k and Agent B r i a n Harvey who
committed
a conspiracy against Appellant
by v i o l a t i n g h i s r i g h t s , making f a l s e
a c c u s a t i o n s , and then t r y i n g and c o n v i c t i n g him t o 16 years imprisonment.
22
NEXUS- AND MENS REA
There "they" to aid For
i s n o NEXUS, o t h e r Petitioner
than
t h e s p o r a i c usage o f t h e word The government between failed
t o connect
to the crimes.
establish
t h e NEITIS, mens r e a a n d r e l a t i o n who a c t u a l l y
Petitioner the crimes. which
the i n d i v i d u a l s good
c o n s p i r e d and committed
causes. P e t i t i o n e r
S t a n l e y i s r e q u i r e d t o show i s s u e s
would
require substantial injustice there to both
and m a t e r i a l c o n s i d e r a t i o n o r r e v e a l a t h e defendant and t h e c o u r t . Petitioner with There i s no the crimes. wrong
manifest mens The
r e a and
i s n o NEXUS t o c h a r g e of justice will
strongest interest
be d e e p l y will
minimized,
defendents w i l l the People
be i m p r i s o n e d ,
and j u s t i c e
n o t be s e r v e d f o r of the c r i m i n a l (Don
resulting
i n shame and d e m i n l s h m e n t
Justice
System.
Especially
s o when a Key g o v e r n m e n t w i t n e s s by a d m i t t i n g
Maddalon) confessed of the a false
t o some o f t h e c r i m e s list which
creation
shareholder
became t h e d r i v i n g
cataiist for others.
SEC t o p e r s u e
fraud charges
against Petitioner.and actually confessed
Another trading
k e y w i t n e s s , Ann N e l k i n , pre-merger
to insider the crime.
showing unequivocably of evidence after
she committed
These knowing were
and s h o w i n g
relied
upon f o r c o n v i c t i o n
c r e a t e d from Petitioner
key w i t n e s s e s
questioning. because she laws
had i n e f f e c t i v e
assistance of counsel
was s o o b l i v i o u s and
and u n k n o w l e d g e a b l e o f c o n t r a c t and S e c u r i t y of the crime, she c o u l d
the s u b j e c t matter
not ask appropriate and d i d n o t
questions,
s h e d i d n ' t know t h e n a t u r e 23
of the evidence
take
time to
at
least the one
study
i t , and
a majority due Ann to
of
the
time,
she
didn't Two
comprehend witnesses,
conversations key witness, positive to
incompetence. and an uncharged and
Nelkin,
witness, carried aa
S a b r a Dabbs w i t h out a conspiracy stock
mens r e a
entered
into
"recoup monies l o s t There Res i s ao way
i n a d i v o r c e " .through Petitioner could
Insider Trading known a b o u t Another
scheme.
have
the
scheme b e i n g to defraud
I n t e r A l i o s Acta. Solution pre-merger the quantity introDave
conspiracy
Conversion mens r e a
occurred of
when M i k e A l e x a n d e r w i t h shares as o w n e d by
concealed
outstanding
Fronthaul
and
i n v e s t o r s , and
duced Ferlej
Dave P e r l e y to be an
a Consultant of
w h e n he^ M i k e A l e x a n d e r ^ k n e w
officer and
Fronthaul. with mens r e a continued as their a Con-
Mike Alexander fraudulent sultant knowing that to by he, Don
Bave P e r l e y
c o n c e a l m e n t when t h e y to the
introduced
Dave P e r l e y
of Mike A l e x a n d e r in fact that
S e c u r i t y Exchange i s an officer SEC of
Commission Fronthaul and attested
Dave P e r l e y did execute
Dave P e r l e y , Maddalon.
certain
d o c u m e n t s as
Further complete the
that Mike Alexander conspiracy, Don convert
with
mens r e a
d i d , i n order shares with released the
to the restricted
his concealed mens r e a ,
assistance shares The to
of the
M a d d a l o n who place.
had
market
F.R.Civ.P. Rule 60(b.) M o t i o n i s t o show the c r i t i c a l i s s u e s t h a t were by c o u n s e l . Counsel's A p p e l l a t e B r i e f a l s o c o n t a i n s e r r o r s and we.are
overlooked
i n disagreement about the c r i t i c a l i s s u e s because A p p e l l a n t . b e l i e v e s t h a t once a . r e a s o n a b l e j u r i s t r e v i e w s t h e a d m i s s i o n s of g u i l t by o t h e r s who w i l l be found innocent. 24 testified, he
A p p e l l a n t a t t o r n e y ' s a c t i o n s may and c o u l d cause o t h e r s t o knowingly circumvent t h e ends o f j u s t i c e . Since t h e Appellate B r i e f contains f a l s e i n f o r m a t i o n , i t Set-Aside,
can be c o r r e c t e d w i t h data from A p p e l l a t e ' s P r o Se Motion t o Vacate,
C o r r e c t and Remand under F e d e r a l Rules o f C i v i l Procedure 6 0 ( b ) , t o prevent v i o l a t i o n s o f A p p e l l a n t ' s C o n s t i t u t i o n a l R i g h t s under Amendments I , V, V I , I X , X, and XIV. A p p e l l a n t has reviewed in t h e A p p e l l a t e B r i e f f i l e d by c o u n s e l . Appellant i s By s u b m i t t i n g verdict, g u i l t during He had
disagreement because c o u n s e l d i d not cover c r i t i c a l i s s u e s .
t h i s M o t i o n t o Vacate, S e t - A s i d e , C o r r e c t or Remand a j u r y ' s g u i l t y c o u n s e l w i l l be a b l e t o see t h e p a r t i e s who p l e d g u i l t y or confessed t r i a l , t h r o u g h t h e i r testimony. Appellant i s res inter a l i o s acta.
a b s o l u t e l y n o t h i n g t o do w i t h t h e o t h e r p a r t i e s t o t h e c o n t r a c t and he had a b s o l u t e l y n o t h i n g t o do w i t h t h e f i n a n c i a l statements. Hired contracted
p r o f e s s i o n a l s worked w i t h those bonds and t h e i n d i v i d u a l s on t h e c o n t r a c t s . A p p e l l a n t S t a n l e y was not a p a r t y t h e r e t o . A p p e l l a n t submits t h i s i n f o r m a t i o n r e g a r d i n g the numerous c o n t r a c t s endorsed by v a r i o u s o f f i c i a l s o f Waatle I n c . and Conversion Solutions, Inc. entering into
c o n t r a c t u r a l agreements f o r ownership o f t h e F i n n i s h and Venezuelan Bonds and the UCC Note. C.O.O. The o n l y c o n t r a c t A p p e l l a n t endorsed i s h i s employment c o n t r a c t as
The b a s i c i s s u e here i s t h a t t h e p a r t i e s t o t h e c o n t r a c t s a r e a u t h o r i z e d
r e p r e s e n t a t i v e s o f t h e c o n t r a c t u r a l agreement f o r t h e Bonds and Note because they share an i n t e r e s t i n t h e f u l f i l l m e n t o f the c o n t r a c t u r a l o b l i g a t i o n s . By t h e i r endorsement t h e r e o n , they excluded and Note. i n d i v i d u a l s t h a t a r e not a p a r t y t o t h e Bonds
Amendment I X o f t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s g i v e s people the A r t i c l e 1, S e c t i o n 10, paragraph 1 i s t h e
right to enter into contracts.
a u t h o r i t y w h i c h prevents the U n i t e d S t a t e s Government from i n t e r v e n i n g i n o r d i s p a r a g i n g t h e r i g h t s of c o n t r a c t s . The S e c u r i t y and Exchange Commission i n 25
c o n j u n c t i o n w i t h the c o u r t h e l d a h e a r i n g w i t h o u t the i n d i s p e n s a b l e p a r t i e s t o t h e Bonds. I n s t e a d , the c o u r t presented t h i r d p a r t y w i t n e s s e s t h a t were not The
r e p r e s e n t a t i v e s o f the Bonds t o t e s t i f y as t o the a u t h e n t i c i t y of the Bonds. SEC and the O f f i c e of the A t t o r n e y General used F e d e r a l i s m t o h a l t l e g a l i l l e g a l share t r a d i n g . f o r which a t r i a l was One, A s s ' t U.S. and
A t t o r n e y Anand f i l e d charges a g a i n s t A p p e l l a n t
conducted and the j u r y found A p p e l l a n t g u i l t y of Counts as:
t h r e e , f o u r and f i v e , and Count 7 e x p l a i n e d
25a
Coiiat One 1S49
i s c o n s p i r a c y t o e x e c u t e a scheme t o d e f r a u d , 18 USC 25 y e a r s f i n e : $84,420,712.32 ( t w i c e t h e l o s s )
1348, 1343, was
&
Appellant
ac-cased and c o n v i c t e d t h a t he c o n s p i r e d by a i d i n g and a b e t t i n g H a r r i s and H o r t o n t o e x e c u t e a scheme t o d e f r a u d w i t h r e g a r d t o t h e p u b l i c l y - t r a d e d s e c u r i t i e s of Conversion Solutions Holding Corporation November 9, 2009.
Darryl
(CSHC) from e a r l y 2005 t o
Count two i s a scheme t o commit s e c u r i t i e s f r a u d , 18 USC years fine: $84,420,712.32 ( t w i c e t h e amount)
1348
and 2,
25
Appellant
accused and c o n v i c t e d o f e x e c u t i n g a scheme and a r t i f i c e t o
defraud
o t h e r p e r s o n s , i n c o n n e c t i o n w i t h s t o c k s e c u r i t i e s o f CSHC, and t o o b t a i n , by means o f f a l s e and f r a u d u l e n t p r e t e n s e s , r e p r e s e n t a t i o n s , and p r o m i s e s , any money and p r o p e r t y i n c o n n e c t i o n w i t h the purchase and s a l e o f s t o c k s e c u r i t i e s a t CSHC, an i s s u e r w i t h a c l a s s o f s e c u r i t i e s r e g i s t e r e d tmder S e c t i o n 12 o f the A c t o f 1934 15(d) ( I B USC 781) and t h a t was r e q u i r e d t o f i l e r e p o r t s under S e c t i o n SEC
o f the Exchange A c t from a t l e a s t September and October 2006. 1343
C o u n t s 3 t h r o u g h 5, and count 7, scheme t o commit w i r e f r a u d , 18 USC and 2 20 y e a r s imprisonment $250,000 f i n e .
A p p e l l a n t S t a n l e y was dates
charged and c o n v i c t e d o f counts 3 - 5
and 7 t h a t on s p e c i f i c
i n September 2006 i n c o n j u n c t i o n w i t h H a r r i s and D a r r y l H o r t o n , f o r t h e t o do so,
p u r p o s e of e x e c u t i n g t h e scheme and a r t i f i c e t o d e f r a u d , and a t t e m p t i n g and f o r o b t a i n i n g money and p r o p e r t y by means o f m a t e r i a l l y f a l s e and
fraudulent
p r e t e n s e s , r e p r e s e n t a t i o n s , and p r o m i s e s , caused t o be t r a n s m i t t e d by means of w i r e and r a d i o comnnmications i n i n t e r s t a t e coiranerce, c e r t a i n s i g n s , s i g n a l s and sound, t h a t i s , named e l e c t r o n i c communication. P e t i t i o n e r p l e d not g u i l t y t o a l l counts because i n h i s p o s i t i o n as O p e r a t i o n s O f f i c e r , he was Chief
i n c a p a c i t a t e d t o perform t h e d u t i e s of h i g h l y q u a l i f i e d Treasurer,
o f f i c e r s ; the Chief Executive O f f i c e r , the Executive V i c e P r e s i d e n t , the
t h e C o r p o r a t i o n S e c r e t a r y , and t h e C o r p o r a t i o n A t t o r n e y ; where h i s d u t i e s were t o d e s i g n a Model Program w i t h Transparency. Just l i k e P e t i t i o n e r , the other
o f f i c e r s o f t h e C o r p o r a t i o n had s p e c i f i e d d u t i e s t h e y must p e r f o r m t o comply w i t h t h e i r Employment C o n t r a c t s . I n work s i t u a t i o n s of t h i s n a t u r e and t o advance
t h e s u c c e s s o f the c o r p o r a t e e n t i t y , a l l o f f i c e r s a r e mandated t o p o s s e s s c e r t a i n knowledge, s k i l l s and a b i l i t i e s t o o p t i m i z e performance. The v e r y n a t u r e of
C o n v e r s i o n S o l u t i o n f a l l s under t h e scope o f O b l i g a t i o n o f C o n t r a c t s , meaning 26
e v e r y t h i n g was done under t h e a u s p i c e s o f c o n t r a c t s .
P e t i t i o n e r was r e s p o n s i b l e
f o r t h e f u l f i l l m e n t o f h i s c o n t r a c t u r a l o b l i g a t i o n s t o f u r t h e r t h e advancement of t h e c o r p o r a t i o n . Because o f A p p e l l a n t ' s p o s i t i o n , he was a l s o a board member.
As a board member, he has c e r t a i n a d d i t i o n a l d u t i e s and r e s p o n s i b i l i t i e s t o t h e board. T h e r e i n , A p p e l l a n t i s p r o t e c t e d by constitution Amendment I i n t h a t no
laiif s h a l l be passed a b r i d g i n g t h e freedom o f speech, o r o f t h e p r e s s , o r t h e r i g h t of t h e people t o p e a c e a b l y assemble, and t o p e t i t i o n t h e government f o r a r e d r e s s of g r i e v a n c e s . I n a c o r p o r a t e s e t t i n g , any s p e a k i n g , speeches o r a c t i o n s based
upon c o n t r a c t s a r e p r o t e c t e d by what t h e l a w i d e n t i f i e s a s "OVERBREADTH." N e x t t h e l i b e r t y o r a b i l i t y t o e n t e r i n t o agreements w i t h o t h e r s i s t h e freedom o f c o n t r a c t . I t i s a " b a s i c and fundamental r i g h t r e s e r v e d t o t h e people
by t h e F i f t h and F o u r t e e n t h Amendments t o t h e C o n s t i t u t i o n which p r o h i b i t s " t h e d e p r i v a t i o n o f l i b e r t y w i t h o u t due p r o c e s s o f law." 32 F. Supp. 964, 987. dom "Free-
of contract i s subject to l e g i s l a t i v e regulations i n the i n t e r e s t of public s a f e t y , morals or welfare." 57A.2d 421, 423. Baron's Law D i c t i o n a r y ,
health,
6 t h e d . The O b l i g a t i o n s o f a c o n t r a c t f o l l o w s .
27
O b l i g a t i o n of a The
Contract
c i v i l o b l i g a t i o n s , the b i n d i n g e f f i c a c y , the c o e r c i v e power, the l e g a l duty of the c o n t r a c t , r e f e r s t o the l e g a l requirement b i n d i n g the c o n t r a c t i n g and not the d u t i e s a r i s i n g out of the
performing
p a r t i e s t o the performance of t h e i r u n d e r t a k i n g contract i t s e l f . 71 P 301.
Except where s p e c i f i c performance i s a v a i l a b l e as a
remedy, one cannot be compelled t o a c t u a l l y perform a c o n t r a c t o b l i g a t i o n ; r a t h e r , he m e r e l y s u b j e c t s h i m s e l f t o l i a b i l i t y i n damages i f he f a i l s t o honor the o b l i g a t i o n of a c o n t r a c t . Impair t h e o b l i g a t i o n of a c o n t r a c t "to weaken [ t h e c o n t r a c t ] , or l e s s e n i t s v a l u e ,
or make i t worse i n any r e s p e c t or i n any degree...Any law which changes t h e i n t e n t i o n and l e g a l e f f e c t of the o r i g i n a l p a r t i e s , g i v i n g t o one a g r e a t e r and to the other 484,
a l e s s i n t e r e s t or b e n e f i t i n the c o n t r a c t , i m p a i r s i t s o b l i g a t i o n s . " 115 A. 486. "The e x t e n t of the change i s i m m a t e r i a l . Any d e v i a t i o n from i t s terms by
hastening
or p o s t p o n i n g not
the time of performance which i t p r e s c r i b e s , or imposing c o n d i t i o n s
i n c l u d e d i n the c o n t r a c t , or d i s p e n s i n g w i t h the performance of those t h a t are
i n c l u d e d . . . i m p a i r s the o b l i g a t i o n of a c o n t r a c t . " I d . Impairment i s a l s o s a i d t o e x i s t where the r i g h t t o e n f o r c e a c o n t r a c t i s e l i m i n a t e d or s u b s t a n t i a l l l y l e s s e n e d . See 185 A. 401. S t a t e s t a t u t e s which do so a r e Constitution. I f the c o u r t as a m a t t e r unconscionable pro-
h i b i t e d by A r t i c l e 1, S e c t i o n 10 of the U.S.
Under O b l i g a t i o n and C o n s t r u c t i o n of Contract,, (1)
of law f i n d s the c o n t r a c t or any c l a u s e of the c o n t r a c t t o have been a t the t i m e i t was made the c o u r t may
r e f u s e t o . e n f o r c e the c o n t r a c t , or i t may c l a u s e as t o a v o i d any unconscionable any
l i m i t the a p p l i c a t i o n of any unconscionable result. (2)
When i t i s c l a i m e d or appears t o the c o u r t t h a t the c o n t r a c t or be unconscionable the p a r t i e s s h a l l he a f f o r d e d a
c l a u s e t h e r e o f may
reasonable effect (1)
o p p o r t u n i t y t o p r e s e n t e v i d e n c e as t o i t s commercial s e t t i n g , purpose= and to a i d the c o u r t i n making the d e t e r m i n a t i o n UCC and (2)Contract Clause: The
Chapter 25, P a r t 3 25-2 - 302
p r o v i s i o n s i n A r t i c l e 1 of the U.S,
C o n s t i t u t i o n that
no s t a t e may
pass a law a b o l i s h i n g c o n t r a c t s or denying them l e g a l e f f e c t , Oran's The
There a r e two l e g a l terms t h a t a r e o f t h e utmost i m p o r t a n c e a t t h i s p o i n t -
terms a r e r e s i n t e r a l i o s a c t a p r e v i o u s l y p r o v i d e d and o v e r b r e a d t h which f o l l o w s . These terms a r e i m p o r t a n t as they f u n c t i o n t o p r o t e c t A p p e l l a n t a g a i n s t and o v e r t a c c u s a t i o n s unfoimded i n law. 28 Federalism
Second, a f t e r the naked s h o r t and l e g a l and i l l e g a l t r a d i n g . A p p e l l a n t S t a n l e y was c o n t a c t e d by Rufus H a r r i s t o telephone t h e Radio Commentator. A f t e r making The question
c o n t a c t , A p p e l l a n t was was designed
asked a q u e s t i o n by t h e Radio Commentator.
t o c o r r e c t a problem i n a c o r p o r a t i o n pending SEC merger a p p r o v a l , A p p e l l a n t ' s answer was based
naked s h o r t s and l e g a l and i l l e g a l t r a d i n g a c t i v i t y .
on c o r p o r a t e i n f o r m a t i o n f r o m p r i o r c o r p o r a t e f i l i n g s , c o r p o r a t i o n press r e l e a s e s and board m e e t i n g s t o i n c l u d e b u s i n e s s judgment r u l e s , r e s i n t e r a l i o s a c t a overbreadth. A p p e l l a n t was w e l l w i t h i n the l i m i t s o f p r o t e c t i o n p r o v i d e d by A t t h e t r i a l , Don Maddalon and the
C o n s t i t u t i o n o f the U n i t e d S t a t e s , Amendment I .
a d m i t t e d r e s p o n s i b i l i t y f o r : h i s a c t i o n s and h i s n e g l i g e n c e w h i c h c r e a t e d the charges.^ The c o u r t ' s e a r s and the p r o s e c u t o r ' s e a r s were closed BUSINESS JUDGMENT RULE. CORPORATIONS (BLACK'S LAW, S t h Ed.) The p r e s u m p t i o n t h a t i n making b u s i n e s s d e c i s i o n s n o t i n v o l v i n g d i r e c t s e l f i n t e r e s t o r s e l f d e a l i n g s , c o r p o r a t e d i r e c t o r s a c t on an i n f o r m e d b a s i s , i n good f a i t h , and i n t h e c o r p o r a t i o n s b e s t i n t e r e s t . The r u l e s h i e l d s d i r e c t o r s and o f f i c e r s f r o m l i a b i l i t y f o r u n p r o f i t a b l e or h a r m f u l c o r p o r a t e t r a n s a c t i o n s i f the t r a n s a c t i o n s made i n good f a i t h , w i t h d u e - c a r e , and w i t h i n t h e d i r e c t o r ' s o r o f f i c e r ' s a u t h o r i t y . ( I n f a c t when t h e bonds came i n t o t h e company by way o f S a b r a Dabbs, she was an o f f i c e r o f s a i d company. Company A t t o r n e y M a u r i c e B e n n e t t and o t h e r o f f i c e r s v o t e d f o r t h e Bonds C o n t r a c t t o be approved. I t was not an i n d i v i d u a l v o t e . M i k e A l e x a n d e r and h i s company o f f i c e r s agreed t o t h e bonds and merger.) And t h i r d , Ann N e l k i n a d m i t t e d she and Sabra Dabbs c o n s p i r e d t o c r e a t e an ce t o "recoup money l o s t i n a d i v o r c e , " and t h e two o f them c a r r i e d out t h e artifi-
artifice.
Ann N e l k i n purchased F r o n t h a u l shares pre-merger based upon i n s i d e r t r a d i n g i n f o r mation. Ms. Ann N e l k i n a d m i t t e d under Oath a t the t r i a l t h a t she v i o l a t e d A p p e l l a n t S t a n l e y was r e s i n t e r a l i o s a c t a t o Ann See page 40 f o r Ann SEC Nelkin
r u l e s and r e g u l a t i o n s . deeds, and was testimony
w r o n g f u l l y charged and c o n v i c t e d .
Nelkin's
and T r i a l T r a n s c r i p t TT1264:20 t h r o u g h TT1293:. t h e U.S. A t t o r n e y v i o l a t e d A r t i c l e 6, paragraph 3,
To e x e c u t e counts 3-7 his oath of o f f i c e .
V i o l a t i o n o f h i s Oath o r Oath o f O f f i c e means he d i d not honor law
A p p e l l a n t ' s C o n s t i t u t i o n a l R i g h t s f o r due p r o c e s s V, e q u a l p r o t e c t i o n of the (XIV) and A p p e l l a n t ' s r i g h t s t o engage i n c o n t r a c t s o r o v e r b r e a d t h IX)
29
Overbreadth d o c t r i n e . is on
C o n s t i t u t i o n a l law.
The d o c t r i n e h o l d i n g t h a t i f a s t a t u t e
Sq b r o a d l y w r i t t e n t h a t i t d e t e r s f r e e e x p r e s s i o n , then i t can be s t r u c k down i t s f a c e because o f i t s c h i l l i n g e f f e c t - even i f i t a l s o p r o h i b i t s a c t s B l a c k ' s Law D i c t i o n a r y , S t h e d . C o n t r a c t s . The common
t h a t niay l e g i t i m a t e l y be f o r b i d d e n . .
r e s i n t e r a l i o s a c t a [ L a t i n a t h i n g done between o t h e r s ] 1.
l a w d o c t r i n e h o l d i n g t h a t a c o n t r a c t cannot u n f a v o r a b l y a f f e c t t h e r i g h t s o f a p e r s o n who i s n o t a P a r t y t o t h e c o n t r a c t . [ c a s e : c o n t r a c t s key 186b ( 1 ) ] 2. Evidence.
The r u l e p r o h i b i t i n g t h e a d m i s s i o n o f c o l l a t e r a l f a c t s i n t o e v i d e n c e , [ c a s e s : c r i n i n a l l a w key 338(1), 369 1; E v i d e n c e key 99, 130,] B l a c k ' s Law 9 t h ed.
Important t o A p p e l l a n t ' s d e f e n s e a r e t h e d e f i n i t i o n s o f Overbreadth and r e s inter alios acta. I n Count 1, A p p e l l a n t was accused o f c o n s p i r i n g by a i d i n g and
a b e t t i n g two o t h e r s t o execute a scheme t o d e f r a u d w i t h r e g a r d t o t h e p u b l i c l y t r a d e d s e c u r i t i e s o f C o n v e r s i o n S o l u t i o n H o l d i n g C o r p o r a t i o n f r o m e a r l y 2005 t o November 9, 2009. As a t t e s t e d e l s e w h e r e throughout t h i s m o t i o n . A p p e l l a n t ' s T h i s A p p e l l a n t never had an agreement w i t h Through h i s work c o n t r a c t
d u t i e s were s p e c i f i e d by c o n t r a c t .
anyone t o c r e a t e a scheme t o d e f r a u d p u b l i c l y - t r a d e d s t o c k .
A p p e l l a n t was i s s u e d 9 m i l l i o n s h a r e s o f s t o c k when o r i g i n a l l y h i r e d by c o n t r a c t i n t o Waatle. S h o r t l y a f t e r b e i n g i s s u e d . A p p e l l a n t g i f t e d f a m i l y member s h a r e s . A p p e l l a n t d i d n o t commit Testimony by E r i c
G i f t i n g o f s h a r e s i s p e r f e c t l y l e g a l and d u l y r e c o r d e d . a c r i m e and he d i d n o t coerce Ms. Deneault - Broker a t P o i n t C a p i t a l open h e r a c c o u n t before ing
Stanley t o trade her shares.
d i s c l o s e s t h a t he c o n t a c t e d Ms. S t a n l e y t o Regard-
v e r i f y i n g t h a t she c o u l d t r a d e h e r r e s t r i c t e d s h a r e s .
Count 1 and t h e t r a d i n g o f s h a r e s . A p p e l l a n t i s r e s i n t e r a l i o s a c t a because he i n t h e t r a n s a c t i o n and he was n o t a p a r t y t o t h e s a l e s c o n t r a c t . TT788:22-789:1 p. 86
had no i n v o l v e m e n t
A t TT786:22-23 p. 86 Mr. Deneault c o n t a c t s Ms. S t a n l e y . D e n e a u l t admits
he s e n t t h e h a r d copy o f t h e s h a r e c e r t i f i c a t e t o t h e T r a n s f e r TT799:16-
Agent (Don Maddalon) who removed t h e r e s t r i c t i o n s f r o m 1 m i l l i o n s h a r e s . 25, p. 86
Mr. Deneault a t t e s t s t h e s h a r e s belonged t o Ms. S t a n l e y and she was Any involvement by A p p e l l a n t S t a n l e y would To execute Coimt 1,
w i t h i n her r i g h t s t o s e l l her shares. have been o v e r b r e a d t h .
A p p e l l a n t d i d n o t commit a c r i m e .
t h e U.S. A s s i s t a n t A t t o r n e y v i o l a t e d A r t i c l e 5, paragraph 3, h i s o a t h o f o f f i c e . V i o l a t i o n o f h i s Oath o r Oath o f o f f i c e means he w i l l n o t honor A p p e l l a n t S t a n l e y ' s C o n s t i t u t i o n a l R i g h t s f o r due p r o c e s s (V) e q a a l p r o t e c t i o n o f t h e law ( X I V ) , r i g h t s t o e n t e r i n t o c o n t r a c t s ( I X ) , and h i s r i g h t s t o o v e r b r e a d t h p r o t e c t i o n . 30
I n Count 2, A p p e l l a n t was deraud o t h e r persons,
c o n v i c t e d o f e x e c u t i n g a scheme and a r t i f i c e t o
i n c o n n e c t i o n w i t h s t o c k s e c u r i t i e s o f CSHC...More c l e a r l y .
A p p e l l a n t s u p p o s e d l y c r e a t e d a scheme t o pimip and dump t h r o u g h f r a u d u l e n t means, p u b l i c l y traded shares. F i r s t . A p p e l l a n t i s not a p a r t y t o the c o n t r a c t and i s A p p e l l a n t i s f a l s e l y accused o f a i d i n g and a b e t t i n g Civ.P 60(b).
therefore res inter alios acta.
a pump and dump scheme and a r t i f i c e e x p l a i n e d elsewhere i n t h i s F.R.
A p p e l l a n t ' s r i g h t s under Amendments V, I X , X and XIV a r e v i o l a t e d because a g a i n , he 3, i s res i n t e r a l i o s acta. The p r o s e c u t i n g a t t o r n e y v i o l a t e d A r t i c l e 6, paragraph The
h i s Oath o r Oath o f o f f i c e t o p r o t e c t t h e r i g h t s o f A p p e l l a n t S t a n l e y .
prosecutor perpetuated
the g u i l t y v e r d i c t a l t h o u g h t e s t i m o n y was c o n t r a r y t o g u i l t . r e s p o n s i b l e f o r the pump and dump, T r i a l Transcript
S p e c i f i c a l l y , Don Maddalon a d m i t t e d he was
r e l e a s i n g o f r e s t r i c t i v e shares and f a l s i f y i n g a r e p o r t t o the SEC. (TT) TT1042-1057 and Don Maddalon t e s t i m o n y Affidavit.
b e g i n n i n g p. 46 through 83 i n A p p e l l a n t ' s
A p p e l l a n t i s r e s i n t e r a l i o s a c t a and any c o n v e r s a t i o n s w i t h h i s f a m i l y members become o v e r b r e a d t h . The documents o f a c o n t r a c t a r e not f r a u d u l e n t and any disagree
mentSifflust be r e s o l v e d by e i t h e r r e p r e s e n t a t i v e o r t h e p a r t i e s t o t h e c o n t r a c t , n o t by h o l d i n g an i n n o c e n t p a r t y h o s t a g e . To e x e c u t e Count 2, the U.S. p a r a g r a p h 3, h i s o a t h o f o f f i c e . A s s i s t a n t A t t o r n e y Anand v i o l a t e d A r t i c l e 6,
V i o l a t i o n o f h i s Oath or Oath of o f f i c e means
he w i l l not honor A p p e l l a n t ' s C o n s t i t u t i o n a l S i g h t s f o r due process ( V ) , e q u a l p r o t e c t i o n o f t h e law (XIV) and a p p e l l a n t ' s r i g h t s t o engage i n c o n t r a c t s o r overbreadth. Count 3 t h r o u g h 5 and 7 a r e charged as schemes t o commit w i r e f r a u d by r a d i o communication i n i n t e r s t a t e commerce... was A p p e l l a n t Stanleygled not g u i l t y but
c o n v i c t e d by a j u r y f o r a l l e g e d i n g t o have w r o n g f u l l y communicated
i n f o r i n a t i o n s p e c i f i c a l l y t h a t i n v e s t o r s depended upon t o make i n v e s t m e n t d e c i s i o n s . The p r o s e c u t i n g a t t o r n e y named one such person; Ann N e l k i n .
F i r s t t h e C e n t r a l Government implemented F e d e r a l i s m t h e r e i n v i o l a t i n g A p p e l l a n t ' r i g h t s under Amendment X. Then t h e p r o s e c u t o r v i o l a t e d A p p e l l a n t ' s r i g h t s under
I X t h Amendment by i n t e r f e r i n g w i t h the r i g h t s between two persons t o c o n t r a c t . A p p e l l a n t was Ms. never i n a c o n t r a c t w i t h Ms. Nelkin. A l l communication w i t h
N e l k i n i s overbreadth
because P e t i t i o n e r was
res inter alios acta.
31

