doc. 153-1 -- affidavit of r. lance flores
DESCRIPTION
Case 3:11-cv-00726-M-BH Document 153-1 Filed 08/08/12Page 1 of 13 PageID 2228United States District Courtfor theNorthern District of Texas Dallas Division R. Lance Flores, Vicki Clarkson, Plaintiffs, v. Scott Anthony Koster, et al. Defendants. Civil Action № 3:11-cv-00726-M -BHPLAINTIFFS’ DAMAGES PROVE-UPAFFIDAVIT OF R. LANCE FLORESMy name is Rudolph Lance Flores (hereinafter “R. Lance Flores” the “Affiant”), a plaintiff in the above-styled and -numbered cause. I am compTRANSCRIPT
United States District Courtfor the
Northern District of TexasDallas Division
R. Lance Flores,Vicki Clarkson,
Plaintiffs,
v.
Scott Anthony Koster, et al.Defendants.
C i vi l Ac t i on
№ 3:11-cv-00726-M -BH
PLAINTIFFS’ DAMAGES PROVE-UP
AFFIDAVIT OF R. LANCE FLORES
My name is Rudolph Lance Flores (hereinafter “R. Lance Flores” the “Affiant”), a
plaintiff in the above-styled and -numbered cause. I am competent to make this
declaration and hereby certify under penalty of perjury as provided by 28 U.S.C. §
1746, and further state that the facts stated herein, and the verified and sworn
evidence in exhibit attached hereto or otherwise entered into the record of the
Court by the Plaintiffs, are within my personal knowledge. If called upon to testify
upon the statement, facts and evidence stated herein, I would competently testify to
same set forth herein:
DECLARATION
1. Several months prior to April 14, 2008, I initiated the funding for a screenplay
and film project I had written and developed having a then net present value (NPV)
of between $4-5million to be produced and filmed and produced in Detroit
qualifying for Michigan Film Industry Tax Incentive (“MFITI”) program. (doc. 115 at
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13) Prior to the application and signing of the MFITI by Gov. Jennifer Granhol, I
began working with Janet Lockwood the Director of the Michigan Film Office
Michigan Film Office, along with the Michigan Film Office Advisory Council.
2. About July of 2007, I began negotiations with several finance companies that
provided factoring service for film tax/grant services. (e.g., doc. 114 at 8) My
purpose for purchasing an SBLC to was to secure Non-recourse Loan & Trade
Funding1 available from a number of registered commodity/financial trading and
financial management/trading companies for my 2009/2010 film slate and a San
Antonio studio/sound stage facility.
3. I expanded the project into a film slate (doc. 116) in order to make it more
attractive to financing enterprises by adding a range of low to medium budget films
in popular movie genres with high probability profit margins and distribution of
risk. This strategy yielded opportunities to lever film slate project using project
assets as collateral for non-recourse financing and trade programs as the majority of
legitimate trade programs with guarantees required project sizes of $100,000,000
or greater.
4. After examination of several financing proposals the first proposal considered
was for a loan financing with Prosperity International LLC (“Prosperity”). The early
1 Non-recourse Loan & Trade Funding (NRCL/Trade). The process and prerequisites for this structured
funding is essentially constructed by three financial activities. The client (MFI & Flores’ co-signer) secures aline-of-credit, typically a standby-letter-of-credit or “SBLC”, in this case, the SBLC purchased from the cash assetfrom the factoring of the $8million film incentive receivables. The second activity is the non-recourse loanwhich the provider assumes the loan and proceeds for trade. The client (borrower) exchanges the use of theloan assets for trade by the provider (lender) for a defined period, in the instant case, twelve months. In turn,for the use of client’s loan, the provider guarantees a proportional payout of the loan funds to the client overthe period, and initiates his trades. At the end of the period, Client’s loan is retired without any recourse(repayment) and provider keeps the earnings from the trades over the amount of the loan retirement amount.
In essence, the MFI/Flores secures the loan with their assets and the provider (lender/trading company)makes scheduled payments to the Client, pays off the loan from the trades and keeps after-loan-payoff profitsfrom trades.
