Doc. 209 - Pla Reply REYNOLDS Motion To Dismiss Doc. 203

Case 3:11-cv-00726-M-BH Document 209 Filed 09/30/12
Page 1 of 43 PageID 3271
UNITED STATES DISTRICT COURT

for the NORTHERN DISTRICT OF TEXAS DALLAS DIVISION
R. Lance Flores, Vicki Clarkson, Plaintiffs, v.
Civil
3:11-cv-00726-M -BH
Scott Anthony Koster, et al. Defendants.
In the Matter of: William Chandler Reynolds, RICO Defendant
REPLICATION TO DEFENDANTS PLEA TO THE JURISDICTION REPLY TO DEFENDANTS DEMURRER (Fed. R. Civ. P. 12(b)(6)) OBJECTION TO MOTION FOR MORE DEFINITE STATEMENT (Fed. R. Civ. P. 12(a)(4)(B)) and MEMORANDUM OF LAW
Plaintiffs mutually file their replies, and objection to RICO Defendant William Chandler Reynolds Defense One: Lack of Personal Jurisdiction Defenses Two: Failure to State a Claim upon Which Relief Can Be Granted and object to Defendants Motion for More Definite Statement (Doc. 203) pursuant to the Courts Order of September 21, 2012, (Doc. 208).
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Wherefore in support thereof, Plaintiffs respond and show the following:
The "Defendant" - the "RICO Defendant" - "Reynolds"
20120924083701 Pla Rplctn' - Reply & Obj to Def. Afmtv Defenses & Mtn fr More Dfnt Stmt - REYNOLDS.wpd
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I. PROCEDURAL HISTORY 1.1 On April 8, 2011 Plaintiffs filed their Original Complaint, petition for injunctive relief and other equitable relief in this matter. (Doc. 1, 1-1, 1-2) 1.2 On February 17, 2011, RICO Defendant Reynolds was served a Summons and a copy of the Original Complaint at 26 Marlwood Lane, Palm Beach Gardens, Florida 33418 by Michael Rocco, CPS # 1378, a licensed service processor in the State of Florida. (Agency for Civil Enforcement Corporation D.B.A., A.C.E., Inc., 8130 Glades Road # 352, Boca Raton, FL 33434, (561) 447-7638 Job Serial Number: 2012003463. 1.3 On February 25, 2012, the Proof of Service for Defendant was filed in the Record of the Court. Attached thereto is the sworn affidavit of Michael Rocco, given under pain of perjury. (Doc. 23) 1.4 On March 9, 2012, Reynolds appearance and answer were due. 1.5 On March 9, 2012, Reynolds failed to make an appearance and answer the Complaint. 1.6 On March 19, 2012, Plaintiffs amended their Original Complaint with their First Amended Complaint (FAC Doc. 36) in behalf of the Plaintiffs, and in the national economic and general public interests. Plaintiffs amended, adding additional RICO Defendants, and Nominal Defendants and removing others into statuses in delayed discovery. Plaintiffs petition for compensatory damages including a plea of damages, an amount directly related to Defendants acts in violation of 18 U.S.C. 1962, et seq., (RICO violations) exceeding not less than Two-hundred Twenty Million Dollars (Doc. 36 at 187) subject to mandatory treble award, notwithstanding other compensatory, exemplary, and injunctive relief, or further calculation of damages in prove-up motions or damages affidavit.
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Section 1964(c), title 18, provides that [a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including reasonable attorneys fees. 18 U.S.C. 1964(c).
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1.7 Plaintiffs additionally support their claims pled in conformance of Fed. R. Civ. P. 9(b), with two-hundred seventy-five (275) verified exhibits, or exhibits entered as manifest fact by judicial notice, to evidence their claims. 1.8 Plaintiffs FAC pleads RICO Defendant is jointly and severally liable for damages. 1.9 This matter is brought pursuant to, inter alia, Section 901(a) of the Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted October 15, 1970), and codified as Chapter 96 of Title 18 of the United States Code as 18 U.S.C. 19611968; 1.10 On April 15, Plaintiffs filed Application for Clerks Entry of Default Verified
Motion for Default Judgment Against RICO Defendant Reynolds. (Doc. 76) 1.11 1.12 On April 16, 2012, the Clerk of the Court entered Reynolds into default. (Doc. 87) On August 13, 2012, Hon. Irma Carrillo Ramirez, USMJ, Referring, issued an
order for scheduling proposals due on September 4, 2012 no later than 5:00 PM CST. 1.13 On August 20, 2012, Plaintiffs filed a joint Scheduling Proposal and attached a
proposed Scheduling Order. 1.14 On August 29, 2012, one-hundred seventy-three days into default, Reynolds filed
his untimely answer claiming he wasnt served a summons. (Doc. 185) 1.15 On September 4, 2012, RICO Defendant William Chandler Reynolds failed to file
a scheduling proposal. 1.16 On September 19, 2012, Defendant re-filed a number of previous filed
affirmative defenses in response to the FAC (Defense One: Lack of Personal Jurisdiction Defenses Two: Failure to State a Claim upon Which Relief Can Be Granted and object to Defendants Motion for More Definite Statement; Doc. 203).
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II. STATEMENT OF FACTS 2.1 William Chandler Reynolds ("Reynolds"), circa 40, at times material to this Complaint, Reynolds was a Managing Member (one of two; Mark A. Gelazela and William Reynolds) of Idlyc Holdings Trust LLC, USA (IDLYC); 01/07/2010, FL; FEI/EIN # 271651047, 3677 Jasmine Ave, # 10., Los Angeles CA 90034, USA whose last known address is 26 Marlwood Lane, Palm Beach Gardens, FL 334185. At times material to this Complaint Reynolds was the registered agent of iBalance LLC (iBalance) and managing member (one of two; Mark A. Gelazela and William Reynolds), located at 26 Marlwood Lane, Palm Beach Gardens, FL 33418. The principals of both companies, IDLYC and iBalance, Gelazela and Reynolds, have claimed that they operate in the greater Los Angeles area and Florida. 2.2 On February 25, 2012, the Proof of Service for Defendant was filed in the Record of the Court. Attached thereto is the sworn affidavits of Michael Rocco, given under pain of perjury showing the service of five sets of the Complaint and five summons, one of which is the proof-of-service affidavit for the personal service of William C. Reynolds: Doc.
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Table of Affidavit of Service Filings by the Clerk (Reynolds)