SUMMARY When government o f f i c i a l s i s s u e f a l s e s t a t e m e n t s , they a r e i n v i o l a t i o n
of Oath o r A f f i r m a t i o n o f O f f i c e and when t h e i r a c t i o n s a f f e c t s t h e r i g h t s and l i b e r t i e s o f o t h e r s , t h e y have f a i l e d t o uphold t h e i n t e g r i t y o f t h e t r i a l system by committing perjury, U.S. v. X a v i e r A l v a r e z , S. C t . 132 S. C t . 2537; 183 L.
Ed. 2 d 574 e t . a l . Under Count two, the A s s i s t a n t U.S. Attomeys a r e a l l e d g i n g t h a t a scheme and
a r t i f i c e were u t i l i z e d t o defraud s h a r e h o l d e r s and t h a t i t was w i l l f u l l y and k n o v i n g l y executed. A p p e l l a n t submits t h a t i n l i g h t o f t h e e v i d e n c e a v a i l a b l e
t h e n a s i s a v a i l a b l e now f o r t h e A s s ' t U.S. a t t o r n e y s t o make such a c c u s a t i o n s in view o f t h e e v i d e n c e i s a f r a u d u l e n t s t a t e m e n t . F i r s t a scheme i s d e f i n e d as A plan t o t r i c k , to
any g e n e r a l p l a n o r system, e s p e c i a l l y a b u s i n e s s p l a n .
d e f r a u d someone,(Oran's D i c t i o n a r y o f t h e Law, 2d ed,) An a r t i f i c e i s d e f i n e d as a c l e v e r d e v i c e o r a cmBt$^ t r i c k (Webster New P o c k e t D i c t i o n a r y ) When
A p p e l l a n t combines t h e two d e f i n i t i o n s t o understand how t h e A s s ' t U.S. A t t o r n e y s a r e p r e s e n t i n g h i s i n v o l v e m e n t . A p p e l l a n t p r e s e n t s t h e f a c t s o f t h e events t h e i n d i s p e n s a b l e p a r t i e s were n o t made a v a i l a b l e t o be although
cross-examined. *""~5H{-Simply
p u t , Don Maddalon a d m i t t e d under Oath he d i d v i o l a t e SEC r u l e s , r e g u l a t i o n s and p o l i c i e s and t h a t he prepared the shareholder's list.*"^"~""*
H e r e A p p e l l a n t i s accused o f " w i l l f u l l y e x e c u t i n g and a t t e m p t i n g t o e x e c u t e a scheme and a r t i f i c e . " I n o t h e r words, a c l e v e r and c r a f t b u s i n e s s p l a n " t o
defraud share holders
i n c o n n e c t i o n w i t h s t o c k s e c u r i t i e s o f CSHC.,.with t h e
p u r c h a s e and s a l e o f S t o c k s e c u r i t i e s a t CSHC...an i s s u e r w i t h a c l a s s o f s e c u r i t i e s r e g i s t e r e d under S e c t i o n 12 o f t h e SEC A c t o f 1934." When a d d i n g count t h r e e t o t h e o t h e r two counts a l r e a d y d i s c u s s e d , v a l i d schemes and v a l i d a r t i f i c e s were u t i l i z e d by t h e i n d i s p e n s a b l e p a r t i e s . e v i d e n c e s u b m i t t e d h e r e i n renders t h e B i l l o f I n d i c t m e n t The overwhelming
d a t e d September 15, 2009
a f r a u d u l e n t document d i r e c t l y v i o l a t i n g b o t h t h e F e d e r a l R u l e s o f C r i m i n a l and C i v i l Procedures, Rights. to t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s and Defendant's B i l l o f
These documents were a v a i l a b l e t o t h e p r o s e c u t o r s b u t n o t made a v a i l a b l e A l t h o u g h Defendants p l e a d n o t g u i l t y and h i s a t t o r n e y proved
t h i s Defendant.
he was n o t a p a r t y t o t h e c o n t r a c t s , he was found g u i l t y t h r o u g h a s s o c i a t i o n . The Laws o f O b l i g a t i o n s and C o n t r a c t d i s c l o s e t h a t t h e p a r t i e s t o a c o n t r a c t have a m e e t i n g o f the minds. I n t h i s t r i a l and i n t h i s c a s e , t h e i n d i s p e n s a b l e p a r t i e s L a c k i n g an Agreement cuid t h e i n d i s p e n s a b l e
were n o t a v a i l a b l e f o r examination.
p a r t i e s , t h e r e c o u l d be no meeting o f t h e minds, a key element i n c o n t r a c t s and conspiracies. When o f f i c e r s o f t h e l a w v i o l a t e t h e law, t h e y must be h e l d 32
accountable.
S t a t e v. Montgomery.
W i t h i n t h e pages o f t h i s M o t i o n , A p p e l l a n t S t a n l e y has u n c o n d i t i o n a l l y and i r r e v o c a b l y shown i n t h i s case o f j u d i c i a l m i s c o n d u c t " i s s u e i s whether because of j u d g e ' s a c t i o n , t r i a l was n o t f a i r t o moving p a r t . " C o n s t r . (1999, DC Mass) 190 FRD 21. Matton v. White Mt. C a b l e
Indeed, t h e e v i d e n c e p r e s e n t e d w i t h t h e
A f f i d a v i t and e v i d e n c e show and g i v e many i n s t a n c e s o f j u d i c i a l misconduct and m i s r e p r e s e n t a t i o n o f a c t u a l f a c t s by c o l o r o f l a w where A p p e l l a n t i s c l e a r l y Res i n t e r a l i o s a c t a . T h i s c o u r t must demure t o r e l i e v e t h i s m a n i f e s t injustice.
A p p e l l a n t S t a n l e y ' s j u r y f i n d i n g must be v a c a t e d and t h e case remanded f o r d i s o i s s a l a s he i s w r o n g f u l l y a c c u s e ^ a n d w r o n g f u l l y c o n v i c t e d . R e s p e c t f u l l y submitted fehis 9.3 day o f May, 2013 by.
rfg61490-019 ?. 0. Box 999, Los S e c u r i t y C o r r e c t i o n I n s t . B u t n e r , NC 27509
33
TABLE OF CONTENTS Table of Contents Motion to Vacate, Set-Aside, Correct Key Elements t o E l i m i n a t e B. S t a n l e y from Case Sabra Dabbs C o n t r a c t A u d i t o r Thomas Benson Report C o n c l u s i o n o f Report Nexus and Mens Rea... O b l i g a t i o n of a Contract B u s i n e s s Judgment Rule. C o r p o r a t i o n s Overbreadth d o c t r i n e Res i n t e r a l i o s a c t a Summary C e r t i f i c a t e of Service A f f i d a v i t s o f Benjamin S t a n l e y - Motions t o Vacate M i c h a e l A l e x a n d e r Testimony Ann N e l k i n Testimony Trade Accounts and Payouts Don Maddalon T r i a l Testimony/Admissions A n a l y s i s o f C a p i t a l and Funding Testimony o f E r i c Deneault I n e f f e c t i v e A s s i s t a n c e o f Counsel C e r t i f i c a t e of Service A f f i d a v i t o f Benjamin S t a n l e y ' s A n a l y s i s of M i c h a e l A l e x a n d e r 34 9-94 23 32 -43a -43b-43c-page 45 38-39 46- 49a-83 84 - 85 86 - 87 88 - 93 94 1 - 37 33a . 1 . 3 4a - 4g 5-15 15a 23-25a-27 28-29 29 30 30-31
33a
CERTIFICATE OF SERVICE I c e r t i f y under p e n a l t y o f p e r j u r y t h a t I p l a c e d a copy o f t h i s m o t i o n w i t h p r o p e r postage i n t o t h e Inmate M a i l System f o r d e l i v e r v t o t h e a d d r e s s e e s ^ below t h i s day o f May 2013,
United
States
Court
of Appeals
Fosr The E l e v e n t h Attn: 55 Clerk
Circuit
of Court
Forsyth GA
Street 30303
C l e r k o f t h e Court U.S. D i s t r i c t C o u r t Atlanta Division 600 U. S. Courthouse 75 S p r i n g S t r e e t , S.W, A t l a n t a , GA 30303
Atlanta,
A t t o r n e y Nathan K i t c h e n s A t t o r n e y J u s t i n S. Anand 600 U.S. Courthouse 75 S p r i n g S t . SW A t l a n t a , GA 30303
Defense A t t o r n e y Don Samuels G a r l a n d , Samuels,Loeb, PC T r i a l Attorneys 3151 Maple D r i v e , NE A t i a n t a , GA 30305
Benipnin Stanley Reg: 61491-019 LSCI-VB P. 0. Box 999 B u t n e r , NC 27509 WITNESS IN-LIEU OF NOTARY T h i s w i l l c e r t i f y under p e n a l t y o f p e r j u r y t h a t t h e undersigned d i d w i t n e s s t h e s i g n a t u r e o f Benjamin F. S t a n l e y and t h a t he d i d s i g n t h e above s i g n a t u r e o f h i s own f r e e w i l l . Fujrther t h a t my s i g n a t u r e a s a w i t n e s s does n o t make me l i a b l e f o r t h e c o n t e n t s o f t h i s a c t i o n . F i n a l l y , I am n o t a p a r t y t o t h e a c t i o n and I have no i n t e r e s t i n t h e outcome, dated t h i s day o f Viaj, 2013. My s i g n a t u r e a n d - ^ d d r e s s appears below:
P. 0. Box 999, Vance-B Low S e c u r i t y C o r r e c t i o n I n s t i t u t e B u t n e r , N o r t h C a r o l i n a 27509 34 Low S e c u r i t y C o r r e c t i o n I n s t i t u t e B u t n e r , N o r t h C a r o l i n a 27509
PAGES 1 THROUGH 8 WERE INTENTIONALLY LEFT BLANK.
1 through 8

FROM: 61491019 TO: Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT: Motion to Vacate Jury Guilty Verdict and Remand DATE: 04/16/2013 03:12:09 PM Motion to Vacate Jury G u i l t y V e r d i c t and Remand for Dismissal without Prejudice Petitioner Benjamin Stanley submits as set-forth in trial transcript (TT) beginning on page TT1017:1 and ending on page TT1150:25 presents facts as is based solely on the knowledge about the maintenance and disposition of stock by publicly traded and privately traded companies. Histories of the two companies disclose that Waatle Holding was a company owned by Shareholders Duwayne Woods and Rufus Harris, Board members. Waatle hired Petitioner Stanley by contract. The other officers were also hired by contract. Waatle was a privately held corporation merging with Conversion Solutions surviving the merger and all Waatle shareholders became Conversion Solution share holders. Conversion Solution (Private corporation) was a SEC reporting company in the process of going public through SEC
filings as disclosed by the testimony of Don Maddalon pages TT1027 to TT1150. Share activity or events is recorded by the company itself. The company manages its own records. Likewise, but with substantial differences, Furia and Fronthaul Group, Inc. merged with Fronthaul Group, Inc. surviving the merger. Furia and Fronthaul stock were merged as well. The major differences between Fronthaul and Conversion Solutions are that Fronthaul is a publicly trading company and Conversion Solutions is a private company. Fronthaul's operations are controlled by the SEC rules and regulations. Every event involving shares must be reported to the SEC by public companies. Common to the mergers of Conversion Solution and Fronthaul are Don Maddalon, David Hawkins, Mike Alexander and Dave Perley. TT1028:1-25 It was revealed that David Hawkins had former knowledge ofthe merger before any party was encountered from Pacific Beach Mortgage Company. He owned shares of Furia pre-merger. The Furia/ Fronthaul premerger. This same David Hawkins placed UCC Note assets of over $300,006,000 to Waatle prior to its merger with Conversion Solutions. Michael Alexander, in his deposition to the SEC, testified that Dave Perley is a Consultant and that he paid him with shares. Don Maddalon, the Transfer Agent was hired to merger Furia/Fronthaul with Fronthaul surviving so a public trading company could sun/ive. Alexander testified that he was ready to close Fronthaul but he was in contact with Sabra Dabbs, CEO Powerhouse seeking funding for Fronthaul projects. Dabbs was hired by Conversion Solutions as Vice President Global Funding when she discussed $9 billion in assets and Conversion Solution, the new company she was currently working with would be able to fund his project after going public. Alexander suggested a merger since Fronthaul was on the verge of closing. 9
Dabb-s had a r e q u i r e m e n t w h i c h must be s a t i s f i e d w i t h the bonds so she i n a- conference c a l l w i t h Alexander c o n t a c t i n g P e t i t i o n e r H a r r i s on t h e t e l e p h o n e . acta.
participated
S t a n l e y who i m m e d i a t e l y p u t alios
Through t h i s e n t i r e p r o c e s s , S t a n l e y was Res i n t e r l a t e June 2006, F r o n t h a u l o f f i c e r s and met a t H a r r i s '
The merger was agreed upon i n
C o n r e r s i o n S o l u t i o n s o f f i c e r s and P e t i t i o n e r a p p r o v i n g t h e merger J u l y 10 , 2006.
ranch s u b s e q u e n t l y
10

Failure to utilize contractural Laws of Obligation as disclosed by Article 1, Section 10, Clause 1 to legislate conflicts regarding ccntxacts a mis-application of statute, dereliction of duty, violation of my constitutional rights under Amendments 5, 6, and 14 and grounds to Vacate the jury findings of guilty and order dismissal without prejudice and charges, and expungement of Petitioner's records. Res i n t e r a l i o s a c t a [ L a t i n a t h i n g done between o t h e r s [ 1. C o n t r a c t s . The comnion-
l a w d o c t r i n e h o l d i n g t h a t a c o n t r a c t cannot u n f a v o r a b l y a f f e c t the r i g h t s o f a P e r s o n who i s not a P a r t y t o the contract, [cases: c o n t r a c t s key 186 ( 1 ) . ] 2. E v i d e n c e . The
r u l e P r o h i b i t i n g the admission o f c o l l a t e r a l f a c t s i n t o evidence, [cases: k e y 338 ( 1 ) , 369 1; Evidence key 99, 130.] B l a c k ' s Law, nineth edition.
C r i m i n a l Law
The f o l l o w i n g i n d i v i d u a l s a r e c o n s i d e r e d Res i n t e r a i i e s i a c t a i t o i - p e t i t i o n e r i Benjamin S t a n l e y due t o the n a t u r e o f t h e i r n o n - c o n t r a c t i n g work r e l a t i o n s h i p . Res i n t e r a l i o s
a c t a d e f i n e d above d e s c r i b e s the p r i n c i p l e t h a t a p a r t y t o a l a w s u i t s h o u l d not be a f f e c t e d by t h e words o r deeds o f persons w i t h whom t h e p a r t y has no c o n n e c t i o n and f o r whom t h e p a r t y has no l e g a l r e s p o n s i b i l i t y ' . ( r e s i n t e r a l i a a c t a ) Gran's D i c t i o n a r y o f Law, T r a n s f e r Agent Don Maddalon Dave P e r l e y Randy Moseley Michael Alexander S a b r a Dabbs Ismet Paez Romeo V e n d e t t i , T h e C a r a c a s Mitch Sepantiack D a r r y l Shore Duwayne Woods Toy Morgan Gerald Shore Ann Nelkin Ott Gira David Hawkins S t e v e n Kennedy C r a i g Casson A l l bankers associated with A c r i m i n a l indictment 2d ed.:
Group
the projects.
B o n d s , a n d UCC N o t e . f o r c o u n t one Horton;
numbered above a l l e g e s a c o n s p i r a c y H a r r i s , Benjamin Stanley,
against Count
d e f e n d a n t s Rufus P a u l
and D a r r y l and count
two a l l e g e s a scheme t o commit S e c u r i t i e s F r a u d , 11
three
alleges Harris). hy Billy
false
certification
of financial
statement
(against
Defendant
The c r i m i n a l A.
indictment
labeled a true b i l l by S a l l y
was a u t h e n t i c a t e d Quillian Justin Yates,
Home, Foreperson
and A u t h o r i z e d
Acting Bar
U.S. A t t o r n e y
a n d t w o A s s i s t a n t U.S. A t t o r n e y s
S. A n a n d , 75
0 1 6 1 1 6 a n d J a m i l a M, H a l l , S t r e e t , S. W. Fax 6131. first Atlanta,
B a r 3 1 9 0 5 3 , 6 0 0 U.S. C o u r t h o u s e , GA 30303, telephone
Spring 6031,
(404) 581-6332,
Defendant S t a n l e y disclose cipated founder Holding Stanley position or the B i l l
addresses
certain
e r r o r s when c o r r e c t e d
will
of Indictment
i s f r a u d u l e n t and Defendant never First Benjamin Stanley Second,
parti-
i n a conspiracy of Conversion
or a crime.
i s not a coWaatle Defendant This
Solution Holding
corporation.
C o r p o r a t i o n was n o t c o n t r o l l e d was h i r e d
by D e f e n d a n t S t a n l e y .
under c o n t r a c t as t h e C h i e f Operations t o do w i t h c o n t r o l l i n g
Officer.
had n o t h i n g
Waatle Holding
Corporation
Conversion
Solutions. this Motion a P r o Se A p p e l l a t e B r i e f , i t i s changed wherever the phrase alios
NOTE: and "res acta.
Throughout
Permission inter alia
to file
a c t a " appears,
r o read follow.
Res i n t e r
An A m e n d m e n t / C o r r e c t s o f e r r o r s w i l l
12

FROM; 61491019 TO; Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT; Contracts DATE; 04/16/2013 03; 17:30 PM
Contracts and Obligations of Contracts Petitioner Stanley is speaking to the facts of prior released public announcements by Sabra Dabbs, Michael Alexander and Rufus Paul Harris inferences to bind contracts and merger agreements. All are protected by Contractural clauses. The provisions in Article I of the United States Constitution states that no State may pass a law abolishing contracts or denying them legal effect. All statements and action was overbreadth if it attempts to punish speech or conduct that is protected by the Constitutional law without invalidating the whole law. Oran's Dictionary ofthe Law, 2nd ed. The most fundamental law of all human law incorporates survival which is a Universal Principal. Fundamental laws have to do with human interactions of all kinds. They are based on treating and dealing with others in the way that you would like to be treated or dealt with. This is the Law of Commerce which has been operational many thousands of years through the Sumerian/Babylonian era where it was codified and enforced over 6,000 years ago. The category of law dealing with proprietary rights in personam-namely, the relations between obligors and obligees. It is one of the three departments into which civil law was traditionally divided. Blacks Sth Ed, 736. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law - a binding contract, p. 24. The civil obligations, the binding efficacy, the coercive power, the legal duty of performing the contract, refers to the legal requirement binding the contracting parties to the performance of their undertaking and not the duties arising out of the contract itself. 71 P 301. Except where specific performance is available as a remedy, one cannot be compelled to actually perform a contract obligation; rather, he merely subjects himself to liability in damages if he fails to honor the obligation of a contract. Impair the obligation of a contract "to weaken [the contract], or lessen its value, or make it worse in any respect or in any degree....Any law which changes the intention and legal effect ofthe original parties, giving to one a greater and to the other a less interest or benefit in the contract, impairs its obligations." 115 A. 484, 486. "The extent of the change is immaterial. Any deviation from its terms by hastening or postponing the time of performance which it prescribes, or imposing conditions not included in the contract, or dispensing with the performance of those that are included...impairs the obligation of a contract." Id. Impairment is also said to exist where the right to enforce a contract is eliminated or substantially lessened. See 185 A. 401. State statutes which do so are prohibited by Article 1, Section 10 ofthe United States Constitution. Everyone has the freedom of contract which is the doctrine that people have the right to bind themselves legally, it is a judicial concept that contracts are based on mutual aareement, free choice, and thus should not be hampered by

