Here's the complaint, lol:
Carson Messinger Elliott Laughlin & Ragan, P.L.L.C.
3300 North Central Avenue, 19th Floor
Phoenix, Arizona 85012
Telephone: (602) 264-2261
Michael P. Anthony, SBN 006658
Kevin R. Keating, SBN 012216
Attorneys for Plaintiff Connie L. Gillaspie
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
CONNIE L. GILLASPIE, a single
woman )
) NO. CIV 99-1733 PHX ROS
Plaintiff, )
) COMPLAINT
vs. )
) SANSEA LIMITED, L.LC., a Nevada corporation; )
( Jury Trial Demanded)
ROBERT PONIKVAR and
JANE DOE PONIKVAR, )
husband and wife;
J.D. SURBER and JANE
DOE SURBER, husband and wife;
LIFE FOUNDATION TRUST and
JEANETTE B. WILCHER, TRUSTEE; )
JEANETTE B. WILCHER, a single woman; )
RICHARD B. GONZALES and
JANE DOE GONZALES,
Husband and wife;
ROYALTY PRODUCTS, INC., a foreign corporation;
ABC CORPORATIONS,
I throughX;
XYZ PARTNERSHIPS,
I through X;
TRUSTS,
I through X;
JOHN DOES,
I through X;
JANE DOES,
I through X;
Defendants.
For her Complaint, Connie L. Gillaspie alleges as follows:
1. Plaintiff is a single woman and is domiciled in and is a resident of
the State of California.
2. The acts alleged to have taken place in this Complaint, either took place in the District of Arizona or were directed from or had an effect in the District of Arizona.
3. This action is of a civil nature involving, exclusive of interest and costs, a sum in excess of $75,000. Every issue of fact and law in this action is wholly between the citizens of different states. Therefore, this Court has jurisdiction under 28 U.S.C. õ1332. This Court also has jurisdiction by reason of 28 U.S.C.A. õ1331 because Plaintiff herein asserts claims under the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C.A. õ1961, et seq.
4. Plaintiff is informed and believes that Defendant Sansea Limited, Inc. ("Sansea") is a Nevada corporation with its principal place of business
ocated in Maricopa County, Arizona at 3800 North Central Avenue, Suite 590, Phoenix, Arizona 85012.
5. Defendant Robert Ponikvar is or was, at all times material hereto, the President of Sansea and resides and works in Maricopa County, Arizona. Jane
Doe Ponikvar is the fictitious name of Robert Ponikvar?s wife, if any. The acts
of Robert Ponikvar that are the subject of this Complaint were done for the benefit of the marital community of Robert and Jane Doe Ponikvar, if such a community exists.
6. Defendant J. D. Surber is or was, at all time material hereto, an employee and/or agent of Sansea and resides and works in Maricopa County, Arizona. Jane Doe Surber is the ficticious name of J.D. Surber?s wife, if any. The acts of
J.D. Surber that are the subject of this Complaint were done for the benefit of the marital community of J. D. Surber and Jane Doe Surber, if such a community exists.
7. Plaintiff is informed and believes that Defendant Life Foundation Trust is a Trust established and operated in the State of Arizona. The originator and trustee of the Life Foundation Trust is Jeanette B. Wilcher who is a single woman
who conducts business on her own behalf and as the Trustee of the Life Foundation Trust at 7345 East Acoma Drive, Suite 301, Scottsdale, Arizona 85260. Jeanette B. Wilcher is a resident of the State of Arizona who resides at 10758 E. Laurel Lane, Scottsdale, Arizona 85250. The acts of Jeanette B. Wilcher that are the subject of this Complaint were done on her own behalf and on behalf of the Life Foundation Trust.
8. Plaintiff is informed and believes that Defendant Richard B. Gonzales is a resident of Maricopa County, Arizona. Jane Doe Gonzales is the fictitious name of Richard B. Gonzales? wife, if any. The acts of Richard B. Gonzales that are the
subject of this Complaint were done for the benefit of the marital community of Richard B. Gonzales and Jane Doe Gonzales, if such a community exists.
9. Plaintiff is informed and believes that Royalty Products, Inc. is a foreign corporation, owned and controlled by Richard B. Gonzales.
