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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STATEMENT IN ACCOUNT WITH

DOMINICK INVESTOR SERVICES

CTSY IYDIVIbUlrLS SECUPITIES LTI


@'NORTH QUEFN S T
bbnc4sTER
P A 175i

CORPORATION

W BROADSmEET.NM YOllU. N.Y. 1


II2.W.IDO

CUSTOMER ACCOUNT NO.

ACCOUNT EXECUTIVE

280 1QeOO3 452

I'A6E

1'OF

ARMSTRONG SLICK

STATEMENT PaRIoD

STIWLEY K CATERBONE
4331WEST' 14RION ST:
LANCAS T FR

DATE

OEGINNING

PA

17603

SOLDDEUVSREO
ORWORT

'WWHT.RICEIVEO

on LW(I

12-01-83
*mOlWTEIIEm

ENDING

Tw4aR.

DtSCRIPTION

m a OR e m v

.ML

IMEREST :REBITE0 "0 YOUR Al:COUNT. I N 1 9 8 3 , WAS- r k i i i b l

64.75C

AMOUNT CHARGED

AMOUNT CREOITEI

THE' YTb C l E O I T IWT REST TOT, LS SHOVW OW. TNfSJ ST4RHENT U :LL' BE REPORT EO TO THE I R S
AND ANY ACPROpRIAT STBTE T hX' AUfAORITY'fll' LZFU' JF' FEDER bL: IWFORWATtON RETURN 1099
1

ALL1 PROCEEDS- OF' SA ES TRlNS KTIONS U f t L ' M l R E W I I E O TO T:WE IRS FOR THE PERXOD 8E61NWtN6
7-139. THtIJ' 12-31-13 I N LPEI'OF F E O E R A L ~ M W R R A T ~ ~ ~ ~1 0
~ 9F9O
8~~~

* *
12-3 0-83

utxvxr

FOR THIS

PER~OD

**

rnr
tLUV5t
'ROll 1 1 / 3 0 TO 1 2 / 2 9
:.2129BAL
SWiBlCR
(LVS 8ALi
SBbi6lCR

*
1000

**

POSITIONS

:WTERYlTfOWAL SISNAL
i CONTROL GROUP PLC
I;EIJSQR~~ATTC'COA LTQ

400

I R t PRICE

PORTFOLIO V4tUES

***

1
WCF

*.

16ot.60

4.019

r
I

EE REVERSE SIDE FOR IMPORTANT INFORMATION

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

High Assaiates LTD.


1861 W i l l i a m Perm Way
Lamaster, PA 17601
Attn: Paul Lewis

Deat Mr. Lewis:

i
k

i
%

I have beenrefarred to ynu fran EdwaxdGordcnof the HorstC;rollp. I am


ccnsiderirq making a career change into the real estate devalopnent i d u s t r y
an3 I warld U k a to have yaur -t
amsmtims. I have almys
ctmsiderd the real estate inQstry exciting an3 chllengirrg, especially
after beomdng mpe faniliar with it through limited ips MB tax
shelters.Wofthereasa~~farthecareer-inUghtofaverygmd
home, is the lack of enthudam and hspiraion that I gat frun vatching
tax retmm an3 financial s t a w t s cbange withait s6eitig any material
evi.dm=eof pmgmss, md-t as a newly developed tact of land, or a
rehabilitated darntom building or mall. I do not fear or krdc any
~ t a d b q o f t h e a n a l y t i c a l a s p e c t s o f b u s i n w s , ~ t h e y t e n a tbe
o
mare stjnulating and meanirrgN ipn applied to material prochjcts ar

me.

L!
t
.
d

I have several
that warld enable me to slake a very fast and easy
trahsitiar into the industry. I tau3 good aoanuniaticn akilb and I an
very cnafcctable dealing w i t h at-,
acmmtmb, bankers, private
husinees arnere, etc.. I have sane experieme in qrdicaticne and capital
f~ticnfmmr#aeoftheworkthatIhwedDneinthespontsindustry. I
haveagreatdealofknowle&geandexperienceinuorkingwithtaxlareand
regulations c c m m h g the private irmestcPr. I also feel quite c u n S e
wcPrking w i t h the amlytical aapeds of the bmineas
as feasakdity
analysis, cust mections, bu3gets, etc.. I have had paet expriencc in
the efforts of sub aontzadors far different m e c t s .

~~

resune and @xmemmber wtrre I may he reached. 1f


I wculd appeciate the. d m ~ to
~ =met
you have any msihle -ties
with YOU. 1 -iate
your time and csnsideratM, and wish ycu the best
in your future ventures.
Ehlosed you will find my

--

Stanley J. C a t e r k e
4)

P.S. This inquiry is in strictest


confidence.
Page 2 of 646

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

r
,

'

Section 3189 Federal False Claim Act

55 Butler Ave.
Lancaster, PA 17601
(717) 299-5958

M r . Larry Zielinski, V i c e President


Ommmealth Naticmal Bank
28
Square
Lancaster, PA 17603
1

Dear Mr. Z i e l i n s k i :
As per

our conversation this past mxuntng, enclosed you will find my


resune. One of the main ream^^ for my decision to make a career cfirrnge is

thatIwouldliketo n w e m a e ~ t h e d i r e c t i c n o f ~ t e f ~ a n d
I am firding that
m
t cccupatian is taMng me further fran that
objective. I have been dealing in the financial in3ustq far the past 4
years, since graduatirq frcm odlege. I have beenvery mtmaskl inmy
field, hmmx I feel that this is a critical time in my cmeer in that it
is only going to b e a h m o r e d i f f i c u l t to make the transiticnas timegoes

on.

BecauseofthefactthatComnaarealthhas~mnesalesand~
driven due to the carpetiticn in the financial services im%stry, my past
sales experience and reoord would be of significant benefit regarding a
transiticn into ycnu -tian.
I have learned the b d m i c a l aspects of
an-prate finance i n mae of an idirect m y thm@~my education regarding
aaprate stru&ums and strategies as relatirq to investmer~ts. I am
familiar w i t h the f h a m i a l statenents of carpanrations, and have a very
broad~tanaingandexperienwin~iness.

E
t

Iwouldbeveryinterestedin~mneabauttheopporhrnitiesthatyou
new have within ycur organization. I am lcoking for a salary in the $30,000

range.

L
L

I want t o thank y m

for y a m time and m i d e r a t i o n .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

OK P r c p x t i e s

i
h

39 North m k e t Street

Lancaster, PA 17603
ATIN: Don K. lJ@xse

Iwouldliketo thankycu forycurtimaandaonsideraticnregardingthe


positicn that is currently vacant in the crganization. I sense that (ken
Kugal m i a t e s is a very dynanic and exciting cqmizaticn that is lrnving
and graring very rapidly. The positim that you are trying to f i l l would be
a very challenging and interesting project. I feel very amfident that I
carld be very effective and h
e
l
w to ycur m z a t i c n in beirrg
regpanswe for the equity ne.ds for your p?mjecb. I would bc int%rested
in prtsuFng ax e i a t i a n s for the pos5ticn. lhere are a few queetians
that I have, ha*ever until ycu and ycur assodates +each a Badsian, I w i l l
wait to hear fran ycu. I would ilks to review th-,
andwill
leturn it to you in the very near future.
Please eend my thanks to Ed and Owen for thier ansidemticns.
Again, thanks, and I look faa*wrd to w i b l y WXking with yrxl in the

future.

-t

Regards,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

HOW TO USE
OUR SERVICES

-\

Our services may be retained in any combinaIn necessary to benefit the athlete or to ysist the
ntract advisor in handling the financial affairs
the most competent and efficient manner. We
ve all heard of the horror stories of the famous
Irs and athletes; however, there are far more
bries of less publicized athletes that we never
ar which are the result of improper financial ade. We must remember that as the longevity of a
lyers career siiortens; due to
.~ipetition,injury, attrition, and
momic conditions affecting the
~fessionalsports industry, it
:omes even more important to manage the
ancial affairs in the most prudent manner
iilable.

PRO FINANCIAL
6ROUP, LTD.

-7'

OUR COMMITMENT
Ve guarantee that any and all services rendered
the behalf of any Contract Advisor or Profeslal Athlete will be performed in a satisfactow
,
U.S. 16-4014
RIGHTS
nner or EXHIBIT
we will refund
any andCIVIL
all fees.
W; CLAIM \..
--\.
Property
Advancewill
Media
ntain that
ourofservices
notGroup
only benefit the

1755 Oregon Pike


Lancaster, PA 17601
5 of 646
(717) Page
299-5958
Page 2111 of 2953

"Dedicated to Performance"
/'

,,

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

OUR SERVICES
*

Pro Financial Group, LTD., is a highly


phisticated network of various professional ad;ors needed to perform financial advisory ser:es specifically for the professional athlete. The
twork consists o f several attorneys, accounnts, a Financial Planning Consulting Firm, a
zgistered Investment Advisor, a Broker Dealer
pport organization for some of the most compe11 Financial Planners in every state, and a group
investment advisors.

*
*
*

Estate Investments.

: ,

,. .
,

,:

, ,

:.

.
8

. .
..
. . .*:..

. -

..
'

Dore Valnvanw. ESQ.: Representing the h w Firm


of Shirk. Relst, Wagenseller, & Shirk,
Legal Counsel for Estate Planning.

Our purpose is to provide Financial Advisory


rvices to professional athletes and support ser:es to other contract advisors that d o not have
:necessary resources to provide sound financial
vice. We wish to work right along with your
ntract negoliations to ensure the best financial
ckage given the athlete's individual situation.
e d o not wish to get involved in the actual
gotiations; howcver, we d o feel that it is impori t to realize the financial implications of certain
ategies in conjunction with given situations.

Flnsnclai Plsnnlng Consullane. R.I.A..


FPC is the Rcgirtcrcd lnvcslmcnl Advisor, and is
a firm that provides various financial services for individuals and small businesses.
Financial Sewices Cotporatlon, of Atlanta. Gs.,
FSC is a Broker Dealer and support organization
for Independent Financial Planning Firms in all 50
states. They have a very large and sophisticated due
diligence department for life insurance products, investments and tax shelters. They also provide a network of some of the nations most competent Independent Financial Planning Firms that will be
available for your use.
Stanley 1. Caterbone. Certified Contracl Advisor,
NFLPA,
Responsible for all coordination of services and
President of S.J. Caterbone Associates, an indcpcndent Financial Planning firm catering to upper income individuals and small businesses.
Carl J. Frederick, M.E.D..
Strength Coordinator.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Tax Planning

* Cash Management

Page 6 of 646
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'
'

*
*
*

Individual Portfolio Management


Due Diligence Services for Tax Shelters and
Insurance Contracts
Third Party Negotiations for Deferred
Compensation Packages
Retirement Planning
Business Planning and Negotiations in
Mergers and Acquisitions
Real Estate Investment & Feasability Analysis
Estate Planning
Contract Advisory Services
Third Party Representation for Professional,
Business and Labor Contracts

THE FOUNDERS
Pro Financial Group, LTD. is an outgrowth of
S. J. Caterbone Associates, a Financial Planning
Consulting Firm. S. J. Caterbone Associates
specializes in managing the financial affairs of upper income individuals, small businesses and the
professional athlete. Because of the demand for
an array of diverse and extremely competent advisors in managing the financial affairs of the professional athlete, we feel that our success is due to
the large and ever-expanding information network
that we have developed. After discussing the needs
of several contract advisors across the country, we
have learned that we offer a very unique and
highly qualified financial support system. Pro
Financial Group, LTD. is now in the position to
provide the benefits
of this
support15,
system
Thursday
December
2016 to
other contract advisors.
10/19/2006

mdt eral

002530

US District Court For The Eastern District of Pennsylvana


......

SAVINGS- --'&
~

~~

PAY
TO T H E
ORDER

OF

>+

Section 3189 Federal False Claim Act

JIM '12 86

.. .
. . ..

BANK

'

8-1
4:

DATE

TIMOTHY LANZA, ATTY.


AND STANLEY J. CATERBONE
AND MICHAEL T. CATERBONE

FEDERAL
HOME L O A N
BANK

1Ie002 5 3011'

oF PmTTsmumo*
PITTSBURTH. PA

C O L 3 0 0 L2 3 51:
D E T A C H A N D R E T A I N T H I S STATEMENT

PARENT FEDERAL SAVINGS BANK


DATE

6/12/86

3s IN P A I M E N T O F l T e H S D E S C R l m E D O E L O I .
o r c o a a E C r P L E I S E N O T I F Y U S PROMPTLY. N O RECEIPT O E S t R E D .

TIlE ATTACHED C H E C K

I FN

DESCRIPTION

LOAN 0 0 1 0 0 7 8 9

AMOUNT

100,000.0(

CATERBONE S.

DEBIT 1 0 1 0 - 0 1 FIRST CONVL MORTGAGE LOAN

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 8 of 646
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10/19/2006

US District Court
The Eastern represented
District of Pennsylvana
TheForshares

Federal
False Claim Act
by this certificate have Section
not 3189
been
registered

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

CYWTER BUSINESS PlAN

FDR

JULY 1. 1986

LWGBER. PA -TION

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

TABLE OF CDKTENE:

Mission S t a W

Page 2

Corporate Objectives

Page 3

Eusiness Strategies

Pase 4

Distrifiutim Strategies

Page 6

Services Strategies

Page 8

Market R n e t r a t i m Strategies

Page 10

Planner Support Services

Page 11

Coqwrate Stanrlards

Page 13

I n i t i a l Capitalization

Page 14

Financial Iiiaights

Page 15

Contingency Plans

Page 16

=P -g-

Q-arp

Page 17

Organizational

(harts:

Wit A

Page 20

Wit B

Page 21

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

in
1. To m e the people of the caurty, state and ~ t i m
the hanjlirq of their finances through the m r t of azr financidl
planners ard other advisors, and their persond relationships with their
clients.
2 . To meet the expectations of our various constituercies:
planners, eaployees, stockholderr, and the people residing in the area we
serve.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

rr~npany
as the major provider an3 setvicer of
financial prducts and advice in the clasely related fields of
invesb-m-~ts,financial mnsultation, mortgage banking, l i f e irmmnce,
prcrPertY and d t y in=-=,
taxes, law, ard real estate.

1. lb position the

2.

!Ib transform

the fra-ted

market of independent financial planners

into a quality group of clutstanling professionals nezketing under one


name, thus bringing order to the financial marketplace.
3. To place client interest first a t a l l times by delivering a
diversified prcduct through multiple qxmsors so as to always deliver
high-quality and fairly priced products representing the top 25%
percentile of the matketplace.
4. Tb dwelop and maintain quality m i c e on previcllsly delivered
products by nranaging assets a t a reasoMble fee, thus freeing planners
frcaa the constant pressure of lMking new sales.

Fa insure the g-rwth of the business by hiring professional planners


in sufficient number so as to become the preeminent financial micc~npanyin the area served.

5.

6. !Ib use invcapital rather than loans and long-term leases to


minimize monthly expmses ard maximize profits, hereby assuring our
business gmwth and dwe1cpm-k.

7 . 'Ib enolxuage our planners t o beome stockholders in the finn, thus


satisfying their desire for mnazhip in a ccanpany of redl value. Also to
assure a more stable d e v e l o p a t of cur business through stronger ties
w i t h cxlr top planners.
8. To react to changes in the marketplace ahead of cur amptitim in
creative and thomqhly considered ways.

9. To maintain a strong professional/client relationship throuqh frequent


prsondl c o n t a d while using high-ted-oxrlcqy
.
.
. equipnent to enhance the
-

quality of our work.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

corporate benefit plans and the media


continues to g m as a s q n e n t of the financial services business.

Mass m.rM5.q

Dwelap wrprate sales thrmgh the concept of cafeteria plans


hhich will dvlnge the enployee benefit mrket by a l l w i g
employees to w e t a prcentage of benefit dollars to the areas of
their choice. Also, continue to en@asize seminars targeting unique
organizations hhich have a strong relationship with the pblic for
specific financial products:

M. Charitable organization
Counseling center

charitable g i v w s e m b a r s .
estate planning s e m b r s
life planning seminars, etc.

Additionally, we will develop plblic awarmess by constantly advertiskg


the corporate mme via nekspaper ard radio.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

1. Current Situation

Section 3189 Federal False Claim Act

W e crurently have 14 financial plannezs and 5 other pmfessiondls


Wtted to an August campncy in cur new space on the Oregon Pike
y anwng
,
the 16 people involved, we
i n Lancaster. ~ t i ~ l fman
have selected m g e r s for w offiin ,
lewkhq,
Reading an3 Landale. Based on l a s t year's business by those
dLready irnrolved, we e x p z t to g-te
2.7 millicsl dollin

revenue, and invest 54 million dollars in 1987.

an lancaster staff to 18 financial plWe plan to


6 othes p m f e s i d s . W e we plan t o locate and devela;, in
areas, we will OYIEentrate during w first year on w
operati-.
,

2.

Cuzlwt

and

w d

Situation

A t least 80% of our staff is caprcanprised of professiumls established

in business for a t least f w years.

We will m n t h to seek predaninately self-sufficient,


professional lVeteranstl of the industry. (Xrr desire is to
agpeal to their need for the fnxdan to plan and ccumnmicate rmre
effectively with their clients. We'll also offer a higher paycut,
mre varied products, Md a mre professiondl envkment. We w i l l
duplicate d y the msst criticdl brokexage house semi-.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PI-rn

Current Situation

(Continued)

-.

Planners have been stable in their relationship with past employers.

a very stable core of top planners in Lancaster, Pa., due


We
to strong nnnagement, staSle planners, strong local w
r
t systems,
an3 equity mmrship. We will m m t r a t e on local development
ahead of satellite dwelqment. We
a x satellite retention
*ere equity vmership is strong and mediocre
to be
where equity a n w d ~ pis weak.

Current Situation
are independent and thus use various p1amb-q txxhniques,
Planoffer a limited
ard differ in their areas of expertise.

~~

Zhe w i s e a d techniqaes of cau planners ard ather professionals


wjll be p l e d to provide clients with higher quality m i c e and
a broader line of products.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

1. current Situation

Invesbnent products are predceninately delivered t k a q h captive


prcducts and manage
sales organizatims who manufacture their
which
all mmies. 'Ihis leads to limited product offerfrequently do not entirely satisfy specific mnsumer needs. It
also leadsto a d o n e product because there is no free mket
pressure to insme top qmlity products that are axpetively
priced.

planners w i l l be free to deliver the highest quality prcducts fran


of sponsors so as to work exclusively for the
-fit
of the client. Zhe p l m my chccse top h % s t r y
pzrforuers, solid ard sizeable mopanies and a variety of ~~nichevt
products to f i l l wery client need.
mong

2.
-

Current Situation

Fee-paid financial plans vary widely i n price and quality and


deperd mmt heavily on the individual developing the plan or
inteqxeting it. With regard to oonsumer expedations, the
marketplae is in disarray.

Fee-bsd plans in advance? of prduct sales shculd beccme sinpler


due t o tax reform. Ihe mjority of ad,plans were originally
purrhased for tax planning wfiich my no longer be needed. (Xlr
eqhsis w i l l be an a business being revived by tw r e f m
Asset m g e m m t or InvMonitoring. With clients paying
their taxes ard investing for appreciation rather than seeking
shelters, this business is eqected to bocmn. We plan to have an
in-hportfolio manger and mket-tk. W e plan to charge
clients an average of .75% for the service. A s planners gain
assets under nwagement, their annual h a m e fmn this ~ x l r c e
should alleviate pressure for new clients.

--

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Currmt Situation

Section 3189 Federal False Claim Act

Associated prufessirmals sucfi as attorneys, acamtants, bankers,


and insuranoe a d real estate agents seldcan -te
to help
clients attain their g d s . Ihe ultimate contrul of the
lusiness tends to bacome divided, m a k b q pecrple
client's
defensive ard prducing fear of e x p u r e in the event of error.
Zhis often leads to professionals dxaditing one another or
taking W e nedit for advice leading clients to inaction.

In-hmse legal and real estate professionals will eMble a p l m


to get sudr services for his client witha-t fear of losing the
It will also help omsreve revenue
client to artside .
n
i
normally spent for sucfi mi-.

Current

Situaticxr

in wr
Ongoing client m i c e is a desire for m s t &es
marketplace. H m e r , the amstant pressure is a~pliedto plmlers
to produce new clients and new sales as 90% of eKnings is still
. camnission generated. Ihe t i m e required to praspert and close new
sales severely limits the necessary servicing time.

a &annual
Ongoing client m i c e will be =lied
newsletter anl sadannual client investmnt @te
delivered
altermtely every three months. ?he costs of these services will
be borne by client-paid asset m g e r w t fees, innzrance renewals
an3 mtml furd trailing oamnissions. Althmqh this is an
ambiticus, high-tech undertaking, our basic inclination remains
persondl client review ssqsions held on a regular basis.
We also expsct better crossover r e l a t i d p s and broadened
information base for both planners and specialists due to amon

laation.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

m k e t Penetration Strateqy

1. Ekisting Clients

--

Planners an3 other professional joining

aur g-rw.xp w i l l have dwelaped deep perrcaral c l i e n t relationship

which a d d allw new investment dollto be handled by w


people. A s f o l l w systems are inp1ement.d we
65% of dl
businesstoccPnefmanthissalrce.

-presence-We plan to present fax seminars on a


joint basis with institutions mch as mlleges, wities, business
organizations and corporations. Cur semirrars include
vl,successful1 4 m Manaclemen++"- a sauptc-nuts on inva l i f e planning s e n k a , wolaritable
products, vtpalf4mew
and Retirenent Plannim S m h z ! s . CUrrently aur plarrners
regularly a p p e ~a t Millersville State CBllege, RCA, AZIXIA, St.
Jcseph's limpitdl ard e l m . W e also plan regular seminars for
the general public.
2.

--

--

'Ihese t w o markets w i l l be
3. Business and Retirement Markets
singled cut for specific eqhasis because of the vast potential and
strcsrg reex3 for planning axrg these grou~s. Business benefit plans
and specifically "cafeteria plansv1w i l l be rwketed. RetireJrPnt
mrkets w i l l be expam3ed p r k i l y t 3 m q h increased sedmr
marketing.

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Section 3189 Federal False Claim Act

Planner Sumort S w i c e s
It is cur plan to pruvide necwary office and clericdl m
r
t
services to help each planner or a f f i l i a t e d c t his o r her business.
W
e into limit w office to w r t services and not t o pruvide
-ific
marketim sexvices for individuals.
marketing efforts
will be for the gmup a t large, that is t o say t h a t individual
prospecting w i l l be a m n a l expmse borne by the planner or advisor.

Inherent in cur e r t services w i l l be the follwing:

1) Phone H a n d l i r q
including the f a c i l i t y to forward other
business lines to cnu c ~ t r a system
l
should a planner leave the
office.

a sample of tbank you,


referral appointrent setting, data requests, and ammnly
wd review l e t t e r s m y be selected and generated. Rzsonal
mrnsprdence w i l l
handled by our s t a f f , frea of charge.

2) m t i t i v e S t a m l a r d Bn-esmndence

3)

Business process^ ompleted applications w i l l be checked,


logged, oopied and m i l e d by aur cashiers. F o l l w p with
broker/dealer or p r d u c t qonsors w i l l be offered to premier
pIDducers only.

4)

cmwter Services
financial plans and invesbwmt rmnitoring
services w i l l be prarided through data base entry. Yass
distritution an3 hardplan generation w i l l be done on a

piece by piece and pmentage fee basis respectively.

5) p D f e s s i o ~ Networkinq
l
our in-house a f f i l i a t e s in law,
accounting, tax, estate, real estate, mortgage brukerage,
portfolio mamgement, l i f e innrranCe and pxqertq/casualty
insurance stand ready to serve clients related financial needs.

6)

Suwlv S c c k i m p m z p d u s , applications, trust a-ts


and
other forzs needed to conduct kusinesS w i t h cur r&
prcduct
suppliers w i l l be maintained.

7)

Reference and Pericdicals professiondl journals an3 data


services meet* the ammn need of cur advisors w i l l be
plrchased and w i l l be mintdine3 by cur office s t a f f .
Material unique to specialized areas w i l l be provided by those
planners K+-IO work in those areas.

8)

Cornrate Marketinq we w i l l p m t e the me of our firm along


w i t h all planner a f f i l i a t e s to gain p&lic awareness in wiess
of k h a t any irdividtual alone cauld achieve. W
e w i l l become the
best h m f
in Central Pennsylvania.

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9)

Section 3189 Federal False Claim Act

minim and Education

Ro1h-g cur production will give us


additional lcut with sponsors, i r d u s t q t d m r s ard those
wishing to address cur e
p
. (bst shculd be 1ard
quality higher. It is cur plan to provide a mnstant f l u s of
information, new product profiles, ard specialized p 1 a m . h ~
techniques.

Size and strength of cur gmup should


allw us to t
Dirrcreaseconoessions made by sponsors wer m t s
m d l y negotiable by M v i d u a l s .

10) G m s Pavout Neaotiation

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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--

(XTR

ST-

Section 3189 Federal False Claim Act

.'

FQR A GREAT CCMPANY

Having w e l l established busprinciples is critical to the


success of any new business. m y p e r s i m , hard vork an3
sufficient capital oan rival its impJrtance. W e feel the need to state
the basic values of this firm so that the basis for the decision-making is
well established ard urdersbx5.
A great ampmy..

...l.

Serves its

custarrers well.

m hi* principles.

3.

~EG&PS

4.

Makes

5.

taa.rds the interests of stakholders and


emplw-.

m ~ ~ l regularly.
g r

6. ~nanrsits mission.
7.

KnaJs its p i t i o n i n the nar-lace.

8.

~ e s i r e s s o l i dommmity ard corpxate


citizenship.

9.

Hires mprior people ani pays than vell.

lo. Will cha.qe carne innidst cfvlngirq tines.


11.

Has the vision to see cpprtunity.

12.

Retains- .

13.

Has a bias for action (do it, try it,


fix i t ) .

14.

Is value driven.

spirit.

15. Regards people as its greatest asset.


16. Uses a lean staff , a shple f o m management

laJest level.

17.

pus.'les d e ~ i ~ i ~ - m a k jto
n gthe

18.

W t e s deserving people, rqaxdless


of race, sex, or religion.

3We hereby resolve to W d such a t x n p n y .

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Section 3189 Federal False Claim Act

'Ihe abo\~epages have been mitted due to the legality of precedbg


in mnjunction with Federal and State Securities
the O f f e r h I~~~
Regulations. An Offerins P I e m o w w i l l be issued to a l l htere&&
parties upon registration w i t h the apprapriate authorities. 'Ihir; M c l
happen on or before August 1, 1986.

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Section 3189 Federal False Claim Act

The begining phase of n o s t businesses phase is dma~teriZdby


erratic sales trerds, fluctuating m k e t share, increashq dependence on
inproving technological systems, and possible cash flm losses. We do not
exped to face any of these pmblems because of the established nature of
the planners we are hiring. H-er,
we wauld be foolish to believe that
we scnnehm were inmme fmm such potentidl pmblems and therefore need not
to plan for these wentudlities.
(Xzr very first need a
d be to raise capital thrmgh stock plrcXases
beyonrl cur initial capitalization t
s
to the extent of at least
$loo,OOo to cover any initial shortfall in revenue or budget projections.
'Ibis wmld protect us from going the way of nwst mdercapitalized
businesses---.
m y , we e q e t to invest heavily in state-of-the-art
technological s y s k m so that we do not face ned hardware/sofbare charges
e ~ l yin cur business developwlt. Stan Catertune will devote m r h of his
mamgenent tine to this area.
h-iority will be given to rwiewiq perfoOmarm against objectives on
All abjectives will be quantifiable aid measuable, ard
as necesaq adjustments will ke made and mnitored accordbqly. Such
scrdiny of perfomaxe will allw us to oonstantly assess and respand to
any pmsible s h o ~ i r g aid
s to market needs.
a m t h l y basis.

C u r mgement i
s d t t e d to deriving a large portion of its
personal i x a ~
fmpn serving clients as crpposed to relying on managemmt
i . . 'Ihis should preserve w cash flm and insure its grcrJth.

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Section 3189 Federal False Claim Act

Stanley J. Catertam is axrently proprietor of S. J. Q W n e


Associates, a Financial Planning Firm specializing in but not limited to
upper inwne individuals. He is also president and founder of Pro
Financial Grarp,
, a firm prwiding financial -ices
and amtractual
negotiations to Professid Athletes an3 Agents.

Stan began his career with a financial sdxidiary of m i c a n


Express, I E Financial Services. He was hired by and worked w i t h Bob
Kauffmm for six mths before Bab was prcnmted to the Florida area. Stan
developed a practice center& around fee-p l m that fowed on
the tax aspects and conoerns of individuals while they pertained to the
clients investmenk and werall financial situation. While at ID6, Stan
was one of the leading planners in the nation to utilize fee based
plannirq at its inception. He was one of the tap producers in centtal
Rennsylvania, an3 ranked rnnnter 5 in the nation in his class. He also had
closed one of the biggest estate planning cases in the division.

f
i

In January 1985, Stan left I13S and became ird@ent


to provide a
better product line for his clients and to escape the pqxietary
s very creative and has developed a sbmq practice
environment. He i
ammg physicians.

Stan has dwelaped a variety of professid networks thmu@xut the


country with rqaxd to the various Sports Professionals that he works
with. He is currently working on a joint venture with fornrer Chief
Financial Officer and Vice President of jloubledav Fu?Aishina m,
Richard E. Madigan. He i
s lookhg to Stan to help him manage an annudl
inamne of $7 million fron the 20 Professional Athletes that he auwrtly
IMMges.

Stan has helped to develop the Central m l v a n i a Chapter of the


Internaticmal Association of Financial Planning, and had organized and
nieeting with Alexandria
attracted nwre than 100 m a t oattend a
Amstrong, one of the more pnahlnent Financial P1arvm-s in the nation, who
is cxlrrently the National President of the IMP. He is also a mPmber of
the Estate Planning Council of the Instiof Certified Financial
P l m . Stan is currently a Certified Contract Advisor of the National
Fwtbdll League Players Association an3 the NBA. Stan will be an
Exative Vice President respnsible for professional networking and
market*
and sate of the fiscal and negotiating functions.

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Section 3189 Federal False Claim Act

Fbb Kauffman is wrrmtly the National Sales Manager, at large, for


FSC Seolrities (brporation. FSC is a b r o k e r M e r with a 1200 planner

sales force. It raised wer 600 million dollars of investment capital in


1986. Bob's respnsibilities include dweloping a ccanpany-amd
distribution system wi-~er&y FSC pralucts and services are delivered to the
pblic-at-large Umqh FSC Financial Service Centers. E& is also
reqmnsible for recruiting pmven financial planners thrcqhout the natior.
for Financial Senrice Corporation. He also contributes to the strategic
planning of sales for FSC m i t i e s Corporation..
Bob began his career with a financial subsidiary of the American
Wress Corporation in 1976 upon his graduation frcan Millersville S t a t e
College in Mill-ille,
Zknnsylvania. In his f a r years of direct
selling to the plblic, he became the y q e s t perscm in the a m p n y to
achieve multi-million dollar praluction status at the age of 25. Bob then
began to take on additional assxiates as he began to huild his practice
in Lancaster, PP-mqlvania. In j u s t two years, his pzlctice had gru.m to
12 representatives handling wer $12 million dollars a year in annual
investnmts and managing in ex-s
of $60 million dollars of client
mnies. W e building this operation, Bob continued to be the leading
producer in his office and the region.

Bob was then pmmoted to division mnager of the West Coast. In eat
position, he tripled the size of the sales force an3 increase3 volume wer
500% in a period of 2 years. His division of American Express handled
w e r $100 million dollars of investor mnies.
Bob was then asked to take wer the largest operation in the
scutheast, located in Atlanta in 1984. With wer 60 financial planners,
ha7dling an wcess of $200 million dollars of investor's mmies, Bob again
simed his territory into the top echelon of the ccnnpany.

With FSC since 1985, Bob has opened the first three aapny-mnd
offices and nm supervises an excess of 75 qloyees. His qmations new
rank 4th in all FSC related planning -ti=.
Bob brings to Financial
Management G r o u p , Irc. 10 years of experience in the financial planning
industry in both sales and sales -gment.
He is a member of the
International Association of Financial Planners and is in the process of
capleting the cwrre wok for r i f i e d FFinancial Planners designation.
Bob is a frequent speaker at both corporation and business financial
planning functions and has been quoted frequently in local an3 national
media pblications. He continues to hardle investments for select
clients.
Bob will serve as president, chaof the board and will be the
largest s ~ o l d e r . Kis e x p r i m in - g i q
and developing large
financial service organizations will pmvide the leadership and expertise
necessary to insure the growth we envision.

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Section 3189 Federal False Claim Act

BICGFAWY OF M I ( H P S . M. HAKIZEIT. AFP

Mike Hartlett is a r r e n t l y an irdepdent financial planner and heads his


om l d firm
Financial Plannbq Bnsultants. Mike is a licensed
m i t i e s principal and fully a l i e searrities broker. He has
ccanpleted the Oertified Financial Planning program with the College for
Financial Planning and currently holds an Associate Financial Planner
designation. He w i l l m i v e the Certified Financial Planner designation
in Feb1987.

--

Mike began his Financial Planning career f i v e years ago with ILS a
IXlrhq his career w i t h ILS he
subsidiary of m i c a n Mp-.
amnq
the firm's top planners. He was on the Presiderrts Advisory Cavril for
I= i n 1985 and f m a f i e l d of wer 5,200 lX6 planners, finished amg
the tap 66 financial planners in the cwuntry. In 1983 am3 1984 he was
amg the top three in IR?&Llified
Plan Frcduction. In Septanber, 1985
he left ILS to f o n n h i s om financial planning firm.

Mike has an extensive knmledge of corporate retirement plans ard pension


prograns and has excelled in retirement planning f o r individuals. He
auxlucts financial plin several large fancaster &mty
corporations and is active in prancrting financial planning in fancaster

-'a'.
Mike currently m g e s i n excess of $14 million in c l i e n t assets.

Mike is carmLitted to deliver* the highest quality p1armis-g sewices to


his clients. He beliwes that m
r
n
l attention and sexvie are the key
t o a strong client/planner relationship.
Mike w i l l sewe as Executive Vice President of Financial Manag&
Group,
Ltd. He w i l l be in charge of operations and serve as chief financial
offi-.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Firrancia. Securities, Inc.

............... .?he Broker Dealer

Em Advisory, ........................

..The Registered Investment Advisor

.......The Insumme Agency


In=. .............?he Acamting Finn

Financial Savims Insurance Agemy


EM; Acmmting Sezvices,

Financial tbrtqages Services, Inc. ........?he

..

Wealth MaMgement Semi-,

..........The

Financial PlarPling &msultants, Inc. ......We

Mortgage Bmkmqe Firm

Portfolio MaMger
Financial Pla-

&

Market Timer

Finn

mmTE FmG (In Hause)


Eager Real Estate

........................Redl Estate Services

O'my ti smith .............................Legal

Counsel for Business

&

Xeal Estate

.........Legal cavrsel for Estate Planning


W e l l Associates, Inc. .................. .Property 6 Casualty Servicrs
Pro Financial harp, Inc. .................Servicc5 for Profe55ional Athletes
Shirk, Reist, Wagenseller

&

Shirk

Please note that the W e f i n s are currently wrler nqotiations and have given
ve.rhl amnnitment for affiliation.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act


STLI1L!*C

"OSCS n . " O S c * * c ~
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100 PINE STREET

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OAVID C LCWYIN
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ATTORNEYS AT LAW

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MCNEES.WALLACE & NURICK


P. 0.B O X

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HARRISBURG. PA. 1710B.1100

X r F r n C T B. CLAY
DAVID
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W I T r. ' ( C * " ~ l " l
D W E I.
IOURII1
U C S J. DoOD-0

In re:

July 31. 1986

Financial Management Group. Ltd.


Draft Offering Memorandum

Mr. Stanley J. Caterbone


255 Butler Avenue
Lancaster. PA
17601
Dear Stan:

I have now reviewed the draft Offering Memorandum for Financial


Management Group, Ltd. which I received several days ago, and my connnents
follow.
The cover page indicates that stock will be sold at two different
prices, but it should include reference to the fact that the lesser priced
shares will be offered to persons who will affiliate with one or more of the
subsidiaries. This can be done by a brief notation on the cover, together
with a cross-reference to the section in the Memorandum where is subject
will be discussed more fully. There should be a rather full discussion
somewhere in the document indicating the qualifications and requirements
pertaining to persons who desire to become affiliated, and as we discussed,
this also should be incorporated into a form of agreement or agreements
which should be attached as an exhibit. In this connection, should people
who affiliate and later terminate be required to sell their stock back to
the corporation?
than shares of
the cover page should clear1
clear on that point, and co
The Memorandum should be much more descriptive in outlining the
proposed activities of each of the subsidiaries. In that connection, I
suggest with respect to each subsidiary the following information:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Mr. Stanley J. Caterbone


July 31. 1986
Page 2
Reference to the fact that the subsidiary has not yet
1.
begun business, as well as the date by which it is reasonably
anticipated that some business activities will begin.
Xore detailed information on just what each subsidi2.
ary will do.

,-

.2

Likewise, where applicable, more spec1fic information


3.
as to licenses and regulatory requirements (if any) which must be
met and continually observed by the subsidiary.
A discussion identifying the directors and officers
4.
and also who will manage its business operations. If formal
arrangements have been made with specific persons, so indicate;
if the business will be operated by an employee or independent
contractor yet to be designated, give details, including the
terms of employment that are expected for any such person.

In this connection. I would think you would indicate the possible difficulty
of retaining such persons as one of the risk factors. Also, if such persons
will continue to operate or be connected with the businesses from which they
come, you will have to point out the possibility of a conflict of interest
on their part. Further, it is my impression that these businesses are
highly competitive. All in all. you should discuss among yourselves what
type of information about the proposed businesses a sophisticated potential
investor would want to know, and then state your response in vriting.
Obviously, I would err in favor of more, rather than less, discussion.
With reference to the parent corporation, you should give detail sirnilar to that you will give for the subsidiaries. Further, you may want to
discuss how the parent will "manage" the subsidiaries; that is, whether each
subsidiary will be largely autonomous or whether parent company officers
personnel will be directly involved with the subsidiaries' activities.
With further reference to "risk factors". I would think you would add
a section stating that a11 of the business activities are in fields that are
highly competitive. Also. I would think you should state that, while the
founders have had considerable experience in certain of the activities, they
have not had such experience with respect to all of the other subsidiariesr
proposed businesses; further. I presume none has had experience in managing
a group of companies and business activities such as is contemplated in this
case.
,.

'?'

2'

With respect to the use of proceeds, you should consider a further


breakdovn of at least some of the components "working capital" category for
which $187,000 is allocated which is a relatively large amount. Among other

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Section 3189 Federal False Claim Act

Mr. Stanley J. Caterbone


July 31. 1986
Page 3
thoughts, you might refer to the lease obligation (and any other present or
contemplated contractual-obligations), wages for secretaries and the like.
and professional expenses (e.g.. legal and accounting).
As discussed, and in relation to the use of proceeds. you will have to
with the matter of the salaries to be paid to key management personnel.
I note your disclosure that each will receive a salary not exceeding
$60,000. but that raises the possibility that virtually all of the vorking
capital could be used for that purpose. If I were a prospective investor. I
rant additional infomation, as I would be concerned about the potenof a large part of the proceeds to pay salaries. I would also ask
to what extent revenues generated by the businesses would be able to pay
part or all of the salaries. Perhaps one approach, if agreeable, would be
to disclose that not more than half (for example) of the salaries paid
during the two years would be from proceeds of the offering.
Under the "Business" discussion, you make reference to legal services
as o m k e fiel-ds of activity for the corporation. You will want to
check with legal c2mae-l wvho would be involved, but I am doubtful that under
cal standards your corporation can offer legal services.

prOfessio
As I review the "Business" section, and as a potential investor. I
would want to horj more about how solid the arrangements are with " p l a q
and affiliatesw. and also have some idea of the timetable by which the
c/
corporation believes it can begin to engage in business.

With reference to "Management", you need to identify the Board of


Directors. Also, you should indicate whether management will provide
time services, and if not, what approximate percentage of their time is
,expected to be devoted to the organization's business.

v-

'

iI
I!

The biographical summaries, in my view, should be toned down in order


to be somewhat more "matter of fact" in tone. In this section, as in the
rest of the document, you must be able to support each fact that is stated.
and some of the disclosures are a bit vague. An example is the reference to
Bob Kauffman "handling o7er $12,000,000 of investment ponies per year" and
having "an asset base of up to $60,000,000". Also, while you do indicate
the functions each of the three of you will have. I think it would be useful
to be a bit more specific.
With respect to "Certain Transactions', you must be sure to disclose
fully any arrangement or situation pnrsuant to which any director or officer will have dealings directly or indirectly with the corporation. For
example, if any
will continue to be retained by your present employer

OW

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JD*HDistrict
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US District Court For The Eastern
of Pennsylvana

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In Re:

August 7. 1986

Financial Management Group. Ltd.


Our File No: 11489-001-5

Stanley J. Caterbone. Executive


Vice-President
Financial Management Group. Ltd.
1755 Oregon Pike
Lancaster. PA 17601
Dear Stan:

1
As we discussed, it will be necessary to file five copies of Form
D not later than 15 days after the first sale of securities in the
proposed limited offering. This requirement is sunnnarized in the first
paragraph of Form D, a partially completed copy which is enclosed. We
will discuss the actual mechanics of filing, as well as completion of
the form, after you have reviewed the enclosed.
Please also note from that paragraph that it is necessary to make
one or more additional filings as the offering progresses and is completed.
This will be your responsibility, as only you will know how long the
offering will continue and when it is completed. It is most important
to make these filings in a complete and timely manner, as failure to
do so will make the exemption under SEC Regulation D unavailable, and
therefore may result in a violation of the registration provisions of
the Securities Act of 1933 and, consequentially, potential liability
for the directors and officers.
You will note that in several places I did not have sufficient
information to complete the form, and I will rely on you to supply this
information. I have marked where these items appear. In particular.
you will have to complete Page 5, which requires you to itemize the
offering expenses, and then allocate the use of proceeds. You will note

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Stanley J. Caterbone. Executive


Vice-President
August 7. 1986
Page 2

that it is permitted to estimate these emounts, although in the supplemental


filings the estimates should be revised to reflect actual figures.
Please review this document closely. as it is my strong suggestion
that the document should be complete and ready for filing before I leave
for vacation. You will then be in a position to file the five copies
directly with the SEC as soon as the first sale has occurred. Your signature
should go at the end of the form vhere indicated, but please do not date
the form.
Sincerely.
McNEES. WALLACE 6 NURICK

WJJ: jp

Enclosures

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MCNEES. WALLACE & NURICK


ATTORNEYS AT LAW
100 PINE STREET
P. 0.BOX 1166

HARRISBURG. PA. 17108-1166


T c ~ r w o ~(717)
r 232 - ~ o O O

August 11. 1986

In Re:

Financial Uanagement Group. Ltd.


Our File No: 11489-001-5

Mr. Stanley J. Caterbone


Financial Management Group, Ltd.
1755 Oregon Pike
Lancaster. PA
17601

Dear Stan:

1
The purpose of this letter is to address generally the requirements
you must meet in connection with the actual offer and sale of securities
by the corporation pursuant to the exemption under Section 203(d) of
the Pennsylvania Securities Act of 1972 with respect to which a filing
has been, or is about to be, made with the Pennsylvania Securities
Commission.

As an initial matter, as you are aware no sales may occur until


the materials have been "cleared" by the Pennsylvania Securities
Commission. That will occur initially via a telephone call from the
Cornmission staff to our office, at which point we will advise you.
Thereafter, the staff will send a letter of confirmation. Alternatively.
as we have discussed, it may be necessary to deal with one or more staff
coments before clearance can be obtained.
At the point clearance has been obtained, you may distribute copies
of the Offering Memorandum subject to the numerical limitations of Section
203(d) and regulations thereunder. As we discussed, the Memoranda should
be numbered consecutively, and the number and name of the recipient
of each copy should be recorded in your records and written on the
upper-right hand comer of the Memorandum in the spaces provided.

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Mr. Stanley J. Caterbone


August 11. 1986
Page 2

Under ~ e A n s ~ l v a n iSae c u r i t i e s Commission regulations, you a r e required


t o keep t h i s type of record; s p e c i f i c a l l y , you must maintain a l i s t
showing ( i ) t h e name and address of each o f f e r e e , ( i i ) t h e name of t h e
person making t h e o f f e r , and ( i i i ) t h e d a t e t h e o f f e r i s made. As we
previously discussed, t h e numerical r e s t r i c t i o n s a r e t h a t a maximum of
90 o f f e r s and 35 s a l e s may be made t o Pennsylvania r e s i d e n t s i n any
t v e l v e month period.
The foregoing r e l a t e s only t o o f f e r s and s a l e s made i n Pennsylvania.
and i n t h e w e n t you intend t o make any o f f e r s o r s a l e s elsewhere. it
v i l l be necessary f o r a review t o be made of t h e applicable s t a t e "blue
skyw s e c u r i t i e s law. C e r t a i n of such s t a t e s t a t u t e s permit a small
number of o f f e r s and/or s a l e s t o be made without requiring any f i l i n g s ,
while o t h e r s t a t e s r e q u i r e f i l i n g s t o be made e i t h e r before o r a f t e r
o f f e r s o r s a l e s a r e made. I n a l l events, you should be very a l e r t t o
t h i s matter, and determine s t a t e s e c u r i t i e s law requirements before
approaching prospective i n v e s t o r s i n o t h e r j u r i s d i c t i o n s .
As f a r a s f e d e r a l s e c u r i t i e s laws a r e concerned, a s ve have discussed
i t v i l l be necessary t o f i l e Form D with t h e S e c u r i t i e s and Exchange
Commission not l a t e r than 15 days a f t e r t h e i n t i t i a l s a l e is made i n
t h e offering. We must r e l y on you t o a l e r t us vhen such i n i t i a l s a l e
has occurred, a s of course we have no independent means of knowing vhen
t h a t has occurred. Accordingly, please c a l l Mike Jarman o r me a s soon
a s t h e f i r s t s a l e a c t u a l l y occurs.

Section 203(d) of t h e Pennsylvania S e c u r i t i e s Act p r o h i b i t s "public


media advertisement" and "aIass mailing" i n connection with t h e s o l i c i t a t i o n
of investors. Similarly. SEC Regulation D, vhich i n e f f e c t provides
t h e exemption from f e d e r a l r e g i s t r a t i o n upon vhich r e l i a n c e i s being
made, p r o h i b i t s "any form of general s o l i c i t a t i o n o r general advertising".
including published o r broadcast ads o r n o t i c e s and seminars whose attendees
have been i n v i t e d by any general s o l i c i t a t i o n o r advertising.

As t h e o f f e r i n g continues, t h e o f f e r i n g materials must be updated


by supplement o r amendment t o advise i n v e s t o r s of m a t e r i a l changes
a f f e c t i n g any of t h e disclosures.
I hope t h i s general o u t l i n e v i l l be of use, and of course i f you
have any questions o r need any f u r t h e r information, please l e t us know.
Sincerely,

BY
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August 19, 1986

Mr. Joseph Lyden


Pennsylvania Securities and Exchange C m i s s i o n
333 Market Street

Harrisburg, PA

17101

Dear Mr. Lyden:

Enclosed is the edited offering memorandum for the Financial Management


Group, Ltd. Please note that we are in the process of assming the RIA
of Bravero Financial Services of Lewisburg.

If you have any further questions please call.

Sincerely,

SJC/mld
Enclosure

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LAW OFFICES

O'DAY0

SMITH

243 NORTH DUKE SIKEET

LANCASTER, PA 17602

2QO4 NORTH BROAD STREET

MICHAEL P. O ' M Y
EDWARD H. SMlTH

PHIUDELPHLh.PA IS121
1215b763-5280

17171 393-4001

T I M O M A. IAN-

005 WEST MAIN STREET

M O W JOY, PA 17552

17V)653-8131

A u g u s t 2 2 , 1986

M r . S t a n l e y J. Caterbone
F i n a n c i a l Management G r o u p , L t d
1755 Oregon P i k e
L a n c a s t e r , PA 17601
Dear S t a n :
Enclosed herewith p l e a s e f i n d i n v o i c e p e r t a i n i n g t o t h e
f o r m a t i o n o f F i n a n c i a l Management Group a n d i t s s u b s i d i a r i e s
t o g e t h e r w i t h a n i t e m i z a t i o n o f a l l c o s t s and e x p e n d i t u r e s
made.
If you h a v e a n y q u e s t i o n s , p l e a s e f e e l f r e e t o c o n t a c t

me.
Very t r u l y y o u r s ,
h SMITH

,A+&Timothy A.

LL--

tinza

TAL:djg
Enclosure

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I h W OFFICES

O'DAY0 SMITH
243 u o n T n DUKE STREET

LANCASTER, PA 17602

2004 NORTH BROAD STREET


MIlADELR(IA.PA 19121
I215b763.5280

,717) 393--1

eo5 VEST

MAIN m E E T

MOUNT JOI. PA 175%


lfVb653-0131

A u g u s t 25, 1986

Commonwealth o f PA
Department o f S t a t e
Corporation Bureau
308 N o r t h O f f i c e B u i l d i n g
H a r r i s b u r g , PA 17120
Gentlemen:
E n c l o s e d h e r e w i t h p l e a s e f i n d A r t i c l e s of I n c o r p o r a t i o n f o r
a p r o p o s e d b u s i n e s s c o r p o r a t i o n t o b e known a s FMC S e c u r i t i e s ,
lnc.,

R e g i s t r y S t a t e m e n t i n t r i p l i c a t e and check i n t h e amount o f

$75 r e p r e s e n t i n g f i l i n g f e e s f o r same.
I t r u s t you w i l l f i n d e v e r y t h i n g t o b e i n o r d e r .

V e r y t r u l y yours,,
O'DAY

.,I .\I.
,

:djg

& SMITH

Timothy A.
.

Lanza

Er~closures
cc:

Mr. S t a n l e y J . C a t e r b o n e

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MICHAEL P. O'DAY
EDWARD H. SMITH
TIMOTHY A. UNU

US District Court For The Eastern District of Pennsylvana

243 NORTH DUKE STREET


LANUSTER, PA 17642
3934CQ1

Section 3189 Federal False Claim Act

805 WEST MAIN STREET

August 22, 1986

MOUNT JOY. PA 17552


U3-9131

1
Mr. Stanley J . Caterbone
F i n a n c i a l Management Croup, L t d .
1755 Oregon Pike
Lancaster, PA 17601

-I

- ---

~ r o f e s s i o n a ls e r v i c e s r e : F i n a n c i a l Management Group. L t d . . and


s u b s i d i a r y c o r p o r a t i o n s , including: ~ o n s u l t a t i o n sand advice;
preparation and f i l i n g of A r t i c l e s of Incorporation f o r F i n a n c i a l
Management Group, L t d . and nine s u b s i d i a r y c o r p o r a t i o n s ; prepar a t i o n and placement of l e g a l n o t i c e s .
Costs: 1 ) F i l i n g f e e s t o Corporation Bureau
nine c o r p o r a t i o n s a t $75 each '
$675 .OQ
2) Legal Notices ( s e e a t t a c h e d i n v o i c e s )
402.05
Financial
3 ) Corporation o u t f i t
76.32
Management Group, L t d .
4 ) Additional s t o c k c e r t i f i c a t e s
Finan45.76
c i a l Management Group, L t d .
T o t a l Costs
Total f e e s and c o s t s
Less c o s t s r e t a i n e r
Balance Due.

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LAW OFFICES

O'DAY 0

SMITH

W N O R M DULL ITNEET

LANCASTER, PA 17602

NILH A E L P. O D A Y

I ~ w h w . rI ~
i. SMITH
1 1 # . 4 ~ 1IIY
1
A. U N L A

17171 393-4UOI

2001 NORTH BROAD STUEET


PnllADELPtllh.PA 10121
121517L1J.51BO

005 VEST MAIN STREET


Y O U M JOY. PA 17552
1717,653-9131

A u g u s t 2 5 , 1986

I n t e r n a l Revenue S e r v i c e C e n t e r
P h i l a d e l p h i a , PA 19255
Gentlemen:

E n c l o s e d h e r e w i t h p l e a s e f i n d A p p l i c a t i o n f o r Employer
I d e n t i f i c a t i o n Number f o r F i n a n c i a l Management Croup, L t d . and
F i n a n c i a l S e r v i c e Insurance Agency, I n c .
I t r u s t you w i l l f i n d
e v e r y t h i n g t o be i n o r d e r .
Very t r u l y y o u r s ,

O ' D A Y & SMITH

T i m o t h y A . Lanza

Enclosures
cc:

Mr. 2 t a n i e y J . C a t e r b o n e
..

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FINANCIAL MANAGEMENT GROUP, LTD.


(a Pennsylvania Business Corporation)

TO:

Financial Management Croup, Ltd.


1755 Oregon Pike
Lancaster, Pennsylvania 17601

Gentlemen:
The undersigned, intending to be legally bound, hereby irrevocably
Shares of Common Stock, no par
tenders this subscription for
value, of Financial Management Group, Ltd. (the "Shares"), at a purchase
in the aggregate), including
price of $per share ( $
my check for the latter amount.

,I

This subscription may be 'rejected by the Company in its sole discretion. If this subscription is rejected, or if it is determined that this
offering will not be consunanated for any reason, the payment tendered by the
undersigned will be returned to the undersigned, without interest, as soon
thereafter as practicable.

i
-

The Company will sell the Shares to the undersigned in reliance upon
the following representations, warranties and agreements of the undersigned,
which the undersigned hereby makes in favor of the Company:
(a) The undersigned has received the Offering Memorandum dated
August-,
1986, prepared solely by the Company, and, prior to signing this
Subscription Agreement, has carefully reviewed the Offering Memorandum, and
has relied solely on the information contained therein, information
otherwise provided to him or it in writing by its officers, or information
from books and records of the Company. The undersigned understands that all
documents, records and books pertaining to this investment have been made
available for inspection by his or its attorney.and/or his or its accountant
and/or his or its purchaser representative, and himself. The undersigned
and/or purchaser representative(s) has had a reasonable opportunity to ask
questions of and receive answers from the officers, concerning the offering
of the Shares and all such questions have been answered to the full
satisfaction of the undersigned. No oral representations have been made or
oral information furnished to the undersigned or his or its purchaser
representative(s) in connection with the offering of the Shares which were
in any way inconsistent with the Offering Memorandum.

(b) The undersigned (i) has adequate means of providing for his or
its current need and possible personal contingencies, (ii) has no need for
liquidity in this investment, (iii) is able to bear the substantial economic
risks of an investment in the Shares for an indefinite period, and (iv) at
the present time, could afford a complete loss of such investment. The
undersigned together with his or its purchaser representative, if any, has

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such knowledge and experience in financial, tax and business matters as to


enable him or it to utilize the information made available in connection
with the offering of the Shares to evaluate the merits and risks of the
prospective investment and to make an informed investment decision with
respect thereto. The undersigned recognizes that the Shares as an investment involve significant risks.

(c) The undersigned is acquiring the Shares for his or its own
account for investment, and not with a view to distribution or resale, and
understands that the sale of the Shares has not been registered under the
Securities Act of 1933, as amended (the "Act"), or under any state
securities laws in reliance upon exemptions therefrom for non-public offerings. The undersigned understands that the Shares must be held indefinitely
unless the sale thereof is subsequently registered under the Act and under
certain state securities laws, or an exemption or exemptions from such
registration are available, and that the Company is not required to register
the Shares under the Act, or to take any steps to perfect any exemption
therefrom for any resale of Shares pursuant to Rule 144 under the Act or
otherwise. The undersigned further understands that (i) the Company is
under no obligation to register the Shares on his behalf or to assist him or
it in complying with any exemption from registration, and (ii) the certificates representing the Shares (and representing shares of common stock upon
conversion of the Shares) will bear a legend summarizing the foregoing
restrictions and the 12 month prohibition of sale provided in the Pennsylvania Securities Act of 1972.

(d) The undersigned understands that no federal or state agency has


made any finding or determination as to the fairness of this investment.
(e) The undersigned realizes that the Shares are being purchased by
the undersigned solely for purposes of investment for the undersigned's own
account and not for the account of any other person and not for distribution, assignment or resale to others and the undersigned represents that no
other person has a direct or indirect beneficial interest in such Shares.
(f) The undersigned realizes that he or it may not be able to sell
or dispose of the Shares as there will be no public market available. The
undersigned agrees not to sell or otherwise transfer the Shares unless they
are registered under the Act, and under any applicable securities laws, or
an exemption or exemptions from such registration are available.
(g) All information which the undersigned has provided to the
Company concerning himself or itself, his or its financial position and his
or its knowledge of financial and business matters, is correct and complete
as of the date set forth on the signature page hereof.

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PENNSYLVANIA PURCHASER STATEMENT

- PENNSYLVANIA INVESTORS ONLY.

The undersigned represents and agrees that he or it will not sell his
Shares for a period of twelve months from the date of purchase. The
undersigned understands that he or it has the right to cancel the purchase
of the Shares within two business days after making payment therefor.
The undersigned understands that he or it (A) has the right to withdraw his or its subscription, without incurring any liability to the
Company, and to cancel his purchase of the Shares within two (2) business
days after he or it enters into a binding contract of purchase by executing
and delivering the Subscription Agreement, or within two business days after
the exemption of this offering from registration under the Pennsylvania
Securities Act becomes effective, whichever is later, and (B) cannot sell
his or its Shares for a period of 12 months from the date of purchase if his
or its subscription is not timely withdrawn.

To accomplish this withdrawal, a purchaser need only send a letter or


telegram to the Company indicating his or its intention to withdraw. Such
letter or telegram should be sent and postmarked prior to the end of the
aforementioned second business day. It is prudent to send such letter by
certified mail, return receipt requested, to insure that it was received.
If the request is made orally, a written conformation that the request has
been received should be requested.

ACCREDITED INVESTOR STATUS:

INDIVIDUAL

If you are an individual and meet any of the following tests, please
initial in the appropriate spaces below.
I certify that I am an accredited investor because
1.
I had individual income (exclusive of any income attributable to my spouse) of more than $200,000 in 1984 and 1985 and
I reasonably expect to have an individual income in excess of
$200,000 in 1986. ("Individual income" means adjusted gross
income, as reported for federal income tax purposes, less any
income attributable to a spouse or to property owned by a
spouse, increased by the following amounts (but not including
any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any tax exempt interest income under
Section 103 of the Internal Revenue Code (the "Code") received,
(ii) the amount of losses claimed as a limited partner in a
limited partnership as reported on Schedule E of Form 1040,

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(iii) any deduction claimed for depletion under Section 611 of


the Code, and (iv) amounts contributed to an IRA or Keogh
retirement plan).

I have an individual net worth, or my spouse and I have a


combined net worth, in excess of $1,000,000. ("Net worth" means
the excess of total assets at fair market value, including home,
home furnishings and automobiles, over total liabilities.)
2.

ACCREDITED INVESTOR STATUS:

ENTITY

The authorized representative of any entity executing this Subscription Agreement should initial in the appropriate spaces below if the entity
meets any of the following tests.
The undersigned entity is
1.

A bank, as defined in Section 3(a)(2) of the Securities


Act of 1933, whether acting in an individual or a fiduciary capacity.

2.

An insurance company, as defined in Section 2(13) of the


Securities Act of 1933.

3.

An investment company registered under the Investment


Company Act of 1940.

4.

A business development company, as defined in Section


2(a)(48) of the Investment Company Act of 1940.

5.

A small business investment company licensed by the U.S.


Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.

6.

An employee benefit plan within the meaning of Title I of


the Employee Retirement Income Security Act of 1974 and
the investment is made as a plan fiduciary, as defined in
Section 3(21) of such Act, and the entity is a bank,
insurance company or a registered investment adviser, or
has total assets in excess of $5 million.

7.

A private business development company as defined in


Section 202(a)(22) of the Investment Advisers Act of 1940.

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Section 3189 Federal False Claim Act

8.

An organization described in Section 501(c)(3) of the


Internal Revenue Code, with total assets in excess of $5
million.

9.

An entity in which all of the equity owners and accredited


investors and meet one of the criteria for individual
accredited investors listed above.

If you checked (g), please complete the following part of


this question:

10.

(a)

List all equity owners:

(b)

What is the type of entity?

(c)

Attach a copy of your resolutions or other evidence


of the entity's authority to make this investment.

(d)

Have each equity owner respond individually to the


accredited investor criteria tests listed above.

An entity which is subscribing to purchase at least


$150,000 of securities, which amount is no more than 20%
of the net worth of the entity.

This Subscription Agreement constitutes the entire agreement between


the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties hereto.
This Subscription Agreement shall be binding upon the parties hereto
and their respective heirs, legal representatives, successors and assigns
and shall be enforced, governed and construed in all respects in accordance
with the laws of the Comonwealth of Pennsylvania.
The undersigned further represents and warrants that the residence set
forth below is his true and correct residence. The undersigned understands

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Section 3189 Federal False Claim Act

and agrees t h a t t h i s subscription is made s u b j e c t t o the condition t h a t the


Company s h a l l have the r i g h t t o accept o r r e j e c t i t i n whole o r i n p a r t .

Individuals:
P r i n t o r Type Name

Signature

Date

Soc. Sec. No.

P r i n t o r Type Name

Signature

Date

Soc. Sec. No.

Residence Address
J o i n t Tenancy

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Tenants

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Common

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Print or Type Name

Taxpayer I.D. No.

Date

Signature

Print or Type Name and Indicate T i t l e


or Position with Entity

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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ive. if

Section 3189 Federal False Claim Act

Purchaser ~e~resentat-ivehas read this Subscription Agreement, and to


the best of Purchaser Representative's knowledge, all of the information,
warranties and representations made by Subscriber in this Subscription
Agreement are correct.

Print or Type Name

Address

Taxpayer I..

No.

Date

Signature

Print or Type Name and Indicate Title


or Position with Entity
ACCEPTED FOR THE COMPANY BY:

Stanley J. Caterbone, Secretary and


Executive Vice President
Dated:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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1986

Thursday December 15, 2016


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US District Court For The Eastern District of Pennsylvana


"05L5 I " 0 S C " ~ t l C
*".*"I
L..CllCCI)
,.l**C,*
MIUS. _I".
6 . T"O*.l
lDLLCl
D O U L D I).WAIICL
IICMARD n. L c r r v r m
J . ,*O*AS
"LMIIILR
CLIDC W I L I N T l l C
s. .in*c SMITH

Section 3189 Federal False Claim Act

MCNEES.WALLACE & NURICK


ATTORNEYS AT LAW
100 PINE STREET
P. 0.SOX 1 1 6 6

i o J~ rrar

HARRISBURG.PA.

-IRD
1 1)01*"**
"0.C".
A "kLS
w. JC,,".
,.*OY*L*Y
"LIBCrn, n ""IICI
DAVID I L C * " U
"011"A"
I.. R I I I L
""R*.
."VAN
I I C U R D w *.c*c*50*
C,LLI."
I. C * C S * Y I I
MLNll'l I " r Y l C Y D L I J
rou1c. 2".
WILLI1*
ROBLIT W. CHCRRY
D A n D i DlSMCr
Lcr IWSSCL
L I U I t C C A. ,"lllLl
t.OUIWOLa m011AN

171oe-11e6

lrrcr*o*r (717) 232-BOO0

..

*.

Mr. Stanley J. Caterbone. Secretary


and Executive Vice President
Financial Management Group. Ltd.
1755 Oregon Pike
Lancaster, PA 17601
Dear Stan:
Enclosed is a copy of the Subscription Agreement prepared for use in
connection with the limited offering you now are conducting. I have reviewed
the document, and it appears to be in good order and does not contain reference
to warrants. Of course, you should review the document to be sure you deem
it suitable.
We sent Form D to the Securities and Exchange Commission by certified
mail. return receipt requested. on August 27, 1986. As you are aware, such
filing is a requirement of the exemption from registration under federal
securities law, and one or more additional filings will be required as well.
as we previously discussed. In general, the requirements are that another
filing must be made every six months while the offering continues, and not
later than 30 days after the last sale of stock. As you will have this
information, and we will not, it will be your responsibility to stay on top
of these future filing requirements. For your use, an extra blank copy of
Form D is enclosed, which you can photocopy in order to provide additional
copies for use.
Sincerely.
WALLACE 6 NURICK

BY
WJJ/sg
Enclosures

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Jamouneau

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Section 3189 Federal False Claim Act

100 south Street. post m i c e

BOX

486

Harrisburg. PA 17408

Telephone 1747) 238-6715

COMMITTEE ON LEGAL
ETHICS AND PROFESSIONAL
RESPONSIBILITY
Chairrnon
M#Ch.,F A a,:>*
Vice Choirman
.lom-~
'j "=:%*?"

PBA Liaison
,%.IC
;=: :ae,

September 19, 1986

PERSONAL AND CONFIDENTIAL


Keneim L. Shirk. Jr.. Esciuire
Shirk, Reist, wagensellei and Shirk
P.O. Box 1552
Lancaster, Pennsylvania 17603-1552
Dear Ken:

This letter is in reply to your inquiry of August 6, 1986


which inquiry enclosed a copy of the 'Charter Business Plan for
The Financial Management Group, Ltd.' dated July 1, 1986. You
have requested advice concerning the ethical implications for a
lawyer associating with The Financial Management Group, Ltd.
Briefly, in review of the materials which you provided,
seeks to position
The Financial Management Group, Ltd. ('FMG')
itself as a "major provider and servicer of financial products
and advice in the closely-related fields of investments,
financial consultation, mortgage banking, life insurance,
property and casualty insurance, taxes, law, and real estate..
It is the intention of FMG to retain in-house legal and real
estate professionals to assist financial planners in rendering
advice to clients, in the words of the Plan, .without fear of
losing the client to outside interests.'
Identified as part of
the "Support Services' which FMG intends to provide to clients,
is so-called 'professional networking' described by FMG as the
use of "in-house affiliates in law, accounting, tax", etc., to
serve clients and their related financial needs. The FMG
proposals specifically identify so-called 'affiliate firms'
which include a real estate entity and two law firms, one of
whom is identified as 'Legal Counsel for Business b Real
Estate' and the other firm is identified as .Legal Counsel for
Estate Planningg. A true and correct copy of the Charter
Business Plan of FMG is attached hereto and incorporated herein
as Exhibit "A".

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Section 3189 Federal False Claim Act

Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 2

At the outset of our evaluation, certain points should be


made clear. First, a lawyer is entitled to engage in
businesses other than the practice of law provided that the
lawyer keeps such enterprises entirely separate from the
lawyer's independent practice of law. One of the problems
which an 'affiliatedg lawyer may face in associating with any
such financial services provider is the importance under the
Code of Professional Responsibility of maintaining the lawyer's
independent professional judgment on behalf of a client where,
for example, it may be argued that the lawyer can be said to
benefit because the tendering of advice may give rise to the
purchase of financial service products from FMG. Under those
circumstances, the lawyer may be subject to charges of
conflicts of interest arising under DR 5-101 which provides, in
pertinent part, that: "a lawyer shall not accept employment if
the exercise of his professional judgment on behalf of his
client will be or reasonably may be affected by his own
financial, business, property, or personal interests.'
Of equal concern is the ethical requirement prohibiting
in-person solicitation of a prospective client with whom the
attorney does not enjoy a present or former attorney-client
relationship. There appears to be a likelihood that FMG will
directly solicit, on an in-person basis, clients with whom your
law firm has no present or past attorney-client relationship
which may subject you to the charge that PMG has done for you
indirectly what you are prohibited from doing directly.
Certainly, we cannot opine that there is no risk of violation
based on the foregoing assumed facts.
Additionally, one must take care to avoid any ownership
interest in PMG mindful of the prohibition contained in DR
5-107 that a lawyer shall not engage in the practice of law for
profit if a non-lawyer owns any interest therein. Accordingly,
compensation for legal services rendered should be made on a
fee for service basis or other objective format, avoiding any
possible charge of joint ownership of the venture.

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Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 3

.............................

It is also important that the confidentiality of


information developed during the course of the client
rtprssentatisn by your lax fir3 be held secret and confidentiai
in accordance with DR 4-101. Accordingly, disclosure of the
estate planning needs of clients should be done with the
express written consent of the client, particularly where a
charge may later be made by a disgruntled client that such
information was misutilized in order to induce the client to
purchase financial services products sold by FMG (on which FMG
may be entitled to commissions or fees). Moreover, to the
extent FMG earns such fees or commissions, full disclosure of
FMG's interest in the sale of such financial services products
should be made by the attorney pursuant to the attorney's
independent obligation to provide the client with competent
advice and a duty of loyal representation.
As you may sense, this brief reply to your inquiry
identifies only some of the ethical problems which may exist in
connection with the proposed structure.
It is not intended, by this letter, however, to
discourage such enterprises. To the contrary, it is believed
that, carefully structured, lawyers are free to participate in
such ventures. Should you require a more detailed opinion, we
request that you provide us with specific questions about
proposed courses of conduct so that we may be responsive to
them.
Should you have any questions concerning this preliminary
reply, please contact me. I remain
Sincerely,

pdh
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 4

.............................

Caveat: Each person requesting an opinion from this Committee


must be informed that this not an official opinion of the
Disciplinary Board of the Supreme Court of Pennsylvania and
that any opinion rendered will be afforded only as much weight
as the reviewing authority may choose to give it.

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November 2 1 ,

Section 3189 Federal False Claim Act

1986

M r . Stanley J. Caterbone
Executive Vice President
F i n a n c i a l Management G r o u p , L t d .
E d e n P a r k I1
1 7 5 5 Oregon P i k e
Lancaster. Pennsylvania
17601

Dear S t a n l e y ,

I r e c e i v e d your l e t t e r d a t e d O c t o b e r 29, 1986 w h i c h accompanied


t h e Compaq c o m p u t e r w i t h a v i d e o m o n i t o r .
I also received the
S o f t b r i d g e system.
I assume you i n t e n d t o k e e p t h e :
E p s o n m o d e l FX-286
HP l a s e r j e t

dot matrix printer

printer

2 4 0 0 b a u d H a y e s modem
DOS 3 . 1

9=s'L

( S e r i e s 300H) S b /

r7Yd

and C r o s s t a l k X V I

/'$6

I f t h e e q u i p m e n t and s o f t w a r e m e n t i o n e d a b o v e was t o b e i n c l u d e d
w i t h t h e p a c k a g e s y o u s e n t me, p l e a s e l e t me know i m m e d i a t e l y .
Sincerely,

4Jig,*-

R . B r a d f o r d Thomas
Vice President1
D i r e c t o r o f MIS

cc:

R o b e r t E . Kauffman
Steve Franklin

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Section 3189 Federal False Claim Act

Advisory, Inc.
m m w m w
IN',.'

*"N"Gr*E*r

OID",.

Eden Park 11. 1755 Oregon Pike

Lancarter, PA 17601

717-569-4100

LID

STANLEY J. CATERBONE
PRESIDENT

December 31, 1986

Mr. Thomas TucKer


221 Lincoln Way East
Chambersburg, PA 17201
Dear Tom:
Attached are updated R.I.A.
Kits for your use.
Please
note that we amended the ADV to include Asset Monitoring
and also changed the client agreement to include Market
Timing. Please discard your previous kits.
If you have any questions or concerns, please call
Sincerely,

Stanley J. Caterbone
President
SJC: lmk
CC

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Section 3189 Federal False Claim Act

Executive Vice-President
Stanley Caterbone
Acts as Marketing Officer, Supervision of Registered Investment
Advisor, Supervision of Computers and Word Processing,
Insurance Product Selecsion
1.

Manages all Advertising - Radio and Newspaper, Seminars


and Corporation promotion

2.

Manages computer and word processing, letter and proposal


generation, Insurance proposals, Software review, IFS System,
data input, hardware and software maintenance

3.

Manages Registered Investment Advisor, Compliance with NASD


laws for R.I.A., set up and maintain files and review plans

4.

Supervision of casewriters, coordination of efforts

5.

Supervises computer technician, oversees the above functions

6.

Advise on hardware acquisitions for all reps and train all


reps in the use of all network software

7.

Acts as Corporate secretary, keeps corporate minutes and


issues stock certificates

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Section 3189 Federal False Claim Act

Jerry Ehvem, President


Registered R e p r e ~ n t a t i

"tnnovarton m ~ l n o n c ~ srralegres"
al
.

Bennington Financial Group, Inc.


21 South Fourth Smec
Levusburg. PA 17837
7 17-513-3118

January 5, 1987

Pcnsionr

dn , fkt

Financial Management Group, Inc


1755 Oregon Pike
Lancaster, Pa. 17601

heft

Ikfind Contribution
P d t Sharing

ATTENTION:

Kmuglis

Dear Stan:

IRA'S

STAN CATERBONE

I have received the programs that I wrote to you


about on November Zlst, and I want to thank you very much
for the quick service. 1.expect that they will be very
helpful. !

Auet Manngrment

I was wondering if there is a manual that explains


these programs and how to best utilize them. If such a
guide exists, I would very much appreciate receiving a
copy of it.
I also need instructions for loading the
programs on my computer. I have a Leading Edge computer
with a fixed disk, which is compatible with the IBM P.C.;
therefore,
I need to know the proper method to use to
install and run the programs on this type of system.

Oil & Gas

If you have any questions regarding the above,


please don't hesitate to give me a call.

Emphyrr &n&t
Plans .

I'm looking forward to hearing from you soon.

Employee Communicption

Booklets

Thank you for your help.

L n t e Planning
College Funding m

Charitabk Giving

Foun&tlonr

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Securiticr Tmnsactions through ~ S C
Sccu;irics Corporation

*.~-~L~
.,A=..

Thursday December 15, 2016

A Rrgirrcmd BrokcrlD?lcr

''
1
10/19/2006
2 .

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

K. L SHIRK, SR. (1915-1956)

NELM L SHIRK, JR
3CER S REIST
DAVID WAGENSELLER. Ill
KENELM L SHIRK. 111

ATTORNEYS A T LAW

P.0

WILLIAM J PELHAN
STEPHEN R GIBBLE
DORE C VALAVANES
SAMUEL M MECUM
BARBAM RElST DILLON

LANCASTER,

BOX 1 5 5 2

PENNSYLVANIA17603-1552

January 8, 1987

PRINCIPAL OFFICE
132 E. CHESTNUT STREET
AREA CODE 717
LANCASTER-394-7247
AKRON-859-1742

I N REPLY REFER TO:

C0127 WO2DV U M I l
Stanley J. Caterbone
Executive Vice President
Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster PA 17601
Re:

Dr. and Mrs. Vlilliam Umiker

Dear Stan:
Hope you had a merry Christmas and a good start to your new
year.
Just wanted to let you know that the Umikers paid their bill
within a week,after it was sent. That made me feel better. Thanks
,
: so much for your guidance.
I had a thought before I close the file. Do the Umikers have
powers of attorney? They really should. Given that so many of their
assets are not jointly titled, the incompetency of either one of them
would create enough complications that the appointment of a guardian
would probably be necessary. On the other hand, they might rather go
to that expense at that time than have a power of attorney instrument
done at this point. They could limit the power of attorney to each
other, if that would make them feel better.
At this point in time, we are billing people an average of
about $1,000.00 for appointment of a guardian, as a hearinq is necessary. On the other hand, a power of attorney instrument costs about
$50.00 to $75.00, and so it is obvious why we advise people of its
wisdom.

I know that you are well familiar with the uses, advantages
and disadvantages of a power of attorney, so if you would like to
briefly discuss those concepts with the Umikers and get back to me,
please do so. If you do not feel it is necessary or you have discussed it previously, just let me know. If they wish to discuss it
with me, that is fine. The powers that are now available under the

OTHER OFFICES
107 WEST MAIN STREET

EXHIBIT
U.S. 16-401417522-2014
CIVIL RIGHTS CLAIM
EPHRATA, PENNSYLVANIA
717-733-2588
Property
of Advance Media 117-626-2404
Group

4 0 2 SOUTH BROAD STREET


PagePENNSYLVANIA
59 of 646 17543-2602
LITITZ.
717-626-2775
Page 2165
of 2953

2 5 0 MAPLE AVENUE

Thursday
December
15, 201617566-132C
QUARRWILLE.
PENNSYLVANIA
717-786-1123
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

S t a n l e y J. C a t e r b o n e
~ x e c u t i v eV i c e P r e s i d e n t
January 8, 1987
P a g e Two

new l a w ( a b o u t two y e a r s o l d ) a r e b r o a d e r a n d t h e y may w a n t t o know


about t h a t .
Thank y o u .
Sincerely,
SHIRK, -3EIST, WAGENSELLER AND SHIRK

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COMMONWEALTH OF PENNSYLVANIA

ROBERT M. IAM
Chairmin
I

Section 3189 Federal False Claim Act

DICKTHORNBURGH
Governor

FREDERICK H. PLANK
Commi~sioner
LORI HEISER
Commissioner

--

--

Pennsylvania Securities Commission


333 Market Street
Harrisburg, PA 17101-2209
Telephone: (717) 787-8061

January 13, 1987


Stanley J. Caterbone, President
F M G Advisory, Inc.
1755 Oregon Pike
Lancaster, PA 17601
ADVISER APPLICANT:

DATE OF FILING:

F M G Advisory, Inc., (FKU)


1755 a e g o n Pike
Lancaster, PA 17601
Septenher 25, 1986

Dear M r . Caterbone:

This w i l l a c b l e d g e receipt of your'sutmission on December 18. 1986, in


response t o our letter dated October 24, 1986. In this respect, before
f u r t h e r consideration can be given, it w i l l be n e c e s s a q t o provide the
following:

1. Effective date of Applicant's r e g i s t r a t i o n with t h e U.S.


Securities and Exchange Cemnission under Section 203 of the
Investmnt Advisers A c t of 1940.

2.

Reference is made t o t h e disclosure on Schedule F f o r 'Item 8(C)'


wherein it s t a t e s "A potential c o n f l i c t of interest rnsy arise
from t h e fact the Financial Management Group, Ltd., w h i c h ow^
a l l the outstanding stock of the Applicant, a l s o has an i n t e r e s t
in a f f i l i a t e d ~ a n p a n i e swhich o f f e r products m services similar
In this respect, p r w i d e
t o those t h a t might be r e c m n d e d . '
an opinion as t o why these ' a f f i l i a t e d canpanies" have not been
i d e n t i f i e d under question 8.C., Fonn ADV-Part 11. AmMd
Form ADV if appropriate.

3.

With reference t o Financial Management Group, Ltd. (-)


p r w i d e a detailed and mnprehensive description of the nature
and scope of EMGL's plan of business and t h e relationship, if
any, between this e n t i t y and t h e Applicant.
With respect t o Robert E. Kauffman and Michael M. H a r t l e t t , who
are individuals with control and l i s t e d as Vice R e s i d e n t and
Secretary, respectively, p r w i d e an opinion as t o why their
educational and business background has not been disclosed an
Schedule F under question 6, Form ADV-Part I f . .

4.

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10/19/2006

1109 STATE OFFICE BUILDING. PHILADELPHIA. PA 19130-4088:Tele~hone215-560-20

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Stanley J. Caterbone
F M G Advisory, Inc.
3&1uuy.13, 1987
Page 2

5. With respect t o the f a c t t h a t Messrs Caterbone, Kauffman and


H a r t l e t t are registered representatives with FSC Securities
Corporation (FSC), p r w i d e an undertaking signed by an officer
of FSC, s t a t i n g that F5C has reviewed and has no objection t o
the follwing:
a.

The Applicant's plan of business, method of


operation, (including but not limited t o f e e
s t r u c t u r e ) as we11 as c o n f l i c t of interest disclosure, s e t forth i n Applicant's Form AW as
f i l e d with this agency;

b.

The tenns, conditions and disclosure s e t f o r t h i n


t h e Applicant's proposed investment advisory cont r a c t (s)/agree~r~=nt
(s); and

The inv&tment advisory a c t i v i t i e s of the above


namsd individuals, as disclosed in t h e Applicant's
Fonn AW, while registered as agents f o r FSC.
After review of t h e Schedule D f o r Michael Hartlett, it is noted
t h a t Mr. Hartlett is a planner f o r Financial Planning Consultants
(FFC), Lancaster, Pa. In this respect, p r w i d e a detailed
the duties and
description bf FPC's plan of business to incl*
r e s p o n s i b i l i t i e s of Michael Hartlett as a planner f o r that firm.
Fbrnish specimen w p i e s of a l l f o m of contracts and/or agreem t s t o be used by the Applicant f o r its investment adviser
c l i e n t s i n Pennsylvania.
Reference is m d e t o the disclosure cn Schedule F f o r
" I t e n 13(B)' wherein it indicates t h a t the Applicant w i l l &
cash payrents t o s o l i c i t o r s . I n this respect, amend Form ADVPart I1 in order t o p r w i d e an affirmative response t o question
13.B.

c.

6:

7.

8.

..

In t h e event a canplete response t o the information requested above is not


received within t h i r t y (30) days frcxn receipt of this l e t t e r , t h e application
rnay be placed before t h e Ccmnission so that it m y consider issuing a Denial
f o r Abandonment Order pursuant t o Section 602.022 of the Pennsylvania
Securities A c t of 1972.

Paul M. Schwartz, ~ c t i n kDirector


~ i v i s i o nof Licensing

CERTIFIED W

EXHIBITRETURN
U.S. 16-4014
CIVILREQUESTED
RIGHTS CLAIM
RECEIPT
Property of Advance Media Group

Page 62 of 646
Page 2168 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Bob Kauffmn,

Section 3189 Federal False Claim Act

Mike M e t t , and

S t a n Caterbum

Frow: Qrolyn D Royer

As you Iomw, I have f u l l f i l l e d the initial step in my 1987 plan by obtahhg


my series #24 lisc. lherefore a t this time I feel I shcdd recap my g a d s as
W as the time table for the inP,lementation. I am basing much of the time
table on information that has am to liqht since I passed my test on m&y,
1/12/87, and as always Upaates and champs can be expsct&.

Pr*

Goal: lb E?e m
i
n
t
e
d President of FIG Emker/D=aler

Secondary Goal: To Continue To


SupplanerM Perscolal Earnings.

In The Year 1987.

Fursue A Firm Client Base An3 -te

I reaffirm my primary goal w i t h the


that the firns desire a t the
present time is that I work on my prsmal production and pit the B/D
Presidency cn hold until such time as I am notified by the firm that this goal
f i t s the corporation goals and objectives.

In the
I w i l l continue to familiarize myself w i t h any detail w h i c h may
aid the hplementation of the B/D while taking no direct responsibility for B/D
pmcessing or hpleinmtaticn.
I k w l d like to continue in the licensing of the Series 114, the Reg. wens
Principal and am requesting that the firm pay for the ticket sim3y mterial and
thecranlc~xlrse~.

I feel that my request for remmemtion was f a i r tut feel that an alternative
would be to eliminate the base salary and increase the over ride to a lwel of
3% for a t least the f i r s t year of operation. This is just a mggesticn and of
c u r s e muld have to be discussed in more detail.

I muld

stress my camnitment to this goal is for the betterment of the


corporation as a whole, while a t the same time, this amnnitment will give me
great perscnal satisfaction.

sincerely m t t e d ,

Carolyn D Royer

I
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 63 of 646
Page 2169 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

P.O. BOX 601 1

ROCKV'

MD 20850

(301) 738.6500

j/\Y 13 E ~ J

CANDIDATE QUALIFICATION EXAMINATION SCORE REPORT


CANDIDATE:

CRD #

ROYER, CAROLYN DELLER

1092979

SSN:

184-36-7730

DATE:

1/15/87
I

The above named candidate has taken an examination administered by the NASD through the facilities of
the Control Data Corporation
Plato System. The performance of the candidate is shown below:
..
. , .
"

TEST:

GENERAL
. . . SECUR

EXAM DATE:

1/12/87

IPAL EXICMINATION
.

CORE:

SERIES:

24

845

GRADE:

PASS

The following table contains an analysis of the candidate's performance in each of the major sections
of the exa
s indicated by the percentage of questions in each
j

Percent corr

failed and wishes to retake this examination should


complete page one of Form U-4 and return it to the CRD, P.O.Box 6011, Rockville, MD 20850. A $50.00
examination fe

. .

BROKER DEALER #

7461

FSC SECURITIES CORPORATION


250 PIEDMONT AVE NE STE 1900
ATLANTA, GA 30365
ATTN:
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 64 of 646
Page 2170 of 2953

DENISE M. PROPES
Thursday December 15, 2016
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Institutional Investors of America, Inc.


Financing.Investments & Advisors
iUlan D. Dannsli
Managing General Parhler

January 20, 1987


HONORARY CHAIRMAN

Gm.s. Moon

,)