AFFIDAVIT of Service for Summons & Original Complaint (iBalance LLC) served on William Chandler Reynolds on 2/17/2012. (Flores, R) (Entered: 02/25/2012) AFFIDAVIT of Service for Summons & Original Complaint (IDLYC Holdings Trust LLC - IDLYC New Zealand) served on William C. Reynolds as Co-Resident w/ Mark Gelazela on 2/17/2012. (Flores, R) (Entered: 02/25/2012) AFFIDAVIT of Service for Summons & Original Complaint (IDLYC Holdings Trust LLC - IDLLYC USA) served on William C. Reynolds as Co-Resident c/o Mark Gelazela on 2/17/2012. (Flores, R) (Entered: 02/25/2012) AFFIDAVIT of Service for Summons & Original Complaint (Mark Alan Gelazela) served on William C. Reynolds as Co-Resident w/ Mark Gelazela on 2/17/2012. (Flores, R) (Entered: 02/25/2012) AFFIDAVIT of Service for Summons & Original Complaint (William Chandler Reynolds) served
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iBalance LLC, State of Florida Secretary of State Company Filings (Plaintiffs Exhibit 125, Doc. 1-9) See, Idlyc Holdings Trust LLC, State of Florida Secretary of State Company Filings (Plaintiffs Exhibit 124, Doc. 1-9)
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on William C. Reynolds as Co-Resident c/o Mark Gelazela on 2/17/2012. (Flores, R) (Entered: 02/25/2012)
2.3 Plaintiffs incorporate by reference Plaintiffs Exhibit 275, the testimony of Mark Alan Gelazela in the Securities and Exchange Commission (SEC v. Wilde, et al. ) deposition of May 13, 2010, as though fully set forth, each and every, all and singular, generally and specifically, the facts and statements made by Mark Alan Gelazela by oath under penalty of perjury. (Doc. 205) The incorporated testimony of Gelazela and Plaintiffs allegations follow in relevant part: 2.3.1 Doc 29-6 SEC Exhibit 6 Deposition of Mark A Gelazela Thursday May 14, 2010 - PLAINTIFFS' EXHIBIT 275 Gelazela Deposition SEC v. Wilde, et al. Doc 29-6 Page 5 (Depo. page 40-41) Q (SEC) And does iBalance maintain offices? A (Gelazela) Not physical offices, no Q What is the relationship between iBalance and IDYLC? A Other than their being co-owners, we just you know, two different vessels, two different vehicles. To be honest, I was a little bit more on trying to form IDYLC, because I wanted something that I had formed, as opposed to something that Dr. Reynolds had formed. It was just a personal desire. I wanted a vehicle that I felt like I had, you know, opened from the ground up, per se. I thought it was, you know, more prudent to follow the advise of having an overseas entity based in the overseas business, and Dr. Reynolds wasn't as excited about that idea. So I was kind of the bull leading the horns on that charge. So I was the one who, you know, really pushed for having another entity with which to work under. And I explained to Dr. Reynolds, I said, "All the legal advice I've been given is that it's better for business, it's safer from a business standpoint toand it's also more lucrative, in term of the fact that all of business is moving overseas, to have an overseas entity to work under." And he agreed. Q Did Dr. Reynolds work with you on the contracts that you've produced
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United States Securities and Exchange Commission vs. Francis E. Wilde, et al., 8:11-cv-00315-DOC -AJW, U.S. Dist. Ct. CD Cal. 05/13/11 (Doc. 1, the SEC Complaint; cited herein as SEC v. Wilde, et al.; all proceedings thereto related, cumulatively, the SEC Action. The Mark A. Gelazela Deposition or Gelazela Deposition (SEC v. Wilde, et al. Doc. 29-6); also Plaintiffs Exhibit 275 (Doc. 205)
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in response to the subpoena? A Work on them. What do you mean, "Work on them"? Q Well, was he working on this funding program that investors were sending in money for? Was he finding investors, talking to you, working withA Yeah. We were full business partners. 2.3.2 Here, Gelazela affirms that Reynolds was a full business partner and jointly solicited and participated through the iBalance LLC and Idlyc Holdings LLC enterprises which they used in perpetrating their fraud activities and those of the association-infact enterprises. Thus, the predicate crimes were directly committed by Gelazela and Reynolds. Though in some instances only one of them participated or was involved in the direction of the criminal activities, under the RICO statutes, Reynolds is equally culpable for racketeering, racketeering conspiracy, and each and every predicate crime committed by Gelazela as well as by each and every RICO actor.
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See, e.g., United States v. Oreto, 37 F.3d 739, 752 (1st Cir. 1994) at 751-53 (finding that Congress intended to reach all who participated in the conduct of the enterprise, whether they were generals or foot soldiers and holding that the Reves test (Reves v. Ernst & Young, 507 U.S. 170 (1993) was satisfied by evidence that the defendant collected extortion payments under the direction of leaders of an extortion collection enterprise); Napoli v. United States, 32 F.3d 31, 36 (2d Cir. 1994) (overwhelming evidence that attorneys, although of counsel to the law firm enterprise, were not merely providing peripheral advice, but participated in the core activities that constituted the affairs of the firm), cert. denied, 513 U.S. 1110, reh'g granted, 45 F.3d 680, 683 (2d Cir.) (upholding convictions of law firm investigators who were lower-rung participants whose racketeering activities were conducted under the direction of upper management), cert. denied, 514 U.S. 1084 (1995); United States v. Urban, 404 F.3d 754 (3d Cir. 2005) at 769-70 (stating that the operation or management test does not limit RICO liability to upper management because an enterprise is operated not just by upper management but also by lower-rung participants in the enterprise who are under the direction of upper management; and holding that Reves liability encompassed city employees who performed plumbing inspections and related work for the citys Construction Services Department, the alleged enterprise) (internal quotation marks and citations omitted); United States v. Delgado, 401 F.3d 290 (5th Cir. 2005) at 297-98 (same); First Capital Asset Mgmt. v. Satinwood, Inc., 385 F.3d 159, 176 (2d Cir. 2004) (RICO liability is not limited to those with primary responsibility for the enterprises affairs (citation omitted)); Baisch v. Gallina, 346 F.3d 366, 376 (2d Cir. 2003) (same and adding that [o]ne is liable under RICO if he or she has discretionary authority in carrying out the instructions of the [enterprises] principals) (citations omitted); DeFalco v. Bernas, 244 F.3d (2d Cir. 2001) at 309 (ruling that RICO liability is not limited to those with primary responsibility or to those with a formal position in the enterprise, and finding that there was sufficient evidence to satisfy the Reves test where the defendant instructed others to facilitate commission of racketeering activity) (internal quotation marks and citations omitted); United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) (finding that Reves does not require that the defendant have decision-making power, only that defendant take part in the operation of the enterprise, and holding that the defendant was liable under Reves since he bought multi-kilogram amounts of cocaine from the drug (continued...)
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Q How did you decide to the contracts were signed under IDYLC. A Um-hum. Q How did you decide to use IDLYC rather than iBalance? Was there any thought that went into that? A Because the programs that were set to pay out on the investments were mostly based overseas, so that's why it made sense to use IDYLC. Doc 29-6 Page 7 (page 46) Q How would you term these investment opportunities generally? I mean, this is a private placement program? A trading program? How do you refer to it? A I refer to it as a private placement. I avoid the moniker "trade program" because people have different definitions and I'm not a trader. I don't do trades. And it's very important to make the distinction, because I'm not a trader and I don't have a license. So I very specifically refer to it as a private placement program. And in reviewing the e-mails that I was getting together for this process, there was a couple of times where the word "trade" was used liberally by, specifically, Mr. Christou or Dr. Reynolds. And that's out of ignorance, you know. And I explained very clearly to them that, you know, you have to be careful with the terminology you use. Because when you say "trade," you may be thinking one thing and thinking that they think the same thing, but they might not be. And the word "trade" has a very specific meaning. So be sure that they know what it is they're doing. They not purchasing any instruments here, okay? Doc 29-6 Page 10 (page 75-76) Q And when you say "shutting down," what do you mean by that? A In all of the contracts the investors have all of our contracts are open-ended. There's no time frame for performance nowhere in our paperwork, nor do we represent to any of the investors that "By this date you're going to get paid." There was a couple of e-mails that Reynolds sent out that said, "In 7 to 10 days, you know, this will be trading," which is a misnomer, and I told him, "You shouldn't be saying that, A. And B, you shouldn't be using the word "trade," because that's not accurate." But that's ignorance on his part. So
(...continued) enterprise on a regular basis); United States v. To, 144 F.3d 737, 747 (11th Cir. 1998) (holding that Reves test was satisfied by evidence that the defendant planned and carried out a robbery with other members of an Asian crime gang that committed a series of robberies targeting Asian-American business owners and managers).
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2.3.3 Gelazela clearly establishes that Reynolds was actively participating in the frequent, if not daily, routine operations and direction of the formal enterprises and association-in-fact enterprises of the Syndicate and the elements of the aggregate criminal enterprise just as in First Capital Asset Mgmt., 385 F.3d 159, 176 where the defendants RICO liability was not limited to their own activity. Reynolds civil and criminal liability include the acts of those who took primary responsibility for the enterprises affairs such as, inter alios, Francis Wilde, Bruce Haglund, Steven Woods, Jon Divens, James Linder, Scott Koster, John Childs, and Kerim Emre. Reynolds is also jointly liable for the crimes instituted by the other RICO actors, as was the defendant in Baisch, 346 F.3d 366, 376, where [o]ne is liable under RICO if he or she has discretionary authority in carrying out the instructions of the [enterprises] principals) Doc 29-6 Page 21 (page 155-156) Q You mentioned "we" and "my business partners" in a couple of your answers? A Yeah, Dr. Reynolds. Q Dr. Reynolds? I mean, what involvement did Dr. Reynolds have in the BMW program? A Him and I are ubiquitous. We're business partners. All of these discussions, aside from Frank, we discuss. Q Has he [Reynolds] had any discussions with both you and Frank [Francis Wilde]? A You know, yeah, all three of us have been on the phone together a couple times. But mostly it's Doc and I talk, and then I talk to Frank. Doc and Frank don't really care for each other's business practices. They're both bulls. And when they get on the phone, they tend to have a bit of an ego clash. So at some point, Frank said, "Mark, if you don't mind, I know you guys are business partners, but I'd rather just talk to you." So I said, "That's not a problem" Q Has Dr. Reynolds been involved with any communications with the investors? A Yes, but just the same as myself. In fact, Doc sent out most of the initial drafts of the contracts. Q Directly to investors? A No. Same thing. Q Through