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discussions negotiated for a 5-10 year note for the Burgess/Prosperity loan. At the
same time I was negotiating the terms with a registered commodities trading
company, through Dave Svec and Hoang Nguyen with Minh Da Nguyen the President
and C.E.O. of MC Commodities Trading, Inc. (doc. 111 at 54) MC Commodities
Trading, Inc. (“MCCT”) would joint venture with Prosperity using MCCT their trade
facilities to payoff the loan. However MCCT, after its due diligence processes, could
not verify Prosperity’s information and Burgess refused to provide verifications of
pertinent information. The joint venture with Prosperity was then dissolved. It
would be later learned that Michael Burgess the principal of Prosperity was stealing
funds from clients and was eventually convicted and sentenced to fifteen years in
federal prison.2
5. Following the Burgess/Prosperity due diligence failure, MCCT offered a larger
NRCL/Trade for Two-hundred Fifty million dollars ($250,000,000) for the funding
of the Film Slate and the purchase and initial development of the Loan Star Brewery
property as a motion-picture/video media production facility. Additionally, the net
present value of the assets were to be further increased by the incentive benefits
offered by the City of San Antonio for the construction, operation, and employment
related to the facility which would bring in an estimated One-hundred Million
Dollars to the San Antonio economy annually increasing over time as the facility
matured. Projections estimated that the studio/sound stage facility would bring two
to three hundred million dollars into the local economy annually as it matured. More
2 USA v. Burgess, 6:10-cr-00161-ACC-GJK (U.S. Dist. Ct. MD Florida, Orlando Div. 2011); also, Ex-business
manager who owes $94M gets 15-year federal prison sentence, November 23, 2011|By Amy Pavuk, OrlandoSentinel:http://articles.orlandosentinel.com/2011-11-23/news/os-michael-burgess-prosperity-international-senten-20111123_1_federal-prison-sentencing-hearing-federal-money-laundering-case
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specifically, I had face-to-face discussions with San Antonio City Council Member
David Medina3 concerning the development of the Federal Empowerment Zone
within his district and the education, training, and employment of the financially
depressed community of his district and the development of the South Side of San
Antonio.
6. The funding structure of the MCCT funding would occur in such a manner in
which I and MFI would pledge assets and assign our cash assets and properties and
MCCT would trade the instruments. The commodities trading company would then
fund us 66% of the $250MM (165MM)in equal amounts ($13,750,000/month).
7. Again, in exchange for the use of our debt instrument and use of assets our
debt would be retired at the thirteenth month.
8. The loss of $165,000,000 funds, damages, were unquestionably, directly and
proximately caused by the RICO Defendants actions and conspiracy as alleged and
more fully set forth in the Plaintiffs’ FIRST AMENDED COMPLAINT and the
corresponding sworn evidence attached thereto.
9. I, the Affiant, having the ownership of all MFI assets, rights, and property
returned to me, and being the guarantor of all loans and debts incurred in and by all
financial transactions, and Vicki Clarkson, also having unencumbered standing,
brought this matter before this Court pursuant to, inter alia, Section 901(a) of the
Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted October
15, 1970), and codified as Chapter 96 of Title 18 of the United States Code, 18 U.S.C.
§ 1961–1968; and
10. that Plaintiffs specifically brought an action pursuant to 18 U.S.C. § 1962(a),
3 http://www.sanantonio.gov/Council/d5/
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(c), (d), and other causes of action elucidated below:
1. COUNT 1– 18 U.S.C. §§ 1962(c) (Against the RICO Defendants),
2. COUNT 2 – 18 U.S.C. §§ 1962 (a) (Against the RICO Defendants),
3. COUNT 3 – 18 U.S.C. §§ 1962 (d) (Against the RICO Defendants),
4. COUNT 4 – Fraud in the Inducement (Against all Except Cook and Divens),
5. COUNT 5 – Common Law Fraud, (Against all Defendants),
6. COUNT 6 – Negligent Misrepresentation and Deceit (Against all Defendants),
7. COUNT 7 – Fraud by Non-disclosure (Against all Defendants),
8. COUNT 8 – Aiding and Abetting Fraud (Against all Defendants),
9. COUNT 9 – Breach of Confidential or Special Relationship (Against all
Defendants),
10. COUNT 10 – Promissory Estoppel (Against all Defendants),
11. COUNT 11 – Intentional Infliction of Emotional Distress (Against all
Defendants),
12. COUNT 12 – Civil Conspiracy (Against all Defendants).
11. That Plaintiffs’ Compensatory Actual Damages result from Defendants'
intentional and willful acts that directly or proximately caused, inter alia, the
following damages:
12. Direct and Proximate Caused Actual Damages inflicted by the RICO
Defendants exceed an amount greater than $220,000,000 and, in fact, is
$357,014,558 as itemized:
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Source $ Assets Description & Reference
MC Commodities Trading, Inc.Minh Da Nguyen,President/C.E.O. Non-recoursefunding & trade.
