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TRAVERSE CITY FILM FESTIVAL 2017 FINANCIAL REPORT ASSERTS MISAPPROPRIATION OF “TEMPORARILY RESTRICTED FUNDS”: IRS Form 990 Reveals $262,920 Paid Out Without TCFF Board Approval
“In December 2017, the organization learned that an employee directed the use of $198,020 of temporarily restricted funds without board authorization or approval.
In addition, monies were raised and paid out of the organization in the amount of $64,900 for the benefit of a community member outside the scope of the organization’s charitable purpose.”
In its 2017 annual financial report (“Return of Organization Exempt From Income Tax”), recently made publicly available by the IRS, the Traverse City Film Festival finally acknowledged a significant diversion of its assets: a $262,920 loss attributed to “an employee”.
As of 2008, the IRS has implemented regulations that require tax-exempt organizations with gross receipts greater than or equal to $200,000 or whose assets are greater than or equal to $500,000 to report “any unauthorized conversion or use of the organization’s assets other than for the organization’s authorized purposes, including but not limited to embezzlement or theft.”
As a result, those organizations (like the Traverse City Film Festival) are now required to publicly disclose any embezzlement or theft that is a “significant” diversion of assets, defined as “if the gross value of all diversions (not counting restitution, insurance, or similar recoveries) exceeds $250,000, 5% of the organization’s gross receipts, or 5% of its total assets.”
In the Supplemental Information filed with its 2017 report, the TCFF revealed additional details relating to the departure of its former Executive Director, Deb Lake:
“In December 2017, the organization learned that an employee directed the use of $198,020 of temporarily restricted funds without board authorization or approval.
In addition, monies were raised and paid out of the organization in the amount of $64,900 for the benefit of a community member outside the scope of the organization’s charitable purpose.
This fundraising and funds dispersal was also done without the authorization from or approval of the board of directors.
The involved employee was terminated from the organization. The fundraising activity for the community member has been terminated.
The organization has strengthened internal financial controls and an independent forensic investigation is underway.
The organization has contacted the county prosecutor and is sharing information with him as it becomes available.”
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During last year's festival, founder Michael Moore answered questions from an audience during a two-hour, no-holds-barred Q&A at the Old Town Playhouse.
Moore, whose reboot of his docu-series “TV Nation” was recently scrapped by TBS, disclosed that the TCFF board had “terminated” Lake in December 2017.
As reported in the Traverse City Ticker, Moore provided additional details surrounding Lake's sudden departure after nearly 13 years:
“We (terminated Lake) because of our ethical obligations, our legal obligations,” Moore said, hinting there were also “fiduciary” factors related to Lake’s termination. “We made an informed decision that was…what any group like this had to do when faced with the situation that we were faced with. We had a responsibility to this institution and its longevity so that it exists long beyond us, and so that decision had to be made.”
In addition to the revelation of a significant financial misappropriation, the TCFF's 2017 report revealed a its deficit increased by 6.6% over the previous year.
The 2016 deficit was -$456,196 and grew to -$486,356 in the fiscal year ending December 31, 2017.
An “independent audit” and “quarterly financial statements”, which Moore promised to deliver by December 2018 during that August 2018 Q&A, were incomplete at the time the Traverse City Film Festival filed the 2017 report.
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In addition, monies were raised and paid out of the organization in the amount of $64,900 for the benefit of a community member outside the scope of the organization’s charitable purpose.”
Traverse City Film Festival FY 2017 Form 990
In its 2017 annual financial report (“Return of Organization Exempt From Income Tax”), recently made publicly available by the IRS, the Traverse City Film Festival finally acknowledged a significant diversion of its assets: a $262,920 loss attributed to “an employee”.
As of 2008, the IRS has implemented regulations that require tax-exempt organizations with gross receipts greater than or equal to $200,000 or whose assets are greater than or equal to $500,000 to report “any unauthorized conversion or use of the organization’s assets other than for the organization’s authorized purposes, including but not limited to embezzlement or theft.”
As a result, those organizations (like the Traverse City Film Festival) are now required to publicly disclose any embezzlement or theft that is a “significant” diversion of assets, defined as “if the gross value of all diversions (not counting restitution, insurance, or similar recoveries) exceeds $250,000, 5% of the organization’s gross receipts, or 5% of its total assets.”
In the Supplemental Information filed with its 2017 report, the TCFF revealed additional details relating to the departure of its former Executive Director, Deb Lake:
“In December 2017, the organization learned that an employee directed the use of $198,020 of temporarily restricted funds without board authorization or approval.
In addition, monies were raised and paid out of the organization in the amount of $64,900 for the benefit of a community member outside the scope of the organization’s charitable purpose.
This fundraising and funds dispersal was also done without the authorization from or approval of the board of directors.
The involved employee was terminated from the organization. The fundraising activity for the community member has been terminated.
The organization has strengthened internal financial controls and an independent forensic investigation is underway.
The organization has contacted the county prosecutor and is sharing information with him as it becomes available.”
During last year's festival, founder Michael Moore answered questions from an audience during a two-hour, no-holds-barred Q&A at the Old Town Playhouse.
Moore, whose reboot of his docu-series “TV Nation” was recently scrapped by TBS, disclosed that the TCFF board had “terminated” Lake in December 2017.
As reported in the Traverse City Ticker, Moore provided additional details surrounding Lake's sudden departure after nearly 13 years:
“We (terminated Lake) because of our ethical obligations, our legal obligations,” Moore said, hinting there were also “fiduciary” factors related to Lake’s termination. “We made an informed decision that was…what any group like this had to do when faced with the situation that we were faced with. We had a responsibility to this institution and its longevity so that it exists long beyond us, and so that decision had to be made.”
In addition to the revelation of a significant financial misappropriation, the TCFF's 2017 report revealed a its deficit increased by 6.6% over the previous year.
The 2016 deficit was -$456,196 and grew to -$486,356 in the fiscal year ending December 31, 2017.
An “independent audit” and “quarterly financial statements”, which Moore promised to deliver by December 2018 during that August 2018 Q&A, were incomplete at the time the Traverse City Film Festival filed the 2017 report.
