Author Topic: The Rufus Paul Harris Story - Detailed Explanation  (Read 325 times)

Offline Rufus Paul Harris

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The Rufus Paul Harris Story - Detailed Explanation
« on: September 24, 2018, 09:39:21 AM »

     Astonishingly, I am typing this from a federal prison having been charged with securities fraud and I have never sold a publicly traded stock or opened a brokerage account in my life.  I will start with a short version of the events for those with attention issues and then follow up with a more detailed explanation supported with evidence for those who really want to know the truth.

     SHORT VERSION

     I was the CEO of a private start-up asset management corporation with several large research and development projects.  Our company was taking things very slow when we were approached by a high-end international investment broker who represented billions in potential investors that offered to fund our projects.  After the broker would contract several large assets into our management program, she would then lobby the board of directors to merge with a publicly traded company.  As part of the proposal, our executive staff would be the only surviving management after the merger.  I was against the merger, but the board would vote “yes”.

     Immediately after the "plan of merger" was announced, the public company insiders (officers, directors, and stock transfer agent) would start dumping (selling) hundreds of millions of unreported and illegally issued shares.  Prior to the merger completion and over the next few months (July-September, 2006), the public company would trade 235,739,755 shares and increase in price from $.05 per share to $3.02.  A 6,040% increase since the merger announcement.

     On September 26, 2006 FINRA would publish the merger approval on its website and I would officially take over as CEO of the publicly traded company.  In less than 30 days, and before we would even receive most of the public company internal documentation, the SEC would suspend trading of the newly merged company and accuse me of a "Pump and Dump" scheme.  When the investigating SEC attorney found out that I did not have a single publicly traded share, the cover-up of the mistake would start.  She was already "in for a penny," so she went "all in for a pound."

     DETAILED EXPLANATION

     Our private company's business model was that of a diversified asset management company that would locate or originate viable projects and fund them through the issuance of asset based securities to accredited investors.  Upon complete funding of a project, the company would spin-off the venture through a dividend transaction.  Each owner of the parent company would receive the same percentage of ownership of the new spin-off company.  It’s an investment that keeps on giving back to the investor as long as the projects are viable.

(The following Exhibit 1 is a "Certificate of Good Standing" for my private company, Conversion Solutions, Inc.  Its importance will develop as you read)

<a href="http://iharris.us/smf/exhibits/Exhibit1.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit1.pdf</a>

     
     The company projects, from inception, were bold and designed for the betterment of the USA.  The projects were publicly available on the company website as follows:

1.   National Education Facilities and Standardized Studies Reform Program

-   The building of an alternative nationwide education system, including structures, teachers and curriculum, where each child gets exactly the same first class education as the next child

2.   Research Program for developing a viable high-speed commercial ground transport system to replace the antiquated system of railroads.

-   The development of a 500 MPH electrically powered ground transport system (Cobra Air Train) to replace all commuter trains and to compete with less energy efficient and polluting commercial aircraft.  Secondarily, the development of a heavy lift transport to replace all cargo carrying railroad trains in the United States of America.  Tertiary, develop and implement a light cargo transportation system to replace most of the semi-truck traffic on the nation's interstate highways

3.   Coastal Seas Electrical Energy Generation Program

-   The building and installation of a series of submersible electrical generation platforms, on the ocean floor, that will produce clean safe electrical energy for Southern California, the Gulf Coast and the Eastern Seaboard of the United States; The goal is to supply at least 66 million homes with electrical energy and retire as many oil and coal fired electrical generation plants as possible and eliminate the troublesome brownouts that are experienced by both coast.

4.   Research and Development Program to design and build an alternative fuel fleet vehicle with standardized recharging systems and related infrastructure

-   The Development and building of vehicles usually purchased in quantity for a specific purpose that will utilize an alternative fuels such as; Police cruisers, Ambulances, interagency motor pool vehicles, fire trucks, etc.  The development and implementation of a simple efficient recharging system for these, and possibly other, alternative fueled vehicles that will be available nationwide.