‡
$165,000,000 66% × $250,000,000 BG = $165,000,000monetized; Exs Vol. 10, Exs 212, 213, 221,222, 231, 232.
Mockingbird Films International2009/2010 Slate production
$170,350,200 Net Profits. Ex. Vol. 15 “Slate Summary” pg 4of 54. Does not include 2010/2011 and2011/2012 production slate revenues.
Michigan Film Incentive Rebatefor The Black Messiah Murders
$7,972,149 Ex. Vol. 14, Ex. 258. Usable for slate pre-funding through Fallbrook (Exs. Vol. 13, Ex.252) to purchase MC Commodities Trading,Inc. SBLC.
Texas Film Incentive Grant forAlter Ego
† and Killing Frank
$1,996,345 Ex. Vol. 13, Ex. 251; Ex. Vol. 15, Ex. 259 at33, 51 (see also references below)
††
City of San Antonio - Lone StarBrewery (Studio) Incentive Pkg.
Ex. Vol. 13, Ex. 251. Value of benefit packageestimated at $17MM, not calculated.
St. George’s Project Inc.,studio/sound stage facilityfunding
Value of $510MM funding benefit & value offully developed property losses, notcalculated.
Lone Star Studio Lost Revenues $11,508,864 Loss of studios and sound-stage 1 yearrevenues $13,539,840 at 85% use.
Vicki Clarkson $187,000 $90,000 funding plus agreed film profitsharing($80,000 BG purchase to Alicorn CapitalMgt)
Damages $357,014,558 Actual Direct & Proximately CausedDamages
† Alter Ego (Brennert/Hart, 2009)originally scheduled for Louisiana shoot anticipating 30% taxcredit rebate w/approx. net of 20% tax credit benefit.†† Both Alter Ego and Killing Frank (Holland, 2009) rescheduled for production in Texas.‡ Combines two financial processes. 1) MFI purchases an SBLC and collateralize a loan where thelender is only entitled to repayment from the profits of the project the loan is funding, not fromother assets of the borrower; 2) then the instruments are traded much like CMO (collateralizedmortgage obligations) are traded.
13. Consequential Compensatory Damages. Plaintiffs’ plead damages of Three-
million Dollars ($3,000,000) for consequential compensatory damages awarded by
virtue of the losses suffered by the Plaintiffs resulting from the Defendant's
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intentional and willful criminal and tortuous acts causing injury to the Plaintiffs’
physical health, infliction of extreme mental anguish, and harm to Plaintiffs’
professional reputations as to lower them in the estimation of the community,
deterring third persons from associating or dealing with them throughout the
industry, and additionally impugning their integrity and standing in society.
14. Exemplary Damages resulting from Defendants' malice and criminal acts
greatly harmed the Plaintiffs, producers, crews, talent, employment in the City San
Antonio and Texas communities, revenues to ancillary business, and City of San
Antonio, Texas tax revenues.
15. Pre/Post- Judgment Interest. Plaintiffs also seek pre- and post-judgment
interest on damages and taxable costs of court.
16. Attorneys' Fees are not applicable in this instance, but should not be deemed
waived as Plaintiffs anticipate attorneys' fees to be incurred following the summons
and complaint service of the balance of the RICO and Nominal Defendants at which
time Plaintiffs shall hand over the prosecution of this case to their Dallas law firm.
17. that Plaintiffs were harmed directly and proximately by the Defendant’s
RICO predicate crimes and violations, resulting in actual damages for which Plaintiff
are entitled to mandatory treble damages in the amount of not less than
3 × $220,000,000 plus other compensatory relief, attorneys fees and costs.
18. that Plaintiffs shall attach hereto their verified evidence in exhibit, affidavits
and in support thereof, and proposed order on Plaintiffs’ Prove up and motion for
entry of judgment;
19. that Mark A. Gelazela after accepting Wilde's offering of an opportunity to
engage in the operations and rewards of Wild’s organizations, Gelazela subscribed
Koster, Childs and Emre, the Milaca Gang, into the criminal fold;
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20. that at all time material to this case Koster, Childs, and Emre were engaged in
illegal activities internationally and within this District. Defendants operate,
promote, facilitate and sell financial instruments and services on their, and others'
Internet websites existing under their various Domain Names in direct
telemarketing and e-mail marketing activities acquiring prospect information
through intelligence gathering efforts in various industries that use the same or
similar financial instrument and services which are promoted and marketed by the
Defendants;
21. that Francis E. Wilde, by and through the Wilde Mob, engaged Bruce H.