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MIKE'S SURPRISE? Former Traverse City Film Festival Executive Director Reponds To “Traverse Ticker” Report; Lake's Assertion (“TCFF’s distribution of Michael Moore’s 2016 film, MICHAEL MOORE IN TRUMPLAND”) May Solve The Mystery Of The Festival's 2016 $51,627 Expense Line Item For State Run Films Distribution Effort
One line item stuck out: a $51,527 expenditure for a “trial run of distribution services” under the name “State Run Films”.
As I wrote last summer, I was unable to locate any Michigan business entity under the name “State Run Films”.
However, I did find a New York State business with that name, formed by a New York City accounting firm on June 5, 2018 on behalf of its client, Michael Moore.
I think I may have found my answer to that so-called distribution effort.
Former TCFF Executive Director Deb Lake, addressing two allegations made by Moore in today's Traverse Ticker story, appeared to cast some light on the “State Run Films” mystery: it may have been a Moore boondoggle and (in Lake's words) a “conflict of interest that was never brought before the board.”
“It is my understanding that Mr. Moore and Kathleen Glynn donated $200,000 to the TCFF in 2014 as a part of their divorce settlement. Though in press releases Mr. Moore described the donated amount as $250,000, TCFF only received a $200,000 donation as of the date of my termination by Mr. Moore in late December 2017. Mr. Moore allegedly earmarked the funds to be used for three program initiatives: Mike’s Movie Night, the State Theater Project, and distributing films. I use the term "allegedly" because -- while Mr. Moore did unilaterally declare his intentions to use the funds to promote his pet projects during the 2016 board of directors meeting -- the terms of the donation were never put in writing, TCFF never signed a restricted donation agreement with Mr. Moore or Kathleen Glynn, and the board of directors never voted to approve terms of use for the donation.
I was instructed to earmark this $200,000 donation for actions that, in my opinion, would provide both personal and financial benefit to Mr. Moore, and which therefore constitute a conflict of interest. Nevertheless, between 2014 and 2017, over $200,000 was spent by the TCFF on these projects, including tests for Mike’s Movie Night during the TCFF, staff time developing the State Theatre Project and assisting theaters around the US, and, most significantly, TCFF’s distribution of Michael Moore’s 2016 film, MICHAEL MOORE IN TRUMPLAND – a conflict of interest that was never brought before the board.”
In her response, Lake states that she is consulting with her legal team and “to determine whether Mr. Moore’s statements on behalf of himself and the TCFF are actionable defamation for which a legal remedy is appropriate. If such legal remedy is necessary, I look forward to disclosing the truth of what happened in 2016 and 2017 in a forum in which all of the facts may come to light, including the way the TCFF board of directors functioned prior to my departure, and Mr. Moore's role in that system of operation.”
The $51,627 expense associated with the Traverse City Film Festival's 2016 “program service accomplishments” resulted in $37,182 in revenue attributed to “State Run Films Distribution”, for a net loss of $14,445 to the festival.
Stuff's getting real.
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BRUCE'S BAD DAY IN BAD AXE: Disgraced Ex-Veterinarian Bruce P. Langlois Takes Deal & Pleads Guilty To One Felony Count Of “Unauthorized Practice Of Veterinary Medicine”; In Return, Michigan Attorney General's Office Drops Two Additional Unauthorized Practice Counts &“Habitual Offender” Sentence Enhancement. Sentencing Set For May 13; Langlois Facing Up To Four Years In Prison
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| Bruce P. Langlois |
Defrocked veterinarian Bruce P. Langlois knuckled under this morning during a plea hearing in Judge Gerald M. Prill's Bad Axe, Michigan courtroom, and took a plea deal. Langlois plead guilty to one count of Unauthorized Practice of Veterinary Medicine.
Langlois admitted during the hearing that he'd “neutered a cat named Skittles” on December 16, 2016, even though his Michigan license to practice veterinary medicine had been revoked in 2015.
Judge Prill set sentencing for May 13, 2019 at 10:00a.m., and ordered a pre-sentencing investigation report and defendant sentence score. There is no mandatory minimum in this case, and the maximum sentence is 4 years in a Michigan prison and a fine up to $2,000.
In return, the Michigan Attorney General's Office agreed to drop the two additional unauthorized practice charges and not seek a sentencing enhancement against Langlois as a habitual offender. (Langlois has fourth-degree criminal sexual conduct convictions in 1988 and 1995 in Kent County and is on the Michigan Sex Offender Registry.)
Kent County property records reveal Langlois still owns the building, located at 11610 Fulton St. E in Lowell, and maintains regular access—purportedly for “maintenance”, as he testified this morning.
Langlois has multiple Michigan business entities, including the one shown below, the Animal Hospital and Pet Complex of Lowell, P.C.
Registered at the same address as his former vet clinic and current pet grooming business (11610 E. Fulton in Lowell), the September 2018 filing show below reveals Bruce P. Langlois, D.V.M. offers “Boarding Kennels, Grooming and Low Cost Spay/Neuter” at the location.
On March 1, 2017, former Michigan Attorney General Bill Schuette announced he had charged Bruce Phillip Langlois, D.V.M., with three felony counts of Unauthorized Practice of Veterinary Medicine for allegedly presenting himself as a licensed veterinarian and practicing veterinary medicine with a suspended veterinary license.
Each charge was punishable by up to five years in jail and/or a fine of $5,000. Langlois, of Lowell, was charged as a habitual offender 3rd Offense.
“This man repeatedly violated the rules of his profession to the point of his license was revoked but even that was not enough to stop him,” said Schuette. “People like Mr. Langlois who believe they operate outside the law will end up facing the consequences. It is a stark reminder that we must remain diligent and do our research when choosing who to trust with our pet’s health.”
Langlois was arraigned on Wednesday, March 1, 2017 before Judge David Harrington in 73B District Court in Bad Axe. Bond was set at $10,000.
Langlois, whose career as a vet is as checkered as the tablecloth in your favorite Italian restaurant, lost his Michigan license in 2015 for negligence, incompetence and “lack of good moral character’’ and later lost a bid to have it reinstated.
Langlois ran the Animal Hospital of Lowell and a mobile business called Spay Neuter Express.
A panel of the Michigan Board of Veterinary Medicine in 2015 revoked his license and fined Langlois $25,000 for myriad problems ranging from poor record keeping to inadequate follow-up care.
Langlois took his case to the Michigan Court of Appeals, saying his license revocation was not supported by “competent, material and substantial evidence.’’