CHAIRLLINoFrnEmARD
* a d w. I-h

Mr. Stan Caterbone


Financial Management Group
1775 Oreqon Pipe

DIRECTORS

~~~~~.~
~

k.
v*. P&n(
k t x hB=+.NYC

*. I..
oyimy.

Re:

C u U

Fo-.

ur. A

CAYIW I-. co.


hrnbnvdca

F~-u.s.
40

Mortgage Loans
Commercial and Residential

Dear Stan:

&
"
.
.
"
A

Chi,"""
An- W..'"I

C*.
rO u i r m a n norpied
C-nth
d Arrri.

In reference to the above captioned subject, enclosed


please find a synopsis of our lending programs. We
are very interested in business in your part of the
Country. I will also be in a position to do some
other business with you through the bank we just
purchased in 60-90 days.
Very truly yours,

Allan D. Dannatt
President
ADD/slh
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Page 65 of 646
777 North Eldridge Page
Parkway.
2171 ofSuite
2953 730

Property of Advance Media Group

Thursday December 15, 2016


Houston. Texas 77079
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LOAN HIFTFOLJO
aJFEimRA!iE~vrms

ma
10 yrs.

Variable

5 yrs.
7 yrs.

Fixed
Fixed

&
e
225 bp wer
03F o r 300 bp
wer 1 yr T- ill

Pay R a t e

Fee

Amortization

Stating

1-2 pts.

30 Y e a r s

1-2 pts.
1 3/4 pts.

30 Y e a r s
30 Y e a r s

@ 9%

9.5%
9.65%

Fived Rates a l s o available a t 325 basis pints wer c

o T-Bill

Retail, O f f i c e , Industrial
10 yrs.

Variable

5-7 yrs.

Fixed
Fixed

1oyrs.

300-350 bp wer
1 yr. T-Bill o r
250 bp wer 03F

1-2 pts.

30 Y e a r s

8.75%
9%

Par-1 pt.
Par-1 pt.

30 Y e a r s
30 Y e a r s

Similar terns available f o r m i n i wx&mses,


homes and ACLF f a c i l i t i e s .
Forwarrl,
available.

q,
open-ended

hotels, mobile home parks, nursing

and covered construction


Maxmm loan to value of 809.

loans are also

W e are a r n m t l y seeking t o plrchase $500 million in


Sale Leasebacks
p r q e r t i e s nationwide leased to nationally listed public corporations w i t h good
credit ratings. Leases r r p ~ s tbe NNN with a minimJm of a 10 year tenn. Mininnnn
cash h
t
$5-$500111.

REMICS
Beginning in the 2nd W X t e r of 1987, I I A will be placing $100 million
a m n t h into real estate investment mortgage conduits. Innn&iate urdbg lcans
w i l l be made on all types of I n s t i t u t i o n a l quality property.

Fates quoted are test available and m y vary depending on location and quality
of product.

1
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 66 of 646
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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Planning Consultants
Oregon Pike Lamaster, PA 17601 717-569-1100

ROBERT E. KAUFFMAN
PRESIDENT

January 20, 1987

Hibbard Brown & Co., Inc.


7855 Walker Drive
Suite 6 2 0
Greenbelt, Maryland 20770
Dear Pete:
I have discussed our visits with the other two partners and the
initial reactions have been favorable. I am going to give you my
interpretations of our meeting along with some minor changes my
partners would like to see. Hope to hear from you soon.
A.

Payout
We would like to work with a financially sound entity and would
like to cap our payout at 90 percent on all products with a
pass-through of the ticket charge from SSC to HB Inc.
We would like it understood that no other firms be offered a
higher payout. We would further request that we receive a 2
percent overwriting on all shops we bring directly to HE Inc.
as oppossed to becoming a part of FMG. If these independent
"shops" are at less than 90 percent payout, we would like an
additional 1 percent for every 5 percent under 90 percent these
shops are being paid.

0.

Territory
It would be our understanding that we could veto any hires in
the state of PA and that we would need to approve all direct
contracts (outside FMG) in that state. It is further understood
that at any time FMG may solicit other HE Inc. shops in PA to
come under our contract/services.

Securities Transactions thmugh FSC Securities Corporati-n


Page 67 BmkerIDtaler
of 646
A Registered
Member
NASD
Member SIPC
Page
2173 of 2953

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

c.

Section 3189 Federal False Claim Act

Stock
-

F M G i s to receive a 20 percent interest i n HB Inc. a s recognition


of its production to the bottom line equity value of HB Inc.
10 percent based upon a preThis number may be adjusted
determined production schedule over the next five years.

Prod in Mil

--t

7
-

o+

10%

6- 20

- 3 3 0

30

10%

10

20

30

Full Years
F M G i s to receive credit for direct volume a s well a s for volume
where a 2+percent overwriting i s generated for referring independent shops.
FMG

D.

i s to receive the stock at n o charge.

Divorce Planning
1.

Should F M G volume drop below two million in volume, HB Inc.


would have the right to sever relations from F M G and buy back
stock earned at book value.

2.

Should F M G leave HB Inc. any time within five years (unless


sale o f HE Inc. occurs sooner), F M G rould also leave with
HB Inc. any equity attributed to i t s o w n business. F M G
would retain both equity and overwriting on direct relationships
they referred t o HE Inc.
Example:

3.

leaves producing 4 million after 4 years


Referred shops produce 2 million

FMG

a.

FMG

retains 1/3 o f 10 percent share or 3.3 percent o f stock

b.

FMG

retains 2 percent overwriting o n 2 million or $40,000

If our relationship survives five years, we would set the


earned equity percentage attained and reconfirm other
agreements.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 68 of 646
Page 2174 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

MINUTES OF THE 1/26/87 MEETING OF


THE BOARD OF DIRECTORS
The

Board

of

Directors

meeting

Oregon Pike, Lancaster, Pennsylvania


January, 1987.
PRESENT :
Robert E. Kauffman

was

on

the

held
26th

at

1755

day

of

Stanley J. Caterbone
Michael M. Hartlett
constituting a quorum of the Board.
The Meeting was called to session and minutes recorded
by Stanley J. Caterbone.
TOPICS DISCUSSED
Review.of the Business Plan
Weaknesses:
a. Specialists
b. RIA Fees
c. Improve client services
d. Organize marketing
e. Profitability
The Board of Directors should be expanded to five
(5) persons. This was agreed upon unanimously and the followi~g
persons were nominated:
a. P. Alan Loss
b. Robert Long Jr.
c. Peter Poneros
d. Richard Braverman
e. Carolyn Royer
f. Kenneth Ray
g. Scott Robertson
h. Harry Radcliffe
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 69 of 646
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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I t was agreed upon that the election of t h e additional

Board

of

Directors

at 4:00 p.m.

would

take

place

on

February

4,

1987

This would involve a one ( 1 ) year term.

The Meeting was adjourned.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 70 of 646
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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Qxative Finance Campany


P.O. Box 4412
Lancaster. PA 17604

Hi* Ascciates, LTD.


Tom Kyle

1861 William Pem Way


Iaraster, PA 17601
February 3, 1987
Dear Tom:

,l

As per your recent mane conversation w i t h Bob brig, I would like to give
you scane information reganiing cur lenling ability. I have been selected to
represent a group of Institutiondl Investors that are htemsb3 in projects in
the Eastern part of the acRmtry. We are able to finance projects ranging in
s i z e of $3 t o $100 million.
hrojeds include aparbe&s,
retail, office,
hdwtrial,
health care f a c i l i t i e s , mabile hare parks, hotels and mini
warehouses.
Underwriting can be very f a s t and can often times be approved in
14
days froan time of application.
follow^ is list of underwriting
r q h x m m t s ; pro forma, rent r o l l , financial statemnts, resume of borrower,
and s c a n e under
~
certain c a d i t i o n s an MAI Wraisal. For new a m s t n ~ c t i o n
a sales agreement and cost brealcdowns are r q u i r d .
a copy of our portfolio. I hope that w e on do h i n e s s
together and provide ycmr financing for your next: project, o r possibly prwide
a r e f h n c i q package f o r ycur existing portfolio.
I appreciate the
opportunity to work w i t h you.
~slclosed is

W e may be reached a t the following nlrmber; (717) 569-5555

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 71 of 646
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Thursday December 15, 2016


10/19/2006

. I \

US District Court For The Eastern District of Pennsylvana

TO: BaARD OF D l X C l D E

Section 3189 Federal False Claim Act

FINANCJAL IGmGmm GEmP,

Em.

RE: WKER DEALER WWGER


A t this time I feel it is appropriate t o preserrt the Boazd of Directors w i t h an
qdate & reiteration of my godl to
the Broker DBaler Branch of F h c i a l

Management

c;ruop, m.

As i n i t i a l l y stated in my meim dated 12/30/86 & presented to the Principals a t


FMG, I would like to pusue establishing a strang, organized locdl situation to
clear our c u r r a t brokerage b u s h e s .

I u n d ~ t h a t a l e t o m a n y c h a n g e s i n t h e l a s t ~(FMG)
w mybe

cbngirq our a x r s e fran the plrsuit of an FMG broker dealer.

For that reason I would like to point ak t h a t we have invested a good deal of
mney i n the ADP system. It i s currently able t o allm u s direct order entry.
A t this time scumne needs to organize a system so that we can begin to u t i l i z e
this f e a h r e .

mst

of ycu knm that I was responsible f o r the inplementation of the BTS & DNS
us a-t
retrieval & order entry. I q l e t e d t h i s task
w i t h i n the nnnth of J m , while a t the same time obtauung my series #24
license. I would like the opportunity to amtinue in the direction of
hplemsnting the f u l l services we have a t our dispmal t h r a q h ADP.

..

system w h i c h all-

For the corporate good I feel the direction we w i l l plrsue in the area of the
Broker Dealer should be established by the E ! c a d of Directors.

If this dkection is to continue and/or to plrsue a strang aperation here a t


Financial Mmagemxtt Group I am requesting that I be considered for this
position.
'Ihank Y o u for your time and consideration.

sincerely Sukmitted,

EXHIBIT U.S.
16-4014
CIVIL RIGHTS CLAIM
Carolyn
D Royer
Property of Advance Media Group

Page 72 of 646
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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

MINUTES OF THE 2 / 1 0 / 8 7 MEETING OF


THE BOARD OF DIRECTORS

The Board of Directors meeting was held at 1755


Oregon Pike, Lancaster, Pennsylvania on the 10th day of
February, 1 9 8 7 , at 4:25 p.m.
PRESENT:
Robert E. Kauffman
Stanley J. Caterbone
Michael M. Hartlett
Robert Long, Jr.
P. Alan Loss
constituting a quorum of the Board.
The Meeting was called to session by Michael Hartlett
and minutes recorded by Stanley Caterbone.
TOPICS DISCUSSED
Robert Kauffman asked for input regarding his letter
to Carolyn Royer.
The Board unanimously suggested that
the said letter be rewritten with more positive style and
softer tones.
The letter to Lynn Wood regarding the securities
problems was addressed and the following issues are to be
resolved by FSC:
a. direct entries
b. wireless mutual fund transactions
c. increased payout to our group
1. 8 0 % as of 1 / 1 / 8 7
2. 9 0 % in the future
1

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 73 of 646
Page 2179 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

The topic of the purpose of the visit from Don Aultman


and Steve Franklin was discussed:
a. inform Robert Kauffman of his release from FSC
contract
b. make Robert Kauffman an offer for a position
with FSC
The financial position of company was discussed
and it was recognized that revenues are lagging by as much
as eight (8) weeks.
The company is operating at a deficit
and the following solutions were mentioned:
a. Hire additional, better qualified people
b. Negotiate better margins
c. Use new product
1. local syndication
2. insurance contracts
Broker Dealer subject was discussed
a. Hibbard Brown offer was looked at and we decided
t? persue in more detail.
b. The deal with
Integrated Recourses was not
looked upon as being a possible alternative.
Robert R. Long adjourned the meeting at 6:30 p.m.
until February 11, 1987 at 4:00 p.m. to continue to discuss
the offer by Hibbard and Brown.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 74 of 646
Page 2180 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COLUbBIA ASSET MANAGEMENT CORP.


IXVESTbENT BANKERS

TWINING OFFICE CENTER


715 TWINING ROAD SUITE 116
DRESHER. PA 19025

Scott Rabertson
Financial Management Group
1755 Oregon P i k e
Lancaster , P A 17601
February 1 0 1987

Dear Scott :
Enclosed i s a vrrite up o n the prcxperty w e discussed.
The owner desires to refinance for a minimum of
$2,500,000 o n a non-recourse assumable basis.
It i s
understood that the enclosure is ta b e forwarded to a
private investor in Texas and is not to b e shown to
anyone else.

I f this is handled to our satisfaction, I would b e


pleased to submit additional properties for your clients
cc-nsideratinn.

Leonard M. Shendell

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 75 of 646
Page 2181 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

MINUTES OF THE 2/11/87 MEETING OF


THE BOARD OF DIRECTORS

The Board of Directors meeting was continued at 1755


Oregon Pike, Lancaster, Pennsylvania on the 11th day of
February, 1987 from the previous Board Meeting held on
the 10th day of February, 1987. Meeting held at 3:40 p.m.
PRESENT:
Robert E. Kauffman
Stanley J. Caterbone
Michael M. Hartlett
Robert Long, Jr.
P. Alan Loss
constituting a quorum of the Board.
I

TOPICS DISCUSSED
Mr. Peter Hibbard was present regarding a merger with
Hibbard Brown.
After four (4) months of considerations,
we are interested in persuing a relationship
a. Due Delligence: Department is growing and
they
do attempt to screen and filter only sound products.
1. Syndication 46M will help us syndicate
b. Product:
All funds will wire order minimum 5,000
c. Custodian Accounts
1. State Street, Recourses Trust, Delaware
d. Variable Annuity -Most of ours
Our Want .List:
a. Wire order materials
b. Naked options, straddles, etc.
c. Revise forms
d. No forms charges
e. Ticket charges pass through
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 76 of 646
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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Mr. Peter Hillard gave a brief history of B/D


At present there are sixty ( 6 0 ) representatives, intentions
of adding forty (401 in the next three (3) months.
$10 million by year end
The Board approved the loan of $10,000 to Gail Turner
for the start up costs of her office.
The
5:30 p.m.

Meeting

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

was

adjourned

Page 77 of 646
Page 2183 of 2953

by

Robert

E.

Kauffman

at

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

February 1 3 , 1987

Stanley 3. Caterbone
Financial Management Group
1 7 5 5 Oregon Pike
Lancaster, PA 17601
Re:

Carter Manor Associates

Dear Stan:
Enclosed is a Loan Request for Carter Manor Associates for the
Refinancing of two particular properties that it currently owns
and we would appreciate you consideration of this matter. Please
note that the terms in the Loan Request are negotiable.
If you have any questions, please do not hesitate to contact me.
Sincerely,

Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Page 78 of 646
Thursday December 15, 2016
REAL ESTATE DEVELOPMENT I BUSINESS ACOUISITIONS

) Property of Advance Media Group

Page 2184 of 2953

1681 Crown Avenue 1 PO Box 8200 i Lancasler PA 17604 11717) 395-7100

,>.

10/19/2006

'

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

BARRY L . SCHUTTLER and ASSOCIATES


5501 TWIN KNOLLS ROAD SUITE 101 COLUMBIA, MARYLAND 2104
BALTIMORE 995-4084
WASHINGTON 621-566
COLUMBIA 992-3446

February 13, 1987

Again my apologies!

I can place the order for you for the tabs if


you are having problems locating a reasonable
price on ther?. What you may want to do, if
you plan on ?reducing Plans immediately, i s
to take some of ours and we will replenish when
your order is completed.
Feel free to call should you have additional
questions.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 79 of 646

Thursday December 15, 2016

SECURITIES OFFERED T H R O U G H FSC SECURITIES CORPORATION


Page 2185 of 2953
A REGISTERED BROKER DEALER
MEMBER NASD/SIPC

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Meet the Specialists


in Helping You Prepare for
Your Financial Independence.

M E R T L KAUrrYW

ICNLLWWLEll.CFV
E.MMVr.-

STANLEY J. C A m E

EnanhrnRrM

P. A U N U s

bmdFM*vl",n*

ROBERT R UYIO. JR.


Spsllll*

The Finincia1 Management Group Specialists are experienced


professionals with the knowledge and resources available in ONE

- - .Maximize your wealth

A. Tax Planning & Prepamtion B. Financial Planning


C. Estate Planning
D. Retirement Planning

.Minimize your taxes


-Improve your investment

IRA'S, KEOGH'S
E. Investment Analysis. Implementation & Management
F. Insurance Analysis, Planning & Implementation
G. Legal Services
H. Real Estate Services

coordinate your personal and

business financial planning

A B C D E F G H

A
..

-.."a.--

"I.*

Eden Park 11,1755 O w o n P l b


L d n ~ s l e rPA
, 17601

(717) 569-4100
(800) 322.1 128

S.CurIt&s ~ r i n ~ c r k mthrough
s
FSC SIKYrll~esC ~ N ~ ~ I O ~
F~mncialManagement Group, L~,-J
A Rsgbtemd Bmkbr/Cmaler
1755 Oregon Pike
Mmnbar NASD
Member SIPC
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Page 80 of 646
Thursday December 15, 2016
Property of Advance Media Group

Page 2186 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COMMONWEALTH OF PENNSYWANIA
ROBERT P. CASEY

ROBERT M. LAM
ch.innan

Governor

FREDERICK H. PUNK
Commissioner

NANCY L. DIANA

secrasry
EUOTT KLElN
Chid Car-

Pennsylvania Securltler Commluion


333 Market Street
Harrlrburg, PA 17101-2209
Telephone: (717) 7876061

S t a d e y J. Giterhme, President
F M G Advisory, Inc.
1755 OrPike
Lancaster, PA 17601
IWESBENT AWISER APPLICANT:

P M G Advisory, Inc. (=)


1755 OrPike

Lancaster, PA 17601

Dear M r . Caterme:
This w i l l ackno#ledge receipt of yam subnission on February 20, 1987. In this
respect, before further consideration can be givm, it w i l l be necessary to provide
the follauiq:

)
h

1. Attached is a ccpy of a letter dated October 24, 1986 wherein w e requested


rtain infornation w i t h r e s p e d to Fm;'s application. To date, question 18 of
our October 24, 1986 l e t t e r has not been answered. I n this respct, furnish a
of those permns who will provide investmnt advice in FWuqlvania to
nclude, i f not previously filed, a ccropletd Schedule D of Fonn AW for each
such individual. This infornation is requested with reference to yan
affimmtive r e s p m e to question 17.A.(4), Form AW-Part I wherein you indicate
Em; enploys "10 or m x e persons" w l n p e r m i n w s t m n t &vimry fmctions.

&

2.

Reference i s nade to y a ~ rrespnse to qmstion 1.A.. Form ALYV-Part 11. The


responses, as presented, accamt for only 80%of m's Mal advisory billings.
W r d Form AW to -de
d i s c l e u r e as to &at -titutes
the r-iniq
20%.

3.

W i t h reference

4.

An affirmative respome to question 2.G.. Porn AW-Part 11 requires disclosure


on s&edule F. A m r d Schedule F accordimly.

to your affirnative response to q u e s t b 1.A. (8). Form AW-Part


I1 an3 the required disclosure on Shedule F, it appears that the information,
as presented, dces not povide a descripticn of the timing services of FMG. . .
W d Schedule F to include a description as required. The description s b l d
include, a t a mininum, any fees M d . 1 are d-arged to the c l i e n t w i t h respect to
timing, i.e., a witchiq fee.

"\

1109 STATE
OFFICE
BUILDING,
191304088;
Telephone
EXHIBIT U.S. 16-4014 CIVIL RIGHTS
CLAIM
Page
81 of 646PHILADELPHIA. PA
Thursday
December
15, 215-56C-205
2016
OFFICES
806 STATE OFFICEPage
BUILDING.
PITTSBURGH. PA 15222-1210; Telephone 412-565-5003
Property of Advance Media Group
2187 of 2953
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

F M G Pdvisory, Inc.
February 24, 1987
pase 2
5.

%ference i s made to question 12, Pbrm AW-Rut 11. In this respect, the
follcuirq i s requested:
a.

With reference to Section I1 of FM;'s "CLPXT AGREFMWT" wherein it states,


"'Ihe client m y authorize FM; Pdvisary, Inc. to i n i t i a t e wit*
of
as to why this
imrestmnts between W s .
to question 12.A.,
information build not require an
R., C., o r D, Porm AIN-Part 11.

. .-,

b.

With reference to yw affirmative r e s p n s b ~ & e s t i m12.B.. Fonn AWPart 11, it is noted that Medule F states, "Clients are under m
obligation to plrchase or s e l l seclurities thrmgh FSC Securities mrp.,
Mw,
i f FSC Securities Corporation executes any transactions, fees
already paid to the applicant." Inasnu& as t h i s statement does not appear
to be q l e t e , amnd Schedule F in order to provide ccrrplete disclosure as
to what m y happen to "fees already paid to the applicant".
C

An affirmative response to question 13.A.. mrm AW-Part I1 requires disclosure


Amenil Schedule F accordingly.
-

on Schedule F.

After review of the Shedule D for Mid-ael M. Flartlett, the follcwhq


discrepancies are noted:

a.

Schedule D reflects M r . H a r t l e t t w i l l becane a CFP in 3/87.

b.

Item 6 on Schedule F reflects Mr. Hartlett received his Certified Financial


Planner designation in the eprirg of 1985.

c.

Schedule D reflects Mr. Hartlett is a vice president of PMG Advisory, Inc.

d.

I t e m 6 on Schedule F reflects "Mr. H a r t l e t t w i l l serve as secretary of FMG


Pdvisory, Inc.

In view of the abwe, it w i l l be necessary to amend the appropriate docments in


order to reflect accurate and consistent inform?itim.
8.

Attached i s a aipy of our l e t t e r dated January 13, 1987 wherein we reqwsted


additional information with respect to m's ~ p l i c a t i m . As of this date, a
response to the follaving questions hks not keen received:
a.

vherein we requested an a p M m as to why certain "affiliated


mnpanies" had not been identified under question R.C., Form AW-Part 11.
(X1estirn 2

W i t h respect to PMG's "CLIISNT -",

it is noted that page 2 states, " I t is


undentccd that representatives of
M s o r y , Inc., mC Securities mrporation or other affiliated c a p n i e s , including the abwe-Mmed representative,
w i l l receive a share of that anmission, in addition to the abwe intrduction
fee." In this respect, it i s the opinion of staff that these affiliated
ccrrpanies should be nisclosed under R.C., Form AW-Part 11.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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Section 3189 Federal False Claim Act

F M G Advisory, Inc.
February 24, 1987
page 3
b.

m e s t i o n 3, wherein we requested informtion on Financial MaMgement Grmp,


Ltd. (m).In this respect, it is noted that ymr response on February
20, 1987 states,
Financial MaMgem?nt Graap, Ltd. i s a canpany prwidiw
financial services to individuals and small business. Financial
M n a g a e n t Group, Ltd. ams a l l of the cutstam%ng stock of Fm;
Advisory, Inc. Financial M a n a g m t Grmp, Ltd. pmvides
insurance an3 securities products to its clients a d is a x r e n t l y
using I332 Securities as its registered broker-dealer.

I n addition to prwidiq securities products t o its clients, it is noted


that the Shedule Ds f o r Messrs. C a t e r h e , K a u f m , and Hartlett r e f l e c t
under question #6, BUSINESS BAQ(-,
that FM;L i s a "financial plannirq"
firm. I n vied o the above information, provide an ophim as t o v h y F?GL
i s not registered under the Pennsylvania S e a x i t i e s A c t of 1972.

c.

Question 6, requested information w i t h respect to Financial Planning


Consultants (FPC), Lancaster, PA. Inasrmch as PPC i s referenced on M r .
FhrUett's Schedule D, as subnitted on Deenker 18, 1986, ard on Schedule
F, a s sulmitted on Febmiry 20, 1987, urder i t e m 6 (Michael Miles
H a r t l e t t ) , BIlSINESS BA(XGJDU?lD, it i s requested that Mr. Hartlett provide,
v i a *m;, a detailed description of F'FC's plan of tusiness to include the
duties ard responsibilities of Michael Hartlett as a p l m r for t h a t firm.

NOE: Men a m d i n g Form A W , cmplete all mded pages i n full ard circle the
mnker of t h e i t e m being amended. Each amedmentmst include an emcution
page w i t h an original m a l s i g n a h r e and Mtarization.

f l w l d ycu need any additional infornation and/or c l a r i f i c a t i o n , please feel free t c


call m direct a t (717) 787-5675.
requested abcnre i s not received
I n the event a mnplete response to the infoma*
w i t h i n s i x t y days fran receipt of this letter, the application m y be placed before
the C a n & & . oso
n t h a t it nay consider issuing a Denial f o r M o r m n t O r d e r
pursuant to Section 602.022 of the Pennsylvania Securities A c t of 1972.
Very t r u l y yaas,

Paul M. S d u a r t ~ ,A
Division of Licensing

Director

(3ERTIFIED MAIL
m
r
w RECEIPT R m I E S l m

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

FBI Pro.bes Kugel


Contracts with
N.Carolina Cities
Several Towns Unhappy with Delays;
Kugel Says He'll Fulfill Pacts
Lancasler developer

Owen Kugel, whose rev~taliration succea in domtom

lancaster helpcd him land


%imilsr confram in at least

seven states, is bein inverti.

Bald by, t k , ~ e d e r a fBureau


Of Investlgatron for downtown
revitalization pro'eets in
North Carolina. FBf omcia;
sav.
Robert Pence, in charge
OrNorth Carolina FBI opera.
tiotb. said (he investiflahen
centers on whether Kugel's
OK Assmiales firm based
here is involved in -mail
fraud, wire fraud or any other
typeofrraud.,,
lle added thal Ule use of
interstate racilities, as well as
the use of funds in interstate
eom,yeree,wouldbr studied.
I can confirm that we

are looking into the matter to


determine if an federal laws
have been vioited:. added.

Daniel Womiak, a senior FRI


agent a t Ute bureau's GWM.
boro. N.C.. omce today.
omcials in a t least flve
North Camlina cities sa
they.re dissatisilied w i d
Kugel's prfarmanee on the
contracis and each has asked
him to returnhis w,mfee.
Kugel this mornin& tm
the New Era that he has been
aware of the investigation for
several w e d s and that he is
y p e r a t i n g with authorities
100 percent, in the interest
of &etttg It wrapped up
quie ly
"We know" the outcome
"can on1 be successful from
our standipo' ~nt."he said.
Kuge s a d he did not

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

know how the FBI got in.


volved in the situation. EX.
Plainin the contracts, he
said i f
d w t ( foum
thmugh on contract pmmis.
es. '.we give the money
back."
On the advice of dis attnr.
W .Alvin B. Lewis Jr.
Kugel wwld not discuss thd
status of the develo
Pro*
underway in

Carolina.

?%h'

Pence said the investiga.


t i ~ began
l
about M days ago.
But Kugel's former vice pres]dent. who arranged the
North Carolina contracts and

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

OWEN KUGEL
39 NORTH MARKET STREET
LANCASTER PA 17603
717-299-4371

2 M a r c h 1987

To:

S t a n l e y J. Caterbone
President
FMG A d v i s o r y , I n c .
E d e n P a r k II
1755 O r e g o n P i k e
Lancaster, - PA 17601
717-569-41 00

From :

Owen K u g e l

Subject:

M o r t g a g e Financing.

T h i s follows up o n o u r 17 F e b r u a r y meeting a b o u t 112ortgage


Financing f o r o u r upcoming development projects.

I h a v e selected a g r o u p o f 11 p r o j e c t s f o r w h i c h we h a v e completed
pre-development w o r k a n d w h i c h a r e r e a d y f o r d e b t placement;
a n d a t t a c h e d t h e c u r r e n t financial p r o j e c t i o n s o n each.
1 h a v e assumed a 65/35 D e b t l E q u i t y s p l i t , a 9.00% r a t e o f
interest, a 30 y e a r term, a n d a o n e p o i n t o r i g i n a t i o n fee. Note
t h a t t h e L o a n t v a l u e u s i n g a 9 " s a p R a t e averages 56.54%.
Note also t h a t 1 h a v e i n c l u d e d a 2.50% D e b t Placement Fee f o r
y o u r e f f o r t s in p l a c i n g t h i s debt; w h i c h w o u l d t o t a l $433,592
f o r t h e package.
L e t me k n o w if t h e r e i s i n t e r e s t and, if so, what a d d i t i o n a l
information y o u w i l l need.
Regards,

msrlattachments

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

'

'
.
.

I--

In
u-

n DrDw

newsletter
MARCH 24,1987

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

6 Month
1 Year
2 Year
3 Year
4 Year
5 Year
7 Year
10 Year

Other 0 ' s Available


10 Year Zero Csupon $500
olll Mark if interested.

4/l/97

Yeild 7.90%

l&u~C. T. -,
ex-divisional m g e r of ID6/AM E 'lamjest office,
has joined F K . Tan w i l l be developing an office in MN/St. Paul as
well as d t i n g nationdlly for m.
Barry Schuttler and Bob Kauffman are intexviewhg and p r e p r j n g to
bagin an -type
office in l?X@s% area. W e plan to raise mney
in the same manner as in PA and use the same basi~marketing~lan.

Thmas Asselin of

with me

Cleanvataer, Florida has joined FIG.


in Florida and was a tap p
w a t ICE, and FSC.

Tcan mrked

As of early today, he reahed a negvtiated accord with n i k k m d - a


of Wash. D.C. to be an: new b-er.
We w i l l finalize our
agreement x + b a we have final contracts and have ampleted our due
diligence on their amp2ury.
Please keep an: offices as dean and neat as pcesible, it says the
right things to cur clients.
m

Qooked Oak Rmmacy, Inc.


is a soall d
t
y dnag store with
prsonal service.
Prescription piclaq .and delivery service to our
office is available for ycur wnvience. Also those who are in a
hurry and tiant wmethirg different they have delicia sandwiches by
Kelly's Deli.
They are lccated just a short distance f m our
office in Qwlced OakVillage. Store h m are 9 to 6 weekdays and
9 to 1 on Saturday. mir @one mm$er is 560-1710.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

MINUTES O F THE 3 / 2 6 / 8 7 MEETING OF


THE BOARD OF DIRECTORS

The Board

of

Directors

m e e t i n g was

Pike,

Lancaster,

Pennsylvania

on

the

1987.

The M e e t i n g was h e l d a t 1 1 : 2 5 a . m .

held a t
26th

day

1755 Oregon
of

March,

PRESENT :
R o b e r t Kauffman
R o b e r t Long
P.

A l a n Loss

Michael H a r t l e t t
Stanley Caterbone
c o n s t i t u t i n g a quorum o f t h e B o a r d .
TOPICS DISCUSSED
H i b b a r d Brown P r o p o s a l
A.

Agreement now s a t i s f a c t o r y

1.

20% o f H i b b a r d Brown

2.

Loan:

3.

E x c l u s i v e t o s t a t e o f PA

4.

A l l o v e r r i d e s a r e u n d e r FMG

5.

Perpetual override f o r r e p s introduced outside

Stock

1 8 Months f o r $ 2 5 , 0 0 0

o f FMG t h a t g o d i r e c t .
Board o f D i r e c t o r s M e e t i n g s
A.

Have a m e e t i n g e v e r y f o u r t h week

B.

F o l l o w i n g Dates:
April

16,

1987

8:00

a.m.

at

the

office

of

Jeff

Jamouneau, o u r C o r p o r a t e A t t o r n e y .
1.

Purpose

May 5 , 1987

to

d i s c u s s r e s t r u c t u r e of

8:00 a . m .

J u n e 2 , 1 9 8 7 8 : 0 0 a.m.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

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orgar~izatiorl

a.m.

a t Dempsey's

t o 10:OO a.m.

a t Dempsey's

t o 1O:OO

Thursday December 15, 2016


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US District Court For The Eastern District of Pennsylvana

C.

Section 3189 Federal False Claim Act

Agree t o b r i n g

Satellites

J e r r y Bavero

to

Board

Keetings:

Richard Podlasek

Tom T u c k e r

R i c h a r d Volpe

The M e e t i n g was a d j o u r n e d by R o b e r t Long a t 12:45 p.m.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

FlNANClAL SERVICE
CORPORATION
ATLANTA CENTER
250 PIEDMONT AVENUE N.E.. SUITE 2100
ATLANTA. GEORGIA 30365
I100 521-6500

K 3 i N 8. KEEBLE
PREYCXNT

March 26. 1987

Mr. Robert E. Kauffman


Financial Management Group, Ltd.
1755 Oregon Pike
Lancaster. PA 17601
Dear Bob :
Steve Franklin, Don Aultman, and others have brought to my attention their
recent correspondence and conversations with you concerning your present
status, and that of others. vith our Company.
I

Your recent letter stating that you propose to attempt to transfer the
licenses of some of our representatives to Bibbard Brown, Inc.. possibly as
soon as April 1, 1987. prompts me to vrite this letter to you. on a very
urgent basis.
During the period from early 1985 until January 31. 1987. you vere an officer
of FSC Securities. Up until October 1986 you vere Senior Vice President of
Financial Service Corporation. For this entire period you vere paid a
substantial salary and expenses. Also during this period you vere a
registered representative, the last four months serving as an MFA in Lancaster
(vhile being paid as an officer of FSC Securities Corporation). This dual
relationship called for an unusual amount of trust in you on the part of FSC,
as our letter agreement of October 7. 1986, stated.
Your contractual and fiduciary obligations to us in these capacities include
the following:
1.

You oved and owe FSC and FSC Securities Corporation a strong duty of
fidelity vhich vould prohibit your solicitation or enticement of
their employees and representatives to become employees or
representatives of some other brokerldealer or employer in
competition with FSC.

2.

Your Employment Agreement vith the Company specifically provides


that you would not engage the services of any of our representatives
into any other brokerldealer without giving us 90 days notice (the
purpose of which obviously vould be to allow us to talk with these
representatives).

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

I I;iI

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I of 2953
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Section 3189 Federal False Claim Act

Mr. Robert E. Kauffman


March 26, 1987
Page 2

3.

Said employment also specifically provides that no such change


should be made with respect to representatives outside the Lancaster
MFA, for a period lasting through September 30, 1989, or two years
following termination of your employment.

4. During this time, as an employee of the company, you owed FSC a


strong duty not to solicit other FSC HFAs into your Lancaster MFA in
order to join your program with a competitive brokerldealer.
5.

Your duties to FSC included an obligation not to accept an extension


of your salary while in Lancaster after you had begun to solicit our
representatives to leave FSC.

We expect to hold you strictly accountable for these obligations, through


legal action if necessary.
Meanwhile, we plan to continue talking to our representatives currently under
contract, whose relationships with us we value highly. Whatever decisions
they may be in the process of making, should be made on the basis of all the
facts so that careers are not unfairly prejudiced. At the same time, we would
welcome an orderly and businesslike termination process in your case, and
others who may choose to join you, leaving all to engage in competition,
fairly and in good faith.
We hope that, after studying this letter carefully, you vill not proceed
rashly.
We need to know from you before April 1st whether we can disengage without
further hostility on your part, or whether we will be compelled to take legal
I
act ion.
-

Yours sincerely,

/ ~ o h n B. Keeble

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Section 3189 Federal False Claim Act

FINANCIAL SERVICE
CORPORATION
ATLANTA CENTER
2 5 0 P I E D M O N T A V E N U E N . E . SUITE 2 1 0 0
ATLANTA. GEORGIA 3 0 3 6 5
I4Wl 5 2 1 - 6 5 0 0

March 26, 1987

To Associates of t h e L a n c a s t e r MFA
We have become aware d u r i n g t h e p a s t s e v e r a l weeks t h a t Bob Kauffman has
determined t o s e v e r h i s r e l a t i o n s h i p w i t h PSC, and t h a t he has been t a l k i n g
w i t h a number of our r e p r e s e n t a t i v e s about j o i n i n g him w i t h a n o t h e r
b r o k e r l d e a l e r . We a r e w r i t i n g you i n t h e hope of avoiding any
misunderstanding between you and t h e Company, which may work t o t h e
disadvantage of both of u s .
I

F i r s t , we want you t o know t h a t you a r e a valued r e p r e s e n t a t i v e of t h i s


Second, we want a f u l l
Company, and want v e r y much f o r you t o s t a y w i t h us.
o p p o r t u n i t y t o d i s c u s s t h e s i t u a t i o n w i t h you t o avoid any p o s s i b l e
misunderstanding. And p a r t i c u l a r l y we want you t o h e a r our s i d e of t h e
s i t u a t i o n w i t h r e s p e c t t o Bob Kauffman.
We have w r i t t e n Bob today s t a t i n g our p o s i t i o n w i t h regard t o him, and e n c l o s e
a copy of our l e t t e r , s o t h a t you may be advised of t h a t p o s i t i o n . We would
welcome a c a l l from you confirming your d e c i s i o n t o remain w i t h u s o r
e x p r e s s i n g any concerns t h a t you may have w i t h r e g a r d t o Bob Kauffman's p l a n s .
We w i l l continue our e f f o r t s d u r i n g t h e next few d a y s t o c o n t a c t you.
W
e would l i k e v e r y much a c o n t i n u i n g , p r o d u c t i v e and c o r d i a l r e l a t i o n s h i p w i t h
you f o r many y e a r s t o come.
We apologize f o r t h e form of t h i s l e t t e r , but w e r a n o u t of time.
Yours s i n c e r e l y ,

John B. Keeble

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Stephen G. F r a n k l i n

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Donald S. Aultman

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Section 3189 Federal False Claim Act

JOHN M. C I C A L A SR.
DEVELOPER

22nd & Boardwalk


North Wildwood N.J. 0 8 2 6 0
December 1 2 , 1 9 8 6
Dear P r o p r i e t o r :
Due t o y o u r e x c e l l e n t r e p u t a t i o n a s a s u c c e s s f u l member o f New
J e r s e y ' s S o u t h S h o r e b u s i n e s s c o m m u n i t y , we a r e d e l i g h t e d t o
i n v i t e you t o p a r t i c i p a t e i n a n e x c i t i n g new v e n t u r e : SEAPORT
VILLAGE.

SEAPORT V I L L A G E h a s b e e n d e s i g n e d a s a u n i q u e a n d p i c t u r e s q u e
shopping complex s i t u a t e d a t 22nd S t r e e t i n North Wildwood.
The
complex i s now under c o n s t r u c t i o n on a r e b u i l t , widened p i e r
t h a t w i l l e x t e n d 500 f e e t o u t from t h e boardwalk t o w a d s t h e
ocean. The development, s c h e d u l e d f o r c o m p l e t i o n i n t i m e f o r t h e
s t a r t o f t h e S p r i n g , 1987 season, w i l l f e a t u r e a t o t a l of f o r t y
s p e c i a l t y and f o o d s h o p s . T h e s e s p a c e s a r e now a v a i l a b l e f o r
a n n u a l r e n t a l , a t p r e - c o n s t r u c t i o n p r i c e s r a n g i n g f r o m $30 t o $ 3 6
p e r s q u a r e f o o t . Types of b u s i n e s s e s i n c l u d e d w i l l b e c a r e f u l l y
chosen t o i n s u r e s u c c e s s f o r a l l .

A p e r f o r m a n c e a r e a w i l l be b u i l t a t t h e end o f t h e p i e r . T h i s
a r e a , t o i n c l u d e l i v e t e l e v i s i o n and r a d i o f a c i l i t i e s , w i l l s e r v e
a s t h e s i t e f o r ' p o p u l a r e n t e r t a i n m e n t and o t h e r e v e n t s d e s i g n e d
t o a t t r a c t l a r g e numbers of p e o p l e t h r o u g h o u t t h e s e a s o n as well
a s continued media coverage. Restrooms and o t h e r p u b l i c
a m e n i t i e s w i l l a l s o be included t o help i n c r e a s e f o o t t r a f f i c . A
large
s t a i r w a y w i l l permit beach access.
An e x c i t i n g
a d v e r t i s i n g and p r o m o t i o n campaign i s p l a n n e d t o c a l l a t t e n t i o n
t o SEAPORT VILLAGE.

According t o r e c e n t demographic s t u d i e s , t h e number o f a f f l u e n t


s i n g l e s , c o u p l e s and f a m i l i e s v i s i t i n g North Wildwood e a c h summer
i s r a p i d l y i n c r e a s i n g - along w i t h t h e i r p e r c a p i t a spending.
The o t h e r p i e r s i n t h e a r e a a r e a l l Amusement P i e r s . T h u s ,
S e a p o r t V i l l a g e i s a f i r s t of i t s k i n d - and a n a t u r a l s i t e f o r
t h e r e l o c a t i o n o r e x p a n s i o n of y o u r b u s i n e s s .
T h u s f a r we h a v e a p p r o a c h e d B e n e t t o n , S w a t c h , A t h l e t e ' s F o o t ,
Gimmee J i m m i e s Cookies and Banana R e p u b l i c , a s w e l l a s a s e l e c t
g r o u p of l o c a l b u s i n e s s e s s u c h a s y o u r s t h a t would b e b e s t s u i t e d
t o o u r c o n c e p t and would have t h e g r e a t e s t c h a n c e o f s u c c e s s .
S i n c e r e n t a l s p a c e i s l i m i t e d , we w i l l a c c e p t r e s e r v a t i o n s on a
f i r s t - c o m e , f i r s t - s e r v e d b a s i s . An a r c h i t e c t u r a l r e n d e r i n g of
S e a p o r t V i l l a g e i s e n c l o s e d f o r your f u r t h e r i n f o r m a t i o n .

Our r e p r e s e n t a t i v e , E l l e n Libman, w i l l b e i n y o u r a r e a i n t h e
n e x t two weeks.
S h e w i l l c a l l on y o u t o p r o v i d e you w i t h
a d d i t i o n a l i n f o r m a t i o n . Of c o u r s e p l e a s e f e e l f r e e t o c o n t a c t me
a t anytime.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 93
S iofn c646
erely,
Page 2199 of 2953

Thursday December 15, 2016


10/19/2006

li

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Planning Consultants
Omgon Pike &nuster, M 17601 717-569-4100

ROBERT E. KAUFFMAN
PRESIDENT

Mr. Jahn B. Keeble

FSC Seaxities
250 Piedim& A v e . , N.E.
A t l a n t a , Georgia 30365
Dear John:
ycxl for your letter of March 26,
1987.
It was very
enlighening.
I, of canse, have n, interest in getting into any
legal acticm w i t h anyone, partiaIlarly hhere both parties would be
hurt and only the legal repxesentatives wculd make m y . I knaw
that yau are not easily drawn into litigation and see no need for it.

Thank

Bncezning your points, allm me t o respand.


1.

I am not irRerested in d t j n g o r p r r s u i n g o t h e r ~ ~ c ~ ~ ~
when I a f f i l i a t s w i t h another b-er.

2.

I am open to a period of time


yau could solicit whawer you
want to stay withFSC. I cannot coerce representatives to join
with me anyway.

3.

I did not s o l i c i t -tatives

t o leave FSC while under salary

a t FSC.
While ycu need same relief fnm the possibilities of solicitation by
me
your ather MFA1s, I need to be treated as others wfio have left
I app-te
your willingness to have Don Aultmn
upon my

-.

and myself work that out.


I also appreciate your interest i n a
peaceful tzansition as per our phme conversation.

R.E. Kauffman

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 94 of 646

Sccvrfties r r a n n n i o n r t h m q h FSC Securities C-ration


2200 ofB2953
APage
RnJstcmd
rok~rl~ler
Member NASD
Member SlPC

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Planning Consultants
Omgon Pike &nuster, M 17601 717-569-4100

ROBERT E. KAUFFMAN
PRESIDENT

Mr. Jahn B. Keeble

FSC Seaxities
250 Piedim& A v e . , N.E.
A t l a n t a , Georgia 30365
Dear John:
ycxl for your letter of March 26,
1987.
It was very
enlighening.
I, of canse, have n, interest in getting into any
legal acticm w i t h anyone, partiaIlarly hhere both parties would be
hurt and only the legal repxesentatives wculd make m y . I knaw
that yau are not easily drawn into litigation and see no need for it.

Thank

Bncezning your points, allm me t o respand.


1.

I am not irRerested in d t j n g o r p r r s u i n g o t h e r ~ ~ c ~ ~ ~
when I a f f i l i a t s w i t h another b-er.

2.

I am open to a period of time


yau could solicit whawer you
want to stay withFSC. I cannot coerce representatives to join
with me anyway.

3.

I did not s o l i c i t -tatives

t o leave FSC while under salary

a t FSC.
While ycu need same relief fnm the possibilities of solicitation by
me
your ather MFA1s, I need to be treated as others wfio have left
I app-te
your willingness to have Don Aultmn
upon my

-.

and myself work that out.


I also appreciate your interest i n a
peaceful tzansition as per our phme conversation.

R.E. Kauffman

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 95 of 646

Sccvrfties r r a n n n i o n r t h m q h FSC Securities C-ration


2201 ofB2953
APage
RnJstcmd
rok~rl~ler
Member NASD
Member SlPC

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

For

1142 ELIZABETH AVENUE

Section 3189 Federal False Claim Act

,nfL

BOX 4665

LANCASTER. PENNSYLVANIA

17604

17171 397-6174

April 9, 1987

Mr. Robert Kauffman, President


FINANCIAL PLANNING CONSULTANTS
1755 Oregon Pike
Lancaster, PA 17601
Dear Mr. Kauffman:
First, I would like to express my thanks for the co-operation and excellent
service rendered by Harry E . Radcliffe, a member of your orgainzation. The
response Harry has given to my specific goals has been extremely satisfying.
Due to Harry's display of concern and manner of handling my personal investments, I made the introduction to Mrs. Patti M. Rottmund.
Mrs. Rottmund is the owner of Conestoga Fuels, Inc.. Currently the company
and Mrs. Rottmund are searching for an accounting f i n to assist in the
management of the corporate money. Due to Mr. Radcliffe's patience and
ability to explain financial matters to Patti Rottmund, we had been considering utilization of Financial Planning Consultants to aid in Conestoga
Fuels, Incorporated's financial planning.
-

Harry arranged a meeting with Mr. Robert Long, another member of your firm.
After discussing the proposed plan for growth of the corporation and utilization of various assets with Mr. Long and Mr. Radcliffe, we were pleased with
the "team' concept.
This finally has lead to the matter at hand. I wanted Bob Long to prepare my
personal income tax returns for the year 1986. All the information was
compiled and in his hands in February 1987. To date, the work is not completed.
Harry has, on several occasions, asked the status of my returns, and I have
called to be told "it is on the list to be completed."
If
my
is
on

this is the type service the corporation would receive, I am not bettering
position. Therefore, I am of the opinion Financial Planning Consultants
not the proper group to retain for either a personal of corporate adviser
financial matters.

I regret this decision due to the find working relationship with Mr. Harry
Radcliffe. However, your financial group is not delivering your entire product,
service. Should you wish to discuss the situation, please feel free to call.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 96 of 646
Page 2202 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

For

1142 ELIZABETH AVENUE

Section 3189 Federal False Claim Act

,nfL

BOX 4665

LANCASTER. PENNSYLVANIA

17604

17171 397-6174

April 9, 1987

Mr. Robert Kauffman, President


FINANCIAL PLANNING CONSULTANTS
1755 Oregon Pike
Lancaster, PA 17601
Dear Mr. Kauffman:
First, I would like to express my thanks for the co-operation and excellent
service rendered by Harry E . Radcliffe, a member of your orgainzation. The
response Harry has given to my specific goals has been extremely satisfying.
Due to Harry's display of concern and manner of handling my personal investments, I made the introduction to Mrs. Patti M. Rottmund.
Mrs. Rottmund is the owner of Conestoga Fuels, Inc.. Currently the company
and Mrs. Rottmund are searching for an accounting f i n to assist in the
management of the corporate money. Due to Mr. Radcliffe's patience and
ability to explain financial matters to Patti Rottmund, we had been considering utilization of Financial Planning Consultants to aid in Conestoga
Fuels, Incorporated's financial planning.
-

Harry arranged a meeting with Mr. Robert Long, another member of your firm.
After discussing the proposed plan for growth of the corporation and utilization of various assets with Mr. Long and Mr. Radcliffe, we were pleased with
the "team' concept.
This finally has lead to the matter at hand. I wanted Bob Long to prepare my
personal income tax returns for the year 1986. All the information was
compiled and in his hands in February 1987. To date, the work is not completed.
Harry has, on several occasions, asked the status of my returns, and I have
called to be told "it is on the list to be completed."
If
my
is
on

this is the type service the corporation would receive, I am not bettering
position. Therefore, I am of the opinion Financial Planning Consultants
not the proper group to retain for either a personal of corporate adviser
financial matters.

I regret this decision due to the find working relationship with Mr. Harry
Radcliffe. However, your financial group is not delivering your entire product,
service. Should you wish to discuss the situation, please feel free to call.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 97 of 646
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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Management Group, LTD

TO:

Bavero
Schuttler
Volpe

April 14, 1987

Cur next board of di.re3mr-s meeting will be held on Tuesday,


May 5, 1987, at m y ' s Restaurant. We would like you to attend if
at all pssible.
If rut, please discuss the topics at hand with
Mike, Stan or me prior to the meeting.
At that meeting we plan:
1. An uplate of Fm; f m inception

a. budget review
b. goal achievmt analysis
2. A discussion of Profit Participation Plan in the form of

stock bonuses for prcducers


3. A

discussion of corporate legdl advice concerning the


formation of a separate ccwparnl to function nationally

4.

A discussicm of any newsworthy plans naw in developent such


as
private
take-down
-ps
and
illmmme
relationships

R.E. Xauf?imn

a: s. Qterbone

M. Hartlett
R. Long
A. Loss

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Section 3189 Federal False Claim Act

Advisory
11, 1755 Oregon Pr*e

TO:
FROM :
DATE:

Lancaster, PA 17601

717-569-4100

Representatives
Stanley Caterbone
April 21, 1987
FMG

Attached please find the billing procedure that will be used


by the FMG Advisory and Accounting.
Please submit this form to Lynn and a statement will be sent
to .the client.

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newsletter
A P R I L

14,

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1 9 8 7

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Section 3189 Federal False Claim Act

Insmame Manual
m t l y begun t o prt together the contents f o r our Innuance Sezvioes
'Ihe purpose is to have the necessary information to help all -T~S
becoane familiar w i t h the procedures f o r all of our primary insurance carriers.
I t w i l l be an easy reference guide to:
1) Underwriting t
s
2) P r d u c t s & Carriers
3) Processing Procedures
4) Contact Persons
5) Ccanpensation
My gcal is to have this in your hands w i t h i n 30-45 days. This w i l l help a l l of
us w r i t e mre b s u r a x e w i t h less effort. -Stan Qtm%cm
W e have
Manual.

P l a n n h Demrtmnt
the f i r s t week of operation
f o r $1500.00 from Scott Robertson
anyone would like same ideas on
happy to share saane of t h e i r ideas.
After

t h e Planning Department has received a plan


and R i M ~ e r m n - - C o n g r a t u l a t i o n s . If
h m to use our plan, they would be mre than
--Stan Qterkone

Retirement Plan
For a l l persons awaiting cxn Retirement Plan, I m y have hit the ja-!
I am
s t a r t i n g to negotiate ard recruit the
thathas developed the retirement
plan f o r a MAJOR brokerage house. mis plan is regarded as one of the best in
the irdustry. L e t s keep our fingers crossed. --Stan Qtexkone
-

New Off ice Potential


W e have begun talks w i t h a m j o r Redl Estate finn in York PA that w i s h e s us to
sydicate a new building in the dmarea. They are very interest4 in

taking this project into Financial Senrice Center w i t h FM; as a canpany sponsor
and tenant.
W e w i l l be lcoking to &t
planners and brokers f o r that area.
Anyone w i t h contacts should contact myself o r Bab Kauffman. Your help is
greatly appreciated.

-Stan Caterbone

Real Estate Fruiects


I have secured a source
million and above.
Any
refinancing such projects
available.
C a l l me i f
states. -Stan Qte?&one

--

of mortaaae funds f o r lame real estate miects. 2


anyi
n
in f'L-iaiking'or
m y be good .-p
'Ihere are finders fees
you need any more information. Available in all
persons having

Marketins Seminars
Anyone who is plarvling Seminars f o r t h e i r marketing plan please contact Alan
Loss. Seminars t h a t are available:
1) Half-Time Seminar
2) Successful Money MaMgement Seminar
3) Product Sponsored Seminar

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Section 3189 Federal False Claim Act

Meetins

A brief reminder that an office meeting is s&eduled for 8:30-10:OO AM i n our


conference rwm this Wednesday April 15th, and also in two weeks on Wednecry
April 29th. -Bob Kauffman

Board of Directors
?his week vour board of directors w i l l be d i s a ~ ~ ~ iwith
n g the m p r a t e
attorney thec o r e form for us to:
1) Fersue wntxacts w i t h represa-katives autside of PA.
2) Provide an Equity Participation prcqram f o r F?n%cers.
e -type
capital raising for other locations with& violating
3) m
certain security laws.

It remains an exciting time, as this new business begins to take form. So marry
apportunities, so mch to do, so mch to get organized and developed. Is it
fun! -Bob X a u f m

t -

Assets

in the IF'S W i t v Pool are

nclw

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in all capitdl letters, rather than

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

MINUTES OF THE 4/16/87 MEETING OF


THE BOARD OF DIRECTORS

The Board

of

Directors Meeting was held at

the

offices of McNees, Wallace and Nurick, 1 0 0 Pine Street,


Harrisburg, Pennsylvania on the 16th day of April, 1987.
PRESENT :
Robert Long
Robert Kauffman

P. Alan
Stanley
Michael
I
Jeffrey
constituting a quorum of

Loss
J. Caterbone
Hartlett
Jamouneau, Esq.
the Board.

TOPICS DISCUSSED
Corporate Structure for National Expansion
Because of the growth potential on a national
level, we needed to research the alternatives
to
our
present
organizational structure that
would allow additional equity participation from
other large groups, ie. Barry Schuttler
Tom Turner
Form FMG National, Inc.
This entity would own
100% of Hubbard/Brown Stock.
FMG, Ltd. would
retain 100% ownership of FMG National, Inc.
The above would be conducive for equity
and
also
foz
marketing
participation
the concept.
'

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The

Section 3189 Federal False Claim Act

followir~g topics will be consj.dered

for shareholder

vote within the next thirty days:


Formation of FMG National Inc.
Directors Liability
Exemption of By Laws for above
Closing current offering

A 5:l

Stock Split

~ e % f r eJamouneau
y
advised on subjects of the R.I.A.
%

P. Alan Loss adjourned the meeting at 10:15

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a.m.

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LICENSED REAL ESTATE BROKER

P. 0.BOX 2300. PINELAND, FLORIDA 33945

PHONE (813) 283-106'

April 29, 1987

Stan Caterbone
1755 Oregon Pike
Lancaster, PA 17601
Dear Stan,
Enclosed is a contract, and supporting documents for the purchase of Useppa
Village Unit #lo-Left. Please sign all the documents where indicated and
return all three (3) documents to me together with a check in the amount of
$100.00made payable to the Useppa Property Company Escrow Account.
If you should have any questions, I can be reached at the Club, (813) 2831061.
\

Sincerely yours,

Sales Associate
JRKIjnj

Enclosures

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May 2, 1987
I

of this dmmmt is to recollect a l l activities that I've been


involved w i t h i n Financial Planning and the formation of Financial Ma~gement
G r m p , to verify and doarment seine of the activities that I've been involved in
to date.
WpupOSe

I ' m afraid that as w e go further and further there w i l l be a need for such
information especially w i t h what has h a m this past week w i t h our corporate
officers and board. F i r s t I would l i k e to begin back in ti-&very beginning so
that the f u l l scope of our activities seem to f i t into ane place and also so
that
of the issues that have mme up are tied into what has happmd up to
this point.

First of a l l , I started in the Financial Plback in 1982. After


getting out of the amtracting kusiness I took six weeks and traveled across
the country and came back and decided to get into the financial services
Being that several relatives have had dealings w i t h IDS, Investors
industry.
Diversified -ices,
I called the local branch in
upon finding the
manager Mmed R & e r t Kauffinan. Bab spent -time
withme, decided he w i s h e d
to hire me, and that began the process.
I was actually licensed in 1982 for securities and l i f e and was p t under the
mnagement of Bob Kauffman. Shortly thereafter, I would say probably in Jwe
or July, Bab was pmmDted and took a division in Tampa, Florida. Myself and
)three o r four other individuals who were under m g e m e n t decided that w e
wanted to fom a g r w p together so w e talked to anather district manager,
Staren H. and decided that, i f he would allm, we kcdd like to plt an office
together w i t h him.
A t this time w e did not have an office and he was mrkjng
out of a sndll office in Millersville. 'Ihe people who were with me was myself,
Mike Hartlett and Alan Loss. The three of us were very, very large producers,
especially Mike and Alan.
The three of us were probably larger than Steve's
district a t that time, so a t that point we located an office a t 255 Wer
Avenue, we walked under Staren H. district which increased his inmme by a t
least 30% to 40% pthat -&ion.

After being involved in the business I decided that firrancial planning should
be wre abjective and fee based, so I became one of the larger fee producers
using fees as w e l l as mmnisSion incane. A t about the same time, I became
involved i n the IntermtiAssociation of Financial Planners. A t that time
the local chapter was just being fonwd and I volunmy services to help
on the board.
Menbrs of the board, a t that time, was just being formed and
headed by John Herr.
I became m t i v e vice president and virtually helped
run the chapter and
build it to its largest m
p
. lhat gave m e
as f a r
the apportunity t o meet other people, broaden my horizons and *tian
as the financial planning h3ustry and just haw the hleperdent planners f i t
into the stream of the industry. I had quite a b i t of activity and did alot
for the local chapter and became very involved.

helm

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mer the next several years I made a very gwd living. I was never a very big
pmducer, althmgh one of the bigger ones in the Harri.skurg division. But I
was not the biggest, but the premier fee producer for the division and was om
of the leading in the camtry a t that time. I shortly became kmmledgable of
the other pmfucts available in the financial services industry and learned
very quickly that it w a s virtually inpossible to have one canpany manufacture
and produce ccpnpetitive products across the line. A t this the I was setting
l
e Amstrong
up a dhmr meeting for the IFP that was going to sbax2ase A
who was one of the premier planners i n the cumtry. She was very visible and
very widely m. I set up a dinner meeting for her khich attracted close of
om hundred
p r o f e s s i o n a l s a n d o t h e r p e o p l e t o a ~ . l h i s w a s f o u r o r five
times larger that any ather meetirg the chapter had ever had. A f t e r the
meeting I was involved in a -ion
w i t h Alex regarding the financial
planning h l d z y and my aspirations of what was cutside of a pmpriety
envimmnmt.
I told her that I was thinking of lMking a m e and asked her i f
she had any suggestions of wha to q e a k to. A t this point in time, we were all
i n Butler Avenue and Bob Kaufhan was in Georgia, running a division of ID6
back there.
He, a t this time, had become one of the l a q e s t divisional
n g e r s and had shwn very high pm&active
recruith-q skills. He was running
one the largest shop= intheScuthEastandwasbexdtqveryprofitable for
II1S. Alex suggested that I c a l l a gentlwen by the name of John &&le who was
then president of Financial Services COT. a bmkerjdealer based in A t l a n t a ,
Georgia. A t this the Bob Kauffman was probably, as unfamiliar i f not mre
unfamiliar, of the irdependent e n v k m e n t available to the Fimrcial Services
Industry. Specifically Financial Planners.

I phaned Bob a n d t o l d h i m t h a t I w a s ~ i n g t o l o a l c a n d ~ ~ t e l s e w a s l ~ o u t
there."
Before this time, a ccuple months prior, I atb&& a career
conference in Florida with IRS. A t one p i n t I was in a roam w i t h Bob Ihufhan
and R
' mt TUmr, who was the biggest divisicmal l ~ ~ g aet this
r
time with ID6.
I began to disc;uss my dissatisfaction with the ccmparry and the way that they
op=rate and I suggested to them that it pmbably would not be too difficult to
duplicate an organization instead of bebg built araYd a proprietary that was
built solely amund a non-proprietary product. A t the time they both leaked a t
w and I don% m m a k e r i f they l a w , k u t the idea really didn't redlly
interest them, and it just rolled off their shailders. Right after this
meeting is whenIhadthedinnermeetingvithAlexandIsetupthemeetingin
A s I usually did, I always leaked a t Bob Kaufhan as my mentor. H e
virtually w w o f f t h e s t r e e t s a n d m m e a w a y t o w m y i n a w a y
that I never
I a u l d w. I always respected Bob as a very good
sal.esnan, seeming to have a very high financial intellect and I looked up to
him as he taught me alot. So I got on the phone and told him I was going to
v i s i t an imkpn%& planner i n Atlanta.
A t this time, Bob was bemning
dissatisfied with the management of ID6 and was not very happy with the way
they were using him to build areas. Vihen the areas would become profitable to
him they waild mehimtoanotherdistressedamatobebuiltup. Sohewas
doing a l l the work and ID6 was making a l l the mmey because they waild plt i n a
m a ~ g e rfor less money and so on and so forth.
Atlanta.

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Bob then told rn that he may be willing to go intD the meeting w i t h me under
the asslrmption that I did not tell them who he was o r who he was w i t h . I
called J&n m l e and told him I wanted to cane dawn and v i s i t him, being
referred by Alex and he was very nice mer the @mne, giving me a cordial
invitation to cane down and actually had me set up the meeting w i t h Ray S m i t h
who was one of the sales ~ g e r s .I set up a two day meeting w i t h myself and
this anonymxls person, Bab KaufBnm.
W e spent two daysatFSCandwhat
essentially happened is that they became infatuated w i t h Bob's recruiting
skills.
On the spat they offered Bcb a position within the a m p n y as far as
recruiting and head of sales manqement of FSC.
I resigned fm m6 January 1985.
Bob m i n d a t ID6 and fnm Octaber to
March w a s negatiating his position and pay and his -tion
w i t h FSC. By
March he actually decided to resign fmn ID6 and he was a k a r h d into the
corporate structure of FSC. January Ist I resigned fmm IS. I was Upstairs
w i t h Mike Harllett, sharing an office space and the rest of district w i t h Alan
Lms was still dwEbks.
A t this time, I began to build my independent
practice of Financial Planning. Basically I took 95% of my clients fmm IC6
and began working w i t h them. Bob began working i n the national recruiting for
FSC and started attracting IDS people to FSC.

1985 I had became w i n t e d w i t h my business l i f e , not


learning
lonely being hkprk3ent and I became frustmted. I knew that
no one in Lancaster was doing a very high quality m i c e rqardbg Financial
laming and Financial Services.
Tb me, lancaster seemedtobeahighly
By

the

Fall of

m,

attractive market w i t h alot of wealth being spread cut amDng alot of different
No one was being creative
r " lg their efforts it was just three
players.
o r four brokerage houses, insurance agents, banks and irdependent planners but
iw one had a very strcarg p i t i o n or d a b a x e in the financiae services

-.

I visited w i t h Bcb Kauffman in the Fall of 1985 as I usually did every ccuple
mths ard told him I wished to do scwthing else. A t t h a t time he asked me i f
I wanted t o cane dam to Atlanta and help him work on the concept of o n p n y
awned shops.
W h a I was dawn there, he mmtioned severdl positions i n the
corpration that I may be ini n and he set up a meeting w i t h me and
Steve Franklin.
Stwe m t l y needed smmw to m a ~ g eh i s national sales
office so khj dawn there I spoke to him, just t o verify w h a t was available.
A t this meeting, Steve Fmnklin more of less indicated t h a t I was a ~~kuned
cut
who was just leaking for a place to go. Ncrthing ever happen& and I
left the meeting w i t h very l i t t l e respect for Steve Franklin.
Bob offered me a position w i t h i n his mnpany owned store, writing cases doing
p l m , doingsaneotherthings. CIhatwasearlyOctober. F o r t h e n e x t t h r e e o r
four weeks I prepared myself, relwtmtly, for the transition and moved to
Atlanta and tried to maintain clients up he^^ as well, and plrsue whatever Bob
was doing down in Atlanta. A s th went on I f e l t I really didn't wish to move
away fmn the area and that maybe the opportunity down there wasn't what I
thought it was, o r wasn'twhat Bab said it was.

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On Nw&
27 or 28 of 1985, I had a meeting w i t h Bob I c a u f m and Mike
Hartlett a t 1 4 x b n r s m u n t on the Rahrerstawn M,
Ianaster, PA. 'me
pupose of the meeting was to find art i f we a u l d collectively p r t together
xmething in Iancaster w i t h regards to f h i a l planning. I wwld say that
e t i n g was mre of an effort on my part than anyone especially Mike Hartlett.
Mike was, a t this time, also inrlependent, l e f t ID6 anl follckied me to FSC along
w i t h Bob.
?he meetingwas on themorning a t 9:00 a.m. and we dkmxxxdwhat
options we had as far as w i n g sanething tcgether in Iancaster. I guess the
bsic reason for the meeting was to see i f Mike Hartlett wished to do sanething
together w i t h us. A t this time I was qmating my practice, Mike was aperating
his practice, anl the only
we had in amumn w a s a reception man
adjoining ax offices.
A t thistimeBobsawthatifwecculdputsawthbg
together in Lancaster he omld pmbably f u l f i l l same of his recruiting
-ts,
giving h i m a place to actually xecmit people to rather than
using FSC in Atlanta. So that began the process of w i n g together a shop in

lancster and Cerrtral PA.

I b e s a n t o recruit fran that point forward into our so called plarvling firm.
A t this time the plarvling firm was going to be caprised of financial
Sane of the f i r s t pecplethatItall#dtowasMonaRishel,Dick
and Bab Lnrg. I spoke to other plannezs-about joining our firm and
then I got the idea of adding other professionals mainly legal, a m - ,
& estate and ma@ insurance. It was then that I got the idea for the one
stop financial firm.
Tbmeitseemedapprmt-thatitwasimportanttohave
a l l the individuals working tagether collectively
manage one financial

planners.

-,

'

'affairs.
It didn't seem that d i f f i d t to accaylish that i f yau had the riqht
irdividuals willing to take the risk of a t t m p t h q such a project sod who had
the clientele where they didn't have to rely on attracting new clientele.
Well, ~ t h i n g l e d t o a M t h e r a n d w e s o o n b e g a n t o r e n U i t ~ a t ~ ~ a n d
sizable grcup of individuals. I prcbably was responsible for d t i n g 90% of
the local people and artside pecple, Mike was mrking with Rick Volp in
F h i l a d e l m who he w o w w i t h a t ID6, and a hcst of others. T h e i n i t i a l core
was myself, Mike, Mma, Dick Sherisahn.
A t thistimeIranintoSattRobertsonattheZhreeMilelhsewhowasworking
with Asset Mamgement.
I expressed the idea to him and he became interested
and became one of wr pecple. I also talked to Gmmlyn Royer who was w i t h Pru
Bache and she was interested in joinhg. By February we had a fairly large
group of people who were willing to ammit. F i r s t thing we had to do was find
facilities and Mike f d the place available a t the OregcPl Pike location which
was just urder -on.
A t f i r s t we were looking for 2,000 square feet to
hcuse f w or five i n a i v i d ~ ~ LA~t. this time I talked to Tim Lanza, people a t
the legdl firm, and Danny Beqer as f a r as doing me thing with real
estate.
It was s q p x e 3 to beanaperationfinancedandsqportedbyFSC.
horn December until May FSC was pranking furd to f h m c e the aperation. We
nedd start up funks for fur nit^^?=, caymter systems, salaries for myself and
Mike for ranaging the -tion.
Mat happerred &ing this t h was that FSC
was constantly premising us financing and we had yet to receive any actual
m ~ n e yand the invoices d t t e d w e r e never paid by FSC.

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Bob ~ ~ a u f f u n n
was the liaison and -tly
was being directed by Stare
Franklin ard Jdyl m l e . F'ran what I have learned over the past several years
was that they never really interded to finance the aperation brt they were
strirqirq us along ard using us to recruit other people to the operation.
After we rexuited ten o r more people it became apparent t h a t Mike o r myself
g e an operation. We also
did not have the managing skills required to l ~ ~ such
learned we l o s t our financial backing, so we had to figure out what to do with
A t this time we decided to raise the capital a.u-selves,
finance the
financing.

And
operation auselves with quity we raised thmqb the planners.
essentially we learned that no one i n the industry, or very few actually awn
their awn business but are only a distrikrtion for a f i n a d a l product. W e a l l
have seen bmkr/dealers b e b g b a q h t and sold for very sizable m t s of
m y , usually in the vacinity of $1 of quity for $1 of gross ccrmnission
inmne.
We began to see t h a t we were seeing anyi&em hran $1 million of gross
amnksion imxms per year w i t h the grcrup that we had. In the grarp was Ken
Ray and some very m t i v e and talented people.
cur m e e t h p and discussiuns d c h w e r e very long, durable and
mpn L&omber t o May I probably spent every other evening with Bob
tiresame.
i n Atlanta trying to pt this deal together.

Tbx@mt

L e t me go over a couple of other things that had happened up to that time that
I f d ljke mentianed in this document, before I fozget. Back in the sunmer of
u
s
e of
1985, I was contacted by Jdyl Fhilips fmn Blue Pall National Bank. m
)ny v i s i b i l i t y w i t h the local chapter of the IFP J d m wanted to call me and look
a t the o p t i c u s of Blue Bas11 National Bank becane involved in Financial
Planning.
Jchn called a meeting w i t h me ah3 I believe he was looking for
scanmne to head a Financial deparbnent with inside Blue Pall National Bank o r
contract w i t h s ~ n e o n e outside. I had 1-1/2 bar with J d m and his suborbant,
whcan I can't remember his name, I believe it was Joe. H e was the vice
president of the trust m t , I believe. m
y a f t e r the meeting they
did not have the fiath o r the confidence that I was the right person or they
didn't believe t h a t this was really what they wanted to do. But I have never
M firm them s i n .

Fall of 1985, before our initial meeting, a f t e r I &idea


that I was not goin g
t o relocate in Atlanta, I began to look for other options in
One of
those were t h a t a couple people pt me in tmd w i t h several banks. One was
Joe S. with -th
National Bank and another was Meridian Bank. Both of
those irdividuals received
calls fmn peoplekl I did business w i t h
stating that I was looking for s a n & h g
ard asking that they give me an
btemiew. None of them !could wen goive me an interview. I received a letter
fmn C c m k m e d t h s
t
a
m t h a t they had no pasitions c p a a t this time, but
they would keep my ram on f i l e .
Fmm Meridian, I don't believe I wen
received a letter.
aLis is oneof t h e r e a s o n s t h a t I d o n f t h a v e v e r y ~
respect for banks, or people whowork inbanks. I d o n f t w i s h t o d w e l l into
this subjed, but because of several of these eposides I just don't have mch
respect for bankers, o r banks what so ever.

-.

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was going to receive 60,000 shares, I was to receive 40,000 shares andMike
was to receive 40,000. Also, Mike ard I w e r e to receive $3,000 per month and
Bob $5,000 per mnth. Bab and I had a deal as I did not believe he shaild have
more of the canparry than I because I pit it together. We had an agreement
&ereby
I could buy 10,000 shares of his 20,000 a t anytime a t cost so we would
both have 50,000 shares. I had papers drawn u p t o that, however, whenwe began
t o have problens, I l e f t things drop by the wayside.

Back in Februaq 1986, I became g o d friends w i t h Mary Lynn D i F o l c a , Kevin's


sister ard Mike's wife. We were always g c d friends, but back then when Kevin
left, we
very close because I spent alot of tim with them. Mary Iynn
was a t the time, 30 years old with three children, and she was always very tied
dam with the kids, basically a housewife. She never really had a job, never
worked.
I t w a s h a r d forherbecauserrmtof her other frienlswerecutworking
and had 01-eers. I a s k e d h e r i f s h e W d l i k e t o M p m e o u t f o r a f e w h o u r s
a we& doing general clerical an3 typing. She was very excited. I tho~@tit
was a chance for me to get S(II*~thirqs done ard I liked Mary Lynn alot d we
got along and I thx&t it was a chance for me to get a few extra things done.
I took her on in February and before too long she was working 30 hours a week.
She had a babysitter lined up for the kids, ard it was very encanraging for me
to see her do this because it gave her the confidence for the f i r s t time that
she could do spnethhq other than just have children. She was having a great
time and I was having a great time and.= enjoyed working with Baeh other. A t
that time, Bob invited .Mike and I down to the annual confererms in !Iwsm,
Arizorn ard w i t h the conferenoe amangments we were allawed to take saneone,
such as your spouse. I asked Mary Iynn i f she wanteA to go and I don't believe
she was ever on a plane before and she asked Mike and he said it waild be good
for her t o meet scme of these peqle and get: involved w i t h a career. We ended
up d a m a t Tucson ard that was i n A p r i l 2 a n d w e s p e n t f m o r f i v e d a y s
there.
Upon meeting Bob ItoldhimIwasbringingMaryLynnoutandIhew
from the start that this was a sore spot. First of a l l she was married d he
couldn't urdershtd what she was doing cut there w i t h me. Semnl of a l l he
didn't appreciate the whole s i b t i a n when he met her he said scauethbq to the
effect that she looked very young.
After the secand day w e were a l l g c d
ard she was getthq a l a q very w e l l w i t h W and Pam. In fact, Pam
friends
confided things in her that I kmm Pam never told anyone. It looked as thcaigh
they liked, or a t least pretmxkd to like Mary Lynn and so anyway we all had a
Bcb, myself, andMikespent&of
w r t i m inindividualprivate
good time.
meetings trying t o pt this deal together and work cut the details -idly
with FSC.

think it was back a t this time-we r e a l i z e d that Bob was probably going to
fran management and cannit and cane up to Lancaster. I think one of the
reasons whyMaryLynn andIbecameveryclosewasthatsheremindedmesonuch
of my mother i n t&
way that she handled her kids, family and I became
infatuated w i t h that.
I liked her alot. Wt haFpened was that Mike and Bob
resented the fact that we had so rmch fun while we worked. We got m r k done,
but we went out t o lunch for an hour or so and we really enjayed things. To
I

resign

'

them that had no place in business. For me, as 1as I got my work done, I
f e l t better about my work ard it worked art for the best. mis w a s a problem
an3 w i l l ccmne up later.
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into the building, they wmld not a l l m Mary Iynn to be back in my


haever, Nancy A. 's desk was right ma& up against Mike's door. lhis
start& all the problem w i t h Mary Lynn. She saw that and she wished to work
for me, and they were not goiiig to let her. It just started problem fmn day
one and it had a tmmxdms impact on the relationship between me, Mike and
Bob.
'Ibis was the straw that broke the camels back as f a r as cur relationship
was wncen-ed.
Ever sincethathKpenedwestoFpedcamunicating. matwas
the f i r s t m e i n trying to rescind m y i n p r t a n d m y o m t m l s o f a r a s t h e
campany was c0ncxm-d.
As f a r as the staff was ooncerned they had a feeling
that the staff should be treated as dirt and made this urderstxm3 many times to
me
this is against a l l my philasophy of life. For months, because of this
attitude, Mere were problems with the staff. It was because of this t h a t the
staff didn't respect them, and it was just a formths.
We w e d

section,

July and August, Bab w a s still d m in Atlanta and I was doing


the work i n lancaster. Fmn J a n u a ~
until
~
Januray I took one day off
for Memrial Day, one day for July 4th, one day for labor Day and cme day for
'Ihanksgiving.
Mike H a r t k t t took off two of three becks, leaving m e to tend
the shop.
I was always the care doing all the work, recruiting, stock
offering,labor m a t t e r s , drew up all the amtmcts, drew up the offering
w i t h the help of the attorney. It was fiwry t h a t I was the only one
raising the mney
probably 808 of the furls. I was the only care of the
principals who had outsiders investing i n the canpany. Ihe most they did: Bob
Kauffman raised $5,000 frun his father in law, so not d y did I pit my cwn
mney i n I risked that of my clients. But they w e r e willing to a a q t t h a t up
front.
A carple times it came down to either me getting the m m q fmn my
clients o r us not having the financial a b i l i t y to pay off sane of the capital
resources that we had.
W i n g June,

most of

~~

W i n g %pteubr we began to have pmblems w i t h Mazy Lynn and the staff and
me.
'Ihis was the beginning of them hying to reduoe and dilute my control of
the canpany as f a r as input was cancerned.
It was a very emotional and
d
r
a
m expsriexe a f t e r a l l t h e w o r k I d i d t o p l t t h i s a l l t o g e t h e r t o f i n d
those twowere trying to plsh me cut. Itrsachedthepointinoctoberor
Noventer where they actually asked me i f I wanted to "get out." 'Ihqr indicated
that I was not right for m a ~ g & ,
m a ~ g e m e n twas nat right for me, t h a t I
wasn't having fun and all this and that. Mnst of t h a t was due to their action
as f a r as their trying to dilute me and weaken my umfidenz. lhey c0Ntantly
made fun of me i n f m n t of all the other planners a t meetings and it was just
ugly.
'Ihey also t r i e d to internqj my relationship w i t h Mary LyM w h i c h was
ruthirq mxe than a very p e r s a d , deep fri-p.
No care lamws this, kR the trauma was so heavy that I went mxier the care of a
Hospital, beginning N m m h e r and I was suffering a
psychologist a t St. J@
severe case of depression. Eecause of d z @ r e n i a being f a v d in my family,
I was not afraid to go seek psydmlogical camseling. I was on medication for
three months.

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In September they had it in their minds that they were going to get r i d of Mary
Lynn.
And they tried every opporbmity, finally in N o v e n h r a week before
Thanksgiving, they fired Mary LyM. W i t h o u t cause, for no reason, other than
they just wanted her art ard felt she was incapable of whatever. It actually
reached the point wfiere Bob andMikewhenarnurr].politickingthebrokersto
s q p r t them t h a t M a r y L y M w a s n u t d o i n g h e r j o b w h i c 3 1 w a s m t t r u e . Shehad
the canplete w
r
t of a l l the brokers. Maybe a t times there was a case wfwe
sawom was unhappy w i t h her perfommce, but in general it was a ploy, a plot,
fabricated by Mike and Bcb.

their attarpt to lmy me out and get rid of me so far as my Oontrol and my
interest, I held cut reluctantly often times mxlering i f I were going to give
in an3 by 0lristma.s I decided I wnuld stick it cut. 'Ihere
not other
alternatives, kR the nwney they offered me to get out was $2,50 a share which
canes out to $100,0000.
Iwantednopartsof it, s o b y J a n u a r y I d e c i d e d t o
stay.

After

Bob h a d s e v e r a l c a n v e r ~ a t i ~ ~ l ~ w i t h B o b I c n g s a y i n g t h a t h e w a s ~ i e d a b o u t m y
v
i
a
l efforts and that I was heocming slack. Ihe whole reason was
that they were hamering me daJnandbeatingmeupineverywaytheycculd,
cktmying my confidence. AftarIspenttimeandeffortardIbelieved inso
nu& of Wmt I'd done, and they were trying to take this away franme and get
me art of the picture.

Thraqh N o v and
~
Decc&er
there were meetings between myself, Scott
R c h r k x m , Alan Loss, Bob Long and (luo1ynFlayer rqanibq the activities and
the ~ S t y l e s o f M i k e a n d B o b . ~ w e r e v e r y ~ , w e r e n o t v e r y
trusting and I was always in the middle between the managerwt and financial
planners.
I had relatiMships with everyone and I believe that this -tend
Bob and Mike ard they tried t o g e t m e c u t o f thepicture, kttheplanners
wxlld not allcu this because the planners did not trust Bob and Mike w i t b a r t
havingme to keep them on balance.

I raised most of

the nomy, d t e d lnost of the people, p t the offering


together, pit the ampter system tcgether, workedwithall the
ampter softwa??=, and a c t u d l l y . came up with the name Firnncial Management
(;mup and the idea of having a l l the subsidiaries doing different things. My
involvement was very deep, pmbably deeper than anyone in the organization.

memo-

W - m I w a s p l t t i n g a l l t h i s t o g ~ , I w a s i n ~ w i t h A l n Y u l a tItalked
.
abaR having nnr@age,
banking a part of a t I was doing. Nathing ever
happened bebeen the two of us, but in ~anuaryI received a call fran Al askhq
me to see i f I a d d place any mrtgages in the east coast. H e was willing to
pay me xmghly one half a point and this was a t a time, because of the
activities of Bob and Mike, that I tku$~tI would give this a t r y to give me
sane secwity. Should saoething f a i l i n the canpany, I would have sanething to
f a l l back an. A t this time I involved Scott IInbertscn and Bob ~cngand I told
them we would form a three way w
p and we wnuld work an a real estate
project on cur awn. ' I h e r e a s o n I t o l d n o o n e a b c u t t h i s w a s t h a t t h i s w a s m y
ace card in case Bob and Mike ever really threw n~ out. I was mt going to give
&em any r e l a t i m s h i p , and I j u s t TIE&&
sane d t y .
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we were really doing was lwkirg for 1of 2 millicm dollars and up to
refinance or finance new and existing realestateprojects. Wemadeafew
calls, finding that ax rates are very anpetitive.
A l was mre of less
letting me get plqged into the major Savings and Loans and Inswaxe
mnpanies.
Wefam3cuttherewereveryfewpeopleinthearea, i f a n y a t a l l
who could a q u b s the terms. We began having a great deal of success and what
we found was that almcst everyone was allawing us to bid on their project. We
created a campany called C!rekive Finance Caopany so that we would not a p x e
Fm; t o any l i a b i l i t i e s as far as cur activities. W e agreed fmn the beginning
that FIG wxild receive a m t a g e of cur activities ~IXI
we figured 15%was
f a i r since we actually mnufacturd the pIoduct wfiere FIG *en cut and used
othex manufactured products. We didn't feel they were entitled to a 20 30%
split.
What

of cur amtmzts was w i t h Tony Bongoivi in New York. He a t one time dated
Scott's
sister apprmhmtely ten years ago.
Scott maintained a loose
relationship w i t h Tony, calling him one= in a while regarding business m a t t e r s
and business activities. Scott called Tony one day atcut a real estate project
that he i3mught
Tony said no, but he my have another
project that we would be interested in. Scott asked m e to go up to New York
with him to talk abcxlttheprojectand1 askedwhat itwas. He indicatedit
was a mwie.
I was very reluctant and hesitant to do this because nnvies t o
me, tax shelters, scans, not very econcmic type investment. Me being very
comxvative was not attracted, but I decided to go anyway just to get cut of
town, mre or less just to get away.
(Xle

I got up t h e n I was totally amazed a t the caliber and the people who we
were associating w i t h .
What I found cut was that we were working w i t h the
leading recolding s h d i o in the world. T h e r e d t i a l s , their acccnplidxm~ts
were @enmaml- they were just it. I'm not going to spend alat of time of
this because just the battcm line is what is inporbnt here. After seeing the
project wfien I lcoked a t what Tony was doing, and fran a business perspective
there were just so nary elewnts in this project that were just truly amazing
to me so far as distribution and markeI5.g and riskand eveqtAi.q else.
Bottan line was a pruluct that was worth 15 to 20 million dollars being made
for 4 million w i t h the ability to be one of the -1
movie, video projects
of the years.
biten

a l l ycu have the leading recoxding studio in the world working on the
scan3 for the project that was going to include a follaw up of Tony's previous
band who- was BM Javi who was alreacty one of the hottest thing in nusic as far
as alkum sales.
Then you have the fact that he was going to digitize the
recording which was never done before in the nnvie industzy a t a time when the
vidm market is just going bananas. N o t only that, hut the label that signed
the banl m MN.
You put a l l this together and ycu've got a penmend
business w i t h alot of apportunity
F i r s t of

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seeing this, I ammitt& myself to the project not kmwing h o , where or haw we
were going t o raise 4 million dollars but I beliwed in the project so mplch. I
guess because I saw alot of the same elements used in F% in this project, and
even more.
I got instincts when I raised money for Em; I was still very
concerned with the risk elements to my investo~sbut when I looked a t this
project the risk was even less. Iess risk, m r e protection with this project
so I believed in this project. We spent seven or eight weeks developing the
packaging the product for the investors, things have hapxwd during that time
that f e l l into place perfectly
the a r t i c l e in lblling Stone, the marketing.

is May 4 t h a t 4:30 a.m. and there is no d a b t inmyminlwith the articles


in Rolling Stone that we have the money for the m i e . lhat project in itself
w i l l pmbably p t us in the forefront of the n
e
industry within
It

eight W.
It is mird b o g g l i n g a s f a r a s h t o n c a a e o f t h i s , b u t t h e
project is done, we did sanethjrq, we did not use Fm;, they w i l l receive no
I guess what I'm saying ik that because of the way Bob and Mike treated
split.
me or plshed me to go cut and do things, that did not involve Em; and I did not
feel that they did not deserve to becarre a part of these things. Fran the
beginning I knew Em; was going to get their piece.

L e t me go back to an earlier developlwt a m c e m h g the E!mker+er.


We of
course thought in the begthat we would becarre ax own broker/dealer.
However, after long, bard discussion, we were to the pint of getting a license
for brokerldealer, we decided we did not have the admhktmtive capacity to
N f i l l what we waild need to a-lish
the broker/dealer. Back in Nwember,
-,
Bcb started soliciting other -/dealer,
l c o k h ~for
~ three things;
service, high pay cut, and
equity.
We knew that we had t o own our
brolerldealer kusiness.
'Ihere were two players that we came a
m one was
Iiikkml-m cut of wshhqhl DC and the other was Financial P l a m e ? s Group
which really involves sane of the premier financial planners of the cumtry,
B i l l I b q l e r , Wayne Webster, so on and so forth.

The Iceogler grarp was strcng, large, y a q and they were doing nxghly 20
million dollars of gross canmission incane per year but there were saoe people
in the organizaticm we did not feel ccmfortable with. Hikbaxd Brrx~nwas a new
start up, starting up when we did, was a s p l i t f m a previous bmker/Mer in
D.C.,
that involved f m a syrdiotor to a -/dealer
that no one knew
anything a?xut. However, they really enticed us w i t h a very attractive equity
deal.
Bob maintained most of the cmmmications and mmt of the research
involved in this project.
It was brcqht to us in January w h i c h was IpuFplly
20% of their stock . w i t h 90% payout , territorial with override for aqthirg
that w e did.

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0fthethingsImtshaildbedoneisthatscmeaneMdbedownthere
a t their t m d i q department, along with the capability of FSC. I tried
to get people down there several tims and I suggestd Qmlyn Royer because of
what had haFpened to her.
Finally Peter Pnneros and Ken Ray bent down, and
this was probably during U a x h . Anyway, this whole thing was dcne w i t h very
l i t t l e mmmicaticn as f a r as me, Bob and Mike. lbre of less, Bob wculd go
cut and do scanethirq and wculd fee3 back to us, but we redlly had very l i t t l e
involvement with what we into do w i t h M Bnmn. One thing Bob
irdmted w a s t h a t i f w e b e n t d o w n t o K i b b a r d m w e w c u l d n o t f i n d i r m c h , they
were just starting up, they were new, they had rmghly 10,000 sq. foot of
office space, a few staff people and the system of operation. He did feel they
w e r e capable of fulfilling cur needs.
One

1
-

the transformation of licensing fmpn FSC to Hilhxd-Bnmn and we


prcbably had 60% to 70% of the in house w l e to FSC, Alan Inss, Scott
Robertsan, Rich Bravenuan, Keith Waters, R x M Dellinger, Kazly Radcliffe, along
with Barry Schuttler and sapne of the other satelites. A t this point Tan 'I\uner
was free ard clear and he was looking for scsne direction. By the week of A p r i l
19th
Tcm was up v i s i t k g with Bob all week seeking that direction and he was
also visiting w i t h Hibbard Bnmn so it looked l i k e Tan wculd also b e a m
involved.
We began

I also negotiated the courtship of Tony Pascoti and got him involved.
Fran the perid of A p r i l 1st on, wfien we began transferring license, one of the
main

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EXPANDED EOAIlD METIKG


May 5, 1987

Jerry Bavero

In A t t e x h x e :

Stan caterbane

Mike naruett
AlanLDss

m
Bob K a u f m

XM Ray

-er
Richard Volp
Meeting opened by Bob Kauffinan

A.

N k r e we are tcday

~~

Week article on conveniexe Wtxies largest


1. S t a n graJth in5mtry for next ten years. Financial Management Group is
a wnvenience i d w t z y .

Mortgage Ebmkerage contacts leading to distressed properties


symiication pxsibilities. Ccmercial -y
located from insumwe
Accamt
fram
$2,000,000 and up.
capmies and Savings and Ioans.
2.

3.

Eawie.

4.

McCormick.

Raise $4,000,000.

Tony Bongiwi.

Sports figure fjnancial planning

in retum for

agents contracts.
Service

B.

IFS. DyMtwownedby IFS. Barry Schuttlers IFS enhancement.


wants to design a system which would coordinate all three of
the above. ISIS developent w e l l under way. XM Ray reports c q y
w r i t e mrk done for llEkrsanal BrokerI1 software. C o s t approximate
$10,000 per site. $100 per month maintain fee for s a t e l l i t e distri1.

Stan

bution.
C.

T h i n g Service; Ken Ray


1. Monitors mutual M offering switch protections done for both
stocks and mutual funds. 1/2 of 1% fee charge.

1. Express the p t e n t i a l for linking Dynatax t o IFS for benefits of


coordinating tax preparation an3 client review.
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1.

ming w e l l .

Section 3189 Federal False Claim Act

Good

profit scurce.

1. mkhg book for us to cutline licensing procedures,


a ~ l i c a t i a n s ,insurance canpany information.

A.

Bab Kauffmn raises question: Shcmld F h i a l Mmgement


be
~withachievingequitycninsurancebusinessinex~e
for v o l m ? Shaild we limit the nrmber of c a p a n i s ?
1. ShGild we ,py htere&d in reinsmame program.
risks.

a.
b.

2.

Down side

Limit planners -on


of objectivity.
harder to s e l l FIG i n the firture because of latent
l i a b i l i t y &e to losses extending fnmn lass of business
and adverse insumme risk.

Mi.&

VoteOutcoPne-Notto~auSel~e~with~hSXaXx2.

Retain cur objectivity.

1. Eemett W i l 1 k m - s prqject.

1.6 million needed.

Bennett Williarrs

is major tenant.
Downtclwn Kistorical project w i l l prcbably be a joint venture
instead of a sytxiication.

2.

.
Bob Larq reports on active participation p a r b s d uP.
Partnership investors and Financial Management Gmup to have a
g
gm
p structure. W i l l pass alcslg 99% of tax lcsses to
rs. Financial Managenwit Gmup to keep 10%of cash f l m ,
20% of back erd. Designsd for investors with joint inam2 urder
$100,000, for single irdividuals w i t h inxme under $50,000.

3.

C.

Satellite Offices
1. Columbia, &tryland

a.

Barry has a m t a n t , attorney, mortgage broker, insurance


agency an3 real estate a f f i l i ates....nwving along well.

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a.

Section 3189 Federal False Claim Act

W e are lwkhg to develop a Harrishmg office which could


include F e t e r Labella, Davidwn and Valencia and a miscellanecxls grarp of brakers caning fnxn E.F. Hutton and Merrill
Lynch.

b.

3.

A.

Frojected time frame six months away.


for offices.

Olrrently looking

Reading, FFmSylMnia
a.

Rich Podlasek. Close to recruiting Bob Caukins. Reports


of a large grcllp of
.I people m t l y w i t h Hackett
-/Dealer.

a.

Jerry try*

to recruit Bab JWmxe and Ben Clements

Report on trip to HBC

1. Barry Schttler; no problems e m z m t a d thus far that he h m s


of.
2. Jerry Bmrero; HBC staff is themajorpmblemarea. IXle
Diligence L&prbmt is very week. Pmducb
to be available
kut is light.
3. KenRay; H B C l a c k s ~ i e w e d t r a d e r s . OaYzrnedabartHBC
being unable to serve the brokers business. Wants a detailed
p-of
howtorectify~~ctradingpmblemswithatimeframe
for capletion.

4. Questicm. ShaildwestaywithHBCorreapencnxsearchfor
alternatives?

a.

Decision. Tu work
inthreemonths.

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pmblenrs and reassess situation

Thursday December 15, 2016


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

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Section 3189 Federal False Claim Act

K E N N E PROPERTY
~Y
CORPORAT~ON
A Subsidiaw of Kennedy Health Cars Foundation

May 6, 1987

Mr. Stan Caterbone


1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:
This correspondence is to address our previous conversations
regarding the refinancing of some commercial real estate that I
am currently managing for Kennedy Property Corporation. At that
time, you had requested information on each of the buildings so
as to determine the feasability of this endeavor.
Of the four properties listed, three are owned by Kennedy
Property Corporation and the fourth is owned by Professional
Medical Management, Inc. Both companies are subsidiaries of the
Kennedy Health Care Foundation.
Enclosed you will find a description on each property. This is
accompanied by the current lease schedule for each property and
an income statement for Kennedy Property Corporation.
If after reviewing this package you believe that favorable fixed
terms can be provided, please contact me at your earliest
convenience.
Sincerely,

Michael Lawson
Property Manager
ML/~
Enclosures

EXHIBIT U.S. 16-4014


CIVIL
RIGHTS
CLAIM
Page
124 'of Turnersviile.
646
December
15, 2016
P.O.
Box 1015
' 100
Egg Harbor
Road
N.J. (W012 Thursday
' 604589.3300
Ext. 421
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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

MICHAEL LAWSON
Property Manager
P.O. rn 101s
im E Q nubor
~
M.
1wmn.Il..
WJ mot1

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Richard P. Sllva, CLU


Regonal D~rector

May 12, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, PA
17601
Dear Stan:
Per our conversation I think it is important that I shift the responsibility for contact to you. As I stated my time is as valuable as yours
and I cannot justify continual contact without a reciprocal effort.
Should you choose to access Alexander Hamilton Life as a general agent
for maximum support and compensation I will be more than happy to discuss this with you, however I do not feel that we should pursue any
conversation until you are in a position to make a definitive commitment.

Richard P. Silva, CLU


jah

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Section 3189 Federal False Claim Act

In atterdance: Mike Hartlett


Bab Kauffman

m m

Alan Loss
Absent:

Stan Caterbone
Concern wer relationship with Hib$ard

W O N :

I.

BraJn

Corp.

as a Ebmkr/Dealer.

Should Financial Management Group (FM;) be affiliated with them.

p5TING OPENED BY BDB IGWmMAN


A.

LDok a t all d o n s .
1.

Wty. Hihbard BImm Corp. (HBC) waild offer 20%ownership in


the Bmker/Dealer and 24%of UCC. (The parent). 'Ihe UCC stock
is to be used for national recruiting who would not be directly
awned by FIG, kR FM; would have partial clwnership.

3.

High degree of input into w r p r a t e decisions.


sst on the board.

4.

We waild have a

'Ihey inlicated that they should be able to service our

business.
B.

Risk i f we leave HBC.


1.

'Ihe core of planning shqs in the n a t i d wrpbratian auild be


i n danger due to their decision to stay where they are as

opposed to mning w i t h FM;.


2.

3.
C.

'ItyO

R k e n t h l loss of revae. FM; could lose $1,000,000 in G U if


Schutler,
(as an individual), Rdlasek, and Tucker would
not cane along. lhis wnuld result in a loss of reverrue of at
least $5,000 per month, $60,000 per year.

of leverage when M i n g w i t h a &oker/Dealer.


risks i f we stav w i t h HBC.

1.

'Ihey do not service our business - we wculd lose people due to


poor servics and lack of responsiveness.

2.

We would not build our hiness as fast as we would like to.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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D.

Section 3189 Federal False Claim Act

!Be board aarees to divide the issues into

1.

mvoteonwheulertostaywithHBC.

2.

Tu loak a t other &oker/bder

two rarts.

@CUE.

Are we m i n g fozward o r backward and is the Broker/Dader


going to help help us o r hurt us and for
lcmg?

Bob Long;

Bob K a u f m ; Can we continue cur tusiness day to day? Y e s . But it


w i l l r q u i r e mre of a x daily inpt and personal managenm-lt.

BobKauffman; mlathashappenedinthelasttendaystochan@the
boards decision t h a t ms reached in the extended
dated May 5, 1987.

Alan Ioss;

Gave perspective of joint meeting in Maryland. Was


amcemed about the lack of cammication between Fete
Hibbard and Rick Fwcm. H e f e l t there was alot of
disorginization w i t h HEC but ci-~a positive note he feels
like they wanted to work things cut.

E3Zb Umg;

Indicated that he sees the securities area as k i n g the


focal point of our pmblem. He doesn't perceive there
to be a servicing pmblan w i t h M u t u a l FU%~.S,Annuities,
etc.

Alan

Again poses w o n ; Do we have other alternatives to a


Braker/Dealer?

k6.S;

Bob Kauffman; Y e s , we have Planner Securities C;roup (PSG), Financial


Service Corporation (FSC), an3 Integrated Rsowces.

ooncernedabouttheduediligenceatHBC. Aretheystrong
enough t o do local d c a t i o n . Why wasn't more due
diligence done in choosing a Em&x/Dealer.

Alan Loss;

Mike Iiartlett; Basic question is where are our priorities? Do we want

.
Bob KaufBnm:

maxinun service o r maxinun equity participation.

reason for o w choice of HEC was in direct response


to our stock brokers not wanting to leave Secwities

(Xlr

setuemerrt Cow. (SSC)

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

What is

mostimportant.

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Management Group, LTD


,

111-

Omgon Pike Lancashr, M 17601 717-569-5555

b v i d R. Schod, President
Bennett Willians, Inc.
30 East King Stre&
Office ax 1364
Yak, PA 17405
Dear Dave:

Enclosed is a prcpsal for ycur splicaticn. Please go wer its contents and
mi*,
we sharld get together to discuss the project
in person. I will be away until the 18th of May.

wfw you are finished

I lock forxmd to hearing frcw ycu.

Stanley J. cat333xme

President
SJC: lmk

cc: file
Robert J. BeNer, Jr.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

BENNET WILLIAMS / SYNDICATION

11. Services and functions of FtG, Ltd.


FtG I and Bennet Williams
111. Structure of Syndication

IV.
V.

Costs of Syndication +Financial S e


4krwd-t d :lIh m s
Financial Senrice Center

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

m6.

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center

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Section 3189 Federal False Claim Act

SCOPE OF

m s m

The following is a proposal to Bennet Williams, Inc. to pmvide the


syndication and marketing of the 1.5 million office building to be constructed
i
n downtown York, PA.
This proposal is an attempt to describe the role and
function of Financial Management Group, LTD (FMG), the Syndicator, Bennet
Williams, Inc. the General Partners and FMG I the Limited Partnership.
The purpose of the project is to raise the necessary capital
approximately 1.5 million (excluding syndication fees) and to m g e the
partnership through its, tirety until it is dissolved. As per previous
prcceeds
conversations, the b u i l g i l l be fumle3 conpletely f- pwithout using and debt, 'ch will provide a steady stream of income, projected
to be between 9% - 12%,dth the possibility of refinaxing the project around
the seventh year i
n order to return the original capital back to the investors.
L-

that

FMG will also consider developing a Financial Sexvice Center, similar to


wkj,
r-n.~ts & - > k c * .
WLCI'LC B - L +
U:((?-I WilL b C

icka d d i
yorh.

:<

~ I G Y C I

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

'

JCQ,C

-b-u.rj/lw c r p , n

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eY

7)

~ A L Q~

-J-

( l Ci

U L S ~ ~ C T

~ j $ ~6,~r1 1 n c s r

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

11.

FUNCTION OF

Section 3189 Federal False Claim Act

BENNGT WILmmE

- mE GENEmL PARmEE

(G.P.)

The General Partner (GP) w i l l be responsible f o r the folliwing:

A).

B).

C)

D).

Development - The G.P. w i l l be responsible f o r a l l development


involved in the project.
construction

- The G.P.

w i l l be r e s p n s i b l e f o r all construction

phases associated w i t h the project.

Leasing All leasing r e q m n s i b i l i t i e s w i l l be of the G.P.


The
G.P. w i l l have the task of obtaining 100% occupancy of t h e building
in a reasonable and timely fashion. The G.P. w i l l also be
r e s p n s i b l e f o r determining the f a i r market value of the space
and f o r a t t r a c t i n g a t t r a c t i v e tenants w i t h favorable leasing
agreements t o maintain a favorable and healthy cash flaw.

Management - Tne G.P. w i l l be rspmsible f o r the rcanagement of


both tenants and the building in order t o obtain maximum

appreeiati-+the-proje&-forAuhrcprofib
fukre

/I'

r c c : A ; o - yiven

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Guersbte

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US District Court For The Eastern District of Pennsylvana

11.

FUNCTION OF

Section 3189 Federal False Claim Act

BENNGT WILmmE

- mE GENEmL PARmEE

(G.P.)

The General Partner (GP) w i l l be responsible f o r the folliwing:

A).

B).

C)

D).

Development - The G.P. w i l l be responsible f o r a l l development


involved in the project.
construction

- The G.P.

w i l l be r e s p n s i b l e f o r all construction

phases associated w i t h the project.

Leasing All leasing r e q m n s i b i l i t i e s w i l l be of the G.P.


The
G.P. w i l l have the task of obtaining 100% occupancy of t h e building
in a reasonable and timely fashion. The G.P. w i l l also be
r e s p n s i b l e f o r determining the f a i r market value of the space
and f o r a t t r a c t i n g a t t r a c t i v e tenants w i t h favorable leasing
agreements t o maintain a favorable and healthy cash flaw.

Management - Tne G.P. w i l l be rspmsible f o r the rcanagement of


both tenants and the building in order t o obtain maximum

appreeiati-+the-proje&-forAuhrcprofib
fukre

/I'

r c c : A ; o - yiven

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Guersbte

Page 133 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

'Ihe follaiing is a description of the structure of the partnership. ?he


Partnership w i l l be registered by the Securities and Exchange Carranission a s a
Private Placement Regulation D, W e 144 Offering. ?his w i l l limit the number
of investors t o 35.
A

Bennet Williams Inc.

FIG, Ltd.

-s*W

- General Farher

P v l o r - k j l h ~&S

,-Equity: '26% ok
Income:
5%of N e
/

Equity:
ItIcome:

LQM :

75%
75%of N e t Proceeds
88% of: a h go- )-+a acb-l d e v c l y ~ c ~ t .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 134 of 646


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

IV. COST AND FEES

m , ~ t d . w i l l receive
of the
-,1;?n~associated with

capital raised in order to perfom the


the project.
This includes all legal,
accounting a n d m & % i n g fundions needed.

necessary

cd ;,la f l c o c L - ~
w i l l go in;*

y a c

77

/jlThis means approximately 88%of the-&capital


This
includes
a
l
l
legal,
accounting,
printing, wketing, e+mc of
W
i
p
u -(
b " ' & & @ ~ i ~ -h-tt,r;,
ht-io. $(\L pJrLVM
W:LI
hC
-the ' * o l t i ' u ~ ~ k e ~a~,IbU~ Je ~ ,,?L ~~ ~ " ~ b - j .
11' I

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 135 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FEiANCIAL SERVICE

cmmm

Financial Management Group,


will
t o develop a Financial
Service Center similar t o the lancaster Office in the building being
syndicated.
FMG has develop a N1 Service Financial Center that provides a l l
of
the relative services necessary t o manage the financial a f f a i r s of
individuals,
businesses and institutions.
The Center w i l l include the
following sevices:
1.

Financial Planning

2.

Investwrit and Portfolio Management

3.

Accounting and Tax Preparation

4.

R e a l Estate Services

5.

Legdl Services

6.

msrance services

7. Inves-t

and Mortgage Banking

Financial Management Group, LTD w i l l structure the Center similar t o that


of the Iancaster location w i t h the exception t h a t Bennet W i l l i a m s w i l l have a
role in the formation and the operation of the Center. F E w i l l provide the
recruiting and m g e m e n t of the operation and w i l l use the current system
that have keen developed and used in Lancaster.
me ownership w i l l be
structurd among FMG, Bennet W i l l i a m s , and the other Major Players that wish t o
get involved.
Enclosed is an original Business Plan that outlines the concept
in
m e
detail.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 136 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

HIBBARD BROWN

&COMPANY,INC.

May 11, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:
It appears as though we keep missing each other on the
phone. This is a short note just to advise you that I am sending
up a list of the standard items that we request when we do due
diligence on a private placement.
The reason for my wanting to contact you before sending this
list is that at the present time I am unsure of the structure and
nature of the offering.
I would like you to provide me with the
following:
1. Who is the General Partner?
2. Has counsel for the partnership been chosen? (If not, I
would prefer to make a recommendation to insure speed in
completion of the documents.)

3.
What is the structure of the offering (public, private,
Reg D, 504, 5 or 6)?
4.

Has an independent accountant been obtained?

5.

Is it your intention to take down the whole deal?

If
we need to discuss this matter on the telephone.
necessary,
we should make an appointment for that
phone
conversation.
I will wait to hear your response to these questions and
look forward to hearing from you.

Sincerely,

Ti?/.Richard P. Brown
President

Menzh.r N A S D

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

M e n h ~ rSlfC

Property of Advance Media Group

Page 137 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

7855 Walker Drive


Suite 620
Greenbelt. Mayland 20770
(301)220.0111

May 11, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:

I was unable to reach you today by phone, but felt immediate


communication was important enough to enclose this short note in
a Federal Express package already being sent to your offices.
I

I became fully aware of your proposed date to have the York


Private Placement on the street at our joint meeting Friday of
last week.

Having put together several private placements, I am sure


that we can meet this deadline, if we coordinate our activities.

I look forward to hearing from you as soon as possible.


Sincerely,

President

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

UNIVERSAL

"."

Page 138 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 139 of 646


Property of Advance Media Group

Page 2245 of 2953

Thursday December 15, 2016


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 140 of 646


Property of Advance Media Group

Page 2246 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

May 14, 1987

Mr. Peter Kit$ard


~Brown&Ccnpvvly

7855 W
W Drive
Greenbelt, Maryld 20770
Dear Fete:

As ycu h-w fma cur phone amversation, I feel very poorly about the
Fm; Board of D i r e c t o r ' s decision to leave Hibbard BraJn. Neither
Mike M e t t or I shard the feelings of scmne "key pxducersl1 that
lang-term service shortfalls would exist. We also felt that your
people were bath amptent and intemsted in providing good mice.
Given time, our feelings were that ycu wculd be able to semi= the
needs of a hiqh volume office.
I am very concerned about the attiand mrale of your people
n q a r c l i q the x x x x n t ixrn of events. It wculd be ,wen mre unjust of
Fm; to leave the olblameolon HB anployees for pmr service. In my
opinion, there existed an ovemcsction to sane system @lens w i t h
mch relationship unlerrrmung by PIhad persanal
considerations in mind. mat is a l l !

..

.
I

I believe that I did my level best to avoid the votq and I also did
level best t o m a v t h e v o t e . I r e g r e t t h a t I failedandthatmy
me lrmst be associated w i t h the deckion d announcement
Correspondence.
A t this tine, I am so^ throughthe feelings and
messages sent to nre in this action. I hope you can urxkstand and
that your staff can also I1I.derstand.
I give you my best w i s h e s for the future and believe yau w i l l succeed
i n proving this to be a bad decision by FlG.

Robert E. Kauffman

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 141 of 646


Page 2247 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 142 of 646


Property of Advance Media Group

Page 2248 of 2953

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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 143 of 646


Property of Advance Media Group

Page 2249 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SC'IDCO PRODUCTS GO.-4Contmued)


mlas!.c

Consumer Video RWUZUh v . (I)

Sack Dn I11

*,,om

5a"l Dnr

Park R w . NJ 076%
T l l W1-9301WO
Son vde. ems
3651. YX(. 267s
Ovrm N a U iF7es.J

~.l.r:

.-

.87CO1I

Coml%nen!alFtbre Drum (1)


R?. mtr. 18% P--.v

R.. SU.

em

Usnena. GA -7
F h . sums

5.1.c: 3079
7 C C.mm

0M.lo":

.
I t M I I

Consumer S.kLhv. (1)


15 E-.
Rd

10" V.P. 4 G.n W.)


-t,.

l e a . Packaging. Inc. (1)


P C 00. AB
C d r r mm a 9
1.1. -73-35
F'rCl,"*Ssnrt*e
-Is
G M Sum i. t n Urn,

-.

kt--

-.

PVVM.1007652
T*: 10l.360.Ym

*Suam(RnJ

.I-

(I)

(rdo"2l

R.,I,O.d

s.1.c:

4011

fa"" O r r &x. O l h x l

D. M. D".ry

R. C G - % ~ .

0 Wax 428
SUI.rmlk. m: 2 8 6 n
'*I. 701412.7424
wart. P W
4

So3 line RaGlroed Cornpan

P.O. Boa 530. MO Soo ~ r r L %


Mnnrmb. MN 5 % ~
Tm: 6 1 1 . 3 ~ 7 d w o
w
a
r su.:%,7.030.000
EW. 7 x 0

.tMI1

Paper Stak Dealer.. Inc. (1)

s.1.c; 2291

Oennlr M tavanaugn
Russell Cleary
John H. Dsnaelr
Gwrge H. Dtxon
Rsnald K. Gamey
Roben C, Gtlmore
F. 1. Heliell8nger. I1
Burleqn E. Jacobs
George W. Mead. 11
W~llharnG. Pnciilpr
W811tarnW. Sltnson
Donald F. Swanson
W l N l ~ nR. Wallm

m.511

0b.r

a,m

~o.,Oom

SORG PRINTING CO.


~
111 8 t h Avo.
New York. NY 10011
Tel.: 212-741-6600
~

L Narrih.1

NY

SOR W O T C )

CCmpDnent PIOM~IS Lhv. ()I


9 w 57m sr

.(MI5

.. -. ....

E m 490

9s.: 166.544.272

-OX.

~r r a . NV I ~ I S
li.nn F m IR.rI

F,scaI Yearend: 5131186


mnun of Fwmlal. Cqmrsle. m
~eg.1
uments aria Forms
S.1.C: 2751: 3555: 2752
Galben B Soro n7nm ad
-., I
Roy A. Cardi;(&es.)
Harold Cmney I E x w V P . 6 SKI

Boc

l .no

Johnh MonNUI

Sow Magnetic RoduOI Co. (1)


t.-

SONV CORPORATION OF AMERICA


(Wholly-Owned Sub. of Sony Corp.. Tokyo.

Japan)
Executive Headquarters. S W. 57th St.
New York. NY 10019
7el.: 212-371-5800
NY
Sony Drive
Nat(onal Opera. Headqtr.
Park Ridge. N J 07656
1 el.: 201-930-1000
SriE+NYSE
PS Bo Ci MW Ph Ts)
Assets: S5.345.%7.0~
LlabLlrs: 13.132.561.000
Nef mmn 12.212.9BO.000
W r O r . Sic: S6.701.816.000
Enp- 43.000
Mlr 6 S k r 01 E * N D n r r Equrp.. lnrmmmtr 6

,,,M,,

Z R Z .
0,656
- 201IJa1030
Jd'a
lRul

1
.
1

.(Urn

..

lkncer

S.I.C.: 3679: 3651: W:


5065
N n o Ohga (Uun Bd.)
Kenp T s v a (Chm 6 -1
EJT 0111cer)
Nw' Vander Dusren (Rar 6 Chel Opn, On-)
V ~ z h a dE a r (EIBC. V P.&)
Flben h l l s n (Exec V P)
Kocht Twnda (Exec. V.P.+s.
6 E m )
John Slerr. (Sr V P - H v m n RewnrcnJ
J Ph8l.p SUci 19
. VPJ
Kennelh Nees ( V P 4
. Sec)
Chns Wab. N P G M . Refs 1
F.a.l* LEMn W P 6 Gen Cnnrrer)

WrMrlrrm

.
I
-

S O 0 LINE CORPORATION
56% Owned by Canadian Pacific Ltd.
Soo Unt Bldg.
MinneaooI#%MN 55440
-. ~.
Ma1ling'~ddiess: P.O. Box 530
Mlnneapollr. MN 5 s u o
Tel.: 612-347-8000
MN
SOO-(NYSE)
&see: S1.138.205.m
Lntdrles: S830.327.m
Net Wath. W7.878.000
A p m Sk.: 161757OWO
Ew: 73x1
~ransmtsndinp
bn+av
S.1.C: 4011: 6711
DQnrvS M. Cauamnruph (avn 6 Qref Ex-.
~

SOUNDESIGN CORPORATION
Harbor Financial Center. Plaza T w o
Jersey Clty. N J 07302
Ttl.: 201-434-1050
DEArrefs: S74.132.~0
Llab;blder: S40.902.m
Net W m h : s33.230.m
WO..
s1s.: I2W.OOO.000
E w yK)
Mlr. OT T~~YSIOI
Rad'or 6 MW WS.
S.1.C; 3651: 5064
Sad E. *mh.nui KXM. Exec ccmmnee)
Ehl Ashkenam l h . M. 6 Chel Oper m-)
M. Franco (PIC)

R&n

Wuur ( E x e c V.P.)
H. F r a 1%
~ VP.)
C. Chraime (SI. V P 6 TreasJ
S. Lanudo (Sr. V.P.1
Thomas Gtsena ( V P . - M m n . 6 ParoMcl a,)
h a r d Kkln 1Sec.J
AIben Hamay IPu. Dr.)

mlrrr,

r S e x Mlg. Co.. Inc. (I)


51.
EhaDClh NJ O7X16
T*. 201.3552110
C1.c~
2651

.'"(U1

107 1,-l

C o m r n u ~ ~ ~ at M
, . )s

Y a u a b TUV*I W.P. 6 dma;.)

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 144 of 646


Property of Advance Media Group

Board of Dlrtnom
Roben L. sorp
Eugene Blanc. Jr.
Eugene Bkm. ~ r .
Ncholas Cawto
Roy A Cardta
Dons S Cunnlon
DOM P a e r s
AIben W. VanQ

Page 2250 of 2953

(100%)

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 145 of 646


Page 2251 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

socpe of Pmject

m k e t i r g and Distrikution

Financial Prcposdl

amtracts

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 146 of 646


Page 2252 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

'Ibny m i m i

Section 3189 Federal False Claim Act

is about to undertake one of the

and F t x e r Station

~roiectsin the entertairmrent irdusby that the Business World

mast

has wer seen.

Ihe fascirratbq elements of

A).

Wical Overtcn=s

B).

~ 1 o g y

.
D).
C)

this project are as follows:

m k e t b g ard D i s t r i h k i c n
Limited DJrJrside Risk B t e n t j d

W h a ycxl prt

have a vezy s t r a g and paJerN entity.


' of the largest ard mDst visible

in any business v

all of the abwe elaoents tog-

Naw, prt the abwe elements in o m

htertairmrent

W i e s available ---the

-.

We want to pcsitim Scmy as the primier ~a~


EsuipPent
Vi&o

of P r o f e s s i d

in both the RemrdIndustryardalsotheTbeatricaland

B3ushy as s e l l as Television arrd Pay T.V..

In additicm and even uore

inportant we waiid like to credit Scny w i t h omtrihtiq in the develcpnent of

the Scny-

Digital

Ren,rdiq System that w i l l recoFprized

World by way of several different medium e q c s u s .

the

lhis will have

effeds in the bay of jmreasd sales in both the C l x m m e r m level as well

as the Professianl E n v i s m e n t .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 147 of 646


Page 2253 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

In the f o l l d q paragraFhs I w i l l address the abzwe elements an3 pmve

to-rt

thepcrtential for this project.

wa,s developed to help Wmy

'Ihe m v i e

in

Marts

the

hdustry to captxre ather k d w b y ' s that are

- theatrical, televisicn an3 cable, video,

aanplimentary

rmsic

mi6 take his mtive ard &us

el&cs

aocanplishents in both -logy

Wmy's. track reond ard

of

Because
~

an3 nusical prducticn

aE

Dmy has used the s a nusical


~
format for their f i r s t a l k m as he used

hasI
sold nine millicn alhms thus far
for Bn Jwi, *&

- Bon Jovi!

of his latest band French

film already will have appeal t h r u q h the fed-

Lick.

intennticenl film ard

ever

n, dllxrm has

sold nvre alhms in its f i r s t six ucmths in the history of the recon3iq
I

kbstry.

Because of

saxe

rmsical

the timirg of the a l h x m - w b i d l w i l l

the two sbaild anl w i l l ccnpliment ane another vezy

'Ib further the mrktzbility of the picture he w r a p d

profitably!

horror script

'Ib add

the

okritiffil"

Minfluencing the audiences.

the f i r s t wvie ever w i t h a

finther to the project, Tcny w i l l

digital sand txack fran set to theatre arrl video.


mst

this into a

- w i d e s t mrketability due to intennticanl d k k i h t i c n - an3

that will plwerrt

an

aaninate the

anyme else 190% of

This tectylology a l e wmld

the total budget just for the s a d prrducticn.

rmis is W h e n t h e p j e c t g e t s i n t e r e S t i n g a s f a r a s ~ a n d d i s t r ~ c n

isculzemd.

Because of
xarkthg

the exclusivity of

ad

the te&nicdl

r l i s t r ~ a nsbaild be pxerful

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

mrventianl
deals.
Property
of Advance Media Group

Page 148 of 646


Page 2254 of 2953

arr3 the

elacne

in even the

'

the
,
nost

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

lmxEmxz AND

DlsTmmrION

Ncw lets take this project and look at it with 5-:

to biu e1eQmt.s:

a ) . Video
b)

T h e vi-

utren

yrxl

D i g i t a l r6mrd.k~ard playiq

inaustry is a 56 billion dollar

'

' ,'

y that

is in need of product.

lmk a t the patentidl for a prcduct that w i l l be the first a d a d

prduct that will canpliment the fast paced


w i t h a rmsical

-re

~~Fsltertainmet

that m y have emmgh d t s of its am-ym

have an

arnazirg p b m t i a l for d i s t r M m ! !

- )

D i g i t a l an3 D i s c Irduslq has p

mrdi.rq ard playing in due time.

m to be the fuhrre standard for


Because of its newness, there are nore

m l e wfao have yet to hear the digital sm-d. Because of the visibility and

exposure that will cane fron this project-this

a u l d be the first time ever

pecple hear digital by way of theatre ard video! As to hckJ mmy pecple? 1

- 10

- 50 - 100 millian?
well, what w i l l be their first reactim? J NEED 'ID HTY A DISC PIAYER!

lheir
VIDEX),

reaction w i l l be I ~ T O H E A R ~ S a U N D I N M y N D L T ? V ~ ,

MXrIE,

a-.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 149 of 646


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Thursday December 15, 2016


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US District Court For The Eastern District of Pennsylvana

W
e a

Section 3189 Federal False Claim Act

d likesmytocarnait fifteenmillion f o r t h r e e t o fcur future products

that will follm t h e s a n r e f o m t a s t h e ~ ~ ~ s o t h a t ' l t m y ~


sCply

w i l l p i t i o n tharselves as the picmeer ard leaders in the

-.

lhis

will mt allcu onpsitim t o gain assets to the marketplaoe until ue are a l l

fkmly situated ard profitable.

We w i l l also assist in any way possible in the

of the theatrical

an3 video distriialtim.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 150 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

a 60 scxrd spot in the beginning of the video, ve will do


.Smy

d its r m t r W c m s to the Digital lY&stry and the differa-ce be-

a m v e n t i d and digital recordirq.

I.

The

spot will be a ~xzme-my w i t h nusic fmn Rpncfi Lick inthe

&
-

'Ihe Carmentary w i l l d i s c l l s s t h e S c i y / F S l 3 5 S a M D S Y ~ a n d t h e

cur pint the

pmrzss by uhid-l the FURE SaMD IS develcpaa. To


"Differern= '&st"

will be used.

'Ihe

mnreie

M?NCP1 will be pmnoted as

the~FeatmeFilmtousethisSystem.

11.

WEW#I

We w i l l
Sciy

a mxdmxlking canpign us-

rarket a N1 line of

the v i c b , (similar to Wp (amet),

KMGSlNTCN

w.

will offer a l m k d g e t h t profitable disc player to a l l

the video.

?he offer w i l l

be a t wholesale pri-.

of

Ihe reason for

the 1m

tudget prduct is that rn hcpe when pezple actually get to the store they w i l l
upsrade an3 tuy a t full retail!

Far Scny it w i l l a-tically


tedYlical aazmplkhmmts

inskute that Scny is -ible

fran the view of the audiervz

for TcPry's

- drich lby will

m t b e ~ w i t h . I t w i l l a l S o p m m o t e a l l ~ f S c n y ' ~ ~

-P
-

We w i l l alsn develcp a -60" scxrd spat to be used on telwision to p

p t i m project for both

Saty ard Tcmy

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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m the

Eaqiovi.

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Section 3189 Federal False Claim Act

will also include s a y EquipnerrtinthePSlMSSystemsthatwillbe

n e w to convert the Theatres to the New Sand System.


T%atres

We w i l l amvert the

Free if the lheatre d t s to d-wdrq the next'MReElXNGIOVI

SSXKTIW.

This will give us a guaranteed ccPhirrued sqasure ard w i l l give

us guaranteed distritution for both

Say

Software an3 m j w i as.

We

will recwer the true casts of ecNA~7t


fran distrihtion profits frcrm the

films.

N.

We w i l l prochvm a 60 seaad stard alone cnmexial for television, cable

arrl theatre that will be used to pramte the project before the release of

mtant Mania.

--

eg\; A 60 seaad spot utilizing the follubq elements


1

a.

Frencfi \lick

b.

Rmx Station r e o o facility


~

c.

Sony8s r m t r i t u t m s to the mmufacturer of the equip=& to prcduce

thescum3.

A spat

'Ihismay sim~"~thedifferenoe**.

R-errfi Lick recording in Rxer Staticn for the -Mania

h e .

W e warld like to

to yu.~the Say/psa--give

"Now sit back ard let UE J a w i f

ycll

hpxt cn w h t it is.

he&- the difference."

p
t warld you rather listed to when 1-

to feature film: video, cable

or television.
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ImFaLWJISING DEAL

Scmy will private label a "Tay E!mqiwinor

Statim line of e&prent:

a ) . Wevisim
b).

-S

ccnpahlent

c). Disc Player


d)

ViaeD Player

'Ihe above package w i l l include a free video

rebate f u l l price back to

--

of Mutarrt Wwda of whi&

Say

will

distritution.

' ' l b y arrl Stan will m i v e credits for complete line:

'lbtd will

be negotiated aftex we have an idea of Smy margins.

We want

touakeucmeyonlyif Sonymakesnmq!

W e w i l l also provide a m a r k e m package for a l l retail artlets that i


s naw

-m.

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Tcny w i l l ~ 1 u d e i n c q T i g h t A g r e e m D J l t t h a t ~ E q u i p n e n t r m s t : b e u s e d t o b e
EnE.

Scny will

xwxive nQeditswon all video, theatrical, telwisicn, and

cable ~ ~ / s C SystemT
n y

l i n y ard Stan will also ~ v e ~ t s c n a l l s y s t a n s u s i n g ~


sold to other film stw3ic6

- Also to be e

d after w
i
n
s are figured.

the x e s a q quiprmt in all shdios. We w i l l pmvide a one day seminar to

thirty cp2J7ators of the largest theatre

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Section 3189 Federal False Claim Act

S C g l y w i l l c n l y p a y f o r a p n s e s t ~ p ~ 6 O s e m n d s p a t s%myand
.
Rwet Station will utilize any anl all s e m i s

to help pxduce the spat

am3willallwreimbursaaentforcmlytruecostswithn>mkeup
e
.
x
l
wa l l of Tony's time ~&

11.

w i l l be free.

Rwet Staticn ard Rwet Productims I will receive a negotiated

w-

age of pzpfits fran all profits gwerated from the m x d m d i z i n g

e~

of the Scllypmdcck ard the sale thatmay result to other film st&ios
UtilizhqScllyequipoerRintheINSSystem.

m.
-\

W e will receive three sets of a full entertainment system

- Telwisicm,

VCR, Stereo, Etc. that is tcp of the line to help during the pm3ucticn
of the film to be utilized by Marcia, Stan and Scott.

IV.

Scsly

will have first right ard first refusal of all ard any d i s t r W o n

wets for theatrical, video, cable, and telwision qnticaticms.

We

willprcmiSenottOeventalkto~else~uefeelthatScnyis

not gokg to offer a fair and reasamble deal. W e w i l l give Scny a 5%

margin to gain a cmpetitive edge.

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='=F=F'==
m

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Section 3189 Federal False Claim Act

of the abave and all aspects of this Dedl is to let the

entities involved maximize their profits for their m

in film an3 nusic prakcticsl d

Scmy

distrihutim of both equiprent a d

e talents;

in mnufacturirq and wentxally


and later video and film

m m m .

Wid side mrkethg available after this pi*

thruqh chamrld anl =ia.

S a y w i l l b e o n m x d t s of the filmmrldwide BUS?

Rwer Staticm Digital to be shared with BIXS?

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JOINT VEKPURE PAKTICIPATICN

AM)

C~RIBVTICN

The undersigned, intending to be l e g a l l y b o d , i n consideration o f h i s


&ssicn

as a p a r t i c i p a n t in the j o i n t v e n t u r e t o be known a s "POWER PRO-

DUCTIONS I" md r e c e i p t o f a p r o f i t / l o s s d i s t r i b u t i o n share o f

% of

such j o i n t venture, hereby d e c l a r e s ard ackmwledges h i s i n t e n t to p a r t i c i p a t e


i n such j o i n t venture and hereby m e n a n t s and agrees to contribute the sun of

t~ t h e c a p i t a l of such j o i n t venture, which sum s h a l l c o n s t i t u t e

h i s i n i t i d c a p i t a l account i n s w h j o i n t venture.

T h i s L e t t e r o f I n t e n t i s e n t e r e d i n t o by t h e undersigned u p n t h e
/

following general d e r s t a n d i n g :

Power P r o d u c t i o n s I w i l l b e a j o i n t v e n t u r e t o be
formed under t h e laws o f Pennsylvania, having t h e
s p e c i f i c p u r p s e to invest ( l o a n ) its funds to MUPANIA
PRODUCTIONS,

INC.

to

finance

p r o d u c t i o n o f a motion p i c t u r e .

such c o r p o r a t i o n ' s
The j o i n t v e n t u r e

s h a l l receive f u l l repayment o f i t s investment from


MVPRNIA PROWCTIONS, I N C .

b e f o r e the d i s t r i b u t i o n o f

any p f i t s to any party. Thereafter, t h e j o i n t venture


s h a l l r e c e i v e 50% o f t h e p r o f i t s from such motion
p i c t u r e , o f which 85% s h a l l be d i s t r i b u t e d to t h e

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non-managing j o i n t v e n t u r e r s ( i n c l u 6 i i - q t h e unders i g n e d ) and 15% s h a l l b e d i s t r i b u t e d to S t a n l e y J.


C a t e r b o n e a s t h e Ranaging J o i n t V e n t u r e r o f Power
P r o d u c t i o n s I. The j o i n t v e n t u r e s h a l l have a r i g h t o f

first r e f u s a l to finance t h e next movie p r o d u c t i o n o f


MUl'ANIA PROWCTICNS , TNC. and/or 'XNY EXNGIOVI

The Lndersigned a g r e e s t h a t he w i l l execute an3 d e l i v e r a counterc o u n t e r p a r t o f t h e j o i n t v e n t u r e agreement (which s h a l l be c o n s i s t e n t with t h e


a b o v e g e n e r a l u n d e r s t a n d i n g ) and t h a t h e w i l l execute and del'iver all docw n t s required f o r t h e j o i n t venture to elect n o t to bF! t a x e d a s a p a r t n e r ship.
Contemporaneous w i t h the execution o f t h i s L e t t e r o f I n t e n t , t h e undersigned is c o n t r i b u t i n g 10% o f h i s t o t a l agreed c o n t r i b u t i o n , or $

'-)
-

W i t h i n f i f t e e n (15) dzys f r a n t h e d a t e hereof, time being o f t h e essence, t h e


-

undersigned s h a l l c o n t r i b u t e t h e 90% balance, or $

Such c o n t r i -

b u t i o n s h a l l be h e l d by S t a n l e y J. Caterbone a t i n t e r e s t , pending a m p l e t i o n
o f all n e g o t i a t i o n s ard execution ard d e l i v e r y of
PRoUlmIOLJS,

2ii

documents w i t h MUTASIA

m.

I f s u c h n e g o t i a t i o n s , d e l i v e r y , and execution &e not m p l e t e d within

t h i r t y (30) days a f t e r the f u l l c o n t r i b u t i o n is m d e , the e n t i r e c o n t r i b u t i o n ,


with all i n t e r e s t earned thereon, s h a l l be returned to t h e undersigned without

den&.

S t a n l e y J. Caterbone s h a l l be r e s p n s i b l e f o r c o l l e c t i o n , r e c e i p t ,

i n t e r i m i n v e s t m e n t and management, and ultimate investment or r e t u r n o f a l l

f d s c o n t r i b u t e d , and s h a l l be t h e Managing J o i n t V e n t u r e r o f t h e j o i n t
venture.

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The u n d e r s i g n e d h e r e b y a u t h o r i z e s and e n p k e r s S t a n l e y J. Caterbone to


n e g o t i a t e , e x e c u t e , and d e l i v e r a l l documents n e c e s s a r y or r e q u i r e d t o
implement t h e j o i n t v e n t u r e plr~oseand to take all o t h e r a c t i o n s and n q o t i a t e , e x e c u t e and d e l i v e r a l l o t h e r documents n e c e s s a r y or d e s i r a b l e t o
implement or e f f e c t u a t e the j o i n t v e n t u r e p r p s e .

SIGN
(L.S.) Date: W y

tWE:

-,1987

PRINP
NAME:

STREET

F.

ADDRESS:

STATE:

CITY:

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Section 3189 Federal False Claim Act

RICHARDC. FOX,PC.
ATTORNEYS AT LAW

1015 ROBERTS VALLEY ROAD

HARRISBURG,PENNSYWANIA inlo
RICHARD c

mx*

('ADMllTED ALSO M R W

May 20, 1987

M r . S t a n l e y J . Caterbone
FMG Advisory, I n c .
Eden Park 11, 1755 Oregon P i k e
Lancaster, PA
17601

For P r o f e s s i o n a l S e r v i c e s rendered i n c o n n e c t i o n w i t h
Power Productions I , i n c l u d i n g c o n f e r e n c e , p r e p a r a t i o n o f
Letter o f I n t e n t , and e x p r e s s m a i l i n g , .and follow-up t e l e p h o n e
check.

Professional Fee
UJP.S.

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8.95

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FLATBUSH
FIlMS,INC,
May 21, 1987

Mr. Stan Caterbone


Financial Management Group
1755 Oregon Pike
Lancaster, Pa. 17601
Dear Stan:
At your request I've investigated the requirements of the Completion Bond.
Bert Schneiderman of Worldwide Completion Services in New York
has given me a figure of 5$%, excluding contingencies, with a
50% No Claims Bonus. Since Bert also owns BonBon Payroll Service
he has agreed to waive the payroll fee if we use their bonding
service.
Requirements: They need copies of the budget and/or production
board, resumes for the director and producers as well as copies
of their contracts and any other production agreements which
have been completed.
Further they need to know when we will commence principal photography, editing location and if we intend to have a distribution
deal up front.

I spoke to Jerry Vandersonde and Bill Hudson of DeWitt Stern Insurance in Los Angeles, who were recommended by Worldwide. Since
I couldn't show him a budget or a script we did some educated
guessing and came up with a figure of approximately $75,000. The
Production Package policy should include: General liability, cast
insurance, negative film, faulty stock and camera processlng,
props, sets, wardrobe, rented equipment, extra expenses, third
party property damage, non-owned auto, Errors and Ommissions
including a one year bond and a minimum workmen's comp policy
for anything that is not covered by workmen's comp.

I understand you're going to Wildwood this weekend. We need to


house a crew of about 60-80, production offices, catering service.
We'd like to get as many free extras as possible and need high
quality promo type giveaways. For screen credit, of course. If
you have any such contact we'll need mutant dolls (500?) and if
you can help bring down location costs that would be great. I'm
talking about beaches, amusements, the pier, parking facilities.
Probablv k 7 ~ ' l . jh?r,-?:e t h ? t '- '.-; r e:.:t w e e k m e n w e czn talk in ..
- 1

person.
4334 STERN
AVE..
H E646
RMAN
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FLATBUSF LMS,NC,
May 2 3 , 1987

E l l e n Libman
Power S t a t i o n , I n c .
4 4 1 West 5 3 r d S t r e e t
New York, N.Y. 1 0 0 1 9

Ms.

Dear E l l e n :
B a r b a r a a n d I h a v e mapped o u t a s k e l e t o n s c h e d u l e f o r o u r t r i p
t o N e w York a n d I t h o u g h t I ' d s e n d i t o f f a n d see i f i t w o r k s
f o r e v e r y o n e e l s e . By t h e way, w e ' v e d e c i d e d t o s t a y i n N e w
York u n t i l T u e s d a y i n s t e a d o f Monday as o r i g i n a l l y p l a n n e d .
Thursday

A r r i v e a b o u t 3:OOPM. You h a v e t h e e x a c t t i m e
s i n c e y o u ' v e booked o u r f l i g h t s .
Please let
u s know i f someone w i l l p i c k u s u p o r i f w e
should take a t a x i .
W e ' l l come t o Power S t a t i o n a n d g i v e you a n d
Tony c o p i e s o f t h e s c r i p t a n d b u d g e t w h i c h w e ' d
l i k e you t o r e a d Thursday n i g h t . .

B a r b a r a a n d I h a v e a d i n n e r m e e t i n g w i t h a Director of Photography.
Friday

Leave f o r New J e r s e y i n t h e morning. D i s c u s s


s c r i p t and budget.
Meet Mayor o f Wildwood and b r i n g him a s y n o p s i s
o f s c r i p t which h e h a s r e q u e s t e d .
M e e t w i t h Steve Garelick, t h e P r o d u c t i o n Coordin b t o r o f t h e N e w J e r s e y F i l m Commission.
Look a t l o c a t i o n s .

Saturday
Sunday

S t a n C a t e r b o n e a r r i v e s i n New J e r s e y .
M e e t the
r e p from Maury's P i e r t o d i s c u s s l o c a t i o n costs.
Check o u t h o t e l s f o r c r e w a n d c a s t ,

Monday

L a s t m i n u t e d e t a i l s i n New J e r s e y .
L e a v e f o r Mew York a r o u n d noon.
M e e t i n g s a t Power S t a t i o n f o r f i n a l d i s c u s s i o n s
a b o u t s c r i p t , budget, c o n t r a c t s , etc.

Tuesday

Tuesday A f t e r n o o n

L e a v e N e w York a p p r o x i m a t e l y 4FY t o a r r i v e
i . c r ?..nc;i.i r , . ? b o u t $FbI.

.
.
C,lk
<~ i n planning your schedules.
- -.7
7

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S t Group
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Rarhara

PO+-T<

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Management Group, LTD


Oregon Pike

Lancarter. PA 17601

717-569-5555

Table O f Contents

)
.

Section I

Financial MaMgement

Section I1

The Project

Section 111

Distribution and Structure

Section IV

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Bart>ara Peters: D i r e c b r / W r i t e r / P r m h c e r

Barbara has directed many prograros such as "Matt Hcuston"! "Falcnn


an3 Iacey', , "Misfits", "-erst',
and l'Remulgton
Steele" to name a few. The film Barbara direct63 that convince3 Tony t o
hire her for this production was "Hummids Frau The Deepw. Mrmanoids w a s
made in 1978 for $ 980,000 ($ 20,000 under w
e
t and f a r days ahead of
schedule) and gmssed over $28 million in danestic and foreign theatrical
Sales. T h i s was
a period in time when the video market was in its
early stages of ~~~~t. A film released today that would gross $ 28
million i n 1978 dollars has wen greater putential for a much highex gross
w i t h the strong video market that is available now. What i n p m Tony
the most with E?a&aa1s
direction of IEsMnoids was her a b i l i t y to bring a
high degree of quality to a film on SG& a limited hdget.
Crest1', " C a q n q

6urw

Peter H o c k : Stunt Coordinator/Actor/Wmtmn


Peter's &ts
include f i l m such as, - 1
Places", "Stepford
Wives", "To K i l l A Cop", " G h c s t Bustersw, "FX", and a host of other Films,
Broadway, Musicals and Television Shows.
?here are many factors which mnixibute to a projects success. If you
w e r e t o take a cross section of themovie industzy to find w h i c h types of
projects w e r e most likely t o succeed, you waild find that w i e s in the
two to four million dollar range have rmch greatex chances of success than
wies in the ten to fifteen million dollar range. T h e reasons for this
are quite simple. A movie in the two to four million dollar range is a
hi@ enough budget t o produce a quality film but limiting the r i s k t o the
investor since it needs less of the market share to prcduce a profit.

Horrvr nwvies, from the investors point of view are the safest type of
m i e to finance. Horror movies have an dLmost cultist follwing. m e
type of audience t h a t attend homr 'movies rarely wait to see what the
critics have to say ahcut the movie. There is a fascination with gore
that this audiens would rather see than have described to them. The
overseas mket for movies of this genre are ~
0
~ In salmost
. all
cases the grass revenues frcan the theatre, w i l l be greater werseas than
in the d-ic
(US and CaMda) market. mis especially holds true for
horror wies.

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Over the l a s t few years, we have h e n seeing a trend for wwies t o have a
much heavier nusic score than in the past. The feelings that can be
invoked in an audience from audio are sanetimes as great o r greater than
the visual aspeds of a film. W i t h Bongiwils m i e n c e and past track
record, w e are assured of having one of the best quality sound tracks to a
mmie ever made. 'Ihis prcduction d d very well revolutionize the mavie
hhstq in t h a t this w i l l be the f i r s t time t h a t the sound track w i l l be
totally digitized from the set to the theatre o r home video. W h a t this
means is that the quality of the sound, w h i c h is typically extremely poor
i n a movie theatre o r hoane video cassette, w i l l n a be
~ trewrd~~~ly
crisp. 'Ihis new mavie sound w i l l be similar to the quality you would
expect fmm a laser disc. Nolmdlly the costs involved to prcduce a movie
w i t h this type of sound track would greatly increase the budget to a point
where the project wnuld have an increased element of risk. W i t h Rmer
Station, w h i & already has in place state of the art equipat, sane of
which can be f
a i n only one o r two other studios i n the world, this
sound track can be prcduoed for a fraction of the oosts that another
prcduction wmpany a
d have to pay. This greatly reduces the r i s k to
the investor to be able to pmduce state of the art audio a t a fraction of
the costs.

It is a very naturdL progression for a recording studio such as Fuder


Station t o evolve into an entertainment ccsnplex vhich includes the
production of films. Ewder Station currently has financing in place f o r a
$ 3.5 million video mix studio to be built next t o the recording studio.
Distrjlxltion ccwpanies are constantly looking for new scures of prcduct
to market. W i t h Bongiari's track record in the entertainment industry,
any product that carries the Bongiwi label should create a bic?dq
situation w i t h the distributors.
Advanced p b l i c relations work is cun-ently being done to set the stage
for negotiations w i t h the distribution companies. "BilIlxxmlt1, lVarietyll,
and "Box Office" have a
w
l
agreed to do articles on Bongiovi and the
mie. On April 30, ABC w i l l be airing a radio talk s h w w i t h Bongiovi
that w i l l air on 2300 stations to a total listening awiience of uver six
million people. "Fame, Fortune, and Romnce" have also agreed t o give

network 'N average.

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The home video m k e t has rapidly been charging the ptential mnrie
profits for the industry. A Nighbare On Elm Street was made f o r w e l l
under two million dollars and has earned New Line Cinana more than $24
million a t the domestic box office. In addition, after a short video
release, this pnxtuction has sold wer 3 million cassettes. In the past
videos w e r e sold only to video rental stores for approximately $70
apiece. Recently the price has been lawered to expand the market to the
but they my
general public. The video rentdl stores won't disa-,
beccone more like record stores that also rent their albums. A l l of this
translates into nmre p r o f i t potential f o r prducer and investor.
It is an extremely rare opportunity t o be able to get i n on the ground
floor in an offshoot of an already w e l l established e n t e x t a h t
campany. Any investor willing t o back this project w i l l have f i r s t right
of refusal on any future projects. The prcentages w i l l remain the same
for a t least the f i r s t two projects.

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Mependently praiuced motion pictures are a better investment tcday

than ever before.

1) Irmeased FBrkets: T h e r e is much wider distribution of motion


p i d a r e s today than ever before (i.e. Pay TV, Cable TV,
videmassettes, satellite transmissions, etc. )
I P r e s a l e 1 contracts which bind the buyers (i-e. networks, pay W ,
foreign distributors, etc. ) to specific payments a t a future date,
this insuring return of capital and, in same cases, a profit before
the film is released.

2.

Inv-t

)
.

Structure:

Ihe producer and investor form a limited partnership for the purposes
of pmducing one o r more motion pictures. The investor receives 100%
of the net profits u n t i l reaqmmt, after which the s p l i t is 50-50.
Profit participation of others (actors, director, writer, etc.) oomes

out of the pmducerls end.

Ihe producer secures the services of a director, principal actors,

and a writex.
Presale Deals:

me producer can negotiate presdle (preproduction) arrangements w i t h


distrilmto~~
networks,
,
pay TV, merchandisers, etc. Whereas such
a?=rarqements can minimize the d-ide
risk, they can also mit
the eventual profitability of the film.
Risk Fadors:
It is very d i f f i c u l t t o d e t a m b e exactly how much of a r i s k one runs

in financing a theatrical film. Adequate statistics are hpssible


to find. S h a n ~ Sexvices
t
of b s Angeles a four-year-old study w h i c h
revealed that 60% of a l l films released make money. This study,
hwever, did not include long range TV syndication (foreign and
domestic) revenues, and w a s made before Pay TV and video cassettes
lxmnks significant additional markets. chmical Bank of New York
reports that they have never l o s t money on film financing.

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Another risk is the possibility that no distributor will want to


release the picture. That is why some independent producers include
a provision for distribution financing in their investment
agreemnts. If worse comes to worst, producers can distribute the
film themselves. (Notable exanples are "Billy Jack" and "Benjil*.)

There may be prcduction catastrophes that will delay or cancel


production once it is under way. m-oduwill carry various forms
of insurance (including completion bonds) to at least repay whatever
funds have already been spent.

If a distribution arrangement has not already been made, the producer


now secllres such an arrarqement. If the picture is good, it is
possible to negotiate a much better deal than could have been done
earlier. On the other hand, the prducer owld have trouble securing
the kind of distribution cormnitment wanted. The main factors here
are haw rmch money the distributor is willing to ccmunit to selling
the picture, haw much influence the producer can have on the
marketing e g n , and the distribution fee. Sametimes small
distributo~sare able to give more time and attention to independent
pictures atid offer better terms, but the producer may have to provide
some digt-xihtion expmses.
Cut of gross damestic box office receipts, the exhibitor (retailer)
usually subtxacts his fixed costs and then receives 10%. Out of the
remining 90% gross film rentals received by the distributor
(wholesaler), he usually recoups all or part of his asts plus a
distribution fee of 20-35%' then passes the reston to the
producer/investor. Terms of distribution deals vary wnsiderably.

Box office d p t s , hawever, only account for a part of the


prcduoer/investorls revenues. As the enclosed figures &ow, the
ancillary markets are at least as significant as the domestic theatre
box offie. TV syndication, for instance, can continue to bring in
revenues for the next twenty years.
Demand for met:

W y ' s supply comes nmhere near to matching real demand. At the


present time, there are over 18,000 theatres in the United States.
It can readily be seen that roughly 400 films prcd1.1~4
and rated last
year did nut begin to meet their needs. 'Iheatres are campelled to
shm any type of film they can obtain to keep their doors open.

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To date, independent producers are respnsible for 72% of all films


made world-wide. The domestic figure is 62%. me inaependent
producer has three primary options regarding distribution. These

include the sale of the film cutright to a major national


distributor, their merchandising of the film by the production
mmpany i t s e l f , or the use of smaller regional mb-dktr&utors who
may p m t e the film i n their respective geqrapkicdl areas.
Distribution of films often relies on a l l three methods to one degree
or another.
Another market, television, can consume nearly every film that has
been, or is p-tly
being p r o d u d . If each of the three mtmrks
would show only one film per night, they wald need wex 1,000 films
per year. In Lns Angeles area alone, there are nearly 10,000 films
aired each year in a combination of local and network viewing time.
Many films are sham time and time again because there are no llew
films to replace them.

1
. .

. .

Today, virtually every film of quality has residual value in


television, either by outright sale o r by term licensing. me l a t t e r
is preferable since it allows the production company t o retain
ownership of the negative. me time lag between theatre release and
TV sale has dimhished fram seven years to an average of 18 mths.
However, sane major features such as "The Wizl' have heen sold to TV
before ccwpleting a f u l l year in theatrical release. me trend seems
to be taward purchase of 'fresh' films, and the outlets a p p a r
willing to pay the higher costs involved
Because of the great demand and the outrageously c a p e t i t i v e attitude
that penades the networks, handsome deals are being consunnnated
before the production has been ampleted and then, by preamangenent
its
with the producers, hold the film until it has -let&
theatrical run.

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Section 3189 Federal False Claim Act

APPENDIX

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Breakeven for Limited Fartners:


Based on grass revenues of $ 11,200,000 collected fmm 1st and 2nd
t h e a t r i d runs

1st run t i c k e t costs of $ 6.00


2nd run ticket costs of $ 5.00

$ 300.00 G r c s s per show

$ 300.00 per show X 1000 houses

$ 300,000 Gross

$ 300,000 X 14 days

= $ 4,200,000 Gross

50 people per show

x $

6.00

2nd Run
50 people

per show X $ 5.00

$ 250.00 per shm X 2000

= $25O.OOGrosspershow

hauses

$ 500,000 X 14 days

$ 500,000 Gross

$ 7,000,000 Gross

Total 1st Ibvl

Total 2nd Ibvl


Total

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Forcast A

Total Box

office Gms

$ 11,200,000

15%F~~ me.,-

1,680,000

g 520 000

2,856,000

6,664,000

Less : jy,"em Capital

4,000,000

~~t
profit

2,664,000

1,332,000

1,332,000

199,800

mtion pic-

-fit-

30% ~ i ~ i - ~
F~~
k t i ~ ~

prodUcers

split

50%

Investment Ccrmpany R e t u r n
: General partners S p l i t

-------

15% -----

These are onlv umiections and are f o r informational pwmses only. Any
investment made. based solely on these u r o i e d i o n s would be unadvisable as
actual uerfonnane could vary cyreatly.

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Forecast B
Forecast B is based on a total box office gross of $ 28 million
A film that prcduces a theatrical gross of $ 28 million can be expected to
gross at least that much from TV, Cable and video markets. Depnding on h m
distribution a-ts
are negotiated we can expect 50% to be net profits.

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Forecast B

M~15% F~~ meatres

--

Motion Picture Profits

$ 23,800,000
$

Less 30% Distribution Fee

4,200,000

7,140,000

$ 16,660,000

T.V., Cable and Video Net

-------

$ 14,000,000

Less : Investors Capital

F?xducers Split @ 50%

$ 10,670,000

Investment Companies' IWxm

$ 10,670,000

Less : General Partners split @ 15%


Investors Return

4,000,000

1,600,500

9,069,500

These are onlv proiections and are for i n f o m t i o ~ lm x c e s onlv. An


investment made. based solelv on these ~roiectionswould be unadvisable as
actual cerformanoe could vary qreatlv.

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You Oughta Be In
Pictures!
I by Alan Talansky 1

here's explosive growth occurring in the motion picture industry, and growth should always he
music to any investor's cars. -Hut
movies!" you wy? It's time to put
aside your images of Tinseltown and
'Heavm's G:~te,"and to take another
look at an industry with some new,
sound invest~ilentpotmtial.
There's risk in any investment, of
course, rvc-n in real estate - the investment area on which many firms
originally built their reputation and
success. In real estate, it's a matter of
how carefully you assess a variety of
influential factors and how you struclure the deal. Motion pictures are
much the s;arne. You've got to look
for potenti:~l.

fashioned profit: an ideal solution for


post tax-reform era.
The key here is undersranding how
much the industry has changed. The
tyranny and fickleness of box-office
receipts is no longer. More people
around the world are viewing more
films than ever before. but not necessarily in the theatres. Consider, for
example, that there are only about 300
feature films made every year, of
which about half could be considered
"major." Now, compare that with the
number of movies a cable outlet, like
Home Box Office,
shows in a single
duy. Eight? Then.
take a look at the
shelve?;o f your locxl
3

ucts to & financed, and [he second


the structuring of the deal.
in wlecting the pn)duct, success
u s ~ J [ l y found in tilinking small, ~h
larger [he budget in a film, the great,
[he risk,
[he $50 ,,,illion antic
pdted blockbusters and seek out. ir
stead, the more modest undenJkint
of smaller, ambitious film produc
tion sources. A,,
example i
Island Pictures, a
small, in
dependent film production and di>
tribution conlpany for which, la,

-,

N d guile a btochburrcr: lslund3 - N o M . y ' s Fool.' slurrim>


h'osunnu Arqurtlr und Eric Robens. wrr u more modrmrc succerr
e ~ will1
m Pulil2er Prtm winning phyw(yhr 5elh Henley uniting. Phok

muriesy lsland Pichrres.

video rental store, year, a $7.4 million equity placement


a n d the crowds was arrsngrd. lsland Pictures is an rflooking them over, ficient operation - unlike some of
and a Mule Filmwohs.
and you begin to the more notorious larger Hollywood
understand the di- studios - and it knows how to
mensions of growth.
recognize quality.
When the motion picture industry
Of course, just as not every piece of
Litrle known lsland Pictures capwas first examined as an investment
real estate is a great investment, every tured a great deal of anention in 1985
vehicle a few years ago, the expeclamovie isn't bound to turn a profit. with two extraordinary films - "Kiss
j tion was that there was potential for But, there are two factors that h ~ v e of the Spider Woman" and "Trip to
tax deferment. Wh;lt was found, howproven ro be the critical difference in Bountiful." It was the first time in hisever, was a surprisingly rich source of
creating a sound investment vehicle. tory that one production house could
income
for investors
good,CLAIM
oldof the prod- Thursday
ThePage
first 176
is the
claim credit
for both 15,
the 2016
Best Actor
EXHIBIT
U.S. 16-4014
CIVILfrom
RIGHTS
ofselection
646
December
Success o m a shoesrrlmg: ~mducer/dix~clor
spike Lru fcmrler) turned

a puttry i l 7 5 , O ~ W p ~ u c r i obtrdwt
n
for "She% C<,tla HUM R - i~ilou
$7 millio~rgrr*u.irr#suqriY hi,. Co-slursjulrn Can',nb T&l
(lejll utrd
~ r t . ~ I Ww.1.Photo courtesy Forty ~ c r s s
~sd,,ro,td Hicks f"gkr)

Property of Advance Media Group

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SPRING 1987

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

l h e i n f o m t i o n s e t f o r t h herein w a s obtained from sources which w e


believe reliable, but w e do not guarantee its accuracy. Neither the
information nor any opinion expressd constitutes a s o l i c i t a t i o n by us of
the pwchase o r sale of any securities o r cmmtxlities. 'Ibis package is
f o r informational puzposes only, to gain an indication of interest in this
project. Financial Mamgement Group Ltd. does not endorsed and has not
been contracted by mer Station to p-te
this projed. Any questions
regarding i n f o m t i o n contained herein should be W e d t o Stanley J.
Caterbne o r Scott Rokertson.

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Section 3189 Federal False Claim Act

1
In
u-

n u m w

newsletter

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Welcome
FMG would like to e x k x l a hearty welcome to Jon Gruh=r & Craig mseli.
Principals in the law firm of &see1 Krafft G n h r & Huber. 'Ihey w i l l
mintain office hours here daily f m 1 t o 5 EM and w i l l be part of our Legal
Referral system. --MICHAEL HARllEW

Parkinq

euplayees please park in back of ccmplex f o r o m client's convenience.


&
FMGl
J
?his means both you and me. -ROEBU! XAUFEMAN

Fhone Messases
If vou take messaaes a t niaht lease leave the nssaaes in the circular on the
---.
front desk.
We -are lo&
&o many afi%r-haur messages fram clients due to
lack of c o o ~ t i o n . --T(D=
KAUFEMAN
---

lb F I G Frcducers f o r A ~ r i l
1. P e t e m m
2. 'Ibm 'nlrlxr
3. P. Alan Loss
4. Harry Radcliffe
5. RabertKauffiMn

My sincere congratulations to our top prcducers and award w i n n e r s .

--ram

KAUFFMAN

Win A Wiv lb San Fancisco


% w i l l be sprmring a t r i p to San Francisco for a R-iday, Saturday, Sunday,
and Monday i n September. The contest w i l l run on a business sutPnitted basis
fmm May 15 through August 15. Your g w l for t h e t r i p w i l l based on your first
quarter total with d i n minimunrS.
IfyourfirstauarterGCIwas
0 - 20,000 then vour seal is 20,000
20,000 - 29,999
30,000 - 49,999
50,000 - 74,999
75,000 - 99,999
99,999 +

G c d

Luck. See you in San Rrancisco!

--ROEBU! KAUFEMAN

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 179 of 646


Property of Advance Media Group

30,000
50,000
60,000
70,000
80,000

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= -7
-

Section 3189 Federal False Claim Act

-'_'
FMG Advisory

m
=
I

Eden Park 11. 1755 Oregon Pike

Lancarler, PA 17607

717-5694100

XUL * I . L T I M Z N T L l W . L1D

May 28, 1987


Ms. Dore c. Valavanes
Shirk, Reist, Wagenseller and Shirk
Post Office Box 1552
Lancaster, PA 17603
Dear Dore:
Enclosed are the completed files on the Umiker's Power of
Attorney.
I have been extremely busy and would like you
to distribute the copies to those involved.
Thank you so much for your help with this.
Sincerely,

SJC: lmk
CC

encl

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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May 29, 1987


Ms. Ellen Libman

Pcwer Station, Inc.


441 West 53rd S e e e t
N e d York, N.Y. 10019
Gear Ellen:

L e t ' s try it again. This time w e are scheduled t o leave IDSAngeles


on Thursdzy, Jdii 4 & i ret3 Ias Arzjdes cz TJ&-,
Z&w 9. 3.e
follaJing is a rough s c h d l e .

m & Y

Arrive atout 3:OOR.I. Please l e t us laww the exact


f l i g h t information as w n as possible so we can
arrarrge *rt
transportation here. Let us Iuxw
if sureone w i l l pick us up in New York o r i f we
M
d arrange tr-rtation
to F a e r Station.
Also let: me -1
what btel we w i l l be hoked a t
in New Y a k so we can leave t h a t information here.
W e ' l l corne to Power Station for any discussion
regarding the s c r i p t &/or budget.
Barbara and I have a dinner meeting with a Director
of Photqraphy.

Ieave for Ned Jersey in the mrning. M e e t w i t h


Steve Gorelick, the hrcduction Coordinator of the
New Jersey Film Carmission. Look a t locations.

in New Jersey. Meet the rep


fmm Maury's Pier to discuss location costs.
Check out btels for crew ard cast.
last m i n u t e d e t a i l s in New Jersey.
Leave for New York a n x d m n .

3-Y
Y-

S t a n Caterkon-e arrives

Meetas a t P a e r Station for findl discussions


about s c ~ i p t ,budget, oatracts, etc.
Additional ueetins in r r p r n i q if necessary.
Ieave New York a p ~ o x i m t e l y4PM to arrive Los
Angeles a b u t 9R.I.
\

Please let me kmm if ycu have an:! additions or changes. I ' l l probably
talk to @u a9a!,n c-;.!,>.TY%:J.

.. <&"., .

c:t_::

Barbara Peters

%7=ds,

Arlene

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


PageA
181
646
Thursday December 15, 2016
4334 STERN
m..of
SHERMAN
OAKS.CA 91423
Property of Advance Media Group
Page 2287
of 2953
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(8161
995-3417

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FlATBUSH
FILMS,NC,
May 29, 1987

Mr. Stan Caterbone


554 Berkley Avenue
Stone Harbor, N.J.
Dear Stan:
I'm enclosing a first draft of the screenplay, complete with
typos and a couple of other errors. (For instance, Kennie
Queens is also Kenny Peterson.)
This
well
very
talk

should give you sufficient time to study the script as


as the budget, which I'm also enclosing. It would be
helpful if you could have notes prepared which we can
about when Barbara and I are in New Jersey next week.

&
rlene

,avidson

4334 STERN Am..SHERMAN OAKS. CA 91423


Page 182 of 646
Thursday December 15, 2016
1818) 995-3417

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TIME
S Y S T E M S
MONTH

,-d u g

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YEAR

1487

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Section 3189 Federal False Claim Act

RICHARD L. TRUMP
P.O. BOX 557
SKIPPACK. PA 19474
Bus. (215) 489-2447

June 3, 1987

Mr. Stan Catcrbone


Financial Management Group
1755 Oregon Pike
Lancaster, PA 17601

Dear Stan,
Enclosed is Stock Certificate number 28 that you requested
to be returned to you.
I am concerned about the $2,000 purchases of FMG stock
which I placed via a money order for Michael and Melissa
Metallo.
When registering and printing their certificate please
use the following information:
Michael C. Metallo and
Melissa J. Metallo
Social Security. Number 027-34-9917
Address:

1401 Rising Wind Court


Silver Spring, MD 20904

Please let me know if there are any problems with having


the certificate issued.
Sincerely,

&,&
&zU/&@
Rick Trump
RLT/tpp
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS


CLAIM
Pagethrough
184 ofHibbard
646 Brown & Company,
Thursday
Securities
Transactions
Inc. December 15, 2016
Property of Advance Media Group

2290 of 2953
APage
Registered
BrokerfDealer
Member NASD & SlPC

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Section 3189 Federal False Claim Act

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Section 3189 Federal False Claim Act

June 1 2 . 1 9 8 7

Mr. Stan Caterbne

Financial Manag-t
Group
1755 Oregon Pike
lancaster Pa. 17601
Dear Stan:
As you requested here's a schedule for hroject 441 (mrking t i t l e ) :

PRE-Pmmm
Ju~le28-July 11, 1987
July 12-Sept 5, 1987

POST-P~m
Novanber 1-January 30,1988

New York
New Jersey

2-

New Jersey

8 5 day weeks

8weeks

New York

In order to s t i l l get the film made this season we've got to speed everythkq
up. W e originally planned four weeks of pre-production in New York kt t h a t ' s
ID longer possible. I f we start J w 28 we've got only ten weeks to get the
mtant effects going and then w e ' l l have to schedule mutant scenes later in
the film i f t h y aren't ready.
This schedule also takes us to October 31 for the enl of the shoot, which means
we've got to schedule exteriors f i r s t , leaving the interiors f o r later in the
went of bad weather.
S i x e we're on such a tight M u l e I can't r e d l y hreak

down the

costs for

you because it w i l l a l l start ha-

so quickly, We'll inmdiately have a


NaJ York office, per d i m , hotel an3 contracted fees for Barbara and myself.
W e ' l l hire a casting director, p d w t i o n manager, production coordinata~a d
location manager, get the mutant effects started and begin hiring key personnel.
If p check the m e t p ' l l see the a c M m m h r of weeks of aployment
for crew. mere w i l l be legal fees for preparing mntracts. During those +XJ
weeks ~ ' 1 twpefully
1
do rmst of the castiq.

4334 STERN
AVE.,
SHERMAN
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Page
186
of 646 OAKS.CA 91423Thursday December 15, 2016
Property of Advance Media Group

(818)of995-3417
Page 2292
2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

w i n g the eight weeks of pre-producLLion in N w Jersey w e ' l l be mrkixg


w i t h the art director, c o s m e designer, s e t decvrator, building s e t s ,
tying d m locations, e t c .
A week before shooring the f u l l crw w i l l be prepping.

a r r i v e ~ a tabout t h a t tire ard


e n t i r e shootinq period.

hill

The editor w i l l

be working on a rough cut during the

A t the close of p d u c t i o n Barbara, the editor and I w i l l m e back to


New York f o r a three mnth editirq period a t the end of w h i c h we w i l l

deliver the finished film, incllxlinq distributor's requirements ard t h e


MPAA ratinq.

As you can see this w i l l be very tricky but I s t i l l think we can do it


i f Barbara an3 I are in New York no l a t e r than June 28.
Hope this helps.

Regards,

cc: Tony Bongiovi


Barbara P e t e r s

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 187 of 646


Page 2293 of 2953

Thursday December 15, 2016


10/19/2006

PERSONAL FINANCIAL STATEMENT


US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

IMPORTANT: Read these dlrsctions baton cornpletlng this Statement.


,

n r o u . r m ~ ~ ~ ~ a n a l n d ul n~v w
~ rro~m ar v~m~e i n o a , a ralympanl a n a r n r r o m s m ~ r w c r a r u l m ~ n u n c a s ~ ~ t ~ d ~ m m a r ~ ~ ~ ~ ~ ~ ~ ~ ~ l m ~ s p a y m c n
C m p ~ ~mb
e S T ~ S 1 and 3
0 n y w are .pply4ng la p n t cradftrlnn armnn palm, cornwe *I~ ~ t r pfaamnp
n r
nlamalrn n ~ s c t ~ a2 n.mr inr on8 awlcant
nw.rerorna,v~srsou.~uln.raylw~ncm~,~Uml.
C N ~ s Y P L X ) R a - , . I . ~ ~ . I . ~ . a m m . l n C O m m a I ~ ~ ~ ~ a m ~ e r w l T O n u ~ n ~tor
~ ~r ~c p a l ~ i d ~ h e ~ r e
,bq-tad.
S ~ C I M I . (10n0,~pnpm~ammn
%clan 2 a m IM D~Mal,mny. s
-.
a* mamom- paymantr a nca issatr sou i r e i c h ~ q
J 11ns s.I-~
rehta. to mu plw#ann,dma -msdnandolnr
p r u n l r l I h r q s ) a cmpaatm(r). compbce S % l m 1 an0 3

cmyMe~~

Salary banuses 6 C

O~~~SSMS

Dlvlaenar
Real estace t n c w
Otner mcome W m m ~CNU
.

or

PERSONAL INFORMATION

.IS-

SOURCES OF INCOME FOR YEAR ENDED

Do yw nave a w

, me 01 ereculor

Are yw a partner or olllcer m any otter venlure? 11 so aercrlbe

ml-

Are you mlgatea IO pay Ymony cnda w r p w l or separate rnalntenance


paymenls? 11 so aescrme

.*ar*llop~.-~w~onmi.l.blohr~

-~r.o.*tw-muowdm)

~ , any
e assets pledgeaamr Inan as dercratlea on scneaules? II w, aescrabe
TOTAL

CONTINGENT LIABILITIES
DOyou nave any conlmgent lhabl8ller~11 w, aercntle

Income tax selllea lnrougn (date)


Are you a delenoant in any rut's or kgal acl6ons7

As onaor~erCD-make, or guarantor?

Perma1 DlWl accounls carved a1

On leases or cmlraclr7

S
L-1
cla~ms
S
OlMr specoal aebl
S
M
w
n
l
01 cmtsned mcome tax loens
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIMS
Property of Advance Media Group

739 REV 3/78

Have you ever men declarea b a h p t ? IIw, aerclb?

Page 188 of 646


Page 2294 of 2953

Thursday December 15, 2016

(COMPLETE SCHEDULES AND SIGN ON REVERSE SIDE)

10/19/2006
n -Y

US District Court For The Eastern District of Pennsylvana


Section 3189 Federal False Claim Act
SCHEDULE A U.S. GOVERNMENTS h MARKETABLE SECURmES
NumDn 01Shares
a Face V a f w (BaMsl

Descr~ptm

Ale Thaw

In Nam 01

Marha
Valw

Piedpea?

SCHEDULE B NON-MARKETABLE SECURITIES


Descr~plm

Number 01 Snares

Are There

ln Nams 01

Sovrce 01

Value

Valve

Pleapea'

SCHEDULE
C PARTIAL INTERESTS
MUtTlES
- ~- - IN REAL
~ESTATE
-

Thlle 10
N01

Address 6 l y p

01Prooeny

Dale

5 01

Ma~kel
valw

Cost

~*nerstnpAcwvea

Mongape

Mrfgagc

Mslwtly

Amunl

SCHEDULE D REAL ESTATE OWNED


1

Dale
AcqusreO

Tdle I"

Address 6 Type
01Rwuly

Name 0 1

Market
vale

MMQaX

MOU
Y
II

SCHEDULE E LIFE INSURANCE CARRIED. INCLUDING N.S.L.I. AND GROUP INSURANCE


Om- 0 1
PMcy

Name 01
Insur-e Ccm~4-y

Benefr~ary

Face

Amml

Cam Surrna

Po1.c~

Value

L-I

I
t

SCHEDULE F BANKS OR FINANCE COMPANIES WHERE CREDIT HAS BEEN OBTAINED

The Informdlon c0nlain.d i n this s t a t m n t is 0rovid.d for tha w m s e of obtaining, or maintaining credit with you on behalf of
undmlgwd.orp~nona, Urms orcorporstlona i n who" b.hantha undenigrvd may aith; uvaraily or jointly with others. e n u u t a 8 guara
in vour favor. Euh undomiand undustandr mat vou am nlvlng on me infomutton providsd h r e l n (lndualng t h designation made a1
o w ~ - h i ~ o i ~ r n p . ~ind.cldlng
)
togmnt or contiriw cndn.
undenlgmd n p n m t s and warrants tttmtth information prov1d.a is t
and comoietand that vou m w consider thIsstrtam.nt ucontlnuln. l o k trueand correct until a written notice of a chsngb i S given toyor
the undarslgned. You .n mtlhorlzed to maka aU inqulrta you dwmnaCa.ury to verlty the accurvy of the statements made herein. an<
detnmlne m y l w r cmdlhrorlhinu. You am authorized to answer questions about your &it
exprlenca with melus.

Euh

Sigmlure (I!ldl#~Oual)

S S No

Dale 01 B~rtn

Slgnalure (Olner Party)


S S No

Date Sognea

19-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 189 of 646


Page 2295 of 2953

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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

June 15, 1987


Mr. Stanley Caterbone
FINANCIAL MANAGEMENT GROUP LTD
1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:
It was good speaking with you - - at last - - after our message
go round. Enclosed are the materials you requested. I expect that
this should reach you by Wednesday.
As I indicated to you, Hunterdon County is the area I have tareeted
for development in New Jersey. InteretaLc 78 was completed this
year and tied Hunterdon County into a 25-35 minute commute to many
major corporate centers in New Jersey, i.e. Morristown. Princeton
and New Brunswick. After completing a survey of the area, I am
satisfied with the resulting information. I have been dealing with
local brbkers with a view towards locating both residential and
commercial sites for development, several properties are under negotiation
at this time. These projected investments are well leveraged and
offer impressive cash-on-cash returns.

I look forward to discussing these opportunities with you.

SW:wc
Enclosures
Via Express Mali

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

0
C O Group
U N T Y
Property1of 2
Advance
Media

R O A D

Page 190 of 646


IPage
E 2296
N A ofF2953
L Y

Thursday December 15, 2016


N l

O I h 7 O

2 0 1

5 610/19/2006
8 h 8 7 5

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PLAN

DIXX

UEEINGS
-T

RIINNG-

El 4101

RtY 1-85

P*YSEAL
S.R,lU*L
-MIL"

PRlNTED IN US

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 191 of 646


Property of Advance Media Group

WNTU

Page 2297 of 2953

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LAW O F F I C E S

SEIDEL,GONDA, GOLDHAMMER& ABBOTT,P. C.


PATENT A N D TRADEMARK A T T O R N E Y S
S U I T E 1800 T W O P E N N C E N T E R P L A Z A

P H I L A D E L P H I A . P A . 19102
A R T H U R H . SEIDEL

T E L E P H O N E 12151

J O E L 5. G O L D H A M M E R
MlCMAEL P ABBOT7

22 J u n e 1987

TELEX

845

CABLE

GREGORY 3 . LAVORGNA
DANIEL A . MONACO
ROQEFlT H

WAMMER lil

THOMAS J

DURLlNG

GROUP I , I I b

EDWARD

GONDA

O F COUNSEL
SYLVIA A. G O S Z T O N Y I

S C O T T J FIELDS
8*R*

STANLEY H . Z E I H E R

ONLY

Mr. Stanley J. Caterbone


FMG Advisory, Inc.
Eden Park I1
1755 Oregon Pike
Lancaster, PA 17601
RE:

Service Mark Search f o r


"FINANCIAL MANAGEMENT GROUP"
Our File: 7351-G

Dear Stan:
As requested, I have completed a search in respect t o t h e above-referenced
service mark. The results of t h a t search a r e annexed hereto.
I t is my understanding t h a t t h e mark "FINANCIAL MANAGEMENT GROUP"
is used for services of providing a complete package of legal, accounting, real estate,
insurance, stock brokerage, portfolio management, market timing, financial planning,
mortgage banking and investment banking t o business firms.
Based upon t h e results of t h e enclosed search, it i s my opinion t h a t you
can adopt and use t h e mark in this region of t h e United States. I t is a close question
a s t o whether t h e mark i s federally registrable. Moreover, you may a n t i c i p a t e difficulty
in using t h e mark in California, Arizona, Georgia and Illinois. The possibility of opposition
t o your use of t h e mark also e x i s t s f o r t h e states of Louisiana and Oregon. T h e reasons
for my opinion are explained below.
If t h e only consideration were federal registration, then I would s a y t h a t
t h e mark is probably registrable. The closest registered mark is "FINANCIAL
MANAGERS SOCIETY". T h e marks differ only by t h e last word, and "SOCIETY" and
"GROUP" arguably have a similar connotation. But your services a r e fairly distinguishable
from those of t h e registered mark. Thus, on a federal level, t h e major objection t o
an application t o register may b e a n argument t h a t your mark is descriptive of t h e
services being offered. Descriptive marks are not registrable unless by virtue of their
long use and heavy promotion t h e y have become distinctive. However, t h e r e is at l e a s t

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

5549

,!I

(1930-19851

NANCY A . R U B N E R

b NI

1 1 6

SIPAT

12151 5 5 8

TELECOPIE-

S T E P H E N J. M E I E R S
AMANDA LAURA NYE'

'DC

see-e3e

Page 192 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SEIDEL,GONDA, G O L D H A M M E R& ABBOTT; I? C.


Mr. Stanley J. Caterbone

22 June 1987

-2-

a f a i r argument t h a t "FINANCIAL MANAGEMENT GROUP" i s merely suggestive, not


descriptive.
The more difficult problem arises in respect t o t h e f a c t t h a t t h e r e a r e
others using "FINANCIAL MANAGEMENT GROUP" o r slight variants thereof. See
for example California s t a t e registration No. 14070 f o r "THE FINANCIAL MANAGEMENT
GROUP". S e e also t h e listing of four companies under t h e n a m e "FINANCIAL
MANAGEMENT GROUP" in California, Louisiana and Oregon. Moreover, t h e r e a r e
"FINANCIAL MANAGEMENT GROUPS" listed in t h e telephone book for Atlanta, Georgia
and Chicago, Illinois. Whether o r not these o t h e r users remain in business, and whether
o r not they o f f e r services competitive with yours, i s nearly impossible t o evaluate on
t h e limited f a c t s available from t h e report. Thus, t h e risks exist t h a t should you e n t e r
into one o r more of these companies geographical market areas, they may a s s e r t a claim
of prior rights.
If, on t h e o t h e r hand, you will not a s a practical m a t t e r be trading in these
market a r e a s f o r t h e foreseeable future, then I recommend proceeding with a n application
t o register t h e mark. If w e are successful in obtaining such registration, then your
right t o use t h e mark can ultimately become incontestable if not f o r t h e prior users
market areas, then f o r t h e r e s t of t h e United States.
Please f e e l f r e e t o call m e if you have any questions concerning t h e
foregoing.
With kindest personal regards, I a m
Sincerely yours,
SEIDEL, GONDA, GOLDHAMMER & ABBOTT, P.C.

5. 2
3 c~4?J,0~Ym

. GOLDHAMMER

--*-\

\
.

JSG:md
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 193 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STANLEY CATERBONE
Eden Park 11, 1755 Oregon Pike Lancaster, PA 17601
569-4 10 0

June 22, 1987

Dear Dr. Umiker:


Just a brief note to let you know you
should be receiving the distribution from
your IRA'S with IDS in several weeks.
Please call us when the money comes in
so that we know everything is in order.
Also, due to the growth of FMG and my
duties, I have found it necessary to hire
a Director of Client Affairs, Todd Dellinger.
Todd will
handle
any tactical details
of your accounts, while I will continue
to
look after
the strategic planning.
More details later.
Any questions, please call myself or Todd.
Thanks,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 194 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

DATE:

JUNE 23, 1987

10:OOam

PLACE:

FINANCIAL MANAGEMENT GROUP, LTD


1755 OREGON PIKE
LANCASTER, PA 17601

SUBJECT:

SCHEDULED MEETING O F STAN


CATERBONE, LARRY RESCH,
AND CARL JACOBSON O F ISC AND
UNITED CHEM CON

Upon the arrival of Mr. Larry Resch, Stan Caterbone met him in the lobby of FMG, Ltd, at which
time Larry Resch said "Carl Jacobson could not attend, we had t o suddenly fly him out of the
country early this mourning?
The meeting was started with the subject of the fmancial difliculties of United Chem Con and
possible alternatives. Larry Resch specifically addressed the possibility of moving the operations
of United Chem Con to another facility, with specific regards to the Renevo Plant. Larry Resch
specifically addressed the financing capabilities of Stan Caterbone, along with possible management
opportunities.
Larry Resch also gave financial statements and documents to Stan Caterbone for the latest fiscal
year for United Chem Con.
Stan Caterbone went on to allege that United Chem Con had embezzled some $15,000,000 from the
United States Government for contracts that contained improprieties.
Stan Caterbone also alleged improprieties of International Signal & Control and James Guerin,
with specific regards to its role in the United Chem Con, and its business activities a s related to
government contracts.
Stan Caterbone noted that he, a s a legal shareholder of International Signal & Control was
concerned about improper business activities.
Larry Resch was taken by surprise by all of the above.
Stan Caterbone became quite upset by the evasiveness and the lack of specifics with regards to
Larry Resch's conversation.
In efforts to thwart any further communication from James Guerin, United Chem Con, or
International Signal & Control, Stan Caterbone demanded a retainer fee of $10,000 before anyone
contacted him again.

NOTE: It should be noted that it was quite evident that Larry Resch was merely acting as a
messenger for James Guerin and or others, and Stan Caterbone has continued a relationship with
Larry Resch that was not reflective of any improper activities or misconduct.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 195 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PLAN

TtME %PEN1

arm
WET-

RlWC-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 196 of 646


Property of Advance Media Group

Page 2302 of 2953

SPIURU-

l V P l RmP

ULNW
RnSCII

rWLI

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana


( i T H O Y A 5 Y1LLFR
DOMALO R. W A I S F L
R I C H A R D Q. LEFEVER

CR1C L 8 A 0 5 S Y A N
ROBERT D S i L T S
TERRY R 8 0 6 5 C R 7

-I. T H O M A S YENALF'I
CLYDE W M t l N T I R E

MARY JANE FORBES


JEFFREY B CLAY
DAVID
LLLPPlNGEii
NEAL 5 . W F 5 T
BRUCE A TLLDMAN
T R A H I L I N A MILLS. J R
YICHALL
OUCIROW
BiUCF D 8ACLCY
BARBAR* 5 . LAHOE
STEPHEN A. M W W C
DAN* 5 . SCIOUTO

!DWARD w ROTHYIN
0 0 8 E I l i A MILL5
W JFFFRY JA*OUNE*U
HERBERT fl NURICK
DAYNO L LEHHAY

Section 3189 Federal False Claim Act


1923-8959
MCNEES,WALLACE& NURICK

STERLING C . YCHEES

ATTORNEYS AT LAW

19.2-1967

100 P I N E STREET
P. 0 B O X 1166

~~

DAVID W . WALLACE

H A R R I S B U R G , PA. 17108-1166

TLLEPHONC (717!232-8000
TELECOPtER (717)236-2665

LL12hB-H
A. DOUGHERTI
A L A N R . BOYHTON. JR
GARY T I E H K O W S K I

DAVID 8 . D l l W L l
H. LEE ROU5SEL
MAURICE A . TRATEll
C C I I I I W C E R BOW***
.(O)tW 5 . 0 1 L F I I

In Re:

DIANE H 7 0 1 A R 5 1 1
JAMES J D O D D - 0
AHIIE I.FIOnENZA
JOHN Y l B F L
RICURD 5. LAHLBIVGII
KEVIN _I. F R L D C R I C L

DlVlD

O f COUWSLL

61LBER1 Y U R I C I
EDWARD C. FIRST, J P .
ROBERT H.GR15WOLD
JETTEISOW C. B I R U H A R I
SAMUEL I . SCHRECIENGIUST..

June 23, 1987

*.w*ris,JI1.

FMG Advisory, Inc. - Pennsylvania Investment


Advisor Application
Our file: 11489-001-5

Stanley J. Caterbone, President


Financial Management Group, Ltd.
1755 Oregon Pike
Lancaster, PA
17601
Dear Stan:
I am enclosing a form of letter I propose to send to
Mr. Schwartz, and in case any changes in the application
are needed I also am returning executed Form ADV which you
recently sent to me.

.4
9

\..
4
Wd

Please review the draft response letter very closely


and give me any comments. In connection with your review,
please consider the following points:
1. With respect to Item 1, Form ADV indicates that
10 or more persons will perform investment advisory functions,
and I note that you have included additional Form D's. However,
there appear to be only nine such forms attached. You also
should prepare a separate list that names such persons.
2. With respect to Item 5, the explanation given on
Schedule F with reference to question 12.B. has not been
changed, although as was pointed out by Mr. Schwartz and
as we agreed, the information given is garbled and should
be revised.

3. With respect to Item 7, Mike's Schedule D should


be revised in accordance with the information given in my
letter, which of course is taken from Mr. Schwartz' letter.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 197 of 646


Property of Advance Media Group

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Stanley J. Caterbone, President


June 23, 1987
Page 2

The clarifications should include the information you gave


me concerning his status as a Certified Financial Planner,
and also should relate to his corporate positions with Ltd.
and Advisory, Inc.
Please look this over and call me at your early convenience.
When you and I are agreed on all changes, you should return
the application and I will see that it and the transmittal
letter are filed promptly with the Commission.
Sincerely,
McNEES, WALLACE & NURICK

WJJ: jp
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 198 of 646


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Section 3189 Federal False Claim Act

INVOICE

Lo&L

CthQba

N-456

RUSSELL
Locksmith - - Safesmith
334 N o r t h Q u e e n S t r e e t

Lancaster, PA 17603

Telephone: (717) 394-3757

Customer's
Order No.

Phone
No.

sold TO

F*G

Address

Ed-,

PJVISO.-U

&,*

.Sn<- 1755

*~
1987

C'hrtq-p)C'

TERMS: Net 30 Days. A 1 %%Finance Charge or 18%Annual Rate Of Interest will be


added to all invoices over 30 days and each 30 days thereafter.
Rec'd. By

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 199 of 646


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Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 200 of 646


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Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 201 of 646


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LANCASTER AVIATION, INC.


LANCASTER MUNICIPAL AIRPORT P.O. BOX 375 LITITZ, PA 17543 717-569-5341

J u n e 2 6 , 1987
Account $282396
U / O HE240
F i n a n c ~ a lManagement Group, I n c .
Eden Park 1 1
1755 Oregon P i k e
L a n c a s t e r , PA 17601
Navajo

N27623

1.

T r o u b l e s h o o t i n o p e r a t i v e h e a t e r , remove a n d a d j u s t
\ 115.50
h e a t e r p r e s s u r e s u i t c h . I n s t a l l neu b r u s h e s i n h e a t e r
combustion b l o u e r m o t o r . R e p a i r b r o k e n h e a t e r d r a i n h o s e .

2.

C o r r o s i o n i n l e f t e l e c t r i c a l p a n e l , removed
and p a i n t e d .

3.

H y d r a u l i c power pack f l u i d l o u and s l i g h t l e a k a t f i t t i n g ,


t i g h t e n e d f i t t i n g and s e r v i c e d pouer p a c k .

16.50

4.

Accomplish t h e f o l l t u i n g minor m a i n t e n a n c e :

39.60

A
8.

C.
0.

16.50

corrosion

A d j u s t baggage door c a t c h e s t o c l o s e more t i g h t l y .


R e p l a c e l e f t f u e l s t r a i n e r s e a l and r e f o r m b o u l i n
seal area.
R e p l a c e t a i l n a v i g a t i o n l i g h t lamp.
R e p l a c e r i g h t t a x i l i g h t lamp.

5.

I n s t a l l neu b r a k e d i s c s and l i n i n g s .

158.40

6.

Remove oxygen b o t t l e , ( a d j a c e n t equipment h a d t o be r e moved t o g a i n a c c e s s ) . P r o v i d e neu u e i g h t and b a l a n c e


t o r e f l e c t b o t t l e removal.

227.70

Total

1
4

1
2
1

\ 574.20

CFO-100 F i l t e r
387 Lamp e 1 . 7 9
l4P23-1 Cap
25164-14 Brush e 9 . 8 7
4596 L a m p

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 202 of 646


Property of Advance Media Group

Page 2308 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

J u n e 2 6 , 1987
Navajo

U/O H8240
N27623

A508-28 L a m p
H i s c . H a r d u a r e a n d H y d r a u l ~ cF l u l d

Total
L e s s 10%

93.24
9.32

83.92

Total
F o l l o u i n g b r a k e r e p a i r p a r t s b i l l e d a t o u r c o s t p l u s 10%:
Total from above items
2
164-79 D i s c B r a k e @ 214.27
16
66-66 L i n i n g @ 1 0 . 0 0
1
751-898 S e a t
6
68-28 S h i m - b r a k e @ 1 6 . 8 6

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 203 of 646


Property of Advance Media Group

Page 2309 of 2953

Total

$ 775.20

Labor
Parts
7a r

$ 574.20

Total

$1430.36

775.20
00.96

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LANCASTER AVIATION, INC.


LANCASTER MUNICIPAL AIRPORT P.O. BOX 375 LITITZ. PA 17543 717-569-5341
June 2 9 , 1987
X n r , Stanley J . Caterbone
F i n a n c i a l Hanagement Group, 1 n c . J
1 7 5 5 Oregon P i k e
Lancaster. P A 17601
Dear S t a n ,
Thank y o u f o r t h e r e p l a c e m e n t check i n t h e amount of S 2 5 . 0 0 0 . 0 0 , u h i c h
u a s h a n d - d e l i v e r e d t o d a y t o r e p l a c e your p r e v i o u s l y r e t u r n e d c h e c k . Ue
s i n c e r e l y r e g r e t h a v i n g had t o i n s i s t o n immediate payment, b u t I
b e l i e v e t h a t our i n i t i a l l i m i t a t i o n s and u n d e r s t a n d i n g s u e r e c l e a r .
I have e n c l o s e d summaries of i n v o i c e s f o r e x p e n s e s y o u have i n c u r r e d
t h r o u g h t h e u s e and m a i n t e n a n c e o f your a i r c r a f t . I n t h e c a s e of t h e
m a i n t e n a n c e uork o r d e r l e t t e r , y o u w i l l n o t e t h a t S 2 0 8 . 3 4 i n c r e d i t s
u e r e i s s u e d . The a s s o c i a t e d e x p e n s e s were more f a i r l y a s s i g n e d t
a i r c r a f t s a l e s d e p a r t m e n t . Your p r e s e n t b a l a n

(.-

-Haintenance:

,
'

- FPui leol :t S e r v i c e / f u e l / e t c . :

1 1 ,,142.0@
92 76 12 . 57 89

-Total:

(3,376.3

Your a i r c r a f t i s nou i n s u r e d o n ~ a n c a s t e r w ' fs l e e t p o l i c y .


Uhen t h e a i r c r a f t i s removed f r o m our p r e m i s e s , i t w i l l b e removed f r o m
t h a t p o l i c y . Uhen we r e c e i v e our s u b s e q u e n t b i l l i n g f o r a i r c r a f t
i n s u r a n c e , ue u i l l s e n d y o u a C O P Y o f t h a t p a r t of t h e b i l l u h i c h d e a l s
w i t h your a i r c r a f t , and ue u i l l i n v o i c e y o u f o r t h o s e premium d o l l a r s .
That p r o b a b l y u i l l n o t o c c u r b e f o r e h u g u s t 31. Y o u u i l l need a i r c r a f t
i n s u r a n c e . I have t a k e n t h e l i b e r t y of e n c l o s i n g t h e c a r d s of t u o
a b s o l u t e l y r e p u t a b l e b r o k e r s , and recommend them t o y o u e q u a l l y .
Ue u i l l r e l e a s e t h e a i r c r a f t t o y o u or t o your a g e n t s uhen your ~ o s t
r e c e n t l y p r e s e n t e d check h a s c l e a r e d , and uhen t h e c h a r g e s o u t l i n e d
above have been p a i d .
1 s i n c e r e l y r e g r e t t h e d i f f i c u l t i e s ue have e x p e r i e n c e d i n our b u s i n e s s
r e l a t i o n s h i p . I f ue can be o f any h e l p i n m e e t i n g your f u t u r e a v i a t i o n
n e e d s , p l e a s e c a l l u p o n us.
Sincerely yours,

SHITH
Vice P r e s i d e n t and G e n e r a l Hanager

C.H.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 204 of 646


Property of Advance Media Group

Page 2310 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

C..

;.

:.:

.. .. . .
~, ~:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 205 of 646


Page 2311 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

I 12th Year- No.35,315

METROPOLITAN

Section 3189 Federal False Claim Act

LANCASTER, P A . . FRIDAY. JANUARY 5 . l!

I The Ferranti fraud


(

Officials describe an international charade of 'cardboa


companies,
accounts,
a non-existent
conti
EXHIBIT U.S. 16-4014 secret
CIVIL RIGHTS bank
CLAIM Page
206 of 646
Thursday December 15, 2016
Property of Advance Media Group

Page 2312 of 2953

10/19/2006

Jacobson gets jail for role in bribe scam

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

2-month pris
HEW YORI: - Forms,? E I r i
P ~ l c r r b u bu,,nermman
r~
Call E.
J ~ c o b ~ o n w ~ ~ r c n l c by
ncrn
era1 judge on ~uc.srlay t o two
monfhr in oris<>" fa" his
as
the "bsgnlan" in hrihlng a Navy
oll,",al Iorllrr drfrnsr controdr
to Unrlsd ChcmCon Corp and

I
I

I9

I
I

After the rcnrenrc r o s an^


naunced by US. nlrlr~rtc o u n
Judge Pebr K L?isurp, h c o b MRUlrned to hi. wrfe and fnends
mthecounmamnnd gave* brief
&andsmile.
Jacobson. who told the judge
be wan "a.hrmrd
of my a c ~
llone." recelved two months m a
minimum-security prtson for
Passing along 180.m in bribe
money to a Navy oillcial who
pmmrsod to steer contracts to
ChcmCon.
For the Wedtech charge. ~n
which he was the nliddicmrn lor
1 il1S.WO bnDe. Jacobson R"ivcd a Ulrae-year rvrpended
~nfenceandproh8tron.
Lri.?re o m r e d Jarubron to
Lurnhnmsclf inonJune27tts11n
thcprironlerm
Jacobson, 47.1% the brother-inA---

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 207 of 646


Property of Advance Media Group

Page 2313 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 208 of 646


Property of Advance Media Group

Page 2314 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

In the Court of Common Pleas

of Lancaster County, Pennsylvania

KATHERINE H .

EVERS

Plaintiff/s

v.

J . HERBERT FISHER, J R .
DONA LOU FISHER

and

Defendant/s

Docket No.

103 5

.I9 84

SUBPOENA
DUCES T E C U M
To

r. !
. .M

S. .t. a. . n. . . .C
. . .a. t. .e. .r. b
. .o
..n
. . .e

F i n a n c i a l Management G r o u p , L t d .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1755 Orenon P i k e
L a n c a s t e r , PA

..............................

Law O f f i c e s o f Ranck & R a n c k , P . C . ,


I. You are ordered by the Court to come ~ O & P ( R % M W ~ X X ~ & X ~ R ~ X & E W ~ .
Duke & C h e s t n u t S t r e e t .
on Wednesday,

J u l y at
1 5 , 1987

10

Lancaster, Pennsylvania - - - - - - - - - o'clock,

a .m

totestifyonbehalfofthe P l a i n t i f f
in the above case, and to remain there (or in such other Court Room
or location to which the case may be assigned) until excused.

2.

P l e a s e b r i n g w i t h you - a n y and a l l l o a n a p p l i c a t i o n s .
f i n a n c i a l s t a t e m e n t s , a s s e t s u m m a r i e s o r a n y o t h e r document a t i o n p r o v i d e d t o you by J. H e r b e r t F i s h e r , J r . a n d / o r
Dona Lou F i s h e r a n d / o r M a r t i n Y . S p o n a u g l e , E s q u i r e a n d / o r
F i s h e r - S p o n a u g l e I n v e s t m e n t Group. l t d . a n d / o r F i s h e r S p o n a u g l e R e a l t y Co. o r a n y o t h e r e n t i t i e s owned o r
c o n t r o l l e d b y J. H e r b e r t F i s h e r . J r . , Dona Lcu F i s h e r a n d /
o r Martin Y . Sponaugle.

3.

I n l i e u of a p p e a r i n g i n p e r s o n a t t h e s c h e d u l e d D e p o s i t i o n
d a t e , you may, i n l i e u of a p p e a r a n c e , make p h o t o c o p i e s o f
a l l r e q u e s t e d d o c u m e n t a t i o n a n d d e l i v e r i t by o n e week i n
a d v a n c e of t h e s c h e d u l e d D e p o s i t i o n d a t e t o t h e o f f i c e s o f
M i c h a e l H . Ranck. E s q u i r e o f Ranck & Ranck, P . C . , 1 0 1 E a s t
C h e s t n u t S t r e e t , L a n c a s t e r . PA 17603.
(SEAL OF

By the C o w ,

THE COURT)

Dated: .......Ju neBQ.,..


1 9 8 . 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

M i c h a e l H. Ranck. E s q u i r e
.................. Par ..Ranc.k. . & Ranck .,... P.. C ................,
Attorne /s or P l a i n t i f f
E a s t C h e s t n u t S t r e e t . P.O.
Address:
L a n c a s t e r , PA 1 7 6 0 3

iOi

Box 1 5 2 4

If U.S.
witness16-4014
is to producc
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"2.646
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EXHIBIT
CIVIL
RIGHTS
Page
209 of
10thanone person. whkh wilnnr ir l o producc 1hcm.l

Property of Advance Media Group

Page 2315 of 2953

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US District Court For The Eastern District of Pennsylvana

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 210 of 646


Page 2316 of 2953

' "2

Thursday December 15, 2016

10/19/2006

db-d
Section 3189 Federal False Claim Act
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Page 2317 of 2953

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Time

While ou

of

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Date

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 212 of 646


Property of Advance Media Group

Page 2318 of 2953

Thursday December 15, 2016


10/19/2006

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 213 of 646


Property of Advance Media Group

Page 2319 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 214 of 646


Property of Advance Media Group

Page 2320 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Time

of
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 215 of 646


Property of Advance Media Group

Page 2321 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 216 of 646


Property of Advance Media Group

Page 2322 of 2953

Thursday December 15, 2016


10/19/2006

a 3/PN

US District Court For The Eastern District of Pennsylvana

Section 3189
Federal False Claim Act
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 217 of 646


Page 2323 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

\
/

Page 218 of 646


Page 2324 of 2953

Thursday December 15, 2016


10/19/2006

mltonm a m k

US District Court For The Eastern District of Pennsylvana

----

SERVING
Section 3189
Federal
False Claim Act
CENTRAL
PENNsYLvANtb
M E M B E R FDIC

LANCASTER. PENNSYLVANIA 17604

STANLEY J CATERBONE
433 W MARICN ST
LANCASTER PA 1 7 6 0 3 - 3 4 1 6

1057
0002

D I R E C T I N Q U I R I E S TC
717-291-2591

0
0
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l FUND

ACCOUNT NO.

OESCRIPTION OF A C T I V I T Y

REFERENCE

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HECK N

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

MOUNT

Page 219 of 646


Page 2325 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

----

SERVING

Section 3189 Federal False Claim Act

CENTRAL PENNSYLVAN\A
MEMBER FDIC

LANCASTER, PENNSYLVANIA 17604

STANLEY J CATERBCNE
433 W MARIGN ST
LANCASTER PA 1 7 6 0 3 - 3 4 1 6

DIRECT I N Q U I R I E S TO
717-291-2591

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0002

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PAGE
(ECKING

ACCOUNT NO.

0556-0114t

498-0:
66,670, 2'
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 220 of 646


Property of Advance Media Group

Page 2326 of 2953

AMOUNT

BALANCE

Thursday December 15, 2016


10/19/2006

mlton'J''F$mnk

Section 3189CENTRAL
Federal SERVING
False
Claim Act
pENNsyLvAN,b

US District Court For The Eastern District of Pennsylvana

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LANCASTER, PENNSYLVANIA 17604

STANLEY J CATERBGNE
4 3 3 W MARICN ST
LANCASTER PA 17603-3416

1057
0002

NO

0 1 RECT I N Q U I R I E S T O

717-291-2591

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100.00
100.00
317.00
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 221 of 646


Property of Advance Media Group

Page 2327 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

----

----

SERVING
Section 3189 FederalCENTRAL
False Claim
Act
PENNSYLVA
M t M R E R FUlC

LANCASTEA. PENNSYLVANIA 17604

STANLEY J CATERBCNE
433 W MARION ST
LANCASTER PA 1 7 6 0 3 - 3 4 1 6

DIRECT I N Q U I R I E S TC
717-291-2591

1057
0602

-- - PAGE

M CHECKING

ACCOUNT NO.

INDICATES

0556-

hHfSK 18UnnARY
CHECK NUl48ERS

L I S T E D BELOY
TOTAL A C T I V I T Y CHARGES
TD T A L BALANCE CRED iTSTOT~,jt&ggk
NET S E R V I C E CHARGE'
I eC****************+***********w*****
I : T I V I T Y CHARGES SUMMARY
BANK B Y PHONE PAYHENTS
CHECKS

************+*.
TOTAL A C T I V I T Y C H A R G F S

I L T O N FUND

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: ., .., 'g!,?,:',
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ACCOUNT NO.

9900-

I E V I O U S STATEMENT BALANCE AS OF Q6/ 0187


0 D E P O S I T S AND
3,OT
R
1 CHECKS AND
, l 0 ,CN#ER
I D I N G BALANCE T H I S STATEHENT A S O F *07
- 0 0 REGULAR SERVICE CHARGE AND

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+*~~~~~
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1 ERAGE LEDGER BALANCE


1 N I U U M LEDGER BALANCE
i Y E S T A B L E BALANCE

.IS;

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2*403:g:w..
*..&i&&@&fgt

S E R V I E CHARGE CYCL

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f

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P A I D T H I S YEAR
YS T H I S CYCLE

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. ..:,,
.j*:,+*:***&$m7. :*$*,:,+&..<,., ?*fl'*$+T>ij;,,

1 4

RUATIO

.,.,

,,

REFERENCE

AMOUNT

B Al

1 110 B E G I N N I N G BALANCE
1 4 11 FUNDS TRANSFER T O
ACCOUNT
55601148
. / 1 2 FUNDS TRANSFER TO
CCOUNT
556-01 148
1 41,
UNOS TRANSFER TO
ACCOUNT
556-01 148
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

5.5'
5.5'

5 v O(

4.8'
Page 222 of 646
Page 2328 of 2953

Thursday December 15, 2016


10/19/2006

B'hlton

US District Court For The Eastern District of Pennsylvana

- --

-------

CENTRAL PENNSYLVANIA
MEMBER F O C

LAMCASTER, PENNSYLVANIA 17604

MICHAEL CATERBONE
STAfuCEy J CATERBCNE
2 5 5 B U T L E R AVE
CANCASTER PA 176Cl-6308

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 223 of 646


Property of Advance Media Group

Section 3189 Federal False


Claim Act
SERVING

Page 2329 of 2953

1057
0'202

DIRECT I N Q U I R I E S To
717-291-2591

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 FederalSERVING


False Claim Act
CENTRAL PENNSYLVANIA
M E V E E R FDIC

----

LANCASTER, PENNSYLVANIA 17604

MICHAEL CATERBONE
STAhCEY J CATERBCNE
255 BUTLER AVE
LANCASTER PA 176C1-6308

OG02
1057

DIRECT INQUIRIES TO

717-291-2591

PAGE

A R CHECKING

ACCOUNT NO.

i W S STATEMENT BALANCE AS O F
0 O E P O S I T S AND
0
0 CHECKS AND
iG BALANCE T H I S STATEMENT AS
F?Xl@R?ZGUCA~
S W V I CE CHARGE.
,

~.

04/05/87

OTHER C R E D I T S

0218-435 1;
1,157.;!

GF
AND

~.,-.d
.:,.,..

..................................

**************ti

S E R V I C E CHARGE CYCLE I N

1.157.15
lt 157- 15
1.157.15

'i-

RWATIO

A
M IVN IEMR
UM
~ ECOLL$CTED
COLLECTED ~
BALANCE
~ A N C E

lr 157- if
1.157- 1'

. *.:;:.*.i,
, .

i..

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 224 of 646


Property of Advance Media Group

Page 2330 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

--

----

-, J

Section 3189 Federal False Claim Act

LANCASTER, PENNSYLVANIA 17604

CATERBONE ASSOCIATES
1 3 5 5 9PEGCN P I K E
LI~~CASTER
PA 1 7 6 0 1

1C57
OOC2

DIRECT I N G U I R I E S TC
717-291-2591

LAST PPGE

5 - 2 7 - 8 7 To 6-30-87
'h.

?
i
\

ACCOUNT NO.

F. !.l N l.
)

t D E S C R I P T I O N OF A C T I V I T Y

REFERENCE

BALANCE

bMOUNT

4,168- 1
4 , 167.2

3.954.6
17.06

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 225 of 646


Property of Advance Media Group

9901-462t

5-25-07

dL3IPrNIIIG ePLaucE
tU?Ji;S T R A N S t E H T l i
A.C-CBU NT
556-GL18O
FUNDS TRANSFER TO
ACCGUNT
550-cl180
1UTEG.iST CREDIT

Page 2331 of 2953

6-30-87

3,971.7

Thursday December 15, 2016


10/19/2006

FARMERS
FIRSTWK

US District Court For The Eastern District of Pennsylvana

P O . BOX

102. LITITZ. PA 17543

S J CbTERJONE 4ScCOIATES
1755 TRES3N P t Y E
L A N C A S T E R PA i7601

Section 3189 Federal False Claim Act

CIJSTOVFR NUMBER
0232102500
PAGE
1
4-30-87
TO
5-29-87

-----

..............................................................................

' P R E V I O U S BALANCE

. 01

NUYBERITOTAL CREDITS

NUNf3ERITr)TAL D E B I T S

FEES

NEW R 4 L A N

REGULAR C H E C K I N G

53.13

ENCLOSURES
0
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 226 of 646


Page 2332 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 227 of 646


Page 2333 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

6
PWNSIAPPOINTMENTS

I 1Z

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

RESULTSIEXPENSESIETC

--

- ---

Page 228 of 646


Page 2334 of 2953

- -

MESSAGES RECEIVED
-

--

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 229 of 646


Property of Advance Media Group

Page 2335 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 230 of 646


Property of Advance Media Group

Page 2336 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

~ ~ % ~ B /FOR
~ T [ Sun
E M~o n

Tues

Wed

Thur

~4

[C#rcleOne]

1
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i
Cl

Ilvm
i

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. -"

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.

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 231 of 646


Page 2337 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 232 of 646


Property of Advance Media Group

Page 2338 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

PLAN

Section 3189 Federal False Claim Act

a~la
WET-

--

-7

-NC

AID-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 233 of 646


Property of Advance Media Group

Page 2339 of 2953

MNIAL

R("ScAL
SR~ITUIL

mML"

.-

--

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

/ FBI ties Guerin to illegal military sales


1 Agent charges that arms were shipped to South Africa

114LhYear-No. 35,427

METROPOLITAN

LANCASTER.PA.. WEDNESDAY. MAY IG.14YU

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 234 of 646


Page 2340 of 2953

~s$m.-k
~

Thursday December 15, 2016


10/19/2006

~Pri, ~

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Commonwealt

National Bank''''
A Mellon Banku'""

July 6,

1987

Mr.

S t a n l e y J. C a t e r b o n e
2323 N e w D a n v i l l e P i k e
C o n e s t o g a , PA 17512

M r . S t a n l e y J. C a t e r b o n e
c/o F i n a n c i a l Management ~ r o u p , ~ t d .
1 7 5 5 Oregon P i k e
L a n c a s t e r , PA 1 7 6 0 1
I n Re:

1978 P i p e r A i r p l a n e
PA 31-325
M a n u f a c t u r e r s S e r i a l Number 31-7812065
S i m p l e I n t e r e s t A i r c r a f t R e t a i l I n s t a l l m e n t C o n t r a c t and
S e c u r i t y Agreement D a t e d J u n e 1 2 , 1 9 8 7
1201-5011006

Dear M r .

3
~.

Caterbone:

T h i s l e t t e r i s to a d v i s e you i n w r i t i n g t h a t o n J u l y 2 ,
1 9 8 7 , t h e Commonwealth N a t i o n a l Bank r e p o s s e s s e d y o u r 1 9 7 8 P i p e r
A i r p l a n e PA-31-325,
Mfg. S.N. 31-7812065, p u r s u a n t t o t h e terms
o f t h e "Simple I n t e r e s t A i r c r a f t R e t a i l I n s t a l l m e n t C o n t r a c t and
S e c u r i t y A g r e e m e n t " d a t e d J u n e 1 2 , 1987 ( r e f e r r e d t o h e r e i n a f t e r
a s " A g r e e m e n t " ) a s a r e s u l t of y o u r d e f a u l t u n d e r said A g r e e m e n t .

I t i s my u n d e r s t a n d i n g you a r e a w a r e o f t h e r e p o s s e s s i o n
p r i o r t o t h e r e c e l p r or t n l s l e t t e r .
-The d e f a u l t s u n d e r t h e Agreement which p r o m p t e d B a n k ' s
a c t i o n are a s f o l l o w s :

1.

F a i l u r e to provide adequate insurance coverage:

a.
I n s u r i n g t h e p l a n e f o r t h e amount owed b y you w h i c h
i s s e c u r e d by a l i e n a g a i n s t t h e a i r p l a n e as r e q u i r e d under
Paragraph 7,

" A d d i t i o n a l P r o v i s i o n s " o f Agreement.

3
-

b.
Naming Bank a s l o s s p a y e e r e q u i r e d u n d e r P a r a g r a p h
7 , " A d d i t i o n a l P r o v i s i o n s " o f Agreement.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

Page 235 of 646

Property of Advance
Media Group National Bank. ContinentalPage
2341York.
of 2953
The Commonwealth
Square.
Pa. 17405

Thursday December 15, 2016


(7171 8 4 8 - 1 5 3 1

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

c. Covering normal and usual losses and damages


required under Paragraph 7, "Additional Provisions" of Agreement.
2. Removal of the plane from the business premises of
Lancaster via ti on, Inc. to the business premises of Romar
Aviation, without informing Bank in writing pursuant to Paragraph
3 of "~dditionalProvisions" of Agreement.

3. Immediate and eminant intended removal for an indefinite


period of the airplane without prior written notice to Florida
without informing Bank in writing pursuant to Paragraph 3 o f
"Additional Provisions" of Agreement.
As a result of the defaults, Bank has exercised its remedies
under the Agreement to:

1, Accelerate the entire amount of principal and interest


to be payable over a period of time so that all principal and
interest is now immediately due and payable, thus abrogating the
amortization schedule set forth in the ~greement.
2.

T o take possession of the aircraft.

Furthermore, Bank intends to liquidate the collateral after


July 27, 1987, if you do not pay in full the amount owed to the
Bank by July 24, 1987.
The amount owed is:
Gross Balance
Interest to 7/7/87
Dealer Reserve

$94,000.00
695 -28
15.60

Total

$94,710.88 plus all costs of


repossession, storage
removal, maintaining
and insuring.

To prevent the sale, you must pay the above-mentioned amount


in cash, certified check, treasurer's check, cashier's check or
money order by 5:00 p.m. DST, Friday, July 24, 1987. Please
contact the following person for the exact amount:
.Larry W. Snyder
150 South 43rd Street
P.O. Box 1010
Harrisburg, PA 17108
(717) 561-3549
The disposition and sale of the airplane will occur:
1.

At any time after Monday, July 27, 1987, at 9:00 a.m.

DST.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 236 of 646


Property of Advance Media Group

Page 2342 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

At the premises of Lancaster Aviation, Inc. at Lancaster


Airport, RD # 3 , Lititz, Lancaster Pennsylvania.
2.

The sale and deposition will be by either public or private


sale and will be conducted in accordance with the requirements of
Section 9-504 of the Uniform Commercial Code as adopted in
Commonwealth of Pennsylvania.
Any proceeds resulting from the sale or disposition of the
aircraft will be applied as follows:
1. Costs of repossession, retaking, storing, holding,
insuring, maintaining, securing and preparing for sale and
selling of airplane as well as reasonable counsel fees.

2. Then to all principal and interest due under the


Agreement.
In the event the disposition or sale does not satisfy the
entire indebtedness, you will be obligated f6r any-deficiency and
the Bank will take the appropriate legal action to collect the
deficiency.
Very truly yo

IS,

pmd+?

Larry W. Snyder
Manager
Consumer Loan Collections
LWS/mjb

cc:

J. Robert Baker, Collection Dept., File

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 237 of 646


Property of Advance Media Group

Page 2343 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

THE PLANNER'S SECURITIES GROUP,

INC.

HEMORAND UII

TO :

Stan Caterbone

FROM:

Kathy A . D i e h l
R e g i s t r a t i o n Administrator

DATE:

J u l y 8 , 1987

s e c u r i t i e s l i c e n s e w i t h The P l a n n e r ' s
P l e a s e b e a d v i s e d t h a t your
S e c u r i t i e s Group, I n c . h a s been t e r m i n a t e d e f f e c t i v e . J u l y 6 ,
1987.
P l e a s e r e t u r n t h e Compliance Manual which was a s s i g n e d t o you.
We wish you s u c c e s s i n your f u t u r e e n d e a v o r s and hope you w i l l

C.,

c a l l on u s i f we c a n b e o f f u r t h e r s e r v i c e t o you.

cc : Bob Kauf fman

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 238 of 646


Property of Advance Media Group

Page 2344 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 239 of 646


Property of Advance Media Group

Page 2345 of 2953

Thursday December 15, 2016


10/19/2006

ACTIVBF$E%FOR

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 240 of 646


Property of Advance Media Group

Page 2346 of 2953

sun

on

SectionW
3189 Federal False Claim Act
Tues
lC8rcle Onel

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 241 of 646


Page 2347 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

July 10, 1987

Stanley J. Caterbone
Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster PA 17601
Re:

Robert F. Kauffman
Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster PA 17601

WILLIAM 0. UMIKER
TRUST AGREEMENT

Dear Messrs. Caterbone and Kauffman:


Notice is hereby given to you that I hereby cancel Trust
Agreement dated October 17, 1986, of which I, WILLIAM 0. UMIKER,
was Settlor, and of which Stanley C. Caterbone was Trustee and
Robert F. Kauffman was Alternate Trustee.

('j

I will be calling to make arrangements to return any and


all assets in your possession to me.

<~.

Thank you for your many courtesies in this matter.


Respectfully yours,

WILLIAM 0. UMIKER
COMMONWEAL~HOF-PENNSYLVANIA)
COUNTY OF LANCASTER

)
)

SS:

#*
A

ON THIS, the lo* day of


, 1987, before
peared WILLIAM 0. UMIKER,
me, the undersigned officer, personally
known to me (or satisfactorily proven) to be the person whose name
is subscribed to the within Letter of Cancellation, and acknolcledged
that he executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and
notarial seal.

(SEA
My Commission Expires:
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 242 of 646


Page 2348 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

J u l y 1 0 , 1987

S t a n l e y J. C a t e r b o n e
F i n a n c i a l Management Group, L t d .
Eden P a r k I1
1755 Oregon P i k e
L a n c a s t e r PA 17601
Re:

Robert F. Kauffman
F i n a n c i a l Management Group, Ltd.
Eden P a r k I1
1755 Oregon P i k e
L a n c a s t e r PA 17601

NORA A. UMIKER
TRUST AGREEMENT

Dear Messrs. C a t e r b o n e and Kauffman:

Notice i s h e r e b y g i v e n t o you t h a t I h e r e b y c a n c e l T r u s t
Agreement d a t e d o c t o b e r 1 7 , 1986, o f which I , NORA A. UMIKER; w a s
S e t t l o r , and o f which S t a n l e y J. C a t e r b o n e was T r u s t e e and
Robert F. Kauffman was A l t e r n a t e T r u s t e e .
I w i l l b e c a l l i n g t o make a r r a n g e m e n t s t o r e t u r n any and
a l l a s s e t s i n your p o s s e s s i o n t o m e .

Thank y o u ' f o r your many c o u r t e s i e s i n t h i s matter.


Respectfully yours,

NORA A.

UMIKER

COIMONWEALTH OF PENNSYLVANIA)
)

COUNTY OF LANCASTER

ON THIS, t h e

SS:

day o f

1987, b e f o r e

m e , t h e u n d e r s i g n e d o f f i c e r , p e r s o n a l l y appe r e d NORA A. UMIKER,


known t o m e (of s a t i s f a c t o r i l y p r o v e n ) t o b e t h e p e r s o n whose name
i s s u b s c r i b e d t o t h e w i t h i n L e t t e r o f C a n c e l l a t i o n , and acknowledged
t h a t s h e e x e c u t e d t h e same f o r t h e p u r p o s e s t h e r e i n c o n t a i n e d .
I N WITNESS WHEREOF, I h a v e h e r e u n t o s e t my hand and
n o t a r i a l seal.

(SEI

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 243 of 646


Page 2349 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

From the &sk of

...

Section 3189 Federal False Claim Act

ROBERT 0. ACKERMAN

519 CENTRAL AVE.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 244 of 646


Property of Advance Media Group

Page 2350 of 2953

HIGHLAND PARK, IL 60035

(312)433-4500

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PLANNER'S SECURITIES
CONSULTING SERVICES

Planner's Securities Consulting Services offers the independence


and expertise to help the client:

1. Develop an INVESTMENT PLAN

2. Determine the criteria for selection of an INVESTMENT


MANAGER

3. Evaluate investment managers, presenting only


those who can meet investment plan's needs
4. Monitor these investment managers' performances
within customer set parameters

5. Monitor monthly detail reports


Our structured approach saves a plan's sponsor, trustees or
individuals time and effort and allows them to retain control over
asset management.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 245 of 646


Property of Advance Media Group

Page 2351 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PTY.

~ ~ t ~ t f e e i s b a t e d o n t h e m a r k e t ~ ~ l o l u e

d the. account, hrdudlng tush. as shown on fhe lnltlal and


gUatW oppratsd a cutodlan bank octhrity 4
..Th;e maw
auement tee k d e t e c m i n e d - m tto the f o l m scheduk
.

S I . ~ ~ ~ X K K ) C ~ M O ~ ~ ~ ~ V O ~ ~

.85%onnext

..

-75%on next
.65% on nad

-6% on next

s i m m o f ~orketva~ue' .
'

~1.OObXXKJ
0f;MarketWil~e

s l ~ I . l O O C 4MarketValue

R X B ) I ~ E m R T m l m
(~axabieor Non TcKable)

5 of 1%of Maket Value

Fees are prepoyable quatecly. @ d e m g emay be &ed


allocated per ciient )nmuctlons

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 246 of 646


Page 2352 of 2953

and

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

INVESTMENT MANAGER
Dataform

Name

.(

Address

614 LANDIS AVENUE

i city/~tate/Zip

Ownership

VINELAND.

NEW JERSEY

e Feestructure

08360

800-257-7013
DONALD SULAM
SUZANNE GREENBERG

.JUNE 1 9 7 3

Date Founded

PARTNERSHIP

1 Affiliation
NONE
Minimum
Tax-Exempt
fi
c Account Size:
S100.000

Minimum
Fee:

Taxable

Tax-Exempt
$1.500

Taxable

SEE ATTACHED FEE SCHEDULE

z Manage:

Equity
Only

Capital Markets Used: Stock lxl


I
Real Estate
Equity
Asset Mix in All
jEqJy Accounts as of

Telephone
Contact
Name
Contact
Name

CUMBERLAND ADVISORS, PTY.

Mutual Funds Managed:

Balanced
Acwunts
Corporate
Bond

Fixed
Cash
Income [ia Management (7 Other: MUNICIPAL BONDS
Government
International
Bond
(7 Cash IXI
Securities
(7

Futures

Options

Max Equity

CD' S

Other:

100 %

Min. Equity

CUMBERLAND GROWTH FUND

- In-HouseCo-Mingled Funds: .

Special Services (check one):

Active

Passive

NIA

Minimum Account
Size (specify):

Bond lmmunization/Bond Dedication


Municipal Bonds
Socially Sensitive (if asked, will not invest in "sin" stocks)
Convertible Preferreds
-

Convertible Bonds
Government Bonds
INVESTMENT STYLE:
attach statement of investment philosophy and style for each type of management.
f
send a copy o f your current marketing piece, contract(s), ADV andfiscal report.
@ 1886 Richard SchlMMh h Awcdates. Ud.The lnlonnatbn providedhaiein la oblalned lrom the investment manager named herein
.ndPublkly lvailaMe .wroes and la bePsMd to be rdiaMe, bul ma mpwmbtlon or wananly is made w to ks accuracy or axnpleteness.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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1 1 u v c 3I MEN I
US District Court For The Eastern District of Pennsylvana

MANAtikH

Section 3189 Federal False Claim Act

Dataform

Name

Swanson C a p i t a l Management

Telephone
Contact
Address
4 6 0 0 Fashion Square Blvd. ~ t 109
e
& 111 Name
Contact
Cit~/State/Zi~ Saginaw, M I 48608
Name
Ownership

Incorporated

Affiliation
Minimum
Account Size:

None

Fee Structure

1%F~~~~

Taxable
$100.000

Stephen Swanson

Date Founded 1973

Tax-Exempt
$100,000

(517) 790-1291

Minimum
Fee:

Tax-Exempt
$1,000

Taxable
$1,000

In-HouseCo-Mingled Funds: 0

.
Special Services (check one):

Active

El

Municipal Bonds

El

rn
rn
rn

Convertible Bonds
Government Bonds

Minimum Account
Size (specify):

Convertible Preferreds

NIA

Bond Immunization/Bond Dedication

Socially Sensitive (if asked, will not invest in "sin" stodts)

Passive

INVESTMENT STYLE:
Please a m h statement of investment philosophy and sty* for each
of manawment.
i nt"fe rend a m p y of your current marketing piece, wntract(s), ADV and f seal report.
d

01 s f l l c h d SChlmMh I ate^, M.Th. lnform6lbnpmvldad IwreIn b obtained fmm the inwamdnt mamger named herem
~ ~ ~ n W * ~ . . ~ b b e ~ t ~ b e r e ~ s b l e ~ b u l m ~ t l o n o r w ~ ~ k m & ~ t o ~ t s - ~ o r a m

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 248 of 646


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INVESTMENT MANAGER Section 3189 Federal False Claim Act

US District Court For The Eastern District of Pennsylvana

Dataform
(818) 247-5330

Telephone
(213) 245- 7 4 6 1
Contact
Name
Richard A. Snyders
Contact
1 Name

Name

Van Deventer & Hoch


420 North Brand Boulevard, Suite 405
Address Glendale, CA 91203

cin//State/zip
Ownership

Date Founded

Chemical New York Cor~oration

Affiliation
Minimum
~ c c o u nSize:
t

Tax-Exempt

Taxable

$100,000

$100,000

1969

Minimum
Tax-Exempt
(annual) $2.000
Fee:

Taxable

$2,000

Feestructure 2% first $100,000; 1% next $200,000; 3/4% next $200,000:

2/3% all over $500,000


Manage:

Equity
Only

Capital Markets Used: Stock


Real Estate
Equity
Asset Mix in A l l
in/ Accounts as of
n/a
Mutual Funds Managed:

In-House Co-Mingled Funds:

Balanced
Accounts
Corporate
Bond

Fixed
Cash
Income
Management
Other:
Government
International
Bond
Cash [XI
Securities

Futures

Options

Max Equity

Other:
%

Min. Equity

none

none

Special Services (check one):

Active

Passive

N/A

Minimum Account
Size (specify):

I3

Bond Irnmunization/Bond Dedication

[7

Municipal Bonds

Ed

I3

0
0

Socially Sensitive (if asked, will not invest in "sin" stocks)


Convertible Preferreds

rn

Convertible Bonds

El

Ed

Government Bonds

INVESTMENT STYLE:
ease attach statement of investment philosophy and style for ewh type of management.
M a copy of your current marketing piece, contractls), ADV and fiscal report.

a-

01986 Richud Schimarth &ksoda(es. m.~ h Infanutbn


s
prov~ed
m h is obtained fmm the lnvwtmnr manager named herem
."d prblidy
.MIlabb wrcw
mnd b belle&
to be rel&e.
mrepresentabon
a wanamy k made
as to its accuracy
aampkrtemtss.
EXHIBIT
U.S. 16-4014
CIVIL RIGHTS
CLAIM
Pagebul
249
of 646
Thursday
December
15, 2016
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US District Court For The Eastern District of Pennsylvana

Van Deuenier 81 Hoch

Section 3189 Federal False Claim Act

4.0 North Brand Boulevard

Id

~1enda.k.California 9120)

(213) 247-5330/24;

Investment Counsel
FEE SCHEDULE
Fees are charged QUARTERLY in advance using the following
W A L formula:
Portfolio
Value

Fee as a % of
portfolio Value

First

$100,000

2%

Next

$200,000

1%

Next

$200,000

3/4 9

Amounts
Over

$500,000

2/39

Examples of V A L Fees:
Portfolio
Value

I
I
I
i

Fee as a % of
portfolio Value

Annual
Fee

750,000

7,167

0.96

1,000,000

8,833

0.88

2,000,000

15,500

0.78

3,500,000

25,500

0.73

5,000,000

35,500

0.71

pINIMUM ANNUAL FEE:

$2,000 PER YEAR

Note: No start-up or termination charses

II
I

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

..

.
.'

.'*

- -._%

- ----.-!---.;
=.L
L.1;

--.

-__

PENSION A N D PROFIT SHARING COLLECTIVE INVESTMENT FUND

REPORT O N EXAMINATIONS OF FINANCIAL STATEMENTS


for the years ended December 31, 1986 and 1985

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 251 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

To the Board of Directors


~ari-isburg,Pennsylvania
We have examined the statements of assets and liabilities
of the
Pension and Profit Sharing Collective Investment Fund
as of December 31. 1986 and 1985, including the portfolio of investments as of December 31, 1986, and the related statements of operations and changes in net assets for the years then ended. Our
examinations were made in accordance with generally accepted auditing standards and, accordingly, included confirmation of investments
held for the account of the fund by the custodians, and such tests of
the accounting records and such other auditing procedures as we considered necessary in the circumstances.
.In our opinion, the financial statements referred to above
present fairly the financial position of the
Pension and Profit Sharing Collective Investment Fund as of December 31, 1986 and
1985, and the results of its operations and the changes in its net
assets for the years then ended, in conformity with generally
accepted accounting principles applied on a consistent basis.
We have also previously examined. in accordance with generally accepted auditing standards. the financial statements of the
fund for each of the three years in the period ended December 31,
1984; and we expressed unqualified opinions on those financial statements.
In our opinion, the financial information set forth in Note 4
to the financial statements for each of the five years in the period
ended December 31, 1986, is fairly stated in all material respects
in relation to the financial statements from which it has been
derived.

March 19. 1987

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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,f&Q

L,76

-.

',."-

I . . .
Section
.. . , . 3189
:.-::r-Federal False;..Claim
. .?.-Act

US District Court For The Eastern District of Pennsylvana

PENSION AND P R O F I T S H A R I N & ' " , . COLLECTIVE INVESTMENT FUND


...

'

-&:% ;
I v , - ! . ! : , 2 .:$?
.uI
h

"//...,.
! .

... . _...

STATEMENTS O F A S S E T S AND L I A B I L I T I E S

December 31, 1986 and 1985

ASSETS:

Investments at value (cost


$126,174,490 and $125,472,567,
respectively)
Cash
Accrued interest and dividends
receivable
Total assets
LIABILITIES:
Income due participants for month
of December 1986, payable
January 1, 1987 at rate of
$.697 per unit and for month
of December 1985, payable
January 1, 1986 at rate of
S.800 per unit
Accrued expenses
Total liabilities
NET ASSETS
Net assets are represented by:
Funds applicable to 1,093,410 units
outstanding, equivalent to
$131.00 per unit in 1986,,and
to 1,174,423 units outstanding
equivalent to $121.81 per unit
in 1985:
Consisting of:
Amounts invested by
participating trusts
Accumulated gain on securities
sold o r redeemed
Unrealized appreciation
of investments
Excess of accumulated redemption
value of units redeemed
over participants' cost
Undistributed net investment
income

111,304,255

116,450,421

24,250,255

13,163,605

15,432,951

15,944,284

(7,778,196)

(2,520,983)

28,780

16,695

$143,238,045

$143,054,022

See accompanying notes to financial statements.


EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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'

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PENSION AND PROFIT SHARING


COLLECTIVE INVESTMENT FUND
STATEMENTS OF OPERATIONS
for the years ended December 31, 1986 and 1985

INVESTMENT INCOME:
Interest
Dividends
Less investment advisory
fees
Net investment income
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS r
Realized.gain from security
transactions (exclusive
of short-term investments)~
Proceeds from sales
C o s t of securities.aold
Net realized gain

46,156,866

32,383,816

35,070,216

29,263,026

11,086,650'

3,120,790

15,432,951

15,944,284

Unrealized appreciation
of investments:
Beginning of year
End of year
(Decrease) increase in
unrealized appreciation
Net realized and unrealized
gains on investments

(511,333)'

13,715,308

$10,575,317

$l6,896,09B

See accompanying notes to financial statements.


EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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..:..-:.

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal


False Claim Act
...
,: ,;;,;. ;
*..--. .'e
P,.-.->.
i...
:t..:<!.;

PENSION AND PROFIT SHARING..COLLECTIVE INVESTMENT FUND


:
- 1

-.:.\

;i;\:2:<z,:,

STATEMENTS-OF CHANGES IN NET ASSETS


for the years ended December 31, 1986 and 1985

FROM INVESTMENT ACTIVITIES:


Net investment income
Distribution of net investment
income to participants
Net realized gain from
security transactions
(Decrease) increase in
unrealized appreciation
of investments
Increase in net assets
derived from invest,
ment activities

FROM PARTICIPANT UNIT TRANSACTIONS:


Net proceeds from sales of units
(94,412 and 131,674 units,
respectively )
Paid for units redeemed (175,427
and 132,950 units, respectively)
Decrease in net assets
derived from participant
unit transactions
Increase in net assets

12,304,002

1S,040,381

(22,707,381)

(15,047,521

(10,403,379)

(7,13

184,023

16,903,83

$1431238,045

$143,054,02

NET ASSETS:
Beginning of year
End of year

See accompanying notes to financial statements.


EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

NOTES TO FINANCIAL STATEHENTS, C o n t i n u e d

2.

Investments:
A summary o f

i n v e s t m e n t s is a s f o l l o w s :

/
.

i
:

..-.

December 31, 1986

fioney market funds


Bonds, debentures
and notes:
U.S. and foreign
governnent
obligations
Corporate bonds,
notes and convert ible debentures
Carmen and preferred
stocks
Insurance group
annuity contracts

4,427,800

35,103,995
$

4,427,800

5,774,937

Value

Cost

6,399,600

39,445,939

5,049,732

_ _ _-

Decanber 31, 1985

Value

Cost

/,

.:
.. .

6,399,t

34,665,221

37,598,:

9,738,720

$ 10,341,'

55,056,018

65,421,820

49,214,679

61,623,t

26,536,945

26,536,945

25,454,347

25,454,

P u r c h a s e s and sales of s e c u r i t i e s o t h e r t h a n United S t a t e s


Government o b l i g a t i o n s a g g r e g a t e d 5 3 6 , 9 7 1 , 2 8 1 and $34,885,320
i n 1 9 8 6 , a n d $23,754,759 a n d $ 2 2 , 6 3 8 , 0 9 3 i n 1985, r e s p e c t i v e l y .
P u r c h a s e s a n d s a l e s o f U n i t e d S t a t e s Government o b l i g a t i o n s ,
o t h e r t h a n s h o r t - t e r m T r e a s u r y b i l l s , a g g r e g a t e d $887,762 and
$ 3 0 0 , 0 0 0 i n 1 9 8 6 a n d $887,761 a n d 5 1 , 0 0 0 , 3 4 9 i n 1 9 8 5 , r e s p e c t i v e l y .

Continued
6
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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

compeator's purchase before Far;


b Penrod was invited ta pardciregained control as CEO.
pate in the secret plan, but refused,
The Texas Court of Appeals sa
prompting the banks to retaliite by
thatFarah lenders went too far in co
attempting to destroy Penrod
trolling Farah management. " A
Far from conceding any points.
though the lenders may have be
the banks denied the charnes. and
to exerdre ledIimate le6
fled counterdauns seeking payment
tighuorto
jw&ble busin;
of about $1.5 b i o n borrowed by the
interests." the court said. 'their cc
I Hunt com~anies.and moved for -sumduct fail& to comport with the sta
mary judgkent on the claims.
dards of fair play.. .. [Farah] was en
The lender Liability theow of the
tled to have its atfain managed
Hunts' lawsuits is a Gent phe~UIecompetent directors and office
non Lender liability hrst athacted
..
widespread attention in 1984, when
The court also upheld a frd
the Texas Court of Appeals afXmed
daim based on a bank's wa?lings tf
the result (although it reduced the
it w u l d declare the loan m defa
$18.9 million award to $18.6 million)
- in S m National Bank of El Aw v.
when in fact the bank either had ma
no decision on the maaer. or d ~ dI
Farah Manufacturino Co.. 678
plan to call the Loan
S.W2d 661.
The court also upheld a dun
'At that tine,
was
daim based on the warnings ti
decided, we really thought it was a
hrah would be bankrupt and p
fairly isolated event:' said Mawy
lodred the next day if Farah were
Poscover of Donohue, Comfeld & Jen- A A Bany Cappello, B e Santa
kins in S t Louis "Now there are liter- Barbara. Calif., attorney who won a d e d as CEO.
ally stacks of lender liability cases multimillion dollar judgmd agaimt
DUTY OF GOOD FAITH
co&
in And it isn't just going one Eonk of America.
- /'
fdthough no separate daim T
way--a few of them are good cax law
~ in- made for breach of good faith,
for the lenders. IimitinR
- the scow of of lender l i a b i i c o n h u and
terferine in a boborrower's affairs not cowt discused good faith in its or
I their Liabilitv."
A. c airy Cappello, a Santa d w - k t h a borrower in good iaith: ion,saying a thrGat made in bad i;
. can be considered duress and that
Barbara Calif.. attornes. who won a and mirre~resentationand fraud
lenders should have acted in gt
m u l d i o n dbllar j u b e n t against
Bank of America in a lender liability MANAGEMENT CHANGE CLAUSES faith rather than making the false.
The Famh case dealt with bank misleading warnings.
suir. said he r e c M about 10 phone
The good faith theory got a
.
calls a 4from borrowers who interference, duress and haud
The dispute centered on W h boost in a 1985 decision. ILMC.
would l i e him to represent
Cappello says the big increase in h r a h s bid tn become CEO of Farah Inc v. I N i n g nust ca. 757 F2d
a clothing manufac- (6th Cu.), upholding a $7.5 mil
these lawsuits may be caused by sw- Manera1 factors. including a poor econ- turer. A management change clause in jury award that included puni
omy. and publicity about large judg- the Ioan ageement gave any two damages.
W C . a food broker in Kr
banks veto power ow any change in
ments.
Many lawsuits are' brought by thehemamgementofFarah,if We. Tenn,alleged its bank faile
fanners who fell victin~to the farm they considered the change. "for any advance funds under a loan ag
airis. he said Farmers who borrowed reason whatsoever, to be adverse to ment. The Sixth Circuit said the c
heavily when the value of their land . t h e interests of the banks." Anv galion of good faith implied in rn
was h@ are now suing their banks change that occurred despite th;. .contract covered by the U.C.C.
when the banks call the loans or insist banks'objections could be treated as a posed a duty on the bank to give
-lice before discontinuinn financ
default
on chanxes
.
. . .. . . . .
--.. in
-. the farmers' mananemerit. The weak economy also a
izk : The lenders, basing their author- :even though the bank h& a dis
the
--- banks. sourrim them to call loans 'ity on that clause. told company dim- ,.tionam r i a to make advances.
Since M.C. the good faith
they would 'COntinLe to hold in more ..:. tdrs that hrah w i s Unacceptable, and 'i.*.,
. :..%..,.
.....:.:if he were elected CEO, the banlcs " ory has been the &is Gf many l e
times. -.:, ..:....
liabiity lawsuits. focusing prim
'When there's good &es, 'the ' .would bankrupt Farah Man. .
on rhe e s t a b w e n t of a cours
banks work with their borrowers, roll and padlock it the next day.
Under the management of two dealing bemeen the bank and
over the loans, work it o r g 5nd another lender for them" C a ~ w l l osaid . lender-backed CEO's. the comoanv's borrower that the b o w e r expec
"But when times are &ugh' h u h got :position in the market dete&rat& . continue despite stnct enforcer
some banks in the country that are in .;and hrah assets were -sold to pay :provisions in the loan agreement
e : v * ~ ~ hottest
e
new area of le
financial trouble. and thev mom ore-ii?interest and reduce the-outstandinn ...
cipitaudy a@& the borkwr." >-.-27~~.bbility
on the loans. Some equipment :liabiity b a widerung of the breac
: . F a d and the cases that f o l
said to hnh competitors, M i t h e duty of good faithand nd t
:
lowed established three orimarv areai one of the Farah lenders 6nancinn the 'rim"said Ca~wilo.a Darmer in

Famh

__

'

. .

'

I1

~~

~~

2-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 258 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

t sounds like an episode from legal theories such


!-sa
"Dallas."A group of hard-nosed Muciarv resvonsibiIity -na
bankers embark on a secret plan .>me with a buslnesto bankrupt two Texas energy compa- accountable for unfairnenies owned by a family of billionaires, lban or nustakes m
-a
e managemqt decisions
in order to aain control of offshore oil

I
I'

Wheeling and dealing, the banks


k a confuiential
~
information to the
energy companies' cornpentors and
hold off on r e s t r u m the loans
unhl they can work the best possible
terms.
But this isn't a soap opera, and it
h't Bobby and JR Ewmg The sons
of the lace oil billionaire KL Hunt,
Nelson Bunker, Lamar and W h
Herbe- have sued 23 banks and lendinn institutions chan!in~ that the
banks manipulated &ir-loan m c a conspiracy to destroy taro
Hunt-owned energy companies and
create an oligopoly wer oBhore drill-

Though it is not likely to break


new gmund in legal theory, the drama
inherent in this Texas-size ($138 billion m c h n e d damages) &suit has
drawn public attention to an emerging
I set of I d oroblems fa- the bankmg and hding communir;. The Hunt
brothers' Lpwsuit embodies v i r h d y
enry known theory inmrpora(ed
der the umbrella of lender liability.

I
I'

.o I

- \ /I

fi
I

I
Lender liability uses traditional cion, bad faith, breaCh of fiduciary
V I

BY DEBRA CASSENS MOSS

un;

Debm C a m Moss. a lawyer,


is a repolterfor the ABA JoumaL

duty, breach of conthct, fraudulent


misrepresentation, and violation of
the Sherman Antitrust Act, the Bank
Holding Company Act, and RICO.
The lawsuits indude allegations
that:
The banks controUed Penrod
.- Plaintiffs' lawyers hail recent and Placid's affairs to their own adlender liability iudnnents as an h- vantage. and delayed loan restructurp o m t curb i; th; power of credi- ing to-force the companies ta agree to
tors. The other side-banks and E- unremnable terms, such as a pay~ c i a linstitutions-foresee huge ment schedule that could not be met
losses for banks and as a result, more and a pledge of additional assets as
collateral
cautious lendinn wlicies.
.Many of the banks @anted
Another qt%ion is whether, as
critics charge, these suits are 6led pri- concessions and gay: better c&it
marily m 'stallii tactic to give the terms to other customers. some of
them Penrod and Placid competitors.
plainth% time to raise funds.
W Several banks promised to reThe Hunts' lawsuit w originally
fled as w.separate suits, and then nrucrure Penrod's loan before Februconsolidated The 6rst suif filed in ary 1986. but intended to break that
US. Dihict Court in Dallas last June. promise.
Some Placid creditors disaccuses the banks of crying to destroy
w Company closed con6dential information to pothe Hunts' Penrod D
and- Placid
O'i Comoanv. Its& $3.6 tential bidders for property that
Placid w attempting to seU to pay
biion in damages.
he second suit, ~ ~ b ey d
. k A ~ off its debts, and "sabotaged" efforts
Drilling and Placid Oil in July. charges bv Placid to refinance its debt with anthat the same banks engaged in a oiher bank
.The banla drafted a secret
price-fixing scheme to control offshore oil drilling and seeks $102 bil- plan in March 1986 to m a t e and control an offshore oil drilling oligopoly.
lion
By exercising certain creditors' rights.
the banks wodd determme which
THE THEORIES
The lawsuits p m c k on a litany borrowers would survive, and obtain
of Lender Liability theories: wrongful ownership interests in those compacontrol, domination. economic coer- nies.
~

~~

~~

. -~

.
. .- -.:
. . .. ....
.:-.
Herbert Hunt,
.. ... ....
bit,and Nelson .
. .
Bunker Hunt
;:.:. :.....;::

4 William

charge that

. .

; !,&.;:.+,,j

..banks hove con-

.L.~~..:::*

spired to destroy <


:.;
(heir energy ;.:-:
.:r,.
. ....
.
com~ania. ;.,..--.. :.
I.

.BA JOURNAL.I .MARCH !, ,1987


.a
..
.
.
,=. .>.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 259 of 646


Page 2365 of 2953

.. .

.. ....'-......
~

...~

..

Thursday December 15, 2016


10/19/2006

... .~

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Banking
Malpractice?

In August. 1984 a Texas court issued a


decision which shockd b a n k c o a s t - t m t .
In State Nar Bank v F a d M&. Ca.' two
Texas Court of Appeals upheld a S19 million
jury verdict against a group of fuwdal institutions for fraud durcSS. and inklltioflal intCt'fermcc
a
oorporalc powas. The
found that while
'endas may
to protectl~timstelegalrjghu
and
business intcfstS
conduct failed to
wagh'ng the
of fair phX.
Of Ihe ha
utility of their respctive conduct. Justice Shulte
decided that
bendis daivcd from
pamining the Icndm' interfamce
-I'y
upcacd thereby the harm to
from." By installing incompetent managanent
and pmmting the election of competent managmenS the ladm
Liable for all
damage the borrower suffered. including lost
profits.
A year later, wen again
when thc Sixth C-it
Cou* of appeal upheld
a 7.5 million d o h jury v&ft b.scd on a
lender's r d d to advance funds up to a
borrowerPscredit limit KM.C ca xNing
T~~ a . 3 the
found that the d-ion
by
a loan officer to cut ORfinancing with no prior

mntaau
.-

C?

i ~'
...

..

~678SW2d661,UIUCCRS764(19(U.T~A~ppU
Puo).
ScpumkrOrro6cr I986

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 260 of 646


Page 2366 of 2953

notice "'amounted to a unilateral decision on hi


part to wind up thecompany":This constituted
's dutv of enmllaiLb
of e
a b-h
performanccw--t,
.ultimately resulted in the comvanv's collamc as
a viable -b
Sinv 1984, judgments against bank have
been coming in thick and fast, with more caxs
k i n g filed every day. With the advent of lender
liability law. it h clear that the days of the
one-sided balance of power between banks and
are ova, While lender liability a an
for years,
of to* law bar been in
it has only recently been applied extensively to
obtain relief for borrowers. Lender liability is
quickly changing traditional notions about the
rights of banks, and is setting new standards
a b u t legitimate conduct between banks and
borrowen.
T h e new standards are often being xt in a
spectacukr way in the form of multi-million
dollar judgments which include large punitive
damage awards. Last summer in California.
apple farmers and the owner of a apple dehydrating plant in which the farmers had invested
obtained a 47 million dollar jury verdict against

.,

,Id,.
690,
3757 F2d 752 (1985. CA6 Tcnn).
4 Id. at 763.

Thursday December 15, 2016

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act


.

i-i

A B.y Cappello is managiog partner of a SanIa Barbara.

dealing or "bad faith breach". This tort is


grounded in the Uniform Commercial Code's
requirement that all commercial transactions be

California law firm. A member

mnn
encouraged by the bank to make terrain busi-

million. which included


court to a total of 66
and the rcmaind
represent one of the most far-reaching decisions
yet in the area of lender liability.

Duress

A third theory of recovery in thew caws is

example. if facts which should be kdxlowd to


Bad Faith Breach
arc true. or promises are m d e with no intention
One of the broadest basa for liability is
du&may be present.
breach of the covenant of good faith and fair Banks have also been found liable for supplying
false or misleading information to third panics
ll-J-'
"
of
who make credit inquiries about a customer.
Supaior Coun No. 112439.
epcomer. a.v M W ~ Flnvac CO., M) NM 680. threatening to call a loan due before the bank

459 PZd 842 (1969).


?Far&, lupn. u 686.

'UCC I-ZOI(19).

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 261 of 646


Page 2367 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 262 of 646


Property of Advance Media Group

Page 2368 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Financial Management Group Ltd.


Eden Park 11,1755 Oregon P l k e
800-211-8567

Lancarter, P A 1 7 6 0 1
800-312-1128 (PA only,

(..ROBERT E. KAUFFMAN
PRESIDENT

Millard Johnson
3450 Duff Avenue
T-z?c=+tol
PA
17601

Dear B i l l and Dattie:

I wculd like to inform you that Stanley J. Ca-ne


w i l l no longer
be servicing Financial. MaM.gem~t Group, Ltd. c l i e n t s in the -ter
area.

r,
w

Stanley has w e d his o f f i c e to Stone Harhr, N. J. ard is pusuing


WsineSS interests fmm that location. I have been informed that for the
near future Stan w i l l not serve c l i e n t s in Iancaster and may not handle
invesbrmts at all.

Fecple clc6e to Stan have asked wz to personally service his clients


until Stan can bring h i s other b u s i m s interests to a cl-.
~e
recognize t h i s separation m y be perrnanent as Stan has indicated a desire
to relocate.
As I rwiewed Stan's f i l e s , I m i z e d mmy people &o I
m e t while I trained and supervised Stan beginning in 1980. Other; 1 met
as a D i s t r i c t Nanager w i t h I E when they were my p x s o ~ clients.
l
I'm
looking forward to gettirq reacquainted and hope you'll continue to allow
Financial Management Gnxrp and myself to serve your invesbwnt needs.
I plan to call you within tke next two months concerning these
matters.
Should ym desire to discvss any issue prior to my call, please
feel free to a m t a c t me a t 569-4100 or 1-800-322-1128.

Rcbert E. X a u f m .
President

Sec~rltlcsOffercd through Planner's Serurltlcr Group. Inc.

Reglncrcd BrokerlDealer
EXHIBIT U.S. 16-4014 CIVIL RIGHTSA CLAIM
Page 263 of Member
646 SlPC

Property of Advance Media Group

Page 2369 of 2953

Member NASD
Thursday

December 15, 2016


10/19/2006

Jacobson gets jail for role in bribe scam

US District Court For The Eastern District of Pennsylvana

die

Section 3189 Federal False Claim Act

e
ld
o
$
ila
o
ll"
U
,m
l ugh
u
r.fd
h
tm"gh

frad
~ m e ~ r e c r i n diwuafitying
p.
his"phltoUle1unds.
They areehargLog.mlClar(iis
nOtenUUedtoUammey h e c a w
he sllegodlr used extortim and

Of his to^ employees and r TY


bmadcaoter who workcd as s
mRsUhsnl 101 ISE. Gucrin LesLtfiedst (hetime.
Clark r a ~ "he
d had information
concerning i i l e ~ a shipments
l
to
SouUIAlrica. intorrnrtion on manipnlstingdala having to do with
01- audibm, information eoneorninp payoffs of tarctgn ofrici816, i n f ~ r m a t i o n caneernlng
midending UIe auditom ot the
eorplNtion:'Guc"nteatified.
GUctin said hc aid Clark II
mlUion and agmc81o psy more
beeauee he feared thc attorney's
ntlegrtlons, whether true o r not.
wouldwrerk his plans to a b t r ~ n
eritlcslly MededLundnforhir dctcnspemplre
Mter he "suceuibpd to blackmn4.:Cwrin had asid, "it bothered me'grestiy !I gnawed a t me

Jacobson's sentenc
btrastanwriiW
OaugWendrh
eu

Farmcr Cnned C h e m ~ o n
~ i e r l d e nJaines
l
0 . chr#st,an.
scerrlng a six-year prlron ir.im
tordcrraudinethrgoremment
Of115 nliuion. rearlrd uatl,da~
belief and anger today upon
haar8nCthrl Carl E ~ a e ~
had r e c e i v d s ix*s,"nth

!,llhrsnddav'

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 264 of 646


Property of Advance Media Group

Page 2370 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Eden Park 11, 1755 Oregon Pike


5 6 9 4 1 00

,
i..

Lancaster, PA 17601

.,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 265 of 646


Property of Advance Media Group

Page 2371 of 2953

... .
Thursday
December 15, 2016

7 2'r-J

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STANLEY CATERBONE
Eden Park 11, 1755 Oregon Pike
569-4100

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 266 of 646


Property of Advance Media Group

Page 2372 of 2953

Lancaster, PA 17601

6c

Thursday December 15, 2016


10/19/2006

-US District Court For The Eastern VALORE,


District of Pennsylvana
McALLISTER,

3189 Federal False Claim Act


WESTMORELAND, GOULD, VESPER Section
& SCHWARTZ
A PROFCIClOhALCOf\mR*nON

MR. S T A N L E Y J (:A'TE:Iy<T:ONE
C/O F M G ACCOUNTING S E R V I C E S
1755 O R E G O N P I K F
LANCASTERt P A 17601.

STATEMENT +
009246
US. W I L L I A M h BETTY O'HARA
S U M M F F ; Y
T h i s s u m m a r y includes a l l t r a n s a c t i ~ n sup t o and including
t h e month end preceding t h i s statement.
Any c r e d i t s or r e c e i p t s
processed a f t e r that d a t e may nut he included and w i L L b e
reflected o n your next statement.

' C)
'

Less: fieta i n e r s
B A L A N C E
Fees for this b i l l

3 0

T o t a l a m o u n t of
New Balance Forward

t h i s bi L L

T O T A L B A L A N C E NOW D U E x - r x * x * a a x w x x u u x x x x

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 267 of 646


Page 2373 of 2953

Thursday December 15, 2016


10/19/2006

-US District Court For The Eastern VALORE,


District of Pennsylvana
McALLISTER,

3189 Federal False Claim Act


WESTMORELAND, GOULD, VESPER Section
& SCHWARTZ
A PROFCIClOhALCOf\mR*nON

MR. S T A N L E Y J (:A'TE:Iy<T:ONE
C/O F M G ACCOUNTING S E R V I C E S
1755 O R E G O N P I K F
LANCASTERt P A 17601.

STATEMENT +
009246
US. W I L L I A M h BETTY O'HARA
S U M M F F ; Y
T h i s s u m m a r y includes a l l t r a n s a c t i ~ n sup t o and including
t h e month end preceding t h i s statement.
Any c r e d i t s or r e c e i p t s
processed a f t e r that d a t e may nut he included and w i L L b e
reflected o n your next statement.

' C)
'

Less: fieta i n e r s
B A L A N C E
Fees for this b i l l

3 0

T o t a l a m o u n t of
New Balance Forward

t h i s bi L L

T O T A L B A L A N C E NOW D U E x - r x * x * a a x w x x u u x x x x

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 268 of 646


Page 2374 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

ACTIVITIES FOR

Section 3189 Federal False Claim Act

Thur

Fri

sat

T ~ m eEsriActual

TS4101

185

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 269 of 646


Page 2375 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

h 8 ADqebSr

Section 3189 Federal False Claim Act

QL 90067

FEB 1

::mA~.Culcrr'b

SEE REVERSE
SIDE FOR
INSTRUCTIONS

s
t&--.
......-..

~-

FICTITIOUS BUSINESS NAME STATEMENT


THE FOLLOWING PERSONIS) IS (ARE) DOING BUSINESS AS:
lFictitious B&ess

1.

AUDIO SERVlcBs/mBarr sowD aooIOs

,- Street Address Cltb & State of P r ~ n c ~ pplace


al
of B u s ~ n e r s ~Cal~forp~a
n
2.

-1

Full name a e g l s t r a n t

ZIPCode

1137 north k c a d d e n Place, Lam Angrlem, CA

...

--

Name(~)

90038

( ~corporation
f
show state of ~ncorporat~onl

I
"side-

"ress

City

State

Zip Code

madden Place, La6 Angelas, CA 90038


&
Full name of Registrant
(if corporation - show state of incorporation)

1137

lQorth

Res~denceAddress

1 (1

City

State

--

bullname of Registrant

ZiPGde

(if corpaatlon . show state of inmporatio")

I
i

Residence Address

~.
...

City

State
-

Full name of Registrant

- .. - . .
Stale

5.

~ .. . . ~ ~
.~
.
s
I
t
a n 80deradu.l I 1 a wneral wrln.#mlo I I larn8tad mrln.nnar,
t
ta~,Is?...a1...8ala.l
*.I.=I
..tt-rr a
n.,, a oar#,>e-rn~u
(
ro,on,.8qa,n I 8
ba,.enn.
t r ~ a s t icb&*.
~ . . . .
*

....

- --

__

17p Codr

L
?-

1 3 d . u
,

onr

Typed or Printed--

---

...

...

4
'

,,
?*

a
.
~
.

--

--

. __-..-

rn

..

.efile - Statement expire


December 31.<*

File No.

....-

.h

C&~I?*;(

::

on &re indiuted by file sump a b

---Cwnty

IHEREBY CERTIFY THAT THIS COPY IS A CORRECT COPY


OF THE ORIGINAI.STATEMENTOL1 FILE I N M Y OFFICE.
!

7.

2 4

a'%>

ry.
1

THE L16-4014
m ANGELES
DAILY
Y)URI\IAL
EXHIBIT U.S.
CIVIL
RIGHTS
CLAIM
c.uus+n(
,am
Property of

210 South & r w S t r r t . P 0 110. Yo16


Advance
Media
L a AGroup
W k . Wltc.",. Oa)+l
T*.pho12131 6252141

,=

'
I
I

:'.:#.
. . . . . . .-.

Signature & Title

-", I
-L.

Corporation Name

7-

6. New Fict~tiousBusineu
Name Statement

c,N~v(

I f Registrant a corporation r@ below:

-(

Signed

,F

