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Raoul Barrie Clymer 14150 Grant St., Suite 33 Moreno Valley, CA 92553 (951) 231-5886 raoulclymer@yahoo.com Propria persona UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAOUL BARRIE CLYMER; Plaintiff, CASE NO. 11-CV1414-VAP (OPx)

PLAINTIFFS OPPOSITION TO DEFENDANT KEVIN ELDER & vs. GoWIRELESS, INC.s MOTION TO DISMISS PLAINTIFFS FIRST KEVIN ELDER; RICHARD ELDER; AMENDED COMPLAINT, AND SCOTT WOODSIDE; PIMLICO RANCH MEMORANDUM OF POINTS AND LLC; DRAKE DEVOLOPMENT, LLC,; AUTHORITIES IN SUPPORT GOWIRELESS, INC.; ALLIANCE BANK; MARK COHEN; DATE: November 26, 2012 TIME: 2:00 p.m. Defendants. CTRM.: 2 JUDGE: Hon. Virginia A. Philips Action Filed: September 7, 2011 Trial Date: None Set

Opposition to Elder & GoWireless Motion to Dismiss

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TABLE OF CONTENTS I. INTRODUCTION STATEMENT OF THE CASE LEGAL STANDARD ASSIGNMENTS STANDING

Opposition to Elder & GoWireless Motion to Dismiss

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In

STATEMENT OF THE CASE 2005 Kevin Elder was the sole owner of GoWireless, Inc.

[and a plethora of other businesses]. GoWireless was cash poor however had a monthly income of 80 stores providing Verizon wireless phone service. From 1995 to 2005 Kevin Elder was able to open a average of 8 stores per year. In fall of 2005 Michael Murray introduced Kevin Elder to Scott Woodside a managing member of Pimlico Ranch LLC [a stalled real estate project of 26 middle class homes in Murrieta, California]. Scott Woodside informed Elder that there was an $11.9 million construction loan issued by Alliance bank secured by the property. Kevin also found out that Alliance Bank issued said construction loan without regard for performance. Woodside informed Elder that

the Project could be purchased from Randall Haskins for $3.8 million. A Deed of Trust was recorded for Diversified Builders

[owned by Randell Haskins or associates?] for $3.8 million dollars. Kevin made an agreement with Haskins to pay the $3.8 with the proceeds from the construction loan. With this knowledge Kevin Elder created a ponzi scheme to finance his GoWireless corporation. Elder and Woodside met with the VP of Alliance Mark Cohen who had issued the first construction loan on the Pimlico Ranch project.

Opposition to Elder & GoWireless Motion to Dismiss

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The terms agreed 1were that Kevin Elder would deposit $3.5 mil in escrow in Alliances bank and they would issue a money purchase loan with an unbridled line of credit in the disguise of a construction loan. With these terms set, Elder needed $3.5 million. Murray informed Elder that his Father-in-laws brother, Ben Clymer [hereinafter Clymer], was interested in getting into real estate and that he could convince Clymer to invest. Murray explained that Clymer had full faith and confidence in him. Elder agreed that he would pay $70,000.00 to Murray if Murray could deliver. Murray, a specialist in sub-prime mortgage loan preparation, was at the time a licensed real estate broker. Murray made the initial presentation prefaced by informing Clymer that Elder was the sole shareholder of GoWireless, Inc., and Murrays Brother-inlaw was the CFO for GoWireless. Murray endorsed Elders

credibility, honesty and integrity. With the alleged possibility of making almost 100% profit on a 2 year investment Clymer agreed and

Murray scheduled a meeting with Elder in Clymers office in Riverside California. Kevin Elder flew in from Las Vegas, Nevada, in November of 2005 to meet with Clymer in Riverside, California. Kevin Elder confirmed that he was the sole shareholder of GoWireless, Inc and
1

It is unknown how the Deed of Trust recorded by Alliance for $11.9 million construction loan was satisfied, however, said deed was removed from the Official Records to give the appearance of clear title. Opposition to Elder & GoWireless Motion to Dismiss 4

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that he would give his personal guarantee backed by the 80 GoWireless, Inc. stores that the project would be completed in a timely fashion. Elder said he needed $3.5 mil to purchase the Pimlico Ranch LLC project with clear title to property. Elder assured Clymer his investment would be secured. However, when Elder explained that Clymer would have to subordinate his secured loan on title to the bank for the construction loan Clymer balked. Elder

immediately sweetened the deal by providing three of the homes to be built at cost for Clymer and his sons. Clymer then agreed. At the direction of Elder on December 23, 2005, Clymer began to wire transfer $3.5 million dollars into Elders personal bank account. Prior to recording on December 31, 2005, of the Contract, Promissory Note, and Deed of Trust Loan

Murray presented said

documents to Clymer for signing. Murray assured Clymer the terms were recorded as represented and Clymer signed without reading. Thereafter, Elder continued to purchase stalled real estate projects. Etiwanda Arbors LLC is another project that was financed by Alliance Bank, same bank agent, Mark Cohen, and Richard Elder, Scott Woodside, and Kevin Elder as managing members. Turtle Rock 29 Enterprises LLC, Mesquite 55 LP, Juniper Tree LLC, Cajalco Road LLC, all had the same managing members and are a few that are currently known that are all stalled. Pimlico Ranch LLC and

