Case 3:11-cv-00726-M-BH Document 153-1 Filed 08/08/12

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United States District Court

for the

Northern District of Texas Dallas Division R. Lance Flores, Vicki Clarkson, Plaintiffs, v. Scott Anthony Koster, et al. Defendants. Civil Action 3:11-cv-00726-M -BH

PLAINTIFFS DAMAGES PROVE-UP

AFFIDAVIT OF R. LANCE FLORES

My name is Rudolph Lance Flores (hereinafter R. Lance Flores the Affiant), a plaintiff in the above-styled and -numbered cause. I am competent to make this declaration and hereby certify under penalty of perjury as provided by 28 U.S.C. 1746, and further state that the facts stated herein, and the verified and sworn evidence in exhibit attached hereto or otherwise entered into the record of the Court by the Plaintiffs, are within my personal knowledge. If called upon to testify upon the statement, facts and evidence stated herein, I would competently testify to same set forth herein:

DECLARATION

1. Several months prior to April 14, 2008, I initiated the funding for a screenplay and film project I had written and developed having a then net present value (NPV) of between $4-5million to be produced and filmed and produced in Detroit qualifying for Michigan Film Industry Tax Incentive (MFITI) program. (doc. 115 at
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13) Prior to the application and signing of the MFITI by Gov. Jennifer Granhol, I began working with Janet Lockwood the Director of the Michigan Film Office Michigan Film Office, along with the Michigan Film Office Advisory Council. 2. About July of 2007, I began negotiations with several finance companies that provided factoring service for film tax/grant services. (e.g., doc. 114 at 8) My purpose for purchasing an SBLC to was to secure Non-recourse Loan & Trade Funding available from a number of registered commodity/financial trading and financial management/trading companies for my 2009/2010 film slate and a San Antonio studio/sound stage facility. 3. I expanded the project into a film slate (doc. 116) in order to make it more attractive to financing enterprises by adding a range of low to medium budget films in popular movie genres with high probability profit margins and distribution of risk. This strategy yielded opportunities to lever film slate project using project assets as collateral for non-recourse financing and trade programs as the majority of legitimate trade programs with guarantees required project sizes of $100,000,000 or greater. 4. After examination of several financing proposals the first proposal considered was for a loan financing with Prosperity International LLC (Prosperity). The early
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Non-recourse Loan & Trade Funding (NRCL/Trade). The process and prerequisites for this structured funding is essentially constructed by three financial activities. The client (MFI & Flores co-signer) secures a line-of-credit, typically a standby-letter-of-credit or SBLC, in this case, the SBLC purchased from the cash asset from the factoring of the $8million film incentive receivables. The second activity is the non-recourse loan which the provider assumes the loan and proceeds for trade. The client (borrower) exchanges the use of the loan assets for trade by the provider (lender) for a defined period, in the instant case, twelve months. In turn, for the use of clients loan, the provider guarantees a proportional payout of the loan funds to the client over the period, and initiates his trades. At the end of the period, Clients loan is retired without any recourse (repayment) and provider keeps the earnings from the trades over the amount of the loan retirement amount. In essence, the MFI/Flores secures the loan with their assets and the provider (lender/trading company) makes scheduled payments to the Client, pays off the loan from the trades and keeps after-loan-payoff profits from trades.

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discussions negotiated for a 5-10 year note for the Burgess/Prosperity loan. At the same time I was negotiating the terms with a registered commodities trading company, through Dave Svec and Hoang Nguyen with Minh Da Nguyen the President and C.E.O. of MC Commodities Trading, Inc. (doc. 111 at 54) MC Commodities Trading, Inc. (MCCT) would joint venture with Prosperity using MCCT their trade facilities to payoff the loan. However MCCT, after its due diligence processes, could not verify Prosperitys information and Burgess refused to provide verifications of pertinent information. The joint venture with Prosperity was then dissolved. It would be later learned that Michael Burgess the principal of Prosperity was stealing funds from clients and was eventually convicted and sentenced to fifteen years in federal prison.
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5. Following the Burgess/Prosperity due diligence failure, MCCT offered a larger NRCL/Trade for Two-hundred Fifty million dollars ($250,000,000) for the funding of the Film Slate and the purchase and initial development of the Loan Star Brewery property as a motion-picture/video media production facility. Additionally, the net present value of the assets were to be further increased by the incentive benefits offered by the City of San Antonio for the construction, operation, and employment related to the facility which would bring in an estimated One-hundred Million Dollars to the San Antonio economy annually increasing over time as the facility matured. Projections estimated that the studio/sound stage facility would bring two to three hundred million dollars into the local economy annually as it matured. More