TRULINCS &1491019 - STANLEY, BENJAMIN - Unit: BUF-V-B
extemal control such as governmental interference. This is the principle that people are able to fashion their relations by private agreements, esp. as opposed to the assigned roles ofthe feudal system. Blacks Law, Sth ed. An agreement that affects or creates legal relationships between two or more persons. To be a contract, an agreement must involve; at -least a promise, consideration (something of value promised or given), persons legally capable of making binding agreements, and a reasonable certainty about the meaning of the terms. Uniform Commercial Code defines contract is the "total legal obligation which results from the parties' agreement," and according to the Restatement of Law of Contracts, it is "a promise or set of promises for the breach of which the law in some way recognizes a duty." UCC, Chapter 25. Society and business have become complex. Such complexity has caused the creation and usage of contracts in all areas of the business community such as with this Waatle to Conversion Solutions to Fronthaul merger and its marriage/ partnership/contractural obligations to each other and other companies offering a specific contractural service to promote the company. Contractural employment is an excellent example. Many different types of contracts were utilized to transgress from Waatle Holding Inc to Conversion Solutions, Inc to Fronthaul, Inc. With those contracts came many individuals who are classified as parties to the contracts. When any one contract is breached, a party to the appropriate contract that entered an agreement with the other party must negotiate their current standing. This is the only recognized method for resolding issues with a contract unless done so in a court of law. Herein lies problems that resulted in wrongful conviction of Petitioner Stanley. Instead of bring an actual party to the appropriate contracts, third party interlopers, not a party to the contracts, were called to testify on the authenticity of the contracts. Such testimony was and is flawed. Contracting parties that are not made available for examination in a court proceeding are classified as "indispensable parties." It is trickery and deceit not to have a party to the contract in dispute available for examination. It is Estoppel when one party to the contract/agreement is not available to promote or defend his rights. Petitioner Stanley informs the importance of contractural obligations cannot be over emphasized. As the law vividly manifest, the rules governing relationships among people have existed for centuries becoming complicated based upon societal conditions and willingness to hormoniously enteract for the benefit of human kind. The liberty or ability to enter into agreements with others, freedom of contract is a "basic and fundamental right resen/ed to the people" by the fifth and fourteenth Amendments to the Constitution ofthe United States which prohibits "the deprivation of liberty without due process of law. "32 F. Supp. 964, 987. "Freedom of Contract is subject to legislative regulatios in the interest of public health, safety, morals or welfare." 57 A.2d 421, 423. Barron's Law Dictionary, 6th Ed. 14
FEDERALISM P e t i t i o n e r S t a n l e y submits t h a t p r o s e c u t o r s f a i l e d t o b r i n g t h e i n d i s p e n s a b l e p a r t i e s t o t h e c o n t r a c t i n t o t h e c o u r t room f o r e x a m i n a t i o n by t h e d e f e n s e , thereby f a i l i n g t o charge them w i t h a crime v i o l a t i n g P e t i t i o n e r ' s C o n s t i t u t i o n a l r i g h t s t o i n c l u d e d e p r i v i n g him o f l i f e , l i b e r t y o r p r o p e r t y w i t h o u t due p r o c e s s of law. Amendment 5; d e p r i v i n g o f r i g h t s t o be informed o f t h e n a t u r e and cause o f t h e a c c u s a t i o n ; r i g h t s t o be c o n f r o n t e d w i t h t h e w i t n e s s e s a g a i n s t him and t o have compulsory p r o c e s s f o r o b t a i n i n g w i t n e s s e s i n h i s f a v o r , and t o have the a s s i s t a n c e o f c o u n s e l f o r h i s d e f e n c e . Amendment 6. F u r t h e r t h e p r o s e c u t o r s v i o l a t e d t h e b a s i c p r i n c i p l e s o f F e d e r a l i s m because they p r o s e c u t e d P e t i t i o n e r based on f a l s e e v i d e n c e , o m i t t e d e v i d e n c e , hidden
e v i d e n c e , and l i e s based upon i n v e s t i g a t i o n by f e d e r a l employees t h e r e b y c a u s i n g sevei' f i n a n c i a l l o s s l e a d i n g t o d e s t r u c t i o n o f b u s i n e s s v e n t u r e s and k i d n a p p i n g o f monies because they a l l d i s r e g a r d e d t h e b a s i c s t r u c t u r e o f F e d e r a l i s m a s a r i g h t b e l o n g i n g t o t h e P e t i t i o n e r S t a n l e y a s w e l l as t h e S t a t e o f G e o r g i a because t h e "...enumeration i n t h e C o n s t i t u t i o n o f c e r t a i n r i g h t s s h a l l n o t be c o n s t r u e d t o deny o r d i s p a r a g e o t h e r s r e t a i n e d by t h e p e o p l e . " 9. F e d e r a l i s m i s a s t e a l t h p s y c h o l o g i c a l mechanism u t i l i z e d by U n i t e d S t a t e s Attorneys and A s s i s t a n t U.S. A t t o r n e y s whose modus o p e r a n d i i s t o overpower Amendment
i t s Agreement w i t h any S t a t e , t o u t i l i z e i t s power t o subdue t h e p e o p l e s / p e r s o n by removing thera f r o m t h e i r home and S t a t e , v i o l a t i n g t h e i r R i g h t s guaranteed
by t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s , thereby i n v o k i n g a t e s t e d s y s t e m i c methodology i n t h e a d m i n i s t r a t i o n o f t a c t i c a l c r i m e s s p e c i f i e d i n T i t l e 18 a g a i n s t the peoples/person o f t h e S t a t e s p e c i f i c a l l y v i o l a t i n g Amendments I V , V, and
V I ; and Amendment X I V o f t h e C o n s t i t u t i o n o f t h e u n i t e d S t a t e s c a u s i n g temporary t o permanent r i f t s and d e s t r u c t i o n t o t h e f a m i l y u n i t and s o c i o e c o n o m i c a l systems.
15
By removing t h e R i g h t s a f f o r d e d hy t h e C o n s t i t u t i o n o f t h e U n i t e d the f e d e r a l c e n t r a l government e n s l a v e s t h e p e o p l e s / p e r s o n .
States,
The Tenth Amend-
l e n t t o t h e C o n s t i t u t i o n o f t h e u n i t e d S t a t e s i s designed t o p r o t e c t t h e S t a t e and p e o p l e s a g a i n s t t h e powers o f f e d e r a l i s m . t u t i o n o f t h e u n i t e d S t a t e s i s quoted: "The powers n o t d e l e g a t e d t o t h e u n i t e d S t a t e s hy t h e C o n s t i t u t i o n , n o r p r o h i b i t e d by i t t o t h e S t a t e s , a r e r e s e r v e d t o t h e S t a t e r e s p e c t i v e l y , o r t o t h e peoples." The T e n t h Amendment t o t h e C o n s t i -
16
TtE States exist to protect i t s people against the > .powers of t t e federal govenmeit. The f e d e r a l government i n s t i t u t e d a p s y c h o l o g i c a l mechanism known as f e d e r a l i s m to s u b o r d i n a t e t h e power o f t h e S t a t e and t h e power o f t h e people t o implement i t s c o n t r o l and laws o v e r t h e S t a t e s and t h e p e o p l e s . of f e d e r a l i s m a r e : a. b. c. d. e. f. g. h. i. 3". Agreement t o s h a r e power w i t h a s t a t e mechanism f o r a b s o l u t e c o n t r o l removal o f R i g h t s t h e t r u t h i s what t h e y say i t i s kidnap t h e people m i s - a p p l i c a t i o n of law- c o n t r a c t u r a l or c r i m i n a l law i s geared toward t h e d a r k e r s k i n n e d people o f t h e human-race. t h e f t and d e s t r u c t i o n o f m a i l p r e p a r a t i o n o f f a l s e docimients and c h a r g e s o p e r a t e s t h r o u g h sabotage, s u b t e f u g e , and espionage Some known c h a r a c t e r i s t i c s
Feideralism makes c a p t i v e s o f i t s people and they s e r v e a t e r m of imprisonment w h e r e i n p u r s u i t s o f l o s t R i g h t s a r e managed t h r o u g h Habeas t h a t r a r e l y p r o v i d e the r e l i e f r e q u e s t e d u n l e s s e x t r a - o r d i n a r y e x i g e n c i e s e x i s t . W i t h t h e f e d e r a l govemment e x e r t i n g l a w s , r u l e r s h i p and c o n t r o l o v e r t h e p e o p l e s , one i n d i v i d u a l d i d possess e x t r a - o r d i n a r y e x i g e n c i e s t o c h a l l e n g e h e r c o n v i c t i o n t o t h e Supreme C o u r t . C a r o l Anne Bond, case C a r o l Anne Bond, P e t i t i o n e r v. U n i t e d S t a t e s , Supreme C o u r t o f t h e U n i t e d S t a t e s , 131 S. C t . 2355; 180 L. Ed. 2d 269; 2011 L e x i s 4558; 22 F l a . L. Weekly F e d . S 1156 No. 09-1227, F e b r u a r y 22, 2011 Argued; June 16, 2011, D e c i d e d . , p l e d g u i l t y t o u n l a w f u l p o s s e s s i o n o r usage o f a c h e m i c a l under 18 u s e s 229. A f t e r some thought and s t u d y she d e c i d e d t o a p p e a l h e r c a s e .
The T h i r d C i r c u i t d e n i e d Bond's p e t i t i o n on t h e b a s i s she " l a c k e d s t a n d i n g t o a s s e r t t h a t 229 was i n v a l i d under t h e Tenth Amendment." Bond appealed t o t h e
Supreme C o u r t who r u l e d t h a t Bond "had s t a n d i n g t o c h a l l e n g e h e r s t a t u t e ( I S uses 229) o f c o n v i c t i o n on Tenth Amendment grounds a s an i n f r i n g e m e n t upon t h e powers r e s e r v e d t o t h e s t a t e s . P e t i t i o n e r c o u l d a s s e r t h e r own i n j u r y r e s u l t i n g
from d i s r e g a r d o f t h e f e d e r a l s t r u c t u r e ; f e d e r a l i s m ' s l i m i t a t i o n s were n o t a matter of r i g h t s belonging only t o the s t a t e s . be r e a d i n i t s e n t i r e t y on page 18 through The Bond W r i t o f C e r t i o r a r i c a n 22
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CAROL ANNE BOND, PETITIONER v. UNITED STATES SUPREME COURT OF THE UNITED STATES ^ 131 S. Ct. 2355; 180 L. Ed. 2d 269; 2011 U.S. LEXIS 4558; 22 Fla. L. Weekly Fed, S 1156 No. 09-1227 February 22, 2011, Argued June 15, 2011, Decided
T h e LEXIS pagination of this document is subject to change pending release of the final published version, Editorial Information: Prior History O N WRIT OF CERTIORARI TO THE UNITED STATES GOURT OF APPEALS FOR THE THIRD ClRCUlT.United States v. Bond, 581 F.Sd 128, 2009 U.S. App. LEXIS 20724 (2009) Disposition: Reversed and remanded. Paul D, Clement argued the cause for petitioner. Mlchae! R. Drseb&n argued fhe . cause for respondent,. supporting petitioner. Stephen R. McAllister argued the cause as amicus curiae, by special leave of court, supporting the judgment below. .Judges; KENNEDY, J., delivered the opinion for a unanimous Court. GINSBURG, J., filed a concurring opinion, in which BREYER, J., joined. C A S E SUIWi\flARY PROCEDURAL POSTURE:^Petitioner conditionally pleaded guilty in district court under 18 U.S.C.S. 229 to unlawful possession or use of a chemical. The United States Court of Appeals for the Third Circuit found that petitioner lacked standing to assert that^ 229 v/as invalid under the Tenth Amendment. The Supreme Court granted certiorari.Petitioner had standing to challenge her statute of conviction, 18 U.S.C.S. 229, on Tenth Amendment grounds as an infringement upon the powers reserved to the states, Petitioner could assert her own injury resulting from disregard ofthe federal structure; federalisrn's limitations were not a matter of rights belonging oniy to the states. OVERVIEW: Petitioner challenged 229 based on the premise that Congress ..exceeded its powers by enacting the statute in contravention of basic federalism principl.es. The Third Circuit held that, absent a state's participation in the proceedings, petitioner had no standing to assert a Tenth Amendment challenge. The Supreme Court held that petitioner did have standing to challenge 229 as an infringement upon the powers reserved to the states. The U.S. Const, art. Ill standing requirement had no bearing on petitioner's capacity to assert defenses in her cnminal case, and her appeal met constitutional standing prerequisites. Petitioner could assert her own injury resulting from governmental action that exceeded the authority that federalism defined; federalisrn's limitations were not a matter of rights belonging only to the states. Petitioner also was not precluded from arguing that 229 interfered lecases 1 Counsel
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with a specific aspect of state sovereignty, as the principles of limited national powers and state sovereignty were intertv/ined, Petitioner,, as a party to an otherwise justiciable case or controversy, could atjQflrt that hsr inii irv
TRRI
iltftd from riisrfinRrd nf thfi ffirlftral stninti irs nf thft nnvRrnmsnt
OUTCOME: The Third Circuit's judgment was reversed and remanded. 9-0 decision; 1 concurrencs, LexisNexis Headnotes
Constitutional Law> The Judiciaty > Case or Controversy > General Overview
The United States Supreme Court has disapproved of Tennessee Elec, Power Co. v, TVA as authoritative respecting U,S, Const, art, ( 1 1 limitations.
Constitutional Consti'tutiona! Law Law > The Judiciary > The Judiciary > Case or Controversy > Case or Controversy > General > Standing Overview > General Overview
One who seeks to initiate or continue proceedings in federal court must demonstrate, among other requirements, both standing to obtain the relief requested and, in addition, an ongoing interest in the dispute on the part of the opposing party that is sufficient to establish "concrete adverseness." When those conditions are met, U.S. Const art. Ill does not restrict the opposing party's ability to object to relief being sought at its expense. The requirement of U.S, Const art. III standing thus has no bearing upon a criminal defendant's capacity to assert defenses in a district court.
Constitutional Criminal Law Law > The Judiciary > Case or Controversy & Procedure > Appeals > Right to Appeal > > Standing > Particular Defendants Parties
A defendant's challenge to a conviction and sentence satisfies the case-or-controversy requirement, because incarceration constitutes a concrete injury, caused by the conviction and redressable by invalidation of the conviction.
Civil Civil Claims Procedure Procedure > Justiciability > Standing > Injury in Fact > Pleading & Practice > Defenses, Demurrers,
& Objections
> Failures
to
State
if a person alleging injury is remote from the zone of interests a statute protects, whether there is a legal injury at all and whether the particuiar litigant is one who may assert it can involve similar inquiries. Statutory standing and the existence of a cause of action are closely connected and sometimes identical questions. Still, the question whether a plaintiff states a claim for relief goes to the merits in the typical case, not the justiciability of a dispute, and conflation of the two concepts can cause confusion.
Civil Procedure Constitutional Constitutional > Justiciability > Standing > General Overview Law > Congressional Duties & Powers > Reserved Powers Law > The Judiciary > Case or Controversy > Standing > Particular
Parties
To the extent that it was the intention of the United States Supreme Court in Tennessee Elec. Power Co. V, TVA, 306 U.S, 118 (1939), to refer to standing in the sense of whether plaintiffs are the proper litigants to raise a Tenth Amendment issue, it is inconsistent with the Supreme Court's later precedents. The statement under Tennessee Electric that parties, absent the states or their officers, have no standing to raise any question under the Tenth Amendment should be deemed neither controlling nor instructive on
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-frhe issue of standing as tfiat term is now defined and applied. *iV/7
Procedure > Justiciability Law Law Law > Standing Duties > Injury & Powers in Fact > Reserved > Standing > General Powers > Particular Parties Overview
Constitutional Constitutional Constitutional
> Congressional > The Judiciary > Relations
> Case or Controversy Governments
Among
An individual, in a proper case, can assert injury from governmental action taken in excess of ttie i 3 U t h o r i t y that federalism defines. Her rights in this regard do not belong to a state.
Constitutional Constitutional Constitutional Constitutional Law> Law Law Law Congressional > Relations > Supremacy > State Among Clause Duties & Powers > Reserved > General Overview Overview Powers Overview
Goverrunents > General > General
Autonomy
Federalism has more than one dynamic. It is true that the federal structure serves to grant and delimit the prerogatives and responsibilities of the states and the national government vis-a-vis one another. "Tiie allocation of powers in the federal system preser\/es the integrity, dignity, and residual sovereignty ofthe states, The federal balance is, in part, an end in itself, to ensure that states function as political entities in their own right. But that is not its exclusive sphere of operation. Federalism is more than an exercise in setting the boundary between different institutions of government for their own integrity. State sovereignty is not just an end in itself: Rather, federalism secures to citizens the liberties that derive from the diffusion of sovereign power. Some of these liberties are of a political character.
Constitutional Constitutional Constitutional Constitutional Law > Congressional Duties & Powers > Reserved Powers Law > The Judiciary > Case or Controversy > General Overview Law >. Relations Among Governments > General Overview Law > State Autonomy > General Overview
The federal structure allows local, policies more sensitive to the diverse needs of a heterogeneous society, permits innovation and experimentation, enables greater citizen involvement in democratic processes, and,makes government more responsive by putting the states in competition for a mobile citizenry. Federalism secures the freedom ofthe individual. It allov/s states to respond, through the enactment of positive law, to the initiative of those who seek a voice in shaping the destiny of their own times without having to rely solely upon the political processes that control a remote central power. True, of course, these objects cannot be vindicated by the Judiciary in the absence of a proper case or , controversy; but the individual liberty secured by federalism is not simply derivative of the rights of the states.
Constitutional Constitutional Constitutional Law > Congressional Duties & Powers > Reserved Law > Relations Among Governments > General Law > State Autonomy > General Overview Powers Overview
Federalism protects thefibsiiy of all persons within a state by ensuring that laws enacted in excess of delegated governmental power cannot direct or control their actions. By denying any one .government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power. When government acts in excess of its lawful powers, that liberty is at stake.
Constitutional Constitutional Constitutional Lav/ > Congressional Duties < S Powers > Reserved Powers Law > The Judiciary > Case or Controversy > Standing > Elements Law > Relations Among Governments > General Overview
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Constitutional
Law
> State Autonomy
> General
Overview
The limitations ti'iat federalism entails are not a matter of rights belonging only to the states, States are tiot the sole intended beneficiaries of federalism. An individual has a direct interest in objecting to laws -that upset the constitutional balance between the national government and the states when the jSiiforcement of those laws causes injury that is concrete, particular, and redressable. Fidelity to principles of federalism is not for the states alone to vindicate.
Constitutional Constitutional Law Law > The Judiciary > Relations > Case or Controversy Governments > Standing > Particular Parties
Among
> General
Overview
Iflhe constitutional structure of the United States Government that protects individual liberty is compromised, individuals who suffer othenwise justiciable injury may object.
Constitutional Constitutional Constitutional Constitutional Constitutional Law Law Law> Law Law > Congressional Duties & Powers > Reserved Powers > The Judiciary > Case or Controversy > Standing > Particular Relations Among Governments > General Overview Povjers > Separation of > State Autonomy > General Overview
Parties
Just as it is appropriate for an individual, in a proper case, to invol<e separation-of-powers or cliecks-and-balances constraints, so too may a litigant, in a proper case, challenge a, law as enacted in contravention of constitutional principles of federalism. That claim need not depend on the vicarious assertion of a state's constitutional interests, even if a state's constitutional interests are also implicated.
Constitutional Constitutional Law > Congressional Law> State Autonomy Duties & Powers > Reserved > General Overview Powers
Tlig principles of limited national powers and state sovereignty are intertvvined. While neither originates Jnjhe Tenth Ajnendmient, both are expressed by it. Impermissible interference with state sovereignty is rlo^within the enumerated powers of the national government, and action that exceedsrthe national 'jovernment's enumerated powers undermines the sovereign interests of states. The unconstitutional "action can cause concomitant injury to persons in individual cases.
Civil Procedure Constitutional Constitutional Constitutional > Justiciability > Standing > General Overview Law > Congressional Duties & Powers > Reserved Powers Law > The Judiciary > Case or Controversy > Standing > Elements Law > The Judiciary > Case or Controversy > Standing > Particuiar
Parties
An individual who challenges federal action on'federalism grounds is, of course, subject to the U.S, Const, art, Ili requirements, as well as prudential rules, applicable to all litigants and claims. Individuals have no standing to complain simply that their government is violating the iaw. It is not enough that a litigant suffers in some indefinite way in common with people generally. If, in connection with the claim being asserted, a litigant who commences suit fails to shov/ actual or imminent harm that is concrete and particular, fairiy traceable to the conduct com plained.of, and likely to be redressed by a favorable decision, the federal Judiciary cannot hear the claim, These requirements must be .satisfied before an individual may assert a constitutional claim; and in some instances, the result may be that a state is the only entity capable of demonstrating the requisite injury, Hov/ever, where the litigant is a party to an othenvise justiciable case or controversy, she is not forbidden to object that her injury results from disregard of the federai structure of the United States Government, Whether the Tenth Amendment Is
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regarded as simply a "truism,"'or whetlier it has independent force of its own, the resuit is the same
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FROM: 61491019 TO; Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT: Nicale DATE: 04/1 6/2013 03:20:16 PM
Benjamin Stanley Statement of Facts Relating to Michael Alexander's Testimony Case 1:09-CR-00406-TCB-ALL This detrimental information is extracted and forwarded for incorporation in my appeal. Other information will follow: ! P e t i t i o n e r was Res i n t e r a l i o s a c t a f r o m Ann N e l k i n , Sabra Dabbs, and Rufus P a u l H a r r i s ,
Ann Nelkin follow direct orders from Sabra Dabbs, her friend that she trusted. Petitioner did not offer or had no roll in solicitation of Ann Nelkin. There Plan did not take place atthe meeting with Petitioner. But started some time early July before Petitioner had even heard the name of Ann Nelkin. Government has built their entire case against Petitioner off of the word "they." They have wrongly charged and convicted Petitioner Benjamin Stanley by not seeking the truth. But the truth is that Sabra Dabbs brought the Assets to the company with Ismet Paez and both are indispensable parties, to the contract of said Bonds. Mike Alexander testified to the fact. TT 1673. Petitioner was Res inter alia acta from their action. Michael Alexander and Sabra Dabbs talk about doing a merger with the Fronthaul Group. Michael Alexander put the idea forth. Again, Petitioner is Res inter alia acta from their conversation and their plan. Michael Alexander testified to the fact. TT 1671-72. "They" all enter into contract with Rufus Paul Harris and the company Conversion Solutions. The contract clause the Provision in Article I ofthe U.S. Constitution that no State may pass a law abolishing contracts or denying them legal effect. Oran's Dictionary ofthe Law, Second Edition. Petitioner Benjamin F. Stanley was Res inter a l i o s a c t a from their actions. (Mr. Waldrop) Q: Let's take you back now. you were the CEO of a company called Fronthaul Group, is that correct? Mike Alexander: "I was Yes sir." (TT 1662:14-16) Q.: Okay now let's talk about Fronthaul. How did that company come about? Mike Alexander: "Some information came to me just through my life experiences. And 1 realized that there was a problem in the transportation industry and that was there were 23

quite a few trucks tliat were on the road that were ennpty at any given time. And with technology iinproving, I realized there was an opportunity to maybe assist with that problem by developing a technology that you could access load information through your cell phone. And so 1 created the business to do so." Q.: When did you create the business to access-to sort of I guess network trucking loads and match them up with empty trailers? Mike Alexander: "It was actually about a ten year process so once we~in about 2003 I met a gentleman who assisted me in getting the funds together to complete the project." Q.: And just who was that gentleman? Mike Alexander: "Dave Perley." Q.: And did you get the funds together to sort of complete ~ get you off the ground at the time. Mike Alexander: "Absolutely we got the Web site finished. We had 30,000 loads being posted per day. We had, I believe about 19,000 drivers signed up." Q.: When did that kind of come into being when you were actually up and running with the loads posted and ~ Mike Alexander: "In about 2004." Q.: I see. Now how - long did you operate as this information technology sort of network for these loads and empty trucks? Mike alexander: "From steady 2004 to 2006 June or July 2006." (TT1664:21 - TT1665:1-25) Q.: Do you know a woman by the name of Sabra Dabbs? Mike Alexander: "I do." Q.: How do you know her? Mike Alexander: "During this process, we went and we spoke to many groups. I don't recall who put me in touch with her but we contacted her through a company called Powerhouse Funding." Q.: What was your understanding of what her connection was with that company? Mike Alexander: "She was a CEO of the Company and she would supposedly raise money for companies who needed it like ours." Q.: Did you speak to her personally? 24

Mike Alexander: "I did." Q.: And what did you ask her in terms of what you needed? Mike Alexander: "We were looking for about $2,000,000 to put the trucks that we needed on the road. And she said it was too small." Q.: Was that the end of sort of your first communication with her? Mike Alexander: "Yes sir." Q.: And that was in 2004? Mike Alexander: "Yes, sir." Q.: Okay so, I suppose you just continued operations: is that right? Mike Alexander: "That's correct." Q.: Did you have another chance to talk to Ms. Sabra Dabbs? Mike Alexander: "Yes, sir. We spoke off and on for like once every three or four months and for ~ I guess I probably talked to her about a half a dozen times." Q.: Okay, was there ultimately a time when Ms. Dabbs offered you an opportunity for funding? Mike Alexander: "Well yes sir there was. We contacted her in reference to v/e had a new project that we were trying to fund. And so. I made contact with her. And that's when she made the comment that she- she and her new associates were attempting to go public through the process of a 15c211." (TT1668: 13-21) Q.: I see and when you spoke with Ms. Dabbs at that time was she associated with a different group? Mike Alexander: "It was a new company called Conversion Solutions Holding Corporation. I believe." Q.: Okay and what did she tell you ~ when was this, roughly time? Michael Alexander: "This was early July of 2006." Q.: What did she tell you ~ was this over the phone? Mike Alexander: "Yes Sir." Q . : What did she tell you about her ability to help you with capital? Mike Alexander: "She said she was on hold until they got their 15c211 completed. And that she would you know contact me after that." 25

Q.: Did she tell you about how they would be able to fund you? Mike Alexander: "She did not at that time. However, I asked her what steps she was in the process. During this time there's a lot of stuff (stuff) that was going on business wise. For example there were folks who were selling fuel off of our trucks and things like that, so just normal business challenges you have to go through, so I was kind of fed up with the trucker mentally and trucker life. So she told me she was going through the stuff process and I said Do you remember about nine months ago when we spoke. I was going through that process? and she said Yeah. I said they told me it was going to be three weeks also. And so at that point she really believed that they were going to be public within three weeks. And I said. I got a better idea for you. I'm the Chairman, CEO, majority shareholder of my company. You know. She had told me that ~ sorry she had told me about the Assets that they had -one was a UCCLE Note and a bond at that time and I said well how much do you think this is going to be worth asset wise? And she told me about $9,000,000,000.00" (UCCLE-25, UCCLE: 1-14). (By Mr. Hawker) Q.: Did Ms. Dabs tell you how she came into possession of these $9 billion worth of Assets? Mike Alexander: "Yeah, she was very clear that she brought the assets to the table and that she was - I'm not sure if she did that she had an associate or something like that named Ismet Paez or - I believe it was the gentleman's name." (TT1673: 9-14) Q.: Base on the information, did you act and go to Georgia? Mike Alexanderz: "I did." Q.: Okay when did you come down to Georgia? Mike Alexander: "I believe my first conversation was on Wednesday and we were in Georgia by Friday of the same week." Q.: When was this again? Mike Alexander: "I'm sorry." Q.: What month? Mike Alexander: "It was July. Early July." 26

Q.: 2006? Mike Alexander: "Yes" Q.: And who all came down to Georgia? Mike Alexander: "It was my CFO Randy Moseley, Dave Perley and myself." Q.: Randy Moseley is your CFO? Mike Alexander: "Yes Sir." Q.: And Mr. Perley, what was his position with Fronthaul? Mike Alexander: "He was a consultant." Q.: Okay so, the three of you to Georgia? Mike Alexander: "Yes, sir." (TT1674: 1-2-5) Q.: Where did you go? Michael Alexander: "We met at a horse stable, I guess, and ~ I don't know what else to call it. It's just a horse stable." Q . : Okay. How did you get to the . Mike Alexander: "Ms. Dabbs picked us up." Q.: What was your understanding of whose ranch or horse stable? Mike Alexander: "At that time it was my understanding that it was Rufus." Q.: Okay Mr. Harris? Mike Alexander: "Yeah, I ' m sorry Yes Sir." Q.: Now who all - once you arrived at the ranch, who all was present at the ranch? Mike Alexander: "Mr. Harris, Mr. Stanley, a gentleman named Jerry Bivens, Mr. Bivens. There was an Attorney, Mr. Bennett. And later Mrs. Harris came. (TT1675: 1-17) Q.: Okay. Now how long was this meeting supposed to take at this ranch - I'll call it a ranch even though I know it's not a Texas ranch. Mike Alexander: "Yes sir." Q.: At this Georgia ranch? Mike Alexander: _"There was no time line given,_ although we wanted ~ If we were going to do a deal, there's certain requirements that I felt necessary to conform within the SEC guidelines. If we were going to make a decision like this we needed to notify the shareholders 97

and everything within a certain timeline so we wanted to have a decision made before the weekend was over. Whether we were going to move forward or not." Q.: Okay. And was that decision made? Mike Alexander: "It was." Q.: What was the decision? Mike Alexander: "We received an abundance of documentation and information while we were there at the ranch and ~(TT1676: 7-25) Q.: Tell me about what you saw at the ranch? Mike Alexander: "We received a balance sheet that was printed out and handed to each of us. We viewed a ~ an account, the only way I know to descnbe it was an online account where there was money in it." Q,: How much? Mike Alexander: "I believe it was 336,000,000 but I don't know the exact figure. It was a lot." Q.: And how about the balance sheet, how much on that? Mike Alexander: "The same. It apparently was a print off of that account." Q.: Who showed you those things? Mike Alexander: "Mr. Harris handed us the printed-off balance sheet and Mr. Stanley logged into the account (TT1677: 1-12) Q. Okay when you logged into this account that you saw this money in, did you know whose ~ did it reflect whose account it was? Mike Alexander: "I don't recall." (TT1680: 5-8). Q.: And what other documentation did you see? Mike Alexander: "We saw some ~ not that date, not the first date, but the second day. I believe 1 saw contracts. And you know they had - they had some information that they never claimed that they had you know. Secured those assets at that time." Q.: What documentation of assets? Mike Alexander: "Additional bonds. There was a UCC Note. And I was given copies of the UCC Note which I honestly to this day don't even know what a UCC Note is." Q.: 1 understand. 28

TRULINCS 61491019 - STANLEY, "BENJAMIN - Unit: BUF-V-B
Mike Alexander: "So we were given copies of that we were give copies of contracts and.--" Q.: Did the contracts relate to the Bonds? Mike Alexander: "Yes, sir the first bond." (TT1677: 13-12 thru 1678: 1-4) Q.: At the ranch did anyone ~ did anyone state who brought the bonds to the table? Mike Alexander: "It was very clear, Sabra was very proud of it that she brought the bonds. She said that over and over You know there are mine."
29

FROM: 614-91019 TO: Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT: micalel DATE: 04/1 612013 03:19:47 PM
Q.: I understand. What was the face value to your recollection? Mike Alexander: "I think it was 400. 450 or $500,000,000." Q.: Okay now. You got these documents relating to these assets and you indicated thatyour purpose was to sort of vet this stuff right? Mike Alexander: "Yes, sir." Q.: Did you do that and how did you ~ to make a decision as to whether these were legitimate? Mike Alexander "We did as much as we Possibly could at the ~ you know J n the time frame that we were given_. and it sounds silly but we Googled everything. My CFO was very familiar with bonds and financial instruments, so we relied heavily on his opinion and you know, at that time everything kind of seemed legit. I mean it was ~ everything appeared to be good to go." Q.: Did your CFO, did he have access to the documiontation, such as the UCC Note and the bond? Mike Alexander: "Absolutely, Yes Sir" Q.: And did he review that, to your knowledge, in your Presence? Mike Alexander "Yes he did." Q.: And did also Mr Perley look at those documents? Mike Alexander "Absolutely." (TT1678: 5-25) Q.: And you made a collective decision in this case to go forward? Mike Alexander "Yes we did, we said ifthis is as it appears, then this would be the best thing for the shareholders." Q.: Well, at that point did you hammer out a deal? Mike Alexander "We did." Q.: And under this deal, what would you essentially be giving up? Mike Alexander "Nothing i wouldn't give up anything and I wouldn't gain anything. There was no money traded. There was no - it was just me

turning over ttie company" ~ Q.: The company? Mike Alexander "To him so that you know shareholders would benefit. And I was a shareholder Q.: In hopes that you would be bettered by increased share value; is thatMike Alexander: "That is correct." A.: -a fair statement? Mike Alexander "Yes, Sir" (TT1678: 1-24) Benjamin F. Stanley Petitioner
31

FROM: 61491019 TO: Chapin, Don; Gordon, Shawnette; Sannuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT: Ann Nel DATE: 04/16/2013 03:20:50 PM
Affidavit of Benjamin F. Stanley Statement of Facts Reference Cases 12-11126-DD; 12-11178-DD; and 1:09-CR-406-TCB-ALL Government witness Ann Nelkin and Sabra Dabbs came up with a plan to recoup monies losted in a divorce. Petitioner Benjamin F. Stanley (hereinafter Petitioner) Res inter H i e s knowledge ofthe plan. (.Asamoah Adams): Q: Okay and she told you about the business model of the company is that correct? Ann Nelkin: "Yes" she did probably as much - Yes she did tell me. I heard it from others too." Q.: Okay all right and she told you this was a good idea this would be a good investment for you. Ann Nelkin: "Right" Q.: All Right and you believed her because she was your friend? Ann Nelkin: "She Presented it to me as helping me to recoup what I had lost in" Q.: Okay Ann Nelkin: "A divorce" Q.: Okay so basically you believed her because she was a friend of yours. Ann Nelkin: "I trusted her." (1291: 2-18) To further their plan, some time early July 2006, Ann Nelkin purchased a substantial amount of common stock. Petitioner, Res i n t e r a l i o s a c t a had no knowledge. Q (Ms. Hall): And did you - now, you've mentioned that you bought Preferred Stock in the company? Ann Nelkin: "Yes, ma' am" a c t t had flo
Q.: Did you in fact buy common stock in the company?