~~~

1 This statement was filed with the County Clerk of


- .
. . . . . .
-

111 corporatlon show state of lncorporat~onl

Zip Code

c-

Page 270 of 646

......... ,_.__-....

Y)URNAL
OF COMMERCE
- REVIEW
Thursday
December
15, 2016

**-.I.

210 h

Page 2376 of 2953


- -

~~

L.U(.II*I."

>el7

m s . .strrl.
~ r.o eo. wx
10/19/2006
~
Wlt--"l.
. ~
sM11
.

.-

to File U.S. mdivldual lncqms ,Tak


~et$ih',
.. Federal False Claim Act
Section 3189
.

r r T-R
Court
.*klUS
I- District
Lnr.
,0, For The Eastern District of Pennsylvana
. .
Your riot nam. and l n a t ~ a(if
l loon1 mum. d s a Or* spouse'. turn wd InlUaO

'
r

. .

GOM ~ u o n l
.
.
....

Wd

f
Ressnt homo address (Number and ~l,?naWik
' ~ . n m . b aw ,v d w

r:

city. t a m or port ouca. stat*. snd z ~ ~ c o d .


C UCVEri C l T y
Cr(~

///3'/
r

MARY

I . . . . '

b s l nome

'

' '

cdcerc/cnwd

:, , +

'

<.

3003 y

/g.

':

.. . : .
. . ~

this lorm with the lntsrnal Rsvenue Service Cnter.wnere you m r t flle y o u r i w n m tir return ;nd;p'.y
t h mOuat
ShoWlUn
.
,
,
line 6 be:@w.Thls is not an eltenslon of Unw lor payment of tar. Tke k w mqalra that'e pen& beth.f#ed f or late. w$m#IIt
bt
p.
'?.:.
.,.
tar and idle lil~npunless you show relaonible cause for not payon. the tax when due (see 4nstructlonO);,
r1.m .swt to 11Ia a 1981 plt 114 ralurn (form 709) due p h d n a t)r clow of Uw W h dwda awmc of 19ll.chclchnba8 0.

HQbl: file

Ol
. yder I&.&
. + ' : ;.. -

1. mausst
an autornatoc 2.rnontlj eltensoon 01 tln~e'untllJune.15. 1SZ. In whlch
to file F o m 1040 for tho-lender
.
..
,.
w hwal year return until .................... 1................-.- L
.
.
:
.
.
19--.
fw th. .tar. year beginning
A
. . .. . .
and ending ............................................... 19........)<

. -.-....-...-...--.

,.

,,&

'
'

:~.1981,.. .

. . . . . I . .

.,.

.lo I
;l Total income tar liability for 1981 (You n). e s t i ~ t thla
e .ino~nL).
I, Mot.: YOU must enter an amount on line
If p. . u do not *Ip.Ct to 0"
enter zero (0).
.
B Federal Income tax withheld
,

LI.

........... .......

95 1.981estimated tax payrnwta (include 1980 ov&&nt


1: Other payments (sea instruction E)
)I,

Totai (add l i n n 2.3, and 4)

,bawd u icredit).

. .

..............

..........................

G lncome tax balance due (subtract line 5 fmrn line

1). Pay In full with mlr form

..:.....

,r Total gift tax you expect to owe for 1981 (w inshuctian E).Notc This i s the amount you oxput to gw
r for the giit tax return due following the cJow ot me tounh uI*nd.r q u e r h r d 1981
l,liny--'i

. . . . . . . . . . . . . .

m . .~

(Aimtruciion fot

., . . . . . . . . . . . ... . .
-.

I 1

.........

u b . w c M i w b r t h i l n m a m d ~ m ~ d ~ r l t + ? a ~ ~ ~ ~ * . m & ~ h & i r ~
. .~ . ~. . ~ ' * ~ ~ * ~ .

.ignature and Verification


I If R e p a r d by Teapayer.-Undu
puraltles ofperluy, Ideclen that Ihave bumlnd'thla form, lndudinp eccMnpnylng schadula
.!a
StdtcllIents, and to the best of my knowledge and bllef. it Is truo, corn(..ndcomplete.

.
IfPrepared by Someone Other Than ~w:&Und.rp.d.y,a of pwfuy, I
I h& &mi&
rrwnpanying schedules and statemants and to Ui. best of my I&i n d bollof. .kbtiuq- ai+,. .dd
. .
buthorized to prepre this form; and that Iam: . '

,.

hymt

pwd cause. MY relationship toihetar&y6rand th.'iwii+v@;tli,


...
.. ...

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

..

.; . .

&

..

t&yuannot
. . .

Page 271 of 646


Page 2377 of 2953

*\,,

~e ' . .!. ...:.

*,'&id&
.....
,

."..'. .

in,
~.,

-- .

e p l a t b - t h q l'iin

. .
mernbor In &modstandlng of the bar of th.
court .@ (spdfy luWls(l4n)
. :
. ? .
ceitified pubnic accountant qualifiql to p m c t b In (*panjurId)_
1 A panon anmlled to practlce beforethe Internal Revenue S.rvlu.
nl h authorized agent holding' a power of .ttorn+. (YOUn w d not u n d in the power of ~ m o unhss
y
requv.)
1 A penon in close personal br bu.slnau rektion~hlptq Uu bxpem annot ilgn.pilstormkcaliq of l l t n . 4 ' i ) b l r ~
.%.

-. .:

Iqdudlng.

t q , af&,

'

.. , . . .

.!?

v..-

+.:.

*.z

'

.:.'

. ,.

i ,.,,-

ora@U

.......-.~
<;

. . .. . . .? L. U.

:.!

"

. . . . . . . . .. . ..

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 272 of 646


Page 2378 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

BROUT&

Section 3189 Federal False Claim Act

COMPANY

CERTICIED PUBLIC A C C O U N T A N T S
v E r 10'1

. LOS A N G Z L E S

W O R m l S V O l N . N d.

1900 A V E N U E O F T H E S T A R S

LOF. A N G E L E S .
213

Dear

7-i 3

CAL~FORN~A
90087
553-1941

'

E n c l o s e d i s ttie o r i g i n a l and o n e c o p y o f t h e County o f L o s A n g e l e s B u s i n e s s


S t a t e m e n t a s o f Marcti 1. 1982.
The o r i g i n a l s h o u l d b e s i g n e d b y you a n d p o s t m a r k e d o n or b e f o r e A p r i l 30. 1982.
Mail to:
County o f Los A n g e l e s
Office of t h e Assessor

dPFF.) 4

@A

9 /YO(

The d u p l i c a t e c o p y i s f o r y o u r f i l e .
Very t r u l y y o u r s ,

BROUT h COMPANY

Enclosures

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 273 of 646


Property of Advance Media Group

Page 2379 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

VALORE, McALLISTER, CZIESTMORELAIID,


QOULD. VESPER & SCHWARTZ

1115 A T L A N K A M M

s u m 511

cw

ATLAN~Ccm. NJ

MP-Hid539
COUNSELLORS AT LAU1
Ym PAClRC AVUIUt

MAINLAND PROFESSIONAL PLAZA


535 TILTON ROAD
NORTHRELD. N] 08225
(a91645-1 i l l

P.O. BOX 311

. N1 O
B
m

MP.7IP-IlIl

IN REPLY REFER TO

Northfield
87/346-001

NLN

July 20, 1 9 8 7

Stanley J. Caterbone
554 Berkeley Road
Stone Harbor, NJ 0 8 2 4 7
Re:

Caterbone

O'Hara

~ l e ~ sfind
e
enclosed our July 17, 1 9 8 7 bill in the above
matter in the amount of $206.25 for services rendered from June 9
through June 16, 1987.
As you can see from the summary statement
attached to the front of the bill, we have deducted this amount
from the $500.00 retainer, leaving a credit balance of $293.75'
against which subsequent fees will be charged.
If you have any questions concerning the enclosed, please do
not hesitate to contact me.

LJS:rlh
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 274 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 275 of 646


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

JOSEPH F. RODA. P.C.


ATTORNEYS AT LAW
301 C4PHER BUILDING

36 E A S T I(INC. STREET
LANCASTER. PENNSYLVANIA 1 7 6 0 2
TELEPHONE 17171 3 9 7 - 3 7 9 1

JOSEPH F R O D *
PAUL 5.R O M A N O

July 22, 1987

Mr. Stanley J. Caterbone


554 Berkley Road
Stone Harbor, NJ 08247
Dear Stan:
Enclosed is our statement for services and costs for
July 1, 1987 through July 7, 1987, and an itemization of the
services and costs involved.

Joseph F. Roda

JFR: dlb
Enc.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

JOSEPH F. RODA. P.C.


301 C I P H E R BUILDING. 36 E. KING S T R E E T
L A N C A S T E R . P E N N S Y L V A N I A 17602

J u l y 22, 1987

CATERBONE

ITEMIZED PROFESSIONAL SERVICES


Date
7/1/87

Attorney
JFR

JFR
JFR

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Description

H ours
-

C o n f e r e n c e s w i t h S. C a t e r b o n e ;
telephone c a l l f r o m J .
Jamouneau, E s q . ; l e t t e r t o
R. K a u f m a n .

3.1

Telephone c a l l s t o and f r o m S .
C a t e r b o n e and f r o m R . K a u f f m a n .

-4

L e t t e r f r o m R. K a u f f m a n .

.1

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Section 3189 Federal False Claim Act

JOSEPH
F. RODA. P.C.
3 0 1 C I P H E R B U I L O I N G 36 E K l N G STREET

LANCASTER PENNSYLVANIA 1 7 6 0 2

I
CATERBONE

July 22, 1987

FOR PROFESSIONAL SERVICES RENDERED:


~ i the
r
period July 1, 1987
through July 7, 1987:
COSTS ADVANCED:
Copying costs
Long distance telephone

$74.48
1.00

TOTAL COSTS ADVANCED:


TOTAL PROFESSIONAL SERVICES AND
COSTS ADVANCED:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

14 GREENFIELD ROAD, LANCASTER, PA 17602 PHONE (717) 392-0641

July 2 3 , 1987

Mr. Stanley J. Caterbone


554 Berkley Road
Stone Harbor, NJ 08247
Dear Mr. Caterbone:
On July 14, 1987 we learned you have relocated to Stone Harbor. Until this
morning, I was unable to reach you to discuss the matter of the computer
lease running with us.
you know prior to June, 1987, your credit history with us was execellent
with all obligations paid current. However, we now find the lease is two
months in arrears, with both the June 1 and July 1 rentals being outstanding.
In addition we learned the computer is actually in the shop at Dunlap and
Kerst with an unpaid repair bill of $524.00 levied against it.

As

We have excercised our rights under the the terms of the lease, Paragraph
No. 17, and effective July 16, we reclassified the lease into a default
category and have repossessed all of the remaining equipment from the offices
of the Financial Management Group.
For you to satisfy your obligations to DaLa Company and to allow us to return
the computer to you we will require full settlement of the outstanding balance
on the lease. This amount is $1,939.52 plus the balance owed on the repair
service of $524.04, for a total of $2,463.52, payable imnediately to us
by cashiers check of money order.
If we do not have settlement of the lease by August 1, 1987 we will proceed
to sell the s y s t ~iii order to recoup what ever funds are owed on the system.

Should we fail to recover the full amount owed, we would need to look to
you to settle any remaining balance due.
In my discussion with you today, I informed you of an offer received from
one of our suppliers for the computer system listed on the lease. Their
offer is in the amount of $1,500.00, which represents 35% of the original
cost.
You verbally authorized me to proceed with the sale, stating you have no
interest in having the computer back and indicated your written authorization
for the sale will be mailed to me today.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Accordingly, I will implement the sale for the $1,500.00, and satisfy the repair
bill at Dunlap and Kerst. You will find enclosed our invoice in the anount of
$963.52 representing the balance owed to satisfy your obligation to DaLa Co.
Please feel free to call if you have any questions in this regard.
Sincerely,

baul ~erstine
General Manager

PD:em
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Management Group, LTD


,,".K,.,

WAMCMC".

G..O",

,,o

STANLEY J. CATERBONE
EXECUTIVE VICE PRESIDENT

554 Berliley Road

Stone Hartwr, NJ
( W )%7-5184

08247

J u l y 24, 1987

J i m Bly
Sourcz C a p i t a l
6725 (Xlrran Street
W e a n , VA
22101

. .

Dear J i m :
Enclosed is t h e p a c k * f o r t h e Real E s t a t e Deal as per o u r
c o n v e r s a t i o n . Plg i v e me your response as to a n i n d i c a t i o n of i n t e r e s t as
= a n as p o s s i b l e so t h a t I may c o n t a c t someone else if you are n o t i n t e r e s t e d .
I a p p r e c i a t e your t i m e and c o n s i d e r a t i o n .

Zk

ley J. catertxre

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 281 of 646

Thursday December 15, 2016

Securltl~sOffcred through Planner's Securnler Group. Ine.


Page 2387 of 2953
A Reglitered BrokcrlDealer
Member StPC
Member NASO

10/19/2006

US District Court For The Eastern District of Pennsylvana

I.

Section 3189 Federal False Claim Act

Scope of B u s i n e s s

Servioes and f u n c t i o n s of SourWilliams.


111. S t r u c t u r e of S y n d i c a t i o n
11.

IV.

V.

Costs

C a p i t a l , I n v e s t o r / I n v e s t o r s , and Bennet

of S y n d i c a t i o n - Bennett W i l l i m F i n a n c i a l Center

Financial Projections

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

sWswpE..a...~~-~.~.s2

.
.

is a

follwing

The
,

Section 3189 Federal False Claim Act

syndication

and

Im.

The

of

to

Bennett

Williams,

Im.

to provide

the

marketing of the 2.6 million o f f i e building to b e constructed

i n downtown York,
function

pr-1

This prqms-a1 is an attecrpt to describe t h e role and

PA.

Swrce Capital

along w i t h the relationships of Bennett Williams,

and the Investor/I-tors.

of the p r o j e c t is to r a i r e the ~

plm

million

(excluding

it

entirety

until

will

be

funded

will

provide

rcapital /approximately 2.6

syndication f e e s ) and to mange the partnership t h r w g h its


dissolved.

is

As per previous conversations, t h e building

m n p l e t e l y from partnership proceeds w i t h t using debt, which

a steady stream of inccme, projected to be between 12%

the p o s s i b i l i t y of refinancing t h e p r o j e c t around t h e =nth

15%w i t h

year i n order to

return the o r i g i m l capital back to the investors.

R1G w i l l

which

also consider developing a F i ~ r C i a S


l e w i c e m n t e r , similar t o that

e x i s t s i n Lamaster.

responsible

for

the

While Bennett Williams w i l l be the major t e n a n t and

1-

up,

f%2 w i l l

consider also a i d i n g i n t h a t pr-

through w n s i o n of t h e i r business to York.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I.: DELI% E . B F T T . ..WIUI.W.-zTK GU'E~...~~~E~..IG..~?.,.)


T k Gewral Partner (GP) will be responsible for t k following:

a).

Development

The G.P.

will be r-nsible

for all dsvelcpwnt

involved in t k project.

b).

Construction - The G.P.

will be r q n s i b l e for all construction

pbses associated with the project.

c).

Lait-g - All leasing responsibilities will be of the G.P.


G.P.

The

will have the task of obtaining l a occupancy of the building

i n a reasomble and timely fashion. The G.P.

will also be

responsible for determining the fair market value of the =paand for attracting attractive t e ~ n t s
with favorable leasing
agreements to maintain a favorable and healthy cash flow.

d).

Management

- The G.P.

will be m n s i b l e for the managsent of

both tenants and the building in order to obtain maximum

income and future appreciation given favorable eoomnic oonditions.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LL W L I C N E ~.%...%!?IT.K
MG, Ltd. w i l l be r e q x n s l b l e f o r the follcwing services and factors:

a).

The Syndicator w i l l be r e n s i b l e f o r a l l legal


and a-nting

services rezdsd to register the partnership with

the a p p r w r i a t e regulatory authorities i n order to solicit


investors.

b).

Prospectus - The Syndicator w i l l be reqmnsible f o r the development

to be used to solicit investors.

and prmhction of the pr-tus

c).

Marketing

- The Syndicator

w i l l be responsible f o r the marketing

and s o l i c i t a t i o n of investors i n order to r a i s e the necessary


capital to f i m n c e the project.

d).

Distribution of ~ r o c e e d s- The Syndicator w i l l be responsible f o r


a-nting

and reporting functions necesrary to provide investors

w i t h the progress and performance of the Partnership.

The

Syndicator w i l l be r w n s i b l e f o r the reporting regulations of the


Interm1 Revewe Service f o r

both Investors and the G.P.

The

Syndicator w i l l a l m be responsible f o r U7e distribution of p

both &ring operation and upon sale w r e f i ~ n c i n gof the project.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Partnership
Private

is a c k s c r ~ p t i o nof the s t r u c t u r e of t k p a r t n e r s h i p .

follcwing

The

will

be

Pla-nt

Section 3189 Federal False Claim Act

T k

r e g i s t e r e d by t k Securities and Exckr@ Carmisrion a s a

-lation

D, Rule 144 Offering.

T h i s w i l l l i m i t t h e rxlrrber

of u m c c r e d i t e d i n v e s t o r s t o 35.

Bennet Williams Inc. - General P a r t n e r

. .

Eqity:

20% of P a r t n e r s h i p sale d i s t r i b u t i o n s

Incane:

15%of Net c a s h f l o w d i s t r i b u t i o n s

Souroe C a p i w - Marketing F e e s
Eqity:

5% of P a r t n e r s h i p =le proceeds.

Incane:

@ of N e t c a s h flow d i s t r i b u t i o n s

Eqlity:

75%

I m :

85%

Load :

ES% of c a s h goes i n t o actual development

of Net P r c c e d s

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 286 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

(gipl-hlwill receive ~ r o x i m t e l y 8% of the capital raie&

in

the necessary services associated with the project.

This

order to perform

imludes all legal, accrxlnting and marketing fees needed.

Bennett-Williams will receive a 3%G.P. developnent fee for pltting the project
together (building design, construction %pervision

The
.

Broker/Dealer

(if

...etc.).

needed) will receive a 1% syndication fee for

registration

partnership.

and

preparation of financial disclosure

This means approximately a8% of

j' iltilding

the capital raised will go into the actual

and grand. This ircludes all 1-1,

of the partmrship.

documents for the

aoaunting, printing, marketing,

With this ratio, the program will be among the most

marketable anywhere in the country.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 287 of 646


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US District Court For The Eastern District of Pennsylvana

FiMnCial
Center
has

Section 3189 Federal False Claim Act

LTD. w i l l a t t e c r p t to &welop a F i M I X i a l Service

M a ~ m n t . Grcup,

to

similar

the L a n c a s t e r Office i n t h e b u i l d i n g b e i n g vndicated.

MG

d e v e l q x d a F u l l Service F i m w i a l C e n t e r t h a t p r o v i d e s a l l of the r e l a t i v e

services

re=essary to

and institutions.

mamge t h e f i ~ n c i a affairs
l
of i n d i v i d a l s , b u s i n e s s e s

The Center w i l l i n c l u d e the f o l l o w i n g services:

1. F i r e n c i a 1 Planning

Finamial
the

2.

Investment and P o r t f o l i o Management

3.

k c c u n t i n g and Tax P r e p a r a t i o n

4.

Real E s t a t e Services

5.

Legal Servioes

6.

I ~ r a r c Services
e

7.

Managewnt

Lamaster

role i n

the

that

been

pt

w i l l s t r u c t u r e the C e n t e r similar to that of

LTD

with

the

e x c e p t i o n that Bennett Williams w i l l have a

f o r m a t i o n and the o p e r a t i o n s o f the Center.

and

structured

~ and nMortgage
t
Banking

Group,

location

recruiting
Pave

managerent
dweloped

the

of

and

-ration

used

in

Ft% w i l l p r o v i d e the

and w i l l u s e t h e w r r e n t s y s m

Lancaster.

The

ownership w i l l be

m n g MG, B e n n e t t W i l l i a m , and the other Major P l a y e r s who wish to

involved.

Enclw_sd is a n o r i g i ~ Busil

P l a n t h a t o u t l i n e s tk c o n c e p t

i n more detail.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 288 of 646


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US District Court For The Eastern District of Pennsylvana

following

The

of

Section 3189 Federal False Claim Act

Firms have exprezsed very s t r o n g and f a v o r a b l e i n d i c a t i o n s

i n t e r e s t to s i g n lorg term 1-

this

will

the

be

premier

agreements f o r -ace.

office

q ~ c elocated

P l e a s e be aware t h a t

i n Downtown York, and mt

irrportantly w i l l be the Only O f f i c e S>acz with on site parking.


will

be

rented

for

$30.00

Parking spa-

p e r month, and t h i s is t h e f a i r market v a l u e , n o t

c o n s i d e r i n 3 the convienewe.

Bennet

Williams

agreemenb.

and

will

occupy

25%

of

the

space

a t market v a l u e lease

Bennet W i l l i a m s is t h e l a r g s t Real E s t a t e Firm i n the York area,

is one of the L a r i Q t i n C e n t r a l Pennsylvania.

Dave %had is the P r e s i d e n t

and can be reached a t (717) 843-5551.

Cum-ican Erpress
York Bank

7 . W Sq. F t .

10,000

"

FIcrxrunting Firm

5,000

"

wraisal Firm

1,1333

"

Bennet ~ i l l i a m s

8,000

Total

3 1 , 5 0 Square F e e t

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

'

Page 289 of 646


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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

WSH FLOW

WRD COSTS
WISITImi
CCNSTRUCTIa'l
4% CONTINGENCY FEE

$1.960,00CI.O(i

31,000 32. FT. @ $10.00


9,033 SQ. FT. @ $6.00
108 PARKIW SPACES e m/m.

$310,000

TClrPL INCOME

$402,800

$54,003
$38,800

SOFT COSTS
DES1Q.I
FuWISHINGlj
F I W I f f i FEES

TOTAL COSTS

$ 1 ~ , 0 ~ k l . ~

$m,oi3o.ix

15

$Z,~~R,GXJ.IX)

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

C ; W ON CAW RETURN

$ZB,KKl.Oi,

Page 290 of 646


Page 2396 of 2953

Thursday December 15, 2016


10/19/2006

,,,,,,,,

. ....
"
"
.......................
..................... <\,,,,,$
:<r,~
CBrl L J D C O b I o
minimam-rccurlly
nrlran filr
I ,I
,
, ,
ir
.II,.,l,
j.l,ilC
,illling
5%-11,
to the jtldvo by Edward .I.
ild'Ls
0970s DhYIO)
Dorrlns along s ~ o . n l sin bilhr
rjlil.,iry
tu i~cfr.i,.j
11111
t ~ ~ e , , , , , e ~ , t , ~ , , , ~ ~ t , ~ ~ ~ , ~ , l ,~t ~, , ~, , ~~ ~, , n, bc r , t h c f ~ ~ m e r s u'"c1'e"'~c""""d"'hL'rn"4""k'"~
w r v ~ sl l ~r rirarllcipalrtl
~f
1urCI.b
in
thr
US
District
For The
Eastern
3189 Federal False Claim Act
tnuncv
in a Court
Kav? nll8clal
vlhu
$01-c ~District
~ C ~ ~ I I lilx
Sof
V Pennsylvana
rlifttmh. lie
,'
f h r 1 . m c a s t ~ r Taunts D f l i c ~an1Section
brlllr ,rhumc.scrurdlng,ocuur,
sr;,rr
,,r,n,,
a
,,cc,,rd,nE
uuur, dor,,,,,cn,p
i)r,'ll,nl8on and 1'rrolc"s intcnsivr ,~,,r,~nlcr,t,.
to rccovri
$0" rrrrlrcd :xlx~wt I I
~ ~ r o m , s eLO
d sterr cnntrnrtr to foccii ilrc
chemcon.
82i0,no"ri.~.
\v~,.~,
~n,bl.'ll"n rnunifllns ~ m ~ r r maneiourd
m
hlmbY H
~
ca*h
~
ilnd ~chctki ~l r o , , ~
For the Wcdlccll ~ h i l r ~ in
c
.Inmbn,n, h # w e v e r ,won f.tvnr son wrs ln i.nllr rb,cn(l,rgo,rm.
f"'lulcnll*s.
aflicmlr frnlli ji,,i loI:,
w h ~ he
h was the mtdlt~eman'ror frmxn ~ I ~ O ~ ~ . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ C X ~ I rncllt
The i l l y m r n f s I m m llnlted he~u,n,dou,r,,ltn
,n,r
to berue 11im
I I I I I I I \\,as
I I S trY,'a
r Ills
o
a n .whu has
r efsmtiy
n
11\,1ng Chrm.an
Rsmircl tuut ,,lace
a 8115.WO bnbe. Jacobson re- I ~ I I ~ c ~ ~ ~ ~ ~ c c I I ~ * ~~ l~i l ~: l ~Cr i~l ~~d .i iIl l~~ ~I iCl hOp ~~c ~~ iIw
. .I~
~s~l h
~b r brother
nn ~
the
Jauobrun IS ,,nr or I
CeIved a three-year nvrpendcd u~sligallo!mb. as well i s lhr ear19*, arrord,,,g
Thc fnn:mmrnt lovnd aul he i;wm in C h e s l ~ r N.J
.
, has k n
reconlr,rlthetrmeChcm.
c h u g c d ~ n i h riim,ill,
sentenceandpmbat~an.
i u n l inverlirdllun into Cllfnn m r i n c h d r and rr8iI lllr rubgl8c,
vying to get a cnn,racl
Can lraud m d hr\k,r?
Leisure ordrred lacubson la and lnlcrnati<,#talSlsnal L Con- #i:l LC, ihc l i S c m b r s a ~tllcrc. rollnsellltc youths at a p m g ~ a m ,c
managed bv Hafner and helpine worfh *but mllliun
1ncIud1ns lormrr C ,
turn hlmwlfino"lunc2iUUstt",
troi timup
J~aroliisnu'ar s r r i c d wilh the out at a YMC.4 program in YorLhaprioon k r m .
N~,,~..~~~~~~,,~..
"lbc rllnllgcll 1xHn1 in h l i s u i l y l l m a n l l a r iorlrle h i s ilsCosnty.N.J.
p r c siI
d hrvcpirudud
e n l J r m r r H Chr
far.
gui
Jacobam. 47,- a thebrotherin- Jaeohran'slaror is chat l m n i (he Dasswrt m d irylng to gut a ,sew
Goidberg called Jecobsm a
b LheUredtcrh scheme. ~ s m b hauek~nrenfeneed.

,,

.
~,B,,>~

,,

cl,,,~

,,,

FBI accl
.......-

I Christian angered I

""...*.

The FBI agent said he i n t e r


viewed numemvr 1SCerocut:rea
ol mnversationr h?
who told h ~ m
which Clark rhowcd full koowld y e of the company's allegedly
illepalactivilies.
The agent raid. 10. instance,
that James Deirrh, a former ISC
financial off~cinl,b d recalled a
Fpnve"aariominwhichc~arksaid
Those (ISC1 people have &
worry. thole pemple are oing to
,*(I,
lames G U ~ C , "
knw
what i t leelsUketoberaped."
Aecordirll to ~ e i t r e h .c l a n
also referred to other ISC olllciald Joseph H. Zilligen. R.Clyde
Ivy. andTerry Faulds an"criminals and r m a W in nvmemur
ennvcmation.theFBIaeentraid.
Thomas Mills, another ISC
linrnelal official. told the F B I
agent !hat in 1988 he observed
Clark spending "an unusual
number of hours a, the phatoc*
w i n g machine."
including
nigh* and weekends. O'CdIaChansaid.
Mills told the sgcm that when
sumrone elre cntered the photocopy mom. Clark memed "very
dratvrbcd and agitated" s t not

wifl

be~nealonc.!heagcnfcontinued.
The rgenl srld Michael D.
Spangler, m ISC public relstiona
manager, mrlld c i a r k saying
that if ISC'5 mergcr partner in
Enyland ,'*new the true finan"La1 picture of ISC. they'd all bc
I","#I

"

Gucrln has malnlained br


mOOtha that Clark lorced h i m to
sign the severance pay deal with
thceats Of C X W S U R concerning
a b e d wrongdo"
by IS$.$%
PlOYep9. ' ~t B p r d l m i n ~ r yh?aring+acre
nn i s " o c , , r r , n <a,,, hiF I.*.,.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 291 of 646


Property of Advance Media Group

Page 2397 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Management Group, LTD


A2"

M.urr*t*rr.a*

717-5694100 ~ 5 2 1 - 8 5 6 7 SOO-322-1118 (PA only)

lro

MICHAEL M. HARTLETT, CFP


EXECUTIVE VICE PRESIDENT

Oblenders
37 South @leenStreet
-,
PA 17603

Dear Sir:

a t Financial Management Group Ltd. (Fm; Ltd.) want to inform you that
Stanley J. Caterbone is no longer an officer of our corpration.

We

He w a s was63 as Fxecutive V i c e Fresident on July 1, 1987. W e have been


informed that Mr. Qterbne has keen plrchasitq items under FM; Ltd's name and
obtaining cur Brporate discount and rates.

lhis letter senres notice that Stanley J. Caterbone nwer has had the right to:
1) Furdnse i t e n s for or thraqh FIG.
2 ) Make C o m b ammlim behalf of FM;.
3) Contract for or in any way obligate Fm; W.

and that we are laat ?xspmsible for any debts, liabilities or obligations which
may arise f m or thmugh him.

If you have any questions, please call Michael Iiartlett or Rcbert Kauffman a t
717-569-5555.
?hank you for your w
r
t of
Ltd.
prosperous kusiness relationship w i t h yau.

We

look

forward to a l q and

kchael M. Iiartlett, CFP


Executive V i c e President

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 292 of 646

Thursday December 15, 2016

omnd chmqh mannofa i . N I * k s GIOUP Iffi

A R.p-

M r lPage
D . .2398
h of . 2953
rYrmb.r

S I K

M-b..

NASD

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

K L SHIRK.SR (1915-1956

A T T O R N E Y 5 AT L A W

PRINCIPAL OFFICE

P 0 B O X 1552

132 E. CHESWUT STREET

LANCASTER,

WILLIAM J PELHAN
BARBARA RElST DILLON

PENNSYLVANIA17603-1552

AREA CODE 717


LANCASTER-394-7247
AKRON.859-I742

August 5 , 1987

IN REPLY REFER TO:

C0127 WOlDV CAT

S t a n l e y J. C a t e r b o n e
554 B e r k l e y Road
S t o n e Harbor N J 08247

Mr.

Dear S t a n :
I was v e r y s o r r y t o h e a r of your m i s f o r t u n e when w e spoke
today.
C e r t a i n l y , you a r e w i s e t o o b t a i n c o m p e t e n t , r e l i a b l e l e g a l
c o u n s e l who w i l l g u i d e you w e l l , n o t o n l y l e g a l l y , b u t e t h i c a l l y .
I a m e n c l o s i n g , i n a c c o r d a n c e w i t h your r e q u e s t , a p a c k e t
(of A l l - S t a t e L e g a l Supply Co.) which c o n t a i n s t h e V o l u n t a r y P e t i t i o n i n Bankruptcy ( C h a p t e r 7 ) and a l l accompanying forms which are
n e c e s s a r y t o p r o c e s s s u c h a n i n d i v i d u a l , bankruptcy.

T h i s p a c k e t i s complete i n terms o f what you need t o process a b a n k r u p t c y t h r o u g h o u r f e d e r a l c o u r t system.


W e , i n c l u d i n g S t e p h e n R . G i b b l e and m y s e l f , a r e g i v i n g no
a d v i c e t o you i n t h e c o u r s e of s e n d i n g vou t h i s m a t e r i a l .
It is
our basic, very s t r i c t policy i n t h i s o f f i c e , t o n o t give l e g a l
a d v i c e t o any c l i e n t , new o r f a m i l i a r , u n l e s s we are f u l l y informed.
o f and f a m i l i a r w i t h t h e p r e c i s e , d e t a i l e d f a c t s o f t h e case, upon
which we c a n b a s e a competent o p i n i o n .