10. Plaintiff is informed and believes that additional unknown persons and entities, ABC Corporations, I through X; XYZ Partnerships, I through X; Trusts I
through X; John Does, I through X; and Jane Does, I through X, have worked with the named defendants and assisted those defendants in carrying out the acts which are alleged throughout this Complaint.
11. On or about January 21, 1999, at the invitation of Sansea, through an introduction arranged by Richard B. Gonzales ("Gonzales"), Plaintiff and
Gonzales met with Defendants Robert Ponikvar ("Ponikvar") and J.D. Surber ("Surber") at the Sansea offices in Phoenix. The purpose of the meeting was for Ponikvar, Surber and Sansea to solicit Plaintiff to invest a large sum of money
with and through Sansea. Hereinafter this meeting will be referred to as "th
investment meeting."
12. On or about January 21, 1999, Defendants Ponikvar, Surber and Sansea promised orally and in writing that if Plaintiff would invest $3,300,000 with and through Sansea for one year, Plaintiff and her designees would be paid a return on the investment of 4% per week for 40 weeks per year and that Plaintiff?s investment with and through Sansea would be secured by "$3.3 million in cash or minimum of bank guaranties equating $3.3 million in cash." Under the terms of said agreement, Sansea and Gonzales were to be paid monies from Plaintiff?s investment, such payments hereinafter are referred to as "commissions."
13. On or about January 21, 1999, based upon the representations made by Defendants Ponikvar, Surber and Sansea, and in the presence of Gonzales, Plaintiff entered into the Profit Sharing Agreement with Sansea. The Profit Sharing Agreement was executed by Ponikvar for Sansea. A true and accurate copy of said Profit Sharing Agreement is attached hereto as "Exhibit A" and its terms and conditions are incorporated herein as if it were fully set forth herein.
14. On or about January 22, 1999, Plaintiff paid $3,300,000 by wire transfer to Sansea.
15. On or about January 22, 1999, without the knowledge of Plaintiff, Sansea, through Defendant Ponikvar, entered into another joint venture profit sharing
agreement (hereinafter "Investment Transfer Agreement") with Life Foundation Trust through Jeanette B. Wilcher ("Wilcher") as Trustee. A true and accurate copy of said Investment Transfer Agreement is attached hereto as "Exhibit B" and is incorporated herein as if fully set forth herein.
16. The Investment Transfer Agreement provided for Sansea to invest $3,300,000 with Life Foundation Trusts under terms that were substantially similar to the Profit Sharing Agreement signed the previous day by Plaintiff and Defendant Ponikvar for Sansea.
17. Plaintiff is informed and believes that the $3,300,000 that Sansea agreed to invest with Life Foundation Trust was the same $3,300,000 paid by Plaintiff to Sansea on or about January 22, 1999.
18. Plaintiff is informed and believes that, at all time relevant hereto, Defendants Sansea, Ponikvar, Surber, Life Foundation Trust and Wilcher and each of them planned and intended to transfer Plaintiff?s investment to Defendant Wilcher and/or the Life Foundation Trust.
19. Plaintiff is informed and believes that on or about January 22 or January 25, 1999, Sansea transferred $3,300,000 from its Las Vegas bank account to Life Foundation Trust?s New York bank account for investment with Life Foundation
Trust under the terms of the Investment Transfer Agreement. Attached hereto and made part of this Complaint is "Exhibit C," which contains Sansea?s letter to Life Foundation Trust, confirming the transfer, the facsimile confirmation notice from Sansea?s Las Vegas bank, confirming receipt and transfer of $3,300,000, and a facsimile debit information notice for $3,300,000 from Sansea?s Las Vegas bank.
20. On or about January 25, 1999, Sansea advised Plaintiff that her $3,300,000 had been transferred to a New York bank account but did not identify that
account as being an account belonging to Life Foundation Trust.
21. On or about January 26, 1999, Defendant Surber, on behalf of Sansea and Ponikvar, informed Plaintiff that Plaintiff?s $3,300,000 had been invested in a trading program in Europe as anticipated under the Profit Sharing Agreement, but Plaintiff is informed and believes that said statements were false, that Mr. Surber knew that such statements were false and misleading or negligently made such statements without knowledge whether they were true, and that said actions and representations were in violation of the fiduciary duties owed to Plaintiff by
defendants Sansea, Ponikvar and Surber.
