"VLPI" The Perjury & Crimes of Ken Breen & Derrick Cleveland
by Anthony Elgindy
INSIDETRUTH ON VLPI/BREEN/CLEVELAND
Greetings to all,
The next stock and testimony involves a tiny "nothing" of a company called Virtual Living Products that attempted to exploit the hysteria and fear in the months immediately after 9/11 by claiming it had created a home "anthrax" test kit and that test would be sold through various Big-Name retail outlets, like Ace Hardware...
During the trial Kenneth Breen, my former prosecutor, elicted false testimony from Derrick Cleveland. Cleveland testified that he had given some info to former FBI agent Jeff Royer about VLPI and then Royer got back to him and told him that there was an SEC investigation into VLPI....
In addition, Cleveland testified that he traded based on this "illegally" obtained information from Royer, however the trading records show that he doesnt trade. He never trades VLPI after Royer did his so-called "search".
As you will see below, not only is that testimony FALSE, but it is also testimony that couldnt possibly have ever been true and Kenneth Breen should have known it all along.....
CLEVELAND / DIRECT on VLPI:
Q: Have you heard of a company called Vital Living products?
A: yes
Q: How did you refer to it ?
A: VLPI
Q: Was that the ticker symbol ?
A: Yes
Q: Was it an AP stock?
A: yes
Q: Do you remember how the site became interested in it?
A: The stock was making some rapid upper moves, moves upward and the site began to talk about the stock
Q: Was it a trading call on the site?
A: Yes
Q: Did you do any research regarding VLPI?
A: Yes
Q: What did you do?
A: Followed normal procedures of pulling the financials from the Edgar online site, getting whatever names together I could get and other information on the company to give to Mr. Royer so that he could do his normal checks for me
Q: Did you in fact give that information to Mr. Royer?
A: yes
Q: What did you ask him to do?
A: The gentleman behind the company that we were interested in, his last name was Proderbarac, I had him do a background check on Proderbarac, see if there was any past problems, if there was any current investigations and if there is anybody out there looking at VLPI the company itself.
Q: Did Mr. Royer provide you with information thereafter ?
A: Yes
Q: What did he tell you?
A: He told me that Proderbarac had had several past problems with the SEC but he didn't see anything with the FBI
Q: what did you do with that information?
A: I gave the information to Mr. Elgindy
Q: Did you give it to Mr. Elgindy close in time to when you received it yourself?
A: Yes
Q: Was there a time that you learned more information about VLPI from Mr. Royer?
A: Yes
Q: When approximately?
A: Just a few days after we had started taking a hard look at it. Mr. Royer informed me that the SEC had opened an investigation on VLPI, something about their test not being a certified test.
Q: What did you do with that information?
A: I gave it to Mr. Elgindy
Q: What did you tell Mr. Elgindy?
A: I told him specifically what Jeff had told me, that there was an open SEC investigation into VLPI and that again it had something to do with--the test wasnt certified or some official language
Q: Mr. Cleveland this is a chat log for Nov 28 would you please read the highlighted portion.
A: yes, At 13:30 Anthony states; VLPI SEC investigation, test was never certified and /or approved by anyone
Q: Is that the information that you recieved from Mr. Royer?
A: yes
Q: Is that the information that you then communicated to Mr. Elgindy?
A: Yes
Q: Please continue down the page
A: At 13:31 Anthony states: VLPI, SEC in Frisco is where we sent all our stuff on this turd. [FN: Insert the excerpt where the government mentions that I spoke with SEC personnel in their brief.....the point being that they questioned my claiming to have started the investigation into VLPI.....
**[NOTE: I dealt with SEC attorney Tom Ochs in the San Francisco office and he is the one who got the FBI back east involved.]
**[NOTE: The government makes a very big deal that I used to take credit for things that I had nothing to do with...and they cite my remarks about being responsible for the action in VLPI ... here is Cleveland's testimony that it was Royer who told him that I started the investigations (government claimed I took false credit).]
Q: Did you continue thereafter to get information on VLPI from Mr. Royer ?
A: yes
Q: What did he tell you next?
