Re: 3/14/01 - [AZNT] Amazon's Answer to the SEC Complaint
By: ANTDC_AMAZON $$$
Reply To: None Friday, 16 Mar 2001 at 9:54 PM EST
Post # of 100378
AMAZON'S ANSWER TO THE SEC
Thomas R. Port (Calif Bar # 051349)
Law Offices
931 Hartz Way, Suite 200
Danville, CA 94526
Telephone No.: (925) 855-1910
Facsimile: (925) 838-8696
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA,
_______________________________
Securities and Exchange Commission,
Plaintiff
v. CV-S-01-0229-RLH-RJJ
Amazon Natural Treasures, Inc.
Michael A. Sylver, and Domingos
Lorrichio, Jr.,
Defendants
_______________________________/
ANSWER TO COMPLAINT
NOW COME defendants Amazon Natural Treasures.Com, Inc., sued erroneously herein as Amazon Natural Treasures, Inc., (hereafter, "Amazon"), and Michael A. Sylver, (hereafter, "Sylver"), through counsel, and, for themselves, alone, hereby answer plaintiff's complaint as follows:
Unless otherwise expressly admitted, all allegations in the complaint are denied.
1. These answering defendants are unable to respond to plaintiff's allegation as to what the complaint herein "concerns" and on that basis this paragraph is denied.
2. Admitted that Amazon sells "dietary supplements derived from plants grown in the Amazon rain forest in Brazil", but it also sells other products from the area including gem stones. It is further admitted that Amazon has not yet filed with the Commission its Form 10-KSB for the year ended December 31, 1999, although it has filed its Notice of Late Filings as required. The remaining allegations of this paragraph are denied.
3. To the extent this paragraph merely alleges statutory grounds for the suit it is admitted. Any and all other allegations of this paragraph are denied.
4. To the extent this paragraph merely alleges statutory grounds for the remedies sought in this suit it is admitted. Any and all other allegations of this paragraph are denied.
5. To the extent this paragraph merely alleges statutory grounds for the remedies sought in this suit it is admitted. Any and all other allegations of this paragraph are denied.
6. To the extent this paragraph merely alleges statutory grounds for the remedies sought in this suit it is admitted. Any and all other allegations of this paragraph are denied.
7. To the extent this paragraph merely alleges statutory grounds for jurisdiction it is admitted. Any and all other allegations of this paragraph are denied.
8. To the extent this paragraph merely alleges statutory grounds for venue in this Court it is admitted. Any and all other allegations of this paragraph are denied.
9. Admitted
10. Admitted with the caveat that the corporation is presently named Amazon Natural Treasures.Com, Inc.
11. Admitted that Michael A. Sylver is the President, Chief Executive Officer, Treasurer and a Director of Amazon and admitted the 1998 Form 10-KSB says what it says. The remaining allegations are denied.
12. Domingos Lorrichio, Jr., held the titles at various times the title of Vice-President, Secretary, and was a Director of Amazon, but was not a paid employee. His company, Loripar, was a consultant to Amazon.
13. Denied.
14. Denied.
15. Denied. Upon information and belief, to the extent any customers listed on invoices as purchasers of gems actually received stock in addition to the gems, such stock issuance was not known of, nor was it duly authorized by, either Amazon or Sylver. Upon information and belief, one Chalres Krisfaluci, who was never an officer, director employee, nor consultant for Amazon used Amazon letterhead to direct the transfer agent to issue stock to various of his acquaintances. When this practice was discovered an 8-K was filed to correct the record.
16. Denied.
17. Denied. The cash payments referenced were in fact payments to employees of the company for which signed receipts and appropriate payrolls records were maintained.
18. Admitted that the 1996, 1997, and 1998 forms 10-KSB's reported no stock given to Sylver by Amazon. All other allegations of this paragraph are denied.
19. Admitted that Amazon Natural Treasures, Inc, as a private corporation, agreed it would issue two million shares of Amazon common stock to Titan, Inc. after Amazon went public in return for Titan's raising capital to acquire the "shell" company. All other allegations of this paragraph are denied.
20. Denied.
21. Denied. Upon information and belief, to the extent such press releases were issued they are solely attributable to Charles Krisfaluci and were the initial "pump" phase of the "pump and dump scheme". Charles Krisfaluci was the individual that originally persuaded Sylver and then Chairman of the Board, Domingos Lorrichio, Sr., to take Amazon public, and who was responsible for recruiting into Amazon an individual named Joseph Andy Mann, a recently convicted felon, who is currently a fugitive. Neither Amazon nor Sylver had any knowledge of the "press releases" referred to until long after they occurred. Neither of these individuals has any connection with Amazon at this time.
22. Denied. Upon information and belief, to the extent such press releases were issued they are solely attributable to Charles Krisfaluci and were the initial "pump" phase of the "pump and dump scheme". Charles Krisfaluci was the individual that originally persuaded Sylver and then Chairman of the Board, Domingos Lorrichio, Sr., to take Amazon public and who was responsible for recruiting into Amazon an individual named Joseph Andy Mann, a recently convicted felon, who is currently a fugitive. Neither Amazon nor Sylver had any knowledge of the "press releases" referred to until long after they occurred. Neither of these individuals has any connection with Amazon at this time. The 10-QSB's referenced in this paragraph of the complaint are mis-quoted, but Amazon's goal throughout was to solicit at least 1000 stores to sell its products, and, in fact, today Amazon markets its products through some one thousand five-hundred stores.