In a three-page ruling released Tuesday, February 14, 2017, the Appeals Court disagreed. It upheld the revocation and a $25,000 fine.
“With regard to inadequate recordkeeping in general, there was adequate evidence (Langlois) kept inadequate records,’’ justices wrote. In a 17-page administrative complaint, the state accused Langlois of negligence, incompetence, lack of good moral character, failure to maintain medical records and failure to arrange for emergency coverage or provide follow-up evaluation on animals he treated.
In 2016, the Michigan Bureau of Professional Licensing received complaints that defendant had performed “spay and neuter” surgeries without a valid license. An investigation confirmed that Langlois owned a business called “Spay and Neuter Express.” Dr. Duane Fitzgerald, a licensed veterinarian, worked for Spay Neuter Express as an independent contractor and was designated as its attending veterinarian.
Dr. Fitzgerald described the business as “an ambulatory service that serves remote areas or rural areas for spaying and neutering people’s pets set up in a mobile home that has been converted to a surgical facility.” Langlois was charged with three counts of the unauthorized practice of a health profession, related to performing veterinary surgery in December 2016 while his license to practice veterinary medicine was revoked.
During a preliminary examination, Dr. Fitzgerald testified that on December 16, 2016, Langlois performed many of the surgeries that had been scheduled for that day, and that he and Langlois performed their respective surgeries in the same general area.
Dr. Fitzgerald stated that he did not oversee Langlois, and agreed that he did nothing to ensure that Langlois was performing the procedures properly and did not check to see how many procedures he had completed.
Fitzgerald also believed the animals on which defendant operated were Langlois’s patients, not his.
Dr. Fitzgerald was aware that Langlois’s veterinary license had been suspended or revoked. He characterized Langlois as “a competent surgeon who possessed the knowledge and skills to perform veterinary surgery.”
After Langlois was bound over to the circuit court for trial in 2017, he moved to quash the information on the ground that Dr. Fitzgerald, a licensed veterinarian, had properly delegated to him the surgical tasks that he performed. In response, the prosecution asserted that a delegation defense was unavailable as a matter of law, and also moved to preclude defendant from presenting such a defense to the jury.
After an evidentiary hearing, at which Dr. Fitzgerald testified consistently with his preliminary examination testimony, the trial court denied the prosecution’s motion, stating that there was not “anything within the statutes or rules that say,‘You cannot perform a surgery’ ” and that it was “a question for the jury.”
Langlois argued before the trial court, and argued on appeal, that there is no specific statute or administrative rule prohibiting the delegation of veterinary tasks (including surgery) to an individual whose license has been suspended, noting that the Board of Veterinary Medicine has promulgated a rule regarding delegation that does not preclude the delegation of tasks to unlicensed individuals.
In its July 12, 2018, the Michigan Court of Appeals opinion stated Langlois’s argument ignored the fact that MCL 333.16215(1) prohibits a licensee from delegating an act, task, or function that, “under standards of acceptable and prevailing practice, requires the level of education, skill, and judgment required of [a] licensee . . . .” MCL 333.16215(1).”
At the motion hearing, unrebutted expert testimony by Dr. Dwight McNally, a licensed veterinarian who sits on the State Veterinary Board and was qualified as an expert in Veterinary Medicine, established that the “acceptable and prevailing practice” for veterinary medicine does not allow for the delegation of surgery to an individual who is not licensed at the time.
Moreover, because his license was revoked for providing substandard care to animals upon which he performed spay and neuter procedures, a determination was made that Langlois did not meet the requirements of a licensee regarding “the level of education, skill, and judgment” required, not only to practice veterinary medicine in general, but to perform the specific task that forms the basis of the charges against him.
Langlois disagreed, and on September 6, 2018, his attorney filed “Application for Leave to Supreme Court”. On December 21, 2018, the Michigan Supreme upheld the lower court ruling, allowing the case to proceed.
FAIT ACCOM-PLEA? NOT SO FAST!
During this morning's plea hearing, Michigan Assistant Attorney General Robert Hayes revealed allegations about Langlois that could jeopardize the deal accepted today by Judge Prill.
In addition to Langlois allegedly performing a veterinary surgery as recently as October 2018, he still drives the Spay Neuter Express bus to its remote clinic locations, leading the average pet owner to assume he's licensed to practice veterinary medicine and provide care.
And, although Langlois had provided pet owners with a 24-hour telephone number if any complications appeared with pets after surgery was completed, after-hours calls are still routed to a cell phone owned by Langlois, and he is the only one with access to the hotline.
As Assistant Attorney General Hayes revealed during this morning's hearing, Langlois “still answers the phone.” Hayes sought additional bond restrictions (Langlois was released on $10,000 bond, with a prohibition restricting him from practicing any form of veterinary medicine).
Judge Prill, responding to defense attorney Robert Andretz's objections to allegations from Hayes, stated the rules of evidence don't apply when requesting further bond restrictions.
Allowing he would “take it under advisement”, Prill instructed Langlois the Spay Neuter Express emergency telephone number “needed to be changed today!” Prill told Langlois he was “not to be engaged in any veterinary service”.
Leveling his gaze at Langlois, Judge Prill advised him if there are any additional violations, “we’re gonna have a problem. It it is happening, stop!”
Langlois is scheduled to be sentenced on May 13, 2019
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WHERE IN THE WORLD IS BRIAN ACKERMAN? At Home In Gaylord, Maybe?
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| Brian Ackerman, Otsego County mugshot |
According to a brief story on the Traverse City Ticker, Ackerman and his wife, Virginia (Ginger) have “vanished” after fleecing a Peninsula Township woman out of thousands dollars after an estate sale last September, and police cannot locate them.
In May 2016, Ackerman and his wife conducted an estate sale at a Bay City property formerly owned by convicted felon, and disgraced charter school honcho, Steven Ingersoll. The sale was conducted by the Ackermans under the name Estate Sales of Northern Michigan. After briefly attending the sale, I subsequently discovered Ackerman's extensive criminal history.
Ackerman was arrested in Gaylord on May 5, 2015, and charged in May 2016 in Otsego County with two counts of third degree criminal sexual conduct, three counts of fourth degree criminal sexual conduct as well as one count of furnishing alcohol to a minor.
Ackerman was accused of sexually assaulting a 13-year-old family friend.