Etiwnada Arbors LLC are suspended entities by the California Opposition to Elder & GoWireless Motion to Dismiss 5

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Secretary of State. It is interesting to note that Etiwanda Arbors LLC and Juniper Tree LLC have attorney, Kevin Bagley, of Spradling, Metzer and Wynne, Process. There is an ongoing pattern of racketeering activity amongst an association-in-fact enterprise comprised of the same individuals. The real estate projects are suspended, the bank bankrupted, meanwhile Defendants, Kevin Elder [ as sole Duckor,

listed as Agent for Service of

shareholder] and Gowireless, have grown by leaps and bounds from 80 stores the first ten years [ 8 stores per years average] to 385 stores in the last 7 years [ over 43 stores a year average]. The successor to Alliance Bank continues to conduct business with the instant defendants. According to defendants it is purely circumstantial that a cash poor enterprise in 2005 suddenly found funding in the middle of the worst depression in history. They

claim there is nothing illegal with absconding with investment funds intended for real estate projects, or commingling funds between fictitious entities in interstate commerce as long as said entities are owned by the same sole shareholder. They purport that the complaint sub judice is nothing more than a real estate investment that went bad and Plaintiff is only harassing the poor Defendants. They claim the wrongdoing alleged is patently frivolous and immaterial. Is it only happenstance that the real Opposition to Elder & GoWireless Motion to Dismiss 6

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estate projects that Kevin Elder was sole shareholder of are suspended and insolvent and that GoWireless flourishes in the midst of an economic depression? Plaintiff is the brother of the former real party in interest and a member of the family whose family assets were liquidated to fund the Pimlico Ranch LLC real estate project. Inasmuch as the Plaintiff has a real interest in the family business, which has been damaged by the loss of title to real property and saddled with monthly payments of approximately $50,000.00 per month as a direct result of Defendants predicate acts, Plaintiff has standing to seek redress for said damages. The Plaintiffs Family business once flourishing has been holding its own in an effort to avoid laying off dedicated employees. The Defendant, Kevin Elder, knew the sensitive financial condition of the Family Business and made his power play. There is no question as to the costs of litigating a cause of action such as the instant case and the costs would be an overbearing burden upon the Plaintiffs Family Business. It was for this reason that Clymer ultimately made the Assignment of Deed of Trust to Plaintiff with the intent to transfer 100% of real interest in the attached Note to enforce it. In this manner Plaintiff contends that he can avoid the cost of joining Clymer; inasmuch as receiving consent from the debtors is not an option. The aforesaid Assignment is subject to Opposition to Elder & GoWireless Motion to Dismiss 7

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the one satisfaction rule and bestows standing upon Plaintiff with the right to enforce the note as noteholder. CONDUCT After being introduced to Scott Woodside, the managing member of Pimlico Ranch LLC, and learning of the working relationship Pimlico Ranch LLC had with Alliance Bank wherein the Bank would lend a Construction Loan without regard for paying out according to performance, the Defendant, Kevin Elder, as the sole shareholder of GoWireless, Inc., devised a Ponzi Scheme or artifice to defraud in order to acquire funding for investing in GoWireless [in preparation of a public offering] and other businesses in interstate commerce. Kevin Elder deliberately made false misrepresentations to private investors and financial institutions, seeking capital for purchase of non-performing notes on multiple home real estate projects, and the construction thereof, which he never intended to complete on schedule. Once the Defendant, Kevin Elder, obtained the real estate projects Kevin Elder would present his sole ownership of GoWireless, Inc., and the earned income therefrom the 80 [then existing; now 385] stores as verifiable income and guarantee for a construction loans to build the projects. Defendant, Richard Elder, as managing member of Drake Opposition to Elder & GoWireless Motion to Dismiss 8

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Development, and R L Elder Construction Company, Pimlico Ranch LLC, and, Scott Woodside, as accountant of and managing member of Pimlico Ranch LLC, Etiwanda Arbor LLC, would also give their personal guarantees on the construction loans. Defendant, Richard Elder, in his managerial capacity for Drake Development, and R L Elder Construction Company, would sign Guaranty of Completion and Performance guaranteeing a timely completion of construction as per contract, knowing that the money would not be utilized for the stalled real estate project. Once the Construction loan was procured Scott Woodside, as Pimlico Ranch LLC accountant and managing member, would falsify Release Documents claiming completion of Phase I construction and submit said documents to Mark Cohen, Vice President and acting agent of Alliance Bank for release of the Construction Loan knowing that the claimed performance required for release of funds was never started much less completed. Thereafter, defendant VP Mark Cohen, in his managerial capacity for Defendant, Alliance Bank, did release the Construction Loan in the form an unbridled line of credit for Defendant, Kevin Elder, knowing that in so doing he was breaching the Construction Loan Agreement contract mandating performance [completion of Phase I] and violating Alliance Banks fiduciary duty to Plaintiff. Thereafter Defendant, Kevin Elder, would invest the money Opposition to Elder & GoWireless Motion to Dismiss 9

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fraudulently procured as a construction loan into opening new businesses and Go Wireless, Inc. throughout North America as a means of laundering the ill-gotten gains. Said defendant would

make several interest payments with funds diverted from one of his wholly owned businesses and then refuse to pay investors the interest or reimburse the principal of the financing borrowed claiming insolvency. [It should be noted that Alliance Bank had to sue Kevin Elder for non-payment on the second construction loan in question. Request for Judicial Notice, infra, of Alliance Bank v.