5.   Research and development program for designing "The New navy's" next generation ship configuration and propulsion systems

-   The development of three minimal crew, composite, bi-hulled, assault screening vessels classifications for the New united States navy; These ships will be equipped with a next generation underwater propulsion system which will allow the vessel to attain very high speeds on the water and meet today's and tomorrow’s threats with minimal service people at risk.

6.   Downtown Tempe, Arizona business district revitalization program, utilizing planned recreational and retail commerce zones

-   The building of state-of-the-art Ride Park on city property to enhance the synergy and retail traffic flow to the Tempe Town Lake and River walked recreation and retail commerce zones.  Secondarily, buyout and complete construction of Phase 1, 2, 3 and 4 of the Lakeside commercial development as a cyclical to the three above mentioned recreation and retail commerce zones culminating in longer customer visits to the area.

7.   Mississippi River Flood Waters Diversion and Drought Remediation Program

-   The transportation of potential flood-waters from the Mississippi river flood basin, via large canals, to the lakes and reservoirs throughout the state of Texas, New Mexico and Arizona, before the river rises to flood stage.

8.   First response oil spill and coastline reclamation and oil remediation

-   Build a flotilla of ships * with oil skimming equipment and capture tanks to reclaim oil spills at sea.  Additionally, ocean-to-beach running hover-crafts * with solvent injecting, earth tumbling machines that will process shore-line sand-soil-rocks, reclaim the spilled oil and return the shoreline back to pre-spill conditions.

9.   Research and development program for building an alternative energy fueled commercial commuter aircraft

-   The development of a viable commercial aircraft that is powered by a non-polluting alternative fuel source, such as "Electricity".

10.   Programs to build and operate a radioactive material and atomic waste reclamation and disposal facility

-   Build and operate, in a remote location, a radioactive material and atomic waste reclamation - remediation and disposal facility

     The project's projected cost was in the hundreds of billions.  Our company was a 2004 start-up corporation that was in the staffing stage.  Prior to the events herein the company was legally funded solely by accredited investors.  In March of 2006, the company attorney Maurice Bennett and an investor by the name of Ott Gira introduced Sabra Dabbs, a high-end international investment broker who represented billions of dollars in potential investors.  Dabbs claimed to have the clients to fund all of our projects.  She wanted to start the relationship with an investment of $500 million USD's to cover all projected start-up cost of the company.  For the initial investment, Dabbs requested two million shares of the company stock, a salaried position of Executive Vice President of Investments with a $200,000 annual compensation.  The board agreed to her terms.

     Dabbs immediately produced a client by the name of Ismet Paez, who had billions in global government bonds from the central bank of Venezuela.  The bonds had a 13.625% annual interest coupon and would be loaded in the Euroclear financial system in the name of our company.  To achieve funding, all we had to do was obtain a loan against the instrument.  For the investment, Paez would receive 50% of profits generated from projects launched with the loan proceeds.  All transactions codes and Euroclear screen printouts would be provided after agreement execution.  The board voted to enter into the investment contract.

(The following Exhibit 2 is the actual Global Funding Agreement with Paez, the Banco Central De Venezuela Certificate of Ownership, the actual Euroclear financial system computer screen printout of the Venezuelan bonds in the name of my private company, Conversion Solutions, Inc., a copy of Paez's passport and the board resolution concerning the investment)

<a href="http://iharris.us/smf/exhibits/Exhibit2.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit2.pdf</a>


     The company was working on the banking relationship to establish a loan or credit line against the investment, but none of the local U.S. banks used the Euroclear system.  Dabbs would then introduce Romeo Vendetti, owner of Emiro Holdings (Emiro) and claim that he had the relationship with the European banks required to handle the credit lines against the bonds.  Emiro seemed to be the answer to our prayers.  We would enter into a funds management contract with Emiro and an employment agreement with Vendetti.  Vendetti would also request two million shares of company stock and a $200,000 annual salary.  His title would be Executive Vice President of International Investments.  Under the terms of the funds management contract, Emiro would manage the credit line within the European banks.  The investor (Ismet Paez) claimed to know Mr. Vendetti and stated that the relationship would greatly benefit us.  Paez also claimed that he would consider an immediate increase in his investment if Vendetti was involved.