According contemporaneous news reports, Michigan State Police began an investigation in August of 2014 when a family member contacted the police about Ackerman. The incident happened at a home in Bagley Township where Ackerman allegedly assaulted the 13-year-old and gave the victim alcohol. Ackerman turned himself in on May 4, 2015.
Ackerman was found not guilty by a jury on August 1, 2016.
However, Ackerman's violent criminal history stretches back to at least 2002.
Ackerman was charged in Wayne County, Michigan on April 16, 2002 with assault with intent to do great bodily harm/less than murder and a probation violation. Ackerman pled nolo contendere (no contest) to the assault on September 31, 2002 and was sentenced to two years probation.
In addition, Ackerman served 63 days in Wayne County jail for the probation violation.
Later, after a three-day jury trial in 2003, Ackerman was found guilty in Oakland County of felonious assault (assault with a deadly weapon). Sentenced to a term in the Michigan corrections system of one to four years, Ackerman was ordered to pay his victim $35,124.46 in restitution. (The Michigan Legislature requires the MDOC to keep offender information on OTIS for only three years after the offender has discharged from MDOC supervision, so I was unable to confirm the actual time Ackerman served.)
On May 7, 2010, Ackerman was charged with misdemeanor assault in Pima County, Arizona. The charge was later dismissed by the Marana City Attorney.
I'm betting someone knows where Ackerman and his wife are located, and it's likely Otsego County.
If you know, call your local police department.
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15 YEARS OF FINANCIAL DATA: OFFICAL IRS FORM 990-PF REPORTS FOR CENTER FOR ALTERNATIVE MEDIA & CULTURE, MICHAEL MOORE'S PRIVATE FOUNDATION, REVEAL $213,501 DONATED TO THE TRAVERSE CITY FILM FESTIVAL: It Started In 2010...With $100!
“It is my understanding that Mr. Moore and Kathleen Glynn donated $200,000 to the TCFF in 2014 as a part of their divorce settlement. Though in press releases Mr. Moore described the donated amount as $250,000, TCFF only received a $200,000 donation as of the date of my termination by Mr. Moore in late December 2017. Mr. Moore allegedly earmarked the funds to be used for three program initiatives: Mike’s Movie Night, the State Theater Project, and distributing films. I use the term "allegedly" because -- while Mr. Moore did unilaterally declare his intentions to use the funds to promote his pet projects during the 2016 board of directors meeting -- the terms of the donation were never put in writing, TCFF never signed a restricted donation agreement with Mr. Moore or Kathleen Glynn, and the board of directors never voted to approve terms of use for the donation.”
Deb Lake media statement
March 4, 2019
The Michigan nonprofit domestic corporation that ultimately became Michael Moore and former wife Kathleen Glynn's private foundation began on April 30, 1982. The original file, reproduced below, reveals the formation by three Flint, Michigan friends of Moore.
The three, including Jack Stanzler, Laurie White and Harold Ford, originally filed the formation documents with the Michigan Department of Commerce, for an organization that would “support non-profit community offerings of alternative music, film, theatre, music and art.”
That 1982 formation predated the release of Moore's 1989 film, “Roger & Me”, by nearly seven years.
After digging through 15 years (2000-2015) of the Center's official federal tax filings (IRS Form 990-PF, or Return of Private Foundation/Nonexempt Charitable Trust Treated as a Private Foundation), I discovered donations to the Traverse City Film Festival by the Center totaled $213,501 between 2010 and 2014.
According to federal Form 990-PF tax records, the Traverse City Film Festival received $100 from the Center in 2010, $1,401 in 2012, $202,000 in 2013 and $10,000 in 2014, for a grand total of $213,501.
The Center's Michigan business filing history, reproduced below, reveals a patchy pattern of filing the required annual documents. For example, three annual reports (2006, 2008 and 2009) were all filed on the same day: March 24, 2010.
State of Michigan records reveal that the Center For Alternative Media & Culture was “automatically dissolved in the State of Michigan on December 31, 2015” after failing to file the required annual reports for 2013 and 2014 and payment of the respective filing fees.
The 2014 claim that Moore and Glynn donated $250,000 to the Traverse City Film Festival that year is directly contradicted by the Center for Alternative Media & Culture's federal tax filings.
But that public claim in 2014 of a donation from Moore wasn't the only one that created a wave of goodwill and media reaction.
In 2011 Moore, pictured above with former Traverse City Film Festival Executive Director Deb Lake, was in Manistee, Michigan to kick off the fundraising campaign to restore the town's Vogue Theatre.
Extensive news coverage of the event included what was described as Moore's “personal check” for $10,000, seed money for the Vogue's restoration.
But that $10,000 didn't come from Moore's personal bank account, it came from his private foundation, the Center for Alternative Media & Culture.
As noted in an excerpt from the Center's 2012 Form 990-PF, a $10,000 donation was made to the Manistee County Community Foundation, a 501c3 organization that received and managed the grants and donations that were received to support the revitalization project.
Is it illegal to claim you've made a personal donation to a cause when it's really coming from your foundation?
Probably not.
Is it a bullshit move?
In my opinion, it is.
But, like a lot of bullshit moves, it worked.
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BUCKHANNON & PAGANES & SHLAIMOUN, OH MY! Three Amigos Of Fraud Team Up Again; Exclusive Story Of Their New Investment Fraud Scheme...WITH DOCUMENTS THAT COULD PUT BUCKHANNON BEHIND BARS!
EXCLUSIVE: IS ROBERT BUCKHANNON LOOKING TO SCAM POTENTIAL INVESTORS IN ZIA SHLAIMOUN'S CRYPTOCURRENCY FRAUD SCHEME? Less than three months after Robert Buckhannon was indicted in federal court on various charges relating to a “conspiracy to obtain money by means of false and fraudulent pretenses” for allegedly converting business loan proceeds that were intended for Battle Creek’s On Deck Sports Bar & Grill, he visited Michigan with a new investment scam—and two familiar partners in crime: Chris Paganes and Zia Shlaimoun.
In my opinion, the actions violate the terms of Buckhannon's current release on federal fraud charges, and the product (Shlaimoun's purported KryptMiner PowerDrive cryptocurrency mining system) doesn't really exist.
Buckhannon, and alleged co-conspirator Kelly DeMoss, were each charged on August 8, 2018 with a total of five counts: one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering. If convicted, maximum penalties range from 10 to 20 years, plus mandatory restitution.
