September 29-1987 Transcript PA SEC Oct 20 2006

US District Court For The Eastern District of Pennsylvana
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."
Property of Advance Media Group
" 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
"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
0"
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
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
memorandum. Then a year after it is raised, or a year after
they comc i n
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
are stock certificates in here in force with names on them that
, that there
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
- 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.
(-
11
Page 2503 of 2953
10/19/2006
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
.
i
12
Page 2504 of 2953
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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
13
Page 2505 of 2953
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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
14
Page 2506 of 2953
10/19/2006
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.
Page 2507 of 2953
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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
Page 2508 of 2953
10/19/2006
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
Page 2509 of 2953
10/19/2006
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
--.
Page 2510 of 2953
10/19/2006
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
Page 2511 of 2953
10/19/2006
just heard it on the news
- 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
Page 2512 of 2953
10/19/2006
Christian owned it
- now I hear
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
21
Page 2513 of 2953
10/19/2006
that an over the
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.
Page 2514 of 2953
10/19/2006
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
Page 2515 of 2953
- they just
10/19/2006
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
Page 2516 of 2953
10/19/2006
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
!
about you taking your medicine. What medicine?
, that's a bunch of crap.
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
Page 2517 of 2953
10/19/2006
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
.
26
Page 2518 of 2953
10/19/2006
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.
Page 2519 of 2953
10/19/2006

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US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

RECORDED TRANSCRIPT WITH

THE PENNSYLVANIA SECURITIES

Quotes from a recorded transcript between Stanley J. Caterbone and

2323 New Danville Pike

Property of Advance Media Group

Page 2491 of 2953

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

" Wasn't there some allegations about a tie to Wedteck?" (Defence

Contractor of New York)

Stan Caterbone Stan Caterbone

" I sold it when things started to hit the

iust did a multimillion dollar merger with a company in London.

Property of Advance Media Group

"I was framed and set up...-....."

Page 2492 of 2953

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

the items in the column (newspaper column) is the reporting of your

- there is about 50 names I am dealing

with here and they

so the 203D exemption was filed for. Of course we have

added the security statement

where the money is going to be spent, how

these things have not

- the only one that's

separate distinction is the IRA.

selling securities or dealing with

Now that came in under your name ...at

- the offering memorandum was done last August because that's

Coming up this October is the 203D. 15 months

- to explain how much money was raised and where it was

Property of Advance Media Group

Page 2493 of 2953

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

- when Financial Management Group limited applied for

Page 2494 of 2953

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

18-25 - that was sold as a result of the public offering.

. Were those funds all

They never showed anyone the books to this day. I got

and Brown out of DC.

Property of Advance Media Group

- I went down there after about 3 weeks of

Page 2495 of 2953

US District Court For The Eastern District of Pennsylvana

Section 3189 Federal False Claim Act

- all the former IFP presidents.

International Association for Financial Planners

- the big guys.

So, I swing everything

- I had my lock changed in my office for

Property of Advance Media Group

Page 2496 of 2953