TONIGHTS CRIMM FAIRY TALE: PATTIWAGON HAYTON DIGS A HOLE TO CHINA (A 10 PART SERIES OF HARTCOURT BEDTIME STORIES)
ONCE UPON A TIME ON WALL STREET THERE WAS A SWINDLER AND SECURITIES RECIDIVIST WHO WAS KNOWN BY THE NAME OF PATTINSON (PATTIWAGON) HAYTON. sec.gov PATTI WAS A CLEVER CROOK AND THROUGH HIS INVESTMENT BANKER FIRST CAPITAL NETWORK DEVISED A SCHEME THROUGH NOMINEE ACCOUNTS TO CONTROL THE STOCK OF HARTCOURT PEN WHICH IS NOW KNOWN AS THE HARTCOURT COMPANIES. FIRST CAPITAL NETWORK WHERE A BUNCH OF NO-GOODERS SUCH AS CRIMINAL AND CONMAN REGIS POSSINO google.com WHO ALSO WAS A DISBARRED ATTORNEY, AND REMON D'ONOFRIO WHO WAS ANOTHER CAREER STOCK SECURITIES RECIDIVIST SWINDLER. THIS CREW OF STOCK RIGGERS WHERE WELL REPRESENTED BY ANOTHER WELL KNOW STOCK CROOK, DISBARRED ATTORNEY KEVIN JAMES QUINN sec.gov
THE FRONT MAN OF THIS WELL GROOMED STOCK RIGGIN CREW WAS ALAN PHAN WHO ALONG THE WAY PURCHASED HIS PHD FROM A WELL KNOWN DIPLOMA MILL. THIS WELL VERSED GROUP OF PROFESSIONALS PUT OUT PRESS RELEASE AFTER PRESS. DEALS WITH IBM, MICROSOFT, ALASKAN GOLD MINES, PURCHASES OF LARGEST ISP IN CHINA WHICH INVOLVED CAREER SWINDLER ALAN WOLFSON FROM CYBERAMERICA BUT THE DEAL NEVER WENT THROUGH. GO FIGURE!! SOON THE STOCK STARTED TO MOVE ONE DAY TO ASTOUNDING HIGHTS BECAUSE THE RIGGER USED CHINA WHICH WAS FAR AWAY FROM REGULATORS SIGHTS. THEN ONE DAY THERE WAS A FALLING OUT AMONGST THE THEIVES hartcourt.com
AND THE STOCK COLLAPSED AND COLLAPSED AND COLLAPSED ALL THE WAY TO A NICKEL. TO FIND OUT THE REASON IT WAS NOT HARD TO FIND JUST SEARCH THE WORD "fraud" IN WORLDCALL'S SEC FILINGS AND THIS IS WHAT YOU'LL FIND BUT FROM THIS RECENT COURT CASE THE SEC MAY FINALLY BE UP PHAN'S BEHIND.
Alan Phan v. US Securities and Exchange Commission Motion for order pursuant to customer challenge provisions of the right to Financial Privacy Act of 1978. John Furutani 9/18 CV00-10023 JSL
courthousenews.com
THE END
8-K for WORLDCALL CORP filed on 1/15/99 4:33:00 PM
f.100,000 shares (or 600,000 pre-split) on February 18, 1997 to The Hartcourt Companies, another company owned and controlled by Mr. Hayton;
e.50,000 shares (or 300,000 pre-split) on February 18, 1997 to Pacific Rim Capital, a controlled by Mr. Hayton;
THE HAYTON GROUP DEFRAUDS NEVADA ENERGY
22. The Hayton Group's scheme to defraud Nevada Energy through
its pattern of racketeering activity was as follows: Golden Chance, one of the
members of the Group, would purport to make the payments due under the
Subscription Agreement and the Note (as described below in Paragraphs 23-25),
thus entitling it to receive substantial amounts of Nevada Energy's Class A
Common Stock. After receiving the stock, Golden Chance
13would sell that stock on the open market, reaping the proceeds for the Group.