Ann Nelkin; "Yes, I did I bought common stock in eariy July like maybe about the 12th ~ 11th, 12th, in about a week's time, I bought a substantial amount of common stock." Q.; Do you happen to remember the price the shares were trading for at the time? Ann Nelkin; "Yes when I bought the first ones I bought, I think it was about 9 cents a share. Some when I bought a little bit later. Maybe 17th or 18th July. It was a little bit more even up as high as like 43 cents. I know I averaged out at like. I think 24 cents was my average. Q.: Okay, Did you follow the stock price between the time you bought, well, for the next 12 months? Ann Nelkin; "Yes." (1274; 2-18) during this time frame. Petitioner had never met or heard of Ann Nelkin. Ann Nelkin purchased shares of Fronthaul pre-merger shares. Conversion Solutions was not a trading company. On July 10, 2006 Defendant Rufus Paul harris met with Fronthaul Group and signed merger agreement. On September 26, 2006 the merger was completed. The Fronthaul company was failing. Ann Nelkin invested in Fronthaul company not because of Petitioner, but because of Sabra Dabbs insider trading information. (1291; 2-18), (1274; 2-18) Ann Nelkin testified she met Harris early July of 2006 and she owned the stock by that point. Conversion Solutions (1261:1-20) Petitioner learned through trial transcripts that Ann Nelkin Purchased common and preferred shares. Though the advice of Sabra Dabbs. Petitioner, r e s i n t e r a l i o s a c t o was not in the sell transaction of the preferred or common shares of Fronthaul or Conversion Solutions. Ann Nelkin entered in a contractual agreement with Sabra Dabbs and Rufus Paul Harris. 33 involved
Q (Ms. Ashamoah Adams): All right now, your understanding of the preferred shares, that came from Ms. Dabbs as well? Ann Nelkin: "Yes". (1294: 16-18) Q.: Okay, What was explained to you about Preferred Shares? And I guess second to that question, Who explained that to you? Ann Nelkin: "The person who explained it to me was Sabra Dabbs. And what she told me and what ended up happening were different. And what I did was I gave - I wrote checks as the money came available to me, because sometimes you have to access it. You know, and I, she had told me at the ~ at the beginning when I first actually wrote checks that the stock was going to be stock was going to be around a dollar ~ a a share. And that it was guaranteed in six months to be $50. a share." Q.: I just want to clarify. The stock that you would be buying you would be buying something at a dollar a share? Ann Nelkin: "Yes. That's what she told me originally." Q.: Separate and apart from whatever it was trading on the open market? Ann Nelkin: "It wasn't ever ~ this was preferred shares and they weren't ever apparently on the open market. I was writing the check directly to the Principals or the company itself. And so that's what she talked about, and She said she had gotten that information as it transpired, as it ~ later on." (1276: 625) (1277: 1). "I wrote $500,000 worth of checks directly to Conversion Solutions and I did it with - on word of mouth. Not using good business sense of sorts. I didn't have the contract. 1 didn't have shares. I just had cancelled checks." Q.: Okay, well we'll get to that, Ms. Nelkin. And I just want -we're going to take our time. Okay? Ann Nelkin: And I just want ^,
Q.: we're get to that. Ms. Nelkin, Ann Nelkin: "Okay." Q.: Okay. Now you said that you wrote checks prior to having a contract? Ann Nelkin: "Yes" Q.: Okay. (1277:1-11). Q.: What do you mean that wasn't happening? Ann Nelkin; "That it wasn't going to be a dollar a share. And anyways, I was going to be out of town. I was in North Carolina and all I had to have done at this
Point was
written
the checks in August and September. And I was ~ I didn't have anything, and then, Sabra called me and said I have to have this contract signed because of something, I don't know. There was some deadline with some SEC filings. And she had to have a signed contract. And so. I said I ' m not home. And so she said Let me ~ I'll I'll email it to you. I said I don't have a Printer. So she sent me a fax to a Winston-Salem, North Carolina Kinkos. And all it was was a signature Page. And because Sabra was my friend I ~ I signed the Page and sent it back." Q.: Okay. And I ' m going to stop you there Okay? So you had already written all of your ~ the checks for $500,000 before you had a contract? Ann Nelkin: "Yes, ma'am." Q.: And what was your understanding of what that $500,000 would get you as far as an investment in the company? Ann Nelkin: "In the beginning. When I wrote the checks. I had been told that it would be a dollar a share guaranteed -that was a verbal from Sabra ~ to be $50.00 s share in six months." (1278: 1-25). Q. (Ashamoah Adams): All right. And you had a conversation with 35

her that I believe you had to sign something and get it back to her as soon as possible? Ann Nelkin: "Correct." Q.: Okay...Nov/ you have no knowledge as to who actually Prepared this document, do you? Ann Nelkin: "I -1 believe - I know what Sabra told me that Mitch Sepantiack had done it." (1297:1-18). Q: (Ms. Hall): Okay I ' m going to ask you to take a look at -at in front of you what's marked as Government's Exhibit 251. Ann Nelkin: "Yes" Q.: And do you recognize this document? Ann Nelkin: "Yes." Q.: Okay and what is this? Ann Nelkin: "it's a contract for - it says Series B convertible Preferred Subscription Agreement." Q: And is this the Agreement that you ultimately received? Ann Nelkin: "Yes." . Q.: And how do you know that? Ann Nelkin: "Because I have a copy ofthis in my Possession." Ms. Hall: I move to admit Government's Exhibit 251. (1286: 1-14). (By Ms. Ashamoah Adams): And Ms. Goldring can we go to 18 believe it's JKS-454? I think it might be sixth Page. Ms. Goldring: 454? Ms. Asamoah Adams: Yes Q.: All right now, this is actually signed by Ms. Dabbs and Mr. Harris? Ann Nelkin: "Yes." (1298:7- 13) 0.: (By Ms, Asamoah Adams): Okay But nevertheless, you received a contract that detailed the terms of the agreement isn't that 36 true?

Ann Nelkin: "After the fact." Q.: Okay and then just one more question. It was your understanding that these Preferred Shares were restricted stock, is that correct? Ann Nelkin: "Yes." Q.: Okay. And your understanding of restricted was that they would not be able to be sold at least not right away? Ann Nelkin: "Right." (1300:2-11).
37

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V.
AFFIDAVIT A N A L Y S I S OF ANN N E L K I N IN RUFUS P A U L H A R R I S , B E N J A M I N S T A N L E Y , o f MS. Ann N e l k i n
DARRYL
HORTON
testimony
i s s c r u t i n i z e d to determine activities and trial
t r u t h as i t r e l a t e s t o t h e employment conviction of P e t i t i o n e r Stanley thereto. 20 S a b r a Dabbs i n this
and h i s i n v o l v e m e n t i n
transactions Under Solutions She for Ms. faxed
relating
page T T 1 2 6 4 :
i s an employee o f C o n v e r s i o n case but never charged. Nelkin TT1267, wonderful joint veneven
and a co c o n s p i r a t o r the c o n t r a c t u r a l
shares
A g r e e m e n t t o Ms. A n n dollars. On p a g e be a
her investment Nelkin
of a h a l f m i l l i o n Ms. D a b b s told
testified that
her i t would
investment, tures, though
i t had a great
potential
...a l o t o f
substantial funding, i t was a p e n n y stated stock.
excellent
business
investment
Ms. N e l k i n twice, Chris Sabra friend The 2006. parking stock one t i m e Steak
and P e t i t i o n e r c o n c u r s Barrel
that
h e met Ms.
Nelkin
at Crackel
( T T 1 2 6 8 ) and one t i m e
a t Ruth by
House
(1269-1271). President, Nelkin.
B o t h meetings were Solutions
arranged and
Dabbs, V i c e t o Ms. A n n first time
Conversion
admitted
P e t i t i o n e r met A n n N e l k i n Sabra Dabbs at a Cracker
was J u l y Barrel
or August,
S h e was w i t h lot.
Restaurant a were
Ms. D a b b s
had c o n t a c t e d
P e t i t i o n e r t o come m e e t l o t because Dabbs they
holder.
We met b r i e f l y Paul
i n the parking ranch.
enroute of
t o CEO R u f u s
Harris'
Sabra
made
mention
Ann N e l k i n Petitioner
becoming a p r e f e r r e d left Ann N e l k i n w i t h and Dabbs
stockholder. Sabra Dabbs s o h e was n o t because they left
present
during
Nelkins
conversations
40
for
CEO
Rufus about
Paul the
H a r r i s ' s house. business
Petitioner
only
talked System
very under
briefly
model w i t h
Transparency
de v e l o p m e n t . Again w i t h Ann don't per Petitioner Nelkin at the was contacted Steak by Sabra Dabbs t o meet her I
Rugh C h r i s exact again date.
House i n Sandy met with
Springs. Ms.
remember
Petitioner
Nelkin TransMs.
Sabra
Dabbs t o
e x p l a i n the was not
business selling bought She
model w i t h
parency Nelkins and
System.
Petitioner she of
anything. and owned
Per
conversation, shares
had
already .
common about trying shares find
preferred
Fronthaul
asked
Petitioner i f she i s
trading
preferred type
stock.
Petitioner
opinioned been
t o make t h o s e and could to only
t r a n s a c t i o n s , she'd against them. her me them She
s o l d the
wrong or
borrow
i n a marginal asked how the
account
a party works? against price your she
lend
against told
a marginal stock and
account lend stock
Petitioner i t . Ann
they
leverage
asked
what happens they debt would or
t o my
money i f t h e call and
drops? account
I explained to have settle to pay the
make a and Ms. My
liquidate do that, her inter
loan I told her. party
when t h e y Nelkin to
doesn't as alia
i t back.
ask
Broker inter
they acta
could
e x p l a i n i t to I am not first and a
a c t i o n s w e r e Res Nelkin's to
because
t o Ms.
shares' of
contract. speech are and
Further because
i t i s my contracts
Amendment R i g h t s the freedom are to
freedom into by Ms. at
engage
contracts overbreadth. Nelkin
Constitutional Rights, The conversation f o l l o w i n g two and ending owned at
my
statements i n part trial as
protected by
continued pages of 1272.
explained
on
the
testimony i n her shares
starting
page actually 1271).
TT1269
Ann
Nelkin
conversations (see 1269 and
realized
she
common and
preferred 41
Attorney follows ittorney company ? Melkin:
A s h m o a h Adams
continued
to question
Ms. N e l k i n a s
beginning
a t TT1274:5: D i d y o u i n f a c t buy common s t o c k i nt h e
A s h m o a h , Q:
Yes, I did.
I bought
common 12th.
stock
i n early a week's
July, time,
like I bought
Biaybe a b o u t
the 12th l l t h ,
I n about
a s u b s t a n t i a l a m o u n t o f common Q.: at Do y o u h a p p e n time? Yes. When I b o u g h t a little t o remember
stock. t h e p r i c e t h e s h a r e s were trading
that
Melkin:
, I think
i t was a b o u t maybe 1 7 t h ,
9 cents
share.
Some when of July,
I bought
bit latter,
or 18th a s 43 cents. average.
i t was a l i t t l e
b i t m o r e , e v e n up a s h i g h I think, 24 c e n t s
I know I a v e r a g e d Q.: Okay.
out at l i k e ,
was my
D i d you f o l l o w t h e stock f o r the next 12 m o n t h s ?
price
between
t h e time you
bought, w e l l , Nelkin: Q.: Yes.
And d i d y o u s e e t h e s t o c k Yes, I did.
actually increase
i n price?
Nelkin: Q,:
O k a y . And d i d y o u s e l l No, I d i d n o t . not? Well, tohe I didn't sell
at that
time?
Nelkin: Q.: Why
Nelkin: He s a i d put mine
because have copy,
Rufus
told
us n o t t o . s e l l . I actually
s a i d we s h o u l d i n a hard
i ti n hard
copies.
i n October stock
i n a stock. Conversion that
I a c t u a l l y even Solutions from
m o v e d my
portfolio
fromwith
Ameritrade said
to Scott
Trade,
because he s a i d things 42 or
A m e r i t r a d e had something that
or d i d i n a p p r o p r i a t e
was d o i n g
was wrong and they were.
I don't know, l a c k i n g i n i n t e g r i t y or something. But I do know..."
don't even remember e x a c t l y what.
IMs. N e l k i n was f u r t h e r q u e s t i o n e d by A t t o r n e y
Asamoah as f o l l o w s :
At TT1281: 7-12, Ms. Ann N e l k i n wrote a check t o C o n v e r s i o n S o l u t i o n s on August 14, 2006 f o r $50,000. " I t ' s from my A m e r i t r a d e account." This shows
t h a t Ms. N e l k i n was o p e r a t i n g out of her A m e r i t r a d e Account t r a d i n g S t o c k d u r i n g t h e merger.
Fronthaul
1292: 6-8: July.
"My i n i t i a l investment was i n common s t o c k t h a t I bought i n e a r l y
And t h e n , l a t e r , I bought $500,000 i n p r e f e r r e d shares d i r e c t l y from the
company."
1292: 9 Q.:
"Okay, W e l l , l e t me make sure I understand t h a t .
The Common
s h a r e s t h a t you purchased, was t h a t through a b r o k e r , was i t on t h e open Market?" Nelkin: "Through A m e r i t r a d e .
1274:1 t h r o u g h 1275:25
While being examined by A t t o r n e y
Asamoah Adams, Ann
N e l k i n t e s t i f i e d t h a t she s o l d a f t e r t h e h a l t when they were on t h e i r way down at around 23 c e n t s . The h a l t occurred October 26, 2006. The r e c o r d reveals She
t h a t Ms. N e l k i n indeed s o l d a t the h i g h ($1.09) and p r i o r t o the h a l t . a c t u a l l y t r a d e d between September 26, 2006 and October 6, 2006. N e l k i n committed another p e r j u r y .
Here Ms.
43
lased upon t h e S c o t t r a d e 2006-, L a s t Trade Date
Account #581-47083-1, F i r s t Trade Date September Ms. Ann N e l k i n s o l d 416,850 shares a t The same p e r i o d , she purchased
26,
October 6, 2006.
$ 1 . 0 ^ p e r share f o r a g a i n of $450,243,00. 3,600 s h a r e s . the halt.
Ms. N e l k i n p r e v i o u s l y t e s t i f i e d t h a t she d i d not s e l l p r i o r t o Record showing Ms. N e l k i n ' s t r a d e s t a r t s on page
A copy of the T r a d i n g
38 o f t h e A f f i d a v i t . Ms. M e l k i n has committed two p e r j u r i e s , one c o n s p i r a c y w i t h Sabra Dabbs and one or two counts of i n s i d e r t r a d i n g . A l l of the above mentioned transactions
were done under t h e mandate of c o n t r a c t s .
A p p e l l a n t S t a n l e y was and i s Res i n t e r have
a l i o s a c t a t o Ann N e l k i n and her c o n t r a c t i n g p a r t i e s and any comments he may made to her a r e p r o t e c t e d
by t h e C o n s t i t u t i o n of the u n i t e d S t a t e s . Amendment 1
and summed up as Overbreadth,
43a
TRULINCS 61491019 - STANLEY, BENJAMIN - Unit: BUF-V-B 1273 1 And he's never yet said that the stock is dead. You 2 know, people still believe it's good. Not me. I've learned 3 years ago and just tried to move on and forget it. And, so, it's 4 a struggle for me to even remember things because I just - it 5 was a bad experience, a really bad experience. And i thought 6 they were very likeable people, and I wanted it to be good like 7 everybody else did, but it wasn't.'And I knew it. But he's 8 never - he never admitted to me that it wasn't good and 9 Q, Ms. Nelkin, Cm going to stop you there so we can move on 10 and ~ we will come back to your actual investment as we're 11 talking. 12 A. Uh-huh. 13 Q. Did you hear ~ have you ever heard of subpennyradio.com? 14 A. Yes, 1 listened to ~ Rufus was on SubPenny Radio for hours 15 and I listened to a great deal of it. Not all of it, but much of 16 it. 17 Q. What do you recall from what you heard? I S A . You know, I mean, his favorite line was buy the crap out of 19 it and, you know, not to sell and it was going to be good. And 20 it was $15 a share, and it was going to - that was common stock. 21 He was always talking about common stock. He never talked about 22 the preferred stock on SubPenny Radio. And that, you know, he 23 talked about the joint ventures. He talked about where fhe 24 business was going and the money and the bonds and the funds and, 25 you know, endlessly said it was going to be 6 to 1 and $15 a ELISE SMITH E V A N S , R M R , C R R 1274 1 share for common stock. 2 Q. And did you - now, you've mentioned that you bought 3 preferred stock in the company? 4 A. Yes, ma'am. _ , 5 r ^ . ^ 5'Q:"Did you in fact buy common stock in the company? i I 6 A. Yes, I did. I bought common stock in early July, like maybe 7 about the 1 2 t h ~ 11th, 12th. In about a week's time, I bought a 8 substantial amount of common stock. 9 Q. Do you happen to remember the price the shares were trading 10 at at that time? 11 A. Yes. When I bought, the first ones I bought, I think it was 12 about 9 cents a share, Some when I bought a little bit later, 13 maybe 17th or 18th of July, it was a little bit more, even up as 14 high as like 43 cents. I know I averaged out at like, 1 think, 15 24 cents was my average. 16 Q. Okay. Did you foiiow the stock price between the time you 17 bought, well, for the next 12 months? 18 A. Yes. 19 Q. And did you see the stock actually increase in price? 20 A. Yes, I did. 21 Q. Okay. And did you sell at that time? 22 A. No, I did not. 23 0 , Why not? 7 24 A. Well, I didn't sell because Rufus told us not to sell. He 25 said to ~ he said we should have it in hard copies. 1 actually ELISE SMITH E V A N S , R M R , C R R 1275 1 put mine in October in a hard copy, in a stock. 1 actually even 2 moved my stock portfolio from - with Conversion Solutions from 3 Ameritrade to Scott Trade, because he said that Ameritrade had__ 4 said or did inappropriate things or was doing something that was 5 wrong and they were, I don't know, lacking in integrity or 6 something. 1 don't even remember exactly what. But I do know 43b
TRULINCS 61491019 - S T A N L E Y , BENJAMIN - Unit: BUF-V-B 7 that I believed that, too, and I moved my stock from one trading 8 company to another. 9 When the stock went up in price, I didn't sell because 10 he had said don't sell, that it was a long-term investment. In 11 fact, his comments were always that like people that sold were 12 like traitors or ~ I don't know, was like contrary or like doing 13 something wrong to sell it. 14 Q. Did ~ was there a time where you did in fact sell the common 15 shares that you had? 16 A. I sold my common shares after the stock was halted in late 17 October. And 1 didn't even have mine in my stock portfolio at 18 the brokerage house because I had it in a hard copy. So, I took. 19 my hard copy and forwarded it to Ameritrade. And when the stock 20 traded again, I sold it. 21 Q. How much ~ do you recall how much ~ 22 A. It was around 30 - it was on its way down. And I think I 23 sold it - I can't tell you exactly, but around 32 cents, 24 something like that, 35, 32, you know. And it was dropping as I 25 was selling. ELISE SMITH EVANS, R M R , C R R 1276 1 0 . So, anywhere from 6 to 10 cents more than what you had bought 2 it for? 3 A. Yes. I did make a little money on it. 4 Q. Now, I'd like to talk about this preferred stock. 5 A. Yes, ma'am. 6 Q. Okay. What exactly was explained to you about preferred 7 shares? And I guess second to that question, who explained that 8 to you? 9 A. The person who explained it to me was Sabra Dabbs. And what 10 she told me and what ended up happening was different. And what 11 I did was I gave ~ I wrote checks as the money came available to .12 me, because sometimes you have to access it, you know. And I 13 she had told me at the - at the beginning when I first actually 14 wrote checks that the stock was going to be around a d o l l a r - a 15 dollar a share and that it was guaranteed in six months to be $50 16 a share. 17 0.1 just want to clarify. The stock that you would be buying, 18 you would be buying something at a dollar a share? 19 A. Yes. That's what she told me originally. 20 Q. Separate and apart from whatever it was trading on the open 21 market? 22 A. It wasn't even - this was the preferred shares and they 23 weren't even apparently on the open market. I was writing the 24 check directly to the principals or the company itself. And, so, 25 that's what she talked about. And she said she had gotten that ELISE SMITH EVANS, R M R , C R R 1277 1 information as it transpired, as it - later on. 2 I wrote $500,000 worth of checks directly to Conversion 3 Solutions and I did it with - on word of mouth. Not on ~ not 4 using good business sense of sorts. 1 didn't have the contract, 5 I didn't have shares. I just had canceled checks. 6 0 . Okay. Well, we'll get to that, Ms. Nelkin. And I just 7 want - we're going to take our time. Okay? 8 A . Okay. 9 0 . Okay. Now, you said that you wrote the checks prior to 10 having a contract? 11 A. Yes. 12 0 . Okay. 13 A. Because it was different when 1 got the contract. It didn't 43c
S L Oc^^jvÔx C^^WN - - V A _i ~V^'ii
r\
i \
4,,,
^so'N
o\:,c_-\~
o /^ \ \sj-;i-vc'--^'e,0
. '^'ô._--cs
These aad
are
the
correlating action become
facts
which
exonerate because as
Petitioner his responses
Petitioner's
overbreadth
are a r e s u l t within
of h i s d u t i e s and contract.
responsibilities operate
stipulated inter alia acta
h i s work
Petitioner she
Res
b e c a u s e Ms. bf S a b r a Jaly is oa by 10,
Nelkin states
c o n t r a c t e d pre-merger
represented on That shares do so
Dabbs. 2006.
Conversion Shares sold as
S o l u t i o n s and for .09 (9
F r o n t h a u l merged per share. sold
cents) Solution not
a p e r j u r e d statement the the Open/Public Security
Conversion because
never
Market
i t was
a u t h o r i z e d to
Exchange
Commission sold
(SEC). on 10, the day at of Fronthaul This Besides Fronthaul and
However,
Fronthaul Inc.
shares on July
lac/Conversion is the only
S o l u t i o n s merger and day
2006
.09. .09.
time
F r o n t h a u l Shares previously
sold
for
that, sliares they the
Michael Alexander
gave t e s t i m o n y
that
were w o r t h l e s s , they t o do the merger
were about after
to c l o s e the the
company
wanted INSIDER
verifying
assets. have
Without
TRADING I N F O R M A T I O N , Ms. worthless shares. unknown q u a n t i t y of by
N e l k i n would the
been on J u l y .09 10, was 2006 10,
purchasing 2006 of an
Therefore, shares
purchase
byMs. N e l k i n a t
purchase was the
prompted only day
I N s i d e r Trade sold She
I n f o r m a t i o n ; as so Ms. Nelkin
July
shares
f o r .09 traded
purchased for $450,243.00
Fronthaul, @ 1.09 with
Inc. shares. Scottrade.
409684 s h a r e s
Further, perjury (100)
investigation alleged
discloses
t h a t Ms. shares
Nelkin
committed than .10
when she
to have t r a d e d $85,000.00 Her
for less
making
approximately
(TT1292:1-25)
Attorney violated
A s h m o a h Adams C r o s s - e x a m i n a t i o n . 44
perjured statement
the V,
due VI,
process and XIV
rights and
of P e t i t i o n e r 1. As Res the
C o n s t i t u t i o n a l Amendments evidence clearly and on discloses because of of the
Article
Petitioner his
Stanley
i s purely
inter alios acta, to speak
contractural obligations, permitted without others gains of who and the being personally and
behalf for
corporation actions of
pecuniarily liable knowingly entered
the contract, crime be
willfully then
into own
make c a p i t a l aad the
commit
perjury
to hide This
their
crimes and
indispensable
parties.
c a s e must
ViCATED This and his it
DEFENDANT STANLEY I M M E D I A T E L Y of facts i s true,
RELEASED. meant and to set mislead, forth
Affidavit on
c o r r e c t , not of the law
based best
P e t i t i o n e r ' s understanding to
efforts
e x p l a i n what happened. convincing an elaborate to recoup carried the that Sabra
From
the
evidence, Ann Nelkins Nelkin's
i s very
c l e a r and to to create a
D a b b s and based
conspired losses scheme. in and due
conspiracy
u p o n Ms.
divorce
money t h r o u g h out their of and
a stock
investment were
They
planned
and
methods. ($1/2
They
absolute they
agreement absolute
about
amount timing not a
money
million), with
were
in their was
involvement to the And Ann
co-conspirators. Petitioner Petitioner conspiracy. affidavit. did had not no
Petitioner profit
party
agreement. most of all.
from of
the
agreement. Dabbs and
knowledge
Sabra and
Nelkins this
Related
evidence
testimony
accompanies
Reg:
L ! ^ ^ ] 0 )
P. 0. Box 999, LSCI-VB B u t n e r , NC 27509 45

F R O M : 61491019 TO: S U B J E C T : DON MAD D A T E : 0 4 / i 0/2013 03:46:55 P M A F F I D A V I T BY B E N J A M I N F. S T A N L E Y OF DON M A D D A L O N ' S TRIAL T E S T I M O N Y
On July 10, 2006, Don Maddalon did unlawfully solicit the public's purchase of securities before the Securities Exchange Commission approved a registration statement. The making of offers after the filing of a registration statement, but
before its effective date, when such offers violate the securities act; also termed conditioning the market is considered 18 U S C section 1348 Securities and Commodities fraud. Knowing he was violating the Act and the Blue Sky Laws, nevertheless President of Integrity Stock Transfer, Don Maddalon, Transfer Agent located at 2920 North Green Valley Parkway, Bldg 5, Suite 527, Henderson, NV 89014 did cause to be released legal shares, restrictive shares, and illegal shaf-es to be traded on the open market without approval from the Securities Exchange Commission. Don Maddalon's violation of the S E C Act of 1934 caused the untimely trading of illegal and restrictive shares from July 10, 2006 to September 20, 2006. Therefore, Defendant /Petitioner Stanley cannot be held liable for Don Maddalon's actions because he is incapacitated to perform the functions of that job and he is Res inter alios acta.
Sabra D. Dabbs, Executive Vice President - Giobai Operations, C S H C on September 15, 200 notified Don Maddalon, President, Integrity Stock Transfer by letter stated that "passing a resolution requiring all Fronthaul Groups restricted shares to be held, halted, and recalled." And in paragraph three of the same leter, Ms Dabbs advises Mr. Maddalon "Additionally we are demanding a hold, halt and immediate recall of all Fronthaul restricted shares. W e have attached a copy ofthe letter to N A S D A Q , ofthis stoppage and recall." The letter can be read in its entirety. Following that letter is an email from Ms. Dabbs to C E O Harris dated October 20, 2006 information copy to defendant Stanley and
46