(The following Exhibit 3 is the actual board resolution making Romeo Vendetti Vice President of International Investments)

<a href="http://iharris.us/smf/exhibits/Exhibit3.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit3.pdf</a>


     Immediately following the Emiro contract, Dabbs and the company attorney started to push for a merger with a publicly traded corporation called "The Fronthaul Group" (FHAL).  Upon first introduction, FHAL stock was trading at $.05 per share on the NASDAQ Over-the-Counter Bulletin Board (NASDAQ).  We were not seeking a merger partner.  We only needed to file a registration in the form of a Small Business filing with the Securities Exchange Commission (SEC) to become publicly traded.  We had already started working on the filing and were in the process of looking for a securities attorney to assist.  In spite of this, the corporate attorney and Dabbs would lobby the board of directors that the merger was the right thing to do because FHAL already had the internal mechanics in place.  A stock transfer agent, a SEC filing agent, an outside auditor and a securities attorney that would save the corporation a projected two million USD in salaries and fees.  The board approved the merger.

     In early July 2006, Michael Alexander (CEO) and Dave Perley (COO) of FHAL would come to Georgia to execute the merger agreement.  In the merger agreement under 5.3 Buyers Stock, FHAL claimed to have only 62,157,721 issued shares (Exhibit 4 page 40).  Recent FHAL SEC filings supported their claims.  The shares were defined as 32 million restricted and 30 million publicly tradable.  The FHAL insiders (officers, directors and stock transfer agent) held 15 million of the tradable shares, but they would be restricted from selling any shares by SEC regulations and by "Representations and Warranties" within the merger agreement.  The 47 million restricted share break-down and the "Representations and Warranties" were the key to the workability of the merger with FHAL.

     Over the next two business days, Monday, July 10 and Tuesday, July 11, 2006 the FHAL stock would trade 2,693,297 shares and its price would increase 100% to $.10 per share, despite no public announcement of the merger.  On the 11th FHAL would file the following FORM 8-K with the SEC that included the actual merger agreement itself.

(The following Exhibit 4 is the actual FHAL FORM 8-K filed with the SEC)

<a href="http://iharris.us/smf/exhibits/Exhibit4.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit4.pdf</a>


     On Wednesday, July 12, 2006, a press release about the merger was published by FHAL and shockingly that day alone, its stock traded 18,684,608 shares and its price increased another 40% in value to $.14 per share.  Our management began to question the trading.  The FHAL CEO and its stock transfer agent, Don Maddalon, ensured us that the trading activity was due to naked short selling by large financial institutions and brokerage firms and that it was normal after a merger.

     Between July 13, and July 28, 2006, FHAL stock would trade 101,219,545 shares and increase in price to $1.60 per share, a 3,200% increase.  Concerned about the trading activity, we would contemplate nullifying the agreement with FHAL.  The FHAL CEO and stock transfer agent would claim that they were going to stop the naked short selling by changing the stock CUSIP number, the company name, and its trading symbol.  On July 31st, we were informed that FHAL had received a new CUSIP number from Standard and Poor's CUSIP Bureau and that they were in discussions with NASDAQ officials about a symbol change.  On August 2nd, FHAL changed its name to "Conversion Solutions Holdings Corporation" and its trading symbol to "CSHD".

     Immediately following the FHAL name and symbol change, Dabbs would introduce additional clients, Craig Cason and Steven Canady of the Humanitarian and Scientific World Foundation LTD (HSWF).  HSWF produced a list of financial instruments and a United States Federal Reserve authorization document to fund all of our projects.  To say the least, we were blown away and very excited.  An investment agreement was entered into for an initial amount of 450 million EUR ($579,149,835 USD) in the form of a Lehman Brothers Holdings PLC MTN bond.  A few weeks later, Dabbs would execute a contract extension with HSWF for $749 million USD's in the form of a Finland government bond.  The procedure for these assets was the same as before, the instruments were to be loaded in the Euroclear system in our company's name.