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A Through other people or just through their associates or affiliates. 2.3.4 The foregoing testimony of Mark Gelazela implicates Reynolds in the substantive part of the fraud solicitation and operations of the Syndicate. Therefore, for the purposes of a more definite statement it advanced by the Plaintiffs that by Reynolds extensive evolvement in the activities of the enterprises and associations-in-fact, that each and every act by any member thereof, but particularly those related to the criminal acts of Wilde, Haglund, Woods, Gelazela, Koster, Childs, and Emre. Reynolds participation can be said to be, inter alia, his individual acts or solicitation and the contract processes of the criminal enterprises. Extracts from First Amended Complaint 2.4 Extracts from First Amended Complaint (FAC) Showing statements, facts and allegations directed toward and relating to Reynolds: 2.4.1 FAC 1.2.12: William Chandler Reynolds (Reynolds), 39, at times material to this Complaint, Reynolds was a Managing Member of Idlyc Holdings Trust LLC, USA (IDLYC); 01/07/2010, FL; FEI/EIN # 271651047, 3677 Jasmine Ave, # 10., Los Angeles CA 90034, USA whose last known address is 26 Marlwood Lane, Palm Beach Gardens, FL 334185. At times material to this Complaint Reynolds was the registered agent of IBalance LLC, located at 26 Marlwood Lane, Palm Beach Gardens, FL 33418. [emphasis added] 2.4.2 FAC 4.1.3: Prior to the collaboration of the Gelazela-Reynolds-IDLYC and Woods-BMW Majestic enterprises with the Kosters Alicorn Enterprise, both Reynolds and Gelazela had created a number of companies and networks of their own. Koster forming the Milaca Gang with individuals he had previously associated in other business transactions, collaborated with IDLYC and BMW using his attorney to handle the Gangs or Kosters issues. Nevertheless, all the RICO Defendants, including those that later joined the founding membership,
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including the identified RICO actors, lied to investors and potential investors through false and misleading telephone conversations and conferences and e-mail communications, and fraudulent and forged documents throughout the course of their financial transactions. Most investors lost their entire investment in the schemes. [emphasis added] 2.4.3 FAC 4.1.4: The international private placement program incorporated financial transactional funding with an estimated twenty or more principals according to Koster. The said transactional funding platform and related financial instruments were created within an association-in-fact business enterprises in which Defendants Woods, Linder, Gelazela, Reynolds, Koster, Childs, Emre and others including Melissa Shapiro presented security for investment funds based on a stated written bank guarantee on a Deutsche Bank SBLC instrument and monetization of that SBLC through HSBC Hong Kong. Kosters Alicorn Capital Management LLC company was used as a funneling tool overseen by Koster to move funds into the IDLYC/BMW investment platform. The Defendants used a complex network of their companies and other indirect network resources to accomplish their theft of money, frauds and criminal 7 activities [footnote omitted; emphasis and notation added].
Reynolds was a full business partner with Mark Gelazela and authored documents for the fraud scheme and solicited investors for the Syndicates fraud-theft scheme through their enterprises iBalance LLC and Idlyc Holdings Trust LLC, and Gelazelas foreign enterprise, Idlyc Holdings Trust (New Zealand). Reynolds engaged in racketeering and the RICO conspiracy: Reynolds/Gelazela/F. Wilde conspiring within the Syndicate by directing, organizing, planning, and execution of racketeering operations: Q [SEC] Did Dr. Reynolds work with you on the contracts that you've produced in response to the subpoena? A [Gelazela] Work on them. What do you mean, "Work on them"? Q Well, was he working on this funding program that investors were sending in money for? Was he finding investors, talking to you, working withA Yeah. We were full business partners. (2.3.1 at 6, supra.) Q How would you term these investment opportunities generally? I mean, this is a private placement program? A trading program? How do you refer to it? A I refer to it as a private placement And in reviewing the e-mails that I was getting together for this process, there was a couple of times where the word "trade" was used liberally by, specifically, Mr. Christou or Dr. Reynolds. And that's out of ignorance, you know. (2.3.2 at 7, supra.) Q And when you say "shutting down," what do you mean by that? A In all of the contracts the investors have all of our contracts are open-ended. There's no time frame for performance nowhere in our paperwork, nor do we represent to any of the investors that "By this date you're going to get paid." There was a couple of e-mails that Reynolds sent out that said, "In 7 to 10 days, you know, this will be (continued...)
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2.4.4 FAC 5.9.6: Koster and Emre articulated they would place the Plaintiffs money in the PSP and Flores, would in turn, own a proportional interest in the IDLYC PPP platform which was guaranteed in writing by a secured financial instrument. Flores asked Koster to provide the due diligence report to him, and Koster pledged that my friend Mark, Mark Gelazela,53 had a successful financial trading company which Koster had substantial knowledge, experience and had previously obtained successful results with Mark Gelazelas transactions for other clients. [FN 53] Idlyc Holdings Trust LLC (IDLYC); 01/07/2010, FL; FEI/EIN # 271651047: Address: a. Mark A. Gelazela, Title MGRM (Registered Agent), b. William Chandler Reynolds, Title MGRM, 26 Marlwood Lane, Palm Breach Gardens, FL 33418 USA; Idlyc Holdings Trust, Head Office, Melody Lane 9, Ruakura Road, 3216 Hamilton, New Zealand [fr Florida Office of the Secretary of State, emphasis added] (See, FN 4 at 4) 2.4.5 FAC 5.31.1: 4/22/2010 On 4/22/2010 1:10 PM CST, Kerim Emre wrote through an e-mail over the Internet by use of interstate wire communications in furtherance of a scheme with specific intent to defraud 4, restating Kosters telephone conversation that Koster was told by an SEC investigator99 that the IDLYC transaction was legitimate, and that he was advised that the PSP funding was imminent [FN 99] Koster had mentioned in several telephone conversations
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(...continued) trading," which is a misnomer, and I told him, "You shouldn't be saying that, A. And B, you shouldn't be using the word "trade," because that's not accurate." But that's ignorance on his part. (2.3.2 at 7, supra.) Q You mentioned "we" and "my business partners" in a couple of your answers? A Yeah, Dr. Reynolds. Q Dr. Reynolds? I mean, what involvement did Dr. Reynolds have in the BMW program? A Him and I are ubiquitous. We're business partners. All of these discussions, aside from Frank, we discuss. Q Has he [Reynolds] had any discussions with both you and Frank [Francis Wilde]? A You know, yeah, all three of us have been on the phone together a couple times (2.3.3 at 8, supra.) Q Has Dr. Reynolds been involved with any communications with the investors? A Yes, but just the same as myself. In fact, Doc sent out most of the initial drafts of the contracts. Q Directly to investors? A No. Same thing. Q Through A Through other people or just through their associates or affiliates. (2.3.3 at 8, supra.)
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with Flores that he was contacted on a number of occasions by an investigator from the Securities and Exchange Commission looking into IDLYC, each time reporting that there appeared no wrongdoing by Mark Gelazela and William Chandler Reynolds. Chandler Reynolds. [emphasis added] 2.4.6 FAC 6.1: The members and associates of the Wilde Mob,178 the Milaca Gang,179 the Contra Costa Family,180 and the Atlanta Family,181 include: the Alicorn Capital Management LLC (the Alicorn Enterprise also Alicorn), Berea Inc. (the Berea Enterprise also Berea), BMW Majestic LLC (the BMW Enterprise also BMW), Bush Law Center LLC (BLC Enterprise), Colker-Childs IGM Enterprise (also IGM), Law Offices of Jon Divens & Assoc. LLC (also JDA), Matrix Holdings LLC (the Matrix Enterprise or Matrix), Success Bullion LLC (the Success Bullion Enterprise also Success Bullion), Cook Business Services LLC (CBS Enterprise or CBS) and the Wiseguys Investments LLC (the Wiseguys Enterprise or Wiseguys or WGI ) or otherwise the organized crime families constituted "enterprise[s]," as defined in Title 18, U.S.C. 1961(4) The aggregate Syndicate enterprise constituted an ongoing organization whose members functioned as a continuing unit for a common purpose of achieving the objectives of the separate enterprises and the Syndicate. The Syndicate or the crime families engaged in, and their activities affected, interstate and foreign commerce. The Syndicate and associated crime families is an organized criminal group that operates in the interstate commerce of the several Federal Districts including the Northern Eastern District of Texas and also operates in international commerce. [FN 178] Francis E. Wilde, Jon Divens, Steven E. Woods, Bruce H. Haglund, Mark A. Gelazela, William Chandler Reynolds, James Linder and Maureen OFlanagan Wilde and other John Does. [emphasis added] 2.4.7 FAC 6.4: the Syndicate grew out of Wildes independent activities [and] were borne out of the association formed by Francis Wilde and Jon Divens who engaged in elaborate thefts and schemes which is referred to as the Wilde Mob that later engaged the associations of Steven Woods, James Linder, Mark Gelazela - William Chandler Reynolds and their IDLYC, iBalance and their other enterprises [emphasis added]