and Mitch
cshd.us. Ms. Dabbs is seei<ing instructions for terminating the
Transfer Agent, Doh Maddalon along with ongoing procedures for filing. The next two documents are evidence that Integrity Stock Transfer "transfer restricted Waatle restricted shares and Reissue with Legend Removal Rule 144(K)," and a cancelled stock certificate to Vice President Duwayne Woods, Vice President Waatle for two million shares of Waatle Holdings Corporation stock authorized by Intergity Stock Transfer. This page follows also. Lastly is a letter from Don Maddalon to Rufus Paul Harris dated October 17, 2006 giving notice of Transfer Agent termination as C S H C representative. The totality of these documents and the Transfer Agent's admission of commiting a S E C violation when he allowed restricted shares to be traded ( T T 1 0 4 2 - T T 1 0 5 7 ) a n d the fact that Defendant Stanley was not a party to the official actions of Dabbs, Harris and Maddalon and that's Maddalon's actual admission of violation of S E C Rules clearly discharges Defendant/Petitioner from the actions of the prosecutors. Besides the facts above, the office of General Counsel for Merrill Lynch presented the newly discovered evidence impeaches the "critical evidence" and testimony and brings to rise that Mr. Maddalon (the Fronthaul Transfer Agent) made an error in the issuance of the freely tradable shares to the defendant's/Petitioner's family member (See Affidavit of Rufus Paul Harris, Evidence #2). Following is Securities and commodities fraud section #1348, Conversion Solution letter dated September 15, 2006 by Sabra Dabbs to Don Maddalon, email from Dabbs to C E O Harris, Subj: Transfer Agent/Board Resolutions, Invoice to Duwayne Woods (Transfer restricted Waatle Restricted shares and reissue with legend removal rule 144(k)., Cancelled Shares Certificate, and Letter from Integrity Stock Transfer dated October 17, 2006 confirming the information provided herein. I certify this information to be true, correct, and not meant to mislead, and based on my interpretation of the facts as presented by the indispensable
47
F R O M ; 61491019 T O : Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina S U B J E C T : Affidavit of Benjamin Stanley regarding Don Maddal D A T E : 04/1 6/2013 03:17:01 P M
Affidavit of Benjamin Stanley regarding Don Maddalon, Transfer Agent Benjamin Stanley's examination of the testimony by Don Maddalon, Transfer Agent for both the Furia/Fronthaul and Fronthaul/Conversion Solutions mergers, and President of integrity Stock Transfer located at 2920 N. Green Valley Parkway, Bldg 5, Suite 527, Henderson, N V 89014 with twenty to twenty-one years experience in the accounting and management of various forms of stock in public companies hiring him for his expertise, reveals his schemes to compromise the integrity of Conversion Solutions by conspiring with agencies and individuals not a party to contractural obligations. The compromises are revealed through questions by C E O Rufus Paul Harris; Attorney Ashmoah; Attorney Hawker and Attorney Hall. The completeness ofthe examination of Don Maddalon, under oath, revealed startling facts and events as recorded under the specific areas of testimony. Foremost to these events which lead to trial is the United States of America v. Rufus Paul Harris, Benjamin Stanley and Darryl Horton, violation of petitioner rights under Amendment 10 are overwhelming. The rights reserved and protected by Amendment 10 were completely stampeded by the prosecutors and investigators for unspoken reasons because based upon the lack of evidence in this trial and the unremarkable appearances and illusions of Petitioner's involvement are only overshadowed by his innocense. At the very onset of the investigation, Don Maddalon, Transfer Agent did provide false and fraudulent information to government officials. Specifically, Don Maddalon testified in his Deposition to the S E C that he prepared the Share List for Conversion Solutions ( S E C Deposition March 28 2007) and during cross examination and redirect examination, TT1027 to TT1150 it was he (Don Maddalon) who filed various S E C filings on behalf of Conversion Solutions and Fronthaul. It was he, (Don Maddalon) who violated S E C rules most substantially releasing restrictive shares in the market. As the examinations by Mr. Harris, Ms. Ashmoah, Mr. Hawker, and Ms. Hall clearly exposed the fraudulent antics of Don Maddalon. Ready, if ever, was there a mention of this Petitioner's involvement in wrongdoings. Petitioner believes, based upon the actions of the prosecutor and the court, that he is a victim of selective prosecution due to Federalism first because there is no evidence, direct or circumstantial to tie him to defrauding any clients of Waatle Holdings, Conversion Solutions Holdings or Fronthaul, Inc. Third, there is no evidence, direct or indirect, which proves that he is liable for obtaining U C C Notes and Bonds. Fourth, that he is not liable to Ms. Nelkin because she relied totally upon and she depended absolutely upon and that she unequivocably trusted Sabra Dabbs, an Indispensable party to prepare share contracts which she signed without any reservations whatsoever prior to investing over $500,000 in common and preferred stock of Fronthaul prior
to any aerger. F i f t h that Petitioner cannot be held l i a b l e f o r the actions of Don Maddalon, Transfer Agent and non-charged party, for authorizing the unlawful release of common shares and ...i preferred shares therein v i o l a t i n g SEG laws and regulations. (TT987:12 ~ TT1019:1-19) Sixth that P e t i t i o n e r Stanley cannot be held l i a b l e for the contractural obligations of other company o f f i c i a l s (Rufus Paul Harris, Duwayne Woods, Sabra Dabbs, Don Maddalon, MichaeX Alexander, Ann Nelkin, e t . a l . . . or SEC o f f i c i a l s and share holders because; he was not a party to their contractural obligations. Sei?enth, that P e t i t i o n e r cannot be held l i a b l e for the actions of Don Maddalon, Transfer Agent and non-charged party for his unlawfully releasing r e s t r i c t i v e shares as
coimHon
stock thereby v i o l a t i n g SEC laws and regulations because Petitioner was As evident by TT786:22-23, E r i c Deneault t e s t i f i e d that
incapacitated to perform the duties of Don Maddalon.
TT788:22-789;T, Don Maddalon committed another perjury.
he i n i t i a t e d contact with Leisa Stanley and that i t was he who mailed the hard copy share c e r t i f i c a t e to Don Maddalon. That Don Maddalon released the 1,000,000 shares
f o r trading and n o t i f i e d Deneault's agency by electronic means. Further that upon r e c e i p t of the,, Deneault contact Ms. Stanley to determine the quantity she wanted traded. Again, P e t i t i o n e r Stanley i s Res i n t e r a l i o s acta to the events between
the p a r t i e s , he lacks NEXUS, he lacks mens rea, and i s a victim of selective prosecut i o n f o r the crime of others and the crimes alleged against him. I t i s clear to this
P e t i t i o n e r that absent the negligence of investigatory individuals, these gross mistakes against P e t i t i o n e r would not exist, Eigth that Petitioner Stanley cannot
be held l i a b l e for Don Maddalon!s unlawful reslease of l e g a l shares, i l l e g a l shares, and fraudulent reports to the market place and SEC v i o l a t i n g the laws and rules pertaining thereto to include the Merger Agreement. Ninth, that Petitioner Stanley cannot be
held l i a b l e for the actions of Duwayne Woods, O f f i c e r , Director and indispensable party of Waatle Holdings, Inc and David Hawkins, Owner-Pacific Beach Mortgage and a UCC Note t o t a l i n g #3000 m i l l i o n which was presented to Waatle Holdings, Inc. f o r c a p i t a l
infusion; who have r i g h t s under A r t i c l e 1, Section 10, Clause 1 of the Constitution of the United States to contract without interference; and Tenth, that Petitioner cannot be held l i a l e f o r the contractural obligations of Ann Nelkin, Investor and indispensable party, regarding investments i n Fronthaul and her purchase of Fronthaul shares because she too has rights provided by the Constitution of the United States, A r t i c l e 1, Section 10, Clause 1 to enter into any type contract she so desires. P e t i t i o n e r Stanley was not a party to Ann Nelkins's contractural obligations.
Eleventh, that Petitioner Stanley cannot be held l i a b l e for the contractural o b l i gations o f Sabra Dabbs (company o f f i c e r , indispensable party, and recruiter of Ann Nelkin, indispensable party and Ismet Paez, indispensable party and owner of Venezuelan Bonds of $9 b i l l i o n ) because under the Constitution of the United States, A r t i c l e 1, Section 10, Clause 1, a l l including Ms. Dabbs have the rights to enter into any types of contracts they so chose. P e t i t i o n e r was not a party to their contracts,
HE WAS AND IS RES INTER ALIOS ACTA.
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F R O M : 61491019 T O : Chapin, Don; Gordon, Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina SUBJECT: DONMAD D A T E : 04/16/2013 03:19:18 P M
AFFIDAVIT BY B E N J A M I N F. S T A N L E Y OF D O N M A D D A L O N ' S TRIAL T E S T I M O N Y
On July 10, 2006, Don Maddalon did unlawfully solicit the public's purchase of securities before the Securities Exchange Commission approved a registration statement. The making of offers after the filing of a registration statement, but before its effective date, when such offers violate the securities act; also termed conditioning the market is considered 18 U S C section 1348 Securities and Commodities fraud. In his own words as stated in U.S. v. Rufus Paul Harris; Benjamin F. Stanley; and Darryl Horton, Don Maddalon testified under oath as follows while being questioned by Rufus Paul Harris: (Mr. Rufus Paul Harris) Q.: Can you please tell the jury what it is that you do for a profession? 843:25 Don Maddalon: 1 run a stock transfer agency called Integrity Stock Transfer. Q.: I'm going to ask that you try your best to speak directly into the microphone because the jury needs to hear you as weii a the court reporter and the defense counsel. Okay? Maddalon: Thank you. 1 will. Q.: Okay. That's perfect. Okay. A n d , so, if you could repeat for the jury and for the court reporter what you do. Maddalon: I run a company called Integrity Stock Transfer. Q.: And what does that company do? Maddalon: Stock transfer agencies handle the shareholder records for publicly traded companies. Basically, name and address information for those people who have invested in a company and have received stock certificates representing
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that i n v e s t m e n t . Q . : Is it a r e q u i r e m e n t for a p u b l i c c o m p a n y to h a v e a t r a n s f e r a g e n t ? Maddalon: Y e s . E v e r y p u b l i c c o m p a n y must h a v e a t r a n s f e r agent that is r e g i s t e r e d
w i t h he S E C and h a s satisfied certain S E C r e q u i r e m e n t s for the maintaining of t h o s e records. Q . : A n d , s o . Integrity S t o c k T r a n s f e r , y o u r c o m p a n y , is registered with the S E C ? Maddalon: Y e s , we are.
Q . : It's s a t i s f i e d the r e q u i r e m e n t s that the S E C h a s for t r a n s f e r a g e n t s ? A.: Y e s , it d o e s .
Q . : O k a y . C a n y o u tell t h e jury in sort of l a y m a n ' s term.s w h a t it m.eans for a s t o c k t r a n s f e r a g e n t , v^/hat it m e a n s for a s h a r e h o l d e r to get i n v o l v e d with a stock transfer a g e n t ? A . : W e l l , s i n c e t h e S E C r e q u i r e s that a public c o m p a n y maintain a s t o c k transfer a g e n t i n d e p e n d e n t of the c o m p a n y itself, our responsibility is to t h o s e s h a r e h o l d e r s w h o invest in that c o m p a n y . W e must maintain information, a s I s a i d , a b o u t their n a m e a n d a d d r e s s d a t a , a s w e l l a s a n u m b e r of s h a r e s that t h e y h a v e r e c e i v e d in that c o m p a n y . A s t h e c o m p a n y m o v e s into the public a r e n a o r gets registered within the s t o c k m a r k e t , w e t h e n m a i n t a i n the information a b o u t h o w t h o s e s h a r e s that w e r e i s s u e d to a s h a r e h o l d e r h a v e b e e n d e p o s i t e d , b e e n with b r o k e r s , a n d p e r h a p s g i v e n into the p u b l i c a r e n a for t r a d i n g on the s t o c k markets. Q . : Mr. M a d d a l o n , if s o m e b o d y w a n t s to invest in a c o m p a n y , let's s a y a publicly t r a d e d c o m p a n y , h o w -- h o w c o u l d t h e y do s o ? A . : W e i l , t h e r e ' s two w a y s in w h i c h a s h a r e h o l d e r c a n invest in a c o m p a n y . E x c u s e m e . T h e first w a y is directly with the c o m p a n y through s o m e t h i n g m a y b e c a l l e d a private p l a c e m e n t or s o m e offering that the c o m p a n y m a k e s to private individuals. T h i s is v e r y offer the w a y a c o m p a n y w o u l d get started. T h e y w o u l d go to their ~ their l o c a l b u s i n e s s p e o p l e a n d p e o p l e in their community, f r i e n d s a n d relatives, a n d s a y I w a n t to start this c o m p a n y , w o u l d y o u like to invest. A n d a s p e o p l e invest in the c o m p a n y , they r e c e i v e a s t o c k certificate s a y i n g this is ~ this r e p r e s e n t s m y investment. A n d that b e c o m e s the initial s h a r e h o l d e r information relative to the c o m p a n y . A s t h e
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c o m p a n y m o v e s into the p u b l i c market a n d gets registered in a ~ in o n e of the s t o c k m a r k e t s , they t h e n b e c o m e eligible to h a v e their s t o c k t r a d e d in that market. T h a t ' s a different s e g m e n t of the ~ of the S e c u r i t i e s E x c h a n g e C o m m i s s i o n kind of rules a n d regulations. A n d t h e s a l e of the s t o c k in that particular m o d e is h a n d l e d by s t o c k b r o k e r s . T r a n s f e r a g e n t s k e e p r e c o r d s a b o u t the individuals w h o m a d e their individual i n v e s t m e n t s in t h e c o m p a n y . A n d a s far a s the other p e o p l e w h o m a y h a v e i n v e s t e d t h r o u g h a s t o c k b r o k e r , w e m a i n t a i n just o n e s h a r e h o l d e r r e c o r d w h i c h r e p r e s e n t s all of those p e o p l e in the s t o c k market w h o h a v e a position in that c o m p a n y . It m a y s o u n d a little c o n f u s i n g , but there i s ~ t h e r e is two e l e m e n t s to a publicly t r a d e d c o m p a n y ; that is, t h o s e i n d i v i d u a l s w h o still hold the s t o c k certificate a n d t h o s e p e o p l e that h a v e c o m e into a broker to s a y p l e a s e buy m e s o m e s h a r e s in this particular c o m p a n y . Q . : O k a y . W e l l , let's t a k e t h o s e two different s c e n a r i o , o n e o v e r h e r e , t h e individual that b u y s d i r e c t with t h e c o m p a n y , a n d o n e o v e r h e r e , h e o n e that b u y s through his o r h e r b r o k e r . Maddalon.: Okay. 847 Q . : W h a t if the i n d i v i d u a l that b u y s with the c o m p a n y w a n t s to s e l l their s t o c k ; w h a t d o they d o ? M a d d a l o n : A l l right. T h e r e ' s - a s a private individual w h o h a s a s t o c k certificate r e p r e s e n t i n g his investment in t h e c o m p a n y , h e h a s the right to sell t h o s e private s h a r e s , that s t o c k certificate, to other private i n d i v i d u a l s . A n d if h e c h o o s e s to do that, w e a s the s t o c k transfer a g e n t w o u l d record the c h a n g e of o w n e r s h i p f r o m that - of that stock certificate from party o n e to party two. A n d that is h o w w e ~ w e interface with the s p e c i f i c s h a r e h o l d e r s . A n individual w h o w a n t s to sell his s h a r e s in t h e p u b l i c m a r k e t w o u l d t a k e his stock certificate to a broker. A n d a s long a s that s t o c k certificate m e t c e r t a i n S E C criteria allowing it to be d e p o s i t e d in the m a r k e t , that b r o k e r c o u l d a c c e p t t h e certificate, d e p o s i t it in that broker's a c c o u n t , a n d t h e n s u b s e q u e n t l y s e l l the s h a r e s a s dictated b y that particular s h a r e h o l d e r . Q . : A n d , s o , that p e r s o n that's h o l d i n g that stock certificate that i n v e s t e d directly with t h e c o m p a n y , until t h e y t a k e that certificate to a broker to be i n v e s t e d o r d e p o s i t e d , a s y o u s a i d ,
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w h a t ' s the m o n e t a r y v a l u e of that certificate? Maddalon: I h a v e no i d e a w h a t the m o n e t a r y v a l u e of a certificate is b e c a u s e that w a s s o l e l y
b e t w e e n t h e s h a r e h o l d e r a n d the c o m p a n y at the time h e i n v e s t e d it. Stocl< transfer a g e n t s k e e p no information at all relative to the v a l u e o f t h e s t o c k s that 848 t h e y ' r e h a n d l i n g the r e c o r d s for. Q . : W e l l , I g u e s s m y q u e s t i o n is rather: Is it a t r a d e a b l e a s s e t b e f o r e it's d e p o s i t e d by t h e b r o k e r into t h e D T C ? M a d d a l o n : H a v i n g a s t o c k certificate m e a n s y o u o w n t h o s e s h a r e s in that c o m p a n y . A n d if that c o m p a n y is trading on the market a n d the s t o c k h a s a v a l u e in the market, t h e n , y e s , that certificate w o u l d h a v e a r e p r e s e n t a t i v e v a l u e relative to it. Q.: N o w , y o u c a n ' t sell it until y o u d e p o s i t it?
M a d d a l o n : Y o u c a n n o t - y o u c a n sell it privately, but y o u c a n n o t s e l l it in the market until it's d e p o s i t e d , correct. Q . : A n d s o o n this s i d e , if s o m e b o d y h a s their s t o c k with a b r o k e r ~ all right ~ a n d they w a n t e d to s e l l , w h a t w o u l d they n e e d to d o ? M a d d a l o n : 1 can't s p e a k to the s p e c i f i c s a b o u t h o w a b r o k e r a g e w o u l d h a n d l e the n n e c h a n i c s of that, but typically a s h a r e h o l d e r w o u l d d e p o s i t his certificate with a s t o c k b r o k e r a n d g i v e h i m instructions stating p l e a s e s e l l all of t h e s e s h a r e s or p l e a s e , y o u k n o w , just d e p o s i t t h e m in m y a c c o u n t , I w a n t to sell t h e m at a later time. B u t it is b e t w e e n that s h a r e h o l d e r a n d his b r o k e r a s to the m a n n e r in w h i c h h e w o u l d sell t h o s e s h a r e s in the m a r k e t . Q . : W e l l , w h a t is y o u r i n v o l v e m e n t o n c e t h e certificate is g i v e n to a b r o k e r ? M a d d a l o n : W e l l , s i n c e w e - w e h a n d l e the certificated transaction a s p e c t s of it, w e r e c o r d the m o v e m e n t of o w n e r s h i p from that 849 s h a r e h o l d e r w h o s e n a m e a p p e a r s o n the original certificate to the - the n e w n a m e of e i t h e r that b r o k e r o r the D e p o s i t o r y Trust. S o , o u r role is to s i m p l y state that J o h n S m i t h a n d a n e w certificate is i s s u e d a s b r o k e r A . K n o w i n g he w a s violating the A c t a n d the B l u e S k y L a w s , n e v e r t h e l e s s P r e s i d e n t
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of Integrity S t o c k T r a n s f e r , D o n M a d d a l o n , T r a n s f e r A g e n t l o c a t e d at 2 9 2 0 North G r e e n V a i i e y P a r k w a y , B l d g 5, Suite 5 2 7 , H e n d e r s o n , N V 8 9 0 1 4 did c a u s e to be r e l e a s e d l e g a l s h a r e s , restrictive s h a r e s , a n d illegal s h a r e s to be traded on the o p e n m a r k e t w i t h o u t a p p r o v a l from t h e S e c u r i t i e s E x c h a n g e C o m m i s s i o n . D o n M a d d a l o n ' s v i o l a t i o n of t h e S E C A c t of 1934 c a u s e d the untimely trading of illegal a n d restrictive s h a r e s f r o m J u l y 10, 2 0 0 6 to S e p t e m b e r 2 0 , 2 0 0 6 . T h e r e f o r e , D e f e n d a n t / P e t i t i o n e r S t a n l e y c a n n o t be held liable for D o n M a d d a l o n ' s a c t i o n s b e c a u s e he is i n c a p a c i t a t e d to perform the f u n c t i o n s of that j o b a n d h e is R e s inter alia a c t a . S a b r a D. D a b b s , E x e c u t i v e V i c e P r e s i d e n t - G l o b a l O p e r a t i o n s , C S H C on S e p t e m b e r 1 5 , 2 0 0 notified D o n M a d d a l o n , P r e s i d e n t , integrity S t o c k T r a n s f e r b y letter s t a t e d that " p a s s i n g a resolution requiring all F r o n t h a u l G r o u p s restricted s h a r e s to b e h e l d , halted, a n d r e c a l l e d . " A n d in p a r a g r a p h three of t h e s a m e letter, M s D a b b s a d v i s e s Mr. M a d d a l o n "Additionally w e a r e d e m a n d i n g a h o l d , halt a n d i m m e d i a t e recall of all F r o n t h a u l restricted s h a r e s . W e h a v e a t t a c h e d a c o p y o f t h e letter to N A S D A Q , o f t h i s s t o p p a g e a n d r e c a l l . " T h e letter c a n b e read in its entirety. Following that letter is a n e m a i l from M s . D a b b s to
C E O Harris d a t e d O c t o b e r 2 0 , 2 0 0 6 information c o p y to d e f e n d a n t S t a n l e y a n d a n d Mitch @ c s h d . u s . M s . D a b b s is s e e k i n g instructions for terminating the T r a n s f e r A g e n t , D o n M a d d a l o n a l o n g with o n g o i n g p r o c e d u r e s for filing. T h e next two d o c u m e n t s a r e e v i d e n c e that Integrity S t o c k T r a n s f e r "transfer restricted W a a t l e restricted s h a r e s a n d R e i s s u e with L e g e n d R e m o v a l R u l e 144(K)," a n d a c a n c e l l e d s t o c k certificate to V i c e P r e s i d e n t D u w a y n e W o o d s , V i c e P r e s i d e n t W a a t l e for two million s h a r e s of W a a t l e H o l d i n g s C o r p o r a t i o n s t o c k a u t h o r i z e d by Intergity S t o c k T r a n s f e r . T h i s p a g e follows a l s o . L a s t l y is a letter f r o m D o n M a d d a l o n to R u f u s P a u l H a r r i s dated O c t o b e r 17, 2 0 0 6 giving notice of T r a n s f e r A g e n t termination a s C S H C representative. T h e totality of t h e s e d o c u m e n t s a n d the T r a n s f e r A g e n t ' s a d m i s s i o n of c o m m i t i n g a S E C v i o l a t i o n w h e n he a l l o w e d restricted s h a r e s to be t r a d e d a n d
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t h e fact t h a t Defendant S t a n l e y w a s not a party to the official a c t i o n s of D a b b s , Harris a n d M a d d a l o n a n d that's M a d d a l o n ' s a c t u a l a d m i s s i o n of v i o l a t i o n of S E C R u l e s c l e a r l y d i s c h a r g e s D e f e n d a n t / P e t i t i o n e r f r o m the actions of t h e p r o s e c u t o r s . B e s i d e s the facts a b o v e , the office of G e n e r a l C o u n s e l for Merrill L y n c h p r e s e n t e d the newly d i s c o v e r e d e v i d e n c e i m p e a c h e s the "critical e v i d e n c e " a n d t e s t i m o n y a n d brings to r i s e that M r . M a d d a l o n (the F r o n t h a u l T r a n s f e r A g e n t ) m a d e a n error in the i s s u a n c e o f t h e freely t r a d a b l e s h a r e s to the d e f e n d a n t ' s / P e t i t i o n e r ' s f a m i l y m e m b e r ( S e e Affidavit of R u f u s P a u l Harris, E v i d e n c e #2). F o l l o w i n g is S e c u r i t i e s a n d c o m m o d i t i e s fraud s e c t i o n #1348, C o n v e r s i o n S o l u t i o n letter d a t e d S e p t e m b e r 15, 2 0 0 6 by S a b r a D a b b s to D o n M a d d a l o n , e m a i l from D a b b s to C E O H a r r i s , S u b j : T r a n s f e r A g e n t / B o a r d R e s o l u t i o n s , Invoice to D u w a y n e W o o d s ( T r a n s f e r restricted W a a t l e R e s t r i c t e d s h a r e s a n d r e i s s u e with l e g e n d r e m o v a l rule 144(k)., C a n c e l l e d S h a r e s Certificate, a n d Letter f r o m Integrity S t o c k T r a n s f e r d a t e d O c t o b e r 17, 2 0 0 6 c o n f i r m i n g the information p r o v i d e d h e r e i n . I certify this information to b e true, correct, a n d not m e a n t to m i s l e a d , a n d b a s e d o n m y interpretation of the facts a s p r e s e n t e d b y the i n d i s p e n s a b l e p a r t i e s o w n t e s t i m o n y a n d letters, y-)
B e n j a m i n F. S t a n l e y R e g ; 61491-019 P. O . B o x 999, L S C I - V B Butner, N C 27509
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F R O M : 61491019 T O : C h a p i n , D o n ; Gordon, Shawnette; S a m u e l , D o n ; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina S U B J E C T : E x a m i n a t i o n of D o n M a d d a l o n by A s a m o a h A d a m s D A T E : 0 4 / 1 6 / 2 0 1 3 03:11:11 P M
C r o s s E x a m i n a t i o n of D o n M a d d a l o n by Attorney A s a m o a h A d a m s T T 1 0 5 7 through 1078:14 T T 1 0 5 7 : 1 4 - 1 0 5 8 : 8 D o n M a d d a l o n stated h e is r e q u i r e d a s a T r a n s f e r A g e n t to follow l a w s and b e registered with S E C a n d b e audited e v e r y y e a r for the past two y e a r s . TT1058:19 G o v e r n m e n t Exhibit 4(a), s e c o n d p a g e c o n t a i n s a list of W a a t l e S h a r e h o l d e r s . M a d d a l o n s t a t e s it w a s b) directors of c o m p a n y
m e r g e d into C o n v e r s i o n S o l u t i o n s . T h i s d o c u m e n t identified: a) n u m b e r of s h a r e s held c) other s h a r e h o l d e r s
T T 1 0 6 0 : 14 Q o v e m m e n t Exhibit 4(b) T h i s is a l s o a list of W a a t l e S h a r e h o l d e r s e x c e p t it h a s n o t e s that w e r e written b y M a d d a l o n o r s o m e o n e on his staff. T h e r e is no d a t e s h o w n w h e n all the s h a r e s w e r e a c q u i r e d . T T 1 0 6 2 : 7 - 1064:6 A l l e m a i l s a p p e a r to r e f e r e n c e filings of v a r i o u s 8 - K s for the c o r p o r a t i o n . T h e r e is no d o c u m e n t with 6 - 1 - 2 0 0 4 d a t e . D o c u m e n t s to S E C in 2 0 0 7 didn't h a v e date of 6-1-2004 written or s c a n n e d . T h e s h a r e s are restricted b e c a u s e t h e y a r e not r e g i s t e r e d with S E C . T T 1 0 6 4 : 6 - 7 P r i v a t e c o m p a n i e s not required to register with S E C . Don't h a v e to c o m p l y with S E C r u l e s . T T 1 0 6 4 : 1 9 - 2 4 P r i v a t e c o m p a n i e s do not h a v e to r e g i s t e r with S E C . TT1064:15 P r i v a t e c o m p a n i e s are not required to c o m p l y with S E C rules a n d regulations.
T T 1 0 6 4 : 19 Private c o m p a n i e s generally don't u s e T r a n s f e r A g e n t s . T T 1 0 6 5 : P r i v a t e C o m p a n a c t i n g a s its o w n T r a n s f e r A g e n t c a n p r o d u c e its own S t o c k C e r t i f i c a t e s , t h e y c a n print t h e m f r o m their o w n c o m p u t e r s . TT1066 M a d d a l o n c o n c e d e d that W a a t l e w a s a private c o m p a n y at s o m e point a n d that t h e s t o c k certification h e r e c e i v e d
w e r e W a a t l e s t o c k certificates a n d could h a v e printed their o w n s t o c k certificates. T T 1 0 6 6 : 1 7 T e s t i f i e d p r e v i o u s l y he w a s the T r a n s f e r A g e n t for Fronthaul or Furia (2004) at s o m e p o i n t a b o u t 2 y e a r s prior to C o n v e r s i o n S o l u t i o n / F r o n t h a u l (2006) m e r g e r , that D o n M a d d a l o n w a s familiar with M i c h a e l A l e x a n d e r a n d D a v e P e r l e y a s O f f i c e r s of F u r i a / F r o n t h a u l . M a d d a l o n r e c e i v e d 1,000,000 s h a r e s of F r o n t h a u l s t o c k . T T 1 0 6 7 : 1 1 M a d d a l o n s o l d 5 0 0 , 0 0 0 s h a r e s of stock. B u t in a D e p o s i t i o n to S E C o n M a r c h 2 8 , 2 0 0 7 , M a d d a l o n forgot h e s o l d 5 0 0 , 0 0 0 s h a r e s to p a y for bills left by F r o n t h a u l a n d C o n v e r s i o n S o l u t i o n . T h e court o b j e c t e d to i m p e a c h m e n t H o w e v e r the p r o s e c u t o r a n d j u d g e exhibited p r o s e c u t o r i a l m i s c o n d u c t w h e n they a c t e d a s d e f e n s e c o u n s e l s for D o n
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M a d d a l o n w h o lied c o n s i s t e n t l y t h r o u g h o u t his t e s t i m o n y .
B y o p e n l y d i s c u s s i n g the situation, M a d d a l o n l e a r n e d h o w
to respond to t h e q u e s t i o n s o h e c o u l d not b e i m p e a c h e d . T h i s is a n irresistable error a n d d u e p r o c e s s violation of P e t i t i o n e r ' s ' V a n d X I V A m e n d m e n t Rights. T h i s is a further violation of Article 6, p a r a g r a p h 3 in that the j u d g e a n d p r o s e c u t o r failed to u p h o l d Petitioner's constitutional rights a s e x p l a i n e d a b o v e . T h i s c a s e m u s t be d i s m i s s e d a g a i n s t Petitioner b e c a u s e h e c a n n o t b e p u n i s h e d for committing a c r i m e not in his c a p a c i t y to commit. T T 1 0 7 7 : 1 0 D o n M a d d a l o n a d m i t t e d he sold F r o n t h a u l / C o n v e r s i o n S o l u t i o n s h a r e s after the s t o c k p l u m m e t e d from h i s C h i d e s S c h w a b A c c o u n t after t h e merger. S t a t e d h e s o l d 5 0 0 , 0 0 0 s h a r e s for $ 5 0 0 . 0 0
57