Scott Woodside, Richard Elder, Kevin Elder, Superior Court for Riverside County, case no. RIC496198, filed March 26, 2008.] The illegal retention and embezzlement by the Defendant, Kevin Elder, of the entire portion of Plaintiffs investment, interests, and profits which was spent on the devised scheme resulted in tens of millions of dollars of illegal gains invested in new businesses in interstate commerce and damages to Plaintiffs business and property as set forth in the Complaint. From the year 2004 to the present, in furtherance of the Ponzi Scheme to defraud investors and financial institutions, the Defendant, Kevin Elder, and his willing co-conspirators caused, and continues to cause, the United States mails to be used to send brochures, flyers, negotiable instruments, and communications in support of his scheme. Each of these mailings is an act that is Opposition to Elder & GoWireless Motion to Dismiss 10

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indictable as mail fraud, together

with wire transfers, wire

communications, and filing of fraudulent documents with private investors and banks, in support of the ponzi scheme which all constitute a pattern of racketeering activity. By conspiring to conduct, and in fact conducting, the affairs of their ASSOCIATED IN FACT ENTERPRISE, as defined hereunder, through this pattern of racketeering activity, the Defendants violated RICO, 18 U.S.C. 1962 (a),1962(C) & 1962(d). As a result, the Plaintiff and the others unknown were injured in their business and property as set forth infra. Said ASSOCIATION IN FACT ENTERPRISE is ongoing as will be established subject to discovery. Defendants now attempt to evade responsibility for their dishonest acts, claiming that the First Amended complaint against them is insufficient to put them on notice of the particulars of the fraud they have committed. This argument is as disingenuous as it is meritless, as is the defendants baseless contention that their fraudulent scheme has not directly caused Plaintiff any harm. Plaintiffs allegations set forth, in great detail, the defendants fraudulent ponzi scheme for which the defendants must now be held accountable. The defendants motion to dismiss Plaintiffs FAC is unfounded and should therefore be denied. ASSIGNMENTS In December of 2005, Clymer invested $3.5 million with Kevin Opposition to Elder & GoWireless Motion to Dismiss 11

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Elder to purchase the Pimlico Ranch LLC project with property outright. This investment was memorialized by contract, Promissory Note, and secured by a Deed of Trust on title to the real property the Project was to be built upon. Upon default by Pimlico Ranch LLC, and Kevin Elder as sole owner, Plaintiff was given an Assignment of Interest by B&D Real Estate A Trust LLC as follows: THIS ASSIGNMENT is made, by and between, Randolph Ben Clymer, the sole proprietor of B&D Real Estate A Trust, LLC, Assignor, and Raoul Barrie Clymer, Assignee. WITNESSETH, that for valuable consideration in hand paid by the Assignee to the Assignor, receipt of which is hereby acknowledged, the Assignor hereby assigns and transfers to the Assignee one half of the interest in the Promissory Note, Contingent Interest Loan Agreement, and Deed of Trust secured by the Pimlico Ranch Property and any of his/her rights, including but not limited to chose of [sic] action, title, and interest in said property commonly known as TRACT 29981, City of Murrieta, California; Parcel number 906-250-017. [Emphasis added.] The intent of both parties was [and is] clear, however, an assignment of 50%, as the Court correctly pointed out, was insufficient to establish standing. Notably, there were also the issues that B&D was a Trust, not an LLC and that Plaintiff was not

an original party to the action. Notwithstanding the aforesaid assignment, to legalize the parties intent, an Assignment of Deed of Trust was recorded in the Official Records of Riverside County, California, on January 30, 2012, naming Plaintiff as Assignee. Opposition to Elder & GoWireless Motion to Dismiss 12

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The language of the Assignment of Deed of Trust exhibited to the FAC states that Clymer assigns and transfers to Raoul Barrie Clymer all beneficial interest.TOGETHER with the note or notes therein described and secured thereby, the money due and to become due thereon, with interest, and all rights accrued or to accrue under said Deed of Trust including the right to have reconvened, in whole or part, the real property described therein. [Emphasis ADDED.] ASSIGNABILITY OF R.I.C.O. CLAIM Defense Counsel sets forth an argument claiming that FAC fails to allege facts showing how the Assignment could also transfer Bens individual tort claims. [MTD, page 9, 1, ln 1011] However, said claim lacks any argument and/or case precedent

to support this proposition. In a case of first impression in the Central District of California addressing the issue of whether a RICO cause of action was assignable, Judge Tashima rendered a most articulate opinion specifically on assignment of RICO claims wherein he held: While it is true that Congress did not intend to import all of existing antitrust law into RICO, it appears that Congress intent in this regard was to keep from restricting RICOs reach by burdening private RICO litigants with antitrust concepts of standing and proximate cause. Permitting the assignment of RICO claims, on the other hand, would not restrict RICOs scope, but would serve to effectuate RICOs broad remedial purposes[] Therefore, the Court holds that RICO treble damage claims are assignable. In re Opposition to Elder & GoWireless Motion to Dismiss 13