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2.4.8 FAC 8.9.4.5 the money purportedly invested by the Plaintiffs in the ALICORN/IDLYC/BMW PSP Fund was simply being transferred to Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New Zealand), BMW Majestic LLC [emphasis added] 2.4.9 FAC 9.1.4 Koster, and Emre had apparent authority to act on behalf of Wilde, Linder, Woods, Gelazela, and Reynolds at all relevant times material to this lawsuit. More specifically, Wilde, Woods, Gelazela, and Reynolds knowingly permitted Koster, Childs and Emre to hold themselves out as having authority or acted with such lack of ordinary care as to clothe Koster and Emre with the indicia of authority. 2.4.10 FAC 9.3.2: Upon information and belief Koster, Childs, Emre, Wilde, Woods, Gelazela, Reynolds, ALICORN CAPITAL MANAGEMENT LLC, IDLYC HOLDINGS TRUST LLC (USA), IDLYC HOLDINGS TRUST LLC (New Zealand), and BMW MAJESTIC LLC, were mere tools or business conduits of one-another, or were operated as a single business enterprise; thus, each should be liable for the liability of the other as alter egos by piercing the corporate veil. First Amended Complaint VIII Causes of Action 2.5 Plaintiffs incorporate by reference the allegations purported within the First Amended Complaint Causes of Action COUNT 1 thru COUNT 12 (Doc. 36 at 177 thru 201) and re-averred, and re-alleged, for all purposes, with the same force and effect as if set forth verbatim herein.
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FAC VIII Causes of Action: Count 1 (Doc. 36 at 183), Count 2 (id. at 188), Count 3 (id. at 190), Count 4 (id. at 192), Count 5 (id. at 193), Count 6 (id. at 194), Count 7 (id. at 195), Count 8 (id. at 196), Count 9 (id. at 197), Count 10 (id. at 202), Count 11 (id. at 204), Count 12 (id. at 206).
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III. REPLICATION TO DEFENDANTS PLEA TO THE JURISDICTION 3.1 Point 1: 1. REYNOLDS was never personally served with a Summons in this matter. All of the Summons that were delivered to me are attached hereto as Composite Exhibit A. It should be noted most of the summons I received are not even directed to me. (Doc. 203 1 at 1) 3.1.1 Reynolds advances his fraud upon the Court in second attempt pleading fraudulence and dupery of the Court in yet another claim he was not served a summons. The evidence shows that Reynolds was served by Michael Rocco, CPS # 1378, a licensed service processor in the State of Florida with five separate sets (copies) of the Complaint and five Summons ( 1.2, supra.). The five proof-of-service affidavits are determinative proof that Reynolds was personally served Summons and Complaint at his home and the Florida Secretary of State registered business addresses (domiciliary addresses) for IDLYC Holdings Trust LLC, and iBalance LLC,
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William C. Reynolds and
Mark Gelazela who, along with Reynolds is a co-owner and co-managing member of those aforementioned companies located at 26 Marlwood Lane, Palm Beach Gardens, Florida 33418. (See, Table of Affidavit of Service Filings by the Clerk, supra, 2.2 at 4.) 3.1.1.1 Plaintiffs note that Reynolds previously hedged his allegation stating: To the best of my knowledge and belief I have never received service of process directed to me individually. (Doc. 185, 7 at 2) 3.1.1.2 RICO Defendant Reynolds now repeats in altered form: REYNOLDS was never personally served with a Summons in this matter. All of the Summons that were delivered to me are attached hereto as Composite Exhibit A. It should be noted most of the summons I received are not even directed to me.
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See, Idlyc Holdings Trust LLC Company Filings (Plaintiffs Exhibit 124, Doc. 1-9) iBalance LLC, Company Filings (Plaintiffs Exhibit 125, Doc. 1-9)
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(Doc. 203, 1 at 1) 3.1.2 Reynolds previous and present claims of insufficient service are unsworn while the Proof of Service Affidavit, upon its face, is sworn under pain of perjury by a service processor without interest in the case, and licensed to practice in the State of Florida, attests to Reynolds service of summons. ( 1.3, supra.) Thusly, the determination of fact and truth lies in the weighing of prima facie evidence, other direct and circumstantial evidence, against Reynolds self-serving unsupported claim and his credibility. 3.1.3 Reynolds does not dispute being served five sets of the complaint and admits to receiving the other four summons. Because he is a managing member of both companies being contemporaneously served (both only having two members, Gelazela and Reynolds) had a duty to read the complaints for iBalance LLC and Idlyc Holdings Trust LLC, and each time reading his identification as a RICO Defendant, and his relative position, status and standing pertaining to the other RICO Defendants, Nominal Defendants, un-named co-conspirators, legal enterprises, association-in-fact enterprises and the twelve Causes of Action, all inscribed in and throughout the Complaint, it cannot be said Reynolds did not know he was a defendant in this action. 3.1.4 The fact is, the prima facie evidence of the affidavit of service, proves he was served. Reynolds was handed the box containing five two-hundred sixteen page copies of the complaint and served five summons when he arrived at the address of service. Whether after that service of the summons was made upon him, he enter the domiciliary of his residence and companies headquarters, he lost, misplaced or the dog ate the particular instrument that was the summons of Reynolds, such loss after service cannot be held to the determent of the Plaintiffs as reason for failure to answer the Complaint or respond to subsequent actions of the Court. The dogs appetite quenched
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by the delight of Reynolds summons and the remaining summons saved by Fidos assuaged hunger, the afore begs us to question, why did Reynolds two companies for which he affirmed service for iBalance LLC and Idlyc Holdings Trust LLC, fail to answer? In support of Plaintiffs contentions they further show: Argument and Memoranda of Law 3.1.5 Service of Process Under the Federal Rules of Civil Procedure Rule 4(c) provides that service upon an individual defendant shall effect service: (c)(1) In General A summons must be served with a copy of the complaint. The plaintiff is responsible for having the summons and complaint served within the time allowed by Rule 4(m) and must furnish the necessary copies to the person who makes service. (c)(2) By Whom. Any person who is at least 18 years old and not a party may serve a summons and complaint. (emphasis added) 3.1.6 Service of Process Under the Federal Rules of Civil Procedure Rule 4(h) provides that service upon a corporation shall be effected . . . (1) in a judicial district of the United States in the manner prescribed for individuals by subdivision (e)(1), or by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant. Fed. R. Civ. P. 4(h)(1) (emphasis added). 3.1.7 Accordingly, it must be determined whether a copy of the summons and of the complaint was, in fact, delivered to one of Defendants officers or authorized agents. Plaintiff bears the burden of establishing a basis for an inference that Defendants iBalance LLC and Idlyc Holdings Trust LLC, authorized a particular personWilliam
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Chandler Reynolds, in this caseto accept service of process on its behalf.
11
Affinity
Card, 8 F. Supp. 2d at 376 (citing Scot Lubricants of Pa., Inc. v. YPF, S.A., No. 95 Civ.. 9602, 1996 U.S. Dist. LEXIS 7106, 1996 WL 278082 (S.D.N.Y. May 24, 1996), in turn citing Santos v. State Farm Fire and Cas. Co., 902 F.2d 1092, 1094 (2d Cir. 1990)). 3.1.8 Affidavits of service establish a prima facie case that service was effected or attempted in the manner described therein. Old Republic Ins. Co. v. Pac. Fin. Servs. of Am.,
See, footnotes 3 and 4, supra; also, Florida Rules of Civil Procedure 48.061 Service on partnerships and limited partnerships: Process against a partnership shall be served on any partner and is as valid as if served on each individual partner. If a partner is not available during regular business hours to accept service on behalf of the partnership, he or she may designate an employee to accept such service. After one attempt to serve a partner or designated employee has been made, process may be served on the person in charge of the partnership during regular business hours. After service on any partner, plaintiff may proceed to judgment and execution against that partner and the assets of the partnership. After service on a designated employee or other person in charge, plaintiff may proceed to judgment and execution against the partnership assets but not against the individual assets of any partner. Process against a domestic limited partnership may be served on any general partner or on the agent for service of process specified in its certificate of limited partnership or in its certificate as amended or restated and is as valid as if served on each individual member of the partnership. After service on a general partner or the agent, the plaintiff may proceed to judgment and execution against the limited partnership and all of the general partners individually. If a general partner cannot be found in this state and service cannot be made on an agent because of failure to maintain such an agent or because the agent cannot be found or served with the exercise of reasonable diligence, service of process may be effected by service upon the Secretary of State as agent of the limited partnership as provided for in s. 48.181. Service of process may be made under ss. 48.071 and 48.21 on limited partnerships. Process against a foreign limited partnership may be served on any general partner found in the state or on any agent for service of process specified in its application for registration and is as valid as if served on each individual member of the partnership. If a general partner cannot be found in this state and an agent for service of process has not been appointed or, if appointed, the agents authority has been revoked or the agent cannot be found or served with the exercise of reasonable diligence, service of process may be effected by service upon the Secretary of State as agent of the limited partnership as provided for in s. 48.181, or process may be served as provided in ss. 48.071 and 48.21. History. s. 13, Nov. 23, 1828; RS 1017; GS 1404; RGS 2601; CGL 4248; s. 4, ch. 67-254; s. 74, ch. 86-263; s. 3, ch. 87-405; s. 272, ch. 95-147. Note. Former s. 47.15. Florida Rules of Civil Procedure 48.071 Service on agents of nonresidents doing business in the state: When any natural person or partnership not residing or having a principal place of business in this state engages in business in this state, process may be served on the person who is in charge of any business in which the defendant is engaged within this state at the time of service, including agents soliciting orders for goods, wares, merchandise or services. Any process so served is as valid as if served personally on the nonresident person or partnership engaging in business in this state in any action against the person or partnership arising out of such business. A copy of such process with a notice of service on the person in charge of such business shall be sent forthwith to the nonresident person or partnership by registered or certified mail, return receipt requested. An affidavit of compliance with this section shall be filed before the return day or within such further time as the court may allow. History. s. 1, ch. 59-280; s. 4, ch. 67-254; s. 273, ch. 95-147. Note. Former s. 47.161.
11