However, the scheme contemplated that almost all of the money Golden Chance paid
to Nevada Energy would not be used for proper corporate purposes, instead being
improperly taken from the Company by members of the Hayton Group, principally
Jones, McCloy, Peterson and Mortlake. The net result of this scheme was that the
Hayton Group would actually pay very little money to Nevada Energy, yet be able
to keep the considerable proceeds it obtained from selling the Class A Common
Stock. Because this scheme necessarily would involve the repeated use both of
the United States mails (or private interstate or international carriers) and
interstate and international wire communications, it was reasonably foreseeable
to each defendant that the Hayton Group's scheme to defraud Nevada Energy would
be conducted through a pattern of racketeering activity including violations of
the mail fraud statute, 18 U.S.C. Sec.1341 and wire fraud statute, 18 U.S.C.
Sec.1343.a. As part of the Hayton Group's scheme to defraud Nevada
Energy, between May and August, 1996, Mr. McCloy, on behalf of Golden Chance,
transferred a total of $1,242,381.40 from accounts controlled by Mr. McCloy's
law firm, Jones, McCloy, Peterson, to the Palm Desert Bank Account, allegedly
pursuant to the Subscription Agreement and Note. As a result of these
"payments," on or before July 22, 1996, Mr. McCloy (who was in Canada) directed
Nevada Energy's board of directors (who were in Australia and the Isle of Man),
by facsimile, to authorize the issuance of 1,242,381 shares of restricted Class
A Common Stock to Golden Chance. On July 22, 1996, the board did so, apparently
meeting via a telephone conference call, and the shares were issued on July 24,
1996. Thereafter,
14Golden Chance, pursuant to the Hayton Group's scheme, sold this stock, with the
proceeds benefitting the Hayton Group.
23. The $1,242,381.40 allegedly used to purchase this stock
was deposited in the Palm Desert Bank Account from the following sources:a. $10,000 from Maynard M. Britlan on May 17, 1996. Nevada
Energy believes that Mr. Britlan was at the time an associate of Mr. Hayton's.
b. $118,495 from Jones, McCloy, Peterson on May 24, 1996.
c. $528,302.50 from Jones, McCloy, Peterson on May 30, 1996.
d. $123,412.50 from Jones, McCloy, Peterson on June 3, 1996.
e. $108,620 from Jones, McCloy, Peterson on June 6, 1996.
f. $113,557.50 from Jones, McCloy, Peterson on June 17, 1996.
g. $49,394.76 from Jones, McCloy, Peterson on June 27, 1996
h. $88,870 from Jones, McCloy, Peterson on July 2, 1996.
i. $81,453.75 from Jones, McCloy, Peterson on July 12, 1996.j. $20,275.39 from Jones, McCloy, Peterson on July 15, 1996.24. Based on sworn statements by Mr. McCloy, all of this
money was sent by wire transfer from Jones, McCloy, Peterson's account at the
Canadian Imperial Bank of Commerce, Commerce Place, Vancouver, British Columbia,
Canada to the Palm Desert Bank Account.25. Almost all of the money deposited in the Palm Desert Bank
Account was immediately withdrawn from that account (frequently the same day
that it was 15deposited), at either Mr. Hayton's or Mr. McCloy's direction (using either the
telephone or the mail). Specifically, at least the following money, totaling
over one million dollars, was diverted improperly from the Palm Desert Bank
Account in the following manner:a. May 2, 1996--$50,000 to Jones, McCloy,
Peterson; check number 81;b. May 2, 1996--$10,000 to Jones, McCloy,
Peterson; check number 82;c. May 10, 1996--$2,000 to Mortlake; check
number 1006;d. May 17, 1996--$3,000 to Mortlake; check
number 1014;e. May 21, 1996--$1,500 to Mortlake; check
number 1016;f. May 24, 1996--$103,000 to Mortlake; check
number 1021;g. May 30, 1996--$250,000 to Jones, McCloy,
Peterson; check number 1041;h. May 30, 1996--$177,000 to Mortlake; check
number 1043;i. June 3, 1996--$5000 to Kevin Quinn; check
number 1050;j. June 3, 1996--$50,000 to George O.