(The following Exhibit 5 is the actual Global Funding Agreement with HSWF and communications concerning the investments)

<a href="http://iharris.us/smf/exhibits/Exhibit5a.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit5a.pdf</a>


     These people were a master at their game.  They would keep the ground moving in all directions with things like letters and phone calls from an actual UNESCO Ambassador who was working on our behalf in order to secure the necessary European banking required for funding.  To keep the excitement up, Dabbs would notify the company that Paez was ready to SWIFT (electronically transfer bank-to-bank) the bond from the Central Bank of Venezuela.  Dabbs, via email would provide the company with the transaction procedures.

(The following Exhibit 6 is numerous communications to keep us twisting in the wind.  You will find multiple letters from an actual UNESCO Ambassador and emails about bank-to-bank SWIFT communications concerning the investments)

<a href="http://iharris.us./smf/exhibits/Exhibit6.pdf" target="_blank">http://iharris.us./smf/exhibits/Exhibit6.pdf</a>


     Early September, we were notified that the outside auditor for FHAL had resigned prior to the execution of the merger agreement due to possible "Illegal Act's" of the FHAL executives.  This major event was not disclosed to us by FHAL executives, nor was it filed with the SEC as required by rules and regulations.  I now wanted to void the merger but the company attorney and Dabbs would insist that we could not legally reverse the process on suspicion alone or we could be held legally liable.  They would state that we had to hire an outside auditor to review the merger documentation and then if the documents did not check out, we could void the agreement.

(The following Exhibit 7 is the actual letter from the FHAL auditor)

<a href="http://iharris.us/smf/exhibits/Exhibit7a.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit7a.pdf</a>


     Due to ever growing concerns, I started to look for a way to put all of the documentation in a safe public place that could not easily be manipulated or deleted.  I would go to the local Bartow County Courthouse and eventually settle on a process that would scan deeds and titles and make them accessible on the courthouse website for a fee.  Here, I would place the Global Funding Agreement with Ismet Paez, the board resolutions concerning the Venezuelan bonds, the Euroclear supporting documentation, the letters from Vendetti and the UNESCO Ambassador about the bond funding, all of the Humanitarian and Scientific World Foundation LTD supporting documentation, and other miscellaneous documentation concerning the events.  Please Note:  On page 1 of Exhibit 2, the BETA stamp that starts with DOC# 019725, placed there by the Bartow County Clerk of Superior Court upon my request.  I would also place several calls to the SEC.  At a later date, in a returned call, I would tell the SEC how to access the files on the courthouse website.  The files are still accessible today.

     Mid-September, we were notified by a longtime FHAL shareholder that the stock transfer agent was releasing the restriction on millions of shares.  We assumed the shareholder was referring to the reported 47 million restricted shares identified in the merger agreement.  Upon contact, Maddalon acknowledged the activity and claimed that it was standard operating procedure.  We called an emergency board meeting and voted to issue a "Cease and Desist" order to Maddalon for violating the terms of the merger agreement.  This notification started the 15 day termination window under Section 9.1(e) in the merger agreement (Exhibit 4 page 57).

(The following Exhibit 8 is the actual "Cease and Desist" fax that was sent to Maddalon immediately after the board meeting)

<a href="http://iharris.us/smf/exhibits/Exhibit8.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit8.pdf</a>


     In an attempt to validate the naked short selling explanation being offered by Alexander and Maddalon, the CVSU executives would (in late September) pull a Non Objecting Beneficial Owner (NOBO) list from Automatic Data Processing, Inc.  The report disclosed that 106,405,424 shares of FHAL were free trading in the market.  Believing the FHAL naked short selling story was true and to expose the illegal activity of the financial institutions, we would put out a press release that read as follows:

      The corporation has received the Non Objecting Beneficial Owners list form Automatic Data Processing, Inc.  Located at 51 Mercedes Way Edgewood NY, 11717.  The NOBO list has disclosed 75,487,085 shares above the total free trading shares of 30,918,339 of CSHD.  The shares are held by 15,184 shareholders to include institutions.  "For anyone carrying shorts and for CVSU shareholders with questions, please contact Ben Stanley at our corporate office number 777-420-8370", stated CEO Rufus Paul Harris.  Ben Stanley, COO stated, "Our actions have always been to ensure the well-being of our shareholders for this reason we are going to work closely with the SEC and all institutional holders to quickly and fairly resolve the issue by September 29, 2006."  Sabra Dabbs, EVP of Investments, stated, "Now all of our attention can be focused on our Humanitarian and Global Business Development efforts."