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Inc., 301 F.3d 54, 57 (2d Cir. 2002); Howard Johnson Intl v. Wang, 7 F. Supp. 2d 336, 339 (S.D.N.Y. 1998). Plaintiff has filed the Affidavit of Michael Rocco, CPS # 1378 (See, 1.2, supra.), asserting that the information reflected in the Proof of Service of Summons is true and correct by sworn affidavit under penalty of perjury. (Doc. 23) Accordingly, Plaintiffs have established a prima facie case that service was effected properly upon RICO Defendant William Chandler Reynolds. The unsworn unsupported claims submitted by Defendant, however, deny that service was made, but do not deny knowledge of the instant action before or after Plaintiffs had filed their motion for default judgment in their favor against him. To the extent that Defendant had actual notice or knowledge of the instant action since February 17, 2011, and after Plaintiffs had already filed for a default judgment, the burden is on Plaintiff to establish that Defendant was properly served. Cf. Burda Media, Inc. v. Viertel, 417 F.3d 292, 298-99 (2d Cir. 2005) (holding, on a motion to vacate a default judgment based on improper service of process where a defaulting defendant had actual notice of the original proceeding but delayed in bringing the motion, that the defaulting defendant bore the burden of proof to establish that the purported service did not occur). The Plaintiffs have clearly proven Defendant was properly served in light of the holdings of the vast majority of courts. 3.1.9 Many courts have held that even affidavits, which when presented, merely
deny service, are insufficient and do not meet muster on such a claim. (N.B., Plaintiffs noting that Reynolds made no affidavit disputing service, only made an unsupported claim.) See, e.g., Nolan v. City of Yonkers, 168 F.R.D. 140, 144 (S.D.N.Y. 1995) (The mere denial of receipt of service . . . is insufficient to overcome the presumption of validity of the process servers affidavit.) (citing Sassower v. City of White Plains, 1993 U.S. Dist. LEXIS 13475 at *24, 89 Civ. 1267 (S.D.N.Y. Sept. 24, 1993)); Greater St. Louis Constr.
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Laborers Welfare Fund v. Little, 182 F.R.D. 592, 595-596 (D. Mo. 1998) (citing In re Cappuccilli, 193 B.R. 483 (Bankr. N.D. Ill. 1996)); Trustees of Local Union No. 727 Pension Fund v. Perfect Parking, Inc., 126 F.R.D. 48, 52 (D. Ill. 1989). In one case, a motion to vacate was denied because the evidence showed that the defendants conduct was grossly negligent or even willful, as the defendants refused to accept service by certified mail, ignored personal service, ignored an unambiguous notice of a status hearing set by the court, claimed that they never received notice of a motion for default mailed to an address supplied by defendants and at which they had previously received mail, and failed to appear at a citation to discover assets. Trustees of Local Union No. 727, 126 F.R.D. at 53-54. Nolan involved a motion to dismiss for failure to properly serve, see 168 F.R.D. 140, and Little involved only a motion to set aside entry of default; trial was held on the issue of damages, see 182 F.R.D. 592. 3.1.10 Additionally, in Insurance Company of North America v. S/S Hellenic Challenger, 88 F.R.D. 545 (S.D.N.Y. 1980), the court held that although the person served was not properly authorized to receive service and had misplaced and lost the summons and complaint, service had been properly effected since the person served was a representative of defendant well-integrated into the organization and quite familiar with the formalities associated with the receipt of service of summonses and complaints. Id. at 548. 3.1.11 In this case, the evidence on record shows that Defendant Reynolds was clearly aware that an action had been filed against him and Mark Gelazela, his comanaging member of their three companies, and their three companies iBalance LLC, Idlyc Holdings Trust LLC, and Idlyc Holdings Trust in New Zealand as nominal
Page 19
defendants.
12
Moreover, Mr. Reynolds contends that he was personally aware of the
service of Gelazela and the three entities and that they were served with the summons and complaint in this action. Moreover, in the face of the uncontradicted affidavit of service, the evidence conclusively establishes that Reynolds was actually served. 3.1.12 Further, RICO Defendants failure to timely answer is not excusable by inadvertence, ignorance of the applicable rules, or mistake in construing the rules, and does not constitute excusable neglect, nor intentional negligence or disregard, as in this instance. Here, Defendant advances a fraudulent claim that Defendant was not served, when in fact, the proof of service was attested to by oath under pain of perjury. Defendants mere contrivance where Reynolds states, [t]o the best of my knowledge and belief I have never received service of process directed to me individually falls far short of impeaching the proof of service affidavit reflected in the Record of the Court. Clearly, the Defendants purposeful neglect and indifference fall nowhere near excusable neglect. T: Pioneer Inv. Servs Co. v. Brunswick Assocs. Ltd. Pship, 507 U.S. 380, 392 (1993).3 In Pioneer, the Supreme Court held that in order to determine whether the actions of a party constitute excusable neglect, a court must take into account all relevant circumstances. Id. at 395. Specifically, the Supreme Court has held that four factors must be considered. Id. These factors include: (1) the danger of prejudice to the non-moving party or parties; (2) the length of the delay and the potential impact on judicial proceedings; (3) the reason for the delay, including whether the delay was within the control of the movant; and (4) whether the movant acted in good faith. Id. The Third Circuit has instructed that [a]ll factors must be considered and balanced; no one factor trumps the others. In re Am. Classic Voyages Co., 405 F.3d 127, 133 (3d Cir. 2005) (citing George Harms Constr. Co. v. Chao, 371 F.3d 156, 164 (3d Cir. 2004)). 3.1.13 Federal Rule of Civil Procedure 11 provides in relevant part: (b) Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or
See, Plaintiffs Exhibit 275, Doc. 205 at 3; (SEC v. Wilde, et al. Deposition of Mark Gelazela {Doc. 29-6 at 3} Depo. p.18-20).
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other paper, an attorney or unrepresented party is certifying that to the best of the persons knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, (1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief. Replication to Defendants Plea to the Jurisdiction Point 1 Conclusion 3.1.14 The evidence filed by the proof-of-service affidavit remains unimpeached by Defandant. Accordingly, the Court should strike Reynolds answer and proceed to the entry of a Default Judgment as proposed by the Plaintiffs. 3.2 Point 2: 2. Notwithstanding the above, Plaintiffs have failed to allege that REYNOLDS has had any contact whatsoever with either the Plaintiffs or the State of Texas nor attached any documents that suggest such contact. (Doc. 203 2 at 1) 3. It is well settled law that at the very least minimum contacts with the jurisdiction are necessary to establish personal jurisdiction. International Shoe Co. v. Washington, 326 U.S. 310 (1945). 4. In Vichi v. Koninklijke Philips Electronics N.V., Civil Action No. 2578-Vcp, 2009 WL 4345724 (Del. Ch. Dec. 1, 2009). Vichi made a loan to a Delaware LLC which was a subsidiary of a joint venture between two foreign companies. The LLC went bankrupt and defaulted on the
Page 21
loan to Vichi. Vichi then sued various parties. Among other claims, Vichi brought breach of fiduciary duty claims against an individual citizen of Singapore who resided in China and was an officer of the joint venture and 5. The Securities and Exchange Commission filed suit regarding some of the allegations contained herein, copy attached hereto as Exhibit E. The case can also be found at http://www.sec.gov/litigation/complaints/2011/comp21866.pdf. REYNOLDS was not named a party in that action. 3.2.1 Because Reynolds has moved the Court pursuant to Fed. R. Civ. P. 12(b)(1), (presumably to dismiss though it is claimed as a defense) as a preliminary matter Plaintiffs must show whether this Court has subject matter jurisdiction. See 15 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure 3827 (2d ed. 1986) (A court may not order a transfer under 1406(a) unless the court has jurisdiction of the subject matter of the action.); see also Leroy v. Great Western United Corp., 443 U.S. 173, 180 (1979) ([N]either personal jurisdiction nor venue is fundamentally preliminary in the sense that subject-matter jurisdiction is, for both are personal privileges of the defendant, rather than absolute strictures on the court, and both may be waived by the parties.). 3.2.2 A motion under Rule 12(b)(1) may be treated as either a facial attack on the complaint as in the present case or a factual challenge to the court's subject matter jurisdiction. Gould Electronics Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).
13
court reviewing a facial attack may consider only the allegations of the complaint and any documents referenced therein or attached thereto in the light most favorable to the
The RICO Defendant does not appear to challenge to the existence of an underlying fact which would confer subject matter jurisdiction upon this Court, such as an insufficient amount of damages in controversy as in a diversity suit. See Carpet Group Intern. v. Oriental Rug Importers Ass'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000) (noting that an attack on subject matter jurisdiction "in fact" means defendants dispute existence of certain jurisdictional facts alleged by the plaintiffs.) Thus, Plaintiffs need only address the issue of personal jurisdiction here.
13
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plaintiff. Id. Although Plaintiffs bear the burden of persuasion when subject matter jurisdiction is challenged, the legal standard for surviving a Rule 12(b)(1) motion is a low one. Kehr Packages , 926 F.2d at 1409. The Court of Appeals has recognized that: A claim may be dismissed under Rule 12(b)(1) only if it clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or is wholly insubstantial and frivolous. Id. at 178. Moreover, dismissal for lack of jurisdiction is not appropriate merely because the legal theory alleged is probably false, but only because the right claimed is so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy. Kulick v. Pocono Downs Racing Ass'n, 816 F.2d 895, 899 (3d Cir.1987), quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666 (1974). 3.2.3 It is apparent at this stage of litigation, the Court cannot conclude that any of Plaintiffs claims are devoid of merit as to rob this Court of subject matter jurisdiction nor personal jurisdiction. Plaintiffs assert that this Court has federal question before it, thus has aquired jurisdiction under 28 U.S.C. 1331, which provides that district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States. The federal statute that Plaintiffs invoke in their complaint is 18 U.S.C. 1964(c): Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962.