You had mentioned t o m e and t o Stephen G i b b l e t h a t you


wanted t o c a l l S t e p h e n G i b b l e from t i m e t o t i m e t o a s k him l e g a l
I do not
q u e s t i o n s and s o l i c i t l e g a l a d v i c e a s you f e l t n e c e s s a r y .
t h i n k t h a t t h i s i s a w i s e way f o r you t o h a n d l e t h e s i t u a t i o n , S t a n .
P l e a s e f o r g i v e m e f o r g i v i n g you p r a c t i c a l , n o n - l e g a l a d v i c e , when
you have n o t a s k e d f o r i t . However, I a d v i s e you as a f r i e n d t h a t
it i s b e t t e r t h a t you s e e k t h e o p i n i o n o f C a l i f o r n i a a t t o r n e y s , when
you a r r i v e t h e r e , a s t o p r o c e s s i n g t h e bankruptcy p e t i t i o n , o r s i m p l y
as t o q u e s t i o n s you m i g h t have from t i m e t o t i m e . Given t h a t t h e y
w i l l a l s o know your e n t i r e s i t u a t i o n , b e c a u s e of t h e l i t i g a t i o n t h e y
may b e h a n d l i n g f o r you, t h e r e w i l l b e no i s s u e s t h a t a r e o v e r l o o k e d .

OTHER OFFICES
107 WEST MAIN STREET
EPHRATA. PENNSYLVANIA 17522-2014
717-733-2588
717-626-2404
EXHIBIT
U.S. 16-4014
CIVIL RIGHTS

Property of Advance Media Group

CLAIM

402 SOUTHBROAD STREET


LITITZ. PENNSYLVANIA 1 7 5 4 3 . 2 6 0 2
7 1 7of
- 6 2 646
6-2775
Page 293

Page 2399 of 2953

250 MAPLE AVENUE


WARRWILLE, PENNSYLVANIA 17566-132C
Thursday December
15, 2016
717-786-1123

.10/19/2006
? 3 1

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Mr. Stanley J. Caterbone


August 5, 1987
Page Two
,

'

It would be extremely dangerous for us, and unfair to you!, ,d


to advise you in this situation when we do not have the information
that is necessary. I feel that it would be very hard for you to communicate all of that over the phone to Stephen Gibble.

I:

I do not mean to imply that we are not happy to send you


these forms out of courtesy to you for the many kindnesses and courtesies which you have extended to us in the past. We very much
appreciate that courtesy and kindness and want to reciprocate. But
we do not want to create an unwise attorney/client relationship.

Again, it is very distressing to hear of your misfortune,


and I sincerely hope that you are able to resolve these problems in
the future, and that, with patience and support, you will be able to
rebuild and succeed.
With every best wish, I am
Sincerely,
SHIRK, REIST, WAGENSELLER AND SHIRK

By:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 294 of 646


Page 2400 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FAX: 0 1 1 8 1 ~ 5 5 0

B i l l T e l l , President PD2 I-tries


Oshaka, Japan

Dear B i l l :
If you no of anyover there that would l i k e a great i n v e s t m n t i n
real estate, I am i n desperate need of fur& for a Prime p i e c e of Real Estate
i n the Heart of I - b l l ~ The
.
-r
of Gomillion Studios, of which I am
Executive V i c e P r e s i b n t . The Film and Sound Studio is doing f i n e , kaever he
was i n the middle of r a i s i n g 6 m i l l i o n dollars by way of a Bond Offering,
ha*rever
the I-bent
Firm was caught i n a Scardal, which sears l i k e a n
everyday occurram. H e rmst declare p e r m 1 Barcruptcy by -st
6 t h unless
he can f i n d $200,000. He owns the R e a l Estate p e r s o ~ l l yand r e n t s it to the
Film Studio. The R e a l Estate ard all E ~ i p n e n tis worth o v e r 6.6 m i l l i o n
Dollars. He was paying $300.aX)per year i n Rent. I c a n worU a very
attractive deal f o r Ior E ~ i t iyf i n t e r e s t e d . Enclosed are sune piof i n f o m t i o n .

Thanks f o r ycur a x s i d e r a t i o n .
I

If you can gst me a n R-Dat for the S t u d i o , please also g t me a box of 90


miruete blanck tapes, the b e s t q m l i t y available.

cc: T. G a n i l l i o n

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 295 of 646


Property of Advance Media Group

Page 2401 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Commonwealt

National Bank

A Mellon ~ a n k ~ ' " ~ " ~ ' ~

August 7, 1987

Mr. S t a n l e y C a t e r b o n e
554 B e r k e l e y Road
S t o n e H a r b o r , N.J. 08247

Dear Mr. C a t e r b o n e :

M r . S i e g e l h a s r e v i e w e d w i t h me t h e s u b s t a n c e o f h i s t e l e p h o n e c o n v e r s a t i o n
w i t h you oii August 5 , i927, and has askei me Zo r e s p o n d t o you d i r e c t l y .
A s a r e s u l t o f t h e c o n c e r n s which you e x p r e s s e d , w e have a g a i n r e v i e w e d
t h e f a c t u a l background o f t h e s i t u a t i o n which r e s u l t e d i n t h e bank
r e p o s s e s s i n g your a i r p l a n e on J u l y 2 , 1987. You are a d v i s e d t h a t , g i v e n
t h e c i r c u m s t a n c e s , w e are s a t i s f i e d t h a t t h e r e p o s s e s s i o n was b o t h l a w f u l
and a p p r o p r i a t e . T h e r e f o r e , we are n o t i n c l i n e d t o a c c e p t y o u r s e t t l e m e n t
demand o f $5 m i l l i o n which you communicated t o Mr. S i e g e l .

Should e i t h e r you o r your a t t o r n e y wish t o d i s c u s s t h i s matter f u r t h e r ,


f e e l f r e e t o , c a l l e i t h e r myself a t (717)295-3362, o r a t t o r n e y J a c k 3
' . Ream,
who i s r e s p r e s e n t i n g t h e bank i n t h i s matter. He c a n b e r e a c h e d a t (717)
I m i g h t remind you t h a t t h e bank i s i n t h e p r o c e s s o f s e l l i n g
843-8968.
t h e a i r c r a f t . However, s h o u l d you be i n t e r e s t e d i n redeeming t h e a i r c r a f t
p r i o r t o t h e time t h e bank e n t e r s i n t o a n a g r e e m e n t t o s e l l i t , or i f you
d e s i r e t o r e f e r a p o t e n t i a l buyer t o t h e bank as you h a v e i n d i c a t e d i n
c o n v e r s a t i o n s w i t h bank p e r s o n n e l , p l e a s e c o n t a c t e i t h e r M r . Ream o r m e
a t t h e numbers p r e v i o u s l y m e n t i o n e d , i m m e d i a t e l y .
Very t r u l y y o u r s ,

Vice P r e s i d e n t

cc:

J a c k F. Ream, Esq.
I r w i n H. S i e g e l

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

Page 296 of 646

The Commonwealth
Pa. 17603
Property of Advance
Media Group National Bank, 28 Venn square;
Page Lancarter.
2402 of 2953

Thursday December 15, 2016


1717) 393-5601

10/19/2006

MINNESOTA
MULTIPHASIC
PERSONALITY
INVENTOR'
US District Court For The Eastern District
of Pennsylvana
Section 3189 Federal
False Claim Act
S.R. Hathaway and J.C. McKinley

GROUP FORM TEST BOOKLET


& L q J .

-=-

J / / ,7

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 297 of 646


Property of Advance Media Group

Page 2403 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Published by: The University of Minnesota Press


Distributed by: National Computer Systems, Inc.
P.O.Box 1416
Minneapolis, Minnesota 55440
0

MINNESOTA MULTIPHASIC PERSONALITY INVENTORY


CoovriahP
,. THE UNIVERSITY OF MINNESOTA
1943. Renewed 1970. This Test Booklet 1982 All tights resewed.
Disbibuted Exclusivelv by NATIONAL COMPUTER SYSTEMS. INC.
Under ljcen& horn m e University of Minnesota
*'Minnesota Multi~hasicPersonalty Inventow" and "MMPI"
are lradernalks-ownedby The university Minnesota

.,

The invento~ycantained in this booklet has been designed for use with the Group Form answer sheets
distributed and authorized by National Computer Systems If other answer forms are used. National Computer
Systems takes no responsibility for the meaningfulness of scores

0
I

Printed in the United States at America

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 298 of 646


Page 2404 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

DO NOT MAKE ANY MARKS O N THIS BOOKLET.

1. I like mechanics magazines.

2. 1 have a good appetite.

'i)

4 4

3. 1 wake up fresh and rested most mornings.

4. I think I would like the work of a libra5ian.

23. 1 am troubled by attacks of nausea and


vomiting.

24. No one seeks to understand me.<

.5. 1 am easily awakened by noise.

22. At times I have fits of laughing and crying


that I cannot control.

C,

/'

6. 1 like to read newspaper articles on crime. \

/-

25. 1 would like to be a singer.

26. 1 feel that it is certainly best to keep my


mouth shut when I'm in trouble.

7. My handsand feet are usually warmenough.

27. Evil spirits possess me at times.


8. My dail; life is full of things that keep me
interested.

- \

/j/

28. When someone does me a Wrong I feel I


should pay him back if I can:just for the
principle of the thing.

9. 1 am about as able to work as I ever was.


10. There seems to bea lump in my throat much
6
of the time.
I
11. Apersonshould try to unqerstand hisdreams
and beguided by or take yarning from them.
12. 1 enjoy detective or mystery stories.
13. 1 work under a great deal of tension.

3
.

)(

e .

15. Once in a while I think of things too bad to


talk about. /j
16. 1 am sure I get a raw deal from life.
17. My father was a good man.

fi
\

peculiar and strange experiences.


34. 1 have a cough most of the time.

35. If people had not had it in for me I would


have been much more successful.
36. 1 seldom worry about my health.

/C
/
\

19. When I take a new job. I like to be tipp doff


on who should be gotten next to.

/
\

18. 1 am very seldom troubled by constipation.

20. My sex life is satisfactory.

31, 1 have nightmares every few nights.

32. 1 find it hard to keep my mind on atask orjob.

14. 1 have diarrhea once a month or more.

29. 1 am bothered by acid stomach several tin&


a week.
/
30. At times 1 feel like swearing. [

&

37. 1 have never been in trouble because of my


sex behavior. (
'

38. During one period when I was a youngster


I engaged in petty thievery.
39. At times I feel like smashing things.

21. At times I have very much wanted to leave


home.

40. Most any time I would rather sit a d dayaream than t o do anything else.

Go on to next page
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 299 of 646
Property of Advance Media Group

Page 2405 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

41. 1 have had periods of days:~eeks, or months


when I couldn't take care fthings because I

60. 1 do not read every ditorial in the newspaper every d a d

couldn't "get go
nig
..

61. 1 have not lived the right kind of life.

42. My family does not like the work I have


chosen (or the
intend to choose for
my life work).

.-

43. My sleep is fitful and disturbed.

time my head seems to hurt all


over.

45. 1 do not always tell the truth.

46. My judgment is better than it ever was.

.c

47. Once a week or oftener I feel sudd nly hot


all over. without apparent cause.

63. 1 have had n o d i f f i c u l t ~ n or


g holding
my bowel movement.

64. 1 sometimes keep on at a


lose their patience with me.
65. 1 loved my father.7

66. 1 see things or animals or p F l e aro'und#f:


glSt
that others do not see.

67. 1 wish Ico Id be as happy as oth&


be.

49. It would be
thrown away.

all laws were

L Ce
W

seem to

68. 1 hardly ever feel pain in the back of the neck.

health as most

/C

69. 1 am very strong1


myown sex.

50. My soul sometimes leaves my body.

c?

&w

48. When I am with people I a


hearing very queer things.

51. 1 am in just as
(
,. ~ .
of my friends.

62. Parts of my body often have feelings like


burning, tingling, crawling, or like "going to
sleep."
7
0G
m I f 6f i

ttracted by members of

1.7
-

70. 1 used to lik2>rop-the-handkerchief.

71. 1think agreat many people exaggeratetheir


52. 1 prefer to pass by school friends. or people Iknow but .have not seen for a - ng time.
unless they speak to me first.

i'

misfortunes i n order to gain the sympathy


and help of others
72. 1 am troubled by discomfort in the pit of my
stomach every few days or oftener. F

53. A minister can cure disease by

k-

putting his hand on your head.


73. 1 am an important person.

54. 1 am liked by most people who know me<l


55. 1 am almost never bothered
the heart or in my chest.

palns over
p
'
\

56. Asa youngster I was suspended from school


one or more times for cutting up. /

/
57. 1 am a good mixer./\

74. 1 have often wished I were a girl. (Or if you


are a girl) I have never been sorry that Iam a
girl.
75. 1 get angry sometimes.

76. ~ o soft the time 1 feel blue.

77. 1 enjoy reading love stories.

58. Everything is turning outjust liketheprophets of the Bible said it would.

/
)

59. ihave often had to take orders from someone


who did not know as much as I did. /

78. 1 like poetry.

79. My feelings are not easily hurt.


80. I sometimes tease animals.

f-

<

Go on to next page
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 300 of 646


Page 2406 of 2953

Thursday December 15, 2016


10/19/2006

//

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

81. 1 think I would likethe kind of worka forest


ranger does.

101. 1 believe women ought t p & v e as niuct


sexual freedom as men: f - ,
& 0,

82. 1 am easily downed in an argument.

102. My hardest battles are with myself.

83. Any man who is able and willing to work


hard has a good chance of succeeding.

103. 1 have little or no trouble with my muscle:


twitching or jumping.

84. Thesedays I find it hard not to give up hope


of amounting to something.

104. 1 don't seem to care what happens to me.

>,

..

.. >. .... .

..

hen I am not feeling well I an


85. Sometimes I am strongly attracted by the
personal articles of others such as shoes.
gloves, etc.. so that I want to handleorstea
them though I have no use for them.

106. Much of the time I feel as


something wrong or evil.

86. 1 am certainly lacking in self-confidence.

107. 1 am happy most of the time.

87. 1 would like to be a florist.

108. There seems to be a fullness ' my head o


nose most of the time.

(I;

88.

cross.

yI d 9

/
1 usually feel that life is worth while. \

89. It takes a lot of argume o convince most


people of the truth.
I

109. Some people are so bossy that I feel like


doing the opposite of what they request
even though I know they are right. /Z
a

90. Once in a while I put off u


what I ought to do today.

tomorrow

111. 1 have never done anything dangerous f o ~


the thrill of it.

91. 1 do not m ~ n dbeing made fun of<

2 . I would like to be a n u s

110. Someone has it in for me.

112. 1 frequently find it necessarytostand u p f o ~


what-l think is right.<

93. I think most people would lie'to get aheaclf


113. 1 believe i n law e n f o r c e m e n t . 7

94. 1 do many things which I regret afterwards


(I regret things more
more often than
others seem to).
/
95. 1 go to church almost every wee/\
96. 1 have very
my family.

arrels with members of

97. At times I have a strong urg


thing harmful or shocking.
,.

0
..

. ....
:i
*-

do some-

98. 1 believe in the second coming of Christ. 1


99. 1 like to go to parties and
where there is lots of loud fun.
100. 1 have met problems so full of possibilities
that I have been unable to make up my
mind about them.
.f,'

114. Often I feel as if the


about my head.

were a tight banc

>

115. 1 believe i n a life h e r e a f t e r : T

/P"

116. 1 enjoy a ra
on it.

-r'

or game better when I be

117. Most people are honest chie


fear of being caught.
118. I n school I was sometime
principal for cutting up.

sent to thc

119. My speech is thesame as always (not fastel


or slower, or slurring; no hoarseness). (
120. My table manners are not quite as good a'
home as when I am out in company.

Go on t o next pagl
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

Page 301 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

201. 1 wish I were not so shy.

222. It is not hard for me to ask help from my


hough I cannot return the

202. 1 believe I am a condemned person.

P
: 7/h-wsor ,
:
Tifib
'i=
223. 1 very much like huntin

203. If I were a reporter I would very


to report news of the theater.

224. My parents have often objected to the kind


of people 1 went around with.

204. 1 would like to be a journalist.

225. 1 gossip a little at times.

205. At times it has been impossible for me t o


keep from ealing or shoplifting something.

226. Someof my family have hab~tsthat bother


and annoy me very much-

206. 1 am very religious (more than most people).<

227. 1 have been told that I walk during sleep.

7
like to flifl. f

207. 1 enjoy many


recreation.
1
2 0 I

ferent kinds of play and

-p

210. Everything tastes the same.


21 1. 1 can sleep during the day %not

229. 1 should like to belong to several clubs or


lodges.
/

at night.

231. I like to talk about sex.


I

?m

f=

216. There is very little love and companionship


in my family as compared to other homes.

P
P

e particularly to see

then get over it soon.


pendent and free

es are nearly all in sympathy with


237 me.
My

&I$

219. 1 think I would like the work of a b 11 in


contractor.

238. 1 have periods of such great restlessness


that I cannot sit long in a chair.

220. 1 loved my mother.

239. 1 have been disappointed in lov

221. 1 like science.

240. 1 never worry about my looks.

F=

<

235. 1 have been


from family rule.
236. 1 brood a great deal.

T?P

234. 1 get mad easily

myself worrying about

218. It does not bother


animals suffer.

3.

233. 1 have at times stood in the way of people


who were trying to do something, not
because it amounted to much but because
of the principle of the thing.

214. 1 have never had any breaking out o n my


skin that has worried m e . 4
J
215. 1 have used alcohol excessively.

217. 1 frequently fin


something.

232. 1 have been inspired to a program of life


based on dut- which I have since caref lly
f0llOWBdr(
3 6 >
&
B

Ci

230. 1 hardly ever notice my heart pounding and


I am seldomshort of breath<

e more likgachild than a

213. I n walking L am very careful to-step over


sidewalk cracks.
t

228. At times I feel that I can make up my mind


with unusually great e a s e / r

209. 1 believe my sins are unpardonable.

212. My people tre


grown-up.

IAJ (

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 302 of 646


Property of Advance Media Group

Page 2408 of 2953

F-

Go on to next page

Thursday December 15, 2016

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

441. 1 like tall women.

459. 1 have one or more bad habits which areso

strong that it is no use in fighting against


them.

'42. 1 have had peri ds in which I lost sleepover

worry.

460. 1 have used alcohol moderately (or not a

443. 1 am aDt to Dass uo somethina I want to do

because oihers feel that I


about it in the right way.
444. 1 do not try to correct

not going

ple who express


462. 1 have had

hen I was young

7"
I

463. 1 used to like hopscotch.

464. 1 have never seen a vision.

447. 1 am often inclined to g o out of my way to

465. 1 have several times had a hange of heart

about my life work<


466. Except by a doctor's orders I never take

drugs or sleeping powder<

448. 1 am bothered by people outside. o n

cars. in stores, etc.. watching me.

-i

portant (such as automobile licenses, etc.).


468. 1 am often

I am so crossand

469. 1 have often found people jealous of my

451. My worries seem to


into a crowd of lively

good ideas, just


thought of them first
1

'p

452. 1 like to poke fun at people.

470. Sexual things disgust me.

453. When I was a child I didn't

471. In school my marks

member of a crowd or gang.

bad.
auite reaularlv
-

454. 1 could be happy living all alon

talk of the group I belong to.


474.
456. A person shouldn't be punished for break-

&

ing a law that he thinks is unreasonable.

475. When I am cornered I tell that portion

the truth which is not likely to hurt me.

uld never taste

476. 1 am a special agent of God.

458. The man who had most to do with me


when Iwas a child (such as my father, step-

(-

[/
1 have to urinate no more often than ottiers. 4

473. Whenever possible Iavoid being in acrowd.

455. 1 am quite often not in o n the

an alcoholic drink.

portment were

472. 1 am fascinated by fire.

in the woods or mountains.

457. 1 believe that a person

grouchy.

of a ciowd.l(

467. 1 often memorize numbers that are not im-

gatherings just to be with

446. 1 enjoy gambling for small stakes.

wina p c ~ s o m e o n who
e has opposed
me.

starting or holding

my urine.

445. 1 wasfondof exciteme


(or in childhood).

(-1

--

461. 1 find it hard to set aside a task that I have

undertaken, even for a short t

an ignorant belief.

all).

father, etc.) was very strict with me.

477. If I were in trouble with several friends who

were equally to blame. I would rather


the whole blame than to give them
Go on to next page

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 303 of 646


Page 2409 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

555. 1 sometimes
to pieces.

Section 3189 Federal False Claim Act

that I am about to go

562. The one to whom I was most attached and


whom I most admired as a child was a
woman. (Mother, sister, aunt, or other

556. I am very careful about my manner of d r e s s r


/>

"Oman.'

557. 1 would like to be a private secretary.

P
pried

558. A large number of peo


sexual conduct.
559. 1 have often been
of the night.
560. 1 am greatly both
put things.

stories.

are guilty of bad


564. 1 am apt to pass up something I want to do
when others feel that it isn't worth doing.
in the middle
565. 1 feel like
high place.

when I am o n a

by forgetting where I

561. 1 very much like horseback riding.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

T-ories betterthan romantic

566. 1 like movie love scenes.

/
1

Page 304 of 646


Page 2410 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

W*W,II

YIUS,*I*I

Section 3189 Federal False Claim Act

n Park II. 1 1 5 9 O r w o n PI*.


U n c a e r , PA 1Ywr
1694100 1 0 0 - S l $ J S L 7
U 1 D i n - i I 2 4 [PA o n w

ROBERT E. KAUFFMAN
PRESIDENT

Mr. stanley C
554 BerEley
Stone

mad
New Jersey

08247

Dear Mr. CaWe,

the Board of D i r e s t o m , are in ramipt of y~


rn back to the oorpcaation.

note offer-

to sell shares or

A l l u i me to first a&9ress the easy points of your pro-1:


1. William Um&x does mt, at this

-,

never cuqmw~teany ex-staff

desire to cash out h i s

2.

We w i l l

3.

We w i l l not give you 0% share of Trl: stmk for nostalgic


reasons as we dd rat want any dissident stcckholders in our
Alture. Flhen we buy s M c , it will be the entire ammt.

4.

m
y
, you feel strongly abcut yrur debt to B i l l Johnson
a d want it to be paid. So do we. You also have several
other d t o r s who we wculd like to see paid. To be sure
that they are paFd, we will dsdud their paynent f m m any
pmcsds.
A t t a w you will f i r d a l i s t t h a t w e n a ~ h o u

psaple for any reason.

abart.
As for the price of the &xk, we are willing to pay $2.50 per
share for 40,000 shares and $5.00 per share for y a r 400 shares or
$102,000 less debts* lhat is what we are w i l l *
to pay this W!
I~ the future,

will mibe the price by:

1.

m
' e build up of any debt,

2.

'me continued d e f m t i o n of our corporate nan!e will reduce

costs, interests and penalties

its value
3.

Dur time

penaingbjnlauptcy

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

ask in c l e a l i q with either -pr

Page 305 of 646


Page 2411 of 2953

your

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Please Sr aa~ised.+
&
t
tm this p i n t we have tried to urderstand
cirumstances, W i v e s an3 corditions to your actions.
In Lne
flhlre, we w i l l not be unjersming.
prepsred to pursue

We

enkezzlemnt

(we

crimiral

for

attempted

have che~=& to prwc it), bLPglJTY.

,theft

'

~ d'~&Yye
~ i t ~ j ~ ~a~
J qige~ ~
s x 1 s oterm,
n
E!e aadvised that Ure
sli&test p r u v m t i o n of m l r m q n r a t l n n will result in tho filinj of
the &bVe mfs,
'&e filiny o f Chargffi ha^ rmthirq tn dn with this
negotiation.
It has to do with amtinued kritten ard v-1
assault lfeon cur ffm.

w a n t l y ,

any a l e of sta2k will also n q u k e an agreanent


kMch settles any
all

not to &fans= cur firm and a covenant


claims aguinst the corporation.
Stan,

our skirrurte is that toclay you would raceive ahout

$55,000

for ycur s M c
a1 1 cmlitors are paid. You, or course, have the
option to hold your stock hlefinitely, offer it to us at a later
time or
R 131tlmrepmsentative offer it ta us. It is up to
ym. YOU have rn best offer.

me Board of

DinXtom

Fincuwial Mwagemcnt &cup, I A A .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 306 of 646


Page 2412 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Financial Management Group Ltd.

ROBERT

E. KAUFFMAN

PRESIDENT

M r . Stanley J. Qterimne
554 *?Hey RCx5.1
Stone Harbor, New Jersey 08247
Dear Stan:

We have been advised by our legal counsel not to personally


any matters m q a r d h g your past affiliation and stock
prqcsal with our firm.
dxxms

Henceforth, s h a d ycu desire t o d h m s any ma-,


please have
awrneys contact cur attorneys R u s s e l l Krafft G n b e r & H u b e r at
(717) 569-5383, as we will rm l q e r deal with you on any matters at
any time.

your

R.E.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 307 of 646

Kauffman

Thursday December 15, 2016

Sccvrltln Offered through ~1anncr.sSecurltln Group i n r


Page 2413 of 2953
A Regln~ed
BmkerlDealer
Member SlPC
Membcr NASD

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Specialists in Radio Communications


309 East White Horse Pike Absecon, N.J. 08201

< -

.\ , .1 - -

c,,sroMEn

::.;..:

i,'

..

. (

- ,-;,:

(609) 652-5888

,,<.,,,>

/-.
, ,.
.A
I

.'

. I

JOE LOCATION

'.:

-~~

TERLIS:AF-OUROEW
~%%PE~~I*HYUALRITEOF~~
m u BE C U A ~ E DOH UUNCES OVER JO O A ~

O)Pz

C . I 1..

sm.0 .
I

S?

UCASH
IJ

C.O.D.

OCHARGESO M O S E .R E T O .

I
YON.

DESCRIPTION
OF WORK

TUES:

WED.

THURS.

FRI.

SAT.

SUN:

TOTAL

MATERIAL

SALES T A X

TOTAL
I

I
SIGNED

-NT

I 34
,;/

PLEASE PAY FROM THIS INVOICE. N O OTHER STATEMENT WILL BE RENDERED

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 308 of 646


Page 2414 of 2953

Thursday December 15, 2016


10/19/2006

OC!

US District Court For The Eastern District of Pennsylvana

. .

,, 'p,

.' .--r-

-.

Section 3189 Federal False Claim Act

AN/

ED%

4
'

COLli'.%I!

JAIL

c3ESTH.9LVEN SITE

OFFSIE/W

~~3x31

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. . . ..-....-

(5)

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D.O.B.

7llrICP
-

~ ~ i 1 ~ i . ? ~ (t j~ 1

(v:)

T.1 ZCi'_c;JS CCS C(X\TA4Cr:

PilFVIOUS STATE I I3S?ITAL

(bate)

.P

.. -- --- - - - -------.--. . --.--.A


I

I.

b'micipality

!;rc,-sziltinq Problcn (including onset of s y m p t m )

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 309 of 646


Page 2415 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

-~
,

.
.
.
.

~~

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...........

.-

>

-_

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--

........
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--

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 310 of 646


Property of Advance Media Group

.,

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.-7.._--.

.,

.,

'

11

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.~. . .

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............
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. . . . .

:
~

..

11

Thursday December 15, 2016

Page 2416 of 2953


EMERGEWCY
~ Q O MADMISSION RECORD

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

, -.
.
-- --.- . --- ---. . .
..
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FC!.i l . i E R G E i i C Y T R E A T l r l E l l T
CA .
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.
. -~
I
v?c?s-:: : '-.: :,i,
-.; . . ,
; 8 . ::, f ~ r ~ : ( . : i : . !lhii h : ~ ;~nforr:>ed of the fmer:?niy lfea:m?nl cor ,.,,red
.
-.-.i,.!
r , d ;I;zI ; i r . ? ~ e a t r n r r2nd
. ~ r.:ecedure ,..:ill I,?p ? f i o - m t ! :.y yl,yric';r.
. ~nc..
:..,:.
71.'.,
.. ..
, . . .,,
\,,!. A.>;h9. ,I.,.,..
--. ., , i l,?:c!ry g;ant:;! f c i such eatme men! ar:d prc ed2res.
;:,,rranz! ph:.sici:n
is t o bp selerlp~ t or o n l;r!:-!' :.' 11%- p l r i r t : :..
. ..-;- - :'
TI;,
<,-rs,q:?;!
:~r.derst: iii :ha:
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.'lc alsi.e auiho:i:ztion


i t ~ e
GI!:~~IIC(!.

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.

CU?:?L\RIZRTION ?c? ?.<LEASE


-~

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:utli~,r.::~.
:
cr(l~lli?a: .;%

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arc n:.

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fa: szle! ?mi"!

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.?,en! named o.i t ! ~ i rseg~slrat~on.

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liflEDICAL RECORD I N F O R h i A I

.-

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i...: i1.;,

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. . '." . '.!E'.?ORIAL HOSPITAL 1 5 herehy


.,' ::;:ii.n l o such insurance cornpanic:.
~

~-.RDE;TE

and undcrrta?d
-

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

x- ,. ..... - .... . . . ...

Page 311 of 646


Page 2417 of 2953

. ,, .

+.
, ..- ; ..:
,

.:

-.

-,

. .
.~

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Angina

0 Psychiatric lll?err
0 Allergy.

2 Perm. Pacemaker
0 CHF

0 Diabetes
0 Hypertension

Ei E P ~ ~ ~ P S V

M.I.

Othet Heart Cond8cion

0 Pulma>ary Condation
J

Medical

0Trauma
0 Psycho Service
Notilacd

CVA

rJ

Chronic Lung Osrorder

Notification
01:

Orher

'.:z#ent'$Phyr8cia11.

----

;$<I

TIME
v
I

TEMP.,

j\
I

TREATMENT I N PROGRESS O N ARF


C] Mart Trouser
CPR

REASON FOR ER VISIT Weight

PAST HISTORY

L/ 1i 4.4j$-

- - $/P

-.

Airway: Oral: InNbatedSize:

Visual Accuity

0s

Rcr~rmdcd
Family
Social Service

0I V
0 Monitor

OD

Police

0
O

Clergy

0S

A""eb

nMental Health
-

Orugr

Backboard
Phila. Collar
~ ~ ~ ~ l s

Prerrure Orerring

OBJECTIVE
ASSESSMENT

I NURSING DIAGNOSIS

/'&- li q

I'

SPECIAL PROCEDURES

0Ace Applied

C3 u?.

0 Lab Stix

0 Irrigations
0 Ice Applied

0Dressing Applied
Cervical Collar

L A B WORK

0 Urine

Bld

Hct

Hgb-

-K e t
rot

Ph

0Cap GI"
OCul~re
DISCHARGE PLANNING

0Smial Service

0Cart Care

0 Wound Care

0 Head Trauma

X43AYS

nER Inrt.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 312 of 646
Property of Advance Media Group

Page 2418 of 2953

Thursday December 15, 2016


CHA7T

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

. . .1 S : . i : c s Exmination (Circle or enter appropriate r e s p n s e s )


..., ..

1. ;:-zc:rmce
a.

and Behavior

Thin, (herweight,

Pnysical Characteristics:
2

Looks older, Looks younger, Effeminate, I.


Ill a t ease, Healthy, Sickly,
I

Other:

Dress/Graxing:

b.

ticulous, Disheveled,

Ina$propriate/bizarrz.
Other:
c.

b a t o r Activity:

Dystonic, Graceful, Clumsy,

Tics, R q e t i t i v e m v m t s , Posturing, Facial grimaces, Trcmrs,


Rigid, Relaxed, R e t a d & , m a t i v e .

L*,

Other :
Facies:

d.

Facial Eqression:
Other:
e

Contact:

0
Mobile

Futed, Blank

.:

@,Avoided.

SiarUg.

Other:

c. A t t i t u d e ! b w a d Examiner:

Cooperative,

Playful,
Other:

2.

Affect/bW

a.

Affect (outwad n-anifestation of r r d ) :


Incongruent, Full range, Constricted

changes) Flat.
!.hod (a p r v a s i v e and sustained internal f e e l i n g s t a t e / e m t i o n ) :
b. Lkpresscd, @Anxious,

% &a

~ u s ~ i c i c kaiiltY1shdnefu1,
s,
~ c r :

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 313 of 646


Page 2419 of 2953

IP.

mphoric, Elevated &thymic ("n&nral)


./

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

~ ; ~ s a i rw
r dh ~ ~ ( 5t~ ~s: : : : .

O;l~ei-:

b.

Tn,ic$t.

Process:

Ov?r&straction,

Dtclusively ~a::'.:

(:.Y : :

(unrclatecl thouqhts), f l i g h t n i iC:.;.2:

s&-related

ideas)

:: : :

~ -i.,
t

, Calf abulat ic::,

T
3
:

=
&

otiix :
2.

dZt+

'Iii~GJlltCO!~~~II'C:

::.. :,

C.

1r:~xircclrc.?lity t e s t i n g , Persevcratio::

hx F-I'?(~.-.

i A *a%

' In&
iC
1
'

(kehaviors) , Phobias, Row.

l, I- ,.;

: .
ft ~

LLG;

Ot!lcr :

2.

1. l ' r ~ m ~ p t i o n(specify
s
content) : O
Cs:r;;ulsions

., ,.

- .

:.

rl

-.

A.:.:

f <c

:'=
~
;

Thought bro.:c?c:.:- t ::. : ,

Samt i c ,

3.

n.:-, :i:

:;

r?rcc$ion:
2.

I%illucinstions (describe and specify contcntl:

V:

.. :

Auditory, Olfactory, Custdtory, Tactile@

kw4.

h r k d LU.*

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 314 of 646


Page 2420 of 2953

r.:

2?*,k

vJ-

Czlusions (specify content) : Extern1 co:;t :.?:,

Thursday December 15, 2016


10/19/2006

~4
~

crl.

US District Court For The Eastern District of Pennsylvana

4.

Section 3189 Federal False Claim Act

Scnsorim:
,.
a.

Orientation:

Orientcd to:

perform 7's, 3's.


Ot!!?r:

c.

I.'m-oqf: recent:

In-paired,

Pamte:

Inpaked,

i+!,,,i of I(nok:lcd-je: F z l w averag?, Averag

c.

e.
--

OLhzr:

~fcllig~?:
rcc
& l o t average, i

age,

./

Othcr:

f . J u 2 q ~ ~ x t?ppropriate,
:
O t i k r:

5.

Insicht:,
Ph?Li'i~i!llncss and attributes

ness

hiit

tp internal causation, Amnits ill-

.-

-..

accepts no responsibility for participating in i t s

trmtwxt.
Other :
111.

Substance Abuse Ilistory:


a.

b.

Current drug/alcohol Use


.. .. ' - '
n

-~

..- ..

..

--

- ,. ~ .ii-=--

...

Previous Drug/Alcohol Treatnent:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 315 of 646


Property of Advance Media Group

Page 2421 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

c..

i;;lcx~ltI.*icr?l

Section 3189 Federal False Claim Act

data:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

(e.9. h i s t o q of diabetes, cardiac pm05lc~s)

Page 316 of 646


Page 2422 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

V.

Section 3189 Federal False Claim Act

Current Ik-dication (Specify dosage and last dose)

F * ~ : h J b+Sk\b
\

q%w

5 . Provisional Diagnostic Impression (Dm111)

,9Jq&dq7+.

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 317 of 646


Page 2423 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

1:SIITAL HEALTH S E R V I C E S OF CAFE t<AY COUiITY I I!:.


PROGRESS NOTES
Clicnt ' s

--D 4 i C

.illERAP I ST

n /

/?

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 318 of 646


Property of Advance Media Group

Page 2424 of 2953

fl

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Court told attorney Clark


z-/ to stop ISC 'crooks'
tried
7-90
.

,-

by Tim Mekeel
and Ernest Schreiber
hew Era Slafl Wr ters

had removed, theFBI agent said.


O'Callaghan's testimony came
in a federal court hearing over
the settlement of a severance
PHILADELPHIA - The for- deal for Clark.
mer top attorney a t International
Clark signed the deal with GueSignal & Control regularly did
the right thing when he encoun- rin and his personal holding comtered wrongdoing inside the com- pany, Parent Industries Inc.
pany, an FBI agent conceded Gcerin later established a $2 million escrow account to cover payhere Wednesday.
ment of the deal.
William A. Clark, formerly
But on March 28, the U.S. AtISC's vice president and general torney's Office won a federal
counsel, tried to steer ISC execu- court order freezing the account
tives away from illegal actions and blocking the payouttoClark.
and made "extra efforts" to asThe federal prosecutors arsist federal investigators, said gued that Guerin earned the
Special Agent Gerard O'Cal- money through racketeering and
laghan.
fraud, so the money was forfeitUnder cross-examination by able to the government.
Clark's lawyer, O'Callaghan conClark likewise was not entitled
firmed that Clark even hired an to it, since he knew that it was
outside law firm to advise ISC fi- earned by criminal schemes, and
nancial officers on how to re- he used that knowledge to extort
spond to questionable ISC con- the deal from Guerin, the protracts they had uncovered.
secutors said.
Clark went as far as to replace
In the two-day hearing, the
incriminating documents that U.S. Attorney's Office is seeking
ISC founder James H. Guerin to extend the freeze by 90 days.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 319 of 646


Property of Advance Media Group

Page 2425 of 2953

Clark wants to liftthe freeze, and


get his $1.76 million share of the
escrow account.
Judge Thomas O'NeiU did not
indicate when his ruling will
come.
Wednesday Aorning ~ u n
O'Callaghan, in response to questions by Assistant U.S.Attornej
Robert E. Goldman. relatine nu
merous times when ~ l a r re
6
ferred to Guerin and his col
leagues a s "criminals ant
crooks."
But in the afternoon, unde
cross-examination by Clark's at
torney Charles D. Sheehy, thc
FBI agent confirmed other as
pects of Clark's conduct.
It was Clark who called to Gue
rin's attention the illegality o
reimbursing ISC employees wh
attended a fund-raiser for presl
dential candidate Alexande
Haig, saidO'Callaghan.
It also was Clark who made a
"extra effort" to supply a gran,

See CLARK, Page A4

Thursday December 15, 2016


10/19/2006

I * o d . r l r a YURICIPa I R A I H I C I .

US District Court For The Eastern District of Pennsylvana

MUNiClf'AL

COURT OF

Address:

<m196>716 - l l l . < r r ..I. P W ~ C ~ U

Section 3189 Federal False Claim Act

BOROUGH OF A V A L O N

DEFENDANT'S COPY

M u n i c i p a l Building, 3100 D u n e Drive


Avalon, N. J. 08202

I TO

Stanley J. Caterbone
2323 New Danville Pike
Conestoga, PA 17516-36

The records of this court indicate that


a complaint charging you with

0.p.e.e....df.oho1.....coLLt.i%i.n.e.K
....i.n....!!

in this court on the

MOlrWO"

Violation Date shown above and a summons was issued for your appea

(-'
,!
. .

Since you failed to appear in Court and have not paid the prescribed fine,
YOU ARE ORDERED to appear .in t h.~ scourt on .- 12-2-87 -STONE BARBOR COURT
(D.tO)

to plead not puilty, you must notify this court a? least 3 days prior to the new court date.

COURT APPEARANCE IS MANDATORY.

. at

7:30 p.m.

...................................................

lf you wish

VIOLATION CANNOT BE PAID THRU VIOLATIONS BURE

NOTE: Canadian Residents Please Send U. S. Currency.


IF YOU FA11 TO APPfAR OR PAY THE PRESCRIBED PENALTY:
RESIDENTS OF NEW JERSEY: (1) A warrant will be isssued for your arrest; (2) you may be subject to contempt of court and additional
penalties, and (3) you may be subject to possible revocation of your driving privilege by the Director of the Division of Motor Vehicles.
NON-RESIDENT MOTORISTS: (1) Your driving privilege in New Jersey may be revoked, (2) your own Commissioner of Motor Vehicles
requested to take action against you, and (3) a warrant may be issued for your arrest should you be found in this State.

PARKING OFFENDERS Residents and Nondesidents: In addition to the consequences listed above, a civil judgment may be entered
against you.
BY OROER OF THE JUD6E
.....

Mary Monks
......................................................

"

(Jude or Court Clerk)

Office Houn:

Mon. thrv Fri, 8:3O a.m. t o I p.m. 8 2 t o 4 p.m.


.............................

(609) 967-4457
(609) 967-8200
Telephone: .........................................................................................................................................................

(Please return
this Notice
and your
Summons
when making
A receipt will be sent toThursday
you only ifDecember
your payment
accompanied I
EXHIBIT
U.S. 16-4014
CIVIL
RIGHTS
CLAIM
Page payment.
320 of 646
15,is2016
a
self-addressed
envelope.)
- - Property of Advance Media Group
Page 2426 of 2953
10/19/2006

1 4 0

US District Court For The Eastern District of Pennsylvana

MUNICIPAL COURT OF
Address:

Section 3189 Federal False Claim Act

BOROUGH OF AVALON
DEFENDANT'S COPY

M u n i c i p a l Building, 3100I D u n e Drive


Avalon, N. J. 08202

Date ..

D.L. NO.

Caterbone
Stanley .I.
2323 New Danville Pike
Conestoga, PA 17516-36

18 195 782 PA

Unregistered
Unregistered
-

EYE
CODE

7-15-58

The records of this court indicate that


a complaint charging you with

......................

VIOlAT1ON(S)
SECTION

39: 3-17

VIOLATION
DATE IL TIME

8-14-87

SEX

8:42 p.m.
was filed in this court on

failure. to ...exhibit....d r i u e r ! ...~license


(ViolrHon)

th

~.-.16_:8~.-sST~E!~...~P
.- .........

Violation Date shown above and a summons was issued for your appearance in this Court on

mts)

Since you failed to appear in Court and have not paid the prescribed fine,
YOU ARE ORDERED to appear in this court on

12-14-87

STONE HARBOR COURT - at


Wt.1

-.!.3~..~.&
.......... If you wisl

to plead not guilty, you must notify this court at least 3 days priw to the new court date.

COURT APPEARANCE IS MANDATORY.

VIOLATION CANNOT BE PAID THRU VIOLATIONS BUR1

NOTE: Canadian Residents Please Send U. 5. Cumncy.

IF YOU FAIL TO APPEAR OR PAY THE PRESCRIBED PENALTY:


RESIDENTS OF NEW JERSEY: (1) A warrant will be isssued for your arrest; (21 you may be subiect to contempt of court and additional
penalties, and (3) you may be subject to possible revocation of your driving privilege by the Director of the Division of Motor Vehicles.
NOW-RESIDENT MOTORISTS: (1) Your driving privilege in New Jersey may be revoked, (2) your o m Commissioner of Motor Vehides
requested to take action against you, and (3) a warrant may be issued for your arrest should you be found in this State.
PARKING OFFENDERS- Residents and Non-Residents: In addition to the consequences listed above, a civil judgment may be entered
against you.
BY ORDER OF THE JUD6E

George B. Neidig. Jr.

Office Hours
Telephone:

Moa. thru Fri,

8:3O

Mary A. Monk:

a.m. ta 1 p.m.& 2 to 4 p.m.

(609) 967-4457

EXHIBIT
16-4014
CIVIL
CLAIM
of 646
15, is2016
(PleaseU.S.
return
this Notice
andRIGHTS
your Summons
when Page
making321
payment..
A receipt will be sent Thursday
to you only December
if your payment
accompvlied
Property
of Advance Media
Group
a salfuddressed
envelope.)

Page 2427 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

l.iUNlClPAL

COURT OF

Address:

Date

Section 3189 Federal False Claim Act

BOROUGH OF AVALON

DEFENDANT'S COPY

M u n i c i p a l Building, 3100 Dune Drive

11-12-87
.............................................................................................

Stanley J. Caterbone
2323 New Danville Pike
Conestoga, PA 17516-36

DATE

The rewrds of this court indicate that

(L

TIME

a complaint charging you with ...........................sp.e.e.ding


....45....mp.h....in . 25..
mph . zone....

............... was filed in this court on th,

(violmon)

.................. HARBOR, N
Violation Date shown above and a summons was issued for your appearance in this Court on ..................... 9 - 16-87-STONE
(ruts)

Since you failed to appear in Court and have not paid the prescribed fine,
YOU ARE ORDERED to appear in this court on

12-2-87 -STONE HARBOR COURT

at

7;30 p.m -......


: If you wisl

(Dale)

to plead not guilty, you must notify this court at least 3 days prim to the new court date. If you wish to plead guilty, you must pay ;

80.00

total penalty of $
your payment.

......... before your new court date. You must sign the back of the summons and return summons wit1
NOTE: Canadian Residents Please Send U.

S. Currency.

IF YOU FAIL TO APPEAR OR PAY THE PRESCRIBED PENALTY:


RESIDENTS OF NEW JERSEY: (1) A warrant will be isssued for your arrest; (21 you may be subject ta contempt of court and additional
penalties, and (3) you may be subject to possible revocation of your driving privilege by the Director of the Division of Motor Vehicles.
NON-RESIDENT MOTORISTS: (1) Your driving privilege in New Jersey may be revoked, (2) your own Commissioner of Motor Vehides
requested to take action against you, and (3) a warrant may be issued for your arrest should you be found in this State.

PARKING. OFFENDERS Residents and Non4esidents: In addition to the consequences listed above, a civil judgment may be entered
against you.
BY ORDER DF THE JUDGE
................................................

Mary Monks

...................................................

(ludne or Court Clem

EXHIBIT
CIVIL
CLAIM
of 646
15, is
2016
(PleaseU.S.
return16-4014
this Notice
andRIGHTS
your Summons
when Page
making322
payment
A receipt will be sent Thursday
to you only December
if your payment
accompanied
Property
of Advance Media
Group
a selfsddrened
envelope.)

Page 2428 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

MUNICIPAL COURT OF
Address:

Section 3189 Federal False Claim Act

BOROUGH O F A V A L O N
DEFENDANT'S COPY

M u n i c i p a l Building, 3100 Dune Drive


Avalon, N. J. 0 8 2 0 2

Date

TO

........................................ 11-.9 -81

Stanley J. Caterbone
2323 New Danville Pike
Lonestoga, PA 1151b-36

6 STATE

Unregistered

REG. EXP.
DATE

Unregistered

DATE OF

EYE
CODE

7=-15-58

SEX

wOUTION(sl

39:3-4

SECTION
VIOLATION

The records of this court indicate that


a complaint charging you with

having
..... an unregistered vehicle

d in this court on thc

MoIaWon)

p6~&
Violation Date shown above and a summons was issued for your appearance in t ~ b r @

&'

L....I

Since you failed to appear in Court and have not paid the prescribed'fine,
YOU ARE ORDERED to appear in this court on .......12.
-2-aZ.-STQNE...WB...C(lURT

ccuq

...................

at ......Z.:.30 ...p.m

-. . . . If you wish

to plead not guilty, you must notify this court at least 3 days priw to the new court date.

COURT APPEARANCE IS MANDATORY.

VIOLATION CANNOT BE PAID THRU VIOLATIONS BURE

NOTE: Canadlan R e d d e n h Please Send U. S. Currency.

IF YOU FAIL TO APPEAR OR PAY THE PRESCRIBED PENALTY:


RESIDENTS OF NEW JERSEY: (1) A warrant will be isssued for your arrest; (21 you may be subject.to contempt of court and additional
penalties, and (3) you may be subject to possible revocation of your driving privilege by the Director of the Division of Motor Vehicles.
NON-RESIDENT MOTORISTS: (1) Your driving privilege in New Jersey may be revoked, (2) your own Commissioner of Motor Vehides
requested to take action against you, and (3) a warrant may be issued for your arrest should you be found in this State.
PARKING OFFENDERS-Residentsand Won-Residentr: In addition to the consequences listed above, a civil judgment may be entered
against you.
BY ORDER OF THE JUDGE

George B. Neidig, Jr.

Mary Monks
.........................................................................

(ludic or Coo* Clerk)

EXHIBIT
CIVIL
CLAIM
Page 323
of 646
15, is2016
(Please U.S.
return16-4014
this Notice
and RIGHTS
your Summons
when making
payment.
A receipt will be sent Thursday
to you only December
if your payment
accompanied
Property
of Advance Media
Group
a self-addressed
enve1ope.J

Page 2429 of 2953

10/19/2006

I ,

US District Court For The Eastern


District of Pennsylvana
VALORE,
McALLISTER.

Section
3189 Federal False Claim Act
WESTMORELAND, GOULD. VESPER &
SCHWARTZ

h PROILSSII1NAL COiJQRAnOS
-

S T A N L E Y J. CATE:RIiONL'::
F M G ACCtJLlNTING L;EIiUICE:S
17C
-ra OREGON PIKC
1-ANCASTER,
F'A
17Xr31

1.8 1
877344h.-C

AUGUST

C/O

FILE

STATEMENT
()0~:8.24
US+ W I L L I A M h BE-TTY iJ'tlRrir:

G I J M M R R Y
T h i s s u m m a r y i nc ludec; a I. L i : r a n 3 a c t ion-: up t o a n d i nc Lud i ng
t h e m o n t h end P I - r c e d i ng tl-ii s s t a t e m e n t .
A n y cl-ed i t s o r r e c e i p t s
p r o c e s s e d a f t e r . t h a t d a t e m a r n o t be i n c ludea and w i L L be
reflected o n y o u r n e x t s t a t e m e n t .

Previ o u s
Less:

Statements
R e t a i ners

B A L A N C E
Fees f o r t h i s b i L L
T o t a L amount
N e w R a Lance FOI-ward
T O T A L EcALANCE NOW flLlE

this b i L L

x*wX.x3c-xxx**xw*crx.*

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

o f

Page 324 of 646


Page 2430 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern


District of Pennsylvana
VALORE.
McALLISTER.

3189 Federal False Claim Act


WESTMORE~AND,GOULD, VESPER &Section
SCHWARTZ
A PROF~SSIOSAL

MR.

S T A N L E Y .J

CuMnK~nos

C;ATETITIOE.IE

C / O FMG ACCOUNTING S E R V I C E S
1755 OREGON P I K E
F'&
17601
:..ANCAST-ER,

STATEMENT
VS.

-i

::

W I L L I A M h B E T T Y OiHARA

J U L Y 09 07
J U L Y 21 87
JI.JLY 23 87
.lULY 2 4 67

J U L Y 27 67
nJULY
27 67
J U L Y 28 B 7
J U L Y 29 87

8
J U L Y 31 87

, :-,

AUG

009824

03 87

TELEF'I.iONE CONFERENCE W I T H S. CATEREmNE


P R E P A R A T I O N O F L E T T E R TO S. CATERHONE
TELEPHONE CONFERENCE W I T H S. CATERBONE.
O U T S I n E O F F I C E CONFERENCE W I T H S.
CATERBONE, I N C L U D I N G T R A V E L
TELEPHONE CONFERENCE W I T H J. HEHAN.
TELEPHONE CONFERENCE W I T H YOI-AND6 ANXI
P H I L CATERBONE.
TELEPHONE CONFERENCE W I T H S. CATERNONE
TELEPHONE CONFERENCE W I T H G. N E I D I G ;
R E V I E W O F DOCUMENTS; CONFERENCE W I T H R.
M C A L L I S T E R AND A . B O N G I O V A N N I RE: C H O I C E
OF COURTS^ TELECONFERENCE WITH
n.
CAMPBELL AND S. CATERBONE
L E G A L RESEARCH RE: K I I V E R S I T Y
J U R I S D I C T I O N AND VENUE: CONFERENCE W I T H
S. CATERBONE; TELECONFERENCE W I T H T.
LANZA
TELEPHONE CONFERENCE WITH G . N E I L I I G
(O'HARA ATTORNEY?+ P. C A T E R H O N E t GI
N E I D I G AND S. CATERHONE
T O T A L HOURS
FOR S E R V I C E S RENnERED
BALANCE DUE

I N T E K E S T WII-I..
B E CIiARGELI AT TkIE R A T E
PAYMENT I S D U E UPON R E C E I P T .
O F 1%PER MONTH ON EALANCEG R E M A I N I N G U N P A I D AFTER T H I R T Y DAYS.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 325 of 646


Page 2431 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Twenty-five
...........
lJous??d,,Se~enH

x.

..

(Stanle~_J~-!terbohe_L

............................

EXPLANATION OF RIGHTS IN CONNECTION WITH SIGNING OF


INSTRUMENT CONTAINING CONFESSION OF JUDGMENT, AS
REQUIRED BY OPINION OF SUPREME COURT OF THE UNITED STATES
RE:

NOTE IN FAVOR OF
Millard E. and Dorothy A. Johnson , AND AGAINST
THE UNDERSIGNED, CONTAINING A CONFESSION OF JUDGMENT.

DATED :

C'i

July 1, 1987

AMOUNT :

$25,733.00

1. The undersigned certify that the Income of the undersigned,


or conjugal (husband-wife) income with both spouses executing the '
document, is at least $10,000.00 annually.
...
.ti
~.
.<.
+

2.

The undersigned clearly and specifically unaerstand that by


signing the note above referred to, containing a Confession of Judgment clause:

4:

.;&

(a) We and each of us authorize the Prothonotary or Deputy


Prothonotary to enter a judgment against the undersigned, or either
of us, at its discretion and in its favor without notice and without
declaration of default for non-payment, which entry will give the
holder a lien as security for payment upon the real property (including
the home) owned by the undersigned at the time of entry, and a lien
on personal property owned by the undersigned at the time it is given
to the Sheriff for executiofi.
(b) We and each of us waive all right to notice and to have
an opportunity to be hear4 prior to the entry of the judgment on the
Court records, understanding that the only method to challenge this
judgment would be by proceedings in Court to open or strike it which
proceedings would result in substantial attorneys fees which the
undersigned would have to pay.
(Without such 'clause containing a
Confession of Judgment the holder would have to file suit against the
undersigned which would give the undersigned an opportunity for a
hearing which the undersigned does not have by reason of the Confession,
i

3 . The undersigned acknowledges receipt of a copy of this affidavit


and certifies that after reading and fully understanding it, the
. undersigned have signed this affidavit intentionally, understandingly
being willing to sign such
and voluntarily waiving all the above r!ghts,
note despite the consequences set forth above.

:
!

Affirmed to and Subscribed


(

before me this

eel

J / day

.+
.c
.j

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 326 of 646


Property of Advance Media Group

Page 2432 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Financial Management Group Ltd.

ROBERT E. KAUFFMAN
PRESIDENT

Mr.

Millard Johnson

3450 Duff Avenue


Lancaster, PA 17601

Dear Bill :

I am sorry that I was not in the office last Thursday


or Friday to accept a telephone call.
I did, however,
receive your message that you were going to take some
kind of "action".
In order for Financial Management Group to be successful,
!I:ve returned to the full time work of building the
flrm.
We are referring all questions regarding Stanley
J. Caterbone to our counsel Craig Russell of Russell,
Kraft, Gruber and Huber (569-5383).
Should your counsel
need to speak wlth us, he may call Mr. Russell.
(1 have been told that Mr. Patterson no longer represents

the Caterbone family and no action is pending on their


;behalf concerning Stanley.
Best regards,

Robert E. Kauffman
President

REK: lmk
CC

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 327 of 646


Property of Advance Media Group

Thursday December 15, 2016

Scrurl*ler Offer&
tnrovph
Scrumles Group. InG
Page
2433 ofPtanner's
2953
A R r p m l n d ilrokcrlL%.ler
Member SlPC
M m k r NASD

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

F i n a c i a l Management Group, LTD.


1755 Oregon Pike
L a m a s t e r , PG
17601
(717) 569-5555
Robert Kauffman, P r e s i d e n t
Mickel N. mrtlett, E x e c u t i v e V i c e P r e s i d e n t
P. Alan Loss, Board of Directors
R o b e r t Long, Board of D i r e c t o r s
P e t e r Peneros, Broker

._-.
-

Defamation of C h a r a c t e r
Slander
Mental Duress
Malice
Unfair C a T p e t i t i o n
Wrongful I n t e r f e r e with BusiRelations
Wrongful I n t e r f e r e m w i t h C o n t r a c t s
Trezpass to P e r s s n
Burglary
Theft
Criminal Mischief
I n v a s i o n o f Privacy
T r e z p a s s to Personal P r o p e r t y
Undoinf l u e m
Fraud
Conspiracy
EMxzzlmnt
Breach of C o n t r a c t
Extortion
Forgery
S b r h o l d e r Freeze-cut

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 328 of 646


Page 2434 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

- -

Section 3189 Federal False Claim Act

Cornno-lth
M t l 0 ~Bank
1
Penn m a r e
Lancaster, PA
176432

W l l o n Bank
Pittsburg, PA
Parent Carpany
Mike W o l f , Executive Vice President of Comnercial Lending
f ' w PEAJBLOS

U(;ATIONS.:
Defamation o f Character
Slander
Mental Duress

Malie
Unfair Cocrpetition
Wrongful I n t e r f e r e ~ zw i t h Business Relations
Wrongful Interference w i t h Contracts
Trespass t o Person

T M t
Criminal Mischief
Invasion o f Privacy
Trespass to Personal Property
Undoinf luenoe
Fraud
Conspiracy
EntEzzlement
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 329 of 646


Page 2435 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Ckce Smith, Execxltive Vice President


Pete Wolfson, Sal-n

Defamation of Character
Slander
Mental IXlress
Malice
Unfair Conpetition
Wrowful Interference with BusiRelatiom
Wrowful Interference w i t h Contracts
T r e s p a s to Person

Theft
C r i m i m l Mischief
Invasion of Privacy
Trespass to Personal Property
Urdoinf luence
Fraud
? Corqsiracy
I EmSezzlement
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 330 of 646


Page 2436 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Farrcers F1-t Bank


L l t r t z , PA 17512

Pete Richter, Pkrmger of La-ter


Glenn Nelsn, President

Shcpping Center Branch

r/Aw ,455

PLLE%~.ICNS:
Defamation of Character
Slaoder
Mental Duress
Mall03
Unfalr Corrpetr t i o n
Wrongful Interference w l t h BusiRelations
Wrongful Interference w l t h Contracts
T r e z p a s t o Pemn

,ary
.

- .

Theft
Invaslon of Prlvacy
Trespass t o Perzonal
Undolnfluence
Fraud
Cor?zplracy
Breach of Contract
t Extortion

Property

C'

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 331 of 646


Page 2437 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Hunllton Bank
Oregon Plke
Lamaster, PA

Section 3189 Federal False Claim Act

17601

Chris Izzo, Loan Officer


Corestates, Credit Card M n i n i s t r a t o r

Defamation of Character
Slander
Mental Duress
Malice
Unfair Conpetit i o n
Wrongful Interference with Business Relations
Wrongful Interference with Contracts
Trt o Person
Trto Personal Prcperty
Undoinf luence
Fraud
Coqiracy
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 332 of 646


Page 2438 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

F u l t o n Bank

O l d Hickory B r a n c h
Stor L a n c a s t e r . PA
17601

?6tl

U n f a i r Conpeti t i o n
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o m
Wrongful I n t e r f e r e with Contracts
Undoinfluem
Fraud
Comiracy
Erkezzlement
B r e a c h of C o n t r a c t
Extortion

Cor
Brc

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 333 of 646


Page 2439 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Berdett T m l l n Hospital
Cape Nay County Courthouse
Stone Harbor, NJ
08247

Social Worker
Psychiatrist 1
Psychiatrist 2

WEGAT IONS:
Defamation of Character
Slarder
k n t a l Duress

Malice

Unfalr Carpetrtlon
Wrongful Interferew l t h Busines Relatiow
Wrongful Interference w i t h Contracts
Tnzspass to Person
Irwa~lon
of Prrvacy
Trespass to Percsml Property
Undolnf luence
Fraud
Cowpiracy
Breach of Contract
~orgsry
Neg11gsnce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 334 of 646


Page 2440 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Avalon Police DeparWnt


Avalon, NJ
08247

Officer Dean
Fat Aswrciate

Defamation of Character
Slander
Mental Duress
Malice
Unfair Conpetition
Wrongful Interference with Business Relations
Wrongful Interference with Contracts
Trespass to Percan
Burglary
Theft
Criminal M i x h i e f
Itwasion o f Privacy
Trto Personal Property
Undoinf l u e n z
Fraud
Conspiracy
En'&ezzlmnt
Breach of Contract
Extortion
Forsew
Sharholder Freeze-out
mligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 335 of 646


Page 2441 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

k n h i m Towrship P o l i c e Deparbnent
C i r c l e Drive
Lancaster, PA
17601
D e t e c t i v e Mathias
Officer 1
Officer 2
Officer 3
Officer 4

Defamation of C h a r a c t e r
Slander
k n t a l hresr
Malice

'j

Wrongful I n t e r f e r e n c e w i t h Business R e l a t i o n s
Wrongful I n t e r f e r e with Contracts
T r e s p a s s to Person
8urglat-y
Theft
C r i m i n a l Mischief
Invasion of Privacy
T r e s p a s s to Personal P r o p e r t y
Undoinf l u e m
Conspiracy
Breach of C o n t r a c t
Negligznce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 336 of 646


Page 2442 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

L a n e a s t e r P o l l c e Department
W. Chestrwt S t r e e t
L a n e a s t e r , PA
17602

Defamation of C h a r a c t e r
Slander
Mental DuMalioe
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o w
Wrongful I n t e r f e r e n c e w i t h C o n t r a c t s
Trto Person
Undoinfluence
Fraud
Conspiracy
Breach of C o n t r a c t
Negligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 337 of 646


Page 2443 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Jocsh R c d a , E s q .
301 C l p k r Building

36 E. K i y Street
L a m a s t e r , PA
17602
(717) 397-5791

Defamation of Character
Slander
k n t a l Duress
Malice
Unfair Conpeti t i o n
Wrongful I n t e r f e r e w i t h Business R e l a t i o m
Wrongful I n t e r f e r e with Contracts
Undoinfluence
Fraud
Colqriracy
Embezzlenmt
Breach of Contract
Extortion
S h a r b l d e r Freeze-cut
Neglisnce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 338 of 646


Page 2444 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Lou S c ~ l l e r Esq.
,
V a l o r e , M c A l l i s t e r , W i x o r e l a n d , Gould, V e s p e r & Sctwartz

Northfield, NJ
(609) 64-1111

Mental Duress
Malice
U n f a i r Gorrpetltion
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o n s
Wrongful I n t e r f e r e n c e w i t h C o n t r a c t s
Undoinf l u e n c e
Fraud
Conspiracy
mzzlement
Breach of C o n t r a c t
Extortion
Negligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 339 of 646


Page 2445 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

D r . W r s h a l l L e v i r e , E ffl D P A
l a 1 T i l t o n Road
N o r t h f i e l d , NJ
(653) 646-2011

D e f a m t i o n of C h a r a c t e r
Slander
Mental LXlresr
Malice
Unfair C a r p e t i t i o n
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s Relations
Wrongful Interference w i t h C o n t r a c t s
T r e a s s to Person
I n v a s i o n of P r i v a c y
Undoinf l u e e
Fraud
Comiracy
Fdxzzlmnt
Breach of C o n t r a c t
Extortion
Neglige-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 340 of 646


Page 2446 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 341 of 646


Property of Advance Media Group

Page 2447 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 342 of 646


Page 2448 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

B I L L TO: :S J CgJEEf#EAIZSOCIATES
HARBOR,
TRACKING NOS
REFERENCE

08247

SENDER'S AME AN0


ACCOUNT A ~ R E S S

1 SHIPPED

PAC
DAl
ACCOUNT NO.

I N V O I C E NO. 6 - 2 5 0 - 7 3 1 9 7
PACKAGES
8 WEIGHT

R E C I P I E N T INFORMATION AND
PROOF OF DELIVERY

1/

D I A N E SAWYER
CBS
555 W 5 7 T H S T
NEW YORK C I T Y
NY 1 0 0 1 9 AA
DELIVERED 0 8 / 3 7 / 8 7 11:2 2
SIGNED: 0 PARKER

STAN CATERBONE
S J CATERBONE ASSOCIATES
554 BERKELEY AVE
STONE HARBOR,
N J 08247

5587942463

4632584

NJ

SENDER A C T I V I T Y SUMMARY

08/28/87

(SENDER SUBTOTAL

CHARGES

SERVICES

14.0C
1 0 . OC

NA OVRNIGHT L T R
S A T SERVICE

2 4 . 0 0 1 ~T H~ I ~S AMOUNT

RC-M-1279 9/05 FEC Repragraphics

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 343 of 646


Page 2449 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act


JOSEPH F.

RODA. P.C.

A T T O R N E Y S AT L A W
301 ClPHER BUILOINC.

36 E A S T K I N G STREET
LANCASTER. P E N N S Y L V A N I A 17602
TELEPHONE (7171 3 9 7 - 3 7 9 1

.JOSEPH F R O D A
PAUL

5 ROMANO

September 2 ,

1987

M r . S t a n l e y J . Caterbone
5 5 4 B e r k l e y Road
S t o n e H a r b o r , N J 08247

Dear S t a n :
Our r e c o r d s show a p a s t due amount o f $525.48 o n your
a c c o u n t , as r e f l e c t e d on o u r s t a t e m e n t o f J u l y 22, 1 9 8 7 , a
copy o f which i s e n c l o s e d f o r your c o n v e n i e n c e . A s you w i l l
r e c a l l , t h i s i n c l u d e d copying c h a r g e s which w e advanced on
your b e h a l f .
Your immediate a t t e n t i o n i n b r i n g i n g t h i s a c c o u n t
c u r r e n t would be a p p r e c i a t e d .
I know t h a t you w i l l t a k e
c a r e o f t h i s , and t h i s n o t e i s s e n t s i m p l y by way o f a
reminder.
I saw Tom t h e o t h e r n i g h t and had a n i c e c o n v e r s a t i o n
w i t h him.
C a t h o l i c High s h o u l d h a v e h i r e d him.

With k i n d e s t r e g a r d s ,

Sincerely,
A

w
&
G
z
k
ose h F. Roda

JFR:dlb
Enc .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 344 of 646


Page 2450 of 2953

Thursday December 15, 2016


10/19/2006

..--

^-"

--

. "..,..,," ,...

"..,,...

., -.,. ~ , ,

JUSTICE
US District Court For The DISTRICT
Eastern District
of Pennsylvana
MAGISTERIAL DISTRICT NO{;>14>

Section 3189 Federal False Claim Act

_ 7--I
ox;'y.&gaw

. ----i N C l O E N T NUiilEER UCR NO.

.,..__
i I>-I>>u

OTN

b384SbCi-13

L-.::
C O M M O N W E A L T H OF P E N N S Y L V A N I A

vs.

DEFENDANT

- ,1

7 . .

PLxJ~oir;lT

of

*,

.a;..>
-- ,-:."fAffi",,l/
(NO##,<

j:.,*

i\

p *lice

..%

..

mflle

ADoREss 2323

.,is:

Lu'i;.

/ti

RSA
A K A

s;j

>*

i;tii:t5 July 1958

2:-3;fi3

do hereby slate:
I accuse the above named defendant, who lives at the address set iorLh above or,
(1)
I accuse an individual whose name is unknown to me but who is described as

-:
4

'

his nickname or popular designation is unknown Lo me and, therefore, 1 have designated him herein as Johr
' ~ b d p
with violating the penal laws of the Commonwealth of Pennsylvania a t

.
?

(Plur.~.Polirieol Subdivis#onl

in

.x

Participants Were

(iftl#ere

DutlCfKM dr UoOU 1 %pi,

~&&&"k
County on or about

parIicip(1n11. plucc illnr

tlulvtsr

Lrrc, r r p r u r i n l rhr ;,u?r,l,ofuhovr rl<,,ir#danr/:

U,
s-py
J, p&&.;., ;.(2) The acts committed by the accused were:@
~ p , ~ ~ ; r L y ~ , ~r~~;j;:2~,j,;;
;;~~!;
?
:
.?r
Said &tor did tlurakn ta d
t auy c r h of v i o l u ~ ~uiih
o ti& intat to txazwka atme
to IXSUSO cvczautian or' a
>laso US irc;maLly as facility. of pub310 tzasrmt;rtLq
;is1%&4 ?O
,
OiU130 G&W
pCbU b i C Q l ? S G l h i ~ c tOX b ~CCii'L6wd l W X q p d 0
f
~
~
tmmx a;c b c o w ~ e Yo
, Uitr
actor
p k z e ii @1oiu1 w l l to
P f f h af
y& 2,- thqpsu~t
cL~u.9 1755 Crcr*
2 2 h
~i~
~ taFL. b ~ h e t i n
hru & licroa W
- 1 %yt. i]?. Tiic uiU w atxmxd by J u u Eai;c.r, ~ 1 ;k i p l ~ y w ,crtxi tis c a l l e r utatsd I r
&-visa yiru all to but out of a x 3 bdlriiy: if yarr v;luc ycjur a2.t-b".
. i i cziUm2 %.id6ut.j
fa
byliisvlacutus &at d iheakr~ecict3L.b~ikzXiaqiz-.
k i d a ~ t u bkrmx'pr:
r ~
!@ ~ ~ ~ e t i e o ~ p a e w s i n t L o ~ c - ~

-,

'$6

..

"

all of url~ichwere against the peace and dignity of the Commonweallh of Pennsylvania and contrary to the Actof Ass,
and
of the Act of .
.
.. . .. .
or in violation o f . q$ r''r,ur,/
.
(Sub.rurriorrl

or the

'l%W ib -.WO

Ordinance of

(l'ubtirul Sub-divisirml

(3) I ask that a wanant of arrest or a summons be issued and that the accused be required to answer the charge!
have made.
(4)

I verify that the facts set forth in this complaint are true and correct to the best of my.knowledge or informati
and belief. Thii verificition is made subject to the penalties of Section 4904 -of t. h e W i u Coc)t?.(l8 Pa. C. S.
..-...
54904) relating to unsworn falsification to authorities.
.
.
.S*..' , , L . ...

.-

s o ~ t d r r3 , 19 157, I certify the compluint has .6een-p~o&b~'cbrnpleted a


/ 'D NOW, on this date
. , <
h i e d , and that there is probable cause for the issuance of process.
. - . ,. .. .. 8

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 345 of 646


Page 2451 of 2953

Thursday December 15, 2016


10/19/2006

Clark, Guerin

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Continued from Page One

K-17-9a

After Guerin and asso-

jury that is investigating ISC


ciate Michael A. Peck
with documents that other ISCofficials balked at sending, be'purged' a file containcause they were too damaging,
ing documents revealthe agent confirmed.
After Guerin and associate Miing wrongdoing by
chael A. Peck "purged" a file
United Chem-Con, it
containing documents revealing
wrongdoing by United Chemwas Clark who reproCon, it was Clark who reproduced and replaced
duccd and replaced those items,
O'Callaahan said.
those items, O'Cal( ~ u e r y nowned 20 percent of
Chem-Con. Twelve others have
laghan said.
been charged with wrongdoing in
a defense contract fraud there.)
~- invest.
Clark also sent the grand. jury shareholders- to
So they went to Clark for help.
one of his memos, which quotes
ISC executive Donald Peterson wondering what liability they
as saying that ISC and Chem-Con miaht face. Clark in turn went to
exchanged false invoices to ~ e i s l e r .
"We are doubtful that the con"make sales look better and collect proper payments from the duct of Deitch or Liddick to the
present date could result in perDefense Department."
sonal,
civil or criminal liability,"
Peterson
said
he,
Guerin
and
:
i fellow ISC executive CarlDreyer Kessler replied.
"However, (they) can and
took part in the scheme, which
should scrupulously avoid particwas started in 1978.
The scheme also served to ipation in the making of misleadmake ISC appear to be a bigger ing representations to parties
company when it went public in outside the company." he said in
his response.
1982,according to the memo.
ISC financial officers "should
While Clark was aware of these
exercise great caution in the
x::~~4~
activities,
~ . : ~ u he
~ was not a p a r t of
, Guerin's inner circle, said O'Cal- months ahead. They should continue to raise questions, should
laghan.
'
Guerin himself told the agent consider documenting their acthat he did not rely onClark's ad- tions and should scrupulously
vice and excluded Clark from avoid acts which would indicate
sensitive discussions - actions complicity," Kessler advised.
which frustrated and irritated
the attorney.
Along that line, Clark told ISC
colleagues that he gave advice to
keep the company clean, but
Later discovered that his advice
was not followed, the agent
testified.
A striking example of Clark's
efforts was his contact with a
Washington, D.C., law firm for
advice on handling- auestionable
.
ISC contracts.
~ response
The ~ e b r u a r1988
from attorney Judd L. Kessler,
submitted to the court as evidence, reveals how the questionable contracts caused internal
j turmoil.
The letter recounts how James
Deitch, then controller of ISC
Group Inc., and Michael Liddick,
then its treasurer, had apI' proached Clark for advice.
They long had suspected that
ISC's financial portrayals were
"less than accurate."
I Their feelings were fueled by
August CLAIM
1987 letterPage
from 346
ISC's
EXHIBIT U.S. 16-4014 CIVILanRIGHTS
of 646
Thursday December 15, 2016
; outside auditors (Peat Marwick),
Property of Advance Media Group
Page
2452
of
2953
10/19/2006
in which the auditors criticized
~

~~

!Tee"

r-r

..--*--I-

--A

>.

~~

II

;..,,LL-yJ

...

>.<JJ.

~ o r n p l m n nruuanurrs

LGII'

US District Court For The Eastern


District
of Pennsylvana
DISTRICT
JUSTICE

81

vtnrr v a r $ ~ c ~ p i l n f s

Section 3189 Federal False Claim Act

;;-1-02

IMAGISTERIAL DISTRICT NO.

<,;;f&+,,,~'f&<j~()G i > i ~ i - ~ ~ y l
C O M M O N W E A L T H O F PENNSY L V A N l A

vs.

DEFChOANT

do hereby state:
I accuse Lhe above named defendant, who 1ivt.s aL the address set forth above or,
(1)@!
I accuse an individual whose namc is unknown Lo me but who is described as
X
0

his nickname or popular designation is unknown to mc and, therefore, I have desigt!ated him herein as Johl
wilh violating the penal laws of the Commonwe;tlth of Pennsylvarlia a t 1'755 Ore&on 'i'k- -caste:

(I'lucc.I'~,lir!..ulSt,h,finlio,al

$
~ : a d ~ e iTn~ i p
<

Participants were

>

Uc-

in

kllc&sCt?r

County on or about

2230 t o 2330
3
07

l!Yf3

.Fr%&:
-

( i , ~ t ~ r r r ~ ~ ~ ~ r r ~ p ~ r r i c i p o , ~ t s . p ~ u c ~ ~ t ~ t r i r , r ~ r r ~ ~ ~ ~ ~ z r r u . r c p c v r i , ~ ~ i ~ ~ ~ r ~ u r r ~ ,r, I~. :r. ~ ~ ~ b


<:

Criniriul ;::iticl-iiei (P-5)


iis:ll~rilul !iesl;ruinf ( i i - 1 ) IJnltiwful l l ~ e3 P Cu~;iputar (
3 'I'lmft Uy
i
i
' - 3 )
l i o b b u r y (2-1 )

(2) The acts committed by the accused were:@

1)

21- Surglury- Acuuard did u o l x u l u l l y rutsr u b u i l d i n g o r occupied


s t r u c t u r e o r ~;,epiraZe:y tjecured cr n c c c ~ i e dp o r t i o n t k ~ e r c o f , t o w l t : o
1
, t h e property of 2 i n i i n c i n l Hgt. Group 1755 O r e ~ o n2k. I.tinctie$er
l./tc71, ti?e prersise ul; t h e t i u e n o t beitid open t o the p u b l i c o r uJ11cL trtc
+ccubeci was no
sed o r ~ r i v i ' red t o enter, t r i t h t h e i n t m t t o conzl
r c ~ ; u ~ ~ ~ x ~ i - : l C
~ r i s i n a l &~shief tirid T%eft and $p,erof..: C~kiiuter.
.'.
5 i d i t i t r r l t i o n a l l y o r r e ~ k l e ~ t~l ~
;

O C;ur:t

'

pa/
~

as T o entl;in,jrr PerLiufi

02 jiI.Opcr:y.

uachine, 'telephone Breadbox, (


(

1111 of which were against the peace and dignity of the Commonwealth of Pennsylvania and cotitrary t o the Act of Ass,
or in violation of 2 ~ : .
and
rp,.e
o f the Act of ,Ph Critueu Co2e

%~'.,,XW~

or the

&.ub-sc.-tru;d,

Ordinance of

--

(Politicel Subdil.irinn)

(3j I ask that a warrant of arrest or a summons be issued and that the accused be required to answer the charge:
have rnadi.
(4)

I verify that the facts set forth in this complaint are true and correct t o the best of my lmowledge or informati
and belief. This verification is made subject to the penalties of S e c t i o ~4904 of the C r i e s Code (i8Pa. C. S.
4904) relating to unswom falsification t o authorities.

/
3 NOW, on this dale
. . .

---

.;

, 19 1 , ,~ I certify the complaint h;qs been properly -.cop~pleted


a
-.ep
.,
verified, and t l ~ a there
t
is probable cause for the issuance of process.
,'
,
'

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 347 of 646


Page 2453 of 2953

I'

'-

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Count # : d G n l a w f u l R e s t r a i n t - A c c u s e d d i d u n l a w f u l l ySection
and3189kFederal
n o w iFalse
n g lClaim
y rAct
estr:
a n o t h e r u n l a w f u l l y i n c i r c u m s t a n c e s e x p o s i n g s a i d o t h e r p e r s o n o t r i s k ol
s e r i o u s b o d i l y harm, t o w i t : a c c u s e d d i d p u l l S t a c y L. ' d a t e r s by t h e w r i s t
t h r o u g h o u t a b u i l d i n g w h i l e h e c a u s e d damage t o s a i d b u i l d i n & and s t o l e j
'-on ';he f i l e s .
Accused t h r e a t e n t o harm Waters i f s h e would n o t cooper:

a con?

Use o f Computer-Accused d i d a m s , m r , damage o r dc


cornouter swstem. c o m ~ u t e rn e t w o r k , computer S o f t w a r e , cornputt
e o f , w i t ; t h e ' i n t e n t t o i n t e r u p t . ths
ye o r t : x e c u t e a n y scheme
v i c e s by means o f f a l a e
, t o TIC a c c u s e d d i d

EBPPB -3$

x.
ccused did unfaefuily t a k e o r e x e r c i s e c i n t r l
moveabl n r o u e r t g of a n o t h e r t o w i t , z c c u s e d d i d remove numerous f i l e s i'
t h e r e c o r d s a r e a s of Y l n a n c i a l Mgt. Group 1755 Oregon Pk. L a n c a s t e r , Pa.
w i t h t h e i n t e n t t o d e p r i v e t h e owner t h o use t h e r e o f .
S e c t i o n 3921 ( a )

Count #6- Robbery-accused d i d , i n t h e c o u r s e o f c o n m i t t i n g a c r i m e , t h e l


by u n l a w f u l t a k i n g , b u r g l a r y , Unlawful Use of Computer, t h r e ~ . t e n a n o t h e r
o r i n t e n t i o n a l l y p u t her i n f e a r o f immediate s e r i o u s b o d i l y i n j u r y , t o
a c c u s e d d i d thseaten t o knock o u t S t a c y L Waters when s h e t r i e d t o r e s i s
n i s e f f o r t s t o commit t h e a b o v e l i s t e d cr.irnes.
S e c t i o n 3701 ( a - I - i i )

L i s t o f A c t s Committed by Accused:
B u r g l a r y Sec-3502, C r i m i n a l Mjsc:l.ief
Sec-3304 S u b s e c - ( a ) (.2.) .. U n l a w f u l R e s t r a i n t Sec-2902 S u b s e o - ( I )
U n l a w f u l Use of G o q p u t e r Sec-3933 ~ u b s e c - ( a ) ( 1 ) ( 2 ) , and ~ o b 5 e r yS e c 37
Sujsec-(a) (I ) ( i i )

..

ilof which were qainst thepeace and dignity of the Commonwealth of Pennsylvania and contrary to the Act of X
<
-..- . ~ - 7 ? ? - . 7 L
-5: 7 .- ;,-,-r in violation of . . .
o f t h e ~ c t o f ' q ,rim??. %,f?
l~crrionl
andT: CiYlrrrnu,,/
....
.-_ . . . - -.-.---,--.. .. .. . - . Ordinance of '. " - :.:
. - :....... >:-. ...........
.
r the '

fPoIirirar SubUivtrronl

;I I ask that a warrant of arrest or a summons be issued and that the accused be required to answer the c h q
have made.

L) I. Det. L a r r v G. P I a t h i ~ s

verify that the facts set forth-in this complaint are true
correct to the best of'my knowledge. information and belief.
. . penalties of Sec
4904 of the Crimes Code (18P a C. S. s 4904) relatine.
to
ontles.
-

, kc/.,./ / /-&&-

, 19

4 Seu

(Signah.rc of Complninanc)

6'WDNOW.on
this d a t e 4 S ~ 87
D
. 1 9 ,
that there is probable cause for the issuance of process.
-fl3+.-&-..-

- ,.

( . ~ I z ~ ; r r = r #Oistr;<c#
al

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

l I s x u t ~ 2A~ ~ ~ h o r ~ r v ~

Page 348 of 646


Page 2454 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

RECEIVED FROM

Caterbone, Stanley Joseph

Four hundred a'hd sixty-ty-------,,

. .L.,.;'

(,

! I

. ,

Section 3189 Federal False Claim Act

/'

t$,

,,
'~-.

90/100----------

------------,------------L---~-~--~~

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

. ..
DOLLARS

.<
-(*;

Property of Advance Media Group

THE SUM OF

/: i

.',

..

INMATE SIONANRE

%,.

COMMlTlNG OFFICER SIGNATURE

Page 349 of 646


Page 2455 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

+.

,,,, .I
./
1755 Oregon .

Conestoga Man Linked to Theft

.. .
I
i,
Manheim Township police ar!
i rested a Conestoga man Thursday
i , n$ht on charges that he erased
.'.
1 ormation from a township company's computers, stole files and
. I damaged equipment.
Stanley J. Caterbone, 29, of
2323 New Danvilie Pilte. . was
I
, charged with btsrglary, thetl, un,f l a d u l restraint, robbery, unlawuse of a computer, criminal
I..., . . ful
mischief and terroristic threats.
' ~ e t e c t i v eLarry ~ a k i said
s
- w e . victim, Financial ManageI'

Section 3189 Federal False Claim Act

meht Group Ltd.,


Pike, lost an estimated

$60 Wo-as

.I

1.
I

i'

,'

EX-~orkei,Charg&d
In Bvrglgry
.
at Firm
,

The suspect also was served a i


warrant, for terroristic threats in
a case snvolving another female ;
employee of the firm. Caterbone,
a former employee of the coppa- . '
ny, was committed to prison,in
lieu of f20,W bail.

crimes.
He also was servgl a warrant'
for terroristic threats tn a case Invoivin another female employee ,
ofthe-firm. .
.
CAterbone, a former 'employ. /
ee of the coppany, was commit- ,
ted to prLson 1n l ~ e u
of $20,OW bar\.. :I

:.

'A:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 350 of 646


Page 2456 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

'

NAME :

,',--

Section 3189 Federal False Claim Act

,.

BLOCK:

ATURE:

CELL :
,

DATE :

~-

.
!.

ANYONE DESIRING TO COMMUNICATE WITH THE FOLLOWING STAFF MEMBER OR AGENCIES, INDICATE
BY PLACING AN "X" ON THE APPROPRIATE L I N E . REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
I F MORE THAN ONE L I N E I S CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. I T I S IMPORTANT
THAT YOU GIVE A COMPLETE EXPLANATION.
(PROVIDE ALL NEEDED INFORMATION) AS TO THE
REQUEST YOU ARE SUBMITTING. T H I S WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
I N THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GIVE MEDICAL REQUEST DIRECTLY TO THE MEDICAL
TECHNICAN DURING SCHEDULED MEDICATION TIME.

MEDICAL DEPT. - S I C K CALL:


(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?
EDUCATIONfTREATMENT PROGRAM:
(EG.,

GED, ABE, SELF HELP WORKSHOP, ETC.

WELFARE GRANT:
(MUST HAVE 50.00 OR LESS I N PRISON ACCOUNT TO BE ELIGABLE, MUST SUBMIT TWO WEEKS PRIOR
TO D E F I N I T E RELEASE DATE, ALSO WRITE YOUR DATE OF BIRTH AND SOCIAL SECUqITY N W E R ) . .
SUPPLY OFFICER:

( L I S T ITEM NEEDED S I Z E ) :

- , I

SPANISH SERVICES COORDINATOR:


L o s q u e necesitan a y u d a d e c u a l q u i t e r clase y no s a b e n i n g l e s deben d e m a r c a r esta
l i n e a y echar l a p e t i c i o n e n l a caja d e s i g n a d a p a r a s o l o c o t u d e s ( R e q u e s t s ) .
PRoBATIoNIPARoLE:
PUBLIC DEF. &./Mrs.:
RECREATION DIR.:
VOCATIONAL DIR.:
BAIL ADMINISTRATOR:
WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE SPECIFY):

:
QEN
DEPUTY WARDEN:
DIR. OF TREATMENT:
ASSOC. WARDEN:
COUNSELOR:
OFFENDER DEV. SER.:
CHAPLAIN :
VISITATION:

AGE :

NAME :

RELATIONSHIP :
YOUR REQUEST (COMPLETE INFORMATION) PLEASE PRINT
I

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 351 of 646


Page 2457 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

AGENCY :

PERSON ANSWERING REQUEST:

DATE:

ANSWER:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 352 of 646


Page 2458 of 2953

Thursday December 15, 2016


10/19/2006

uu~rr'-u

US District Court For The Eastern District of Pennsylvana

L u l u u4r

TVRI'L

Section 3189 Federal False Claim Act

(PLEASE PRINT)

/]

ANYONE DESIRING TO COMMUNICATE WITH THE FOLLOWING STAFF MEMBER OR AGENCIES, INDICATE
BY PLACING AN'"Xm' ON THE APPROPRIATE LINE. REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
I I F ?IORE THAN ONE L I N E I S CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. I T I S IMPORTANT
1 THAT YOU GIVE A COMPLETE EXPLANATION.
(PROVIDE ALL NEEDED INFORMATION) AS TO THE
I REQUEST YOU ARE SUBMITTING. T H I S WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
I I N THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GIVE MEDICAL REQUEST DIRECTLY TO THE MEDICAL
1 TECHNICAN DURING SCHEDULED MEDICATION TIME.
I
,-- ,,
E MEDICAL DEPT. - S I C K CALL:
,qi-'l
LA
b ~ / \
(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?

EDUCATIONjTREATMENT PROGRAM:
(EG.,

L.

WELFARE GRANT:
(MUST HAVE 50.00 OR L E S S I N PRISON ACCOUNT TO BE ELIGABLE, MUST SUBMIT TWO WEEKS PRIOR
TO DEFINITE RELEASE DATE, ALSO WRITE YOUR DATE OF BIRTH AND SOCIAL SECURITY NUMBER)
SUPPLY OFFICER:

GED, d B E , SELF HELP WORKSHOP, ETC.

( L I S T ITEM NEEDED S I Z E ) :

SPANISH SERVICES COORDINATOR:


Los que n e c e s i t a n ayuda de cualquiter c l a s e y no saben i n g l e s deben de marcar e s t a
l i n e a y echar l a p e t i c i o n e n la c a j a designada para solocotudes (Requests).
PROBATIONJPAROLE:
PUBLIC DEF. M r . / M r s . :
RECREATION D I R . :
VOCATIONAL D I R . :
BAIL ADMINISTRATOR:
WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE SPECIFY):

wr9SrN:
DEPUTY WARDEN:
I DIR. OF TREATMENT:
E ASSOC. WARDEN:
(
COUNSELOR:
(
OFFENDER DEV. SER. :
(
CHAPLAIN:
i VISITATION:
V
,

NAME :
ADDRESS:

SA.C{~,L
/ 5 7b
!d.~
ttlc-13 q "LC

)>(A U E

RELATIONSHIP:

FAI &'w

,Cfi5

C/O

.
I

AGE:

3c

*
/UUI
5

YOUR REQUEST (COMPLETE INFORMATION) PLEASE PRINT

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 353 of 646


Page 2459 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

REQUEST CONTINUED:

PERSON ANSWERING REQUEST :

IL

AGENCY :

ANSWER:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

DATE:

Page 354 of 646


Page 2460 of 2953

Thursday December 15, 2016


10/19/2006

K E q U E > l kUKM

rUKl'U>C

IrLLYfiUL

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

(PLEASE PRINT)

I'

..., . jr.i.r ,i -

NAME:

ANYONE DESIRING TO
WITH THE FOLLOWING STAFF MEMBER OK AGENCIES, INDICATE
BY PLACING AN "X" ON THE APPROPRIATE LINE. REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
I F MORE THAN ONE L I N E I S CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. I T I S IMPORTANT
THAT YOU GIVE A COMPLETE EXPLANATION.
(PROVIDE ALL NEEDED INFORMATION) AS TO THE
REQUEST YOU ARE SUBMITTING. T H I S WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
I N THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GI& MEDICAL REQUEST DIRECTLY TO THE MEDICAL
TECHNICAN DURING SCHEDULED MEDICATION TIME.

'

'

,. :

BLOCK:

CELL :

DATE :

COMMUNICATE

.-\
.I ; ,. ,
I..,.: , .
MEDICAL DEPT. - S I C K CALL:
(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?

,-.

EDUCATIONJTREATMENT PROGRAM:
(EG.,
1

GED, ABE, SELF HELP WORKSHOP, ETC.

WELFARE GRANT:
(MUST HAVE 50.00 OR LESS I N PRISON ACCOUNT TO BE ELIGABLE.
SUPPLY OFFICER:

MUST SUBMIT TWO WEEKS PRIOR

( L I S T ITEM NEEDED S I Z E ) :

SPANISH SERVICES COORDINATOR:


Los que necesitan ayuda de cualquiter c l a s e y no saben i n g l e s deben de marcar e s t a
l i n e a y echar l a p e t i c i o n en l a c a j a designada para solocotudes (Requests).

"

:
:

.
I

9'

L..,<5EN :
DEPUTY WARDEN:
CDIR.OFTREATMENT:
c
ASSOC. WARDEN:
1
COUNSELOR:
LOFFENDER DEV. SER. :
L
CHAPLAIN:
i..
.>,.~,
VISITATION:
~!,;%,!<\,pId' ,
,. .
NAME:
,,..~
;..
,,:

,,!

/'

'

/:;I,?

ic '-:.<

ADDRESS :

'
RELATIONSHIP:

'.

'

i,;:,

PROBATION/PAROLE:
PUBLIC DEE. M r . /&rs. :
L/RECREATION D I R . :
, ' ,I
VOCATIONAL D I R . :
&'
BAIL ADMINISTRATOR:
4"
WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE SPECIFY) :
AGE :

'_.I

.#

&

.
I

~:

\:,

..

YOUR REQUEST (COMPLETE INFORMATION) PLEASE PRINT

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 355 of 646


Page 2461 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

REQUEST CONTINUED:

Q a ~ td

Section 3189 Federal False Claim Act

A+

,PA

-1..:.:~..,.~--.
: . -:.--

,. .. -

:I i,. I

~3/uc
,

PERSON ANSWERING REQUEST:

DATE:*

ANSWER:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 356 of 646


Property of Advance Media Group

Page 2462 of 2953

Thursday December 15, 2016


10/19/2006

--

ur,nLntiL, r u n r v ~ rn ~ q u ~ ra ul
.
.
-. .
US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

(PLEASE PRINT)

NAME:

:a

.?

;"'

,. .

S. TURE:

'

,. I .:: :

'

BLOCK:

. . ( :.
j

. ,

CELL:

.:*"

DATE: ,//-

?J~

ANYONE DESIRING TO ~OMMUNICATEWITH THE FOLLOWING STAFF MEMBER OR AGENCIES, INDICATE


BY PLACING AN'"X" ON THE APPROPRIATE LINE. REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
: IF MORE THAN ONE LINE IS CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. IT IS IMPORTANT
: THAT YOU GIVE A COMPLETE EXPLANATION. (PROVIDE ALL NEEDED INFORMATION) AS TO THE
1 REQUEST YOU ARE SUBMITTING. THIS WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
: IN THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GIVE MEDICAL REQUEST DIRECTLY TO THE MEDICAL
TECHNICAN DURING SCHEDULED MEDICATION TIME.

I
1

MEDICAL DEPT. - SICK CALL:


(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?

EDUCATIONJTREATMENT PROGRAM:

(EG., GED, ABE, SELF HELP WORKSHOP, ETC.

WELFARE GRANT:
(MUST HAVE 50.00 OR LESS IN PRISON ACCOUNT TO BE ELIGABLE, MUST SUBMIT TWO WEEKS PRIOR
TO DEFINITE RELEASE DATE, ALSO WRITE YOUR DATE OF BIRTH AND SOCIAL SECURITY NUMBER)
SUPPLY OFFICER: (LIST ITEM NEEDED SIZE):

SPANISH SERVICES COORDINATOR:

Los que necesitan ayuda de cualquiter c l a s e y no saben i n g l e s deben de marcar e s t a


l i n e a y echar l a p e t i c i o n en l a c a j a designada para solocotudes (Requests).

DEPUTY WARDEN:
C O W SELOR :
OFFENDER DEV. SER.:
CHAPLAIN:
4
VISITATION:
NAME:

WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE SPECIFY) : ;A, .?,
AGE :

~ ' 5 ,

JEFF

k&f

* .

ADDRESS :
-

RELATIONSHIP :
YOUR REQUEST (COMPLETE INFORMATION) PLEASE PRINT

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 357 of 646


Page 2463 of 2953

Thursday December 15, 2016


10/19/2006

I ~ P ~ L Y L K Ar L
uwuhfi

US District Court For The Eastern District of Pennsylvana

54ANLE

NAME :

Section 3189 Federal False Claim Act

(PLEASE PRINT)

\I. G m~~J/&-BLOCK: , I

CELL:

DATE:

,.
,) ,

ATURE:

~ t q u ~ bkuKM
l

,j

//

, : ',..
>J;/

e.

L h . 4

..'

(1

ANYONE DESIRlNG TO COMMUNICATE WITH THE FOLLOWING STAFF MEMBER OH AGENCIES, INDICATE
BY PLACING AN "X" ON THE APPROPRIATE LINE. REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
I F MORE THAN ONE L I N E I S CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. I T I S IMPORTANT
THAT YOU GIVE A COMPLETE EXPLANATION.
(PROVIDE ALL NEEDED INFORMATION) AS TO THE
REQUEST YOU ARE SUBMITTING. T H I S WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
I N THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GIVE MEDICAL REQUEST DIRECTLY TO THE MEDICAL
TECHNICAN DURING SCHEDULED MEDICATION TIME.

AAL/E

! 3 ~ 6 C~O C A

MEDICAL DEPT. - S I C K CALL:


(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?

foa T H E

&k?7

q l+3d,ti

EDUCATION/TREATMENT PROGRAM:

(EG.,

GED, B E , SELF HELP WORKSHOP, ETC.

WELFARE GRANT:
(MUST HAVE 50.00 OR LESS I N PRISON ACCOUNT TO BE ELIGABLE, MUST SUBMIT TWO WEEKS PRIOR
TO DEFINITE RELEASE DATE, ALSO WRITE YOUR DATE OF BIRTH AND SOCIAL SECURITY NUMBER)
SUPPLY OFFICER:

( L I S T ITEM NEEDED S I Z E ) :

SPANISH SERVICES COORDINATOR:


L o s que necesitan ayuda de cualquiter c l a s e y no saben i n g l e s deben de marcar e s t a
l i n e a y echar l a p e t i c i o n en l a c a j a designada para solocotudes (Requests).

$3A N :
..P

r/

DEPUTY WARDEN:
W
DIR. OF TREATMENT:
LI
ASSOC. WARDEN:
L,
COUNSELOR:
rl
OFFENDER DEV. S E S w
CHAPLAIN:
' 7 .
I
VISITATION:
L
1 0~

--

LAdZ.4

NAME :

PROBATION/PAROLE:
PUBLIC DEF. Mr./Mrs. : RECREATION DIR.:
VOCATIONAL DIR.:
BAIL ADMINISTRATOR:
WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE SPECIFY) :

p.

ADDRESS :

/t

11
n t-'E

\/

AGE :

%I.

LAJRELATIONSHIP:

PA

YOUR REQUEST (COMPLETE INFORMATION) PLEASE PRINT

A3 U-P

t k e
TL+E

C O O POLA

T,'O

ta

D4 ST
(3

c.6

U,OCIL

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Ci

4 L~~

Page 358 of 646


Page 2464 of 2953

Thursday December 15, 2016


10/19/2006

GENERAL PURPOSE REQUEST FORM

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

(PLEASE P R I N T )

NAME:

4
1,I .
.
.

0-

, ,

.ATURE:

j'

~.

..

;,
.

\'i '

::-<,d-+BLOCK:
,
-2 .. t

-< .-LI

1, 1,

,Af/

CELL:

&
;,-

qcy

-.' >
.

7
3

DATE:

.
..
,

-~

'..

ANYONE DESIRING TO COMMUNICATE WITH THE FOLLOWING STAFF MEMBER OR AGENCIES, INDICATE
BY PLACING AN "X" ON THE APPROPRIATE L I N E . REMEMBER ONLY ONE (1) CHECKED PER REQUEST.
I F MORE THAN ONE L I N E I S CHECKED, THE REQUEST WILL BE RETURNED UNANSWERED. I T I S IMPORTANT
THAT YOU GIVE A COMPLETE EXPLANATION.
(PROVIDE ALL NEEDED INFORMATION) AS TO THE
REQUEST YOU ARE SUBMITTING. T H I S WILL ALLOW A FASTER ANSWER. YOU ARE TO PLACE THE REQUEST
I N THE DESIGNATED REQUEST BOX. ONLY EXCEPTION GIVE MEDICAL REQUEST DIRECTLY TO THE MEDICAL
TECHNICAN DURING SCHEDULED MEDICATION TIME.
MEDICAL DEPT. - S I C K CALL:
(DESCRIBE THE MEDICAL PROBLEM: WHETHER TREATED BEFORE, BY WHOM?
EDUCATION/TREATMENT PROGRAM:
(EG.,

GED. ABE, SELF HELP WORKSHOP, ETC.

WELFARE GRANT :
(MUST HAVE 50.00 OR LESS I N PRISON ACCOUNT TO BE ELIGABLE, MUST SUBMIT TWO WEEKS PRIOR
TO D E F I N I T E RELEASE DATE, ALSO WRITE YOUR DATE O F BIRTH AND SOCIAL SECURITY NUMBER)
SUPPLY OFFICER:

( L I S T ITEM NEEDED S I Z E ) :

SPANISH SERVICES COORDINATOR:


Los que necesitan ayuda de cualquiter c l a s e y no saben i n g l e s deben de marcar e s t a
l i n e a y echar l a p e t i c i o n en l a c a j a designada para solocotudes (Requests).
f-

PROBATION~PAROLE:

W~,,L)EN:
DEPUTY WARDEN:
D I R . OF TREATMENT:
ASSOC. WARDEN:
COUNSELOR:
OFFENDER DEV. SER.:
CHAPLAIN :
VISITATION:

PUBLIC DEF. Mr./Mrs.:


RECREATION DIR.:
VOCATIONAL DIR.:
B A I L ADMINISTRATOR:
WORK RELEASE:
CLASSIFICATION COMMITTEE:
OTHER (PLEASE S P E C I F Y ) :

NAME :

/
- ,

AGE:

ADDRESS :

RELATIONSHIP :
YOUR REQUEST (COMPLETE INFORMATION) PLEASE P R I N T

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Al~h Ccz--tiu o
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

'

Page 359 of 646


Page 2465 of 2953

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Thursday December 15, 2016


10/19/2006

A;

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

REQUEST CONTINUED:

/
n
AGENCY :

PERSON ANSWERING REQUEST:


V

ANSWER:

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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Page 360 of 646


Page 2466 of 2953

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

THE VILLAGE OF OLDE HICKORY


VILLAGE SQUARE OF OLDE HICKORY
OLDE HICKORY RACQUET CLUB
BOYDfWILSON BUILDING
OREGON PIKE
MANHEIM TOWNSHIP
LANCASTER COUNTY, PENNSYLVANIA
for

BOYD/WILSoN COMPANY

MARY L. CLINTON
APPRAISAL ASSOCIATES, INC.
PRESIDENT
DATED:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

SEPTEMBER 1, 1985

Page 361 of 646


Page 2467 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

.,.

. ..,
.. . .. .-

Section 3189 Federal False Claim Act

430 WEST CHESTNUT STREET

LANCASTER, PENNSYLVANIA 17603

October 2 3 , 1985

BoydfWilson Company
208 Oregon Pike
L a n c a s t e r , PA 17601
ATTN: Dale Witmer
RE:

The Olde Hickory Complex

Dear M r . Witmer:
I n accordance with your r e q u e s t , I have examined t h e above p r e m i s e s , c o n s i s t i n g
of a group of townhouses, 3.0 s t o r y e l e v a t o r garden apartment b u i l d i n g s , a l o c a l
shopping c e n t e r , ( 2 ) o f f i c e b u i l d i n g s , a r a c q u e t c l u b and miscellaneous improvements
i n c l u d i n g a swimming p o o l , a 30 a c r e g o l f c o u r s e and t e n n i s c o u r t s l o c a t e d on
approximately 100 a c r e s of l a n d i n Manheim Township, L a n c a s t e r County, Pennsylvania.
The purpose of my examination and s t u d y i s t o v a l u e t h e premises i n t h e c u r r e n t
market .
I n a r r i v i n g a t my v a l u a t i o n , I have among o t h e r f a c t o r s c o n s i d e r e d t h e following:
(1)

Location Trends. The V i l l a g e of Olde Hickory and t h e surrounding developing


a r e a i s an a t t r a c t i v e r e s i d e n t i a l d i s t r i c t . I am o f t h e o p i n i o n t h a t i t
w i l l maintain i t s p r e s e n t s t a t u s o r g r a d u l l y improve.

(2)

I e s t i m a t e t h e e s t a b l i s h e d Net Income imputable t o a l l t h e f r a c t i o n s of t h e


V i l l a g e of Olde Hickory a t $1,324,333 p e r annum.

(3)

C a p i t a l i z e d Value f o r both income flows which computes a t $13,000,000


per annum. T h i s i s p r e d i c a t e d upon t h e t o t a l e a r n i n g s o f $1,324.333 p e r
annum c a p i t a l i z e d a t an o v e r a l l r a t e of 10.14%.

I n my o p i n i o n , t h e market v a l u e of t h e premises i n t h e c u r r e n t market is:


THIRTEEN MILLION DOLLARS

I n l i g h t of t h e s e c o n s i d e r a t i o n s and o t h e r f a c t o r s s e t f o r t h i n my a p p r a i s a l r e p o r t
which f o l l o w s , I have a r r i v e d a t t h e aforementioned v a l u a t i o n .
Respectfully submitted,

C l i nCIVIL
t o n RIGHTS CLAIM
EXHIBITMary
U.S. L.
16-4014
p
r
e
s
i
d
e
n
t
Property of Advance Media Group

Page 362 of 646


Page 2468 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

INCOME APPROACH

VILLAGE OF OLDE HICKORY:

DEFINITION: T h i s approach d e a l s with t h e p r e s e n t worth and f u t u r e p o t e n t i a l


b e n e f i t s of t h e p r o p e r t y . This i s g e n e r a l l y measured by t h e n e t income which
a f u l l y informed person i s warranted i n assuming t h e p r o p e r t y w i l l produce d u r i n g
t h e remaining u s e f u l l i f e . A f t e r comparison with investments of s i m i l a r t y p e and
c l a s s , t h e n e t income i s c a p i t a l i z e d i n t o a value e s t i m a t e .
The g r o s s and n e t income g e n e r a t e d by t h e c u r r e n t r e n t s f o r t h e y e a r 1985 a r e
d i v i d e d as f o l l o w s :

Residential
Commercial Income
Golf & Swimming

Annual Gross Income

Annual Net Income

$2,224,766

$1,072,465

275,714

204,182

93,310

(11,870)

Racquet Club
Total

(Expense r a t i o i s 52% of g r o s s ( i n c l u d i n g vacancy & bad debt allowance).

The r e s i d e n t i a l income o f $2,224,766 p e r annum averages $89.31 p e r room p e r month.


The l e a s e s have a 1 y e a r term with t e n a n t s absorbing a l l o f t h e i r e l e c t r i c a l charges
which i n c l u d e s e l e c t r i c h e a t i n g , a i r c o n d i t i o n i n g and h o t w a t e r .
Management e x p e c t s a t u r n o v e r of 30% t o 35% i n t h e r e s i d e n t i a l u n i t s d u r i n g 1985.
This would i n c r e a s e t h e r e n t r o l l m a t e r i a l l y a s shown on t h e following s c h e d u l e o f
Monthly Rates e f f e c t i v e September 1, 1985.

A 3% allowance f o r vacancy and bad d e b t s was considered a p p r o p r i a t e due t o t h e f a c t


t h a t t h e r e i s g e n e r a l l y a w a i t i n g l i s t f o r new c o n t r a c t s .
COMMERCIAL RENTALS:
Rentals f o r t h e shopping c e n t e r , t h e f o u r o f f i c e s i n t h e former s t o n e farmhouse and
3 r e t a i l and o f f i c e u n i t s i n t h e Boyd/Wilson Building aggregates $275,714 p e r annum
( s e e schedule of b a s e r e n t a l s ) . A 5% vacancy and bad debt d e d u c t i o n appears a p p r o p r i
based on p a s t h i s t o r i c a l r e c o r d s .
The r e n t a l o f f i c e ( U n i t 6 ) does n o t c o n t r i b u t e any r e n t . I have a p p l i e d a r e n t a l o f
$6.75 p e r s q . i t . which i s i n t h e lower h a l f of t h e r e n t r o l l range which computes
I
1
t o $9,072 annually.
The income from t h e Golf and Swim Club which we have taken from t h e l a s t s t a t e m e n t
of e a r n i n g s i s $93,310 p e r annum and m i s c e l l a e o u s income approximates $5,000 p e r y e a r

CHESTNUT

EXHIBIT U.S.
Page 363 of 646STREET, IANCASTER,
Thursday
December 15,
2016
x P 16-4014
P a S a 1CIVIL
~ S SRIGHTS
O C S . ~ SCLAIM
430 WEST
PENNSYLVANIA
116m
Property of Advance Media Group

Page 2469 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

INCOME APPROACH

REAL ESTATE TAXES CONTINUED:

Mills
County
February 28th F i s c a l Year:

.5

Township
February 28th F i s c a l Year:

4.5

School D i s t r i c t
June 30th F i s c a l Year:
TOTAL :
,

! !

35.75
45.25

See Summary o f Assessed Valuations f o r The V i l l a g e of Olde Hickory Complex.

i i.

Net Income imputable t o t h e premises based upon t h e c u r r e n t r a t e s i s e s t i m a t e d


a t $1,324,333 per annum.

EXHIBIT U.S.
RIGHTS CLAIM
Page
364 of 646STREET, LANCASTER,
Thursday
December 15,178m
2016
& m16-4014
S i s r CIVIL
l assoeiat~s
430 WEST
CHES&UT
PENNSYLVANIA

Property of Advance Media Group

Page 2470 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COST APPROACH

DEFINITION: The c o s t approach t o value c o n s i d e r s t h e value of t h e s u b j e c t l a n d


as i f i t i s v a c a n t , t o t h i s f i g u r e i s then added t h e d e p r e c i a t e d replacement c o s t
o f t h e improvements on t h e p r o p e r t y . The f i r s t s t e p i n t h i s approach i s t o e s t i m a t e
b a r e l a n d v a l u e . The n e x t s t e p i s t o e s t i m a t e t h e replacement c o s t of t h e s u b j e c t
improvements. The Marshall Swift V a l u a t i o n S e r v i c e i s used f o r t h i s purpose.
D e p r e c i a t i o n i s determined and e s t i m a t e d and then deducted from t h e c o s t new t o
a r r i v e a t a d e p r e c i a t e d accrued d e p r e c i a t i o n v a l u e . To t h i s f i g u r e t h e v a l u e o f
t h e l a n d a s i f unimproved i s then added. The d e p r e c i a t i o n deductions were f o r
p h y s i c a l wear and t e a r .

1.

The 54 townhouse b u i l d i n g s , Nos. 1 t o 54 have been valued on t h e c o s t b a s i s


o f $42.00 p e r s q . f t . o f t h e b u i l d i n g s which were e r e c t e d i n 1969 and 1970.
This t o t a l s $15,953,280. A 30% p h y s i c a l d e p r e c i a t i o n was deducted t o r e f l e c t
t h e wear and t e a r and a 15% f u n c t i o n a l obsolescence deduction r e p r e s e n t s t h e
s t r u c t u r a l age a s w e l l a s f u n c t i o n a l obsolescence items such a s f i r e p l a c e s
and f l o o r p l a n s .
The d e p r e c i a t e d p r e s e n t worth of t h e townhouses i s $12,170,430.

2.

B u i l d i n g Nos. 55 t o 57 would be t h e Wedgewood Buildings e r e c t e d i n 1971 have


a n e s t i m a t e d c o s t of $45.00 p e r s q . f t . o r $4,175,550. A 30% p h y s i c a l d e p r e c i a t i o n was deducted t o r e f l e c t t h e wear and t e a r and a 15% f u n c t i o n a l o b s o l e s c e n c e
d e d u c t i o n r e p r e s e n t s t h e s t r u c t u r e age a s w e l l a s f u n c t i o n a l obsolescence i t e m s
such a s f i r e p l a c e s and f l o o r p l a n .

3.

The shopping c e n t e r which h a s a g r o s s a r e a of 23,051 s q . f t . I have valued a t


$44.00 p e r s q . f t . f o r a t o t a l o f $1,014,244. This s t r u c t u r e was e r e c t e d i n
1972 and t h e d e p r e c i a t i o n deducted r e p r e s e n t e d 20% p h y s i c a l wear and t e a r and
10% f u n c t i o n a l obsolescence w i t h regard t o f l o o r p l a n and f i r e p l a c e s a s w e l l a s
t h e s t r u c t u r a l components o f t h e b u i l d i n g .

4.

I n J u l y 1974, t h e Olde Hickory Racquet Club was e r e c t e d which h a s a g r o s s s q u a r e


f o o t a g e of 70,569 s q . f t . Based on t h e c u r r e n t c o n s t r u c t i o n i n d e x e s , t h e Racquet
Club and a l l i e d f a c i l i t i e s c o s t $38.00 p e r s q . f t . o r $2,681,622. The d e p r e c i a t i c
deducted from t h i s s t r u c t u r e was 25% f o r p h y s i c a l wear and t e a r and 10% t h a t
r e f l e c t s t h e o b s o l e t e f l o o r p l a n , hallway d e s i g n and s i m i l a r a m e n i t i e s .

5.

The Boyd Wilson b u i l d i n g has j u s t been e r e c t e d i n 1984 and c o n t a i n s a g r o s s


s q u a r e footage o f 12,240 s q . f t . a t an e s t i m a t e d c o s t o f $45.00 p e r s q . f t . T h i s
I have d e p r e c i a t e d t h i s s t r u c t u r e a t a nominal f i g u r e of 5%
t o t a l s $550,800.
t o r e f l e c t minimal wear and t e a r .

The o t h e r b u i l d i n g s have s i m i l a r deductions based on t h e i r age and f u n c t i o n a l u t i l i t y ,


See a t t a c h e d suarmary.

&pdiSd
a S RIGHTS
S 0 ~ l a eCLAIM
S430 WEST
CHES~NUT
PENNSYLYANtA
178m
EXHIBIT U.S.
16-4014 CIVIL
Page
365 of 646STREET, LANCASTER.
Thursday
December 15,
2016
Property of Advance Media Group

Page 2471 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COST APPROACH
SUMMATION
REPRODUCTION COSTS:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)

V i l l a g e of Olde Hickory
V i l l a g e Square ( S t r i p Shop)
Olde Hickory Racquet Club
Boyd/Wilson Building
Community Center (Barn)
Stone Farm House
Pool F a c i l i t i e s
Golf Course & Shed
Tennis Courts
S i t e Improvements
Tot a1

DEPRECIATION & OBSOLESCENCE:


Physical

Bldg. D e p r e c i a t i o n

Functional
Obsolescence

Economic
Obsolescence

Total
-

-0-0-0-0-0-0-

(1)
30%
15%
10%
(2)
20 %
(3)
25%
10%
(4)
5%
-0(5)
30 %
20%
(6)
25%
15%
(7)
35%
10%
-0(8)
5%
(9)
40 %
-0(10)
35%
-0T o t a l Accrued D e p r e c i a t i o n

-020%
-0-0-

DEPRECIATED COST OF THE IMPROVEMENTS:

$15,908,414

ESTIMATED LAND VALUE:


~ e s i d e n t i a lAcreage: 86.88
Shopping Center:
4.591
Racquet Club:
4.279
Boyd/Wilson Building: 4.25
T o t a l Land Value

acres
acres
acres
acres

= $1,867,920
=
330,552
@ $72,000 p e r a c r e =
308,088
@ $21,500 p e r a c r e
@ $72,000 p e r a c r e

@ $72,000 p e r a c r e =

TOTAL ESTIMATED VALUE BY THE COST APPROACH:

306 000

$2,812,560

2,812,560
$18,720,974

Rounded $18,700,000

I 1:

EXHIBIT U.S.
16-4014 CIVIL
RIGHTS CLAIM
Page
366 of 646STREET. UNCASTER,
Thursday
December 15,l7bd
2016
&~pmsal
assocIaIS.
430 WEST
CHESTNUT
PENNSYLVANIA

Property of Advance Media Group

Page 2472 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

WEDGEWOOD
Layout of Each Building
1st - 3rd Floors

4/4's, 415 with 2 Baths, Each Floor


TOTALS
Per Building

3 Buildings

24

72

Rooms

108

324

Baths

36

108

Balconies

24

72

Apartments

Parking Spaces

97

Carports

32
TOWNHOUSES
Rooms
House
Type

24
-

Baths

Fireplaces

Each Total Each Total Each Total


-

Courtyards

Burgess

246

2.5

102.5

41

Burgess

120

2.5

50.0

20

20

Landis

260

1.5

78 .O

52

Landis

95

1.5

28.5

19

19

Haymarket

270

2.5

112.5

Haymarket

36

2.5

15.0

Passmore

605

1.5

181.5

Passmore

120
1,752

1.5

36.0
-

328

604.0

132

24
69

TOTALS
Units
,
,

,
,

i i.~.
,-

,
,,

72

328
400

Baths

324
1,752
2,076

604

133

714

157

108

Ftreplaces

24

co~rt~ards/Balconies

72
65
137

, .

Wedgewood
Townhouses
TOTALS :

Rooms

,
9

,,

~ p16-4014
p ~ i CIVIL
s aa slRIGHTS
s o c i aCLAIM
~ s430 WEST
PENNSYLVANIA
EXHIBIT U.S.
PageCHESTNUT
367 of 646 STREET, UNCASTUI,
Thursday
December 15,17603
2016
Property of Advance Media Group

Page 2473 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

THE VILLAGE OF OLDE HICKORY


TOWNHOUSES:
The Burgess House which i s a luxury type house c o n s i s t s o f 61 b a s i c type h o u s e s ,
some w i t h c o u r t y a r d s and some without c o u r t y a r d s . The e x t e r i o r s a r e b r i c k and
s t o n e with some c o n c r e t e p a t i o s on t h e grade l e v e l . F e n e s t r a t i o n i s wood double
hung w i t h aluminum s t o r m windows and wood s h u t t e r s . Entrance doors a r e s o l i d
c o l o n i a l design and roos a r e p i t c h e d a s p h a l t s h i n g l e with g u t t e r s and l e a d e r s .
The Burgess u n i t s and t h e Haymarket u n i t s a l l have 6 rooms with 2.5 b a t h s . The
f l o o r s a r e c a r p e t e d and t h e d i n i n g a r e a s a r e provided with a c h a n d e l i e r . Walls
and c e i l i n g s a r e of s h e e t r o c k c o n s t r u c t i o n . T y p i c a l grade f l o o r c o n t a i n s a
l i v i n g room and d i n i n g a r e a , c o a t c l o s e t i n t h e f o y e r with composition f l o o r i n g
and a k i t c h e n with s i m i l a r f l o o r i n g and s t a i n l e s s s t e e l s i n k w i t h formica countert o p s , and a General E l e c t r i c 4 b u r n e r range, General E l e c t r i c dishwasher, and a
General E l e c t r i c c l o t h e s washer and d r y e r . The k i t c h e n s a l s o have wood cupboards and General E l e c t r i c r e f r i g e r a t o r s . The powder room has a composition
t i l e f l o o r i n g , enameled i r o n washbasin w i t h formica t o p , low tank t o i l e t , and
medicine c a b i n e t . Carpeted wood s t a i r s with wrought i r o n r a i l i n g l e a d s t o t h e
2nd f l o o r .
The 2nd f l o o r i s c a r p e t e d throughout and c l o s e t space i s e x c e l l e n t . The r e a r
bedroom h a s a double wardrobe c l o s e t with louvered metal doors. There i s a l s o a
s i n g l e louvered h a l l c l o s e t and a p r i v a t e bathroom with composition t i l e f l o o r i n g ,
t i l e jumbers and b u i l t - i n tub w i t h shower, low tank t o i l e t , enameled i r o n washb a s i n with formica t o p and s l i d i n g medicine c a b i n e t . The f r o n t h a s two bedrooms,
one s m a l l and one s l i g h t l y l a r g e r . Wardrobe c l o s e t s a r e i n each bedroom. The
r e a r bedroom a l s o h a s a s e p a r a t e washbasin w i t h medicine c a b i n e t . The e n t i r e
house i s h e a t e d and a i r c o n d i t i o n e d by e l e c t r i c i t y , with a u n i t of General E l e c t r i c
manufacture l o c a t e d i n a shed a d j o i n i n g t h e r e a r t e r r a c e . Heated and c h i l l e d a i r
a r e d i s t r i b u t e d by d u c t and f o r c e d a i r c i r c u l a t i o n . There a r e r e g u l a r 3 bedroom
s i x roomhouses and t h o s e w i t h t h e f i r e p l a c e which a r e d e s c r i b e d a s a luxury u n i t .
A 1 1 houses have a f o l d i n g door i n second f l o o r h a l l c e i l i n g s which l e a d t o t h e
a t t i c . The a t t i c i s h e a v i l y i n s u l a t e d and can be used f o r s t o r a g e purposes where
t h e roof beams a r e covered. Water p i p i n g i s copper throughout.
I understand t h a t
t h e 3 bedroom Deluxe Burgess Houses a r e u s u a l l y on t h e end of a b u i l d i n g . There
a r e 54 b u i l d i n g s c o n t a i n i n g t h e 328 townhouses which have 1,752 rooms, 133 f i r e p l a c e s
and 65 c o u r t y a r d s . The townhouses a r e i n S e c t i o n s I, II and 111 of The V i l l a g e o f
Olde Hickory.

WEDGEWOOD SECTION:
T h i s p a r c e l h a s an a r e a of 5.9134 a c r e s . The improvements c o n s i s t s o f t h r e e 3.0
s t o r y medium r i s e apartment b u i l d i n g s which a r e of non-fireproof c o n s t r u c t i o n w i t h
b r i c k e l e v a t i o n s and c e d a r mansards a t t h e t h i r d f l o o r roof l e v e l . Each apartment
has an enclosed wooden s c r e e n e d porch, some o f which have g l a s s e n c l o s u r e s . The
s t r u c t u r e s were e r e c t e d by t h e C l a b e l l Company, according t o p l a n s by W . F . L a n d i s .
The r o o f s I understand a r e a l l f l a t r u b e r o i d . Windows a r e wood double hung and t h e
e n t r a n c e t o each of t h e t h r e e b u i l d i n g s c o n s i s t of a c o l o n i a l wood type a r c h i t r a v e
with columns and two p l a t e g l a z e d wood doors a t b r i c k s t o o p . V e s t i b u l e s o r lobby
have b r i c k f l o o r i n g , p l a s t e r w a l l s w i t h e l e c t r i c a l w a l l b r a c k e t s and 3.0 s t o r i e s i n
h e i g h t w i t h b a l c o n i e s a t t h e 2nd and t h i r d f l o o r s w i t h wrought i r o n r a i l i n g s . The
ceilings are plaster.
Each v e s t i b u l e c o n t a i n s 28 approved m a i l r e c e p t i c a l s w i t h
push b u t t o n s . Only 24 a r e used. There i s one Dover s e l f - s e r v i c e e l e v a t o r of
1,500 l b s . c a p a c i t y w i t h paneled cab which t r a v e l s from t h e 1 s t f l o o r t o t h e 3rd f l o o

CHESTNUT

~ p16-4014
p d i s CIVIL
a la s sRIGHTS
ocia~
s430 WEST
PENNSYLVANIA
178m
EXHIBIT U.S.
CLAIM
Page 368 of 646STREET, UNCASTER,
Thursday
December 15,
2016
Property of Advance Media Group

Page 2474 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

THIS VALUATION IS CONTINGENT UPON THE FOLLOWING


UNDERLYING ASSUMPTIONS AND CONDITIONS:
This appraisal. is to be used in whole and not in part. No part of
it shall be used in conjunction with any other apprai'sal.
Possession of this report or a copy thereof, does not carry with
it the rights of publication nor may it be used for any purpose by
any but the client for whom it was made, without the consent of
the appraiser and the client.
The appraiser is not required to give testimony or attendance in
court by reason of this appraisal, unless arrangements have been
previously made therefore.
This appraisal covers the property as described in this report and
the areas and dimensions as shown herein are assumed to be
correct. The appraiser has made no survey of the property and
assumes no responsibility in connection with such matters. Any
sketch or identified survey of this property included in this
report are only for the purpose of assisting the reader to
visualize the property.
The information furnished in this report by others is believed to
be reliable, but no responsibility for its accuracy is assumed.
(
The appraiser assumes no responsibility for matters of a 1-egal
nature effecting this property or the title thereto, nor does the
appraiser render any opinion as to the title which is assumed to
be good and marketable. The property is appraised as though under
reasonable ownership and competent management.
Any distribution of the valuation in this report between land and
improvements applies o n l y under the existing program o f
utilization. The separate valuation for land and building must
not be used in conjunction with any other appraisal and are
invalid if so used.
The appraiser assumes that there is no hidden or unapparent
conditions of the property subsoil, or structures which would
render it more or less valuable.
The appraiser assumed no
responsibility for such conditions or for engineering which might
be required to discover such factors.
The appraiser's duties pursuant to his employment to make the
appraisal are completed upon delivery and acceptance of the
appraisal report. All conclusions set forth in the appraisal
report were prepared by the appraiser whose signature appears on
the appraisal report. No change of any item in the appraisal
report shall be made by anyone other than the appraiser, and the 1
appraiser shall have no responsibility for any such unauthorized
change.

