The Institute for Complexity Management

The Institute for

Complexity
Management
Making
the complex simple
Making the complex simple
Ianus

The Honorable Michael E. Horowitz

Office of the Inspector General
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.,
Suite 4706
Washington, D.C. 20530-0001
VIA CERTIFIED MAIL
February 6, 2015
Dear Inspector General Horowitz:
We are writing this letter to request that the Inspector General of the U.S. Department of Justice open an
investigation into the violation of the civil liberties of a small New Jersey business called Demodulation.
Under our Constitution all Americans have the right to due process of law. The U.S. Department of Justice
has intentionally acted to deny the owners of the small business their right to due process of law.
THE INSTITUTE FOR COMPLEXITY MANAGEMENT (ICM)
The Institute for Complexity Management (ICM) is a non-profit charitable organization that assists small
businesses that are the victims of government fraud, waste, abuse and corruption. Approximately 12
months ago, we were contacted by Demodulation to conduct an independent inquiry of their allegations of
widespread government fraud, waste, abuse and corruption.
RESULTS OF INVESTIGATION
Our investigation has uncovered evidence to support allegations of widespread financial fraud along with
the theft of Demodulations technology as the consequence of collusion among members of an enterprise
including but not limited to Federal agencies of the U.S. Government, State of New York public officials,
NYSTAR, the SUNY Research Fund, Alfred University, Alfred Technology Resources Incorporated (ATRI), the
State University of New York (SUNY) at Alfred, Corning Glass Works and numerous other large corporate
entities operating in the State of New York. The fraud involves the misuse of millions of dollars of taxpayer
funds annually.

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A copy of our investigative report of the Demodulation matter is enclosed for your use. The report is
accompanied by a comprehensive computer library of evidentiary exhibits too voluminous to include with
this letter. To obtain access to these evidentiary exhibits we request that your staff contact us directly to
make arrangements for the secure transmittal of the documents to your offices.

FoodQuestTQ LLC, 7420 Hayward Drive, Frederick, Maryland 21702 Telephone: 240-439-4476 ext. 11

VIOLATIONS OF FEDERAL LAW

The scheme to defraud Demodulation of their technology by the enterprise involves major violations of the
Constitution, Federal statute and criminal law. Among the alleged violations of Federal law by the
enterprise in the matter of Demodulation include 15 U.S.C. 1-7; 18 U.S. Code 371; 641; 654; 92 et
seq; 1031; 1341; 1343; 1832; 1951;1961 et seq.; 41 U.S.C. 253; 48, U.S.C. Chapters 1 and 2; P.L. 96480; 94
Stat. 2311; P.L. 99-502; P. L. 104113; C.F.R. Part 2635; P. L. 96-303; P.L. 104294, 110 Stat. 3488 and
possibly others.
MONETARY VALUE OF THE DEMODULATION TECHNOLOGY
The Demodulation technology consists of a material that can be surreptitiously affixed to an object that can
then be tracked by electronic means even at great distances by satellite. It is a so-called dual use
technology with both national security and commercial applications. The monetary value of the
Demodulation technology misappropriated under enterprises scheme to defraud has been conservatively
estimated, across the single limited field of use of electronic article surveillance (EAS), at $500,000,000
annually. Because the Demodulation technology is a platform technology it can be applied across many
other fields of use raising the monetary value to billions of dollars annually.
DENIAL OF DUE PROCESS OF LAW
Because of the serious violations of law, Demodulation turned to the following Federal law enforcement
authorities with legal jurisdiction over the matter as they attempted to pursue their Constitutional right to
due process of law. The Federal law enforcement agencies contacted were all provided with ample
evidence demonstrating probable cause to believe that felonious crimes were being committed in the
matter of Demodulation as listed in Table 1, below. When law enforcement is presented with evidence
that constitutes probable cause to believe that felonious crimes are being committed and they fail to meet
their sworn obligation to uphold the law they are guilty of misprision of felony.

Provided with detailed documentation demonstrating

probable cause to believe felonious crimes were being
committed; declined to investigate

Opened case file and filed to investigate

Provided with detailed documentation demonstrating
probable cause to believe felonious crimes were being
committed; unresponsive to all communications

Table 1: Federal Law Enforcement Agencies Engaged in Misprision of Felony

FoodQuestTQ LLC, 7420 Hayward Drive, Frederick, Maryland 21702 Telephone: 240-439-4476 ext. 11

Department of Justice Office of

Professional Responsibility

Actions Taken

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Law Enforcement Authority

Department of Defense Office of
Inspector General
Defense Criminal Investigative Unit
Department of Energy Office of Inspector
General
U.S. Attorney for the Southern District of
New York
U.S. Attorney for the State of New Jersey
Baltimore Office of the FBI
Newark Office of the FBI
Newark Office of the FBI
Albany Office of the FBI