Rebensdorf; check number 1051. Nevada Energy
believes that Mr. Rebensdorf is an associate
of Mr. Hayton;k. June 3, 1996--$10,000 to cash, which
plaintiff believes was taken by Mr. Hayton;
check number 1052;16l. June 6, 1996--$45,000 to Dean Chamberlain,
to pay a debt of Telecom (AE) Limited and/or
Wina Associates, companies controlled by Mr.
Hayton; check number 1053;m. June 6, 1996--$50,000 to cash, which
plaintiff believes was taken by Mr. Hayton;
check number 1055;n. June 17, 1996--$60,000 to Jones, McCloy,
Peterson by wire transfer;o. June 21, 1996--$25,000 to Pillsbury, Madison
& Sutro to pay an existing debt owed either
by Mr. Hayton personally or by one of his
companies; check number 1068;p. June 25, 1996--$15,000 to Jones, McCloy,
Peterson by wire transfer;q. June 26, 1996--$10,000 to Mortlake; check
number 1070;r. July 1, 1996--$10,000 to Mortlake; check
number 1074;s. July 2, 1996--$10,000 to Mortlake; check
number 1077;t. July 3, 1996--$75,000 to Jones, McCloy,
Peterson by wire transfer;u. July 3, 1996--$10,000 to Mortlake; check
number 1081;v. July 12, 1996--$40,000 to Mortlake; check
number 1084;w. July 16, 1996--$10,000 to Mortlake; check
number 1087.1726. None of this money withdrawn from the Palm Desert Bank
Account was used for proper Nevada Energy purposes but was instead paid,
directly or indirectly, to the Hayton Group.27. In furtherance of the Hayton Group's scheme to defraud
Nevada Energy, all of the checks set forth in Paragraph 26 a-w were mailed from
Palm Desert California, by the United States mail, the same day as or shortly
after they were dated, to the payees in the United States and Canada. The wire
transfers were sent from the Palm Desert Bank Account to Jones, McCloy,
Peterson's account in Canada on the dates set forth above.28. This money was obtained from Nevada Energy as part of and
in furtherance of a scheme and artifice to defraud in violation of the mail
fraud statute, 18 U.S.C. Sec.1341 and the wire fraud statute, 18 U.S.C.
Sec.1343.29. The Hayton Group's scheme to defraud Nevada Energy was not
yet completed, however, on October 31, 1996, the board of directors of Nevada
Energy (then consisting of Messrs. Cain and Cannell and Stefan Tevis, who had
replaced Mr. Goold), at the direction of Mr. Hayton and Mr. McCloy (using either
or both the telephone and the mail), voted to amend the Subscription Agreement
to allow Golden Chance to receive immediately the remaining Class A Common Stock
it would have been entitled to receive had it paid the remaining amounts due
under the Note in cash. Through this amendment, however, Golden Chance was
required to pay none of that amount in cash, instead being permitted only to
sign a demand note. However, the Hayton Group (pursuant to its scheme) prevented
such a note from being signed, and Nevada Energy received no further money from
18Golden Chance. Nevertheless, pursuant to the Hayton Group's scheme, Golden
Chance received the following unrestricted Class A Common Stock:a. 1,061,729 shares on October 1, 1996b. 2,543,734 shares on November 6, 1996.30. This stock was sent by mail to Mr. McCloy who, pursuant to
the Hayton Group's scheme, thereafter directed that it be sold to third-party
investors at a substantial profit for the Hayton Group. In furtherance of the
Hayton Group's scheme, Mr. Hayton and Mr. McCloy refused to permit Nevada Energy
to sue Golden Chance for failing to pay for this stock.31. In addition, following a 1-for-6 reverse split of the
shares of Nevada Energy's Class A Common Stock that apparently occurred
effective January 30, 1997, Mr. Hayton and Mr. McCloy, acting pursuant to the
Hayton Group's scheme, instructed the Nevada Energy board to issue the following
post-split shares to the following persons or entities:a. 220,000 shares (or 1,320,000 pre-split) on
February 3, 1997 to Jones McCloy Peterson to
pay for attorneys' fees incurred by Golden
Chance;b. 100,000 shares (or 600,000 pre-split) on
February 3, 1997 to the law firm of
Wilson, Elser, Moskowitz, Edelman &
Dicker for legal work done of behalf of
either Mr. Hayton or a company controlled
by Mr. Hayton;19c. 300,000 shares (or 1,800,000 pre-split) on
February 3, 1997 to Mortlake;d. 300,000 shares (or 1,800,000 pre-split) on
February 11, 1997 to Pacific International
Securities for the benefit of Golden Chance;e. 50,000 shares (or 300,000 pre-split) on
February 18, 1997 to Pacific Rim Capital, a
company owned and controlled by Mr. Hayton;
f. 100,000 shares (or 600,000 pre-split) on
February 18, 1997 to The Hartcourt
Companies, another company owned and
controlled by Mr. Hayton;
32. Nevada Energy received no consideration for the issuance
of any of this stock.33. This stock was obtained from Nevada Energy as part of and
in furtherance of a scheme and artifice to defraud in violation of the mail
fraud statute, 18 U.S.C. Sec.1341, and the wire fraud statute, 18 U.S.C.