&tpdiSd
. s RIGHTS
s O C ~ . ~CLAIM
S 430 WEST
H EofS 646
~ ~ USTRE=,
T
EXHIBIT U.S.
16-4014 CIVIL
PageC369
Property of Advance Media Group

Page 2475 of 2953

LANCASTER,
PENNSYLVANIA
Thursday
December 15,I78m
2016
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I h e r e b y c e r t i f y t h a t I h a v e no p a s t , p r e s e n t o r c o n t e m p l a t e d
f u t u r e , u n d i s c l o s e d i n t e r e s t i n t h e p r o p e r t y a p p r a i s e d h e r e i n and
n e i t h e r t h e employment t o make t h e a p p r a i s a l nor t h e compensation
i s c o n t i n g e n t upon t h e a p p r a i s e d v a l u e of t h e p r o p e r t y .
R e s p e c t f u l l y s u b itt

Mary L. C l i n t o n
President

APPRAISAL ASSOCIATES.

d
INC.

EXHIBIT U.S.
PageCHES~NUT
370 of 646STREET, L4NCASTER.
Thursday
December 15,,7603
2016
& p16-4014
~ t S . l CIVIL
a ~RIGHTS
S 0 ~ CLAIM
l .430
e ~WEST
PENNSYLVANIA
Property of Advance Media Group

Page 2476 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

RESUME OF MARY L. CLINTON


1968

1971

1971 to Present
1978 to Present
1982 to Present
APPRAISAL EDUCATION

Licenced Real Estate Salesperson, State


of Pennsylvania
Licenced Real Estate Broker, State of
Pennsylvania
President, Appraisal Associates, Inc.
Vice-president, Hershey/Clinton &
Associates

REAL ESTATE COURSES COMPLETED:


1.
2.
3.
4.

5.
6.
7.
8.

Residential Appraising
Commercial Appraising
New Construction
Real Estate Law
Real Estate Financing
Real Estate Sales
Right-of-way
Real Estate Theory annd Practice

APPRAISAL COURSES COMPLETEDA.1 .R.E.A.

COURSES:

1. I-A Basic Appraisal Principals, Methods and Techniques


2. I-B Capitalization Theory and Techniques
3. I1 Urban Properties
4. Standards of Professional Practices
5. Valuation Analysis and Report Writing
6. Capitalization Theory and Techniques Part I1 (refresher)
SEMINARS:
1. Attended the Residential Appraisal Seminar conducted by
A.I.R.E.A.
2. Attended the Solar Xorkshop Seminar for the Financial
Community sponsored by H U.D.
3. Attended Valuation of Matrimonial Assets Under Equitable
Distribution conducted by A.S.A.
4. Attended Introduction to Machinery and Equipment
Valuation conducted by A.I.R.E.A.

I
I

xpp&iSal
.sscW~~US
430 WEST
CHESTNUT
PENNSILVAN1A
178m
EXHIBIT U.S.
16-4014 CIVIL
RIGHTS CLAIM
Page
371 of 646STREET,LANCASTER,
Thursday
December 15,
2016
Property of Advance Media Group

Page 2477 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

REAL ESTATE ACTIVITIES:

President of the Greater Lancaster Board of Realtors


Director of the Greater Lancaster Board of Realtors
Past President of the Lancaster Chapter of Women's Council
Member of the National Associate of Realtors
Member of the Pennsylvania Association of Realtors
Honored at 1977 Leaders Luncheon by the Lancaster YWCA
Arbitrator for the National Academy of Conciliators Honored
Recipient of the Realtor of Year Award - 1981
Recipient of Dorothy M. Slaugh Award - 1981
DESIGNATIONS AND AFFILIATIONS

,,

.
,

ASA

!,
,,

!T
.,

SCV

CRP

CRV

RMU

ICA
MA1

!
I
.,

Y-1)
F:
.,

I .

Senior Member of the International Organization Real


Estate Appraiser
Candidate of the American Institute of Real Estate
Appraiser #M 81 1577
Candidate of the American Society of Appraisers
International Institute of Values
International Institute of Valuers
Senior Certified Valuer
National Association of Certified Real Property
Appraiser
Certified Real Property Appraiser
National Association of Review Appraisers
Certified Review Appraiser
National Association of Review Appraisers and Mortgage
Underwriters

CIVIC ACTIVITIES:
Member of Upper Leacock Zoning Board
Director of the Soroptimist International of Lancaster
Director of the Ressler's Mill Foundation
Life Member of the Lancaster Osteopathic Hospital Blood Bank
Member of Leola United Methodist Church
Member of Upper Leacock Women's Club

EXHIBIT U.S.
16-4014 CIVIL
RIGHTS CLAIM
PageC372~
of 646
December 15,17603
2016
Kppl~is.1
associaes
430 WEST
~ STREET,
~ TUNCASTER,
k Thursday
~ PENNSYLVANIA
Property of Advance Media Group

Page 2478 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PARTIAL LIST OF FINANCIAL INSTITUTION CLIENTS


Bank of Lancaster County
Commonwealth National Bank
Dauphin Deposit Bank
Farmers First Bank
Fulton Bank
Hamilton Bank
New Holland Farmers National Bank
First Federal Savings & Loan
Heritage Savings Association
Lancaster Federal Savings & Loan
Parent Federal Savings Bank
State Capital Savings & Loan
York Federal Savings & Loan
Bell Savings & Loan Association
Brokers Mortgage Service
Central Mortgage Company
Chase Home Mortgage Company
Clarion Mortgage Company
Colonial Mortgage Service Company
Horst Financial Services
Jersey Mortgage Company
Lomas and Nettleton
Meridan Mortgage Corporation
Northwest Mortgage Company
The Kissell Company

CHESTNUT

430 WEST
PENNSYLVANIA
7a
EXHIBIT U.S.&p&isnl
16-4014 CIVILassociaf5s
RIGHTS CLAIM
Page 373 of 646 STREET, IANCASTER,
Thursday
December 15,12016
Property of Advance Media Group

Page 2479 of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PARTIAL LIST OF APPRAISAL AND CONSULTANT CLIENTS


MARY L. CLINTON
Armstrong World Industries
Cutler-Hammer
R.R. Donnelly and Sons Company
DuPont Company
Employ ee Transfer Corporation
Executrans, Inc.
Homequity
Howmet Aluminum Corporation
Investors Relocation Group, Inc.
Merrill Lynch Relocation Management, Inc
Oscar Mayer and Company
Packaging Corporation of America
Philadelphia Electric Company
Relocation Realty Services Corporation
Relocation Resources
TransAmerica Relocation Services, Inc.
Westvaco
Avco Financial Services
Dial Consumer Discount Company
Federal Housing Administration
Federal National Mortgage Association
Lenders Services, Inc.
Record Data of Pennsylvania, Inc.
Veterans Administration

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 374 of 646


Page 2480 of 2953

Thursday December 15, 2016


10/19/2006

--

ICHARGEISI.

US District Court For The Eastern District of Pennsylvana

I DATE OF

CHAR,

Section 3189 Federal False Claim Act

- .
U r r l ~ w i u l Use of k n p u t e r (13j, T h e f t

O N a r n i r i a l Bail
$
?0.0C0.00

'[

N E X T COURT ACTION

Ldilians of Release (aside fmm appearing a1 court when required:)


DATE

AND TIME

LOCATION

S r ~ t .14, 1487 10:130

I1

JUOGE O R

for

ISSUING

THIS

BONO

AND

IS

&&-hard L. ,Qcset, D, J.
Mrton, M s t r i c t Justice

VALID

UNTIL FULL

INCLUDING

FINAL

y the defendant,

c59(

FOR THE ENTIRE

DISPOSITION

OF ANY

OISCHARGE THE ABOVE-NAME0 DEFENDANT FROM CUSTODY If


DETAINEO F O R NO OTHER CAUSE THAN. THE
. ABOVE STATED.
Given under m y hand a n d the'official Seal o f this Court.

PROCEEDINGS

PETITION

W R I T OF C E R T I O R A R I OR APPEAL T I M E L Y F I L E D
SUPREME COURT OF THE U N I T E D STATES.

Bring Cash Bail Receipt t o Clerk o f Court.

A N D F I N A L DISPOSITION OF T H E CASE
this

FOR

IN

T
. -?
;
..

THE

. .
.

9ch

'

4n

O n behalf o f the defendant by:

Refund o f all other types o f bail w i l l be made p r o m p t l y aftel


2 0 days following final disposition. (Pa.R.Cr.P. 4 0 1 5 ( a I l

A P P E A R A N C E OR B A I L B O N D

Other

l[.i<=nse
Refund o f cash bail w i l l be made w i t h i n 2 0 days afrer
final disposition. 1Pa.R.Cr.P. 4 0 1 5 ( b ) I

AUTHORITY

i+urray R.

176i

I hereby c e r t i f y t h a t sufficient bail has been entered


p

SECURITY O R SURETY ( I F A N Y )
a s u r e t v Company
professional Bondsman
ORealtv
Cother

4 ' ~ n c ~ s c r r?A.

E D Xk iEiE5%%4 J W SbT%'iCE CU.


Alfred0 %rchf0, 529 Cherry S t . ,
r.Vw-e 6 .4ddrrsr o f S u r e r ~ 1Reading, PA
14602

(attach addendum, i f necessary)

2205
-

a Detention Center

TO:

11

i;:-

tjj-

.;
a

..

L.,.

,1

Septcsber

dgy o f

-- .

..

/
.f
::
,.I .,- ,~.'
. .:
. .. .
;

(Clerk ufCourr or Isruing Aurl8orityl

'

, 1:
I'

,:&

-------

WE, THE UNDERSIGNED, defendant and surety. our successors, heirs and assigns, are j o i n t l y and severally b o u n d t o pay t o the
20,COO-GCI
M a c y tbouslnd-dollars ($
).

commonwealth o f Pennsylvania the sum o f

SEE REVERSE SIDE FOR B A l L COND~T~ONS

CERTIFICATION OF COUNTER INDEMNITY AND PREMIUM

(Applicable Only When Surety Is A Corpor:


Indiana
turnberman's Insurance Co.
1.400.00
11 3 hereby certify that the amount paid by said Principal to said Surety for bail in the above matter is S

>:

S*d&

J. Czterbone

,Ptincipal, and

and that no further sum or sums i s l a be paid therefore by the said Principal or anyone on his behalf.
We lurther certify that said Principal has given to said Surety counter indemnity consisting of
/rur&
of the value of 5
and no further counter indemnity is to be given the said Surety
as followr:

\I

ir

- .
' .

.j

#'

We further certily that there are no judgments against the said corporate surety outstanding and'unpid f a r d p e r i p d a f w h i r t y days from thedat
.
e n l ~ o l s u c hjudgment except thorein which apetition to openorvacate the judgment hasbeenfileda"dkmainrundirpbred of:

Oated:

Se3tenbe~

!!

. 1 9 8 7
/PrincipsU

'

\ lSureryl ;. / ,.

M U S T BE SIGNED I N PERSON
B Y T H E APPROVED AGENT

1
i

(!

$GN4;iREO

IA C K N O W L E D G E T H A T I A M L E G A L L Y RESPONSIBLE F O R
THE FULL A M Q U ~ T OF THE BAIL.

The followinga~knowledgementis also applicable


if Percentage Cash Bail is used.
: THIS B O NSIGNED
~
ON September
9, 1 9 3
at
iiev Holland.
PENNSYLVANIA.

Signature of Surety ( M y v ~ o n d s m a n .Bail Agency. o r private


indiuidual or organration). Excepb when defendanr is releared on his

'

.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

Page 375 of 646

I r * Property
In case of
corporate
surew
hail. Power of A nornev muzr Page 2481 of 2953
of Advance
Media
Group

Sursry No. or Thursday


Proferrional Bondrmon
License
& Erpirntic
December
15, No.
2016

n race nf P n r r ~ n r s n or l r h

R = i l r 10/19/2006
r n,--;-=,

O-;,

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

ST. JOSEPH HOSPITAL AND HEALTH CARE CENTER


LANCASTER,

PENNSYLVANIA

INPATIENT MENTAL HEALTI1 UNIT


P A T I E N T

G U I D E

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 376 of 646


Property of Advance Media Group

Page 2482 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

T h e following guidelines have been established in order that


a s a f e and congenial environment can be provided for all patients

within the Inpatient Mental Health Unit.


and

if y o u h a v e ' q u e s t i o n s ,

Please read the guidelines

ask t h e staff t o respond t o y o u r

questions.
I.

ADMISSION PROCEDURE
For safety reasons, the staff will. check your personal
belongings o n admission and will check other packages brought
into the unit thereafter.
Any sharp objects, medications,
glassware, or electrical appliances will be kept within a bin
at t h e n u r s i n g station.
Any l u g g a g e and personal i t e m s
should be labeled with your name.
Any valuables or money should be sent home or placed
within t h e hospital safe. You are encouraged t o keep no more
than $10.00 on the unit. Each person is responsible for his/
her own belongings.

p;Y

Visitors may be received during the following hours:


Monday, ~ e d n e s d a y , Friday

7:00 p.m.

8:00 p.m.

Saturday and Sunday


T h e n u m b e r o f v i s i t o r s should be limited t o 4 p e r
patient at any one time. Children under the age of 13 may be
a l l o w e d t o v i s i t w i t h patients in the Atrium and at t h e
discretion of the charge nurse.
Visitation is permitted in the Atrium, South Unit, or
West Unit.
For patients with ground privileges, visitation
i s permitted within the Hob-Nob. Acute care patients may be
v i s i t e d o n t h e A c u t e C a r e Unit.
W h e n a p p r o v e d by t h e
patient's
psychiatrist and when accompanied by a staff
member, Ac
are Unit patients may receive visitors in t h e
Atrium.
111.

GROUND PRIVILEGES
Ground privileges allow a patient to leave the Inpatient
Unit and visit: ( 1 ) the Hob-Nob, ( 2 ) the Gift Shop, and (3)
the Chapel.' Visits to the hospital Library must be approved
by the patient's treatment team.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 377 of 646


Property of Advance Media Group

Page 2483 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

G r o u n d P r i v i l e g e s are each day during the following


hours:

NOTE:

T h e visitation and ground privileges a r e i n effect


o n l y during t h o s e t i m e s when t h e patient(s) a r e not
i n treatment activities.
P a t i e n t s a r e expected t o
conduct themselves and their behaviors based o n
a c c e p t a b l e socialization standards.
A l l p a t L e n t s are a s k e d t o s i g n o u t at t h e n u r s i n g
s t a t i o n when leaving the Unit.

IV.

ATRIUM H O U R S
F o r a l l p a t i e n t s e x c e p t w h e n c o n t r a i n d i c a t e d by t h e
patient's psychiatrist and treatment team t h e h o u r s a r e 7:30
a.m.
9:00 p.m. daily. No'smoking i s allowed i n t h e Atrium.
L i g h t snacks and beverages are allowed in the Atrium for
visitors and patients.
Alcohol and other chemicals are
strictly forbidden.
P a t i e n t s and. v i s i t o r s a r e a s k e d t o
d i s p o s e o f cups, napkins, etc.

v.

PHONE C A L L S

P h o n e calls may b e m a d e or received any t i m e during t h e


w e e k between t h e h o u r s o f 7:00 a.m. and 11:30 p.m. a s long a s
they do not interfere with o t h e r activities. Each p h o n e call
s h o u l d b e limited t o 10 m i n u t e s s o t h a t other patients m a y
make and receive calls.
A c c e p t a b l e t e l e p h o n e behavior is expected a s a courtesy
t o o t h e r s and a s a demonstration o f one's
abilfty t o
c o m m u n i c a t e i n a r e s p o n s i b l e manner.

VI.

SMOKING
T h e hospital discourages smoking in the interest of
better h e a l t h care. S m o k i n g is permitted only i n t h e multip u r p o s e rooms o n t h e South and West Units and in the
d e s i g n a t e d s m o k i n g a r e a o n t h e A c u t e C a r e Unit.
Smoking is
p e r m i t t e d in t h e Hob-Nob if ground privileges a r e granted.
Visitors m a y s m o k e only in t h e Hob-Nob.
No s m o k i n g u n d e r t h e a g e o f 16 i s allowed u n l e s s t h e
s t a f f r e c e i v e s permission f r o m t h e parents.
No c i g a r e t t e
lighters o r matches a r e allowed t o be carried o r used o n t h e
Units. P l e a s e u s e a s h t r a y s
not papercups o r wastecans.

VII

PASSES
T h e r a p e u t i c passes a r e approved by t h e t r e a t m e n t team.
p a s s e s a r e arranged o n a n individual basis. ~ 1 patients
1
m u s t be Picked UP and returned by approved arrangements m a d e
with t h e treatment team.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 378 of 646


Page 2484 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

P a t i e n t s a r e e x p e c t e d t o a t t e n d a n d 9otf n a1 1
designed by the t r e a e
e n ot s- a
a t t e n d t h E m T s a n d Thursday
e v e n i n g c o m m u n i t y m e e t i n g u n l e s s e x c u s e d by t h e t r e a t m e n t
team.
P a t i e n t s a r e a s k e d t o be d r e s s e d i n s t r e e t c l o t h i n g and
ready t o begin t h e day's a c t i v i t i e s a f t e r h r p a k f a q t ,
P a t i e n t s a r e e x p e c t e d t o b a t h e o r shower a t l e a s t e v e r y
o t h e r day.
P a t i e n t s a r e asked t o a s s i s t i n keeping t h e public a r e a s
c l e a n by p u t t i n g c u p s , t r a s h , a n d o t h e r d i s c a r d a b l e items
i n t o t h e wastecans.
E a c h p a t i e n t i s r e q u i r e d t o b e h a v e i n a manner t h a t is
c o u r t e o u s t o o t h e r s and t h e s t a f f .
The manner o f d r e s s
s h o u l d n o t b e o f f e n s i v e b u t show r e s p e c t f o r o t h e r members o f
t h e community.
Laundry f a c i l i t i e s a r e provided s o t h a t each p a t i e n t can
have c l e a n c l o t h i n g .

XIII.

TREATMENT PLANS
~ a t i e n t s h a l l have a w r i t t e n , i n d i v i d u a l i z e d
,Each
t r e a t m e n t p l a n t n a t i s b a s e d on t h e a s s e s s m e n t s o f h i d h e r
c l i n i c a l neeas.
T h i s p l a n s h a l l b e d e v e l o p e d w i t h i n 72 h o u r s
o f t h e p a t i e n t ' s admission.
When a p p r o p r i a t e , t h e p a t i e n t
s h a l l p a r t i c i p a t e i n t h e development o f h i d h e r t r e a t m e n t
plan.
Any c o n c e r n s o r d i s a g r e e m e n t s r e g a r d i n g t r e a t m e n t
should be handled on an informal b a s i s before u t i l i z i n g a
formal grievance procedure.

0
XIV.

PATIENT BILL OF RIGHTS AND G R I E V A N C E PROCEDURE


E a c h p a t i e n t w i l l r e c e i v e a c o p y o f t h e P a t i e n t B i l l of
R i g h t s w h i c h i s Addendum I t o t h e P a t i e n t G u i d e a n d i s
a t t a c h e d t o t h e P a t i e n t Guide.
The P a t i e n t B i l l o f R i g h t s
p r o v i d e s f o r t h e p a t i e n t i n f o r m a t i o n a b o u t your r i g h t s and
p r i v i l e g e s while a p a t i e n t a t S t . Joseph Hospital.
The G r i e v a n c e and Appeal Procedure s h o u l d be handled o n
an informal basis with t h e s t a f f if possible.
Any p a t i e n t s ,
o r t h o s e h e l p i n g t h e p a t i e n t , may i n i t i a t e a c o m p l a i n t
o r a l l y or i n writing
and t h e complaint w i l l be handled
t h r o u g h t h e t r e a t m e n t team l e a d e r o r t h e Program Manager o f
t h e I n p a t i e n t M e n t a l H e a l t h S e r v i c e w i t h i n 48 h o u r s o f
T h i s d e c i s i o n may b e a p p e a l e d
r e c e i p t of t h e c o m p l a i n t .
w i t h i n 10 d a y s t o t h e M e d i c a l D i r e c t o r o f M e n t a l H e a l U
S e r v i c e s o r t h e Directo-r o f M e n t a l H d t h / S u b s t a n c e w e
Services.
l f a n a p p e a l is s t i l l r e q u e s t e d , t h e g r i e v a n c e
must be s u b m i t t e d t o t h e P r e s i d e n t o f S t . Joseph H o s p i t a l and
t o t h e C o u n t v MH/MR A d m i n i s t r a t o r .

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VIII.

Section 3189 Federal False Claim Act

MEALS/FOOD
Approximate Hours:

Breakfast
Lunch
Dinner

7:15 a.m.
12:OO noon
5 : 1 5 p.m.

You are responsible to be present at the scheduled meal


times except when medical tests interfere.
M e n u s e l e c t i o n f o r t h e f o l l o w i n g day s h o u l d be m a d e
during the breakfast hour.
If your selection is not
completed during that time, you will receive a regular house
tray for all three meals.
Foods should be eaten in the dining area only unless
staff permission is received.
Foods kept in the bedrooms
should be with staff permission.
F o r safety purposes, glass bottle containers are not
allowed on the unit.
Soda cans are also not allowed on the
unit. Soda and juices should be poured into papercups.
Foods brought from home or from friends will be examined
by s t a f f , labeled, and put in t h e pantry a r e a f o r s a f e
keeping and storage.
Pantry access is available during the following hours:
9:30
10:OO a.m. and 8:00
8:30 p.m.
Foods ordered from outside the hospital should be
o r d e r e d b e f o r e 9:00 p.m. and must be o r d e r e d by a s t a f f
member.

TV AND RADIO
. TV and radio are allowed when not interfering with other

Ix.
\.

therapeutic unit activities.


As a courtesy t o others, the
hospital stereo should not be turned above "3" in volume.
Because of fire/safety regulations, all personal stereo/
r a d i o e q u i p m e n t must be approved by h o s p i t a l m a i n t e n a n c e
prior to use, unless it is battery operated.

X.

BEDROOM AND LIGHTS OUT


Monday through Thursday and Sunday lights are out at
11:OO p.m. t o e n s u r e an opportunity f o r plenty o f rest.
Friday and Saturday lights should be out at 1:00 a.m.
R o o m s should be kept neat and clean.
Beds are t o be
made prior to morning group.
Linens are changes on
Wednesdays and Saturdays. Patients should not visit in other
patients' rooms unless invited and with the permission from
the staff.

XI.

MEDICATIONS
Patients are encouraged to know what medications they
a r e taking. M e d i c a t i o n s c h e d u l e s a r e p o s t e d o n t h e u n i t
bulletin board. Patients are encouraged to be prompt for the
scheduled medication.
N o m e d i c a t i o n i s t o be k e p t at t h e bedside.
All
medication brought in from home is t o be kept at the nursing
station.

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XV.

Section 3189 Federal False Claim Act

FORMER PATIENTS' VISITS TO T H E INPATIENT M E N T A L HEALTH


SERVICE

We encourage former p a t i e n t s t o r e t u r n t o t h e I n p a t i e n t
M e n t a l H e a l t h S e r v i c e f o r v i s i t s t o keep i n c o n t a c t w i t h
supportive staff.
However, r e t u r n i n g f o r t h e p u r p o s e of
v i s i t i n g p a t i e n t s w i t h whom t h e former p a t i e n t has developed
a f r i e n d s h i p i s not encouraged. T h i s may i n t e r f e r e w i t h t h e
current patient's treatment.

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Section 3189 Federal False Claim Act

i
nd Health Care Center
Direct Dial Number: 291-8163

September 25, 1987

To:

Stanley Caterbone
2323 New Danville Pike
Conestoga, Pa. 17516

Amount Due:

$3,064.60

Account Number:

081609802

Enclosed i s a copy of your hospital b i l l f o r services from 9-9-87


to
9-15-87
The amount of the b i l l i s $ 3,054.50 , and i t i s your responsibility t o see that the hospital i s paid i n f u l l .

Full payment i s due w i t h i n 30 days. I f you would l i k e t o s e t up payment


arrangements f o r a period of 6 months, you must c a l l our o f f i c e within
10 days.
I f you have any insurance coverage o r Medical Assistance information t h a t
will help pay a l l o r part of t h i s b i l l , please contact our o f f i c e immediately w i t h the necessary information.
Sincerely,

7);,L7c
DRB@LA

Patient Accounts Representative


St. Joseph Hospital

CARING AND CURING SINCE 1883


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-----I-

US District Court For The Eastern District of Pennsylvana

,--

-I-

,-AMY(

".YLIU*I

c-.

llD

Section 3189 Federal False Claim Act

Financial Management Group, LTD


Eden Park 11, 1755 Oregon Plke Uncastcr, PA 17601
7 1 7 - 5 6 9 4 1 0 0 800-521-8567 800-322-1128 [PA only)

.NLEY J. CATERBONE

EXECUTIVE VICE PRESIDENT

Capello & Foley


831 State Street
Santa Barbara, CA
Attn: Diane Carrbell

Dear Diane:

As per our previovs conversation,

emlozed i s the brief awry of my

care! I want to t b n k the law f i r m of Capello & Foley'for a l l of t h e i r help!

Regretfully,

Emlollre
:

Barry Capello

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S=rurHler Offered threuph PI.+er's


Se~u1ItIe1Group. Inc.
Page 2490Mlmber
of 2953 SlPC
A R=plitertd BrokerlDealir
h3.rnb.r
NASD

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Section 3189 Federal False Claim Act

RECORDED TRANSCRIPT WITH

THE PENNSYLVANIA SECURITIES


AND EXCHANGE COMMISSION
"JAMES GUERIN AND ISC OPERATIONS"
~97''

Subject:

Quotes from a recorded transcript between Stanley J. Caterbone and


Howard Eisler, Agent of the Pennsylvania State Securities and Exchange
Commission. This transcript was recorded with the approval of all present
parties.

Date of
Conference:

September 6 1987

Place
of
Conference:

0
0

2323 New Danville Pike


Conestoga, PA 17512

Relationship to
James Guerin:

ISC Shareholder
Debtor to Parent Federal Savings and Loan

The following transcriptsd represent a few of the converstions recorded during the meeting.
Stan Caterbone

Stan Caterbone

"Jim Christian owned it now I hear rumors that I was tied to ISC and I am
close to several people in that organization. Why they sent someone'in to
California to see me, I don't know. They wobt answer me."

Stan Caterbone -

"they wanted me to talk to a guy from D.C., New York, a guy from the
Caribbean. I don't know what the hell is going on."

" Chem Con is the big local minority-held corporation that was doing a lot
of Defense contracts-it was associated with ISC. They went under last
spring, beginning of the summer, and there was a lot of criminal auegations
made, none of them substantiated. And I was connected with that. They
sent a board member in to see me a week before this happened. Why. I
don't know."

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Howard Eisler

Section 3189 Federal False Claim Act

"the supposition was - I don't know how true it was a front for ISC."

Stan Caterbone -

"It was, I'll tell you why. Because when Chem Con was started, back to their
inception, you look at ISC's books. They didn't have any money. Well, the
f i s t thing Chem Con did was they went and got all that free money from the
government and you look where that money went. I bet I know where it
went."

Stan Caterbone

"this guy named Geurin, James Geurin. And I know that they were selling
contracts back. He runs ISC and he also has his fmgers pretty deeply into
Chem Con. He's the one who started Chem Con, Guerin is the one who
started it."

" Wasn't there some allegations about a tie to Wedteck?" (Defence

Howard Eisler

Contractor of New York)


Stan Caterbone Stan Caterbone

(I

Stan Caterbone Stan Caterbone

'C\

"You bet. They were tied, you'd better believe they were tied with Wedtech.
The same guys in Wedtech were invoked with ISC and Chem Con."
"ISC is sold over the London Exchange. (I bought my shares from Gib
Armstrong) I owned a thousand shares."

" I sold it when things started to hit the

"

N
"

iust did a multimillion dollar merger with a company in London.


They probably think this is going to cover their tracks.',

Stan Caterbone -

"What they did was, they fronted all that money and started the contracts,
went bankrupt, and now the government is stuck for $18,000,000."

Stan Caterbone -

"I know right now in this town's viewpoint, I stole money, I am insane, and
I am a lunatic I tell you I will not condemn Jm
i
Christian until he tells to
my face what happened."

C)

Stan Caterbone

Stan Caterbone -

"I was framed and set up...-....."


"I don? know maybe Jim Christian doesn't have the money. Maybe Guerin
has it or somebody else"

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/?

$.fibne of

Section 3189 Federal False Claim Act

the items in the column (newspaper column) is the reporting of your

- somehow

somebody associated with - oh, someone associated - in your District Office? Yea. Of

0"

course you were also one of the principals in the - I still am the minor one
Financial Management Group

- there is about 50 names I am dealing

- yes, the

with here and they

are all very similar so I have to be --- Financial Management Group Ltd. filed for 202B
exemption. Now all the security sold in PA had to be registered. Some securities are
exempt but you have to apply the detention type of thing. It is a registration, not a
registration that

so the 203D exemption was filed for. Of course we have

added the security statement

- explanation of

where the money is going to be spent, how

it is going to be run, who runs the corporation and all that sort of thing. Now under
the umbrella of this Financial Management Group there is a whole (now I a m repeating
what is in the 203D which I spent some time Friday reading)

- there is about

15, 14 - I

guess under that there is about 5 other corporations which are going to be an insurance
agency, an investment advising agency, a group

- now a lot of

these things have not

come about. Well we simplified it. What do you mean simplified it? They are operating
but because of the accounting procedures they would have been a nightmare with all
those stubs. So, they a r e operating

- the only one that's

separate distinction is the IRA.

Everything else is operating under Financial Management Group Limited. So these other

corporations have not really come into being. Technically, legally, no.
I seen also; I guess there is an application for a n investment advisor. Now, if you are

selling securities or dealing with

Now that came in under your name ...at

that time I was President, but now there is another application i n that is being acted on
now by somebody else. There is? I don't know who. Is that for the advisor? Yes, the
investment advisor.
Do your current records in Harrisburg indicate that he is still an executive with FMG?
Yes, because this offering memorandum was given back last March I think,

- last August

when I initially did it. Oh, no, pardon me. We are talking about two different

things. You a r e talking about your application for the investment advisor. No, I a m
talking about FMG

- the offering memorandum was done last August because that's

when

I started raising the money. August of 1986 is when I did the initial filing for the
offering memorandum

- the

144

Coming up this October is the 203D. 15 months

after conception. Alright, yea. There is a report that is due a year after
that's what is coming up

- Right,

- to explain how much money was raised and where it was

spent with the idea then of protecting investors. The idea of the

your are

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limited to like 35 investors. You can't sell to 105 - you are limited. What the state
does is comes in and says, how are you going to raise the money in your offering
they comc i n

memorandum. Then a year after it is raised, or a year after

and say, now what did you do with the money. You raised 4 hundred and some odd
thousand, now how did you spend it? Now that has not been filed yet. It is due, in
fact I think it is overdue. It is due October 20. I got the letter right here. They just
sent me the letter. You guys just sent me the letter, I have it right here.
I have nothing to do with that end of it. I just came. well whenever I called you

I didn't get a hold of you the next day; it was the following day which was
Friday t h a t w e made contact.
Our idea in coming here was to let you ask whatever questions you had in terms of the
investigation. Of my limited knowledge of the type of securities these guys deal with
and securities in general, the things that came t o interest me was the fact that there

, that there

are stock certificates in here in force with names on them that

are with the annual report, his name is forged by someone else. This gentleman has
some involvement with the original group and the President suggested that he make false
reports to the bonding company so that he can get money back. They are the three
things that stuck out to me as a regular criminal attorney, that I thought you might be
interest in because, but like I say. we a r e here to have you ask questions of anything
that you might.
O.K., this offering then

- when Financial Management Group limited applied for

their

203D, I get the idea they were going to raise four hundred and some odd thousand
dollars. At that time, they listed Bob Kauffman a t 60,000 shares and you and Hartlett
40,000 a piece. So, Kauffman a t this point is the main factor? Or, when 1 was talking
to you, it was really your idea that put this whole thing together. I put i t all together.
I brought him up from Atlanta to be president because I have a lot of business interests
and I didn't want to be tied down to the day-to-day operation. Plus, I never had any
management experience. Most of my work was consulting, business deals, this and that,
so I actually brought him up from Atlanta to be president. And, Hartlett

- is he a

complete local person. He's local. We all started together in IDS back in 1982. That's
your connection with Kauffman. you know him through IDS? He's the one that got me
started in business. I am the one who took him to FSC, that was our broker/dealer and

C
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we started putting it together. Are they registered as FSC? Yes, that's John Keegel.
This similarity in names is a hassle; you are going to have to bear with me because you
throw these names out at me

-----.

So then, you had the public offering which you were going to sell another 120,000 shares
and raise $435,000. That would be in addition to what yon people put in. We put in 20
grand a piece. Well, we had 5 people. You were allowed 5 shareholders

- so we put in

5. Five put in 100,000 - five a t 20,000 yon mean? No, it was a little bit more than
that. Three of us put in 20; two put in 25. What we are talking roughly is one half
million dollars? Right. Financial Management Group now is responsible for maintaining
proper control over that money and it would be invested as 5
many people

- there is roughly

- now I don't

know how

18-25 - that was sold as a result of the public offering.

I have that here. Do you mind if I look at it. That's 0.k. I went through a half hour

of frustration to get here. I wasn't running late until I got caught in the

The

way you described it, I assumed it was going to be in the country and I knew ...I stopped
a t the Post Office. I said where is 2300 New Danville Pike. I don't know. I was here
on Friday and I drove past it this morning. You'll bear with me then.

This is interesting. I've got about 40 shareholders. Is this as a result of the 203 deal?
Yes. Did you know about that. These are all the ones that are forged by the other
guys? No, no, just one is forged.
Now, yon people were acting as your own sales

. Were those funds all

properly accounted for? Were they all collected and put in the bank and the people
received their stock certificates. Uh, huh. Who all would have been in charge of that.
Mainly me. I was in charge of just about everything. Now, we have one-half a million
dollars or there about in the bank account. Where? They never would show me the
book

- my partners - never.

They never showed anyone the books to this day. I got

shut out literally. What brought that about? They were trying to take the company
from me from day one. I had too much power, too much control. They wanted to cheat
and be dishonest and I wouldn't. What happened was we had to acquire a n interest in a
broker/dealer to assume our equity, to realize our equity potential. So back in January,
we drummed u p this deal with a broker/dealer called

and Brown out of DC.

The deal was we were going to acquire 20% of their broker/dealer in return for aligning
our group with them. What I found was

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- I went down there after about 3 weeks of

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them not doing what we needed, I got scared. I had so much money and time into this
company. I went down there myself and found an empty shell

- nothing.

Now, as a

corporate office, I know how liable I am, for everything, personally. Then what I find
out is that Hebron is a born-again, just like Kauffman. Oh, Kauffman is - yes. And,
is a Jehovah Witness. I get pissed off, so I swing the whole bore, change
everything and I line us with Planner's Security Group in Atlanta
that group is Wade Webster. Bill Carter

- Bill Kaker.

- all the former IFP presidents.

International Association for Financial Planners

- the big guys.

Now, in

ISP?

So, I swing everything

around, turned the whole board over, aligned up with them. The day after I get back
from Atlanta, Kauffman calls me into his office and goes through this spiel with I
thought I was president, who's running the company? I said 1 don't care who runs it, it
just got to be run right and for the right reason. Two weeks later, I am in New Jersey
working on a movie and doing some things

- I had my lock changed in my office for

security reasons. I find that they have all these stock certificates and everything that
were in my office. You had the locks changed? You had them changed yourself, but
they still got into your office? I don't know how. They stole my files. July 1, I went
in and took all my files out of the office and went to an attorney, Joe Roda, and
explained what happened. Nothing. I met with attorneys in New York, New Jersey,
Boston. I found all these security violations and everything else, but no one could help
me. Then, about four weeks later. I called the FBC, the NAFC, the FBI, the Attorney
General, Senator, Governor, everybody. And, they all think I am bluffing.
Actually, they all thought he was crazy. They all thought I was crazy. And that was
started because of Robert Kauffman. That's what he did. The day after I went out and
got my files out, he spread rumors that I left the company, that I was thrown out, that
I was mentally unstable, that I was spending money. At that same time, I get

blackballed by all the local lending institutions. They repossessed my claim three weeks
before my first payment, with the files in it, of which a brother of the broker in FMG
is one of the lending officers. It gets ugly. That was before he spent the 5 days in
jail. I tried to get arrested. I had to. Then after you were arrested, you were in the
hospital at St. Joseph. I was coerced into going there.
No, that was my idea. I wanted him in a place where we were going to satisfy the
victim so to speak, and the police a t one point, that he would still be able to work with
them. In reality, he was in the hospital but had his car in the parking lot. He was

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going to play basketball and come back. He was not committed. He was just there. I
walked in to satisfy the bail. Are you on medication? No.
One of the police officers mentioned to me that he was

and that you are

alright now. Again, this might be one of these stories coming from FMG. What
Kauffman did was, back when they started doing this I had a psychiatrist that was my
client. I was depressed. I mean they were making a fool out of me in public; they were
firing people that were very close to me for no reason other than they were close to
me. So I went to A1 Schultz, a psychiatrist, because I was depressed. Very normal,
given the environment I was thrown in after putting this big thing together then having
these guys slam i t in my face, then take all the credit for what I did. He diagnosed me
as having biphola, depression. My father was schizophrenic and my brother committed
suicide two years ago. The reason he diagnosed that was because I was on a low, and
a t previous'times he thought I was on a high when I put this company together. So,
what I did was, three weeks before July 1, this previous July 1, I told Kauffman that I
went to see a psychiatrist because of how depressed I was because of what he and
Hartlett were doing. They fed on that, and tried to use that to use as their alibi for

'

what they have done to me.


Again, t h e r a y 1 am getting this

- I didn't

know anything to start with

- I just

haven't

to make inquiry a t the police office and one said that you were taken
not.

I was

See, that was all started by Kauffman. He actually h e had meetings

with my family to have me committed and take guardianship over my assets so he could
buy the stocks from them a t what ever price he felt like it.
Incidentally, you may want to point out that as late as mid-August of this year,
Kauffman wanted t o buy you out for $2.50 a share or something like that. We have that
documented. Eight weeks prior t o that, I was working with the attorneys to do a 5 to 1
split. That makes the stock worth $25. Either he is ripping me off or he is ripping the
people off who are paying $25 a share.
The offering as you people had it was 3
issue completely sold

- that

prices. It was $5 a share. Was that

120,000 shares? No. Was the best part of it? There was

4 hundred and some thousand sold. Did you buy any of that stock? No, I was in the

organizational sale. You don't know how that money is being accounted f o r now. I have

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the corporate books. When I went in there June 30, I mean I was in there. I mean it
is not like I went in from the outside; I had a plane and was flying back and forth for
me. In fact, what happened was, I was granted a 60-day leave of absence late June with
pay. Really, what I wanted to do was meet with legal counsel and find out how I was
going to resolve all these problems that I was finding. What happened was, in June I
copied everything in that office (June 30th). and I copied the books. You see, I
developed a computer system. So I just took one of the copies

- it was a big system.

I've got the books. I don't know how accurate they are because the way that the guys
kept the records, the accounting is all screwed up too. I have an idea, but I found a
lot of money going to people that should not have been. In what way? What they did
was, there was a lot of Jehovah Witnesses that were hired in that firm

- receptionist,

cleaning, etc. Then what they did was replace all the staff people that I brought in
with their own. Then, there was money going out to a fellow by the name of Tom
Turner in Minneapolis. Now Tom Turner was the biggest divisional manager in IDS. Hc
was terminated by IDS in February because of religious convictions

- another born-again.

Then I find this guy was making $750,000 a year with IDS and I find FMG loaning him
money? Is that what they are going after

- in the form of loans?

Yes. And, how much

money are we talking about going to Tom. 12-15 grand. Then. I find checks going to

(-1

Kauffman's wife. Large amounts? Are you talking a hundred dollars? No, a thousand
here, $800 here.
FSC, which is a registered broker/dealer, was an entity started by you? No. What
happened was, back in 1983 I had a dinner meeting

- I was running the local chapter of

the IAFC - and I drummed up a business meeting and had Alex Armstrong. Do you know
who Alexandria Armstrong is? Yea. She was one of the most prominent financial
planners in the company, a woman from DC. I brought her up to speak a n d I told her
that I wanted to get out of thc proprietary business. She said, go talk to John
FSC. Now, this is when Kauffman, Hartlctt, everybody was still a t IDS. So, I went a n
had a meeting a t FSC in Atlanta. At this time, Bob Kauffman was the Divisional
Manager for IDS in Atlanta. The next thing I know. I left; then he was hired by FSC to
be an officer and to run their sales force.
Then the idea of the company you a r e forming up here is to invest other people's
money? No, it is a one-stop financial entity

- provides services in mortgage backing,

investment backing, insurance, real estate, taxes, lending, portfolio management,

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everything. I had it researched legally by a leading patent law firm in Phila. It is


definitely the most innovative in the country. There is not a firm in the country
offering all the services that we offer.
Now, just up the street from your place

They are

that line. I mean big. We're talking an office of 10,000 sq. ft. right here and 35
people; then we travel all over the country. When I say offering services, we have 2
attorneys in there, we have 2 realtors, 4 insurance people, a portfolio manager, 8
financial planners, 5 brokers

- I mean, in depth.

Before I left, I was working on

mortgage banking. I had started a mortgage banking operation and the minimal loan I
wa looking a t was $3,000,000. 1 bet you I bid on S150,000,000 in the first 6 months of
1987. These were loans that you were going to provide the people with? You bet.
Where was those funds going to come from? They were coming from the largest biggest
insurance companies, the largest pension funds, and some of the largest banks. 0 . K . you
were going t o be a s a mortgage banking type of thing. That is right. You were not
lending the money; you were putting the lenders together with the borrowers and you
get a finders fee, or whatever. Yes.

(--')

&:how
did you get into this? You were an initial investor? No. I've been with Stan
since he started in business in 1982. I had come into some money and I was investing. I

had lent Stan some money and things got really screwed up with

and all. FMG


told me that they were responsible f o r the money because Stan was an officer of the

company and that they would

Then, after several me

with them, they more or less asked me to say to the bonding company (that they took
out after June 30th of this year) - t h e y wanted me to tell the bonding company that I
gave Stan the money to invest for me and

&fm
with the funds, which I flat our

refused to do. As a matter of fact, I damn near punched Kauffman in the mouth when
he was asking me to commit a very serious crime.
Now, Kauffman's background, is decent, is it not? Clean on paper. I mean he worked
for

- clean on paper;

there's a lot of people after that man. What he did to FSC was,

he was double dipping. He was telling FSC that we were going to stay with FSC the
rest of our lives; in reality, he was telling me that we were telling them what I wanted
them to hear that we were going to do our own broker/dealer so we could obtain our
own equity. And then, I find out that he is receiving a salary from FSC up until

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February this year. Plus, his salary is in violation of the offering memorandum. Two
weeks before I left, he had the Board approve a salary of about 2-3 times what is in the
offering memorandum.
Maybe this is why the 203D

- they're dragging their feet on this.

They don't know

what to do. I did all that legal work; they don't know how to do it. This offering
memorandum we are talking about

- I just

copied this. This is just happens to be page

9 and 10 because the type of information that is in it. That is the only thing we do
not have a copy here of. Well, we have a copy in the office if you need one. It is
public information; there is no problem with it. So are the books public - I got thrown
in jail for trying to get them. Well, we will try to resolve this; it is not going to
happen overnight.
Who is Kauffman connected with here. He called up everybody I know and told them I
left the company; told them I was stealing money from clients; told them I was mentally
insane. I was doing business everywhere. I was doing business with the Japanese; I was
doing business with the President, Stoney; I was doing business with High at New York,
Boston, Houston. Everybody all over the country heard that I was insane. Everybody.

f'\-

I've been 4 months without money. I haven't paid a bill since June 30. What do I do?
No one believes me. I tried going to the unemployment office. Do you know what they
did? When 1 was in the hospital, that was over $3,000. They called up the insurance
carried and told them to terminate me

- my hospitalization.

I have nothing. The only

thing I have is what is in this house.


Well, Kauffman comes up here from Atlanta, and he's a born-again Christian, so he
comes together with a group up here somehow. You see. he's hiring born-again people ...
Jehovah Witnesses. Hartlett is a Jehovah. There were more Jehovah Witnesses than
there was anybody. But Hartlett was somebody you brought in though, wasn't he? Well,
what happened was I put everything together. But would it not be right to say that
Hartlett would be your person as opposed to Kauffman's person. Well, it is those two
against me. They are the two that are trying to take the company from me. See, I
controlled everything. Everyone went with what 1 said because I did things that were
right for business and right for people. I treated people fairly and honestly. People
respected me more than anybody.

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Did Kauffman in the initial offering that you had, the preorganizational offering - each
of you put up $20,000

- did Kauffman put up 20?

He got more stock; he never paid the

other 10 for the remainder of the shares. He was supposed to put in 30 for his 50 $50 a share. The three of you put in 20. Then, he had a back agreement with me to
sell me 10; so we both would have 50,000 shares. I got that contract and he never
fulfilled that. I said no way are you getting more shares than me when 1 put it
together. I said you can be equal with me. But how did that come about? We signed a
back agreement so Hartlett wouldn't get mad. I had to write to buy about 10,000 shares
from Kauffman, 50, to give us both 50 a t anytime a t $.50 a share. You have that
agreement? Yes, he never signed it after he got his 50. It was a bad move on your
part. There is nothing wrong with the idea but do you think a t that point he was
conniving to d o

- he was conniving from day one.

When we put this thing together, I

was in the middle constantly between Kauffman and Hartlett. In fact, a t one time
Kauffman was going over an idea

- this was over a year ago before we moved

into the

office - about how he could set Hartlett up to get him out. Then, when he couldn't get
Hartlett out then the two of them tried to get me out.
Now, everything is in place and it is operational? But obviously you have a lot of

Ci

contacts to make this thing go. I'm out. I haven't talked to anybody? But you did
have initially. You already made them and they now have the

- yea, spent 5 years.

But now they've picked up your contacts really, so to speak? Exactly right. They are
acting as mortgage bankers, etc. The whole bit

- everything I put into place,

they just

stole away from me. See, I never communicated with people. I couldn't, only because I
couldn't find competent legal counsel to tell me what to do. All they did, was send me
bills. I didn't even want to send a letter to everyone explaining the situation until I got
a competent legal counsel to tell me what is right, what is wrong, and what to do. I
went to 3 attorneys and they tell me there is no violation

- and I'm

in jail for 5 days

for what they did to me 3 months previous.


Even according to FMG, Stan was with the company until July 1, is that right?

Here are 2 certificates, June 25th, signed by Bob Long, Secreta~


I wasn't Secretary, I was a Board Member. And, this is April 24th. 1987 Semi-Annual
Report in which someone

- forged my name.

I never even saw that. They never even

had an Annual Shareholder's Meeting; they never let people examine the books that have
wanted to.

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Of course, all of this would boil down to their getting money from somewhere, extracting
money. Either they are cheating somebody and putting it in their pockets or taking
exorbitant salaries

- is business that good that it could stand that?

We are paced to do

$4,000,000 PC1 a year, that's a lot of money passing through your hands.

, doesn't it affect those people? Are they

Now the people that are

skeptical of what's happening? I have no idea. I know the clients that 1 have talked to
to, that came down from New Jersey to find out what really went on ran the other way
as soon as they talked to me. In fact, one woman got so sick, she went downstairs and
threw up when I told her.
Well, you know the corporation, regardless of what the situation is when there is a
problem like this with you, or anyone, the corporation has to continue to function? The
fact that somebody has signed your signature to a financial management semi-annual
report. I don't know if that is a security violation, in that end of it. If it would be
corporate law, it may be, but not at the security end of it. Well, someone changed my
address. Who knows who gets my mail? I never changed it. From where? From 1755
Oregon Pike, FMG. It goes here; it goes down to New Jersey. 1 never did it; who did
it. They go through all my mail

- open all my mail, then send i t to me in bunches 10

days later. This is the Financial Management Group that does this? Of course, it is
coming to you as one of the principals in the corporation, and if i t comes in from their
standpoint, they wouldn't know if it had to do with corporate business or your business
personally. The fact that they opened it may not be ethical, but I don't know that

-.

If you change my address, that is forgery. You got to go to the Post Office and sign to
change an address, don't you? Well, I don't know. If you are no longer associated with
them

- who says, I am no longer associated

with them. The Post Office doesn't know

that. If somebody comes in and says you are no longer here, you're over there - I don't
know that the Post Office - somebody there should not have done it.
These are things that show this is not fabricated or something; they are actually
happening. I got so desperate I already wrote 60 Minutes.
How much money are we talking? Millions. That they have taken? I was Executive
Producer of the first digital movie ever, in the world. I was to get 40% of the profits.

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I could have made 100-200 million dollars. I was ready to do a deal with the owner of

Turkey Hill. I was supposed to receive a check in July for $200,000; after he heard the
rumor, he backed off. How much have they squandered? How do I know? I can't get
at their books.
These stock certificates that you

Scott Robinson, for instance, bought

42,000 shares. Stock certificates wouldn't

In June of 1987, he bought

2,000 shares of stock. Now the signature that is forged on yours is the secretary. It
should have been yours, but there is nothing wrong with the certificate as such

- aside

from the secretary signing the certificate? There is something shady about that stock
deal too. You see this is a year, not quite a year. Would this be part of the of 203
offering? Yes, everything is. All stock is part of the 2030. What I a m saying is, Scott
Robinson bought the 2,000 at $5 a share or whatever; he put up $10,000 and he was
entitled to get a certificate. If you weren't there to sign i t
Telephone call

'

- someone for Bob Kauf f man

If Scott Robinson put up the money and Peter Ponderose put up 8,000 shares, if he paid

$5 a share

- they didn't

pay $5; they paid $2.50. Regardless, they were entitled to the

shares. If they can't get at you to sign the shares

-- why couldn't

they get me? I was

in that office. Oh, you were still there in June. Yes. Even according to them. When
were you actually locked out? July 1. That's when I went in there and took my files,
when I found out they were doing that. Because they only way they could get the
certificates was to break into my office, because I had them. You had the stock
certificate book? Yes, I did everything

- they didn't

even know how to d o any of that

stuff. That's how I caught them. I knew the law because I did it. I did the
memorandum and everything.
The thing that is wrong with these certificates basically is the fact that Long is signing
as secretary and at that point, on the 25th of June, you're the secretary. As f a r a s we
know, these things could have really been negotiated a t the end of July a n d backdated.
I am not trying to beat you down. I got them July 1 - my attorney copied them for me.
That's how I got those copies. What you are saying, prior to your being locked out of
this place, they were already bypassing you. They found out that I was talking to an
attorney. Now what would they be afraid of when you were talking to the attorneys.

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What they were doing. Of course, they do have control of the corporation

- between

Hartlett and - I did, I controlled the Board. That is why they threw me out. When I
made a decision, the Board followed it. But now, they are gaining control of the Board
I have no idea. I have never heard of a Board Meeting. Who is on the Board of

Directors? Me, Bob Kauffman, Mike Hartlett, Bob Long and Alan Loss. I heard those
names; I can't remember where. They were the signatures on the semi-annual report. Is
Long a born-again Christian. No, he is the accountant who hired from Main Herdman.
Were you a party to hiring all of these. Everybody. Pete

was terminated by

Shearson and I was the only person in time to give him a job. He already had some
trouble with the NASD. He was suspended; it took about 5 months just to get him
relicensed

- they had charges against him, allegations - forgery - in fact what he did

in

June was he went and used another persons rep number a t FSC to do options trading and
that person supposedly reported him, or wanted to report him
from Lancaster?

- Greek.

- Dick Sherbach.

Is he

But he is from Lancaster? Yes, but he was working in

Harrisburg a t Shearson. They fired him in November. I saw his name but I can't
connect it. So many names came up as a result of this

- I'm

sort of swimming trying to

get everybody straight. It's not easy, believe me. Time is one thing that I have a lot
of

- so do I.

I can't d o anything else, what can I do?

Did you ever hear of a


some outfit

or

organization? Some years ago, there was

- New Environmental Technology - Remember when that was floating around.

They had a big shindig down a t the Strasburg Inn. A lot of people from New York came
in. The whole thing fell through although Environmental Technologies are is a local
corporation in business a n d they were trying to merge with
Corporation out of New York. I a m not familiar with it.

Shell
Again, it was a lot of born-

again people that would meet; they would push on the idea that all things stock up.
Well, I know h e is running advertisements on the radio that deals with the religious
sect.
Now, that they are set up, does the Financial Management Group need money or do they
have enough money to operate. No, they've got money. They are a self-sustaining
operation then; anything they get from selling securities they will pick up the
commission, if there is brokers mortgages they will pick up the commission on the
mortgages, and that's enough to keep them going, right? Oh, yea. They a r e not pressed
for money? No. Have the handled the customers/investor's money correctly. No. You

.
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have mentioned they've given money to Tom Turner and Kauffman's wife, what else
have they mishandled? I know the Federal people wanted to investigate Kauffrnan's
books, of his stock book that he was managing. This is when he was down at Atlanta?
No, this is now. That's why they wanted him to liquidate his mutual funds so he could
manage it f o r him. They wanted you to liquidate your mutual funds? I told him that 1
was a little unhappy with the performance of the mutual funds that I had; he wanted me
to liquidate it and go into the stock market and let him work it for me. He was going
to act as your financial planner? I would imagine, yea, broker, buy and sell stock.
Have they acted as financial planners?
Is the one that you
last year

- illegally.

- Now there license has not

- there is over $100,000

been approved yet.

of our RIA fees that they have collected

Did you say IRA? Registered Investment Advisor. Do you want to

see it? Yea, let me. Who is registered now? No one is registered. I was that close to
getting it registered when I got shut it. It was all ready set to go; I got the papers. I
think it was just some questions. Were you working with Jamino? Yea, he is the
corporate attorney that I got

- and I think he is very

He is good. There's

no problem with him. No, Jeff's a good guy. He taught me securities law. I am trying
to think, this application here? Paul Short is who I was working with. I asked to see
the file quickly on Friday

C'!

- I didn't

know it was there. Now I am still President of

FMG Advisory. O.K., now wait a minute

- let me see, FMG Advisory comes in yet.

They threw me out of the Financial Management Group; they never mentioned FMG
Advisory which I was President of. Is this the one that applied to

- oh, alright, you're

using the initials FMG. that's Financial Management Group? Right. I set up an umbrella
so it would be consistent. What threw me off was. when Financial Management Group
was registered there was a whole lot of other entities involved which used the initial
FMG Advisory Service, Accounting Service. That was for continuity. O.K., then FMG
Advisory Service was never really, up to now. was never really registered a s an
investment advisor, right? Correct. They were registered
state?

but not with the

Right

But, now, during this time

- from the time they are in business, from August of

1986

until now. they have done investment advisory services a n d these a r e the fees that they
collected? I charged some. You are allowed to charge up to, what is it

- 14 people?

think it is only 5. I was careful about that one. I know I only charged 5 clients, I am
sure of it. T h e FCC really gave me a rough time getting that thing filed

- I couldn't

even understand their questions half of the time. They are a mess, they really are. I
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must have spent 100 hours. I agree with you, there is a lot of attorneys work in the
Harrisburg, and the question is the application

- the question is about that long and

the

answer is Not Applicable. Yea, it takes you 3 hours to figure out that you don't answer
it. I agree with you. I have a tendency to want to throw it away. Well, after 5
months of fooling with it myself, I called Jeff up and said, Jeff, you got to help me get
through this thing. I got to get this registered. I called Jeff on the RIA probably in
January

- no, probably

February or March.

So, June 1987 was the last correspondence you had. Yea, right there it is. Right there,
it was done on June 23. I am going to want a copy of this. I need to get a copier in
here and copy it for you. I can't leave these out of here without copying them. These
files are just to valuable to me

- if

they get lost or whatever. You can attach it to

whatever you want, but I want to get a copier in here and make copies f o r you and you
can just run. I don't know where I am going to get money for a copier but

--.Well,

these files have been literally all over the country. In fact, most of these files are in 2
law firms in California and New Jersey. I was all over the place.
This is the application for your registration as an investment advisor. I would like to
see what the new one says on it. As you can see, they are all like a standard form.
Like I said, I have difficulty looking a t these things. If I am looking a t something I can
find it, but~justto look over and say its alright or whatever. But I would like to see
who they have listed on as officers. I just looked at it Friday and didn't take particular
notice other than I knew that Kauffman and Hartlett were some of the people. My name
wasn't on it. Oh, no, no, your name wasn't on it. Well if they are using FMG
Advisory, I am still President of that company. Well, I don't know in corporate law
what it takes to do away with a President at the Board of Directors meeting. I'll tell
you what it takes.

----- that's

exactly right, but they didn't have a Board of Directors

Meeting. No, the shareholders must vote on the Board. Shareholders must vote and
approve, and shareholders must exempt people on the Board. Shareholders have to vote
to remove someone from the Board. Yes, but the Board of Director would be elected for
a year to two years, whatever the situation would be. So that corporate officer would
be there for that entire period. The three of us were elected to the board for a period
of 3-5 years. The initial Board members

- this was one of

Kauffman's move to gain

control over a one-year term. Me, Kauffman, and Hartlett were 3-5 year terms. When
did that take place? We did that back in June of 86 when we started the company.
I

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Your only connection with the company now is the fact that? I have no connection.
They will not let me

- and I have personal

belongings in that office, and they owe me

money. That is something that you two are going to iron out. See, my involvement is
criminal charges

- that's

how I am involved. And my involvement is going to be the

mishandling of investor's money.


Well, all of these other financial management groups are 100% stock holders
Advisory Inc

- FMG

100% stockholders? Yea, what it is, the shareholders own Financial

Management Limited; Financial Management Limited owns all the other subs. O.K., 100%

there is no other involvement? That's right.

- I think there would be some


give it to anybody - not even me. You

Financial Management Group's Semi Annual Report


financial information

- that's

right, they won't

had mentioned that there are offices throughout the country. How are those people
connected here? Shareholder and they are aligned with us through the broker/dealer.
They go through us to the brokerjdealer, rather than direct. We own 5% of Planner's
Security Group in Atlanta. We get the same deal that we 're supposed to with
Brown with this outfit in Atlanta. They are a fairly large broker/dealer. They are
doing about 15-20 million dollars a year right now, gross commission and
Is it Heubert? No, they are the born-agains that I left, I moved away from. What's the
name of the Atlanta Group? Planners Security Group

- Bill Kegler.

There's nothing

wrong with that group? Yea. they terminated me for no reason. As a registered rep?
Yep. I am sure they will come up with a reason; there is a reason why they did i t
because with the NFAC they had to file. I would like to know why? You know, you
were termed because you were sick or, you know there is going to be a reason.
Whether it is true or not. Lying has become a n accepted norm for all of this. Well, in
their compliance department, all of these broker/dealers should and generally do keep
very good close track of their sales people. How can they when 1 did the deal? But
Financial Management Group owns 5% of Planners Security? Bill Kegler was with FSC
and got angry when he couldn't run FSC 3 years ago. Then he started his own
broker/dealer. This is with Planners Security? That's right. He left John Keebel
because of a power struggle with them.

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But now, other than terminating you when they shouldn't have, they are not doing
anything bad? How do I know? Do you suspect they are? Yea, they terminated me,
you bet. You better believe I suspect. If they are doing that to me, what are they
doing to the poor clients who don't know anything. The same thing with FMG

- if

they

are doing all this to me, what are they doing to the clients that don't know anything.
My clients are pissed.
So, what they could do is withdraw their money from the organization whether its in the
form of stock or whatever, but there is nobody making investments
? I've got the former Medical Director

Your money is invested through

St. Joseph Hospital that owns 10,000 shares with FMG that is very upset about all of
this. He,is away; I couldn't get him last night to come to the meeting. They got 35,000
of his. He went through everything from that company

- but he still owns the stock?

What did they offer you $2 a share or something? They didn't offer me anything. But
in that letter they did. They offered me when it came time for me to get the check
because they knew what I was going to do. Well, you wouldn't have taken the $2 a
share would you, because you were talking about a 5-1 split. I would have taken i t but
I would have pursued my civil and legal rights and sued them for the rest. I went 5
days without food

- I was starving.

I had no money - 5 days without food

- people

look at me a n d laugh. Did you ever go 5 days without food? when you are worth a
considerable amount of money?
Kauffman told me that he was going to offer Stan $1-1.25 a share to settle it out, to
buy his

and out of the proceeds of that he was going to pay me the money

that is owed to me first, right off the top, I was his first consideration

- that he

wouldn't buy the stock unless my note was satisfied. You have a note with First
Financial Group claiming they are liable for it. So you took the money and put it into ?
No, I don't know who has the money. A bank either has it or Lancaster Aviation. It
was embezzled from me, I don't know who has it. But they are acknowledging that they
have custody of it? They were acknowledging liability for it. We don't know who has
it. Either Commonwealth Bank has it or Lancaster Aviation, I don't know. But you put
it in the bank? No, I didn't put it anywhere. He gave you the money, what did you do
with it? I gave it to Lancaster Aviation for the airplane. Then they repossessed the
airplane before my first payment for, I don't know why. And I don't know where the
$25,000 down payment is. He don't have it and I don't have it. But the $25,000 went to
7

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him, not as an officer of the corporation? To me personally. The airplane is not part
of this corporate complex? No. But now Financial Management Group is saying they
will pay you back that $25,000? Uh, huh. They sent letters to all my creditors. They
told me that on 3 different occasions

- before they suggested I go to the bonding

company. Then they gave me a letter saying basically that if 1 wanted to talk about it,
talk to their attorney. Well, did you tell him about the bonding company? Yea. They
wanted you to sort of make the allegation that I gave Stan the money to invest f o r me
and that he had scuffled the money

- they wanted me to tell the bonding company

that,

which I refused to do. They took out the bond after July 1. I got a thing in the mail
about a bond; I thought what is going on. Then he told me about a week later
that's what that is

- a $4,000,000 bond.

- I said

You know the bonding company? Fidelity.

Of course, I a m thinking from their standpoint

- Financial Management Group has not

seen the $25,000. No, I don't know, maybe they have it. They might have it. Well, the
only way they could get it is if it were a reimbursement made on the airplane. They
were the ones calling the bank and the Aviation Company about the plane, asking what I
was doing with it, where I was going? They were the ones that initiated all the
conspiracy with the lending institutions. My credit rating was excellent up until August

01 down the line, never owed anybody anything.

I : (

This-is going to drag out; I will keep in touch with you. Now. you also have
investments through mutual funds through Financial Management Group? And how much
money are we talking about roughly? About 170,000. Now. do you have the certificates
for this. No, they were never issued. They are held in

with the broker, and

the broker in this case was? His probably weren't transferred yet, it was probably FSC.
So, it would still be a monthly statement from them

- so there is no problem with it

disappearing. I don't get anything from FSC, I get it from Keystone

- FSC is noted as

the broker/dealer, I a m sure. I doubt that they were yet to Planners Security. I get
the interest off that money, I get a check every month. But your investment is not in
jeopardy now, as f a r as you know.? No, but he is on disability a n d 25 grand meant a lot
to him.
Now, Kauffman wants you to sell these the mutual funds a n d give him t h e $100,000 to
invest as a broker? Right. Of course, you are reluctant to do that because you still
have confidence in Stan. I have confidence with Stan and I am not very comfortable

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dealing in the stock market just now. I like more settled investments - the stock
market idea and I don't get along very well. I am looking for safety of my investments.
Like Stan said, I a m on disability a n d I d o need income. And K a u f f m a n promised you a
fortune if you made this transaction? He didn't come right out and promise me a
fortune but he insinuated that I could d o a lot if I let him work the stock market.. He
was doing all options, that's all he does. Well, I don't want no d a m n parts of options.
You look a t his client files; they are all option accounts. All of them, little old ladies
down to

--.

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Here again, which you know, the broker when he is talking to you, or the registered rep
when he is talking to you, should file a form as to what you want. Now you just
mentioned to me that you are a conservative of man. I had him in government
securities.

- And

they should have these on file. Now, if you are conservative and you

give him the moncy and he starts dealing in options, he is really violating the trust that
the government and the NAFC is trying to establish between the client. I tell you what.
I feel sorry f o r you guys. You guys got a hell of a nightmare. Stan always backed me
up; there were times I pulled my investments out and put them in CDs for a while
because I was just not comfortable with what was happening. And, I tell him what CDs
to buy a t local banks. I have the utmost confidence in Stan. Mr. Kauffman tried
extremely hard to shake that confidence.
He tried to shake up my own family. He had my own family believing. Do you want to
know something. I n August, I was on my way to Hollywood to the film studio and to
see some legal clients I was working with one day
to get a night's rest. I get thrown in

- that

night I come back to my house

- I go to the police station to get a restraining

order against my family that didn't understand what was going on - I get retained in the
police station f o r two hours, get taken to a hospital. That day, someone called the
Stone Harbor police and said I had a gun and was running to the beach to kill myself.
This thing is ugly.
As a matter of fact, I would believe I am the only one left to believe Stan is still sane.
Well, I caught on real ~ u i c k . I don't believe he had anyone to talk to except me. I
didn't. 1 could talk to him every other day since April; someone had to believe what
was going on. I have tapes
client of mine

- I have a tape of Bob Kauffman July 3 telling a, supposedly

- it was actually my brother - that I was mentally ill, spending money

that I shouldn't been, and wasn't taking care of my clients. He told me the same thing.

that Stan had wasted away somewhere between $45,000 and $70,000 of his own money,

just throwing it away on frivolous things.


Every minute I have ever spent and every dollar I have ever spent, I've made money on
anything. I got my brothers in profootball

- held my own free agent camp.

And, they

were both picked up last week, as a matter of fact. I was involved in that too. Right
there. I thought I heard

- is he connected with

the Eagles? Eagles and Dauphins. I

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just heard it on the news

Section 3189 Federal False Claim Act

- one of

those things - I heard the name mentioned, it is not

that common a name, and I heard the name mentioned in the newscast of the NFL strike
and it was like - what was that, but it was too late. That Thursday, right after I called
you, was when I got the call.
Stan held his own free agent camp so that the players who didn't get chances in the
bigger camps had an opportunity to do it. 50 people showed up, from all over the
country. The most innovative camp

- I taped

the camp, sent the tape to all 3 leagues

55 teams. When was that, 84? Yes, right there it is. And some of them got picked up
as a result of this? Only one, my brother. I guess they had to have some body. Yea,
that was a fun day that day. That camp cost me 5 grand and generated so f a r
$200,000.00 in salaries for my brother.
That airplane that 1 bought would have made me $3,000 net profit a month, leasing it
out. I had a t least 20 hours of leasing every month for 350 a month a t $7,000, and my
payment was $1500.00. You were leasing it to? My contacts, my network. With you as
a pilot, you mean? No. It's a big plane. I hired my own pilot. When I'm doing
business all over the country I can't fly commercially. I three weeks, my charter bill
was 4 grand for using another person's plane 5 times. Then, you bought this. and before
the first payment was due they grabbed it back. Can they do that? No they can't.
Why do you think I've got a large lawsuit against 3 banks. One of the reasons they said
they did it was because it wasn't properly insured, but he had insurance. The other
reason they said, he took it to Florida. Now I don't know why you would buy $100,000
airplane and leave it a t the airport. Do you know why I was taking it to Florida? I
bought a place on a n island, another very good investment. Now they are suing me
because I couldn't settle because I got blackmailed 2 months later. They said I was
going to Florida to run away and hide. I was going to Florida to settle my property.
They had to come up with a reason so that's the reason that was around I guess. But,
Pete

brother works for Commonwealth National Bank. Plus, do you know

anything about United ChemCon? They are being investigated right now by the FBI and
Attorney General. Chemcon is the big local minority-held corporation that was doing a
lot of defense contracts

- it was associated with ISC.

They went under last Spring,

beginning of the summer, and there was a lot of criminal allegations made, none of them
substantiated. And I was connected with that. They sent a Board Member in to see me
a week before this happened. Why, I don't know. Is this Lancaster based. Yes, Jim

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Christian owned it

- now I hear

Section 3189 Federal False Claim Act

rumors that I was tied to ISC and 1 am close to several

people in that organization. Why they sent someone to California to see me, I don't
know. They won't answer me. Who is this, the FBI? No, this is Chemcon. I said if
you ever come back or you have someone else call me, I want a $10,000 retainer fee.
Never heard from them since. Then, two weeks ago, Jim Christian called me while I
was in the hospital. That guy hated my guts for five years. Why, he called me, I don't
know. What did he want? I don't know. You didn't speak to him to find out? I spoke
to him, he said nothing. The same thing the Board Member said when he came from
California. Asked if I could go get ChemCon another building; asked if I would be
interested in saving the company from bankruptcy

- I was working with a

guy from

Belgium, they wanted me to talk to, a guy from DC and New York, a guy from the
Caribbean. I don't know what the hell is going on. Then I find out the Commonwealth
Bank went and nailed ChemCon. Commonwealth Meridian said Christian personally signed
for the $18,000,000 that was invested or lost of the governments money for these
contracts. I don't know. I am sick of asking questions and people lying to me.
You don't have any connection with that, other than you knew some people? No, I've
got their files, I got their financial statement, everything

- they wanted

me to do

something. But you're not connected with the company? You're not an investor? No, 1
sold my ISC stock June 8.
A lot of people were saying that ChemCon. which is a minority - Christian is a black
guy

- was getting all the minority government contracts because he was one of the

leading minority defense contractors around, and actually the supposition was
know how true it would be

- is that it was a front for ISC.

- I don't

It was, I'll tell you why.

Because when ChemCon was started, back to their inception, you look at ISC's book.
They didn't have any money. Well. the first thing ChemCon did, was they went and got
all that free money from the government and you look and see where that money went.
I bet you I know where it went.
This guy named Geurin, James Geurin. And I know that they were selling contracts
back. He runs ISC and he also has his fingers pretty deeply in ChemCon. He's the one
who started ChemCon, Geurin is the one who started it. Wasn't there some allegations
about a tie with Wedtack You bet. They were tied, you'd better believe they were tied
with Wedtack. The same guys in Wedtack were involved with ISC and ChemCon. ISC is

.
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that an over the

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exchange-.

ISC is a London Exchange. International Signal

and Control? I owned a thousand shares. I sold it when things started to hit the

Now they just did a multibillion dollar merger with a company in London

They probably think it is going to cover their tracks. You mean United ChemCon is a
local corporation. Yes, they went bankrupt as of this last 3 months. What was it,
$18,000,000 in liabilities? What they did was, they fronted all that money and started
the contracts, went bankrupt, now the government is stuck for $18,000.00. They weren't
paying employees, they weren't producing the product. they weren't paying their
unemployment and everything else. Did they pay the withholding taxes? No. It turns
out that Christian, who I have had a few dealings with, had a n office that would be

would be suiting of any AT&T


office. 4 or 5 cars, thousands

Amazing. Had these racquetball things in his

- let me tell you about Jim Christian now.

I know right now in this town's viewpoint, I stole money, I am insane, and I am a

lunatic. I tell you I will not condemn Jim Christian until he tells me to my face what
happened. I was framed and set up and I know (I see what you mean, your experience).
I don't know, maybe Jim Christian doesn't have the money. Maybe Geurin has it or
somebody else. $18,000,000 is a lot of money and he is broke because he lives with one
of my best friends,

I mean they don't have money. And, I would think that

if he took it, he would have something. You're pretty nice, Stan, to somebody who has
hated your guts for 5 years. I know what I am going through, a n d who knows, maybe
he was innocent too. Is this Christian you are talking about. Yes.
You were going to make copies of these. I can't make copies. I can f a x them to you.
I will make copies for you, in fact, what I should do is get everything copied for you.
Well, no, because that is a tremendous expense. I would rather, if you have the time, or
can stick me in the corner somewhere, maybe say, this and this, a n d this, I a m sure we
can eliminate half of it. O.K.but you should tell me what you want and I will make
copies. I just don't want this stuff to leave my hands anymore. I can get them to you
overnight. Well, there is nothing we can do overnight. I can't elevate your problem as
far as being out of the corporation

- oh, I thought

you were going to give me a check

before you leave. So, anything that I would be involved in is going to be long and
drawn out; it is not going to be a n answer to your immediate problem.
I know, but I had to get someone involved. I had to get authorities to start taking
action for me.

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the FCC

- well, he is the one I am talking about mostly.

They said

they were sending 2 guys up here last week for 2 days. Did you talk to them about
what was going on? How did you happen to talk the FCC. I was just trying to get m y
money back. They promised me my money and they didn't come up with it. So, I called

. If

them. So basically, you have


would be well,

------

they came there, I think their attitudc

no, they were curious as to some of the other things that were

going on. I talked to them a couple of times. They were curious for one thing,
Kauffman wanting to take my investment and putting i t in the stock market and working
it for me, they were curious about that. They were curious about the allegations of
Stan's alleged insanity and forcing him out of the corporation, and I think they were a
little confused about why they would accept liability for the money if it wasn't there
liability. That would be a question that I would ask. I think that aroused their
curiosity, but he also said that they have never been checked, and they are about due,
so we might just as well go up there and dig into it and find out what was going on.
As f a r as I know, that is what they did, what they call a compliance examination. I
don't know that they were there looking

-. Sincc your allegations were made, I am sure

they looked into some items like that, but I think basically it was just a compliance
examination. What did they find? I don't know. They were there though? There was
two people supposed to be up there. Were they there last week? Well, it was recent,
the report isn't even written, but the report I think will be more on the lines that they
don't have a client complaint form filed

- compliant type examination.

Proper

procedures, etc.

I am still interested as to how you wcrc alerted to it. I have yet to get it

- I was

coming down as an appointment last Tuesday o r Wednesday, which ever day, it was the
next day I called you. I had an appointment here i n Lancaster. I had gotten a call
about 4 3 0 in the afternoon from the Phila office, and my supervisor down there said
there is a newspaper clipping of your break-in of the Financial Management Group. I
don't know whether to make a n investigation out of it or not. It seems there are some
securities involved. The only 2 articles that appeared are right over there and none of
them say anything about it. They just know my name, right? They just knew that I
was involved with the company?

- it doesn't

say anything about securities there.

Nothing a t all? Then how it came to our office I don't know, unless somebody sent it.
Even if they sent the articles, there is nothing i n there to indicate who

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called me an ex-worker. That is the interesting thing about it. "burglary, theft,
unlawful restraint, robbery, unlawful use of computer, criminal mischief, and terroristic
threats." I've never seen the article. There it is, pull them down. No, that's alright.
They were supposed to send it up to me and they didn't. I'm leasing that building and
accused of burglarizing his own building.
See, he called me and said, you are going down to Lancaster. See if we should start an
investigation. Stop up to the

-- exemployee.

Christian, I think was the arresting

officer? Mathias, they said Lancaster Detective Mathias. He's not, he's Manheim Twp.,
fortunately I found that out. I called Township 2 months ago and they didn't help me.
Then they throw me in jail when my partners call.
So anyhow, I stopped up that evening, Tuesday or Wednesday night, the next day I called
you but did not get you until Thursday or Friday, so that is my association. They were
supposed to send up the newspaper clipping or whatever it was they had. But the only
thing I know is that your name was associated in our office computer file with Financial
Management Group. Your not telling me anything new. But you see I was supposed to
have this. Why I don't, I don't know because they were supposed to send it up. But
the state in their own way to save a .40 postcard, they have a messenger service to
Harrisburg. So, its alright if you get it in the mail, like if I was in the office this
morning and put it in the mail before 10:OO it goes to the central office and gets
distributed

- then the next day i t goes down and would

be there the next day. But if

you miss that 10:OO mail, it don't leave our office until the next day then the next day
in the central file. then somebody drives it down to Philadelphia. I should buy you
guys some stamp. I had to deal with the State that long so you know these are just
little quirks that keep popping up every now and then.
1'11 tell you an interesting part that I had when I went out to view - they had to

- a n d Manheim Twp. called in t o Hartlett as I was there.

I was there to

get property returned to Stan, and Hartlett started going through things and paying a lot
of attention to what was there, and had already admitted wasn't his. There was a lot of
correspondence there, he was very interested in, and the policeman even came to my aid
and made him not be nosey. even its yours or it isn't, and he released everything to me.
Do you know what I took out of the office was on the books, everything that I wanted

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to see. Did they let you keep that? No, no, in fact the inventory from the service
warrant, just about everything on here is Stan's files, even labeled as such. Then I
found a

checking account, K & H Enterprises, Kauffman-Hartlett Enterprises,

they returned that to Kauffman. K & H, what do you think that stands for? Kauffman
and Hartlett. Well, that's what the initials stand for but what type of business? I
never heard of it. You don't know what it would be? I can imagine what it would be.
A brokers business somehow? It's something fishy. I can't remember the bank, I think

it was Hamilton Bank., Probably Hamilton or Farmers First.


In looking a t these, the only thing I can say, as far as I know Philadelphia is the only
information they had. Now maybe i t came in anonymously. I know a lot of people in
Philadelphia. This involves Financial Management Group or something or involves
securities, because the guy I talked to said, you know, should we be involved in it at
all? Ask what it is, see if there is securities involved? And that's what I did and

that's when I came up Mathias and of course he mentioned

Well, who mentioned to you about medicine. I t wasn't Mathias; Seigler was involved.
Why, how did they get wind of that? Harlctt and I were there and Hartlett was talking
!

, that's a bunch of crap.

about you taking your medicine. What medicine?

That's what Hartlett was telling him. And Hartlett was saying is he taking care of
himself and all of this stuff. That son of a bitch. He is really painting a nice picture.
Well, the cops didn't really buy it because they asked Hartlett to leave and they gave me
the information that they told Hartlett they weren't going to give me.
Yea, well they mentioned the things that you had taken, a couple of items, that they had
given back and allowed you to have them. They gave all the files back to FMG before
we were involved and then he gave me the personal correspondences, but they kept his
camera. Apparently, Stan was doing the policeman's work when he was in there the
night he was accused of burglarizing the place. He took pictures of all his files i n their
office and they said they had better keep that.
This is June 30th. It is my files in their office. That's the night I left. Who's taking
the pictures? A friend of mine. You were with someone? This was 3 o'clock in the
morning. Oh, you weren't arrested on the premises, were you? No, but this is when I
was in the office. This is when they stole my files out of my locked doors. He was

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arrested September 3rd I believe it was

- this is June 30th.

They don't know he was in

there then, I guess. These aren't the films that you are talking about? No, the films he
is talking about I took of my files again in their office, and attorneys say they didn't do
anything wrong

- explain why 1 was in jail

for 5 days.

This is the stock certificate book here, this big black book? Yea. You are still
connected with the company here? This is June 30th. The funny thing is, even the
second one is not breaking in

- well, the girl left me in and she's a friend of mine.

He

is still President and a t the time he was still Secretary I guess. I don't think the police
feel too awfully strong that they have a burglary type charge. I know. Well, I tell you
what, they abused me the night they arrested me.

Well, the cop that picked

me up here left me ride on the front seat and everything. When I get to Township,
handcuffed me, put my hands to the belt, threw me in a cell, bounced me around the
car. They wouldn't even listen to who I was. I had all the documents to hold them
that I was lease holder of the building

- wouldn't

even look at it. They didn't ask me

anything. I know why they a r e acting nice now. They are going to hear from my
attorney.

I don't know who even made the complaint, whether it was the girl who made the
complaint. You were arrested the next day? No, that night. I told 5 people that I
wanted to arrested that night: I had to. But then somebody had to call the Manheim
police. Do you know what they did? They called up the police that day and said 3 days
previous t o that, that I made a bomb threat to that building
picked me up for. Oh. really?

- that's

what the police

That's what the police picked me up

for. Then, while I was there they charged me with the burglary. They initially picked
me up for a terroristic bomb threat, that took FMG three days to report, they couldn't
even remember when the phone call was, and the person that reported it, I don't even
know who she is

- never saw her, never heard of

her. You were a t the premises there

roughly what time? I went there about 10:30 Thursday night; you were there an hour?
Not even that, about a half hour. I left and dropped off at

, had a drink,

and got a girl to take the car I had, I borrowed somebody's car because my cars were in
New Jersey

- I flew back,

and got this girl to drive me here and as soon as I pulled in

Conestoga police were right behind me. I said, great, they're here. And when the
Conestoga Twp. cop, I said, let me take all these files with me so I can show you guys
who I a m and what I was doing. Well, they just took everything and threw me in the

.
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cell and that was it - arrested.


,

Well, let me get started. I didn't read these letters yet. Read that one letter right
there.
That's right we have that other thing now. Yea, he's being sued civilly f o r this office
furniture here which was purchased from FMG. But FMG then tells the Office Supply
Store that he has not connection with us. When they have my suite of furniture in that
building. Oh, that what the pictures, is that your personal furniture? You bet. I
purchased this in June to go down to Stone Harbor; see the movie that I was working
on, FMG was to get 15% of the profit f o r my endeavors down there. This was purchased
as a n agent of Financial Management Group.

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admitted
by Guerin
company
by Ernest Schreiber
andTim Mekeel

New Era Staff Writers

The company that once held


much of the wealth of ex-lancaster defense contractor James H.
Guerin has pleaded guilty to
racketeering and agreed to pay
the U.S. government up to $4.4
million for its wronedoine.
In a plea agreemfnt d z e d May
15, Parent Industries Inc. says it
will pay t h e government
$2.376.000 in cash and -forfeit
its
- - - .. .
.rightsto a $2 million bankescrow
account that the Justice Department has claimed
The agreement. neentiatrd hv
assistti5 U.S. .2itorne!- liobcyt
E. Coldman and Gucrin's attori
neys, is the first acknowledgement of wrongdoing by a Guerincontrolled business since allegations were raised about the
: financial conduct of his defense
~~~-~
hus~nesscmplre two years ago.
The docunicnt has glvcn rise to
u'idcspread succulation that
Guerin himselfinay be negotiatinga plea agreement.
When an FBI agent was asked
about that possibility in federal
court on Wednesday, prosecutor
Goldman immediately objected
to any discussionof the topic.
Guerm's attorneys did not return New Era telephone requests
for comment. Guerin, who was
reached at his present home in
Naples, Fla., declined to comment on the advice of his attorneys, but said he would ask his
attorneys to return reporters'
phone calls.
this
In testimonv
- . " rarlv
. ~
" ...- wpek
..- -..,
an Internal Revenue Service
criminal investigator and FBI
agent charged that Guerin directed a $1 billion contract fraud
-and, with his brother-in-law, Carl
Jacobson, illegally shipped arms
to South Africa.
But the guilty plea from his
holding company is limited to one
general charge of racketeering
by the corporation and does not
include Guerin nersonallv in its
~.
provisions.
One key section, however, does
specify that the Justice Department may continue its investigation and prosecution of other individuals and companies involved
in the alleged racketeering.
Page 414 of 646 Guerin founded Thursday
December 15, 2016
Parent IndusPage 2520 of 2953 tries Inc. in 1982 as a holding
10/19/2006
comoanv for h ? ? c i n n r r - - L ,>

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L A W OFFICES

CRAIG V R U S S E L L
GARY G

KRAFFT. G R U B E R & H U B E R
~

1729 LlTlTZ PlKE


PENN5YLVANdA , 7 6 0 , - 6 5 6 5

KRhFFT

J O N M GFIUDFR
dOHN E

*USER

(717)569-5383

CHRISTINA C. HAUSNER

October 2, 1987

Mr. Stanley J. Caterbone


New Danville Pike
Conestoga, PA 17517
Re:

Financial Management Group, Ltd. Property

Dear Mr. Caterbone:


I have been retained to represent Financial Management
Group, Ltd. FMG has advised me that you are in possession of
several items af FMG property, which include but-are not limited
to the followingi
1.

Zenith ZF 171 42 Lap Top Computer, Serial No. 710 CE


0322.

2.

A.C. Power Adaptor for above listed computer.

3.

Parallel printer cable.

4.

Royal Adler FAX machine, Serial No. 1731379.

5.

Internal 300/1200 Band modern, Serial No. ZA-170-4.

6.

Soft carrying case, ZA-170-2.

7.

Battery pack, ZA-170-1

8.

Premier Technologies, "Lite Disc Drive", 10 MB Disc.

9.

Various business records and office supplies.

Unless the above items, along with all other personalty of


Financial Management Group, Ltd. in your possession is returned
in original condition to FMG within the next ten (10) days, my
client will take legal action by filing an action in replevin to
recover its property, and/or to collect damages for the loss of
its property.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 415 of 646


Page 2521 of 2953

Thursday December 15, 2016


10/19/2006

. . ,,

US District Court For The Eastern District of Pennsylvana

TO:

Section 3189 Federal False Claim Act

Sta
N O T
-I C
-E
-

Take notice that you are not licensed nor privileged to


enter or remain on the premises at Financial Management Group,
Ltd., 1755 Oregon Pike, Eden Park 11, Manheim Township,
Lancaster, Pennsylvania, 17601, which premises are the-and
exclusive property of Financial Management Group, Ltd.
P

If you enter or remain, or attempt to enter, gain entry or


break into said premises, you will be committing the offense of
defiant trespass as set forth in the Pennsylvania Crimes Code,
Act of December 6, 1972, P.L. 1482, No. 334, Section 1, as
amended by the Act of June 23, 1978, P.L. 497, No. 76, Section 1,

8(\.-,
-7

18 Pa.C.S.

Section 3503, and will be prosecuted to the full

extent of the law.

Having been advised, govern yourself accord-

ingly.
!I

.7

RUSSaL, KRAFFT. GRUBER

HUBER

~anagement~ro&, Ltd
1729 Lititz Pike
.Lancaster, PA 17601
(717) 569-5383
Date:

October 2, 1987

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 416 of 646


Property of Advance Media Group

Page 2522 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Mr. Stanley J. Caterbo


October 2, 1987
Page 2

Please note that in accordance with the trespass notice


served contemporaneously herewith, you are prohibited from enter
upon FMG premises. Therefore please have your attorney contact
me to arrange the time and place for return of FMG property.

cc:

Mr. Robert Kauffman

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 417 of 646


Page 2523 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 418 of 646


Property of Advance Media Group

Page 2524 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 419 of 646


Property of Advance Media Group

Page 2525 of 2953

Thursday December 15, 2016


10/19/2006

In the Court of Common Pleas


US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COMMONWEALTH OF PENNSYLVANIA

. CATERBONE

STANLEY J

WAIVER OF ARRAIGNMENT
Ocbbber 5, 1987

AND NOW,

, I, the undersigned defendant, hereby acknowledge


that I am represented by the undersigned attorney who is the counsel of my choice, that I am charged with the crimels
bf
theft;--qirni'nal mischief;. qnd.~unlawfuldse of computers
~.

that mycasels
before the Criminal Division of the Court of Common Pleas of Lancaster County,
, . . will be called-for!trial
,
'Pa., a t thekourt House, Lancaster;Sa., on
i

~1

i
'

,~

'!

'

. . Novernkr 25, ,1987:

1@86
(trial date)
9

, and +at I may file an omnibus pretrial motion at any time but not later than

,-.

.
~ ~ q v ~ m b25,
k r 1987

, \, .,.
(303;:+j.s f

r~j

,.

ojl,! ,-.'y:.,,;,J
"$, . ,

January

~'tqidenta&$mt !kay commence d;&very aiany time but not later than fourteen (14) days from

'; ; i d j i ~ o arra&r&eit)
f
'

'.

,,

:,:;,.\

, {:'

..-;. :;.

<'
been
,$

/(p;e,of
, ' +
arraignmetit)

*,

idy~d-d
.'

-,;

9 f . d myrights by my undersigned attorney, I do hereby plead=/

said ehargeii,;and
, . , , , 1.d; l$iiby w'gi+qirrai&ment

on said charges. 1 further do hereby authorize my undersigned at-

I Not d$ty o i m y behalf


of said charges.
....

torney t o eitkr a bleiofi%@


;
4';'.

... ;, . '
[; ,

.
. .
r*

Not Guilty t o

2..

'

<

i
\.~

Defendant
STAXTLEY J
. .CATERBONE
,.
,.,
. . ,
~~~~

.A
rL$

.-$

*:+',,

yi

'

7.

.&'

,.'

..

Attorney'for Defendant
ROBERT D. BEYER
By signing the above Waiver of Arraignment, the undersigned attorney for defendant hereby certifies thpt he has
given said defendant all of the advice required for an effect~veand valid walver of arraignment.

Robert D. Beyer
Attorney for Defendant
1 1 0 81 Kinp S t r e e t . Lancaster, PA
Address

17602

344-7204
Telephone No.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 420 of 646


CLERK
OF COURT - WHITE COPY
Property of Advance Media
Group
DISTRICT ATTORNEY
PINK COPY

Page 2526 of 2953

Thursday December 15, 2016


DEFENDANT-YELLOWCOPY

:6 2

10/19/2006

US District Court For The Eastern District of Pennsylvana

REMIT TO

Section 3189 Federal False Claim Act

FW-tb7s U n r r

...

301 NORTH QUEEN STREET


LANCASTER, PA 17603
(717) 393.3941

'

- JOB DESCRIPTION

NEEDS

TYPESETTING
NEGS 6 PLATES

::n
,.

NEEDS

POSTED

.. ,,
.. .
7 ,

~.

BINDERY
OTHER

',<:
.

POSTED
' 5 .:
, ., L
-

ORIGINAL ARTWORK RETURNED TO CUSTOMER


YES

ARTWORK
. NO

NEGS 61 PLATES
YES
NO

OTHER
SERVICES

'I

Sir Speedy Centers' prices are calculated on a "cash wlth


order" basls. Therefore, all orders are on 'COD' cash on de.
livery basls, unless credit is already established by an acknowledged credit application. Terms on established credit
* accounts: Net on presentation. Balances unpaid after 30 days
from date of Invoice are subjec't to a service charge of lt/2 %
per month, or maximum allowed by law, if different, together
U.S.incidental
16-4014 CIVIL
RIGHTS CLAIM
3 withEXHIBIT
expenses
to collection,
including reasonable
attorney's
fees. Media Group
Property of Advance

FILED IN

SUB-TOTAL

w / -.2.G

DEPOSIT

Page 421 of 646


Page 2527 of 2953

Thursday
December 15, 2016
BALANCE DUE
10/19/2006
P E G PAY ALL R E M l n A N C E S TO THE

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 422 of 646


Property of Advance Media Group

Page 2528 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

L A W OFFICES

Section 3189 Federal False Claim Act

OLD. BEYER & HOMSHER

:!

'

EAST KING STREET


HARRIS C ARNOLD

7 H N U'. BEYLX

(IWIPMI

AVID G. HoMsHER
ARNOLD. BRKKEX BEIEII G BA

lOHN WILLIAM BEYER

tI957.19761

LESLIE GORBEY

IAMES P COHO
llPlSlqd61

ROBERT D. BEYER

& HUYER
1729 L i t i t z Pike
Lanczster: PA 17601

Dear C r i s s :
October 2 , 1987
Mr. Caterbone on

as well as t h

a r y Hearing t h e

:at t h e su.ggestion of t h e District Attorney's Office,


R e s t r a i n t , and T e r r o r i s t i c T h r e a t s were d i s m i s s e d
of t h e f t , c r i m i n

r r e r . Mr. Caterbone w i l l now be f a c i n g t h e c h a r g e s


e i and unlawful u s e of t h e computer.

With r e f e r e n c e t o your l e t t e r o f October 2nd i n which you set


f o r t h n i n e ( 9 ) items belonging t o Federal Management which are a l l e g e d l y i n
M r . Caterbone's p o s s e s s i o n , I f e e l i t necessary t o b r i n g t o your a t t e n t i o n t h a t
&. Caterbone h a s s e v e r a l items o f h i s p e r s o n a l p r o p e r t y i n t h e p o s s e s s i o n of
R3G. Those items i n c l u d e h i s desk and credenza , bookcase, s e v e r a l c h a i r s and
t a b l e s , a s o f a , f i l i n g c a b i n e t g p i c t u r e s , a s s o r t e d achievement plaques, p l a n t s ,
o e r s m a l f i l e s andmisce1lan;ouscomputer equipment. O f c o u r s e , we w i l l also
assert our. demand f o r t h e r e t u r n o f t h a t p r o p e r t y i n t h e same manner which you
have a s s e r t e d y x r d e m a n d o f October 2 , 1987.
Obviously, t h e r e a r e f a r more i ~ p o r t a n tt h i n g s t o be r e s o l v e d
t h a t h e t r a d i n g o f computer equipment, p l a n t s and p i c t u r e s ! I a m n o t sure t h a t
M r . Caterbone is i n a p o s i t i o n t o s e t t l e any d i s p u t e s , p a r t i c u l a r l y w h i l e t h e
c r i m i n a l charges are s t i l l pending a g a i n s t him. I t h i n k i t might b e s t be approp r i a t e t h a t we both sit down with o u r r e s p e c t i v e c l i e n t s and f i n d o u t what t h e y w i l l
be s a t i s f i e d with i n o r d e r t o s e v e r any b u s i n e s s r e l a t i s n s h i p c u r r e n t l y e x i s t i n g . It seems t h a t it would be f a r more economical t o work toward t h a t end
r a t h e r then t o n i c k l e and dime each u i t h p e t t y property c!.aims.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 423 of 646


Page 2529 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

a g e tcio
Christina L. Hausner, Esquire
Cctober 9, 1987

If you have any s w e s t i o n s as to how we might get this ball


rolling, I will gladly listen with attentive ears. Thank you very ~ u c hfor your
continued cooperation in the above.
Very truly yours,

ARNOLD, BEYER & HOMSHER

Robert D. Beyer
RDB/reg
cc:
Stanley Caterbone i/

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 424 of 646


Page 2530 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

A R I ? ~ T R O D U C T ~ GTO
~ J IKTERCON SPECIAL SERVICES INCOk\PORATED

The o f f i c e r s a f I c t e r c o n r e a l l f o r m e r S p e c i r ! \ g e n t s o f
t h e F . B . 1.
T h e i r combi.:ed e x p r i e n c e i n g o v e r n m e n t i n v e s t i g a t i v e and p r i v a t e s e c u r i t y f i e l t ! : : t o t a l s o v e r 100 y e a r s .
The
members o f I n t e r c o n ' s i r ~ v e s t i c , ; ., i v e s t a f f h a v e a1 1 h t ~ dp u b 1 i c
l a w enforcement and p r i v a t e i n s t i g a t i v e e x p e r i e n c e and t h e y
i n c l u d e C e r t i f i e d P u b l i c A c c 3 ~ : i a n t . s w i t h b o t h b u s i n e s s and
I n t e r n a l kevenue S e r v i c e e x p e r i e n c e .
We h a v e c o n d u c t e d s u c c e s s ! i i l i n v e s t i g a t i o n s f o r some 3 f
t h e m o s t p r e s t i g i o u s l a w f i r m s . a n d some o f t h e l a r g e s t c o m p a n i e s
i n the world.
T ; ~ e j e i n v e s t i g a ' t i o n s have i n c l u d e d 3 r e - t r i a l
i n v e s t i g a t i o n s o f %any t y p e s i . ! t . l u d i n g c o n t r a c t v i o l a t i o n s ,
fraud, t o r t s , d e f a l c a t i ~ n s , l . i > e l s , embezzlements, p a t e n t and
c o p y r i g h t , a r s o n a n d i n s u r a n c e r e c o v e r i e s . He h a v e h i d s u c c e s s f u l i n v e s t i g a t i o n s i n v o l v i n g c.!rporate a c q u i s i t i o n s , takeovers.
pel-;onal
s e c u r i t y and executiv: personnel r e c r u i t m e n t .
;.le n a v e
q u a l i f i e d F.B.1.-trainc?
~ o l y c r a p he x a ~ i n e r s , a n d we o f f e r t h e
usual f o r e n s i c science bervice;,
s u c n 2s d o c u m e n t e x " a i n a t i o n ,
handwri king a n a l y s i s , etc.

6,.

,i

d,
,);-ov j L s d d j , i i c e t - . . s < ; g t j 6 ,
ti s e ~ v i ; e ; i ~ r !..:.,I : ..I c
o f f i c i z i s , c o r p o r a t e o f f i c e r s ;rid p r o m i n e n t f i g u r e s i n t h e
e n ~ e r t a i n m e n tf i e l d .

We h a v e c o n d u c t e d d e t a i l e d S e c u r i t y s u r v e y s f o r some o f t h e
p r i n c i p a l banks, c o r p o r a t i o n s , u n i v e r s i t i e s and governmental
agencies i n t h e U n i t e d S t a t e s t o a s s i s t them i n enhancing t h e
physical sesurit y o f t h e i r prenises.

F o r l a n d l o r d s a n d l e a d i n g r e a l t y management f i r m s we h a v e a l s o
conducted such s e r v i c e s as - s e c u r i t y s u r v e y s , b u r g l a r y i n v e s t i g d t i o n s and work up o f t e n a n t s " p r i m a r y r e s i d e n c e " t y p e c o u r t cases.
( ,

\r

O u r o r g a n i z a t i o n was e s t a b l i s h e d i n 1 9 7 2 a n d i s l i c e n s e d a s
p r i v a t e s e c u r i t y a g e n c y b y t h e S t a t e s o f New Y o r k a n d C o n n e c t i c u t .
We a r e b o n d e d a n d f u l l y i n s u r e d .

W CIVIL
EAST 42N0
STREET-SUITE
370-4430 15, 2016
EXHIBIT U.S. 16-4014
RIGHTS
CLAIM 1045.NEW
Page 425YORK.
of 646NEW YORK 10165. TELEPHONE
Thursday(212)
December
Property of Advance Media Group

TELEX ?36 520 (TATS)

Page 2531 of 2953

?Gfi

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

M i c h a e l M. O ' R o u r k e .
St.. J o s e p h ' s C o l l e g e , A.B.,
U n i v e r s i t y , M.B.A.
F . B . I . 1942-1965, L i a i s o n and
New YTF~
Pub1 i c R e l a t i o n s S u p e r v i s o r .
Director o f Security, A l l i e d
S t o r e s 1965-1968.
D i r e c t o r c f S e c u r i t y , American B r o a d c a s t i n g
Company i 9 6 8 - 1 9 7 6 , r e o r g a n i z t d a n d d i r e c t e d t h e p l a n t a n d
After
p e r s o n n e l s e c u r i t y f o r ABC a1.d i t s many a f f i l i a t e s .
r e t i r e m e n t f r o m ABC, c o n t i n u e d a s t h e i r c o o r d i n a t o r o f
s e c u r i t y f o r World Olympics a t Innsbruck and Montreal.
Paul P i c c o t t i .
George k a s h i n g t o n U n i v e r s i t y .
University
o f S c r a n t o n , M a j o r i n E d u c a t . ~ o n a n d I n d u s t r i a l Management.
E x p e r i e n c e o v e r t w e n t y y e a r s i n e l e c t r o n i c computer and
c o m p u t e r s e c u r i t y f i e l d w i t h RCA C o m p u t e r D i v i s i o n a n d MSC
Computer Systems, I n c .
Has s e r v e d g o v e r n m e n t a g e n c i e s a n d
b u s i n e s s f i r m s i n c l u d i n g bani:ing, t r a n s p o r t a t i o n and i n s u r a n c e
t o r e v i e w and e s t a b l i s h s e c u r i t y f e a t u r e s f o r b o t h computer
programs and computer o p e r a t i o n s .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 426 of 646


Page 2532 of 2953

Thursday December 15, 2016


10/19/2006

111 1 LKLUN

US District Court For The Eastern District of Pennsylvana

SPECIAL bERVlCES,
INC.
Section
3189 Federal False Claim Act

STAFF QLIAL . FICATIDNS

Frank R. Ger,rity.
S c r a n t o n U n i v e r s i t y , B.S. i n
a u s i n e s s A d m i n i s t r a t i o n , G e o r q e t o w n U n i v e r s i t v . ' LLB.
F.B.I.
1950-197:.
S u p e r v i s o r M a j o r i h e f t Squad, c r i m i n a l D i v i s i o n .
C o o r d i n a t o r Organized Crime S e c t i o n .
F.B.I.
Polygraph
Coordinator.
D e m o c r a t i c N a t i o n a l C o n v e n t i o n , New Y o r k C i t y
1976, o r g a n i z e d ayd s u p e r v i s e d F.B.I. s e c u r i t y d e t a i l and
managed l i a i s o n w i t h a l l o t h e r a g e n c i e s .
John J . Danahy.
Columbia
G e o r g e r o w n U n i v e r s i t y , A.B.,
linive-y
LLB.
F . B . I . 1942-19.63.
B o t h C o u n t e r 1 . n t e l l i q- e n c e
and C r i m i n a l S u p e r v i s o r .
Director o f Security, National
F o o t b a l l Leasue 1968-1980.
A u d i t e d s t a d i u m s e c u r i t y f o r 28
member t e a m s .
S u p e r v i s e d a1 : s e c u r i t y a r r a n g e m e n t s f o r 1 2
S u p e r B o w l s , i n c l u d i n g game s i t e , t e a m r e s i d e n c e s a n d p r a c t i c e
s i t e s , p r e s s and o f f i c i a l s ' p e r s o n a l s e c u r i t y .
Lectured American S o c i e t y I n d u s t r i a l S e c u r i t y and I n t e r n a t i o n a l
A s s o c i a t i o n o f Campus Law E n f o r c e m e n t A d m i n i s t r a t o r s .
Has
o r g a n i z e d and s u p e r v i s e d m a j o r s e c u r i t y a u d i t s p e r f o r m e d b y
i n t e r c o n i n b o t h p r i v a t e and p u b l i c s e c t o r s .
.
; i o m a s ?i.,iolan.
St. t.. . : I I I I ' S U n i v e r s i t y , 6 . S . - i t , > i i 5 . : . 1 : $ ~
Administration:
S t u d i e d e l e c t r i c a l e n a i n e e r i n q Mantiattan
L 3 1 1 ege, M i s s i s s i p p i S t a t e a n d ~ e o r ~ i a - ~ e c hf o. m m u n i c a t i o n s
O f f i c e r , U.S. A r m y .
N.Y.C.P.D.
1946-1951.
F.B.I.
1951-1959,
Criminal Supervisor.
President, Tolan Investigations, Inc.
1 9 5 9 - 1 9 8 0 , i n v e s t i g a t i v e and s e c u r i t y c o n s u l t a n t s s p e c i a l i z i n n
i n i n d u s t r i a l , r e t a i l and r e a l t y problems.
Joined Intercon
1980. P o l y g r a p h e x a m i n e r .
Supervises and conducts a l l t y p e s
o f i n v e s t i g a t i o n s and s e c u r i t y s u r v e y s .
Specializes i n investigations involving r e a l t y matters.
Member o f N a t i o n a l Law
Enforcement A s s o c i a t e s and A # l e r i c a n S o c i e t y f o r I n d u s t r i a l
Security (holds t h e i r C e r t i f i e d Protection Professional Rating).
New Y o r k C i t y F i r e depart men^ a p p r o v e d F i r e S a f e t y D i r e c t o r .

EXHIBIT U.S. 16-4014


RIGHTS
CLAIM
60 CIVIL
EAST 42NO
STREET-SUITE
Property of Advance Media Group

Page
427 YORK.
of 646NEW YORK
1045. NEW
520 (TATS)
PageTELEX
2533 of236
2953

Thursday(2123
December
10165. TELEPHONE
3704430

15, 2016
10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 428 of 646


Page 2534 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

October 12, 1987

Mr. Robert Byers, Esq.


110 E. King Street
Lancaster, PA 17603

Dear Mr. Byers:


Please be advised that I am purchasing real estate currently
owned by a client of yours, Stanley J. Caterbone.
At Stan's
request, I have scheduled settlement for purchase of the premiss
located at 433 W. Marion Street for 2 : 0 0 PM on Friday, October
23, 1987.
Settlement will take place at the Pioneer Agency,
located at 44 N. Lime Street in Lancaster, PA.
Stan indicated to me on Friday, October 9, that he probably would
not represent himself at settlement. Therefore, this notice is
sent to you assuming you will be representing Stan at
settlement.

I have enclosed a copy of the "Agreement of Salen.


change I foresee is that an Addendum to the Agreement
signed, in that the seller will pay two point. rather
transfer taxes.
The difference between these two
$32.18, which I will pay at settlement.

The only
will need
than both
costs is

By law, I need a
One other condition still needs resolved.
certificate from the City of Lancaster which states that the
property meets all City Code requirements. Section 6 (b) requires
that the responsibility of this lies with the Seller. Therefore,
I will insist on reimbursement for all fees and work performed to
bring this property to Code standards. The fee for the City Code
inspection is $50.00, which I paid today, and there is some
electrical work needed which is scheduled for later in the week.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 429 of 646


Page 2535 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I have enclosed a copy of the "Agreement of Salen and a "good


faith estimate" which I have revised to reflect the changes in
the Agreement of Sale. Additionally, I have included a Notice of
Code Violations for the property.
I will be out of town until October 19, 1987. Upon return, I
will contact you with any additional information needed.

D
L
P
~
/
B
Sin erely,

anes D. Warner

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 430 of 646


Page 2536 of 2953

Thursday December 15, 2016


10/19/2006

w,reaid(e> D ~ 0 1K velaware N A
US District Court For C
The
Eastern
of Pennsylvana
RE
D I T District
ACCOUNT
CENTER

Section 3189 Federal False Claim Act

COLLECTION DEPARTMENT
P.O. BOX 8 9 2 3
bJTLMINGTON, DELAWARE 1 9 8 9

'

10)

833-3012

CONTACT:
I

M FERRIOLA

OCTOBER 28,

@@

CoreStates Ban
of Delaware H A

1987
STAN J CATERBONE
2 3 2 3 NEW D A N V I L L E P I K E
CONESTOGA
PA
17516

ACCT.

NO.

4261620027015

BALANCE
CREOIT L I M I T
AMT PAST DUE

$3559.27
$3500.00
$280.00

....

..
DEAR STAN J CATERBONE

T H I S O F F I C E HAS ATTEMPTED TO REACH YOU B Y TELEPHONE I N ORDER


D I S C U S S YOUR S E R I O U S L Y DELINQUENT ACCOUNT.

(3

WE WOULD L I K E TO SPEAK TO YOU ABOUT T H I S , AN0 WE REQUEST THAT


YOU TELEPHONE T H I S O F F I C E I M M E D I A T E L Y A T THE NUMBER SHOWN
ABOVE.

C O L L E C T I O N DEPARTMENT
C R E O I T ACCOUNT CENTER

CD8Y0,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 431 of 646


Page 2537 of 2953

t.,c

Thursday December 15, 2016


A CoreStates
Bank
10/19/2006

Judge tells Guerin to pay $189 millic


US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Fraud payment would go to two Ferranti subsidiaries


-

h a d l a i l c i l t n r u ~ ~ p l y ~ n l o r r nbut
~ti~
e,t~ ~all, of ~ c r r a ~ t , . ~
" " t i an nccounl of any profitr
to backuplllsrerslolluft~bmfs
<ourl r l a i m s a C a l n s t ~ u ~ r i n ,
mndetllmuyhtheallepedfraud,
C a r i # n ,who buill l n l r r n a t ~ o a Jartlce l l a f f m n n said Cuerin a" ("II Fcrranla who else was
Br8tish iustlce < d a y ur. a1 Slilrial & Contrnl mtcl an hacl fclilrd to explain what h a p in'o1"edinlhrsrhrme.
U : ~ WOrld~idrconelumriatrdllrlng p ~ n r dto money mlsring fmm
Gu*rin, i n a brief telephone
deren former L ~ ~ I C ~ S dc.
ienrcronlrarlor
H G L S C . th? I!IHUS. had t r . ~?haiged
the accounts of ISC ~
~ ronversatlon
~
fmm
h hi, hame
~
n n to pay SIW million to lr,,
lalu 1989 with rhratini: F ~ ~ C . Z I plea ~ t d and
.
ISC ~~~d~~ PLC
Naples. F I ~ , said he was una~
~
~
~
~
t 11. ia nrltish
~
~defense
b
~ a- ~
d of, the~
~
~ in
~ hi; ~ ware of the court deciaon. ~e
,ha, hr~
rorpol
two
r e i c r r d calls t o his
Ilsn, out of an rstimafcd $350
conplomeratc.
legedlydrfravde~l.
High Coud Jusl8ee MI. IPII~
m ~ l l ~ o n r l i c n l h r t w o c o n ~ p ~ ~ n i In
i s addition to repaying the Joseph A. Tate of Philadelphia,
m a n r c ~ ~ r tGr UdC ~ ~ ~ drnial
,'S
of m r r e e d
m8srxnp manry, the judge
who could be reached immedir e i p ~ n s l b s l # l yfor the ollcgud
Brlthrll press RCCOUII~S i m d t i ~ e i i nmust pay u n p ~ e i t i o d a t e l y f o r e o m m m l .
frauds brrruae, h r raid, Gaerin t o d a ~ ' s d r r i s ~ o n r r r u l r rsome.
1lrmn8cs and rorlr, give ~ e r F c r r a n t i a t t o r n e y .
d
had

%*fmedschrelber
sIBIIW~I~~

said. Guerin must givc Fcmmti m account oral

~~8

'

law"~a ' m d m
l the company's
~
s"'Lthal
inheclted subsldlar
ieswhose value was grn=ls i n
fldted by fake dcfmse c o n
~~t~~~~ 1 0 ~ 4md 19m,
F~~
rant, claimed, i t p a d
s4i0

man c o m p a n ~ r rf n r u
flcr~llarurrontrarts
When queslloned
contracis. ~
~
rin yrvc " n a n - a d m ~
"dc"ials." lluL no1 a n
wha'lladacrurred
~ ~ ~W C U
~ E RbI I

LANCASTER
NEW ERA

114th Year-No. 35.455

METROPOLITAN

LAWCASTER. P A ,MONDAY, JUNE 18,1990

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 432 of 646


Property of Advance Media Group

Page 2538 of 2953

w-.r-

s,m.W.6+

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Residential
Appraisal
Specialists
Inc.

147 N. Shippen Stre


Lancaster. PA 1760

October 29, 1 9 8 7
Mr. Michael Caterbone
Mr. Stanley J . Caterbone
HD 1 New Danville Pike
Conestoga, PA 17516
Dear Sirs:

We have been requested by Parent Federal Savings Bank to make


periodic inspections of your property at KD 1 New Danville Pike.
~

Within the next


appointment.

day

or

so we-will call

you

to

set

up

an

Thank you for your cooperation.


Cordially Yours,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 433 of 646


Page 2539 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act


LAW OFFICES

AIINOLD. BEYER & HOMSHER


l I 0 EAST KING STREFT
LANCASTER. PA 17602-2876
OliN W. BEYER

l i l i i 394-7204

,AVID G. HOMSHER

l O H N WILLIAM BEYER
LESLIE GORBEY
IAMES P. COHO
,1919-I9861

ROBERT D. BEYER

M r . S t a n l e y J . Caterbone
2323 New D a n v i l l e P i k e
Conestoga, PA 17516

Dear M r . Caterbone:
I am e n c l o s i n g h e r e w i t h your copy of t h e waiver of a r r a i g n m e n t
I r e c e n t l y f i l e d on your b e h a l f . Accordingly, you may now d e l e t e t h e
scheduled a r r a i g n m e n t from your calendar.

which

I a m i n t h e p r o c e s s o f p r e p a r i n g a n i n f o r m a l d i s c o v e r y r e q u e s t t o be
s e r v e d upon t h e L a n c a s t e r County O f f i c e of t h e District A t t o r n e y . A s s o o n
as I have r e c e i v e d a r e s p o n s e from them, I w i l l be i n touch w i t h you i n o r d e r t o
schedule
a m u t u a l l y c o n v e n i e n t d a t e and time t o d i s c u s s o u r p o s s i b l e d e f e n s e s .

Very t r u l y y o u r s ,

,-..,

ARNOLD, BEYER & HOMSHER

Robert D. Beyer
RDB/reg
Encl .

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 434 of 646


Page 2540 of 2953

Thursday December 15, 2016


10/19/2006

Ine Last uay to t l l e an Appeal lrom this Ueterr

NOTICE

~ O M M O N W E A L TOF
H PENNSYLVANIA

US DistrictCEPARTMENT
Court For The Eastern
District
of Pennsylvana
OF LABOR
AND
INDUSTRY

Section 3189 Federal False Claim Act

0F

OFFICE OF EMPLOYMENT SECURITY

Page 2 o f 2

1 2 1 0 1 0 1 4 1 6 1 0 1 9 1 5 1 91
I

PD U C

Type Claim

RIGHT OF APPEAL
I F YOU OLSAGREE WlTH THIS OETERMINATION,
YOU MAY APPEAL IF YOU WISH TO FILE AN
APPEAL. YOU MUST DO SO ON OR BEFORE THE
DATE SHOWN ABOVE. SEE BELOW FOR APPEAL
INSTRUCTIONS.

Claimant

Stanley J. Caterbone
2323 New D a n v i l l e P i k e
Conestoga, PA 17516

and

10-1 8-87

AE Date

Social Sacurity Account Number

Name

11-2&-87

is

DETERMINATION

FINDINGS OF FACT

In addition, claimant was terminated f r o m h i s employment w i t h Financial Manageme


Group e f f e c t i v e 7-1-87.
The final incident occurred between 10 p.m. on 6-30-87
and 8 a.m. o n 7-1-87 when claimant entered the W i n e a s premises and removed
corporate f i l e s , corporate seal, corporate atock regiater a d c e r t i f i c a t e s ,
computer disks containing oorporate financial records and c a p i t a l f i l e s .
C l a i m a n t had also attempted t o drain two corporate checking accounts o f $27,000
by writing checks to himself. He enteredcthe o f f i c e s o f several individual
representatives and removed f i l e s f r o m t h e i r desks and f i l e cabinets.

Under Section 402(e) o f t h e Law, thi~


muat be considered willful misconduct and
b e n e f i t s a r e also denied under t h i s Section.

DETERMINATION

'402('

Insmordwrs with the provirions of the Panrylvenia Unmploynwnt C a n ~ l aLm,tha


r
fdlowlng am:
-APPROVED

DISAPPROVED undn ~ k t i o n ( d

under Sstlonlsl

of ma Law:
Application fw ~

of ma ~ m :

t Dated
1

Applkatlon for Ennsflta

pCY-M

Claim for Waiting Week Endlitg


clnirnls) for

mwd

W i m for Waiting W n k Endlitg

lS2h47

cialm(t1 for ~ e e k b~i n d i i t g

10-31-87

Miladon:

11-9-87

mli~radon:
SIGNATURE OF OES REPRESENTATIVE

DATE

APPEAL INSTRUCT^. Undw S o d o n 601(el d tho Pmnwkanb Unmplovm*m Comwnmlon Law. thk r(.trml~tion b r o m r fl-I ur
a p m l lstlrr*lvfll.d. I f you dltagm.wlth thlldmrmlru!lon. vou r n . v f I l * ~ n a ~ a
~ tI h e 0fllnwh.nvov.n
chlmlnpb.n.(morfll.~n.p~l b
I+the .
-I
Is n1.d In -n.
It mum be fl1.d on or b d o n the Intd.v m .pp..l *om in th.u p p r
Ifme .pwI Is f1l.d by MII. the nppoml l m o r mum lnelud. v w r rum. and
r s u r l t y numbr, and sua p c H l a l l v mn you w l h
an . o w l from thls d*t.rmlrutlon. The a p p u l lmr m u l t be add&
m
Pmt"vlv.nh
O f f l w of dmploym.ntScurlty whish .pr
the l o w , rl*t corn* and p0stm.rk.d on w bofon tho 1a.t dav ta a p p n lhorrn In t h - u p w rlght conwr.
EMPLOYER: THlS IS NOT A DETERMINATION ON RELIEF FROM CHARGES
STATE JOB SERVICE OFFICE

rwt -.

Employer

C?

49.5.C

PinaPoial Management Group


1755 Oregon Pike
Lancester,PA 17601

Name

And
Address
uc-44

ma

-I

PY;-.-L

:s,.:

F-9-y-r-+

5.c..2

:,',::,,,

- h,

:trcct

f r.::,2ce

e.9. fix i4:3


bn-xk,

FA lib03

0312

-I

L
~

'2::

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

See Reverse Side

for

Provisions of t h e

Page 435 of 646


Page 2541 of 2953

Law

Thursday December 15, 2016


10/19/2006

COMMONWEALTH O F PENNSYWANIA
Section 3189 FederalNANCY
False Claim
Act
L. DIANA
ROBERT P. CASEY
Secretary

ROBERT
M. LAM
US District Court
For The
Eastern District of Pennsylvana
Chairman

Governor

EDERICK H. PLANK

ELIOTT KLElN
Chief Counsel

Pennsylvania Securltles Commlsslon


333 Market Street
Harrisburg, PA 17101-2209
Telephone: (717) 787-8061

November 25, 1987


.

J. Caterbone
New Danville Pike
Conestoga, PA 17516

2323

RE:

Financial Management Group, Ltd.


Lancaster, Pennsylvania

Dear Mr. Caterbone:


With reference to our telephone conversation on November 23,
1987, I feel that we suffered from a lack of communication
and to avoid any misunderstanding in the future, I am
requesting that you submit your complaint in writing.
I

Enclosed is the Commission's standard complaint form which


you may use or use as a guide.
The Pennsylvania Securities Commission does conscientiously
review and take appropriate action relative to all complaints
pertaining to its mandated purpose.

Yours truly,

Howard L. Eissler
Securities Investigator

HLE:sec
Enclosure

j.

1109 STATE OFFICE BUILDING, PHILADELPHIA, PA 19130-4088; Telephone 215560-208


806 STATE OFFICE BUILDING, PITTSBURGH, PA 15222-1210; Telephone 412-565-5083
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 436 of 646
Thursday December 15, 2016
OFFICES

Property of Advance Media Group

Page 2542 of 2953

10/19/2006

I I

US District Court For The Eastern


District of Pennsylvana
VALORE,
McALLISTER,

3189 Federal False Claim Act


WESTMORELAND, GOULD, VESPER &Section
SCHWARTZ
h PROFES5lONhL CORIDRATION

STANLEY .J.
CATERBONE
HOAU
STONE WARBOR. N J 08247

MR.

c.=-.sa-? HERKEI..EY

ACCOUNT P R E V I O U S L Y RENDERED
US.
STATEMENT

BALANCE

INTEREST

W I L L I A M h BETTY O'klAFiA

9824 AUGUST
18 1987
3.0026 SEPTEMBER 21 1987

Slt362.50

ss0.00

$46.57
$1.14

CATERDONE.

%1.4(

e:

STANLEY J

' J017
I N T E R E S T WILL HE CHARGEKI AT
1.00%
PER MONTH ON ACCOUNTS U N P A I D 30 DaYS
AFTER
T H E DCIVIL
A T E RIGHTS
OF THE
STATEMENT.
EXHIBIT
U.S. 16-4014
CLAIM
Page 437 of 646

Property of Advance Media Group

Page 2543 of 2953

Thursday December 15, 2016


10/19/2006

----

-..-r..h."m n

lUUJlllOl

JCI V l C e S

US District Court For The Eastern District of Pennsylvana


1901

- 1925 Lahiah Streat,

Section 3189 Federal False Claim Act

Allentown. Pennsylvania 18103 215-791.2230

..-..-..--

(Same ar " I N V O I C E T O " unlerr otherwire

GLOBAL E N T E R T A I N M E N T
GROUP LTD.
PO BOX 40
CDNESTOGA, P A
17516

SAME

INVOICE DATE: 11/30/87

DEPT: 2

1
<

DUPLICATES
DIAZO DUPLICATES

SILVER

~..

'8
c

GROSS AMOUNT

930.54

TAX

55.84

9
-

FREIGHT

1.
(

A N V C W U FOR DAM-CE OR SHORTAGE MUST BE U A M


W#TH~N
FIVE D*YS FRW THE OATE OF THO* tnvo#cc

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

ORIGINAL INMiCE

Page 438 of 646


Page 2544 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 439 of 646


Property of Advance Media Group

Page 2545 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

:*\
C

2 unwr
t
.tt****'

Section 3189 Federal False Claim Act

R
*

OFFICE OF THE INSPECTOR IN CH


Harrisburg. PA 17105-9000

December 17, 1987


Stan Caterbone
40 Box PO
Conestoga PA 17516

RE:

False Change o f Address


Complaint No.:
08662

Dear P o s t a l Customer:
I have r e c e i v e d a complaint concerning t h e a l l e g e d f i l i n g o f a f a l s e
change o f address o r d e r f o r y o u r m a i l .