Reply to Defendants Claim of Failure to Allege Contact with Forum State 3.2.4 In Defendant Reynolds plea to the jurisdiction 2 thru 4, challenges the
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Courts in personam jurisdiction. Reynolds disconnected and digressive gainsay purports that Plaintiffs have failed to allege that RICO Defendant has had any contact whatsoever with either the Plaintiffs or the State of Texas nor attached any documents that suggest such contact. Reynolds statement to the Court is singularly fallacious considering his participation in the operations of the Syndicate which are substantively elucidated in the Plaintiffs First Amended Complaint; therein, Plaintiffs show that: 3.2.4.1 Plaintiffs alleged in FAC 1.2.12,
14
Reynolds position and authority in the
operation, control, direction, of Idlyc Holding Trust LLC and iBalance LLC. Both companies are owned, operated and managed by Reynolds and Gelazela, and are two of the enterprises identified as vehicles used for the perpetration of the fraudtheft, conspiracy and other racketeering activities of the Syndicate and Wilde Mob. 3.2.4.2 Plaintiffs alleged in FAC 4.1.3
15
Reynolds criminal association, and
associated conduct, collaboration, mechanisms and methods with other RICO actors through various company and/or corporate enterprises and association-in-fact enterprises. Plaintiffs note that their allegations are proved by Mark Gelazelas deposition to the SEC, he testifies that Reynolds was involved in the communications with the investors and sent out most of the initial drafts of the contracts.
16 17
3.2.4.3 Plaintiffs alleged in FAC 4.1.4
that the funding platform and related
financial instruments were created within an association-in-fact business enterprises in which Defendants Woods, Linder, Gelazela, Reynolds used a complex network of their companies and other indirect network resources to
See, FAC 1.2.12 citation text at 2.4.1 at 9, supra. FAC 4.1.3 citation text at 2.4.2 at 9. 16 See SEC Deposition extract 2.3.3 at 8, supra. 17 FAC 4.1.4 citation text at 2.4.3 at 10.
15
14
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accomplish their theft of money, frauds and criminal activities. 3.2.4.4 Plaintiffs alleged in FAC 5.9.6
18
that the Reynolds and Gelazelas Idlyc
companies were the enterprise vehicles which were used by Gelazela, Reynolds, and Koster to initiate in part, the deceptive and fraudulent financial instruments to advance their fraudulent inducements and other episodes of their fraud-in-fact. 3.2.4.5 Plaintiffs alleged in FAC 6.1
19
that Reynolds was a member of the
aggregate Syndicate and equally responsible for each act of each and every RICO actor engaged in, and their activities that affected, interstate and foreign commerce; and that the Syndicate and associated crime families is an organized criminal group that operates in the interstate commerce of the several Federal Districts including the Northern Eastern District of Texas and also operates in international commerce. 3.2.4.6 Plaintiffs alleged in FAC 6.4
20
that Reynolds was a member of the
Syndicate which grew out of Wilde's independent activities [and] were borne out of the association formed by Francis Wilde and Jon Divens who engaged in elaborate thefts and schemes which is referred to as the Wilde Mob that later engaged the associations of Steven Woods, James Linder, Mark Gelazela - William Chandler Reynolds and their IDLYC, iBalance and their other enterprises 3.2.4.7 Plaintiffs alleged in FAC 8.9.4.5
21
that Reynolds participated in the
taking of funds from the Plaintiffs; and that the money purportedly invested by the Plaintiffs in the ALICORN/IDLYC/BMW PSP Fund was simply being transferred to Mark Alan Gelazela, William Chandler Reynolds, Steven E. Woods, Alicorn Capital Management LLC, Idlyc Holdings Trust LLC (USA), Idlyc Holdings Trust (New
18
FAC 5.9.6 citation text at 2.4.4 at 11. FAC 6.1 citation text at 2.4.6 at 12. 20 FAC 6.4 citation text at 2.4.7 at 12. 21 FAC 8.9.4.5 citation text at 2.4.8 at 13.
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Zealand), BMW Majestic LLC 3.2.4.8 Plaintiffs alleged in FAC 9.1.4 that Reynolds, inter alios, afforded Scott Koster and Kerim Emre authority to act on behalf of Wilde, Linder, Woods, Gelazela, and himself (Reynolds) at all relevant times material to this lawsuit; specifically, Wilde, Woods, Gelazela, and Reynolds knowingly permitted Koster, Childs and Emre to hold themselves out as having authority or acted with such lack of ordinary care as to clothe Koster and Emre with the indicia of authority [conferring authority to commit criminal acts in their behalf to benefit of the Syndicate]. 3.2.4.9 Plaintiffs alleged in FAC 9.3.2 that Reynolds, inter alios, ALICORN CAPITAL MANAGEMENT LLC, IDLYC HOLDINGS TRUST LLC (USA), IDLYC HOLDINGS TRUST LLC (New Zealand), and BMW MAJESTIC LLC, were business conduits of one-another, or were operated as a single business enterprise; thus, each should be liable for the liability of the other as alter egos 3.2.4.10 Plaintiffs alleged in FAC VIII Causes of Action
22
twelve causes of
action for which Reynolds is one of among all RICO Defendants, charged with those listed therein. 3.2.5 Reynolds cites International Shoe Co. . and Vichi
23 24
as authority for his
argument. Defendants dependance on these cases as substantiating authority are misplaced. As to the context which Reynolds relates, those context are immaterial because he does not relate the cases as they relate under the racketeering statutes (Chapter 96 of Title 18 of the United States Code as 18 U.S.C. 19611968) and therefore the context related by Reynolds does not reach to the expansive RICO
(Doc. 36 at 177 thru 201) International Shoe Co. v. Washington, 326 U.S. 310 (1945). 24 Vichi v. Koninklijke Philips Electronics N.V., Civil Action No. 2578-Vcp, 2009 WL 4345724 (Del. Ch. Dec. 1, 2009).
23
22
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jurisdiction of 1965(b) which confers nationwide jurisdiction over nonresident defendants. 3.2.6 RICO Defendant Reynolds should have been well aware of the jurisdictional issues before he filed his answer as the Plaintiffs pled jurisdiction in their First Amended Complaint at footnote 7 (Doc. 36 at 29) citing this Courts position in Allstate Ins. Co. v. Plambeck: Most courts interpret 1965(b) as conferring nationwide jurisdiction over nonresident defendants if the plaintiff can establish personal jurisdiction over at least one defendant under 1965(a). This Court [Northern District of Texas] in Allstate Ins. Co. v. Plambeck, 2009 U.S. Dist. LEXIS 10302 (N.D. Tex. Jan. 30, 2009) asserted personal jurisdiction over a single resident defendant, and held that In a RICO action, the ends of justice require nationwide service of process to further the Congressional intent of allowing plaintiffs to bring all members of a nationwide conspiracy before a court in a single trial. The Allstate Court asserted personal jurisdiction over a single resident defendant, and held that In a RICO action, the ends of justice require nationwide service of process to further the Congressional intent of allowing plaintiffs to bring all members of a nationwide conspiracy before a court in a single trial. (emphasis added) 3.2.7 Here, the Plaintiffs replication to Reynolds plea to the Courts jurisdiction conforms to the Northern Districts
25
jurisdictional findings in Allstate, and in fact, this
Court has already acquired personal jurisdiction over the RICO Defendant Francis E. Wilde (Wilde) and Nominal Defendant Maureen O. Wilde by virtue of their proven domicile.
26
Francis Wilde is the kingpin and inferred Godfather of the Amenpenofer
Syndicate (hereinafter the Syndicate) involved in domestic and international fraud,
United States District Court for the Northern District of Texas. Francis E. Wilde is a resident of Richardson, Texas, a city boarding Dallas, well within the jurisdiction of the United States District Court for the Northern District of Texas. Wilde has been the target of a number of federal criminal and civil investigations and suits, as well as other civil suits from around the country for fraud and theft; see, Exs. Vol. 9, Exs. 174, 175.
26
25
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theft and other crimes and torts acted and solicited extensively through direct, active and non-passive means by e-mail, or telephonic facsimile, or telephone voice communication, so described in the Plaintiffs First Amended Complaint. Clearly, Plaintiffs have met the Districts precedent in the Wildes Northern District residency alone. 3.3 Likewise, the Allstate Plaintiffs brought a civil RICO action as well. In their case brought against chiropractors who allegedly submitted fraudulent bills and attorneys were allegedly involved in the fraudulent scheme, only one defendant resided in the district, whereas in the instant cause action, there are two defendants that reside in the district. See, 3.10 Service of the Wildes at 30. 3.4 As stated above, most of the courts as well, have interpreted 18 U.S.C. 1965(b) to confer nationwide jurisdiction in a RICO actions over nonresident defendants if the plaintiff can establish personal jurisdiction over at least one defendant under section 1965(a). Two Dallas Division Courts in the Northern District have also ruled to confer Nationwide jurisdiction over nonresident defendants in Rolls-Royce Corp. v. Heros, Inc., 576 F.Supp.2d 765, 778-79 (N.D. Tex. 2008) (citing cases); Oblio Telecom, Inc. v. Patel, No. 3-08-CV-0279-L, 2008 WL 4936488 at *4 (N.D. Tex. Nov. 18, 2008) (citing cases). 3.5 Essentially, if the RICO Plaintiffs of the instant case can show that at least one defendant "resides, is found, has an agent, or transacts his affairs" in the forum, as the Wildes are, then the Courts subject matter and personal jurisdiction is proper as to all other defendants if the ends of justice require as they do in the instant case.
27
Due
process in such cases is satisfied if the nonresident defendant has sufficient minimum
Rolls-Royce, 576 F.Supp.2d at 779; Paolino v. Argyll Equities, L.L.C., 401 F.Supp.2d 712, 718 (W.D. Tex. 2005).
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contacts with the United States.
28
3.6 Reynolds was one of, if not the primary, author of the deceptive contract instruments, thus he was responsible for the construction of the tools, or otherwise forged the weapons for the Syndicates evil deeds, conjured with malice and scienter. Because Reynolds intentionally constructed many of the documents used in the fraud, he knew and planned their use by Gelazela and others in nationwide and international commerce. (See, Calder v. Jones, 465 U.S. 783, 789-91 (1984) (holding California jurisdiction over defendants was proper because their intentional, and allegedly tortious, conduct in Florida was calculated to cause injury to plaintiff in California, and they must have "reasonably anticipate[d] being haled into court there"). 3.7 Plaintiffs further elaborate on their replication to Reynolds plea to the Courts Jurisdiction: 3.8 Though a differently convened Fifth Circuit panel has criticized the Busch test for exercising personal jurisdiction over a nonresident defendant in a nationwide service of process case,
29
Busch has never been overruled