Sec.1343.H. THE HAYTON GROUP LOSES CONTROL OF NEVADA ENERGY
34. On or about August 11, 1996, John Goold resigned as a
director of Nevada Energy, as he was concerned (quite properly) that the
instructions he was receiving by telephone or facsimile from Mr. McCloy (on
behalf of the Hayton Group) were improper. 20Mr. Goold was replaced by Stefan Tevis, whom the Hayton Group believed
(ultimately incorrectly) would do as Mr. Hayton and Mr. McCloy directed.35. On or about August 28, 1996, Golden Chance failed to make
its scheduled payment of $500,000 under the Note. Because the board of directors
of Nevada Energy was under the control of the Hayton Group, they failed to
demand that Golden Chance make this required payment. Instead, on September 13,
1996, the then-President of Nevada Energy, Jeffrey E. Antisdel (who was
unaffiliated with the Hayton Group), wrote a letter to Golden Chance informing
it that notice of Default (as defined in the Note) was being given and demanding
the entire remaining balance as immediately due and payable. By the same letter,
Nevada Energy made a demand upon Waterford under the Guaranty as guarantor of
Golden Chance's obligations. Pursuant to the Hayton Group's scheme, neither
Golden Chance or Waterford responded to these demands.36. On September 30, 1996, Nevada Energy's officers (Mr.
Antisdel and Richard A. Cascarilla, the Secretary and General Counsel, who also
was unaffiliated with the Hayton Group) attempted to file an electronic Form 8-K
on EDGAR with the Securities and Exchange Commission setting forth Golden
Chance's default on its obligations under the Note and the Subscription
Agreement. As the revelation of this information could have harmed the Hayton
Group's continuing scheme to loot Nevada Energy (which at the time was far from
completed), Nevada Energy's board of directors, pursuant to instructions from
Mr. Hayton and Mr. McCloy (using either or both the telephone and the mail),
immediately terminated Messrs. Antisdel and Cascarilla without cause.