TRULINCS &1491019 - STANLEY, BENJAMIN - Unit: BUF-V-B
F R O M : 614-91019 TO: S U B J E C T donmadl D A T E : 04/1 2 / 2 0 1 3 0 8 : 4 8 : 4 0 A M 929:23-25 Q . : A n d 1 j u s t h a v e o n e last s e t of n a m e s to a s k y o u a b o u t o n this d o c u m e n t . A g a i n , w e ' r e l o o k i n g at G o v e r n m e n t ' s Exhibit 12. I'd a s k for y o u to p r o v i d e the jury with the information 930 f o u r n a m e s that I've highlighted there. M a d d a l o n : Ok.ay. T h e first i s L e s i a S t a n l e y . S h e w a s a s s i g n e d certificate n u m b e r 1 2 5 for 1,000,000 s h a r e s , effective 6 / 1 / 0 4 . T h a t certificate w a s c a n c e l e d o n S e p t e m b e r 29th, 2006. R o b e r t S t a n l e y h a d certificate n u m b e r 1 2 4 a s s i g n e d for 100,000 s h a r e s , a l s o ofthe
on 6/1/04. T h a t a s well w a s c a n c e l e d o n S e p t e m b e r 2 9 t h , ' 0 6 . S h a k e t h a S t a n l e y h a d certificate 1 2 2 for 1 0 0 , 0 0 0 s h a r e s i s s u e d 6 / 0 1 / 0 4 . c a n c e l e d o n 9 / 2 9 / 0 6 . A n d S h a r i n a S t a n l e y h a d certificate 1 2 3 f o r 1 0 0 , 0 0 0 s h a r e s , i s s u e d 6 / 0 1 / 0 4 , c a n c e l e d o n S e p t e m b e r 29th, '06. Q.: Mr. M a d d a l o n , e v e r y o n e of the s h a r e s that w e ' v e d i s c u s s e d w a s i s s u e d on t h e s a m e
d a t e , 6 / 1 / 2 0 0 4 . Is that c o r r e c t , w a s that the representation that w a s m a d e to y o u ? Maddalon: Y e s . Q . : O k a y , a n d t h e s e four s h a r e s that w e r e - that w e r e - f o u r s h a r e h o l d e r s that w e ' r e talking a b o u t t o d a y , they w e r e all c a n c e l e d o n the s a m e d a t e ; is that c o r r e c t ? Maddalon: Y e s , they were. Q . N o w , w h e n e v e r a s h a r e is c a n c e l e d or w h e n e v e r a s h a r e h o l d e r w a n t s to c a n c e l their s h a r e s a n d a c t u a l l y d e p o s i t t h e m into the s y s t e m , c a n y o u tell the jury a g a i n what t h e y h a v e to d o ? M a d d a l o n : W e l l , there's ~ there's ~ in the c a s e of C o n v e r s i o n S o l u t i o n s , there's two w a y s in w h i c h it h a p p e n s . Prior to their b e i n g in a F A S T e n v i r o n m e n t w h e r e the s h a r e ~ w h e r e the broker 931 s h a r e s are e l e c t r o n i c , a s h a r e h o l d e r w o u l d go to his broker, bring a p h y s i c a l certificate. That
58
b r o k e r woul d d o s o m e p r o c e s s i n g on that certificate, w o u l d s u r r e n d e r it to the D e p o s i t o r y Trust. T h e D e p o s i t o r y Trust w o u l d in turn s u r r e n d e r it to us with instructions to c a n c e l the certificate in that s h a r e h o l d e r ' s n a m e a n d i s s u e a new certificate in the n a m e of C e d e & C o . C e d e & C o . is a g l o b a l n a m e for all of the s h a r e s on d e p o s i t for all of the brokers in the U n i t e d S t a t e s . S o , prior to t h e r e being the F A S T s y s t e m i m p l e m e n t e d in C o n v e r s i o n S o l u t i o n s , that is h o w a s h a r e h o l d e r w o u l d h a v e his s h a r e s a d d r e s s e d . W h e n the F A S T s y s t e m is i m p l e m e n t e d , a s h a r e h o l d e r with a certificate c a n g o to a broker a n d s a y I w o u l d like t h e s e e l e c t r o n i c a l l y d e p o s i t e d to my a c c o u n t . U n d e r that c i r c u m s t a n c e s , the b r o k e r w o u l d s u r r e n d e r ~ w o u l d i s s u e a r e q u e s t to t h e c o m p u t e r s y s t e m at the D e p o s i t o r y Trust for that n u m b e r of s h a r e s . It e s s e n t i a l l y is a r e q u e s t for delivery of s o m e e l e c t r o n i c s h a r e s . W e a s a transfer agent go into the D e p o s i t o r y Trust c o m p u t e r s y s t e m s about e v e r y 2 0 minutes of e v e r y w o r k i n g b u s i n e s s d a y a n d w e look f o r t h e s e r e q u e s t s . W h e n w e s e e the r e q u e s t from a b r o k e r for t h e d e p o s i t of the s h a r e s , w e look f o r validating information in our o w n office. In the c a s e of a s h a r e h o l d e r , for e x a m p l e , w e w o u l d h a v e to h a v e s o m e written instructions f r o m t h e m s a y i n g m y ~ I'm g o i n g to h a v e m y s h a r e s e l e c t r o n i c a l l y d e p o s i t e d in my a c . (account) 914 Q.: O k a y M . M a d d a l o n , y o u indicate in this letter that a n u m b e r of t r a n s a c t i o n s , p r o c e s s e d at the instructions of C o n v e r s i o n S o l u t i o n s c a u s e d you to violae S E C rules a n d e g u l a t i o n s . W h a t t r a n s a c t i o n s specifically w e r e y o u referring t o ? M a d d a l o n : W e l l , w e - w e l e a r n e d t h r o u g h v a r i o u s brokers that a n u m b e r o f t h e e l e c t r o n i c d e p o s i t s w e m a d e w e r e to i n d i v i d u a l s w h o w e r e affiliated with Mr. H a r r i s a n d others. A n d b y virtue of S E C rules a n d r e g u l a t i o n s , t h o s e e l e c t r o n i c d e p o s i t s s h o u l d not h a v e b e e n m a d e . T h o s e s h a r e s s h o u l d h a v e b e e n c o n s i d e r e d restricted a n d t h e o w n e r s of t h o s e s h a r e s s h o u l d h a v e b e e n p r e v e n t e d from trading or d e p o s i t i n g their s h a r e s with a broker for at least a t w o y e a r p e r i o d . W h e n I f o u n d that we h a d in fact a l l o w e d t h e s e e l e c t r o n i c transfers to go f o r w a r d , it violated e s s e n t i a l l y s o m e of the rules a n d r e g u l a t i o n s that w e a s a t r a n s f e r a g e n t must a b i d e by. I o b v i o u s l y h a d to bring it to the attention o f t h e S E C , w h i c h I d i d . A n d a s a result, I - I a d v i s e d Mr. Harris that w e w e r e g o i n g to terminate a s their transfer agent. S u b s e q u e n t l y , h o w e v e r , after d i s c u s s i o n with t h e S E C , w e jointly m a d e t h e d e c i s i o n that I w o u l d - my c o m p a n y w o u l d not terminate a s t r a n s f e r a g e n t only b e c a u s e t h e r e w o u l d b e a kind of investigation into the t r a n s a c t i o n s that I h a d p r o c e s s e d

a n d that t h e y w a n t e d m e to r e m a i n a s t r a n s f e r a g e n t for the duration of that investigation a n d that w a s o n g o i n g . S o ~ s o , e v e n to this 915 d a y w e stili remain a s a transfer a g e n t for the c o m p a n y . Q . : A l l right. 917 Q . ( B y M s . Hall) : Mr. M a d d a l o n , prior to the b r e a k for lunch, w e w e r e d i s c u s s i n g this letter, a n d y o u h a d r e a d to the jury the s e c o n d p a r a g r a p h r e g a r d i n g the r e a s o n s for y o u r termination of y o u r - the r e a s o n s y o u p r o p o s e d to t e r m i n a t e ? Maddalon: Yes. Q.: D o you mind r e a d i n g that to the j u r y a g a i n , p l e a s e ?
M a d d a l o n : T h i s t e r m i n a t i o n is d u e to t h e fact that a n u m b e r of t r a n s a c t i o n p r o c e s s e d at t h e instructions of C o n v e r s i o n S o l u t i o n s H o l d i n g C o r p h a v e c a u s e d us to violate S E C rules a n d r e g u l a t i o n s a n d h a v e j e o p a r d i z e d our reputation a n d position a s a registered transfer a g e n t a n d participant in the D T C F A S T p r o g r a m . Q . : A n d ~ a n d just b e c a u s e w e ' v e h a d a b r e a k , I k n o w that y o u ' v e a l r e a d y d i s c u s s e d this, c a n y o u tell the jury w h a t t h o s e ~ w h a t y o u w e r e talking a b o u t w h e n y o u s a i d a n u m b e r of transactions? M a d d a l o n : A t this time w e b e c a m e a w a r e t h r o u g h c o n v e r s a t i o n s a n d c o m m u n i c a t i o n s w e r e c e i v e d f r o m v a r i o u s b r o k e r s that s o m e a c c o u n t s h a d b e e n o p e n e d at the b r o k e r a g e a c c o u n t s on b e h a l f of p e o p l e w h o w e r e affiliated with the officers a n d di.rectors of 918 C o n v e r s i o n S o l u t i o n s . A n d a s a result o f t h a t , t h o s e s h a r e h o l d e r s ' positions s h o u l d not h a v e b e e n a l l o w e d to b e free trading. T h e y w e r e - by ~ by a s s o c i a t i o n with the other m e m b e r s o f t h e c o m p a n y , their s h a r e s s h o u l d h a v e b e e n restricted. Y e t , w e h a d p r o c e s s e d e l e c t r o n i c d e p o s i t s into their s h a r e h o l d e r a c c o u n t s w h i c h effectively m a d e t h e m f r e e trading a n d a l l o w e d t h e m to s e l l t h o s e s h a r e s if they s o d e s i r e d . That is in violation of our rules a s a t r a n s f e r a g e n t , e s p e c i a l l y u n d e r the ~ the provisions of a F A S T p r o g r a m . S o , s i n c e it reflected poorly u p o n m y c o m p a n y , w e w e r e o b l i g a t e d to bring that
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TRULINCS S1491019 - STANLEY, BENJAMIN - Unit: BUF-V-B
to t h e attention o f t h e S E C s o that they c o u i d at l e a s t investigate t h o s e t r a n s a c t i o n s a s w e h a d p r o c e s s e d t h e m to d e t e r m i n e , y o u k n o w , o u r ~ o u r failure to h a v e f o l l o w e d the rules a n d regulations 992 Q ( B y Mr. H a r r i s ) : All r i g h t 5.3 B u y e r ' s S t o c k , t h e n u m b e r in the m e r g e r r e p r e s e n t s F r o n t h a u l ' s information. F r o n t h a u l G r o u p , Inc., a s y o u c a n s e e is the buyer. A n d the 6 2 , 1 5 7 , 7 2 1 wojuld h a v e c o m e f r o m the transfer a g e n t ; c o r r e c t ? Maddalon: I would a s s u m e s o , y e s , b a s e d u p o n that particular date that this a g r e e m e n t
was reached. Q . : S o r r y a b o u t this. D i d y o u v a l i d a t e that information or w o r k with M i c h a e l .Alexander a n d t h e m or p r o v i d e t h e m with a n y d o c u m e n t a t i o n in s u p p o r t to t h e m e r g e r ? M a d d a l o n : A n y time h e a s k e d for information relative to the s t o c k position of the c o m p a n y , it w a s p r o v i d e d . Q . : Did y o u provide that n u m b e r to h i m ? M a d d a l o n ; I w o u l d a s s u m e s o , if h e i n c l u d e d it a s his portion o f t h e or a s his position in t h e - of s t o c k in F r o n t h a u l . Q . : O k a y . In this m e r g e r t h e r e w a s a private c o m p a n y a n d a public c o m p a n y m e r g e r . W e ' v e e s t a b l i s h e d that. D o y o u s h o w ~ a n exhibit w a s s h o w n to y o u earlier that y o u c l a i m to h a v e r e c e i v e d f r o m m y s e l f - we'll pull it up a n d d i s c u s s that a g a i n , but I w a n t to e s t a b l i s h s o m e t h i n g correctly - o f c o m m o n a n d restricted s h a r e s . O k a y . C o r r e c t ? Maddalon: Y e s . Q . : W h a t is a restricted s h a r e ? 993 M a d d a l o n : T h e s t o c k certificate w h o s e s h a r e s a r e restricted from s a l e in the market. Q . : A n d that w o u l d refer to only a public c o m p a n y ? M a d d a l o n : A c t u a l l y , n o . A n y s h a r e s i s s u e d in a private c o m p a n y a r e by definition restricted. Q . : S o , a n y s h a r e s i s s u e d in a private c o m p a n y is r e s t r i c t e d ? Maddalon: Y e s . Q.: Automatically? Maddalon: Y e s . fil

Q . : S o , is any share Maddalon;
i s s u e d in a p u b l i c c o m p a n y restricted?
S h a r e s initially i s s u e d in a public c o m p a n y that a r e a c q u i r e d a s a direct i n v e s t m e n t
f r o m that c o m p a n y are typically restricted. Q . : O k a y . S o , k n o w i n g that a n y s h a r e in a public c o m p a n y is restricted, w h e n y o u r e c e i v e d ~ H o w e a s y i s it to s w i t c h to h e r ? 14(c), p l e a s e , or let's - I tell y o u what, 14(b). N e x t ~ y e a h , there w e go. T h a t will w o r k . Q . : S a y F a y e H a r r i s ' stock f r o m her broker, w h o e v e r that w a s , y o u w o u l d a u t o m a t i c a l l y a s s u m e it's restricted? Maddalon: I don't u n d e r s t a n d y o u r s t a t e m e n t .
Q . : W e l l , y o u s t a t e d all s t o c k i s s u e d in a private c o m p a n y by all m e a n s is restricted? A. 994 Q . : W e l l , w h a t w a s C o n v e r s i o n S o l u t i o n s a d d r e s s e d to y o u a s ? M a d d a l o n : It w a s a public c o m p a n y , a n d w e r e c e i v e d the s h a r e h o l d e r r e c o r d s f r o m a transfer a g e n t w h o t r a d e d that public c o m p a n y . Q . : It w a s a publicly traded c o m p a n y ? M a d d a l o n : T h a t ' s w h a t I w a s told a b o u t the C o n v e r s i o n S o l u t i o n s , y e s . A n d it w a s c o n f i r m e d by H o l l a d a y S t o c k T r a n s f e r . Q . : O k a y . W h a t part in the m e r g e r did W a a t l e s h a r e h o l d e r s p l a y ? Maddalon: Pardon me? Q . : W a a t l e s h a . r e h o l d e r s . Y o u w e r e r e c e i v i n g W a a t l e certs ~ Let's go - did that exhibit h a v e a n o t h e r p a g e to it, m a ' a m ? M s . G o l d r i n g : W h a t exhibit a g a i n w a s it, p l e a s e ? M r . Harris: 14(b). It's o n e p a g e ? O k a y . Right t h e r e . C o n v e r s i o n S o l u t i o n s w a s not a d d r e s s e d to m e a s a private c o m p a n y .
Q . ( B y Mr. H a r r i s ) : W a a t l e H o l d i n g s , this c o m p a n y , this particular cert that y o u r e c e i v e d right here, w h a t part did W a a t l e H o l d i n g s play in the m e r g e r ? M a d d a l o n : W e w e r e told that prior to the m e r g e r with F u r i a , that C o n v e r s i o n S o l u t i o n s h a d m e r g e d w i t h the c o m p a n y c a l l e d W a a t l e a n d that all W a a t l e H o l d i n g s s h a r e h o l d e r s w e r e now C o n v e r s i o n S o l u t i o n s h a r e h o l d e r s .
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Q . : A n d w l i o told y o u t h a t ? Maddalon: Q.: I did? You did.
M a d d a l o n : Y e s , sir.
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F R O M : 61491019 T O : C h a p i n , Don; G o r d o n , Shawnette; Samuel, Don; Stanley, Lesia; Stanley, Shawketha; Stanley, Shrina S U B J E C T donmad 2 D A T E : 04/1 6 / 2 0 1 3 0 3 : 1 8 : 1 6 P M
995 ELISE SMITH E V A N S , R M R , C R R Q . ( M r . Harris): O k a y . W h e n y o u r e c e i v e a certificate s u c h a s this, sir, is it g e n e r a l p o l i c y for y o u to a c t u a l l y r e a d it as transfer a g e n t ? M a d d a l o n : N o , w e do not. T y p i c a l l y w e do not. Q . : Y o u typically don't r e v i e w it a n d s e e the n a m e o n it s o y o u e v e n k n o w w h a t to d o with it? M a d d a l o n : T y p i c a l l y w e w o u l d not. Q . : S o , do y o u h a v e - w e l l , I don't actually k n o w w h a t to s a y to that. D o y o u h a v e a list of n a m e s t h a t y o u j u s t c h o o s e f r o m a n d i s s u e s t o c k to that p e r s o n w h e n a certificate c o m e s i n ? M a d d a l o n : A n y t i m e w e r e c e i v e instructions relative to a transfer of a certificate, w e r e a d t h o s e i n s t r u c t i o n s , w e verify that there is a certificate a t t a c h e d r e p r e s e n t i n g t h e n u m b e r o f s h a r e s c o n t a i n e d in that instruction, a n d w e p r o c e s s it a c c o r d i n g to the s h a r e h o l d e r or w h o e v e r w r o t e the instructions. But that d o e s not require u s to r e a d all of the content of e v e r y certificate that.... 990 Q . (Mr. Harris): S o , a s far a s that information g o e s , the transfer a g e n t a n d the E D G A R filer - I think y o u w a s for F r o n t h a u l , originally, a n d y o u ' v e stated y o u filed I think it's the o r i g i n a l 8 - K with the m e r g e r a t t a c h e d to it? M a d d a l o n : 1 filed t h o s e ~ t h o s e E D G A R files that w e r e identified by t h e prior attorney, y e s , I did. T h e r e w e r e m a n y , m a n y E D G A R files that w e r e filed o v e r the c o u r s e of m i n v o l v e m e n t with F u r i a a n d with C o n v e r s i o n S o l u t i o n s , s o . Q (Mr. Harris): M s . G o l d r i n g : P a g e 2 6 M s . G o l d r i n g : of 3 0 1 ? Mr. Harris; Y e s , m a ' a m . T h e C o u r t : W e ' r e g o i n g to t a k e a 5 minute break. 5 minutes e v e r y b o d y . . .
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988 Q . (Mr. Harris): S o , a s a t r a n s f e r agent, whiat is y o u r g e n e r a l responsibility to a public c o m p a n y ? Maddalon: To m a i n t a i n t h o s e s h a r e h o l d e r r e c o r d s
Q . : A n d w h a t all d o e s the r e c o r d s pertain to? Maddalon: I'tn s o r r y . I'm a little hard of h e a r i n g , s o ~
Q . : W h a t a l l d o e s that pertain to a s far a s r e c o r d s ? Maddalon: T h e ~ their p o s i t i o n or the n u m b e r of s h a r e s that t h e y hold in the
company, the date on which they acquired those shares, and where ~ wherever possible, t h e certificate n u m b e r that w a s given to t h e m r e p r e s e n t i n g t h o s e s h a r e s . Q . : S o , e a c h certificate n u m b e r in your s y s t e m h a s - a s far a s that g o e s on the b o o k entry, is t h e r e a n y t h i n g e l s e that y o u d o ; just k e e p the r e c o r d s ? M a d d a l o n : T h a t ' s all w e d o is k e e p the r e c o r d . A n d w h e n ~ w h e n a s h a r e h o l d e r r e q u e s t s that a certificate o r s o m e s h a r e s be transferred to a different s h a r e h o l d e r , w e p r o c e s s that c h a n g e in the r e c o r d f r o m o n e s h a r e h o l d e r to a n o t h e r . Q . : D o y o u p r o c e s s the s a i e s ? S a y , if i w a s to o n the b o o k s o f t h e corporation h a v e 1 0 0 , 0 0 0 a n d I s e l l 5 0 , 0 0 0 of t h e m , do y o u h a v e a r e c o r d of t h a t ? M a d d a l o n : W e h a v e no k n o w l e d g e of a n y s a l e of a n y s h a r e s of a n y o f t h e c o m p a n i e s w e h a n d l e . W e h a v e nothing to d o with the s a l e o f t h e stock. Q . : A n d if ~ a n d s a y in this i n s t a n c e , the merger, a b r o k e r c o n t a c t s you in a c a s e of the m e r g e r a n d - let's bring that d o c u m e n t up first. M r . H a r r i s : Exhibit 301 I think it is, p l e a s e , m a ' a m . Let's try Article V . Ms. Goldring: P a g e number? Mr. H a r r i s : In a n i n s t a n c e of this type, w h a t is the transfer a g e n t ' s responsibility in c a s e of a m e r g e r b e t w e e n a private corporation a n d a ~ a p u b l i c corporation? M a d d a l o n : O n l y to m e r g e t h e s h a r e h o l d e r d a t a from both of t h o s e corporations into a s i n g l e file r e p r e s e n t i n g t h e survivor of that m e r g e r . Q . : A n d in m o s t m e r g e r s that a r e public a n d private, the g o a l is a l w a y s f o r t h e public c o m p a n y to s u r v i v e ; c o r r e c t ? M a d d a l o n : W e l l , that's entirely b e t w e e n the terms of the m e r g e r a g r e e m e n t .