Haglund, Atty at Law into the Association-in-Fact as the mob’s Money Man;
22. that Francis E. Wilde engaged the services of Haglund as escrow attorney for
a trust account; and that Woods and Gelazela were offered the opportunity to bring
clients into the program and arranged for Haglund's involvement;
23. that during or prior to the Fall of 2009, RICO Defendants Koster, Childs and
Emre operated through Koster's company, Alicorn Capital Management LLC, a
"Legal Entity" and RICO Enterprise, referred also as the "Alicorn Enterprise;" that
the association of Alicorn's principal, Scott Koster and non-principals,
non-employees Childs, Emre, and legal counsel, the Thomas P. Harlan, formed the
Association-in-Fact Enterprise, or otherwise the "Milaca Gang"; and that the group
used the legal entity Alicorn Enterprise as their operational vehicle for
confederating with the Wild Mob;
24. that the Syndicate for purpose of profiting from expanded participations in
the Syndicate's ongoing activities, extended and continued the fraud, predicate
crimes and overt criminal acts in furtherance of the conspiracy and racketeering
with newly engaged criminal organizations;
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25. that RICO Defendants, each having joint and several criminal and civil
liability, through their various legal enterprises, association-in-fact enterprises, and
by their direct individual and collective racketeering acts and conspiracy, did secure
$18,000,000,000 or more in negotiable securities (doc. 36 at 168), other cash assets
located in domestic and foreign banks, and have purchased assets with those funds,
e.g., a $90,000 Land Rover purchased by Francis Wilde (doc. 36 at 50) and $800,000
deposited in a bank account of his wife Maureen O’flanagan Wilde, &c.; further
26. that from both the pre-discovery investigations of the Plaintiffs’ and the
Securities and Exchange Commission (Washington D.C. and Los Angeles) it was
found that Woods, notwithstanding receiving and possessing other illicit monies
from his active involvement in conspiracies of the related RICO enterprises, received
from Wilde by wire through Haglund, $565,000 as a commission fee for the
solicitation and collection on the securities offering by the “Syndicate” related to the
same RICO acts involving the members of the Milaca Gang (doc. 80 at 222);
27. that the Plaintiffs’ pre-discovery investigation uncovered that RICO
Defendants used the Plaintiffs’ cash assets to acquire at least one of ten or more
financial instruments including bonds, of which one domestically acquired $3 billion
bond and a European $5 billion bond4 with total face value equal to or exceeding
eight-billion dollars ($8 billion USD). (doc. 36 at 42)
28. that a European $5 billion bond referenced (doc. 36 at 168) is directly
4 Bank of America and KFW Bank - Financial services Headquarters Frankfurt, Germany. KFW banking
group is a German government-owned development bank, based in Frankfurt. Its name originally comes fromKreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute. It was formed in 1948 after WorldWar II as part of the Marshall Plan. It is owned by the Federal Republic of Germany (80%) and the States ofGermany (20%). It is led by a five-member Managing Board headed by Ulrich Schröder, which in turn reportsto 37-member Supervisory Board chaired by Philipp Rösler, Federal Minister of Economy and Technology,since May 2011.
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associated with the Plaintiffs’ investment funds. The HSBC pre-advise transaction
code and the bank transmission confirmation was presented to the Plaintiffs as
proof and verification of the instrument that was acquired (doc. 1-4 at 21), in part,
from their funds in behalf of the Plaintiffs. Since the purchase the Five-Billion Dollar
instrument the Plaintiffs have located its tracking and note that the bond has
matured, and
29. that there were, or still are, at least nine MTN5 offshore instruments, that
were acquired. The various instruments are either European or Pacific Rim financial
instruments secured by the Syndicate using investors’ money, and never paying out
their earning or returns, just as Divens had done previously in stealing the Cobolt
CMO interest from Betts and Gambles. (doc 36 at 169);
30. that Plaintiffs’ calculations estimate that the face value sum of all
instruments for which they have become aware, includes another four to ten billion
dollars, totaling not less in value, than eighteen billion U.S. Dollars ($18,000,000,000
or €14,428,854,000);
31. that the RICO Defendants and Nominal Defendants collectively, by and
through, inter alios, various legal, criminal association-in-fact enterprises, criminal
enterprises, and unnamed RICO Co-conspirators including:
1. Alicorn Capital Management LLC, Berea Inc.,
2. BMW Majestic LLC,
5 Investopedia explains 'Medium Term Note - MTN'
“1. Notes range in maturity from one to 10 years. By knowing that a note is medium term, investorshave an idea of what its maturity will be when they compare its price to that of other fixed-income securities.All else being equal, the coupon rate on medium-term notes will be higher than those achieved on short-termnotes.