Thereafter, they were replaced by21Mr. Tevis (as President) and Kenton Bowers (as Secretary), whom the Hayton Group
perceived as being more willing to follow Mr. Hayton's and Mr. McCloy's
instructions to loot the Company.37. As Golden Chance never made proper payments under the
Note, and the cure period for those payments had long since run, a Default
existed under the Note. On December 4, 1996, after determining that such a
Default existed, the holders of all five shares of Series B Preferred Stock
(which included Mr. Cascarilla) executed a written consent, either personally or
by proxy, electing Michael R. Kassouff (a director of Nevada Energy prior to the
closing of the Transaction and a holder of one share of Series B Preferred Stock
who also was unaffiliated with the Hayton Group) as the Series B Director
pursuant to the Certificate.38. On or after February 3, 1997, Mr. Tevis resigned his
positions as an officer and director of Nevada Energy, because he was concerned
(appropriately) that the Hayton Group's activities were illegal. Mr. Hayton
apparently replaced Mr. Tevis as President on February 10, 1997 (although he
purported to act as President beginning as early as January 23, 1997); Mr. Tevis
never was replaced as a director.39. On approximately February 6, 1997, Mr. Bowers was
terminated as Secretary of Nevada Energy because the Hayton Group believed (with
good reason) that he would no longer do its bidding pursuant to their illegal
scheme and instead was cooperating with various investigations into the Hayton
Group's activities. Although the Nevada Energy board previously had purported to
appoint Mr. Quinn as Secretary (on January 21, 1997), legally this appointment
could become effective only after Mr. Bowers was terminated.2240. On February 13, 1997, three creditors of Nevada Energy
(including Mr. Cascarilla) filed a petition for involuntary bankruptcy against
Nevada Energy in the United States Bankruptcy Court for the District of Nevada
(the "Bankruptcy Court"). On or about March 3, 1997, the Bankruptcy Court
appointed a trustee in bankruptcy for Nevada Energy, over the opposition of the
Hayton Group. In connection with the appointment of a trustee, Mr Quinn
purported to appear as an attorney on behalf of the Company and Mr. Hayton, even
though both Mr. Quinn and Mr. Hayton knew that Mr. Quinn had been suspended
from the practice of law as a result of his conviction of grand theft by
embezzlement from one of his clients.
41. On approximately May 9, 1997, Messrs. Cain and Cannell
resigned as directors of Nevada Energy, leaving only Mr. Kassouff as a director.
On May 19, 1997, Mr. Kassouff filled the vacancies resulting from Messrs. Cain
and Cannell's resignations with Mr. Cascarilla and H. Lawrence Herth (who also
was unaffiliated with the Hayton Group). On May 19, 1997, the new board of
directors terminated Mr. Hayton and Mr. Quinn as officers of Nevada Energy,
replacing them with Mr. Cascarilla as President and Mr. Herth as Secretary.
Thereafter, the new management of Nevada Energy continued their investigation
into the activities of the Hayton Group, which resulted in (among other things)
this lawsuit.42. On August 25, 1998, the Bankruptcy Court confirmed Nevada
Energy's plan of reorganization, over the (withdrawn) opposition of Mortlake,
acting on behalf of the Hayton Group. During discovery into Mortlake's
opposition to the Company's plan of reorganization, Nevada Energy learned that
the Hayton Group (led by Messrs. Hayton23and McCloy) was actively attempting to prevent anyone from investigating its
illegal activities.I. THE HAYTON GROUP'S ONGOING ILLEGAL SCHEME AND PATTERN OF
RACKETEERING ACTIVITY
43. The Hayton Group had good reason to fear an investigation
into its activities, because its illegal scheme was continuing, albeit with
another company.
44. In approximately October 1997, the Hayton Group began to
invest in Zulu-Tek, formerly known as Netmaster Group. The Hayton Group's scheme
with Zulu-Tek has used techniques similar to those used with Nevada Energy,
including:a. Employing an attorney who had been suspended from the
practice of law for stealing money from clients (with Zulu-Tek, he served as the
registered agent for the company);b. Setting up bank accounts nominally in the company's name
but actually solely under the Hayton Group's control to hold most of the
company's cash;c. Withdrawing most of the funds from these bank accounts for
the use, directly or indirectly, of the Hayton Group;d. Refusing to allow the proper officers of the company
access to the records of these bank accounts; ande. Controlling the company without Mr. Hayton becoming an
officer or director.