“A SENSIBLE PORTFOLIO WOULD INCLUDE DIVERSITY OF ASSETS”
The activity Buckhannon undertook, jointly with partners Paganes and Shlaimoun, had its roots in 2018 with the launch of Shlaimoun's KryptMiner PowerDrive and PowerServer system.
In addition, and more importantly, Buckhannon's investment-related activities appear to violate not only the current terms of bond in his West Michigan federal case (“I agree not to commit any offense under 18 U.S.C. § 1503 (influencing or injuring an officer, juror, or witness); 18 U.S.C. §1512 (tampering with a witness, victim, or informant), or 18 U.S.C. § 1513 (retaliating against a witness, victim, or informant), or any other federal, state or local criminal law.”), they may also violate the terms of supervision in his hedge-fund related plea deal (Buckhannon plead guilty on June 6, 2018 to one count of conspiracy to commit wire fraud in return for a three-year probation sentence).
Buckhannon, a convicted felon, is not licensed or registered in any state as an investment advisor, and he still owes the SEC nearly $1.5 million he agreed to pay in order to settle a 2010 complaint.
The SEC complaint alleged that between 2008 and 2010, Buckhannon and his partners commingled investor money and looted and bankrupted the hedge funds by steering millions of dollars to themselves.
Buckhannon was accused of secretly funneling at least $341,000 of investor money to his family and associates. He spent $60,000 on an engagement ring for his fiancé, Marlena Michaels (Zia Shlaimoun’s cousin) and $80,000 for a down payment on a Las Vegas house.
According to SEC documents, the “wrongdoing that underlies Paganes’s injunction occurred from August 2008 to at least May 2009 while he was a managing member of Imperium Investment Advisers, LLC (Imperium), an investment adviser registered with the Commission. During part of that time, he was also affiliated with Maximum Financial Investment Group, Inc. (Maximum), a broker-dealer formerly registered with the Commission. Maximum and Imperium served as trustee for a Bradenton, Florida-based hedge fund, Vestium Equity Fund, LLC (Vestium).
Imperium and Vestium were parties to a trust indenture agreement that obliged Imperium to hold investor funds in a custodial account and to monitor Vestium’s investments to ensure the fund used investor proceeds only for uses specified in the fund’s offering materials. The trust indenture was incorporated into Vestium’s securities offering materials.
Paganes also was the co-signatory for Vestium’s custodial bank account.
He approved hedge fund transactions and disbursed investor funds for uses not permitted by the fund’s offering documents or the trust indenture.
Paganes had a direct, undisclosed financial interest in at least one of the transactions he approved. This transaction created an undisclosed conflict of interest between him and the fund’s investors.”
In November 2011, Paganes was ordered by the SEC to “disgorge $650,000 and and prejudgment interest of $90,339.19 and to pay a $650,000 civil penalty".
Paganes and his wife declared bankruptcy on November 30, 2012. Paganes' debts were officially discharged on June 13, except for his SEC fines and penalties, which remain unpaid.
On April 1, 2009, Robert Buckhannon, then CEO of Vestium Management Group and a managing member of Arcanum Equity Fund (AEF), wired $20,000 out of an AEF account to Infinifund Ltd.
Strange, especially when less than six weeks before, (on February 24, 2009), Buckhannon had sent an email to the other AEF managing members, Terry Rawstern, Dale St. Jean and Gregory Tindall, telling them that pending investor redemption requests “can be strung out for a bit” while they pursued other investment opportunities.
According to federal court documents, Buckhannon wired an additional $200,000 to Infinifund on June 30, 2009.
On August 18, 2009, Buckhannon sent a letter to the Funds' investors explaining the Funds lacked the necessary capital to pay investor redemptions.
However, the very next day, Buckhannon transferred $2.5 million of Arcanum's funds to Shea Mining.
When questioned in November 2009 by the Funds’ controller regarding the existence of an agreement authorizing or explaining the purpose for the disbursements, Buckhannon explained that Infinifund’s sole principal, Zia P. Shlaimoun, was the “cousin of his fiancé Marlena Michaels.”
But as I revealed in a March 10, 2014 post titled “Serial Monogamy in the Cereal City”, Buckhannon wasn’t being entirely truthful—Buckhannon and Michaels had actually married on May 15, 2009.
Buckhannon initially told the controller to classify the $220,000 payments to Infinifund as “expenses related the AEF’s August 2009 investment in Shea Mining & Milling.”
However, in March 2010, the controller stated that Buckhannon told him to reclassify the expenses as “legal expenses for AEF”.
Detailed extensively (and exclusively) on this blog, Shlaimoun formed a Delaware corporation (Intellogence Inc.) on January 25, 2018.
Shlaimoun originally used 'intellogence.com' to promote the KryptMiner equipment, before establishing a dedicated KryptMiner site. (Neither site is presently supported.)
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| Zia Shlaimoun, serial fraudster |
In a federal court document filed January 31, 2019 on behalf of a party seeking to recover $960,000 Shlaimoun defrauded via a “concocted leveraged investment transaction”, Shlaimoun was described as a “serial fraudster” who had taken over $11,000,000 from “unwitting victims” in a 2010 investment scam.
Over the last three years, Buckhannon and Shlaimoun launched (and crashed) several businesses, including a clinical testing laboratory scheme, GoldStar Laboratories LLC, that previously had locations in five states, including Michigan, Ohio and Missouri. (The company's website, goldstarlab.com, has been disabled.)
On August 22, 2016, Buckhannon and Shlaimoun submitted declarations on behalf of an alleged California-based Goldstar Laboratories LLC/Advanced Biomedical, Inc. seven-figure testing lab acquisition. (NOTE: Although Goldstar Laboratories LLC conducted business in California, it never legally existed as a California business entity.)
An attorney representing Advanced Biomedical, Inc. filed evidentiary objections on August 31, 2016 to the Shlaimoun/Buckhannon declarations, extensively detailing doubts on the duo and the credibility of their declarations.