USA v. Burgess, 6:10-cr-00161-ACC-GJK (U.S. Dist. Ct. MD Florida, Orlando Div. 2011); also, Ex-business manager who owes $94M gets 15-year federal prison sentence, November 23, 2011|By Amy Pavuk, Orlando Sentinel: http://articles.orlandosentinel.com/2011-11-23/news/os-michael-burgess-prosperity-international-senten20111123_1_federal-prison-sentencing-hearing-federal-money-laundering-case

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specifically, I had face-to-face discussions with San Antonio City Council Member David Medina concerning the development of the Federal Empowerment Zone within his district and the education, training, and employment of the financially depressed community of his district and the development of the South Side of San Antonio. 6. The funding structure of the MCCT funding would occur in such a manner in which I and MFI would pledge assets and assign our cash assets and properties and MCCT would trade the instruments. The commodities trading company would then fund us 66% of the $250MM (165MM)in equal amounts ($13,750,000/month). 7. Again, in exchange for the use of our debt instrument and use of assets our debt would be retired at the thirteenth month. 8. The loss of $165,000,000 funds, damages, were unquestionably, directly and proximately caused by the RICO Defendants actions and conspiracy as alleged and more fully set forth in the Plaintiffs FIRST AMENDED COMPLAINT and the corresponding sworn evidence attached thereto. 9. I, the Affiant, having the ownership of all MFI assets, rights, and property returned to me, and being the guarantor of all loans and debts incurred in and by all financial transactions, and Vicki Clarkson, also having unencumbered standing, brought this matter before this Court pursuant to, inter alia, Section 901(a) of the Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted October 15, 1970), and codified as Chapter 96 of Title 18 of the United States Code, 18 U.S.C. 19611968; and 10. that Plaintiffs specifically brought an action pursuant to 18 U.S.C. 1962(a),
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http://www.sanantonio.gov/Council/d5/

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(c), (d), and other causes of action elucidated below: 1. COUNT 1 18 U.S.C. 1962(c) (Against the RICO Defendants), 2. COUNT 2 18 U.S.C. 1962 (a) (Against the RICO Defendants), 3. COUNT 3 18 U.S.C. 1962 (d) (Against the RICO Defendants), 4. COUNT 4 Fraud in the Inducement (Against all Except Cook and Divens), 5. COUNT 5 Common Law Fraud, (Against all Defendants), 6. COUNT 6 Negligent Misrepresentation and Deceit (Against all Defendants), 7. COUNT 7 Fraud by Non-disclosure (Against all Defendants), 8. COUNT 8 Aiding and Abetting Fraud (Against all Defendants), 9. COUNT 9 Breach of Confidential or Special Relationship (Against all Defendants), 10. 11. COUNT 10 Promissory Estoppel (Against all Defendants), COUNT 11 Intentional Infliction of Emotional Distress (Against all

Defendants), 12. COUNT 12 Civil Conspiracy (Against all Defendants).

11. That Plaintiffs Compensatory Actual Damages result from Defendants' intentional and willful acts that directly or proximately caused, inter alia, the following damages: 12. Direct and Proximate Caused Actual Damages inflicted by the RICO Defendants exceed an amount greater than $220,000,000 and, in fact, is $357,014,558 as itemized:

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Source MC Commodities Trading, Inc. Minh Da Nguyen, President/C.E.O. Non-recourse funding & trade. Mockingbird Films International 2009/2010 Slate production Michigan Film Incentive Rebate for The Black Messiah Murders