31
30
and has been consistently followed by
district courts within the Fifth Circuit,
and without. Plaintiffs elaborate more fully below.
3.9 In Texas, the majority of the federal courts, including not less than two judges in cases from the Northern District and Eastern District, have conformed to the majoritys position.
32
The Second, Seventh, Ninth, and Tenth Circuits have as well, determined that
See, Eldon A. Busch v. Buchman, Buchman & O'brien, Law Firm, et al., 11 F.3d at 1258; Rolls-Royce at 782. See, Bellaire General Hospital v. Blue Cross Blue Shield of Michigan, 97 F.3d 822, 826 (5th Cir. 1996). 30 As of Thursday, March 29, 2012 01:27:36 EST, there are no Fifth Circuit or Supreme Court cases overruling Busch, according to SHEPARD'S reported by LexisNexis. See, Exs. Vol. 9, Ex. 176. Nor have the Plaintiffs found any cases before the 5TH Circuit or the Supreme Court scheduled to be heard anytime in the near future that would affect the prevailing precedence of Busch. 31 Rolls-Royce, 576 F.Supp.2d at 782. 32 Rolls-Royce at 779; Oblio at *4; Hawkins v. The Upjohn Co., 890 F.Supp. 601, 605-06 (E.D.Tex. 1994).
29
28
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subsection 1965(b) confers nationwide service of process in RICO cases and Eleventh Circuits held that 1965(d) relevant. 3.10
34
33
and the Fourth
Service of the Wildes. The United States Security and Exchange Commission,
filed suit against, and serving Francis E. Wilde and Maureen Oflanagan Wilde serving process at their respective domiciliary addresses
35
in Richardson, Texas, within the
Northern District of Texas (the Plaintiffs incorporating same and requesting the Court take judicial notice of same). It is undisputed that, the alleged Syndicate mastermind of the RICO conspiracy, Francis Wilde, resides in the Northern District of Texas. Thus, the Court may exercise personal jurisdiction over all the Defendants named in the Complaint under section 1965(b) if "the ends of justice require." 3.11 The Plaintiffs urge the Court to also follow the majorities decision in Busch. The
Plaintiffs would point out that although Busch was criticized by a subsequent panel of the court in Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822 (5th Cir. 1996), the Bellaire court nonetheless "dutifully appl[ied]" that prior panel decision, as the court rules required.
36
The Bellaire panel concluded: "[W]e find that the instant case falls squarely
within our Busch holding, and hold that the district court properly exercised personal jurisdiction over Blue Cross based on its contacts with the United States." Id. 3.12 Similarly, Plaintiffs urge the Court to apply Busch and conclude that this Court
has properly exercised personal jurisdiction over the RICO Defendants under 18 U.S.C. 1962 et seq. based on their sufficient contacts with the State of Texas and Canada, as well as
PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 71 (2d Cir. 1998); Lisak v. Mercantile Bancorp, Inc., 834 F.2d 668, 671 (7th Cir. 1987), cert. denied, 108 S.Ct. 1472 (1988); Butcher's Union Local No. 498 v. SDC Investments, Inc., 788 F.2d 535, 539-39 (9th Cir. 1986); Cory v. Aztec Steel Building, Inc., 468 F.3d 1226, 1230 (10th Cir. 2006), cert. denied, 127 S.Ct. 2134 (2007). 34 ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 626-27 (4th Cir. 1997), cert. denied, 118 S.Ct. 1364 (1998); Republic of Panama v. BCCI Holdings, 119 F.3d 935, 942 (11th Cir. 1997). 35 See, SEC Proof of Service for Francis E. Wilde and Maureen Wilde. Exs. Vol. 9, Exs. 174, 175. 36 Bellaire Gen. Hosp., at 826.
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the well-documented RICO Predicate Crimes committed by the RICO Defendants identified in the Plaintiffs First Amended Complaint, passim, and in the sworn Records of the Court.
Conclusion of Replication to Defendants Plea to the Jurisdiction Point 2 3.13 Plaintiffs have shown that Reynolds was substantively informed of the issues of
the complaint and that RICO statutes confer nationwide jurisdiction over each and every RICO defendant whether residing or operating in or out of the District because there exists one RICO Defendant that resides and operates in the District, and further, that because the RICO Defendants are disbursed across the continental United States, the ends of justice clearly warrant the venue of this action belongs in the Northern District of Texas.
IV. REPLY TO DEFENDANT'S DEMURRER (Fed. R. Civ. P. 12(b)(6)) 4.1 Reynolds raises his DEFENSE TWO: FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED stating that Plaintiffs failed State a Claim Upon Which Relief Can Be Granted pursuant to Rule 12 (b)(e) FRCP, &c. RICO Defendant Reynolds further states Plaintiff [sic] has totally failed to allege any specific or general act or omission of REYNOLDS which would support any claim against REYNOLDS. 4.2 Plaintiffs incorporate by reference the facts and allegations in 2.1 thru 2.5 and 3.1.14 thru 3.13, restating, re-averring, and re-alleging each for all purposes, with the same force and effect as if set forth verbatim thence.
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Given the incorporated facts and allegations above, Plaintiffs argue:
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4.3 While the Plaintiffs complaint is attacked by Reynolds Rule 12(b)(6) motion to dismiss, they need only to have met Rule 9(b) specification of details in their factual allegations. Plaintiffs have extensively plead the who, what, when, where and how of each allegation. Their complaint is not merely labels and conclusions, and a formulaic recitation of the elements of the causes of action, but factual allegations that are more than sufficient to raise their right to relief above the speculative level and demonstrates plausible grounds if not trial level proof for Plaintiffs relief. See, Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007); Iqbal v. Hasty, 490 F.3d 143, 155-58 (2d Cir. 2007); Kuhns Brothers, Inc. v. Fushi Intl, Inc., 2007 WL 2071622 (D. Conn. July 16, 2007); Hyland v. Homeservices of America, Inc., 2007 WL 2407233 (W.D. Ky. Aug. 17, 2007). Furthermore, once Plaintiffs claims have been stated more than adequately, their claims may be supported by showing any set of facts consistent with the allegations in the complaint as Plaintiffs have done above; e.g., the testimony of Mark Alan Gelazela in the Securities and Exchange Commission {SEC v. Wilde, et al. } deposition, 2.3.1 at 5, supra, and elsewhere. See, Bell Atlantic Corp., 127 S. Ct. at 1969. 4.4 The court in considering a motion to dismiss a complaint for alleged failure to state a claim, must view the Plaintiffs factual allegations in the complaint (FAC) in the light most favorable to the Plaintiffs, and those allegations must be presumed to be true. Papasan v. Allain, 478 U.S. 265, 283 (1986). See also Neitzke v. Williams, 490 U.S. 319, 327 (1989) (What Rule 12(b)(6) does not countenance are dismissals based on a judges disbelief of a complaints factual allegations); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Sherer, 468 U.S. 183, 191 (1984); Harris, 127 F.3d at 1123; Shear
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United States Securities and Exchange Commission vs. Francis E. Wilde, et al., 8:11-cv-00315-DOC -AJW, U.S. Dist. Ct. CD Cal. 05/13/11 (Document 1, the SEC Complaint; cited herein as SEC v. Wilde, et al., all proceedings thereto related, cumulatively, the SEC Action), also (Doc. 29-6 09/14/12 4, the Mark A. Gelazela Deposition or Gelazela Deposition; Plaintiffs Exhibit 275).
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v. National Rifle Assn of America, 606 F.2d 1251, 1253 (D.C. Cir. 1979) . As the Supreme Court stated in Scheuer, 416 U.S. at 236: When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test. Moreover, it is well established that, in passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader. Caribbean Broad. Sys., 148 F.3d at 1086. In truth, the United States Court of Appeals for the District of Columbia pointedly stated: "The rule that the allegations of the complaint must be construed liberally and most favorably to the pleader is so well recognized that no authority need be cited." Sinclair v. Kleindienst, 711 F.2d 291, 293 (D.C. Cir. 1983).
4.5 In addition, it is also well established that the Federal Rules of Civil Procedure do not require a claimant to set out in extensive detail the facts upon which he bases his claim. Plaintiffs claims surpass the requirements of Rule 9(b) and give the Defendant more than fair notice of what the Plaintiffs claims are and the grounds upon which they rest. See, Conley v. Gibson, 355 U.S. 41, 47 (1957)(quoting Rule 8(a) (2), FED. R. CIV. P.) Sinclair, 711 F.2d at 293 (notice pleading is sufficient) . [U]nder Rule 8(a), [a] complaint need not state facts or ultimate facts or facts sufficient to constitute a cause of action. United States v. Private Sanitation Indus. Assn, 793 F. Supp. 1114, 1124 (E.D.N.Y. 1992) (internal quotations and citation deleted); Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 790 (3d Cir. 1984). 4.6 All that is required of the Plaintiffs is that, notwithstanding Rule 9(b) consideration
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for fraud claims, their complaint provides enough factual information to make clear the substance of that claim. Caribbean Broad. Sys., 148 F.3d at 1086. Plaintiffs . . .need only adduce a set of facts supporting their legal claims in order to survive a motion to dismiss under Rule 12(b)(6) . Wells v. United States, 851 F.2d 1471, 1473 (D.C. Cir. 1988). 4.7 For more details and facts, the RICO Defendant must rely upon the liberal opportunity for discovery and other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues. Conley, 355 U.S. at 47-48. Seville Indus. Mach. Corp., 742 F.2d at 790. However, Reynolds showed a complete disinterest in discovery by this display of indifference to the Courts Order for the mandatory submissions of scheduling proposals. Defendant chose not to present a proposal. 4.8 Motions to dismiss pursuant to Rule 12(b)(6) are viewed with disfavor and [are] rarely granted. 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure 1357 at 321 (1990 ed.); Wilkerson v. United States, 839 F. Supp. 440, 442 (E.D. Tex. 1993). Courts are reluctant to dismiss a case on technical grounds and, consistent with the federal rules, prefer to decide cases on their merits. See, e.g., Kauffman v. Moss, 420 F. 2d 1270, 1276 (3d Cir.)(citing Foman v. Davis, 371 U.S. 178, 181 (1962)) (relying on Conley, court stated [i]t is too late in the day and entirely contrary to the spirit of the Federal Rules of Civil Procedure for decisions on the merits to be avoided on the basis of . . . mere technicalities.); Texas v. Am. Tobacco Co., 14 F. Supp. 2d 956, 961 (E.D. Tex. 1997); Yeitrakis v. Schering- Plough Corp., 804 F. Supp. 238, 240 (D.N.M. 1992). 4.9 In accordance with these principles, the courts have repeatedly denied defendants motions under Rule 12(b)(6) to dismiss RICO actions of substantial import such as the
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instant case, as well as Government civil RICO complaints. 4.10 The application of Fed. R. Civ. P. 9(b), provides:
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Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally. 4.11 Rule 9(b) serves two primary interests: Protecting a defendant from
reputational harm and strike suits, and providing defendant sufficient information to respond to plaintiffs claims. Firestone v. Firestone, 76 F.3d 1205, 1211 (D.C. Cir. 1996) . Generally, Rule 9(b) is satisfied when the complaint state[s] the time, place and content of the false misrepresentations, the fact misrepresented and what was retained or given up as a consequence of the fraud, and the identity of the party making the representation. Firestone, 76 F.3d at 1211 (citations deleted). Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir. 1994). Although such allegations are sufficient to satisfy Rule 9(b), the Rule does not require such allegations. Plaintiffs are free to use alternative means of injecting precision and some measure of substantiation into their allegations of fraud. Seville Indus. Mach. Corp., 742 F.2d at 791. Mayer v. Dell, 1991 WL 21567 (D. D.C. 1991) The Plaintiffs have so done throughout their complaint. 4.12 In essence, the Plaintiffs complaint must provide enough detail about the
underlying facts which illustrate that [the RICO Defendants] statements were fraudulent to allow a court to evaluate the claim in a meaningful way. Arazie v. Mullane, 2 F.3d 1456, 1465 (7th Cir. 1993). However, the plaintiff need not allege specific evidentiary details needed to prove his claim at trial in order to satisfy Rule 9(b) specificity. Formax, Inc. v.
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See, e.g., United States v. Philip Morris Inc., 116 F. Supp. 2d 131, 152-155 (D.D.C. 2000); United States v. Private Sanitation Indus. Assn, 793 F. Supp. 1114. 1123-49 (E.D.N.Y. 1992); United States v. Dist. Council of New York, 778 F. Supp. 738, 746-60 (S.D.N.Y. 1991);United States v. Intl Bhd. of Teamsters, 708 F. Supp. 1388, 1395-1401 (S.D.N.Y. 1989); United States v. Bonanno Organized Crime Family of La Cosa Nostra, 683 F. Supp. 1411, 1422-40 (E.D.N.Y. 1988), affd, 879 F. 2d 20 (2d Cir. 1989).
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Hostert, 841 F.2d 388, 391 (Fed. Cir. 1988), (citing Seville Indus. Corp., 742 F.2d at 791-92). Cf. Shahmirzadi v. Smith Barney, Harris Upham & Co., 636 F. Supp. 49, 53 (D.D.C. 1985) (Rule 9 should not be treated as requiring allegations of facts in the pleadings) (citations deleted). See also Brady v. Games, 128 F. 2d 754, 755 (D.C. Cir. 1942). Rather, bare bones averments of fraudulent schemes coupled with plaintiffs allegations that defendant used the mails in furtherance of the scheme to defraud is sufficient to allege mail fraud and wire fraud predicate acts. Formax, Inc., 841 F.2d at 391. 4.13 Plaintiffs note that although Rule 9(b) explicitly provides that intent and