WE ARE DEVELOPING ON TIME AND ON BUDGET AT PRESENT, BUT JUST LIKE CARS, THE MORE MONEY YOU CAN SPEND, THE FASTER YOU CAN GO
Copying his crony Chris Paganes ('cpaganes27@yahoo.com' email address), who referred the prospect, Buckhannon wrote:
I got an email back from you a week ago asking a couple questions about our current project. I would love an opportunity to talk to you. Please feel free to reach out by phone or text to set up a time that I can talk with you my business partner who is the electrical engineer who designed the board in the technical officer who’s been dealing with crypto currency for five years. Would love The [sic] opportunity to speak with an early adopter like yourself and see if you have some interest in a current project.
Several days later, Buckhannon's prospect responded with questions:
1. The material you sent does not specify the cost of buying what you are selling.
2. Am I correct in that what you are actually selling is 1 Powerserver unit (per the price you specify in question #1)?
3. Do you have any Powerserver’s currently running and if so, can you give any details regarding their results? Because I assume the projections are just that – projections, so I would assume nothing is currently operating but please clarify.
4. I don’t see anything online regarding this project so does that mean that it is still in its infancy?
5. Similar to question #4, what is the plan from this point forward? For example, are you looking for investors, are you looking for marketing this opportunity, are you looking for beta testing?
Buckhannon's October 27, 2018 response follows:
1. Cost and Configuration:
i) Each Power Server consist of 128 Cards utilizing 16nm Field Programmable Gate Array (FPGA) technology, running the SHA-256 algorithm at 20 THash/Sec
ii) The Cost for each Card is $2,950.
iii) The business model is to sell cards and then host and manage the process. We will then do a 50/50 split of rewards after energy cost.
a) anticipated minimum sales size is 8 Cards.
b) There is a 8% Sales commission figured into the Sales Price
c) Not physically delivering cards is to protect the details of the engineering and IP of the Card
2. To answer your question #3, we do not have a completed 128 Power server unit running.
We do have 8 Cards running independently. 2 are mining. The others are being used to Maximize efficiency and debug/optimize the firmware.
The units running individually and not yet optimized are running at 17-19 THash/s running SHA-256. We take delivery of our first "production" run of cards in early November. The PowerServer and all other "Hardware" has been engineered and built.
After successful deployment of the first cards we will do a more substantial run.
3. Questions 4 & 5. Our plan is to sell enough $50,000 - $350,000 purchasers to build out 20 PowerServers. Once that is done and we have real production data for the the top 10 Crypto Rewards, then my plan is to grow both internally as well as approach some larger money that I have worked with in the past.
The development plan is very fluid at this point.
We are developing on time and on budget at present, but just like cars, the more money you spend, the faster you can go so I am very open to any suggestions.
100 PowerServer Farm could be produced for around $25 Million. (That is the number for any appreciable volume discount.)
We have talked to several groups in that range, but until Unit 1 is operational I do not have access to an investment of that size.
Post operations I have those potential investors.
I believe that mining coins other than BTC, i.e Monero, Litecoin, Etherium etc. will be much more profitable. The fact that we can change the task in Minutes is a huge advantage over fixed math systems. We have proof of concept of 6 other antilogarithms, but have not optimized them yet and probably will not until we have a full hardware array operational.
I hope this was helpful. I am available to speak at your convenience.
I am at my place in Las Vegas now as I am allergic to cold weather and closed up my Denver place.
Looking forward to speaking to you.
Later, on Friday, November 9 at 10:49am, Buckhannon sent this email to the prospect:
I will be in Detroit November 15 16th and 17th. Love to get together for a coffee or a beer while I’m there to discuss this project with you. Rob
Robert Buckhannon included a contact number, 310-654-4155, that is directly linked to SuperBio, a company Buckhannon and his brother Ronald formed to sell Cultiv1260 fertilizer.
All the original documents, including the emails published and others that weren't, have been provided to federal law enforcement officials.
Here is the presentation deck, followed by the financial spreadsheet:
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SKID MARKS! Prominent Michigan Scientologist Per Wickstrom Cracks Up Company Car In Battle Creek; Wickstrom Took Out A Utility Pole With Dodge Durango, Causing “Disabling Front End Damage”
“I was going 25 mph when I should have been going 10 mph.”
Battle Creek Police crash report
January 28, 2019
Court records reveal Wickstrom “denied responsibility”; pretrial hearing set for March 20, 2019 in Calhoun County's 10th District Court.
Per Wickstrom ,who previously claimed he “began his first business when he was 17-years-old and sold Mexican black velvet oil paintings around the country”, crashed a Dodge Durango in Battle Creek, Michigan, at 7:45pm on January 28, 2019.
According to the official crash report (shown below, with Wickstrom's street address redacted), and obtained via a Freedom of Information Act Request from the Battle Creek Police Department, Wickstrom was traveling northbound on Capital Avenue NE, on the curve near Maple Grove when the incident occurred.
Acknowledging he was going too fast for road conditions, the report noted Wickstrom stated to the responding officer that he was “going 25 mph when he should have been going 10 mph.”
Wickstrom stated he’d lost control of his vehicle, and slide into a snow bank on the east side of the road. Wickstrom continued to slide until he hit a utility pole, causing “disabling front end damage” on the 2018 Dodge Durango he’d been driving.
According to the police report, the Durango was registered to LaGrange Country Jeep Dodge—an Indiana-based dealership owned by the Wickstrom family.
Wickstrom, notorious for his fierce and protracted legal battles on behalf of his shady drug rehab facilities, has retained Battle Creek attorney Mike Toth.
A pretrial hearing in the case is scheduled for
Wednesday, March 20 at 10:00am.
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MARK NOSS, FORMER HEAD OF GRAND TRAVERSE ACADEMY'S MANAGEMENT COMPANY, FULL SPECTRUM MANAGMENT, FILES CHAPTER 7 BANKRUPTCY FOR BUSINESS; Petition Reveals Full Spectrum Management Grossed A Staggering $4,152,755 From The Grand Traverse Academy During 2017
A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13.
Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
In the filing's Summary of Assets, Noss listed $106.00.
However, the Summary of Liabilities exceeds $1.0 million.
Independent Bank, which acquired Traverse City State Bank in late 2018, is the biggest loser: $766,925.
A hangover of the Grand Traverse Academy's Steven Ingersoll regime, the massive debt reflects the deal Noss made in 2014 with Ingersoll (and Traverse City State Bank's Dan Stahl) to personally assume repayment of Ingersoll's delinquent $989,825 line of credit debt.