997 Q (Mr. Harris): D o y o u - w e l l , I g u e s s y o u s t a t e d you don't a c t u a l l y r e a d the certificates w h e n they c o m e in? Maddalon: Not tpically, a n d e s p e c i a l l in the F A S T s y s t e m w h e r e the ~ the broker
h a s ~ the b r o k e r , b e f o r e h e c a n submit a r e q u e s t to the D e p o s i t o r y Trust, is s u p p o s e d t o obtain c e r t a i n information 998 f r o m that s h a r e h o l d e r that a l l o w s him to m a k e that request of the D T C . . I n that particular s c e n a r i o , the b r o k e r m a y not h a v e the stock certificates s o h e w o u l d not m a k e a n y e n t r i e s o n the b a c k of t h e cetificate that w o u l d n o r m a l l y b e d o n e . W e w e s o m e t i m e s look at ~ r e v i e w the b a c k o f t h e certificate. W e d o in the c o u r s e of t h e t r a n s a c t i o n a l w a y s look at the b a c k of a certificate to s e e if t h e r e ' s a n y other a s s i g n m e n t s , p e r h a p s a s h a r e h o l d e r h a d to a s s i g n the certificate to a different individual o r s o m e t h i n g like that. A n d if w e s e e no s u c h thing, w e d o not s c a n a c o p y of the b a c k of a n y of the certificates. Q . : D o y o u r e c o g n i z e that d o c u m e n t ? M a d d a l o n : It a p p e a r s to b e the r e v e r s e s i d e of a W a a t l e C e r t i f i c a t e . Q . : D o y o u s e e f a m i l i a r n a m e , date, c o m p a n y ? M a d d a l o n : I s e e no ~ n o n a m e of a s t o c k transfer a g e n c y o n t h e r e . Q . : D o e s that h e l p y o u ? M a d d a l o n : It's just - identifies the fact that this is s t o c k of W a a t l e H o l d i n g s C o r p o r a t i o n , a n d it w a s i s s u e d to T o d d H a r r i s on a particular d a y . M r . Harris: I'd like to e x h i b i t T h e W i t n e s s ( M a d d a l o n ) : P N o w , there is a restricted M r . Harris: - a d d this into e x h i b i t 999 T h e Court: W e l l , wait a m i n u t e . Let him finish. T h e W i t n e s s ( M a d d a l o n ) : T h e r e is a s t a m p w h i c h r e s e m b l e s a s t a n d a r d restriction s t a m p affixed to the b a c k of this particular certificate. -
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TRULINCS S1491019 - STANLEY, BENJAMIN - Unit: BUF-V-B
M r . Harris:
I'd like to e n t e r this in a s Exhibit ~ D e f e n s e Exhibit H - 4 .
T h e Court: Any objection? M s . H a l l : N o t g e n e r a l l y , Y o u r H o n o r , a l t h o u g h I don't b e l i e v e that this w i t n e s s h a s a u t h e n t i c a t e d this particular d o c u m e n t o t h e r than stating w h a t the d o c u m e n t s a y s . T h e C o u r t : Well, h e h a s n ' t authenticate it, but that d o e s n ' t matter. If it's not
o b j e c t i o n a b l e to t h e G o v e r n m e n t , I'm g o i n g to a d m i t it. If it is o b j e c t i o n a b l e , I'm not. M s . H a l l : W e c a n a d m i t it. T h e C o u r t : All right. It's admitted without o b j e c t i o n . M s . K i n g : 1 think it's 4 . T h e Court: 1001 M r . H a r r i s : C o u l d y o u p l e a s e identify to t h e C o u r t e x a c t l y w h a t that is, s i r ? M a d d a l o n : T h a t ' s a s t a n d a r d restriction s t a m p that w o u l d b e a p p l i c a b l e to s h a r e s i s s u e d p r i m a r i l y in a p Right. It's D e f e n d a n t ' s 4, D H - 4 .
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F R O M : 61491019 T O : C h a p i n , D o n ; G o r d o n , Shawnette; S a m u e l , Don; Stanley, Lesia; Stanley, S h a w k e t h a ; Stanley, Shrina SUBJECT: donmadl D A T E : 04/16/2013 03:18:50 P M
929:23-25 Q , : A n d I just h a v e o n e last s e t of n a m e s to a s k y o u a b o u t o n this d o c u m e n t . A g a i n , w e ' r e l o o k i n g at G o v e m m e n t ' s Exhibit 1 2 . I'd a s k for y o u to p r o v i d e the jury with the information of t h e 930 four n a m e s that I've highlighted t h e r e . M a d d a l o n : O k a y . T h e first is L e s i a S t a n l e y . S h e w a s a s s i g n e d certificate n u m b e r 1 2 5 for 1,000,000 s h a r e s , effective 6/1/04. T h a t certificate w a s c a n c e l e d on S e p t e m b e r 2 9 t h , 2 0 0 6 . R o b e r t S t a n l e y h a d certificate n u m b e r 124 a s s i g n e d for 1 0 0 , 0 0 0 s h a r e s , a l s o on 6 / 1 / 0 4 . T h a t a s well w a s c a n c e l e d o n S e p t e m b e r 2 9 t h , ' 0 6 . S h a k e t h a S t a n l e y h a d certificate 122 for 1 0 0 , 0 0 0 s h a r e s i s s u e d 6/01/04. c a n c e l e d o n 9/29/06. A n d S h a r i n a S t a n l e y had certificate 1 2 3 for 1 0 0 , 0 0 0 s h a r e s , i s s u e d 6 / 0 1 / 0 4 , c a n c e l e d on S e p t e m b e r 29th, ' 0 6 . Q . : M r . M a d d a l o n , e v e r y o n e of the s h a r e s that w e ' v e d i s c u s s e d w a s i s s u e d o n the s a m e date, 6 / 1 / 2 0 0 4 . Is that correct, w a s that the representation that w a s m a d e to y o u ? Maddalon: Y e s . Q . : O k a y , a n d t h e s e four s h a r e s that w e r e ~ that w e r e - f o u r s h a r e h o l d e r s that w e ' r e talking about t o d a y , t h e y w e r e all c a n c e l e d o n the s a m e date; is that correct? M a d d a l o n ; Y e s , they were. Q . N o w , w h e n e v e r a s h a r e is c a n c e l e d or w h e n e v e r a s h a r e h o l d e r w a n t s to c a n c e l their s h a r e s a n d a c t u a l l y d e p o s i t t h e m into the s y s t e m , c a n y o u tell the jury a g a i n w h a t t h e y h a v e to d o ? M a d d a l o n : W e l l , t h e r e ' s - there's ~ in the c a s e of C o n v e r s i o n S o l u t i o n s , there's t w o w a y s in w h i c h it h a p p e n s . P r i o r to their b e i n g in a F A S T e n v i r o n m e n t w h e r e the s h a r e - w h e r e the broker 931 s h a r e s are e l e c t r o n i c , a s h a r e h o l d e r w o u l d go to his broker, bring a p h y s i c a l certificate. That
b r o k e r w o u l d d o s o m e p r o c e s s i n g o n that certificate, w o u l d s u r r e n d e r it to the D e p o s i t o r y T r u s t . T h e D e p o s i t o r y T r u s t w o u l d in turn s u r r e n d e r it to us with instructions to c a n c e l t h e certificate in that s h a r e h o l d e r ' s n a m e a n d i s s u e a n e w certificate in the n a m e o f C e d e & C o . C e d e & C o . is a g l o b a l n a m e for all of the s h a r e s on d e p o s i t for all of the brokers in the U n i t e d S t a t e s . S o , prior to there b e i n g the F A S T s y s t e m i m p l e m e n t e d in C o n v e r s i o n S o l u t i o n s , that is h o w a s h a r e h o l d e r w o u l d h a v e his s h a r e s a d d r e s s e d . W h e n the F A S T s y s t e m is i m p l e m e n t e d , a s h a r e h o l d e r with a certificate c a n go to a broker a n d s a y I w o u l d like t h e s e e l e c t r o n i c a l l y d e p o s i t e d to m y a c c o u n t . U n d e r that c i r c u m s t a n c e s , the b r o k e r w o u l d s u r r e n d e r - w o u l d i s s u e a r e q u e s t to the c o m p u t e r s y s t e m at the D e p o s i t o r y T r u s t for that n u m b e r of s h a r e s . It e s s e n t i a l l y is a r e q u e s t for delivery of s o m e e l e c t r o n i c s h a r e s . W e a s a t r a n s f e r a g e n t .go into the D e p o s i t o r y T r u s t c o m p u t e r s y s t e m s a b o u t e v e r y 2 0 m i n u t e s of e v e n / w o r k i n g b u s i n e s s d a y a n d w e l o o k for t h e s e r e q u e s t s . W h e n w e s e e the r e q u e s t f r o m a b r o k e r for the d e p o s i t of the s h a r e s , w e l o o k for v a l i d a t i n g information in o u r o w n office. In the c a s e of a s h a r e h o l d e r , f o r e x a m p l e , w e w o u l d h a v e to h a v e s o m e written instructions f r o m t h e m s a y i n g m y I'm g o i n g to h a v e m y s h a r e s electronically d e p o s i t e d in m y a c . (account) 914 Q . : O k a y M . M a d d a l o n , y o u Indicate in this letter that a n u m b e r of t r a n s a c t i o n s p r o c e s s e d at the i n s t r u c t i o n s of C o n v e r s i o n S o l u t i o n s c a u s e d y o u to v i o l a e S E C rules a n d r e g u l a t i o n s . W h a t t r a n s a c t i o n s s p e c i f i c a l l y w e r e y o u referring to? M a d d a l o n : W e l l , w e ~ w e l e a r n e d through v a r i o u s b r o k e r s that a n u m b e r o f t h e e l e c t r o n i c d e p o s i t s w e m a d e w e r e to i n d i v i d u a l s v\iho w e r e affiliated with M r . Harris a n d others. A n d by virtue of S E C r u l e s a n d r e g u l a t i o n s , t h o s e e l e c t r o n i c d e p o s i t s s h o u l d not h a v e b e e n m a d e . T h o s e s h a r e s s h o u l d h a v e b e e n c o n s i d e r e d restricted a n d the o w n e r s of t h o s e s h a r e s s h o u l d h a v e b e e n p r e v e n t e d f r o m t r a d i n g or d e p o s i t i n g their s h a r e s with a broker for at l e a s t a two y e a r p e r i o d . W h e n I f o u n d that w e h a d in fact a l l o w e d t h e s e e l e c t r o n i c transfers to g o f o r w a r d , it violated e s s e n t i a l l y s o m e of t h e r u l e s a n d r e g u l a t i o n s that w e a s a transfer a g e n t must a b i d e by. I o b v i o u s l y h a d to b r i n g it to the attention of the S E C , w h i c h I did. A n d a s a result, I ~ I a d v i s e d Mr. Harris that w e w e r e g o i n g to t e r m i n a t e a s their t r a n s f e r agent. S u b s e q u e n t l y , h o w e v e r , after d i s c u s s i o n with the S E C , w e jointly m a d e the d e c i s i o n that I w o u l d ~ my c o m p a n y w o u l d not terminate a s t r a n s f e r a g e n t
o n l y b e c a u s e t h e r e w o u l d b e a kind of investigation into the t r a n s a c t i o n s that I had p r o c e s s e d a n d that t h e y w a n t e d m e to r e m a i n a s transfer agent for the duration of that investigation a n d that w a s o n g o i n g . S o ~ s o , e v e n to this 915 d a y w e still remain a s a transfer agent for the c o m p a n y . Q . : A l l right. 917 Q . (By M s . Hall) : M r . M a d d a l o n , prior to the break for l u n c h , w e w e r e d i s c u s s i n g this letter, a n d y o u h a d r e a d to t h e j u r y the s e c o n d p a r a g r a p h regarding the r e a s o n s for y o u r termination of y o u r - the r e a s o n s y o u p r o p o s e d to t e r m i n a t e ? Maddalon: Yes. Q . : D o y o u mind r e a d i n g that to the jury a g a i n , p l e a s e ? M a d d a l o n : T h i s t e r m i n a t i o n is d u e to t h e fact that a n u m b e r of t r a n s a c t i o n p r o c e s s e d at the instructions of C o n v e r s i o n S o l u t i o n s H o l d i n g C o r p h a v e c a u s e d us to violate S E C rules a n d r e g u l a t i o n s a n d h a v e j e o p a r d i z e d our reputation a n d position a s a registered transfer a g e n t a n d participant in t h e D T C F A S T p r o g r a m . Q . : A n d ~ a n d j u s t b e c a u s e w e ' v e h a d a break, I k n o w that y o u ' v e a l r e a d y d i s c u s s e d this, c a n y o u tell the j u r y w h a t t h o s e ~ w h a t y o u w e r e talking a b o u t w h e n y o u s a i d a n u m b e r of transactions? M a d d a l o n : A t this t i m e w e b e c a m e a w a r e through c o n v e r s a t i o n s a n d c o m m u n i c a t i o n s w e r e c e i v e d f r o m v a r i o u s b r o k e r s that s o m e a c c o u n t s h a d b e e n o p e n e d at the b r o k e r a g e a c c o u n t s o n b e h a l f of p e o p l e w h o w e r e affiliated with the officers a n d d i r e c t o r s of 918 C o n v e r s i o n S o l u t i o n s . A n d a s a result o f t h a t , t h o s e s h a r e h o l d e r s ' positions s h o u l d not h a v e b e e n a l l o w e d to b e free t r a d i n g . T h e y w e r e ~ by ~ by a s s o c i a t i o n with the other m e m b e r s o f t h e c o m p a n y , their s h a r e s s h o u l d h a v e b e e n restricted. Y e t , w e h a d p r o c e s s e d e l e c t r o n i c d e p o s i t s into their s h a r e h o l d e r a c c o u n t s w h i c h effectively m a d e t h e m f r e e trading a n d a l l o w e d t h e m to sell those s h a r e s if they s o d e s i r e d . T h a t is in violation of our r u l e s a s a t r a n s f e r agent, e s p e c i a l l y u n d e r the ~ the p r o v i s i o n s of a F A S T p r o g r a m . S o , s i n c e it reflected poorly u p o n m y c o m p a n y , w e w e r e o b l i g a t e d to bring that
to t h e attention o f the S E C s o that they c o u l d at least investigate t h o s e t r a n s a c t i o n s a s w e h a d p r o c e s s e d t h e m to d e t e r m i n e , y o u k n o w , o u r ~ our faiiure to h a v e followed the rules a n d regula tion s 992 Q ( B y M r . H a r r i s ) : All right. 5.3 B u y e r ' s S t o c k , the n u m b e r in the m e r g e r r e p r e s e n t s F r o n t h a u l ' s i n f o r m a t i o n . F r o n t h a u l G r o u p , Inc., a s y o u c a n s e e is the b u y e r . A n d the 6 2 , 1 5 7 , 7 2 1 w o j u l d h a v e c o m e from the t r a n s f e r a g e n t ; c o r r e c t ? M a d d a l o n : I w o u l d a s s u m e s o , y e s , b a s e d u p o n that particular date that this a g r e e m e n t w a s reached. Q . : S o r r y a b o u t this. D i d y o u v a l i d a t e that information or w o r k with M i c h a e l A l e x a n d e r a n d t h e m o r p r o v i d e t h e m with a n y d o c u m e n t a t i o n in s u p p o r t to the m e r g e r ? M a d d a l o n : A n y time he a s k e d for information relative to the s t o c k position of the c o m p a n y , it w a s p r o v i d e d . Q . : D i d y o u p r o v i d e that n u m b e r to h i m ? M a d d a l o n : I w o u l d a s s u m e s o , if h e i n c l u d e d it a s his portion o f t h e ~ or a s his position in t h e - of stock in F r o n t h a u l . Q . : O k a y . In this m e r g e r t h e r e w a s a private c o m p a n y a n d a public c o m p a n y m e r g e r . W e ' v e e s t a b l i s h e d that. D o y o u s h o w ~ a n exhibit w a s s h o w n to y o u earlier that y o u c l a i m to h a v e r e c e i v e d from m y s e l f - - we'll pull it up a n d d i s c u s s that a g a i n , but I w a n t to e s t a b l i s h s o m e t h i n g c o r r e c t l y - of c o m m o n a n d restricted s h a r e s . O k a y . C o r r e c t ? Maddalon: Y e s . Q . : W h a t is a restricted s h a r e ? 993 M a d d a l o n : T h e s t o c k certificate w h o s e s h a r e s a r e restricted from s a l e in the m a r k e t . Q . : A n d that w o u l d refer to only a p u b l i c c o m p a n y ? M a d d a l o n : A c t u a l l y , n o . A n y s h a r e s i s s u e d in a private c o m p a n y a r e b y definition restricted. Q . : S o , a n y s h a r e s i s s u e d in a private c o m p a n y is restricted? Maddalon: Y e s . Q.: Automatically?
71
Maddalon:
Yes.
Q . : S o , is a n y s h a r e i s s u e d in a public c o m p a n y restricted? Maddalon: S h a r e s initially i s s u e d in a public c o m p a n y that are a c q u i r e d a s a direct investment
f r o m that c o m p a n y a r e typically restricted. Q . : O k a y . S o , k n o w i n g that a n y s h a r e in a p u b l i c c o m p a n y is restricted, w h e n y o u r e c e i v e d ~ H o w e a s y i s it to s w i t c h to h e r ? 14(c), p l e a s e , or let's ~ I tell y o u what, 14(b). N e x t - y e a h , there w e g o . T h a t v/ill w o r k . 0 . : S a y F a y e H a r r i s ' s t o c k f r o m her broker, w h o e v e r that w a s , y o u w o u l d automatically a s s u m e it's restricted? Maddalon: ! don't u n d e r s t a n d your statement.
Q . : W e l l , y o u s t a t e d all s t o c k i s s u e d in a private c o m p a n y by all m e a n s is restricted? A . C o n v e r s i o n S o l u t i o n s w a s not a d d r e s s e d to m e a s a private c o m p a n y . 994 Q . : W e l l , w h a t w a s C o n v e r s i o n Solutions a d d r e s s e d to y o u a s ? M a d d a l o n ; If w a s a p u b l i c c o m p a n y , a n d w e r e c e i v e d the s h a r e h o l d e r r e c o r d s from a transfer a g e n t w h o t r a d e d that p u b l i c c o m p a n y . Q . : It w a s a publicly t r a d e d c o m p a n y ? M a d d a l o n : T h a t ' s w h a t I w a s told about the C o n v e r s i o n S o l u t i o n s , y e s . A n d it w a s c o n f i r m e d by H o l l a d a y S t o c k T r a n s f e r . Q , : O k a y . W h a t part in t h e m e r g e r did W a a t l e s h a r e h o l d e r s p l a y ? Maddalon; Pardon me? Q . : W a a t l e s h a r e h o l d e r s . Y o u w e r e receiving W a a t l e certs ~ Let's go - did that exhibit h a v e a n o t h e r p a g e to it, m a ' a m ? M s . G o l d r i n g : W h a t e x h i b i t a g a i n w a s it, p l e a s e ? M r . H a r r i s : 14(b). It's o n e p a g e ? O k a y . Right there.
Q . ( B y M r . H a r r i s ) : W a a t l e H o l d i n g s , this c o m p a n y , this particular cert that y o u r e c e i v e d right here, w h a t part d i d W a a t l e Holdings p l a y In t h e m e r g e r ? M a d d a l o n : W e w e r e told that prior to the m e r g e r with F u r i a , that C o n v e r s i o n S o l u t i o n s h a d m e r g e d w i t h the c o m p a n y c a l l e d W a a t l e a n d that all W a a t l e H o l d i n g s s h a r e h o l d e r s were now C o n v e r s i o n Solution shareholders.
Q . : A n d who told y o u t h a t ? M a d d a l o n ; Y o u did. Q.: I did?
M a d d a l o n ; Y e s , sir.
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O c t o b e r ! 7,2006 Mr. Rufus P a u l Harris C o n v e r s i o n Solutions Holdings C c r p . 125 Tov'nPcffk Drive Suite 300 K e n n e s a w , G A 30144 SUBJECT: D e B v e r e d b y F A X to [404) 393-9824 a n d F e d e r a l Express delivery.
TERMINATION O F INTEGRITY S T O C K TRANSFER AS TRANSFER A G E N T FOR C O N V E R S I O N SOLUTIONS HOLDINGS C O R P .
Rufus, This wilt s e r v e a s o f f i c i a l n o t i c e o f our t w m i n a t t o n as transfer a g e n t for C o n v e r s i o n Solutions Holdings C o r p . , CUSIP 2 1 2 5 4 V 10 0 ef f e c t t v 0 O c t o b e r 3 1 , 2 0 0 6 . This t e r m i n a t i o n is d u e t o f h e f a c t that a n u m b e r of t r a n s a c t i o n s p r o c e s s e d a t t h e instructions o f C o n v e r s i o n Solutions Holdings Ccp. h a v e c a u s e d us t o v i o l a t e S E C Rules a n d R e g u l a t i o n s a n d h o v e j e o p a r d i z e d our r e p u t a t i o n a n d position a s a r e g i s t e r e d transfer a g e n t a n d p a r t i c i p a n t in t h e D T C FAST progrann. E f f e c t i v e 1 0 / 1 7 / 2 0 0 6 w e a r e w i t h d r a w i n g C o n v e r s i o n Solutions H o l d i n g s C o r p . a s a D T C FAST issue. This is n e c e s s a r y i n o r d e r t o r e c o n c i l e t h e position h e l d b y t h e D T C in t h e issue. A l t h o u g h this will e l i m i n a t e t h e possibility of D W A C t n g t r a n s o c f i o h s , it will h a v e n o o t h e r e f f e c t o n t h e tradir\g of C S H D s t o c k . I a n t i c i p a t e t h a t t h e r e c o n c i l i a t i d n will t a k e s e v e n t o t e n d a y s t o c o m p l e t e . D u r i n g this t i m e p e r i o d , w e will b e u n a b l e t o transfer a n y C o n v e r s i o n Solutions H o l d i n g s C o r p . r e c o r d s t o a d i f f e r e n t transfer a g e n t . If t h e r e c o n c i l i a t i o n s h o u l d t a k e longer, w e vM m o v e t h e 10/31/2006 t e r m i n a t i o n d a t e a c c o r d i n g l y . W e vAW a l s o b e r e v i e w i n g all t h e C o n v e r s i o n Solutions t r a n s a c t i o n s w i t h t h e S E C for c o n n p l i a n c e . If this r e v i e w s h o u l d t a k e l o n g e r t h a n a h t i c i p a t e d , w e will simllarty m o v e t h e t e r m i n a t i o n d a t e . Until t h e r e c o n c i l i a t i o n a n d a u d i t s a r e d o n e , a n d w e c a n transfer C o n v e r s i o n Solutions Holdings C o r p . r e c o r d s to a n e w transfer a g e n t ih a n o r d e r l y f a s h i o n , it will b e n e c e s s a r y t o h a v e a n y s t o c k r e l a t e d c o m m u n i c a t i o n in w r i t f e n form o h c o m p a n y l e t t e r h e a d . W h e n y o u identity a n e w transfer a g e n t , p l e a s e h a v e t h e m c o n t a c t m e to c o o r d i n a t e t h e r e l o c a t i o n of r e c o r d s as t h e y b e c o m e a v a i l a b l e . Yowrs truly> INTEGRff? S T O C K TRANSFER
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T T 1 0 6 3 Y o u r d u t i e s f o r t h e m e r g e r : a . d e t e r m i n e w h o s h a r e h o l d e r s are c. w h o is entitled to s h a r e s in the m e r g e r c o m p a n y a n d d . others T T 1 0 8 4 : 25
- 1 0 8 5 : 1 M i c h a e l A l e x a n d e r f r o m F r o n t h a u l s i d e told y o u w h o the s h a r e h o l d e r s w e r e in F r o n t h a u l . A s the
T r a n s f e r A g e n t for F r o n t h a u l prior to m e r g e r information w a s in y o u r s y s t e m p r e - m e r g e r s o y o u k n e w history of F r o n t h a u l a n d y o u h a d their s h a r e h o l d e r Information l o a d e d a n d y o u h a d control o v e r that. S o y o u w e r e confident a b o u t the F r o n t h a u l s i d e b e c a u s e of y o u r k n o w l e d g e of w h o the s h a r e h o l d e r s w e r e . But f r o m the C o n v e r s i o n s i d e , y o u relied on M r . Harris' t h r e e p a g e fax. M a d d a l o n relied o n the report r e c e i v e d from H o l l a d a y S t o c k T r a n s f e r a n d the list of additional s h a r e h o l d e r s p r o v i d e d by R u f u s Harris he s a i d . M a d d a l o n a g r e e d he 1 0 8 5 : 2 4 rely o n that information to m a k e t r a n s a c t i o n s in the m a r k e t that h e ' s a c c o u n t a b l e for a s a regulated p e r s o n b y the S E C . B y t r a n s a c t i o n s , M a d d a l o n e x p l a i n e d the function is a s t o c k transfer agent. H e relies o n the information s o he c a n m a k e the transfer that h e ' s r e q u i r e d to m a k e . T T 1 0 8 8 : 2 0 - 2 4 M a d d a l o n a d m i t t e d that he relied o n c o m m u n i c a t i o n from M r . A l e x a n d e r a n d H o l l a d a y S t o c k T r a n s f e r that w a s the s t o c k transfer a g e n t for C o n v e r s i o n S o l u t i o n s a n d R e p r e s e n t a t i o n s f r o m Mr. Harri with f a x e d list. T T 1 0 8 9 : 3 M a d d a l o n stated it w a s n ' t his responsibility with r e s p e c t to the W a a t l e s h a r e s , to a c c u m u l a t e all the s h a r e s for p e o p l e to g i v e required s h a r e s to determine w h a t the d a t e of i s s u e is. M a d d a l o n T T 1 0 8 9 : 1 0 didn't get a s t o c k list f r o m W a a t l e to d e t e r m i n e w h a t the l e d g e r r e a d a n d h o w it read in terms of w h o h a d s h a r e s a n d h o w m a n y they h a d .

TT1089:10
M a d d a l o n testified he did not get a s t o c k l e d g e r from W a a t l e to determine what the l e d g e r r e a d a n d h o w it
r e a d in t e m n s o f w h o h a d s h a r e s a n d h o w m a n y s h a r e s they h a d . but he got a S p r e a d s h e e t f r o m R u f u s Harris that i n d i c a t e d w h o the s h a r e h o l d e r s of C o n v e r s i o n S o l u t i o n s w e r e . M a d d a l o n admitted he did not obtain a historical s t o c k l e d g e r f r o m t h e S e c r e t a r y of W a a t l e C o r p o r a t i o n to d e c i d e w h e n the s h a r e s w e r e i s s u e d a n d to w h o m they w e r e i s s u e d . a d m i t t e d h e did perform that investigatory function. T h e f a c t s are plain a n d s i m p l e . B r y a n H a r v e y w a s e x a m i n e d before the G r a n d J u r y in the c a s e of U n i t e d Staites v. R u f u s P a u l Harris, B e n j a m i n S t a n l e y a n d Darryl H o r t o n . G o v e r n m e n t Exhibit 0 2 , 1 1 / 4 / 2 0 0 6 ; M A D D - E - 0 0 0 5 , J K S 0 0 0 5 0 is a n e m a i l from R u f u s P a u l Harris to D o n M a d d a l o n , T r a n s f e r A g e n t on S e p t e m b e r 19, 2 0 0 6 with a n a t t a c h m e n t of 3 p a g e s identifying W a a t l e S h a r e h o l d e r s . T h i s d o c u m e n t originated f r o m the C E O , C o n v e r s i o n S o l u t i o n s H o l d i n g s Maddalon
/ C o r p . this i s the real a n d t r u e listing of s h a r e h o l d e r s . T h e list of s h a r e h o l d e r s d i s c l o s e a total of 4 0 , 8 4 5 , 9 3 5 W a a t l e S h a r e h o l d e r s a n d 6 2 , 4 8 9 , 7 2 1 F r o n t h a u l S h a r e h o l d e r s for a total of 1 0 3 , 1 3 5 , 6 5 7 m e r g e r s h a r e h o l d e r s . ( M A D D - E - 0 0 0 0 7 ) ; J K S 00053). G o v e r n m e n t exhibit 1 is a n i n c o n c l u s i v e list of s h a r f e h o l d e r s p r o v i d e d by H o l l a d a y S t o c k T r a n s f e r . It is o b v i o u s the
list is i n c o m p l e t e b e c a u s e it d o e s not h a v e the n a m e of the C E O , R u f u s P a u l H a r r i s , C o o B e n j a m i n S t a n l e y , C F O Darryl Horton and numerous other shareholders. *******fv1addalon a d m i t s to A t t o r n e y H a w k e r that h e p r e p a r e d the fraudulent s h a r e list that w a s s u b m i t t e d a s a n a t t a c h m e n t to the S E C * * * * * * T T 1 0 9 4 : 7 - 1 9 M a d d a l o n a d m i t s that officers m a y transfer s h a r e s to family m e m b e r s a s gifts a n d that the gifts of s h a r e s t a k e o n the restriction d a t e that the officer or director r e c e i v e d but the initial restriction date a p p l i e s . 8 - 1 5 - 2 0 0 4 In the c a s e of Petitioner S t a n l e y , h e w a s i s s u e d 9 , 0 0 0 , 0 0 0 s h a r e s to his condition of e m p l o y m e n t a s COO. Mr. S t a n l e y gifted his family m e m b e r s v a r i o u s quantities of s h a r e s . In S e p t e m b e r 2 0 0 6 his f a m i l y m e m b e r s w e r e
. n o t i c e d by L i c e n s e d B r o k e r s t h e y c o u l d negotiate their s h a r e s . Petitioner Stanley maintains his r e m a i n i n g b a l a n c e of s h a r e s . T T 1 0 9 9 : 2 M a d d a l o n w a s i n f o r m e d by Harris that W a a t l e s h a r e s certificates s h o u l d h a v e b e e n c o n v e r t e d into C o n v e r s i o n S o l u t i o n , Inc. certificates. F u r t h e r that W a a t l e s h a r e s s h o u l d h a v e b e e n e x c h a n g e d for C o n v e r s i o n S o l u t i o n a n d that
is a n a u t o m a t i c p r o c e s s . W h e n two c o m p a n i e s m e r g e , the ~ the s h a r e s o f t h e surviving c o m p a n y a r e a u t o m a t i c a l l y a s s i g n e d to all the certificates o f t h e other c o m p a n y in the m e r g e r . 1 0 9 9 : 1 5 M a d d a l o n k n e w the certificates had n e v e r b e e n m e r g e d a s directed by Harris in the W a a t l e C o n v e r s i o n S o l u t i o n s m e r g e r . S o H a r r i s w a s reporting to D o n M a d d a l o n that W a a t l e , C o n v e r s i o n Solution s h a r e s h a d not b e e n m e r g e d a n d that they n e e d e d to b e m e r g e d o n a o n e to o n e ratio. M a d d a l o n admitted further T T 1 1 0 0 : 1 1 that G o v e r n m e n t Exhibit 6(b) is a c o p y o f t h e s h a r e h o l d e r ' s list from H o l l a d a y S t o c k T r a n s f e r w h o w a s the T r a n s f e r A g e n t for C o n v e r s i o n S o l u t i o n s .