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NATIONAL MORTGAGE EQUITY CORPORATION MORTGAGE POOL CERTIFICATES SECURITIES LITIGATION, 636 F. Supp. 1138 @ 1156 [C.D. Cal. May 29, 1986] More recently the United States Supreme Court held [a]n assignee of a legal claim for money owed has standing to pursue that claim in federal court, even when the assignee has promised to remit the proceeds of the litigation to the assignor. Sprint Communications Co., L.P., et al. v. APCC Services, Inc., et al., 128 S.Ct. 2531 (June 23, 2008). @2534 INJURY IS ASSIGNABLE In Sprint, id, as here, the defendants claimed Plaintiffs, as assignees, did not suffer an injury and that assignments do not transfer the assignors injuries. However, the Supreme Court quoted a precedent case, Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836, and rendered: But the operators assigned their claims lock, stock, and barrel, and precedent makes clear that an assignee can sue based on his assignors injuries. Sprint Communications Co., L.P., et al. v. APCC Services, Inc., et al., 128 S.Ct. 2531 (June 23, 2008). @ 2533 STANDING The Ninth Circuit recently determined Standing in Mortgage Cases and applying the Uniform Commercial Code held that Under the UCC, a transfer of a negotiable instrument [Promissory Note]

Opposition to Elder & GoWireless Motion to Dismiss

14

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vests in the transferee any right of the transferor to enforce the instrument. UCC 3203(b). In re Veal, 450 B.R. 897, @ 911 (B.A.P. 9th Cir. 2011); in accord, In re Jackson, 451 B.R. 24, @ 29 (Bankr. E.D. Cal. 2011). [Emphasis added.] Plaintiff contends that any right of the transferor includes the right to pursue RICO claims against the defendants. Plaintiff contends that he has established both Constitutional and Prudential standing to pursue his RICO claims. In the event the Court holds otherwise Plaintiff would ask for leave to amend. STANDARD OF REVIEW In evaluating a defendants motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), all facts alleged in the complaint must be accepted as true and construed in the light most favorable to the plaintiff. Lee v. City of Los Angeles, 250 F.3d 668, @677 (9th Cir. 2001) Rule 12(b)(6) motions are viewed with disfavor and rarely granted. Hall v. Santa Barbara, 883 F.2d 1270, @ 1274 (9th Cir. 1986). Review is based strictly on the contents of the complaint. Buckey v. County of Los Angeles, 968 F.2d 791, @ 794 (9th Cor. 1992). Dismissal is inappropriate unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim entitling plaintiff to relief. Livid Holdings Ltd. V. Salomon Smith Barney, Inc., 416 F.3d 940, @ 946 Opposition to Elder & GoWireless Motion to Dismiss 15

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(9th Cir. 2005). CONSPIRACY Title 18 U.S.C. 1962(d) provides that "[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of [Section 1962]." "A conspiracy may exist even if a conspirator does not agree to commit or facilitate each and every part of the substantive offense." Salinas v. U.S., 522 U.S. 52, 63, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997) (citing U.S. v. Socony-Vacuum Oil Co., 310 U.S. 150, 253-54, 60 S.Ct. 811, 84 L.Ed. 1129 (1940)). Thus, "[i]t makes no difference that the substantive offense under 1962(c) requires two or more predicate acts." Id. at 65, 118 S.Ct. 469. "The interplay between [18 U.S.C. 1962](c) and (d) does not permit [the court] to excuse from the reach of the conspiracy provisions an actor who does not himself commit or agree to commit two or more predicate acts requisite to the underlying offense." Salinas, 522 U.S. at 65, 118 S.Ct. 469. In the Ninth Circuit, a defendant may be held liable for conspiracy to violate Section 1962(c) if he "'knowingly agree[d] to facilitate a scheme which includes the operation or management of a RICO enterprise.'" U.S. v. Fernandez, 388 F.3d 1199, 1230 (9th

Cir.2004) (quoting Smith v. Berg, 247 F.3d 532, 538 (3rd Cir.2001)). Plaintiff has plead that each defendant knowingly and Opposition to Elder & GoWireless Motion to Dismiss 16

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willing at some point and time took control of the association-infact enterprise in a concerted effort that ultimately facilitated funding for Kevin Elder, GoWireless, and themselves. [FAC, pages 16-18, 67-73]. DEFENDANTS SIX GROUNDS FOR DISMISSAL Defendants raise the following 6 [six] issues in support of their motion to dismiss, Plaintiff will address each issue seriatim: 1. Plaintiff RAOUL BARRIE CLYMER has not, and cannot, allege facts sufficient to support his RICO claim under 18 U.S.C. 1962, and because Plaintiffs RICO claim is patently frivolous and immaterial, Plaintiff cannot establish federal question jurisdiction by alleging such a claim: [Rule 12(b) (1)] To state a claim under RICO section 1962(c), a party must allege: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity. Odom v. Microsoft Corp., 486 F.3d 541, @ 547 (9th Cir. 2007). The defendants contend that Plaintiff has failed to plead any of the aforesaid elements, and in addition, Plaintiff has not alleged a proximate causal connection between the acts alleged and damages Plaintiff suffered. For the reasons set forth below, none of these contentions support dismissal of Plaintiffs RICO complaint. Accordingly, the defendants motion to dismiss Plaintiffs RICO complaint should be denied.