22. On or about January 28, 1999, Defendants Sansea, Ponikvar and Surber sent a letter to Plaintiff purportedly acknowledging receipt of $3,300,000 into "our account . . . to effect this transaction." Said letter was false and deceptive in that it did not reveal that Plaintiff?s investment had already been transferred to Life Foundation Trust and was already being used for undisclosed and unauthorized purposes by Life Foundation Trust and/or Jeanette B. Wilcher.
23. Under the terms and conditions of the Profit Sharing Agreement and the Investment Transfer Agreement,Defendants Wilcher and Life Foundation Trust were to make payments to Sansea from profits derived from Plaintiff?s $3,300,000, and Defendants Sansea, Ponikvar and Surber were required to make regular payments to Plaintiff and her designees with each payment to amount to approximately four percent (4%) of the initial investment, with the principal investment to be repaid at the end of the investment period. Such four percent (4%) payments were to be made in forty (40) weekly payments during the twelve (12) month period following January 21, 1999.
24. Life Foundation Trust paid to Sansea and Sansea paid to Plaintiff $792,000 in February and March, 1999, purportedly from returns/profits on Plaintiff?s $3,300,000. During the same time period, Life Foundation Trust paid to Sansea and Sansea paid to itself and Richard B. Gonzales/Royalty Products, Inc. $309,375 and $623,125, respectively, in commissions purportedly from returns/profits on Plaintiff?s $3,300,000. At or about the same time, Defendant
Wilcher/"The Grace Trust" (Wilcher as trustee and beneficiary) repurchased
Wilcher?s Scottsdale residence for cash from the lender that had foreclosed upon
it, Defendant Life Foundation Trust purchased large amounts of the internet stock "Hitsgalore.com, Inc." and became the largest customer of Hitsgalore.com by
purchasing the website called "Local City Edition."
25. On numerous occasions from February, 1999 through April, 1999, Defendants Sansea, Ponikvar and Surber published to Plaintiff purported trading results under the Profit Sharing Agreement, listing payouts totaling over one million dollars to Plaintiff and her designees, but said payments were not made to Plaintiff, except the payments that were made to Plaintiff in February and March, 1999, totaling $792,000. The trading results published by Defendants Sansea, Ponikvar and Surber also showed further payments of commissions to Sansea and Richard B. Gonzales/Royalty Products, Inc.
26. The Profit Sharing Agreement provided that Sansea would return to Plaintiff on or before April 15, 1999, the amount of $1,000,000. Plaintiff and Defendants Sansea, Ponikvar and Surber had explicitly agreed that repayment of such amount on or before April 15, 1999 was vital so that Plaintiff could pay her capital gains tax liability on the $3,300,000 that she invested with Sansea.
27. Said promised payment of $1,000,000 by April 15, 1999 was not made
to Plaintiff by Defendants.
28. Plaintiff and her representatives have made repeated demands upon Defendants Sansea, Ponikvar, Surber, Life Foundation Trust and Wilcher to pay
the amounts called for in the Profit Sharing Agreement and Investment Transfer Agreement, but no further payments have been made since the February and March payments.
29. Plaintiff and her representatives have made repeated demands upon Defendants Sansea, Ponikvar, Suber, Life Foundation Trust and Wilcher to return Plaintiff?s $3,300,000 principal investment, but they have failed and refused to do so. Instead, all requests and demands have been referred to Wilcher, who has provided various, conflicting excuses why Plaintiff?s $3,300,000 cannot be returned; who has tendered various, worthless checks from her personal account
and from the account of Life Foundation Trust to partially repay Plaintiff; who has
repeatedly given unfulfilled promises of repayment "next week;"and who has offered virtually worthless stock security arrangements involving internet stock of Hitsgalore.com.
30. Plaintiff?s representatives has made demand upon Richard B. Gonzales and Sansea to repay the commissions they were paid unjustly from Plaintiff?s
$3,300,000, but they have failed and refused to do so.
COUNT ONE - BREACH OF CONTRACT
31. Plaintiff restates each of the allegations contained in paragraphs 1 through 30 of this Complaint as if fully set forth herein.
32. Plaintiff has performed all of the terms and conditions required of her under the Profit Sharing Agreement, namely the payment and investment of the $3,300,000.