      Interestingly, immediately following the NOBO list press release, on September 26, 2006, FINRA would publish the merger approval on its website.  As of this announcement, we would officially take over the management of CSHD.  To have restricted ownership in the newly merged company, the private company shareholders identified under Section 4.3 Capital Stock in the merger agreement (Exhibit 4 page 30) has to now exchange their hard copy CVSU certificate for a CSHD certificate.  We would notify our shareholders in a press release that read as follows:

   Conversion Solutions, Inc. a Delaware corporation asked that all CVSU merger shareholders please exchange their certificates with the corporation’s stock transfer agent as follows:  1) Have your broker exchange the certificate for Conversion Solutions holdings Corporation certificate (Your broker should know how to exchange the certificate) or 2) Send your certificate to the following:  Integrity Stock Transfer 2920 N. Green Parkway Building 5 Suite 527 Henderson, NV 89014.  For quick return, please include a self-addressed return catalog envelop or Fed-Ex package large enough for a certificate (10X13).

     As of September 26th, FHAL had traded 235,739,755 shares and increased in price from $.05 per share to $3.02.  The FHAL trading figures herein were provided and verified under oath by Deborah Oremland, the 11th District's FINRA witness.  Around this time frame, Vendetti would notify us that Emiro had completed the contractual relationships with the European banks required to execute the credit lines and receive the Dabbs SWIFT.   And Dabbs, along with her new hire Mitch Sepentiack, would notify us of a 6 billion USD extension to the Ismet Paez investment contract.  Sabra and Mitch would travel to Aruba to execute the extension.

(The following Exhibit 9 is communications concerning the Paez contract extension "Annex B" and the Dabbs Aruba trip.

<a href="http://iharris.us/smf/exhibits/Exhibit9.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit9.pdf</a>


     Mid-October, we would receive the completed year-end audit report from the new outside auditor, validating the investments and combining the merged companies financials.  The company, as required by SEC regulations, gave the report to Maddalon, who was also the FHAL SEC filing agent.  Maddalon would prepare and convert the document and then file it as a 10-KSB with the SEC.

(The following Exhibit 10 is the actual audit report from Thomas Benson)

<a href="http://iharris.us/smf/exhibits/Exhibit10.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit10.pdf</a>


     In late October, SEC Attorney - Alana Black would take the documents that I had placed in the local Bartow County courthouse and file for a halt trading injunction against the company.  At the injunction hearing, I would not object and on October 24th, the SEC would suspend the trading of the newly merged company (Conversion Solutions Holdings Corporation) less than 30 days after we took over daily operations.  Following the hearing, I would voluntarily give a deposition to the SEC.

(The following Exhibit 11 is a transcript of my actual deposition concerning the events)

<a href="http://iharris.us/smf/exhibits/Exhibit11.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit11.pdf</a>


     Immediately following the deposition, I would shut-down everything CSHD and dismiss the start-up employees.  I figured the SEC would go after the crooks and I could eventually continue with my private company, Conversion Solutions, Inc.  But to my surprise, Black would approach me with an offer.  She wanted me to voluntarily accept SEC sanctions and agree to pay back the people who purchased any FHAL shares.  I would reply, "Heck No, I did nothing wrong.  I did not sell any stock or receive any funds.  You need to pull your head out of your butt and do you damn job."  She was irate and told me that I would regret rejecting her offer and talking to her in that manner.

IN FOR A PENNY, IN FOR A POUND

     Black would continue with the SEC civil trial against CSHD.  We would not attend and she would obtain a default judgment.  At trial she would make misrepresentations, as needed, to protect her overzealous mistake.  The following single page Exhibit is from the composed testimony of James Orr of Merrill Lynch.  Mr. Orr was my wife's broker who would exchange her private company certificate for the newly merged "Conversion Solutions Holdings Corporation" certificate in October of 2006.  As you will see, Orr states that my wife's paperwork identified her as single and that he had no reason to tie her to me.