A: The next thing I remember him telling me was in a conversation he told me that the AP site, our private site was the ones responsible for the raids taking place and also that Proderebarac was going to face criminal indictments and was being looked at for fraud charges
Q: What did you do with that information
A: I gave it to Mr. Elgindy
Q: What did he do with it
A: he gave it to the site (TR 819)
The evidence regarding VLPI demonstrates that NO insider trading occurred. I first built a large short position in VLPI from October 15 to 18 because I researched, determined and then publicly declared my belief that VLPI was a scam.(GX 2582)
The site at that time was monitoring news that VLPI supposedly had invented a "home anthrax test kit". (This was just after the anthrax episodes and the nation was in a panic about anthrax being a potential tool of terrorists.) My site members were scrutinizing the company's financials as well as its scientific claims. The discussions noted how unfeasible the company's claim was, based on the lack of resources, scientific capabilities and development demands of such a product.(JX 237 at1-2; JX 239 at 5,8, 11; JX 237 at 12; JX 240 at 2-3)
Most relevant is Mr. Cleveland's testimony regarding Mr. Elgindy's discussion about VLPI with members on the night of October 17, 2001.
Cleveland / Cross Examination
Q: 14:07 what does Mr. Elgindy say?
A: VLPI has $ 400 bucks in cash
Q: In other words it has no assets, correct?
A: correct
Q: Moving on read the top what Mr. Elgindy says at 14:43
A: Yes, Anthony states VLPI anthrax test kit, mouse in cage, pass mail through bars, and take out other side, leave mail in stack, if mouse dies, its positive
Q: And continue reading sir 14:40 Mr. Elgindy
A: Folks, VLPI is a scam of massive proportion, It was 5 cents two weeks ago
Q: So on October 17th, Mr. Elgindy is calling VLPI a scam, correct?
A: correct
Q: And that's based on research and investigation done by the site, correct ?
A: correct
Q: And if we continue down, sir, to Mark Lehman, Mark L-E-H
A: yes, Mark Leh says, VLPI, this is the first time I have ever seen an item on the balance sheet of a publicly traded company labeled bank over-drafts
Q: And Mr. Elgindy responds to the bank overdrafts on a financial statements
by saying at 15:04
A: VLPI is a turd of massive proportion
Q: And you recall at this time the stock had moved up?
A: Yes
Q: Do you recall that VLPI had shot up a total of 2000% ?
A: yeah at least , yeah (TR 1186-1893) (GX 2578, DX 8829)
The discussion goes on late into the night of the 17th, at 11:46, site member "choban" a government contractor who works with bio-detection companies, informs the group that the companies he works with don't believe VLPI's claims.(TR 1890) I then learned that a large sample of anthrax in a lab setting is required. Choban offers, "only gullible consumers would buy VLPI crap" and "anyone talking about a solution now like VLPI are frauds." (TR 1892)
At 11:55 pm Mr. Elgindy states, "No way we will ever allow the public a test kit for anthrax, he then says, "That's it, it's llegal...Wooo hooo, I got them ". Mr. Cleveland continues reading at 23:56;
A: I'm sorry "moekas" says how do you know it's illegal ?
Q: What does Mr. Elgindy say ?
A: Anthony says Its illegal you cant sell test kits to the public
Q: And then at 23:57 what does Mr. Elgindy say?
A: I'm calling multiple Fed agents now, standing by and then he repeats it
Q: He says he's calling the government, correct ?
A: Yes
Q: Then at 54 past midnight what does Mr. Elgindy say?
A: Anthony says I suggest everyone call every SEC enforcement staff department at every office as soon as possible
Q: Mr. Elgindy is not joking right ? He's telling people call the SEC about this fraud correct ?
A: Yes(TR 1886-1893)
A few hours later, at the market open, On October 17th, 2001, Mr. Cleveland sells 2500 shares short of VLPI at 9:14 EST am. This is the first and only short sale in VLPI Cleveland ever makes. (Trading records) Nevertheless, when Mr. Cleveland is asked about his trading, he once again gives testimony that can't possibly be true and testimony that the government should of known was false.
Q: Did you trade in VLPI stock?
A: Yes
Q: Was your trading based on law enforcement information?
A: yes
Q: On whose behalf did you trade?