33. Defendant Sansea has not performed in accordance with the Profit Sharing Agreement in that the required weekly payments of four percent (4%) for forty (40) weeks during the first year of the agreement were not paid to Plaintiff
and the $1,000,000 payment to be made on or before April 15, 1999 was not made and Plaintiff?s $3,300,000 was not and is not secured by cash or bank guarantees. Defendant Sansea? conduct constitutes breach and anticipatory breach of the Profit Sharing Agreement.
34. By reason of Defendant Sansea?s breach, Plaintiff has sustained damages in the sum of $7,788,000, representing the unpaid amounts and return of principal due to Plaintiff under the terms of the Profit Sharing Agreement.
35. As a direct and proximate result of Defendants? breach of contract, Plaintiff suffered incidental damages in an amount not yet ascertained, and Plaintiff will amend this Complaint when those damages have been ascertained.
36. In addition, Plaintiff is entitled to recover her reasonable attorneys? fees in this contract action pursuant to A.R.S. õ12-341.01.
37. In addition, Plaintiff is entitled to recover statutory interest on all unpaid amounts due to her under the Profit Sharing Agreement at the annual rate of 10% from the date each unpaid amount was to have been paid, until paid in full.
COUNT TWO - BREACH OF FIDUCIARY DUTY
38. Plaintiff restates each of the allegations contained in paragraphs 1 through 37 of this Complaint as if fully set forth herein.
39. At all times herein mentioned, Defendants Sansea, Ponikvar and Surber and each of them, were fiduciaries of Plaintiff in that such Defendants represented that they were expert investment counselors and advisors, that they had operated and directed various trading programs, that Plaintiff could rely upon their ability and expertise, and that Plaintiff?s $3,300,000 investment would be fully secured by cash or bank notes. Herself having no experience in the trading
program that said Defendants were soliciting Plaintiff to invest in and believing their promises that her investment would be fully secured, Plaintiff relied totally upon Defendants? representations and thereby reposed Plaintiff?s entire confidence and trust in Defendants Sansea, Ponikvar and Surber.
40. The Defendants, and each of them, in performing and failing to perform
the acts herein above alleged, breached the fiduciary duty owed by them to Plaintiff.
41. As a direct and proximate result of the breach of the fiduciary duty
owed by such Defendants to Plaintiff, Plaintiff suffered damages in an amount not
yet ascertained although Plaintiff estimates that her damages, under this count of this Complaint, through the date of this Complaint amount to at least $3,300,000, representing the principal investment that said Defendants have failed and refused to return and which they failed to secure with cash or bank guarantees, as they had promised.
42. The aforementioned actions were done by said Defendants with an intention to defraud Plaintiff and justify the award of exemplary and punitive damages in the amount of $5,000,000.
COUNT THREE - FRAUD
43. Plaintiff restates each of the allegations contained in paragraphs 1 through 42 of this Complaint as if fully set forth herein.
44. Defendants and each of them, knowingly, falsely and fraudulently represented to Plaintiff that Defendants together with other persons and entities
whose names are unknown to Plaintiff would take Plaintiff?s $3,300,000 and invest said money in a trading program and as a result of said investment in that trading program, Plaintiff would realize a return on her investment of approximately four percent (4%) per week for forty (40) weeks per
year. Defendants further represented that Plaintiff?s investment would be secured by an equivalent amount in cash or bank guaranties.
45. Although Defendants Wilcher and Life Foundation Trust did not make said false representations directly to Plaintiff, they made said representations to Sansea, Ponikvar and Surber, knowing that Sansea, Ponikvar and Surber would
relay said representations to Plaintiff and/or other similar investors.
46. Plaintiff, in a reasonable reliance upon Defendants? representations,
paid the agreed upon investment sum of $3,300,000 to Sansea on or about January 22, 1999.
47. Defendants with the intent and the purpose for defrauding Plaintiff, devised and carried out a scheme in which the invested amount would be secretly paid
to Life Foundation Trust and/or Jeanette B. Wilcher for conversion to her own use, for payments to others, or for investment in other entities unknown to Plaintiff and not in accordance with the Profit Sharing Agreement or the Investment Transfer Agreement.