Opposition to Elder & GoWireless Motion to Dismiss

17

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Plaintiff alleges that defendants' acts constitute violations of civil RICO, 18 U.S.C. 1962(c) and (d). Plaintiff alleges that Kevin Elder, Scott Woodside, Richard Elder, Mark Cohen, Pimlico Ranch LLC, GoWireless Inc and Alliance Bank, acting together pursuant to their agreement, constituted an associated-infact enterprise under RICO; that their actions, involving private and financial funding in stalled out real estate projects and diverting the investment funds into GoWireless, constitutes a "pattern of racketeering activity" under RICO; and that they knowingly and willingly committed the RICO "racketeering activity" predicate acts of wire fraud, mail fraud, bank fraud, and money laundering. It is well settled that a pattern of racketeering activity must consist of at least two separate predicate acts. Sun Sav. & Loan Assn v. Dierdorff, 825 F.2d 187, @ 191 (9th Cir. 1987) Plaintiff has plead the perpetrators name, the predicate acts, and when committed. [FAC, pages 19-24, 74-98] In determining whether Plaintiff has alleged a pattern of racketeering activity, the court may only consider predicate acts attributable to defendants. Blake v. Dierdorff 856 F.2d 1365, @ 1371 (9th Cir. 1988) Plaintiff has plead that Kevin Elder, as alter ego to GoWireless, Inc., and Pimlico Ranch LLC, Etiwanda Arbors LLC, Opposition to Elder & GoWireless Motion to Dismiss 18

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created a Ponzi Scheme and did: (1) deceitfully and fraudulently cause investment money for Pimlico Ranch LLC project to be wire transferred in interstate commerce into his personal account [FAC, pages 9-15 , 47-65 ], (2) conceal the fact Pimlico Ranch LLC was to be paid off with the Construction loan obtained months later [Alliance Opt2mtd, exhibit ], (3) commingled money by paying interest payments with a Drake Construction LLC check by mail[Original Complaint, Exhibit 10], (4) cause Richard Elder and R L Elder Construction Company to submit a fraudulent Guaranty of Completion and Performance on Pimlico Ranch LLC to Alliance Bank, (5) cause Scott Woodside to submit a fraudulent Release Price Schedule by Lot on Pimlico Ranch LLC to Alliance Bank, (6) sign as Guarantor for the Pimlico Ranch LLC Construction Loan and fraudulently submitted same to the Bank knowing the loan would not be utilized to build the Pimlico Ranch LLC project, (7) cause Mark Cohen and Alliance Bank to release the Construction Loan without regard for performance and completion of Stage I construction; AND THE FACT THAT (8)Scott Woodside fraudulently applied for two construction loans for Pimlico Ranch LLC from the same Alliance bank and not one home was ever built, (9) Mark Cohen and Alliance Bank issued two construction loans to Pimlico Ranch LLC without regard for performance [especially after there was no construction pursuant to the first loan], one could interpret this pattern of Opposition to Elder & GoWireless Motion to Dismiss 19

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racketeering activity as reveling an Association-in-fact Enterprise comprised of the named defendants. PREDICATE ACT IS PROXIMATE CAUSE OF DAMAGE TO PLAINTIFFS BUSINESS Kevin Elder made fraudulent representations knowing Plaintiff would rely upon same to induce Plaintiff to invest in a predetermined Ponzi scheme. Kevin Elder had no intent of completing the project in a timely fashion. There is evidence that Plaintiffs investment money was not used to purchase the Pimlico Ranch LLC project inasmuch as the Construction Loan clearly evidences the purchase payoff of $3.8 million for the Pimlico Ranch LLC Project. The seven (7) predicate acts by Kevin Elder causing Plaintiffs investment money to be wire transferred into Elders personal account in interstate commerce, in lieu of an escrow account, is the proximate cause of Plaintiffs damage. Kevin Elder misappropriated Plaintiffs investment money which has resulted in damage to Plaintiffs business to the tune of $50,000.00 per month for the last six (6) years with loss of title to real property. ENTERPRISE The U.S. Supreme Court has held that a sole share holder and his closely held corporation can be an enterprise as defined by Tile 18 USC section 1962(c). See Cedric Cushner Promotions v.

King, 533 U.S. 158, 121 S. Ct. 2087, 150 L. Ed 2d 198 (2001) In the instant case Kevin Elder is the admitted sole share holder of Opposition to Elder & GoWireless Motion to Dismiss 20

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GoWireless,

Inc.,

and

Pimlico

Ranch

LLC.

It

was

Kevin

Elders

representation of being sole share holder of Go Wireless, Inc., that induced Clymer to invest in Pimlico Ranch LLC. Kevin Elder is the impetus and catalyst of the association-in-fact enterprise. Legally a number of enterprises may be interpreted from the pleading in the complaint. Although counsel cavalierly claims in

this conspiracy that GoWireless committed no act, [l]ogic dictates that a corporation, receiving income from a pattern of racketeering in which it has participated as a principal, can invest that income in its own operations. Pennsylvania v. Derry Construction Co., 617 F.Supp. 940, 943 (W.D.Pa.1985). Thus, we hold that where a

corporation engages in racketeering activities and is the direct or indirect beneficiary of the pattern of racketeering activity, it can be both the "person" and the "enterprise" Co. v. under section

1962(a).