A: Jeff and I
Q: Do you know whether you made or lost money ?
A: I think we did all right on that one, I think we made a little bit of money
(TR 820) According to the government's own documentation. Mr. Royer did not search for anything related to VLPI (Specifically, it's CEO, Donald Proderabarac until the evening of October 18, 2001, long after Cleveland shorts VLPI (GX-JL-1), and after Mr. Elgindy declares it a scam and reports it to both the FBI and SEC. Moreover, the searches querying Proderbarac and VLPI revealed "no record" of any information.(GXC 3400 at 1-3; GX-HS-1 at A1746)
The Supreme Court has consistently held that a conviction obtained by the knowing use of perjured testimony is fundamentally unfair, and must be set aside if there is any reasonable likelihood that the false testimony could have affected the judgment of the jury. (US v Agurs, 427 US 97,96 S.Ct 2392)
Finally, approximately one month later, on Nov 27, 2001, VLPI announces "big news" that it's Anthrax test kit had been "certified by an independent laboratory. (DX 3299) The news is quickly copied and pasted in the chatroom by site members and the news causes a surge in volume and price. Various members, including Mr. Elgindy responded by shorting the stock (JX 265 at 1-3).
The very next day, on Nov 28, 2001 a Bloomberg news story hits the wires reporting that the SEC had issued a subpoena oncerning VLPI's purported certification and the Lab's denial of VLPI's claims from the day before. (DX 3299) The site members took notice of the report (JX 266) and shortly thereafter on that very same day took another short position in VLPI (GX 2582)
Moreover, the only VLPI query ran during that timeframe did not occur until Dec 4, 2001, a full week later.(GXC 3400 at 11) And Gordimer never ran a query in the SEC database (GX-JL-1 at 20-21)
In the government's brief they describe what happened this way; (Government Brief pg 108),
" Clevleland asked Royer to look at VLPI. Royer ran searches on VLPI's CEO on OCTOBER 18, 2001. A FEW DAYS LATER (emphasis added or underline the stuff in CAPS) Royer told Cleveland that the SEC had opened an investigation into VLPI based on questions about their supposed anthrax detection system."
But that isn't exactly what Cleveland said, his testimony was far more specific, he said;
A: Just a few days after we had started taking a hard look at it Mr. Royer informed me that the SEC had opened an investigation on VLPI that had something to do with something about their test NOT being a CERTIFIED TEST.(emphasis added)(TR 816)
He was then immediately shown the chat from Nov 28th, 2001 and asked to read it into the record.
Q: Mr. Cleveland, this is the chat from Nov 28th, 2001. Would you please read the highlighted portion
A: Yes at 13:30 Anthony states; VLPI SEC investigation, TEST WAS NEVER CERTIFIED and/or approved by anyone
Q: Is that the information that you received from Mr. Royer ?
A: yes
Once again the evidence proves that Mr. Cleveland's testimony that Agent Royer told him about an SEC investigation into VLPI"s "CERTIFICATION CLAIMS" which allegedly took place A FEW DAYS AFTER (emphasis added) Mr. Royer's search on Mr. Proderbarac, can't possibly be true, since the company doesn't make the public announcement that their Anthrax test kit has been CERTIFIED for another 5 weeks. The chat on the 27th about the CERTIFICATION came from the company's press release and the chat on the 28th, about an SEC investigation into this supposed certification came from a Bloomberg news story, and none of it could have possibly come from Cleveland or Mr. Royer, nor could it have ever been "non-public" information that "informed" anyone's trading.
The evidence above on Direct and Cross proves that Cleveland lied and it proves that Breen knew he was lying. There is no way possible that Breen didnt know that Cleveland's one and only short sale occurred only AFTER I called VLPI a scam and BEFORE Royer ever does any kind of search, and it is implausible that he didnt know the testimony about the SEC's investigation into VLPI's "certification" claims was completely fictitious. Breen had unlimited access to all the trading records and all the witnesses, yet he still put this testimony before the court and the jury.......... Breen broke the law and there is no greater proof of a prejudiced jury and judge than the inclusion and acceptance, by the court, of VLPI in this case.....
All of the govt's evidence & All of Cleveland's testimony in VLPI cannot possibly be true...... |