To a s s i s t me, please t a k e a moment t o complete t h e enclosed q u e s t i o n n a i r e


and r e t u r n i t t o me i n t h e enclosed pre-addressed envelope which r e q u i r e s
no postage.

I f you need t o c o n t a c t me concerning t h i s matter, please c a l l t h e number


shown below.
When c a l l i n g o r w r i t i n g me, please make r e f e r e n c e t o t h e
complaint number I i s U e d above.

Thank you f o r y o u r - a s s i s t a n c e i n t h i s regard.

<-,

Sincerely,

Postal Inspector
215-921-7101
Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 440 of 646


Page 2546 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

QUESTIONNAIRE
(FALSE CHANGE O F ~ D R E S S )

YOUR NAME:

{0./3&

ADDRESS:

COMPLAINT NO:

\-.-

08662

A/L---Q~&~
/4/7LT/6

PHONE NO:

1.

7Zd

/.d-f

Do you know who f i l e d t h i s f a l s e change o f address, o r do you


have any suspects?
xf Yes,

Yes

NAME:

%4,/3

/7$3-

ADDRESS:

L] No i]
- 20~mL-r

~ F A W

o&w~-&

/dgc,/~&r/ J ~ L T L & / T
?A,+
Aurs

,A

J /

you suspect t h i s person?l"


L

d d L

3.

flqAzcn?&

/
'

Have you contacted y o u r l o c a l p o s t o f f i c e ?

Yes

N0I-I

I f not, immediately c o n t a c t them and request t h a t t h e address

4.

change be cancel led.


Have you been expecting any v a l u a b l e m a i l which has n o t been
received

(i.e.,

check, c r e d i t card, etc.)?

Yes

No

Ifyes, please f u r n i s h t h e type of m a i l and any i d e n t i f y i n g numbers


such as check number, c r e d i t c a r d number, etc.

&$&7,2.

'

YouyIsiy6ature

F+L.

Date

THANK YOU FOR TAKING THE TIME TO COMPLETE THIS QUESTIONNAIRE.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 441 of 646


Property of Advance Media Group

Page 2547 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

..

HEARING WILL BE AT THlS DISTRICTCOURT

k. ..

I..

COMPLAINT NO.
DOCKET NO.
NOTICE DATE:

717 569-8?74
PLAINTIFF:

DEFENDANT:

Scott Robertson
1755 Gregon P i k e

vs.

LancJster,PA

17601

J.

L
THlS IS TO NOTIFY YOU THAT:

q DEFENDANT INTENOSTO DEFEND


q THIS CASE CONTINUED TO
Idate & timel
ATTHE REOUESTOF:

q THE DEFENDANT
(name) StaAl~?yC a t e r t a n c
=JUDGMENT WAS ENTERED FOR
OJUOGMENT WAS ENTERED AGAINST Inamel S m t t RObaztson
I N THE AMOUNT OF
ON (date) Jao3JaEY 7. 19BO
q DAMAGES WlLL BE ASSESSED ON Idate & time)
O T H I S CASE STAYED UNTIL FURTHER NOTICE.
THlS CASE DISMISSED WITHOUT PREJUDICE
POSSESSION GRANTED
q POSSESSION NOT GRANTED
q LEVY IS STAYED F O R OAYSOR OGENERALLY
STAYED

07:

$2035.42

1:
'i.

*;

HEARING WILL BE HELD


COPYto:
AOPC

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

ANY PARTY HAT THE RIGHT


TLl APPEAL WlTHlN 3 DAYS
OF THE DATE OF JUCGMENT
BY FILING A NOnCE OF
APPEAL W l W THE C W R T OF
CUWKN PLEAS

OTHE
PLAINTIFF

,:

,/

..
'

I &

&?

. .;.

t&?&&b2$ :J$>Z~@..:
(signed)

(SEAL)

/District Justice)

31684

. .... :...
..i
,s, .,! >'.
.
'

nPlalntiff'$ Anornsy
nDefandant'r Attorney

Idate & timal

PLAINTIFF OR PLAINTIFF'SATTORNEY

Page 442 of 646


Page 2548 of 2953

_(

I__.-.

Thursday December
15, 2016
i/
10/19/2006

Guerin loses case

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Continued from Page One

ing cash had been traced to a


Pennsylvania charity operated
The judge said he could not be- bv
~" Guerin,
- -~~~~
lievc that-Gucrin was unable to
At the height of his career in
provide inforrnatlon about what Lancaster, Guerin funded numerous charities here and
happened to the money.
That opinion was strengthened abroad through Parent induss
holdmy compabv Guerin's admission that the tries, h ~ private
P-anamanian companies werecs- ny. His donations were estimated
tablished, operated and dls- a t $10 million throueh the 1980s.
said Guerin's failure
solved under his instructions, the to Hoffman
provide any information to the
judge said.
court was not the reaction of a
The judge noted that ~ u e r i n litigant
his best to comolv.
~".
had acknowledged that the indi- but- wasdoing
a
pkrfuniiory
answer.
viduals named as "managing directors" on documents for-the which could fairly be descr~bed
Panamanian companies did not as contemptuous.
A legitimate litigant would
exist.
have offered some explanation to
If the directors of the compa- the
court, he said.
nies did not exist, the judge said,
But, the justice said, the sworn
it follows that the contracts isfiled by Guerin
sued by them could not be genu- statement
showed
a
determination
on. his
ine.
"If they were not genuine con- part not to assist Ferranti or its
tracts, then the money must have subsidiaries in any way to locate
been paid out for some ulterior the money.
The justice said he could not
purpose. and if it was, then Mr.
Guerin must know something take sanctions against Guerin for
about what happened," Hoffman failing to provide additional information.
said.
"As Mr. Guerin is out of the juHe noted that some of the missrisdiction, the court has no sanction against him except to say
that anyone who wished to defend
proceedings in this country is required to play according to the
rules of this court. He has not,"
District Judge Daniel H. the justice said.
Early this afternoon, Richard
Huyett III has turned down the
sentence reduction request of Dunn, a Ferranti attorney, said
jailed Lancaster defense con- the company was pleased the
court has decided in its favor.
tractor James B. Christian.
"Thecompany's never had any
But Christian, theGrmer president of United Chem-Con Corp., aoubt .about the truth and has
can ask again later for a cut in his confidence in the judicial system
six-year fail term, a spokesman in the.U.K. (United Kingdom) and
here to get to the bottom of what
for Huyett said.
Christian has been jailed in the happened," Dunn said in a telefederal prison in Loretto, Pa., phone interview from his Baltisince July 1989 for his role in a moreoffice.
Dunn noted that the British
contract fraud that cost the Defense Department and Meridian judge had ruled on the basis of
statements filed by both sides,
Bank an estimatedS15 million.
Christian had asked for a sen- without a trial occurring.
Apparently the judge believed
tence reduction, based on his cooperation with federal prosecu- the case "was soone-sided that a
tors in on-going investigation of trial was notnecessary," he said.
defense frauds here.
Judge Huyett's order gave no
(Staff writer Tim Buckwalter
reason for denying the request.
alsocontributed to this report.)
~

-~~
~

Christian denied
reduced sentence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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- .

-- ..- . --..-.

...

c..-nuauas

R EDistrict
V d.81 Court For The Eastern District of Pennsylvana
US

,.

~ vnc ~K C V I C R

Section 3189 Federal False Claim Act

REFEREE'S DECISION

5 . 5 . A C C T . NO.

APPEAL NO.

/ \

rStanlev

Cat9rbne
23?3 N e w Danvillc Pike
Conestcqa, Pa. 17516
,T.

I
D A T E A N 0 N A T U R E O F OFFICE O F E M P L O Y M E N T S E C U R I T Y 5
OECISION:
- -- -

- c'

12/16/87

11/09/07 -CIJ\IMAElT INEJJIGIRIZ Section 402 ie) , Wilful m i s c c d u c t


lX3: S t a r i n i e r i

HEARING APPEARANCES:

_ ___

HEARING D A T E L,NO LOCATION

- Lancaster,

O A T E O F APPLICATION

FOR BENEFITS

Penn~lvania
COYPENSABLE WEEK CNO

10/18/87

10/31/R7

WAITING WEEK ENDING DATE

CLAIMANT

EMPLOYER

OES REPRESENTATIVE

OTHERS ISEE BC-1091

10/24/87
CLAIMANT APPEAL

EMPLOYER A P P E A L

FINDINGS OF FACT:

Cj

1.

The claimant was l a s t ~mployedwith Financial MamgBnent G m u p i n chame of


the emplover's m r k e t i n q -rations,
owrsceinq the crrrpxlter functions and
l i f e insurance coordinqtion f o r t h e i r representatives a t a l a s t s a l a p r of
$35,000 per t e a r . He ?tart4 h i s en@mment -st
1, 1986, and l a s t worked
on ;rune 30, 1987.

2.

me

claimant was a l s o an executive vice president of t h e corporation and


rwned forty thousand shares of s t o c k - h e w n f i f t e e n and seventeen percent
of the total stock.

0
- 3.

- 4.

i'

!There were two o t h e r principles i n t h e mrporation, Fnbert K a u f h n , the


president, rho owned s i x t v thousand shares of stock and Michael Hartlett,
vice president. who m.ed the 7 . '-nt
of stwk as the claimant.
The claimant was a m&r

of t h e board of d i r e c t o r s , attended board m e e t i ~ s

and voted h i s stock a t such rrreetims.

5.

The c l a j m t , tcqether with the president and other vice president, set pnlicv
f o r the corporation.

6.

The claimant w a s rcspcmsihle, alnnq with the other two corporate principles,
f o r h i r i n g and f i r i n q . me claimant siqned checks for t h e c o ~ p o r a t i o nand had
as much authoritv as e i t h e r of the other t m persons.

7.

The president and t h e other executive v i c e president w t e d to terminate the

clamant f
on &une ,
%:00 W cm ilulv 1, 19P7, the claimant entered t h e e m p l m r ' s premises and
r
~ ~ k cmpxtcr
s ,
alscs, tiles, m r d s and s o w o-rl
m
e
v
'
s o f f i c e a f t e r which he

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

Property
of Advance
Media
Groupthe
NOTICE:
You
have

-.

Page 444 of 646

Thursday December 15, 2016

2550 of 2953
10/19/2006
r i g h t t o f i l e aPage
further'appesl
within 15 davs a f t e r the mail
in^ d ~ t e

US District Court For The Eastern District of Pennsylvana

~IFMG

Section 3189 Federal False Claim Act

Advisory, Im.

l
N
Edrn Par* 11, 1755 O n g o n Pike

=?L2!!-w-5"

Lancastrr. PY 1760f

717-560-4100

STANLEY J. CATERBONE
PRESIDENT

Stanley J. Catertone $5&


P.O. Box 40
Conestoga, PA 17516

A P P ~ Amm:
L

300

- YL- o 9 C 7

/#/=s/87

Comnrwealth of Fennsylvania Department of Labor and Industry


Unemployment Capensation Board of Review
Ms. Evelyn Stehman
January 8, 1988
Dear Ms. stehman:

As per your decision regarding appeal X87-3-F-808, I would like to site


&or
discrepwzies with your infonuation that can be substantiated by the
F'emsylvath Securities and Bxchange Ccomission as well as the Laws of
Incorporation pnrruant to Pennsylvania "Business Corporation Law" Approved May
5, 1933, P.L. 364, as amended.

First of all you sight "CLAIMANT INELIGIBLBW-Section 402 (E), Willful


Misconduct-Re: Starinieri

I will outline to to you the circunstances that lead to the Action taken
by mgself and James Warner on July 1, 1987. First you w s t read the enclosed
transcript that was placed cn the Complter System that I desijmed at 1755
Oregon Pike, hilding to which I, Stanley J. Caterbone, is currently a
leaseholder of title. This transcript was proceased on or about May 2. 1987.

I am Currently an Executive Vice President of Financial Management


Group, LTD., and President of EM3 Advisory, Inc., all said corporations
incorporated under the Laws of F'ennsylvania.
Let it be known that I personally handled and supervised all legal
matters for the said corporations, through the counsel of McNeeae, Wallice &
Nurick, of Harrisburg Pennsylvania, to whan Jeff Jamounou represented. Often
times I had to s p e d much time and energies diagnosing and aolving many
problems caused by Mr. Hartlett and Mr. Kauffmsn. Most problems came because
of the fact that t h e p would often sacrifice Corporate Opportunity for Personal
Benefit, which is probably the worst dilemna any F o d e r could find within his
Board of Directors. However, because of w stronrr will and determination to
build a Successful Corporation, I was not and wili Not pct up with such
A N D O N , NO M A m WHO IS IMPLICATED!
- - -~
~

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

QI June 23th, 1987 I had the locks on my office changed for Security
Reasons. I will not defend my CONSTImIONAL Right for Privacy regarding this
issue! On June 29th, 1987 I was told by Mr. Kauffman that he had issued a
Stock Certificate to Peter Peneros for 8,000 shares of Financial Elanagement
Group, LTD.. Although I quickly asserted that I was the Corporate Secretary
and only I was authorize to Issue the said Certificate, and my signature was
needed to finalize the transaction. This can be substantiated by New Jersey
Bell, since I was in Stone Harbor, where I w a s calling from. However my real
problem----My Office was burglarize by the President, Robert Kauffman, and the
Executive Vice President, Michael Hartlett. That was a NO NO ! ! ! !!!

hring the course of our First Year, I have discovered many action and
activities of Michael Hartlett and Robert Kauffman, as well as other persons
affiliated with this tragic but true nightmare. These allegations have been
revealed to several authorities and various representatives of the respective
local, state, and federal agencies, specifically the Pennsylvania Securities
and Exchange Comnission, and the Office of the Postal Inspector in Harrisburg,
to which official Complaints were already filed. During the month of May, I
have found substantial evidence to collaborate the said allegations, however
due to the complexity of the Corporations and Buainesses involved as well as
the relationships of all involved, I wanted to handle these affairs in the most
delicate and professional manner possible. W e n making this more bizarre is
the presently turbulent and mismanaged Securities Industry. This can be
substantiate in my letter to Diane Sawyer of CBS 60 MINWES, on August 28,
1987. I had several conversations with outside legal counsel, in particular,
Randy Grespin of The Underwriters Group, of Harrisburg, one of my affiliates.
We had discussed several courses of action, one specifically was a 90 leave of
ah-,
with pay, to take the appropriate time necessary to unravel this legal
NIGH'IMRE! As I began to gather material evidence to these allegations, my
life became very difficult because business was taking me out of town on a
daily purpose, which was the reason for the p m h a s e of my Navajo Cheiften
Airplane. I was virtually supervising every aspect of our operation, trying to
keep within the appropriate LBW9, Rules, and Regulations of the respective
authorities. I more than anyone was especially sensitive to these anrtters,
because of my knowledge of the said Rules, Laus, and Regulations. I was also
concerned for the following Reasons:
1.

Responsibility to all and any Shareholders, and our lack of Officers


Liability Insurance, which they a l w denied me of!

2.

Responsibility of all involved as the Founder of the said


Corporations.

3. Responsibility as Agent for the sale of all M,LTD. Stock.


4.

Terminations of Mary Lynn Dipaolo and Nancey Miller in


November of 1986 without any cause, and most importantly
the Coercion by Michael Hartlett for resignations to deny
Unemployment Canpensation Benefits for them!

5. Personal convictions of tUNE3TY AND INTBXITY IN ALL ASPECI'S OF


LIFE !

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

of Financial Management roc


- as stated in the Corporate Bylaws
LTD. and MC Advisory, Inc.. If I
to extract and m i n g l e $27,000.00
--

IR"

wanted

of Corporate Funds, I certainly would have done that. I merely questioned my


Legal Counsel if I, Stanley J. Caterbone, had the jurisdiction to use the
Corporate hnds, to pursue the costly Legal Elattle, I was about to undertake,
on behalf of Financial Mmsg-t
Croup, LTD. as Executive Vice President ard
Secretary, and EM3 Advisory, Inc., as President and Secretary, to which I still
currently hold the above offices, purauant to the Lam of Incorporation of
Pennsylvania.

UNTIL THIS 1lTH DAY OF JANUARY, 1988, STANLEY J . CATERBMJ3 HAS NEVER
CORRXATB RECOW)S, TO WHICH I AM ENTITLED,
I HAVE NBVER
RECEIVED ANy w R 1 m OR a?AL coEf.IuNICATION mad ANY PERSONS AVTIMRIZED BY IRIE
CORRRATE BY LAWS REG4RDINC ANY TERMINATION mad THE ABOVE MENTIONED OFFICBS!
RECEIVED

As to your Determination that I Had "SUBSTWIAL =L"


over the
affairs of the said Corporations, men How Did I Oet "UXXED OVP" as per your
investigation, and letter of November 24th, 1987?

I would ask that you copy me a copy of the transcript of the Appeal
Hearing.
<.

Regretfully,

cc: Diane Sawyer, CBS 60 Minutes


Governor Robert Caeey

Murray Horton, Distrcit Justice


Detective Siegler, hnheim Township
Detective Mathias, Manheim Township
Officer Fatta, Manheim Townahip
Detective Borger, Stone Harbor Police Departnient
Joseph bdenspacher, Assistant Diatrict Attorney
Avalon Police Department
&an, New Jeraey
Govemer lhPennsylvania Housing Finance Agency, Robert P. Bolincheck
Daniel Berger, Berger Real Estate, EMG,LTD.
George C. Warner, Barley, Snyder, Cooper & Barber
Jeff Jainanou, McNesse, Wallace & Nurick
H a J a r d Eisler, PMnsylvania Securities & Exchance Camnission

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Edgcwwd Exccutivc Offices


255 Butler Avenue
Lancasrer. PA 17601
717-397-8969

Grandview Offices
796A Rear. New Holland Avenu
Lancaster. PA 17602

January 13, 1988

717-299.8914

Stan Caterbone

Word Processing Services


12.25 @ $15.00
Disk w/info
Copies (1 10)

10 tapes given to Secretari-All


I / ' /88dL7
10 tapes returned to Stan Caterbone 1/13/88

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 448 of 646

Page 2554 of 2953


A Proferrional:~ecrelnrial
Service

Thursday December 15, 2016


10/19/2006

--

(717) 464-2601
(717) 464-2311
Section 3189 Federal False Claim Act
2718 W i l l o w Street Pike
WILLOW STREET, PENNSYLVANIA 17584

US District Court For The Eastern District of Pennsylvana

SOLD TO

~cdciimnc/ ~

10,
/om 3-r.

YD

9Ess

SALESMAN

MAKE

ONEW

/?
8 ,0516
Bus.

(onesbe

REs PHONE

/ o ~ c / i o ~ ~ r ~ ~ G+r Lm
w . ,i- / if
PHONE

L'

DATE

/-/5'-F;

SUBJECT TO THE TERMS AND CONDITIONS STATED ON THlS AGREEMENT


SELLER AGREES TO SELL AND THE PURCHASER AGREES TO PURCHASE THE FOLLOWING DESCRIBED PROPERTY:
MODEL & YEAR
LENGTH

O(ef
7W R -

p usm

,1972

SERIAL NUMBER

PROPOSED DELIVERY DATE

~OA~LWD

INSURANCE AGAINST LIABILITY FOR BODILY INJURY OR PROPERTY


DAMAGE TO OTHERS IS NOT INCLUDED IN M I S TRANSACTION.

26 IF^'

ODOMETER READ1

OF

OPTIONAL EQUIPMENT. LABOR AND ACCESSORIES

500

OPTIONAL EQUIPMENT
H l K H HOOKUP
Complete

h
DESCRIPTION OF TRADE-IN

SIZE

. x
MODEL-

MAKE

-n
SERIAL NO.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM

,r 'm

. ORDER AND THAT


D
E, , ! ,

--

Property of Advance Media Group

I T I S MUTU*LLY UNDERSmOO THAT T H l S AGREEMENT I S SUBJ


NECESSARY CORRECTIONS. AND ADJUSTMENTS CONCERNING C I
I N NET PAYOFF AND CONDITION OFzTRADE-IN TO B E MADE AT TH
OF SElTLEMENT.

I, OR WE, HEREBY ACKNOWLEDGE RECEIPT OF A COPY 01


I, OR WE HA
READ
EEMENT,

TITLE NO.
OWMETER READING

T t l e to said equipment shall remain I n the Seller, until the


purchase p r i m themfor I s paM i n full in cash; thereupon I
the within described unit passes to the buyer as of the c
Payment m n though the actual Physlca( d e l i m y may I
made until a later data.

Page 449 of 646


Page 2555 of 2953

SIGNED X

-- )

I ,

,,f

/",

/--URCt

PURCt

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

rurii

AcrccI

P.O. Box 15530


1 4 3 r r i s b u r g . P c n n s y l v a n i a 1?103-5530
7 11-780-3940 or 1-500-342-2397

Section 3189 Federal False Claim Act

W
' m C ' 1 rn.1ORIr;;lGE m1mcE FsCGmM
OR CIANGE
STA'rE.Mmr OF CREDIT D m , m - O N

F ' m

'FEDERAL ~ V X N G SB4M<

24 W. KING ST.

IAN-,

...-

2323 NEW DANVILLE PIKE


0 3 E D X A . PA. 17516

PA. 17603

PdvAction Taken: REJECTION


Principal Reason(s) f o r Arfverse m
n c ~ E . ? h i q Credit:
Mortgagor is not suffering financial hardship ctue t o cjlarmstances bey0I-d mrtgagor's
control: smrtgagor was f i r e d from job. ( A c t 91, Section 404-C(A))

lou may be e n t i t l e d to an appeal hearirq i f you disagree with cur decision. W e must recei
written request for a hearing within 15 days of the p s t m r k date of this letter. T
ring may be on-ducted by a telephone conference call. Therefore, you nwst inciude yo
is request
kle&one number. Fkquests f o r hearings must state the reason(s) that a hear*
ud must k sent f i r s t class, register& or certified m i l to: Chief Counsel H e a r i
Request, Eemsy1vani.a HOUS~I?=J Finance Agency, 2101 North Front S t r e e t , P. 0. Eox 15628
with
%rrisburg, Femq1vani.a 17105-5628. T h e ? u p q w i l l atterm@ to sdwdule the hearbe sure
th+ty (30) days a f t e r the request is received. When sending y m appedl, plprlnt your me legibly and include ycur social security n m k r .

"C

~ ~ - u ' f iOF
Z G
S
T OF W~URMXITON OBTAl3iED F17CM OVrSIDE SMJRCE:
Information obtained from outside source other than a credit hreau. Urder the Fair
edit R e p a i n g Act, ycy have the r i g h t to make a written request, w i t h i n 60 days of

receipt of this notice, f o r disclosure of the nature of the adverse information.


Write to: RmnylMnia Housing Finance Agency, Disclcsure west, 2101 N o r t h Front
S t r e e t , P.O. E~x 8029, Harrisburg, PA, 17105-8029.

I3-e Federal E q a l Q-edit o p p o ~ t yA c t prohibits cx-eclit3r.s frcm discriminating a g a i n


=redit applicants on the basis of race, color, religion, national origin, sex, mrita
r;tatus, age (pmvided that the applicant has the capacity t o enter into a birding contract)
3ecause all or part of the applicant's inccm derives fn;m any plblic assistance program; a
=use
the applicant has in g d f a i t h exercised any right Wer the Consurcex Oredit Protec
tion Ad. e
Federal ~gency that administers a m p l h w i t h this law m m q thi
xedibr is the Federal Trade C a m i s i o n , Equal. Credit c q p r t u n i t y , Washington, D. c

s-Y,

EXHIBIT
U.S. 16-4014 CIVIL RIGHTS CLAIM
I t
Property of Advance Media Group

EXHIBIT "E"
Page 450 of 646
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Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 451 of 646


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I N THE COURT O F COMMON PLEAS OF JANCASTER COUNTY, PENNSYLVANIA


C I V I L ACTION
LAW

PARENT FEDERAL SAVINGS BANK.

65y

NO.

A c t i o n i n Mortgage
Foreclosure

1988

VS.

STANLEY J. CATERBONE and


MICHAEL T. CATERBONE -.

- --

,/

.. ,~

C*

+.

..
'

<

NOTICE TO DEFEND

-? (0

YOU HAVE BEEN SUED I N COURT.


I f you w i s h t o d e f e n d a g a i n s t
t h e c l a i m s s e t f o r t h i n t h e f o l l o w i n g p a g e s , you must t a k e a c t i o n
w i t h i n t w e n t y ( 2 0 ) d a y s a f t e r t h i s C o m p l a i n t and N o t i c e a r e
s e r v e d , by e n t e r i n g a w r i t t e n a p p e a r a n c e p e r s o n a l l y or by .
a t t o r n e y and f i l i n g i n w r i t i n g w i t h t h e Court your d e f e n s e s o r
o b j e c t i o n s t o t h e c l a i m s s e t f o r t h a g a i n s t you.
You are warned
t h a t i f you f a i l t o d o s o t h e case may p r o c e e d w i t h o u t you a n d a
judgment may b e e n t e r e d a g a i n s t you by t h e C o u r t w i t h o u t f u r t h e r
n o t i c e f o r a n y money c l a i m e d i n t h e C o m p l a i n t o r f o r any o t h e r
claim o r r e l i e f r e q u e s t e d by t h e P l a i n t i f f .
You may l o s e money
o r p r o p e r t y o r o t h e r r i g h t s i m p o r t a n t t o you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE.
I F YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW T O FINI! OUT WHERE YOU CAN GET LEGAL HELP.

Court A d m i n i s t r a t o r
Court Administrator's O f f i c e
L a n c a s t e r County C o u r t h o u s e
50 North Duke S t r e e t
L a n c a s t e r , P e n n s y l v a n i a 17602
Telephone Number (717) 299-8041

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

N O T I C I A
S i usted quiere
Le h a n demandado a u s t e d en l a c o r t e .
d e f e n d e r s e d e estas dernandas e x p u e s t a s en l a s p a q i n a s s i q u i e n t e s
u s t e d t i e n e v i e t e (20) d i a s d e plazo a 1 p a r t i r d e l a f e c h a d e l a
dernanda y l a notification. U s t e d d e b e p r e s e n t a r u n a a p a r i e n c i a
e s c r i t a o e n p e r s o n a o p o r abogado y a r c h i v a r en l a c o r t e e n
forma e s c r i t a s u s d e f e n s a s o s u s o b j e c i o n e s a l a s demandas e n
contra de s u persona.
S e a a v i s a d o que s i u s t e d no se d e f i e n d e ,
l a c o r t e t o m a r a m e d i d a s y p u e d e e n t r a r una o r d e n c o n t r a u s t e d si:
p r e v i o a v i s o o N o t i f i c a c i o n y p o r c u a l q u i e r q u e j a o a l i v i o q u e e:
p e d i d o e n l a p e t i c i o n d e demanda.
Usted puede p e r d e r d i n e r o o
s u s propiedades o o t r o s derechos importantes para usted.
LLEVE ESTA DEMANDA A UN ABODAGO INMEDIATAMENTE. S I NO TIENI
ABOGADO 0 S I NO TIENE EL DINER0 SUFICIENTE DE PAGAR TAL SERVICIO,
VAYA EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION
SE ENCUENTRA ESCRITA ABASO PARA AVERIGUAR DQNDE SE PUEDE
CONSEGUIR ASISTENCIA LEGAL.
Court Administrator

Court A d m i n i s t r a t o r ' s O f f i c e
L a n c a s t e r County C o u r t h o u s e
50 N o r t h Duke S t r e e t
Lancaster, Pennsylvania
17602
T e l e p h o n e Number (717) 299-8041
HZXTMAN UNDERHILL & BRUBAKER
Attorneys f o r P l a i n t i f f
By:
221 E a s t C h e s t n u t S t r e e t
L a n c a s t e r , PA 1 7 6 0 2
(717) 299-7254

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

ARNOLD, BEYER & HOMSBER


ATTORNEYS AT LAW
110 EAST KING STREET
LANCASTER, PA 17602
In Account With
Mr. Stanley Caterbone
2323 New Danville Pike
Conestoga, PA 17516

Date:

March 21, 1988

For professional services rendered from September 8 , 1987 through March 15, 1988 a s
follows:
09/08/87

Prison visit

09/09/87

Telephone from bail bondsman

09/09/87

Seven phone calls


Telephone to District J u s t i c e Horton, conference with client
Telephone from client, telephone t o District Justice Horton
Telephone t o M.T.P.D.,

conference a t M.T.P.D.

and conference with M.L.D.

Telephone from client


Telephone t o client, telephone t o Atty. Chris Hausner, telephone t o Core
States
Telephone from Investigator Isler at PSC; telephone t o client
Letter t o Court Reporter, telephone to Court Reporter
Conference at C o u r t House
Conference PSC
Conference with client, Civil Hearing
Telephone from client
Telephone from client re:

checks

Prepare f o r hearing; telephone from Atty. Hausner


10/02/87

Hearing preparation and preliminary hearing

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Letter to client with Waiver of Arraignment


Telephone from client
Telephone from client
Letter to Atty. Hausner
Telephone from client, telephone to Philadelphia attorney
Telephone from Atty. McDonald
Telephone to client; telephone to Atty. Werner
Telephone from M L D
Appeal and letter
Telephone to Atty. Werner
Two telephone calls to Mr. Weeber a t Pioneer Abstract
Telephone from client
Conference with Weeber, telephone from Atty. Russell, telephone to Atty.
McDonald
Conference with client, settlement
Conference with client, two telephone calls to Pioneer Abstract and one
to purchaser
File Ludwig Appeal, telephone to Oblenders, (return)
File appeal card
Telephone from the District Attorney
Letter to Atty. Russel, letter to client
Telephone to District Justice Horton
Telephone from Atty. Jeffrey Wright
Letter from client
Letter t o District Justice Horton
Letter to client; file waiver; prepare discovery request
File and serve discovery request

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Letter to client
Letter to client
Telephone to Atty. Russel
Telephone to Atty. Russel
Telephone from attorney re:

District Justice

Letter to client
Telephone from client; telephone to Attv. Russel; telephone from Atty.
Russel "today"
Letter to District Attorney, letter to client with discovery request
Telephone from District Justice Horton
Prepare release
Telephone from client
Letter to client
Conference with District Attorney
Telephone from client
Phone call a t home
Conference with client
Letter to client re:

Corestates

Prepare Answer for Friday


Letter to client, telephone to Lancaster Aviation
Letter to Atty. Jeff Wright
Letter t o client
Letter to client
Telephone from client
Telephone to Det. Bonowitz; telephone to Prothonotary; telephone from
Atty. McDonald
Letter to Atty. McDonald; telephone conference with Prothonotary's
Office; Appeal; praecipe for joinder

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

03/03/88

Telephone c o n f e r e n c e with Atty. ~ClcDonald

03/04/88

L e t t e r t o client; l e t t e r t o Atty. Russell; l e t t e r t o Atty. McDonald

03/08/88

Telephone c o n f e r e n c e with Attv. McDonald

03/15/88

Telephone c o n f e r e n c e with Atty. McDonald; finalize criminal c h a r g e s


TOTAL COST O F SERVICES:
Retainer

$2,274.00
$ 200.00

Final Bill
RDB/ds

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act


L 9 i V OFFICES

ARNOLD. BEYER & HOMSHER


l I0 EAST KING STREET

LANCASTER. PA 17602-2876
IOHN W. BEYER

HARRIS C. ARNOLD

i i l i l 394-i204

DAVID C. HOMSHER
JOHN WILLIAM BEYER
t1911-l91bl

LESUE GORBEY

JAMES P COHO
ItVIP-19861

ROBERT D. BEYER

March 21, 1988


Mr. Stanley Caterbone
2323 New Danville P ~ k e
Conestoga, PA 17516
Dear Stan:
I am pleased to inform you t h a t a s of March 15, 1988, all of t h e criminal
c ar es endlng against you in this county were dismissed. Additionally. all of your
Cour costs and restitution have been paid. I am sure that you are happy with this
C___
outcome!

w .

3
3

Mike McDonald intends t o enter his appearance on your behalf in those civil
cases which a r e currently pending in Lancaster County. Until he does, however, I
will be on the hook f o r them, so I certainly hope he a c t s without delay. If you
speak with him, you may want t o remind him t o enter his appearance at his earliest
convenience.

(-.

Because this is t h e conclusion of your criminal case, i t appears as though my


work i s now completed. Accordingly, I am enclosing herewith our bill for services
rendered between September 8, 1987 and March 15, 1988. Considering the work
done and the result achieved, I am sure that you will find its contents reasonable.
I understand t h a t you a r e probably not in a financial position t o fulfill this
obligation at this particular time. If you are, of course that is tine! However, if
you a r e unable t o pay this now, any partial payment would be appreciated.
Understanding your current financial difficulty, we will continue to send you
reminder billings on a thirty (30) day basis. This i s usually generated by a
computer, so please do not interpret i t a s harassing you for payment!
I would like t o take this opportunity t o thank you f o r allowing m e t o
represent you during this most difficult time period. I of course will assist Mr.
McDonald in any way in connection with your representation in the civil suits
currently pending or soon to be filed. Do not hesitate to give me a call if you
need any help.
Very truly yours,
ARNOLD, BEYER .& HOMSHER

RDB/reg
Encl.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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Section 3189 Federal False Claim Act

A MEETINGS PROFESSIONAL
March 22, 1988

Mr. Stan Caterbone


P.O. Box 40
Conestoga, PA 17516
Dear Stan:

I haven't Forgotten you but I've been racing around on other programs. I'm
the lady you met on the plane From Dallas.
Here is a list OF persons I've given your name to in case they need a Freelance AV prrsurl For- ti lei,- p , - u y ~ - d ~ s :
Mr. Bob Lazar
Audio Visual Specialist
7617 Mountain Ave
Elkins Park, PA 19117
215/635-6649
also theater contacts

Jim Stoup
Lyons Group
715 Orange
Wilmington, OE 19801
302/654-6146
AV
Dave

Graber

E. I. duPont de Nemours Co., Inc.


N-2425-81
Wilmington, M: 19899
302/774-7432
AV

Or. Roko Paskov


1600 G Canterbu-y Trail
Mt. Pleassnt, MI 48858
517/772-0761
moving to Nashville in June
Theater/NYC contacts not AV
Richard Rothwell

R T G E
604 W. 10th
Wilrnington, OE 19801
302/652-3211
AV

Mark 0. Sullivan
Producer-Consultant
Box A-3793
177 Webster St.
Monterey, CA 93940-3182
408/373-7099
AV

That's all I know to date. IF you have something you can put together as to
what you've done regarding AV or that Sony deal you mentioned .... it would give
all of them an idea of what you can do.
Free-lancing with AV can get you in
touch with other clients and you can take it from there.
Good luck with this! Hope you have Followed up with Ted Turner and 60 Minutes!
Sincerely,

P. 0.BOX EIGHT
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
Property of Advance Media Group

'DE 19899
Page 459 of 646

WILMINGTON.

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U M e r l l l GUr 1 lpdl ly

US District Court For The Eastern District of Pennsylvana

Continued from Page One

yullly 5-f8-7a
Section 3189 Federal False Claim Act

c-,,
8-.
7' 6

To get a $38 million loan from ficials said atthe time.


Citicorp in July 1988, for inA third set of contracts, known
fense electronics business.
stance, Parent pledged as collat- by the code names Gamma,
Parent's holdings included, for era1 32 million Ferranti shares, Damaral and Sasu, supposedly
P
instance, the Four Seasons golf shesaid.
involved the sale of electronic
course in East Hempfield TownThe Fertanti stock also pro- components toSouth Africa.
.In her testimony Tuesday, Ms. j
ship, a California computer duced annualdividendsof nearly
graphics company, a local travel $500.000 for Parent, the IRS agent Zelnik, the IRS agent, said the
agency and a local tool-malung noted.
fraud involved circulation of mil' company, among others.
Under the terms of the plea lions of dollars among front comIn addition, its Centerville agreement, Parent Industries panies and bank accounts in the
I
Road office was the headquar- agrees:
US:, Switzerland and elsewhere.
ter$ for a extensive Program Of
To pay $2,376,000to the U.S.
That circulation of money 1
charitable giving by Guerin,.esti- under the terms of a note as- made it appear that supplies 5
I mated a t more than $10 mllllon signed by Helen Guerin, wife of were being purchased, products 7
during the 1980s.
Guerin.
manufactured and delrvercd, f
:
But Parent Industries also
To give up "in lieu of fines" and profits earned, Ferranti offi- u
served as a depository for 32 mil- the $2 milliondeposited by Gue- cialspreviously said.
lion shares of stock obtained as a rin and Parent in a Fulton Bank
But in fact, IRS agent Zelnik a
1 result of the alleged contract
escrow account to settle a sever- said Tuesday, there was "no a
fraud scheme, Justrce Depart- ancepay dispute witbformerISC product, technology, customer or
menk officials sard in court Tues- attorney William A. Clark.
vendor."
V;
: day qnd Wednesday.
To cooperate with the U.S.
In addition to the continuing 10,
According to IRS agent Amy during its investigation of indi- Justice Department investiga- ot
Zelnik, Guerin had directed the viduals and corporations in- tion, ISC's dealings also are li:
' creation of more than $1 billion valved in the governmentinvesti- being probed by the British Se- a r
worth of false defense contracts gation of ISC, Ferranti Interna- riousFraudOffice.
th
during the mid-1980s in an effort tional and their subsidiaries.
U.S. officials from the Justice d
fa inflate the value of his ISC
To permit the government Department, Defense Depart- a
stock and the company's borrow- to file the specific f a c t s s u ~ o u n d - ment, Customs, FBI and IRS also ni
ing capability.
ing the racketeering charge a t a are investigating charges of iUeGuerin then traded his alleged- later, unspecified date.
gal weapons sales to South Afri- b
ly inflated stock for solid stockin
The agreement, signed by Gue- ca.
Ferranti International, the Brit- rin attorneysJoseph A. Tate and
ish defense conglomerate, during Stephen D. Brown, but not by
a 1987 merger with that compa- Guerin himself, will be filed in
! ny, Zelnik and assistant U.S. At- court at a later date, Ms. Zelnik
torney Sonia C. Jaipaul said.
said.
"As a result of the fraud he
During the past year, as the
(Guerin) perpetrated on Ferran- government has pursued its mnti," in Ms. Jaipaul's words, Gue- vestigation of ISC, Parent Indusrin received well over 30 million tries went through a senes of
shares of Ferranti stock, she and rapid ownership changes, ending
Ms. Zelnik said.
up back under Guerin's personal
After those shares were trans- ownership.
ferred to Parent Industries, the
The company was transferred
holding company "obtained fi- by Guerin to his wife Helen in i
nancing from numerous finan- June 1989, who sold it to then
cia1 institutions using the stock company president Michael A. )
as collateral," said Ms. Zelnik.
Peck for $2.4 million in August.
The loans ranged in size from Peck sold the company back to
Guerininlate April.
$500,000to $39 million, she said.
The government allegations of
a massive contract fraud by Gue- '
rin-controlled companies against
Ferranti echo charges raised by
Ferranti officials in civil court
actions
in Great Britain.
Continuedfrom Page One
The British defense company
hadchargedlastNov.30inacivil
breakdown in s e v e r a l
,
that
jurors. ~
l pale,~,,bvi- ~ lawsuit
~
d it lost
~ $350 million
through fraud because of bogus
ously tired, some dissolved
contracts on the books of ISC
into tears. one juror, her
when the two Companies merged
face awash in tears, put her
I~
in1987.
arms around another sobbOne fake contract, known as
ing woman inthe jury box.
K h ~ h e Pass
r
or KP, appeared to !
1, . The prosecqtors - First
show ISC Technologies Ltd., a
Assistant District Attorney
I
small English
subsidiary,
selling ~
!
joseph C. ~
~
d
~
~
~
and
and city police ~
~
t
~to Pakistan
~
t the
i equipment
~
~
know-how needed to mfmnufac- ,
~~h~ wary - slumped siture state-of-the-art arr and :
in
their
seats.
lently
1
ground missile systems, Ferranjudge ~~~i~~ gently told
ti
officials
the New Era in : Thursday December 15, 2016
!
spectators
try andCLAIM
be
EXHIBIT U.S. the
16-4014
CIVILtoRIGHTS
Page
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of 646
January.
:
quiet
as
he
thanked
and
disProperty of Advance Media Group
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. .Guerin
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himself
..of 2953
rni~end
the 111t-v
.. was responsi'A

'

Outburst

....
Z

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

International Technologies Group, Inc.


--

Member or lnternat~onalStgnat & Control Group

April 27, 1988

Mr. Stanley J. Caterbone


2323 New Danville Pike
Conestoga, Pa. 17516
Dear Mr. Caterbone:
This is to follow up receipt of your resume regarding the Marketing
Representative position in ISC Educational Systems.
Although your credentials are good, we feel this position will require
a different sales/marketing background than your own. As a result,
we will not pursue your candidacy beyond this point.
Perhaps other opportunities will develop in the future which may be of
mutual interest. If so, we certainly will review your resume.
Thanks for responding to our ad and considering ISC in your job
search.

~ a n a ~ e kRecruitment
,

3700 Electronics Way. P.O. Box 3040


Lancaster. Rnnsyhania 17604-3040
Tel:16-4014
(717)285791
Tckz 84.
8438 Cable:Page
INTERSIG
EXHIBIT U.S.
CIVIL1 RIGHTS
CLAIM
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INC.

June 27, 1988

Stanley Caterbone
865 M.E. 74th. Street
Iliami, Fl. 33138
We have had the opportunity to review your resume which you
recently sent to us.
Your background is of interest, therefore, we would
appreciate your contacting us at 749-7000 to arrange an
appointment to sit down and have an in-depth discussion
regarding your employment needs and requirements.
We look forward to speaking and meeting with you soon.
Sincerely,
KAHN AGENCY, INC.

Martin Kahn
MK/1

9 1
EXHIBIT U.S.
RIGHTS
of 646 Lauderdale, Florida
Thursday
7 716-4014
7 0 WestCIVIL
Oakland
ParkCLAIM
Boulevard.Page
Suite462
405.fort
3335 1 December
(305) 7 4 915,
- 7 02016
00
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Section 3189 Federal False Claim Act

AGREEMENT
THIS AGREEMENT is made this

- day

of

fi,-+,&.

.-

1988, by and between ROBERT E. KAUFFMAN, 1755 Oregon Pike,


Lancaster, Pennsylvania

17601, (hereinafter referred to as

"Kauffman") and STANLEY J. CATERBONE, New Danville Pike,


Conestoga, Lancaster County, Pennsylvania (hereinafter referred
to as "Caterbone").
W I T N E S S E T H :
WHEREAS, Stanley J. Caterbone presently owns forty
thousand (40,000) shares of Financial Management Group, Ltd.; and
WHEREAS, Stanley J. Caterbone has the right to exercise
an option to purchase an additional forty thousand (40,000)
shares of stock at the price of Fifty Cents ($.50) per share; and
WHEREAS, Kauffman desires-to purchase and Caterbone
desires to sell his shares of Financial Management Group, Ltd.,
including those to be purchased by Caterbone under said Option
Agreement; and
NOW, THEREFORE, the parties hereto, intending to be
legally and fully bound hereby, and in consideration of the
mutual benefits to be derived herefrom, do covenant and agree as
follows :
1.

Voluntary Execution.

The provisions and terms of

this Agreement are fully understood by all parties and each party
acknowledges that the Agreement is fair and equitable, that it is
being entered into voluntarily, and that it is not the result of
any duress or undue influence.

All parties have been advised of

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their respective rights to seek and obtain representation of


counsel, and warrant and represent that they will never, at any
time hereafter, challenge the validity of this Agreement on the
basis that legal representation was declined.

Each of the par-

ties hereto further covenant and agree for himself and his heirs,
executors, administrators and assigns, that he or it will never
at any time hereafter sue the other party or his heirs, executors, administrators or assigns, or its officers, directors,
officials, employees and agents, in any action, or contend,
directly or indirectly, that there was any absence or lack of
full disclosure, fraud, duress, or undue influence.
2.

Caterbone agrees to sell to Kauffman the forty

thousand (40,000) shares he presently holds of Financial


Management Group, Ltd. at a cost of Two Dollars and Fifty Cents
($2.50) per share, a total of One Hundred Thousand Dollars
($100,000.00).

3.

Caterbone agrees to exercise his rights to purchase

an additional forty thousand (40,000) shares of Financial


Management Group, Ltd. at the rate of Fifty Cents ($.50) per
share, and to sell those forty thousand (40,000) shares to
Kauffman at the rate of Fifty Cents ($.50) per share, a total of
Twenty Thousand Dollars ($20,000.00).

4. An escrow agent, to be mutually agreed upon by the


parties, shall be selected by November 15, 1988, to carry out the
provisions of this Agreement.

Said escrow agent shall be speci-

fically authorized to act as Caterbone's attorney-in-fact and


-2EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 464 of 646
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Section 3189 Federal False Claim Act

aqent in purchasing the above-referenced additional forty


thousand (40,000) shares of Financial Management Group, Ltd. at
the rate of Fifty Cents ($.50) per share, and shall be authorized
to act as attorney-in-fact for Kauffman in using funds deposited
with said escrow agent by Kauffman to effect Caterbone's
purchase.
5.

Caterbone agrees to submit to said escrow agent an

executed stock certificate or certificates to effect the sale of


the forty thousand (40,000) shares of Financial Management Group,
Ltd. presently held by Caterbone on or before November 25, 1988.
6.

Caterbone agrees to deliver to escrow agent whatever

documents are deemed necessary to exercise his option to purchase


an additional forty thousand (40,000) shares of stock at the rate
of Fifty Cents ($.50) per share in full on or before November 25,
1988.

7.

Kauffman agrees to deposit with the above-referenced

escrow agent One Hundred Twenty Thousand Dollars ($120,000.00) by


cashier's check on or before November 25, 1988.
8.

Settlement under this Agreement shall take place on

or before December 1, 1988.


9.

Caterbone and Kauffman authorize the escrow agent on

or before the date of settlement, to deduct from the One Hundred


Twenty Thousand Dollar ($120,000.00) advanced by Kauffman the
following sums:

A.

$15,000.00 to be paid to Financial Management

Group, Ltd.: and


-3-

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B.

Section 3189 Federal False Claim Act

The amount owed to William Johnson, which

amount shall be verified by Mr. Johnson's attorney in writing to


be supplied to the escrow agent, and copies to be forwarded to
all parties on or before November 15, 1988: and
C.

Sums due on any other judgment entered against

Caterbone between the date of this Agreement and the date of


settlement.

(L~ k ~ cm~
h oc

10.

~ C I t=L,

fis

&C.<-C

gGc-,,;skee)

Settlement under this Agreement is contingent on t&e'

happening of the following events:


A.

Caterbone must return the FAX Machine in his

possession in good working order to the offices of Financial


Management Group, Ltd., 1755 Oregon Pike, Lancaster,
Pennsylvania, on or before November 25, 1988.

B.

Financial Management Group, Ltd. waives all

interest and right in a lap top computer which may be retained by


Caterbone, and a bill of sale documenting title to said computer
is executed by FMG, Ltd. on or before November 25, 1988, and forwarded to the escrow agent.

C.

Financial Management Group, Ltd. agrees that in

consideration of the sum of Fifteen Thousand Dollars


($15,000.00).

the receipt and sufficiency of which are to be

acknowledged, releases, remises and forever discharges, on behalf


of its officers, officials, employees, successors, transferees
and agents, Stanley J. Caterbone, his heirs, executors, administrators or assigns, from any and all actions, causes of
actions, suits, proceedings, debts, judgments, damages, claims,
-4EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 466 of 646
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demands and liabilities whatsoever in law or equity, and particularly, without limitation of the generality of the foregoing,
of and from any actions, causes of action, suits, proceedings,
debts, judgments, damages, claims, demands, and liabilities
arising from or in any way connected with Caterbone's employment
and association with Financial Management Group, Ltd., the termination of said association and employment, and any conduct or
actions after said termination.

FMG shall further agree that its

Release expresses a full and complete settlement of liability


claimed, and that said payment and the acceptance of the Release
shall not operate as any admission of liability on the part of
Caterbone.

Said Release shall be substantially in the form as

attached to this Agreement as Exhibit "A".


D.

Financial Management Group, Ltd. releasing

Caterbone's personal effects, including office furniture, upon


reasonable demand to Caterbone, on the condition that Caterbone
bears full responsibility for moving costs.

If Caterbone fails

to exercise this right within three (3) months from the date of
this Agreement, he relinquishes all right to said personal
effects and office furniture, and title to said goods shall pass
to Financial Management Group, Ltd.
11.

Kauffman agrees to authorize escrow agent to pay

Fifteen Thousand Dollars ($15,000.00) to Financial Management


Group, Ltd., in exchange for Financial Management Group, Ltd.'s
execution of a Release substantially in the form as attached
hereto as Exhibit "A", and its execution of a bill of sale for
-5-

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Section 3189 Federal False Claim Act

the above-referenced lap top computer.


12.

Kauffman hereby authorizes the release of the amount

to be determined to be due and owing to William Johnson from


Caterbone in exchange for a certificate of satisfaction of the
judgment and the return of the original judgment note from
Johnson's attorney.
13.

Caterbone, his heirs, executors, administrators and

assigns, for and in consideration of the sum he will receive


under the terms of this Agreement, the receipt and sufficiency of
which are hereby acknowledged, hereby releases, remises and
forever discharges Financial Management Group, Ltd., a
Pennsylvania corporation, its officers, directors, officials,
employees and agents, and Robert E. Kauffman, his heirs, executors, administrators and assigns, from any and all actions,
causes of actions, suits, proceedings, debts, judgments, damages,
claims, demands and liabilities whatsoever in law or equity, and
particularly, without limitation of the generality of the
foregoing, of and from any claims, causes of action, suits, proceedings, debts, judgments, damages, claims, demands, and liabilities arising from or in any way connected with his association
or employment with Financial Management Group, Ltd., the termination of said association or employment with Financial
Management Group, Ltd., and any conduct or activities taking
place after said termination.

It is further agreed that this

Release expresses a full and complete settlement of liability


claimed and denied, and that said payment and the acceptance of
-6EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 468 of 646
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Section 3189 Federal False Claim Act

the Release shall not operate as an admission of liability on the


part of ~inancialManagement Group, Ltd. or Robert E. Kauffman.
14.

Caterbone agrees to execute the irrevocable proxy,

coupled with an interest, attached hereto as Exhibit "B",


allowing Kauffman to vote Caterbone's presently held forty
thousand (40,000) shares of Financial Management Group, Ltd.
15.

This Agreement contains the entire understanding of

the parties and there are no representations, warranties, covenants or undertakings other than those expressly set forth
herein.

IN WITNESS WHEREOF, the parties have hereunto set their


hands and seals the day and year first written above.

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RELEASE
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a duly authorized officer of
Financial Management Group. Ltd, a corporation located at 1755
Oregon Pike, Lancaster, Pennsylvania 17601, for and in consideration of the sum of Fifteen Thousand Dollars ($15,000.00),
the receipt and sufficiency of which are hereby acknowledged,
hereby release, remise and forever discharges, on behalf of
Financial Management Group, Ltd., its officers, directors, officials, employees, successors, transferees, executors, and agents
from any and all actions, causes of action, suits, proceedings,
debts, judgments, damages, claims, demands, and liabilities whatsoever in law or equity, and particularly, without limitation of
the generality of the foregoing, of and from any actions, causes
of action, suits, proceedings, debts, judgments, damages, claims,
demands, and liabilities arising from or in any connection with
Stanley J. Caterbone's employment and assocation with Financial
Management Group, Ltd., the termination of said association and
employment, and any conduct or actions taking place after said
termination.
It is further agreed that this Release expresses a full
and complete settlement of liability claimed and denied, and that
said payment and the acceptance of the Release shall not operate
as an admission of liability on the part of Stanley J. Caterbone.
IN WITNESS WHEREOF, the undersigned has hereunto set his
hand and seal this
day of
, 1988.
FINANCIAL MANAGEMENT GROUP, LTD.
BY:

EXHIBIT "A"

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 470 of 646


Property of Advance Media Group

Page 2576 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FINANCIAL MANAGEMENT GROUP, LTD.


1755 Oregon Pike
Lancaster, Pennsylvania 17601
IRREVOCABLE PROXY FOR ANNUAL MEETING 1988
AND ANY ADJOURNMENTS THEREOF
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned
Shareholder of Financial Management Group, Ltd., 1755 Oregon
Pike, Lancaster, Pennsylvania 17601, do hereby nominate, constitute and appoint Robert Kauffman my true and lawful attorney,
with full power of substitution, for me and in my name, place and
stead to vote all the common stock of Financial Management Group,
Ltd. standing in my name on its books on October 25, 1988, at the
Annual Meeting of its Shareholders to be held at the Shawnee
Resort Inn on Thursday, October 25, 1988, at 10:OO o'clock A.M.,
or at any adjournments thereof, with all the powers the undersigned would possess if personally present. I authorize my proxy
to substitute any other person to act under this proxy, to revoke
any substitution, and to file this proxy and any substitution
with the corporation.
This proxy and the authority represented herein may not
be revoked insofar as it is a proxy coupled with an interest.
Execution of this proxy confers discretionary authority to Robert
E. Kauffman to cumulate votes in accordance with his best

Number of Shares Entitled to Vote:

40,000

E X H I B I T 'B'
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 471 of 646
Property of Advance Media Group

Page 2577 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STANLEY J . CATERBONE
1250 Fremont Street
Lancaster, PA 17603
(717) 394-7710

January 12, 1989


Mr. Richard E. Blouse, r , President
Greenfield Associates, Ltd.
1853 William Penn Way
P.O. Box 10008
Lancaster, PA 17605-0008
Dear Mr. Blouse,
For the last e i g h t years I have been a c t i v e l y pursuing my career goals i n the
f i e l d of business and marketing development.
I have been successful i n
applying my s k i l l s as a broad-based manager and r e c e n t l y developed a
financial management f i r m w h i c h raises over $100 m i l l i o n i n new c a p i t a l
annually.
I f y o u are b y chance l o o k l n g f o r a new member w i t h these
capabilities, please give consid- e r a t i o n t o my credentials.
My a b i l i t y t o conceptualize and implement o r i g i n a l ideas, t o research and
develop new business plans, and t o define and eliminate organizational
weaknesses has been apparent i n my performance.
I am eager t o apply my
skills t o a permanent p o s l t i o n where I can demonstrate my. competence.
My compensation requirements are f l e x i b l e and may c e r t a i n l y be c o r r e l a t e d
w i t h results.
The enclosed resume summarizes my career experience.
I would appreciate
the o p p o r t u n i t y t o elaborate o n these accomplishments and t o discuss i n
specifics how I m i g h t be o f value t o Greenfield Associates, Ltd. May I meet
w i t h you f o r a personal interview?
Sincerely,

Stanley J.

Caterbone

Enclosure

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 472 of 646


Page 2578 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STANLEY J.

CATEXBONE

1250 Fremont Street


Lancaster, PA 17603
(717) 394-7710

CAREER O B J E C T I V E
P o s i t i o n as Marketing/Business C o n s u l t a n t w i t h an aggressive company i n
need o f enthusiastic, experienced professional. Seeking long-term opport u n i t y t o commit myself t o innovative, challenging p r o j e c t s where income i s
commensurate w i t h service and results.

DEMONSTRATED QUALIFICATIONS
Diverse experience i n a l l phases o f organizational management, i n c l u d i n g
s t r a t e g i c planning, sales and marketing planning, and employee r e t e n t i o n
programs.
F u n c t i o n best when operating w i t h specific goals and objectives i n an
autonomous environment; w i l l i n g l y assume a c c o u n t a b i l i t y f o r actions.
E n j o y m o b i l i t y ; r e l a t e w e l l t o new people and new situations.
Able t o
"break ground" i n expanding e x i s t i n g and developing new clientele.
H i g h l y developed understanding o f f i n a n c i a l management operations; able t o
apply t h i s knowledge t o various business settings.

EXPERIENCE
S. J . CATERBONE ASSOCIATES, Lancaster, PA
OwnerlMarketing & Business Consultant (1987-present)
Start-up venture t o provide business and marketing expertise t o c l i e n t s via
advice o n money management, business and marketing development. Design
and develop m a r k e t i n g and business plans f o r individuals and corporations.
i n c l u d i n g m a j o r r e c o r d i n g studio i n New York C i t y ( i n proposed j o i n t
venture w i t h Sony Corporation).
F I N A N C I A L MANAGEMENT GROUP, LTD., Lancaster, PA
Cofounder; E x e c u t i v e V i c e President and Corporate Secretary (1985-1987)
Developed full-service financial organization o f f e r i n g services ranging from
conventional brokerage t o real estate, accounting, and legal services.
Organization i n c l u d e d over 60 professionals o n s t a f f as full-time, part-time,
and a d j u n c t employees. Raised over $100 m i l l i o n i n new c a p i t a l per year.
Managed business and marketing plans.
Developed f i n a n c i a l forecasts.
Secured f i n a n c i n g f r o m p u b l i c stock o f f e r i n g f o r capitalization; produced
and f i l e d o f f e r i n g memorandum w i t h federal and state securities and
exchange commissions.
Recruited s t a f f professionals; n e g o t i a t e d their
contracts. Designed, developed, installed, and administered state-of-the-art
n e t w o r k i n g computer system and i t s software. Conceptualized and founded
the Registered Investment Advisor, an FMG subsidiary which-on
a fee-forservice basis-consulted,
administered, and managed investments f o r clients.

CONTINUED

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 473 of 646


Page 2579 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

CATERBONE, S T A N L E Y J .
Page 2
D e f i n e d and i m p l e m e n t e d s t r a t e g i c p l a n n i n g process f o r c o r p o r a t e g r o w t h .
C o o r d i n a t e d e d u c a t i o n a l seminars f o r c o r p o r a t e c l i e n t s . P r o d u c e d c o r p o r a t e
video f o r m a r k e t i n g purposes. C o r p o r a t e l i a i s o n f o r a l l l e g a l m a t t e r s .
I D S / A M E R I C A N EXPRESS. Minneapolis, Minnesota. M N
Sales R e p r e s e n t a t i v e (1981-1985) .
P r o m o t e d comoanv's
. , f i n a n c i a l o r o d u c t s a n d services: d e v e l o o e d e n t i r e
c l i e n t l i s t through prospecting.
Ranked 7 t h i n n a t i o n f o r c o r p o r a t e sales
a m o n g h u n d r e d s o f " r o o k i e " r e p r e s e n t a t i v e s i n 1982.
D e v e l o p e d and
m a r k e t e d L i f e P l a n n i n g seminars f o r p r e s e n t a t i o n t o c o r p o r a t i o n s . N a t i o n a l
l e a d e r i n sales o f " f e e - f o r - s e r v i c e V i n a n c i a l
plans.

~.

EDUCATION
M I L L E R S V I L L E UNIVERSITY, M i l l e r s v i l l e ,
B.S. i n Business A d m i n i s t r a t i o n , 1980
Emphasis i n M a r k e t i n g

P A 17551

C O L L E G E FOR F I N A N C I A L PLANNING, Denver, C O


A t t e n d e d 1984-1987

AFFILIATIONS
INTERNATIONAL ASSOCIATION FOR F I N A N C I A L PLANNERS
Member; f o r m e r e x e c u t i v e v i c e p r e s i d e n t
IACC
Member; p a s t t r e a s u r e r
INSTITUTE OF CERTIFIED F I N A N C I A L PLANNERS
Member
N A T I O N A L F O O T B A L L LEAGUE
C e r t i f i e d C o n t a c t Advisor

PERSONAL D A T A
Age: 30
M a r i t a l Status: S i n g l e
E x c e l l e n t health.
E n j o y t r a v e l i n g , sports,
W i l l i n g t o travel.

and reading.

REFERENCES
A v a i l a b l e u p o n request.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 474 of 646


Page 2580 of 2953

Thursday December 15, 2016


10/19/2006

US District
Court For
The Eastern
District
of Pennsylvana
TRANS
UNION
Credit
Information
Co.

Section
3189
False
Claim Act DATE U*ILE#
BATCH NO.
OPT Federal
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Credit Bureau of Lancaster County, Inc.

278 West Orange Street


P.0 Box 7271

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EMPLOYMENT MR~F~EO

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U.S. 16-4014 CIVIL RIGHTS CLAIM Page 475 of 646
Thursday December 15, 2016
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1'.

T S S

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US District Court For The Eastern District of Pennsylvana

TRAMS UNION Credit Information CO.

Section 3189 Federal False Claim Act


NO. oPi
fPi TYPE
OATE uIlLt

OPERNO

BATCH

.,. ~
.....

Credit Bureau of Lancaster County, Inc.

CLURED

TRIDE

218 West Orange Sfreet


P.O. Box 1271
Lancasfer, PA 17603
717/397-8144 FAX (71 71293-9224

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

9/87A
3/87C

Page 476 of 646


Page 2582 of 2953

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

TRANS UNION Credit Information Co.

DATE WILED

.!!

Credif Bureau of Lancasfer County, Inc.


218 West Orange Street
P.O. Box 1271
Lancasfer, PA 17603
71 7/397-8144 FAX (71 71293-9224

EMPLOYMENT YER~FSED

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 477 of 646


Property of Advance Media Group

e. .-

Page 2583 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

TRANS UNION Credit Information Co.

oArLMA,LsC

. . i:

Credit Bureau of Lancaster County, Inc.


218 Wesf Orange Streef
P.O. Box 1271
Lancaster, PA 17603
717/397-8144 FAX 171 7J293-9224

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EMPLOYMENT YER~FIED

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 478 of 646


Property of Advance Media Group

W C E
O*N(O

Page 2584 of 2953

Thursday December 15, 2016


10/19/2006

I m.

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

August 9, 1990

David C. Hostetter
Executive Vice President
Fulton Bank
One Penn Square
Lancaster, PA 17602
Dear Mr. Hostetter.
I have become very disappointed in your ability to correct a problem
that your bank has made regarding my personal banking account
#0118-74848. In fact, your actions have not only caused me great
concern for my investments that I have entrusted in your institution,
but I am now being humiliated and intimidated by your lack of
concern. This incident has now caused me to question whether you
have simply stolen my assets. The amount of money in question is
some $S,UW. 1,m sure not one of your larger accounts, however 1'11
fight like hell for $5,000.
You must be aware of the implications of this incident with regards
to the past performance of both commercial and, savings and loan
institutions. The public has already grown insecure and has lost a
great deal of confidence in the banking community a t large. And
maybe this is a n example of how mismanagement and abuse can
cause some of the same public insecurities a s the actual failures
themselves.
The following will depict a chronological accounting of the above
mentioned incident:
On July 31, 1990 a t 2:18pm (see MAC meipt) I was denied
withdraw privileges from my checking and Fulton Fund accounts a t
the Greenfield center. After another unsuccessful attempt, I decided
to inquire inside to a teller. I could not understand the problem,
knowing that L should have a t least $5,000 in the accounts.
The teller began an inquire on my accounts in the computer system.
After 15 minuets, she informed me that my checking account had a
0 balance. I informed her that I also had a Fulton Fund account
with sweep, and maybe there was a problem wifh that fund. Again
after 15minuets she came back with the same answer. The manager
began to become annoyed with my problem and my concern over the
situation. L asked to see some accounting, and she said she could
provide a n account activity report.

--

As she began scrolling transactions over the screen, I began peering


over the counter trying to review the account. I had noticed a check
for $6,250.00. I asked her if that was in fact a check for that
amount. She said "yes, number 470, made out in June". I quite
excitedly stated that I had never made out a check for six thousand
dollars in June. SHE LOOKED AT ME, QUlTE IRRITATED, AND
SAID, "WE'LL SIR, YOU MOST CERTAINLY DIDm.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 479 of 646


Page 2585 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

August 9, 1990, David C. Hostetter


Now, I was emotionally shook I had just lost $5,000 or $6,0000, and
I had no idea how. I would certainly remember any check written
for $6,000. The manager had no right to even question my ability to
recollect such an incident. Instead of receiving support, and help
in dealing with my pmblem, I received harassment. Does the word
CUSM3MER SUPPORT mean anything to your organization?.
The only advice that was given by your sWY was "to go home and
check your statement". Now I must question whether you provide
any training or education to your employees.
Well, I proceeded back to my business meeting. I was quite upset
and disturbed the rest of the day, trying to determine how someone
could have stolen one of my checks without my knowledge. This was
my only logical explanation, of which the manager suggested that
the only way to recover the funds was to prosecute. That was even
more encouraging
That evening I rushed home and pmeeded to review my statements
The statement showed a debit for $6,250.
for check #470.
Corresponding t o the computer ingumbyof that day.
However, the canceled check #470 was for TWELYE HUNDRED
AND FIIiTY DOLIARS". I will admit that the $1,250.00 could look
like a six (SEE COPY). But isn't that why we write the amount out
in longhand?? At this point I was just elated to have recovered my
lost $5,000, (for approximately 37 days).
The next day I had made copies of the check at my oflice, and
proceeded to the Greenfield branch a t noon, on August 1st. I took
the original check and copies of my statement. Before I r e a c h d the
counter, the teller asked "if I had found my problem?' I said 'no, I
found your problem". I went on to display the check, and also give
my dissatisfaction with the attitude by the Manager that I had
forgotten about a $6,000 check, and that the customer service was
really customer intimidation. Never once did anyone mention o r
suggest that there could be a n error in the accuunts, and that maybe
because I had never remembered writing a checkout for $6,000, that
maybe I never did.
.r

The teller was polite and understanding, she pmceeded with my


check to the Manager's office, and returned notifying me that she
would need to take possession of the actual check for veri@ation.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

August 9, 1990, David C. Hostetter


She inCormcd me that the account would be brought current t h a t
day, August 1, 1990. I asked her how I could withdraw cash, being
I still had no means of getting cash. She asked me to write a check
out made payable for cash (see check #486). She handed me $50.00
in cash.
Excluding the lost interest and any cancelled check fees, - I thought
I was made
whole.

TODAY LS A U G U S 9,U)90
I HAVE A CURRENT BAUNCE OF S 129.61I STILL RECEXVE CANCELLED CHECK NOTICES

I CONTINUE TO HAVE CREDITORS NOT BEING PAID


I CONTINUETO HAVEMYCREDITAI)VERSELYAFFE(;TEDBY
YOUR ACTIONS AND N E G W

YOUR INSIlTUTION REFUSES TO RERJRN MY ASSETS

I CONTINUE TO EXPERIENCE %lXESS AND -ATION


FROM YOUR LACK OF CONCERN FOR ME
CUSOhER

YOUR

NOW, YOU IMVE A PROBLEM.

Regards,

Stan J. Caterbone
"Just" a Customer
ENCLOSURES
CC

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Page 481 of 646


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Section 3189 Federal False Claim Act

~~

~.

U.S.(except DE) < 8 0 d - $ 3 3 ~ 1 ~ ~


FAX: (302) 472-2512
TELEX:6502917i'O.: MCI W

FOIlKi'.OM
SUITE 203

1:E

September 2 4 , 1990

Facsimile
General S e r v i c e s Board of Contract Apaeals
General S e r v i c e s Administration
10 & F S t r e e t s , N . W .
Washington, DC 2 0 4 0 5
Attn:
c l e r k of Court

\,..

n.',~
-

T h i s p r o t e s t is being f i l e d pursuant t o t h e R u l e s 5 ( a ) ( 2 )
and 7 ( b ) ( 2 ) of t l i e GSBCA by P h i l i p s and Du Pont O p t i c a l Company
("PDO") t o p r o t e s t t h e a c t i o n s of t h e Defense ~ s p p i n gAgency
Aerospace Center/AQM i n t h e evaluatior. and award o f a c o n t r a c t i n
c o n n e c t i o n w i t h Recpest f o r Proposal bearing S o l i c i t a t i o n
KDMA700-90-R-0011 d a t e d June 1, 1 9 9 0 ( t h e " S o l i ~ i t a t i o n ~ ~ ) .
P u r s u a n t t o R u l e 5 ( b ) ( 3 ) (ii)t h i s p r o t e s t is b e i n g f i l e d w i t h i n
PDQ
t e n ( 1 0 ) dnys a f t e r t h e b a s i s f o r t h e p r o t e s t w a s known.
p u r s u a n t t o Rule 1 9 ( a ) ( 2 ) r e q u e s t s a suspension h e a r i n g t o
suspend procurement a u t h o r i t y pending a d e c i s i o n on t h e m e r i t s .
Backqround
PDO , a j o i n t v e n t u r e between Nederlandse philips B e d r i j v e n
B.V. and E . I . du Dont d e Nemours and Company, r e c e i v e d t h e
above-referenced S o l i c i t a t i o n . o n June 6 , 1990 from t h e Defense
Mapping Agency, Aerospace Center/AQM, 3200 S o u t b Second S t r e e t ,
S t . Louis, MO
63118-3399.
The C o n t r a c t i n g O f f i c e r i n charge ,of
t h e S o l i c i t a t i o n i s William M. Nelson.
The S o l i c i t a t i o n was f o r
t h e p u r c h a s e o f conversion of mapping, charting and g e o d e t i c d a t a
t a p e s t o compact d i s c read only memory (CD-ROM) s t o r a g e m e d i a
a n d , t h e r e f o r e , GSBCA h a s j u r i s d i c t i o n as t h i s i n v o l v e s
procurement o f automated d a t a p r o c e s s i n g equipment.

According t o S e c t i o n M-2 of t h e S o l i c i t a t i o n , e v a l u a t i o n o f
p r o p o s a l s was t o made u s i n g t h e G r e a t e s t Value S c o r e t e c h n i q u e
and award would be made t o t h e proposal d e t e r m i n e d t o be t h e most
advantageous t o t h e Government, c o s t o r p r i c e and o t h e r f a c t o r s
considered.
F u r t h e r , p r i c e was s t a t e d t o be a s u b s t a n t i a l f a c t o r
b u t n o t as i m p o r t a n t a s t e c h n i c a l and was n o t n e c e s s a r i l y
c o n t r o l 1i n q .

A N D

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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P O N T

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10/19/2006

Date for sub1:lissio:: o f ?ropOs2ls was i n i Section


t i a l l3189
y JFederal
u l y False
2 , Claim
1990,
Act
b u t l a t e r extended t o J u l y 1 6 , 1 5 3 0 . Section L - 9 oC t h e
s o l i c i t a t i o n r e q u i r e d submission of t h r e e ( 3 ) sample d i s c s f o r
e v a l u a t i o n u s i n g t h e performance c r i t e r i a contained i n t h e
s t a t e m e n t of Work (Attachment ( 2 ) t o t h e S o l i c i t a t i o n ) . P W
s u b m i t t e d i t s p r o p o s a l i n f i v e volumes alonq with t h r e e sample
d i s c s on J u l y 1 2 , 1 9 9 0 .

US District Court For The Eastern District of Pennsylvana

On August 2 9 , 1 9 9 0 , B e s t and F i n a l Offers r.jere requesteci and


PDO s u b n i t t e d i t s response on August 31, 1 9 9 0 .
On September 6 ,
*

i'
i

1990, a second B e s t and Tina1 O f f e r was requested by t h e


C o n t r a c t i n g O f f i c e r of t h e Defense Mapping Agency t o which PDO
responded and, i n a d d i t i o n , i n q u i r e d as to t h e grounds f o r such
an unusual r e q u e s t .
On September 1 3 , 1990, a r e p r e s e n t a t i v e of PDO c a l l e d kine
Agency t o l e a r n t h e s t a t u s of t h e bid and was informed Ynat it
d i d n o t r e c e i v e t h e award. By l e t t e r d a t e d September 1 2 , 1990,
PDO was informed t h a t i t s o f f e r could n o t be c o n s i d e r e d f o r
award.
F i n a l e v a l u a t i o n r e f l e c t e d acceptable t e c h n i c a l and
manaqement p r o p o s a l s b u t t o t h e i r assigned weight t h e o v e r a l l
PDO r e q u e s t e d
s c o r e was n o t t h e most advantageous t o t h e Agency.
a d e b r i e f i n g meeting and t h i s was h e l d on September 1 9 , 1 9 9 0 i n
S t . L o u i s , MO.
A t t h i s conference, information r e g a r d i n g t h e
a c t i o n s of t h e Defense Mapping Agency wac l e a r n e d which forms t h e
basis f o r t h i s protest.
Basis f o r Protest
A t t h e d e b r i e f i n g conference, PDO was informed t h a t t h e
t h r e e ( 3 ) sample d i s c s were t e s t e d by a member of t h e t e c h n i c a l
e v a l u a t i o n team a g a i n s t t h e p e r f o m a h c e c r i t e r i a .
One d i s c
passed t h e s p e c i f i c a t i o n s .
The o t h e r two f a i l e d t h e
s p e c i f i c a t i o n s b u t i n only one o f t h e more t h a n s e v e n ( 7 )
criteria t o b e t e s t e d a g a i n s t .
A v i s i b l y obvious:surface d e f e c t
was observed o n each of t h e f a i l e d d i s c s near t h e outer r i n
r e n d e r i n g t h e d i s c s unusable f o r c e r t a i n purposes.
This s u r f a c e
d e f e c t was t h e b a s i s f o r f a i l u r e of t h e d i s c s and c o u l d o n l y h a v e
o c c u r r e d w h i l e t h e d i s c s were i n t h e p o s s e s s i o n and c o n t r o l o f
t h e Defense Mapping Agency.

P r i o r t o submission of t h e saraple discs t o t h e Agency, PDO


t e s t e d them a g a i n s t t h e performance c r i t e r i a listed i n t h e
S t a t e m e n t o f Work and a l l t h r e e d i s c s passed t h e criter-ia and
there w e r e no v i s i b l e d e f e c t s on t h e d i s c s t s u r f a c e s . '-PW was
n e v e r informed of t h e d e f e c t .
I f PW had been informed o f t h e
v i s i b l e d e f e c t i n t h e sample d i s c s during t h e Agency's e v a l u a t i o n
p r o c e s s it would have had t h e o p p o r t u n i t y t o r e s u b m i t d i s c s f o r
evaluation.
The Agency would h a v e t r e a t e d a l l q u a l i f i e d o f f e r e r s
e q u a l l y and f a i r l y as r e q u i r e d by t h e Competition i n C o n t r a c t i n g
Act.

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Section 3189 Federal False Claim Act

A t t h e d e b r i e f i n g c o n f e r e n c e , i t was lea-ned t h a t t h e p r i c e s
q u o t e d by PDO were s u b s t a n t i e l l y lower thzn tie a p p a r e n t
The t e c h n i c a l disc d e f e c t d e s c r i b e d above
awardeels prices.
formed t h e b a s i s o f t h e t e c h n i c a l s c o r e . It i s c l e a r t h a t b a s e d
upon t h e e v a l u a t i o n p r o c e s s s e t f o r t h i n t h e s o l i c i t a t i o n a n
o p p o r t u n i t y t o r e s u b m i t d i s c s damzqed k7'nilc in t h e p o s s e s s i o n o r
t h e Agency would h a v e p o t e n t i a l l y r a i s e d t h e t e c h n i c a l s c o r e o f
PDO t h e r e b y making PDO e l i g i b l e f o r award of a c o n t r a c t .

3,

.:

A t t h e d e b r i e f i n g c o n f e r e n c e , i t was l e a r n e d t h a t
he b a s i s
f o r t h e s e c o n d B e s t and F i n a l O f f e r was t h e need t o o b t a i n
f u r t h e r p r i c e a n d d e l i v e r y i n f o r m a t i o n from t h e a p p a r e n t awardee
o f t h e c o n t r a c t , D i g i t a l Audio Disc Corp. ("DADC"), Sony
Corporation.
Communication w i t h a l l o f f e r e r s must b e i n l i n e
w i t h l a w s a n d p r o c u r e m e n t r e g u l a t i o n s r e q u i r i n q f u l l and open
c & n p e t i t i o n among a l l q u a l i f i e d o f f e r e r s and f u r t h e r r e q u i r i n g
equal t r e a t m e n t o f o f f e r e r s during t h e evaluation process.
If
c l a r i f y i n g i n f o r m a t i o n was r e q u e s t e d f r c x Sony, it would a p p e a r
t h a t p r o v i d i n g a n o p p o r t u n i t y f o r PDO t o r e s u b m i t discs would b e

proper.
W e r e s p e c t f u l l y r e q u e s t prompt c o n s i d e r a t i o n a n d a c t i o n o f
our protest.

Very t r u l y y o u r s ,
"
Rushton T. c a p e r s
CD-ROM P r o d u c t Manager
P h i l i p s a n d Du P o n t o p t i c a i Compan:

address:
P h i l i p s a n d Du P o n t O p t i c a l Company
1409. F o u l k R d . , S u i t e 200
Wilmington, DE 19803
t e l e p h o n e numbers:
(302) 479-2501
f a : (302) 479-2512

cc:

Defense Mapping Agency/Aerospace C e n t e r


Attn:
AQ
3200 S o u t h Second S t r e e t
St. L o u i s , HO 63118-3399
E l i z a b e t h Curtis Swain, E s q .
E. I. du P o n t de Nemours and Company

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Tho DefidUve
Source of CD-ROM
inlofmatlon

Section 3189
Federal
False Claim
Act Suto 4
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NUMBER OF PAGES:
(Includhg thls Sheet)

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 485 of 646


Property of Advance Media Group

43

IN,
'

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

The D3f!.Zrr';fVB

570 ,Vwlll riiiY1:nylw Slreol %,!,re


f&7sCndf;n,

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TO:
FROM:

RE:

DATE:

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401

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7 0 ~ ~ fiu
7 ~7 0~~ 32-9,~
2

DISC R4agazlne kut


Linda W. Helgerson
1991 Calendar and Schedules
October 22, 1990

"How can you possibly keep the same consistent depth, quality and variety of
zirtides?" This question and tons of kudos wers the reactions to the premier issue of
DISC Magazine. Certainly we worked hard, but so did you and it showed. I cannot
thank you enough for your initiat contribaion. Istrongly encourage you to continue with
the depth and quality of your first effort.

--

Most authors I have talked with have said how many telephone e i l s they have
received as a result of their articles. This pleases me, because my interest in publishing
DlSC is to increase the communication among the experts and those that need to learn.
The articles themselves provide this. By giving authors FULL credit, we are also providing
a means for follow-on discussions.
Beginning in January 1991, we intend to publish DlSC Magazine each month.
!Each issuewill contain a CD-ROMcalled disc/in/DlSC, feature articles, regular columns,
departments such as multimedia, standards, hardware, etc., and finally a covar story,
comprised of a series of in-depth descriptive, educational and analytical articles. The
1991 calendar for the cover story in DlSC follows:

l!dQ!Xb

Cover Story

January
February
March
April
May
June
July
August
September
October
November
December

Images (Photographs & Video) on CD-ROM


CD-ROM Drives
Multimedia Authoring Systems & Software
Data Preparation & Tagging
Networking CD-ROM.Databases
Audio on CD-ROM
GIs & Mapplng Data on CD-ROM
Prernasterlng Systems & Sofhvare .
Graphics an CD-ROM
CD-ROM indexlng 81Retrieval Software
Data Conversion
Marketing & Distribution

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Section 3189 Federal False Claim Act

LOGISTICS: The first page of an rrticls is approximateP$EOO vtards. Each page


thereafter is 1,200 words. Tharefore, a t ~ o - p a g ecolumn, for examp!9, equals 2,000
words. Each chart or table is equivalent to approximately 200 words. ivlany of you have

asked, so here is the specific information.


The Imgth of an aarticle is not a problem for us. We would like columnists to have
at least a two-page article, but some in the prerrtier issue were only one page and highly
effective. Others were extensive, and that's okay too.

All copy is due 45 days BEFORE the month cf publication. Therefore, your next
column or article far the January issue is due by November 15th. We prefer to have
hardcopy of the article accompanied by a diskette with the text. We can conven almost
anything as long as we know the original word processing program. Vde use WordPerfect
5.1 in DOS. Please send a hardcopy of each of your charts, graphs or tables. We also
appreciate photographs, either black and white or color if they are appropriate.
PHOTOGRAPHS: We would like to have photographs for ALL columnists to
accompany their signatures. We intend to vary the photographs from month to month,
depending on the tone of your column, SO therefore we kvill need many different poses.
Would you please supply us with three color and three black/white photos. If you only
have one type available, please provide the three black/white photcs.

(-'

Your picture should be taken frotn the Tie Knot (or equivalent) up. The following
over your left shoulder. The
poses are suggested: one smiling, one serious, one Io~king
background should be a neutral grey. We would prefer to receive the phdos in 3' x 5"
color proofs, but negatives or slides are acceptable.
SUGGESIIONS. ADVICE&OTHER GREAT IDEAS: Now that we have produced
and you have studied the premier issue of DISC, you should know that we are VERY

open to suggestions and comments. For example, there are many people out there with
an informative story to tell others. Please suggest to them that they contribute to DISC,
or let me know and Iwill contact them directly. Although the first issue seems io contain
most all of the basic CD-ROM Information, we have only just begun. There is so much
to clarify, demystify, explain and so many people who want to learn. We ate particularly
looking for articles that tell how firms published discs themselves, the problems. the
decisions, the trials and opportunities. Help us to find them, if you would.

FINALLY. dlsc/in/DlSC: This CD-ROMis for use BY the CD-ROM industry. If


you want to distribute to thousands of people, dlsc/in/DISC is the method. You may
wish to use examples on disc/ln/DiSC to accompany your ariicle. The full texf of a
standard, demonstrations of user interfaces, public domain software or shareware,
minutes of meetings, demonstrations of something to enhance your articles -- al! these
and plenty of other ideas I haven't thought of are most acceptable. If something is
STRICTLY advertising, then we intend to charge but the cost is very small compared with
Steve Soto is Editor of
the numbers who wit1 receive and use dlsc/in/DISC.
dlsc/in/DiSC. Cantact him to discuss details.

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TRADE SERVICE
1 0 9 9 6 TORREYANA ROAD
S A N DIEGO. CALIFORNIA 92121-1192 PHONE (619) 4 5 1 ~ 5 9 2 0

September 24, 1987


Stan Catderbone
2323 New Danville Turnpike
Conastoga PA 17516
Dear Mr. Catderbone:
Th.r??c ynu fr?r your rs~;rrunct 'el- i.!-:f?r?Llt.:
r.3 c:: thr.
publications that we have available for the Music/Entertainment
Industry.

We are pleased to enclose descriptive literature which


should answer many of your questions. Also enclosed you will find
rate information and order forms.

If you need any assistance or have any questions please call


our Marketing Services Department toll free at (800) 854-1527
(outside California) or (800) 542-6421 (inside California).
We look forward to serving you.
Sincerely,
TRADE SERVICE CORPORATION
H. A. Weber
Circulation Supervisor
HAW: raa
Encl. MVA

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Telephone
703 790 9844

Mr. Stanley Caterbone


Financial Management Group, LTD.
5 5 4 Berkley Road
Stone Harbor, NJ
08247
Dear Stanley:
Thank you for the opportunity to review your York,
Pennsylvania property. Enclosed are your proposal presentations. Unfortunately, we can not proceed on this
activity due to our present commitments.
We wish you continued success.
Sincerely,

L&

sames A. Schretter
Executive Vice President
JAS:nn
Enclosure

AfhllateRIGHTS
of
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CLAIM Page 489 of 646

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3. L

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Section 3189 Federal False Claim Act

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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T H E A S S I S T A N T S E C R E T A R Y OF D E F E N S E
WASHINGTON. D. C . 20301-1300

October 23, 1990


In reply refer to:
OSD # 19043
Honorable Robert S. Walker
House of Representatives
Washington, D.C. 205 1 j
Dear Rob:
I have received your letter of October 15. regarding an inquiry from Mr. Stan J. Caterbone,
concerning a protest on a contract award.

In order to be of service to you, I have referred this matter to the appropriate agency within
the Department of Defense for direct reply to you.

If I can be of further assistance to you, please do not hesitate to let me know.

Assistant Secretary of Defense


Lqislahve Affairs

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C0NUI"C~

VICE CHAlRMAN
:$LNCE. SPACE A N 0 TECHNOLOGY

$joust of Beprerjentatiberj
ZiT4ar?!1ington, BE 20525
October 31, 1990

Mr. Stan J. Caterbone


Director
Advanced Media Group
American Helix Technology Corporation
1857 Colonial Village Lane
Lancaster, Pennsylvania 17601
Dear Mr. Caterbone:
Enclosed please find a copy of an interim report I have recently
received on your behalf.
You may be assured that I will continue to follow the progress of
this matter and that I will be back in touch with you when
further information becomes available.
I

6 C)

Your patience is appreciated.


K
y
,
d
L

obert

S.

Wa ker

Enclosure

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.,

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~...~s...-so,rz.w.

one d them, however, onicials now say.

The Ferranti fraud

Officials describe an international charade of 'cardbl


companies, secret bank accounts, a non-existent co~
r

Tim Mekeel and Ernest Schrelber


w Era Staff Writers

he contract was code-named


"Khyber Pass" and it was the
most sensitive of ISC Technologies L t d . ' s many so-called
"black"or secret programs.
As tight-lipped insiders describe it, the
English ISC subsidiarv. nicknamed Terh
1.td.. had hecn hlrc'd tofiovidc ~ a k ~ s t wlth
an
the equipment and know-how to manufac.
ture a t least three state-of-the-art air and
ground missile systems.
The manufacturing equipment supposedly
would be installed for the government. of
then-president Mohammad Zia ul-Haq in
northern Pakistan, just east of the legendary
mountain pass, not far from the Afghan-Russian border.
Between late 1986 and early 1989, Tech Ltd.
paid out more than $350 million - "laundered" through front companies - supposedly to suppliers of the missile manufacturingequipmmt.
Company records in England showed the
missile systems were installed and supposedly earned more than $100 million in profits.
But in spring 1989. Ferranti executives
found sorncthing amiss a t Tech Ltd.: a lack
of consistency among the dates on paper-

wnrk
...

Questions turned to doubts, then to suspicions, a s other discrepancies emerged.


The payments from Pakistan unaccountably stopped. The front companies went out
of business, again without explanation.
~

~.

. ~..-- -

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Three months ago Ferranti International, the British defense giant,


charged that it fell victim to a $350
mzllion fraud when it merged with
International Signal & Control, the
conglomerate founded here by former Lancastrian James H . Guerin.
This story presents the first detailed
account of how oflcials believe a
massive fraud - stretching from
England to Pakistan,from South Africa to China - was devised and
concealed. The information comes
from investigators and company insiders, all of whom spoke on the condition that they not be identzfied because of pending lawsuits and investigations.

Perhaps of greatest significance, company


founder James H. Guerin, who had brought
in the contract, acknowledged in answer to
inquiries from other company directors that
o a ~ e r w o r kon the deal didn't exactlv match
ih6 way the contract actually had been handled, company officials say.
In September, Ferranti International.
which had bought Tech Ltd. a year after the
supposed Pakistani deal, declared ,it was a
victim of fraud.
Two months later it sued to recover a portlon of its losses. $198.5 million, from Guerin,
three of his employees a t Tech Ltd. and live
front companies.

Now, a s Ftilanti officials p


their case to court, past and p~
there sav thcv are certain the
w:as fak; and'wa- t n e ccn1el.p.
mcntal and cctmplt.h fraud at 1
The missile construction t
how-to manuals were not sold
Pakistan, Ferranti officials s
thirds of the 5350 million supp
get theproje\:t going is missin
"This will clearly go down
of the biggest defense frauds
one of the most cleverly orcht
a former Ferranti financialof
The New E r a obtained its
alleged fraud from four pres,
Ferranti financial officials
board member- all of whom
tionof anonymity.
Their description was confi
ernment investigator familial
In interviews, the Ferran
scribed schemes hidden by a
of inventory, questionable L
thorizations, impostors who
tract managers and a Pakist
era1 whose role in the matte
unraveled.
Who masterminded the elat
remains uncertain, accordir
cials. There a r e a t least thre
Uley said.
-~~

..
~

See FERR

.
+
-

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US District Court For The Eastern District of Pennsylvana

James Guerln

Section 3189 Federal False Claim Act

Thomas Jasln

R. Clyde Ivy

Probers finding
ISC's S. African
ties were close
Thomas L Flannery
lntell~gencerJournal Stan

lnvestiaators believe

Federal investigators probing


alleged criminal activity by for- ISC plgyed a key part in
mer Lancaster businessman obtaining sophisticated
James H. Guerin within his de- U.S, mjljfaryelectronics
fense electronics firm, International Signal & Control Corp., for the South African
now believe the firm was one of government.
the key cogs in a sophisticated
U.S. military electronics procurement wheel set in motion
i
For ISC. now ~ e k a n tInternahere by the South African gov- tional PLC,one d t h e key compaernment.
nies within its incestuous c o r n
Speaking on the condition of rate maze
and unknown-to
anonymity, federal investigators many of its employees- was ISC
told the Intelligencer Journal EducationalSystems.
that Guerin and former top ISC
Com~anyliterature touted it a s
executive; R. Clyde Ivy, used a purveyor of remedial education
their numerous contacts within programs for adult blacks. FedSouth Afr~ca'sgovernment-con- eral investigators said it had antrolled ~ n d u s t r ~ aglant,
l
Rarlow other function, that of supplying
Rand, to assist the Pretoria gov- South Africa with small, sophistiernment in establishing myriad cated computers destined for the
companies whose sole mission gu~dance systems- of Israeliwas to circumvent U.S. military built. nuclear-camble ICBMs
equipment embargoes.
and other weapon$related comCourt testimony in late 1990 re- ponents.
vealed that both Guerin and ISC
Formed in 1986"Ed Systems."
-subjects of a multi-agency fed- as it was known: fit neatlv
- - - - " inin
eral irivestigation now hits-third the Barlow ~ a d dplan in that
year -were suspected of illegal- computer technology could easily selling embargoed military ly move from Lancaasterto South
technology to South Africa ior Africa under Deoartment of
years. However, the scope, meth- State licensure a s aheducationai
ods employed and depth of in- product and, upon arrival in
volvement in this clandestine o p Johannesburg, be easily reconeration were never disclosed. .
figured to supportthe South AfriEXHIBIT U.S. 16-4014 CIVIL
Pageto495can
of 646
missile and weannna
dpv-1GuerinRIGHTS
has alsoCLAIM
been linked
.. .=
. .
..
.Thursday
-- .-- December 15, 2016
Chilean arms dealer CarlosPage
Car-2601o&nentprograms.
Property of Advance Media Group
of 2953
10/19/2006
doen, supplying him with sophis"Ed Systems probably did, a t

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

DEFENSE MAPPING AGENCY


& I 3 LEE HIGHWkY

F I I R F M . VIRGINIA 22031~2131

American H e l i x T e c h n o l o g y Corp.
ATTN:
Mr. S t a n C a t e r b o n e
1857 C o l o n i a l V i l l a g e Lane
L a n c a s t e r , PA 1 7 6 0 1
Dear Mr. C a t e r b o n e :
T h i s l e t t e r is t o i n f o r m you t h a t t h e Defense Mapping Agency
A e r o s p a c e C e n t e r (DMAAC) h a s d e t e r m i n e d t o t e r m i n a t e C o n t r a c t
Number DMA700-90-DO011 w i t h D i g i t a l Audio D i s c C o r p o r a t i o n a n d
t o p r o v i d e a l l c o m p a n i e s which s u b m i t t e d p r o p o s a l s u n d e r R F P
Number DMA700-90-ROO11 a n o p p o r t u n i t y t o r e c o m p e t e f o r award o f
t h i s contract.
T h i s a c t i o n is being taken i n response t o a
p r o t e s t which o n e o f t h e c o m p e t i t o r s f i l e d w i t h G e n e r a l
S e r v i c e s Board of C o n t r a c t Appeals.

'

I n r e s p o n s e t o t h e p r o t e s t , t h e DMAAC a g r e e d t o t e r m i n a t e i t s
c o n t r a c t w i t h D i g i t a l Audio D i s c C o r p o r a t i o n a n d t o r e o p e n
discussions w i t h a l l o f f e r o r s i n competition for c o n t r a c t
award.
T h i s a g r e e m e n t was n e c e s s a r y b e c a u s e t h e DMAAC f a i l e d
t o disclose correctable deficiencies i n the arotester's
p r o p o s a l d u r i n g d i s c u s s i o n s w i t h t h e p r o t e s t e r a s r e q u i r e d by
FAR 1 5 . 6 1 0 ( ~ ) ( 2 ) .
Accordingly, I have determined t h a t under t h e c i r c u m s t a n c e s t h e
most a p p r o p r i a t e c o u r s e o f a c t i o n is t o p r o v i d e a l l o f f e r o r s a n
o p p o r t u n i t y f o r m e a n i n g f u l d i s c u s s i o n s by r e o p e n i n g t h e
p r o c u r e m e n t u n d e r t h e c o n d i t i o n s s e t f o r t h below.
The u n i t p r i c e s c o n t a i n e d i n t h e c o n t r a c t awarded t o D i g i t a l
Audio Disc C o r p o r a t i o n were d i s c l o s e d d u r i n g t h e d e b r i e f i n g
process.
A s a r e s u l t , i t is necessary t o place a l l c o m p e t i t o r s
on a e q u a l f o o t i n g with regard t o t h e d i s c l o s e d u n i t p r i c e s .

::
:
;

Accordingly, s h o r t l y b e f o r e t h e n e g o t i a t i o n s a r e reopened, t h e
DMAAC w i l l p r o v i d e e a c h o f f e r o r who e l e c t s t o p a r t i c i p a t e , i n
a c c o r d a n c e w i t h t h e p r o c e d u r e s s e t f o r t h below, t h e most r e c e n t
u n i t p r i c e s o f f e r e d by a l l p a r t i c i p a t i n g c o m p e t i t o r s . , The
DMAAC w i l l t h e n r e o p e n n e g o t i a t i o n s w i t h a l l p a r t i c i p a t i n g
competitors.
A l l p a r t i c i p a t i n g c o m p e t i t o r s w i l l be i n f o r m e d o f

the
d e f i c i e n c i e s o r weaknesses of t h e i r p r e v i o u s p r o p o s a l . A t t h e
completion of the negotiations, a l l p a r t i c i p a t i n g competitors
w i l l be given t h e o p p o r t u n i t y t o r e v i s e t h e i r p r o p o s a l s and
s u b m i t a b e s t and f i n a l o f f e r (BAFO).

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

S h o u l d you d e t e r m i n e t h a t you do n o t w i s h t o h a v e t h e u n i t
p r i c e s from your p r e v i o u s p r o p o sa l r e v e a l e d , o r t h a t your
company d o e s n o t w i s h t o c o n t i n u e i n t h e p r o c u r e m e n t p r o c e s s
f o r o t h e r r e a s o n s , I r e q u e s t t h a t you t e l e p h o n e me a t ( 3 1 4 )
2 6 3 - 8 5 0 2 no l a t e r t h a n t h e c l o s e o f b u s i n e s s o n 5 November
1990. P l e a s e f o l l o w - u p t h e phone c a l l w i t h w r i t t e n r e s p o n s e .
Send w r i t t e n r e s p o n s e t o :
D e f e n s e Mapping Agency
ATTN:
DFCO(STL)/William M .
3200 S o u t h Second S t r e e t
S t . L o u i s , MO 63118-3399

Nelson

I f you d o n o t w i s h t h e u n i t p r i c e s f r o m y o u r most r e c e n t
p r o p o s a l r e l e a s e d , y o u r r e q u e s t w i l l be h o n o r e d ; however, you
w i l l b e g i v e n no f u r t h e r i n f o r m a t i o n c o n c e r n i n g t h e DMAAC'S
assessment of your proposal nor u n i t p r i c i n g information
c o n c e r n i n g t h e o t h e r o f f e r o r s . Moreover, w h i l e y o u r p r e v i o u s
p r o p o s a l w i l l be e v a l u a t e d and c o n s i d e r e d f o r p o t e n t i a l
c o n t r a c t award, n o f u r t h e r r e v i s i o n s t o your p r e v i o u s p r o p o s a l
w i l l be allowed.
I f I d o n o t t o h e a r from you, I w i l l a s s u m e
t h a t you h a v e n o o b j e c t i o n t o y o u r p r e v i o u s p r o p o s a l p r i c e s
being released.
I w i l l l e t you know a s s o o n as t h e s c h e d u l e f o r n e g o t i a t i o n s i s
developed.

Sincerely,

"'I

JI'
--)1L-*--.
NELSON
Contracting Officer

WILLIAM M.

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s l l rClaim
r (*I C M -Act
CC~
Section 3189 Federal False

US District Court For The Eastern District of Pennsylvana


167" O I I ~ ~ C I .PEWNIILVANIA

CONNIE L THVMS

CHlEF D E P U N REPUBLICAN WHlP

W I i N I N G T O N OFIS,

MARC T. PHlLClP
COUHITTEb

DlSTRlCT OF'lCEI

VICE CHAIRMAN

GjENcE. SPACE AND TEcuNOLOGy

~ O I I ofS %
~e p r e s c n t a t i b e ~

ZZJa5f~irrgton,33C 20515

... .

November 8, 1990

Mr. Stan J. Caterbone


Director
Advanced Media Group
American Helix Technology Corporation
1857 Colonial Village Lane
Lancaster, Pennsylvania 17601

Dear Mr. Caterbone:


Enclosed please find a copy of correspondence which I have
recently received from the Defense Mapping Agency with regard to
your concerns about their handling of your proposal for a
government contract.
<-,
t

'-

!- -

I trust that this information will be helpful to you and that you
will not hesitate to contact me whenever you feel I may be of
assistance.

dc
Enclosure
!

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

D E F E N S E MAPPING AGENCY
M O LEE

HIGHWAY

F l l R F U . VIRGINIA 220312137

.\&:...
.~,

AQ

.c:

.
. ,.

xi

3 1 0CT 1990

Honorable Robert S. walker


House o f R e p r e s e n t a t i v e s
W a s h i n g t o n , D.C.
20515
Dear Mr. Walker:
T h i s is i n r e p l y t o your l e t t e r of 1 5 O c t o b e r 1990 t o t h e
O f f i c e f o r L e g i s l a t i v e A f f a i r s , Department of D e f e n s e on b e h a l f
o f y o u r c o n s t i t u e n t , Mr. S t a n J . C a t e r b o n e , D i r e c t o r o f
American H e l i x Technology C o r p o r a t i o n . n i s i em e r n i n g
D e f e n s e Mapping Agency (DMA) C o n t r a c t DM~700-90-D-0011 h a s been
f o r w a r d e d t o t h i s Agency f o r a c t i o n . DMA is aware of t h e
s i t u a t i o n and i s making e v e r y e f f o r t t o r e s t o r e a l l c o m p e t i t o r s
t o an equal basis.
The c o n t r a c t , which was awarded t o D i g i t a l A u d i o D i s c
C o r p o r a t i o n ( D A D C ) , was t e r m i n a t e d a s a r e s u l t of a p r o t e s t .
A l l c o m p a n i e s which s u b m i t t e d p r o p o s a l s u n d e r R e q u e s t f o r
P r o p o s a l DMA700-90-R-0011 w i l l be g i v e n a n o p p o r t u n i t y t o
r e c o m p e t e f o r award o f t h i s c o n t r a c t . D A D C ' s u n i t p r i c e s w e r e
d i s c l o s e d d u r i n g t h e normal d e b r i e f i n g p r o c e s s p r i o r t o t h e
protest.
The c o n t r a c t i n g o f f i c e r h a s d e v e l o p e d a p r o c e d u r e f o r
t h e recompetition w h i c h w i l l place a l l competitors on an equal
f o o t i n g and p r o v i d e them w i t h e q u i v a l e n t i n f o r m a t i o n .
E s s e n t i a l l y , a l l c o m p e t i t o r s w i l l have t h e o p t i o n t o : ? e v e a l
t h e i r p r i c e s and p a r t i c i p a t e i n f u r t h e r n e g o t i a t i o n s o r t o
r e f u s e which w i l l r e s u l t i n t h e i r c u r r e n t p r o p o s a l s b e i n g
evaluated a s submitted.
DMA is d e d i c a t e d t o p r e s e r v i n g t h e i n t e g r i t y o f t h e c o m p e t i t i v e

p r o c u r e m e n t s y s t e m . The a p p r o a c h we a r e u s i n g h a s b e e n u s e d
s u c c e s s f u l l y i n t h e p a s t under s i m i l a r c i r c u m s t a n c e s by o t h e r
a g e n c i e s . T h e r e f o r e , we a r e c o n f i d e n t t h a t t h i s p r o c e d u r e w i l l
e l i m i n a t e any p r e j u d i c e s u f f e r e d by y o u r c o n s t i t u e n t .
.Sincerely,

B r i g a d i e r G e n e r a l , USAF
C h i e f of S t a t t

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D R A F T -- N O T F O R P U B L I C A T I O N

Escaping the UNM1 Tar Pit


Producing CD-ROMs in the UNIX Environment2
Stan J. Caterbone

John S. Garofolo

Direclor of CD-ROM T~chnolocier


- for
Arneriwn lielki Technology Corporation
and Dircrror of M v a n c z d Media Group. Lad.
1857 Colonial Village Lane
Lancaster, PA 17601.

C o m ~ u l uScicnlist
National lnstitulc of Slandardr and lirhnology
Tcchnolom Llu:ldinc. Room A.216

Phone: (301) 975-3193


Email: john@ui.nal.nist.gov

Phone: (800) 5254575

Fax:(717) 392-7897

Just when things are going smoothly, and we begin to feel a little too comfortable and too
confident with CD-ROM technology, someone or something puts us in our place -- and
thankfully so. It's these challenges that facilitate our progress toward broadening the
horizons of CD-ROM technologies.
This article is intended to inform publishers and manufacturers of the problems that can he
encountered in using UNIX tar-formatted files as a medium of data submission for CDROM production and some of the issues confronting the next generation of CD-ROM
publishers.

.3

Databases developed on non-DOS-based3 systems which have performance requirements


that exceed MS-DOS capabilities are becoming more commonplace. Ironically, the existing
CD-ROM production infrastructure has been created and supported primarily by DOS-based
systems. Although we are making progress in publishing data on other platforms, a large
majority of the CD-ROMs published today are still designed on DOS machines for use on
DOS machines. The current tendency to link CD-ROM with DOS is making difficult the
implementation of CD-ROM technology on non-DOS systems and, therefore, slowing its
widespread acceptance.

'UNIX is a trademark of American Telephone and Telegraph, I n c (AT&T).

2Disclaimer: Cenain trade names and company products are mentioned in the text in order to adequately
specify procedures and equipment used. In no case does such identification imply recommendation or
endorsement by the National Institute of Standards and Technology, nor does it imply that the products arc
necessarily the best available for the purpose.
'DOS is a trademark of the International Busiliesb Machines Corporation (IBM) and MS-DOS is a
trademark of the Microsoft Corporation.

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DRAFT - NOT FOR PUBLICATION


The ensuing paragraphs illustrate the need for the CD-ROM industly become more in tune
with the trends which are shaping information technologies. CD-ROM, which is one such
information technology, is beginning to recruit a new breed of both users and publishers,
which are hoping that CD-ROM will adapt to them, as opposed to them having to adapt to
it. The Automated Speech Recognition Group of the National Institute of Standards and
Technology (NIST) is one such CD-ROM publisher.

The NIST Automated Speech Recognition Group


Sponsored in part by the Defense Advanced Research Projects Agency Information Science
and Technology Office (DARPA-ISTO), the group designs and implements methods of
performance evaluation for spoken language systems. These systems consist of natural
language understanding as well as speech recognition components. Additionally, it
distributes databases, or corpora, of speech recordings as standard reference material for the
development and evaluation of these systems.

'i

-I

Traditionally, these speech corpora have been recorded and stored in a digital form rather
than in an analog audio format. This allows the data to be easily loaded, stored, and
manipulated in computers and prevents signal degradation in copies. The speech is digitized
at a sampling rate of between 10 and 20 Hz., as opposed to the 44.1 kHz. sampling rate
used in CD-audio. Digitizing speech at these sampling frequencies keeps intact the
properties of the speech signal that are important for automatic speech recognition while
minimizing storage requirements. These corpora typically consist of thousands of spoken
phrases or sentences which are stored in separate files for ease of computer manipulation.
In the mid 1980's, the NIST began an archivalnending library for public domain speech
corpora. The corpora were originally maintained and distributed on half-inch reel-to-reel
digital magnetic computer tapes. Initially, these corpora were small, but as recognition
systems became more sophisticated, their appetite for "training" data grew tremendously.
By the end of the decade these corpora were each occupying 50 o r more 6250 bpi. halE-inch
magnetic tapes and even larger databases were on the horizon. Managing these colossal
databases of speech had become a real problem. Simply storing, copying, and distributing
the corpora had become unwieldy. Furthermore, maintaining the integrity of the corpora
was even more difficult as tapes were frequently damaged in shipment o r by rogue tape
drives.

NIST and CD-ROM


By early 1988, the NIST Automated Speech Recognition Group had begun investigating
optical disk storage technologies as a means of replacing its tape archives. Initially, WriteOnce Read-Many (WORM) technology was considered for use as a universal distribution
medium but was found to lack adequate standardization. Fortunately, in the Spring of 1988,

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DIIAFT - NOT FOR PUBLICATION

the SO-9660 file format standard for CD-ROM was adopted and CD-ROM was chosen by
NIST as a new "experimental" medium for distributing speech corpora.
NIST decided that the first corpus to be produced on CD-ROM would be the DARPA
' T I M I T Acoustic-Phonetic Continuous Speech Corpus. Under DARPA sponsorship, TIMIT
was jointly designed, recorded, transcribed, and archived by Texas Instruments IT11 , the
Massachusetts Institute of Technology (MIT), SRI International, and the National Bureau
co~puswas designed to provide speech data for the
acquisition of acoustic-phonetic knowledge and for the development and evaluation of
automatic speech recognition systems. The corpus contains recordings of 630 speakers from
8 major dialect divisions of American English each speaking 10 phonetically-rich sentences.
In addition to standard orthographic (text) transcriptions, TIMIT contains unique timealigned phonetic transcriptions. NIST felt that TIMIT's unique structure would b e of great
interest to speech researchers and, therefore, would probably be ideal for widespread
..
on a "prototype"
publication on CD-ROM. NIST decided to publish two-thirds of the corpus
CD-ROM.

8 (-1.L.
)
,5?

Because of the ISO-9660 restrictions on filename length and format, the chosen two-thirds
of the corpus to be placed on CD-ROM was restructured from a flat directory structure with
lengthy unique UNIX filenames into a dense 5-level directory hierarchy which reflected the
design of the corpus and conformed to ISO-9660. The resulting directory structure
contained 4200 bottom-level subdirectories -- one for each sentence-utterance, and 3 files
per utterance for a total of 12,600 data files! This new organization required the use of the
entire path and filename to uniquely identify a file but was 'Gisually navigable."
T o date, more than 200 "TIMIT Prototype" discs have been distributkd to universities and
speech research laboratories worldwide. The discs were well received by the speech
research community and have been read on PC's, Macintoshes4, various UNIX systems,
NeXT5 machines and ~ i c r o ~ ~ The
~ e"experiment"
s ~ .
had proved to b e successful.
As of this writing, NIST has produced four releases of speech corpora on eight discs.

Recently, NIST completed production of its most ambitious speech disc so far. The new disc
is a complete revision of the TIMIT Prototype disc and contains the speech for the complete
630-speaker corpus as well as all-new time aligned word-boundary transcriptions. The new
TIMIT CD-ROM contains 25,200 data files (4 files per utterance) as well as morcextensive
documentation and software utilities.
After the production of the TIMIT prototype disc, NIST recognized the need to distribute

Macintosh is a trademark of Apple Computer, inc

'NeXT is a trademark of NeXT, Inc.


*MicroVAX is a trademark of the Digital Equipment Corporation (DEC).

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speech corpora in a consistent format. Unfortunately, no standard file format existed f c l '
storing and exchanging speech signals. Compounding this problem, almost every speecl:
research laboratory around the world used different hardware and software configurations
for speech signal processing and analysis.

A UNIX-Based CD-ROM Preparation Workstation


In order to implement a full scale CD-ROM production effort, the Automated Speech
Recognition Group built a UNIX-based CD-ROM publishing workstation, which alsi:
doubles as a general-purpose speech research system. CD-ROM images are prepared 01:
a Sun Microsystems server system with 32 megabytes of main memoy, 3 gigabytes of high
speed magnetic disc storage, a 9-track tape drive, an 8mm tape drive, and of course a CDROM drive. The workstation contains two 1.2 gigabyte magnetic disc drives on which entire
CD-ROM images can be assembled and simulated.

Each CD-ROM is now organized entirely in the UNIX environment. Many of the standard
UNIX utilities and capabilities have proven ideal tools for CD-ROM preparation. Tar files
are now submitted for CD-ROM replication on one 8mm tape, instead of 5 or 6 half-inch
reel-to-reel tapes. UNIX-based CD-ROM premastering software is planned to be added in
the near future to help alleviate some of the complications NIST has experienced in
submitting data for replication. By performing ISO-9660 formatting in house, an ISO-9660
image can be submitted to the replication facility. The ISO-9660 image can then be directly
loaded into a mastering system - thus circumventing the problems which can occur
downloading tar-formatted files.
NIST has developed strategies to maximize the portability of its CD-ROMs by organizing
speech data into a consistent format and providing utilities which can be linked into each
laboratory's unique hardware and software systems. To accomplish this, a flexible, objectoriented header structure was developed for the exchange of speech files, especially on CDROM. The header is an ASCII-based structure prepended to each speech file and allows
an utterance to be uniquely identified (even if the file is copied from CD-ROM and
inadvertently renamed) and describes basic attributes of the speech signal to aid in digital
to analog operations. A set of software utilities have been written, "Speech Header
Resources" (SPHERE), to provide a low-level interface for importing and manipulating these
files. NIST now publishes aU speech data in this more consistent format.

A Data Submission Problem


All of the key components for efficient CD-ROM production were in place at NIST, except
for a vehicle for data submission. When NIST initially delved into the world of CD-ROM
production, it was dismayed to learn that most CD-ROM replication facilities accepted only
standard ANSI-labeled or ISO-9660 imaged tapes as transfer media. The small Automated

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Speech Recognition Group could not justify the expense of purchasing a special-purpose
premastering workstation dedicated to creating ISO-9660 tapes. Neither could NIST provide
standard ANSI-labelled tapes because the simple structure of ANSl-formatted files would
not preserve the extensive directory structure required by the many files typically contained
in speech corpora.

The UNIX tar Answer?


The tar-formatted tape is the standard medium of data exchange in the UNIX world and
NIST had been successfully distributing speech corpora on "tar tapes" for several years.
The UNIX tar (Tape Archive) utility was designed to create a portable archive format for
UNIX files. The tar program generates a single file (usually on magnetic tape) which
contains all of the information necessary for reconstituting directories, files, and UNIXspecific file parameters. What distinguishes the tar utility from most other archive programs
is that the archive format it creates is portable across machines and operating systems. The
key to the tar format's portability is in its simplicity. Tar does not employ any elaborate
compression algorithms when generating an archive. It simply creates a byte-for-byte copy
of each file to b e archived with a prepended header block. The header block contains the
path and name of the file (or directory), the file size, the time of last modification, and
UNM ownership and permission flags.7
Because the information in the each header block as well as the file itself is byte-encoded,
the tar file can be read by any system which can recognize a stream of bytes. Of course,
binary executable files are system-specific and cannot usually be implemented on differing
systems. But text, source code, and binary data files can be easily exchanged.

TOdate, the tar program has been ported to many operating systems, including MS-DOS
and VMS' as well as the many variants of UNIX.
Because the tar format is portable and preselves directory hierarchy, and because a tar file
can be written to a standard ANSI-labelled tape or any other storage medium, NIST
concluded that tar-formatted ANSI tapes would be the ideal vehicle for providing a CDROM-ready file image to a replication plant.
Unfortunately, NIST has found that most replication plants either refuse to accept tarformatted files or they charge considerable "data conversion" fees to download the files into
their premastering systems. To say the least, the acceptance of tar as-an input medium for
CD-ROM production has been less than universal by the CD-ROM replication industry.
-

'Sun Microsystems, Inc, TAR(5)". Unu Interface Reference Manual (Relense 3.0). Section 5 -FileFomtars,
pp. 429-430.. January 1983.
'VMS is a trademark of the Digital Equipment Corporation (DEC).

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1907' F O R P U B L I C A T I O N

The replication facilities that have ventured into the "tar pit" with NIST have frequently
encountered technical delays and cost-overruns. In theory, the tar-tape to CD-ROM process
should be simple. But in reality, it has rarely been straightforward to implement.

Pitfalls in Exbracting a CD-ROM Image from a UNDC tar File


The challenges encountered in producing a CD-ROM from a 630-megabyte tar tape, which
contains over 25,000 files, can at first seem insurmountable . Several problems have
occurred during production, some of which are still not completely resolved. Downloading
and extracting a CD-ROM image from a tar file can be excruciatingly slow, taking 15 or
more machine hours of time for a single disc image. If a tar file is packed with thousands
of files, unforseen complications can arise in the extraction process, and diagnosing and
troubleshooting all of the subsystems involved can become painful for even the most
experienced of engineers and technicians.

a c'!
L...

>
I

Extracting the file structure from a tar file for a CD-ROM such as the new TIMIT disc
requires a great deal of time and attention because of the extraordinary number of
directories and files. The subsystems involved in the tar extraction process require seamless
integration. These include the PC hardware platform and MS-DOS operating system, the
premastering system, the device drivers, controller cards, tape back-up systems, and the tar
utility. Limitations inherent in the MS-DOS operating system, device drivers, and file
structures can result in breakdowns in any one of these subsystems resulting in the loss of
hours of man and machine time in the production process.
Eight-mm tape subsystems can be especially vulnerable when extracting exceedingly large
numbers of files. This is because 8mm tape drives are mechanically suited for streaming
operations. They are not as accommodating as 9-track tape drives in the quick stopping and
starting movements which become necessary when extracting many thousands of small files.
Additional loss of efficiency occurs when 8mm drives must interface with a system which has
become bogged-down with overloaded magnetic disk sub-systems. The only way to optimize
their operation is to load and buffer large blocks of raw data before it is tar-extracted.
Subtle problems may also arise when the controller cards of some 8mm tape systems are not
entirely compatible with the publishing system being used. These and other unforseen
problems can cause a tape drive to abort operations well before completion of the extraction
process.
Worse yet, because the tar format does not guarantee that directories and files are stored
in any particular order, an entire tar file must be scanned to extract any subset of files
contained in it. If the tar-extraction process aborts before the end of the tar file is reached,
the entire process must be restarted from the beginning to insure that all files are loaded.

These constraints require that special efforts be taken to prepare backup tapes and even
second backup tapes during production. This is one area of risk where the insurance is well

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worth the effort, and is within one's control. Many of the other pitfalls are not as easy to
anticipate or avoid.
One of the more frustrating problems encountered while downloading the TIMIT tar file was
that of the overhead created while extracting the 18,900 small transcription files. To
illustrate this point, during the downloading of the 632-megabyte tar file, containing the
25,241 TIMIT files, the process aborted on 650-, 850-, and 1200-megabyte partitions due to
insufficient disc space!
On UNIX systems, the size of file blocks (similar to the ISO-9660 and DOS sector
structures) can be modified. Although the ISO-9660 standard supports different sector sizes,
the individual operating systems used in the premastering process may present problems.
For example, MS-DOS 3.31 does not allow any modifications to sector size. Fortunately,
MS-DOS 4.0 is more forgiving.
The TIMIT tar file contained 18,900 transcription files of under 2Kb each. A premastering
system running DOS 3.31 with a 16Kb sector size would require over 300 megabytes of disk
storage for these files which actually amount to less than 32 megabytes of data. This results
in disk overhead of 1 order of magnitude!

-\
I

However, by switching to DOS 4.0, the sector size can be reduced to as little as 512 bytes.
This significantly reduces the overhead being used by the DOS partition. It is therefore
important to adjust the sector size to accommodate the size of the database files to be
downloaded. T o maximize disk usage, the sector size should be set high when premastering
a database with a few large textual files. But when a database (such as TIMIT) contains
many small files, the sector size should b e greatly reduced. Likewise, it is also important to
allow for this kind of overhead on the CD-ROM itself. Although CD-ROMs are generally
created with a 2Kb sector size, the sector size can be reduced on the ISO-9660 image in the
premastering phase to as little as 512 bytes. By decreasing the sector size on the TIMIT
ISO-9660 image to 512 bytes, potential disc overhead was reduced by about 32 megabytes.
Finally, a hidden source of potential problems lies within the implementation of the utility
used to extract the tar file. There are currently a number of tar utilities that have been
written and are in use today. Many of these utilities are suboptimal in speed and efficiency.
The time required for downloading a tar file can become critical when extracting large
numbers of files. Therefore, using the right tar implementation is a must.

The Real 'Tar Pit" - Universal Operability


The real problem facing the CD-ROM industry concerning the production of non-DOSbased discs lies not in which utilities or platforms to use, but within the deeper abyss of
universal operability.

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Universal operability encompasses the common methodology of transferring, publishing, and
retrieving many different types of data across different platforms, while using different
hardware and software systems?
Attempting to extract a tar file into a DOS-based premastering system is a perfect example
of why universal operability is the next technical challenge for the CD-ROM industry at
large. If this issue is continued to be ignored, entire market segments will be left paralyzed
because of the inability to publish information from beginning to end without experiencing
compatibility problems. This bleak scenario could result in the CD-ROM industry losing the
acceptance and respect it has worked hard to gain.

The Challenge Ahead


This article has illustrated some of the potential problems which can result when using the
UNIX tar format as a data submission medium for CD-ROM replication. More importantly,
it has shown that a much greater variety of CD-ROM applications could blossom if the CDROM industry embraces a diversification of CD-ROM platforms.

-\

'

The ISO-9660 standard has provided a good basis for the exchange of CD-ROMs across
different hardware and software platforms. It is now time for the CD-ROM industry to
address and overcome the many obstacles faced by the challenge of universal operability.
The increasing need for a standard media- and platform-independent format for data
submission is just one such obstacle?'
In the short term, manufacturers of CD-ROM premastering workstations should publish
specifications indicating the limitations of their systems. This would allow publishers and
replicators of "atypical" CD-ROMs to avoid many of unforseen pitfalls they must now face.
In the long term, these premastering systems must be made more robust.
The next generation of CD-ROM publishers and users will help CD-ROM technology reach
new heights, but they will become far less forgiving as CD-ROM becomes more
commonplace. For NIST, the UNIX road to CD-ROMhas certainly been "the road less
travelled." Currently, the development, production, and use of CD-ROM technology in
UNIX and other environments is still in its infancy. However, by increasing support for
development and production in these environments, CD-ROMs may someday be produced
and used on a variety of platforms as easily as they are on MS-DOS-based systems today.
It is only in this way that the CD-ROM will become the truly universal medium of data
%own. T.. "Universal Operability: The Technical Challenge'. Dirc Magazine, pp. 30-34, October 1990.
'%elgerson, L W., "Universal Operability: The Technical Solution: Dirc Magazine, pp. 36-39, October
1990.

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exchange that it was intended to be.

Acknowledgments
The authors wish to thank the following people which have helped them in their quest for
solutions to the problems this article has outlined: Joe Bradley and Clayton Summers at
Philips and Dupont Optical Co., Dennis Clark, formerly of Meridian Data, Inc., Leon
Whidbee and Gisele Venczel at Disc Manufacturing, Inc., Lance Buder and Sylvester Pefek
at Optical Media International, and Tom Brown at Reflective Software.

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DEFENSE MAPPING AQEMCY

'

Section 3189 Federal False Claim Act

8011 L C I l t Z m Y A I
fF4RFM. VRaIW ePml.21Sf

14 NOV EN

AQAF-S

American Belix Technology Corp


ATTN:
Mr. S t a n Caterbone
1857 C o l o n i a l V i l l a g e Lane
t a n c a s t e r , PA 1 7 6 0 1
Dear Mr. Caterbone
T h i s l e t t e r i a t o i n f o r m you t h a t t h e Defense Mapping Agency
Aerospace Center (DMAAC) h a s concluded i t s e v a l u a t i o n of your
A t t h i s t i m e we w i s h t o
p r o p o s a l under R F P DMA700-90-R0011.
inform Y O U of t h e f o l l o w i n g t e c h n i c a l , management o r q u a l i t y
c o n c e r n s , and g i v e you a n o p p o r t u n i t y t o p r o v i d e a n y
i n f o r m a t i o n t h a t c o u l d b e n e f i t your company a s i t r e l a t e s t o
LL---

--..*----.

F i r s t , your sample C D - R O M ~ A ~ It h r e e ( 3 ) sample CD-ROMS


p a s s e d most of t h e P h i l i p s / S o n y s p e c i f i c a t i o n s a n d a l l of t h e
RFP s p e c i f i c a t i o n a w i t h t h e e x c e p t i o n t h a t two ( 2 ) d i s c s

e x c e e d e d t h e maximum i n f n r m a t i a n d i a m e t e r l M T D I a n d a l l t h r e e

( 3 ) d i s c s exceeded t h e t r a c k p i t c h (TRP) s t a t i c d a t a
specif icatione.

Second, Span of C o n t r o l - Span of c o n t r o l g i v e s u s a c o n c e r n


because we d i d n o t s e e t h e c a p a b i l i t y t o c o n t r o l l a r g e
orders, t h i s concern becomes more substantial when you

c o n s i d e r the f a c t t h a t you w i l l be s u b c o n t r a c t i n q
p r e w s t e r i n g / m a s t e r i n g and p r i n t i n g / f f n i s h i n g of t h e artwork.