1 1 0 4 : H o r t o n ' s Exhibit 2 7 w a s i n t r o d u c e d . M a d d a l o n a s s u m e s h e got it s i n c e it w a s a d d r e s s e d to h i m . T h e e - m a i l a d d r e s s e d H o l l a d a y T r a n s f e r old certificates, W i l l i a m T a y , et c e t e r a , a n d n e w o n e s . W a a t l e et c e t e r a , R o b e r t K o e r n e r , X n u m b e r of s h a r e s , t h a n k s , J e r r y . M a d d a l o n w a s told that the officers at C o n v e r s i o n solution are M r . B i v e n s , M r . H o r t o n , a n d Mr. H a r r i s . (Petitioner B e n j a m i n S t a n l e y ' s n a m e w a s not m e n t i o n e d a s a n officer for the p u r p o s e s h e w a s hired for w e r e totally different a n d required a different set of s k i l l s . Petitioner S t a n l e y w a s R e s inter alia acta.) 1 1 0 7 : 2 1 A d m i t s he r e c e i v e d W a a t l e certificates ( S E C 0 5 9 2 8 ) f r o m H o l l a d a y that t h e y h a d d o n e nothing with. (6(c) B i v e n s a s k e d for H o l l a d a y certificates f r o m D o n M a d d a l o n .
H o r t o n E x h i b i t 5 3 : A d m i t t e d h e p r e p a r e d s h a r e h o l d e r list in E x h . 5 3 D e p o s i t i o n . 1 1 1 0 : 1 1 - 2 4 A n d admitted p r e p a r i n g s h a r e h o l d e r list p r e p a r e d from l o o s e leaf W a a t l e certificates b a s e d on H o l l a d a y Stock Transfer Report. 1 1 1 4 : 1 0 - 1 1 M a d d a l o n admitted to filing 8 - k s a n d other d o c u m e n t s o n behalf of C o n v e r s i o n S o l u t i o n . 1 1 0 6 : 2 B i v e n s w a s r e c o g n i z e d a s S e c r e t a r y of C o n v e r s i o n S o l u t i o n s . I w a s told b y H a r r i s , the following are officers: M r . B i v e n s , M r . H o r t o n , a n d himself. S o M r . B i v e n s is requesting information that i n c l u d e d T a y a n d C e d e & C o . a n d t h e other information B i v e n s is a s k i n g is for W a a t l e certificates identifying reports, a n d o l d certificates. M a d d a l o n a d m i t t e d r e c e i v i n g l o o s e W a a t l e certificates after r e v i e w i n g Horton S E C - E - 0 0 5 9 2 8 . **** H e a l s o r e m e m b e r e d M a d d a l o n a d m i t t e d at T T 1 1 1 0 : 1 thru 1 1 1 1 : 1 3 h e p r e p a r e d the s h a r e list.******* T T 1 1 1 6 : thru T T 1 1 2 3 : 1 - 2 4 . C E O Harris r e l e a s e d the restriction o n s h a r e s that w e r e m o r e than two y e a r s old a c c o r d i n g to m a d d a l o n w h o p r o c e s s e d the W a a t l e a n d C o n v e r s i o n s h a r e list. T h e r e w e r e p e o p l e c l a i m i n g to b e s h a r e h o l d e r s t h a t w e r e not o n C o n v e r s i o n S o l u t i o n s h a r e h o l d e r lists ( T T 1 1 1 8 : 1-12) Horton Exhibit 5 3 p r o v i d e d information M a d d a l o n n e e d to-esntact the s h a r e h o l d e r .
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CROSS-EXAMINATION OF DON MADDALON BY R U F U S PAUL HARRIS OBSERVATIONS PROVIDED BY BENJAMIN STANLEY, PETITIONER D o n M a d d a l o n e x p l a i n e d his g e n e r a l responsibilities to a public C o m p a n y T T 9 8 8 : 3 - 5 M a d d a l o n filed 8 - K for F r o n t h a u l with m e r g e r a t t a c h e d T T 9 9 0 : 5 - 1 2 . S h a r e s initially i s s u e d in a p u b l i c c o m p a n y that a r e a c q u i r e d as a direct investment f r o m that c o m p a n y are typically restricted. T T 9 9 3 : - 1 1 - 1 3 T T 9 9 4 M a d d a l o n e r r e o u s l y b e l i e v e d C o n v e r s i o n S o l u t i o n to be a public c o m p a n y c o n f i r m e d by H o l l a d a y S t o c k T r a n s f e r . T t 1 0 0 3 : 1 6 - 2 0 M a d d a l o n identified a s t a n d a r d restriction s t a m p that w o u l d b e a p p l i c a b l e to s h a r e s i s s u e d in a private company. T T 1 0 3 0 : 1 3 - 2 5 Identified o f f i c e r s with h a r e s that w e r e restrictive: D a v e P e r l e y , R a n d y M o s e l e y , J a c q u e l i n e O'neill in the C o n v e r s i o n S o l u t i o n / F r o n t h a u l m e r g e r to r e c e i v e s h a r e s per authorization from M i k e A l e x a n d e r o n 7 / 1 7 / 2 0 0 6 . T T 1 0 3 1 : 1 4 - 1 0 3 4 : 7 R e s t r i c t e d s h a r e s can't b e s e n t C E D E F A S T . T T 1 0 3 3 : 1 0 - 1 0 3 4 : 2 5 D u w a y n e W o o d s , a C o n v e r s i o n Solution b o a r d m e m b e r o n the s a m e s t o c k restriction list with R u f u s P a u l Harris, D a r r y l H o r t o n a n d d o w n to D u w a y n e W o o d s o w n restricted s h a r e s but o n 9 / 2 5 / 2 0 0 6 W o o d s restricted certificate w a s c h a n g e d to a free trading certificate. W o o d nor a n y officer w a s officer a u t h o r i z e d the s w i t c h . It w a s further l e a r n e d that after 2 y e a r s , restricted certificates c a n be r e m o v e d p e r R u l e 14. T T 1 0 3 4 : 2 0 D u w a y n e W o o d s w a s the only W a a t l e / C o n v e r s i o n S o l u t i o n s officer to r e c e i v e l e g a l f r e e trading s h a r e s . TT1031:9-21 8/15/2006 D T C approved merger between Fronthaul/Conversion Solutions. 1 0 3 7 : 6 A n a c t i v e S h a r e h o l d e r report for C o n v e r s i o n S o l u t i o n b e c a m e effective 8 / 1 6 / 2 0 0 6 T T 1 0 3 7 ; 1 2 - 1 7 O n 8 / 1 6 / 2 0 0 6 the a m o u n t of free trading s h a r e s w a s 3 1 , 0 6 0 , 4 9 0 . R e s t r i c t i v e s h a r e s w e r e 6 6 , 1 6 5 , 8 9 7 for total o u t s t a n d i n g c o m m o n s t o c k of 9 7 , 2 2 6 , 3 8 7 . T T 1 0 3 9 : 9 T h i s is the S h a r e h o l d e r n a m e C e d e & C o . T T 1 0 4 0 : 9 T h o s e a r e e l e c t r o n i c entries, 4 0 0 , 0 0 0 s h a r e s . T T 1 0 3 9 : 1 2 - 1 3 T h i s is the s h a r e h o l d e r n a m e W i l l i a m T a y with 2 2 , 8 9 0 , 0 0 0 s h a r e s C o n v e r s i o n S o l u t i o n H o l d i n g C o r p as of m e r g e r date ( 8 - 1 5 - 2 0 0 6 ) F e d e r a l restricted - H o l l a d a y S t o c k T r a n s f e r A g e n t 1 0 3 9 : 2 4 - 2 5 N o t i c e Exhibit 6(b) that H o l l a d a y S t o c k T r a n s f e r provided D T C N o t i c e he w a s prior T r a n s f e r A g e n t a n d r e c o r d s b e i n g t r a n s f e r r e d to Integrity S t o c k .
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T T 1 0 4 0 : 2 3 S e p t e m b e r 15, 2 0 0 6 D a y of c o m p l e t i o n o f F r o n t h a u l / C o n v e r s i o n Solution m e r g e r . T T 1 0 4 1 : - 1 0 5 0 : 2 5 T h e s e a r e detailed q u e s t i o n s a b o u t s h a r e list, N O B O List, f o r m filings, n a k e d s h o r t s a n d u n p r o f e s s i o n a l a c t s p e r f o r m e d by D o n M a d d a l o n a s the T r a n s f e r A g e n t to i n c l u d e violation of S E C rules. Further H a r r i s s u b m i t t e d n u m e r o u s critical d o c u m e n t s into e v i d e n c e in an effort to prove a " s e t - u p " a g a i n s t d e f e n d a n t s but Petitioner w a s not a party to the c o n t r a c t s a n d w a s therefore R e s inter alia a c t a . Harris introduced critical e v i d e n c e Exhibits H-1 to H - 1 3 a n d E x h i b i t s 1 - 1 3 a n d reviewed 1 - 1 3 v a r i o u s p a g e s within certain exhibits. H a r r i s p r o v e d that D o n M a d d a l o n a c t e d in c o n c e r t with o t h e r s
to discredit a n d rob C o n v e r s i o n S o l u t i o n s . Harris s h o w e d that M a d d a l o n did mostly act a l o n e in f u r t h e r a n c e of their goals. T T 1 0 5 5 A f t e r the m e r g e r of 7 / 1 0 / 2 0 0 6 , D a v e P e r l e y did o n 7/17 a s a n officer of F r o n t h a u l a u t h o r i z e t h e t r a n s f e r of e x i s t i n g certificates. T h i s w a s s i g n e d 5 d a y s after the m e r g e r o n J u l y 15, 2 0 0 6 . D a v e P e r l e y w a s o n l y i n t r o d u c e d a s a C o n s u l t a n t . H e r e h e is s i g n i n g a s a C o r p o r a t e officer the i s s u a n c e of s h a r e s . A s c a n b e o b s e r v e d t h r o u g h the q u e s t i o n i n g a n d a n s w e r i n g , D o n M a d d a l o n c o m m i t t e d n u m e r o u s S E C v i o l a t i o n s then a t t e m p t e d to shift t h e b l a m e to Petitioner a n d others T h e s e overt a c t s are violation of Article 1, S e c t i o n 1, C l a u s e 1 in that n o l a w s or bills s h a l l b e p a s s e d hindering the right to contract. T h i s Article 1 is further s u p p o r t e d by A m e n d m e n t s o n e and s e v e n .
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A n a l y s i s of C a p i t a l / F u n d i n g by P e t i t i o n e r B e n j a m i n F. S t a n l e y A l l capital w a s b r o u g h t to t h e corporation b y I n d i s p e n s a b l e parties that w e r e not m a d e a v a i l a b l e for e x a m i n a t i o n by the court. T h e i n d i s p e n s a b l e contracting parties to the financial instruments w h o w e r e r e s p o n s i b l e for a u t h e n t i c a t i n g the v e r a c i t y thereof w e r e a t t o r n e y s ; auditors; certified public a c c o u n t s ( C P A s ) a n d c o r p o r a t e f i n a n c e o f f i c e r s ( C F O s ) ; P e t i t i o n e r S t a n l e y w a s not a party to the c o n t r a c t s , a n d he w a s not a party to the c o r p o r a t e capital origination there b e i n g R e s inter alia a c t a a n d o v e r b r e a d t h . S e e the i n d i s p e n s a b l e parties with their a p p r o p r i a t e c o n t r a c t u a l i n s t r u m e n t s below: W/\ATLE HOLDINGS CORPOFIATION INDISPENSABLE PARTIES D u w a y n e W o o d s , C o r p o r a t e Officer David Hawkins M a u r i c e B e n n e t t , C o r p o r a t e Attorney Dr. Vijaya K u m a r R o g e r L. Hall COMPANY, INSTRUMENT & OFFICERS Pacific B e a c h Mortgate Instrument: U C C N o t e David Hawkins, Owner Dr. V i j a y a K u m a r , Secreta.ry Pacific Beach Mortgage R o g e r L. H a l l , Director Pacific B e a c h Mortgage U C C Note C o n t r a c t of April 15, 2 0 0 4 CONVERSION SOLUTIONS S a b r a D a b b s ( C o r p . Officer) Adnan Sake C r a i g M. C a s o n Steve Canady Maurice Bennett (Corp. Attorney) S a b r a D a b b s (Corp. Officer) Ott G i r a Ismet P a e z ( C o r p . Officer) Humanitarian & Scientific World F o u n d a t i o n , Ltd. L e h m a n Brother Holdings P L C Note (Mediumr T e r m Note) Federal Reserve Agent C e n t r a l B a n k of V e n e z u e l a Global Government Bond Ismet P a e z (Owner)
The Caracco Group J o s e Gabriel Rodriguez Anistegui Louis Domingo Saturvo Marsicobetre
Res inter alios acta.hfe w a s
not a party to the contracts, b o n d s or U C C N o t e . H e w a s
not a party n o r d i d h e h a v e a n y a g r e e m e n t s with the parties i n v o l v e d . T h e y w e r e all hired u n d e r individual contracts a n d t h e r e f o r e l i a b l e for their individual a c t i o n s .
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F R O M : 61491019 T O : C h a p i n , Don; Gordon, Shawnette; S a m u e l , D o n ; Stanley, Lesia; Stanley, S h a w k e t h a ; Stanley, Shrina S U B J E C T : Eric D e n a u l t D A T E : 04/16/2013 03:13:35 P M
R e v i e w of E r i c D e n e a u g h t ' s T e s t i m o n y by B e n j a m i n F . Stanley, Petitioner E r i c D e n e a u g h t is a L i c e n s e d B r o k e r with P o i n t C a p i t a l . D e n e a u g h t h a d to r e g i s t e r t h e h a r d certificate with D o n M a d d a l o n , T r a n s f e r A g e n t , Integrity S t o c k . H e testified for t h e p r o s e c u t i o n that a family m e m b e r o f Petitioner's s o l d s h a r e s b e c a u s e h e r h u s b a n d told h e r too. But o n c r o s s e x a m i n a t i o n , D e n e a u g h t c o r r e c t e d his t e s t i m o n y stating " a family m e m b e r h a d e v e r y right to s e l l h e r s h a r e s a n d that he c o n t a c t e d the family m e m b e r to s e l l s h a r e s . H e k n e w the affiliation b e t w e e n client a n d the petitioner. Petitioner d i d n o t violate a n y l a w s b e c a u s e a g a i n , h e w a s not involved in the c o n t r a c t u r a l obligations o f t h e parties.
Mr, Deneault f i r s t contacted Ms. Stanley ("0:786:22-23) on September 27, 2 0 0 7 to open her accoixnt. He informed her the shares were free tradingAlso Deneault admitted that
he sent CTr788 :22 - 7 8 9 : 1 . ) the Transfer Agent.
the hard copy of the share c e r t i f i c a t e to (Don Maddalon)
The transfer Agent (Don Maddalon) processed the share c e r t i f i c a t e shares of stock was moved from R e s t r i c t i v e Mr. Deneault f u l f i l l e d h i s duties after
e l e c t r o n i c a l l y which means the 1 , 0 0 0 , 0 0 0 stock to free trading on the open market.
following SEC established procedures to the Transfer Agent who released the r e s t r i c t e d shares f o r trading without reservations. Petitioner Stanley i s EES INTER ALIOS ACTA Had the Transfer
to the eontracts and events between Leisa Stanley and E r i c Deneault.
Agent followed policy, procedures and rules, he, Don Maddalon, would not have released the r e s t r i c t e d shares to the open free-trading market. Mr. Maddalon admitted t h i s
v i o l a t i o n i n h i s Deposition to Alana Black of the SEC during her i n i t i a l investigation. There was no way possible for Petitioner Stanley to have found l i a b l e f o r the crimes of other because he was protected by OYERBSEADTS and the Constitution of the United States as he i s and was Res i n t e r a l i o s acta to the events and contracts and crimes.
TT799:
16-25 QUESTION BY MR. HARRIS:
IS THERE ANYTHING THAT YOU KNOW AS A BROKER
THAT WOULD PREVENT LESIA FROM SELLING STOCK IN A CCf-lPANY THAT HER SEPARATED OR EXHUSBAND OWNS? ERIC DENEAULT ANSWERS: I DO, AND SHE WAS WITHIN RIGHT TO SELL THOSE SHARES, Q.: BECAUSE IT WAS ERIC DENEAULT ANSWERS: IT WAS HER SHARES. Correct. Q.: FREE
TRADING IN THE ACCOUNT?
ERIC DENAULT:
As E r i c Deneault admitted to the
Court, Ms. Stanley was within her rights to s e l l her shares released by Don Maddalon.

F R O M : 61491019
T O : C h a p i n , Don; G o r d o n , Shawnette; S a m u e l , D o n ; Stanley, L e s i a ; Stanley, S h a w k e t h a ; Stanley, Shrina S U B J E C T : Maurice Bennett D A T E : 04/16/2013 03:12:48 P M
B e n j a m i n S t a n l e y ' s R e v i e w of M a u r i c e B e n n e t t W a a t l e H o l d i n g s w h i c h m e r g e d into C o n v e r s i o n S o l u t i o n s w a s r e p r e s e n t e d by c o m p e t e n t legal c o u n s e l through M a u r i c e B e n n e t t , C o r p o r a t e Attorney for both W a a t l e H o l d i n g s a n d C o n v e r s i o n S o l u t i o n s . Attorney B e n n e t t r e v i e w e d , \êrified a n d a u t h e n t i c a t e d all t r a n s a c t i o n s a n d p r e s e n t e d the results to the B o a r d of D i r e c t o r s . R e c o r d s c o n s i s t e d of but w e r e not limited to b a n k r e c o r d s , c o n t r a c t s , federal a n d state d o c u m e n t s , private p l a c e m e n t m e m o r a n d u m s ; U C C N o t e s , V e n e z u e l a n B o n d s contracts a n d ownership documentation. H e reviewed and negotiated
V i r g i n R e c o r d C o n t r a c t , rental a n d property related c o n t r a c t s , e m p l o y m e n t cont'-acts a n d a n y c o n t r a c t s related to the company. H e w a s a n e x c e l l e n t attorney in m y o p i n i o n . H e p a s s e d prior to S e r v i c e of the C r i m i n a l C h a r g e s .
87
INEFFECTIVE ASSISTANCE OF COUNSEL The two-pronged S t r i c k l a n t Test i s incorporated herein to j u s t i f y P e t i t i o n e r Benjamin F. Stanley's claims for i n e f f e c t i v e assistance of counsel. The f i r s t
prong of the Stricklant Test i s deficient performance which requires a showing that counsel's performance f e l l below an objective standard of reasonableness. Strickland, 466 U.S. at 687-88. The Constitution does not guarantee flawless U.S. v.
performance; i t guarantees only objectively reasonable performance.
Gronic, 466 U.S. 648, 656 (1984) recognizing that the f a c t that coimsel may have made demonstrable errors does not necessarily mean coimsel was i n e f f e c t i v e ) . Objectively reasonable performance i s performance that i s reasonable under p r e v a i l i n g professional norms. Strickland, 466 at 688 and make[s] the adverStrickland 466 U.S. 690.
s i a l t e s t i n g process work i n the particular case.
The United States Supreme Court has recognized that no set of rules "can s a t i s f a c t o r i l y take account of the variety of circumstances faced by defense cousel or the range of legitimate decisions regarding how best to represent a c r i m i n a l defendants" (200). Id= at 689-90., see also Roe v. Flores-Ortega, 528 U.S. 470, 477
Thus the deciding court must evaluate the reasonableness of defense coun-
s e l ' s conduct on a case-by-case basis and must consider a l l of the circumstances. The court has expressly rejected the adoption of per se rules regarding d e f i c i e n t performance. See Roe, 528 U.S. at 478. Additionally, when judging reasonableness, the court must not engage i n hind
sight rather, i t must consider counsel's conduct as of the time of the alleged d e f i c i e n t performance. See Strickland, 466 U.S. a t 689. Because of the
d i f f i c u l t i e s inherent i n making the evaluation, a court must indulge a strong presemption that cotmsel's conduct f a l l s within the wide range of reasonable professional assistance. Strickland, 466 U.S. at 689; Roe, 528 U.S. a t 477;
Mason, 337 NC at 177-78, 446 S. E. 2d at 65 (same)
Wien analyzing claims under t h i s prong of the Strickland test, courts oc^casionally l a b e l counsel's decision or action "strategic" or " t a c t i c a l " and i n d i c a t e that they w i l l not second-guess such a decision. ^ n j s t r a t e g i c or tactical decision unassailable. with the language of the Strickland decision. Such a view renders then
However, such a view i s at odds
IJhile Strickland recognized that
" s t r a t e g i c choices made after thorough investigation of law and facts relevant t o plausible options are v i r t u a l l y unchallengeable Strickland, 466, U.S. at 690. r .
i t ; i s also recognized that s t r a t e g i c choices made after "less than complete imvestigation are reasonable only "to the extent that reasonable professional judgments support the l i m i t a t i o n s on investigation. Id. at 690-691. a Thus when
strategic or t a c t i c a l decision i s challenged, the court must determine whether was made after thorough investigation of the relevant law and
t^he decision facts.
I f so, the decision i s , i n the words of Strickland, " v i r t u a l l y I f not, the court must inquire whether the l i m i t a t i o n on invest Of course, the defendant bears the burden of rebutting reasonable.
unchallengeable." i g a t i o n was
reasonable.
the presumption that counsel's conduct was Prej udice
Under the second prong of the Strickland test, the defendant must show that the d e f i c i e n t performance prejudiced When an I n e f f e c t i v e Assistance the defense. Strickland, 466 U.S. at 687, 692,
of Counsel claim i s raised after a jury t r i a l , this
requires the defendant to show that 'counsel's errors were so serious as to deprive the defendant, of a f a i r t r i a l , a t r i a l whose result i s r e l i a b l e . Id. at 687 This
means that an error does not warrant reversal of a conviction unless there i s a "reasonable probability that, but for counsel's ...errors, the r e s u l t of the ceeding would have been d i f f e r e n t . Id. at 694" A reasonable probability " i s a Strickland, 466 pro-
p r o b a b i l i t y s u f f i c i e n t to undermine confidence i n the outcome." U.S. at 694
When a defendant challenges a conviction, the inquiry focuses on
whether "there i s a reasonable probability that absent the errors, the factfinder "89
would have had a reasonable doubt respecting g u i l t . "
Strickland, 466 at 695.
If
ttie challenge i s to a death sentence, the inquiry focuses on "whether there i s a reasonable probability that, absent the errors, the sentence would have concluded
ttaat the balance of aggravating and mitigating circumstances did not warrant death. 14. That i s not the case here. This i n e f f e c t i v e assistance of coimsel case i s
raised a f t e r a not g u i l t y plea and focuses on whether "there i s a reasonable prob a b i l i t y that, but f o r counsel's errors, [the defendant] would have been found not g u i l t y p r i o r to t r i a l thereby mitigating the need f o r a t r i a l and saving valtiable tax d o l l a r s . Further, i f not f o r counsel's d e f i c i e n t performance, there Id.
would not have been a t r i a l .
A defendant can r a i s e the claim...in one of three ways: (1) i n a motion f o r a new t r i a l based on anything other than newly discovered evidence; (2) on d i r e c t appeal i f and only i f i t conclusively appears from the record that h i s counsel d i d not provide e f f e c t i v e assistance; or (3) by a c o l l a t e r a l challenge pursuant to 28 USC 2255. United States v. Martinez, 136 F.3d 972, 979-80
On the second point ( i n e f f e c t i v e assistance claims may not be raised on d i r e c t appeal unless record i s conclusive), see also U.S. v. A l l e n , 491 F3.d 178, 191-192 (4th Cir. 2007) Defendant claims i n e f f e c t i v e assistance of counsel i n the following (2) f a i l u r e to study or understand
areas:
(1)
f a i l u r e to investigate or prepare (3)
security laws
Unable to ask appropriate questions, unable to prepare a proper
defense, xmable to impeach witnesses f o r l y i n g (6) f a i l e d to understand the nature of the conspiracy, f a i l e d to understand the nature and cause of the charges, and she f a i l e d to under the nature and laws of contracts and contractural obligations.
90
Puring tier me.
pre-trial,
A t t o r n e y K i n g made an a p p o i n t m e n t When I a r r i v e d ,
f o r me t o meet
i n her o f f i c e .
no one was a v a i l a b l e t o s e e
When I d i d meet w i t h h e r , t o handle
on one o c a s s i o n I a d d r e s s e d h e r i n Seciurities SEC
Qualifications and case if Contracts.
an SEC c a s e and h e r i n v o l v e m e n t she had n e v e r the judge.
A t t o r n e y King s a i d
handledan
i n her l i f e
and she c o u l d a d d r e s s
I don't know
s h e e v e r d i d b u t s h e remained I briefed
on t h e c a s e .
h e r on t h e e v i d e n c e and w i t n e s s e s and s u p p o s e d l y
an e x t r a c t me i n t o attorney Security She to
from an announcement t a k e n o u t o f c o n t e x t t o e n t r a p an SEC c r i m e . I d i d n o t commit a c r i m e . She f a i l e d My
committing failed Laws.
to investigate She f a i l e d
the crime.
to learn
to learn Contract
and Laws o f O b l i g a t i o n s and she f a i l e d
failed
to l e a r n
t h e n a t u r e and cause and d e p o s i t i o n s .
of the crime
examine e x h i b i t s
Her l a c k
o f knowledge and
failures questions
aforementioned she a s k e d .
are v e r i f i a b l e
by t h e t y p e and l a c k o f
Examination, skills
m i n i m u n l y would have p r o v i d e d h e r w i t h of a s c h o o l e d a t t o r n e y because reviewed and examined
knowledge, have
and a b i l i t i e s
she would
prepared and
a proper defense,
a p p r o p r i a t e document defendant's
p r o p e r l y q u e s t i o n e d w i t n e s s e s toward She d i d none o f t h o s e things.
providing
innocense. Of
utmost i m p o r t a n c e
i s the f a c t
that she f a i l e d
t o review
trade
r e c o r d s w h i c h would have enhanced h e r l e a r n i n g effective a. b. questions. M o r e o v e r , she would are?
a s she c o u l d a s k
learn:
who t h e w i t n e s s e s
who committed t h e c r i m e s ?
91
c. d. e. f. g. h. i. j. other And of
What r e s t r i c t i v e
shares
are?
What i t means t o be i n a merger? What i s p r e - m e r g e r ? What SEC laws a r e and how t h e y Failed to object to t h i r d party are a p p l i e d ? witnesses importance?
What s h a r e h o l d e r l i s t s
a r e and t h e i r
What a pump and dump i s ? What naked s h o r t s and t h e i r important matters. application t o t h e market and depositions
She d i d n ' t c h a l l e n g e or r e v i e w Petitioner t o waive
most s e r i o u s l y , bank s t a t e m e n t s
she c o n v i n c e d
, review name had been
e t c n o t knowing t h a t P e t i t i o n e r ' s
subvertly This violation I. r i g h t
w r i t t e n on documents t o i m p l i c a t e him i n a c r i m e . negativity lead to i n e f f e c t i v e a s s i s t a n c e o f c o u n s e l and under Amendments o f law and t o and> t h e r i g h t protection
o f my c o n s t i t u t i o n a l R i g h t s to petition,the
guaranteed
c o u r t , V =f due p r o c e s s
yi=^ ; 1 r i g h t
t o -know c a u s e ; a n d c H a t u r e i o f t h e
charges
t o , b e r e p r e s e n t e d by a competent a t t o r n e y and XIV= e u q a l of the law. Accordingly, and Petitioner
f o r t h i s r e a s o n a l o n e , t h e c a s e must be v a c a t e d imprisonment.
discharged., from
92
THIS
AFFIDAVIT
IS
TRUE, CORRECT AND P E N A L T Y OF
NOT
MEANT TO
MISLEAD DAY OF
AND -M^ftfL,
S U B M I T T E D UNDER THE 2013 by':
PERJURY THIS
i e n j a m i n F. Stanley Reg: 61491-019 P. 0. Box 9 9 9 , L S C I , B u t n e r , N.C. 27509.
fAy Comm. E^girgs
VB
S T A T E OF County
NORTH CAROLINA
) )
o f -Vaucey (^raA\/<ll^
I c e r t i f y a s a N o t a r y P u b l i c f o r t h e S^tate o f N o r t h C a r o l i n a t h a t B e n j a m i n F. S t a n l e y d i d personairy.,.,. a p p e a r b e f o r e me with g o v e r n m e n t i d e n t i f i c a t i o n and t h a t he f r e e l y . s i g n a d h i s name as i n d i c a t e d above t h i s Zf day o f A f r 1 1 . . , 2013..
fiy'C^&mission
V Exp x r e s
93
CERTIFICATE OF SERVICE I c e r t i f y under penalty of perjury that I placed a copy of t h i s motion with proper postage jnto the Inmate Mail System f o r delivery to the addressees beloK t h i s 3S day of May 2013.
United For
States
Court
Che E l e v e n t h C l e r k of
o f Appa I s / / } "-^ Circuit
Attn: 56
Court
Forsyth GA
Street 30303
Clerk of the Court i U.S. D i s t r i c t Court Atlanta D i v i s i o n 600 U. S. Courthouse 75 Spring Street, S.W. Atlanta, GA 30303
Atlaata,
Attoraey J u s t i n S. Anand f N 600 U.S. Courthouse 75 Spring St. SW Atlanta, GA 30303
Defense Attomey Don Samuels Garland, Samuels,Loeb, PC T r i a l Attorneys 3151 Maple Drive, NE Atlanta, GA 30305
Li^'
Betgilamin Stanley Reg: 61491-019 LSCI-VB P. 0. Box 999 Butner, NC 27509
94

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Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 1 of 135

12-11126-DD 12-11178-DD l:09-cr-00406-TCB-JFK

) ) ;KTifTis P a u l H a r r i s , Benjamin S t a n l e y , ^ Appellants.

r i g h t s under t h e S i x t h Amendment, he was and and and

i n t e n t i s meant t o c o r r e c t , bear w i t n e s s t o e r r o r s i n t h e charges and t o separate

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 2 of 135

u i i q u e s t i o n e d ) U n l i k e speecli i n other c o n t e x t s , testimony

f o x ' i i i a l i t y and g r a v i t y necessary t o i^erriind the w i t n e s s

that h i s or her statements

i s q u i t e d i s t i n c t from l i e s not spoken

under o a t h and s i m p l y intended

Argued; June 28, 2012.

federal statute prohibiting

[183 L. Ed. 2d 5891 f a l s e statements t o

government o f f i c i a l s p u n i s h e s " whoever, i n any matter w i t h i n the j u r i s d i c t i o n of

t h e e x e c u t i v e , l e g i s l a t i v e or j u d i c i a l branch o f t h e government...makes any

use lC01s p r o h i b i t i o n on f a l s e statements made t o Government o f f i c i a l s , i n

does not l e a d t o the broader

when made t o any person, a t any

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 3 of 135

Key Elements t o E l i m i n a t e BENJAMIN F. STANLEY FROM THE CASE

The key element " m i s r e p r e s e n t a t i o n

i n v e s t o r s " P e t i t i o n e r p r o v i d e s t h a t h i s statement was not a m i s r e p r e s e n t a t i o n

l y i n g t o i n v e s t o r s about bonds i n a r a d i o announcement.

P e t i t i o n e r was on t h e t e l e p h o n e w i t h the r a d i o s t a t i o n coimnentator and CEO Rufus

P e t i t i o n e r responded based upon overbreadth

and r e l i e d upon t h e f a c t s t h a t the

bonds had been a u t h e n t i c a t e d by t h e p a r t i e s t o t h e c o n t r a c t and approved by

a t t o r n e y s , before t h e merger, t h a t a l l the necessary i n f o r m a t i o n was r e l e a s e d

to t h e p u b l i c and h i s statement being overbreadth

owned t h e bonds and m u l t i p l e s i g n e d c o n t r a c t u r a l p r o j e c t s p r i o r t o merger and

the i n f o r m a t i o n had been p u b l i s h e d i n m u l t i p l e p u b l i c a t i o n s p r i o r t o h i s

a l l e g e d " S t a n l e y had p a r t i c i p a t e d i n a s i m i l a r pump and

dump'' scheme a t a company c a l l e d Broadband W i r e l e s s . "

That statement i s a scheme

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 4 of 135

a l l e g a t i o n t o deceive the j u r i s t and eioud the c u r r e n t f r a u d a g a i n s t A p p e l l a n t

There i s no known court or t r i a l evidence or i n f o r m a t i o n t o prove such a statement

P e t i t i o n e r S t a n l e y i s accused o f A i d i n g and A b e t t i n g i n the p r e p a r a t i o n o f

f i n a n c i a l statements done by CEO H a r r i s ,

" i n t e n t i o n a l l y h e l p or encourage another person t o commit a crime.

I t had i t s c o r p o r a t i o n documents, CEO, c o r p o r a t e a t t o r n e y , s e c r e t a r y , t r e a s u r e r

The company had i t s a s s e t s .

were a l r e a d y i n p l a c e when P e t i t i o n e r was h i r e d a t Waatle I n c .

f i n a n c i a l r e c o r d s were merged i n t o Conversion

P a u l K a r r i s being the CEO, he h i r e d by c o n t r a c t Sabra Dabbs, Ismet Paez, and

Sabra Dabbs and Ismet Paez brought Venezula and F i n n i s h Bond

S o l u t i o n s . Raieo Vandetti was hired to authenticate and apothe-

cate the bonds. The a t t o r n e y s and p a r t i e s to, the c o n t r a c t s , t h e c e r t i f i e d p u b l i c

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 5 of 135

procedures f o r e x e c u t i n g t h e VB-1 Bond t r a n s a c t i o n which i n c l u d e d payment o f $400,000 w i t h i n 72 hours a f t e r t r a n s f e r of t h e bond. The i n s t r u c t i o n s t o H a r r i s

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 6 of 135

Tuesday, March 14,2006

Executive Vice President of Global Investments $ 2 0 0 , 0 0 0 . 0 0 Annually plus Investment Agreements

By: Sabra Dabbs 3 9 3 3 Pine Hurst Way Duluth, GA 30096

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 7 of 135

BINDING LEHER OF INTENT

BINDING LETTER OF INTENTi

MANAGEMENT OF THE BLOl:

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 8 of 135

Case 1:09-cr-00406-TCB-JFK Document 317 Filed 05/31/13 Page 9 of 135

NON-COMPETE, NON-CIRCUMVENT, NON-EXCLUSIVE:

CVSU vwll bear arry costs pertaining to this BLOL