$ Assets $165,000,000

Description & Reference 66% $250,000,000 BG = $165,000,000 monetized; Exs Vol. 10, Exs 212, 213, 221, 222, 231, 232. Net Profits. Ex. Vol. 15 Slate Summary pg 4 of 54. Does not include 2010/2011 and 2011/2012 production slate revenues. Ex. Vol. 14, Ex. 258. Usable for slate prefunding through Fallbrook (Exs. Vol. 13, Ex. 252) to purchase MC Commodities Trading, Inc. SBLC. Ex. Vol. 13, Ex. 251; Ex. Vol. 15, Ex. 259 at 33, 51 (see also references below) Ex. Vol. 13, Ex. 251. Value of benefit package estimated at $17MM, not calculated. Value of $510MM funding benefit & value of fully developed property losses, not calculated.

$170,350,200

$7,972,149

Texas Film Incentive Grant for Alter Ego and Killing Frank City of San Antonio - Lone Star Brewery (Studio) Incentive Pkg. St. Georges Project Inc., studio/sound stage facility funding Lone Star Studio Lost Revenues Vicki Clarkson

$1,996,345

$11,508,864 $187,000

Loss of studios and sound-stage 1 year revenues $13,539,840 at 85% use. $90,000 funding plus agreed film profit sharing ($80,000 BG purchase to Alicorn Capital Mgt) Actual Direct & Proximately Caused Damages

Damages

$357,014,558

Alter Ego (Brennert/Hart, 2009)originally scheduled for Louisiana shoot anticipating 30% tax credit rebate w/approx. net of 20% tax credit benefit. Both Alter Ego and Killing Frank (Holland, 2009) rescheduled for production in Texas. Combines two financial processes. 1) MFI purchases an SBLC and collateralize a loan where the lender is only entitled to repayment from the profits of the project the loan is funding, not from other assets of the borrower; 2) then the instruments are traded much like CMO (collateralized mortgage obligations) are traded.