Although court records show a non-jury trial was scheduled to begin June 11, 2019, the Full Spectrum Management Chapter 7 bankruptcy filing on February 19, 2019 triggered an automatic stay.
An injunction that halts actions by creditors to collect debts from a debtor who has declared bankruptcy, a stay lasts as long as the bankruptcy case.
Surprised?
I'm not. In fact, I called it back in 2017.
More on this as it develops.
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FULL SPECTRUM MANAGEMENT, LLC CREDITORS MEETING SET: Mark Noss To Face Creditors He Stiffed On April 2
First meeting of creditors delayed to allow more time for Noss to submit required documentation to Full Spectrum's Bankruptcy Trustee; Noss to answer questions under oath by Trustee and creditors.
Mark Noss, former managing director of Full Spectrum Management, LLC, and Steven Ingersoll's longtime partner-in-crime, is set to face his creditors and Trustee during a meeting at 9:00am on April 2, 2019.
The Chapter 7 meeting of creditors (also called the 341 hearing) is a meeting at which the bankruptcy trustee and creditors get to ask questions under oath about the bankruptcy petition and the documents required to provide to the trustee.
In a Chapter 7 bankruptcy, creditors have 60 days after the 341 meeting to file a complaint, also known as an adversary proceeding. This is essentially a lawsuit within a bankruptcy case. A complaint can also be filed by the trustee, spouse or anyone with claims against the debtor or his assets.
Noss/Full Spectrum owes $766,925 to Independent Bank from the original $989,825 line of credit debt payment Noss assumed from convicted felon Steven Ingersoll prior to striking a deal to management the Grand Traverse Academy.
Although the charter school's board later insisted in 2017 statement it “did not know and was not advised of the private understanding between Ingersoll and Noss concerning this loan”, that claim was previously refuted by a series of contemporaneous emails from 2014, including the one reproduced below. In the March 18, 2014 email, Noss lays out the plan to the board and officials at Lake Superior State University.
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The following information, taken directly from the February 19, 2019 Chapter 7 bankruptcy filing, shows the secured and unsecured creditors with claims against Full Spectrum Management, LLC.
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Mark Noss, former managing director of Full Spectrum Management, LLC, and Steven Ingersoll's longtime partner-in-crime, is set to face his creditors and Trustee during a meeting at 9:00am on April 2, 2019.
The Chapter 7 meeting of creditors (also called the 341 hearing) is a meeting at which the bankruptcy trustee and creditors get to ask questions under oath about the bankruptcy petition and the documents required to provide to the trustee.
In a Chapter 7 bankruptcy, creditors have 60 days after the 341 meeting to file a complaint, also known as an adversary proceeding. This is essentially a lawsuit within a bankruptcy case. A complaint can also be filed by the trustee, spouse or anyone with claims against the debtor or his assets.
Noss/Full Spectrum owes $766,925 to Independent Bank from the original $989,825 line of credit debt payment Noss assumed from convicted felon Steven Ingersoll prior to striking a deal to management the Grand Traverse Academy.
Although the charter school's board later insisted in 2017 statement it “did not know and was not advised of the private understanding between Ingersoll and Noss concerning this loan”, that claim was previously refuted by a series of contemporaneous emails from 2014, including the one reproduced below. In the March 18, 2014 email, Noss lays out the plan to the board and officials at Lake Superior State University.
The following information, taken directly from the February 19, 2019 Chapter 7 bankruptcy filing, shows the secured and unsecured creditors with claims against Full Spectrum Management, LLC.
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NO TO NARCONON: Birch Run Township's Zoning Board of Appeals Denies Zoning Interpretation For Proposed “Narconon Birch Run”; 4-0 Vote Halts Greg Hetzer's Effort To Seek Special Use Permit
Narconon Ojai Executive Director, Fabian Padro, claims “75.4 percent success rate” and asserts Narconon Birch Run will target “doctors and lawyers” for treatment at their facility.
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The Birch Run Township's Zoning Board of Appeals voted 4-0 during last night's meeting to deny a zoning interpretation requested by Greg and Lori Hetzer, effectively ending the Hetzers efforts to open a Narconon-based residential alcohol and drug rehabilitation facility in their seven-bedroom township home.
Hetzer, along with his wife, Lori, were featured in Rod Keller's report on Tony Ortega's Underground Bunker last November. The Hetzers were represented during last night's meeting by Flint, Michigan, attorney Mark J. Newman. In addition, Saginaw attorney Frank J. Keating of Braun Kendrick represented Narconon, and Narconon Ojai's current Executive Director, Fabian Padro, were in attendance.
Newman recapped the intention by the Hetzers to operate a residential alcohol and drug abuse rehabilitation facility, as permitted, under the Foster Care-Group Home classification of the current Birch Run Township Zoning Ordinances.
Reading from the Hetzer's February 15, 2018 application, Newman stated the facility would offer up to twenty-four adults the opportunity to reside at the Hetzer property for non-medical rehabilitation and receive an array of services including, but not limited to, non-medical detoxification, nutritional support, and life skills counseling.
Newman stated that, prior to being enrolled in the program, all participants receive a physical exam, off premises, from a licensed medical doctor.
The purpose of this exam, per Newman, is to ensure that the individual can safely withdraw from their use of drugs or alcohol, and do so without the assistance of other drugs, or step-down drugs.
Anyone that would require drugs or other medication to assist them in their addiction treatment is referred to a different facility, although that process was not outlined during the meeting.
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As such, anyone participating in this program must be physically well and must only be addicted to drugs that can be withdrawn from without the use of other drugs as part of the treatment—a process known in common parlance as “cold turkey”.
The entire operation would be housed within the home, which has a total of ten bedrooms—seven in the home, and three additional above the attached garage.
Describing the program as “natural and holistic”, Newman stated the facility would house up to 24 adults and would employ up to 25 people. However, not all employees would be on-site at any one time and, instead would work in shifts, which would include a minimum of two employees, on-site, overnight.
In addition, Newman asserted the adults housed in the facility “would not be allowed to wander”, presumably to allay the concerns of those residing near the Hetzer home.
Greg Hetzer then addressed the Birch Run Township Zoning Board of Appeals.
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Clad in blue jeans and a snug, long-sleeved grey t-shirt, Hetzer related the genesis of his quest: his son's successful treatment at a Narconon facility he called “Fresh Start”.