Scheiber

Distributing

Serv-Well

Furniture

Company, Inc., 806 F.2d 1393 (9th Cir. 1986). It is a fact that GoWireless, Inc., now has 385 subsidiaries which is 305 more than at the time of Plaintiffs cash infusion when Kevin Elder claimed to be cash poor. [I]f the enterprise was a corporation, the fact that there was but one stockholder would not shield that individual from suit, because such a corporate one-man band does receive some legal protections., [a] legal shield for illegal activity that Congress Opposition to Elder & GoWireless Motion to Dismiss 21

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intended RICO to pierce. Sever v. Alaska Pulp Corp., 978 F.2d 1529 @ 1534 (9th Cir. 1992) 2. The Complaint as a whole fails as a matter of law because despite amendment - Plaintiff lacks standing to pursue the claims against the moving defendants; [Rule 12(b)(6)] ALTER EGO DOCTRINE Request for Judicial Notice: Plaintiff requests this Court to take Judicial Notice of records in the (1) Riverside Municipal Court Three Lakes District, Temecula, California, civil case no. TES01592 where defendants, Kevin Elder AKA K Elder, individually and DBA GoWireless, are sued for default of payment, filed 09/22/97; (2) Riverside Municipal Court Three Lakes District, Temecula, California, civil case no.043991, where defendants Robey & Associates Inc., a California Corporation dba GO WIRELSS; Kevin Elder, individually and as guarantor, are sued for default of payment, filed 06/19/98; and (3) Riverside Superior Court, Unlimited, Alliance Bank v. Scott Woodside, Richard Elder, Kevin Elder, Case no. RIC 496198, sued as guarantor for default of payment, filed on March 2008. In the first two non related cases Kevin Elder signed as personal guarantor for GoWireless. In the third Kevin Elder signed as personal guarantor for Pimlico Ranch LLC. In doing business Kevin Elder has continually represented himself as personal guarantor for GoWireless since 1997 in all Opposition to Elder & GoWireless Motion to Dismiss 22

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accounts of record. [See Request for Judicial Notice] This Court defined the alter ego doctrine in Nielson v. Union Bank of California, N.A. 290 F. Supp 2d 1101 @ 1116 and stated: Before the doctrine may be invoked, two elements must be alleged: "First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone." Sonora Diamond Corp. v. Superior Court, 83 Cal.App.4th 523, 526, 99 Cal.Rptr.2d 824 (2000); Mesler, supra, 39 Cal.3d at 300, 216 Cal.Rptr. 443, 702 P.2d 601 ("There is no litmus test to determine when the corporate veil will be pierced; rather the result will depend on the circumstances of each particular case. There are, nevertheless, two general requirements: (1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow,'" quoting Automotriz Del Golfo De California S. A. De C. V. v. Resnick, 47 Cal.2d 792, 796, 306 P.2d 1 (1957)). See also AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir.1996). Taking the facts pled as true, Plaintiff contends that he has established there is such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist. Kevin Elder, continually represented himself as

sole shareholder of his numerous companies and commingles funds between said companies and his person. This Court held that the commingling of corporate and non-corporate assets; the diversion of assets from the corporation to the detriment of creditors; and the failure of an individual to maintain an arm's length relationship Opposition to Elder & GoWireless Motion to Dismiss 23

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with

the

corporation

[are]

factors

the

courts

consider

in

determining whether the corporate veil should be pierced U.S. v. Healthwin Midtown Convalescent Hosp. 511 F. Supp. 416, @419 (C.D. Cal. 1981) It is a fact that K. Elder gave his personal guarantee as sole shareholder of GoWireless, Inc., to procure the fourth Pimlico Ranch LLC loan line of credit. [second from Alliance Bank] to secure $13.9 million Kevin Elder gave his personal guarantee as the

sole shareholder of GoWireless, Inc., to Clymer to secure the $3.5 million necessary for the Alliance $13.9 million guaranteed loan. Plaintiff believes that the alter ego doctrine applies to Kevin Elder, GoWireless, Inc., Drake Development LLC, and Pimlico Ranch LLC. It would be an inequitable result to allow K. Elder to hide behind the shell companies that he manipulates to his personal benefit. [I]f the enterprise was a corporation, the fact that there was but one stockholder would not shield that individual from suit, because such a corporate one-man band does receive some legal protections., [a] legal shield for illegal activity that Congress intended RICO to pierce. Sever v. Alaska Pulp Corp., 978 F.2d 1529 @ 1534 (9th Cir. 1992) 3. Plaintiff has not, and cannot, allege claims for Promissory Fraud and Fraudulent Concealment against moving defendants because the facts underlying the alleged fraud and alleged concealment were fully Opposition to Elder & GoWireless Motion to Dismiss 24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

disclosed to Plaintiffs predecessor in May of 2006; the claims are therefore untimely, the claims continue to lack specificity as against each moving defendant despite Plaintiffs attempt to amend; and Plaintiff suffered no damages as a result of the alleged conduct; [Rule 12(b) (6)] PROMISSORY FRAUD Promissory fraud is a subspecies of the action for fraud. See Behnke v. State Farm General Ins. Co., 196 Cal. App. 4th 1443, 1453 (2011). "A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud." Id. The elements of promissory fraud are [1] a promise made regarding a material fact without any intention of performing it; [2] the existence of the intent not to perform at the time the promise was made; [3] intent to deceive or induce the promisee to enter into a transaction; [4] reasonable reliance by the promisee; [5] nonperformance by the party making the promise; [6] and resulting damage. Id. [1] A promise made regarding a material fact without any intention of performing it. Kevin Elder promised two facts: (1) The investment money was to be used to purchase the Pimlico Ranch LLC project and property with free title, and, (2) The project would be completed on time. [2] The existence of the intent not to perform at the time the promise was made. Opposition to Elder & GoWireless Motion to Dismiss 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Kevin Elder knew when he made those promises they were not going to be kept. He had already planned to and indeed caused the investment funds to be transferred into his personal account for his personal benefit and investment in Go Wireless. Kevin Elder also had prearranged a portion of the Construction Loan to pay off the purchase of Pimlico Ranch LLC and that Clymers investment was not going to be used to purchase the Pinlico Ranch LLC project. [3] Intent to deceive or induce the promisee to enter into a transaction. When Clymer balked at taking second position on title to effectuate the Construction Loan Kevin Elder induced Clymer with the bonus promise of 3 homes at cost for him and his two sons and his personal guarantee backed by his GoWireless stores. [4] Reasonable reliance by the promise. Clymer reasonably relied upon Kevin Elder assurances based on Murrays [a family member] intertwined relationship with Kevin Elder and Kevin Elders assurances were backed by his GoWireless stores. [5] Nonperformance by the party making the promise. There is proof in the record that the Pimlico Ranch LLC project was not purchased with the Clymers investment loan. And there were no homes built and there has never been one piece of Opposition to Elder & GoWireless Motion to Dismiss 26

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

heavy equipment of the Pimlico Ranch LLC property. FRAUDULENT CONCEALMENT Defendants claim that the Subordination of Deed of trust is proof that Clymer was notified there was an existing loan at the time of signing. This is not what said document states. In said document, prepared by defense counsels law firm, it plainly states in bold and capital letters at the very top of the document: NOTICE: THIS SUBORDINATION OF DEED OF TRUST RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. [OC, Exhibit 7, page 1, 1] Taking the facts plead as true Plaintiff has stated that it was not revealed that defendant had consummated the loan [FAC, page 7, 36] and that every time Plaintiff would ask the status of the loan Kevin Elder or his agent would state the bank was dilatory with the financing. [FAC, page 7, 35] Taken the pleadings as true the Subordination document does not controvert the pleadings in the complaint. In most subordination documents it usually states the loan and amount being subordinated to. However, since Defendants counsel drafted this document it raises a question why doesnt it state the loan? 3. Plaintiff has not, and cannot, allege facts establishing a fiduciary relationship with either of the moving defendants; [Rule 12 (B)(6)] The unrefuted facts are as follows. Kevin Elder gave his Opposition to Elder & GoWireless Motion to Dismiss 27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

personal guarantee backed by his GoWireless stores for Plaintiffs investment. [FAC, page 6, 28] Kevin Elders personal invitation is memorialized in the Pimilico Ranch LLC prospectus: DRAKE DEVELOPMENT, LLC is offering to a select entity or individual the opportunity to participate in the development of the property. The highlights of this financial opportunity are as follows: 1. Home sale revenue; $33,645,000 2. Total Projected Profits: $7,908,000 3.Preferred Return: 10% plus 35% of Project Profits): $3,100,000 4. Required Equity:$3,500,000. [Original Complaint, Exhibit 1, page 5, THE OPPORTUNITY] The majority of the investment money was wired on December 23, 2005, directly into Kevin Elders personal bank account as directed by Kevin Elder himself. [FAC, page 6, 31] The alleged contracts with Pimlico Ranch LLC that Kevin Elder attempts to shield himself with were signed on December 31, 2005. [OC, Exhibit 2; Loan Agreement, Exhibit 3; Secured Promissory Note, Exhibit 4; Deed of Trust] At the time that Plaintiff invested with Kevin Elder it was purely a partnership agreement and the fiduciary duties of a partnership apply. At the time the Loan Agreement, Promissory Note, and Deed of Trust were signed Kevin Elder was not even registered as a Managing Member of Pimlico Ranch LLC with the California Secretary of State as required by California Corporation code 17060(a)(5). Therefore, Kevin Elder cannot invoke the protection of the LLC inasmuch as he signed in his personal capacity. Opposition to Elder & GoWireless Motion to Dismiss 28

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There is documentary evidence in the record that Kevin Elder was doing business as GoWireless Inc and willing to sign as personal guarantor to procure the money necessary to build his GoWireless stores. [Original Complaint, Exhibit 9, Promissory Note, last page, Commercial Guaranty] Defendants have not denied Kevin Elder gave his personal guaranty to Plaintiff and as such there is an admission of a fiduciary duty to Plaintiff. (E)ach partner or associate occupies a fiduciary relationship to the others in all matters pertaining to the partnership enterprise. Stenian v. Tashjian, 178 Cal. 623, @ 627, 174 P. 883, @ 885.