13. Consequential Compensatory Damages. Plaintiffs plead damages of Threemillion Dollars ($3,000,000) for consequential compensatory damages awarded by virtue of the losses suffered by the Plaintiffs resulting from the Defendant's
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intentional and willful criminal and tortuous acts causing injury to the Plaintiffs physical health, infliction of extreme mental anguish, and harm to Plaintiffs professional reputations as to lower them in the estimation of the community, deterring third persons from associating or dealing with them throughout the industry, and additionally impugning their integrity and standing in society. 14. Exemplary Damages resulting from Defendants' malice and criminal acts greatly harmed the Plaintiffs, producers, crews, talent, employment in the City San Antonio and Texas communities, revenues to ancillary business, and City of San Antonio, Texas tax revenues. 15. Pre/Post- Judgment Interest. Plaintiffs also seek pre- and post-judgment interest on damages and taxable costs of court. 16. Attorneys' Fees are not applicable in this instance, but should not be deemed waived as Plaintiffs anticipate attorneys' fees to be incurred following the summons and complaint service of the balance of the RICO and Nominal Defendants at which time Plaintiffs shall hand over the prosecution of this case to their Dallas law firm. 17. that Plaintiffs were harmed directly and proximately by the Defendants RICO predicate crimes and violations, resulting in actual damages for which Plaintiff are entitled to mandatory treble damages in the amount of not less than 3 $220,000,000 plus other compensatory relief, attorneys fees and costs. 18. that Plaintiffs shall attach hereto their verified evidence in exhibit, affidavits and in support thereof, and proposed order on Plaintiffs Prove up and motion for entry of judgment; 19. that Mark A. Gelazela after accepting Wilde's offering of an opportunity to engage in the operations and rewards of Wilds organizations, Gelazela subscribed Koster, Childs and Emre, the Milaca Gang, into the criminal fold;
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20. that at all time material to this case Koster, Childs, and Emre were engaged in illegal activities internationally and within this District. Defendants operate, promote, facilitate and sell financial instruments and services on their, and others' Internet websites existing under their various Domain Names in direct telemarketing and e-mail marketing activities acquiring prospect information through intelligence gathering efforts in various industries that use the same or similar financial instrument and services which are promoted and marketed by the Defendants; 21. that Francis E. Wilde, by and through the Wilde Mob, engaged Bruce H. Haglund, Atty at Law into the Association-in-Fact as the mobs Money Man; 22. that Francis E. Wilde engaged the services of Haglund as escrow attorney for a trust account; and that Woods and Gelazela were offered the opportunity to bring clients into the program and arranged for Haglund's involvement; 23. that during or prior to the Fall of 2009, RICO Defendants Koster, Childs and Emre operated through Koster's company, Alicorn Capital Management LLC, a "Legal Entity" and RICO Enterprise, referred also as the "Alicorn Enterprise;" that the association of Alicorn's principal, Scott Koster and non-principals, non-employees Childs, Emre, and legal counsel, the Thomas P. Harlan, formed the Association-in-Fact Enterprise, or otherwise the "Milaca Gang"; and that the group used the legal entity Alicorn Enterprise as their operational vehicle for confederating with the Wild Mob; 24. that the Syndicate for purpose of profiting from expanded participations in the Syndicate's ongoing activities, extended and continued the fraud, predicate crimes and overt criminal acts in furtherance of the conspiracy and racketeering with newly engaged criminal organizations;
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25. that RICO Defendants, each having joint and several criminal and civil liability, through their various legal enterprises, association-in-fact enterprises, and by their direct individual and collective racketeering acts and conspiracy, did secure $18,000,000,000 or more in negotiable securities (doc. 36 at 168), other cash assets located in domestic and foreign banks, and have purchased assets with those funds, e.g., a $90,000 Land Rover purchased by Francis Wilde (doc. 36 at 50) and $800,000 deposited in a bank account of his wife Maureen Oflanagan Wilde, &c.; further 26. that from both the pre-discovery investigations of the Plaintiffs and the Securities and Exchange Commission (Washington D.C. and Los Angeles) it was found that Woods, notwithstanding receiving and possessing other illicit monies from his active involvement in conspiracies of the related RICO enterprises, received from Wilde by wire through Haglund, $565,000 as a commission fee for the solicitation and collection on the securities offering by the Syndicate related to the same RICO acts involving the members of the Milaca Gang (doc. 80 at 222); 27. that the Plaintiffs pre-discovery investigation uncovered that RICO Defendants used the Plaintiffs cash assets to acquire at least one of ten or more financial instruments including bonds, of which one domestically acquired $3 billion bond and a European $5 billion bond with total face value equal to or exceeding eight-billion dollars ($8 billion USD). (doc. 36 at 42) 28. that a European $5 billion bond referenced (doc. 36 at 168) is directly
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Bank of America and KFW Bank - Financial services Headquarters Frankfurt, Germany. KFW banking group is a German government-owned development bank, based in Frankfurt. Its name originally comes from Kreditanstalt fr Wiederaufbau, meaning Reconstruction Credit Institute. It was formed in 1948 after World War II as part of the Marshall Plan. It is owned by the Federal Republic of Germany (80%) and the States of Germany (20%). It is led by a five-member Managing Board headed by Ulrich Schrder, which in turn reports to 37-member Supervisory Board chaired by Philipp Rsler, Federal Minister of Economy and Technology, since May 2011.