knowledge may be averred generally, they are aware that courts have held that the complaint must allege specific facts that support an inference of fraud. Tuchman, 14 F.3d at 1068. See also, Greenstone v. Cambex Corp., 975 F.2d 22, 25 (1st Cir. 1992) (The complaint must allege specific facts that make it reasonable to believe that defendant knew that a statement was materially false or misleading.); DiLeo v. Ernest & Young, 901 F.2d 624, 629 (7th Cir. 1990) (the complaint still must provide a basis for believing that plaintiffs could prove scienter); Powers v. British Vita, P.L.C., 57 F. 3d 176, 184 (2d Cir. 1995) (the plaintiff must allege a motive for committing fraud and a clear opportunity for doing so). Close examination of Plaintiffs First Amended Complaint will affirm that they have been particularly diligent to meet or exceed these requirements. 4.14 Furthermore, Plaintiffs inferences to the RICO Defendants fraud and the
requisite mental state can be satisfied by alleging facts that show a defendants motive to commit [the charged] fraud. Where a defendants motive is not apparent, a plaintiff may adequately plead scienter by identifying circumstances that indicate conscious behavior on the part of the defendant, though the strength of the circumstantial allegations must be correspondingly greater. Tuchman, 14 F.3d at 1068. Beck v. Manufacturers Hanover Trust Co., 820 F.2d 46,50 (2d Cir. 1987), cert. denied, 484 U.S. 1005 (1988), overruled on other
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grounds by United States v. Indelicato, 865 F.2d 1370 (2d Cir.) (en banc), cert. denied, 493 U.S. 811 (1989). Of particular mention regarding the Plaintiffs pleading requirements pertaining to Rule 9(b), Plaintiffs aver that the Rule applies only to the RICO predicate offenses supposing in fraud, and not to the other elements of their RICO claims.
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Conclusion of Reply to Defendant's (Fed. R. Civ. P. 12(b)(6)) Demurrer 4.15 The determining factors for claims upon which Plaintiffs relief can be granted,
are found in the numerous claims directed toward Reynolds in the First Amended Complaint, argued above. Those claims are sufficiently concise and numerous as to give Plaintiffs a fair measure of just reasoning and determination for their right to relief. Further, because Reynolds had far more than a casual association with the operations, direction, solicitation of the client base, interactive communications with other members of the RICO conspiracy and was active in the construction of the instruments of the criminal activities, his actions avail them selves to the RICO facility allowing for the joint liability of all RICO actors involved in the racketeering activities. That statutory and facility supported well-established authority gives rise to Defendants liability for claims made against other actors engaged in the racketeering conspiracy, racketeering, and related predicate crimes. The Plaintiffs claims upon which relief can be granted are inescapably apparent.
See, e.g., Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 26 n.4 (2d Cir. 1990); Rose v. Bartle, 871 F.2d 331, 366 (3d Cir. 1989); United States v. Dist. Council of New York, 778 F. Supp. at 746-47 (collecting cases); Federal Ins. Co. v. Ayers, 741 F. Supp. 1179, 1185-86 (E.D. Pa. 1990); United States v. IBT, 708 F. Supp.
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V. OBJECTION TO MOTION FOR MORE DEFINITE STATEMENT (Fed. R. Civ. P. 12(a)(4)(B)) 5.1 Plaintiffs incorporate by reference the facts and allegations in 2.1 thru 2.5 and 3.1.14 thru 3.13, restating, re-averring, and re-alleging each for all purposes, with the same force and effect as if set forth verbatim.
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Argument of Plaintiffs Objection and Memoranda of Law 5.2 Plaintiffs Twelve Causes of Action allegations comply with the liberal pleading standards of Rule 8(a) and with Rule 9(b) pleading standards for allegations of fraud, and is specific enough to apprise the Defendant of the substance of the claim being asserted. 5.3 It seems that Defendant moves for a more definite statement of the entirety of the Plaintiffs complaint, complaining, inter alia, that: one would be pressed to find a handful of the numerous numbered paragraphs which represent a single allegation. (Doc. 203 at 3)
5.4 Reynolds complains about his reading comprehension and vocabulary deficits as well as the wearing of his dictionary; but no more than his troubling of the Plaintiffs two page narrative relating to the racketeering conspiracy, racketeering activities and crimes of the organization to which he and the Syndicate members belong. This he claims, is insufficient, and requires a more definite statement, inferring that a more elaborate statement be made: Paragraph 3.1 contains a 2 page narrative which includes the Russian Mafia, the Italian Mafia, and the internet age gangster. Included in this paragraph is an allegation that actually reads This modern criminal gestalt takes full advantage of the ephemeral nature of the Internet and the commercial and social dependency of the World Wide Web. (Doc. 203 at 3) The Complaint reads like a story that requires a nearby dictionary and leaves the
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reader wondering what he just read. It does not however meet the requirements of a Complaint in that a party cannot reasonably prepare a response to it. (Doc. 203 at 4) 5.4.1 In the Defendants attempt to muddle through Plaintiffs RICO, and other claims, Reynolds has understandably failed to grasp, given his apparent unfamiliarity with complex litigation and 18 U.S.C. 1962(a), (d), and (c), that Plaintiffs allegations and claims are more than a pretext for conferring subject matter and personal jurisdiction upon this Court to hear the instant cause. Reynold would have the Court believe that the two-hundred and one predicate crimes and the overt criminal acts in furtherance of the racketeering conspiracy and racketeering allegations against the Defendants essentially constitute a simple state law fraud claim. Defendant tries to dramatize these allegations and infer statutes were enacted by Congress to prevent Soprano-like interstate mob activity, and not garden variety disputes he affords this instant action. Far be the Defendants suppositions from the truth, as such is not the case here. 5.4.2 Verily, Reynolds recites an excerpt from the FAC III BACKGROUND narrative. 5.3, supra. To what end is its purpose, we are left in the dark except for the reference of contains a 2 page narrative which, because its infusion into the Defendants MOTION FOR MORE DEFINITE STATEMENT, Plaintiffs must infer that Reynolds desires further elucidation. 5.4.2.1 Plaintiffs believe that their two page narrative is sufficient to describe the background of the case relating to the construct of the RICO Defendants organization infrastructure and nature. Such, the Plaintiffs believe, is enough for the background statement as the architecture and machinery of the association-in-fact enterprises and operations are more fully described as the activities are revealed later in the complaint. It is true that other racketeering actions give more tongue to describing the complex background of the criminal activities in a case. For instance,
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following Plaintiffs conferences with the Federal Attorneys office of E.D. New York, Brooklyn Office, concerning organized crime, they were forwarded copies of the incitements of a case they were prosecuting shortly after they were unsealed. Plaintiffs note, that indeed, the background stories of the related cases
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were as
colorful as the Plaintiffs and ran about five pages in each instance. Nevertheless, the Plaintiffs assert their claim of sufficiency. 5.4.3 The Supreme Court has recognized that RICO is to be interpreted broadly: This less restrictive reading is amply supported by our prior cases and the general principles surrounding this statute. RICO is to be read broadly. This is the lesson not only of Congress' self-consciously expansive language and overall approach, but also of its express admonition that RICO is to be liberally construed to effectuate its remedial purposes, Pub.L. 91-452, 904(a), 84 Stat. 947. The statute's remedial purposes are nowhere more evident than in the provision of a private action for those injured by racketeering activity. Sedima, S.P.R.L. v. Imrex Co., Inc. , 473 U.S. 479, 497-98 (1985); see also Annulli v. 43 Panikkar, 200 F.3d 189, 195 (3d Cir.1999). 5.4.4 A complaint need not include every conceivable detail concerning the events alleged so long as the defendant can frame a responsive pleading. "While defendant may not have been able to ascertain all the details [though they are plentiful here] of [P]laintiffs' case from the complaint, that is not the function of pleadings in the federal courts." Boxall v. Sequoia Union High School District, 464 F. Supp. 1104, 1113-1114 (N.D. Cal. 1979). "A Rule 12(e) motion is not a substitute for discovery; such a motion attacks unintelligibility in a pleading, not mere lack of detail." Wood v. Apodaea, 375 4 F. Supp. 2d 942, 949 (N.D. Cal. 2005). "If the detail sought by a motion for more
E.g., United States -against- Vincent Dragonetti, 1:11-cr-00003-DLI-JO SEALED (Doc. 1, 1/5/11). In Forbes v. Eagleson, 228 F.3d 471, 484 (3d Cir. 2000), the Court of Appeals recognized that Rotella v. Wood , 528 U.S. 549 (2000) rejected the injury and pattern discovery rule applied in Annulli.
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definite statement is obtainable through discovery, the motion should be denied." Beery v. Hitachi Home Electronics (America), Inc., 157 F.R.D. 477, 480 (C.D. Cal. 1993) (citation omitted). "[A] motion for a more definite statement should not be granted unless the defendant literally cannot frame a responsive pleading." Bureerong v. Uvcnvas, 922 F. Supp. 1450,1461 (C.D. Cal. 1996).
Conclusion of Objection to Motion for More Definite Statement (Fed. R. Civ. P. 12(a)(4)(B)) 5.4.5 Defendant's motion for more definite statement should be denied because Plaintiffs Causes of Action all contain a short and plain statement and incorporate relevant facts from the substantially detailed complaint from which Defendant can formulate a response.
VI. CONCLUSION 6.1 It is clear from the intermediate conclusion of each issue and inferred motions by the RICO Defendant, that the facts, record evidence, argument and authority clearly and convincingly establishes that RICO Defendants claims are without merit and are wholly incredible. There is no escaping that Reynolds was served the Summons and Complaint, that Plaintiffs complaint meets or exceeds the heightened pleading standards of both Fed. R. Civ. P. 9(b) and 18 U.S.C. 1961 et seq. 6.2 Plaintiffs aver that RICO Defendants motion was supported by false statements in a deliberate and wanton attempt to obstruct the proceedings by making false and frivolous claims.
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Reynolds, as all of the RICO Defendants, should have taken heed and been forewarned by the words and lament of the villainous Lord Marmion, who murmured to himself as his schemes unraveled, in Sir Walter Scott's poem words the Defendants ought soon repeat. VII. PRAYER For the foregoing reasons, the Court should strike Reynolds answer and proceed to the entry of a Default Judgment as proposed. Plaintiffs pray the Court DENY RICO Defendants plea to the jurisdiction and implied motions labeled as defenses, and for any additional relief that the Court may deem just and proper.
Respectfully Submitted on Sunday, September 30, 2012.
s/ R. LANCE FLORES Lead Attorney 3314 Pleasant Drive Dallas, Texas 75227 USA Tel. (Dallas): +1 (214) 272-0349 Tel. (Fax): +1 (210) 519-6528 ECF & Case Management E-mail: LF_legaldept@MockingbirdFilms.com Attorney for the Plaintiff
s/ VICKI CLARKSON 2416 - 36 Street SW Calgary, AB T3E 2Z5 Tel. (Calgary): +1 403-244-9980 Tel. (Fax:) +1 (403) 246-3331 ECF & Case Management E-mail: VC_LegalDept@MockingbirdFilms.com Attorney for the Plaintiff
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CERTIFICATE OF SERVICE On Sunday, September 30, 2012, I electronically submitted the foregoing document with the Clerk of Court for the U.S. District Court, Northern District of Texas, using the electronic case filing system (CM/ECF) of the Court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal rule of Civil Procedure 5 (b)(2). For the Plaintiffs:
s/ R. LANCE FLORES
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Doc. 209 - Pla Reply REYNOLDS Motion To Dismiss Doc. 203

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Case 3:11-cv-00726-M-BH Document 209 Filed 09/30/12

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UNITED STATES DISTRICT COURT

R. Lance Flores, Vicki Clarkson, Plaintiffs, v.

Scott Anthony Koster, et al. Defendants.

In the Matter of: William Chandler Reynolds, RICO Defendant

Wherefore in support thereof, Plaintiffs respond and show the following:

The "Defendant" - the "RICO Defendant" - "Reynolds"

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Table of Affidavit of Service Filings by the Clerk (Reynolds)

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William C. Reynolds and

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Chandler Reynolds, in this caseto accept service of process on its behalf.

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Moreover, Mr. Reynolds contends that he was personally aware of the

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Reynolds position and authority in the

Reynolds criminal association, and

3.2.4.3 Plaintiffs alleged in FAC 4.1.4

that the funding platform and related

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