5. Plaintiff has not, and cannot, allege unjust enrichment claim against either moving defendant because Plaintiff is a stranger to the underlying loan transaction, suffered no out-of-pocket losses, and failed to bring his claim in a timely manner; [Rule 12(b)(6)] Plaintiff as lawful assignee has clearly established that he is not a stranger to the underlying loan transaction (Assignment, supra.)[and he has] suffered [] out-of-pocket losses As for the timeliness the fraudulent concealment tolls the limitation. Fraudulent Concealment, supra.

6. Plaintiff has not, and cannot, allege a breach of contract claim against moving defendants because the Opposition to Elder & GoWireless Motion to Dismiss 29

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moving defendants are not parties to any alleged contract. [Rule 12(b)(6)] BREACH OF CONTRACT: First and foremost, Plaintiff incorporates by reference as if fully set forth herein the alter ego argument to establish Kevin Elders personal liability for the breach of contract. The

uncontroverted facts pled in the FAC clearly states that Kevin Elder gave his personal guarantee backed by his 80 GoWireless

stores. In California, in order to state a claim for breach of

contract a plaintiff must plead: (1) the existence of the contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. First Commercial Mortgage Co. v. Reece, 8 9 Cal. App. 4th 731, 745 (2001). Plaintiff has pled the existence of a contract between Pimlico Ranch LLC and Clymer. (1) The contract was attached to the Original Complaint as exhibit 2. (2) to Plaintiff K. Elder in pled that Clymer of wire said

transferred

$3.5

million

consideration

contract. (3) K. Elder refused to pay the interest on said contract in 2010. (4) Plaintiff has pled the monthly payments of

approximately $50,000.00 for the last six years and the initial $3.5 million issued in consideration of said contract as damages to his business. Opposition to Elder & GoWireless Motion to Dismiss 30

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The elements are plead and liability has been established. DIVERSITY JURISDICTION This Court may exercise jurisdiction based on diversity of the parties. Diversity jurisdiction extends to "all civil actions where the matter in controversy exceeds . . . $75,000 . . . and is between . . . [c]itizens of different States." 28 U.S.C. 1332(a) (1). The Complaint names, Defendant, K. Elder, whom is also a resident of Nevada and GoWireless, Inc., stating the place of The

incorporation and having headquarters in Las Vegas, Nevada.

pleadings of the said complaint also state an amount in controversy exceeding $75,000.00. A Plaintiff must set forth affirmatively not only the state by which these corporations have been incorporated, but also the state where each of them has its principal place of business. Brandt v. Bay City Super Market, D.C., 182 F.Supp. 937 (1960); and Cameron v. Hodges, 127 U.S. 322, 8 S.Ct. 1154, 32 L.Ed. 132 (1888) Recently place of the U.S. Supreme refers held to ..that the place the phrase the

"principal

business"

where

corporation's high level officers direct, control, and coordinate the corporation's activities. Hertz.Corp. v. Friend, 130 S. Ct. 1181, @ 1186 (2009). GoWireless, Inc, headquarters are in Las

Vegas as well as the residence of CEO Kevin Elder. CONCLUSION The irrefutable facts are that: (1) Kevin Elder is sole Opposition to Elder & GoWireless Motion to Dismiss 31

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shareholder of multiple home real estate projects, Pimlico Ranch LLC and Etiwanda Arbors LLC, which entities are stalled and suspended by the California Secretary of State. (2) Both said projects were funded by Alliance Bank through their agent, and Vice President, Mark Cohen. (3) Alliance Bank became insolvent and went bankrupt. (4) Kevin Elder is the sole shareholder of GoWireless Inc and 385 stores throughout North America. (5) At the time of Plaintiffs cause of action Go Wireless had 80 stores. Refuted fact: For the first time defense counsel has claimed that Kevin Elder did not divert Plaintiffs investment into GoWireless. Inferences derived from the aforesaid facts: Defense counsel is mistaken. Kevin Elder owns many other real estate projects such as, Juniper Tree LLC, Turtle Rock LLC, Mesquite 55 LP, and many others unknown at this time to Plaintiff. Alliance Banks successor, CB&T is currently doing business with Kevin Elder. There is the real threat of ongoing activity. Kevin Elder has a new real estate project that he is currently utilizing wire and mail communications seeking investment funds for Desert Vista Village LLC. It should be noted that the California Secretary of State has Desert Vista Village LLC suspended. There is an ongoing pattern of racketeering activity that is Opposition to Elder & GoWireless Motion to Dismiss 32

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ongoing and must be stopped. WHEREFORE, plaintiff respectfully suggests that he has plead

a cause of action for civil RICO violations against the named defendants and their motion to dismiss should be denied. Should this Court determine that Plaintiff has failed to state a cause of action for civil RICO Plaintiff requests leave to amend. DATE: November 14, 2012 Respectfully submitted,

Raoul Clymer

Opposition to Elder & GoWireless Motion to Dismiss

33