Using descriptions lifted nearly verbatim from Narconon's “10 Things Your Friends May Not Know About Drugs” booklet, Hetzer asserted that drugs can stay in your body a long time after you take them. He described his son's Narconon experience as consisting of vitamin and sauna treatments, which served to eliminate the drugs “remaining in the fat” in his body.
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Hetzer, in a not-so-Freudian slip, described Narconon's “life improvement courses” as help overcoming life's “ups and downs”, a Scientology course based on the works of its founder, L. Ron Hubbard.
Hetzer's son spoke briefly, attributing his sobriety to Narconon rehab. While it's heartening to witness anyone, like Hetzer's son, overcoming a drug or alcohol addiction, it's dismaying to hear that person publicly state Narconon has “nothing to do with Scientology”.
Narconon Ojai's Executive Director, Fabian Padro, addressed the Board, revealing that he “was in the process of purchasing the building” from the Hetzers, and would oversee the facility's operation with continuing assistance from the Hetzers.
Padro stated Narconon has a “75.4 percent success rate”, and claimed potential facility residents would be “screened heavily” before admission.
In addition, Padro (who used his four year stint in the Navy to burnish his credentials) said potential clients would undergo a “criminal background” check, even though he asserted the facility would only target an upscale client base, specifically “doctors and lawyers”.
Township residents, who filled the meeting room, spoke against the petition to the Board.
Focused primarily on negative impact on property value, fears for the safety of young children and elderly residents, one resident even challenged the Hetzer home's inadequate septic system.
No Birch Run Township resident spoke in favor of the zoning interpretation sought by the Hetzers.
In the end, it was a report to the Board by Rowe Professional Services that sealed the Hetzers' fate: a “substance abuse disorder program” did not fall under the township's existing Foster Care-Group Home classification.
Immediately after the Board voted to reject the Hetzer petition, Greg Hetzer, with his wife and son in tow, abruptly left the meeting.
The trio returned several minutes later, just as the Board voted to refer any future additions to current zoning ordinances to the Birch Run Township Planning Commission.
That vote was also approved, passing 4-0.
The Birch Run Township's Zoning Board of Appeals voted 4-0 during last night's meeting to deny a zoning interpretation requested by Greg and Lori Hetzer, effectively ending the Hetzers efforts to open a Narconon-based residential alcohol and drug rehabilitation facility in their seven-bedroom township home.
Hetzer, along with his wife, Lori, were featured in Rod Keller's report on Tony Ortega's Underground Bunker last November. The Hetzers were represented during last night's meeting by Flint, Michigan, attorney Mark J. Newman. In addition, Saginaw attorney Frank J. Keating of Braun Kendrick represented Narconon, and Narconon Ojai's current Executive Director, Fabian Padro, were in attendance.
Newman recapped the intention by the Hetzers to operate a residential alcohol and drug abuse rehabilitation facility, as permitted, under the Foster Care-Group Home classification of the current Birch Run Township Zoning Ordinances.
Reading from the Hetzer's February 15, 2018 application, Newman stated the facility would offer up to twenty-four adults the opportunity to reside at the Hetzer property for non-medical rehabilitation and receive an array of services including, but not limited to, non-medical detoxification, nutritional support, and life skills counseling.
Newman stated that, prior to being enrolled in the program, all participants receive a physical exam, off premises, from a licensed medical doctor.
The purpose of this exam, per Newman, is to ensure that the individual can safely withdraw from their use of drugs or alcohol, and do so without the assistance of other drugs, or step-down drugs.
Anyone that would require drugs or other medication to assist them in their addiction treatment is referred to a different facility, although that process was not outlined during the meeting.
The entire operation would be housed within the home, which has a total of ten bedrooms—seven in the home, and three additional above the attached garage.
Describing the program as “natural and holistic”, Newman stated the facility would house up to 24 adults and would employ up to 25 people. However, not all employees would be on-site at any one time and, instead would work in shifts, which would include a minimum of two employees, on-site, overnight.
In addition, Newman asserted the adults housed in the facility “would not be allowed to wander”, presumably to allay the concerns of those residing near the Hetzer home.
Greg Hetzer then addressed the Birch Run Township Zoning Board of Appeals.
Using descriptions lifted nearly verbatim from Narconon's “10 Things Your Friends May Not Know About Drugs” booklet, Hetzer asserted that drugs can stay in your body a long time after you take them. He described his son's Narconon experience as consisting of vitamin and sauna treatments, which served to eliminate the drugs “remaining in the fat” in his body.
Hetzer's son spoke briefly, attributing his sobriety to Narconon rehab. While it's heartening to witness anyone, like Hetzer's son, overcoming a drug or alcohol addiction, it's dismaying to hear that person publicly state Narconon has “nothing to do with Scientology”.
Narconon Ojai's Executive Director, Fabian Padro, addressed the Board, revealing that he “was in the process of purchasing the building” from the Hetzers, and would oversee the facility's operation with continuing assistance from the Hetzers.
Padro stated Narconon has a “75.4 percent success rate”, and claimed potential facility residents would be “screened heavily” before admission.
In addition, Padro (who used his four year stint in the Navy to burnish his credentials) said potential clients would undergo a “criminal background” check, even though he asserted the facility would only target an upscale client base, specifically “doctors and lawyers”.
Township residents, who filled the meeting room, spoke against the petition to the Board.
Focused primarily on negative impact on property value, fears for the safety of young children and elderly residents, one resident even challenged the Hetzer home's inadequate septic system.
No Birch Run Township resident spoke in favor of the zoning interpretation sought by the Hetzers.
In the end, it was a report to the Board by Rowe Professional Services that sealed the Hetzers' fate: a “substance abuse disorder program” did not fall under the township's existing Foster Care-Group Home classification.
Immediately after the Board voted to reject the Hetzer petition, Greg Hetzer, with his wife and son in tow, abruptly left the meeting.
The trio returned several minutes later, just as the Board voted to refer any future additions to current zoning ordinances to the Birch Run Township Planning Commission.
That vote was also approved, passing 4-0.
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DAVID DAMANTE MAKES IT HALFWAY...HOUSE, THAT IS: Heading To June 27, 2019 Formal Release Date, Damante Has Transitioned Back To Las Vegas
It's spring...the season for crazy emails?
Yup!
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Yup!