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associated with the Plaintiffs investment funds. The HSBC pre-advise transaction code and the bank transmission confirmation was presented to the Plaintiffs as proof and verification of the instrument that was acquired (doc. 1-4 at 21), in part, from their funds in behalf of the Plaintiffs. Since the purchase the Five-Billion Dollar instrument the Plaintiffs have located its tracking and note that the bond has matured, and 29. that there were, or still are, at least nine MTN offshore instruments, that were acquired. The various instruments are either European or Pacific Rim financial instruments secured by the Syndicate using investors money, and never paying out their earning or returns, just as Divens had done previously in stealing the Cobolt CMO interest from Betts and Gambles. (doc 36 at 169); 30. that Plaintiffs calculations estimate that the face value sum of all instruments for which they have become aware, includes another four to ten billion dollars, totaling not less in value, than eighteen billion U.S. Dollars ($18,000,000,000 or 14,428,854,000); 31. that the RICO Defendants and Nominal Defendants collectively, by and through, inter alios, various legal, criminal association-in-fact enterprises, criminal enterprises, and unnamed RICO Co-conspirators including: 1. Alicorn Capital Management LLC, Berea Inc., 2. BMW Majestic LLC,
Investopedia explains 'Medium Term Note - MTN' 1. Notes range in maturity from one to 10 years. By knowing that a note is medium term, investors have an idea of what its maturity will be when they compare its price to that of other fixed-income securities. All else being equal, the coupon rate on medium-term notes will be higher than those achieved on short-term notes. 2. This type of debt program is used by a company so it can have constant cash flows coming in from its debt issuance; it allows a company to tailor its debt issuance to meet its financing needs. Medium-term notes allow a company to register with the SEC only once, instead of every time for differing maturities.
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3. Bush Law Center LLC, 4. Colker-Childs-IGM, 5. Law Offices of Jon Divens & Assoc. LLC, 6. Matrix Holdings LLC, 7. Success Bullion LLC, 8. Wiseguy's Investments LLC, and 9. the Amenpenofer Syndicate (the aggregate international association-in-fact enterprises of the Wilde Mob), the Milaca Gang, the Atlanta Family, and the Contra Costa Family, as identified and fully described in Plaintiffs First Amended Complaint, transacted through, own, held, or continued to hold their ill-gotten, tainted, or otherwise criminally acquired cash assets and negotiable securities, in or through the following financial institution/bank accounts from which, inter alia, the Plaintiffs may recover damages from those institutions identified in Appendix A, hereto enclosed.

ACKNOWLEDGMENT EXECUTED under penalty of perjury as pursuant to 28 U.S.C. 1746 on Wednesday, June 27, 2012.

s/ R. LANCE FLORES

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APPENDIX A
Account Holder, Signatory or Beneficiary Bruce Haglund Bruce Haglund Trask Corporation Limited or Assigns Dale Briggs & Associates IOLTA Steven Woods Steven Woods James Linder Maureen Wilde Falcon International Holdings MM5 LLC O'Melveny & Myers James Wan & Company Hing Teik Choon / BMWT / Falcon International Baker McKenzie LLP Hing Teik Choon Lufti Abdulhaq Wakid Hing Teik Choon Matrix/BMW/Hing Teik Choon/New Eurasia Impex Limited Hing Teik Choon / New Eurasia Impex Limited Altofin Bancorp Ltd Bank Wells Fargo Bank Wells Fargo Bank Deutsche Bank Wells Fargo Bank Wachovia Bank (LA, California) Ozark Mountain Bank Bank of America Bank of America Citizen's Bank M&T Bank Citibank OCBC Bank HSBC Barclays Bank Unicredit Bank Citibank International Banking PLC JP Morgan Chase Bank KFW Bank SWIFT or Account Number Transaction Routing Code 121000248 2301 121000248 DEUTCNSHPBC WFBIUS6S UZW1 20711 8259 SIN/CUSIP

81518375 26009593 26009593 21313103 52000113 21000089 OCBCSGSG HSBCHKHHHKH 26002574 DEKRUA22 CITI059AUS CHASUS33

5676 60191 8395 3194 6352 0224 1301 7-888

N677 CUSIP: ISIN:

Bank of America Volksbank Hungary Private Ltd Volksbank Hungary Private Ltd Deutsche Bank Deutsche Bank Deutsche Bank Deutsche Bank Deutsche Bank Deutsche Bank Deutsche Bank MAVOHUHB 0008

ISIN:

Altofin Bancorp Ltd

MAVOHUHB 0 0007 ISIN: ISIN: ISIN: ISIN: ISIN: ISIN: ISIN:

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Deutsche Bank Deutsche Bank CW Capital JP Morgan Chase Bank FannieMae Francis Wilde or Assigns Francis Wilde or Assigns Francis Wilde or Assigns Scott Anthony Koster Kerim S. Emre John Childs Winston J Cook Falcon Bank (Switzerland) Wegelin Bank (Switzerland) Rosbank (Moscow, Russia) TCF Bank US Bank Citibank Sun Trust 114915803 WEGECH2GXXX UNEICHGGXXX 7813 7523 1911 2100

ISIN: ISIN: CUSIP: CUSIP: CUSIP:

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