48. Defendants have paid to Plaintiff the sum of $792,000 as purported partial investment yields in February and March, 1999 as part of the overall fraud
scheme in order to convince Plaintiff that the investment in the trading program had been made as promised when in fact no such investment was actually made. Defendants Wilcher and Life Foundation Trust have made further false representations about the status of Plaintiff?s investment in order to deceive Plaintiff and avoid, forestall or delay the filing of a lawsuit against Wilcher and Life Foundation Trust.
49. When Defendants made the various representations alleged above in this Complaint, they knew them to be false and these representations were made by
Defendants with the intent to defraud and deceive Plaintiff and with the intent to
induce Plaintiff to act in the manner herein alleged.
50. At the time the aforementioned representations were made by Defendants and at the time Plaintiff made some of the payments required in the Profit Sharing Agreement, Plaintiff was ignorant of the falsity of Defendants?
representations and believed them to be true. In reliance on those representations, Plaintiff made the investment payment as set forth above.
51. As a direct and proximate result of the conduct of Defendants as described above, Plaintiff has been damaged, under this count of the Complaint, in the sum of $3,300,000, the amount of Plaintiff?s original investment which was to be fully secured with cash and/or bank guarantees and which was to be returned to
Plaintiff in accordance with the terms of the Profit Sharing Agreement.
52. The aforementioned actions were done by Defendants with an intention to defraud Plaintiff and those actions justify the award of exemplary and punitive
damages in the amount of $5,000,000.
COUNT FOUR ? NEGLIGENT MISREPRESENTATION
53. Plaintiff restates each of the allegations contained in paragraphs 1 through 52 of this Complaint as if fully set forth herein.
54. Defendants Sansea, Ponikvar and Surber made the representations previously alleged without knowing whether said representations were true, despite the duties they owed to Plaintiff to act truthfully and as her fiduciary.
55. Said representations were untrue, in that Plaintiff?s investment was not fully secured with cash or bank guarantees, Plaintiff?s investment was never used as described in the Profit Sharing Agreement or the Investment Transfer Agreement, and Plaintiff was not paid the sums agreed upon as promised returns and return of principal.
56. Plaintiff reasonably relied upon said representations.
57. As a result of Defendants? negligent misrepresentations, Plaintiff has been damaged, under this count of the Complaint, in an amount of not less than $3,300,000.
COUNT FIVE - CONSUMER FRAUD
58. The allegations of paragraph 1 through 57 of the Complaint are realleged as though fully set forth.
59. Defendants? conduct constitutes a violation of Arizona?s Consumer Fraud Act, A.R.S. õõ44-1521 et seq.
60. Defendants? conduct as alleged herein is part of a pattern of such conduct by Defendants Wilcher and Life Foundation Trust. Said defendants have employed similar profit sharing agreements to induce others to invest large sums of
money with said Defendants.
61. As a result of said conduct by Defendants, plaintiff has been damages
in an amount no less than $3,300,000, plus associated out-of-pocket expenses.
62. Said Defendants acted wantonly, recklessly, deceptively and with an evil mind, placing their pecuniary interests above the interests, rights and
expectations of Plaintiff, thereby justifying an award of punitive damages of not less than $5,000,000.
COUNT SIX - CONVERSION
63. Plaintiff restates each of the allegations contained in paragraphs 1 through 62 of this Complaint as if fully set forth herein.
64. Plaintiff is informed and believes that Defendants Wilcher and Life Foundation Trust converted Plaintiff?s $3,300,000 or a portion thereof to their own use to pay for Wilcher?s house, to purchase stock in Hitsgalore.com and for other unauthorized purposes contrary to the fully secured trading program investment described in the Profit Sharing Agreement and the Investment Transfer Agreement.
65. Plaintiff is entitled to return of all such monies from Defendants and an order that Defendants forfeit to Plaintiff those items and property purchased with said moneys.
COUNT SEVEN - RICO (FEDERAL)
66. Plaintiff restates each of the allegations contained in paragraphs 1
through 65 of this Complaint as if fully set forth herein.
67. The acts alleged above in this Complaint involved the use by the Defendants of the U.S. mails and were conducted across state lines and involved the wiring of funds across state lines and, accordingly, those acts constituted mail fraud and wire fraud. Those acts were criminal acts chargeable under 18 U.S.C. õ1341 and 1343.