The p r o p o s a l i d e n t i f i e d 100 s f t of
T h i r d , s t o r a g e of GPP
s t o r a g e s p a c e , t h i s is n o t s u f f i c i e n t t o s t o r e magnet c t a p e s
f o r l a r g e o r d e r s ( o v e r 200 t i t l e s ) .

Request t h a t any i n f o r m a t i o n p r o v i d e d i n r e s p o n s e t o t h i s
1 c C t c r be oont t o the following a d d r o o o and m a i l e d to a x r i v e

n o t l a t e r t h a n 1600 ( 4 P.M.
1990.

C e n t r h l ) on Wednesday, 2 1 Nov

Defense Mapping Agency


William M. Nelson
3200 South Second S t r e e t
S t . L o u ~ B , MO 63118-3399

ATTN: AQAP-S/Mr.

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Hand c a r r i e d responses musk be sent to the following a d d r e s s


hv

Chn

+<ma -p-nICJ-1

-L-u-.

Defen6e sapping Agency


ATTN: AQAF-E/tir. william M. Nelson
8 9 0 0 South BrOadWdy
St. Loui8, Mo 63125-1315
Any question8 may be a d d r e s s e d t o Capt Wright or t h e underfitanat7 at

t l l A \

9+7-Qzn?

Sincerely,

Contracting Officer

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Compact Disc Pmject Managers.

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Section 3189 Federal False Claim Act

Compact Disc Manufacturers.

'

. .

i... .

,. .

.. ,.

.:

? .

November 20, 1990


Defense Mapping Agency
ATTN: AQAF-S/Mr. William M. Nelson
3200 South Second Street
St. Louis, MO 63118-3399
Dear Mr. Nelson:
In accordance with proposal DMA70G9GR0011, the following
information is intended to address the specific concerns that
the Defense Mapping Agency has cited with regards to
technical, management, and quality deficiencies found in our
original RFP.
1.

"Firs4yoursample CD-ROMs - all three (3) snmple CD-ROMs


parred mosf of the Phillips/Sony specimtions and all of the

RFPspecijc&ons with the exception that two (2) &a exceeded


the mmimum information diameter (MTD) and all three (3)
discs exceeded the hnckpitch (TRP)static data specifi&.ons."

Response Due to the fact that certain customers,


including the federal government, request excessive
data capacities that exceed the Yellow book standards,
we will produce a disc that exceeds the limit. However,
we will require that the customer be at risk for certain
performance characteristics common under these
specifications.
In producing a disc that will exceed the Yellow book
specifications, the track pitch (TRP) must compensate
for the excess data that must be stored on the disc. In
some cases, certain drives may have problems with
such discs. The track pitch is a parameter that is
adjusted at the time of mastering in order to
compensate for the extra data. This will inturn result in
a track pitch below 1.55um.
Unfortunately, in today's market we would loose a
majority of our business if we required that discs adhere
t o data limits.
Enclosed is a disc that is well within the data
specifications of the Yellow Book standards.

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2.

Section 3189 Federal False Claim Act

"Second, Span of Control - Span of control gives us a concern


because we did not see the capability to control large orders,
this concerns becomes more substantiated when you consider
the fact that you will be subcontracting the
premartering/mtering and printing/*irhing of the artwonk"

Response The compact disc manufacturing process Is


contingent upon an order as being a title. A large order
is one whereby a title requires a large number of discs.
Only when an order requires large number of
replications do you benefit from economies of scale and
optimal production performance.
The DMA700-90-0011 contract is just the opposite. It is
a large number of titles or orders (1,000) with only 400
reproductions. All individual orders contracted by one
customer requires the same attention and efforts as by
all individual orders. All comoonents such as ~rintina.
mastering, and inserts must all be treated as ieparare
individual orders requiring 400 replications.
American Helix has built its business around small
"niche"customers for the audio market, thus being more
accommodating for the CD-ROM market. The American
strategies specifically
Helix business and produdion
address the issues pertaining to a large number of titles
requiring smaller disc replications.
American Helix already experiences one of the lowest,
if not the lowest, ratios of individual titles per machlne
hour. This also has resulted in developing efficiency
when turning many orders per day, as opposed to
producing one individual order that takes days of
machine time.
In response to the subcontractingl issues, yes we do
subcontract the mastering. We may or may not
subcontract the premastering. However, it has been
proven that we have been able to optimize our business
without experiencing any delays or lateness that is not
considered normal In the industry.

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As for the printing and finlshing of art work, I must


challenge your suggestion that this Is a deficiency.
Thereare not any domestic compact disc manufacturers
that prints inserts or tray cards on site. Again, Iwould
site the fact that we have extensive experience In
producing large numbers orders requiring small runs,
which have allowed us to optimize logistics and
operations of such.
In conclusion, we do not conslder the DMA700-90.0011
a "large order". We conslder it 1,000 small orders.
3.

Thw

the stomge of GFP - The proposal identified 100 sq. fr.


of stomge space, thk k not sumient to store magnetic tapes for
large orders (over 200) fifles."

Response In the original proposal Ihad Identified 100


sq. feet of floor space, not cubic feet. We currently
store over 1,000 1630-Umatic tapes for different titles.
I suspect that you will deliver your data in 8mm tapes,
of which the current storage space will be sufficient. If
you deliver %track tapes, we will accommodate your
requirements in our new storage facility. We have
recently broke through our walls, acquiring more than
5,000 sq. feet of additional space.
We hope that this Information Is useful In helplng you
understand our capabilities and the preceding issues.

Sincerely,

Stan J. Caterbone
Director, CD-ROM Technologies

ENCLOSURE

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Section 3189 Federal False Claim Act

Compact Disc Manu(ncturers.

December 6, 1990
Honorable Robert S. Walker
House of Representatives
Washington, D.C. 20515
Dear Mr. Walker:
Enclosed you will f i d copies of my latest correspondence and
procurement proceedings for the above mentioned contract.
As you can see, I was requested to submit information regarding the

specific technical, management, and or quality deficiencies contained


in the letter from W i a m M. Nelson, Contracting Officer, on
November 14, 1990.
Before submitting my response, I had called Mr. William M. Nelson
on the 19th or 20th of November asking when I would receive the
pricing schedules of the other offerors, as promised in his letter of
October 29th, 1990 which states "shortly before the negotiations are
reopened, the DMAAC will provide each offeror who elects to
participate, in accordance with the p i w e d u r n set forth below, the
most recent-unit prices offered by all participating competitors. The
DMAAC will then reopen negotiations with all participating
competitors."

I have yet to receive the pricing information as promised, and I am


becoming very suspicious of their conduct.
Any information regarding the above, will be greatly appreciated.
Regards,

Stan J. Caterbone
Director of CD-ROM Technologies
P.S. It has come time for me to reveal the truth about the summer
of '87. Unfortunately, this will involve many of you constituents, in
fact you may want to inquire to Mrs. Walker regarding our telephone
conversation in July of 1987. I mean no harm, and appreciate your
integrity and support.
\rnrr<an Helix Te~hnulc~gyCorponlr~n
IS57 Colonial \ ~ i l Lane
~g

Llncrrlrr Yunlts!itanm 1'601


-I: 391 -810
-1- 392 -89- F\S
Boil j!j 6 5 7

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Section 3189 Federal False Claim Act

FROM PAGE ONE

MONDAY,JANUARY 14,1991

ISC: Close ties to South Afhca probe


Continued from A-I

said one federal source. "But to


say they were a U.S. arm of Barlow Rand would be rlght on target, so to speak."

here and there within the com- Robert Shirema]


puter, parts that will be removed South African
once the stuff gets to South Afri- LearnTech Pty.
executive. "But there were milmainland and a I
ca.
lions and millions of dollars in
missile systems, like technology,
Called dual-use technology, the ny. EduTech, on
SPY systems and mobile military
For companies such ase ISC bomblvideo game swing in appli- off the South Afric
to take the cation capabilities of much of
"Jersey Island
command and communications which were
these electronics systems has ma of South Ail
bases sent to South Africa in re- risk of violating the
~
~ thrown
~ customs
r
t
source.
"It's
cent years via Lancaster, much control ~,.t and unit& ~
~
~
i agents
~ and fed~
~
. a
more than just the stuff sent embargoes that have existed era1 licensing agencies into a tur- haven known fo
moil in their attempt to prohibit front companies
through Terry Faulds and (ISC) since 1964 against the white
Technologies Inc."
theirexportfor
illegal uses.
and hide financia
supremacist regime' thepfofits
LearnTech, ac
"I don't think there's any cussources
were astronomical and, iniW!y,
tom, agent, or any federal agent eral sourceS, was
that ISC
Inc., the risks bureaucratically mm- for that matkr, who can look in- ISC and a Barlo,
Faulds and other executives imized,
to federal
side a computer and say, ary within a subr
within ISC's Lancaster-based In- sources,
'Whoops, that part doesn't belong Limited's electrc
..The fact that much of this
ternational Group-once headed
stuff micropmesthere,' " saidone agent.
tech.
by Ivy and which included Ed
isolators
the like
Another ISC source said he
EduTech woul
Systems and Technologies I ~ c-. ,,
were the key distribution areas could be
for peaca
appli- even doubted if many of the com- being used frequ
within ISC's U.S. operations for cations as well as war, made the puters themselves ever saw the conduit to direct
Barlow Rand.
licensing almost a snap,v inside of a classroom, saying payments to h
"Tosay ISC wasowned100per- said one agent.
if yousre what happened to the systems African princips
cent by Barlow Rand might bE shipping personal computers once they arrived in South Africa $1.6 million in
ferred to as the I
"anyone'sguess."
somewhat of an overstatement,
who.s to know if a part is added was
But one common thread ran tion - from IS(
through everyone's assessment African son-in-1
of South Africa's intent - pro- an, for establisl
cure, procure, procure.
investment firr
"As the (worldwide) arms race name.
In recent cl
escalated, it became essential
for South Africa to obtain U.S. Shireman was r
technology to advance the devel- counting mastel
opment of both their convention- ed the phony f
and nuclear weapons pro- federal proseca
grams," said one federal source. were used by GI
Insured .gain# dl rUk
unlfnmed. courteocu Pwsond
"We know this has been an active conduct a mass
We won't smoke In your home- or otRW
mission by the (South African) Ferranti - a f r
We solve Pa Odor Problems
government as far back as the ed at $1 billion.
we can stop Statlc ElecMcIIy
mid-1970s, but as been stepped up time British del
Carpel Protector avallabb
1987 merger wi
considerably since, say, 1985."
that
nearly thr
RY'S CARPET CLEANING
In concert with the establishFerranti has
ment of ISC Ed Systems, Ivy and
~ o p ~ r i ~Bn~t~. ~ . c N N ~ w1982
P . . U.S. Pamnl Nor. 1.1%.5186 4,zrr
rin,
Faulds and
former
top
ISC
finance
director,
EXPERT CARPET, FURNITURE & DRAPERYCIHMN

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 515 of 646


Property of Advance Media Group

Page 2621 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I Guerin vs. Clark 'blackmail' tapes revealec


; $2.7 million paid to destroy harmful data?
-

4EuStScMeiber
T ."d,rn
Mekeel
I New 618 S1a" Wl#lers

e
r

Ferrantl tnternacmnnl ,oftl.


e l r l r made public Wcdncsclrv
IIBMCI~PU
01 taped cunrr.rs8d
Lions that they say hely prove
t
that former rnrp,rr.l,c rt,<>mry
li Willism A Clark wnr black^
il mailmg executive Jamcs H
'I
Cuennlorl2.7Smilli"n
I

F e r r a n l i attorneys liled the


trsnseriptS i n p r ~ p a r a t i " " lor r
court hearing Friday l o consid.
~r the r o m p m y ' s r l n l n l that $2
milliOnof a l l r g d hush monryseized b y the govcrnmcnt beforeitcould bc paid-should be
relvmedtothecompany

:I

he lrling appears to bc part

r
3

Williarncbr*
Allegedinblachmail

JlrdscEdward N Cahnol All<,>


town that C i r i k has no vaild
c l a m tothe money
An rtlorney l o r Clark dzo l s s l r a l e g y loconv~ncelcddrdl

It 1141hYear-No.35,653

Guerin: 'distorted' TV report causing pai

other fornlur ISC rxrrll


are r.ceir,,,i: Lllrealcnln,
harasr#ne phnnc r r l l s 11,
l e C t l ~1" 21112111 l n a C C l l r l
James H Gvurln today of^
p"r,ine '
1 , ~ " df r r s h cvidenrclha, h l s l n ~
~ucrln
s;ud (hat t l i r trcl
tcrnational Stgnal& Control d ~ d
not illegally sail the kmlw-how
gy lor thc Alnerlciln r
bomb, known o r t h r Rnrkc
for building the r l u s l c r bombs
freely a v a l i r b l s waridu,$d
that have ended up in Saddam
Guerln noted that the Ca
Husiein'sanenal.
and I r a q i r r r s i o n s arc sul
c u e r i n was reacting ta a re,,ally d!flcnnt --and l n f r l
w r l F r l d a y b y ABCnewamagatothe Hockeye.
alneZOI20, r h l c h r a i d federalxn'(The Rocklye war d"l
uestigatnm believe ISC illegally
over 30 years ago. i t s c
sold cluster-bomb plans to Carpackage is prshahiy in
10s Cardoen, a Chilean arms
C",un,rr of tho world ,ha,
draler.
JamesGuerln
n.,,s.?dtiuChn
Cardoen t h e n m a d e the
lSCexecut#ve
Cucrin a r i d he I k r m r d I
bombs and sold them Lo I r a q .
N a l y eaptaln in 19i'Jor 191
said M i M . Those weapons now
Hugh Downs, said theshow has the~oekeyerpclfirrcl,,n
pose a deadly threat to U S . caused hxs famdy "unwarrsnt- ,.auailablc to
,ne
trmns
i n l h r Persian Calf
edhadrhin
~~~~,~
Cuenn,inaletkrta2olzahost
"MY w;ie and I,as well as
MoreGUERINc

z:?:2?A,ler

METROPOLITAN

ciuer,,1 sags he dcrpeialely


w;~ntrdto know thosc packages
ha"% beel, deitroyed, so he can
y* ao,1Inlph,'r SIC""

Page 2622 of 2953

~~

~~~~

[.ANCASTER, P A , THURSDAY, FEBRUARY 7.1991

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 516 of 646


Property of Advance Media Group

M
s?m.-.
~

Thursday December 15, 2016


10/19/2006

Prl

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

PEB /--

LANCASTER, PA., NEW ERA

7/ / F ? /

'Blackmail'
Continuedfrom A-1
In the acquisition, Ferranti
~-~ used
"The one thing I will look for savs. "Guerin and others
you to do, Bill, after we close this faise' contracts to overstate the
out, is ...(that) you look me in the value of ISC by at least $350 mileye and you say, I've destroyed lion, and Fcrranti officials relied
those packages," Guer~nsays. on those material misrepresentaClark assures his boss that after tions in agreeing to (a) stock
he gets his last payment, he will swap."
"take a trip, and I don't mean a
Ferranti says it is entitled to
vacation trip.
get the money back because it
"And when I get back from that was "illegally obtained propertrip, I will tell you that I have ty" that Guerin had no right to
been to certain places, and I have give toClark.
recovered the packages that are
The court testimony of an IRS j
there, and I have destroyed agent last May shows that $1.3
million of the funds were direct
them," Clarksays.
"I will take a book of matches results of the ISC swindle, Ferand they will be done away ranti says.
Another $700,000, it says, was
with," hesays.
Guerin testified here in Janu- illegally diverted from an ISC :
i
ary 1990 that Clark had attempt- subsidiary.
ed to extort $2.75 million from
Clark is not entitled to the
him, using 11 packages of al- funds, the company says, belegedly damaging information cause he knew the money was
tainted and used that knowledge,
about Guerin and his associates.
(
to force payments from Guerin.
!
The packages
alleged
"What Clark had in mind was
wrongdoing,
illegal
salefinancial
of arms
to South Africa, conflicts of inter- blackmail, not settlement of real i
est and cheating on government or imagined grievances about his
contracts, Guerin said.
employment," Ferranti charges
Clark's demand for money in its filing.
came during delicate financial
negotiations when Guerin was attempting to buy back a portion of
Ferranti.
Guerin believed the packages
particularly those alleging
Guerin had inflated its financial
worth would have scuttled the
buyback.
Clark suggested masking the
payments as a severance agreement in which he left the company due to health problems and
promised not to "bad mouth" the
company. Guerin agreed.
In Anril and Mav of 1989. while
the buiback negoiiations were in
progress, Guerin p a ~ dClark $1
million, according t o court documents.
But after the negotiations collapsed, Guerin stopped further
payment. Clark sued for the r e
mainder. and Guerin set it aside
in- a hankescrow
- ---- - ...- - account
-.
..-- -.
In Wednesday's filing, however, Ferranti, which in 1987 had
acauired Guerin's International
~ i d n a l & control cornoanies.
~~~.
claims that -ieitht.r Guerin nor
t the money.
Clarkhad any r ~ g hto
Since autumn 1989, the compai
nv has claimed that Guerin and
management
vict~mized
EXHIBIT U.S. 16-4014 CIVIL RIGHTS ISC
CLAIM
Page 517
of 646 it in
Thursday December 15, 2016
what its attorneys
Property of Advance Media Group
Page 2623 ofnow
2953call "a
10/19/2006
1
truly stupendous conspiracy"
~

~.
~~

~~

Lancaster
__
Aviation files for ban
US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I
I Alan Walsh

ii InteUQencw Journal Stan

Lancaster Aviation Inc., the largest of Lan-

t caster Airport's three fixed-base operators,

:I filed

for protection from creditors Friday


I under Chaoter 11 of the Federal Bankruotcy
.- - -.
...- - - - : Charles H. Smith, the president of the com1 oanv. said Fridav that the comDanv is suffering from the effects of an "unprecedented and
s extended downturn in sales, which began
t without warning in August."
I The major factor leading to the decision is
: not a profit and loss problem, but a cash flow
I! crisis: hesaid.
"The oroblem is that. . . exoenses for reJ pay &&[ of debt principal, taxes, capital
.I imorovements, and the like, have combinedto
i keen us in a negative cash flow -wsition over
E the'pait few ye&.," Smithsaid
Strapped for cashand innecdof financingto
I
I get the comoany throueh "this very serious

crisis." Lancaster Aviation will have four


months to restructure under Chapter 11 and
prove it can recover.
However, efforts to refinance and inject
new capital into the company have been
unsuccessful.
also unlikelv that the corn--..It
- is
~.
any will be able to secure a short-term bank
roan during its bankruptcy term.
In additlon. Smith said it will "probably be
imwssible" for the firm to o b t h credit aurinithe restructuringeffort. Asa resul1,Smith
s a ~ dbusiness must be conducted on a cash basis.
Under those circumstances, Lancaster Aviation will be on its own to eenerate enough
- --.
..-- - -- . - - .
The Lancaster firm manages an avionics
(airolane electronics) shop. maintenance
s h o ~used
.
airolane dealerslib. flight school.
charier service, and Exxon fuel dealership at
the airport. It employs 4 1 full time and seven
part-time workers.
After recording sales early in 1990 that
matched the firm s business plan for the year,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

~~~

Page 518 of 646


Page 2624 of 2953

PA

business droooed 35 Dercent in Ar


tember, and Octoher,'usuall?; the fi
activemonths.
August sales dro~oedto %280.00(
cally'below the nominal level for t
Salesdipped to$178.000 ior 1)ecern
For the year, Lancaster Aviatio
$5millionin sales, with lossesof $11
"In the first seven months. we v
of our business plan for the year. 'l
thing just stopped, just stopped." :
who jo~nedLancaster Av~ationin
retiring from the Navy.
Poor sales in used planes an
speeded up thecash flow drought.
"Our avionics and maintenance
really our jewelry store,"Smithsa
Since 1983,sales in avionics hav
from $300,000 to $1.5 million, and
nance department has risen to $1.
sales.
More AVlh

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

--~

Section 3189 Federal False Claim Act

11le

;IIe
,I-

tors One group walked down Dauphin and


Duke, the other along Rockland and down
Northuntil the lines met.
Holdin hands, the hundreds of marchers
adjusted5he lines until the block was surrounded. From the middleof the play round
an exuberant Calvin Duncan, presl ent qf
DADDs, addressed the crowd using a mlMoreDADDS on A-4

that Chilean arms merchant Car10s Cardoen produced the deadly


munitions for Iraq after ISC sold
International Signal & Control him the plans illegally, ABC's
founder James H, Guerin broke a r.20120.. program claimed
day.
year and a
day to reply toan
report
But Guerin denies that ISC prolinking ISC with cluster bombs vided
Cardoen with cluster bomb
used by Iraq'sSaddamHussein.
*,,,-, By Jon Rutter

Sunday News Staff Writer

li

v,
te

M o r e WAR on A-4

parking lot of the 1.ancaster Neighborhood


1- Center on Rockland Street.
)1

Federal investigators allege

More GUERIN on A-4

t I a burning apartment building in Ephrata.

ors may get voice on who gets money


.

-~

choice.
oromam
alreadv
lowine United Wav volunteers to select the
~ ~ a~
=- ~ . agenGesservingfhatneed);orto a specific
by a ma'ority of unitedway org;r s m u n the country, is seen as a non-profit humanservice agency, whether
;t
make United Wav oreanizations it be one of the 47 aooroved as United Way
r esponsive to community 'mncerns agenciesor anotheragency .
s mt contributions, whileonly modA committee is evaluating the test mod: creasingadministrative costs.
el results and prepafing a recommendat i g the 1990 campaign here, 13corn- tion for the board of directors, which meets
Feb. 28. United Way officials say further
, I ?mploying7,125peopletesteddonor
informationwillnotbeavailableuntil then,
1 These potential donors were given
., .onof designating all or part of their but it appearsdonor choice will be the comb ution to the traditional United Way mittee'schoice.
United Way has already approached
e ions system; to an area of need such
EXHIBIT U.S.
16-4014
CIVIL RIGHTS
CLAIM
Page
519
of 646
non-member
agencies
and
asked
them to
? !rehabilitationor
child
welfare(a1I

Property of Advance Media Group

Page 2625 of 2953

sign a document titled "Donor Ootion Pro@%amParticipation Guidelines," in which


they promise not to solicit United Way
donors for designated contributions.
And Thomas Woodland, donor choice
committee chairman, has issued a
statement saying, "The United Way views
donor choice a s a way to further develop its
fund-raising capabilities so it can better
serve the interests of all donors and make
more dollars available for health and human services in Lancaster County ."
Thursday December
15, on
2016
More DONOR
A-5
10/19/2006

US District Court For The Eastern District of Pennsylvana

114th Year-

No. 35,649

METROPOLITAN

Section 3189 Federal False Claim Act

LANCASTER, PA., SATURDAY, FEBRUA

Story: deals
by ISC sent
Iraq bornbs,
but Guerin
denies sales
----Tlrn Mekeel
?em Era Stan Wrtler

- - -- -

Cluster bombs apparently are


in the arsenal of Iraq's Saddam
Hussein indirectly because of
illegal deals by International Signal & Control, the ABC program
"20120" reported Friday.
But ISC founder James H. Guerin, in a rare telephone interview, today vehemently denied
the allegations.
Federal investigators believe
ISC illegally sold plans for cluster bombs to Chilean arms merchant Carlos Cardoen, who made
the munitions and sold them to
Iraq, the show said.
Besides selline
more
------.
~
~
- than
..~
-$400
..
-.
mc~ionworth of cluster bombs to
Iraq, Cardoen also passed on the
technology so Hussein could
build his own cluster bomb facto
ry, 20120 said.
This factory near Baghdad was

t
I

~~

r
I
t

t
I

b
F

b
!

C
)

I.

I.
li

.,

DHAHRAN, Sauc
-Allied bombers t
Iraqi ground for<
into the open, and
would use every
"kitchen knives t~
mass destruction"
emies.
Two American
shot down todav. th
Command in ~ i u d
Marine Maj. Gen.
ston also said a sei
killed, perhaps b:
bringing to 12 th
Americans confirr
the Gulf War.
The planes -an.
6
were shot dou
by anti-aircraft at
ston told reDorters i
The death occ
today when a Mari
parently was hit
bombs, Johnston s:
Marines were woun
A British militar

noted that Iraq's cluster bombs A sailor aboard the frigate USS Curts escorts a wounded Iraqi POW,
"There's no offe
pose a major threat to American
ing going on,v Ro,
who is blindfolded and bound, past a guard on the ship Wednesday.
t r o ~,s if ground fighting begins.
G ~ O UCapt.
~
NiaU
today. "They tend t
IS :was founded in Lancaster The Navy captured about 20 Iraqis on a mine-laying vessel in the
by C l e m , who now lives in Persian Gulf.
and disperse. The p
Napli-s, Fla. Guerin has denied
selling weapons know-how to
. Cardoen, said 20120.
In an interview today, Guerin
blasted the broadcast as "totally
untrue."
~ ~ - - ~ "It's such a distortion, it's so
disturbing to us, I can't remain
(API
- of
President
Bush invoked Thursday
silent.
It's aU.S.
terrible
thingCIVIL
to do,"
"and his anguishduringtheCivil
EXHIBIT
16-4014
RIGHTSWASIIINGTON
CLAIM
Page
520
646
December 15, 2016 War
God
and
the
memory
hesaid.
of
Abraham
Lincoln
today as
'I've
..He turned to prayer,
saying:
Property of Advance Media Group
Page 2626 of 2953
10/19/2006
.
.---..
4
.
. a - .-'
heasked thenation topray for lhcsafetvof AnlrriGuerin said, "The Cardoen
"~,.~i~"~F..~l...r
. .

Bush urges prayer for troo

Calls on Americans to unite in plea for their safety Si

Is4 I

US District Court For The Eastern District of Pennsylvana

I NEWER4

Section 3189 Federal False Claim Act

BUSINES

TUESDAY,
JANUARY 29,1991

1 I990 property
:I transfers lowest
I here since '84
down 13.6 percent from the comparable 1989period.
The economv's slide into reces..-I
.
~ c o~u n t ~y .real
~ ~ estate
~
[ slon~ and~ incrhasing ~ i d d l eEast
iarket turned chillv in late 1990. tensions were bllamed for the real
estatemarket'sdecline.
laking the full ykargs
lance thecoolestsince 1984.
"The bieeest slowdown we've
seen
is in the higher priced ~ O W Some 11,916 property transfers
mk place in 1990, the fewest lng, from $150,000 and UP," said
lnce 1984's 10.954. according to Ronald N. Cohen, recorder of
aeeas.
.gures from the La'ncaster &nf Recorder of Deeds Office.
Cohen added that the market

'I y Tim Mekeel


iew Era Staff Writer

--~---

c
:
:$
11

!'

Mortgage money borrowed


in Lsntaster County
"

While property transfers were


down for the year. the number of
mortgages issued was up 1.0 perWhile property transcent in 1%9Oto22,920.
.
fers were down for the
Recorder of Deeds officials
attributed that rise to homeownyear, the number of
ersusing home equity financing to
mortgages issued was
improve their existing homes.
up 1.Opercent in 1990
"Even if people can't buy something new and move upward,
to 22,920. Recorder of
they'll enhance what they have
Deeds officials attriband move upward that way," said
Anne L. Kendig, chief deputy reuted that rise to homecorder.
owners using home
In addition Cohen noted that
equity financing to imhomeowners are using home equity financing to buy non-home
prove their existing
items, since interest paid on conhomes.
sumer credit is no longer tax-deductible.
"The downside is, more and
more Americans are mortgaging
, :rs, and marked the fourth con- themselves to a dangerous level," sylvania real estate transfer tax reflect the county's s k
second-fastest growing
I :cutive year-to-year decline.
Cohen said. "I think, in America collected.
Cohen said he was "guardedly sylvania.
t At the same time, many county today, a lot of people are living
close to the financial edge. Some- optimistic" 1991would bringareFor instance, thc
I# meowners were getting home
times it's hard to separate needs bound in the real estate market opened with 7,932 prop
1 lulty loans on their .existin
here.
fers. That measure in
~8 .operties.
This trend helpe8 and wants."
I ~ s the
h number of mortgages
Despite the rise in mortgages
Interest rates are relatively 50.2 percent higher, a t I
e sued slightly above the 1989 issued, the sum of mortgage mon- low and many lendersare starting
The value of proper
I lark.
ey borrowed here fell 12.7 per- programs to help first-time buy- 1980 was $253.3 millia
cent in 1990. Some $2.86 billion ers, Cohen noted. On topof that, he thirdof the $845.1 mil&
1 The year started a s if it would
was borrowed, down from $3.28 added, the county remains a high- last year.
? a strong one. For the opening
ly attractive place to live and
billionin 1989.
&I wen months of 1990, property
The number of I
r ansfers were 4.5 percent ahead
The dccrcaje in property trans- work.
issued in 1980was 8,364
1:
1989'snare
fers was reflected in a decline in
"I'm projecting a slight in- egory in 1990 nearly t
-Droperty
%Id. 521 of 646
crease," he said. "Overall,
we'll
174 percent,
to 22,920.
.
.
.Page
EXHIBIT
16-4014 CIVIL thevalur
RIGHTS of
CLAIM
Thursday
December
15, 2016
I While
it mightU.S.
be exaggerating
end upa little bit ahead (in 1991)."
I
say.
"then
the
roof
fell
in,"
it's
The
value
of
property
sold
in
And
the
amount
Property of Advance Media Group
Page 2627 of 2953
10/19/2006
While 1940 W l F 2 'In,,."
it
m
n
.
.
,
.
.
:.of
1990 was $845.2 million. off 1 1 9
1 ilr to say that the roof at least
- r

.ro.>r

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

INTELLIGENCER JOURNAL

LOCALIBUSINESS

iar*casrEn.Pa.
OBITUARIES/<
SATURDAY. FEaRt

Judge delays hearing in Guerin-Clark dispute over c;


~

*nagnah-tstsn

ALLENMWN
- A federal judge
day
the rwuest
nlm
t am
l l,
si I
lorrner
a t h e y lo
de%aheatinglodetermineilhe~enti.
tledta,methaat2milliMthathasbeen

theoblwtof
a legal bttlefwnea.ly
a
year.
William A. Clark's Washin--baed
atfaney Barnet D. SLolnik, asked US.
Dlltrict judge Edward N. Cahn lodelay

hist*timm~inthed~lmatterbee~useIndusbien Ine. was l m n by federal


there are ponsible criminal charge. pmsecutars in karch 1990 under prwiwndingagainstbim.
sionsoffederalanti-racketeeringlawr.
The m i b t e charge. stem from a
Thegouernmentclaim~Gverinwtthe
hpartment
fraud inv-tigalan
a i l e by
~ l the
ydirected
U.S. Justice
at the rne,meltepvernmentbe~ieees~~ark
earh thmu h hisongolng mimmalenterl a m e r Lanoaster delemmtractar'~ newabout.
current owner. F-anti
International
M i t a n t US. AUorney Roben E ,
PU:nandille
Caldman tald the mart Clark remains
by
~ o f ~ !a~l sa fr ~mesr~oi ef lstocr ec rh se.si tnr ae l+
u d -o! the tar ets 01 an ongoing g a n d
ing~JamesHGuerth
jury mvetiga?ion. and faces possible
The money earmarked f a Clark char esolbiachail;erimi~Immpirawhichvanbein h e l d l n ~ u e r i o ' s m u d ~ey: tecurities and Exchange Commirfund -rial Llding mmpany, Parent .ion uiolations; tax w a s l a ; and money

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 522 of 646


Property of Advance Media Group

Page 2628 of 2953

lavnderingfrn hisalie edroleinanmter.


nrt>onat fraud federayagents have -id
eleeeds$lb~li~o~.
Skolnlk argued that lor Clark to p r w
erly
against
protect
sell-incriminati<m,
h a ronstltutianai
he urauldgbe
n hl

~&d"tb"C~
because the m e y wovl
by t h e p r e v i o ~ e a v r t
who
Shesid
la ri hlfully
that theburd,
enti"

unable to testify in thcclvrlmatterwith- r e s ~ d w i i f ~ l a r k . ~


his d w u
lnghirthaneestareeov~rUuf~nds.
wassearching for.,balar
$ h i d Clarkchto tatify.Skolnik tw.havingmreal mnce,
sad any testimony Clark did e v e might of
the funds -use
th
well beusedagainsl hirnrhouIdmim1~1 court ~ u m i ~ i in
r n
bn

?utinvokingUlisri~ht,aadpossibIy
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chargesbebrovghiatalatetedatt.
Assi~tantUS. Attorney Sania C. Jai-

M=.

Thursday December 15, 2016


10/19/2006

\ANCASTER,
PAThe, NEW
ERAof Pennsylvana
US District Court For
Eastern District

Section 3189FROM
Federal FalsePAGE
Claim Act 1
CONTINUED

fraud
..

That arrancement suonosedlv


~
~
\vuuld
tracing of
t the heart of \&,hat ments back to Pakistan.
Ferranti now calcuThird. Tech Ltd. sunoosedlv
lates a s a $350 million
the Pakistanicontract
loss.
officials say. is
four front companies that supposedly masked hidden backers
#(lpposedly landed by Guerin in
of the project.
1 ite 1986.
The companies - named in the
I: That deal actually did not
t uist, officials say, although it suit as Technology Associates InI: lirnicked other legitimate con- ternational, Elverton S.A., Sestri
t .acts with Pakistan that were Associated S.A, and Navarino
Develooment Coro. -were DorI ?Id by ISC.
I The boeus
.. transactions with tru! t.cl iu ..o~ileco~npansoffic~als
n e 10 the CIA and to
I ak~st;~
hlla\vcd
n
I I I . I ~ ~ , I IIn~ I ~ ;I:I ~ I. iI~I \ . ~ ties
I .v~du;tl,- nor ncccs3;rl.~l!Gue- the Barlow-Rand company, a
move designed to enhance the
; n. although hc 1; h e ~ n chclcl resecrecy.
I ,onsible< to steal an estimated
The Elverton company name
.50 million out of Tech Ltd.'s
supposedly was chosen because
e ~ f f e r stheofficialssaid.
,
, In addition. they believe. the the pronunciation of the letters;
u jgus deal inflated lnternational when spellcd backwards, sounded like "Not Reveal."
I ~gnal'svalue when it merged
The arrangement did not seem
I ith Ferranti in 1987. This inflaon led Ferranti to pay far too unusual enough to "ring alarms"
: iuch to International Signal's among ISC officials outside the
TechLtd. operation.
: :ockholders. they claim.
"It made'a lot of sense because
f Officials further say Ferranti
of the incredible ties between
i .as hit by two other losses on
company executives and South
t mtracts held by Tech Ltd.:
I
The disappearance of more Africa." said one source. "They
r Ian $100 million worth of guided have good missile technology in The Khyber Pass, located in northern Pakistan, was the I
supposed missile installation that Ferranti lnternat~onalsi
: lissiles, or missile components, South Africa, and there'd be no
: riginally produced for the Unit- licensing problems. Other pro- $250 million in losses.
grams had been set up that way."
I -i Arab Emirates in 1984, then
As a final secrecy measure, all Ferranti official agreed.
,Id toChina in 1988.
broad contacts Guerin
'I That inventory was last seen in the contract's financial work was
The end result of the suspected South African businc
r a r East warehouses in 1988. but handled internally, without over- fraud: Ferranti has written off
his aides had with
c .ace has vanished. (Ferranti of- sight by International Signal's about $250 million on the Pakista- that
African government, a
own financial staff, past and ni deal.
; cials will not say where the
Guerin associate and
present, Ferranti officials say.
r .arehouses are located.)
A
substantial
portion
of
that,
Taken together, the secrecy about $100 million, is simply prof- tor says. (At one time.
1
The failure of South African
of South
r ompanies to pay an estimated conditions posed a convoluted its that Tech Ltd. claimed were. Barlow-Rand
vested
in
ISC
and (
bookkeeping
and
high
financial
15 million to $50 million. due in
earned but actually were not.
buying it entirely .i
! 389, for electronics equipment riskfor Tech Ltd.
other $150 million, howevEstimates on the v:
But such measures supposedly er,The
c old toit by TechLtd.
is real money forwarded by company's South Ah
were
necessary
to
get
the
deal
: The 1989 transactions were the
Ltd. to the front companies. varv widelv. from as
with Pakistanand to earn the .Tech
E ltest in a business relationship
m e r e that money is now located miliion a G a r to mor
handsome
30
to
40
percent
profits
:. etween South Africa and Interis not known.
million.
t ational Signal that dates to the it was willing to pay, some Tcch
But whatever the I
c lid-1970s. The legality of that Ltd. offificialsargueda t the time.
n the in-depth investi- ranti
officials say, str
As
the
deal
supposedly
worked,
II
rade is now under scrutiny by a
gation that followed of electronics
to Sol
Tech Ltd. gave money to the
j .ide rangeof federal agencies.
d i s c o v e r y of t h e continued into the eal
:I
In this particular case, Ferran- front companies to buy missile
"Khyber Pass" loss- of 1989.
equipment in South Africa for inI
, officials believe real eouioes. Ferranti officials
! lent truly was sold toS0111hhfii- stallation in Pakistan.
say they discovered two other
Those sales, they ad
Pakistan then supposedly paid
, J, but tney question whcthcr the
shortages in the books of Tech fictitious and did occu
hipments' American export a p for the equipment with deposits
Ltd.
on company books?alt
,roval was legitimate and prop- made in the Swiss bank account.
The first shortage involves might have been ma
Tech Ltd. got paid for its work by the unexplained disappearance legitimate U.S. govel
-P .
Ferranti's lawsuit, which con- withdrawals from the account.
of more than $100 million worth of provals. They suspet
In reality, officials now say.
ern6 only the Pakistan and
laser-guided "Hakim" missiles ters from U.S. Com
:hina deals, alleges that Guerin, the money sent to the front com- supposedly shipped to the F a r partment and State t
tobert L. Shireman, vice presi- panies was not spent on equip- East.
officials authorizing
:ent for finance at Tcch Ltd., and ment purchases for Pakistan. InTech Ltd. suppose& had ob- by ISC were not al
.mployees Lawrence L. Resch stead, some of it was returned
tained those missiles in 1984-86 were misused.
Swiss bank
!nd Wayne
K. U.S.
Radcliffe
"knowEXHIBIT
16-4014
CIVILthrough
RIGHTSthe
CLAIM
Pageaccount
523 of 646
Thursday
December
15, 2016
for sale to the United
Arab
"It seems
clear nou
and some is believed stolen.
nglyProperty
participated
in Media
a dishonest
shipments)
didn't rn
of Advance
Group
Page 2629 of 2953Emirates.
10/19/2006
Annually throughout the concheme"
But,-because
needs eensing requirement
. ... ~ . ~ ~ .
" .
.. ..
.of. changing
.
ihontinued from Page One

fA

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- .

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Will Become One of 1argest British Defense Contractors

$1.5 Billion Merger wit


MEKEEL

Signal

, -

lirouD

One

in 1971. ~ e ' i its


s largest stockholder. owning 10.5 percent of
its common stock. Guerin
; also will be the largest individual stockholder of the new
: combined company, owning
4.4 percent.
!
Sir Derek Alun-Jones. exi ecutive director and chief executive officer of Ferranti.
will be executive chairman of
the new company. Guerin will
be its deputy chairman.
merger agreement
: callsThe
for International Signal
stockholders to receive nine
Ferranti shares for every five
, International Signal shares.
Then
each Ferranti share will
be exchanged for one share in

officials said the


merger will not bring any immed~atelocal impact, such as
plant expansions or rrlocations. But the hope it eventuwiu leaLl to more business for 1 s ~operating
' ~
panics.,
.
Under the terms of the
agreement, International Sig- -.
nal stockholders will own 41
percent of the combined new
company. ti stockhold.
59 Percent.
erS
"This one merger quickly
achieves most of ISC Group's

Lancaster County's largest


employers, said today it has
agreed to merge with another
English electron~csand defense com any in a combina
tion value,$at $i,%
International
based in London, said it in- ,
tends to merge with Ferranti
pLC of Cheshire. The com- :i
bined company will he one of
the largest English defense
contractors and will be based
sz$gitcec
in London.
has
logical
and
product
footings
International signal
in certain specific areas,"
headquarters for
said James H. Guerin, execuholding company, ISC G~~~~
tive chairman of InternationInc., in Lancaster, ISC ema1 Signal.
ploys 1,702 people in LancasGuerin, of Manheim R7,
ter, out of a total 5.266 emfounded
International Signal
ployees worldwide..
;

Ei7tc$V",yr

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

.,

fan

the new combined company.


The result will be an 83 per, cent increase in International
Signal's annual dividend of
3.6 cents per share.
i
The value of outstanding
i

Page 524 of 646


Page 2630 of 2953

Thursday December 15, 2016


10/19/2006

D S C ~204

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PLEASE INDICATE (CHECK ONE) TYPE CORPORATION


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DOMESTIC BUSINESS CORPORATION

US District Court For The Eastern District of Pennsylvana

ARTICLES OF lNCORpORAtlON

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flln

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DOMESTIC BUSINESS CORPORATION


A C1 OSE CORPORATION COMPLETE BACK

COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE CORPORATION BUREAU
336 NORTH OFFICE BUILDING. HARRISBURG. PA 17120

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ter(3~)

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a n y o r a l l l a w f u l business f o r w h i c h b u s i n e s s c o r b o r a t i o n s mav be i n c o r z
p o r a t e d u n d e r t h e B u s i n e s s C o r p o r a t i o n Law, A c t o f May 5, 1933, P.L.
364,
a s amended.

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I N T E S T I M O N Y WHEREOF. THE INCORPORATORrSt H A S [HAVE) S I G N E D A N D S E A L E D THE M T I C L E S OF I N C O R P O R A T I C


THIS

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OAY OF .......

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EXHIBIT U.S.
16-4014
CIVIL RIGHTS CLAIM Page 525 of 646
..,"..,t,,,~,.%

Property
of Advance
Media Group
* "<mF
"E."C'VP.*.
*b.lL.rXi.*II

Page 2631 of 2953

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Section 3189 Federal False Claim Act

ot*. b I#,)

US District CourtARTICLES
For The EasternOF
District
of Pennsylvana
INCORPORATION

DOMESTIC BUSINESS CORPORATION


A CLOSE CORPORATION COMPLETE BACK

FEE
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.'

COMMONWEALTH OF PFNNSVLVANIA
,'~PIC-P~HTUENIof STATE - WRPORIION
UURUU
.'
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........

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E N ~ E RBOARD LICENSE NO

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a n y o r a l l l a w f u l b u s i n e s s for w h i c h b u s i n e s s c o r p o r a t i o n s may b e i n c o r Itorated u n d e r t h e B u s i n e s s C o r p o r a t i o n Law, Act of Hay 5 , 1933, P.L. 364
a s amended.

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-- ---.-

MICROFILM
s
NUMBER
E

.
AMOUNT

DATE HCJECTED

..
MAIL1 P HV [>A1E

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

18

REV

Ill

Page 526 of 646


Page 2632 of 2953

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MI CORPORATION NUMBER

.....

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Thursday December 15, 2016


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US District Court
For The Eastern
of Pennsylvana
ARTICLES
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lNCORPORATlON

COMMONWEALTli OF PENMSYLVANIA
IJCPAF(1UENT OF STATE U))(POAITlON LIUHEAU
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PLEASE INDICATE ICHECK ONE) TYPE CORPORATION.


DOMESTIC BUSINESS CORPORATION
Section 3189 Federal False Claim Act

DOMFSTIC BUSINESS CORPORATION


A C I O M CORPORAlION COMPLETE 0ACK

FEE
I75
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W M E S I I C PROFESSIONAL CORPORATION
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM
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Page 2633 of 2953

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Section 3189 Federal False Claim Act
DOMtSTlC BUSINESS CORPORATION

ARTICLES OF INCORPORATION

COMMONWEALTH Of PENNSVLVINIA
DEPA'ARTYENT Of STATE W R K Y ( A l K 1 Y BUIEAU
*h NORTH OfFICt BUILMNG, M R I S L U A G . PA 11120

....................

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any or all lawful business for which business corporations may be incorporated under the Business Corporation Law, Act of May 5, 1933, P.L. 3 6 4 ,
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IN T E S T I M O N Y WHEREOF. THE I N C O R P O R A T O R I S ) HAS I H A V E I S I G N E D A N D S E A L E D T H E M T I C L E S OF I N C O R P O R A T I (

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 528 of 646


Property of Advance Media Group

Page 2634 of 2953

-.-- .WI..............

.
..
AMOUNT

CURPOHATION

NUM

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 529 of 646


Property of Advance Media Group

Page 2635 of 2953

Thursday December 15, 2016


10/19/2006

I S Y .m
, ~#Rev
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DOMt STlC BUSINESS CORPORATION
Section 3189 Federal False Claim Act

L)

US District Court
For The Eastern
District
of Pennsylvana
ARTICLES
OF
INCORPORATION

DOUt STlC RUSINESS CORPORATION


A CLOSE CORPORAllON COMPLETE BACM

T.&NAMONWtA1 TH Of PFNNSVL VANIA


0 DOMCSTIC PROFESSIONAL CORPORATION
rIEP*nTwNT OT STATE - COUKWUTION WHEAU
E N l t R BOARD LICENSE NO
S r , M Y t l H OFtlCt IUIIl 01% H*RRISBaRU PA 111m
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wni ~ r c i c ~ r e r ~ ~

Accounting S e r v i c e s ,

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1 ) # 1 C I I R W ) . . l O H I Y I Y W l ' S <II t t l COUP Rh16M
Tai h a v e u n l i m i t e d p o w e r 'to e n g a g e i n a n d t o d o a n y l a w f u l a c t c o n c e r n i n g
s n y o r a l l l a w f u l b u s i n e s s f o r w h i c h b u s i n e s s c o r p o r a t i o n s may b e i n c o r p a r a t e d u n d e r t h e B u s i n e s s C o r p o r a t i o n Law, Act of Hay 5 , 1933. P.L. 3 6 4 ,
a s amended.
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Caterbone

175 16

IN 1 E STIMONY WHEREOF. THE INCORPORATORIS) HAS (HAVE) S I G N E D AND S E A L E D THE ARTICLES OF INCORPORATIC
THIS
.............
.........
D A Y OF ..
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-

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- FOR Of F

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:E USE ONLY

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. . . . . . .
UATE APPIWVCD

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001 CORPORATION NUMBER

..........

DATE REJECTED

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MLILFO BY OATF

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I

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I
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 530 of 646
' uOlMR
Property of Advance Media Group

Page 2636 of 2953

..
-.
VEHIFlrn BY

....

Thursday December 15, 2016


10/19/2006

.-

u.,.,-.-,..7. ".,
ARTICLES
OF
INCORPORATION
US District Court
For The Eastern
District
of Pennsylvana

Y L L I I L

4~

UrnEln V"L,

."YI.,"IL

WMEsT1c

I .TS

runrunr,,un

CORPORATION
Section 3189 Federal False Claim Act

DOMESTIC BUSINESS CORPORATION


A CLOSE CORPORATION COMPLETE EACU

COMMONMALTH OF PENNSVLVANIA
D WMESTIC PROFESSIONAL CORPLXATION
DFPARTMENT OF STATE - WRPORATION BUREAU
ENTER BOARD LICENSE NO
XM NORlH OfFlCE WILDING. WRRlSBUAG, PA 17110
.
.............
.
.
NIUl 0 1 C&PWIIIO.
I W S T CONIIIN A C W P W A l l INDICAIO. UNLESS E l l Y P l UNDCR 35 P S
81

r,,.

F i n a n c i a l- . -M
ortgage S e r v i c e s , I n c.
...............-...
r13014+ksor
~

c w a ~ t m t ~ ~~~on ~ u~ s~r ct vt . r(so


u r sor

....

M Y U E ~ N O T AC.CTPIU.EI

- -.. ----0'- ..CWWIV


-......
L a n c a. s t e r

1755 O r e.g. o. .n-- P. i. .k. . .e.

ob.

$'La"

(75.00
FEE

-.

013 STATE

OU 21P CODE

1 - a n c a s t e. .r. . . . . . . . . . . . .
PA
17601 .).I#* IMt PUmPO..f OH PUIPO 6 Of l b + l COD? RAllON
T o h a v e u n l i m i t e z p o w e r %o e n g a g e i n a n d t o d o a n y l a w f u l a c t c o n c e r n i n g
a n y o r a l l l a w f u l b u s i n e s s f o r w h i c h b u s i n e s s c o r p o r a t i o n s may b e i n c o r p n r a t e d u n d e r t h e B u s i n e s s C o r p o r a t i o n Law, Act of May 5 , 1933, P.L. 3 6 4 ,
a 3 amended.

I"..

............

C . 3 '

" 1 1 1 :....,,1,

18..

N ~ m l w r01 S~.II.L

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r4.11,1t.,.la
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.~
.
.... ~ . .
.
Sttaren and Pal Value 01 Shales rn-osn lM Corporrtton Snmll H
.
r Aulnoral" l o ls.w

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SM,.'

UII slrl-n Par v1


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11.. N.+ml.
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shares,

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common .....
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aria lhe Nalmbet m d C1.r'

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-

ol Shares Sub.cnMd l o by Eacn Incorporator

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Numb., L CImrr 01 S4vr.s

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. . . . .

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l StllEI I f NlCESSAI1Vl
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T L S T I M O N Y W H E R E O F . THE INCORPORATORISI H A S (HAVE) SIGNED A N D SEALED T H t MTICLES OF INCORPORATIC


.
. .
. ......
..... DAY OF

1H I S .

.-

--

~.
REVIEWED BV

. . . . . .
M hlCC

--

.IMTE APPROVED

...

..

AMOUNT

S
....

DATt H t J t C l E D

Ct ItlIFV TO

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 531 of 646


Property of Advance Media Group

Page 2637 of 2953

INPUT BV

. ....
LOG I N IHEFILEI

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FINANCIAL

M?mGmmm emz?.L m

LCCENSE AGREEmm

dayof
October
19-8,%etween
Agreementmadethis 17th
Financial MaMgement Group, Ltd., 1755 Oregon Pike, Lancaster, PA, 17601,
(hereinafter called "lTGts) I
and
stanlev J. Caterbone
(hereinafter called
"a-I1

Whereas FrG offers, directly and thnxgh its appropriate affiliates, a


mrmber of pmxhcts and services of value to the Licensee in developing
and implemerrting financial progranrs for Licensee's clients; and
Whereas Licensee desires to utilize the services offered by FMG and its
affiliates;
it is agreed htween the parties as f o l l ~

Licensee acImmle3ges E l G I s exclusive right to the names


ltFinancial Management Group, Ltd.'l, , rn Advisory, I ~ C . ~ ~
Securities,
,
FIG Accamting Services, Inc.,
Inc., F-ial
Senices Insurance
Financial Mortgages Services, Inc., Wealth Management Services, Inc.,
and the program, including bulletins,
Financial Planning Cnnsultants,
prcadwes, supplements, fonas, advertising m a t t e r , devices, senrice
marks, trademark r e g h t i o n s and trade ~ m e used
s
in conneztion w i t h or
hereafter applied for or granted for use in connection with the lTG
Program.
1. Trade Name

2. Services lTG shall, f m time to time, offer to the Licensee, career


conferences, Seminars and advanced planning schools to which the Licensee
may send qudlified sales persons associated with Licensee, a t his awn
expense. FIG shall develop, from time to time i n its discretion,
pmmtional mmpaigns and sales programs t o assist Licensee in the

and services.

marketing of financial p

FIG shall negotiate insurance contmcts using its collective bargaining


pmer t o obtain a favorable terns as possible w i t h insurance wnrpanies for
the benefit of the Licensee, who w i l l usually be the General Agerrt.
FIG agrees to pmvide consultation

i n nnnagement, developerits, recruiting

and field training to Licensee.


3. 'Ihe parties hereby agree ard acImmledge that Licensee is an
irdepenaent contrador in relation to EIG anJ. is neither an agent of FMG
nor authorized in any way to incur obligations on behalf of ElG. I n the
event FIG shall became responsible for any obligation h a u r e d on its
behalf by Licensee, Licensee agrees to b-demnity and hold harmless for any
and all damages,wsts or a p n s s (including reasonable attorneys1 fees)
relating to any such obligation.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 532 of 646


Page 2638 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

4. Ccaooensation
In consideration for the services performed hereunder
by FIG, Licensee agrees to utilize the insurance marketing services of FIG
or its apprcpriate affiliate, as mch and as often as possible. Lifurther agrees to use his best efforts to place sales of insurance
products through FIG or its affiliates in all cases where such products
are appropriate and suitable for License's clients. FIG or its
appropriate affiliate agrees to pay Licensee in acmndanx w i t h individual
amnnission contracts signed by Licensee, of whatever gross conmissions are
payable, including all overrides and renaYdl anrmissions on those
contracts.

Exceptions may be made f m t h to time with various insurance carriers


without e i n g mDdification of this Agreemmt.

...

5. Insurance Carriers-Soasnuttochmuush ='s

bargaining

-1

Licensee agrees to utilize insurance carriers selected by FIG in all


possible cases.

6 . Office Owration
Licmsee shall be responsible for all operating
expnses of his office, including but not limited to, -,
insurance!
payroll, advertking, rent telephme, leased or rented equipaent, M
t
losses, etc. Licensee shall not &ligate F X for any dlaims or actions
which may arise or be asserted against FMG by reason of Licensee's
operation of his office. 'Ihe relationship of the parties is one of
L i m r and Licensee and nothing herein contained shall be construed to
constitute them as partners or joint venor the Licensee as agent or
employee of FMG for any pupose whatsxver.

Licensee shall opxate his office at all t5.m~ in amformity with


appropriate rules and regulations of all goverrmnt and regulatory
authorities of jurisaiction.
Licensee agrees that any p e ~ n
or ~ ~ E Z O W
w h m Licensee shall anploy to
assist Licensee in the performance of his duties heremler shall be the
enployees of Licensee and shall Mt be employees or agents of Financial
Management cxroup, Ltd. Licensee agrees that he will canply with all
F e w and applicable state law relating to the employment of labor,
inclu33q.1but not limited to, caqliance with provision of the Internal
Revenue Ccde relating to pay, all taxes and qliance with applicable
state laws relating to worker's capensation. Licensee shall take such
Steps as are necessary and appropriate to insure that none of such persons
misconceive his or her relationship with Financial Management Group, Ltd.

7 . Tenn-'IhisAgreementmaybetermuM ted by either party for any reason


whatsxver by giving thirty (30) days written notice to the ather and by
full and ample* paywlt of .any outstarding irdebkdress or other
obligation.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 533 of 646


Page 2639 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Jurisdiction 'Ihis ILgreemerrt shall be interpmted and gwerned by the


laws of the State of Pennsylvania. All of the clauses of this Agreement
are distinct and severable and i f any clause shall be held illegal or
void, it shall not affect the legality or validity of the r a d n h g
portions hereof.
8.

9. Waiver of Breach - No waiver, q m s s e d or *lied,


of any breach
h e r e W by Licmsee shall be deemd a continuing waiver or as a consent
to any fllbsequent breach.

lo. ~ c r r e a n e n t 'Ibis ILgreement supersedes all previous t


s
whether
oral or written between the parties and enkcdies all representations,
biwaents, urders-s
and a g n s e n t s of the parties hereto relato the subject matter hereof.

RLis Agmemmt may not be modified or amerded woept


11. pkdification
a9reaw-k i n writing. All notices hereun3e.r shall be given by
by
regor certified mail, addressed by either party t o the notices
hereunder shall be given by registered or certified mail, addressed by
either party to the other a t their respective addresses written above or
a t such address as said party may designate in writing.
INWITNESWHEREDF, t h e p a r t i e s h e r e t o h a v e e x e c u t e d t h i s ~ t t h e
day and year f i r s t written W e .

BY:
Witmess :

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

LICENSm :

Page 534 of 646


Page 2640 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

AWImRY. INC.
P s m T E D PERSON AGFmlmm

m-,

entered into this 17th day of October

~ n v m ~aviLr
t
a Reg'
(hereafter referred to as I'EMG1' ) and
dtanleymerbone
I
an individual (hereinafter referred to as l1
caterbone
11)
1986, by and between F I G AWLWRY, INC.

wiEWX5, FIG is v e d in the business of pxdaing investment


advice and as such is deemed an Investment Advisor as that tenn is defined
a t 15 U.S.C.A. %
. =o
itn
202 (a) (11); and
-!

certain

, an

M r . Caterbone
services

M v i d u a l , agrees t o provide
and perform certain duties and responsibilities on behalf

of FM;:

rn 'mmEmm, in considemtion of the mtml prcmiseS and covenants


herein contained, the parties hereto do hereby agree as f o l l m . . Caterbone
1. Amointment. F X hereby appoints and retajns
as an Associated Person as that tenn is defined a t 15 U.S.C.A. 202(a) (17),
-dna
herebyacoeptssuchappointmentfllbjecttothstezlFs
and cmftitions hereinafter set forth.
2.

mties.

M r . Caterbone

w'==:

A. To use his best efforts to solicit and encourage persons


(including M v i d u a l s , families, -ps,
associations,
corporations, d pension and profit sharirq plans) to utilize the
i m r e s b s t advisory serviof FM;.
B. To review financial data suhitted by perxns, finas,
corporations, and others and prepared f m such information a plan for the
attainment of expressed financial gcals in the form of a doarment knum as
a I1Financial Plan1*.
C.

clients.
allmezl by

To render such other -ices

D. Toperformany other w
m y be inc*tal

rn that

as provided by FM; to its


service as d i n c k 3 or
.rcaterbone
principal
I s

duties.

m.

appointuent will begin


on
, 198-, and w i l l end as of the termhation
date as prwided in Section 9 herein.
3.

4.

M r . Caterbone

I s

LW.

A.

M r - Caterbone

I s fees for the -ices


to be provided
herein shall be based upon Exhibit I1A*l as attached hereto and by reference
incorporated in and made a prt of this A g r e n m t . It is agreed that such
fees shall not bemme earned by, or payable to M r . Caterbo e
until
such fees have k e n earned and collected by F X .
I s right

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 535 of 646


Page 2641 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

to payment of such fees shall be subject to l!K+'s refund rights as set


forth below.

B. mz reserves the right, in its sole discretion, to


refund any client all or any part of payments or fees made by client,
and ~ r Caterbone
.
agrees to reimburse FtG prcmptly his fees earned in
connection therewith. FIG is authorized to deduct fnmn any fees due or
herwnder the arnunt m d for
that may b c c e due to M r . Caterbone
any such repayment of fees.
5. Reimbursement of EmJenses

furnish

6. office mce, secretam. Etc. FtG will


Mr. Caterbone
with office facilities, secretary or

and
a&inistxative assistance, am3 any other facilities. 6 - t
supplies that F X in its sole discretion determines as adequate for the
performance of Mr. Caterbone Is duties and reqmnsibilities.
7. Relationshiu
A. Mr. Caterbone

acJolowle3ges that all persons


investment advisory services shall be clients of FIG and all
investment advice rendered shall be rendered by or on behalf of

seeking

%.

B. Nothing herein shall be construe3 to create the relation


Caterbone and FIG, nor between any
of employer and employee between
M r . Caterbone
employee of FIG and Mr. Caterbone
shall be free to
exercise his awn judgment as to those persons f m wfiam he will solicit
business, the method of solicitation and the time and place of
MY. esolicitation; provided, hmever, that in such activities
shall conform to such llsupervision'land policies as may be established by
FIG in order to amply with all applicable statues, rules and regulations
gwthe solicitation and rerdering of inveshmt
advice. Mr. Caterbone shall be free to devote whatever time he chooses
to any other business he may choose. M r - Caterbone
1 haw-,
agrees that he will hndiately notify FIG in writing if he acquires or
obtains any interest or affiliation or engages in any enplcryrrwt.relating
to the sale of securities or invesbm-ks, either direct1Y or mdrrectly,
either alone or with any person or entity other than FSC Securities
Corporation, relating to any other activity that would cause a conflict of
interest on the part of
~ rCaterbone
.
with respect to FIG. The
term "supmisionI1is not used to connote, nor shall it be deemed to mean
the exercise of any degree of control by FMG which would
cause
Mr. Caterbone to be anything other than Meperdent
contractor vis-a-vis FIG. (Note:
m. Caterbone
is free to work as
mu& or as little as he chooses in any location he chooses. He will have
ocmplete control wer the details of his work and he is free to engage in
any other employment or activity he chthat does not create a
conflict of interest with his responsibilities under this Agreement).

C. This agreement is one for the services


of ~ r Caterbone
.
who shall not be entitled to assign or delegate to
any other person the authority and &ligations assumed or any rights,
claims or interests granted or arising hemmider.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 536 of 646


Page 2642 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

A. A s part of the proper performance of his duties


hereM r . caterbone
shall familiarize himself w i t h , and a t a l l
t i m e s durhxj the term of this Zqmmmt shall canply with, the statutes,
regulations, r u l e s and statements of policy promulgated and administered
by the Securities and Exchange Ccnanission, particularly the Imrestment
Advisers kt of 1940, a l l other statutes, regulations and rules of the
Federal Government, or any state or nnmicipal gwemmerhl or regulatory
agency, any of which may now or hereafter apply to M r . Caterbone
activities hereunder.

B.
~ r Caterbone
.
shall timely apply for, obtain
and maintain a l l necessary licenses, m
t
s and registrations as shall be
required by any statue, or regulation in corrnection
with
M r . C&&
, bone
I s activities hereunder.
C.
M r . Caterbone
shall not use in comection with
his solicitation activities hereunder, whether by direct mail, personal
distribution of printed materials, newspapers, radio, telwision or by any
other media, any sales or advertising litemture not specifically supplied
and authorized by FMG for that purpose u n t i l he has f i r s t obtained prior
written apprwal of his praposed use of such literature by the a-mpriate
officer of FIG who has been designated responsible for such approval.

A.

W i t h o u t Cause

1. miSLqeeumtmaybeterminatedbyeitherparty
without cause a t any t b by placing written notice of such tenrimtion in
the U.S. mails, addressed to the other party hereto, either
a t Mr. Caterbone
I s last k x m address as contained in FMG1s records
(such address may be changed from t k to tink= by written notice thereof
being sent to and filed with FMG) or to FMG a t its then principal place of
business. In addition, the
shall a w t i c a l l y terminate in the
event of the death of M r . Caterbone
2 . I f termination of this Pqreaoent is
ne
terms of Section 6(a) (1). FMG shall continue to pay eter
after termination or to his estate after his death, so long as such action
is not wntrary t o law, all fees on those services received from and
appmved and accepted by FMG prior to the date of termination and which

9.2-

were earned under Section 4 hereof less such deductions or set offs as FIG
may be atitled to heremder.
B. With Cause
1. ~n
the event Mr. Caterbone
is declared a
ban)uupt, makes an assignent for the benefit of cxeditons, has a receiver
or trustee a p p o h t d for this property, f a i l s t o canply with any of the
terms, corditions and obligations of this Agmement, conduds himself in
any manner which FMG, in its unrestricted discretion, determines to be
detrhmtd to its b u s h or reputation, or in any way acquires, obtains
or engages in any interest, affiliation or enploymerit relating to the
solicitation of the plrchase or sale of securities or i n v m t s or
m f e r i n g of inveslnmt advice, either direct or indirect, either alone or
w i t h the person or entity other than FMG, FMG my irmnediately terminate
this Agmement, such termination being retroactive to the h a m of

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 537 of 646


Page 2643 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

such went(s) and FIG'S &ligation to pay fees, shall hndiately cease
upon such termination, without notice; and such termhation shall in no
way affect FIG'S right to mllect any
- be due it
- amnmts which may
f
&
M r C i l t ~ ~
2. If anv of the aram%sfor termination srecified in
Sedion 6(b) (1) above &
l
EX&
at the' time of a &tion
pursuant to
a
ternuna
tion
pursuant
to
section
6(b)(1)
=ion
6(a), it shall be .deemed
.
for the purpose of determvLlng whether any fees are
MT. c
n
e
aftex termination. Failure of FIG to
after kncxildge that gnxlnds for termination
tenni~tethis
&st u d e r Section 6(b) (1) above shall not be deemed a waiver by FPG of
its rights to terminate this Agrement under such Section at any later
date.

10. Notices. All notices, applwals and other ommumications


provided for herein shall be validly given or made if in writing and
delivered or mailed, certified mail return receipt requested, to FIG
Advisory, Inc. at 1755 Oregon Pike, hxaster, Pennsylvania 17601, and
to ~ r Caterbone
.
at
2373 New Danville Pike , Conestoga, PA 17543
11. Assianment. No assignmnt of this Agnement shall be made
without the q r e s s written consent of the parties hereto.
12. Cantions. Captions are used in this agreaent for amenience
only, and are not W e d
be used in construction or interpretation of
this agreement.
13. Severability. In case any one or more of the provisions
contained herein shall for any reason be held to be invalid, or
unenforceable in any respect, such invalidity, illegality, or
menforceability shall not affect any other provision hereof, and this
agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
14. Entire Acrreement. 'Ibis Agnement supersedes all previcrus
Agrements whether oral or written between FIG and I@- Caterbone
and embodies all nqmesentations, ,
undand
agreements of the parties hereto relating to the subject matter hereof.
m e terms hereof may not be w e d except in writing ciuly signed by F I G
and
Mr. Caterbone
Time is of the essence of this Agrement.
15. Governina Law. lhis Agrement shall be deemed a Pennsylvania
contract and shall be governed and construed a o c o to
~ the laws
thereof.
16. SuCceSSOrS and Assisn~. This Agreement shall be binding upon and
jnure to the benefits of the heirs, successors, and assigns of the parties
hereto.
IN WI?NESS WI-EREOF, the parties hereto have caused this documMt to
be executed the day and year above first written.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 538 of 646


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Section 3189 Federal False Claim Act

BUSINESS PROPERTY LEASE


BY A N D BETWEEN

EDEN PARK ASSOCIATES I I


(A Pennsylvania General Partnership)
A S LESSOR
AND
FINANCIAL M A N A G E M E N T GROUP, L T D .
( A Pennsylvania Business Corporation)
and
MICHAEL M. H A R T L E T T , lndividual
STANLEY J. CATERBONE, lndividual
and
ROBERT E. K A U F F M A N , lndividual
AS T E N A N T
FOR.
EDEN P A R K II

m h n i s s h by Lessor to Tenant of a proposed lease shall have IW


binding force or efect, shall not ccnstitute an optim for the leasing
of the premises. r r x &er
any rights or m s e any obligaticnr. upcn

zither party until the executim of a lease agreemnt by Lessor and the
delivery of HI executed original copy thereof to Tenant or its
representative. FlmAemure. the parties shall mt be band by q
written or oral representatb benreen them, directly or thnxgh any
representatim, except as specLLcally i ~ ~ r p ? d t e
indche lease
a g r e m t referred to above.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 539 of 646


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Section 3189 Federal False Claim Act

EXRIBIT D
J-

,IJS'~NESSLEASE A

'eluding, but not being


'ereon, of the cone Undersigned hereby
5 time without notice
:h respect to the
Persons (including
ncluding but not
e s , waivers, surrenIn fully liable
!Ver, that the
n all of the
hereunder of the
way affect the
:aPacit~of any of
any other of
f all laws now Or
~bilityof the
!fenses whatsoever
Payments made on
#.and /b) all
:'On
to enforce

EDEN PAPS
ASSOCIATES 11
AND
[-

~INANCIALMANAGEMENT GROUP, LTDAND


HICM. WTLETT,
~ndividual
AND
.~

STANLEY J. CATERBONE, ~ndividual


AND

LEASE

i- ~ d ethe ldgldaY

P.o. Box

GUA-

of

2 5 4 , New

~~~~

GROUP, LTD. and MICM.


E- ~~~, adult indjviduals, have
\ 'Agreement datedC>f+rLLl f
with EDmPRRI[
2
' ;em); and
A

15/a#

I
.
?

of any character

es

~ B ETW E N

w~c~~
GROUP,
miLTD.
~ is a pennsylvania business torigned have agreed to personally guarantee the Tenant's P C Lease.

the Undersigned
On demand all
fa1 expenses)
the liability of
f

.&

i . intending to be legally bound and in consideration of the


t .rein contained the parties agcee as follo~s:
Guaranty. The Undersigned hereby unconditionalL~quacanperiod of five ( 5 ) years from the date of C O - C L ~ ~ ~ L of the
, the prompt performance of the obligations of the Tenant when
c md any alte~tionsor modifications thereof. which alterations
be made without notice to or the consent of the
y,
1
L~~~~and said alterations and modifications are hereinafter
: ..,'Leasea.
The liability of the. Undersigned hereunder is
3,nditional and shall not be affected in any Way by prior reason
:e to retain or pceserve, or the lack of prior enforcement of,
it any person or pecsons, (including the Tenant and any of the
I in any property, (b) the invalidity of any sudh rights which m Y
e obtained, (c) any delay in enforcing or failure to enforce
2 , + v - ~if such rights are thereby lost, or [dl
delay in
undersigned for payment of the Undersigned's obligations
t l t

lr shall be
gists of snore
Le hereunder,
lnts by a e
It and to be
ned by the law

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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'e* the
court Of
rsi9ned and,
~dgment's',
'cessors and
by the
htecest
!ection an
th.
Lngs that
I Or execu-

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

COMMONWEALTH OF PENNSYLVANIA

COUNTY OF LANCASTER

,JIu~ i&

I HEREBY CERTIFY, t h a t o n t h i s E h d a y o f
1986,
b e f o r e m e , t h e undersi'gned, a N o t a r y P u b l i c f o r t h e a f o r e / s a i d S t a t e and County,
p e r s o n a l l y a p p e a r e d Raymnd E. I x , who acknowledged h i m s e l f t o b e t h e Managing
G e n e r a l P a r t n e r o f Eden P a r k A s s o c i a t e s 11, a P e n n s y l v a n i a g e n e r a l p a r t n e r s h i p , and
t h a t h e a s s u c h Managing G e n e r a l P a r t n e r , b e i n g a u t h o r i z e d t o d o so, e x e c u t e d
t h e f o r e g o i n g G u a r a n t y f o r t h e p u r p o s e s t h e r e i n c o n t a i n e d on b e h a l f o f t h e p a r t nership.
I N WITNESS WHEREOF, I h a v e h e r e u n t o a f f i x e d my hand and s e a l t h e d a y and
y
.e a r f i r s t above w r i t t e n .

fiG+fi
'J/.

bhLcy:~i

N o t a r -y P u b l i c
My Commission E x p i r e s :

I HEREBY CERTIFY, t h a t o n this may

of

t 198L,
a t e a n d County,
&--0.f 5 p@r?cl'a
c
c r'
7. C C I ~ - V ~ - - .
r r ,.& 'k)c:b t+
F- f,fi b . 6 - n r L . n .P I & !cr 9
known t o m e ( o r s a t i & f a c t o r i l y p r o v e n ) to b e t h e w r s o n s dhos'e names a r e
s u b s c r i b e d to t h e f o r e g o i n g ~ ; a ; a n t y , - a n d t h e y acicnowledged t h a t t h e y e x e c u t e d

t h e same f o r t h e p u r p o s e s t h e r e i n c o n t a i n e d .

I N WITNESS WHEREOF, I h a v e h e r e u n t o a f f i x e d my hand a n d s e a l t h e d a y a n d

y e a r f i r s t above w r i t t e n .

h % h a.aJ'%lM4.i,

~ o t a r yP u b l i c
MY' C o m i s s i o n E x p i r e s :

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 541 of 646


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Section 3189 Federal False Claim Act

3 2 . CONSENTS.
I n a n y i n s t a n c e i n which t h e " c o n s e n t " o r " a p p r o v a l n o f
L a n d l o r d o r T e n a n t is r e q u i r e d h e r e u n d e r , s u c h r e q u i r e m e n t s h a l l n o t b e
i n t e r p r e t e d a s j u s t i f y i n g a r b i t r a r y r e j e c t i o n but s h a l l connote a r e a s o n a b l e
a p p l i c a t i o n o f judgment.
L

3 3 . COml'ERPARTS. T h i s L e a s e may be e x e c u t e d i n any numtxr o f c o u n t e r p a r t s , e a c h o f which s h a l l be deemed to be a n o r i g i n a l a s a g a i n s t a n y p a r t y


whose s i g n a t u r e a p p e a r s t h e r e o n , and a l l o f which s h a l l t o g e t h e r c o n s t i t u t e o n e
and t h e same i n s t r u m e n t .
T h i s L e a s e s h a l l become b i n d i n g when o n e or mre count e r p a r t s hereof, individually o r taken together, s h a l l bear the s i g n a t u r e s o f
a l l t h e p a r t i e s r e f l e c t e d h e r e o n as t h e s i g n a t o r i e s .

34. !ZNTIRE AGREENENT. T h i s L e a s e s e t s f o r t h a l l o f t h e a g r e e m e n t s a n d


u n d e r s t a n d i n g s between L a n d l o r d and T e n a n t r e l a t i v e to t h e l e a s e h o l d e s t a t e i n
t h e P r e m i s e s h e r e b y c r e a t e d and t h e r e a r e no o t h e r p r o m i s e s , a g r e e m e n t s , cond i t i o n s o r u n d e r s t a n d i n g s , either o r a l or w r i t t e n , between them w i t h r e s p e c t t o
t h e P r e m i s e s or t h e l e a s e t h e r e o f o t h e r t h a n a s s e t f o r t h h e r e i n .
Except as
o t h e r w i s e p r o v i d e d , no s u b s e q u e n t a l t e r a t i o n , amendment or a d d i t i o n to t h i s
L e a s e s h a l l be b i n d i n g upon a L a n d l o r d or T e n a n t u n l e s s r e d u c e d t o w r i t i n g a n d
s i g n e d by b o t h L a n d l o r d and T e n a n t .

35. BINDING EFFECT. A l l p r o v i s i o n s c o n t a i n e d i n t h i s L e a s e s h a l l be


b i n d i n g upon, i n u r e t o t h e b e n e f i t o f and b e e n f o r c e a b l e b y t h e r e s p e c t i v e s u c cessors and a s s i g n s o f L a n d l o r d and T e n a n t t o t h e same e x t e n t a s i f e a c h s u c h
s u c c e s s o r and a s s i g n were named a s a p a r t y h e r e t o .
I N WITNESS WHEREOF, L a n d l o r d and T e n a n t have c a u s e d t h i s L e a s e to b e exec u t e d o n t h e d a y and y e a r f i r s t above w r i t t e n .

"LANULORD"

WITNESS:

ASSOCIATES I1

/@Z!L:(~

[&L3

GROUP, L t d .

By:

Secretary

WITNES

&-/5/Jh?--

/president

, Individual
man, I n d i v i d u a l

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 542 of 646


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Section 3189 Federal False Claim Act

OPTION AGREEMENT
AGREEMENT made t h i s

, .A.D.,

day o f

19E

by a n d b e t w e e n R o b e r t F. K a u f f m a n ( h e r e i n a f t e r r e f e r r e d t o a s

"Kauffman") a n d S t a n l e y J . C a t e r b o n e ( h e r e i n a f t e r r e f e r r e d t o
a s " C a t e r b o n e " 1.

W I T N E S S E T H :
T h a t i n c o n s i d e r a t i o n o f One D o l l a r ( $ 1 . 0 0 )
*

receipt of

w h i c h is h e r e b y a c k n o w l e d g e d a n d o t h e r g o o d a n d v a l u a b l e c o n s i d e r a t i o n , a n d i n t e n d i n g t o b e l e g a l l y bound h e r e b y , t h e p a r t i e s
h e r e t o mutually a g r e e as follows:
1.

Option.

Kauffman h e r e b y g r a n t s t o C a t e r b o n e t h e o p t i o r

t o p u r c h a s e t e n t h o u s a n d ( 1 0 , 0 0 0 ) common s h a r e s of F i n a n c i a l
Management G r o u p , L t d . ,

a Pennsylvania b u s i n e s s c o r p o r a t i o n , on

t h e terms s e t f o r t h h e r e i n .
2.

.,

P u r c h a s e P r i c e . , The p u r c h a s e p r i c e p a y a b l e f o r s u c h

s h a r e s s h a l l b e p a r v a l u e , s p e c i f i c a l l y f i f t y c e n t s (50C) p e r
s h a r e , i n c a s h o r by c e r t i , f i e d c h e c k t o b e p a i d by C a t e r b o n e t o

..

Kauffman upon d e l i v e r y of s u c h s h a r e s .

3.

Exercise o f Option.

T h i s o p t i o n t o purchase s h a l l be

e x e r c i s e d by C a t e r b o n e upon n o t i c e i n w r i t i n g t o Kauffman a t t h e
registered offices of t h e corporation.

C a t e r b o n e may e x e r c i s e

a n d r e - e x e r c i s e t h i s o p t i o n from time t o time f o r t h e f u l l numbe

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 543 of 646


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Section 3189 Federal False Claim Act

o f s h a r e s set f o r t h h e r e i n o r any p a r t t h e r e o f .
4

Closing.

D e l i v e r y of s h a r e s a n d p a y m e n t o f t h e p u r c h a s

price s h a l l take place within forty-eight

(48) h o u r s a f t e r

r e c e i p t by K a u f f m a n o f t h e n o t i c e o f t h e e i e r c i s e o f t h e o p t i o n
a t s u c h time a n d a t s u c h p,lace a s t h e p a r t i e s s h a l l m u t u a l l y a g r

5.

Representations.
a)

Kauffman r e p r e s h t s t h e f o l l o w i n g :

He i s . t h e s o l e o w n e r a n d h a s ? h e r i g h t t o s e f l

t h e t e n t h o u s a n d ( 1 0 , 0 0 0 ) s h a r e s of F i n a n c i a l Management
Group, Ltd.
b)

S u c h s h a r e s a r e now a n d u n t i l t h e c l o s i n g w i l l b e

f r e e o f a l l encumbrances.
C)

C a t e r b o n e s h a l l r e c e i v e good a n d m a r k e t a b l e t i t l e

t o s u c h s h a r e s , free and clear o f a l l encumbrances.

6.

Benefit.

T h i s Agreement s h a l l b e b i n d i n g upon t h e

p a r t i e s , t h e i r h e i r s , l e g a l ' r e p r e s e n t a t i v e s , s u c c e s s o r s and
1

assigns.
I N W ~ T N E S S WHEREQF, t h e p a r t i e s h e r e t o h a v e h e r e u n t o s e t
I
t h e i r h a n d s a n d s e a l s t h e d a y a n d y e a r f i r s t ~ b o v ew r i t t e n .

Witnesses:

R o b e r t F. Kauffman

S t a n l e y J. Caterbone

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 544 of 646


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Page 546 of 646


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Section 3189 Federal False Claim Act

NOTE
$20,000.00

November

1986

F o r v a l u e r e c e i v e d , I , t h e u n d e r s i g n e d , p r o m i s e t o pay t o t h e

a t 1755 Oregon P i k e ,

o r d e r o f F i n a n c i a l Management G r o u p , L t d . ,
Lancaster, Pennsylvania,
D o l l a r s ($20,000.00)

1 7 6 0 1 , t h e t o t a l sum o f Twenty Thousand

i n i n s t a l l m e n t s , a s s e t f o r t h as follows:

J a n u a r y 3 0 , 1987
F e b r u a r y 2 8 , 1987
March 3 0 , 1987
A p r i l 3 0 , 1987
May 3 0 , 1987
J u n e 3 0 , 1987
J u l y 3 0 , 1987
August 3 0 , 1987
Upon d e f a u l t i n t h e payment o f a n y s u c h i n s t a l l m e n t when d u e ,
t h e whole o f t h e p r i n c i p a l sum t h e n r e m a i n i n g u n p a i d s h a l l , a t t h e
o p t i o n o f F i n a n c i a l Management G r o u p , L t d . ,

become i m m e d i a t e l y d u e

and p a y a b l e w i t h o u t demand o r n o t i c e .
And f u r t h e r , t o s e c u r e t h e payment o f s a i d a m o u n t , I h e r e b y
a u t h o r i z e , i r r e v o c a b l y , any a t t o r n e y o f a n y c o u r t o f r e c o r d , t o
a p p e a r f o r me i n s u c h c o u r t , i n t e r m , t i m e o r v a c a t i o n , a t any
tim e h e r e a f t e r , and c o n f e s s a judgment, w i t h o u t p r o c e s s , i n f a v o r
o f t h e h o l d e r o f t h i s N o t e , f o r s u c h amount a s a p p e a r s t o b e
unpaid t h e r e o n , whether due o r n o t , t o g e t h e r w i t h c o s t s , i n c l u d i n g
c o l l e c t i o n c o s t s a n d a t t o r n e y ' s commission o f f i v e p e r c e n t ( 5 x 1 ,
and t o w a i v e a n d r e l e a s e a l l h e i r s w h i c h may i n t e r v e n e a t a n y
s u c h p r o c e e d i n g s a n d c o n s e n t t o i m m e d i a t e e x e c u t i o n upon s u c h
j u d g m e n t , h e r e b y r a t i f y i n g and c o n f i r m i n g a l l tha-y

said attorney

may do by v i r t u e h e r e o f .

S H Y Robeftson

W e , FMG, L t d . , d o h e r e b y a g r e e t o s e l l 1 0 , 0 0 0 s h a r e s o f FMG,
L t d . s t o c k t o S c o t t R o b e r t s o n f o r a p r i c e o f $2.50 p e r s h a r e .
The a b o v e n o t e i s f o r t h e b a l a n c e o f t h e f u l l 2 5 , 0 0 0 a g g r e g a t e
p r i c e o f w h i c h $ 5 , 0 0 0 . h a s a l r e a d y b e e n p a i d by S c o t t R o b e r t s o n .
A l l s t o c k c e r t i f i c a t e s w i l l b e i s s u e d upon c o m p l e t i o n o f payment.
I f ~ a v m e n tc e a s e s , a l l c o l l e c t e d f u n d s w i l l b e u s e d t o p u r c h a s e
s h a r e s a t $5.00 p e r s h a r e .

. ..

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 547 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

February 12

Ten Thousand

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

AN

f//47/' / Pr=eJ/;.,+A: /.

f
I

i. un-rr ~

...................................
o

//lI~,/~/~i;~~fi/t~fit,t~~~/~I/d_a_te
k.+w

-'r. '

,m

v = s d m @ f - .

10-

~~
- b~
h -~
J ~ ~
c ~ ~
& o r~u l~
t ~~
nm rFaun
~
U ~ >
ArrJtkMdcd
. r &
l ~ udr ~;
~ ~b
~
c * ~ ~ t ~ r u n l, yu . ir ~
n *~w r ; ~
~ ~~ ~ ~ a r * r r r ~ ~ t ~

T f f g % z ~m
irnw
q ~ ~m" d ."dUC
& lard.
A a t O/]lce Ada'n~s.
Page 548 of 646

Page 2654 of 2953


n.-.k-..,rv
13

.~/)RR

Thursday December 15, 2016

10/19/2006

US District Court For The Eastern District of Pennsylvana

Schedule D of
Form ADV
Page 2

Section 3189 Federal False Claim Act

SEC File Number:

F M G Advisory, Inc.

mu:

7/15/58
4

12.)
llRS Emol. Ident. No.:

1 200-46-0959

1 1024102

(Number bnd Yrr+l)

(C~IY)

2323 New Danville Pike


(b) Binh

Pan I Items II and

(see P M Illan IA)

Stanley J. Caterbone
3. (a) lmideocc of inhvidlul:

2/18/87

MI. 28743

(Answers for Form ADV


I. A ~ ~ l i ainwYmn(
nl
adviyr:

Dae:

Conestwa

I(c) Cily:

I
(Ute)

[(d) S u l e or Province:

b~

I PA

I p an caster

(Zip Code)

PA

NAMES USED. Li all ma-other lhthe one giwn in 1 1 6 2 above 1h.l the individual has uud, iaeludine maiden lumn.
(W)
(Firu)
(Miidle)

N/A
5. EDUCATION. Scan with lul hiph v h d attended. Ifno dqrec rreclved, slate "none."

Ycan
Atunded

Sehd: ( N e . City and W e )

Lancaster Catholic Hish. Lancaster. PA

la76

Millersville University, Millersville, PA

1980

Series
Series
Series
Series

~~

Year
rdluced

6, March 1982 NASD


22 July 1983 NASD
63 March 1982 NASD
7 July 1985 NASD

the tilk ard dale 01 the mion.


the murt or W y 1akiw lhc w l h .
a donipion or lhc l
n
h

BSDA/Manaaement

Certified Financial Planner; M l q Of Certified F i r m


Pl;nmr
mpleted Section 1-IV as of 4/86

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 549 of 646


Property of Advance Media Group

For Colk#c and above


Degree
Major

Page 2655 of 2953

Thursday December 15, 2016


10/19/2006

US District
Court For The
Schedule
of Eastern District of Pennsylvana

F6rm AD\I
Page 2

Section 3189 Federal False Claim Act

&C File Numbn:

F M G Advisory, Inc.

801-

(Answers for F o r m ADV

-. I. A p p l ' i n l inreYmcnt adviser:


/

.J

Pan 1 Items

Date:

28743

2/18/87

II and 12.)

(ucPan I Item IA)

IRS Empl. Idcnt. No.:

F M G Advisory, Inc.

23-2431433

2. Individud's full M ~ Cfor whom this


Schedule is k i n g compkted:

Saial Saurily Number:

Robert E. K a u f f m
3. (a) Rcsidenm of individual:

CRD No.. ilany:

190-44-9057

829384

(Number and Slrat)

(city)

1306 tieaconfield Drive


(b) Birth Dale:

(Zip Ccdc)

PA

17601

(d) Slate or Province:

Rearing Sprinq

5/31/54

(State)

Lancaster

(c) City:

IRS Empl. Idmt. No.:

(e) Counlry:

PA

USA

NAMES USED. Lisl a11 M m n other than the one given in ltcm 2 above that the individual has u d . ineludin* maiden rumcs.
(hr)
(Firn)
(Middle)

4.

EDUCATION. Start with last h i ~ xh h w l atlrndcd. I1no desrce raelved. stale "none."
Years
Year
Allended Graduated

School: (Name. City and Sntc)

Central High School, Fartinsburg, PA


Millersville St. College, Millersville, PA

Financial Management Group, Ltd.

1976

B.S. Mathematics

Vice Pres.

RIA

Advisory, Inc.

I
7.

1972

I ~inancialplan./ President
I

Fm;

12

For College and above


Major
,
Dcgm

86 Prese

EXAMlNATlONSlPROFESSlONAL DESIGNATIONS. List a l l jurisdiilion. ull.re(ulalory or#anization. and prornsional ercarninations and dna(
loons G ~ r erxam~naloonor dui;ruloon lumc (include any eaaminalion's titlr a d number). body sirin8 it. and dale taken or conferred. I f cramsrul
was waived, ;ivc details.

Series 6, 11-12-76 NASD


Series 63, 11-12-76 NASD
CFP Units I, 4/85, Unit 11, 9/85, Unit 111, 12/85, Unit IV, 1/87
NASD Series 7 General Securities, 10-2-85
NASD Series 24 Reqistered Securities Princiwl, 5-14-86
PROCEEDINGS. For each

'w' answer to Pan Illn ll involving the individual.

tiwe the i d l m u i dnaili


~
of any rwurt or rcguhlory action:

lhc advixr and individwli named.


Ihc lillc ;md date 01 lhc rcion.
thc courl or body taking thc action. and
a dtrriplion 01 the mion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 550 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

'Ihis Agreement, made and entexed into this 2lst dayofMay11987,byarrl


beFINANCIAC
cxm, m.,
a FemsyrW a11~0ratiop1and
R3E!ERT E. IWJFFmN, a resident of Fmtqlvania ("KauffmanlI).

m)

WHEREAS,

F K ; ~ a c c p l t r o l l h q ~ i n F K ; A d v ~ , I n c . , F K ; A u x x l n tI i n g

FK; Securities, W.,


and other subsidiaries.

the
F!
and that,
. parties desire that Kauffman bearme affiliated with G
asmectlon thi.lewth,
Kaufhan be granted a certain -tary
arrangement for his work.

WHEREAS,

in

N&.l, -,
for and in considexation of the mtual pmnises herein
Contained, and other good and valuable considetation, the receipt and
sufficiency of which are hereby aclrmlakjed, the parties hereto do hereby
agree as follm:

1.

Affiliation w i t h FM;. amensation and Cbtion of Shares, Kauffman


shall bearme affiliated with EIG as r;oan as practicable and FK;
shall aoxmm3ate and expdite such affiliation.
It is agreed that icjuffman receive the follawing:
a ) . A base salary of $75,000 annually to be paid on a monthly
basis as income begJune 1, 1987.

b).

to be paid monthly amxnrting to 3% of Gmes Sales


inal1areaswhereFK;doestxlsiness. Grcessalesis
defined as Mal ommission allcmance by any sponsor,
imxance mnpany, mortgage moparry, or ather verdar; or
Mal fees colletd by the RIA, Acaxnrting, or other
fee based business.

A boaus

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 551 of 646


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Section 3189 Federal False Claim Act

It is &gre3that FM; w i l l receive the folludng:

a).

b)

a)i

Kauffmn's tatal fidelity in working solely for the


developmt of EX'S hiness as President of Fl3; W.,
andQlainoanoftheBoord.
Kauffmn agrees to limit his jneane from p e r m sales
to $30,000 annually and a g n not
~ ~to pnsue persondl
sales solicitation thrruFpl any nears other than
ooasicslal referrals.

Shaild Kauff?nm d e s h to alter this agreement w i t h i n


swen yaws, FM= k d d have the right to collect danmges

~ r m r ~ f l t h e l c s t v e s t i n g o f ~ e ~ ~ ~ s
signed on m y 18, 1987. K a u f h m could, however, petition
release fran any &ligatim. Icauffnw could also be
released ha any abligatim to enplayment with FM= shauld
PSGnameswxsxstoIhuffbDanintheiragreementwith
FX dated Uay 18, 1987.

b). EX, W . , agrees not to alterthis agremmt for any


reascn for as l q as KaUffmn Cprates his business
en%wors with corporate f i d e l i e , ani is not m i c t e d
of a crime w h i c h wmld prwe to be sufficient as to
errhnger the corpratim (above mh&mamr level).

IN wmmsWHEREXF, t h e p & z i e s h e r e t o h a v e ~ * ~ t h e d a ~ a
year first above written.
On this 21st day of May, 1987,
FINANCIAL-GIMUP,
IUD.
before me a notary public, the under7
signed officer, personally appeared
Robert R. Long, Jr. and Robert E.
Kauffman, known to me to be the perso
whose name is subscribed to the withi
instrument, and acknowledged that they
5executed the same for the purposes
1
1
M
therein contained.
In witness whereof, I hereunto set my hand and official seal.
.,

*:

I
mmission ex ires 12/10/90

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Compact Disc manufacture!^

AMERICAN HELIX S- STAN J.CA?'EKBONE


UUSlNESS AGKEEhIENT

EFFECTnTE OCTOBER 1,1990


TERMS: This agreement between American Helix Technology Corporation, Inc., and Stan J.
Caterbone, both of 1857 Colonial Village Lane, Ianci~ster,PA 17601 will be valid until February
1, 1991, at which time both parties may negotiate a new ageement for the remainder of the year.
In the event that a new ageement is not settled upon, this agreement will prevail until the new
ageement is implemented. Each party c a n withdraw from this agreement by submitting a 30 day
notice in writing, to the other party.
Any contracts awarded from prospects and marketing efforts up to February 1, 1991, or until a new
contract is negotiated, will be administered under this agreement. AU contracts must have prior
approval by David D. Dering prior to acceptance by American Helix.
Under the termination of a relationship, Stan J. Caterbone, will be entitled to all commissions and
revenues entitled herein for contracts currently under development, and agrees to complete all
necessary requirements of the said project? from end to end.

AGREEMENTS
CD-ROM Raw Disc Replication - American Helix will receive 90% of the raw disc price.
Stan J. Caterbone will receive 10% of the raw disc price. All pricing below $1.00 will be
negotiated on a case by case basis. American Helix will be guaranteed a minimum price
of $ .85 on all projects. Any mastering costs above a wash to American Heliu, will be
recovered against replication commissions.
Mastering - American Helix will receive 15% of the net margin of the premastering and
data preparation services performed by Stan J. Caterbone, American Helix is guaranteed
at least a net wash of all mastering costs.
will be paid upon invoicing of projects. Any past due accounts over 90
a reversal of commissi
reinstated upon paym

"

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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.-

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STATE OF GEORGIA

COUNTY OF COBB
THE FINANCIAL GROUP, INC.
STOCK OPTION AND OWNERSHIP AGREEMENT
T h i s A g r e e m e n t , made a n d e n t e r e d i n t o t h i s - d a y o f
A p r i l . 1 9 8 7 . b y a n d b e t w e e n THE FINANCIAL GROUP, I N C . , a G e o r g i a
c o r p o r a t i o n ( " T F G " ) , THE PLANNER'S SECURITIES GROUP, I N C . . a G e o r g i a
c o r p o r a t i o n ( " P S G " ) a n d ROBERT E . KAUFFMAN, a r e s i d e n t o f
Pennsylvania ("Kauffman").

WHEREAS. TFG owns a c o n t r o L l i n g i n t e r e s t i n PSG, a


r e g i s t e r e d broker-dealer; and
WHEREAS, t h e p a r t i e s d e s i r e t h a t K a u f f m a n ' s f i n a n c i a l
p l a n n i n g company, F i n a n c i a l Manaqement G r o u p . L t d . ( t h e "PLanning
C o m p a n y " ) become a f E i L i a t e d w i t h PSG a n d t h a t . i n c o n n e c t i o n
t h e r e w i t h . Kauffman be g r a n t e d c e r t a i n s t o c k o p t i o n and o w n e r s h i p
r i g h t s i n PSG:

NOW, THEREFORE, f o r a n d i n c o n s i d e r a t i o n o f t h e p r e m i s e s
a n d m u t u a l p r o m i s e s h e r e i n c o n t a i n e d . a n d o t h e r good and v a l u a b l e
c o n s i d e r a t i o n . t h e r e c e i p t and s u f f i c i e n c y of which a r e hereby
acknowledged, t h e p a r t i e s h e r e t o do hereby a g r e e a s f o l l o w s :
1.
A f f i L i a c i o n w i c h PSG a n d O p t i o n o f S h a r e s .
Kauffman
s h a l l c a u s e t h e P l a n n i n g Company t o b e c o m e a f f i l i a t e d w i t h PSG a s
s o o n a s p r a c t i c a b l e and-^^^ S h a l l a c c o m m o d a t e a n d e x p e d i t e s u c h
affiliation.
Upon t h e a f f i l i a t i o n o f t h e P l a n n i n g Company w i t h PSG,
TFG s h a l l g r a n t a n o p t i o n t o K a l i f f m d n f o r s u c h n u m b e r o f common
s h a r e s o f PSG a s d e t e r m i n e d b e l o w :

For each $1,000.000 of annual g r o s s


c o m m i s s i o n s g e n e r a t e d by t h e P l a n n i n g
Company t h r o u g h PSG, s u c h s t o c k o p t i o n s h a l l
represent a 1.3% equity ownership position
i n PSG u p t o a maximum o f $ 8 , 0 0 0 , 0 0 0 a n n u a l
g r o s s c o m m i s s i o n s r ~ ? f l e c t i n ga n e q u i t y
o w n e r s h i ? p o s i t i o n i n PSG o f 1 0 . 4 3 ; t h e
a n n u a l g r o s s commi:;sions g e n e r a t e d t h r o u g h
PSG s h a l l b e d e t e r m i n e d o n a n a n n u a l b a s i s ,
e n d i n g J u n e 30 of e a c h y e a r a n d t h e e x a c t
number o f s h a r e s s u b j e c t t o t h e o p t i o n s h a l l
be d e t e r m i n e d b a s e d upon t h e a v e r a g e a n n u a l
g r o s s c o m m i s s i o n s g e n e r a t e d by P l a n n i n g

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Section 3189 Federal False Claim Act

Company f o r t h e t h r e e y e a r s e n d i n g J u n e 3 0 ,
1988, June 30, 1989 and June 30, 1990.
2.
Option P r i c e and E x e r c i s a b i l i t y .
The o p t i o n p r i c e of
t h e o p t i o n e d s h a r e s s h a l l be t h e par v a l u e of s u c h s h a r e s ( 8 . 0 5 per
share).
The o p t i o n s h a l l be e x e r c i s a b l e i m m e d i a t e l y upon g r a n t o f
t h e o p t i o n , b u t t h e i s s u e d s h a r e s s h a l l be s u b j e c t t o t h e f o r f e i t u r e
provisions l a t e r described a s well a s t o the adjustment i n the
number o f o p t i o n e d s h a r e s a s a r e s u l t o f a n n u a l g r o s s c o m m i s s i o n
f iguces.

3.
Vestinq Schedule.
The e x e r c i s e d s h a r e s s h a l l be
t h i r t y ( 3 0 % ) v e s t e d as of J u n e 30. 1988, a n d t h e v e s t e d p o c t i o n of
s u c h s h a r e s s h a l l i n c r e a s e by t e n ( 1 0 ) p e r c e n t a g e p o i n t s e a c h y e a r
t h r o u g h J u n e 3 0 . 1 9 9 5 , a t w h i c h p o i n t o n e h u n d r e d ( 1 0 0 % ) p e r c e n t of
t h e e x e r c i s e d s h a r e s s h a l l be v e s t e d ; however, i n t h e e v e n t of a
s a l e o f t h e Company o r a p u b l i c o f f e r i n g . a l l e x e r c i s e d s h a r e s s h a l l
be f u l l y v e s t e d .
4.
F o r f e i t u r e and Riqht of F i r s t R e f u s a l .
I n the event
t h e a f f i l i a t i o n o f P l a n n i n g Company w i t h PSG t e r m i n a t e s f o r a n y
r e a s o n . o r i f Kauffman t e r m i n a t e s h i s r e l a t i o n s h i p w i t h P l a n n i n g
Company f o r a n y r e a s o n , t h e o p t i o n s h a l l b e c o m e n u l l a n d v o i d , a n d
a l l non-vested s h a r e s s h a l l immediately be f o r f e i t e d ; t h e v e s t e d
s h a r e s s h a l l b e s u b j e c t t o r e p u r c h a s e b y TFG o n t e r m s c o r r e s p o n d i n g
t o t h o s e i n t h e o p t i o n s i n f a v o r of c e r t a i n of PSG's o t h e c
planners.
Any v e s t e d s h a r e s s h a l l a l s o b e s u b j e c t t o a r i g h t o f
f i r s t r e f u s a l i n f a v o r o f TFG p r i o r t o s a l e .

5.
Related Matters.
TFG a n d PSG a c k n o w l r d g e t h a t c h i s
A g r e e m e n t i s b e i n g e n t e r e d i n t o i n e x c h a n g e f o r t h e s e r v i c e s and
b e n e f i t s t o b e r e n d e r e d b y K a u f f m a n . i n d i v i d u a l l y , a n d PSG a n d TFG
a g r e e t o c o o p e r a t e and a s s i s t Kauffman t o t h e e x t e n t n e c e s s a r y s u c h
c h a t t h e o p t i o n and ownership b e n e f i t s d e s c r i b e d h e r e i n s h a l l i n u r e
t o t h e b e n e f i t of Kauffman, i n d i v i d u a l l y . r a t h e r t h a n t o Planni-nq
Company.
6.
Formal Option Aqreement.
The p a r t i e s a g r e e t h a t . a s
s o o n a s may b e p r a c t i c a l s u b s e q u e n t t o t h e e x e c u t i o n o f t h i s
Agreement, t h e p a r t i e s s h a l l e x e c u t e a more f o r m a l o p t i o n agreement
incorporating the points s e t forth herein. a s well a s other
p r o v i s i o n s which a r e customary and a p p r o p r i a t e w i t h r e s p e c t t o
arrangements of t h i s n a t u r e .

IN WITNESS WHEREOF, t h e p a r t i e s h e r e t o h a v e e x e c u t e d t h i s
Agreement t h e d a y and y e a r f i r s t above w r i t t e n .

THE FINANCIAL GROUP. INC.


By:
[ S i g n a t u r e s Continued on Next Page]
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 555 of-2646
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Section 3189 Federal False Claim Act

C U S H I N&
G MORRIS
ATTORNEYS

AT LAW

UU PEACHTREE CENTER CAIN TOWER


229 PEACHTREE STREET N E

ATLANTA, GEORGIA 30303


TELEPHONE
404 521~2323

W HAMPTON MORRIS
CHARLES M CUSHING. JR
KEVIN R ARMBRUSTER
ROY M JONES
LILA L NEWBERRY

May

5,

TELECOPIER
656-9865

1987

Mr. William H. Keogler, Jr.


The Financial Group. Inc.
Suite 200
200 Galleria Parkway
Atlanta, Georgia 30339
Re:

Bob Kauffman Asreement

Dear Bill:
Enclosed please find the above-referenced agreement, as
amended to reflect Bob's company as the beneficiary of the stock
option. rather than Bob, individually. I understand that, except
for this change. Bob had no comments on the draft of the agreement
presented to him last week.
Please let me know if any further modifications are needed.
With best wishes

--

Charles M. Cushing, Jr.

CMCjr:dsk
Enclosure(s)
cc: Mr. Chris

S.

Guerin (w/encls.)

19885

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 556 of 646


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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STATE OF GEORGIA
COUNTY OF COBB
THE FINANCIAL GROUP, INC.
STOCK OPTION AND OWNERSHIP AGREEMENT

day of May,
This Agreement, made and entered into this
1987, by and between THE FINANCIAL'GROUP, INC., a Georgia
corporation ("TFG"), THE PLANNER'S SECURITIES GROUP, INC., a Georgia
corporation ("PSG"), FINANCIAL MANAGEMENT GROUP, LTD., a
Pennsylvania
("Planning Company") and ROBERT E.
KAUFFMAN, a resident of Pennsylvania ("Kauffman").

WHEREAS, TFG owns a controlling interest in PSG, a


registered broker-dealer; and
WHEREAS, the parties desire that Planning Company become
affiliated with PSG and that, in connection therewith, Planning
Company be granted certain stock option and ownership rights in PSG;
NOW, THEREFORE, for and in consideration of the premises
and mutual promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1.
Affiliation with PSG and Option of Shares. Planning
Company shall become affiliated with PSG as soon as practicable and
PSG shall accommodate and expedite such affiliation. It is
anticipated that, assuming planning Company generates average annual
gross commissions through PSG of at least Four Million
($4,000,000.00) Dollars, Planning Company would have the opportunity
to own a minimum of five and two-tenths (5.2%) percent of the equity
of PSG, to this end, upon the affiliation of Planning Company with
PSG; TFG shall grant an option to Planning Company for such number
of common shares of PSG as determined below:
For each $1,000,000 ,of annual gross
commissions generated by Planning Company
through PSG, such stock option shall
represent a 1.3% equity ownership position
in PSG up to a maximum of $8,000,000 annual
gross commissions reflecting an equity
ownership position in PSG of 10.4%; the
annual gross commissions generated through
PSG shall be determined on an annual basis,
ending June 30 of each year and the exact
number of shares subject to the option shall
be determined based upon the average annual

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Section 3189 Federal False Claim Act

g r o s s c o m m i s s i o n s g e n e r a t e d by P l a n n i n g
Company f o r t h e t h r e e y e a r s e n d i n g J u n e 30,
1 9 8 8 , J u n e 30, 1 9 8 9 and J u n e 30, 1 9 9 0 .
i

2.
O p t i o n P r i c e and E x e r c i s a b i l i t y .
The o p t i o n p r i c e of
t h e o p t i o n e d s h a r e s s h a l l be t h e p a r v a l u e o f s u c h s h a r e s ( 5 . 0 5 p e r
s h a r e ) . The o p t i o n s h a l l be e x e r c i s a b l e i m m e d i a t e l y upon g r a n t of
t h e o p t i o n , b u t t h e i s s u e d s h a r e s s h a l l be s u b j e c t t o t h e f o r f e i t u r e
provisions l a t e r described a s w e l l a s t o t h e adjustment i n the
number o f o p t i o n e d s h a r e s a s a r e s u l t o f a n n u a l g r o s s commission
figures.
3.
V e s t i n q S c h e d u l e . The e x e r c i s e d s h a r e s s h a l l be
t h i r t y ( 3 0 % ) p e r c e n t v e s t e d a s o f J u n e 30, 1 9 8 8 , and t h e v e s t e d
p o r t i o n o f s u c h s h a r e s s h a l l i n c r e a s e by t e n ( 1 0 ) p e r c e n t a g e p o i n t s
e a c h y e a r t h r o u g h J u n e 3 0 , 1 9 9 5 , a t which p o i n t o n e h u n d r e d ( 1 0 0 % )
p e r c e n t o f t h e e x e r c i s e d s h a r e s s h a l l be v e s t e d ; however, i n t h e
e v e n t o f a s a l e o f t h e Company o r a p u b l i c o f f e r i n g , a l l e x e r c i s e d
s h a r e s s h a l l be f u l l y v e s t e d .
4.
F o r f e i t u r e and R i g h t o f F i r s t R e f u s a l .
In the event
t h e a f f i l i a t i o n o f P l a n n i n q Company w i t h PSG t e r m i n a t e s f o r a n y
r e a s o n , o r i f Kauffman t e r m i n a t e s h i s r e l a t i o n s h i p w i t h p l a n n i n g
Company f o r a n y r e a s o n , t h e o p t i o n s h a l l become n u l l a n d v o i d , a n d
a l l n o n - v e s t e d s h a r e s s h a l l i m m e d i a t e l y be f o r f e i t e d ; t h e v e s t e d
s h a r e s s h a l l be s u b j e c t t o r e p u r c h a s e by TFG on terms c o r r e s p o n d i n g
t o t h o s e i n t h e o p t i o n s i n f a v o r o f c e r t a i n o f PSG1s o t h e r
planners.
Any v e s t e d s h a r e s s h a l l a l s o b e s u b j e c t t o a r i g h t o f
f i r s t r e f u s a l i n f a v o r o f TFG p r i o r t o s a l e .
5.
F o r m a l O p t i o n Agreement.
The p a r t i e s a g r e e t h a t , a s
s o o n a s may b e p r a c t i c a l s u b s e q u e n t t o t h e e x e c u t i o n o f t h i s
~ g r e e m e n t , - t h ep a r t i e s s h a l l e x e c u t e a more f o r m a l o p t i o n a g r e e m e n t
incorporating the points s e t f o r t h herein, a s well a s other
p r o v i s i o n s which a r e c u s t o m a r y and a p p r o p r i a t e w i t h r e s p e c t t o
arrangements of t h i s nature.
I N WITNESS WHEREOF, t h e p a r t i e s h e r e t o h a v e e x e c u t e d t h i s
Agreement t h e d a y and y e a r f i r s t a b o v e w r i t t e n .

THE FINANCIAL GROUP, I N C .


By:
THE PLANNER'S SECURITIES GROUP,
INC.
By:
( s i g n a t u r e s c o n t i n u e d on f o l l o w i n g p a g e . )

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 558 of 646


Page 2664 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FINANCIAL MANAGEMENT GROUP, LTD.


By:

(SEAL)
ROBERT E. KAUFF'YAN

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 559 of 646


Property of Advance Media Group

Page 2665 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

R.E. Icsiufiman
NOTES OF STOCK OPTION

A.

B i l l Koegler w i l l supply an adden3.m to point number one


changing the words gsslrminq and
The new paragraph

m.

w i l l read:

is anticipated t h a t the PlanC m p n y w i l l generate


average annual gross unmnissions through PSG of a t least
four million
($4,000,000)
and Planning Oorrrpany w i l l
receive a mhimun~5.2 percent of t h e equity of PSG i n any
event, to this end....
It

B.

Koegler has represented that this is non-dilutable stock


and that FIG'S interest w i l l not change unless

Bill

pnxluce aver 4 million a yea. average annual


d s s i o n s over the next three y w , i n which case our
interest w i l l increase.

1.

We

2.

FMG

3.

Bab M i m a n leaves Planning Ccgnpany f o r any reason, i n


which case the stock option ceases and only vested shares
a t that time are owned by FtG.

leaves PSG w i t h i n seven years, in which case a vest%


schedule exists reducing our interest.

IT S H O U I D W 3 N O T m ' M A T E ' S G W I L L N O T O O ~ ~ F I G S E P A R A T E
FROM ITS INVOL-

m m s:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

WlIM

XAUFFMAN.

Page 560 of 646


Page 2666 of 2953

'IHEIR REASONS ARE ARE

Thursday December 15, 2016


10/19/2006

US District Court For The EasternCompact


District of Disc
Pennsylvana
Project Managers.

Section 3189 Federal False Claim Act

Compact Disc Manufacturers.

May 21, 1990


Stan J. Caterbone
ADVANCED MEDIA GROUP, LTD.
Lancaster, PA 17601
Dear Stan:
As per our recent discussions concerning
our CD-ROM division, it is my intention to
allow the ADVANCED MEDIA GROUP, LTD. to
continue
servicing
these
clients
and
prospects.
There may be finder fees
associated with any or all of these business
activities
payable
to
American
Helix
Technology Corporation.
The Advanced Media Group, LTD., will also
have the opportunity to communicate to these
clients and prospects that The Advanced Media
Group, LTD., will continue the current CD-ROM
business activities.

President

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 561 of 646


Property of Advance Media Group

Page 2667 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Investigators
tie Guerin's
son to seized
-

Inlelrgencer Journal 5tan

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 562 of 646


Page 2668 of 2953

The federal investigation into


James H. Guerinfor violation of
U.S. export laws has expanded to
include his son, James H. Guerin
J r.
Federal investigators confirmed this week that a t least two
shipments of military-grade
electronic components and assorted military support equlp
ment linked to the younger Guerin's Harrisburg-based company
were se~zedby U.S.Customsofflcials at the Port of Philadelphia
during the first two weeks of November.
Speaking on the condition that
their names and agencles not be
used, the investigators said the
improperly documented s h ~ p
ments were bound for Smgapore,
with subsequent resale scheduled to "several embargoed
(Third World) countries that wlll
remain confidentla1 at this
time."
,The subsequent re-distribution
in Singapore was being handled
by the same unnamed person
who handled illegal arms and
military electronics shipments
for the elder Guer~nand his former company, lnternatlonal Slgnal & Control Corp., now Ferranti International Signal PLC, federalinvestigators said.
Investigators declined to specify exactly what they. seized, or
the size of the shipments.
"Let's just say what we seized
is a serious violation of U.S.,
law," said one investigator.
"Young Mr. Guerin did not,;nor
could have he, legally obta~ned
the necessary Department of
State or Commerce licenses
w e d toexport this material."
Thernatertal seued originated
from the younger6tlerin's company, Advent Marketing International Inc., 2405 ParkDrive, Suite
203. The company is located ,in
the Commerce Park industrial
center on the outskirts of Harrisburg.
The company's original adname
dress listed on its fict~t~ous
filing
was theDecember
Holiday Inn,
Thursday
15,Room
2016
117, Liddle Road, Harrisburg.
10/19/2006
Advent was registered w ~ t hthe
'

-2

o^mnr.l.

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FERRBNTI INTERNBTIONAL, PLC, ,

- Stan
Published l i e s a b u t
Caterbane on

Septem@r 4, 1987
regarding fabricafed
crlninal chawes that
w r e filed bj the ilanheim
I o n s h i Pollee Department,
Distric! Justice b r a y Norton,
the L+ncqter District,Attorney,
and Plstrlct Justice Rlchard Rpeser.

SW 618 IIPISIAMIG

- Fomlosed

on
- )lamer
Uorked with Jim
the residence
on t k
of Stan Caterbone Lancaster k t e
in lbvember '87. Uanageynt Bond
Issue in '87.
Stan Caterbone
J
o
h
Depatto
told
that "Guerin i s in
trouble" in Nov '87.

I St

MIID W
l CON, INC.,

- Filed
suit against
J u e s Christian.

- Sold ISC Stock to

Stan Caterbane

Stan Caterbane called


Gib Arrrtmng in July '87
pleading f o r he1 he
sald k uould c a b the
PR Attorney General's
Office.

- Stan
Caterbane
atten ted to

hu

CARL JMOBSOH
WMAli Ck#K
I
- Carl Jacobson uas

rve,&cu*tnts
o Glb Anstrong
in the PB Ca i t o l
building in
1987 -- Gib ran
away!!

scheduled to meet
uith Stan Caterbone
and Larm Resch on
June 23 1987 a t
FNG ~ t d . , "Ue had
to /IY car1 out of
the country early
~ & ~Said ~

DETECTIVE BmM

discussed business
and personal
matters
daily.

COIPIOMIMM BIVa(

- Stan Caterbane

MRRY

- Judgement
of $191 Hillion
iY Farranti,
Int.

Caterbane.

~ JOSEPH
f 'AODB

Illegally rewsseed
Stam Caterbane plane
with f i l e s on board.

- Discuss rescue

- Stan Caterbone

discussed business
anddally
p r s o nbasls.
at.utters
on

co keration
n con. for United

- for
Indicted & Convicted
- Revieu
financials
- Attorney
Pennsylvania
UEDIECH Scandel.
- Represented Uillian
of Ckm Con Stan
- Partner
uith Larm
General's
Clark us. J u e s Guerin
Caterbane a i l e r s
Rpsch in Military
- Guerin's brotkr-in-lau . ~n $2 mlll~on ay
Office.
$17 Million em&zzled Loglstlcs

dispute/ htorfion?

Stan Caterbone had


2 conversations in '87.

Hind iY Stan Caterbone on


July 4, 1987 to fly from
Caw Bay Coyt Air r t to
Lancaster hulalion
resue
f i l e s fmm a i r lane of Stan
Cate~bone, tha! uas illegalyn
n w s s e d a t 9:3B an Julu
2., .
19R1
..
. .
...
lpaynent was
:h Bank.
h a d knlhue died in a
wsterious a i r accident
a feu u ~ e blater, as told
to Stan Cate~boneh Dave
Austin of t k C ~ R R i r ~ o r t
on or a u t July 20, 987.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Stan Caterbane had found


that 0fficers.of FMG had
broken into hls office
and forged cormrate
stock certificates.
- Stan Caterbone w n t
to the office of Joe
Rada on July 1, 1987
uith a l l corresmnding
f i l e s and d o c w n t s
regarding:

from U.S. Gov't.

Stan Caterbone
discusses allegations
a n d i w r o p ~ i e t i r sand
misconduct of J w s
Guerin and ISC, uith
specifics to D.0.D
contracting activities

Engineering, Inc.
Fowr h h t i n g
Rep for United
them Con Office, in
Uashington, D.C.,

HWARD EISSlEA

Stan Caterbone tried to


twuart any f u t u n call
br d ~ n a n d ~ na s219,888 - Investigator uith
Guta~nerfee.
Pennsylvania
Securl t i e s
Financial Mana enent
Stan Caterbone never
Couission.
Groug ~ t d .
knew uhi~the leetin
the bigitai MovieA,
Uas scheduled, or i f - Conducted 5 Hour
Lancaster Auiation,
there uas any agenda.
lleeting uith Stan
CPnmnulealth Bank,
Caterbone on tk
ISC 1 Guerin, and
29th of Septebpr,
other u t t e n .
1987.
- On Jul 4 Stan Caterbone
Stan Caterbone
had carled Joe Roda after
discussed the
t
k
nposession
learning
of
Page 563 of 646
Thursday December
Guerin i 15,
ISC 2016
" Stan ou have to g u t
related issues
Pagefabricaring
2669 of 2953these lies and
10/19/2006
in some detail.
allegationsn. -- Joe Rada
Recorded Ibrtnno

(KIG)

US District Court For The Eastern District of Pennsylvana

Name

Section 3189 Federal False Claim Act

$0.50

Bavera. J e r r y
Braverman, Richard
Caterbone, Stanley
Clark, Glenn
Coho, T h e b e 8 .
H a r t l e t t , Michael
Kauffman, Robert
Kennedy. David
Long. Robert
Loss, Alan
Loss. Nathan
Ncnell, Linda
Oischger, Donald E.
Paneros, Pete
Podlasek, Richard
Radcliffe. Harry
Ray, Kenneth
Robertson, Scott D.
Roesser, Steve
Royer, Carolyn D
Trump, Richard C.
Trump, Richard L.
Umiker , Nora A.
Volpe. Gary
Volpe, Richard J .

40000
40000
60000

'

Total Shares
Total Capital
Raised

140000

65000

35000

$70.000~$162,500 $122.500

Offering Memorandum

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Total
Shares

$5.00

45000

Page 564 of 646


Page 2670 of 2953

35000

5500

245500

$27,500 $382,500
40000

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

G
j($

-Capital Raised

54 million

100 million

*tal

2.7 million

5.0 million

.5 million

million

1.0 million

- 5 million

3 . o million

6.0 million

4. o million

camnksions

-mtal

GKSS

- m a e

.3

lbmiqs

-Affiliate

Revenue

less Orsmnissions

.76 million

1.52 million

'

llion

N/A

SALES FORCE

-=w-'=

37 P==ns

50 Persons

48 plSotl.5

--Hires

10 persons

14 persons

14 persons

-Retention

90%

85%

95%

m N C I A L S (All MlPRberS

in Millions of Dollars)

Revenue

.76

1.8

N/A

--Retained Profits

.21

-501

N/A

--Return On FqUity

70%

66.6 %

N/A

--Capital Base

.300

-785

N/A

-Book Value Begin/Year

.300

.725

.30O-

--Book V d l u e / S h a r e

1.60

3.05

4.00

-~ook value w/Year

-480

1.526

N/A

-Value EQr Share


(at 3.5 x fsook)

$5.60

$10.67

$14.00

$10.00

$13.33

$17.00

-Net

Traditional
-

(at 1

*.sham?
>;

Total Grms R e J e r f ~ e )
-15-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 565 of 646


Page 2671 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 566 of 646


Property of Advance Media Group

Page 2672 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

REGISTRATION NOT TRANSFERABLE


Thllcertlflcate
must b. ~n,he mr
cr.tt Wh." 0p.r.l.d

U N I T E D STATESOF AMERICA
DEPARTMENT OF TRANSPORTATION - FEDERAL A V I A T I O N ADMINISTRATION

CERTIFICATE OF AIRCRAFT REGISTRATION


NATIONALITY AND
REGISTRATIONMARKS

AIRCRAFT
SERIALNO

27623

..

3 1-7812065

MANUFACTURER AND MANUFACTURER'S DESIGNATION OF AIRCRAFT

PIPER

PA-31-325
This car,l~lcexr a
,lS".d

$0. ras,,trs

,,,la
The Fadarsl Aule
,ton Admlnlslr.uon

Of

INDIVIDUAL
.
- -

I( IS ~ ~ r t i that
f ~ ~&he
d ahor. d e u r i b ~ ds~rcrafth u k m .nured on the resls-r of ihr Feder.1
accur&nce with the Convention on
~ " , . f ~ " " *dminu,..,,on.
united stsu.
A~.,,C.,
rllb the ~.d.nl AVI.GIO~ *a of
~ ~ t . ~ . t , ~ CIV,,
, , d A V , . ~ ~ Odated
~
~~~~~k~
7. 1914.
1858, .nd rqul.liun. *surd thereunder

US. Daplrtmoni

DATE OF ISSUE

JULY 22s

,,on purposes only


and I, nor r s r t l ~
IC.1.

-,"

CATERBONE STANLEY J
I 1755 ORE60N PIKE
s LANCASTER PA 1 7 6 0 1

....
..
..
.
0

a
z

..
..

11 1 1

U.S. Department
of Trsnrportslion
F&wl Aviation
AdminisIntion
MI*. ~ . ~ , t ) n c v~ e r o n a u t ~canter
ul
P O . Box 15504
o k t a b m . c i w . OK 73116

Offac#alBus#nssl
pen.lty for Prwal. Ur. $300
AC Form 806C-3 17831

27623

ro:
CATERBONE STANLEY J
1 7 5 5 ORE60N PIKE
UNCASTER PA 1 7 6 0 1

198

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 567 of 646


Page 2673 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Advisory, Inc.
-1*"K,.'

Y.*LI*I*I

'"OW L I D

STANLEY J. CATERBONE
PRESlDENT

June 11, 1987

Mr. Charles Smith


Lancaster Aviation, Inc.
Lancaster Municipal Airport
P.O. Box.375
Lititz, PA 17543
Dear Chuck:
I would like to explain to you the recent activities of Lancaster
Aviation and the reasons for which I have been very frustrated
with the services.
A few months ago my business activities required that I be
in different locations every other day.
These activities
are worth millions! of dollars and entail consulting work inI began using Lancaster
volving international firms and people.
Aviation to charter my flights. I was very surprised to find
no credit report or any formal application necessary to fly!
I even questioned John Steuernagle about this.
I was very
pleased with your charter service, especially the service
of John, Dick and Mike.
They service your clients very well.
Because of my contacts with people in aviation, I put feelers
out for an airplane.
I was called by a person in Harrisburg
who provided a corporate plane that was for sale.
I had the plane (Cessna 402 B- 1973) flown to Lancaster for
They offered me a no
a test flight so that I could see it.
cash deal and said they would give me a note.
The plane was
old, but would have been adequate for my needs'.
Then, your people saw me looking at the plane.
Everyone said
it was a piece of junk and said I was ccazy -- especially Pete
Wolf sen.
I sald rlne, but, I could qet into the plane without
any financing difficulties and the plane would suit my needs.
I said,"you have ten days to find me a better deal."