24K. MR. QUINN DEFRAUDS NEVADA ENERGY
45. On approximately December 20, 1996, Nevada Energy filed a
Form S-8 Registration Statement under the Securities Act of 1933 with the SEC
(the "Form S-8). This registration statement was filed to register with the SEC
(and therefore make freely-trading) 2,500,000 shares of Nevada Energy's Class A
Common Stock that it planned to issue to "consultants," almost all of whom were
members of the Hayton Group. The stock set forth in Paragraph 32 was among the
stock issued pursuant to this Form S-8.46. As part of this Form S-8, Nevada Energy obtained a "legal"
opinion from Mr. Quinn stating that he was "familiar with the proceedings taken
and to be taken by the Company in connection with the issuance of shares of
Common Stock under the [Consulting/Compensation Plan] and the authorization of
such issuance thereunder." In addition, Mr. Quinn's "legal" opinion stated "it
is our opinion that the shares of Class A Common Stock of the Company to be
issued pursuant to such plan have been duly authorized, and that such Common
Stock, when issued in accordance with the terms of the plan will be legally and
valid [sic] issued, fully paid and nonassessable."47. Despite his representations to the contrary, Mr. Quinn
knew he was not qualified to offer a "legal" opinion, because he was not then a
lawyer. On April 17, 1993, Mr. Quinn was suspended from the practice of law by
the California Supreme Court (the only state in which Mr. Quinn had ever been
admitted to the practice of law) after he was convicted of grand theft by
embezzlement for having stolen over $100,000 from a client. On April 25, 1997,
Mr. Quinn was disbarred by the California Supreme Court for the same
25offense. Although the Hayton Group knew that Mr. Quinn was no longer an
attorney, no one at Nevada Energy then knew of that fact.48. In addition, Mr. Quinn's opinion contained knowingly false
statements of material fact. Nevada Energy's board of directors never authorized
a "Consulting/Compensation plan," and therefore no stock could have been
properly authorized by such a non-existent plan. Furthermore, because Mr. Quinn
knew that much of the stock to be issued under this plan would be issued to
defendants or their affiliates for non-corporate purposes (see Paragraph 32
above), it was not and never would be fully-paid stock. For his work, Mr. Quinn
charged Nevada Energy over $21,000.49. By issuing his opinion containing knowingly false
statements of material fact, Mr. Quinn defrauded Nevada Energy. Nevada Energy's
board of directors relied upon Mr. Quinn's representations that he was an
attorney in approving the filing of the Form S-8 with the SEC. Had the board
been aware that he was not an attorney, it never would have filed the Form S-8
with the SEC and thus would not have caused the issuance of freely-trading stock
as desired by the Hayton Group. Accordingly, Nevada Energy has been damaged in
the value of the stock that should not have been, but was, issued pursuant to
the Form S-8.COUNT I --RICO CLAIMS AGAINST ALL DEFENDANTS50. Nevada Energy repeats the allegations of Paragraphs 1-50.2651. As set forth above, all defendants are members of the
Hayton Enterprise Group, a group of individuals and entities associated in fact
conducting an enterprise engaged in and affecting interstate commerce.52. As set forth above, the members of the Hayton Enterprise
Group participated in the conduct of the Group's affairs, specifically the
defrauding of Nevada Energy, through a pattern of racketeering activities,
including mail fraud pursuant to 18 U.S.C. Sec. 1341 and wire fraud pursuant to
18 U.S.C. Sec. 1343.53. These actions, which violate 18 U.S.C. Sec.1962 (c), have
caused injury to Nevada Energy's business and property. Nevada Energy has been
damaged by the Hayton Group's actions by at least the amount of money improperly
taken from the Company by the members of the Hayton Group and in the remaining
amount due under the Note that the Hayton Group ensured was never paid by Golden
Chance.54. Pursuant to 18 U.S.C. Sec.1964, Nevada Energy is entitled
to recover from all defendants three times the damages it has suffered plus the
costs of suit, including a reasonable attorneys' fee.COUNT II-RICO CLAIMS AGAINST ALL DEFENDANTS55. Nevada Energy repeats the allegations of Paragraphs 1-55.56. As set forth above, each defendant was employed by or
associated with Nevada Energy, an enterprise which affects interstate and
foreign commerce.57. As set forth above, the defendants participated in the
conduct of Nevada Energy's affairs through a pattern of racketeering activities,
including mail fraud 27pursuant to 18 U.S.C. Sec. 1341 and wire fraud pursuant to 18 U.S.C. Sec. 1343.