<a href="http://iharris.us/smf/exhibits/Exhibit12.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit12.pdf</a>


     The following Exhibit is a few pages of my wife's actual hard copy Merrill Lynch application used to open the account with Mr. Orr.  The document identified her as married and me as her spouse.  It also identified that I was the CEO of Conversion Solutions, Inc.  Additionally you will find an internal Merrill Lynch computer screen print-out, from that time frame, that identified her as the "Wife of CEO".  This is the simplest example of Black's misrepresentations presented to the civil court.

<a href="http://iharris.us/smf/exhibits/Exhibit13.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit13.pdf</a>


     Thereafter, Black would leave the SEC and go to work for Sally Yates as a staff attorney "in training".  Yates was the 11th District Attorney General at that time.  Black would entice her office to indict me a little over three years later.  To support Black's misrepresentations made during the civil trial and to obtain the criminal indictment an FBI agent, Bryan Harvey, would completely ignore my private company's share issuance identified in the merger agreement (Exhibit 4, page 30, 4.3 Capital Stock) and he would, interestingly, testify to a grand jury that my company only had five shareholders at the time of the merger signing.

     The prosecutions criminal trial narrative is an excellent example of Mayor Giuliani's comment "Truth, isn't the Truth".  In other words; "Partial truth, isn't the whole truth" or "some of the story, isn't the complete story".  The following references clearly establish the understanding of the CVSU officers and shareholders concerning our stock as a result of the merger:

a)  Exhibit 4, page 2:  FORM 8-K, Section 1 Registrant's Business and Operations, Item 1.01, paragraph 4

b)  Exhibit 4, page 61:  Exhibit A, FORM of Plan of Merger, Item E, 1

c)  Exhibit 4, pages 68-70:  Exhibit C, FORM of Affiliates Letter, Items 2 & 3

     As of the merger approval date, all CVSU private stock was nullified and had to be exchanged for restricted shares of FHAL.  And, for the shares to become tradable, they had to be registered in a FORM S-4 with and approved by the SEC.  As you can see in Exhibit 14 that follows, the registration process requires an enormous amount of information and is grueling and lengthy.  But at trial, to make their “story” work AND directly contradicting SEC rules, regulations and the merger agreement itself, the 11th District would present to the jury that CVSU private shares could become publicly tradable NASDAQ shares as a result of a single email.

(The following Exhibit 14 is an actual FORM S-4 registration instruction document from the SEC)

<a href="http://iharris.us/smf/exhibits/Exhibit14.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit14.pdf</a>


     Before trial, for reasons I did not understand, my court appointed attorney, Howard Manchell, would refuse to subpoena Sabra Dabbs or the investors.  As a result, I would file a complaint with the Inspector General's office of the Department of Justice concerning his and the 11th Districts actions.  Thereafter, when he also refused to put a hold on any juror that understood stock or merger related issues, he would lose my trust.  Then, immediately after I heard the 11th Districts completely fraudulent opening statement I would emotionally request to continue Pro-Se with Manchell as standby.  Knowing the TRUTH and expecting a nice, clear and balanced trial, I had no fear of prosecution.  Judge Batten would immediately allow my Pro-Se status and appoint Manchell as standby.  During the prosecution's "story", they would completely ignore anything Sabra Dabbs, the bond investors and all of the FHAL insider SEC violations.  They simply started their narrative at the merger approval date and fraudulently claimed that we illegally caused shares to be issued to our family members (who had been shareholders of my private company for several years).

     As a window into the government's mistaken narrative at trial, I will include an excerpt from the legal opinion of Circuit Judge MARCUS of the Eleventh Circuit Court of Appeals.  Wherein, he denies the appeal and affirms the conviction.  No: 12-11126 on January 6, 2014 reads as follows:

    At trial, the government adduced these essential facts:  Harris founded and served as Chief Executive Officer of Conversion Solutions Holdings Corporation (CSHD), a Delaware company operating out of Kennesaw, Georgia.  Stanley CSHD's cofounder, served as Chief Operating Officer.  The third co-defendant, Chief Financial Officer Horton, is not part of this appeal.  Viewed most charitably, CHSD's business model sought to fund small businesses that were frozen out of the mainstream credit market.  CSHD traded publicly over the counter as a penny stock, and the company was required to file periodic reports with the SEC.