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 568 of 646


Page 2674 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

June 11, 1987


page 2

Mr. Charles Smith

In

the meantime, I scheduled a Saturday morning flight at


a.m. on May 30th to Cape May, where the movie is being
filmed of which I am Executive Producer. On Thursday evening
I found that I no longer needed the flight.
I was out and
ran into Pete Wolfsen.
1 said, "Pete, I have to cancel my
flight, could you please tell them I won't need it?"
His
response was "I will be too busy!"
Here is a salesman that
said I was crazy for not buying a plane from him, in which
he would receive a 4% to 8% commission, telling me he was
.too busy for a 15 minute communication to people he talks
to everyday in his office!
9:00

That is just ridiculous and


of Lancaster Aviation!!

it made

a very bad

impression

Then Pete finds me a nice deal that I was excited about.


He tells me that he can finance the plane in "48 hours"!! So I
only worry about closing costs and 20%. Then I get into hassles
because he can't get the financing he said he can get.
Then,
you cut me, off of, your charter service when all invoices are
net 30 days.
I

--

My. financial statements are very accurate and are on the conservative approach if any.
If you don't believe me, visit
my office at 1755 Oregon Pike.

egretf fully yours,

,,

,,

president
SJC: lmk
cc: P. Wolfsen
J. Steuernagle
D. Loose

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 569 of 646


Page 2675 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

FBI links Guerin to S. African a1


Thomas L. Flan

~ m e l w c ed3sran
r

PHILADELPHIA- James H. ~ u e r i n
used a bogus company headquartered in
a New York post office box to send numerous shivments of embarroed military hardware to South Africa and circulate money used to mastermind a $1
billion fraud, an FBI agent testified
Wednesdar.

Bin, Guerin's former Lancaster de-

fenselelectronics company, International Signal & Control Corp., now Ferranti International PLC.
The first accounts of Guerin's alleged
illegal dealings with South Africa were

Agent tells court ISC founder set up phony company


to trade illegal military hardware, conduct major hu4

reported in the Intellingencer Journal in


October 1989, but Wednesday was the
first time the government officially said
that its investigation had confirmed activities there.
This was the agent's second time on
the stand in as many days as testimony
continued before federal Judge Thomas
N. O'Neill over a disvuted $2.75 million
heem~lovment settlement
contract.
-~
..--.--..
-tween-Guerin and his former top attorney a t ISC, William A. Clark.
This Avril, federal oroseeutors froze
more than $2 mill~ona ~ e g r d l ystrll owid
Clark by Guerin toend Clark's five-year
tenure at ISC last April.
~

~~

In the order freezing the cash, federal


prosecutors said the money came from
a criminal enterprise - ISC and Guerin's personal holding company, Parent
Industries Inc. -and was subject to forfeiture under the pre-indictment provisions of the Racketeer Influenced Corrupt Organization Act, or RICO statUtes. The government said it wanted to
protect disbursement of the money
should the government prevail in its expetted prosecution of Guerin on a number of criminal charges and lay claim to
it, according to court documents.
The two-day hearing was held to allow
the U.S. Attorney to present evidence

supporting a request asking O'Neil


extend the freeze for an additiona
days whilethegovernment continue:
case against Guerin.
The money was escrowed by the I
caster County courts when a legal ha
erupted over the balance owed Clz
with Guerin contending Clark used
tortion and coercioa to obtain the agl
ment.
Tuesday, the Assistant U.S. Rober
Goldman said his office believes C1,
did use "blackmail" to secure
agreement, and that Clark knew
proceeds bad been derived from a c r
inal enterprise due to his former PI

,-".

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 570 of 646


Page 2676 of 2953

..

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

TIME
S Y S T E M S

'

YEAR

MOM

1q87

-m
S
V)

I
I

k
TS 4101

RV ~ 8 5

orsas TME &s

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 571 of 646


Property of Advance Media Group

Page 2677 of 2953

INC

PRNT~
NUS

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

May 2 9 , 1 9 8 7

Stan Caterbone
554 B e r k l e y Avenue
S t o n e Harbor, N . J .

Mr.

Dear S t a n :
I'm e n c l o s i n g a f i r s t d r a f t of t h e s c r e e n p l a y , c o m p l e t e w i t h
t y p o s and a c o u p l e o f o t h e r e r r o r s . ( F o r i n s t a n c e , Kennie
Queens i s a l s o Kenny P e t e r s o n . )

This
well
very
talk

s h o u l d g i v e you s u f f i c i e n t t i m e t o s t u d y t h e s c r i p t as
I t would be
a s t h e b u d g e t , which I ' m a l s o e n c l o s i n g .
h e l p f u l i f you c o u l d have n o t e s p r e p a r e d which w e c a n
a b o u t when B a r b a r a and I a r e i n N e w J e r s e y n e x t week.
@

rlene

avidson

4334 STERN A X . . SHERMAN OAKS. CA91423


Page 572[a181
of 646
Thursday December 15, 2016
995-3417

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 2678 of 2953

10/19/2006

COMMONWEALTH OF PENNSYWANIA

ROBERT
M. LAM
US District Court
For The
Eastern District of Pennsylvana
Chairman

ROBERT P. CASEY
Governor

L. DIANA
Section 3189 Federal NANCY
False Claim
Act
Secretary
ELIOTT KLElN
Chief Counsel

Pennsylvania Securities Commlsslon


333 Market Street
Harrisburg, PA 17101-2209
Telephone: (717) 787-8061

November 25, 1987

Mr. Stanley J. Caterbone


2323 New Danville Pike
Conestoga, PA 17516
RE:

Financial Management Group, Ltd.


Lancaster, Pennsylvania

Dear Mr. Caterbone:


With reference to our telephone conversation on November 23,
1987, I feel that we suffered from a lack of communication
and to avoid any misunderstanding in the future, I am
requesting that you submit your complaint in writing.

'

O C i

Enclosed is the Commission's


I
standard complaint form which
you may use or use as a guide.
The Pennsylvania Securities Commission does conscientiously
review and take appropriate action relative to all complaints
pertaining to its mandated purpose.

Yours truly,

Hovard L. Eissler
Securities Investigator

HLE :sec
Enclosure

1109 STATE OFFICE BUILDING, PHILADELPHIA, PA 19130-4088;Telephone 215-560-21


806 STATE OFFICE BUILDING, PITTSBURGH, PA 15222-1210; Telephone 472-565-5082
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 573 of 646
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Guerin:

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

L l s W amonb. the 10 pcaple


Gucrin could recall i n his tcnti.
m o w war WGAL-TV llewr an.
chormanKeith Martm.
In the text of the deposition.
Cuelin .%id that Msnin worked
as a consultant for ISC handlirlg
e x e c u t i ~ i~n - s e n i ~ ceducation
sndgiving~lasses~n
howtodeal
with the media.
Cuerin funhcrtcstilied art in
w a u i v e o his assrgnments by
f m e r head of communications
.
I 1%. Michael Smoglor. and
U a t Msnin"hand1ed the merger
wiIh Fernanti in Ihe loeai area.
clalm Marlin almngly denied
TYesdav"aht
Martin,& lelephane inter.
view. nand ho w o r m as a con.
sYllant m several 1%-barked,
mmmunit~.otienled mjeetrfur
the Lanraater champer of
memeand Industry and theun~ted way ."era Ihm-year petid,

corn.

rerelvingaboutf10.rminfcesfo0
i s m i a m e n andpmductionex. hEnise.
and did sa with the apDm"~l"fwP.*I.

Cup& claimed Clark's t h a t


lo dlselose the anaitive conVBCtlio~~Lnlgationissues ~ 8 t h
LO would nix Cuetin's
buyback of scvora
~di~k@~lmmFerranfi
The buyback. which fell apan
tm mama auler Ihan Clark inLludcd I%
Teehnologiea h d .
h e ISC wbsldiary Ferranti
chLmrineluded Up g m s s l y o ~ e ~ .
"slued Pakislan eontracts alk g 4 4 ncgotlakl by Haig and
hmcr Laneester-based ESI, the
Z m r Y C?erln allegedly used
IP
milrun. electnnics to
,SouIhhltie..
N s ineluded wilh Ihe depositim were eome la) pages of exbibits and m o t i o ~ liled on
allrk'rhhalf

%%p%

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~ C I \ I \ ~~Yv H i u i H
HUU>II\Ib

US District Court For The Eastern


District of Pennsylvana
Homeowners
Emergency

tII\IAI\ILt A t i t N L Y

Section
3189 Federal False Claim Act
Mortgage Assistance
Program

2101 North F r o n t Strect


P.O. Box 15628
Harrisburg, Pennsylvania 17105-5628
71 7-780-3957

Stanley J. Caterbone
RD 1
2323 New Danville Pike
Conestoga, PA 17516
Re:

NOTICE OF DECISION OF HEARING EXAMINER

Dear Mr. Caterbone:


On January 26, 1988, Pennsylvania Housing Finance Agency issued a
Notice of Adverse Action and a denial of your request for a mortgage
assistance loan pursuant to the provisions of Act 91 of 1983. On
February 10, 1988, you requested an appeal from the decision of the
Agency and an opportunity for a hearing to contest the Agency's denial
of a mortgage assistance loan.
A hearing was held on March 22, 1988,at which time you had an
opportunity to discuss your situation before a Hearing Examiner. The
Hearing Examiner's decision is as follows:
The Appellant's application for a emergency mortgage assistance
loan was initially denied on the following grounds:
1.

Mortgagor is not suffering financial hardship due to circumstances beyond mortgagor's control: Mortgagor was fired from
job. (Act 91, Section 404-C(A))

During the course of


established:

the appeal hearing, the following facts were

According to a notice of determination dated November 9, 1987, the


Bureau of Employment Securlty of the Pennsylvania Department of Labor
and Industry found the Appellant, Stanley J. Caterbone, ineligible for
unemployment compensation because he was an unemployed businessman, not
an unemployed worker. The Appellant appealed the decision.
In the appeal decision of January 7, 1988, the referee determined
that the Appellant was ineligible for unemployment compensation because
he was an unemployed businessman, not an unemployed worker, and had
been terminated on June 30, 1986 for willful misconduct. The referee's
decision indicates that the other two officers voted to terminate the
Appellant because he entered his employer's premises between 12:OO a.m.
and 8:00 a.m. on July 1, 1987, and removed various corporate documents,
records, equipment, files, and checkbooks without authorization.
During the course of the hearing, the Appellant explained that he
had been forced out of Financial Management Group Limited, a company in
which he served as Executive Vice-President and owns 20% of the stock,
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, , , r S I I ~ L~U~~ ~
C ne musc provlde
Section 3189 Federal
Claim Act
25 days in order to refute
the False
Bureau
of
Employment Security's determination of willful misconduct. The Appellant indicated that he had appealed this determination and would
provide evidence supportive of his position.

US District
Court For The Eastern
District of Pennsylvana
documentary
evidence
within

Subsequent to the appeal hearing, the Appellant's attorney,


Michael McDonald, presented evidence that the appellant has been
suffering from a bipolar mood disorder. This psychiatric illness,
which is genetic in character, became severe during the summer of 1987
and later resulted in the hospitalization of the Appellant in September, 1987. His family has a hiscory of psychiatric illness. The
debilitating and disorienting impact of this illness appears to have
led to the appellant's dismissal from employment.
In reference to the termination, it does not appear that the
Bureau of Labor Security was aware of the Appellant's mental condition
when it rendered the determination of willful conduct.
Mr. Caterbone explained, moreover, that he was currently negotiating a settlement with the company. He expects to receive approximately
$200,000 for his interests.
Now the $1,066.97 monthly mortgage payment is delinquent from
July, 1987, through March, 1988, in the approximate amount of $9,602.
According to his testimony, the Appellant plans to reestablish his
earning power by entering into the real estate business. In turn, the
hearing examiner advised the Appellant to provide evidence within 25
days that there is a reasonable prospect of resumption of full mortgage
payments within thirty-six (36) months and paying the mortgage by
maturity. (Act 91, Section 404-c(A))
Subsequent to the hearing, the Appellant's attorney advised the
hearing examiner that the negotiations for the liquidation of the stock
could take anywhere from six (6) months to twelve (12) months.
The Appellant reported gross income of $12,039 in 1984, $11,854 in
1985, and $30,531 in 1986. Mr. Caterbone has not generated an income
since his termination from employment on June 30, 1987.
The aforementioned findings of fact indicate that the termination
of the Appellant's employment, attendant loss of income, and resultant
mortgage default were precipitated by a psychiatric disorder which has
a genetic character. Moreover, it does not appear as though the Bureau
of Employment Security was aware of his illness when the determination
of willful misconduct was rendered. In this context, the Mortgagor is
therefore suffering from financial hardship due to circumstances beyond
the Mortgagor's control. (Act 91, Section 404-C(A))
On the other hand, the appellant's mental health problems and
current income-generating capacity raise questions concerning the
"reasonable prospect", especially in view of the relatively high
mortgage payment ($1,067). Therefore, this situation should be reevaluated.

It is hereby ordered that the Pennsylvania Housing Finance Agency,


Homeowner's
Emergency
Mortgage Assistance Program's decision of
January 26, 1988 is remanded with instructions to reevaluate the
EXHIBITapplication
U.S. 16-4014 CIVILon
RIGHTS
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646
Thursday December
15, 2016 full
the
reasonable
of mortgagor
resuming
payments within thirty-six
mortgage
Property of mortgage
Advance Media Group
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by maturitv. (Act 9 1 S - r t i n - A n n - * / % \ \

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

It is hereby ordered that the Pennsylvania Housing Finance Agency,


Homeowner's
Emergency
Mortgage Assistance Program's decision of
January 26, 1988 is remanded with instructions to reevaluate the
application on the reasonable prospect of mortgagor resuming full
mortgage payments within thirty-six (36) months and paying the mortgage
by maturity. (Act 91, Section 404-C(A))

Hearing ~xakin&;
cc:

file
decision file

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1 THE MIGHTY YEW AND FIERCE COMPETITION ARE FORCING IT INTO HEW MARKET

1 '

here he is, sitting on the floor of


his office with three remote cantrols in his hand, listening to a
Beethoven symphony a t high volume.
He recorded the symphony from a
broadcast of a recent Vienna Philharmonic concert in Tokyo, and now he's
putting the tape to good use. As much
as he likes music, Akio Morita likes trying out new stereo gear even better.
Morita is 66, and the last flecks of
black long ago vanished from hi silver
hair. Although he's spending less time
these days in his cluttered, wood-paneled
cha~rman's office a t Sony Corp., it's
clear that Morita still provides much of

BUSlNtSS
WEEKIJUNE
1987
EXHIBIT 04
U.S.
16-4014
CIVIL1 RIGHTS
CLAIM

Property of Advance Media Group

the spark that has made the company


synonymous with the success of postwar
Japan: innovation, shrewd marketing,
and quality. As executives repeatedly
dash in for consultations, Morita patient
ly explains why one set of speakers he's
checking out doesn't quite have the Sony
sound.
Sony. The very name speaks volumes
about the company. It comes not from a
Japanese word that foreigners might
find difficult to pronounce, -but from
sonus, the k t i n word for sound, finetuned for Japanese tongues. The name
symbolizes the company's origins in its
pioneering tape recorders and transistor
Page 580 of 646
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radios. It also has come to signify tl


international orientation among so mar
mightily successful Japanese companie
Some 7046 of Sony's sales come fm
outside Japan.
VCtDe
Recently, though, Sor
has become one of the most visit& syr
bols of trouble in Japsn. Like other Ja:
anese companies in businesses rangin
from autos and steel to electronics m
computers, Sony's world has bee
turned upside down. The dramatic rir
of the yen has cramped its ability t
compete in export markets. Protectionic
sentiment is 'growing in the U. S. an
Europe. And foreign rivals are figbtin

-.

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back like never before, Far East compet


itors, such as Taiwan and South Korea,
are exploiting their lower costs, and
U. S. and European companies are
achieving efficiency gains and improvements in quality.
The high yen-endaka in Japanese-is slamming the nation's exporters. two
ways. Foreign competitors with costs denominated in dollars or French francs
have more room to undercut Japanese
companies on prices, and a dollar's
worth of sales is worth less in yen. Measured in dollars, Sony's U.S. sales rose
24% last year. Measured in yen, they
were down 11%."The falling dollar has
produced a nearly 50% tax on us," complains Morita.
Overall, the numbers tell a disappointing story. Worldwide sales slipped 7% to
$8.2 billion, in the fiscal year that ended
last October, while earnings from operations fell a stunning 75%. Earnings d e
dined another 56% for the five months
ended in March from a year earlier.
Archrival Matsushita Electric Industrial
Co., by contrast, endured a more manageable 44% drop in operating earnings
last year.
For Sony, adaka is like a drought
that follows a plague of locusts. The
challenges facing Morita and his handpicked president, former opera singer
Norio Ohga, have become even more
daunting than they already were.
WA
aoa~
Competition in consumer

products s u d . Riwls that took about


two years to come up with their own
U.S.versions of the Walkman now re
spond to new Sony products in months.
And the rising quality of competitors'
products has narrowed the advantage
that once permitted the company to

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As if that's not turmoil enough, Son


must now sweat out a trade skirmis
that could &sealate into a war. So f a
the company has avoided any seriou
damage from the cross-fire between Tc
ony Corp. has built its reputation
Raykay was inspired by Hideo's own
kyo and Washington. Its semiconductm
by staying uptodate in the con- experiences overseas, particularly
are not widely used in the computer
sumer electronic8 business. But while studying a t the University of
covered by the tariff imposed by Pres
a t Davis. He remembers viv- dent Reagan recently, and all of th,
the company might not be around today without help from a S00yearold idly the trouble he had 6nding and fur- Sony television models that would hav,
enterprise that is the single largest nishing an aparbnent 'The fist night,
been covered by the tariff are made u
shareholder in Sony.
I slept on an empty bed with no pillow San Diego. But the longer the U. S
Sony's benefsdor is Morita & Co., a or blanket I had to sleep with my mat trade account remains deeply in deficit
f a m i l y - 0 4 business that has been over me."
the greater the likelihood that Son!
brewing sake, the traditional Japanese
Hideo, who does not drink, always
could get pinched in the U. S. market
ricewine, under the brand name Neno- expected to work in the family sake which accounts for a third of its sales.
himatsu since the late 1600s. The corn . buainw. In keeping with tradition, he IMNIWOvlscnlcn The opportunities f01
pany, w h i i has 701 employees, is one
a retaliation-bent Congress to make mis
among a h w t of small regional sake
chief are legion. Even though Congresr
brewem in Japan. M&
& Co. alao
in April rejected a oneyear ban on tht
ultrahigh-fidelity digital tape recorders
makes miso, a fermented soybean
paste used in s o u p and sauces, and
recently introduced in Japan, legislaton
sholyu, or soy sauce. Under the maw
are likely to accomplish the same objec
agemeut of Kyueaemon Morita, the
tive by other means. Congress is daw
husinesa provided a comfortable life
dling over legislation to require that the
for hi son Akim and three other chilnew products be equipped with devices
dren in Nagoya, an industrial city 220
that prevent them from duplicating
mi. southwest of Tokyo.
tapes or records, a provision sought by
As the eldest son, Akim was expected
the recording industry. Richard L.
to take over Moritp & CJ.Instead, afSharp, president of C i u i t City Stores
ter World War 11, Moritn, then 25,
Inc., isn't expecting digital tape mathrew in his lot with business novices
chines to be in his stores for atlesst a
Masaru Ibuka and Tamon Maeda to
year, as Sony and other manufacturers
start Tokyo Tsushin Kogyo, or Tokyo
await a cle* reading on the legislation.
Despite Sony's woes, Morita is as eaTelecommunications Engineering Co.
Unable to get a bank loan for their
ger and enthusiastic as ever. He manages to sound upbeat about both the
struggling company, the trio turned to
A h ' s father, wbo repeatedly provided
company's functional-looking, high-per,formance Profeel Pio w ,which is sellmoney through Morita & Co. in return
for s t x k in the new venture.
ing well, and the 8mm kandheld video
AT Was r;l*mur. l T K evolved into
camera, which is struggling. "This year
we will recover our profits, and next
Sony. And Morita & Co., with A h ' s
am
year will be a much better year," he
brother Kuzuaki a t the helm, has seen mmnm8nraurrrruro#ou
says. Most analysts agree that Sony has
some modest tramformations of its
own. B e s i i selling $40 million worth will bearme president of Morita & CQ, a t least halted the slide that has
and miso annuaUy, the when Uncle Kuzuaki retires. He joined dragged its stock down to a recent fiveof &, 8&,
business now also includes food dietrib- the company two years ago after stinta year low in Tokyo and has kept its U. S.utars, snpermarkets, and a vineyard. in Sony's recounting and treasury d e traded shares essentially unchanged at
about 20 for the past year. But analyst
Its boldest diversiibtiin so far, how- parhnenb and in the company's J a w
ever, is R a y b y Inc., an w r t m e n t of nese record ventura with m Inc. At Eugene G. Glazer of Dean Witter Reynservices that are aimed a t Tokyo's for- the artists and repert~rydepartment olds Inc. says it could be 1989 before
eign,executivesand their spouses. The of W h y Group Inc., he ammpa- Sony surpasses even last year's meager
level of earnings.
v e n m offers a Japaneee cooking nied Julio Iglesias, Men a t Work,
Sony's struggle to recapture its glory
school, interpreter services, and a lan- Heart,and other performers on their
will depend more and mote on Ohga,
t o w of Japan.
~uage
EXhrJL
Despite his diversification moves, Hi- ' since Morita is gradually diminishing his
Raykay is largely the brainchild of
role in handling the company's day-todeo says M O W S traditbnal prcducte
Hidm mrita, 35, Akio's eldest son "I
want people who come to Japan to will always m e first "For my family, day affnirs. "As far as basic policy is
h w about my country, the diier- the Morita history has alway8 been concerned, I'm still in charge," Morita
says. "But Ohga'~running the compae n w between the cultum and how miso, sake, and shqpIuhe nays. &en
we really feel," he says. He plans to Sony "is only a venture business for ny." The pair make a close-knit team,
add courses in auch Japanese arts as the Morita family." Some venture.
Ohga, 57, first met Morita more than 35
flower arranging and to help foreign Morita & Co. owns 9.4% of Sony. The years ago, when he was studying opera
c o m m set up in Japan, whether initial $33 investment is now worth a t Tokyo University of the Arts. At that
time, Ohga began writing letters to Sony
flnding offiee space or renting furni. about $480 million.
in which he criticized the quality of the
hue for executives' homee..
Bg Amg B o r n *a Tokyo
sound from the company's tape record-

THE SAGA OF SOW


ALL STARTED WITH SAA(E

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66 BUSINESS WEEK/JUNE 1,1987

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ME. AID MI. on-

Section 3189 Federal False Claim Act

mrrr sum r u u uomu urn ROIAN OMU ~

I I R TO sow

products, is on the cutting edge of t


diversification strategy. "We have :
proximately 20 new business areas jl
in Sony America where we are inve
ing," says Neil Vander Dussen, p n
dent of Sony Corp. of America.
The efforts in the U. S. and arou
the world are producing some pieces
Sony's vision of the future. Sony a
the first Japanese company with a pa
erful 32bit desktop computer, which
the heart of its engineering workstati(
It has quickly become a major produ(
of full-feature telephones in Japan. So
also has taken the lead with the 3%floppy disks and drives that are biddi
to replace 5%-in. disks as standa
equipment on computers.
Perhaps the most impressive marria
of video with the computer is what So
calls interactive video. Sterling h
Inc.'s Wmthrop Pharmaceuticals UI
uses a van with a custom-crafted versi'
to provide simulated demonstrations
how its products work. The system k
a doetor "treat" a patient with hee
failure, The doctor sees hispatient goi
to the emergency room, while the s]
tem provides the patient's case histo
and vital signs. The patient's reeove
depends on the doctor's response to c
screen questions and choices.
%KIOD o w r r s Even though Sony h
managed to raise sales of such noncc
sumer products to 25% of world*'
sales, executives now concede their tin
table for hitting 50% has been throv
off. "It was a good dream, and I think
is still a good target," says Shim Kc
iyama, who heads Sony's Communic
tion Products Marketing Group. V
Un
c
f
tunately, we won't be there by 1990."
The main problem has been coming I
with enough distinctive products
make strong headway in an already COI
petitive market, particularly compute]
Sony has "a number of good enginee
and marketing guys, but unfortunate
almost none of the top guys understai
the PC or computer market," says a fc
mer Sony executive. And Sony has d
covered in its nonconsumer businer
just as it has in consumer goods, that i
vaunted performance advantage is ni.
rowing. Last year, NBC Inc, tapped MI
sushita for a $50 million, fiveyear ca
tract to supply videotape equipme1
"Sony was comparable but not as good
says Steven Bonica, vicepresident f
engineering a t NBC. Sony has since cou
tered with a new system that recent
won a contract at capital ~ i t i e s
Inc., but it is clear that the company I
longer has the market to itself.
Where Sony has earned almost univ~
sal respect is in its effort to become
more global company, which will go
long way toward softening the impact

relatively cheap $32 Walkman just for Morita still insists has technological adthe U. S. market
vantages that can be exploited. Says one
Betamax $ also one of the reasons competitor: "If Sony switched to VHS
Sony is showing more willingness to co- format in their products, they would be
operate with competitors. In developing No. 3 after one year." This summer, VIE
the technology for compact disks and makers plan to unveil an improved verplayers, Ohga forged an alliance with sion in the U.S. thdt eould make l i e
Dutch electronics giant Philips. Sony has even more difficult for both Betamax
since become the world's largest suppli and the 8mm camcorder.
er of CD players, with 35% of the U. S.
Sony's boldest move for dealing with a
market, and is one of the largest produc- cutthmat consumer electronics market is
its diversification into nonconsumer busiers of the disks themselves.
m w p l ~ u u w Sony
.
has even started nesses. There, the theory goes, the comassembling products for its competitors. pany will be less dependent on coming
In an effort to win wider acceptance for up with a steady stream of relatively
it4 8mm camcorder, which is incornpati- short-lived hit products-and able to use
ble with VHS video players,'it has agreed its unique talents in video and semiconwith 127 manufacturers on standards ductor technology to create its version
for 8mm gear. Sony makes the 8mm of the office of the future. Sony engiequipment marketed by Pioneer, Fuji, neers envision an office where they can
"call up" their colleagues around the
and others.
Ultimately, the Betamax experience world by speaking their names to a vidwas "a blessing in disguise," says Yoshi eo console on their desks. They could
Tsununi, a professor of international dictate memos to the same screen and
business a t the City University of New send them with a voice command. They
York and a friend of Morita. "Mr. Mor- might carry a Walkman-size version
ita has become more receptive to other with a tiny screen so they can review
ideas and has been listening better." documents from the office files while
Tsummi says he wouldn't be surprised entertaining clients on the golf course.
Sony's U. S. operation, which already
to see Sony make an acquisition to
strengthen its nonconsumer businesses. gets 35% of its sales from nonwnsumer
It's not clear just how deep the new
attitudes go, however. Song's commitment to the VHS-incompatible8mm camTheBetamaxdebacle
corder resembles its stubbornness with
Betamax. But this time, Sony executives
taught Sony the value of
say, the format could pay off in differ
sharing technology and
eut products, such as individual movie
players that could he rented on airnot going it alone
; planes. More puzzling is Sony's unwillingness to give up on Betamax, which
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Technology

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Beyond the Bijou


SOPHISTICATED FILM TECHNOLOGIES
AND FUTURISTIC FORMATS ARE REDEFINING
THE MA'PURE OF COMTEMPORARY MOVIE THEATERS.

BY JIM PETTIGREW JR.

..

22 SKY
May
1987
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.

,..

., ..

, , .

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US District Court For The Eastern District of Pennsylvana

! r
i L

n a,world thht Ftinies serrns defined


there isone interby incompat~b~lity,
est which most of us have in common a passion for the movies. And this love
of the cinematic fantasy world shows no
signs of dissipating. Different trends
may appear, such as the VCR explosion,
but upon examining the world of contemporary cinema, one fact becomes
readily apparent - the movies are not
going away. Neither, according to industry leaders. are those esteemed hideouts
of escapism- the theaters.
Though movie theaters are here to
stay, there is a great deal of debate currently going on inside the showcase, or
exhibition end, of the film world. Some
of it concerns topics such as changing
image, and a considerable amount of the
debate relates directly to technology.
The path of events that set the stage for
this situation contains a number of key
elements.
Beginning in the early 1970s. the
movie-theater industry in the U.S.
slowly slipped into what may be called a
technical rut. There were tremendous advances in home-audio technology. but
the exhibition business did not really
keep up.
There was also a trend toward "multiplex" cinema facilities - not an inherently weak mgketing idea - but their
early manifestation didn't prove terribly
successful. The first multicinemas were
cramped, had very small screens, and
ambient sound many times bled over
from next door.
In the spring of 1977. George Lucas
produced a film that would have a revolutionary impact on the exhibition industry. It was released to theaters carefully
picked for certain technical standards.
Besides the well-known special effects
and cinematography, Star Wars boasted
a soundtrack in Dolby" stereo. It was
played over an advanced audio system
filled with new designs, including a
"subwoofer" that generated sound you
couldfecl as well as hear

Section 3189 Federal False Claim Act

The film also brought fresh attention


to the large-frame 70mm format. This
expensive but vastly superior process
had been used in earlier landmark
movies (Lawrence of Arabia. Parton)
but had fallen out of favor in Hollywood.
With a new audio standard established
by the Lucas blockbuster, the cinema industry moved into the 1980s - and a
whole new set of business realities,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

coupled with a feverishly expanding


foreground of technological developments.
Clearly, the industry had to adapt and
change. The situation was brought to a
head by the growth of home video, but
that trend was only a part of the whole
arena. Faced with thischallenge, the thcater industry began what is now a recognizable set of changes to "remainstream"
itself. (The latest studies, incidentally.
show a kind of reverse effect from the
home-movie phenomenon; it's actually
sending patrons back to theaters, seeking
favorite titles in full-blown film environments.)

Page 586 of 646


Page 2692 of 2953

From the projection room to the box


offkc, technology k krmbatlng
the cinema house. Dewlo@ by
Douglas TNmbUll, opposite, YKlwrcanc
equlpped vdth a computcrizcd motion
conbol wtem and 7Qmmfilm a w e d
audiences at Ocpos '85 and '86. Above
computerbed tkkeUng and c c a r a l d a t
sy&ms, i l k those d&bped by Pace
Corporation, a n a k o coming hto
the piEtUre.

Thursday December 15,SKY


2016
May 1987
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

ALL IHX-INSTALLED SYSTEMS UNDERGO RIGID


CERTIPICATION AND ARE THEN TESTED EVERY SIX
PAONtHS TO ENSURE QUALITY ADHERENCE.

Accompanied by an advanced audio


design from THX Sound Systems, a
dMsion
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rests o n a platter and feeds through a
projectorwithouttheprojectionisthaving
to use two projectom.

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Today, the theater repds~tioningpro


csh takes a numher of wses. includil
better s o u n L g
cleaner halls, and hn overall push
rcenereize the "exoerience" vital
moviegoing. "Theaier companies a
building at record numbers, by the way
notes Glenn Rerggren, vice president
Optical Radiation Corporation of Azus
California. one o f the world's large
suppliers o f theater equipment. "Tha
want to make them better, not only aso
erations are concerned - breakdown
etc. t h e y ' d also like to have aneffecti,
theater that lets the public know they'
modem, better than the ones built fiv
ten years ago."
Theaters are now utilizing cor
puterized ticketing and central-data s)
tems, such as those developed by Pac
Corporation o f Bothell, Washingta
The integrated Pacer system instantar
ously gathers all sales data for the cas
intensive business, compiles it, and t
information is uploaded nightly by au1
matic modem to central offices. " 0

Telephone Number

II

24 SKY
1987
EXHIBIT
U.S.May
16-4014
CIVIL RIGHTS CLAIM Page 587 of 646

Property of Advance Media Group

Page 2693 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

system opens up the possibilities of credit-card and off-site ticket purchasing,"


:I notes Keith Myers. Pacer's marketing
t vice president. "This may reach a whole
f different segment of affluent consumers
.I -and even influence the kind of movies
11 that are made."
1 This trend is well characterized by
n numerous showcases across the country.
11 One example is the General Cinema
n complex inside Merchants Walk, a north
I Atlanta mall. There. Cinema One feau tures an advanced audio design from
1 THX Sound Systems, a division of
I( Lucasfilm Ltd. in San Rafael, CaliforI nia. "Patrons don't really articulate it,"
explains theater manager Steve Crisp.
o showing off the loudspeaker system and
a heavily insulated walls, "but they know
I what they want in a film experience
*.
toda ,and sound is verv imppLtanL
1
ne healthy sign that experts point to
t isthe influence eierted by firmssuch as
4 THX Sound Systems and the Theatre
li Alignment Program (TAP), both compo:I nents of Lucasfilm Ltd. All THX-inI stalled systems undergo rigid certification and are then tested every six months
to ensure qualityadherence. TAP vigorI: ously encourages high standards and
a dialogue between suppliers and theaters.
'
' W e are targeting theater managers
a andpersonnel withseminafi," says Kim:I berly Stmb, marketing director of the
3 Theater Operations division at Lucas11 film. 'These will help them answerquestions about film presentation - sounda hacks, how they're made. Lots of times
people will have questions about how
I1
films are made, and the only people that
11 they have to turn to are the theater per)
sonnel. We're trying to make sure they
r are informed and can answer public
u questions - and also realize how impor11
tant theirroles are in the film chain."
Currently, amid the film exhibitors'
concerted push to modernize, there is an
: accelerating debate in both the equip11
ment and showcase fields about what
:I
technical form the near future will take.
1 The issues must be set in context within
I a growing a m y of spectacular new technology, film formats, and even new ap1
proaches to the filmic experience.
Two of the central topics now being
r debated with increasing fervor in the in;I
:;

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 588 of 646


Property of Advance Media Group
-I--

. . .

Page 2694 of 2953


. ..

SKY May
1987
25
Thursday December
15,
2016
10/19/2006

US District Court For


The Eastern
DistrictUTILIZES
of Pennsylvana
ONE
SYSTEM

7OMM FILM, A VERY LARGE


SCREEN, AN EXTREMELY
FAST FILM SPEED AT 6 0
FRAMES PER SECOND, AND
DIGITAL SOUND.

dustry include film speed, expressed in


frames-per-second (fps) and film format
(frame size, coupled with larger
screens). A third topic is the increasing
impact o f high-grade video and its eventual manifestation - high-definition tele- and how the two indusvision (HDTV)
tries will affect eachother.
For decades, the standard film speed
i n the theater industry has been 24fps. At
this speed, a relatively low uroiectionlight jevel must be maintained-(ten-16
foul-candles) to prevent an annoying
sensation called "flicker." There are now
several proponents who are urging that
f i l m speeds be raised. so that higher light
levels may be possible. Faster fps rates.
they point out, also make for richer imagery, better color. and heightened spe-

26 SKY May 1987

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

cial-ell'ccts possih~lities-as well as de- Section 3189 Federal False Claim Act
creasing industry headaches such as
"comet-tailing" and blurring.
The 35mm film format has also been
the industry standard for decades.
Numerous industry leaders are quick to
point out its obvious obsolescence. The
70mm film size, they note, offers much
more than a 100-percent improvement
i n cinematographic possibilities. "Most
people. including large film manufacturers, do not really understand how much
detailed information can be put on 70mm
film." asserts Optical Radiation's Bergpren, "and shown back on the screen."
A central point. i n an overall sense.
that bringsthese debates into focus is that
there i s an already-existing arsenal of
new cinema systems. Each camp points
inarguably to the future, andeach system
is now offering spectacular new cinematic experiences.
some o f the new fomlats first debuted
Theater at the Museum o f Scient
in what the industry calls "specialChicago's O M N I M A X Theater (loca.
venue" theaters - noncommercial, musei n the Henry Crown Space Center at
um, and other educational halls. CurMuseum of Science and Industry).
rently the granddaddy o f these is the
O M N l Theater at the Fort Wonh Mu
um o f Science and History, and the S
IMAXm/OMNIMAXb system, now
amazing audiences at Washington. D.C.'s
mce Museum o f Minnesota in St. Pat
Smithsonian, Boston's Mugar O M N l
among others. Several of these "spa,

Page 589 of 646


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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

format images are projccted ti1rough a


fish-eye lcns orito a 76-foot dorile. which
washes the scrcen witti an cnorrnous picture. The screen is tilted toward the audience at a 30-degree anyic, which crcatcs
astunning wraparound effect.
Showscan" is another radically new
film systcrn with breathtaking sensory
experiences. Developed by special-effects wizard Douglas Trumbull (Star
N'ars, Star Trek; director of Silerrr Rurrning and BrnbzsrormJ Shov'scan has
amazed audiences at Expos '85 and '86;
the Vancouver theater in Canada remained open after the fair, and 50.000
people saw the Showscan presentation in
January of this year. The corporation is
currently opening special-venue theaters
in Los Angeles and several other cities in
the U.S..Australia, andNewZealand.
Showscan utilizes 70mm film, a very
laree screen. an extremelv, fast
film
~speed at 66 f i s , and digital sound. While
developing the process. Trumbull ran
extensive tests at various film speeds,
utilizing participants at California universities. For several years in the 1970s.
Trumbull was also head of Future General, an experimental depanment at
Paramount Studios.

Atlanta's independent filmmaker,


VanDerKIoot Fllrn and Television,
extensively utilizes computers and
high-grade video in current
p:oduction work.

~~~~

~~~~~~

I
1

;
i

:
1

theaters were designed by the architectural firm of HammelGreen and Abraharnson of Minneapolis, which estimated that 20 million people attended
OMNIMAX theaters around the world in
1985.
The heart of the IMAX system is a
unique projection appuach; the large-

Even though Showscan is currently


confined to special-venue theaters, the
corporation clearly has plans to move
inlo the box-office market. "We don't
have an announcement yet, but we're
very close." says marketing director
Cindy Porter. "We're confident that
when an announcement is made, a feature film will beout within two years."
Currently, the leader in the race to
bring stunning new technology into the
first-run film market is FuturVision
~
3@, a division of ~uhlfiinernaInc. in
New York. The brainchild of former
Kodak executive Eric Knutsen, this process utilizes large-screen (wall-to-wall,
flmr-to-ceiling) 70mrn, a sophisticated
digital audio system, and runs at 30fps.
For several months. Knutsen and
FuturVision have had ties with Loews, a
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 590 of 646


Page 2696 of 2953

Name
Address

SKY May15,
1987
27
Thursday December
2016
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

A BIG SELLIIYG POINT TO FiRST-RUN THEATERS I S


COMPARATIVE EASE OF COMPATIBILITY AND
COST-EFFECTIVENESS.

.3

World Famous

Architectural
Antique Auction

Starts 10:00a.m.

The IMAX" system Is a unique projection


approach where large tormat images are
projected through a iish-zye lens onto
a 76foot dome.

Rare Uk Yze G-n

major theater chain (his system is now


being showcased at Loews Tower East,
a prestigious Manhattan screening
mom). At presstime, Knutsen was preparing to announce an agreement with a
second major chain.
Besides its audio/visual sorcery. one
of FuturVision's big selling points to
first-run theaters is comparative ease of
compatibility and cost-effectiveness.
Working with Optical Radiation Corp..
Knutsen has developed his system so that
it can be integrated into existing theater
hardware - and still offer the dazzling
filmic experiences that all aggressive
chains are now scrutinizing.
One aspect of FuturVision is
audio, said to be comparable to
ity (actual CDImovie
still in the future). With this process, the
-ddaudio
is taken from the
film and fed to a Knutsendesigned processor, which then sends audio signals to
an upgraded house system.
"Now," Knutsen says, "the projectionist can walk into the booth and
flip two switches. One automatically
changes screen brightness from low level
to a much higher level for our film, and
at the same time changes film s p e d from
24 to 30. The second switch automati-

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EXHIBIT
16-4014 CIVIL
28 SKYU.S.
May 1987
Property of Advance Media Group

RIGHTS CLAIM

Page 591 of 646


Page 2697 of 2953

cally bypasses housc audio and goes to


our processing equipment. So, there's
virtually nosecup time."
Until recently, the film-production
community and the cxhibitorltheater
equipment industries have viewed each
other as barely tolerable neighbors.
forced to get along. but with littte meaningful dialogue between the two camps.
Now, though, in the face of this starburst
of new technology, the two industries are
working together. insiders point out, to
achieve the common goal of a tmly
realistic cinematic experience, and the
subsequentfiscalrewards.
Bill VanDerKloot, owner of VanDerK l w t Film and Television in Atlanta,
one of the premier independent filmmakers in the south, has a keen eye on these
and other developments. His firm extensively utilizes computers and high-grade
video in current production work.
"Today," he points out. "stereo soundtracks are mandatory, even for lowbudget films, not the case just ten years
ago. People have become very sophisticated in their technical tastes for film.
"I am just incredibly excited about
what the future has to offer," VanDerKloot concludes. "The more like reality
we can make the dreams that we create
on film, the more fascinating and fantastic films will be."
Contributing editor Jim Pertigrew J r .
isbasedinArlanra, Ge0rgia.Q

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

January 24, 1991


Mr. Stan J. Caterbone
Director
Advanced Media Group, Inc.
1857 Colonial Village Lane
Lancaster, Pennsylvania 17601
Dear Mr. Caterbone:
The material--you sent to George Lucas has been forwarded to our legal department for
-

Sincerelydyours,
,
'

Jeffrey C. Ulin
Associate Director of
Legal and Business Affairs
JCU:gg
Enclosure

P.O.Rox 2009. S w Mael California 84812 Telephone (416) 652-1800


EXHIBIT U.S. 16-4014 CIVIL RIGHTS
CLAIM Page 592 of 646
Thursday December 15, 2016
Property of Advance Media Group

Tclex
330499
LFL SRFL
Page
2698
of 2953

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Ferranti sues Guerin,


-

Thomas L. Flanne

lntelligencer ~ourna7~tafI

James H. Guerin and three of his former International Signal & Control
Corp. executives were sued for almost
$200 million for fraud Thursday by Ferranti International Signal PLC.
Ferranti charged in a lawsuit filed in
London that the former Lancaster business leader and the others "knowingly
participated in a dishonest scheme to

abstract funds" totaling more that $443


million from Ferranti.
served
In addition to Guerin.
- - - - - , who
--.
- -- . - - a
-sdeputy chairmanof Ferranti until being
ousted in May, the $198,500,700 suit filed
in London'sHieh Court named:
~-~~~
Robert L.-shireman, Marietta R1,
most recently finance director of London-based ISC Technologies Ltd., and
former finance director of ISC before
Guerin sold the company to Ferranti in
1987 for$660 million.

Wayne K. Radcliffe, of 3190 Grand


Oak Place, vice president of ISC's Lancaster operations a t the time of the
merger.

3 aides for $198.5 million


-

Ferranti buyout.
The suit, or writ, claims that from
February 19% to July 198%the Panamanian companies Sestri Associated. S.A. :
Technology Associated International;
Elverton, S.A.; Navarino Development
Corp.; and Lerwick Holdings, S.A. collectively prwessed 29 bogus sales and/
or purchase contracts for misslle systems destined for the Republ~cof Chlna,

Shireman, Radcliffe and Resch used


five now-defunct Panamanian dummy
corporations as conduits in the "dishonest scheme" to drainover $440 mlllionm
cash from ISC's coffers, via overvalued
or 16-4014
non-existent
prior to the
EXHIBIT U.S.
CIVILcontracts,
RIGHTS CLAIM
Page 593 of 646
Property of Advance Media Group

Page 2699 of 2953

More SUIT on A-4


Thursday December 15, 2016
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

A-4

FRIDAY, DECEMBER 1 ,1989

FROM PA1

Suit: Guerin, 3 associates named


Continued from A-1
the United Arab Emirates and
Pakistan.
The contracts were for:
Air-to-ground missile equipment and technology to the China
North Industries Corv..
. . or Norinco.
A bogus 1984 deal to sell additional Hakim air-to-ground missiles to the United Arab Emirates
general headquarters. The suit
said ISC also had a genuine contract to sell this hardware to the
United Arab Emirates.
A bogus contract for a missile test ranne, missile technoloev and a technical develoombnt
Facility in Pakistan. ~ h i bcontract, codenamed KP for Khyber
Pass. is believed to be the Lareest
-.
of the three.
The exact value of the alleged
bogus contracts was not disclosed in the suit, apparently hecause the contracts were comvlex financial transactions involvine numerous comvanies.
~ u e h and
n ISC remain targets
of grand jufy investigations into
illegal arms shipments to embargoed Third World countries, such
as South Africa, Iran and Iraq.
Also, Scotland Yard, in conjunction with theU.S. Attorney forthe
Eastern District of Pennsylvania
in Philadelphia, is investigating
Guerin's role in the Ferranti
case.
Neither Guerin, who now lives
in Naples. Fla., nor his attorney,
Joseph Tate, would comment on
the massive suit. Shireman, Radcliffe and Resch did not return
calls placed by the Intelligencer
Journal Thursday evening.
Also named, in what British Officials are calling one of the largest CIVII m t E 3 l 7 T ~ n '
IiMb.e,-WeTe the Bve, n o w d v
fuict PZBmanian companies,
a r I t l S h f~rms?Se"PermrofP
I
e& a n d -1SC 'mnKn~.
. , ~~.
-.
- 3 Z i r i n has long'denied being
involved in the alleged fraud.
British sources said Thursday's
action vras just the first of several legal maneuvers Ferranti is
expected to take against Guerin
and possibly others in hopes of

recovering the missing money.


Jacobson has vleaded auiltv to
Ferranti, once Great Britain's
third largest defense contractor,
claims the "massive f r a u d of
the bogus contracts has a l l but'
bankrupted the company and
placed it in a position to possibly
be bought in part by its French
Shireman's ex-wife, Patricia
competitor in radar technology
Dunn-Wiggins, served as head of
development, ThomsonCSF.
Known abroad as Prime Minis, finance for United Chem-Con,
ter Margaret Thatcher's model and was one of nine of the compadefense contractor, Ferranti is ny's executives to serve time in
one of the country's largest em- federal prison on charges involvolovers. About 8.000 of the com- ing fraud against the U.S. govbaris's 2 s . ~ - p e r s o nworkforce ernment. .
represents the largest scientific1
James B. Christian, the former
technical private sector employ- president of United Chem-Con, is
ee group in Scotland.
currently serving six years in jail
Legal sources said filing .the for his part in the company's
suit in England first gives Fer- multi-million dollar defense conranti somewhat of a-strategic tracting scam. Christian, in a
edge and access to information statement to the court. accused
that would be difficult, if not im- Guerin, a United Chem-Con cooossible. to obtain through
- the founder, as the .mastermind of
U.S.courts.
the fraud.
Although admittedly defunct,
Guerin has denied this accusathe Panamanian comvanies are tinn.
..-..
being sued in hopes df prov ing
that the four executives were the
beneficial owners, and thus the
ones who orofited. accordinn to
one international law expert.
Daniel G. Partan, professor of
international law a t the Boston
University School of Law, said
filing the suit in England may initially produce a round of jurisdictional battles. but under the
multi-national' convention, or
treaty, between England and the
US.. if Guerin and the others do
not defend themselves and a
judgment is awarded by the British. the case will not be reviewed
on
its.merits
here.
~
--~
- -- - ~ . . - ~ ~
"They better defend it over
there," said Partan. "Believe
s me. thev better defendit."

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

.....

ti&'6eco~n,
f d r d i t i o n to his involvement
n.

Page 594 of 646


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Thursday December 15, 2016


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Section 3189 Federal False Claim Act

Guerin arrives
:o testify on
12.75-million
pay dispute
1y Ernest Schwlber
bnd Tlm Mekeel

3ew Era Stafi Writers


n Embattled Lancaster defense
.]contractor James H. Guerin
showed up at a city law office
I today to answer questions about
! a $2.75-million pay dispute with
['hisformer corporate attorney.
It was the first time since SepI tember that the founder and forr mer chairman of International
r Signal & Control Corp. has been
I seen in public.
; Guerin, a tall, husky man, a p
I peared relaxed and at ease as he
c strode into the Cipher Bullding, a
I! half block east of Penn Square, a t
L 9:23a.m.
? He quickly rode an elevator to
.I third-floor law offices, where he
a met the glaring white lights of
\ news cameras when the doors
opened.
"Good morning," Guerin said
I to four reporters -two local, two
o from London newspapers
h when he emerged from the elevaI tor in a small office corridor.
He followed that greeting with
1
v two softly-spoken "no comI ments" to questions, and then a
a second, hearty "good morning."
A smile played across Guenn's
3
face as he walked. He was acc companied by h ~ sattorney, JOseph A. Tate, and a Tate assist11
ant.
Guerin, who built ISC from a
I
basement enterprise into an in;
ternational conglomerate, is attt
tempting to stop further payE
ments on a $2.75-mlllion severa ance pay agreement he signed inI
1
March with William A. Clark, hisi
f
former toplegaladviser at ISC:
The defense company chlelI

James H. Guerin, right, founder of International Signal and Control, walks into a law office il
today. He isaccompanied by his attorney, Joseph A. Tate, of Philadelphia.
-b4
'A
paid Clark $1 million in spring $750,000 for Clark's estate in
Court documents 1
1989, but halted payment Of the York County - because, he indicate that be wa:
remainder, claiming that Clark charges, Clark "extorted'' the tion Guerin about
+ lieves the
secrec.
had
broken
a secrecy. ~
~.~~
. ~ -~~
~ .
- r o v ~ s l o n o faeremrentfmrrrhiftr.
- - ~- ~
the agreement.
. 7Today's
session was intended
and wh
In addition, Guerin has agrue@'
to allow Clark's attorney, Joseph
in court, he should not be
quired to pay the.
money - $1 million
See GUEl
~

-.

-L

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 595 of 646


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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

A-4

Section 3189 Federal False Claim Act

WEDNESDAY, JANUARY 10,1990

FROM P I

Guerin: Sued over secret tapes


Continued fmmA-1
In July 1989, Clark sued Guerin, clainling his
former boss balked after paying $1 mill~onon a
March 28,1989 agreement for compensation owed
him after a five-year tenure with ISC.
Guerin has said Clark violated a secrecy provision of this agreement, rendering the deal invalid.
Tuesday's marathon deposition lasted nearly 12
hours, and Bpda declined comment on what was
Satdaunng the proceedln .
The July suit named ~ i e r i and
n his fomer holding company, Parent Industries Inc., now dolng
business in Austm, Texas,,as Urban Industries
Inc., as defendants in the actlon. Guer~nhad signed
the agreement to include both ISC and Parent Industies as responsible parties.
Urban Industries President Michael A. Peck is
scheduled to give his deposition this morning in
Roda's office.
In the suit, Clark claimed his association with
both currently embroiled m
Guerin and ISC
other legal problems here and abroad - had ruined his professional re tation and caused his
health to be compfomisedW
Guerin immedlatelv countered. savine Clark
had used "extortion i n d coercion" to-secure the
deal.
Guerin admitted to making the tapes, but said
the recordings would prove his extortion c l a ~ mand
asked the court to let a jury to decide if Clark
should get the $1.75 million balance or give back
the $1 million he had already received.
IJnder the
Sur. ~state
-~~
~ -Wiretannlnn
.. t h and Electronic
veillance Control ~ c t . ~ b oparties
must give their
consent to having ~ r i v a t econversations recorded,
for
unless the
~~- recordine falls under the ~rovisions
lawenforcement otricers gathering iiformatlon in
the performance oftheirduties.
In the wiretav suit. Clark said Guerin. on at least
two occasions,recorded confidential meetings the
two had in Guerin's ISC office between March 20,
1989, and March28,1989.
Under the civil recovery provisions of the act,
should the jury find in Clark's favor, he could recover actual damages, but those may not be less
than liquidated damages; punative damages; and
reasonable attorney's fees and other costs associated withthe suit, according to the filing.
A violation of the act also constitutes commission of a third degree felony, punishable by up to
seven years in jail andlor a $15,000 fine, according
to Lancaster County DistrictAttorney Henry S.
Kenderdine Jr.
"I am watching the case," said Kenderdine
Tuesday when asked if his office was considerjng
prosecution. "I do not want to take criminal action
(against Guerin) at this time that might interfere
with the civil action pending but, as I said, I am
watching the case."
In October
the
. .first
" questioned
..
,~.
~ , . 1989,
. when Clark

~-~

~~

....

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 596 of 646


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lntelligencerJwrnal photo by DanMarsehka

James H. Guer~nand his Phila. attorney, Joseph


Tate, walk up E. King Streetfor lunch Tuesday.
ings that ended on Dec. 4,1989.
It was then Guerin was ordered bv Lancaster
-~
County Judge Michael A. ~ e o r g e l t6
~ sappear for
the deposition by Jan. 15. to provid
the laves and toanswer any and all aues Ions L a r
asked-.
Tate, to no avail d u r ~ n goral arguements several
days earlier, had t r ~ e dto get Georgelis to postpone
the depositions or, at thevery least, limit Clark's
auestionine to the issue of the agreement. savine
Guerin fac;d possible criminal &arges and&ula
not defend the civil suit without compromising his
criminal defense
~

-py&

Thursday December 15, 2016


10/19/2006

'

1'

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Guerin is expected
to testify ~uesday
?ewn mEraMekeel
Stafl Wrlter
James H.Guerin is scheduled to give preliminary testimony Tuesday in his $2.75 million severance dispute with his former corporate
attorney.
If Guerin appears, it would be the first time his whereabouts have
been established since September.
Guerin. the founder of International Signal & Control, is disputing
the validity of the deal with William A. Clark, formerly its vlce
president and general counsel.
Guerin's deposition is set for 9:30 a.m. in the office of Clark's
S m s i o n is closed to the
attorney, Joseph F. Rod? 36
.- E. King
-.ns.hlie
r
UU....
I'Eideoosition
was scheduled in December at the order of Judge
-~
~..
Michael A. Georgelisof Lancaster County Common I'leasCourt.
Geargelis denled Guerin's bid to ha\.e the session delayed. pending
resolutl'on of ~ossiblecriminal charges aaainst him. and denied his
rique.it lolimit questionsstr~ctlyt o t h c a g k n e n t .
In court papers. Hoda has indicated he \ r i l l ask Guerin about issues
currmll\. under investigation b?' British and American authorltlcs.
becauseihey relate toGierln's stateof mlnd whcn he signed thedcdl
lnternatlonal Signal is being prubcd for posslblecontract fraud and
~llevalexDorts. Nocharges hare been fllcd
But Guerin
is beine sued bv International Signal's merger Dartner.
~Ferranti, torallegcdly participating ina $331)nilllion cont?acifraud.
Guerin's whereabouts have been a mystcry slncr. news 01 thc frautl
broke in Se~tember.Though he has homes in Naples. Fla.. and Lancaster. f r b r k ~~nattemnts
t ~ . . 6v
~the~Dress
- toreach hiin ha've been unsuc~.
cessful He reportedly has been t ; a v e l ~ nabroad.
~
In court DaDers. Guerin has said Roda's questioning \rill force him
to choose between defending himself against Clark and asserting his
constitutional right against self-incrimination. thereby posslbly losing to Clark.
Guerin also has said that answers to Roda's questions could "expose facts" that could hamper his defense against possible criminal
charges.
Tuesday's deposition is the latest development in seven months of
legal jousting between Clark and Guerin.
Clark signed the deal March 28 with Guerin and Parent Industries
Inc., at that time Guerin's holding company.
Guerin paid $1 million of the agreement. then balked at paying the
rest. Clarkstartedcourt proceedingslast July to collect the balance.
Guerin contends that Clark used extortion and coercion to obtain
the deal, and broke a secrecy provision in it. so the deal is void.
Guerin also claims that he has audiotapes of Clark that prove extortion was used.
Clark denies he used extortion to win the deal. He argues that it is a
legitimate agreement to compensate him for unfulfilled financial
promises.
Parcnt Industries Inc. presldenl Michael A. Peck is schcduled for
de~ositlonWednesdas. Peck bought
- Parent Industries Inc from Gutriliin September. In other developments today:
Ferranti is expected this week to report a loss of at least $8
million for the six months ended Sept. 30, in part because of the
restructuring costs from the fraud, said The Guardian newspaper.
The French firm Thomson-CSF is unlikely to complete a rescue
bid for Ferranti before Ferranti's Feb. 5 deadline, The London Times
reported.
~

.~~

----

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~~

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Guerin sued for secret tapes

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 598 of 646


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Thursday December 15, 2016


10/19/2006

-..-

... .....

r l ' U C l i l l iilJlllOri[l
' -..: Section
.'. 3189 Federal False
US District Court
For Thehave
Easternbeen
District of Pennsylvana
Claim Act
criminal
charges
biggest defense
in Europe, but one of the
,nost
: ; ;1 $
t;$
;lfiled.
cleverly
orchestrated
99
ucts
wcre
actual\\
Guerin has steadfastlv" denied
"illegal" products
any wrongdoing.
a former Ferranti financial official
looking at whether
Guerin's attorney. Joseph A.
products were ship
Tate, said this week it is impossibiled military purp
ble to provide a detailed rebuttal
h r.~a
Whatev~r
~..
~- .. t.
...
to the fraud allegations because
of the ongoing criminal investi- suit as Lerwick Holdings S.A. ifying the French Mirage fightcr ranti bcgan raisi
gation. He said he cannot allow Marwick, an outside auditipg jet that would carry the missiles, about the Tech Ltc
Guerin to present his explanation firm that regularly checked In- the missiles were not shipped to ments from South i
a sudden halt.
of the alleged fraud. Nor, hesaid, ternational Signal's figures, took the Middle East kingdom.
Ferranti has wri
is there anyone who can steps to verify thecontract.
Turning that delay to its advanFerranti auditors and officials tage, Tech Ltd. signed the UAE $50 million that it
knowledgeably give Gucrin's
even visited Pakistan, where to a contract for a more sophistiside at present.
Shireman, the Marietta man they interviewed a man believed cated version of the Hakim, and
Fcrranli-is cxnec
who was head of finance at Tech to be Major Gen. Talat Masood, sold, or supposedly sold, the old
Ltd.. was out of town this week then in charge of Army ord- missiles to the People's Republic
and could not be reachedfor com- nance, and received satisfactorv of China.
Durine those
ment on the detailed fraud ac- answers to their questions, iimFerranti
officials
say
auditors
Guerin
and the 0th
count. His attorney didnot return pany officials say.
from Peat Manvick ins~ected
will have an oppo
.
phonecalls.
The alleged fraud began to un- portions of the old mi~silc
vr(1c.r.
The other two employees ravel as Guerin left the company orwhat they though1 a a s t h c mis- fend themselves
explanation (
named in the suit, Radcliife of in May to organize a Leveraged sile order, in a warehouse in 19nh. their
Pass
contract.
buyout
that
would
have
returned
Lancaster, and Resch, of San
But afte'r the missiles were
Meanwhile, the c
Clemente, Calif., have declined several divisions - including shipped from the warehouse, tigation
into Intet
comment on their lawyers' ad- TechLtd. -to hisownership.
they vanishcd. Private investigaThat deal collapsed when Gue- tors hired by Ferranti to find nal's business deal
vice. Radcliffe has told the Brituing.
ish court that he intends to o p rin was unable to get financing, them have beenunsuccessful.
Federal author?
after being turned down by Drexpose Ferranti's lawsuit.
are working "in c
During
a
chairman's
commitel
Burnham,
Citibank
and
Ferf the three losses idention" with their cc
tified by Ferranti, the ranti itself. Had the buyout been tee meeting, however, Sir Derek Britain's Serious :
Alun-Jones,
Ferranti
chairman,
completed,
investigators
believe
fictitious "Khyber
congratulated Guerin on the sale Taking part in the
Pass" contract was the alleged contract fraud might of
the missiles, which were then U.S. Attorney's 01
by f a r the most dam- not have come to light.
code-named
Project Alpha, one Department, IRS,
The
first
substantial
sign
that
aging. accounting for about $250
and other agencies.
director
recalls.
something was amiss came when
~ 1 1 l i k othe
f totdloss.
SO,
wherever
those
missiles
Ferranti
officials
noticed
a
lack
The contract, brought to the
company in late 1986 by Guerin of consistency on dates on con- are today, Ferranti says it had to
swallow a loss on them totaling
nersonall\~.called for delivery of tract documents.
about $100 miltion.
Further
financial
discrepanbroductiin systems for at least
The final shortage discovincorrect date
three missile systems - air-to- cies came to tight in summer, ered by Ferranti financial inves- theAnspeech
Retire,
andin
mid-July,
the
front
compaair, air-to-ground and ground-tonies abruptly were dissolved. At tigators is the smallest - under Richard Scott will
air.
$50 million - and the simplest to Lancaster Histori
~
was month's end, payments on the understand.
Tech Ltd.'s S U.D. D O S ~role
about his escape frc
Pakistan
deal
stopped
altogetht u pnll the pieces together. in this
Since the late 1970s. Ferranti prisoner of war ca
rase buyins h;~rd\vareand tech- e..r. ~
Ferranti officials now are con- officials say, Tech Ltd. and its rect day is Tuesdaj
n o l o ~ from
r
South Africa. and asvinced
the Pakistan1 contract predecessor ISC companies had New Era regrets the
sembling the systems for resale
been selling large volumes of
wasenttrely f~ct~ttous.
to Pakistan.
electronics - integrated cirJoseph C. Kauff
They
say
the
front
companies
Its contract called for supply of
cuits, antennas and other hightooling, technological "how-to" were all controlled by Guerinand tech communication equipment been re-appointed
ship roadmaster by
data, test facilities and missile had no ties to the CIA or South
to South Africa, a nation supervisors. A stor
Africa.
prototypes, all supplied by an
The contract managers, a shunned by many U.S. eorpora- day's New Era inco:
arms subsidiarv of BarlowFerranti official says. tions because of its racial segre- that another towr
high-level
Rand, a South ~ j r i c a ncorporahad been named to
wcre
people
simply posing in that gationpolicies.
tion, and a second as-yet unidenThose. sales were based on New Era regrets thc
role.
tified company.
The major general either was
Even by Tech Ltd.'s normal another impostor, paid by the
~
~
*
~
=
5
3
s
s
~
standards for high secrecy, the Perpetrators, or was a genuine rll
"Khyber Pass" contract had ex- official mistakenly responding to
ccptionalsecurity safeguards.
questions about a different misFirst, it was not accompanied sile project, company officials
a bank's now suspect.
by a letter of credit
guarantee that Tech Ltd. would
All the known contract docube paid. Supposedly, Pakistan ments were fabricated for the auobjected to such a letter, fearing ditors' benefit, a former Ferranti
news of the deal might
- leak official says, Other documents
through the bank.
that would have supported a real
Second, Pakistan's payments contract are nowhere to be found.
Clutches Billfolds- French
were routed indirectly to Tech
"If you'rean accountant, evRoute 340 o n The P l a ~ n& Fancy Far
Ltd. through a Swiss bank ac- erything is there for you. But the
O p e n Dally 9-5,Frl 9-8. Closed Sun 7~
count managed by a front compa- only paper is what was generated
s
a
~
~
~
~
~
~
ny. identified in Ferranti's law- for the financial people." another h
~

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OUlrll,llL1Ci),

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/-5-98

$,irkel's o f New Y

BUXTON WALLE

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

I.'

Page 599 of 646


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Thursday December 15, 2016


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necords seized at
local home aid probe
of Guerin-South Africa

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Mekeel
!?ewTlmErastaff
Writer

Records seized at the local


home of James H. Guerin's
brother-in-law are helping federa1 investigators unravel International Signal & Control's alleged
illegalshipments toSouthAfrica,
The Wall Street Journal reported
today.
According to the Journal, investigators searching the East
Petershurg home of Carl E.
J a e k o n - Guerin's -hr
Ew - mmUnd records of a company named Gamma Systems Associates.
The house was being searched
on another case, the fraud investigation at United Chem-Con
Corp., when investigators found
those records and recognized
what they had stumbled across,
the Journal said.
"Gamma. which had mailing

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

addresses in New York City and


Belgium, t
u
n t~ one bt
-pal
shell companies
used in Mr. Guerin's alleged
South XlWmn smugglln
3&em;"imstTg3Tof's'd
JournaE
The Journal article also noted
that Guerin, in past years. had
cooperated with the CIA and apparently was well-known in the
intelligence agency. The Journal
said:
Guerin's ISC firm, with the
backing of the Central Intelligence Agency, once intended to
sell listening equipment to South
Africa that would track the Soviet Navy. But the plan was scuttled by the Carter Administration.
Federal investigators first
probed ISC's dealings with South
Africa 'in the late 1970s. when
'-

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8.r OUERIN, Page A-5

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

CONTINUED FROM PAGE I

TEXT OF STATEMENT UY JAMES GUEKIN


Following is the text ofithe " ettei to the
editor" written by James H&uenn.
--.

-C.

best, in my opinion, Tim Mekeel. Mekeel has


not always been kind to me, but i ~ e ' salw:iys
been lair, accuratc and balanced. l'hcy also
have some ur~oroCessionaland irresuansible

45-'

Farewell, ~ a n & s l & ? 3 k!.k!


we're going to miss you

Our (Guerin) Family has lived in Lancaster


County (Landisville) for 20 years now. Until
recently it has been the happiest time ot our
life. We've seen our children grow up, get an
excellent education through the Hempfield
school system, participate heavily in sports
and activities, and gain a sense of moral purpose inourchurch.
I have had the opportunity to start a company here (ISC)and watch it grow to 5,500 people
(1,800 in Lancaster) before merging it wit11
Ferranti. The key people I've worked with,
and others in the Company and community,
have been instrumental in the success we have
known and I have appreciated them very
much.
I have had the privilege to serve on numerous community boards in Lancaster along
side some of the finest people I've met anywhere.
I have not written this letter to dwell on problems, only to extend warnings and tl~anks.
Lancaster is a wonderful county. Be cautious
that its growth is plarlned carefully - it slill
does not fullv address the future. Make the Fine
organizatiois of Lancaster and, in particular,
the Urban League and SACA a more integral
partof this planning process.
In our American cycle that occurs when
proble~nsand accusations arise, many seem to
"convert" or return to the Church when troubles hit them. It is significant to me that I have
been a practicing Christian for three decades
and i t forms the center of our family life and
strength.
Our family is immensely grateful for all that
Lancaster has done for us and in return we've
doneour best togive backto Lancaster.
More recently, we have Sound how onpredictable life can be. Wllat took 11s20 years to
build has been significantly undermmed in
just 20 days. There a r e lessons in this for all of
us.
I have helped 15 small companies to slart up
over the years. Eleven of these have done fine
while four have failed. Of these 15 com~)?nies,
four had significantly minoritv ownersh~trand
onlv IlCC
- - - of these four has failed. I worked
cxtt*nsivt81)i s 1111 ~ n n l u r i t ~in
r sk:ast 0:1kl;1nOin
the 6b's through h program u irh I.ucklle3c~dlo
oromote
iob o ~ o o r t u ~ ~ i lfor
i e s those hard-tor
- ~-~
employ ihrough job training ,and minority
business assistance. After movllrg to Lancast--.,
e r 1- .knnt
IID
..-~.
.~r t,his
. . interest in the development
of opportunities for minorities,
Jim Christian chose to appolnt me thc "mas-

that Tom F1annii.v is almost as bad. In a re-

ager) s a ~ dthat: Thornas states he never told


him such a thing and has a witness to prove it.
Fact: I resigned from the Board as my idea to
support a Leveraged Buy Out which I had to
forestall myself, partly due to distorted newspapercoveragc inLancaster.
Recently, the Intel1 Journal (Flannery)
transmitted all of his stories on IiCC and Clark
to a Ft. Myers newspaper where Parent is
moving. This t~arassir~g
action is arfecting the
ability of a lot of guod people to earn a decent
living. The prosecutors have stated that 1 am
not evt:n a subject in the UCC investifiation.
Rut Flannery keeps on. Where's the fairness'?
Whrre's thedccency?
My "rnastcrrnintling" of Christian has bcert
refuted by a number of responsible people
(Crurnp, Szczesny, 2 other UCC managers,
etc.) but lliese irresponsible reporters keep
repealing the same quote from Christian tach
time a story appears. It 1s as if these reporters
choose to ignore what these responsible ~!eo~rle
have said in favor of me, by just cont~numgon
withChristian's sideof thestory.
I have been saddened somewhat by the lack
of protest to Mr. Christian's quotes by the
many who understood the story a t UCC, such
as UCC I.cgal Counscl, Meridian Bank, and
others. However, I do understand how o n ~ i nous a "loose can~ron"such as Chrlslian can
appear lothesc people. So beit.
Mix in to t.lris the great damage a trusted
ingldc corpc~ratelawyer can do when he decides to exj~loillliat trust. You have a n~ighty
tense situatiol~i n d c d .
I will continue w ~ t hmy policy not to answer
to the newspapers. I will be gqne from 1,ancaster. 1 woncler who these few ~rresponsiblereporters will scrve upnext on a platter?
The folluwing quotation has served me well
over the years:
Remember. people a r e t~nrcasonable,
illogical ar~dself-centered.
Love tlterr~arlyway.
if you^ do good, people ii~illaccuse
you ofselfish ulterior rnotiues.
Do good anyway.
1fyou'l.e s~tccesqft~l,
yozc'll wiizfalse
fiietlds u n d ~ n a l t etlrie enciities.
Try to succeed anyway.
termind" behind his UCC malfeasance. This
simply not true. Aiather teaches hisson how t0
&liesty o n d f ~ a ? r k n e s1ci:illget
s
You
use a gun to go hunting. In later years, the son
nowllere;
t h e y mu.ke y o u u u l rThursday
~ e r ~ b ~ eDecember
.
EXHIBIT--..rAom
U.S. 16-4014
CIVIL
RIGHTS
CLAIM
Page
601
of
646
15, 2016
someone with a gun. The son blames
Be
hones1
a
n
d
f
m
n
k
ar!yWa?l.
r
i
t
i
~
f
~
t
o
senh
'
~
~
Property of Advance Media Group
Page 2707 of 2953
10/19/2006
'.,-,4sxnr
hntt th<?tirollo.u?
~~

~~

&-

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 602 of 646


Property of Advance Media Group

Page 2708 of 2953

Thursday December 15, 2016


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LANCASTER 1\II

US District Court For The Eastern District of Pennsylvana

i 112th Year- NO.35,331

METROPOLITAN

Section 3189 Federal False Claim Act

/-A+70

LANCASTER, P A . , WEDNESDAY, JANUARY

for $500-a-plate Haig dinner.

Guerin: Clark said he could


I put me in prison for 50 years

lll@al fund
reportedly
to Haig by

employees and a TV media con- ney's allegations, whether true


or not, would wreck his plans to
sultant.
Clark refused to show Guerin obtain critically needed funds for
defense
m ~ i -~
re
-~-.
~-- e
-~~~
Former defensecompany chief the supposed evidence of wrong- his
International 1
"When he (Clark) alleged he
James H. Guerin has testified doing because Clark said he
Control illegally re
that his ex-attorney claims "he feared for his life, Guerin testi- had information on them. I didn't
employees who bo
has enoughon me to put me away fied in documents filed late Tues- know what information he had."
ets to a 1987 fundGuerin testified. "I didn't know
day in LancasterCounty Court.
for50 years!'
presidential candi
Guerin added, "He said he was how valid it was.
ander Haig, acc,
(;uer~nhays he agreed lo pay going lo keep some of the pack"But I knew he could have such
court documents f
$2 75 m ~ l l ~ o"blackmail"
n
after ages even after I paid him off he- information. even not knowine
day.
that threat and because of con- cause he didn't know, with the what the informationwas."
cern about uthcr thrcats to his friends that I had overseas,
James H. Guerir
The mere suggestion that his
employees and his company's re- whether or not I might ask some lop legal adviser would talk
tional Signal's foi
financing plan.
chairman, reve
of them to kill him.
about suspected wrongdoing
U.S.
16-4014ofCIVIL
CLAIM toPage
646 "would carry enough
Thursday
December
15, 2016
In EXHIBIT
a detailed
account
his RIGHTS
i
reimbursement
"My response
that 603
was,of
you
weight
so
"vivid
andofburning"
memory
testimony
I can't
Bill,
know, in all of this,
Property
Advance Media
Group of
Page
2709
of 2953 that (financial sources) hearing
10/19/2006for a !
the
blackmail
demand, believe
E?Y disoute with 1
, alleged
!~.
8..
-.:J
0 . -.:,I:.. , ., . refardles,s
~
,. of all the about thip would stop us" from

Schrelber
!?ewErnest
Era Stan Wrller

.~--

.A

'9

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim ActWEATHE


Partly sunn)

DetallsBack

IMlh year- No. I X X

*EDITION

*aD*,"sra

LANCASTER. PA., WEDNESDAY. JANUARY 2 4 . 1 W

$8

ma-

Illegal contributions to Haig allegc


V

" Guerin deposition: ISC executives got 'special bonuses' to donate


LLF~~
-"7sun

Former Republiean pre?idential esndidate ALcxander Hang reee~ved!liegal<or-

y e

camwign mntrihutlons fmm


am- H. cuertn and other lnterstional
s i m a l ~ m t ~ i c a rexp.
e
m
e
t
i d u l n g a 1987
rampalm swng thmugh
Lawaster Counv, aed i n g doeumenls filed
with the Uncalter Cmn-

'2%

Nixon and Ford and ss supreme mm-

manderofNAT0.
whonc~.a.s attorney. m e p h ~Roda.
.
sttempted to extract precise detsib on
h,thebonuses
wereealeulatedandp~td
cueti.,.
inwye,.
Joseph rite. . d v d
cue"" not to answer any further quer.

ate w i d the matter was


~ i t h i the
n
issues sumunding the employment setUemcnt dispute. saying a judge wuld
have t ~ m d e r C u c ~ ~ n t o a ~ w e e .
Haig mvld not be reached for comment
~;n~;~~fLaX&R~,"gU$,"~i
returned.
Those attending the iohster and B e d
WeUinptm dinner elso received a e Y of
Hsig's IBW book. "Caveat - Rea%m,

Duringthe deposition, Guerin


refusedmanswer numerous
questions relatingto arms

bombs to detonate larger bombs - to


China.
of the fmuduient eontrihutionstoHaigsomewhatovershsdodthe
of UK deposi-

k$,ma"
"'be

,,,, ,

, ,,,

S a l e s t ~ m i r d ~ ~ l l d ~ o ~ n t r i e s, ,
a judgment
citing his constitutionalrights a e a i ~ cwm:
t
ISC: cuetin's ~eraonal
fOav~dself-incrlmination. holdin m m n~ P a m t '"dueies Im..
nw &ban %&tinlnc; and Urban's
president and l w - t i m e O u e Mmnfidant,
M C h d A. Peek Wallegedly balklngon

; $ ~ : ~ t ~ ~ ~ f t

~ a ~ m & ~ $ ~ $ ~ ~ ~ $ & ~ $

."

~Ama&tsnworfOmIgnP"licY
m.
This wasmtlhc f b t nor the last, time
a r k elaimed O w t i n w i d him $1 milHaig a n d G u e r i n w d k i t h e i r . e l a t a n ~ Uonantheagrerment. thenped. Gueshipmu0uwbaefbaefcial.
t i o e o u n t e ~mying~~artharPvio~hted
a
ReagsnandFomipnPoU~~.~also~sldforin iPBB.awr k f m t h e politiealaffair
m v h m in lhe agmment mby the Halg-For-President committee organizedbylSCandheldatUKFwrSea. de
the daument null and void, and
JuUaUm
atoffed in art by lSC e m ~ i o N@
~ ~ sons
.
ReshmantlaaLed at Lbethen O w tha%rkhadusedmereim~odertortim
local
COP oPfieials attended the f u c t i m , r i n w d Four S e a m Sports Canpl?r. tosecu~etheagrecment.
aceording to n e u s p ~ w rreports of the the tw d e cdly nardinated a lucrauve
0~6rinetsimed~lsrLmre~taed
to tell CHRISTIANS
eventth.tralsedmmcW.WOlorHai~.
m
,e.t
ahtogmud miasUe eontnet with the 11peaplethafk+westhetargetofagmnd J
B. arlaia
I
n
t
h
m
rewrts
a
former
1SC
BpoLes
PahsturimmmenlOlGen.Mohammad
jwy
invemgamn
into
U
k
alarms
ship
Achefording
the daummts, the wy.
made derp,te
W,I.
man '8s quoled as gsylng the eom~sny ZL~UI.H~~.
mm to south ~tricaandlad altered or m i l Y m
fabricated ISC% boob, infl.tingtheeom.
TmsdW ChwI.1
uam~ . ~ l ~ ~ k t ~ l s ~ ~ had
~ ~s kpen
~ r interest
i ~ ~in~&ig,
d ~sodt felt
h his
~ r f AndHligmmWmvi.thIXafterib
~ ~
wouid"heahe~litf0rus."
November 181 m er wlth lhe British pony's w r U l to s e a m a November 1%
crptlm" bY h n
me eontnbutims wre ,ue presidency
~
n
R.
d
Clyde
I
v
y
a
senroc
I
=
or-M
m
a
~
o
m
n
t
i
~
n
t
e
r
mrrgerwlthBtiti~hd~ense@antPemn.
Isd to rn ~ l u
%.I.
under
tive,
and
member
'of
cuenn'a
"inner
nauonal
PK
reee
v
i
n
m
~
e
(em.000
in
~~I~-WIPLC.
aPn-cm cow.
Hal tomor secretary of
white
WE' rimie" o f , k y decision maker8
lepa
lor
ISGbtdll
cluster
bamhom
Pres&,t
magan,
pms,denls
thewr-C~om~denti~edinthedem- PaUsa
tn?%
w p o o a frmaU
~ o n w ~ ~ l m
ll.
M
M
of staff vnder

in a masrive
.wp.gebepasition relat:
h t o a n r t y i o y m e n t disp t e with hmformer chief
attomy admitted u d o r
a t h he
I x execw u-urn
lives who anended the
Wa:piate dinner were ,ximhurjed hY
" W l a l bgnuus'' for*elrattendtng

wn

ty+9m.

ad

;Paper says ISC paid H


$600,000 for contract a
.-

andweapm f u w in the Repub gator6 trying to un


scofchm,emrdingtothe~rti- ofintr.gwsurmunc
Ferranti, the c
E k

-2Zkzam

Uo

.m
...,
.~
~

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 604 of 646


Property of Advance Media Group

Page 2710 of 2953

~ pe, embatp ~

rebins TSC: a c t i
~

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 605 of 646


Property of Advance Media Group

Page 2711 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 606 of 646


Property of Advance Media Group

Page 2712 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Aduanced Media Group,L fd.


An Informution Technologies Company

The Advanced Media Group has recently completed one of the


most aggressive CD-ROM projects for the National Institute of
Standurdr and Technologies {NIST), of Bethesdu, Matyland a
government sanctioned technologies incubator for US. technologies at
large. The project included over 25,000 UNIX Tarfiles and u CD-ROM
of over 675 megabytes. Stan Caterbotte and John Garafolo, Computer
Scientkt for NIST, have written an article containing valuable
information that is useful when publishing UNIX applications on CDROM. The article will appear in the Janualy iwue of DISC Magazine,
published by Helgerson Associates.

CLIENT LIST
National Institute of
Standards & Technology (NIST)
Groller Electronic Publishing
E. Giovanetti
Dialcom
Vaghi Periodicles
Clahritas
Advanced Systems Development
Compaq Computers
Applied Optical Media Corporation
Commodore Business Machines
DRI/McGraw Hill
Meridian Data
Pennsytvania Blue Shield
INFO ONE lnternational
University of Montana
National Technical Information Senrice
Rochester Institute of Technology
NEC

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 607 of 646

c oluniul l'illaye Lunc


I ~ir?c~.~tt~r,
194 17601
/#hi

Property of Advance Media Group

Page 2713 of 2953

Amp, Incorporated
Parkway School District
H i c h i Systems Division
Department of Commerce
Mathew Bender Co., Inc.
Nortek Computers, Ltd.,
University Microfilm International
Bell Atlantic
Aspen Systems Corporation
Microsoft Corporation
Arther Anderson
PC Solutions Plus
capitol Records
Digital Audio Disc Corporation (SONY)
lngram Customer Systems
University of Hawaii at Manoa
National Bibliographic Sewice
International Business Machines (IBM)

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

TUTASTAT

JUTASTAT

Section 3189 Federal False Claim Act

(mLTD - CAPETOWN -SOUTH AFRICA


Registration No 1805815/07

~os1.l address: PO Box 1 0 1 3 . Kenwyn, 7780 -Physical addreas: Mercvny Crescent. W e M n , 7764
TeI(021) 191-5101 - Fax (021) 78f-5010

31 January 1991

Mr S J Caterbone
Advanced Media Group, Ltd
1857 Colonial Village Lane
Lancaster, Pennsylvania 17601
USA

Dear Mr Caterbone
CD-DIAGNOSTIC
Further to my letter of 17 December 1990, 1 look forward to receiving further information on
the above product at your earliest convenience. Thank you.

Yours sincerely

,
S P SEPHTON

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 608 of 646


Page 2714 of 2953

Thursday December 15, 2016


10/19/2006

PC SYSTEMS

US District Court For The Eastern District of Pennsylvana

TO

S.A.

--

AnERiCAN HELIX TECHNOLOGY CORP.

Section 3189 Federal False Claim Act

Aug 8, 1990

A t t n : To whaa .it m a y concerns.

Gentlemen,
We are one o f t h e biggest IBM / COMPAQ k u t h a r l z e d De:ier
Greece, and we have a s p e c l f f c enquiry f o r

in

C D - G e n e r a t i o n - S i m u l a t i o n Software w i t h t h e f o l l o w i n g requiremeilts :
1. I n p u t from magnetic tape ANSI l a b e l l e d , EBCDIC.
2. Creates d i r e c t o r y and hard d i s k i d e n t i t y h i g h S i e r r a / I s o .
3 . D i s k image e d i t o r h i g h S i e r r a .
4 . Loads new f i l e s i n d i r e c t o r i e s .

5. Controls CD ROM image c r e a t i o n .


6. t D ROM s i m u l a t i o n .

7 . Creates magnetlc tapes ready f o r mastering.

Please k i n d k y advise by r e t u r n , w i t h i n today i f p o s s i b l e ,


a v a i l a b i l i t y and p r i c e s o f such software.

Best Regards

C h r l s Giataganas
Sales Manager
PC SYSTEMS S.A. / ATHENS/ GREECE

=-S*-sis
-

@a

1 3 C L = =:
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM HEWLETY
Page 609 of 646
-Property of Advance Media
Group .-

PACKARD

Thursday December 15, 2016

Page 2715 of 2953


?A? Kifiaiax AvA Halandri. Athens 15231 TeI.1011fi478.524 Fax G47R.RlQ

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

lnterOptica Publishing Limited


,I," ,,,:cr ,,,,,,,,,t,,!

,,,I,!

,,.,;,,.:!,,, < !, 1~~l~~~,t,,l#1,<i,,,r~,,,,,,,*<,r,y

FAX MESSAGE
6 June 1990

Amdcan Helix technology Corp


1857 Colonial Village Lane
h c a s t e r PA 17601

USA
Dear Sir,

We are interested in having your cornyany master n 50MB CD-ROMdisc for us and
press 750,000 duplicates of it. The discs will be i~rsenedinto magazines, so will no!
r y u i r e jewei boxes but will rcquirt soft plastic encasement. I would like to have a
quotation on what the cost for (he lot w o ~ ~bc,
l d for both 2- and 4-colour artwork.
if you q u i r e more detniled infomstio~ibefort: you can give 4 prccise quotation, please

do not hesitate to contact us; however, wc would appreciate a rough estimate in the
m m time.
Yours sincereiy,

M a i n e Winchester
hlanaging Director

EXHIBIT U.S. 16-4014 ST,


CIVIL
CLAIM
of 646
O nRIGHTS
Lair Cen!re
On :anPage
$!reel610Fop9
Kcrig
Property of Advance Media Group

Page 2716 of 2953

Thursday
2016
T e l (8521668
I t 1 8 December
F z x i 8 5 ? ) 515,
4 5 n7?0
10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Optical Publishing Division


588 Saddleback Road
Edmonton, Alberta
Canada. T6J 423
(403) 437 5249

21 July 1990
American Helix Technology Corporation
1857 Colonial Village Ln.
Lancaster, PA
17601 USA

Dear Sirs,
A recent article in Personal Computing' I camc across a reference to your organization. I would
appreciate as much information that you could send me on your Indexing and retrieval software and
service bureau. If possible could you also include price lists and turn around times.

Sipcerely,

,-

A.R. Kruger
Chief Exec~rtiveOgicer

Size U p CD-ROM by Russ Lockwood -- July 27, 1990

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 611 of 646


Page 2717 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189I?
Federal
False
Claim M~tchc
Act
Statcon
Street,

V~ci.?r~o,
313"LALlrol

Carrespondence

P -.,si3::

c! CIC~ICSI
Disc ?eC!1iiOiOQIPS Ply. Lla.(111~.in Vic.)

T e l e f ax

~ m t i w a l +513
:
873 5679

...................

Within Australia: 03 873

1 . . . . . . . . . . . l l . . . . . . . . . . . . ~ . . . . . . . . . . . . . . . . . * . . . . . . . . . . . . . .

mto

W.of ~aqsei1

3 1 F . m Gt' MARKETIS
AmIm
HELIX T m

Irftf3

FaxNo.
m CCRPCRRTICN

: 18ch S p C 90

: 0015 1 7 1 7 392 7897

Cur Ref. : rrcr3251

..............................................................................

We r ~ ~ + i v & a r J , m s t r a c i o n d i s k of ybw la~ertext CD-RQM p&lishi!ig p x d d s t


laa? y e a r .
A t t h e LFw +ie had n9 piojects that were suitable for youpl-Cticulbr rnducc.
Haever, wa BLX nod inVBatigating the production of a
f u i l text hardhmk: h i c h m y be suit4 to your laser text program.
I

c l i e n t is oonsiderinq p d u c t i m of 1000 disks with quarterly c:d?tes,


mcrs2leL-a? t~ 5000 in 5 years.
W ~ l dyou advise us of t k cosrs involved i n
purchasing the p q r a m +ad pmvidiiig us with any i n f o m t i o n ttiat ~ a l help
d
u s zo mke a decision on the suitability of your p z d u c t .
&lr

The p&uct
will be bssd on a n IBM platform, full text only, w i t h a ! - ~ y p z
t s x t f a c i l i t y available.
Given this is our first project, I w u l d appreciate as much infornntion a s y>u
m11ld provils w w i t h .
I ! w k forward to

hearFng f m you.

RILHA.tcD 51sIflr9.mging D i r e c t o r
CD RCB! & ILascxiates

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 612 of 646


Page 2718 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

I -

Ins
Informac8es,

..~.~
~

Microformas e Sistemas Ltda.

SSo P a u l n ,

i 0 t h September 1790

Alller i c a n I-101 i:.: e : I l o j Corp


Market i n s D i r e c t o r
i s 5 7 C o l o n i a l V i l l a g e Ln.
u.s.4.
Gent lenien :

TMS i s a B r a z i 1 i a n conlpany, bascd i n SSo P a u l o f o r


t h e l a s t f i fter?n r e a r s , and d e d i c a t e d t o i n f o r m a t i o n !iycjtenis
consult ing,
r i c r o f i In1
services,
and
vidc)te:.:
~n~brella
opc?l-at i o n s . We a r e now i n t r ? r e s t e d i n i n c l u d i n s CD.-I?OM b1.1reau
s e r v i c e s t o o u r o f ' f e r i n g s , and have a l r e a d y i n hand a c l i e n t
who i n t h e p a s t ~ . ~ s e01d.11- s e r v i c e s f o r n > i ( : r ~ p ~ . i b
l in9 o f h i s
i!il,
vehicle parts c a t a I c ) g ~ ~ e ~ .
We a r e
searching
for
a Stateside partner
to
shortc?n t h e l e a r n i n g t i n ~ enecesciary t o r?ntel- i n t o t h i s a r e a .
Our i d e a
i s t o clo t h e r g q u i r e d e d i t o r i a l and d i g i t i n s work
lhr?re and
t h r ? ~ ? send t h e n ~ a c I , i n e . - ~ - e a d : ~ b Idea t a t o
ow
Stateside partner
f o r p r e p a r a t i o n o f t h e m a s t e r and t h e 400
c o p i e s t h e clic.?nt ~ r c ? ~ ? ~ . ~ i r b s .
Ify o u r
f i r m would b e i n t e r e s t e d i n w o r k i n g w i t h
l.~!; on t h i s and o t h e r s i l r i l a r p r o j e c t s , p l e a s e l e t us know b y
l e t t e r a t your e a r l i e s t conven i e n c e .

Sinc:erely

yours,

O p t i c a l Pub1 i s h i n s D i v i s i o n D i r e c t o r

l?l.la i s t e l a , 515 C j . 13..-21 e 0-31


04011 SSo P a u l o , SF, B r a s i l

Tel

Direct:

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 613 of 646


Page 2719 of 2953

( @ i s ) 575-5600
( 0 1 i ) 547-6474
(011) 575-6454

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

OPTiCAL
M E D I A
DIVlSlON

Fax Cover Sheet

Datum / Date:

F( /n/h

Absendei: / from:
weiterleiten an: / CC:

-/qQ

der Selten (Inci. diesern Deci<blatt::


T.~ta\nu:mber of pages (ind. this cover sheet)
,Snzz!?l

Rvkn Si? bitte ehestm6glich an,falls Sle nicht alle Seiten emalten haben sollten !
If you do not receive all pages, please call as soon as posslble !

M e d l a D l v l s l o n
Eine Abteiii-~ngder / a dlvlsion of
Digital
Image
Systems
Computertechnil<
Gesellschaft
mbH 15, 2016
EXHIBIT U.S. 16-4014 CIVIL
RIGHTS
CLAIM
Page 614
of 646
Thursday December
Property of Advance Media Group
Page 2720
10/19/2006
Am Wlnterhafen
13of 2953A-4020 Linz Austria
Optical

-,

.-

--

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

2 3 d Oct;.

90

American H e l i x T e c h n o l o q y Corp.
1857, C o l o n i a l V i l l a c i e t n .
L a n c a s t e r , P.; 17601
U.S.A.

ue-r S i r ,
.'iea r e rvorkina or! 2 p r o j e c t t h a t v d i l l r e q u i r e p u h l i s h i n q
CD-RGh: i < i s c . We b e l i e v e , yo12 o f f e r s e r v i c e s & p r o d u c t s
required for ~ubli.hir!,>
CD-RCt!: : < i s c s . 'fie w i l l be g r a t e f u l , i f you i o c l d s e n d u s d e t a i l . of y o u r s e r v i c e s and
p r o d u c t s i n c l u d i n s t h e Code Scheme you f o l l o w f o r i n d e x ir..r a n d r ~ t r i c v z l , s o t h ~ '::o
t
c a n a p p r o a c h ycu a t t h e .
r r !
'?lc . : c ~ : d l i k f : t o ,;c?t p r i c i n q of t h s s e i t e n i s
f o r cur budgetary purpose.
It w i l l a l s o h e l p us t o get
a l i s t of y o u r c l i e n t s a n d t y p e o i s e r v i c c s you h a v e
o f f e r e d t h ~ m5n t h i s a r e a .
R e p r i n t s of r e v i e t v a r t i c l e s
on your proc!ucts w i l l be o f o r p a t h e l p t o u s .
d

,-c e a r l y r e n l y "\)ill
be h i q h l y ~ ~ n r e c i a t e d .
T h a n k i n g ycu.

Yours s i n c e r e l y ,

p z d i i i ~ ;\en

Principal Scientist

Indian Institute for Research in Information Sciences


H 4 ! l i 9 Safdarlung Enclave. ~ r Glhi
w
110!11') lN1)lA Tclrphunr' - 687221 1 Trie,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 615 of 646


Page 2721 of 2953

: 1 1 3 l - 7 ? 7 4 1 IRIS IN

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Northwest
Territories Culture & Communications
August 20, 1990

American Helix Technology Corporation


1857 Colonial Village Lane
Lancaster Pennsylvania 17601
Attn: Stan J. Caterbone
Dear Stan;
I wanted to thank you for the information which you supplied to me. It
was of great assistance and I look forward to being able to pursue the
matter of CDROM at a later date. As I mentioned to you over the phone, the
Government of the NWT is not ready at this time to invest money into this
system. We firmly beleive that this is the way to go but it will take time
for us to implement. I will get back to you as soon as funds are made
available to us to continue. In the meantime, again thank you for your help
and hopefully we will talk again soon.

Al Granger
Territorial Printer

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 616 of 646

Thursday December 15, 2016

Page 2722 of 2953


Government of the Northwest Territories Vnllowknife N w T Cnnnrln Y l A 71 0

10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SOCIEDAD E S T A W
PARA LA EJECUCION
DE PROGIWMAS
DEI. QIJINTO C E N T E N M O

American H e l i x
A l e x a n d r i a VA
5 t h March, 1990.

U.S.A.

Dear S i r s ,
May we k i n d l y t a k e t h i s o p p o r t . u c l t y t o ! n t r o d u c e o u r s e l v e s .
We a r e an i n t e g r a l p a r t o f t h e "Sociedad E s t a t a l Q u i n t o C e s t e n z r i o " ,
~ l i i i l ?i s c u r r e n t l y s o r k i n g on inany p r o j e c t s c o m n ~ m o r a t i n g t h e d i s c o , ~ e r y
c f America 500 y e a r s ago.
31ir p r o j e c t f r p a r t i c u l a r i s sa'11ed "530 Years r
, af?d i t s sge::Fic
c i m i s m a i n l y t h e c r e a t i o n o f an i n r e r s c t ! v e o p t i c a l i n f o r m a t i o n system
eiicc3passi ny an e x t e n s i YE rh!:ge o i l ! ~ f o r m a t i o r l l i ~ c c r p o r a t ~ n gt h e
rrinjority o f South America arid P a r t s o f Europe.
!+e b e l i e v e y o u w i l l

be r u r ! n i n g

specific

s e ~ i i l n a r s on

the

follo'dlng

s:~bjects:

implement in^ CD-ROM Technoiogy ( 1 8 t h t o 21st June, i99n)


lmplementlng

i n t e r a c t i v e Video Technology ( 1 4 t h t o 1 8 t h IKay,

1990)
Implernentlng L a s e r d i s c Technology ( 1 8 t h t o 1 9 t h A p r i l , 1 9 9 0 ) .

';c,j'd hr. e x t r e m e l y ' p t e - i ! ? t p d : n r e c e f v i : ! 9 s i l t . s t b c i c i a1 !nTc;!-nation


r e i a t e d t o i t s c o n t e n t s , and w u ! d be g r a t e f u l i f y c u c o u i d l e t u s have
a summary o f t h e main p o f n t s d i s c u s s e d I n y o u r s e ~ n i n a r s o f 1 6 t h t o l ? t h
of Jarioary r e : 01'1 I n t e r a c t . + v e Video Technology, and on t h e 1 6 t h arid
1 7 t h c f F e b r u ~ r yr e : CD-I I n t e r a c t i v e Video. Also, i f yo^, a r e p l a n n i n g
t o c a r r y o u t any seminars on ? A S S s u b j e c t s i n t h e near f u t u r e , iue b!.:ould
be pleased t o have a l l t h e r e l e v a n t i n f o r r n a t i o ~ ~ .

'~(9

P.T.O.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 617 of 646
Property of Advance Media Group

Page 2723 of 2953

Thursday December 15, 2016


10/19/2006

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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


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Page 618 of 646

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CONTROL NUMBCR

OPER. NO

BATCH

NO.

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REPORT TYPE

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

CREDIT BUREAU OF LANCASTER COUNTY, INC.


218 W. ORANGE ST., P.O. BOX 1271, LANCASTER, PA. 17603
TELEPHONE: (717) 397-8144

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2725 of 2953
CREDIT Page
REPORTING
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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

CREDIT BUREAU OF LANCASTER COUNTY, INC.


1

218 W. ORANGE ST., P.O. BOX 1271, LANCASTER, PA. 17603


TELEPHONE: (717) 397-8144

I
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EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 620 of 646


Property of Advance Media Group
FORM z
m
CRONUSm

Page 2726 of 2953

Thursday December 15, 2016


PAGE :i 10/19/2006

CREDIT REPORTING ON-LINE NETWORK UTILITY SYSTEM

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

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EXHIBIT U.S. 16-4014


i CIVIL
I

Property of Advance Media Group

FH

IIG
(il

.
'

ti cult

Thursday December 15, 2016


10/19/2006

I
P:1.
Rt
H\,

SC
ST

SV

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STAN J. CATERBONE INVESTMENT PORT


(AS OF JULY 1,1987)
DATE
LOST

ASSET

OWNERSHIP

Mortgage Banking
Activities

Stanley J. Caterbone

07/01 187

'MUTANT MANIAg
Digital Movie

Stanley J. Caterbone
& Tony Bongiovi

07/01/87

Navaho 'CHIEFTEN'
Airplane

Stanley J. Caterbone

07/01/87

Stanley J. Caterbone

09/03/87

554 Berkley Road


I, Stone Harbor, NJ 08742
I

I
i

ESTIMATED
VALUE

TOTALS

A 12% growth rate is used on all assets accruing from July 1, 1987 to January 1, 1991.

?he capital required to produce the movie "MUTANT MANIA, as seen in the budget developed and created by
California, as sent to Stan Caterbone from Arlene Davidson, Associate Producer.
EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 622 of 646
Property of Advance Media Group

Page 2728 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

STAN J. CATERBONE INVESTMENT POR7


(AS OF JULY 1, 1987)

11

1
I

3
c

ASSET

OWNERSHIP

2323 New Danville Pk.


Lancaster, PA 17547

Michael and Stan J.


Caterbone

433 West Marion Street


Lancaster, PA 17603

Stanley J. Caterbone

50,000 Shares of
Financial Management
Group Ltd., Stock

Stanley J. Caterbone

DATE
LOST

ESTIMATED
VALUE

A 12% growth rate is used on all assets accruing from July 1, 1987 to January 1, 1991.

This real estate investment was financed by Parent Federal Savings and Loan, owned by James GI
Parent Federal had filed foreclosure proceedings in November of 1987. The property was sold
before the pending Sheriff's Sale in July of 1988 for approximately $140,000 to the first offeror.

?his real estate investment was sold under duress in October of 1987 to James Warner in order tc
proceedings.
4

In the Financial Services Industry, companies with substantial distribution of financial products ano
valuation formula in order to determine value and worth. Industry statistics suggest that a companies va
Gross Commission Income generated by that company. The standard formula suggests that for every $ C
Income (GCI) Equals $ .70 to $1.00 of Equity. In June of 1987, Financial Management Group, Ltd., had re
Commission Income (GCI) of approximately $3,000,000. In addition FMG, Ltd., had recently consumrn;
of Planners Securities Group, an Atlanta based Broker Dealer, which was selected by Stan J. Caterbon

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 623 of 646


Page 2729 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act


LAW O F F I C E S

SEIDEL, GONDA,GOLDHAMMER& ABBOTT,P. C.


PATENT A N D T R A D E M A R K A T T O R N E Y S
S U I T E 1800 T W O P E N N C E N T E R

PLAZA

P H I L A D E L P H I A , PA. 1 9 1 0 2
A R T H U R H. S E I D E L

TELEPHONE:(215) 5 6 8 ~ 8 3 8 3

3 O E L S. GOLDHAMMER
M I C H A E L P . ABBOTT

p~

2 5 J u n e 1987

p~

GROUP

ROBERT H. HAMMER lil

I. I , b I 8 4

E D W A R D C. G O N D A
I 1 9 3 0 I S e 5 i

DURLiNG

S T E P H E N J. M E I E R S
AMANDA L A U R A N Y E *
NANCY A

845~218

CABLE. SIPAT

TELkCOP$ER 1 2 1 5 1 5 6 8 ~ 5 5 4 9

G R E G O R Y J. LAVORGNA
D A N I E L A . MONACO
THOMAS J

TELEX

OF C O U N S E L
SYLVIA A . G o s r T o r r v l
S T A N L E Y H. Z E I H E R

RUeNER

SCOTT J FIELDS

N r . S t a n l e y Caterbone
FMG A d v i s o r y , I n c .
Eden P a r k I 1

1 7 5 5 Oregon Avenue
L a n c a s t e r , PA 1 7 6 0 1
RE:

Power S t a t i o n
Our F i l e :
7351-G

Dear S t a n :
I h a v e now r e c e i v e d t h e r e s u l t s o f a s e a r c h
p e r t a i n i n g t o t h e above s u b j a c t .
I have a l s o r e v i e w e d t h e f i l e
f o r w a r d e d w i t h y o u r l e t t e r o f May 2 9 .
The f o l l o w i n g i s my
a n a l y s i s and e v a l u a t i o n of t h e r i g h t t o u s e "Power S t a t i o n " a s
d e f i n e d below.
A s I understand the s i t u a t i o n , your b u s i n e s s c l i e n t ,
Power S t a t i o n S t u d i o , h a s , s i n c e 1 9 7 7 , o p e r a t e d a r e c o r d i n g
s t u d i o with a widely regarded r e p u t a t i o n f o r providing high
q u a l i t y r e c o r d i n g s e r v i c e s u s i n g s t a t e of t h e a r t e q u i p m e n t .
The
e n c l o s e d r e p o r t r e v e a l s t h a t Power S t a t i o n s t u d i o h a s r e g i s t e r e d
t h e t r a d e m a r k "Power S t a t i o n " f o r s o u n d r e c o r d i n g s t u d i o s .
(See
Reg. No. 1 , 4 3 3 , 3 2 8 r e g i s t e r e d March 1 7 , 1 9 8 7 . )
You h a v e a s k e d me
t o i n v e s t i g a t e t h e p o s s i b i l i t y o f Power S t a t i o n e x p a n d i n g t h e u s e
o f i t s mark i n t o m e n ' s and women's c l o t h i n g i n c l u d i n g b e a c h w e a r ;
a n d f o r a u d i o a n d vide(:, e l e c t r o n i c s f o r c o n s u m e r s a n d
professionals.
I h a v e assumed t h a t t h i s l a t t e r c a t e g o r y i n c l u d e s
radios, television receivers, video c a s s e t t e r e c o r d e r s , a u d i o
r e c o r d e r s , compact d i s c players, turn t a b l e s , amplifiers,
r e c e i v e r s , t u n e r s , c o n t r o l p a n e l s , mixing b o a r d s and c o n s o l e s ,
among o t h e r t h i n g s .

Based upon t h e r e s u l t s of t h e e n c l o s e d s e a r c h , i t i s
my o p i n i o n t h a t i t would be i n a d v i s a b l e f o r Power S t a t i o n , I n c .
t o u s e i t s mark f o r c l o t h i n g a s a f o r e s a i d .
The b a s i s f o r my

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 624 of 646


Page 2730 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SEIDEL, GONDA,GOLDHAMMER
& ABBOTT;F! C .
Mr.

S t a n l e y Caterbone

-2-

25 J u n e 1 9 8 7

o p i n i o n i s R e g i s t r a t i o n No. 1 , 4 3 1 , 2 4 2 r e g i s t e r e d :.larch 3 , 1 9 8 7
Eor "Power S t a t i o n " .
The r e g i s t r a n t c l a i m s a f i r s t d a t e o f u s e
o f A p r i l 3 , 1986 f o r w o m e n ' s c l o t h i n g i n c l u d i n g s w i m w e a r a n d
o t h e r goods a s l i s t e d .
A l t h o u g h y o u r c l i e n t h a s a s t r o n g r e p u t a t i o n , and
a l t h o u g h i t h a s p r i o r i t y o f u s e f o r t h e mark, t h i s r e g i s t r a n t h a s
a s t r o n g p o s i t i o n f o r arguing t h a t it has superior r i g h t s f o r
women's c l o t h i n g .
One would n o t o r d i n a r i l y a s s o c i a t e c l o t h i n g i n
a n y way w i t h r e c o r d i n g s t u d i o s e r v i c e s .
Thus, your c l i e n t ' s
r i g h t s i n i t s mark d o n o t a p p e a r t o d o m i n a t e t h o s e o f t h e
registrant's.
A c c o r d i n g l y , u s e of t h e Power S t a t i o n mark f o r
women's ( o r m e n ' s ) c l o t h i n g would i n v o l v e a s i g n i f i c a n t r i s k o f
b e i n g a c c u s e d of t r a d e m a r k i n f r i n g e m e n t .
Use o f t h e Power S t a t i o n m a r k f o r c o n s u m e r a n d
p r o f e s s i o n a l a u d i o and v i s u a l e l e c t r o n i c e q u i p m e n t r a i s e s some
i s s u e s , b u t o n t h e w h o l e I am o f t h e o p i n i o n t h a t i t i s
permissible.
A g a i n , I a s s u m e , a s I have b e e n i n f o r m e d , t h a t t h e
Power S t a t i o n s t u d i o i s w e l l k n o w n a n d d o e s h a v e a g o o d
reput-ation f o r its e x i s t i n g s e r v i c e s .
Given t h a t , i t s movement
i n t o e l e c t r o n i c e q u i p m e n t s h o u l d be p e r m i s s i b l e .
Here t h e good
w i l l a s s o c i a t e d w i t h i t s c u r r e n t s e r v i c e s c a n be more r e a d i l y
extended t o audio v i s u a l e l e c t r o n i c equipment.
T h e s e a r c h r e v e a l s t h a t M a n v i l l e C o r p o r a t i o n ' s Ken
C a r y l Ranch i s t h e owner o f t h e mark "Power S t a t i o n " f o r b a t t e r y
o p e r a t e d emergency e l e c t r i c a l 2ower s u p p l y u n i t s .
S e e Reg. No.
1 , 0 4 0 , 3 0 8 r e g i s t e r e d May 2 5 , 1976 and c l a i m i n g a f i r s t d a t e o f
u s e of November 2 3 , 1970.
I n my o p i n i o n , a u d i o v i s u a l e l e c t r o n i c
e q u i p m e n t c a n b e c o n s i d e r e d t o be s u f f i c i e n t l y u n r e l a t e d t o
emergency e l e c t r i c a l power s u p p l y u n i t s t o a v o i d a l i k e l i h o o d of
c o n f u s i o n even though t h e marks a r e i d e n t i c a l .
I r e a c h t h e same c o n c l u s i o n r e g a r d i n g t h e pending
a p p l i c a t i o n by E l e c t r i c a l C o n d u c t o r s , I n c . f o r a m u l t i p l e o u t l e t
power s t r i p .

A c l o s e r q u e s t i o n is r a i s e d by G o u l d ' s S u p p l e m e n t a l
R e g i s t e r r e g i s t r a t i o n f o r Power S t a t i o n f o r m i n i a n d
microcomputers.
G o u l d ' s mark is r e g i s t e r e d on t h e S u p p l e m e n t a l
R e g i s t e r u n d o u b t e d l y b e c a u s e "Power S t a t i o n " a s a p p l i e d t o
computer equipment is considered t o be d e s c r i p t i v e .
A
Supplemental R e g i s t e r r e g i s t r a t i o n h a s none of t h e p r o c e d u r a l
b e n e f i t s of a P r i n c i p l e R e g i s t e r r e g i s t r a t i o n .
Moreover, i f
G o u l d ' s u s e o f t h e mark i s l i m i t e d t o a p a r t i c u l a r m a r k e t w h i c h

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 625 of 646


Page 2731 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

f,lr. S t a n l e y C a t e r b o n e

-3-

25 J u n e 1987

is d i s t i n c t from your c l i e n t s , t h e r e d o e s n o t a p p e a r t o b e a
l i k e l i h o o d of confusion.
T h u s , G o u l d may b e s e l l i n g i t s
c o m p u t e r s i n t o a s p e c i a l i z e d c o m m e r c i a l m a r k e t i f i t is p r e s e n t l y
s e l l i n g computers a t a l l .
Next I c a l l y o u r a t t e n t i o n t o t h e f a c t t h a t s e v e r a l
r a d i o s t a t i o n s have a d o p t e d a n d a r e u s i n g t h e t r a d e m a r k "The
Power S t a t i o n " i n v a r i o u s c i t i e s throughout t h e Unlted S t a t e s .
Conceivably, these radio s t a t i o n s could o b j e c t t o t h e
i n t r o d u c t i o n o f consumer e l e c t r o n i c s i n t o t h e i r market a r e a on
t h e g r o u n d t h a t t h e u s e o f t h e same mark i m p l i e s s p o n s o r s h i p b y
them.
I n o t e t h a t a l l o f t h e s e m a r k s were r e c e n t l y r e g i s t e r e d ,
and I s u s p e c t t h a t a l l of t h e s e r a d i o s t a t i o n s a r e r e l a t e d o r
c o m m o n l y owned.
I a l s o s u s p e c t t h a t t h e a d o p t i o n o f t h i s mark
may b e o f r e c e n t v i n t a g e .
Thus, your c l i e n t i n any n e g o t i a t i o n
w i t h t h e s e p e o p l e would have t h e a d v a n t a g e of b e i n g a p r i o r u s e r ,
and t h e r e l a t i o n s h i p between r e c o r d i n g s e r v i c e s a n d e l e c t r o n i c
e q u i p m e n t on t h e o n e hand and r a d i o s t a t i o n s e r v i c e s and
e l e c t r o n i c equipment on t h e o t h e r hand i s a t l e a s t c o - e q u a l .
Thus, your c l i e n t should have t h e dominant p o s i t i a n .
I n v i e w o f t h e f o r e g o i n g , i t i s my o p i n i o n t h a t The
Power S t a t i o n s h o u l d n o t a d o p t o r u s e " P o w e r S t a t i o n " f o r m e n ' s
a n d w o m e n ' s c l o t h i n g , b u t i t may a d o p t a n d u s e t h e m a r k f o r
p r o f e s s i o n a l and consumer e l e c t r o n i c s a s d e s c r i b e d above w i t h t h e
u n d e r s t a n d i n g t h a t t h e m a t t e r is n o t e n t i r e l y w i t h o u t d o u b t a n d
issues could arise.
I t i s , h o w e v e r , my o p i n i o n , b a s e d u p o n t h e
f a c t s p r e s e n t l y a v a i l a b l e t o me, t h a t The Power S t a t i o n , I n c .
should prevail i f those issues arise.
I f you have any q u e s t i o n s concerning t h e f o r e g o i n g ,
p l e a s e f e e l f r e e t o c a l l me.
With k i n d e s t p e r s o n a l r e g a r d s ,
Sincerely yours,

,'.

SEIDEL, GONDA, GOLDHAMMER


& ABBOTT, P.C.

JSG:mp
Encl.

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 626 of 646


Property of Advance Media Group

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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 627 of 646


Property of Advance Media Group

Page 2733 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 628 of 646


Property of Advance Media Group

Page 2734 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Section 3189 Federal False Claim Act

Page 629 of 646


Page 2735 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SCRIPT MASTER TAPE CUE SHEET


DATE:
I TITLE:
'I

TRACK

10/12/91
1987 RECORDED AUDIO CONVERSATIONS "SELECTIVE CONVERSATIONS"
TITLE

DATE

PERSONS

BEGIN

END

PA SEC I
09/29/87
ISC ALLEGATIONS

Howard Eissler
Bill Johnson
Robert Byers
Stan Caterbone

0000
0-1 6-01

0792
11-51-40

Sandra Gray

02/24/88

Sandra Gray
Stan Caterbone

0793
11-51-58

1230
20-14-00

Lanc. Aviation

07/10/87

Chuck Smith
Stan Caterbone

1236
20-14-08

1467
25-11-06

Dave Drubner

07/07/87

Dave Drubner
Stan Caterbone

1470
25-11-10

1581
27-43-26

Avalon Police

08/27/87

Avalon Police Dept.


Stan Caterbone

1582
27-43-32

1960
52-56-03

Gamillion
Studios, Inc.

07/21/87

Ted Garnillion
Stan Caterbone
Marcia Silen

04358
52-26-15

06718
56-57-00

Family

07/26/87*

Stan Caterbone
Steve Caterbone
Phil Caterbone
Mike Caterbone
Tom Caterbone

1967

End A

Robertson

07/12/87

Scott Robertson
Stan Caterbone

OOOOB

04348

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 630 of 646


Property of Advance Media Group

Page 2736 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

SCRIPT MASTER TAPE CUE SHEET

/ DATE:
7

TITLE:

10/12/91
1987 RECORDED AUDIO CONVERSATIONS "SELECTIVE CONVERSATIONS"

TRACK TITLE
Power
Station Studios

r
3

DATE

PERSONS

07116/87

Bob Walters
Stan Caterbone

0672B
56-57-10

09408
61-01-1 0

10/28/87

Howard Eissler
Stan Caterbone

09428
61-53-10

10418
64-40-1 0

Detective Bodan
Stan Caterbone

1093B
64-50-10

12628
68-18-1 0

10

PA SEC II

11

PA ATTORNEY
10/28/87
GENERAL OFFICE

BEGIN

END

TOTAL TIME OF AUDIO ON CD-ROM

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 631 of 646


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Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

LANCASTER, PA., NEW ERA

LOCAL NEWS
n national to
reading. And
:W Era Alma-

Manager acquitted of lying


I
in sale of Ferranti
stock
When the stocksalcoccurred in

by N m W e e l
New Era Staff Wnter

July 1989. Roberts wasdirectorol


Scrimaeour Vickers Asset ManA former London money-man- agement.
Scrim eour. Vickers, parent
a er was
last week On firm,
held Guer~n's32
cfarges thatBelied
Ferranti shares as collatH.Guerin's stock In Fernant' In- million
eral on a $39 million loan. When
the loan defaulted, Citibank

itb bank,

involved inthis case.

Meals on Wheels elects new officers

. ,,

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 632 of 646


Page 2738 of 2953

. ..

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

F i n a c i a l Management Group, LTD.


1755 Oregon Pike
L a m a s t e r , PG
17601
(717) 569-5555
Robert Kauffman, P r e s i d e n t
Mickel N. mrtlett, E x e c u t i v e V i c e P r e s i d e n t
P. Alan Loss, Board of Directors
R o b e r t Long, Board of D i r e c t o r s
P e t e r Peneros, Broker

._-.
-

Defamation of C h a r a c t e r
Slander
Mental Duress
Malice
Unfair C a T p e t i t i o n
Wrongful I n t e r f e r e with BusiRelations
Wrongful I n t e r f e r e m w i t h C o n t r a c t s
Trezpass to P e r s s n
Burglary
Theft
Criminal Mischief
I n v a s i o n o f Privacy
T r e z p a s s to Personal P r o p e r t y
Undoinf l u e m
Fraud
Conspiracy
EMxzzlmnt
Breach of C o n t r a c t
Extortion
Forgery
S b r h o l d e r Freeze-cut

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 633 of 646


Page 2739 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

- -

Section 3189 Federal False Claim Act

Cornno-lth
M t l 0 ~Bank
1
Penn m a r e
Lancaster, PA
176432

W l l o n Bank
Pittsburg, PA
Parent Carpany
Mike W o l f , Executive Vice President of Comnercial Lending
f ' w PEAJBLOS

U(;ATIONS.:
Defamation o f Character
Slander
Mental Duress

Malie
Unfair Cocrpetition
Wrongful I n t e r f e r e ~ zw i t h Business Relations
Wrongful Interference w i t h Contracts
Trespass t o Person

T M t
Criminal Mischief
Invasion o f Privacy
Trespass to Personal Property
Undoinf luenoe
Fraud
Conspiracy
EntEzzlement
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 634 of 646


Page 2740 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Ckce Smith, Execxltive Vice President


Pete Wolfson, Sal-n

Defamation of Character
Slander
Mental IXlress
Malice
Unfair Conpetition
Wrowful Interference with BusiRelatiom
Wrowful Interference w i t h Contracts
T r e s p a s to Person

Theft
C r i m i m l Mischief
Invasion of Privacy
Trespass to Personal Property
Urdoinf luence
Fraud
? Corqsiracy
I EmSezzlement
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 635 of 646


Page 2741 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Farrcers F1-t Bank


L l t r t z , PA 17512

Pete Richter, Pkrmger of La-ter


Glenn Nelsn, President

Shcpping Center Branch

r/Aw ,455

PLLE%~.ICNS:
Defamation of Character
Slaoder
Mental Duress
Mall03
Unfalr Corrpetr t i o n
Wrongful Interference w l t h BusiRelations
Wrongful Interference w l t h Contracts
T r e z p a s t o Pemn

,ary
.

- .

Theft
Invaslon of Prlvacy
Trespass t o Perzonal
Undolnfluence
Fraud
Cor?zplracy
Breach of Contract
t Extortion

Property

C'

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 636 of 646


Page 2742 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Hunllton Bank
Oregon Plke
Lamaster, PA

Section 3189 Federal False Claim Act

17601

Chris Izzo, Loan Officer


Corestates, Credit Card M n i n i s t r a t o r

Defamation of Character
Slander
Mental Duress
Malice
Unfair Conpetit i o n
Wrongful Interference with Business Relations
Wrongful Interference with Contracts
Trt o Person
Trto Personal Prcperty
Undoinf luence
Fraud
Coqiracy
Breach of Contract
Extortion

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 637 of 646


Page 2743 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

F u l t o n Bank

O l d Hickory B r a n c h
Stor L a n c a s t e r . PA
17601

?6tl

U n f a i r Conpeti t i o n
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o m
Wrongful I n t e r f e r e with Contracts
Undoinfluem
Fraud
Comiracy
Erkezzlement
B r e a c h of C o n t r a c t
Extortion

Cor
Brc

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 638 of 646


Page 2744 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Berdett T m l l n Hospital
Cape Nay County Courthouse
Stone Harbor, NJ
08247

Social Worker
Psychiatrist 1
Psychiatrist 2

WEGAT IONS:
Defamation of Character
Slarder
k n t a l Duress

Malice

Unfalr Carpetrtlon
Wrongful Interferew l t h Busines Relatiow
Wrongful Interference w i t h Contracts
Tnzspass to Person
Irwa~lon
of Prrvacy
Trespass to Percsml Property
Undolnf luence
Fraud
Cowpiracy
Breach of Contract
~orgsry
Neg11gsnce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 639 of 646


Page 2745 of 2953

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10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Avalon Police DeparWnt


Avalon, NJ
08247

Officer Dean
Fat Aswrciate

Defamation of Character
Slander
Mental Duress
Malice
Unfair Conpetition
Wrongful Interference with Business Relations
Wrongful Interference with Contracts
Trespass to Percan
Burglary
Theft
Criminal M i x h i e f
Itwasion o f Privacy
Trto Personal Property
Undoinf l u e n z
Fraud
Conspiracy
En'&ezzlmnt
Breach of Contract
Extortion
Forsew
Sharholder Freeze-out
mligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 640 of 646


Page 2746 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

k n h i m Towrship P o l i c e Deparbnent
C i r c l e Drive
Lancaster, PA
17601
D e t e c t i v e Mathias
Officer 1
Officer 2
Officer 3
Officer 4

Defamation of C h a r a c t e r
Slander
k n t a l hresr
Malice

'j

Wrongful I n t e r f e r e n c e w i t h Business R e l a t i o n s
Wrongful I n t e r f e r e with Contracts
T r e s p a s s to Person
8urglat-y
Theft
C r i m i n a l Mischief
Invasion of Privacy
T r e s p a s s to Personal P r o p e r t y
Undoinf l u e m
Conspiracy
Breach of C o n t r a c t
Negligznce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 641 of 646


Page 2747 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

L a n e a s t e r P o l l c e Department
W. Chestrwt S t r e e t
L a n e a s t e r , PA
17602

Defamation of C h a r a c t e r
Slander
Mental DuMalioe
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o w
Wrongful I n t e r f e r e n c e w i t h C o n t r a c t s
Trto Person
Undoinfluence
Fraud
Conspiracy
Breach of C o n t r a c t
Negligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 642 of 646


Page 2748 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Jocsh R c d a , E s q .
301 C l p k r Building

36 E. K i y Street
L a m a s t e r , PA
17602
(717) 397-5791

Defamation of Character
Slander
k n t a l Duress
Malice
Unfair Conpeti t i o n
Wrongful I n t e r f e r e w i t h Business R e l a t i o m
Wrongful I n t e r f e r e with Contracts
Undoinfluence
Fraud
Colqriracy
Embezzlenmt
Breach of Contract
Extortion
S h a r b l d e r Freeze-cut
Neglisnce

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 643 of 646


Page 2749 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

Lou S c ~ l l e r Esq.
,
V a l o r e , M c A l l i s t e r , W i x o r e l a n d , Gould, V e s p e r & Sctwartz

Northfield, NJ
(609) 64-1111

Mental Duress
Malice
U n f a i r Gorrpetltion
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s R e l a t i o n s
Wrongful I n t e r f e r e n c e w i t h C o n t r a c t s
Undoinf l u e n c e
Fraud
Conspiracy
mzzlement
Breach of C o n t r a c t
Extortion
Negligence

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 644 of 646


Page 2750 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

D r . W r s h a l l L e v i r e , E ffl D P A
l a 1 T i l t o n Road
N o r t h f i e l d , NJ
(653) 646-2011

D e f a m t i o n of C h a r a c t e r
Slander
Mental LXlresr
Malice
Unfair C a r p e t i t i o n
Wrongful I n t e r f e r e n c e w i t h B u s i n e s s Relations
Wrongful Interference w i t h C o n t r a c t s
T r e a s s to Person
I n v a s i o n of P r i v a c y
Undoinf l u e e
Fraud
Comiracy
Fdxzzlmnt
Breach of C o n t r a c t
Extortion
Neglige-

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM


Property of Advance Media Group

Page 645 of 646


Page 2751 of 2953

Thursday December 15, 2016


10/19/2006

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

EXHIBIT U.S. 16-4014 CIVIL RIGHTS CLAIM Page 646 of 646


Property of Advance Media Group

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Thursday December 15, 2016


10/19/2006

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