68. In 1997, Defendants Wilcher and Life Foundation Trust engaged in a fraudulent scheme and enterprise, similar to the scheme and enterprise alleged above, wherein said Defendants also employed a "Joint Venture/Profit Sharing Agreement" and promises and representations like those directed at Plaintiff. The object of the scheme and enterprise was to persuade Francisco Marasco, Sr. to invest $500,000 with Life Foundation Trust for use in a trading program like that described to Plaintiff. Mr. Marasco invested $500,000 with Wilcher/Life Foundation Trust. Mr. Marasco believes that Wilcher used his $500,000 to, among other things, make down payments on homes for Wilcher and her son and purchase a restaurant. These two separate schemes and enterprises constitute a pattern of racketeering activity as defined in 18 U.S.C. õ1961 et seq. The extent to which Defendants Sansea and Wilcher have employed their schemes and enterprises to seduce others to invest monies with them and the extent to which Defendants Sansea, Ponikvar and Surber may have knowingly participated in the conduct of Wilcher/Life Foundation Trust remains to be revealed in the course of discovery. Plaintiff reserves the right to seek court approval to amend her Complaint as necessary.
69. In accordance with 18 U.S.C. õ1964, by reason of the acts alleged above, Plaintiff is entitled to recover from Defendants Wilcher, Life Foundation Trust and all those acting in concert or participation with them and each of them, threefold the damages that she has sustained, together with her costs of suit including reasonable attorneys? fees.
70. Plaintiff has suffered injury as a result of the conduct of this racketeering enterprise which conduct constituted racketeering activity.
COUNT EIGHT - RICO (ARIZONA)
71. Plaintiff restates each of the allegations contained in paragraphs 1 through 70 of this Complaint as if fully set forth herein.
72. The conduct of Defendants Wilcher and Life Foundation Trust and all
those acting in concert or participation with them constitutes a violation of Arizona?s RICO statutes, A.R.S. õõ13-2301 et seq. The extent to which Defendants Sansea, Ponikvar and Surber may have knowingly participated in the conduct of Wilcher/Life Foundation Trust remains to be revealed in the course of discovery. Plaintiff reserves the right to seek court approval to amend her Complaint as necessary.
73. Plaintiff is entitled,
pursuant to A.R.S. õ13-2314, to treble her
damages resulting from Defendants? conduct,
plus award of reasonable attorneys? fees
incurred herein.
COUNT NINE - UNJUST ENRICHMENT
74. Plaintiff restates each of the allegations contained in paragraphs 1 through 73 of this Complaint as if fully set forth herein.
75. The commissions paid to Sansea and Richard B. Gonzales/Royalty Products, Inc. were paid unjustly. Neither provided services as contemplated. They have done nothing to earn such commissions. To the contrary, their actions have resulted in the infliction of dramatic economic and emotional damages upon Plaintiff.
76. Plaintiff is entitled to the return of the commissions paid to Sansea and Richard B. Gonzales/Royalty Products, Inc. To the extent that Sansea distributed said commissions to Defendants Ponikvar and/or Surber, Plaintiff is entitled to return of such distributions.
77. Plaintiff demands a trial by jury.
WHEREFORE, Plaintiff prays that the Court grant judgment in favor of Plaintiff against Defendants, and each of them, as
follows:
1. For contract damages against Defendants Sansea and Life Foundation Trust in the sum of not less than $7,788,000, together with interest at the statutory rate from the date each payment was due under the Profit Sharing Agreement and Investment Transfer Agreement;
2. For tort special damages of not less than $3,300,000;
3. For exemplary and punitive damages not less than $5,000,000;
4. For treble actual damages under 18 U.S.C. õ1964 (c) and A.R.S. õ13-2314;
5. For reasonable attorneys? fees expended on behalf of Plaintiff in this action;
6. For costs of suit; and
7. For such other and further relief as the Court may deem appropriate under the circumstances.
DATED this _____ day of October, 1999.
CARSON MESSINGER ELLIOTT
LAUGHLIN & RAGAN, P.L.L.C.
___________________________________
Michael P. Anthony
3300 North Central Avenue, 19th Floor
Phoenix, Arizona 85012
Attorneys for Plaintiff Connie L. Gillaspie
Trial by jury is demanded.
___________________________________
Michael P. Anthony
Attorney for Plaintiff Connie L. Gillaspi |