2. This type of debt program is used by a company so it can have constant cash flows coming in fromits debt issuance; it allows a company to tailor its debt issuance to meet its financing needs. Medium-termnotes allow a company to register with the SEC only once, instead of every time for differing maturities.”
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3. Bush Law Center LLC,
4. Colker-Childs-IGM,
5. Law Offices of Jon Divens & Assoc. LLC,
6. Matrix Holdings LLC,
7. Success Bullion LLC,
8. Wiseguy's Investments LLC, and
9. the Amenpenofer Syndicate (the aggregate international
association-in-fact enterprises of the Wilde Mob), the Milaca Gang, the Atlanta
Family, and the Contra Costa Family, as identified and fully described in
Plaintiff’s First Amended Complaint, transacted through, own, held, or
continued to hold their ill-gotten, tainted, or otherwise criminally acquired
cash assets and negotiable securities, in or through the following financial
institution/bank accounts from which, inter alia, the Plaintiffs may recover
damages from those institutions identified in Appendix A, hereto enclosed.
ACKNOWLEDGMENT
EXECUTED under penalty of perjury as pursuant to 28 U.S.C. § 1746 on
Wednesday, June 27, 2012.
s/
R. LANCE FLORES
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APPENDIX A
Account Holder, Signatory or
Beneficiary
Bank SWIFT or
Routing
Account Number Transaction
Code
SIN/CUSIP
Bruce Haglund Wells Fargo Bank 121000248 2301
Bruce Haglund Wells Fargo Bank 121000248 UZW1
Trask Corporation Limited or
Assigns
Deutsche Bank DEUTCNSHPBC 20711
Dale Briggs & Associates
IOLTA
Wells Fargo Bank WFBIUS6S 8259
Steven Woods Wachovia Bank
(LA, California)
Steven Woods Ozark Mountain Bank 81518375 5676
James Linder Bank of America 26009593 60191
Maureen Wilde Bank of America 26009593 8395
Falcon International Holdings Citizen's Bank 21313103 3194
MM5 LLC M&T Bank 52000113 6352
O'Melveny & Myers Citibank 21000089 0224
James Wan & Company OCBC Bank OCBCSGSG 1301
Hing Teik Choon / BMWT /
Falcon International
HSBC HSBCHKHHHKH 7-888
Baker McKenzie LLP Barclays Bank 26002574
Hing Teik Choon Unicredit Bank DEKRUA22
Lufti Abdulhaq Wakid Citibank International
Banking PLC
CITI059AUS N677
Hing Teik Choon JP Morgan Chase Bank CHASUS33 CUSIP:
Matrix/BMW/Hing Teik
Choon/New Eurasia Impex
Limited
KFW Bank ISIN:
Hing Teik Choon / New
Eurasia Impex Limited
Bank of America ISIN:
Altofin Bancorp Ltd Volksbank Hungary
Private Ltd
MAVOHUHB
0008
Altofin Bancorp Ltd Volksbank Hungary
Private Ltd
MAVOHUHB
0007
0
Deutsche Bank ISIN:
Deutsche Bank ISIN:
Deutsche Bank ISIN:
Deutsche Bank ISIN:
Deutsche Bank ISIN:
Deutsche Bank ISIN:
Deutsche Bank ISIN:
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Deutsche Bank ISIN:
Deutsche Bank ISIN:
CW Capital CUSIP:
JP Morgan Chase Bank CUSIP:
FannieMae CUSIP:
Francis Wilde or Assigns Falcon Bank (Switzerland) 114915803
Francis Wilde or Assigns Wegelin Bank
(Switzerland)
WEGECH2GXXX
Francis Wilde or Assigns Rosbank
(Moscow, Russia)
UNEICHGGXXX
Scott Anthony Koster TCF Bank 7813
Kerim S. Emre US Bank 7523
John Childs Citibank 1911
Winston J Cook Sun Trust 2100
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