     Despite its officer’s representations, for "Holdings Corporation", CSHD held very little.  Harris and Stanley falsely represented that CSHD owned and maintained hundreds of millions of dollars in assets, including a "UCC security Note" worth $310 million that CSHD had purchased for $40 million.  Harris issued a series of press releases claiming that CSHD owned or controlled entire issuance of foreign sovereign bonds of Venezuela and Finland worth billions of dollars and paying tens of millions in annual interest.  Several of these press releases named Stanley alongside Harris as a CSHD contact person.  CSHD's 2006 10K filed with the SEC by Harris, claimed assets of $800 million counting the foreign sovereign bonds and the "UCC Security Note" along with income of nearly $20 million in interest from the bonds. CSHD's only income.  Stanley and Harris signed a management representation letter in which they attested to the accuracy of financial information provided to an outside auditor who prepared the financial statements attached to the SEC filings.  Both Stanley and Harris solicited individual investors and gave statements in radio interviews that confirmed ownership of the sovereign bonds and promoted the value of the company stock.

     Investors testified that they relied on these misrepresentations when choosing to invest.  All the while, CSHD had few (if any) real assets.  The worthless "UCC Security Note" was not legitimate, and CSHD had not purchased it for $40 million.  CSHD did not own or control the foreign bonds.  The company never earned any revenue and was financed solely by $1.8 million in cash from investors, from which Harris and Stanley each drew more than $300,000 in salary.  The co-defendants held significant equity in CSHD.  Through much of September 2006, CSHD stock traded around one dollar per share.  At the end of that month, as the misrepresentations in press releases and SEC filings took hold, the stock price tripled in forty-eight hours to over three dollars per share and it remained artificially elevated for several weeks.  With the "Pump in progress, the "Dump" began.  The co-defendants each transferred substantial amounts of stock to close family members who sold hundreds of thousands of shares at inflated priced.  By the time the SEC filed suit and halted trading CSHD on October 24, 2006, nearly 600 investors had lost an estimated $42 million.


     On the eve of my first day of defense after only a few hours of presentation, I would be approached by two armed men who would threaten to murder my family if I returned to trial the next day.  They were very insistent.  Upon my absence, at first, Judge Batten would allow standby counsel to take over.  But after the 11th District objected he would dismiss counsel and rest my defense.  Yes, in America, I was tried with no defense.  Well, technically about 3 hours only, I did manage to question a few witnesses.

     At sentencing the 11th District would produce FINRA trading records as support for victim losses to increase my sentence by 20 years.  These records (exculpatory evidence) were suppressed from me as a Pro-Se defendant during trial.  They would expose that the FHAL executives had issued several hundred million unreported shares prior to the merger and then profited tens of millions of dollars between July 12, 2006 (the merger announcement) and October 24, 2006 (the halt trading date).  Dave Perley (the FHAL Chief Operating Officer) alone, illegally dumped over 12 million shares and profited over 11 million USD's on the news of the Dabbs investments.  The FHAL executives had also issued tens of millions of shares to corporations that would cooperate in the dumping of shares.

(The following Exhibit 15 is a summary of the top 32 profiteers and, as you can see, the top 7 FHAL sellers alone, profited over $20 million USD's prior to the trading halt)

<a href="http://iharris.us/smf/exhibits/Exhibit15.pdf" target="_blank">http://iharris.us/smf/exhibits/Exhibit15.pdf</a>


     Michael Alexander, (The FHAL Chief Executive Officer) in a SEC deposition would claim that he had a previous working relationship with Sabra Dabbs and that he knew Ismet Paez prior to the merger.  He would further validate the naked short selling narrative told to the CVSU officers and iterate that the merger was initialized by the FHAL executives and Dabbs.  To this day, none of the FHAL individuals who obtained the tens of millions in ill-gotten gains have paid for their crimes, while three innocent men are prejudicially serving time in prison.



 

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