Defendants were able to engage in their wrongful conduct solely because of their
control over Nevada Energy and certain of the defendants' positions with Nevada
Energy.58. These actions, which violate 18 U.S.C. Sec.1962 (c), have
caused injury to Nevada Energy's business and property. Nevada Energy has been
damaged by the defendants actions by at least the amount of money improperly
taken from the Company by defendants and in the remaining amount due under the
Note that defendants ensured was never paid by Golden Chance.
59. Pursuant to 18 U.S.C. Sec.1964, Nevada Energy is entitled
to recover from all defendants three times the damages it has suffered plus the
costs of suit, including a reasonable attorneys' fee.COUNT III-CONSPIRACY TO VIOLATE RICO AGAINST ALL DEFENDANTS
-----------------------------------------------------------60. Nevada Energy repeats the allegations of Paragraphs 1-60.61. As set forth above, each of the defendants knowingly and
unlawfully conspired to conduct the affairs of the Hayton Enterprise Group
through a pattern of racketeering activity, including mail fraud pursuant to 18
U.S.C. Sec.1341 and wire fraud pursuant to 18 U.S.C. Sec.1343, all in violation
of 18 U.S.C. Sec.1962 (d).62. Nevada Energy has been injured in its business and
property as a result of these defendants' violations of 18 U.S.C. Sec.1962 (d),
and has suffered substantial damages as a result, as set forth in Paragraphs 54
and 59.2863. Pursuant to 18 U.S.C. Sec.1964, Nevada Energy is entitled
to recover from all defendants three times the damages it has suffered plus the
costs of suit, including a reasonable attorneys' fee.COUNT IV-CONVERSION AGAINST ALL DEFENDANTS
------------------------------------------64. Nevada Energy repeats the allegations of Paragraphs 1-64.65. Because Nevada Energy never properly received any goods or
services in return for the checks and wire transfers set forth in Paragraph 26
a-w, the money reflected by these checks and wire transfers was wrongfully
converted by the defendants (all of whom were participants in the Hayton Group)
to their use, either directly or indirectly.
66. Nevada Energy has been damaged in the amount of money
converted by defendants. Each defendant is jointly and severally liable to
Nevada Energy for this amount.67. None of the defendants had a good faith belief that he or
it was entitled to this money, but instead took it intending to cause injury to
Nevada Energy. Accordingly, Nevada Energy is entitled to recover punitive or
exemplary damages from each of the defendants.COUNT V--FRAUD AGAINST QUINN
----------------------------68. Plaintiff repeats the allegations in Paragraphs 1-68.69. Mr. Quinn defrauded Nevada Energy by failing to inform its
board of directors that he was not authorized to act as an attorney because he
had been suspended from the practice of law.2970. Nevada Energy's board of directors was unaware that Mr.
Quinn was not an attorney, and relied on his "legal" opinion in causing the
filing of the Form S-8 with the SEC and the resulting issuance of freely-trading
stock. Had it been aware that Mr. Quinn was not an attorney, it never would have
accepted his opinion on any legal subject, and thus would not have issued the
stock as desired by the Hayton Group.
71. Accordingly, Nevada Energy has been damaged in the value
of the stock that should not have been, but was, issued pursuant to the Form
S-8.
72. In performing these acts, Mr. Quinn acted willfully with
the intent to cause injury to Nevada Energy. Accordingly, Nevada Energy is
entitled to an award of punitive damages from Mr. Quinn.WHEREFORE, Nevada Energy requests that a judgment be entered against
defendants for the full amount of the damages suffered by Nevada Energy, treble
damages 30pursuant to Counts I, II and III, punitive damages pursuant to Counts IV
and V, interest, costs and attorneys' fees as appropriate.DATED this 16 day of December, 1998.HARTMAN & ARMSTRONG, LTD/s/ Jeffrey L. Hartman, Esq.
------------------------------------
Jeffrey L. Hartman, Esq.and
SMITH, KATZENSTEIN & FURLOW LLP
David A. Jenkins (Del. I.D. No. 932)
Michele C. Gott (Del. I.D. No. 2671)
Kathleen M. Miller (Del. I.D. No. 2898)
800 Delaware Avenue
P.O. Box 410
Wilmington, DE 19899
(302) 652-8400Attorneys for Plaintiff31 |