23. Denied.
24. Denied. As alleged previously, Amazon was thwarted in large part by the illegal shorting scheme. The decline in share price from $3.50 per share to $0.06 prevented the private placement from going forward and left Amazon strapped for funds. Meanwhile, the "dump" phase of the scheme was in full force destroying Amazon's relations with its best potential customers.
25. Denied.
26. Denied.
27. Denied
28. Denied.
29. Denied.
30. Denied.
31. Denied
32. Denied.
33. Defendants lack information and belief sufficient to enable them to respond to this paragraph and on that basis it is denied.
34. Admitted that there have been errors in accounting which errors have been acknowledged in Amazon's 8-K filings. The remaining allegations of this paragraph are denied.
35. The term "documented" is argumentative, and on that basis this paragraph is denied.
36. Denied.
37. Denied.
38. Admitted that Amazon's private placement offering memorandum offered five million shares of restricted common for $1.00 pre share on a "best efforts" basis, beginning on November 1, 1997 and closing December 31, 1998, and that the offering memorandum stated that the stock was exempt from registration pursuant to section 4(2) of the Securities Act and/or Rule 506 of Regulation D. The remaining allegations of this paragraph are denied.
39. Denied.
40. Admitted that Robert Quiel contolled Titan, Inc. Robert Quiel was a stock broker and also was a consultant to Amazon. The remaining allegations of this paragraph are denied.
FIRST CLAIM
41. Defendants incorporate by reference their responses to paragraphs one through 41, inclusive, as though re-stated herein in full.
42. Denied.
43. Denied.
SECOND CLAIM
44. Defendants incorporate by reference their responses to paragraphs one through 40, inclusive, as though re-stated herein in full.
45. Denied.
46. Denied.
47. Denied.
48. Denied.
THIRD CLAIM
49. Defendants incorporate by reference their responses to paragraphs one through 40, inclusive, as though re-stated herein in full.
50. Denied.
51. Denied
52. Denied.
53. Denied.
54. Denied.
55. Denied.
FOURTH CLAIM
56. Defendants incorporate by reference their responses to paragraphs one through 40, inclusive, as though re-stated herein in full.
57. Denied.
58. Denied.
FIFTH CLAIM
59. Defendants incorporate by reference their responses to paragraphs one through 40, inclusive, as though re-stated herein in full.
60. Denied.
61. Denied
62. Denied.
AFFIRMATIVE DEFENSES
FIRST AFFIRMATIVE DEFENSE
Injunctive relief should be denied on grounds there is no reason to believe any of the alleged violations of securities laws will continue to occur. The allegations of the complaint relate to a time in the past when the defendants were being victimized by a sophisticated international criminal conspiracy. As previously alleged herein, defendants were targeted for a "pump and dump" scheme by a professional stock fraud ring. As part of the conspirator's efforts to destroy the company and render its shares worthless, the defendants were shot at, they and their attorney's lives were continually threatened, and their most promising customers were driven off by slander on the internet and from "boiler room" phone calling operations.
All this occurred after Amazon's stock value was driven down from $3.50 per share to $0.12 per share overnight by the selling from Canada of more than 12 million shares that never existed.
The evidence will show that these criminal conspirators were able to get an operative and/or operatives inside the company to damage and in some cases to destroy and/or falsify critical documents, many of which have apparently been relied upon by the plaintiff's to support the allegations of this complaint.
By this time the conspiracy has been thoroughly exposed and the individuals involved, many of whom are either under indictment or are fugitives from justice, are no longer able to damage the company. The individuals at Amazon that, on information and belief, were in league with the conspirators, are no longer associated with the company in any way. Also, once the market makers of the shorted stock have had to "buy in" the fictitious shares, there will no longer be any incentive for anyone to try to put Amazon out of business. Amazon will at last be free to conduct its business without interference and will have the funds necessary to do so. Thus, there is no reason for believing any of the alleged violations, even if proven, would likely occur again.
SECOND AFFIRMATIVE DEFENSE
While there is always a duty to comply strictly with the applicable securities laws and regulations, the evidence will show that Sylver and Amazon have acted in good faith throughout this ordeal even while placed under severe duress. There is simply no reason to believe that after the short interest is finally driven out, and they are at last allowed to go forward with running their business, that there will be any further problems.
THIRD AFFIRMATIVE DEFENSE
If this court were to restrain Sylver from leading Amazon after he has successfully resisted all efforts of the conspirators to destroy the company it would not only be damaging to the shareholders whose investment he has so far protected, but would award to those who shorted the stock the victory that have so far been unable to achieve - and that would only serve to encourage similar criminal conspiracies in the future.
Thus, not only would it be an injustice under recognized principles of Equity to restrain or sanction either Amazon or Sylver at this time, it would actually work against the interest of the investing public.
PRAYER
Wherefore, these answering defendants respectfully request that the Court,
As to Amazon Natural Treasures.Com:
1. Find that there are no grounds for any Rule 65(d) injunction against defendant and enter judgment in favor of said defendant on each of plaintiff's claims.
2. For costs of suit and for such other and further relief as the court may deem proper.
As to Defendant Michael A. Sylver:
1. Find that there is no evidence to support any of the alleged violations as to defendant Sylver.
2. Find that there is no basis for the injunctive relief sought by plaintiff.
3. For such other and further relief as the court may deem proper.
Dated: March 14, 2001 Respectfully submitted,
________________________
Thomas R. Port, Attorney for
Amazon Natural Treasure.com and Michael A. Sylver.
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