FOUR MATTERS OF IMMEDIATE CONCERN

1. Probable Cause to Believe that Members of the Enterprise Have Engaged in Homicide
During the course of our investigation, we discovered probable cause to believe that a homicide was
committed at Alfred University in the State of New York. A mid-level accounting official at Alfred University
was accused of embezzling cash funds from the Admissions Office and was later reported by the University
as having committed suicide. Our interviews of eight individuals either directly or tangentially involved in
the matter provided contradicting testimony concerning the circumstances surrounding the death. This
testimony includes reports that the Alfred University accounting official was aware of financial irregularities
taking place in the University. For example, one witness testified that he, wouldnt be surprised if she
found out something and was murdered.
We were also unable to find any evidence that an independent investigation of possible foul play was
conducted by any law enforcement authority. The serious inconsistencies in the testimony we gathered
are fully described in the attached exhibit to our investigative report. A redacted version of the attached
report was provided directly to Ms. Robin Ashton, Chief Counsel for the Department of Justice Office of
Professional Responsibility (OPR) requesting that OPR immediately spearhead an independent and
complete investigation of the matter. We expressed our concerns for the physical safety of individuals at
Alfred University having knowledge of the true circumstances of the death. A copy of the letter is enclosed.
Ms. Ashton did not respond to our letter.
2. Evidence of Corruption within the U.S. Attorneys Office for the Southern District of New York
During the course of our investigation we have discovered evidence of serious misconduct by an Assistant
U.S. Attorney (AUSA) involved in prosecuting offenders in bid-rigging in the $3.7 billion municipal bond
market. More than a dozen defendants were convicted or entered guilty pleas and $743 million in
penalties were assessed against five major financial houses.
The AUSA involved in the matter was approached by Demodulation at the same time he was actively
involved in prosecuting two of Demodulations principal investors for bid-rigging as part of the municipal
bond prosecution. The AUSA failed to inform Demodulation of the conflict of interest and declined to
investigate the Demodulation matter. In the attached letter to Ms. Ashton, we filed a complaint of
prosecutorial misconduct and requested that she immediately report the matter to the Honorable Kimba
Wood, the judge who presided over the trial of the two Demodulation investors. Again, Ms. Ashton did not
respond to our letter. On January 24, 2015, we wrote directly to Judge Wood informing her of the
prosecutorial misconduct. A copy of our letter to Judge Wood is also enclosed.

FoodQuestTQ LLC, 7420 Hayward Drive, Frederick, Maryland 21702 Telephone: 240-439-4476 ext. 11

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Our investigation reveals that the U.S. intelligence community has violated prohibitions on the domestic
collection of intelligence from citizens of the United States in violation of Amendment IV of the Constitution
in their attempts to misappropriate the Demodulation victims valuable intellectual property for
intelligence and military applications. The National Security Agency, the Department of Defense, the
Department of Energy, the Department of Commerce and other agents of the U.S. Government are
complicit in these activities. These activities are more fully described in the attached report of
investigation. These allegations of unlawful collection of domestic intelligence remain uninvestigated by

3. Evidence of Unlawful Domestic Intelligence Collection Activities Involving U.S. Citizens

the U.S. Department of Justice and the FBI raising the specter that the Department of Justice itself is
intentionally failing to enforce the law.
4. Evidence of Foreign Espionage Involving the State of Israel
Our investigation reveals that two 155 mm Howitzer shells and detonators were stolen from Picatinny
Arsenal in New Jersey in 2007. The theft of these munitions from a U.S. Government reservation was
allegedly masterminded by a U.S. Army official in collusion with a U.S. Government contracted agent. Our
inquiry shows probable cause to believe that the contracted agent involved in the theft may have been an
unregistered agent of the State of Israel. The purpose of the theft appears to relate to the application of
Demodulation technology for Israeli military purposes. The U.S. Army official who allegedly masterminded
the theft is a cleared employee who still works at Picatinny Arsenal. Demodulation attorneys have
presented the U.S. Government with a subpoena to compel the sworn testimony of the U.S. Army official
but the U.S. Government is refusing the subpoena. We have reported these and other significant
irregularities to the Department of Commerce and other Inspectors Generals. A copy of our letter to the
Department of Commerce is enclosed.
REQUEST FOR AN INDEPENDENT AND COMPREHENSIVE INVESTIGATION
We consider this entire matter of the utmost importance to the common defense and security of the
United States. The violations of law by the enterprise that includes agents of the State of Israel are doing
grave damage to our nation. We now conclude that the failure to investigate the large scale corruption
reported to the Department of Justice and other Federal law enforcement authorities is the result of
corruption within the Department of Justice itself. Thus, we are requesting that you conduct an
independent and comprehensive investigation of the handling of the entire Demodulation matter.
If you have any questions or need further information please contact me directly.
Sincerely yours,

John Hnatio, EdD, PhD

Chief Science Officer

FoodQuestTQ LLC, 7420 Hayward Drive, Frederick, Maryland 21702 Telephone: 240-439-4476 ext. 11

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1. Report of investigation into the Demodulation allegations of fraud, waste, abuse and corruption w/o
exhibits dated 11-26-2014
2. Exhibit 83: Results of inquiry into possible homicide by the enterprise at Alfred University, Alfred, New
York dated 1-23-2015
3. Letter to Ms. Robin Ashton USDOJ-OPR requesting an immediate investigation of possible homicide by
the enterprise dated 1-23-2015
4. Letter to Ms. Robin Ashton reporting prosecutorial misconduct within the U.S. Attorneys Office of the
Southern District of New York dated December 30, 2014
5. Letter to the Honorable Kimba Wood, United States District Court, New York, dated 1-24-2015
6. Memorandum exhibit on the possible role of the Department of Commerce with copies to all
intelligence community Inspectors Generals reporting violations of ITAR, FOCI, AECA, EAR and unlawful
domestic intelligence collection activities against U.S. citizens dated November 22, 2014.

(6) Encs: