2016 Chron Sof 5 USC 111 Obstruct Performace Dity and - Abuse

Spongetech Lack of Coordination
Protected Reporting
●2009 through May 2010:
HO-11156A
Eents Occurring Prior to May 11, 2009 (the day my SO group opened its MUI)
In early and late 2008, two of our Regional Offices (Boston and Atlanta) examined certain
allegations made against Spongetech and Metter (current CEO). Two MUIs were opened and
closed. Sources included SARS and FINRA referrals and the issues included potential Section
5 violations, insider trading, false press releases (including amount of outstanding shares),
and false statements that the company was buying back stock.
Next, in March 2009, OIEA also received at least two e-mail/e-form complaints that it
forwarded to OIE. OIE forwarded the two complaints to Boston. Moreover, on or about
March 5, 2009, OIEA conducted a telephone interview of a Spongetech investor who then
filed an in-person complaint with the Atlanta office on March 11, 2009.
From at least as early as 2008 and into 2009, there was a HO “pump and dump” investigation
involving a number of issuers. This HO SO group’s investigation tangentially included
Spongetech as well as many other micro-cap companies. Information regarding this SO’s
investigation as relating to Spongetech was not inputted into NRSI. However, OIE and others
seem to have been aware of that SO group’s interest in Spongetech and forwarded
complaints to that SO group. Accordingly, that SO group conducted some voluntary
interviews of persons who submitted complaints to the Division.
In early May 2009, George Curtis asked me whether my group could investigate the ARO
complaint. At that time, neither I nor my SO group was aware of the pre-existing, ongoing
investigation tangentially implicating Spongetech.
Events Occurring on and after March 11, 2009 MTF

UPDATED.FROM.CC.V.2010.FOR.ROB.IN.CONNECTION.WIT
H.COMPLAINTS.WE.SAT.ON.OUR.HANDS.AND.MISSED.FRA
UD.
May 11, 2009: The ARO investor complaint and the 2008 FINRA referral were forwarded to
us. The matter was assigned to staff attorney, Uta von Eckartsberg on May
11. A MUI was opened on that date and case-related information inputted into NRSI. Uta
began to review the complaints, obtained the exhibits to the FINRA referral, sent blue
sheet requests, review public filings and press releases, conduct Internet searches and
look at message boards.
June 12, 2009: We learn about the pre-existing HO case relating to Spongetech as well as
other micro-cap companies.
June 15-July 2, 2009: Our investigation is put on hold while we consider whether it makes
sense to pursue our investigation in light of the fact that Spongetech was a piece of a larger,
pre-existing investigation and given that some preliminary investigation relating to
Spongetech had occurred.
Performed significant physical labor at my job several times particularly in 2009-2010

(case closing project, case closing generally, repeated office moves) over the past 5 years
or so and have in each instance aggravated my back although I just engaged in self-care
by taking a day or two off. I rarely even took an aspirin. Since the most recent case
closing effort when I was assigned six cases to close in very short order, I began notice
tailbone pain when sitting. It appeared to be hormonally related so I assumed that it had
something to do with my fibroid tumors swelling at certain times and perhaps pressing on
my sciatic nerve. Not that big of a deal and came and went. Also, every time I had to
travel for work I ended up in some pain and over the past year began curtailing my
workout routine to give my back a chance to heal. The problem is that I simultaneously
began having to work even more intensely at my computer for up to 14 hours a day
sitting almost immobile the whole time. I realize now that I really stopped working out
because I didn’t feel good due to the back issues the effects of which had been slowly
growing over time. Up to the November 20 incident, however, other than curtailing my
workout routine significantly I really didn’t have horrible pain – I rarely even took
aspirin.
2012 - F:\2013 employee stuff\CHRONO
July 2, 2010: Investigation resumes.
(May 1, 2009 through January 31, 2010)
During this performance period I have primarily been focused on one expedited investigation (In the Matter of Spongetech
Delivery Systems Inc., HO-11156-A). I have worked extremely hard on this relatively high-profile matter involving a
sophisticated pump-and-dump scheme implicating a complex network of interrelated individuals and entities. I have
demonstrated the utmost dedication to this case. In my determination to be fast, furious, and effective in shutting down
what I viewed from the outset as an egregious fraud, I voluntarily worked through most holidays, most scheduled 5-4-9 days
off, weekends and nights. My exemplary dedication and effort efficiently and effectively uncovered compelling evidence of
potential violations of the antifraud, registration and reporting requirements of the federal securities laws.
Since May 1, I opened a MUI, conducted numerous voluntary interviews, obtained materials from related transfer agents,
drafted a FO memo, obtained a FO, obtained a trading suspension, issued multiple subpoenas, prepared for and took the
testimony of the issuer’s CEO, CFO, Director and two attorneys for the issuer and the attorney for the transfer agent. All of
this occurred while I simultaneously fielded and triaged hundreds of investor complaints and inquiries in addition to multiple
referrals from multiple internal and external sources and agencies. All testimony was taken on an expedited basis within a six
week period. The testimony I took provided the primary evidentiary support for our decision to Wells the issuer, a related
entity, its CEO, CFO and two attorneys for the issuer for various violations of the antifraud, registration, and reporting
provisions of the federal securities laws. Further, I have taken the lead in drafting a complex Action Memo and have
obtained supervisory approval of the theories of liability that I have developed over the course of this investigation. We
expect to file an Enforcement Action within the next several weeks. A detailed summary of my accomplishments as related
to this matter (and others) follows:
●Lead (and sole) attorney on this matter until late September 2009 (conducted the preliminary investigation alone
with the guidance and oversight of my Assistant Director);
●Quick (and accurate) assessment of this matter as potentially implicating an egregious, ongoing fraud requiring much
attention and prompt recognition that a significant time lapse had occurred between a 2008 FINRA referral (and numerous
initial complaints regarding this issuer) and its eventual assignment to me. Thus, with percipient foresight and good judgment
I drafted a chronology of events leading to the ultimate assignment to me in order to ensure that the Division would not be
caught off guard should there be questions arise about the timing of our investigation. Ultimately, such timing-related
questions were raised by the press and in various complaints made directly to the Commission and thanks to my initiative and
foresight we were prepared and able to respond;
●Similarly, I immediately investigated external tips that attorney-authored complaints had been sent to our Director alleging
that issuer and its principals forged attorney opinion letters in connection with re-sales of Spongetech shares. These
complaints went astray and, when I was unable to verify their existence internally, I demonstrated initiative and dogged
persistence by tracking them down via independent research. I then followed up each complainant and obtained statements
and documents from them each on a voluntary basis. I recognized from outset, that the Division might also be subject to
criticism for failing to timely follow-up on the attorney-authored complaints and, thus took the initiative to draft a real-time
chronology of what I learned and how I learned it. As a result we were prepared and able to respond when such criticism was
in fact ultimately alleged against us;
●By September 2009, I had developed the primary theories of liability as relating to the issuer, its principals, and certain
attorneys for the issuer all of which have thus far been borne out by the evidence adduced to date and all of which are
reflected in our current draft action memo;
●Two days after the issuance of the FO, I issued detailed subpoenas to the issuer, its officers and directors, attorneys for the
issuer, and an attorney for a transfer agent. During the same time frame, I received and efficiently reviewed and triaged
additional referrals and reports of potential malfeasance by issuer and its principals. I also received and processed access
requests from the AUSA for the EDNY;
●After the case was staffed, we obtained a trading suspension on October 5 based upon the evidence I had gleaned during
the course of my independent investigation;
●In October and November, I took testimony and even while conducting back-to-back sessions, my preparation for
testimony was in each case thorough, detailed and most importantly – productive. The testimony I elicited through skilful,
lengthy, and thorough questioning provided primary evidentiary support for anticipated enforcement action. For instance, my
extensive preparation for the testimony of one of the original attorney complainants resulted in attorney’s material, on-record
admissions providing support for ultimate decision to pursue enforcement action against him;
●Lead drafter of draft Action Memo; also took the initiative to draft (of my own volition) alternative draft memo setting
forth my theories of liability against attorneys for the issuer for non-routine theories relating to Section 5 and fraud violations.
As a result, I obtained supervisory approval to proceed against the defendants on the theories articulated in my alternative
memo;
●Wellsed the issuer, a related entity, its CEO, CFO, an associated stock promoter and two attorneys for the issuer for
violations of the antifraud, registration and reporting requirements. The issuer, related entity, and its principals offered to
settle the matter almost entirely on our terms within a few days of the Wells notices;
●Exemplary team player and consistently demonstrate leadership ability with respect to those members of the Spongetech
team that look to me for leadership. With respect to those individuals, I make a conscious, ongoing effort to openly
acknowledge and show appreciation for their commitment and dedication. In return, those individuals have gone the extra
mile in devoting their time and efforts to this matter; many of them working well beyond their required duty hours.
Other Cases and Contributions:

●Astropower: Filed follow-on AP based on entry of injunction in related enforcement action (In the Matter of Thomas
Stiner, CPA, Rel. No. 34-60331 (July 17, 2009));
●Universal: Assisted winding up of FCPA case which will be filed this quarter as a settled, injunctive proceeding (while
primary efforts focused on Spongetech this period, historically I led the books and records piece of this investigation and took
all testimony; and such testimony of company executives provided a primary basis for anticipated Section 30A charge
against the issuer);
●Heritage: Assisted AUSA in her trial prep relating to an earlier criminal referral of Ed Johnson (securities fraud
recidivist); on October 29, 2009, Johnson and his wife were convicted on all counts of a 14 count indictment (both found
guilty by federal jury of one count of conspiracy to commit mail and wire fraud, 10 counts of mail and wire fraud and one
count of engaging in an illegal monetary transaction. Johnson was also convicted individually of one additional mail and wire
fraud count);
●BryCar: Tracked down recalcitrant Receiver and forced him to wind up Receivership by leading a teleconference call
(with Collections Unit attorney) during which I advised in no uncertain terms that this conduct was unacceptable and that we
were prepared to seek court action if necessary. Accordingly, we have since received full accounting (absent one outstanding
issue which should be resolved this month) and are satisfied that the delay is not a result of malfeasance;
●Clearnet: Assisted Collections Unit in defeating defendants’ spurious claim that they did not have the income to satisfy
the final judgment entered against them in insider trading case;
●Miscellaneous: Finalized closing memos and performed related work on two matters; completed initial inquiry into
investor complaint; volunteered with the homeless in support of SEC’s commitment to pro bono service; mentor interns and
make ongoing effort to make their work on my matters a true learning experience;
●Activities: Member: Division’s Post-Wells Process Focus Group; Member: Division’s “Case Closing” working group;
Staff Coordinator: Special Assistant U.S. Attorney Detail Program (EDVA).
September 16, 2010:
To Do in Anticipation of Rule 26 Obligations
• Delete entire “Branch File”
• Locate all document production cover letters.
• Create new files designated as: “Document Production Cover Letters” and load all cover letters into
the file.
• Consider creating new databases designated as:
A. Incoming Correspondence
B. Subpoenas
C. Outgoing Correspondence
5. Delete all dox in current Joel Trockman database and load actual Trockman production;
6. Create “Flo Wienberg” database and load production per CD email of 09-16- 10;
• Create “Joe Poe” database and load the four Poe dox there: Inaccurately BN’d as FOE and Bomart;
• Create “Michael Snarski” database and load files;
• Search all databases for internal communications inadvertently loaded into the database;
• Review databases to ensure that each database contains only documents produced by one source and
take corrective action when necessary. For instance
• Delete dox from existing JP DB that were not produced by him but rather by his brokerage firms;
• Create new databases designated as “Sloan”/”Lantern” respectively and move documents from JP
file accordingly.
• Review Frank Lauzauskas database re: BN 1-115 which indicates producing source was
Dominick & Dominck ?? not FL. If not related to FL, create new database if necessary and
move dox accordingly.
• Create databases for Walgreens, Kroger, and Speranza;
• Track down all dox produced by Walgreens, Kroger, and Speranza and load them into the appropriate
database.
• Confirm that all responsive documents produced by so-called customers of Spongetech’s have been
identified and loaded into Concordance in a dedicated DB.
14. Create Romero database and load data (dox only) voluntarily produced by him into the Concordance
database.
Ev
Late June to mid July 2009: During the course of her initial investigation, Uta began to hear
chatter on various Spongetech message boards, blogs and other external sources, that two
attorneys may have filed letters of complaint with Rob alleging that the Spongetech’s COO
was submitting forged attorney opinion letters to Spongetech’s transfer agent in order to
remove legends from restricted stock. Uta tries to track down the letters and determine the
truth or falsity of the allegations. She also started working on a formal order memo and
document requests including from Spongetech’s transfer agent.
July 14, 2009: The OIE conducts an interview of a broker who claims he has copies of the
forged attorney opinion letters. OIE forwards the interview notes to us.
July 23 to July 29, 2009: Uta conducts a voluntary interview of the broker and confirms that
two attorneys did write letters of complaint to Rob in May 2009 when she obtains copies of
the letters from the broker. Within a week of obtaining this information Uta conducts
voluntary interviews with the authors of the complaint letters (one of whom we are charging
with fraud). We obtain and begin to review the transfer agent records while finalized the FO
memo and preparing subpoenas.
Mid-August 2009: Uta learns that the original complaints submitted to the Division (dated
May 14, May 15, and May 26) came into the Director’s Office in May but were inadvertently
directed to CF. Uta contacts the two TAs implicated in the fraud and issues 17(a) letters. Uta
obtains the requested information and begins reviewing the transfer agent journals and other
information.
September 2, 2009: Formal Order issued. Subpoenas issued to all defendants and testimony
begins and continues through December 2011.[Check Nov?].
September 17, 2009: New York Post published the first of a series of articles critical of Spongetech.
September 28, 2009: In its Form 8-K filed with the Commission, Spongetech publicly disclosed
that it was being investigated by the SEC for various securities law violations; and that it and
its officers and directors had received subpoenas. Despite limited staff resources and budget
constraints, the case was staffed the case with two additional attorneys
October through December 2009: During this time frame, the staff received and reviewed
hundreds of investor complaints that were filed with the SEC while continuing to issue
investigative subpoenas and 17(a) letters to persons and entities connected to the
investigation. Ultimately, more than one-hundred subpoenas and 17(a) letters were issued
to persons and entities connected to the investigation. The responsive production to these
investigative subpoenas was in excess of 100,000 pieces of paper. The staff issued
subpoenas, reviewed and managed the document production while contemporaneously
taking the testimony of the defendant and other related parties.
October 5, 2009: Despite the Defendants ongoing, on-record professions of innocence supported by
voluminous, ongoing document production, the Commission issued an order temporarily suspending
the trading of Spongetech’s common stock. The Commission suspended trading while simultaneously
moving forward with its investigation which implicated ongoing (allegedly) false testimony,
protestations of innocence, and the bombardment of documents (containing among other things,
allegedly forged Purchase Orders)(see Indictment filed May 5, 2010, USA v. Metter, et al, 10-CR- 600
(DLI (charging defendant with perjury and obstruction in connection with the SEC’s investigation) (see
also Doc. 106, SEC’s Reply for PI as to Pensley; Ditto MM, SM, Halperin)). Since the Commission’s
trading suspension Spongtech’s stock has continued to trade in the grey market but is no longer
traded on the OTC- BB. Furthermore, trading volume has been relatively low and the stock has
traded at a fraction of a penny.
December 24 2009: Six months after the underlying Spongetech investigation at HO- 11156-A was
opened, the staff concluded its preliminary investigation. On December 24, the staff notified RM
Enterprises, Spongetech, Metter, Moskowitz, Speranza, Pensley, and Halperin of the staff ‘s intention
to seek Commission authorization to file a civil injunctive action against each for violations of the
federal securities laws (see Spongetech’s Form 8-K publicly filed with the Commission on December
31,2009 for disclosure or receipt of Wells notice).1
December 25, 2009 through May 05, 2010: The defendants continued to profess their innocence
and bombard the staff with documents while the staff continued its investigation. In March 2010,
the OAUSA EDNY opened its investigation into Spongetech and began to work collaboratively with the
staff. (See Dkt. No. 207, filed February 10, 2012, USA v. Metter, et al, 10-CR-600 (DLI) The SEC and
the EDNY decide it is best to file the cases simultaneously so that neither agency’s case would be
prejudiced and so that neither agency would lose the element of surprise [reword’].
May 05, 2010: the instant complaint and the criminal indictment are filed. As of that date, the SEC
had issued more than 100 subpoenas (inclusive of the numerous 17(a) letters) issued to persons and
entities; and, had by then received responsive production in excess of 200,000 pages. Furthermore,
the indictment charged MM, SM, and GS with obstruction and perjury in connection with the SEC’s
investigation.
2010
TRANSFERRED TO AK IN JUNE. 2010 IMMEDIATELY POST-

REORG.AK.NEVER.PAID.ATTENTION.TO.ME.UNTIL.PIM.FORCED.TO.WORK.SUPER.LA
TE.WHEN.BROTHER.WAS.IN.ICU.IN.PGH.ON.VENTILATOR.I.AM.HIS.POMAY 2012
From: Koch, Alexander
Sent: Monday, September 13, 2010 2:34 PM
To: Khuzami, Robert; Reisner, Lorin L.
Cc: Chion, Antonia; von Eckartsberg, Uta; Stevens, Linda; Tao, Jeffrey; Block, Frederick L
Subject: Spongetech
Rob and Lorin:
We wanted to update you on the status of the Spongetech pump and dump case, including the possibility
that in early October the EDNY may bring charges against additional individuals for their role in the
scheme. For the reasons described below, we do not intend to recommend an enforcement action against
any of these individuals at this time.
Since the case was filed on May 5, we have engaged in extensive briefing related to our motion for
preliminary injunctions, asset freezes, and other relief. Unfortunately, Judge Irizarry has yet to rule on the
motion or schedule argument. Discovery has not been stayed, although a discovery schedule has not yet
been set. In addition, Spongetech filed for bankruptcy in mid-July and its subsidiary, Dicon Technologies
LLC (which appears to have been an actual business with real sales) was the subject of an involuntary
bankruptcy petition in late June. Trustees are now in place over both entities. We have had preliminary
discussions with the Spongetech trustee about a bifurcated settlement of our action, under which the
company would agree to full injunctive relief and to having the court decide at a later date, upon our
motion, whether disgorgement and penalties are appropriate. Following the reorganization in late May,
we also have been transitioning the supervision of this case from Chris Conte and Charles Cain to Toni
and me.
Since the Spring, the staff has been working with the USAO for the EDNY, which filed charges against
Spongetech’s CEO, Michael Metter, and its CFO/COO, Steven Moskowitz, on the day we filed our
complaint. In late July, the EDNY first informed us that they had been meeting with Moskowitz since
late May, and had conducted a number of proffers with him, as well as interviews with other witnesses.
The EDNY subsequently has allowed us to review the 302s and interview notes (without allowing us to
keep copies), and we recently have participated in two joint proffers with Moskowitz, who has signed a
cooperation agreement with the EDNY. We have had preliminary settlement discussions with
Moskowitz’s counsel.
The EDNY recently informed us that they are considering seeking to bring charges against a second
round of defendants in early to mid October, although no final decisions have been made. As described
below, this second round of defendants would include former Spongetech employees, only some of whom
would be charged with securities fraud:
• Tom Cavanagh and Frank Nicolois – Each was a defendant in a landmark SEC pump and
dump case brought in the late 1990s. The final judgment against them in that case
ordered them to pay over $15 million in disgorgement and penalties, and also enjoined
them from taking any action to “delay, impede or obstruct any Commission or U.S.
Government efforts to locate, liquidate, repatriate and pay into the Fund any asset,
whether located in or outside the United States, and to otherwise collect on this Final
Judgment.” As Spongetech employees, they received at least $640,000 and $945,000,
respectively, between August 2007 and October 2009. The vast majority of these
payments were made through checks written for amounts just under the CTR limit of
$10,000. In FBI interviews, they have admitted to structuring the payments in this
manner to avoid detection by their creditors, including the SEC and IRS. They also
claimed that their involvement was limited to promoting Spongetech products in Europe,
rather than raising money from investors. While the evidence indicates that they were
involved in raising money from investors, there currently is little evidence to support
securities fraud charges against them. We understand that the EDNY currently is
considering charging them with structuring and criminal contempt based on their
violation of the final judgment in our earlier case, but not with securities fraud.
[DONE. See superseding indictment]
• Seymour Eisenberg and Andrew Tepfer – Spongetech sales representatives who served as
presidents of three corporations, two of which were created by Moskowitz, that acted as
conduits for the illegal distribution of unregistered Spongetech shares. Eisenberg and
Tepfer each signed backdated documents purporting to show that the entities they
controlled had made loans to Spongetech as consideration for the shares they received.
These false loan documents were used to support false attorney opinion letters prepared
by Jack Halperin, a defendant in our current case. Eisenberg and Tepfer were paid
commissions and received Spongetech shares as compensation for their role in the
scheme. Our rough calculations indicate that Eisenberg may have received close to $1
million, and that Tepfer may have received over $1.5 million. We understand that the
EDNY currently is contemplating charging them with conspiracy to commit securities
fraud, and presumably would seek forfeiture of these gains. [Done. See superseding
indictment]
• Chris Bruderman – A Spongetech employee during 2009 who had a role in providing
false documents to Spongetech’s transfer agent to support the false attorney opinion
letters. Bruderman is a former registered representative, but it currently is unclear how
much he knew regarding the fraud. We understand that the EDNY currently is
considering charging him with conspiracy to commit securities fraud. [Not charged]
• George Speranza – We understand that the EDNY currently is considering whether to
charge Speranza with obstruction and securities fraud. He already is a defendant in our
case. [Speranza recently entered a guilty plea to perjury (SEC testimony).
Sentencing is set for October].
After consideration, we do not plan to recommend that the Commission authorize actions against any of
these individuals at the present time. Although we believe there is sufficient documentary evidence that
could support a case against Eisenberg and Tepfer for direct and/or secondary violations of the antifraud
provisions and Section 5, we have not taken their testimony, interviewed them, or Wells’d them, and as of
now we would not be able to rely on presenting evidence from the proffers to support such a case. In
addition, other than an injunction or a penny stock bar, we would not be able to obtain additional
meaningful relief beyond that which likely would be sought by the EDNY. Eisenberg and Tepfer do not
appear to be repeat players in the penny stock world, making an injunction somewhat less important, and
we would be able to institute follow-on APs based on their criminal convictions to get penny stock bars
against them. Finally, adding Eisenberg and Tepfer to our pending action could further complicate what
is already going to be a complex and hard-fought litigation. With respect to Bruderman, we believe there
would be significant risk associated with litigating a case against him based on the currently available
non-proffer evidence. With respect to Nicolois and Cavanagh, we do not believe the currently available
evidence supports securities fraud or Section 5 charges against them, although we intend to continue to
closely investigate their conduct. Moreover, having the EDNY file criminal contempt charges would be
an important statement about the importance of compliance with our judgments. If they proceed with
filing charges, we would ask the EDNY to convey to any of these defendants who are interested in
resolving their criminal charges that we also would be interested in reaching a settlement of our potential
claims.
At this stage, we believe it would be better to focus our resources on (a) continuing to litigate our
currently pending action and (b) investigating potential violations by others involved in the scheme. In
particular, there are a large number of promoters and other beneficiaries of Spongetech stock who are
repeat players in the penny stock world and appear in numerous SEC investigations. In addition, the
conduct of Spongetech’s auditors appears to have been especially egregious. We would, of course,
continue working with the EDNY.
Please let us know if you have any questions or would like to discuss this matter further.
Thanks
M. Alexander Koch
Assistant Director
Division of Enforcement
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549-5041
Ph: (202) 551-4762
Fax: (202) 772-9227
This e-mail message (and any attachments) from the United States Securities and Exchange Commission is for the
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From: Reisner, Lorin L.

Sent: Monday, September 27, 2010 8:39 AM
To: Koch, Alexander; Khuzami, Robert
Cc: Chion, Antonia; von Eckartsberg, Uta; Stevens, Linda; Tao, Jeffrey; Block, Frederick L
Subject: RE: Spongetech
Alec,
The approach outlined in your email seems reasonable and appropriate. I had the following questions,
reactions, suggestions:
• Who are the defendants charged in our action and their titles/positions?
• Can we use EDNY cooperators (like Moskowitz) to support/advance the claims we have
asserted? What steps can we take with the EDNY toward that goal?
• Does it make sense to approach some of these individuals (or others) as potential cooperators in
our case to the extent they are not being signed up by the EDNY and can be helpful to us?
Thanks.
Lorin
_____________________________________________
From: Chion, Antonia
Sent: Monday, September 27, 2010 11:48 AM
To: Reisner, Lorin L.; Koch, Alexander; Khuzami, Robert
Cc: von Eckartsberg, Uta; Stevens, Linda; Tao, Jeffrey; Block, Frederick L
Subject: RE: Spongetech
Lorin,
The individual defendants in our case are:
Michael Metter, former CEO

Steven Moskowitz, CFO/COO
Jack Halperin, former attorney for SpongeTech
Joel Pensley, former attorney for SpongeTech
George Speranza, stock promoter
For your information, the lit release link is:

http://www.sec.gov/litigation/litreleases/2010/lr21515.htm
We have been working with the EDNY which is now very focused on careful coordination with
us. In fact, they deferred bringing charges to assure that we had the benefit of information that
they had obtained. We have participated in proffer sessions (including with Moskowitz) and
have had access to other proffer information. We continue to explore all avenues for promoting
our case, including evaluating Moskowitz’s usefulness as a cooperating witness.
We do not believe it appropriate at this juncture to reach out to potential defendants to see if they
would cooperate in our litigation/investigation. We already have participated in proffers with
some of these individuals. We also have advised EDNY of our interest in these potential
defendants should they consider resolving anticipated criminal actions and/or cooperating.
See 2011
July 19, 2011: MTF for mid-year meeting
From: von Eckartsberg, Uta

Sent: Tuesday, July 19, 2011 6:25 PM
To: von Eckartsberg, Uta
Subject: Meeting/ bring Investigative Plan dox, too.
Philosophy TU
Concerned not protecting staff enough from unreason demands/ unnec’y work
Creating unnecessary work for Staff
Eval: Work on TU responsibilities. Substantive, facts, law, OL – every substantive response,

every material fact, the law, ol responses.
One year ago!
Preventing me from meeting my investigative goals. No 26, no interrog, no discovery requests,

no concordance – MRR/RR done, Pensley done. Can’t get through the awful db – bring AK an
example which may provide us with the ability to win this litigation! Should be a priority and
TU should assist because it’s material to the litigation.
Enabling – no favor to him or to anyone else.
No confidence.
No respect.
At a minimum, should be required to draft pleadings as best he can before kicking it to the staff.
-----Original Message-----
Sent: Sunday, October 16, 2011 2:45 PM
Subject: Fw:
Silo off Maenza, much of lit and MW. Not efficient, strategic, or effective. Which is what I think of.
All I know is this is what I would have investigated and questioned. Wouldn't know what exactly was
done since kept out of loop.
--------------------------
Sent from my BlackBerry Wireless Handheld
----- Original Message -----

Sent: Sunday, October 16, 2011 12:09 AM
Subject: Fw:
Didn't get it. No one else cares. Asking to recognize my individual contrib and respect my need to be in
loop.
--------------------------
----- Original Message -----

Sent: Saturday, October 15, 2011 11:22 PM
Model?
Double stnd
Ack appre ind'l contrib
--------------------------

Sent: Thursday, November 03, 2011 5:43 PM
To: Koch, Alexander
Cc: von Eckartsberg, Uta
Subject: FW: Employee Narrative
Please find the revised and original versions attached.

Uta

Sent: Thursday, October 20, 2011 10:26 PM
To: Koch, Alexander
Subject: Employee Narrative
Please find my narrative attached. Thank you for granting me an extension.
Please let me know if you have any questions.
Thanks.
Uta
mployee Discrimination

Sent: Friday, November 04, 2011 10:04 PM
To: Koch, Alexander
Subject: Fw: Update
Hi Alec,
Fyi, please see the P.S. below.
As my supervisor I thought you might have an interest in knowing that others in this building
hold me in high regard for my work on Spongetech.
For the record, I don't personally know Tom Sporkin and have never spoken to him about
SPNGE.
By the way and fyi, it is not "PC" to describe any woman as "bossy" these days. It is more
appropriate and in my case significantly more accurate to describe me as assertive rather than
"bossy."
And being assertive is a necessity for me on this case. If I were not assertive, this case could
have been a huge embarrassment for this Division instead of being (as recently described by Eric
Bustillo, Regional Director of the Miami Regional OFfice) a "shining example" of the efforts of
the Division to prosecute microcap fraud and the so-called "gatekeepers" who facilitate it.
Have a wonderful weekend.
Uta
--------------------------
From: Pradel, Philippe
Sent: Friday, November 04, 2011 04:16 PM
Subject: Update
Hi Uta- I hope you are having a good time in NY, and that the investigation is going well. Just
wanted to let you know, I will be back in the office next Wednesday. If possible, I would like to
meet with you then, to give you an update on the stuff I have worked on. Have a great weekend,
GO STEELERS! Be on the lookout for Antonio Brown, he’s definitely an up and coming
receiver- he had a really good game last week. Talk to you soon-
Philippe
P.S. You got a shout out at our seminar on Wednesday. Tom Sporkin from the Office of Market
Intelligence asked if any of the interns were working on Spongetech (we were talking about
micro-cap fraud)- Regan and I raised our hands, and he said that you were doing a great job
leading that investigation.

Sent: Saturday, November 05, 2011 12:11 AM
Subject: RE: Update
Thank you for forwarding the e-mail. I am glad to hear that you were recognized in that
fashion.
I don’t recall using the word “bossy” during our meeting the other day, but if I did I apologize
for any offense. That certainly was not my intent in any of the things I said, which I hope you
understand.

Sent: Sunday, November 06, 2011 6:27 PM
To: Koch, Alexander
Subject: Re: Update
Thanks. You did use the word "bossy" more than once during our meeting. I am offended by
your use of that particular word in the context that you used it. That said, I acknowledge that
you did not intend to offend me.
Uta
--------------------------
Sent from
See 2012
ISSAC WINEHOUSE MANIPULOATION CARTELS
To:
File
From:
UvE
Date 06/21/12
Returned from SM proffer Tuesday night.
During proffer, FBi agent became agitated by the answers the CHS was giving me. He halted
questioning and stormed out of the room and then accused me of leading CHS to make statements
that were supportive of my view of the facts.
In fact, this was not true. While I did make statements of fact it was mostly just to remind CHS of
non- controversial history related to the subject matter at hand. Also, given the purpose of this
particular proffer which was for me to ascertain to my own satisfaction that either SM gave
materially misleading info to the criminal authorities from the beginning (and continues to do so) or
that he did not, meaning the criminal authorities asked the wrong questions or did not understand
his answers.
The FBI agent was confrontational, unprofessional, and rude. The agent cut me off and did not let
me explain what I was trying to accomplish. AK did not address the agent’s tone or demeanor but
agreed with the agent’s point and did not support me in any respect whatsoever. I subsequently
pointed out that I was upset that AK never backs me on anything.
Subsequently, my questioning was chilled by the FBI’s agent’s unprofessionalism and my supervisor’s
support of his comments. The agent then led the CHS to answer various questions by providing him
the answer, (i.e., you knew but you really don’t know, blah, blah, blah). In sum, the agent was actually
the person leading the CHS.
As I informed my supervisor, this FBI agent is known to be extremely protective of his witness. In
my view, he is biased on the CHS’s behalf. If CHS were lying it would call into question the agent’s
judgment and his work on this matter. Most of all proactive cases this agent has worked on since
filing SPNGE are off-shoots of one sort or another of SPNGE and rest upon evidence given by CHS –
who is a sociopathic liar.
I don’t necessarily trust the agent’s judgment on CHS. He has a lot invested on the CI relationship
with the CHS.
While CHS answered certain questions in a way that makes me think it is more likely than not
that he did not (or is not) intentionally withholding info re: Double U, et al.
That said, he definitely gave many questionable responses. Among other things, before he
knew where I was going with my questioning he reiterated certain statements that he made
to the agents 3 years ago that I believe may be false.
Against, my better judgment I allowed my supervisor to convince me to show CHS emails

relating to IW, ab, and Double U. SM largely confirmed my investigative conclusions: (1)
There were several groups (akin to manipulation cartels) controlling events at SPNGE; 2) that
IW/AB were pretty much calling all the shots on PRs etc from early July onward; (3) that they
directly link MM to the fraud including PRs and manipulation); 4) that they are dangerous
men. IW among other things claimed to have been in the Israeli army and would threaten
and/or promise to take care of problematic persons.
CHS proffered that IW/AB hired security person to conduct background investigations on me,
Charles Davis, and Christine Neal. I am very concerned about this. No one else (either FBI
or supervisor) seem to share my concern.
FBI did not bring the AUSAs in and (in my view) downplayed the importance of what he was
hearing re: AB/IW significantly. Today I sent him an email asking if he intended to brief the
AUSA about this piece or any other office (preferably the Organized Crime Unit). If not, I
will pursue this. I did not copy my supervisor on this email because I do not believe that he
will support me on this.
Note: In Sept or Oct 2010, I had my first opportunity to speak with CHS. The same FBI agent
yelled at me because he blamed me for the fact that he was not able to move forward with
certain arrests until my agency caught up given the EDNY’s unfortunate decision to hide
CHS cooperation from us.
While at the EDNY, Tao, Koch agreed to FBI agents concerns and I was not permitted to ask the
questions I intended to ask which related to the potential of organized crime connections (Sigmoid)
and/or the brokers/Transfer agents. In addition, another AUSA conducted himself improperly with
me. Because I was expected to change my entire line of questioning at the last minute, I had to
work alone late in the evening at the AUSAs office. Tao, stevens, the fbi and the rude AUSA all
went out for dinner and did not assist me in any way. I believe that had I been able to proceed the
way I deemed necessary, I would have ferreted out the Double U/JH Darbie piece. I also sensed
right away that SM was lying about Gellis but was not able to pursue this at this time.
When I returned to the office, I informed AK of the unprofessional, mean-spirited conduct of the
AUSA/FBI but AK declined to take any action or follow-up. This was so even after Adam -Chief, DOJ, DC advised
To this day, I feel that what happened to me in NY two years ago was awful. AK and I have discussed
many, many times. Yet, he allowed it to happen again. He let someone treat me badly and
unprofessionally and allowed a biased, uninformed Agent to dictate the proffer. This lack of support
is in my view once again negatively impacting the case. It is reinforcing my view that AK will never
change and anything I accomplish on this case will have to be despite him as always.
We have not seen each other since our return from NYC, but my impression from talking to others is
that he is downplaying the significance of this proffer and all we learned.
Among other things, CHS for the first time told me that the TAs were paid $25 per cert – amassing a
fortune through that route. So far as I can tell, neither the TAs or SM have ever admitted this
compensation arrangement before.
From: von Eckartsberg, Uta [EXCLUDING]

Sent: Thursday, May 24, 2012 4:42 PM
Subject: MTF Privileged and Confidential work product (JH)
JH Darbie call ultimately conducted by SS and AK concurrent with this email:
I previously identified numerous evasive and/or outstanding responses to the JH Darbie

subpoena. AK decided that SS should follow-up which he did. AK has not felt it necessary
that I participate in the calls even though I drafted the subpoenas and have always led this
piece. Just now, a follow-up call was made and AK made it clear that while I was welcome, it
was certainly not necessary for me to be in the loop. I strongly suggested that he obtain written,
direct responses to the outstanding subpoenas requests but he declined to do so despite my
documented history of getting admissions or blatant misrepresentations under similar
circumstances (See BT emails from Mitchell; SPNG responses, etc.).

Sent: Wednesday, June 13, 2012 3:21 PM
To: Koch, Alexander; Kisslinger, Paul
Subject: Confidential Update [SPNGE]
Importance: High
Alec and Paul,
As I began to prepare for the upcoming proffer and in connection with the overall spin-off
investigations of TAs/B-D’s, I started to connect some dots. Because of the sensitivity of the
information and my concerns about the many potentially significant ramifications, I decided it
was best to keep everything close to the vest until I could confirm to my own satisfaction that my
suspicious are correct. Ultimately, I won’t know for sure one way or another until I speak with
SM. That said, I feel fairly confident that some of my suspicions are correct in at least some
material aspects, so this email is to summarize certain of my conclusions:
● From at least July 2009, it was not MM and SM that called the shots on the SPNGE
fraud. Rather, they were controlled by Issac Winehouse and others who organized and
operated a manipulation cartel (members of which included groups run by (1)
Winehouse/Bodchin; (2) Apollant/Schaeffer, (3)David Bocci, and (4) Seth Shaw. Each of
the cartel members brought in others (i.e., Apollant/Schaeffer brought in Halperin,
Xirinachs, Emmauel Suchert, Yu, Young, etc.). During my review of the SM MSN DB, I
saved relevant emails (other material info) for each of the groups that I now believe were
members of a cartel organized by Winehouse (and probably Bodchin). Some of the
relevant subfolders are as follows:
J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\csh

J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\Bocci
J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\Double
U Aaron B and Issac Winehouse
Update: CW largely confirms my conclusions in this regard and has provided additional
information fleshing out some of the details.
●Winehouse is mob- connected. For instance, he was connected to the SC&T mob case
out of Brooklyn. Notably, that case and related cases describes Mob-related stock
manipulation schemes. For example, a BusinessWeek article provides, that “traders and
brokers have been subjected to “persuasion” and punishment – threats and
beatings.” Similarly, Winehouse threatened Yarmish at JH Darbie in the attached
email. When you consider that the person behind the threat controls millions of dollars via
the PIPE investment funds, the threat becomes very real. I believe that certain brokers
(i.e., Yamish and perhaps Rabinowitz) facilitated the Spongetech fraud as relating to
Double U group of companies because Winehouse/mob threatened them. (see
http://www.businessweek.com/1996/51/b35061.htm);
http://www.businessweek.com/1997/12/b3519127.htm#Related%20Items.
Update: CW largely confirms my investigative conclusions albeit he does not necessarily use the work
“mob” and denies any knowledge of any threats to JH Darbie. That said, SM confirmed that these are
dangerous men and he does not discount that they are capable of murder. Again, the Double U gang
ordered background investigations of me and other members of the staff which were apparently
widely disseminated.
● Winehouse and his associates are identified as being part of “Metter’s group.” In this
regard, I have now thoroughly reviewed all proffer notes; I have also asked Thomas to
identify pages that contain info about the parties I’ve identified as primary players in the
fraud. The MOIs do not reflect the evidence that I am putting together and that I describe
in this email.
Update: Absent intent to obfuscate by SM, I cannot understand why none of this came out
in previous proffers.
●With respect to the Winehouse piece, after I put started putting the pieces together I identified
and segregated Winehouse/Double U emails that seem to tie MM directly into the fraud
including, but not limited to, press releases and market manipulation. I’m working on a
spreadsheet identifying those emails now.
Update: SM confirms that the emails relate to market manipulation and the
drafting/timing of press releases. The emails directly tie MM into this piece of the
fraud. If SM is to be believed, then MM was the primary contact with the Double U
gang. I now believe that a primary motivation for MM’s motion to suppress was to
prevent detection of these communications.
● I have always believed and asserted that the only reason for SM and MM to subject
themselves to the type of jeopardy that has occurred during underlying investigation (i.e.,
the false testimony, the barrage of document productions which did include incriminating
information) was fear or greed. In this case, I now think it was both. If SM is lying, then
he is in collusion with MM even today given the Double U connection. They both know
what he is not telling anyone. And, SM is not giving the criminal authorities what he
knows they want most – direct evidence on MM. If this is true, then SM is taking huge risks
given that he is giving up certain persons (who I now suspect are the bottom-feeders considered
to be expendable) via undercover operations in which he is wired while simultaneously perhaps
double-crossing the criminal authorities. I can’t imagine any reason that SM would ever be able
to play such a dangerous game unless he were either afraid for his life (and the lives of his
family) or he knew that there were millions of dollars at the end of the rainbow.
Update: As noted above, I still have questions and concerns and look forward to speaking
to SM again under more favorable conditions with the support of the OUSA.
●In this case, I believe that the end of the rainbow is in Israel. As we noted in our
declaration to the MPI, Clearview is an Israeli entity previously associated with tax
fraud. A 2007 37 count indictment for criminal tax fraud within an orthodox sect based in
Brooklyn/Israel/LA can be read here: http://www.pgdc.com/pgdc/news-
story/2008/01/08/religious-leader-and-others-indicted-charitable-contribution-scheme-
other-tax-fraud. In this case known as the “Jewish Mafia” case, Clearview is described as
follows: On or about January 29, 2003, defendant and co-conspirator R.K. caused
$190,000 to be wired from a Spinka nominee account in the name of Clearview
International Investments ("the Clearview account") at BH-Bnei Brak, Israel (Spinka is a
religious group within Orthodox Judaism). Note also, that according to our declaration,
Clearview and Double U share the same bank account number.
Update: SM denies any knowledge of Clearview. He also denies that he or anyone he

knows participated in such a scheme. I’m not entirely convinced by this but will review
the evidence to see if it is consistent with his proffer in this regard.
With respect to the paragraphs that follow, I think that there is more work to do before I
can come to a definitive conclusion in this regard.
Overall, I’ve been able to make these connections because of my taking the time to obtain and
review almost every of the 70,000 email database. I tried to save and identify all material emails
of interest whether or not I had primary responsibility for any particular beneficiary. For
instance, I identified and saved emails relating to Double U and Winehouse even though I did
not have responsibility for that piece at the time of my review. I have also taken the time to
review every single M0I available to us. In addition, given that I have led all the proffers, took
the testimony of all the primary defendants (and in almost each case recognized and locked in the
false testimony to support the perjury charges), have led the investigation of the TAs/B-Ds from
the outset, among other things, I am confident that my understanding of the big picture case is
largely correct.
During the review of the MOIs, I also noted that in some instances, SM appears to have
intentionally led the criminal authorities down the wrong path. That said, it is always
possible that no one asked the right questions or something that seems pretty prominent
and obvious to me was somehow not that important to him. Again, I will be able to make
an assessment in this regard next week. If I believe SM is lying, it is important that none
of us let on during the proffers. If even half of this is true, SM is a definite flight
risk. Moreover, given the mob connections I see in this case, I believe that his life could be
at risk.
If SM does tell the truth, as reflected by my investigation, then we will have a much bigger and
even better case than what we have now. We obviously will have to make decisions about what
and when to tell the EDNY. Certain tendrils of the cases I’m putting together now definitely
trickle down to MJ and Matt Beck is a good, experienced prosecutor. Depending on what we
learn given EDNY’s delay in prosecuting either Pensley or Romeros, I think we need to consider
whether we should let them take the lead on everything I am pulling together. Also, if I’m
correct that may have significant ramifications for their SM-related spin-off investigations.
Also, in my view, the EDNY dropped the ball when they decided to keep SM’s cooperation
secret for months after he first came in – less than one month after we filed our cases,
respectively. Moreover, when I finally had a chance to speak with SM myself, I
immediately recognized that he was not being entirely truthful in certain areas –
particularly with respect to Gellis, the TAs, and Joel Trockman. The bottom line is that
there was no joint investigation that resulted in the criminal prosecution. I handed them
my case and I believe it was extremely short-sighted to exclude me/us from the proffers
with SM under the circumstances.
Lastly, the materials and evidence that I have been gathering are saved to the file path that
follows: J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\INVESTIGATIVE
WORKING PAPERS\PHASE II INVESTIGATIONS\Staff work product - data,
memos,spreadsheets, etc\Proffer Prep\June 2012 PROFFER PREP.
I have more information which we can discuss in person.
Uta
PS My spell-check is not working so please ignore any spelling typos I may have misse
MTF 06.26.2012 3:52PM
File F:\2013 employee stuff\HISTORICAL MAT INFO

From: Uta von Eckartsberg
Re: Meeting with Supervisor
Am meeting w/ AK in a few minutes. Will have to discuss case and my view of what we should
do. See earlier emails to MCFWG, SS/CD. Ak is not going to be happy.
Depending on the conversation, I may tell him my view on all:
Mismanagement me and my case
Discriminate against me by promoting a much younger, very inexperienced lawyer by giving her
public credit for my work (Weiner) and promoting her as the face of the Section 5 reseller theory
that I developed before this particular attorney was even in the building. Or before I actually
met her or had anything to do with her.
Also, that because of his personality disconnect with me (i.e., he thinks I’m “bossy” and
overbearing, whatever) he is treating me unfairly and more importantly his negativity towards
me is negatively impacting my case as he almost invariably opposes every
recommendation/conclusion that I make.
I will tell him that everything that I have accomplished on this case – and it is a lot – has been
accomplished despite him not with him. Great examples of this are both the Romero and the
Pensley cases, both of which I did entirely by myself with nothing but pushback from AK until
others (i.e., the FBI and Fred Bloch) agreed wholeheartedly and quickly that I was exactly on
point with my conclusions.
Furthermore, the lack of support in every instance and particularly most recently in connection
with the latest proffer and the first proffer materially impacted my ability to investigate the case
as I needed to do and in my view (in particular the first proffer) set this investigation back by
years. SM has not been entirely truthful and I am not sure he is being so now but I’ll have to go
back to figure it out.
Note, that once again AK stood back while someone (this time the FBI)(previously the FBI, Jeff
Goldberg, Tao, Leeder) treated me disrespectfully. In each instance, his response was that I
should change my manner of communication or my questioning (latest proffer). In not one
instance did he address the rudeness directed at me.
I also may send him the revised project lists which demonstrate that what I suspected was true –
AK ignores the fact that I have done almost all – both substantive and ministerial – the work on
this case. This confirms my suspicion and my overt statements to AK historically that he goes
out of his way to give credit to others who work on this case – to the extent of giving them credit
for my work. Repeatedly. At the same time, he gives me little or no credit for the work I have
done. This is unfair to me and disadvantageous to the case. We’ve discussed this hundreds of
times to no avail but now I have concrete proof in the revised project lists which I may send now.
If these subjects are addressed and I tell ak that I was one send button away from filing an OIG
report for gross mismanagement of me and my case, I will also inform him that if any adverse
employment action is taken against me as a result of my forthrightness about this and other
subjects as detailed in the various emails that have come out today, I will not hesitate to file a
retaliation complaint.
UvE
MTF:
June 27, 2012 02:00 PM
We did not speak yesterday but I am scheduled to speak with AK in 15 minutes. Earlier I sent
an email strongly recommending that this matter be escalated to Toni. He does not appear to be
taking this thing seriously. I think he will try to rely on the FBI’s bad conduct to say that there
is nothing to worry About. My educated guess is that he will deny that the FBI behaved
inappropriately and was not open to a new reality feature SM as potentially playing both sides of
the fence.
Presumably either SM the FBI or PK would support my view of what actually happened. See
draft email to Lisa R for discussion.
I will tell him that I have been wrestling with the OIG investigation request, retailiation,
happened on Toni’s watch whatever. I need him to get out of way and let me run my
investigation. Support it. And give high level advice as needed. I like AK and do not want to
blacken his reputation but it is one thing to treat me badly it’s another to mess with my case. I
am at my limit with this.
What I intend to say about the FBI is this:
In this regard, I think it is unfortunate that I was not permitted to question the witness as I
planned. As described below, I put a lot of thought and careful consideration into my
proffer prep. Ultimately, this proffer was not for the criminal authorities benefit but
rather for ours. I needed to get through a lot of material without highlighting the major
areas of concern. The areas that I sought to question SM on were not addressed in depth
or at all during the many interviews of the CW by the FBI and therefore, there was no real
concern that my questioning would lead to inconsistent statements. Further, whatever
case we end up with will in no way rely on SM’s credibility so far as I can envision at this
time. Therefore, I see no problem whatsoever with my questioning to the extent that I
needed to fill in some blanks or describe certain events in a certain way to get to the
information I needed.
I was certainly not trying to incriminate or entrap SM because to the extent my questions
were leading they related to historical background information at most. That said, Agent
McGuire’s reaction to my question was overwrought and overly dramatic as well. He was
overtly agitated. He was not willing to calmly discuss the situation. I do not agree that my
questions were leading or inappropriate given the circumstances described below. In
retrospect, I regret that we did not seek Roger or Jay’s input on this.
He would not have conducted himself in such a fashion had the AUSA been
present. Frankly his attitude and demeanor was very much reminiscent of his conduct
two years ago when I was not permitted to conduct the initial proffer of SM as I
intended. In this regard, FBI agents generally (and Thomas specifically) are known to be
notoriously over-protective of their witnesses.
My understanding is that the majority of cases that Thomas has worked on since we filed
SPNGE implicate SPNGE or an off-shoot of SPNGE. SM’s credibility is the center of all
this hard work and effort. Also, the evidence I’ve uncovered (and SM confirms) indicating
that it was largely members of the manipulation cartel that orchestrated and directed
much of the SPNGE fraud -- was not detected by the FBI despite having substantially more
access to the witness and the evidence.
Furthermore, in my view SM has largely corroborated my conclusions described below
that implicate racketeering, international money laundering, and organized criminal
enterprises. My guess is that the EDNY’s Organized Crime Unit will have some interest
in the evidence that I have developed. If the 0rganized Crime Unit takes over, Thomas
may lose control of “his” witness.
At some level, I’m pretty sure that is an issue that Thomas is (or will be) grappling
with. To be clear, I think Thomas is an excellent (albeit somewhat inexperienced agent)
and I certainly appreciate his support of my cases against the Romeros and Pensley. In no
way, whatsoever, do I question Agent McGuire’s dedication and integrity. That said, I
think it is naïve not to recognize that Thomas is not completely objective when it comes to
this case or SM and he should not be the decision-maker on any of this.
In this regard, I followed up with Thomas who told me that he has not (and does not)
intend to brief Roger (or Jay) on any of this before he departs for a six-week training
program next Tuesday.
Given that there are millions of dollars at stake and that IW/Double U are potentially
extremely dangerous men who seem to use threats of murder and coercion to get there
way, I do not think it is a good idea to wait until Thomas returns to raise this entire matter
with the EDNY.
Stay tuned.
03:11 EST PM
Talked with AK. Told him that I have lost trust and confidence in his ability to manage me or
my case. Told him that I believe that our personality disconnect precludes him from
acknowledging or appreciating my work.
I told him that once again after Thomas’ discourteous conduct towards me and his support
thereof, I felt once again that I was I was in a hostile room and I was not able to lead the proffer I
needed.
Told him if any adverse employment action is taken against me, I will not hesitate to hit send on
an OIG report as well as a retaliation email. I told him that obviously by telling him this I’m
once again trying to just work my case – hopefully with him but that I will not allow his personal
issues with me to impact my case negatively more. I am at my limit.
We are going to try to talk again later today and try again tomorrow. I think Alec is now in
agreement with me that we need to brief Toni. I am going to follow-up later.
June 26, 2012
MTF 1:30 to 04:30PM:
Met with Toni and AK: Toni did not review the dox sent to her in advance. I impressed upon
her my view of why it is important we move forward quickly on this. She wasn’t really
particularly interested in hearing the whole story. Cut me off; wanted to move on. I advised
that I only found out after the meeting scheduled with her that NYC had not sent our post-proffer
boxes back. Therefore I could not provide her with a presentation as I hoped since I could not
reinvent the wheel on what has occurred.
I insisted on forcing her to hear that I was concerned about SM status as potentially status as
potentially playing both sides of the fence. Told her that I thought the AUSA should have notice
that there is at least a potential that SM could be less than fully cooperative – and that there may
be OC involvement. And that I have real concern that IW/AB/CSH whomever could try to
reach out to try to bribe or threatened me, CN, or CD. Moreover, I questioned whether or not
there are certain procedures in place that we should get our arms around so that the proper
internal authorities can advise how such a circumstance should be handled.
I also made it clear that regardless of what we do with limited staff resources we must pass this
information on in the form of a TCR or whatever so that someone looks at and takes action on
what we have found.
Toni started to understand that she should take me seriously and did at least take a look at the
J:/Drive so I could show her the hundreds of emails at issue as well as the work done in advance
of the proffer that crystallized my research on all aspects of this fraud and my preliminary
conclusions.
She told me to not get “sick” and to not be so excited. When I mentioned that it was difficult to
convey a three year investigation to someone to whom I had not spoken directly to about my
case at all since approximately October 2010 and she denied that she had never spoken to me
about my case. She has never even talked to me alone about my case ever – until today.
Ultimately, she said she would look at what I have already sent to her and we agreed to meet
Monday. She said I should definitely take my 5-4-9 day because she didn’t want me to get
“sick” because I was over-excited. I told her several times that I had been up until 2:00 AM the
night before and that I had been working alone on this since before my June 1 vacation and
through it.
Subsequently, she came to my office by herself to give me something and I made the point of
apologizing to her to the extent that I seemed frustrated during our discussion. She then
proceeded to sit down and give me a lecture about “presentation” and how I should calm down
and be clearer about my evidence, etc. She basically reiterated everything mean thing Chris
Conte, Richard Grime, and Christine ever said to me. I suggested she not push me on this issue
since she has no idea what the big picture is of what has occurred on this case. She continued to
lecture me and then again asserted (falsely) that she had met with me plenty. Then she had the
nerve to tell me it wasn’t as if she had no recognized my work on this case – after all she
recommended me for a Director’s Award in the Fall of 2010. I reminded her that she
specifically told me at the time that she did not recommend me or the team and it had nothing to
do with her. I also later confirmed that it was Chris Conte and Charles who nominated me for
the Special Act Award. She really did not like that and walked out.
I tried to connect with her by asking her whether she ever had issues ever in getting people to
take her seriously during her career because she is a petite woman in a tough field. She
basically reacted as if I was trying to back her into some sort of employment discrimination
admission.
She is not anyone that will ever support anything I do or recommend. I do not now have any
more confidence in her ability to treat me fairly or to appropriately deal with my case and the
issues implicated by my report to her.
I think that she is now going to be wary of me and that I am probably on her short list. She
doesn’t however know what to do b/c she doesn’t want to be accused of not doing anything if
I’m right in my suspicions.
I told her that I don’t have the resources or the ability to wrap this up in a pretty package at the
moment and that we need to move forward now to at least give the EDNY notice of what is
going on.
I again tried to tell her that I am frustrated because no one has heard me all along on this case.
No one wants to hear anything for reasons that have absolutely nothing to do with doing the right
thing. That I had been raising red flags all along that everyone ignored and that had I been
supported we would have caught all this three years ago. Furthermore, despite her comments
about my presentation (which were accurate in some respects given the enormity of what I’ve
put together, her almost total lack of knowledge of the case, my discussion of yesterday with
AK, and the fact that I have been carrying this burden all alone, plus the fact that I didn’t have
any prep time, etc).
She has seen how much I’ve done. Her response is to try to make me feel like there is something
wrong with me and that I should be concerned about my ability to be successful in the Division
because of my
Demeanor and presentation.
I noted that despite my “demeanor” I had no problem making presentations before the Court, to
the U.S. ATTY., to the FBI, to the MCWG, to the District Court Judge for whom I clerked. And
further, that despite my “demeanor issues” (I know she got this from Conte, CN, Amy-Beth and
probably Cain) that I managed to complete a six month investigation by charging 7 defendants
including two attorneys, etc. I also noted that despite my “demeanor issues” and her view of my
“presentation skills” I had managed to successfully refer to so-called cooperators and Pensley by
myself without little to no supervisory support.
I do not believe that she can or will effectively, efficiently, and strategically manage me or my
case as I see it now. I am very concerned that she will not handle this appropriately because she
will be too busy making sure that she gets the credit if there is any to be had or making sure I get
the blame if there are any problems.
During our “chat” I also made it clear that to the extent she is giving lectures about my demeanor
that she doesn’ t know the whole story and she should hold off for now since getting into the
whole story would detract from the important work at hand --- getting the bad guys. Now, I
must go write a memo for her in which I am to provide her with evidence I do not yet have.
Last note: she tried to take credit for getting us a contract paralegal when in fact I did the work
to make that happen. I did point that out which she also did not particularly appreciate. This
was all in response to my assertion that I cannot do more than what I have already done to try to
put all this together. I need staffing and I need to get the criminal authorities in the loop.

Sent: Friday, June 22, 2012 5:55 PM
Subject: Confidential Update II [SPNGE]
Importance: High
I write to update the narrative below and to identify certain outstanding areas of concern.
First, after speaking with SM, I believe that my preliminary conclusions as set forth below
are largely accurate. I have inserted my comments as highlighted in bold below. I am less
convinced that SM is in active collusion with MM or other criminal elements. I note,
however, a number of inconsistencies in his statements.
In this regard, I think it is unfortunate that I was restrained from freely questioning the witness as
I planned. As described below, I put a lot of thought and careful consideration into my proffer
preparation. Ultimately, this proffer was not for the benefit of the criminal authorities but
rather for ours. I needed to get through a lot of material without highlighting the major areas of
concern to the witness. To the extent my questions were leading, they related to historical
background information at most. Also, the areas that I sought to question SM on were not
addressed in depth or at all during the many interviews by the FBI and therefore, there was no
real concern that my questioning would lead to inconsistent statements. The MOI notes of this
particular proffer are not material to me or in my view to any case we bring going
forward. Moreover, I do not envision that whatever case we ultimately end up with will in hinge
upon SM’s credibility.
Furthermore, in my view SM has largely corroborated my conclusions described below that

implicate racketeering, international money laundering, and organized criminal enterprises. My
guess is that the EDNY’s Organized Crime Unit will have some interest in the evidence that I
have developed
In this regard, I followed up with Thomas who told me that he has not (and does not) intend to
brief Roger or Jay on any of this before he departs for an approximate six-week training program
next Tuesday.
Given that there are potentially millions of dollars at stake and that IW/Double U are potentially
extremely dangerous men I do not think it is a good idea to wait until Thomas returns to raise
this entire matter with the EDNY. Among other things, it may be that the Organized Crime Unit
of the EDNY will have an active interest (or investigation) in all this. It’s also certainly possible
that there is an ongoing, active investigation of the persons and entities of interest to us. If so,
Thomas would not be in a position to necessarily know of such an investigation.
If the EDNY is not interested in pursuing this angle, I recommend that we talk to the District of
New Jersey.
We should plan to talk to Matt Beck in any case to update him on the IW/JH Darbie piece as well
as on some of what we’ve learned about Gellis and related entities.
Lastly, given the possible organized crime component of this investigation I think there may be
special issues to consider related to the personal security of the staff that investigates such a
matter. Indeed, we now know that Isaac Winehouse and Bokchin hired investigators to
investigate me and other members of the staff. According to SM, the investigative reports were
circulated among many of the participants in the fraud. This is a concern to me and I wonder if
there are any procedures or policies in place to protect or assist staff in conducting this type of
investigation.
Thanks,
Uta
July 12, 2012: MTF
MTF:
After the negative initial meeting with Toni, we met again that Friday, July 3. Toni was actually
kind and told that she and AK were there to help and support me. I was struck by the fact that I
could not even remember the last time that a direct manager was actually kind to me.
The meeting was brief. I again tried to present the big, picture but it’s extremely difficult to do
because the entire case is a complex web of interrelated persons, entities, and connections.
I told Toni that I was working with Dan Koster to try to use the links analysis to help with the
presentation of such a complex case.
I reiterated that I thought it was urgent to go to the AUSA asap with the information I’ve
adduced thus far. Toni and Alec disagreed. Rather Toni requested that a binder be prepared
that focuses on the discrete time frame reflected in the spreadsheet I prepared in advance of the
proffer.
She asked me to draft an Executive Summary of everything that I have put together and a memo
identifying my concerns about the inconsistent and possibly false proffer statements by SM.
It was not a horrible meeting; Toni was nice and not in my view, unreasonable. However, given
that she knows nothing about my case or my role on the case (apparently AK never filled her on
my hard won, successful referral of Pensley to the EDNY for criminal prosecution).
AK also wanted us to obtain wire transfer info from JH Darbie.
I assumed that SS could easily pull data from existing spreadsheets that he has created and
controls into the current spreadsheet reflecting the JH Darbie data.
Toni did agree to my strong recommendation that we contact EDNY right away to inform of the
investigations into the staff’s backgrounds by persons other than SM/MM that appear to be
members or organized criminal enterprises.
I was on vacation from the 4th through the 5th. We scheduled the call to Jay on the 5th and I
advised him of the new evidence and of our basic concerns. I told Jay that I was concerned
about SM’s status as a true cooperator. Thomas apparently told Jay that there was no new
information about the background investigations, etc. I explained to all that there was in fact
new evidence. I had to follow-up on the call with certain emails for Jay.
I have strong concerns that Thomas will be extremely resistant to the new evidence and my
current view of the big picture case. It is obvious to me that AK will likely support Thomas
versus me. In this regard, I told AK before my vacation of Thomas’ unprofessional and
disrespectful conduct towards me during the first proffer (when I had to prepare alone), the two
days I spent alone with him on Pensley and the Romeros) and again his conduct at the recent
proffer. I told AK that I will not allow Thomas to speak to me this way again regardless of
AK’s support or lack thereof.
While technically on vacation, I spent most all my free time continuing to link persons, places
and things. I’ve linked Clearview, Shifra Winehouse, Advisor’s Associates, the Weiss Family
Trust going back as early as 2006. I have also connected a known bad guy Moshi Kraus to the
Double U gang. I did all of this while on vacation. I intended to write all that up on Monday,
July 9. I separately worked on an ongoing basis with Dan Koster – who is apparently the only
person who understands the urgency of this piece of the investigation – and he doesn’t even work
with me.
Yesterday, however, it became necessary to write a huge to-do list – particularly as I slowly
realized that no one seems to be working on this but me. The to-do list took me all day –
particularly given the critical feed-back from Toni apparently emphasizing form over substance.
I also tried to get Ak to move on the paralegal. Today I forced the issue by pointing out that this
process began more than a month ago and we have not even a resume as yet. We called together
but still no resume.
__
I’ve also been following up with exam staff to get material info we need now. In addition, I’m
trying to gather more evidence on the TA’s financial motive as proffered by SM. So far there is
no evidence to support his proffer in this regard. However, AK is not supporting more than a
cursory review of SPNGE accounts and apparently no in-depth review of the accounts was ever
completed.
Today, while whittling down by third version of the to-do list I slowly came to understand that
absolutely no one has been asked to focus on this phase of this investigation. In other words, the
only dedicated staff is me. AK is not asking Scott or Charles to do any dedicated work on this.
Moreover, he will not even allow our group intern to assist me (a fact I previously suspected but
only confirmed by AK just now). Basically, it seems that AK thinks I should do all the
substantive and ministerial work that will be needed – before –we can even tell the OAUSA
anything. When I ask for assistance, AK volunteers to do it if I can’t. however, he is busy with
his 900 other cases so his assistance is sporadic at best. So far they have not even called JH
Darbie to get the wire info.
In this regard, today after much perseverance I was able to obtain account records from JH
Darbie showing all open accounts at the time of their exam. I did not have the time to search
through all the spreadsheets for relevant accounts and asked for assistance. AK said he would do
it. Unfortunately, since he doesn’t know most of the relevant accounts I had to do it. It turns out
all the suspect players/bad guys associated historically with Double U; Winehouse are all at JH
Darbie. This includes Moshe Kraus, the Bessie Weiss trust (clearview, Shaolom Weiss).
I told AK that I thought we should obtain all account opening statements on all known accounts,
as well as dates of opening, closing, as well as all balances on date of closing or as of now. In
addition to the above noted suspect accounts, I now have identified several other previously
unknown Double U funds. Also it seems most of the primary cartel members are with JH
Darbie still. I asked AK assign someone to do a thorough breakdown of the spreadsheet
including by name, address, etc.
I explained that my concern is that we identify as soon as possible how much money is in those
accounts associated with these highly suspect accounts. Obviously we do not want to lose what
may be our only opportunity to get this info before JH Darbie figures out what is going on and
ceases to cooperate. In my view, we need to quickly identify the suspect account so that we can
go in and freeze them if necessary or give the OAUSA the info so that they can initiate forfeiture
proceedings if possible.
AK does not want to request all the info with respect to all the accounts that I have already
identified as being controlled by bad actors, etc. I disagree with his decision. In discussing this
issue, I learned for the first time that neither AK or Toni intend to staff this case at all until after I
apparently do all substantive and ministerial work entirely by myself with AK’s occasional
assistance.
I directly told him that the decision to wholly decline to provide me any dedicated support –
including even an intern – is outrageous under these circumstances. How he and/or Toni could
not find two or three bodies in this entire AD group that could assist on this is beyond me.
I find this appalling and told him so. If they are not going to support this phase of the
investigation, then they obviously don’t care about moving this forward quickly as I have already
been working around the clock on this for weeks. Alec now claims that Toni did not tell me to
write an executive summary or a memo summarizing my concerns about SM’s cooperation. He
thinks instead I should be preparing the binder myself, doing all the related work, updating the
spreadsheet with more information from existing spreadsheets that I did not create or maintain,
while simultaneously trying to absorb and memorialize the latest result of my research over the
past week which is important.
His issues with me are entirely impacting his ability to make good decisions on this case in my
view. This last conversation basically ended with us yelling at each other. This is not a good
situation for me and I am increasingly concerned about retaliation possibilities. The more
important issue, however, is that the case is continuing to be mismanaged and I will have to seek
assistance from Senior Management.
AK just came in and told me that he now will agree to ask JH Darbie for the accounts that I have
now additionally identified. It only took us two hours and three screaming arguments to get
there.
This is just not right. In response to his question, I told him that I intended to continue to try to
put together the results of my investigation over the past week, and start writing an executive
summary for Toni addressing the SM issues as well.
We are now supposed to be calling JH Darbie tomorrow morning. I told him that I will be
working at home...
Note: It is getting increasingly difficult to even come into the office. The issues with AK are
never ending and soul-sucking. The work is the only thing that keeps me going at this point.
And my need to get the bad guys.
SEE PERFORMANCE NARRATIVE. WHAT’S LEFT OUT IS CONF I-11 AND THE FALL OUT
FOR WHICH I AM STILL PAYING THE PRICE --REEATIL

Sent: Monday, July 23, 2012 8:42 PM
To: Chion, Antonia
Cc: Koch, Alexander; Kisslinger, Paul; von Eckartsberg, Uta
Subject: RE: Confidential Update III [SPNGE] [ORG.CRIME WALL STREET CONGRESSIONAL STMT
WALKER 2000
Toni,
Since we last met, I have continued to investigate this matter and have adduced new
evidence which I have summarized below. Among other things, we now have reason to
believe that the manipulation cartels, some of whom have apparent links to organized
crime, made millions of dollars in the Spongetech fraud and conducted this activity
through accounts held at the brokerage firms Sloan Securities, J.H. Darbie and Blue
Trading, likely with those firms’ knowledge and complicity.
Moreover, the evidence suggests that this illegal activity continued at JH Darbie through at
least early 2011 and that it may well continue today. Accordingly, I recommend that we
reach out to the criminal authorities now to give them as much information as we know.
The back-up documentation for this email is saved at the following file path: J:\HO-10700 to
HO-11199\HO-11156\INVESTIGATIVE FILES\INVESTIGATIVE WORKING
PAPERS\PHASE II INVESTIGATIONS\Staff work product - data, memos,spreadsheets,
etc\Proffer Prep\June 2012 PROFFER PREP\Back-up.
A summary of the current status follows.

Summary Update
First, as noted above, we now have evidence indicating that many parties involved in the
Spongetech fraud have (or recently had) accounts at JH Darbie, and that many of these
parties have apparent links to organized crime. Specifically, last week OCIE provided us
with a spreadsheet of all of JH Darbie’s customer accounts as of its 2011 exam. A
preliminary review reveals that many of the primary members of the manipulation cartel
including, but not limited to, Apolant, Shaw, Double U, Clearview and other parties related
to either Clearview and/or Double U all had accounts at JH Darbie as of early 2011 – more
than one year after we filed SPNGE. In addition, we now know that other participants in
the Spongetech fraud have (or recently had) accounts at JH Darbie; and many of these
parties are recidivists involved in other SEC investigations. There is evidence that the
parties of interest may have funneled money illegally through JH Darbie (with its
knowledge and complicity) since at least 2009. Including,
MAREK
IMFELD/LUGO/HERNANDEZ
And, as you know, the evidence is that that Double U threatened JH Darbie representatives
during the Spongetech fraud; and given that Double U and many-related entities/persons
continued (and may continue) to conduct business with JH Darbie, it is possible that JH
Darbie is currently controlled or influenced by organized crime.
In this regard, with respect to SPNGE, the transfers of shares and money occurred in the
context of an ongoing, illegal scheme to distribute shares in unregistered transactions when
no safe harbor applied and there was no applicable exemption available. In my view, given
the new evidence of post-SPNGE accounts at JH Darbie, it is not unlikely that this illegal
conduct continues with respect to other penny stocks.
Many of the SPNGE beneficiaries/parties, including Double U, have come up in prior or ongoing
SEC investigations. To the extent that the SPNGE-related accounts are still at JH Darbie, we
may have a window of opportunity to recover perhaps millions of dollars due to injured investors
for the reasons described below. In my opinion, this scenario triggers a need for urgent action of
some sort. Before deciding on next steps, however, we need to decide who will take the lead –
us or the DOJ.
Second, we now have additional evidence that supports my preliminary conclusion that the
SPNGE-related Clearview account controlled by Double U is the same account described in
US v. Wiesz et al., CR 06-775(A) (EDNY) (2007) (http://www.pgdc.com/pgdc/religious-
leader-and-others-indicted-charitable-contribution-scheme-other-tax-
fraud). Weisz involved a wide-ranging conspiracy to defraud U.S. governmental agencies, to
operate a money transfer system, and to launder money through Israeli banks via a charitable
contribution scheme using Spinka nominee accounts, including Clearview International
Investments located at BH-Bnei Brak, Israel.
The charitable contribution scheme was orchestrated by the Spinka which is a religious group
within Orthodox Judaism. The Wiesz defendants included Rabbis and other highly respected
members of the Spinka rebbes. The Spinka rebbes live in Brooklyn and Israeli branches are
found in Jerusalem and Bnei Brak, Israel. Double U-controlled accounts Pentium and Brasshorn
are located at the same address in Jerusalem, while Clearview is in Bnei Brak. In order to flesh
out the suspected link between the Double U gang, Weisz, and Clearview, I focused on linking
Double U to the Spinka rebbes. Note, that during the recent proffer, SM denied knowing
whether any of the Double U gang were members of Spinka and that any Spinka member was
associated with the SPNGE fraud. SM also denied knowing of any Double U or other SPNGE
connections to Sholam Weiss, a former American businessman and convicted
felon. (See http://en.wikipedia.org/wiki/Sholam_Weiss).
My research indicates otherwise:
● IW and certain of his associates were linked to the Clearview account as early as
2004 per various filings made with the Commission – three years before Weisz was
filed.
●In each instance where the Clearview account is referenced in a filing, IW and
Double U are also involved. Also, in each instance the “Bessie Weiss Family
Partnership” and other individuals with the “Weiss” surname (associated with the
Brooklyn Spinka rebbes) are also referenced in that filing; as are other Double U
associates including, but not limited to, Shifra Winehouse, Advisors Associates, and
Moshi Kraus, Esquire. Each of the latter related parties has been linked to various
regulatory and criminal investigations and cases.
●Moreover, Sholam Weiss (pre-incarceration) is also an IW associate – including in

connection with the SC & T mob case described in below in Confidential Update I.
●As noted above, at my request, OCIE provided us with a spreadsheet of all of JH

Darbie’s customer accounts as of its 2011 exam and we now know that Double U,
Clearview and other parties related to either Clearview and/or Double U all had
accounts at JH Darbie as of early 2011 – more than one year after we filed SPNGE.
`
●In my opinion, given the longstanding connections between Winehouse, members
of the Spinka rebbe, and Clearview it is not unlikely that he and his associates are
possibly unindicted co-conspirators in Weisz.
● The EDNY prosecuted Weisz and may therefore have an interest (and a basis) for
immediate action with respect to the Clearview account .
Third, I believe that I have now identified the group that in my view orchestrated the SPNGE
fraud from pump through dump – including by arranging for dirty attorneys (Pensley and
Halperin), dirty TAs (OM (Pensley) and WWST (Gellis), and several of the dirty brokers (Sloan,
BT, and JH Darbie) (Gellis)). Specifically, the evidence leads me to conclude that this
scheme was or orchestrated by Steve Apolant and that the genesis of this scheme can
be traced back to Hackensack, NJ and Apolant circa 1998. Indeed, Gellis (and other
current JH Darbie reps) managed SPNGE customer accounts (i.e., Pensley, Acacia) at
Sloan Securities (another NJ brokerage) as early as 2005 which well predated Gellis’ first
meeting with SM in 2009.
Fourth, the historical evidence supports the conclusion that there was another primary cartel
member – SM. Specifically, the SM group included the Romero Gang (the Romeros and all
their DE associates who got shares in return for touting and/or manipulating the stock) and
the MicroPipe group (headed by Howard Salmon. The group also included Steve Hess,
Alan Palmer (“Mingy”) and others – most of whom (among other things) inundated the
stock message boards touting SPNGE. Note, that of all the cartel groups, it appears that it
was only SM’s group that led the highly successful effort to tout the stock online.
MAREK
Fifth, I have now identified additional evidence that gives me additional concern about some
of SM’s proffer statements and the status of his cooperation. This information must be
communicated to the EDNY as soon as possible because we now have more reason to
suspect that SM’s ties to members of the cartel including, but not limited to, IW/Double U
are perhaps ongoing and significantly more extensive than what he has admitted to. If so,
then Winehouse, JH Darbie, and others could know what we are looking for and who we
are looking at, and thus the staff is potentially in jeopardy. I can provide additional detail
when we meet.
Sixth, in the late 1990s through the early 2000’s, the SEC and the DOJ launched a coordinated
attack against Mob infiltration on Wall Street which was running rampant at that time. (See
attached, September 13, 2000, Congressional Statement of Richard Walker). Indeed, many of
the SPNG group of fraudsters, including most of the primary cartel members (Double U Gang,
Apolant, Nicolois and Cavanagh), were indirectly or directly implicated in some of the seminal
Mob/Wall Street civil and criminal cases filed during the joint DOJ/SEC targeted attacks.
In my view, the SEC and the DOJ accomplished what they set out to do at that time – stop (or at
least slow down) mob infiltration of Wall Street. In the intervening years, however, it seems
that the organized crime factions may have regrouped and reorganized as demonstrated by the
instant case. If so, this case presents us with an opportunity to step in and stop what may well
be the next wave of Mob-infiltration on Wall Street. In this regard, we are in a position
(assuming this investigation is staffed) to give the AUSA several hooks for immediate action if
necessary.
Specifically, for instance, we can provide the OUSA evidence to support the following criminal
actions:
Section 5 (criminal)
Given the historical work on this case, we are uniquely positioned to give the criminal
authorities evidence to support criminal section 5 cases against many of the 200 +
beneficiaries of the attorney opinion letters. Indeed, such an action would be a coup for the
Commission given that many of the beneficiaries – including the largest beneficiaries/cartel
members – are recidivists (e.g., Apolant, Kaplan, Shaw) or known stock promoters who
have historically proved too slippery to catch (i.e., Winehouse, Double U funds, Kramer).
While criminal prosecutors routinely shy away from criminal section 5 cases, they often do
so because they believe that the typical Section 5 case is too complicated for jury
presentation. Arguably, this is an accurate assessment given the numerous exemptions,
safe harbors, etc., that typically come into play in such cases.
This case, however, could be an excellent vehicle for a large-scale joint enforcement action
against micro-cap fraud given that the beneficiaries of the forged opinion letters are resellers who
did not receive shares via a primary distribution. Under a reseller theory of liability there are
only three possible exemptions available to the beneficiaries (Sections 4(1), 4(1 ½), and 4(2) of
the Securities Act), but under the facts of this specific case, it is highly unlikely that any of the
primary beneficiaries could successfully claim one of the three exemptions. Furthermore, under
a reseller theory the beneficiary of the shares in presumed to have sold the shares into the market
upon receipt, so there is no burden of proof in this regard.
As you know, the effort to combat microcap fraud is a strong priority of this Division and of our
Chairman. Of late, the programmatic interest in fighting such conduct has increased given the
recent passage of The Jobs Act as well as in light of the recent controversy regarding the
continued viability of Rule 504 Section 5 cases.
Parallel Section 5 actions targeting the primary cartel members, the largest beneficiaries, and
recidivists would be a powerful sword in the Commission’s war against microcap
fraud. Certainly to the extent that this investigation also implicates the reemergence of mob
infiltration on Wall Street, a targeted action would also be of major programmatic importance.
Moreover, under these facts there is very little litigation risk for the criminal authorities (or
for us) because the only mens rea element for which the AUSA bears the burden of prove is to
demonstrate beyond a reasonable doubt that the defendant “knew” that the securities were not
registered and not exempt when sold. Here, in almost every instance we have already obtained
or can easily find evidence (i.e., emails, certain witnesses, etc.) that demonstrates beyond a
reasonable doubt that the primary beneficiaries in question knew the securities transactions were
unregistered and not exempt. Such evidence also demonstrates the “red flags” typically required
for Commission authorization of a Section 5 action. Consequently, in my opinion, such a joint
action would involve relatively little litigation risk. In fact, my guess is that the defendants
would be knocking each other down in order to be the first in line for a deal.
False Statements/Obstruction
In addition, regardless of whether or not we pursue the above suggested course of action,
we can give interested AUSAs a solid basis for search and/or arrest warrants and probably
indictments in connection with certain of the primary parties of interest with respect to
potential criminal actions for false statements and/or obstruction.
●Gellis (D.NJ): During SM’s recent proffer, he described payments being made to
the transfer agents for each transaction, thereby providing a financial motive for the
transfer agents’ conduct that presumably can be easily corroborated. Assuming
this information is corroborated, then Gellis blatantly lied to the FBI during an
official interview conducted as part of the New Jersey criminal investigation of
Gellis; and made similarly false statement directly to me in writing in response to
our subpoena.
●Rabinowitz and Yarmish: Both made false statements regarding the relationship
between the Double U, Brasshorn, Pentium, and Clearview accounts to OCIE staff
that are directly contradicted by email and other evidence. These false
representations materially obstructed the SEC inquiry and investigation. I have
reached out to OCIE to obtain the staff’s notes of the interviews.
●Brian Mitchell (current COO of NavPoint formerly Blue Trading): Mitchell has
made blatantly false statements to me repeatedly in emails related to our subpoena
to Navpoint. For various reasons I can address in person, I think it is possible that
Mitchell is being influenced and/or threatened by an organized criminal faction
(and/or Double U).
●Chis Bruderman: Bruderman ignored our subpoena of April, 2012. He is in the

middle of the dump phase of the case in almost every possible aspect. Bruderman is
already part of the EDNY’s criminal case and is potentially a valuable source of
information regarding the principal cartel members, including Double U.
●Metter: The evidence linking MM to market manipulation and the Double U

gang, will provide the EDNY with several options. For instance, they may seek a
new search warrant and recover the electronic evidence MM has successfully
suppressed. Alternatively, we can probably give them (or direct them to) evidence
sufficient to support an arrest warrant and a superseding indictment against MM.
Tax Fraud
●The Double U Gang: Weisz was a tax fraud case and it is likely that the current
conduct relating to the Clearview account also implicates tax fraud. Moreover, my
review of various public records indicates that Bokchin, Winehouse and certain of their
associates all have federal and/or state tax liens, etc. The criminal tax agent on SPNG is
very aggressive and good.
Potential Witness/Informant (JH Darbie/Apolant)
●Michael Krome: In response to my inquiry of the MCWG, Josh Felker told me that
he had just concluded a proffer with Krome an attorney/defendant on June 26. Krome
proffered some information on Apolant. Last week, we learned that Krome also had an
account at JH Darbie as of early 2011. Accordingly, it is possible that that he is a
member of the Apolant/Schaeffer group and that he was directed to JH Darbie by Apolant
(and Schaeffer) for reasons of interest to us and to the criminal authorities. Josh offered
to make this CW available to us upon request. The AUSA on that case has offered to
give Krome a Rule 35 reduction in sentence if he can provide useful information to the
SEC. us.
Conclusion
The evidence indicates that the members of the SPNGE manipulation cartels, some of
whom have documented links to organized crime, have made millions of dollars using
accounts at JH Darbie to participate in the Spongetech fraud and other securities scams,
likely with JH Darbie’s knowledge and complicity. Furthermore, we have reason to believe
that millions of dollars’ linked to the cartels have been funneled to accounts in Israel by
and through JH Darbie (with its knowledge and complicity) since at least 2009 – and that
such conduct may be ongoing.
In my opinion, this evidence triggers a need for urgent action of some sort. Before
deciding next steps, however, we need to apprise and consult with the criminal
authorities.
With respect to next steps, in my view, is imperative that we be cognizant of the fact that
our actions may limit options for the criminal authorities. We may have already taken
actions that may have impacted our ability to recover evidence from JH Darbie. For
instance, we have subpoenaed JH Darbie, Blue Trading, associated brokers, Worldwide
Stock Transfer (the transfer agent owned by Gellis), and its employees. Moreover, we
have reached out to JH Darbie repeatedly regarding specific accounts including, but not
limited to the Double U accounts. In some instances, we have been fairly pointed in our
inquiries.
Certainly there is reason to be concerned that if JH Darbie figures out what we are looking at, it
may well destroy any incriminating evidence. Indeed, JH Darbie is stalling on responsive
production by not giving us any information likely to be incriminating (e.g., detail re: trading
blotters, wire transfers) indicates to me they may well be stalling to buy themselves time to
conceal or destroy evidence (original return production date was mid-April). As noted above, I
now have less trust in SM’s discretion about the recent proffer which focused on Double U and
related parties.
I recommend that we brief the criminal authorities with what we know now – irrespective of
our ability to make a polished presentation at this time. I am fully prepared to lead a
telephone call or an informal meeting with the criminal authorities to get them up to
speed. In addition, Alec and an intern have conflated several of my historical spreadsheets
and chronologies into one comprehensive document focused on Double U and the
Hackensack-related phase of the dump. Also, Scott has incorporated his analysis of
Double U-related trading activity during the relevant time period into the comprehensive
document. We are also preparing a binder of significant Double U-related emails based
upon the spreadsheet that I prepared in advance of the SM proffer.
Once I come to a more final conclusion as to how the parties/entities/groups are linked, Dan
Koster has kindly offered his ongoing assistance to aid me in preparing a links analysis-based
chart which will be immensely helpful.
Please let us know when you are available to discuss.
Thanks,
Uta
MTF: July 24, 2012 F:\2013 employee stuff\HISTORICAL MAT INFO
I sent confidential update III to Toni last night at 9 PM I was here again that late. Today the
binder the intern was supposed to prepare was a complete mess and now AK wants to make yet
another binder of the hot dox in the first hot dox binder. I just spent the entire day on my own
and with AK going through the binder for Toni to identify what hot dox for Toni.
I asked AK what Toni’s response was and he said she was “overwhelmed” and that what I gave
her wasn’t what she was expecting, i.,e, a polished presentation.
AK apparently told her something like we are trying to put binders together while Uta is
investigating. This is BS. I have been working around the clock since I last met Toni as
demonstrated by the zillion emails and MTF. I cannot conduct the ongoing primary
investigation entirely on my own while simultaneously putting together presentations also by
myself with AK’s (by necessity) limited participation. I only had intern assistance for two days
in the past two weeks.
Bottom line is, he didn’t tell her (or at least reiterate what was in the email), specifically, as a
result of my round-the-clock hard work I have identified more links between CLR and
Weisz. Realized that all potential defendants are now gathered in one place – JH
Darbie. And that Darbie is likely controlled by Organized crime and that millions of dollars
potentially due injured investors in our case are probably continuing to be funneled overseas by
the cartel/organized crime factions.
I’ve put together evidence of a mass conspiracy by myself over the past 6 weeks and all anyone
cares about is a binder – but no one will dedicate staff resources to this investigation. AK
will not stand up on this point with Toni. He thinks I should do it all alone quickly. I’m
exhausted. Six weeks of this is enough already. And despite the overwhelming evidence to the
contrary, AK continues to undermine my belief based on years of intensive scrutiny and
investigation, that SM is lying. Ak’s stated belief is based on his instinct. Period. He admits
that he has not conducted any independent investigation relating to SM at all.
He would rather I play secretary/paralegal for the group than put together my own evidence for
whatever presentation we make. Moreover, to the extent he keeps contradicting me on SM, I
will have to finish the memo Toni requested describing the basis for my view of SM’s proffers
statements. AK doesn’t want me to do this but I don’t see that I have a choice.

Subject: MTF
I sent confidential update III to Toni last night at 9 PM I was here again that late. Today the
binder the intern was supposed to prepare was a complete mess and now AK wants to make yet
another binder of the hot dox in the first hot dox binder. I just spent the entire day on my own
and with AK going through the binder for Toni to identify what hot dox for Toni.
I asked AK what Toni’s response was and he said she was “overwhelmed” and that what I gave
her wasn’t what she was expecting, i.,e, a polished presentation.
AK apparently told her something like we are trying to put binders together while Uta is
investigating. This is BS. I have been working around the clock since I last met Toni as
demonstrated by the zillion emails and MTF. I cannot conduct the ongoing primary
investigation entirely on my own while simultaneously putting together presentations also by
myself with AK’s (by necessity) limited participation. I only had intern assistance for two days
in the past two weeks.
Bottom line is, he didn’t tell her (or at least reiterate what was in the email), specifically, as a
result of my round-the-clock hard work I have identified more links between CLR and
Weisz. Realized that all potential defendants are now gathered in one place – JH
Darbie. And that Darbie is likely controlled by Organized crime and that millions of dollars
potentially due injured investors in our case are probably continuing to be funneled overseas by
the cartel/organized crime factions.
I’ve put together evidence of a mass conspiracy by myself over the past 6 weeks and all anyone
cares about is a binder – but no one will dedicate staff resources to this investigation. AK
will not stand up on this point with Toni. He thinks I should do it all alone quickly. I’m
exhausted. Six weeks of this is enough already. And despite the overwhelming evidence to the
contrary, AK continues to undermine my belief based on years of intensive scrutiny and
investigation, that SM is lying. Ak’s stated belief is based on his instinct. Period. He admits
that he has not conducted any independent investigation relating to SM at all.
He would rather I play secretary/paralegal for the group than put together my own evidence for
whatever presentation we make. Moreover, to the extent he keeps contradicting me on SM, I
will have to finish the memo Toni requested describing the basis for my view of SM’s proffers
statements. AK doesn’t want me to do this but I don’t see that I have a choice.

Sent: Thursday, July 26, 2012 7:24 PM
Cc: Mariatatiana38@gmail.com
Subject: MTF Confidential Update III [SMAIL]
MTF: TC came by just now to ask if I was in to discuss the email tomorrow. She said that she
didn’t want me to think that she was not paying attention to my email. She wants to ensure that
I am not “losing my focus.” I’m out tomorrow but offered to call in if she wanted to call the
criminal authorities. She wants to wait until we have a binder for her. Said we would get it to
her early next week. Ak has been helping me this week.

Sent: Wednesday, August 08, 2012 5:31 PM
To: Koch, Alexander
Subject: FW: Confidential Update III [SPNGE]
PRIMARY POINTS OF CONFIDENTIAL UPDATES 1-111 TO COMMUNICATE TO

TC ARE HIGHLIGHTED IN BOLD

Sent: Monday, July 23, 2012 8:42 PM
To: Chion, Antonia
Cc: Koch, Alexander; Kisslinger, Paul; von Eckartsberg, Uta
Subject: RE: Confidential Update III [SPNGE]
Toni,
Since we last met, I have continued to investigate this matter and have adduced new
evidence which I have summarized below. Among other things, we now have reason to
believe that the manipulation cartels, some of whom have apparent links to organized
crime, made millions of dollars in the Spongetech fraud and conducted this activity
through accounts held at the brokerage firms Sloan Securities, J.H. Darbie and Blue
Trading, likely with those firms’ knowledge and complicity.
Moreover, the evidence suggests that this illegal activity continued at JH Darbie through at
least early 2011 and that it may well continue today. Accordingly, I recommend that we
reach out to the criminal authorities now to give them as much information as we know.
The back-up documentation for this email is saved at the following file path: J:\HO-10700 to
HO-11199\HO-11156\INVESTIGATIVE FILES\INVESTIGATIVE WORKING
PAPERS\PHASE II INVESTIGATIONS\Staff work product - data, memos,spreadsheets,
etc\Proffer Prep\June 2012 PROFFER PREP\Back-up.
A summary of the current status follows.
Summary Update
First, as noted above, we now have evidence indicating that many parties involved in the
Spongetech fraud have (or recently had) accounts at JH Darbie, and that many of these
parties have apparent links to organized crime. Specifically, last week OCIE provided us
with a spreadsheet of all of JH Darbie’s customer accounts as of its 2011 exam. A
preliminary review reveals that many of the primary members of the manipulation cartel
including, but not limited to, Apolant, Shaw, Double U, Clearview and other parties related
to either Clearview and/or Double U all had accounts at JH Darbie as of early 2011 – more
than one year after we filed SPNGE. In addition, we now know that other participants in
the Spongetech fraud have (or recently had) accounts at JH Darbie; and many of these
parties are recidivists involved in other SEC investigations. There is evidence that the
parties of interest may have funneled money illegally through JH Darbie (with its
knowledge and complicity) since at least 2009. Including,
MAREK
And, as you know, the evidence is that that Double U threatened JH Darbie representatives
during the Spongetech fraud; and given that Double U and many-related entities/persons
continued (and may continue) to conduct business with JH Darbie, it is possible that JH
Darbie is currently controlled or influenced by organized crime.
In this regard, with respect to SPNGE, the transfers of shares and money occurred in the
context of an ongoing, illegal scheme to distribute shares in unregistered transactions when
no safe harbor applied and there was no applicable exemption available. In my view, given
the new evidence of post-SPNGE accounts at JH Darbie, it is not unlikely that this illegal
conduct continues with respect to other penny stocks.
Many of the SPNGE beneficiaries/parties, including Double U, have come up in prior or ongoing
SEC investigations. To the extent that the SPNGE-related accounts are still at JH Darbie, we
may have a window of opportunity to recover perhaps millions of dollars due to injured investors
for the reasons described below. In my opinion, this scenario triggers a need for urgent action of
some sort. Before deciding on next steps, however, we need to decide who will take the lead –
us or the DOJ.
Second, we now have additional evidence that supports my preliminary conclusion that the
SPNGE-related Clearview account controlled by Double U is the same account described in
US v. Wiesz et al., CR 06-775(A) (EDNY) (2007) (http://www.pgdc.com/pgdc/religious-
leader-and-others-indicted-charitable-contribution-scheme-other-tax-
fraud). Weisz involved a wide-ranging conspiracy to defraud U.S. governmental agencies, to
operate a money transfer system, and to launder money through Israeli banks via a charitable
contribution scheme using Spinka nominee accounts, including Clearview International
Investments located at BH-Bnei Brak, Israel.
The charitable contribution scheme was orchestrated by the Spinka which is a religious group
within Orthodox Judaism. The Wiesz defendants included Rabbis and other highly respected
members of the Spinka rebbes. The Spinka rebbes live in Brooklyn and Israeli branches are
found in Jerusalem and Bnei Brak, Israel. Double U-controlled accounts Pentium and Brasshorn
are located at the same address in Jerusalem, while Clearview is in Bnei Brak. In order to flesh
out the suspected link between the Double U gang, Weisz, and Clearview, I focused on linking
Double U to the Spinka rebbes. Note, that during the recent proffer, SM denied knowing
whether any of the Double U gang were members of Spinka and that any Spinka member was
associated with the SPNGE fraud. SM also denied knowing of any Double U or other SPNGE
connections to Sholam Weiss, a former American businessman and convicted
felon. (See http://en.wikipedia.org/wiki/Sholam_Weiss).
My research indicates otherwise:
● IW and certain of his associates were linked to the Clearview account as early as
2004 per various filings made with the Commission – three years before Weisz was
filed.
●In each instance where the Clearview account is referenced in a filing, IW and
Double U are also involved. Also, in each instance the “Bessie Weiss Family
Partnership” and other individuals with the “Weiss” surname (associated with the
Brooklyn Spinka rebbes) are also referenced in that filing; as are other Double U
associates including, but not limited to, Shifra Winehouse, Advisors Associates, and
Moshi Kraus, Esquire. Each of the latter related parties has been linked to various
regulatory and criminal investigations and cases.
●Moreover, Sholam Weiss (pre-incarceration) is also an IW associate – including in

connection with the SC & T mob case described in below in Confidential Update I.
●As noted above, at my request, OCIE provided us with a spreadsheet of all of JH

Darbie’s customer accounts as of its 2011 exam and we now know that Double U,
Clearview and other parties related to either Clearview and/or Double U all had
accounts at JH Darbie as of early 2011 – more than one year after we filed SPNGE.
`
●In my opinion, given the longstanding connections between Winehouse, members
of the Spinka rebbe, and Clearview it is not unlikely that he and his associates are
possibly unindicted co-conspirators in Weisz.
● The EDNY prosecuted Weisz and may therefore have an interest (and a basis) for
immediate action with respect to the Clearview account .
Third, I believe that I have now identified the group that in my view orchestrated the SPNGE
fraud from pump through dump – including by arranging for dirty attorneys (Pensley and
Halperin), dirty TAs (OM (Pensley) and WWST (Gellis), and several of the dirty brokers (Sloan,
BT, and JH Darbie) (Gellis)). Specifically, the evidence leads me to conclude that this
scheme was or orchestrated by Steve Apolant and that the genesis of this scheme can
be traced back to Hackensack, NJ and Apolant circa 1998. Indeed, Gellis (and other
current JH Darbie reps) managed SPNGE customer accounts (i.e., Pensley, Acacia) at
Sloan Securities (another NJ brokerage) as early as 2005 which well predated Gellis’ first
meeting with SM in 2009.
Fourth, the historical evidence supports the conclusion that there was another primary cartel
member – SM. Specifically, the SM group included the Romero Gang (the Romeros and all
their DE associates who got shares in return for touting and/or manipulating the stock) and
the MicroPipe group (headed by Howard Salmon. The group also included Steve Hess,
Alan Palmer (“Mingy”) and others – most of whom (among other things) inundated the
stock message boards touting SPNGE. Note, that of all the cartel groups, it appears that it
was only SM’s group that led the highly successful effort to tout the stock online.
MAREK
Fifth, I have now identified additional evidence that gives me additional concern about some
of SM’s proffer statements and the status of his cooperation. This information must be
communicated to the EDNY as soon as possible because we now have more reason to
suspect that SM’s ties to members of the cartel including, but not limited to, IW/Double U
are perhaps ongoing and significantly more extensive than what he has admitted to. If so,
then Winehouse, JH Darbie, and others could know what we are looking for and who we
are looking at, and thus the staff is potentially in jeopardy. I can provide additional detail
when we meet.
Sixth, in the late 1990s through the early 2000’s, the SEC and the DOJ launched a coordinated
attack against Mob infiltration on Wall Street which was running rampant at that time. (See
attached, September 13, 2000, Congressional Statement of Richard Walker). Indeed, many of
the SPNG group of fraudsters, including most of the primary cartel members (Double U Gang,
Apolant, Nicolois and Cavanagh), were indirectly or directly implicated in some of the seminal
Mob/Wall Street civil and criminal cases filed during the joint DOJ/SEC targeted attacks.
In my view, the SEC and the DOJ accomplished what they set out to do at that time – stop (or at
least slow down) mob infiltration of Wall Street. In the intervening years, however, it seems
that the organized crime factions may have regrouped and reorganized as demonstrated by the
instant case. If so, this case presents us with an opportunity to step in and stop what may well
be the next wave of Mob-infiltration on Wall Street. In this regard, we are in a position
(assuming this investigation is staffed) to give the AUSA several hooks for immediate action if
necessary.
Specifically, for instance, we can provide the OUSA evidence to support the following criminal
actions:
Section 5 (criminal)
Given the historical work on this case, we are uniquely positioned to give the criminal
authorities evidence to support criminal section 5 cases against many of the 200 +
beneficiaries of the attorney opinion letters. Indeed, such an action would be a coup for the
Commission given that many of the beneficiaries – including the largest beneficiaries/cartel
members – are recidivists (e.g., Apolant, Kaplan, Shaw) or known stock promoters who
have historically proved too slippery to catch (i.e., Winehouse, Double U funds, Kramer).
While criminal prosecutors routinely shy away from criminal section 5 cases, they often do
so because they believe that the typical Section 5 case is too complicated for jury
presentation. Arguably, this is an accurate assessment given the numerous exemptions,
safe harbors, etc., that typically come into play in such cases.
This case, however, could be an excellent vehicle for a large-scale joint enforcement action
against micro-cap fraud given that the beneficiaries of the forged opinion letters are resellers who
did not receive shares via a primary distribution. Under a reseller theory of liability there are
only three possible exemptions available to the beneficiaries (Sections 4(1), 4(1 ½), and 4(2) of
the Securities Act), but under the facts of this specific case, it is highly unlikely that any of the
primary beneficiaries could successfully claim one of the three exemptions. Furthermore, under
a reseller theory the beneficiary of the shares in presumed to have sold the shares into the market
upon receipt, so there is no burden of proof in this regard.
As you know, the effort to combat microcap fraud is a strong priority of this Division and of our
Chairman. Of late, the programmatic interest in fighting such conduct has increased given the
recent passage of The Jobs Act as well as in light of the recent controversy regarding the
continued viability of Rule 504 Section 5 cases.
Parallel Section 5 actions targeting the primary cartel members, the largest beneficiaries, and
recidivists would be a powerful sword in the Commission’s war against microcap
fraud. Certainly to the extent that this investigation also implicates the reemergence of mob
infiltration on Wall Street, a targeted action would also be of major programmatic importance.
Moreover, under these facts there is very little litigation risk for the criminal authorities (or
for us) because the only mens rea element for which the AUSA bears the burden of prove is to
demonstrate beyond a reasonable doubt that the defendant “knew” that the securities were not
registered and not exempt when sold. Here, in almost every instance we have already obtained
or can easily find evidence (i.e., emails, certain witnesses, etc.) that demonstrates beyond a
reasonable doubt that the primary beneficiaries in question knew the securities transactions were
unregistered and not exempt. Such evidence also demonstrates the “red flags” typically required
for Commission authorization of a Section 5 action. Consequently, in my opinion, such a joint
action would involve relatively little litigation risk. In fact, my guess is that the defendants
would be knocking each other down in order to be the first in line for a deal.
False Statements/Obstruction
In addition, regardless of whether or not we pursue the above suggested course of action,
we can give interested AUSAs a solid basis for search and/or arrest warrants and probably
indictments in connection with certain of the primary parties of interest with respect to
potential criminal actions for false statements and/or obstruction.
●Gellis (D.NJ): During SM’s recent proffer, he described payments being made to
the transfer agents for each transaction, thereby providing a financial motive for the
transfer agents’ conduct that presumably can be easily corroborated. Assuming
this information is corroborated, then Gellis blatantly lied to the FBI during an
official interview conducted as part of the New Jersey criminal investigation of
Gellis; and made similarly false statement directly to me in writing in response to
our subpoena.
●Rabinowitz and Yarmish: Both made false statements regarding the relationship
between the Double U, Brasshorn, Pentium, and Clearview accounts to OCIE staff
that are directly contradicted by email and other evidence. These false
representations materially obstructed the SEC inquiry and investigation. I have
reached out to OCIE to obtain the staff’s notes of the interviews.
●Brian Mitchell (current COO of NavPoint formerly Blue Trading): Mitchell has
made blatantly false statements to me repeatedly in emails related to our subpoena
to Navpoint. For various reasons I can address in person, I think it is possible that
Mitchell is being influenced and/or threatened by an organized criminal faction
(and/or Double U).
●Chis Bruderman: Bruderman ignored our subpoena of April, 2012. He is in the

middle of the dump phase of the case in almost every possible aspect. Bruderman is
already part of the EDNY’s criminal case and is potentially a valuable source of
information regarding the principal cartel members, including Double U.
●Metter: The evidence linking MM to market manipulation and the Double U

gang, will provide the EDNY with several options. For instance, they may seek a
new search warrant and recover the electronic evidence MM has successfully
suppressed. Alternatively, we can probably give them (or direct them to) evidence
sufficient to support an arrest warrant and a superseding indictment against MM.
Tax Fraud
●The Double U Gang: Weisz was a tax fraud case and it is likely that the current
conduct relating to the Clearview account also implicates tax fraud. Moreover, my
review of various public records indicates that Bokchin, Winehouse and certain of their
associates all have federal and/or state tax liens, etc. The criminal tax agent on SPNG is
very aggressive and good.
Potential Witness/Informant (JH Darbie/Apolant)
●Michael Krome: In response to my inquiry of the MCWG, Josh Felker told me that
he had just concluded a proffer with Krome an attorney/defendant on June 26. Krome
proffered some information on Apolant. Last week, we learned that Krome also had an
account at JH Darbie as of early 2011. Accordingly, it is possible that that he is a
member of the Apolant/Schaeffer group and that he was directed to JH Darbie by Apolant
(and Schaeffer) for reasons of interest to us and to the criminal authorities. Josh offered
to make this CW available to us upon request. The AUSA on that case has offered to
give Krome a Rule 35 reduction in sentence if he can provide useful information to the
SEC. us.
Conclusion
The evidence indicates that the members of the SPNGE manipulation cartels, some of
whom have documented links to organized crime, have made millions of dollars using
accounts at JH Darbie to participate in the Spongetech fraud and other securities scams,
likely with JH Darbie’s knowledge and complicity. Furthermore, we have reason to believe
that millions of dollars’ linked to the cartels have been funneled to accounts in Israel by
and through JH Darbie (with its knowledge and complicity) since at least 2009 – and that
such conduct may be ongoing.
In my opinion, this evidence triggers a need for urgent action of some sort. Before
deciding next steps, however, we need to apprise and consult with the criminal
authorities.
With respect to next steps, in my view, is imperative that we be cognizant of the fact that
our actions may limit options for the criminal authorities. We may have already taken
actions that may have impacted our ability to recover evidence from JH Darbie. For
instance, we have subpoenaed JH Darbie, Blue Trading, associated brokers, Worldwide
Stock Transfer (the transfer agent owned by Gellis), and its employees. Moreover, we
have reached out to JH Darbie repeatedly regarding specific accounts including, but not
limited to the Double U accounts. In some instances, we have been fairly pointed in our
inquiries.
Certainly there is reason to be concerned that if JH Darbie figures out what we are looking at, it
may well destroy any incriminating evidence. Indeed, JH Darbie is stalling on responsive
production by not giving us any information likely to be incriminating (e.g., detail re: trading
blotters, wire transfers) indicates to me they may well be stalling to buy themselves time to
conceal or destroy evidence (original return production date was mid-April). As noted above, I
now have less trust in SM’s discretion about the recent proffer which focused on Double U and
related parties.
I recommend that we brief the criminal authorities with what we know now – irrespective of
our ability to make a polished presentation at this time. I am fully prepared to lead a
telephone call or an informal meeting with the criminal authorities to get them up to
speed. In addition, Alec and an intern have conflated several of my historical spreadsheets
and chronologies into one comprehensive document focused on Double U and the
Hackensack-related phase of the dump. Also, Scott has incorporated his analysis of
Double U-related trading activity during the relevant time period into the comprehensive
document. We are also preparing a binder of significant Double U-related emails based
upon the spreadsheet that I prepared in advance of the SM proffer.
Once I come to a more final conclusion as to how the parties/entities/groups are linked, Dan
Koster has kindly offered his ongoing assistance to aid me in preparing a links analysis-based
chart which will be immensely helpful.
Please let us know when you are available to discuss.
Thanks,
Uta
Uta von Eckartsberg

Senior Counsel
U.S. Securities and Exchange Commission
100 F. Street, N.E.
Washington, DC 20549
202.551.4465 (PH)
202.772.9233 (FAX)
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waived by the transmission of this message.
Importance: High
I write to update the narrative below and to identify certain outstanding areas of concern.
First, after speaking with SM, I believe that my preliminary conclusions as set forth below
are largely accurate. I have inserted my comments as highlighted in bold below. I am less
convinced that SM is in active collusion with MM or other criminal elements. I note,
however, a number of inconsistencies in his statements.
In this regard, I think it is unfortunate that I was restrained from freely questioning the witness as
I planned. As described below, I put a lot of thought and careful consideration into my proffer
preparation. Ultimately, this proffer was not for the benefit of the criminal authorities but
rather for ours. I needed to get through a lot of material without highlighting the major areas of
concern to the witness. To the extent my questions were leading, they related to historical
background information at most. Also, the areas that I sought to question SM on were not
addressed in depth or at all during the many interviews by the FBI and therefore, there was no
real concern that my questioning would lead to inconsistent statements. The MOI notes of this
particular proffer are not material to me or in my view to any case we bring going
forward. Moreover, I do not envision that whatever case we ultimately end up with will in hinge
upon SM’s credibility.
Furthermore, in my view SM has largely corroborated my conclusions described below that

implicate racketeering, international money laundering, and organized criminal enterprises. My
guess is that the EDNY’s Organized Crime Unit will have some interest in the evidence that I
have developed
In this regard, I followed up with Thomas who told me that he has not (and does not) intend to
brief Roger or Jay on any of this before he departs for an approximate six-week training program
next Tuesday.
New Jersey.
We should plan to talk to Matt Beck in any case to update him on the IW/JH Darbie piece as well
as on some of what we’ve learned about Gellis and related entities.
investigation.
Thanks,
Uta

Sent: Wednesday, June 13, 2012 3:21 PM
Subject: Confidential Update [SPNGE]
Importance: High
Alec and Paul,
As I began to prepare for the upcoming proffer and in connection with the overall spin-off
investigations of TAs/B-D’s, I started to connect some dots. Because of the sensitivity of the
information and my concerns about the many potentially significant ramifications, I decided it
was best to keep everything close to the vest until I could confirm to my own satisfaction that my
suspicious are correct. Ultimately, I won’t know for sure one way or another until I speak with
SM. That said, I feel fairly confident that some of my suspicions are correct in at least some
material aspects, so this email is to summarize certain of my conclusions:
● From at least July 2009, it was not MM and SM that called the shots on the SPNGE
fraud. Rather, they were controlled by Issac Winehouse and others who organized and
operated a manipulation cartel (members of which included groups run by (1)
Winehouse/Bodchin; (2) Apollant/Schaeffer, (3)David Bocci, and (4) Seth Shaw. Each of
the cartel members brought in others (i.e., Apollant/Schaeffer brought in Halperin,
Xirinachs, Emmauel Suchert, Yu, Young, etc.). During my review of the SM MSN DB, I
saved relevant emails (other material info) for each of the groups that I now believe were
members of a cartel organized by Winehouse (and probably Bodchin). Some of the
relevant subfolders are as follows:
J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\csh

J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\Bocci
J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\Double
U Aaron B and Issac Winehouse
Update: CW largely confirms my conclusions in this regard and has provided additional
information fleshing out some of the details.
●Winehouse is mob- connected. For instance, he was connected to the SC&T mob case
out of Brooklyn. Notably, that case and related cases describes Mob-related stock
manipulation schemes. For example, a BusinessWeek article provides, that “traders and
brokers have been subjected to “persuasion” and punishment – threats and
beatings.” Similarly, Winehouse threatened Yarmish at JH Darbie in the attached
email. When you consider that the person behind the threat controls millions of dollars via
the PIPE investment funds, the threat becomes very real. I believe that certain brokers
(i.e., Yamish and perhaps Rabinowitz) facilitated the Spongetech fraud as relating to
Double U group of companies because Winehouse/mob threatened them. (see
http://www.businessweek.com/1996/51/b35061.htm);
http://www.businessweek.com/1997/12/b3519127.htm#Related%20Items.
Update: CW largely confirms my investigative conclusions albeit he does not necessarily use the work
“mob” and denies any knowledge of any threats to JH Darbie. That said, SM confirmed that these are
dangerous men and he does not discount that they are capable of murder. Again, the Double U gang
ordered background investigations of me and other members of the staff which were apparently
widely disseminated.
● Winehouse and his associates are identified as being part of “Metter’s group.” In this
regard, I have now thoroughly reviewed all proffer notes; I have also asked Thomas to
identify pages that contain info about the parties I’ve identified as primary players in the
fraud. The MOIs do not reflect the evidence that I am putting together and that I describe
in this email.
Update: Absent intent to obfuscate by SM, I cannot understand why none of this came out
in previous proffers.
●With respect to the Winehouse piece, after I put started putting the pieces together I identified
and segregated Winehouse/Double U emails that seem to tie MM directly into the fraud
including, but not limited to, press releases and market manipulation. I’m working on a
spreadsheet identifying those emails now.
Update: SM confirms that the emails relate to market manipulation and the
drafting/timing of press releases. The emails directly tie MM into this piece of the
fraud. If SM is to be believed, then MM was the primary contact with the Double U
gang. I now believe that a primary motivation for MM’s motion to suppress was to
prevent detection of these communications.
● I have always believed and asserted that the only reason for SM and MM to subject
themselves to the type of jeopardy that has occurred during underlying investigation (i.e.,
the false testimony, the barrage of document productions which did include incriminating
information) was fear or greed. In this case, I now think it was both. If SM is lying, then
he is in collusion with MM even today given the Double U connection. They both know
what he is not telling anyone. And, SM is not giving the criminal authorities what he
knows they want most – direct evidence on MM. If this is true, then SM is taking huge risks
given that he is giving up certain persons (who I now suspect are the bottom-feeders considered
to be expendable) via undercover operations in which he is wired while simultaneously perhaps
double-crossing the criminal authorities. I can’t imagine any reason that SM would ever be able
to play such a dangerous game unless he were either afraid for his life (and the lives of his
family) or he knew that there were millions of dollars at the end of the rainbow.
Update: As noted above, I still have questions and concerns and look forward to speaking
to SM again under more favorable conditions with the support of the OUSA.
●In this case, I believe that the end of the rainbow is in Israel. As we noted in our
declaration to the MPI, Clearview is an Israeli entity previously associated with tax
fraud. A 2007 37 count indictment for criminal tax fraud within an orthodox sect based in
Brooklyn/Israel/LA can be read here: http://www.pgdc.com/pgdc/news-
story/2008/01/08/religious-leader-and-others-indicted-charitable-contribution-scheme-
other-tax-fraud. In this case known as the “Jewish Mafia” case, Clearview is described as
follows: On or about January 29, 2003, defendant and co-conspirator R.K. caused
$190,000 to be wired from a Spinka nominee account in the name of Clearview
International Investments ("the Clearview account") at BH-Bnei Brak, Israel (Spinka is a
religious group within Orthodox Judaism). Note also, that according to our declaration,
Clearview and Double U share the same bank account number.
Update: SM denies any knowledge of Clearview. He also denies that he or anyone he

knows participated in such a scheme. I’m not entirely convinced by this but will review
the evidence to see if it is consistent with his proffer in this regard.
With respect to the paragraphs that follow, I think that there is more work to do before I
can come to a definitive conclusion in this regard.
Overall, I’ve been able to make these connections because of my taking the time to obtain and
review almost every of the 70,000 email database. I tried to save and identify all material emails
of interest whether or not I had primary responsibility for any particular beneficiary. For
instance, I identified and saved emails relating to Double U and Winehouse even though I did
not have responsibility for that piece at the time of my review. I have also taken the time to
review every single M0I available to us. In addition, given that I have led all the proffers, took
the testimony of all the primary defendants (and in almost each case recognized and locked in the
false testimony to support the perjury charges), have led the investigation of the TAs/B-Ds from
the outset, among other things, I am confident that my understanding of the big picture case is
largely correct.
During the review of the MOIs, I also noted that in some instances, SM appears to have
intentionally led the criminal authorities down the wrong path. That said, it is always
possible that no one asked the right questions or something that seems pretty prominent
and obvious to me was somehow not that important to him. Again, I will be able to make
an assessment in this regard next week. If I believe SM is lying, it is important that none
of us let on during the proffers. If even half of this is true, SM is a definite flight
risk. Moreover, given the mob connections I see in this case, I believe that his life could be
at risk.
If SM does tell the truth, as reflected by my investigation, then we will have a much bigger and
even better case than what we have now. We obviously will have to make decisions about what
and when to tell the EDNY. Certain tendrils of the cases I’m putting together now definitely
trickle down to MJ and Matt Beck is a good, experienced prosecutor. Depending on what we
learn given EDNY’s delay in prosecuting either Pensley or Romeros, I think we need to consider
whether we should let them take the lead on everything I am pulling together. Also, if I’m
correct that may have significant ramifications for their SM-related spin-off investigations.
Also, in my view, the EDNY dropped the ball when they decided to keep SM’s cooperation
secret for months after he first came in – less than one month after we filed our cases,
respectively. Moreover, when I finally had a chance to speak with SM myself, I
immediately recognized that he was not being entirely truthful in certain areas –
particularly with respect to Gellis, the TAs, and Joel Trockman. The bottom line is that
there was no joint investigation that resulted in the criminal prosecution. I handed them
my case and I believe it was extremely short-sighted to exclude me/us from the proffers
with SM under the circumstances.
Lastly, the materials and evidence that I have been gathering are saved to the file path that
follows: J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\INVESTIGATIVE
WORKING PAPERS\PHASE II INVESTIGATIONS\Staff work product - data,
memos,spreadsheets, etc\Proffer Prep\June 2012 PROFFER PREP.
I have more information which we can discuss in person.
Uta
PS My spell-check is not working so please ignore any spelling typos I may have missed.
Sent: Tuesday, September 11, 2012 1:18 PM
Subject: MTF. Confidential.
At presentation before EDNY. AK took over the entire presentation. Neuter he or Toni would let me
speak to explain the case or the background.
As a result, we are wasting time on minutia. They still have no idea what's going on. Would not let me
tell the story. The EDNY cannot go home without telling the big story one way or another.
I am going to have to confront TC and AK when we take a break. This is so bad for the case and it is such
a waste of time. I told AK that I was furious and his taking over and running this meeting is completely
unprofessional. Worst he is letting FBI and AUSA run the show and they only care about their case as
see it.
--------------------------
Sent: Tuesday, September 11, 2012 1:46 PM
Subject: FW: MTF. Confidential.
At break, I told Toni, Alec, and Paul that what was happening was wrong. That I cannot let them go
home without telling them my view of the big picture of this case. Toni told me she was frustrated
with me and my presentation. And that we need to give them what they need even though all of that
had to do with something that goes back to the underlying case that we could easily fill them in on
another time. I told Alec that I wanted my mid-year review now. I told him that it was appalling that
he was not taking charge of this meeting, that Toni (obviously still doesn't understand the big picture of
this case or how it has evolved over time. Toni wants a nice power point since I don't have staff that's
pretty hard. I told Ak that if I received any negative feedback or any other negative consequences,
then I will file an OIG report and a retaliation claim. Toni basically said that I have only 15 minutes to
make my point and then I have to sit down. So 5 months of round the clock work is to be condensed in
15 minutes. This is awful. And I'm really upset now.

Sent: Tuesday, October 09, 2012 5:15 PM
Subject: MTF PERSONAL AND CONFIDENTIAL
MTF: Told everyone that I am opposed to MM getting SFS or any break on the money. Think
the whole thing is premature because I am trying to develop and put together the evidence of the
bigger picture case that we are trying to develop.
EDNY wants to walk away from the criminal case with just false stmts. Have asked that I be
able to give them the facts that we have now put together versus the binder stuff we wnet
through.
Nothing decided other than that we our position for now is bifurcated or nothing. No affidavit
or anthing.
______
discussed more fully below with regard to Metter and Moskowitz, the SEC has shown that
Metter and Moskowitz acted with scienter because they knew the statements were false. The
scienter of Moskowitz, as Spongetech‟s Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer, and Metter, as Spongetech‟s President and Chief Executive Officer, can be
imputed to Spongetech. See, e.g., Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250
F.3d 87, 100-01 (2d Cir. 2001); In re Ambac Fin. Group, Inc. Sec. Litig., 693 F. Supp. 2d 241,
265 (S.D.N.Y. 2010).
Therefore, the SEC‟s request for an order prohibiting Spongetech from committing future
violations of the securities laws is granted.5 Furthermore, as described in the SEC‟s proposed
However, Metter argues that an asset freeze is inappropriate because there is no evidence that
Metter will dissipate his assets and the SEC has “essentially all of the protection to which it is
arguably entitled.” (Metter Opp. 5-6.) Metter does not address the SEC‟s other requests.
In his opposition to the asset freeze, Metter baldly asserts that he was not involved in
Spongetech‟s daily operations. He fails to provide any further argument or explanation as to why
he believes the SEC has not established a prima facie case. The court finds that the SEC has met
its burden. The SEC has shown that Metter made materially false or misleading statements
in multiple press releases and SEC public filings to inflate the value of Spongetech shares.
Metter signed many of the allegedly fraudulent filings in his capacity as Chief Executive Officer,
and also made statements that were directly quoted within the filings. Metter knew or should
have known that the filings contained false and misleading statements. For example, Metter
testified under oath before members of the SEC staff that he had met one of the contact persons
for the fictitious customers. (Neal Decl. Ex. SS, Metter Testimony, at 255, 272-73; id. Ex. SS,
Speranza Testimony, at 102-04.) Metter‟s statements in the press releases and public filings
speak to the viability of Spongetech, suggesting a value for its operations and market potential
that were, on this record, unquestionably deceptive. Accordingly, the statements are material.
There is also no dispute that the statements related to the purchase and sale of securities. In sum,
the SEC has established a prima facie case that Metter violated Section 10(b) and Section 17(a).
Although the SEC has provided only a vague description of Metter‟s participation in the
distribution of unregistered shares, there is nevertheless prima facie evidence that Metter violated
Section 5. The SEC has shown that (1) no effective registration statement exists in connection
with the shares sold through RM Enterprises; (2) RM Enterprises issued unregistered stock; and
(3) the relevant stock certificates were either mailed or sent by courier as well as facsimile. There
is also evidence that Metter was a necessary participant and substantial factor in the unregistered
offerings. When Halperin wrote the opinion letters that caused the shares to be freely tradable, he
relied on the written representations of Moskowitz and Metter to conclude that the shares did not
need to be registered, when in fact, Metter‟s and Moskowitz‟s representations were false.
(Halperin Memorandum in Opposition, Docket Entry 32 (“Halperin Opp.”), at 7-8; Halperin
Decl. ¶¶ 10-12.) The
The SEC has also shown that Metter is likely to dispose of his assets absent an asset freeze. Not
only did Metter‟s conduct involve fraud, it involved a scheme to funnel and conceal illegal
proceeds through nominees and affiliates. (See SEC Reply Brief as to Metter, Docket Entry 62
(“SEC Metter Reply”), at 5-7.) Metter‟s past conduct is sufficient to demonstrate that, without an
asset freeze, Metter would likely dispose of his assets. See SEC v. Manor Nursing Ctrs., Inc., 458
F.2d 1082, 1106 (2d Cir. 1972) (“Because of the fraudulent nature of the appellants‟ violations,
the court could not be assured that appellants would not waste their assets prior to refunding
public investors‟ money.”); SEC v. Credit Bancorp Ltd., 2010 WL 768944, at *3 (S.D.N.Y. Mar.
8, 2010).
Metter argues that his assets are not traceable to the fraud and thus not subject to a freeze. The
only case Metter cites in support of his assertion is SEC v. Bremont, 954 F. Supp. 726, 733
(S.D.N.Y. 1997), which held that “the Commission is not entitled to freeze assets unrelated to its
investigation.” However, the Bremont Court ordered the SEC “to file with the Court within 60
days an estimate of defendants‟ maximum liability, including all penalties and interest,
whereupon the Court will entertain an application to modify the amount frozen.” Id. It appears
that the court was not requiring that the SEC show that the funds were traceable to the fraud, but
rather that the funds would likely be subject to eventual disgorgement. See id. This requirement
is consistent with the Second Circuit‟s statement that the purpose of the freeze is to enable the
SEC “to preserve its opportunity to collect funds that may yet be ordered disgorged.” Unifund,
910 F.2d at 1041. It is clear that, ultimately, a defendant can be ordered to disgorge funds that
were not causally tied to the fraudulent activity. SEC v. Aragon Capital Mgmt., LLC, 672 F.
Supp. 2d 421, 443 (S.D.N.Y. 2009); SEC v. Banner Fund Intern., 211 F.3d 602, 617 (D.C. Cir.
Case 1:10-cv-02031-DLI -JMA Document 112 Filed 03/14/11 Page 16 of 38 17

2000).6 Furthermore, “the terms and duration of the freeze order fall within this Court‟s „broad
equitable powers to grant ancillary relief.‟” SEC v. Gonzalez de Castilla, 145 F. Supp. 2d 402,
415 (S.D.N.Y. 2001) (citing SEC v. Am. Bd. of Trade, Inc., 830 F.2d 431, 438 (2d Cir. 1987)).
Although the SEC need not demonstrate that the frozen assets are traceable to the fraud, it must
show that the amount is an approximation of defendant‟s maximum liability. The SEC
demonstrates in its reply brief that “Metter was the beneficiary of at least $5,386,000,” which is
the “bare minimum reasonable approximation of Metter‟s illegal profits.” (SEC Metter Reply 5-
9.) The court finds that Metter‟s offer to put “six million shares of Spongetech stock that he
personally owns, which he received in lieu of compensation for his employment at Spongetech”
to be insufficient because there is no evidence that their value meets Metter‟s maximum liability.
Therefore, $5,386,000 of Metter‟s assets shall be frozen, and the SEC may renew its application
after it obtains any additional information, including an accounting, that further informs its
calculation.
Having
RELIEF DEFTS
OUR MOTION FOR PI
MTF:JULY 2012
After the negative initial meeting with Toni, we met again that Friday, July 3. Toni was
actually kind and told that she and AK were there to help and support me. I was struck by the
fact that I could not even remember the last time that a direct manager was actually kind to
me.
The meeting was brief. I again tried to present the big, picture but it’s extremely difficult to
do because the entire case is a complex web of interrelated persons, entities, and connections.
I told Toni that I was working with Dan Koster to try to use the links analysis to help with the
presentation of such a complex case.
I reiterated that I thought it was urgent to go to the AUSA asap with the information I’ve
adduced thus far. Toni and Alec disagreed. Rather Toni requested that a binder be prepared
that focuses on the discrete time frame reflected in the spreadsheet I prepared in advance of
the proffer.
She asked me to draft an Executive Summary of everything that I have put together and a
memo identifying my concerns about the inconsistent and possibly false proffer statements by
SM.
It was not a horrible meeting; Toni was nice and not in my view, unreasonable. However,
given that she knows nothing about my case or my role on the case (apparently AK never
filled her on my hard won, successful referral of Pensley to the EDNY for criminal
prosecution).
AK also wanted us to obtain wire transfer info from JH Darbie.
I assumed that SS could easily pull data from existing spreadsheets that he has created and
controls into the current spreadsheet reflecting the JH Darbie data.
Toni did agree to my strong recommendation that we contact EDNY right away to inform of
the investigations into the staff’s backgrounds by persons other than SM/MM that appear to
be members or organized criminal enterprises.
I was on vacation from the 4th through the 5th. We scheduled the call to Jay on the 5th and I
advised him of the new evidence and of our basic concerns. I told Jay that I was concerned
about SM’s status as a true cooperator. Thomas apparently told Jay that there was no new
information about the background investigations, etc. I explained to all that there was in fact
new evidence. I had to follow-up on the call with certain emails for Jay.
I have strong concerns that Thomas will be extremely resistant to the new evidence and my
current view of the big picture case. It is obvious to me that AK will likely support Thomas
versus me. In this regard, I told AK before my vacation of Thomas’ unprofessional and
disrespectful conduct towards me during the first proffer (when I had to prepare alone), the
two
days I spent alone with him on Pensley and the Romeros) and again his conduct at the recent
proffer. I told AK that I will not allow Thomas to speak to me this way again regardless of AK’s
support or lack thereof.
While technically on vacation, I spent most all my free time continuing to link persons, places and
things. I’ve linked Clearview, Shifra Winehouse, Advisor’s Associates, the Weiss Family Trust going
back as early as 2006. I have also connected a known bad guy Moshi Kraus to the Double U gang.
I did all of this while on vacation. I intended to write all that up on Monday, July 9. I separately
worked on an ongoing basis with Dan Koster – who is apparently the only person who understands
the urgency of this piece of the investigation – and he doesn’t even work with me.
Yesterday, however, it became necessary to write a huge to-do list – particularly as I slowly realized
that no one seems to be working on this but me. The to-do list took me all day – particularly given
the critical feed-back from Toni apparently emphasizing form over substance.
I also tried to get Ak to move on the paralegal. Today I forced the issue by pointing out that this
process began more than a month ago and we have not even a resume as yet. We called together
but still no resume.
I’ve also been following up with exam staff to get material info we need now. In addition, I’m
trying to gather more evidence on the TA’s financial motive as proffered by SM. So far there is no
evidence to support his proffer in this regard. However, AK is not supporting more than a cursory
review of SPNGE accounts and apparently no in-depth review of the accounts was ever completed.
Today, while whittling down by third version of the to-do list I slowly came to understand that
absolutely no one has been asked to focus on this phase of this investigation. In other words, the
only dedicated staff is me. AK is not asking Scott or Charles to do any dedicated work on this.
Moreover, he will not even allow our group intern to assist me (a fact I previously suspected but only
confirmed by AK just now). Basically, it seems that AK thinks I should do all the substantive and
ministerial work that will be needed – before –we can even tell the OAUSA anything. When I ask for
assistance, AK volunteers to do it if I can’t. however, he is busy with his 900 other cases so his
assistance is sporadic at best. So far they have not even called JH Darbie to get the wire info.
In this regard, today after much perseverance I was able to obtain account records from JH Darbie
showing all open accounts at the time of their exam. I did not have the time to search through all
the spreadsheets for relevant accounts and asked for assistance. AK said he would do it.
Unfortunately, since he doesn’t know most of the relevant accounts I had to do it. It turns out
all the suspect players/bad guys associated historically with Double U; Winehouse are all at
JH Darbie. This includes Moshe Kraus, the Bessie Weiss trust (clearview, Shaolom Weiss).
I told AK that I thought we should obtain all account opening statements on all known
accounts, as well as dates of opening, closing, as well as all balances on date of closing or as
of now. In addition to the above noted suspect accounts, I now have identified several
other previously unknown Double U funds. Also it seems most of the primary cartel
members are with JH Darbie still. I asked AK assign someone to do a thorough
breakdown of the spreadsheet including by name, address, etc.
I explained that my concern is that we identify as soon as possible how much money is in
those accounts associated with these highly suspect accounts. Obviously we do not want to
lose what may be our only opportunity to get this info before JH Darbie figures out what is
going on and ceases to cooperate. In my view, we need to quickly identify the suspect
account so that we can go in and freeze them if necessary or give the OAUSA the info so that
they can initiate forfeiture proceedings if possible.
AK does not want to request all the info with respect to all the accounts that I have already
identified as being controlled by bad actors, etc. I disagree with his decision. In discussing
this issue, I learned for the first time that neither AK or Toni intend to staff this case at all
until after I apparently do all substantive and ministerial work entirely by myself with AK’s
occasional assistance.
I directly told him that the decision to wholly decline to provide me any dedicated support –
including even an intern – is outrageous under these circumstances. How he and/or Toni
could not find two or three bodies in this entire AD group that could assist on this is beyond
me.
I find this appalling and told him so. If they are not going to support this phase of the
investigation, then they obviously don’t care about moving this forward quickly as I have
already been working around the clock on this for weeks. Alec now claims that Toni did
not tell me to write an executive summary or a memo summarizing my concerns about SM’s
cooperation. He thinks instead I should be preparing the binder myself, doing all the related
work, updating the spreadsheet with more information from existing spreadsheets that I did
not create or maintain, while simultaneously trying to absorb and memorialize the latest
result of my research over the past week which is important.
His issues with me are entirely impacting his ability to make good decisions on this case in my
view. This last conversation basically ended with us yelling at each other. This is not a good
situation for me and I am increasingly concerned about retaliation possibilities. The more
important issue, however, is that the case is continuing to be mismanaged and I will have to
seek assistance from Senior Management.
AK just came in and told me that he now will agree to ask JH Darbie for the accounts that I have now
additionally identified. It only took us two hours and three screaming arguments to get there.
This is just not right. In response to his question, I told him that I intended to continue to try to put
together the results of my investigation over the past week, and start writing an executive summary
for Toni addressing the SM issues as well.
We are now supposed to be calling JH Darbie tomorrow morning. I told him that I will be working at
home...
Note: It is getting increasingly difficult to even come into the office. The issues with AK are never
ending and soul-sucking. The work is the only thing that keeps me going at this point. And my need
to get the bad guys.
MM
SM
Subject: MTF Privileged and Confidential work product (JH)
Date: Thursday, May 24, 2012 4:41:49 PM
JH Darbie call ultimately conducted by SS and AK concurrent with this email:
I previously identified numerous evasive and/or outstanding responses to the JH Darbie subpoena.
AK decided that SS should follow-up which he did. AK has not felt it necessary that I participate in
the calls even though I drafted the subpoenas and have always led this piece. Just now, a follow-up
call was made and AK made it clear that while I was welcome, it was certainly not necessary for me
to be in the loop. I strongly suggested that he obtain written, direct responses to the outstanding
subpoenas requests but he declined to do so despite my documented history of getting admissions
or blatant misrepresentations under similar circumstances (See BT emails from Mitchell; SPNG
responses, etc.).

Subject: MTF Personal and Confidential SMAIL
Date: Thursday, September 13, 2012 4:52:25 PM
I told TC I had to leave and would not be able to talk. She insisted on talking and then critiqued my
presentation skills. After being pushed, I told Toni exactly what I thought that I was appalled that they
would not let me speak and did not give me any prior notice that I would not be making the
presentation that I believed that I would be making. Particularly after working around the clock for
days in advance of the meeting I anticipated that AK knew I anticipated.
Toni denied that she gave me two options (i.e., chime in as AK went through the binder) or speak for
15 minutes. Then she said I didn’t do what she told me to do. I most certainly did. Then TC basically
said it was my fault because they lost interest when I started to speak. Again, the issue was that I was
forced to go through the underlying case which I did not anticipate doing because Sinclair didn’t know
anything about it. If I knew I was on a clock then I never would have bother taking up my ½ hour on
this.
After TC kept pushing even though I told her I was sick and had to leave, I basically told her
everything that has been memorialized in the MTF’s in this chain. Apparently she thought the
purpose of the meeting was something other than what was addressed in my confidential email
updates. I told her that she was bullying me and that her comments to me before and during the
meeting were abusive.
All the long, I just wanted to leave but just awful situation. She now wants me to talk to SM if NYC will
allow but she wants to control the whole thing which will result in the exact same problem that I
encountered when I talked to SM with Thomas, Alec, and Paul in the first place. Again, I told her that I
was concerned that my inability to put together a package for the EDNY or NJ because of lack of
support including staffing, would give everyone involved to stall instead of moving forward to
determine if there is any evidence of ongoing misconduct. At the end, I affirmed that I would do as I
was told. That I would defer to Alec and Toni. And that as always my interest was in doing the right
thing and getting the bad guys. I have serious concerns that Toni will try to retaliate against me. I told
Toni after she starting critiquing my style and presentation technique that I would be happy to
forward to her the years of positive feedback that I have received with respect to my preparation,
trial practice skills, demeanor, integrity, and work ethic. She’s not interested. AK admitted that he
knew that whatever Toni thought this meeting was about that my prep was based on my
understanding that we were moving forward as stated in confidential update I, II, III.

Sent: Thursday, October 25, 2012 7:03 PM
To: Koch, Alexander
Subject: One more thing....
With respect to my concerns expressed in my email earlier today regarding the EDNY, I forgot
to remind you that Patrick said that he met with SM recently.
If that’s the case, then why were we not included?
From what he said, it seems that he met with SM recently and after the trip to DC. If so, did
they talk to him about Double U or any of the other areas of concern that we have identified. I
would assume the concerns about SM’s credibility would have triggered this recent meeting
between SM and Patrick. I’m sure the FBI was present and I’m betting that notes were taken.
Patrick keeps telling us that he is too busy to make himself available for the proffer with SM that
we have urged. If he had time to meet with SM, however, then then he could have made time
for us to meet with him.
I think this is a problem that should be raised with Jay or someone who has the power to do
something about it. In my opinion, time continues to be of the essence to the extent that
millions of dollars potentially attributable to the SPNGE may be at stake.
Thanks.
Uta
Nov. 2012
MTF addressed to Toni.C. Never.sent.because.I.didn’t.think.she.would.back.me. and wanted tot

ake high road.
T,
I’m sorry to come to you on this but I’ve hit a brick wall with A. I’ve tried to talk things through with
him but he is not hearing me. Things finally came to a head at the Commission meeting on
(Weiner) and I now much come to you for advice and guidance on how to proceed with A.
I was shocked and appalled that there was no mention of the underlying work that I and
other members of the Spongetech team performed which led to the Wiener enforcement
action.
Wiener was named in our Complaint. I, Charles Davis, and other original members of the
Spongetech team did all the background work on Weiner. I personally ran background
checks, led the proffer of SM which addressed Weiner’s role, and subpoenaed another
Spongetech-related entity that Weiner invested in so that I could obtain additional
information on him. Linda Stevens did not play any primary role whatsoever in the
underlying investigation leading up to Wiener’s being named in the complaint.
During that time frame, Linda was a part-time intern assisting on the Spongetech matter on a
part-time basis. As of approximately February 2010, directly due to my efforts on her behalf
Linda was employed by the Division as the Spongetech paralegal.
In approximately 2010, Alec approached me to suggest that the Wiener piece of the
case be handed off to Linda to be wound-up. I did not see the need for Linda to lead any
piece of the Spongetech investigation as I assumed that she would be leading her own
investigations under her new AD, Lisa Dietch, while simultaneously helping out on our
litigation as a legacy case.
I agreed to transfer this piece of the case to her only after much discussion with Alec and after
being given assurances that my role as lead staff attorney would not change and that the
Weiner piece would not be treated as a stand-alone matter. Certainly, I understood that my
(and other team members that worked on Weiner) would not be entirely silo’d off the Weiner
piece. Linda in no way investigated or brought the Weiner case from bottom up. The only
reason I agreed to Linda winding up this piece of the case was because A insisted that it was
necessary LS have the opportunity to own a piece of the case and b/c he promised that my
work on this piece would not fall by the way side as it most certainly has done.
Moreover, given that I had identified the reseller Section 5 theory as an extremely efficient
way to prosecute the beneficiaries of the attorney opinion letters – even in the absence of
provable fraudulent conduct; I expected and requested to be kept in the loop as the Weiner
piece progressed.
Contrary to my request, I was completely silo’d off the Wiener investigation. For instance, I
was not permitted to participate in Wiener’s proffer nor in his testimony. Furthermore, I
was not given the opportunity to attend a meeting with Matt Martens on the viability of the
Section 5 theory I indentified which you, Alec, our then-trial counsel and Linda Stevens
attended.
This entire situation has been extremely demoralizing and upsetting to me. I have discussed these
issues repeatedly with Alec but nothing has changed as demonstrated by the Commission meeting
which only the efforts of Alec, Scott Stanley (who was not assigned to the case during the inception
of the Weiner case), and Paul Kisslinger (ditto) were acknowledged.
In this regard, two senior attorneys significant contributions have gone entirely unnoticed and
unacknowledged in favor of a very young, very new attorney. Just not right.
As my Associate Director, it is important to me that you understand the following:
From the time period, May through September 2009, I worked the Spongetech investigation alone
and reported directly to my then-Assistant Director, Charles Cain.
During that time frame, I alone identified all the primary theories of liability against all the
primary defendants including, but not limited to, the reseller Section 5 theory of liability as a
means to facilitate
_.
Since I began working for Alec, I have been promoting the reseller theory of liability to him.
When he finally got on board, I was thrilled but since then it’s as if my work and efforts on
this never happened.
During the period from May through September 2009, to my knowledge Linda Stevens was
not an intern with the Division. If she was, she did not work for me during that time.
In this regard, Linda was a part-time intern working on a part-time basis on my case from
October through early winter 2010. Linda did not, and could not, play any primary role in
the underlying investigation at that time. She primarily assisted Charles Davis in the
follow the money/follow the shares piece of the investigation. In late November through
December 2009, Linda played a primary role in analyzing and identifying the fraudulent
loan documents that were the purported basis of the Halperin attorney opinion letters. I
in no way minimize Linda’s contributions but to the extent that anyone thinks that she had
a primary role in the underlying investigation.
I am extremely troubled by the way things have turned out w/r/t Linda. I do not understand
why my Assistant Director is promoting this young women and her work at my expense.
I really like and in many ways respect A. I think that he is a good manager for the case but we
do not seem to be a good fit. I’m sorry that things have come to this, but I will not let anyone
treat me unfairly
– particularly w/r/t my work on the Spongetech investigation/litigation.
2013

Sent: Friday, February 01, 2013 4:57 PM
Subject: MTF PERSONAL AND CONFIDENTIAL PWP
AK gave me my written PWP today. Overall, the worst evaluation I have ever received from
him. It definitively went down from last year and is not in line with what said to me at mid-
year. In fact, he did not say anything to me at mid-year other than to “please not yell at him so
much”. He has never given me my IDP last performance period or this one. I called him since
he left before speaking to me and left a message telling him that I was appalled that he would
write something like this in light of everything I have done over the past year and in light of how
unfairly he has treated me in the past. While I did not say so in the message, I believe that this
evaluation is retaliatory. Alec, for all the reasons described in the various MTF since I put all
the evidence together. Tony, because I said that he was using bullying and abusive language
towards me. I do not want to sign this thing. I don’t see how I can talk to Toni about this since
I believe that this evaluation is also demonstrative of retaliation on her part.
Uta von Eckartsberg

Senior Counsel
100 F. Street, N.E.
202.551.4465 (PH)
202.772.9233 (FAX)
This e-mail message (and any attachments) from the United States Securities
NOTE. UNION TOLD ME I HAD TO SIGN AND THAT ALL I SHOULD SAY FOR THE RECORD IS WHAT
FOLLOWS:

Sent: Friday, February 01, 2013 5:29 PM
To: Koch, Alexander
Subject: Follow-up PWP
Alec,
I disagree with a number of points in the PWP.
Uta
Uta von Eckartsberg

Senior Counsel
100 F. Street, N.E.
202.551.4465 (PH)
202.772.9233 (FAX)
2014: Olde Momouth PP FRAUD –EVERYTHING THROUGH THE PRESENT
See 2014
HALPERIN AND PENSELY CONTROL-RESTRICTED.
Events Occurring Prior to May 11, 2009 (the day my SO group opened its MUI)
In early and late 2008, two of our Regional Offices (Boston and Atlanta) examined certain allegations
made against Spongetech and Metter (current CEO). Two MUIs were opened and closed. Sources
included SARS and FINRA referrals and the issues included potential Section 5 violations, insider
trading, false press releases (including amount of outstanding shares), and false statements that the
company was buying back stock.
Next, in March 2009, OIEA also received at least two e-mail/e-form complaints that it forwarded to OIE.
OIE forwarded the two complaints to Boston. Moreover, on or about March 5, 2009, OIEA conducted a
telephone interview of a Spongetech investor who then filed an in-person complaint with the Atlanta
office on March 11, 2009.
From at least as early as 2008 and into 2009, there was a HO “pump and dump” investigation involving a
number of issuers. This HO SO group’s investigation tangentially included Spongetech as well as many
other micro-cap companies. Information regarding this SO’s investigation as relating to Spongetech was
not inputted into NRSI. However, OIE and others seem to have been aware of that SO group’s interest in
Spongetech and forwarded complaints to that SO group. Accordingly, that SO group conducted some
voluntary interviews of persons who submitted complaints to the Division.
In early May 2009, George Curtis asked me whether my group could investigate the ARO complaint. At
that time, neither I nor my SO group was aware of the pre-existing, ongoing investigation tangentially
implicating Spongetech.
Events Occurring on and after March 11, 2009
May 11, 2009: The ARO investor complaint and the 2008 FINRA referral were forwarded to us. The
matter was assigned to staff attorney, Uta von Eckartsberg on May 11. A MUI was opened on that date
and case-related information inputted into NRSI. Uta began to review the complaints, obtained the
exhibits to the FINRA referral, sent blue sheet requests, review public filings and press releases, conduct
Internet searches and look at message boards.
June 12, 2009: We learn about the pre-existing HO case relating to Spongetech as well as other micro-
cap companies.
June 15-July 2, 2009: Our investigation is put on hold while we consider whether it makes sense to
pursue our investigation in light of the fact that Spongetech was a piece of a larger, pre-existing
investigation and given that some preliminary investigation relating to Spongetech had occurred.
July 2, 2010: Investigation resumes.
Late June to mid July 2009: During the course of her initial investigation, Uta began to hear chatter on
various Spongetech message boards, blogs and other external sources, that two attorneys may have filed
letters of complaint with Rob alleging that the Spongetech’s COO was submitting forged attorney opinion
letters to Spongetech’s transfer agent in order to remove legends from restricted stock. Uta tries to track
down the letters and determine the truth or falsity of the allegations. She also started working on a formal
order memo and document requests including from Spongetech’s transfer agent.
July 14, 2009: The OIE conducts an interview of a broker who claims he has copies of the forged
attorney opinion letters. OIE forwards the interview notes to us.
July 23 to July 29, 2009: Uta conducts a voluntary interview of the broker and confirms that two
attorneys did write letters of complaint to Rob in May 2009 when she obtains copies of the letters from
the broker. Within a week of obtaining this information Uta conducts voluntary interviews with the
authors of the complaint letters (one of whom we are charging with fraud). We obtain and begin to
review the transfer agent records while finalized the FO memo and preparing subpoenas.
Mid-August 2009: Uta learns that the original complaints submitted to the Division (dated May 14, May
15, and May 26) came into the Director’s Office in May but were inadvertently directed to CF. Uta
contacts the two TAs implicated in the fraud and issues 17(a) letters. Uta obtains the requested
information and begins reviewing the transfer agent journals and other information.
September 2, 2009: Formal Order issued. Subpoenas issued to all defendants and testimony begins and
continues through December 2011.[Check Nov?].
September 17, 2009: New York Post published the first of a series of articles critical of Spongetech.
September 28, 2009: In its Form 8-K filed with the Commission, Spongetech publicly disclosed that it
was being investigated by the SEC for various securities law violations; and that it and its officers and
directors had received subpoenas. Despite limited staff resources and budget constraints, the case was
staffed the case with two additional attorneys
September 16, 2010:
To Do in Anticipation of Rule 26 Obligations
• Delete entire “Branch File”
• Locate all document production cover letters.
• Create new files designated as: “Document Production Cover Letters” and load all cover
letters into the file.
• Consider creating new databases designated as:

A. Incoming Correspondence
B. Subpoenas
C. Outgoing Correspondence
5. Delete all dox in current Joel Trockman database and load actual Trockman production;
6. Create “Flo Wienberg” database and load production per CD email of 09-16- 10;
• Create “Joe Poe” database and load the four Poe dox there: Inaccurately BN’d as FOE and
Bomart;
• Create “Michael Snarski” database and load files;
• Search all databases for internal communications inadvertently loaded into the database;
• Review databases to ensure that each database contains only documents produced by one
source and take corrective action when necessary. For instance
• Delete dox from existing JP DB that were not produced by him but rather by his
brokerage firms;
• Create new databases designated as “Sloan”/”Lantern” respectively and move
documents from JP file accordingly.
• Review Frank Lauzauskas database re: BN 1-115 which indicates producing source was
Dominick & Dominck ?? not FL. If not related to FL, create new database if necessary
and move dox accordingly.
• Create databases for Walgreens, Kroger, and Speranza;
• Track down all dox produced by Walgreens, Kroger, and Speranza and load them into the
appropriate database.
• Confirm that all responsive documents produced by so-called customers of Spongetech’s have
been identified and loaded into Concordance in a dedicated DB.
14. Create Romero database and load data (dox only) voluntarily produced by him into the
Concordance database.
October through December 2009: During this time frame, the staff received and reviewed hundreds of
investor complaints that were filed with the SEC while continuing to issue investigative subpoenas and
17(a) letters to persons and entities connected to the investigation. Ultimately, more than one-hundred
subpoenas and 17(a) letters were issued to persons and entities connected to the investigation. The
responsive production to these investigative subpoenas was in excess of 100,000 pieces of paper. The
staff issued subpoenas, reviewed and managed the document production while contemporaneously taking
the testimony of the defendant and other related parties.
October 5, 2009: Despite the Defendants ongoing, on-record professions of innocence supported by
voluminous, ongoing document production, the Commission issued an order temporarily suspending the
trading of Spongetech’s common stock. The Commission suspended trading while simultaneously
moving forward with its investigation which implicated ongoing (allegedly) false testimony, protestations
of innocence, and the bombardment of documents (containing among other things, allegedly forged
Purchase Orders)(see Indictment filed May 5, 2010, USA v. Metter, et al, 10-CR-600 (DLI (charging
defendant with perjury and obstruction in connection with the SEC’s investigation) (see also Doc. 106,
SEC’s Reply for PI as to Pensley; Ditto MM, SM, Halperin)). Since the Commission’s trading
suspension Spongtech’s stock has continued to trade in the grey market but is no longer traded on the
OTC- BB. Furthermore, trading volume has been relatively low and the stock has traded at a fraction of a
penny.
December 24 2009: Six months after the underlying Spongetech investigation at HO-11156-A was
opened, the staff concluded its preliminary investigation. On December 24, the staff notified RM
Enterprises, Spongetech, Metter, Moskowitz, Speranza, Pensley, and Halperin of the staff ‘s intention to
seek Commission authorization to file a civil injunctive action against each for violations of the federal
securities laws (see Spongetech’s Form 8-K publicly filed with the Commission on December 31,2009 for
disclosure or receipt of Wells notice).
December 25, 2009 through May 05, 2010: The defendants continued to profess their innocence and
bombard the staff with documents while the staff continued its investigation. In March 2010, the
OAUSA EDNY opened its investigation into Spongetech and began to work collaboratively with the
staff. (See Dkt. No. 207, filed February 10, 2012, USA v. Metter, et al, 10-CR-600 (DLI) The SEC and
the EDNY decide it is best to file the cases simultaneously so that neither agency’s case would be
prejudiced and so that neither agency would lose the element of surprise [reword’].
May 05, 2010: the instant complaint and the criminal indictment are filed. As of that date, the SEC had
issued more than 100 subpoenas (inclusive of the numerous 17(a) letters) issued to persons and entities;
and, had by then received responsive production in excess of 200,000 pages. Furthermore, the indictment
charged MM, SM, and GS with obstruction and perjury in connection with the SEC’s investigation.
2011 -2012 F:\2013 employee
stuff\mtf.MM.BACKUP.INVESTIGATIVE.WORK.REMEDIES.JUDGMENT.2012-13\
2011 Weiner. Memo to TC never sent
F:\2013 employee stuff\Chronos Memos drafted for Toni but never sent
- May __ through September 2009:
I worked the Spongetech investigation alone and reported directly to my then-Assistant Director,
Charles Cain.
-I alone identified all the primary theories of liability against all the primary defendants including,
but not limited to, the reseller Section 5 theory of liability as a means to facilitate _____ before
Linda assisted
to my knowledge Linda Stevens was not an intern with the Division before that time. If she
was, she did not work for me during that time.
September 2009:
Post-Labor Day Subpoenas and NYP bad press, LS was assigned to help on occasion.
However, In this regard, Linda was a part-time intern working on a part-time basis on my case
from October through early winter 2010.
Linda did not, and could not, play any primary role in the underlying investigation at that time.
She primarily assisted Charles Davis in the follow the money/follow the shares piece of the
investigation.
In late November through December 2009, Linda played a primary role in analyzing and
identifying the fraudulent loan documents that were the purported basis of the Halperin attorney
opinion letters.
I in no way minimize Linda’s contributions but she did not deserve credit for my work.
Moreover, she did not have the knowledge or experience to accurately assess the Section 5 theory
of liability. Wiener was a fail.
She had no primary role in the underlying investigation.
Pre-transfer AK group:
Spongetech team did all the background work on Weiner.
I personally ran background checks, led the proffer of SM which addressed Weiner’s role, and
subpoenaed another Spongetech-related entity that Weiner invested in so that I could obtain
additional information on him.
Linda Stevens did not play any primary role whatsoever in the underlying investigation leading
up to Wiener’s being named in the
During that time frame, Linda was a part-time intern assisting on the Sponger on a part-time
basis.
February 2010:
` Went to great lengths to get LS a job with us as paralegal because her pending offer with law
firm was postponed and she would be unemployed otherwise.
on her behalf Linda was employed by the Division as the Spongetech paralegal
. June 2010: Post re-org/transfer
-Post transf.to AK, I have been promoting the reseller theory of liability to him. When he finally
got on board, I was thrilled but since then it’s as if my work and efforts on this never happened.
recognized the implications of a reseller theory immediately upon call with Cf re Kramer and
spinoffs. Long before I worked with LS.
Around time of June 2010 Transfer to TC group
AMG-B TAKES CREDIT FOR M Y WORK ON UNIVERSAL

CHRISTINE AFFIRMS. IS DEMOTED
SPONGETECH BIGGEST CASE TO EVER COME OUT OF CN GROUP AND NEITHER
WERE INVOLVED OTHER THAN TO ASSIST ME
BOTH HATED ME AND WERE EXTRAORDINARLY JEALOUS AND MEANSPRIRITED.
KNOWN FACT. AMB G-B KNOWN AS “MALICIOUS MUFFIN”
CC TELLS ME I’M TAINTED.
THEY ALL SPREAD THE TAINt
TIM LEAVES
TAO IS ASSIGNED. LITTLE TO NO LITIGATION EXPERIENCE.
TOTALLY DROPS THE BALL. METTER.PENSELY.MOSKOWITZ.
IN 2012 EVAL TOLD THAT I AM BOSSY.
THEY ALL GIVE CREDIT TO LS FOR MY WORK
THEY ALL EXCLUDE ME
THEY DO NOT SUPPORT ANY RECOMMENDATIONS OR EFFORTS I MAKE RE
LITIGATION
THEY NEVFER READ A TRANSCRIPT
NEVER UNDERSTAND THE RECORD
LATE 2010-11: Wiener
AK Breaks up my team and isolates me.
F:\2013 employee stuff\Chronos Memos drafted for Toni but never sent
- May __ through September 2009:
I worked the Spongetech investigation alone and reported directly to my then-Assistant Director,
Charles Cain.
-I alone identified all the primary theories of liability against all the primary defendants including,
but not limited to, the reseller Section 5 theory of liability as a means to facilitate _____ before
Linda assisted
to my knowledge Linda Stevens was not an intern with the Division before that time. If she
was, she did not work for me during that time.
September 2009:
Post-Labor Day Subpoenas and NYP bad press, LS was assigned to help on occasion.
However, In this regard, Linda was a part-time intern working on a part-time basis on my case
from October through early winter 2010.
Linda did not, and could not, play any primary role in the underlying investigation at that time.
She primarily assisted Charles Davis in the follow the money/follow the shares piece of the
investigation.
In late November through December 2009, Linda played a primary role in analyzing and
identifying the fraudulent loan documents that were the purported basis of the Halperin attorney
opinion letters.
I in no way minimize Linda’s contributions but she did not deserve credit for my work.
Moreover, she did not have the knowledge or experience to accurately assess the Section 5 theory
of liability. Wiener was a fail.
She had no primary role in the underlying investigation.
Pre-transfer AK group:
Spongetech team did all the background work on Weiner.
I personally ran background checks, led the proffer of SM which addressed Weiner’s role, and
subpoenaed another Spongetech-related entity that Weiner invested in so that I could obtain
additional information on him.
Linda Stevens did not play any primary role whatsoever in the underlying investigation leading
up to Wiener’s being named in the
During that time frame, Linda was a part-time intern assisting on the Sponger on a part-time
basis.
February 2010:
` Went to great lengths to get LS a job with us as paralegal because her pending offer with law
firm was postponed and she would be unemployed otherwise.
on her behalf Linda was employed by the Division as the Spongetech paralegal
. June 2010: Post re-org/transfer
-Post transf.to AK, I have been promoting the reseller theory of liability to him. When he finally
got on board, I was thrilled but since then it’s as if my work and efforts on this never happened.
recognized the implications of a reseller theory immediately upon call with Cf re Kramer and
spinoffs. Long before I worked with LS.
Around time of June 2010 Transfer to TC group
AMG-B TAKES CREDIT FOR M Y WORK ON UNIVERSAL

CHRISTINE AFFIRMS. IS DEMOTED
SPONGETECH BIGGEST CASE TO EVER COME OUT OF CN GROUP AND NEITHER
WERE INVOLVED OTHER THAN TO ASSIST ME
BOTH HATED ME AND WERE EXTRAORDINARLY JEALOUS AND MEANSPRIRITED.
KNOWN FACT. AMB G-B KNOWN AS “MALICIOUS MUFFIN”
CC TELLS ME I’M TAINTED.
THEY ALL SPREAD THE TAINt
TIM LEAVES
TAO IS ASSIGNED. LITTLE TO NO LITIGATION EXPERIENCE.
TOTALLY DROPS THE BALL. METTER.PENSELY.MOSKOWITZ.
IN 2012 EVAL TOLD THAT I AM BOSSY.
THEY ALL GIVE CREDIT TO LS FOR MY WORK
THEY ALL EXCLUDE ME
THEY DO NOT SUPPORT ANY RECOMMENDATIONS OR EFFORTS I MAKE RE
LITIGATION
THEY NEVFER READ A TRANSCRIPT
NEVER UNDERSTAND THE RECORD
LATE 2010-11: Wiener
AK Breaks up my team and isolates me.
In approximately ____ 2010, Alec approached me to suggest that the Wiener piece of the
case be handed off to Linda to be wound-up.
I did not see the need for Linda to lead any piece of the Spongetech investigation as I assumed
that she would be leading her own investigations under her new AD, Lisa Dietch, while
simultaneously helping out on our litigation as a legacy case.
I agreed to transfer this piece of the case to her only after much discussion with Alec and after
being given assurances that my role as lead staff attorney would not change and that the Weiner piece
would not be treated as a stand-alone matter.
Certainly, I never understood that my (and other team members that worked on Weiner) would
not be entirely silo’d off the Weiner piece.
Linda in no way investigated or brought the Weiner case from bottom up.
The only reason I agreed to Linda winding up this piece of the case was because A insisted that it
was necessary LS have the opportunity to own a piece of the case;
and b/c he promised that my work on this piece would not fall by the way side as it most
certainly has done.
-Despite the fact that I identified the reseller Section 5 theory as an extremely efficient way to prosecute
the beneficiaries of the attorney opinion letters – even in the absence of provable
fraudulent conduct; I was entirely exclude for the last steps of wiener investigation.
I requested to be kept in the loop as the Weiner piece progressed.
Contrary to my request, I was completely silo’d off the Wiener investigation. For instance, I was not
permitted to participate in Wiener’s proffer nor in his testimony.
Furthermore, Linda was highlighted to senior staff as the face of my reseller theory during a material
meeting with the TU. I have never been invited to such a meeting in 16 years.
Not only was LS given credit for my work; I was not even permitted to attend the meeting with Matt
Martens on the viability of the Section 5 theory I indentified which you, Alec, our then-trial counsel and
Linda Stevens attended.
This entire situation has been extremely demoralizing and upsetting to me. I have discussed these issues
repeatedly with Alec but nothing has changed as demonstrated by the Commission meeting which only
the efforts of Alec, Scott Stanley (who was not assigned to the case during the inception of the Weiner
case), and Paul Kisslinger (ditto) were acknowledged.
In this regard, two senior attorneys significant contributions have gone entirely unnoticed and
unacknowledged in favor of a very young, very new attorney. Just not right.
I’m sorry to come to you on this but I’ve hit a brick wall with A. I’ve tried to talk things through with
him but he is not hearing me. Things finally came to a head at the Commission meeting on _____
(Weiner) and I now much come to you for advice and guidance on how to proceed with A.
I was shocked and appalled that there was no mention of the underlying work that I and other members of
the Spongetech team performed which led to the Wiener enforcement action.
I am extremely troubled by the way things have turned out w/r/t Linda. I do not understand why my
Assistant Director is promoting this young women and her work at my expense.
I really like and in many ways respect A. I think that he is a good manager for the case but we do not
seem to be a good fit. I’m sorry that things have come to this, but I will not let anyone treat me unfairly
– particularly w/r/t my work on the Spongetech investigation/litigation.
2012 Status MTF F:\2013 employee stuff\MTF - IMPACT ON CASE
F:\2013 employee stuff\MTF - IMPACT ON CASE

Subject: STATUS
Date: Wednesday, May 02, 2012 2:58:19 PM
Attachments: FW Fall 2012 Interns.msg
Spongetech
• Continued to review SM’s 70,000 email database in connection with proffers and subpoena
drafting. Also continue to preserve and organize emails relating not only to the spin-offs that I
am responsible for, but also for the anticipated litigation as well as for the spinoffs that I am not
100% primarily responsible for. Continued to review Eisenberg proffer and all the work such
an interview requires - NYC
●Tepfer proffer NYC and all the related work such an interview requires
●also prepared for a two-day proffer with SM that was cancelled immediately before the proffer.
●Attended Status Conference (attended)
●Continued to be primary contact with respect to the litigation with respect to the facts of the case
including, but not limited to, issues relating to our decision to name BTR as a relief defendant and taking
the lead to identify issues with respect to various proposed, largely suspect transactions related to Metter’s
claim that he is “selling” certain of the radio stations. In this regard, I also took the lead in investigation
the proposed buyers among other things.
●Continue to monitor the stock message boards as necessary and in one instance identified a not
anticipated important decision by Judge Irizarry on the private class action which was a great catch. I
also took the time to summarize the Court's opinion for the benefit of the team.
●Required to put together numerous memos and organize all proffer notes in order to get AK, TC, and
the AUSA up to speed on Pensley, MRR, and RR. I spent time with the AUSA in NYC and reviewed the
proffer notes, etc. He was satisfied based upon the very reliable, credible record that I built that both the
Romeros made material misstatements during several proffers with us occurring over the course of one
year.
He was also satisfied that the JP criminal referral was a righteous case. The AUSA did, however,
anticipate that they might need our proffer notes to prove material misstatements – albeit not in support of
any criminal case for obstruction, false statements or perjury. Rather, the AUSA intends to charge the
Romeros directly for conspiracy, mail fraud, etc. The ASUA simply requested that we affirm we would
provide him with our notes or even a declaration in case counsel for the defense denies that the Romeros
made false statements to us in violation of the relevant cooperation agreements.
●Given the AUSAs request, I was instructed to gather materials and info for my AD and my SO, which I
did do. Initially, I was to gather and organize the proffer notes
which I did. I created binders, identified and organized the written false statements made by the
Romeros. During the course of the Romero investigation, I recognized almost immediately that the
Romeros were not truthful. Accordingly, I ensured that each proffer be memorialized and recorded as
accurately as possible give that we did not have a court reporter. Still I gathered raw notes, final memos
authenticating the notes, and emails circulated in order to confirm the accuracy of the notes at issue.
When I met with the AUSA-EDVA in NYC and the obviously materially false statements in the raw
notes and in the final note memorandums, he agreed that the Romeros did make obvious false statements
and made the above request for the reasons described in the immediately foregoing paragraph..
●Subsequently, my supervisors’ requested that I walk them through the proffer notes (just as I did with
the AUSA) somehow after my meeting with the AUSA over time that request morphed into a request for
a memo describing both the proffer-related conduct as well as the underlying conduct that we and the
criminal authorities intend to charge against the Romeros.
●As requested, for the past two years in connection with our investigation, the DE criminal case, the
EDNY investigation; I drafted numerous memos of this sort. The case, however, continues to evolve and
change largely as a direct result of the Romeros’ lies. Accordingly, each memo is quickly out of date and
requires substantive revision. Given the last request for memos relating to both the false statements and
conduct at issue, we agreed that should just try to get the Action Memo done because right now it is the
only reasonably up-to-date document that addresses the facts relating to the proffers as well as the facts
supporting a case against both Romeros for touting, market manipulation, and registration violations.
However, I cannot finalize this memo until I know whether or not we are going to give the EDNY the
assurances they seek and/or criminal charges are filed against the defendants.
Accordingly, it is pretty difficult to get this memo into any kind of form which will not require
substantive revisions. Moreover, when I try to prioritize the memo some other urgent task is put before
me.
●For instance, before I knew that we needed to expedite the TA/B-D investigations I intended to
prioritize the memo during the month of March. However, I was told to prioritize the other spin-off
investigation and so that I have been unable to make much progress on that memo.
●After our civil case was definitively stayed, in February it was decided that we should move forward on
certain of our spin-off investigations – particularly the TAs.
Initially, we were occupied with other things such as the litigation, proffers, the Romero and Pensley
criminal referrals among other things.
●Accordingly, while simultaneously attending to other work described in this email; I went back in an
effort to create updated chronologies and spreadsheets for both OM and WWST that showed the pattern
of communications and conduct which would incorporate historical evidence and new information culled
from the SM 70,000 email DB. While I made substantive progress on both, I was not able to complete
the spreadsheets before March 2012 when I learned of the expedited time line of the TA/BD
investigations.
• In early March 2012, I learned that that I was to draft and get out subpoenas to the TAs, two
Broker deals and the principals and employees of each by the end of that month. While another
attorney provided assistance, he is relatively inexperienced so it was necessary for me to take lead
in the initial draft of all subpoenas in order to turn them around that quickly. In each case, the
subpoena had to be tailored to reach the documents that the recipient was most likely to have given
his or her role in the conduct (i.e., broker/TA/Principal/Employee/Registered Rep/Compliance, etc.
This required significant research into the roles of each entity and/or related party in order to
identify the primary issues so that we would ask the right questions in our subpoenas as well as in
testimony. To get all this done quickly, it was once again necessary to review thousands of emails
obtained in certain OCIE exams as well production from an unrelated investigation and OCIE
exam referrals, etc.
●Simultaneously, in light of the new deadline I also had to review the M and J Drives in an effort to
identify all outstanding related production that had not been processed through Concordance. In this
regard, I ultimately had to manage the processing of the following productions: Blue Trading NERO.
WWST emails and other materials related to the initial inquiry and JHDarbie exam hard drive. In this
regard, it was necessary to take the lead in communicating with NERO, OCIE (diff staff BT versus JH
Darbie) in an effort to identify exactly what materials we have already have with respect to a possible
case against either of the two brokers, the TA, and/or the principals and employees of each. As a result
of my hard work, I believe we have now uploaded or in process of uploading the data to Concordance
●Ultimately, after I identified the primary subjects for the subpoenas, I drafted the underlying templates
for all individuals no matter what their role (i.e., compliance, registered rep, transfer agent, etc.). I also
drafted the subpoenas for the entities.
Another attorney assisted in tailoring the Broker/Dealer templates based upon his own knowledge and
research in this area. Ultimately, however, I was entirely responsible for the majority of the subpoenas
and as well almost entirely responsible for the others. In total, I (with some assistance from another
attorney with respect to 1 broker/dealer) drafted and issued 11 comprehensive subpoenas to certain
principals and employee of two Broker-Dealers, Transfer Agent, a former Spongetech employee, two
broker-dealers and a TA by the end of March 2012 as requested.
●I have also found it necessary (given that the other member of the team – while awesome – has little to
no staff attorney experience) to do all the work related to document control. In this regard, I am the
primary POC for Jason, the CPU, and each and every one of the subpoena subjects). To the extent that
you have been out of pocket the last 6 or so weeks, I’ve been everyone’s POC on this case. I am in role
of overseeing and managing pretty much everything. Just so you can get a sense of how much time and
energy I am required to perform with respect to document production alone, I am attaching some of the
emails which demonstrate the enormity of time and attention it takes simply to manage document product
with respect to each and every subpoena we issued. Last week, I asked Scott to take the lead with the JH
Darbie production because I just did not have time to do it. As far as I know that has been taken care of
but in order to figure what to do, Scott needed to confer with Rebecca, me, Jason and who knows who
else. ** Even though I at least handed off this one production, I know that based on the cover letter I
read that JH Darbie’s
production is not complete. I don’t know whether Scott even has the experience to recognize that he
needs follow-up with JH Darbie, get dates for the new production, figure out what they holding back, etc.
This is probably not any of my business but if I don’t follow-up and oversee how do we know it will ever
be done?
Non-Spongetech
[Note: I agreed to take on much of this work not knowing that I would also be required to expedite
the time frame/investigation as to the TA/B-D investigations described above. Despite my
workload, I have managed to meet my other commitments while making substantive contributions
of high value to the Division with respect to each of the initiatives I worked on during this time
frame.]
Ma7 2012: mtf See F:\2013 employee stuff\CHRONO
ked to SS this date and discovered that AK told him that we would lead JH Darby and have
primary responsibility for that piece of the case. This is contrary to the explicit conversation
that I had with AK regarding SS’s role (ala Linda). This piece of the investigation has been on
my radar and I have worked on it every chance I get since late summer/early fall of 2009 (when
not being tasked with cleaning up after paralegals who do not know how to do their job, while
simultaneously being forced to act as paralegal/secretary for everyone on the case.
• No one but me has read the transcripts;

• No one but me has led any proffers;
• No one but me reviewed, saved, and segregated the 70,000,000 email SM database. In
doing my review, I saved all emails that I thought were helpful to the team as a whole.
Not just emails related to my primary, assigned responsibilities (which change on a
weekly basis for reasons not within my control)
• With a few short term exceptions and no accountability – any support that I have had in
leading my primary responsibilities (i.e., case historian, case fact-checker, liaison btwn
crim folks and SEC – preparing for and making a successful criminal referral on JP and
the Romeros with no support assistance whatsoever. Taking the lead with respect to any
factual issue related to our case or the criminal case.
• Over the years, I have always conducted myself as the lead on this case with respect to
any spin-off investigation. I have always done the lion’s share of work. Other
members of the team have repeatedly indicated their willingness to second chair the
investigation with me, but my supervisor complete disregards for reasons entirely beyond
my control.
• For instance, this date I confirmed that AK despite explicit agmts to the contrary told SS
that he would take the lead on JH Darbie and be entirely responsible for this piece of the
case. I have explicitly not agreed to that. My understanding was that given the recent
sudden rush to move things forward that the testimony/subpoena issuance had to be
divvied up. That said, I am determined to avoid another Linda situation and I have made
that abundantly and explicitly clear to AK.
• I am responsible and have been responsible for the ongoing investigations with respect to
all gatekeepers.
• I am the only one who has asked questions of witnesses re: the gatekeepers
• I am the only member of the team who is a member of the MCWG and TA
subcommittee, issuer and promoter subcommittee
• I have also been the intermediary between the criminal authorities both NJ and EDNY
with respect to all gatekeeper issues.
• I drafted all the subpoenas for every current subject including all the JH Darbie
subpoenas in order to get them out as quickly as my supervisor request.
• To the extent that I have ever had any substantive support on the primary litigation/spin-
off investigations it has been through my own efforts and by virtue of the goodwill and
respect that I have gained over the years both due to my work on [REDACT] and also
because of my long record of volunteering my time to serve on other initiatives such as
Career Intern, SHP, Advance Commits, TA subcommittee, ISSUER subcommittee, many
focus groups including case closing groups, Fall Intern subcommittee, SAUSA-EDVA
coordinator – all efforts that I have taken on behalf of others sometimes to my own
disadvantage. For this reason, prior to my February 2012 move to AK’s group area,
many others were willing to share their interns with me so that I could even try to stay
ahead of the game (Front Office, OMI, and AMU). In each instance, I have used such
assistance to move the case forward as a whole. Furthermore, I ensured that my interns
would help the various trial lawyers on the case that refused to use their own paralegal
assistance.
• I am also personally responsible for (1) getting LS a job (as paralegal, as law clerk as
staff attorney; (2) keeping LS on this case after she was hired; (3) and without my
knowledge her “stand-alone” case.
• I am also personally responsible for Scott’s assignment to my case. I reached out to his
then-supervisors including Mark __ and Eric. Over time, I became friendly with Eric
and he appreciated my efforts on [REDACT]. Accordingly, he assigned a great market
surveillance specialist to our case and allowed me to keep him despite the fact such
personnel had extremely limited availability. I made sure that both Eric and SS knew
how much I appreciated SS and his input all the way along this case since his assignment
in late 2010? Had it not been for my efforts to engage, motivate, and show appreciation
for effort, we would not have SS now.
• In addition to finding out that AK entered into an agreement with SS that is directly
contrary to the assurances he gave me in this regard
• Given my efforts with the SAUSA-EDVA program, I have built up some good will with
RK and AS. We need support staff to move this case. Accordingly, when I learned
from AS that there was funding for contract paralegals and as good as told me (during
group meeting) that if I submitted a one-page paragraph with a justification for LSS, it
would be approved. Accordingly, despite my many responsibilities for non-substantive
as well as substance case-related duties; I made the time and effort to again use my hard
earned personal capital and good to connect with Jennah and her staff, find out exactly
what was needed for the process, drafting the memo, etc. I told my supervisor from the
beginning that the paralegal would be assigned to [REDACT]. Despite working through
nights and weekends (as usual) in prep for my substantive responsibilities, I was recently
forced to spend many, many work hours trying to track down production with respect to
the 12 or subpoenas we issued. While the paralegal responsibilities were ultimately
divvied up, it was not until after I had tracked the production, identified the problems and
fixed it. To do this I was required to act as intermediary between the staff and the CPU
and LSS.
• After my supervisor allowed me to do all the leg work on the justification memo and the
process (despite the fact that I was simultaneously forced through the weekends and
nights to meet an arbitrary deadline which once again required me to be not only my own
paralegal but my supervisor’s, the AUSA’s, the FBI’s paralegal(Thursday night prepare
binders of all proffer materials for shipment COB Monday); once I had figured it all out
and was preparing the final memo, he informed me that the paralegal would not be
dedicated to [REDACT] but also to other cases under his supervision. This after we
discussed (1) there was funding; (2) given the good will I built up, that AS would almost
certainly approve; (3) that we desperately need a dedicated intern. This conduct is
completely unacceptable
• In this regard, also not that through my own efforts and good will between me and JC, CS
etc., I had gone through the whole justification process to keep LS as an paralegal so she
would have a better chance of employment. Accordingly, after the reorg I advised my
super of the justification process etc. At this request, I compiled data demonstrating the
metrics of this particular investigation/litigation required a paralegal. I received no
support on this and the justification was not submitted.
• Later, I advised the very new TU lawyer of the justification memo/process. I sent both
trial lawyers the memo. They utilized the process to obtain a paralegal for [REDACT].
The lead TU atty, however, with my supervisor’s tacit approval used the paralegal for
another matter so [REDACT] benefitted not at all. Rather, the investigative staff was
required to deal with all secretarial, paralegal activities related to discovery issues,
preparation, etc. We were forced to do all the filings for a massive declaration
complaint, PI motion, etc. We had to work nights weekends etc., none of this effort was
acknowledged in my 2010 eval. Somehow, I managed to keep us all afloat by using
creativity and ingenuity to get us help including the TU.
• I did this all to avoid losing document control to the extent that the files would once
again be a complete mess as they were during CG’s brief stint as a paralegal on this case.
The files were a catastrophe (despite my pre-reorg warnings that the paralegal did not
know what she was doing I did not receive any support on this issue then or now).
Ultimately, the staff was forced to spend potentially hundreds of work hours on
Concordance/ Production issues in advance of Discover which took away endless time
from the investigation/litigation. Because of my efforts to ensure that this sort of thing
did not happen again, our LSS apparently decided that he wasn’t happy with me and
became overtly disrespectful on email (this despite my efforts to deal with his obvious
anxiety about the production in a kind and patient fashion). I asked my supervisor to
speak with LSS because I could not imagine why this person would have any reason
whatsoever with me since I went out of my way to help him to his job. Apparently the
end result of his conversation with AK was a joint determination that I (Not he) needed to
communicate better. Accordingly, implicitly or explicitly my supervisor allowed the
LSS be overtly disrespectful to me without any consequence. Accordingly, I have no
idea how I am supposed to communicate with this person going forward since he knows
he can be disrespectful to me, blame me, and will not suffer any consequences.
Started working on all OCIE exams WWST, JH DARBIE AND OM DURING OCT/NOV 2010
WHILE SIMULTANEOULSY TAKING EXPEDITED TESTIMONY OF ALL PRIMARY
DEFENDANTS (ALL BUT TWO OF WHICH HAVE BEEN CHARGED IN CONNECTION
WITH TESTIMONY BEFORE ME (Two defendants have entered GPs and we expect another D
(lawyer to be charged as well).
2012 Fall Law School Observer Program:
On January 30, 2012, I volunteered to serve on a three-member team responsible for hiring approximately
100 interns Commission-wide. From February to May 1, I was responsible for screening resumes,
interviewing candidates, and making offers. We hired nearly 100 interns for the entire Home Office. To
meet my responsibilities on this hiring initiative, I needed to interview approximately 50- 60 students in
order to hire 30. When I volunteered to take on this work, I had no idea that I would simultaneously be
required to expedite my historical TA/BD investigations – in particular the subpoenas and related work
with a target deadline of April 1. Certainly, the time-intensive nature of the intern-related work was
made clear to you before I agreed to take this on. [See Email attached] When we initially discussed this,
we talked about the time commitment and the concerns we both had in this regard. Since you had no
other volunteers, I agreed to take this on. Despite the fact that you and I were concerned about my time
constraints before you decided to expedite the spin-off investigations, not only was there any effort to
reduce my case work at all. Rather, I was required to take on significantly more work with short deadlines
during the same two month time frame of the intern project. Still, I’ve managed to hire a third of the
approximate 100 interns that will be working for us this fall (and I still made sure all the subpoenas were
ready to go by the end of March). Because of my hard work on this, we will have the best available full-
time intern to work for us next
fall.
MCFWG
• Member, Issuer/Promoter subcommittee
• Member, TA sub-committee: The MCWG Transfer Agent requested that I join that
subcommittee, too. I agreed. I played a material role in ensuring that a brief that
GC would file in the 9th Circuit would not result in bad law that could potentially
negatively impact any future case we may bring against the TA. I’ve taken this
role on because it will help move our
•
investigation forward for any number of different reasons. I’ve also identified and summarized for the
TA subcommittee pretty much all ENF cases relating to Task
c) Member, Rule Making (OCIE) subcommittee offshoot of TA subcommittee. At Cindy Wong’s

request, I have also agreed to serve as a member of the Rule Making portion of the TA committee.
SAUSA Program-EDVA:
Began the process to initiate our resumption of our participation with the SAUSA Program (at various
times interfacing with Rob, Adam, and Cohen). Acted as intermediary between SOs and Rob. I also
acted as intermediary between the EDVA Specials Unit as well as the Public Corruption and Fraud Unit
in order to affirm that Units will allow our detailee to work out of the Fraud Unit during the felony
portion of the detail. Significant programmatic implications. I was able to get everyone on board. Over
the past month, I’ve also had to create spreadsheets and draft memos relating to the detail and the
selection process.
SEC’s 2012 International Institute for Securities Market Development.
Upon request of the front office, led (w/two other attorneys) a market manipulation workshop. The
attendees were high-level securities regulators from all over the world. This required a fairly significant
time investment given prep, etc. I and the other Enf participants have been commended for our
“outstanding” work. It was a great success judging from the attendees evaluations.
Feb. 2013: Nathan Dimock F:\2013 employee stuff\MTF END OF SEPT 2012
Chrono F:\2013 employee stuff\Chronos
●On November 20, I traveled to NYC by Acela for a witness interview. Due to travel
restrictions and budgetary issues, I had to travel alone and needed to personally transport
my interview materials including my laptop, a large binder of materials and other assorted
materials adding at least an additional 20 lbs. to my luggage which included my personal
handbag, a carry‐on bag, my computer bag, and a large rolling suitcase. When we arrived at
Penn Station and I exited the train there was a long line behind me. I had requested Red Cab
assistance to get off the train but none was available. Accordingly, I needed to quickly grab
all three pieces of luggage off the storage rack and then step off the train down onto the
platform of the train station. Because there was a huge line of people behind me I had no
choice in that moment but to step down onto the platform, then twist back, bend, and lift my
heavy suitcase (while holding my computer bag , my purse, and my carryon bag on my
shoulder) off the train onto the platform. In that moment, I felt something pull in my back
and I suffered from significant pain from then onward. The next day, I had to get a car to
take me from the hotel to the interview site not more than three blocks away simply because
I was in too much pain to try to walk there myself.
●On top of this, I was late to the interview which I was leading so I then had lug my suitcases
up a concrete stairwell at the location of the interview.
●I returned to DC that night and then learned my brother had been the victim of a drunk
driving incident and as his medical and legal POA, I needed to focus my attention on him
rather than myself. The pain was bad but not horrible at that time. It was significantly more
and different than what I had experienced in the
past. Simultaneously, the massive and complex investigation that I am assigned to as lead
and (pretty much) only attorney ginned up.
●As a result, it was necessary for me to spend 4 to 8 hours a day at my computer sometime
not even leaving for a ladies room break on a daily basis. I often worked (and continue to
work) nights and weekends, too. Due to the current office set up, my body is twisted at my
computer. It’s is not possible to sit in an ergonomically correct position. Accordingly, the
pain and stiffness began to increase and I started feeling significantly more pain/discomfort
in my tailbone as well as sciatic pain in my leg.
●During this same time period, I was required to return to NYC for another interview of a
material witness in mid‐December. Again, due to budget and travel restrictions I needed to
travel alone and personally transport significant materials with me. It was a difficult journey
and my pain and stiffness became significantly worse and it became increasingly difficult to
sit for any length of time particularly in my office given the setup.
●Then in early January, I was required to move the materials, files and folders in my office
that had gathered up over the course of a three year complex and massive investigation to
another office in order to free up space in mine. Given that my back issues did not seem to
impact my ability to lift, I performed the physical labor of lifting all those materials including
heavy binders and moving them to another office.
●Since that time, the sciatic pain increased significantly as did the stiffness and
discomfort at the facet joints. All of these factors combined to bring me to you for
evaluation and treatment.
Given your diagnosis of the more chronic DDD condition as well as the herniated disc, I recognize now
that there were symptoms of a more chronic condition that I began to experience over the past
several years.
May 7, 2012:
alked to SS this date and discovered that AK told him that we would lead JH Darby and have
primary responsibility for that piece of the case. This is contrary to the explicit conversation
that I had with AK regarding SS’s role (ala Linda). This piece of the investigation has been on
my radar and I have worked on it every chance I get since late summer/early fall of 2009 (when
not being tasked with cleaning up after paralegals who do not know how to do their job, while
simultaneously being forced to act as paralegal/secretary for everyone on the case.
• No one but me has read the transcripts;

• No one but me has led any proffers;
• No one but me reviewed, saved, and segregated the 70,000,000 email SM database. In
doing my review, I saved all emails that I thought were helpful to the team as a whole.
Not just emails related to my primary, assigned responsibilities (which change on a
weekly basis for reasons not within my control)
• With a few short term exceptions and no accountability – any support that I have had in
leading my primary responsibilities (i.e., case historian, case fact-checker, liaison btwn
crim folks and SEC – preparing for and making a successful criminal referral on JP and
the Romeros with no support assistance whatsoever. Taking the lead with respect to any
factual issue related to our case or the criminal case.
• Over the years, I have always conducted myself as the lead on this case with respect to
any spin-off investigation. I have always done the lion’s share of work. Other
members of the team have repeatedly indicated their willingness to second chair the
investigation with me, but my supervisor complete disregards for reasons entirely beyond
my control.
• For instance, this date I confirmed that AK despite explicit agmts to the contrary told SS
that he would take the lead on JH Darbie and be entirely responsible for this piece of the
case. I have explicitly not agreed to that. My understanding was that given the recent
sudden rush to move things forward that the testimony/subpoena issuance had to be
divvied up. That said, I am determined to avoid another Linda situation and I have made
that abundantly and explicitly clear to AK.
• I am responsible and have been responsible for the ongoing investigations with respect to
all gatekeepers.
• I am the only one who has asked questions of witnesses re: the gatekeepers
• I am the only member of the team who is a member of the MCWG and TA
subcommittee, issuer and promoter subcommittee
• I have also been the intermediary between the criminal authorities both NJ and EDNY
with respect to all gatekeeper issues.
• I drafted all the subpoenas for every current subject including all the JH Darbie
subpoenas in order to get them out as quickly as my supervisor request.
• To the extent that I have ever had any substantive support on the primary litigation/spin-
off investigations it has been through my own efforts and by virtue of the goodwill and
respect that I have gained over the years both due to my work on [REDACT] and also
because of my long record of volunteering my time to serve on other initiatives such as
Career Intern, SHP, Advance Commits, TA subcommittee, ISSUER subcommittee, many
focus groups including case closing groups, Fall Intern subcommittee, SAUSA-EDVA
coordinator – all efforts that I have taken on behalf of others sometimes to my own
disadvantage. For this reason, prior to my February 2012 move to AK’s group area,
many others were willing to share their interns with me so that I could even try to stay
ahead of the game (Front Office, OMI, and AMU). In each instance, I have used such
assistance to move the case forward as a whole. Furthermore, I ensured that my interns
would help the various trial lawyers on the case that refused to use their own paralegal
assistance.
• I am also personally responsible for (1) getting LS a job (as paralegal, as law clerk as
staff attorney; (2) keeping LS on this case after she was hired; (3) and without my
knowledge her “stand-alone” case.
• I am also personally responsible for Scott’s assignment to my case. I reached out to his
then-supervisors including Mark __ and Eric. Over time, I became friendly with Eric
and he appreciated my efforts on [REDACT]. Accordingly, he assigned a great market
surveillance specialist to our case and allowed me to keep him despite the fact such
personnel had extremely limited availability. I made sure that both Eric and SS knew
how much I appreciated SS and his input all the way along this case since his assignment
in late 2010? Had it not been for my efforts to engage, motivate, and show appreciation
for effort, we would not have SS now.
• In addition to finding out that AK entered into an agreement with SS that is directly
contrary to the assurances he gave me in this regard
• Given my efforts with the SAUSA-EDVA program, I have built up some good will with
RK and AS. We need support staff to move this case. Accordingly, when I learned
from AS that there was funding for contract paralegals and as good as told me (during
group meeting) that if I submitted a one-page paragraph with a justification for LSS, it
would be approved. Accordingly, despite my many responsibilities for non-substantive
as well as substance case-related duties; I made the time and effort to again use my hard
earned personal capital and good to connect with Jennah and her staff, find out exactly
what was needed for the process, drafting the memo, etc. I told my supervisor from the
beginning that the paralegal would be assigned to [REDACT]. Despite working through
nights and weekends (as usual) in prep for my substantive responsibilities, I was recently
forced to spend many, many work hours trying to track down production with respect to
the 12 or subpoenas we issued. While the paralegal responsibilities were ultimately
divvied up, it was not until after I had tracked the production, identified the problems and
fixed it. To do this I was required to act as intermediary between the staff and the CPU
and LSS.
• After my supervisor allowed me to do all the leg work on the justification memo and the
process (despite the fact that I was simultaneously forced through the weekends and
nights to meet an arbitrary deadline which once again required me to be not only my own
paralegal but my supervisor’s, the AUSA’s, the FBI’s paralegal(Thursday night prepare
binders of all proffer materials for shipment COB Monday); once I had figured it all out
and was preparing the final memo, he informed me that the paralegal would not be
dedicated to [REDACT] but also to other cases under his supervision. This after we
discussed (1) there was funding; (2) given the good will I built up, that AS would almost
certainly approve; (3) that we desperately need a dedicated intern. This conduct is
completely unacceptable
• In this regard, also not that through my own efforts and good will between me and JC, CS
etc., I had gone through the whole justification process to keep LS as an paralegal so she
would have a better chance of employment. Accordingly, after the reorg I advised my
super of the justification process etc. At this request, I compiled data demonstrating the
metrics of this particular investigation/litigation required a paralegal. I received no
support on this and the justification was not submitted.
• Later, I advised the very new TU lawyer of the justification memo/process. I sent both
trial lawyers the memo. They utilized the process to obtain a paralegal for [REDACT].
The lead TU atty, however, with my supervisor’s tacit approval used the paralegal for
another matter so [REDACT] benefitted not at all. Rather, the investigative staff was
required to deal with all secretarial, paralegal activities related to discovery issues,
preparation, etc. We were forced to do all the filings for a massive declaration
complaint, PI motion, etc. We had to work nights weekends etc., none of this effort was
acknowledged in my 2010 eval. Somehow, I managed to keep us all afloat by using
creativity and ingenuity to get us help including the TU.
• I did this all to avoid losing document control to the extent that the files would once
again be a complete mess as they were during CG’s brief stint as a paralegal on this case.
The files were a catastrophe (despite my pre-reorg warnings that the paralegal did not
know what she was doing I did not receive any support on this issue then or now).
Ultimately, the staff was forced to spend potentially hundreds of work hours on
Concordance/ Production issues in advance of Discover which took away endless time
from the investigation/litigation. Because of my efforts to ensure that this sort of thing
did not happen again, our LSS apparently decided that he wasn’t happy with me and
became overtly disrespectful on email (this despite my efforts to deal with his obvious
anxiety about the production in a kind and patient fashion). I asked my supervisor to
speak with LSS because I could not imagine why this person would have any reason
whatsoever with me since I went out of my way to help him to his job. Apparently the
end result of his conversation with AK was a joint determination that I (Not he) needed to
communicate better. Accordingly, implicitly or explicitly my supervisor allowed the
LSS be overtly disrespectful to me without any consequence. Accordingly, I have no
idea how I am supposed to communicate with this person going forward since he knows
he can be disrespectful to me, blame me, and will not suffer any consequences.
Started working on all OCIE exams WWST, JH DARBIE AND OM DURING OCT/NOV 2010
WHILE SIMULTANEOULSY TAKING EXPEDITED TESTIMONY OF ALL PRIMARY
DEFENDANTS (ALL BUT TWO OF WHICH HAVE BEEN CHARGED IN CONNECTION
WITH TESTIMONY BEFORE ME (Two defendants have entered GPs and we expect another D
(lawyer to be charged as well).
Nov. 19, 2013. Traumatic Injury

my interview materials including my laptop, a large binder of materials and other
assorted materials adding at least an additional 20 lbs. to my luggage which included my
personal handbag, a carry-on bag, my computer bag, and a large rolling suitcase. When
we arrived at Penn Station and I exited the train there was a long line behind me. I had
requested Red Cab assistance to get off the train but none was available. Accordingly, I
needed to quickly grab all three pieces of luggage off the storage rack and then step off
the train down onto the platform of the train station.
Because there was a huge line of people behind me I had no choice in that moment but to
step down onto the platform, then twist back, bend, and lift my heavy suitcase (while
holding my computer bag , my purse, and my carryon bag on my shoulder) off the train
onto the platform. In that moment, I felt something pull in my back and I suffered from
significant pain from then onward. The next day, I had to get a car to take me from the
hotel to the interview site not more than three blocks away simply because I was in too
much pain to try to walk there myself.
●On top of this, I was late to the interview which I was leading so I then had lug my
suitcases up a concrete stairwell at the location of the interview.
Nov. 20 through mid-December, 2013:
●Upon returning to DC on Nov. 20, learned my brother had been the victim of a drunk
rather than myself. The pain was bad but not horrible at that time. It was significantly
more acute than what I had ever before experienced – particularly when sitting. The
pain was acute and stabbing at times and went entirely down my leg to my foot. At
times it more of an constant deep ache.
●Simultaneously, the massive and complex investigation that I have led since July, 2009,
evolved to into a more complex and significant matter as a result of my investigative and
due to lack of staff resources the demands upon my time became greater. .
●As a result, it was necessary for me to spend 4 to 8 hours a day at my computer
sometime not even leaving for a ladies room break on a daily basis. I often worked (and
continue to work) nights and weekends, too.
my interview materials including my laptop, a large binder of materials and other assorted
materials adding at least an additional 20 lbs. to my luggage which included my personal
handbag, a carry‐on bag, my computer bag, and a large rolling suitcase. When we arrived at
Penn Station and I exited the train there was a long line behind me. I had requested Red Cab
assistance to get off the train but none was available. Accordingly, I needed to quickly grab
all three pieces of luggage off the storage rack and then step off the train down onto the
platform of the train station. Because there was a huge line of people behind me I had no
choice in that moment but to step down onto the platform, then twist back, bend, and lift my
heavy suitcase (while holding my computer bag , my purse, and my carryon bag on my
shoulder) off the train onto the platform. In that moment, I felt something pull in my back
and I suffered from significant pain from then onward. The next day, I had to get a car to
take me from the hotel to the interview site not more than three blocks away simply because
I was in too much pain to try to walk there myself.
●On top of this, I was late to the interview which I was leading so I then had lug my suitcases
up a concrete stairwell at the location of the interview.
●I returned to DC that night and then learned my brother had been the victim of a drunk
rather than myself. The pain was bad but not horrible at that time. It was significantly more
and different than what I had experienced in the
past. Simultaneously, the massive and complex investigation that I am assigned to as lead
and (pretty much) only attorney ginned up.
●As a result, it was necessary for me to spend 4 to 8 hours a day at my computer sometime
not even leaving for a ladies room break on a daily basis. I often worked (and continue to
work) nights and weekends, too. Due to the current office set up, my body is twisted at my
computer. It’s is not possible to sit in an ergonomically correct position. Accordingly, the
pain and stiffness began to increase and I started feeling significantly more pain/discomfort
in my tailbone as well as sciatic pain in my leg.
●During this same time period, I was required to return to NYC for another interview of a
material witness in mid‐December. Again, due to budget and travel restrictions I needed to
travel alone and personally transport significant materials with me. It was a difficult journey
and my pain and stiffness became significantly worse and it became increasingly difficult to
sit for any length of time particularly in my office given the setup.
●Then in early January, I was required to move the materials, files and folders in my office
that had gathered up over the course of a three year complex and massive investigation to
another office in order to free up space in mine. Given that my back issues did not seem to
impact my ability to lift, I performed the physical labor of lifting all those materials including
heavy binders and moving them to another office.
●Since that time, the sciatic pain increased significantly as did the stiffness and
discomfort at the facet joints. All of these factors combined to bring me to you for
evaluation and treatment.
Given your diagnosis of the more chronic DDD condition as well as the herniated disc, I recognize now
that there were symptoms of a more chronic condition that I began to experience over the past
several years.
●Due to my office set up from 2010 through March 2014, my body was twisted at my
computer. It was not possible to sit in an ergonomically correct position.
●Accordingly, the pain and stiffness began to increase and I started feeling significantly
more pain/discomfort in my tailbone as well as sciatic pain in my leg.
Nov. or Dec. 2013

Dr. Johnson : pain, back, annual: “just getting old” Result: Delayed further medical
care until ___
Mid December, 2013:

●Required to return to NYC for another interview of a material witness in mid-
December. Again, due to budget and travel restrictions I needed to travel alone and
personally transport significant materials with me. It was a difficult journey and my pain
and stiffness became significantly worse and it became increasingly difficult to sit for any
length of time particularly in my office given the setup.
Early January 2014:
●Then in early January, I was required to move the materials, files and folders in my
office that had gathered up over the course of a then-3 year complex and massive
investigation to another office in order to free up space in mine. Given that my back
issues did not seem to impact my ability to lift (versus sitting and walking), I performed
the physical labor of lifting all those materials including heavy binders and moving them
to another office.
●Subsequently, the sciatic pain increased significantly as did the stiffness and discomfort
at the facet joints.
February – March 2014
●After I learned that my investigation of a complicit gatekeeper was in danger of being
shut-down due to my need to prioritize then other-more important defendants and
potential defendants, I worked around the clock – literally for 3 weeks in ____ I put
together a complex and voluminous record going back decades in power point form. By
the time I completed the project, I could no longer sit at my desk for any period of time
without significant pain. I immediately reported the same to my supervisor and
scheduled an appointment with my PCP.
March 2014:
●Dr. Joel Taubin; Couldn’t sit without pain, stiffness like since recently 11/14
illosomas muscles. Diagnosis possible Fawcett Joint Syndrome, Degenerative Disk
Desease, and herniated disc consistent with the symptoms including sciatica which I
experienced only after the Nov. 19 traumatic injury.
●No diagnostic test at the time due to my anxiety. Referred me to Physical Therapy and
prescribed a Medrol pack.
●March __, 2014: Dr. submitted a disability accommodation request to my
employer describing the symptoms as impacting major life activities such as sitting,
walking, lifting and bending.
●I established disability on ____- when the request for ergonomic
furniture/equipment was granted.
March through September 2014:
PT: MedStar at least three months (had back pain like I have now and occasional then-
believed to be referred pain on my right leg in addition to left. Extended PT. Sciatica
enough for discharge after traction.
Accupuncture: With Medstar PT for another couple months until end of May 2014.

Sent: Friday, May 30, 2014 12:31 PM
Subject: mtf affiliates never sent to
Alec.what.they.are.trying.to.cover.up.in.addtion.to.IW.mm.events
Alec:
When we spoke last week, when you said that Halperin’s testimony regarding affiliate
status (what he knew/when he knew it, etc.) referred to AT/JE (a/k/a the transferrors)
not the beneficiaries (a/k/a the transferees) you were right --- but you were also
wrong: Halperin’s testimony explicitly referenced each group separately at various times
during his testimony.
More importantly, however, in either instance no matter which group he reference what he
knew and we have not apparently picked up on (I wasn’t in the loop on the Halperin
briefing during the litigation, the Wiener case, or recently w/r/t Tim’s assignment, so
perhaps I’m missing something?) is that the transferor/transferee designation is a
misnomer. At the end of the day each group fell into a single category – affiliate. And
this fact is the primary, material fact that the entire dump phase of this scheme hinged
upon.
Affiliate:
http://www.feinberghanson.com/Rule144.html
Securities which are acquired from the issuer or an affiliate in a "transaction or chain of
transactions not involving any public offering," are also deemed restricted securities for
purposes of Rule 144, whether or not they bear a restrictive legend.
Thus if a director (an affiliate) of General Electric buys G.E. stock in the open market, that
stock is deemed not to be restricted, because it was acquired in a "public" transaction.
Even so, the director would have to comply with Rule 144 to sell the stock on the open
market to avoid underwriter status simply because he is an affiliate. If the director instead
sells the stock in a private sale to a non-affiliate, the stock becomes restricted in the hands
of the buyer, because he has purchased from an affiliate in a transaction not involving any
public offering. The buyer would have to comply with Rule 144 in order to resell the stock
on the open market without registration.
http://www.sec.gov/investor/pubs/rule144.htm
Control securities are those held by an affiliate of the issuing company.

An affiliate is a person, such as an executive management and policies of the
company in question, whether through the ownership of voting securities, by
contract, or otherwise. If you buy securities from a controlling person or "affiliate,"
you take restricted securities, even if they were not restricted in the affiliate's hands.
In our case, all of the stock purchased by the affiliates who were in many instances
affiliates themselves was restricted.
When you made that comment about Halperin’s testimony, I realized that I needed to go
back where I started in the Spring of 2009 and walk through the entire Section 5 reseller
theory once again to refresh my recollection in light of what I know now. So while I did
not ask you if I could earn credit hours this weekend (primarily because I didn’t want to
disturb your holiday) I continued to work on all this assuming you would not have a
problem with my doing so. In addition to looking at the law generally, I spent a lot of time
looking at the Internet reviewing the guidance that everyday practitioners put out there
w/r/t the lifting of legends in the resale context and walked through the process by
examining the links at every step of the distribution chain. I now realize that we stopped
our analysis too soon. The hook for our theory to me was always the fact that in addition
to only having the burden to demonstrate that only three exemptions were inapplicable, I
also understood that we have the benefit of the presumption that the shares are assumed
sold into the public market once they reach the hands of the reseller thus relieving us of the
necessity of having the burden to prove that point as well.
As it turns out, there is another presumption of sorts that is material to our analysis of this
fraud. This presumption is well-known by Rule 144 practitioners including gatekeeper
such as attorneys, B/Ds, and Transfer Agents and they each have duties in this
regard. Specifically, when an affiliate transferor resells shares to an affiliate transferee
such shares are restricted regardless of whether or not the certificate has been
listed. Accordingly, in such circumstances the transferee/affiliate must satisfy the Rule 144
holding period or find an exemption allowing it to sell sooner. In a pump-and-dump,
the goal of the scheme is always to dump the shares as soon as possible. There is always a
risk that the whole thing will fall apart at any time because the company and its products
are a fraud. The Spongetech fraud was no different than any other in this
respect. However, as of April 2009, when Spongetech made its first blatantly false filing
and began the extreme pump of the stock it was on borrowed time because of the intense
scrutiny that its aggressive pump drew to the Company. Everyone involved in the late
Spring/early Fall (see material events chrono in AT proffer materials) knew that they were
on borrowed time and that time was of the essence. None of the beneficiaries, all of whom
likely fell in affiliate category including, but not limited to, AT, JE, Double U could afford
to hold onto that stock one more second than absolutely necessary. So as time went on the
goal of the various phases of the Spongetech fraud became increasingly dependent on not
just getting the shares to the beneficiaries through the false/fraudulent opinions but also
ensuring that once the shares were in hand that the affiliate status of those beneficiaries
would be ignored or concealed by the TAs/B/Ds processing the stock.
Hence the need for B/T, WWST and then Darbie beginning in June 2009. I also now
realize after having gone through as much of the various BT/Darbie DBs as I have been
able to do in advance of the AT/JE proffers and in the context of trying to fill in the blanks
on Darbie, including but not limited to, the Broker DBs that were not produced by the
brokers but rather by via my requests of internal sources (i.e., NYRO’s BT DB and OCIE
DB) that this this fraud evolved over time particularly w/rt/ the dump phase which needs to
be analyzed at each phase in order to understand what happened here.
The first phase of the dump began at the time Spongetech (a shell company) emerged after
a merger between JP’s company and an predecessor MM/SM company. That phase of
the dump continued until approximately April 2009, when SA/CSH largely took over and
started brining in all the trading groups. During the initial phase of the dump, the goal
was to get the shares from insider affiliates to other insider affiliates. For instance, JP was
not only an attorney who wrote an opinion distributing shares to himself as
beneficiary. He was an affiliate who transferred shares to himself also an affiliate. The
majority of the other so-called beneficiaries of the Pensley letters (with some expections)
were also affiliates (i.e., all MM companies, SM companies, etc.). The first TA, OM,
undoubtably knew given its long history with SPNGE and its predessecor companies along
with its longstanding relationship with JP that the distributions were from affiliate to
affiliate and therefore (1) the legends should not have been lifted at all but also that (2)
contrary to representations to B/Ds that there were “stops and restrictions” on the certs
regardless of whether the legend was lifted.
In this regard, the BDs statutory duty of inquiry requires that they confirm that the resale
is not to an affiliate regardless of what the TA says and regardless of whether or not the
legend has been lifted off the certificate.
RULE 144 NOT APPLICABLE TO SHELL COMPANY IF IT WAS EVER A

SHELL. HAVE TO MEET CERTAIN STEPS ONE YEAR BEFORE RULE 144
INCLUDING FILE FORM 10 – BRILLEMAN KNEW – SEE TESTIMONY. SO DID
HALPERIN.
Current ADEQUYATE info applies to affil and nonaffiliated.
HALPERIN KNEW THAT CSH/SA/YU/YOUNG WERE AFFILATES BY HIS OWN

DEFINITION. LIKELY KNEW THE SAME ABOUT PENTIUM/DOUBLE U. AS
LONG AS HE KNEW ABOUT ONE DON’T’ HAVE TO PROVE HE KNEW ABOUT
ALL. KNOWING AS TO ONE KNOWING AS TO ALL. DON’T HAVE TO PROVE
900 HUNDRED COUNTS OF FRAUD—JUST ONE.
WWST/BT. JG, SC, YK. PRIMARY HOOK. THEY KNEW AT AND JE WERE
AFFILATES THAT IS THE MEANING OF ALL THE DOC I identified in preparing for
at/je proffer.
Doc where SC lies aobut the reason that they share same address. Hid this from
compliance. Yonah at the offices. He knew what the set up was. See also Fbi – description
of the office set up. Bunch of guys sitting in tiny office with tons of desks. One desk VAE,
ONE SPNG.
JE/AT – HAVE TO REVIEW DARBIE DB TO UNDERSTAND THE CONNECTION TO

PENTIUM. WERE BT DOX IN THE DARBIE DB?? WHY?
REFERRING TO THE OCT/NOV EMAILS WHERE SM HAS TO SEND REVISED
LETTERS GIVING THEM BASIS TO ACCEPT THE STOCK DEPOSIT.
REASON FOR URGENCY AND REASON THAT THE EVIDENCE INCLUDING

EMAILS THAT I PUT TOGETER IN ADVANCE OF THE AT,JE, SM re-do proffers this
quarter did not fit the chronology offered by all 3 profferors. AT/JE obviously got
together and threated to go to criminal authorities around the time that AT allegedly
w/drew from the scheme. The deal was that they would shut up if he paid them off by
giving them certs and then getting them a broker who would accept the certs and allow
them to make a profit right away by ignoring or covering up the fact that they were
obviously affiliates. Alternatively, AT DID WITHDRAW AND JE ALSO DID. SM
NEEDED THEM TO GET THE STOCK TO DOUBLE U AND THEREFORE MADE
THEM AN OFFER THAT THEY COULD NOT REFUSE SO THEY BOTH CAME
BACK IN KNOWINGLY AND GOT PAID OFF BY VIRTUE OF THE ABOVE.
June 2014: Developed painful and now chronic TE due to specific case demands.
August through September: Double U
Back/sciatica extremely painful and tennis elbow to the point of almost inability to type
Septemer __, 2014:
Dr. James Gasho: Sent me for MRI. Steroid shot for elbow. Did not resolve entirely
nor completely.
● Jan. 01, 2015 (L/S MRI) (see Report/film) small Ruptured Disc
Dr. Gahso referred for LSE
● January through March 2015: Three L/S epidural injection procedures for
sciatica/lower back pain. Dr Bradley Dick. Suburban. Fibroid specialist as well as
top radiologist.;
● When I only obtained partial relief after two ESI’s, Dr. Dick referred me to another
MRI to determine if large fibroid tumors could be compressing nerves.
● Feb. 04, 2015 (Pelvic MRI # 1, w/wo contrast) (see Report/Film)
● Mar. 9, 2015 (Pelvic sonogram) (see Report/Film)
● Mar. 18, 2015: Corr. Spies to H. Johnson (then-OB/GYN) ( Corr. attached)
referencing back pain; nerve compression primary concern
● April 9, 2015 (UFE, GUH, Spies) (see Report)
● May 9, 2015 – to present: (sloughing or possible expulsion of pedunculated,
submucosal fibroid(s) –on alert from that date onward of potential risk of life-
threatening infection (i.e., sepsis) requiring three (3) days intravenous antibiotics
and/or hysterectomy )
● May 15, 2015 (Culture Positive infection) (see Rpt)) (Three (3) day antibiotic
● May 19, 2015 (Pelvic MRI #2 w/wo contrast) (Spies) (see Report /Film)
●PC Spies: I emphasized need for collaboration. Asked him
● May 20, 2015 (Corr. Spies to H. Johnson) (see attached)
● Monday, July 6, 2015: Learned upon receiving a call from Sibley that I was
scheduled for surgery two days later on Wed. Scrambled to make arrangements:
work, family, dog, et.
●Because of my many clear and repeated concerns re: close collaboration
between Dr. Spies and Dr. J, I hoped she would tell him that I was going to
have this surgery. Had she done that, he would v. likely have reiterated the
need for antibiotic therapy pre-and post surgery. Would have been a safety
net. This was not done. Because I had less than 24 hours notice pre-surgery,
I did not do it myself. [ONGOING ISSUE WHICH SHOULD BE
CLEARLY REFLECTED IN NUMEROUS EMAILS BETWEEN D. J’s
assistants and staff.
●Based upon my internet research on July 21, 2015, I see that I should have
started oral antibiotics three days before surgery. Given the less than 48
hour notice, it’s now obvious that the need for antibiotics was not even on Dr.
J’s radar by that time. I was not aware of nor told of the need to begin
proprolactic [sp] antibiotic treatment in advance of the procedure.
●From: von Eckartsberg, Uta

Sent: Monday, June 22, 2015 10:16 AM
Cc: uvoneck@icloud.com
Subject: MTF: overtime [personal and confidential [smail]
Up til March 2014, knew about hours but mostly ignored or when I reacted badly to performance
evals, told not to work so hard or do so much.
Note, the fact that I worked nights, weekends, and holidays was always included in my self-
narratives, however, that same fact never appeared (maybe once). I never understood this and
pushed back. At some point , I recall someone saying that my manager would not be permitted
to include this fact in my review – that it would be frowned upon.
All changed when I put together the OM case working around the clock in under a month. My
managers then finally understood that I had a case (although we charged the wrong one in my
view, straight Section 5). That month was the worst for me physically: I worked around the
clock often sitting in one position for more than 12 hours straight.
By the end of the month, I developed severe shooting pains down my leg while sitting and could
no longer sit. This finally led me to my physician for the first time for back pain -- around 5
months after I herniated my disc while transporting docs to a proffer. Within two months of
this, I also developed chronic tennis elbow. I went through months of physical rehab for both
these issues.
Since then and particularly August (the Double U memo) and since every single person we
subpoenaed wanted settle, my overtime work has been expected and often required from my
perspective. That said, my boss has also been flexible with my schedule/telecommute, etc.
X)
● July 8, 2015: (D&C and Hysteroscopy – Sibley at 2:45pm – ●
● July 8- 9, 2015: Phone call to Dr. Reiter. Got JoAnn Jackson. See online review
posted several days ago – first ever review online.
● July 9, 2015 (Pelvic MRI #3) (Spies) MRI indicates changes since May 19 MRI.
Spies findings:
●Potential intracavity communication between large prominent Intramural
fibroid and uterus;
●Large prominent intramural cluster moving downward and prolapsing
uterus and potentially compressing nerves;
● D&C/Resection incomplete – Tissue remaining in uterus;
●The concern is that the manipulation of the uterus during the
D&C/hysteroscopy caused the intramural fibroid to slide downward and
towards or into the uterus.
●Accordingly, I cannot have a repeat D&C or resection o remove the
remaining tissue.
● June 2015: Referred to neurologist by ENT. Told work hours back to back shifts
for five years had caused CSD and DSSD EXTRAORIDARILOY SENDENTARY
LIFESTYLE UNBEKNOWST TO ME

Sent: Friday, July 24, 2015 12:12 PM
Cc: Kisslinger, Paul; Dhandayutham, Sathish (Contractor)
Subject: Scheduling a meeting with Selvers re Halperin
Uta:
I know you’re out today, but if you have a chance today I wanted to check with you about
scheduling for a meeting with Selvers to discuss a potential Halperin settlement sometime
between now and the next status conference, which is scheduled for 3pm on August 26. Paul
and I think the best approach will be to conduct it as essentially a reverse proffer, because Jerry
seems to be sticking to his position that no scienter-based fraud charge is warranted. The dates
we’re looking at are 8/21, 8/24, or 8/25, which will give us time to finalize the presentation. If
you can, please let us know today if you have a preference for one of those dates.
(As you and I discussed last week, I have been working on a draft of the reverse proffer power
point, which is now largely complete. The draft is located at the following file path, although
I’m sure you will have comments once you’ve had a chance to review it: J:\HO-10700 to HO-
11199\HO-11156\LITIGATION FILES\DRAFTS\COURT PAPER DRAFTS\Halperin Reverse
Proffer)
Thanks!
M. Alexander Koch
Assistant Director
100 F Street, N.E.
Ph: (202) 551-4762
Fax: (202) 772-9227

Sent: Tuesday, July 28, 2015 1:19 AM
Subject: RE: Scheduling a meeting with Selvers re Halperin
First, the plan has always been to conduct a reverse proffer with Selvers. Second, since I will
lead and prepare for this proffer the date set will have to be one that is convenient for
me. Third, because I am currently set for major surgery on August 11, it is highly unlikely that
we will be able to go forward with the reverse proffer before the next status conference. Fourth,
given the tone of this email and other recent communications between us, I now recognize that I
have done a poor job of communicating the gravity of my medical condition and my view of the
impact of my condition on this case; particularly in light of our last chat relating to my medical
condition, the need to limit stress, and the subsequent short, artificial deadline you allowed me to
labor under irrespective of my concerns. For the record, I am the last person that needs to be
manipulated or tricked into doing my job and I am offended that that either of you felt the need
to use that tactic on me.
Still to the extent that my failure to provide more detail on my medical conditions is contributing
to miscommunications regarding the case and the settlement process, I feel it is necessary to give
you both more information despite my strong preference for privacy. In short, shortly after the
deadline issue, I underwent what should have been a relatively routine surgery to resolve
complications from an earlier surgery (April, 2015) which left me at risk for (among other
things) a life-threatening infection (i.e., septicemia). Unfortunately, the surgery turned out to
be anything but routine as post-discharge I quickly developed the severe, life-threatening
postoperative infection that I had been dreading all along. Not to be overly dramatic but the
fact is that I was close to death when I was admitted to the emergency room. I was
hospitalized almost a week and was discharged only two weeks ago. Since then my vital signs
have not been great and I do not feel very strong. And I need to get strong fast given that the
underlying surgery resulting in the postoperative infection was unsuccessful and thus I remain at
high risk for infection (among other things) which may result in emergency
hospitalization/surgery at any time.
The only recourse left to me now is to undergo the major surgery I have gone to great lengths to
avoid (i.e., the two prior surgeries). And it is that surgery which is now set for August 11 --
assuming I can stay stable until that date. My hope now is that I am a candidate for laparoscopic
surgery because I may then yet be able to avoid the significant recovery period associated with
open surgery. That said, until the surgeons get in there no one can predict whether or not the
laparoscopic surgery can go forward or not and at the end of the day laparoscopic or not, it is a
major surgery. Even if everything goes exactly as planned, I have no way of predicting when I
will be fully recovered or how long that process will take. Hopefully, I will not have to be out of
the office more than a week but again no way to predict that at this time.
Bottom line, under the circumstances we should get an extension or a stay because I and I alone
have conducted almost the entirety of the underlying investigation. And despite Alec’s able
assistance and collaboration, I have no back-up whatsoever with respect to my investigative
work. In this regard, I have pled for additional staffing. And Paul, I even went so far as to ask
that you get more involved in this case or at least to get more familiar with Halperin as a
personal favor to me.
The reality is that I have been pleading for assistance for years now and in fact my primary
motivation in writing the Confidential Updates I-III emails was to get help -- bodies to help
package and flesh out the evidence I dug up implicating a massive, fraudulent scheme
implicating multiple players, dirty gatekeepers, organized crime, and sham
cooperation. Indeed, as you may recall I wanted to present the case to our then-Director as a
worthy candidate for massive, targeted joint enforcement action with the DOJ but to do that I
needed a lot of help to organize and package a massive evidentiary record. And as the
investigative evolves and expands, I need bodies even more today. Yet my pleas then and now
continue to go unheard even despite the fact that there is not much doubt today about the
accuracy of my investigative conclusions back then.
When I wrote those emails, I did not think that it was physically possible for a single staff
attorney to prove up and/or package all of the allegations/concerns that I articulated in
Confidential Updates I-III. I proved myself wrong because I somehow did just that -- but only
with tremendous effort and at a significant personal cost, working on my own nights, holidays
and weekends for years and as consequently was able to achieve results (note that pretty much
every single potential defendant has offered to settle this case just as I predicted in Confidential
Updates I-III).
While I gave gotten results and proved up what I alleged then, these results have come at
significant cost to me personally and physically. And had I gotten the support and assistance I
sought when I wrote those emails or since, we (1) would not be here today constantly pushing up
against investigative and litigation-related deadlines; (2) certain folks who were not as forthright
as they should have been would be in jail for a very long time where they belong; (3) we would
have been in a position to seek civil penalties in addition to disgorgement; and (4) many of the
Spongetech players and gatekeepers would not be in free to engage in what appears to be
multiple, ongoing schemes implicating multiple issuers while in many instances continuing to
obstruct our investigation.
It is what it is and whatever happened is in the past. That said, I am not going to let it happen
again just because I am currently a bit hobbled. Halperin and Pensley obstructed justice and
perjured themselves during the investigation during the investigation and the litigation. The
overwhelming evidence is that they were both members of the various groups that controlled
Spongetech during different points in time. This conduct is not okay.
And both the Halperin and Pensley cases must be properly and fully prepared for presentation
whether in the context of a proffer or in written draft admissions for strategic and tactical
purposes. And because it is just the right thing to do under the circumstances. The investors
(even the annoying ones on the message boards) deserve to know the truth. These defendants
are lawyers and their combined conduct is beyond reprehensible. The fact that I am not
physically able to continue to work double shifts and am unwilling to subject my body to further
repetitive injuries (i.e., chronic tennis elbow) does not mean that all of my investigative findings
of the past three years with respect to JP and JH should just go down the toilet.
And if we approach these reverse proffers in a limited, tentative fashion, we will lose our tactical
advantage and there will be a ton more work on the back-end to the extent that we then have to
engage in endless negotiation discussions, etc., etc., etc.. That is a complete waste of limited
staff resources given that these defendants are in no position to bargain.
We are in control. We have the power. Abdicating that power and control just because I am
not in position to meet the current deadlines, will ultimately just waste time and prevent us from
going after the many other bad guys in this case, including multiple gatekeepers and notorious
figures in the microcap space – many of whom I have now implicated in current and ongoing
scams. If properly presented, both Halperin and Pensley should be begging for settlement on
any terms that we offer because then they will then have some control over the language of the
settlement papers which will potentially shield them from prospective liability in shareholder
lawsuits for rescission based upon a control person or group theory.
Finally, the results that I have been able to achieve on this case so far have not brought me
brought me accolades, pay increases, multiple awards, substantial bonuses, and or other good
things. To the contrary, my efforts have cost me dearly. My overall health and fitness level has
suffered materially. I have chronic tennis elbow from typing away from 14 to 18 hours a day for
months at a time trying to meet somebody’s deadline.
And after an arrogant, willfully blind FBI agent was permitted to inappropriately,
unprofessionally, and unilaterally abort the most important proffer of this investigation, I did not
get another crack at that witness for more than a year. By that time, I had developed an
enormous amount of additional evidence which I personally transported to NYC. In doing so I
ruptured a disk in my back which has caused me to undergo physical therapy and endless
procedures –none of which have entirely resolved the pain I have suffered since I blew out the
disk.
Every allegation and suspicion I had about this witness has been borne out by the evidence I
have continued to develop. I don’t think anyone disputes that today but look how that
ended. Did anyone other than me pay a price yet? I don’t think so. I understand everyone has
a boss and that each of you have multiple other obligations, duties, and priorities but still there is
something materially wrong about what has happened on this case. No one should have to go
through what I’ve gone through over the past few years.
In any event, what I need from both of you now is for you to get me some breathing room so that
I can have time to recover, regain my strength, and focus enough to bring these cases home in a
way that I can live with going forward. If necessary, I have no problem appearing at a
telephonic status conference to personally describe in broad stokes terms the basis for our request
for more time; specifically, the impact of my current medical condition on the forward
movement of our settlement negotiations given my role on the case and staffing limitations.
For the record, I apologize in advance for any offense. I did not intend to cause offense or show
any disrespect. I am not interested in attacking either of you or in casting blame. Given what
I’m going through, I can’t edit myself endlessly and I think you both know I am not a vindictive
or mean-spirited person. I’m just telling you my reality as I see and given the medical stuff I’ve
been dealing with, artful phrasing, tact, and even typos are not at the top of my priority list. I’m
sure you both get the essence of what I am saying. What you do with that information is up to
you but I hope we can ultimately move forward as the team we are supposed to be for the good
of the order.
Lastly, I am not looking for sympathy, compassion, or even concern. All I want and deserve
from both of you is basic respect. Respect for my role on this case, respect for my opinion,
respect for my opinion of what assistance can best help me to further this investigation, respect
for my demonstrated investigative instincts, respect for my work ethic and achievements, respect
for my judgment, respect for the gravity of my current medical condition, and respect for me as a
longtime colleague who is who is going through a difficult time.

Cc: Kisslinger, Paul
Subject: RE: Scheduling a meeting with Selvers re Halperin
Uta:
I had no intent to offend or convey any sort of tone in the email that I sent on Friday, and I
apologize if it came across that way. Between your email and our conversation yesterday, I now
have a better understanding and appreciation for everything that you have been – and will be –
dealing with. And I want to emphasize that neither Paul nor I were trying to “trick” you into
working on the Pensley admissions before the last status conference. I take full responsibility for
not letting you know that Paul was going to request the extension.
I also want to reiterate that I greatly respect your efforts and investigative work on this case. My
focus as I have worked on the draft Pensley admissions and Halperin presentation has been to try
to incorporate and reflect the substantial record that you developed against each of them. None
of us want to present anything less than our strongest case in the draft admissions or reverse
proffer, and your work certainly is not going to “just go down the toilet.” Far from it, in fact,
because we will be demanding extensive admissions of fact and antifraud liability from attorney
gatekeepers, which is extremely rare and would be a very impressive accomplishment reflecting
the work you’ve done.
As we discussed today, between now and your surgery, to the extent that your condition permits,
I’d like for us to prioritize the Pensley admissions. By COB today or tomorrow morning, I hope
to circulate a revised draft to both of you with all the supporting documents saved in a filepath
for review. I am trying to incorporate all of your prior work product on Pensley, including but
not limited to the items you forwarded me last week. Undoubtedly you will have comments, but
I am hoping that we can send a draft to his counsel before I leave for vacation and you prepare
for your upcoming surgery (I will be out 8/5 – 8/17).
As for Halperin, I now recognize that in light of your upcoming surgery it is unlikely that we will
be able to finalize a presentation before the next status conference. Given the relationship you
have developed with Selvers, the fact that he knows you have led the investigation of Halperin,
and his own health issues which we have accommodated at various times, I am confident that he
would not oppose a request for an extension. I also think that we’ll be in a better position to
obtain an extension if we can show the judge that we’ve made progress on Pensley. That said,
there is of course the risk that the judge will not agree, in which case he’ll presumably lift the
stay and we’ll have to move forward with discovery.
Finally, please know that you have my respect and support as you go through this difficult time
(as well as my compassion, sympathy, and concern). The last thing Paul or I want is for you to
jeopardize your health right now.
Thanks
Sent: Wednesday, July 29, 2015 10:22 AM
Subject: RE: Scheduling a meeting with Selvers re Halperin -mtf
PC INSTEAD OF EMAIL: Acknowledged and accepted. Thank you. That said, I don’t think
you are hearing me. My point is that no one could have done more than me to move this
case. And I’ve done that almost singlehandedly most of the time. To the extent I have been
supported in any way, that was only after I put together a 50 page power point together in three
weeks Given that I am dealing with a serious medical condition, I should not be under this kind
of pressure at this time. As you and I have discussed many times, no one could have si

these issues.
● July 9- 12, 2015 (Admitted GUH (Spies) (Ob/Gyns D. Caseida (sp?) and Jon
Shilberman (sp?) brought in as consultants); Advised of need for emergency
hysterectomy if infection not controlled by course of Intravenous antibiotics);
●, blood culture reports not in yet; and,
●vaginal culture ordered by UNK person returned positive for “scant”
evidence of some v. rare bacteria that one get in jungles.
● August __ : LVH
● August: AT HOME THOUGHT NO COMPRESSION. NOT ERGONAMIC.
CONSTANT PRESSURE. WORKING 8 HRS STRAIGHT AND ON WEEKENDS.
November __ 2016
Disablity #2 established.
Traumatic Injury #2 As a result of my being required to implement my own
accommodation and as a result of HR failure to acknowledge existing limitation and
established disability despite notice of the same. See all earlier emails to KMS.
Gasho
Tabuin
O’briend
Snienel
PT
Schwartz: MRI
SAME LAB NOW THREE BULGING DISCS AND THREE PREVIOUSLY
UNDETECTED ANNULAR FISSURES. PAIN AND EXAMPLES OF MISDIAGNOSES
EXACTLY LIKE WHA T I have experience
From EMAIL TO DR.TAUBIN AND ATTACHED TO 2013 EZ ERGONAMIC REQUEST
Sent: Wednesday, October 07, 2015 9:42 PM
Subject: FW: Scheduling a meeting with Selvers re Halperin -mtf
Highlights:
● , I recommend that we tell the Court that we are evaluating our options after only
recently discovering material evidence of the of the Defendants’ obstructive conduct (including
perjury and arguably fraud on the Court) as a result of which we only recently identified
material, evidence about their roles in the scheme (and the roles of others) which we are still
developing in an effort to come up with an appropriate settlement under the circumstances.
●we need an extension or a stay because I and I alone have conducted almost the entirety of the
underlying investigation. I continue to seek some staff or even intern assistance as I have done
since I put the overall scheme together including, by asking Paul to get more involved in this
case or at least to get more familiar with Halperin as a personal favor to me.
●I have been pleading for assistance for years now and in fact my primary motivation for
the Confidential Updates I-III emails was to get help -- bodies to help package and flesh out the
evidence I dug up implicating a massive, fraudulent scheme implicating multiple players, dirty
gatekeepers, organized crime, and sham cooperation.
●I recommended we present the case to our then-Director as a worthy candidate for massive,
targeted joint enforcement action with the DOJ but to do that I needed a lot of help to organize
and package a massive evidentiary record.
●I did not think that it was physically possible for a single staff attorney to prove up and/or
package all of the allegations/concerns that I articulated in Confidential Updates I-III but I did
it by working on my own nights, holidays and weekends for years up until my doctors put a stop
to it a couple months ago.
●Had I gotten the support and assistance I sought when I wrote those emails or since, we (1)
would not be here today constantly pushing up against investigative and litigation-related
deadlines; (2) certain folks who were not as forthright as they should have been would be in jail
for a very long time where they belong; (3) we would have been in a position to seek civil
penalties in addition to disgorgement; and (4) many of the Spongetech players and gatekeepers
would not be in free to engage in what appears to be multiple, ongoing schemes implicating
multiple issuers while in many instances continuing to obstruct our investigation.
● Halperin and Pensley obstructed justice and perjured themselves during the investigation
during the investigation and the litigation. The overwhelming evidence is that they were both
members of the various groups that controlled Spongetech during different points in time. This
conduct is not okay.
●And both the Halperin and Pensley cases must be properly and fully prepared for presentation
whether in the context of a proffer or in written draft admissions for strategic and tactical
purposes. And because it is just the right thing to do. The investors to know the truth. These
defendants are lawyers and their combined conduct is beyond reprehensible. T
●The fact that I am not physically able to continue to work double shifts and am unwilling to
subject my body to further repetitive injuries (i.e., chronic tennis elbow) does not mean that all of
my investigative findings of the past three years with respect to JP and JH should set aside in a
rush to settle on their terms. If we do for no good reason other than no wants to staff this case
nor try it, we will lose our tactical advantage and there will be a ton more work on the back-end
with respect to all other prospective defendants and probably JH/JP, too. That is a complete
waste of limited staff resources given that these defendants are in no position to bargain.
●From what I can tell, Selvers call coincides with the opinion of last week meaning that Selver
knows his guys are in jeopardy of a finding of joint and several liability for the whole fraud –
which is exactly what we should be seeking. If Halperin and Pensley want to settle on those
terms that’s fine with me.
●We are in control. We have the power. Abdicating that power and control just because I am
not in position to meet the current deadlines, will ultimately just waste time and prevent us from
going after the many other bad guys in this case, including multiple gatekeepers and notorious
figures in the microcap space – many of whom I have now implicated in current and ongoing
scams. If properly presented, both Halperin and Pensley should be begging for settlement on
any terms that we offer because then they will then avoid joint and several liability along with
MM/SM/Apolant/Scheaeffer, etc.have some control over the language of the settlement papers
which will potentially shield them from prospective liability in shareholder lawsuits for
rescission based upon a control person or group theory.
In any event, what I need from both of you now is for you to get me some breathing room so that
I can have time to recover, regain my strength, and focus enough to bring these cases home in a
way that I can live with going forward.
●I recommend that we tell the Court that we intend to file an amended complaint and
F JANUARY 19, 2016 F:\2013 employee stuff\Chronos
Disab accom granted BACK ERGONAMIC EQUIPMENT

DISAB ACCOM PROCESS BEGAN IN JUNE 2015 – NO DIRECT ANSWERS, NO NOTICE
NOT PROCESSED THROU DISAB ACCOMDATIONS; LITTLE TO NO COMPLIANCE
WITH THE GUIDANCE OF JUNE 2015.
ALL THE WHILE – JULY HOSPITALIZED SEVERE POST OP INFECTION
AUG MAJOR SURGERYT
AUG THROUGH OCT – UNDER MAJOR PRESSUE TO MEET DEADLINES AND TO GO
ALONG WITH RECOMMENDATIONS NOT REFLECTING THE EVIDENCE.
WORKING ON A SINGLE LAP TOP [HAVING TO SIT 8 HOURS PER DAY BECAUSE NO
AT-HOME ASSISTANCE W/ ERGONAMIC EQUIPMNET AND BECAUSE I WAS NOT
NOTIFIED AND DID NOT UNDERSTAND THAT I COULD OBTAIN MONITORS,
PRINTER, PORT, ACCESS TO BEST TECHNOLOGY UNLESS THE DISAB
ACCOMDATION WAS PROPERLY PROCESSED AND APPROVED.
BECAUSE I DID NOTHAVE ACCESS TO A STANDING WORK STATION AND COULD
NOT OBTAIN ASSISTANCE AND NOT KNOWING THE FULL EXTENT OF
RESOLUTION OF BACK ISSUES, I SAT TOO MUCH AND MY BACK CONDITION
BEGAN TO DETERIORATE. BECAUSE I WAS ON A STRICT 8 HOUR WORK DAY, IT
WAS NECESSARY TO WORK WEEEKENDS IN ORDER TO DEAL W/ ENDLESS BACK
AND FORTH BETWEEN ME AND DISAB ACCOMODATION. IT WAS NOT UNTIL MY
SUPER CORROBORATED MY HOURS THAT THIS THING WAS PROCESSED
IN ADDITION, MY SUPER/TU ATTY IGNORED MY NEED FOR EXTENSIONS EVEN i
DID THE WORK THAT PUT US IN A POSTION TO SETTLE. UNRELENTING
PRESSURE AND STRESS TO THE EXTENT THAT I HAD TO TAKE OFF A WEEK OF
WORK JUST TO RECOVER FROM SURGERY WITHOUT CONSTANT UNRELENTING
PRESSURE
DURING THIS PERIOD, GIVEN THAT I ONLY HAD A SINGLE LAPTO TO VIEW
MULTIPLE DOCUMENTS, 100S OF FILES, P DRIVE AND J DRIVE PLUS MORE THAN
100 DATABASES, I COULD NOT PERFORM AT THE SAME PACE THAT I DO IN-
OFFICE WITH THE PROPER EQUIPMENT. THUS THE DELAY – NOT MY DISABLITY
– SUBSTANTIALLY PREJUDICED ME, MY HEALTH, AND MY CASE. LAST YEAR I
RECEIVED A SPECIAL ACT AWARD – WHILE I WILL BE AT ACCEPTABLE THIS
YEAR MY PERFORMANCE RATING WILL BE MUCH LOWER LARGELY BECAUSE OF
ALL THIS.
ON OCT 26 NEW POC AT DISAB- HAD TO OBTAIN ADDITIONAL DOCUMENTATION
WITH NO GUIDANCE AS TO WHAT WAS REQUIRED FINALLY APPROVED
IN NOV – BEGAN TO RECEIVE EQUIPMENT . HOWEVER NO ONE TOLD ME THE
VOLUME, AMOUNT, DIMENSIONS OF THE EQUIPMENT. HOWEVER THE
ANTICIPATED RECIEOPT OF AT LEAST 2 22 IN CH MONITORS TRIGGERED A NEED
TO CREATE A WORK STATION TO ACCOMMODATE THIS STUFF W/OU T
ON NOV 15, 2016, AS I BEGAN TO REGORANIZE MY HOME OFFICE I INCURRED AN
INJURY TO MY BACK – AGAIN. CONTACTED ALL RELEVANT PARTIES AND
IMMEDIATELY INQUIRED AOBUT COP STATUS FOR REASONS DESCRIBED IN MY
EMAIL OF THE SAME DATE.
NO FOLLOW-UP; NO GUIDANCE, LOST OPPORTUNITY TO OBTAIN COP STATUS

BECAUSE HR IGNORED MY EAMILS AND REQUESTS FOR INFO – AGAIN. SEE NOV.
2013. NO COMPLICANCE WITH CRF REGS BY EITHER HR OR SUPERVISOR
EQUIPMENT RECEIVED IN PIECEMEAL FAHSION. DESPITE INJURY AND REQUEST
FOR REIMBURSEMENT OR ASSISTANCE FOR ERGONAMICALLYU CORRECT DESK,
NEVER GO TIT.
FORCED TO BUY MY OWN DESK ETC, TOOK MORE THAN ONE MONTH TO SET UP.
TWO MONTHS TO GET FULL OIT ASSISTNCE TO EVEN GET NETWORK CAPACITY.
NOW BECAUSE I HAD TO GUESS AS TO WHAT SIZE DESK, ETC. THAT I NEEDED.
MY STATION IS NOT ERGONAMICALLY CORRECT SO MY BACK CONTINUES TO
DETERIORATE AND I CANNOT WORK AT THE PACE AND INTENSITY NECESSARY
TO BRING MY HUGE, MASSIVE CASE HOME.
IN THE MEANTIME, I HAVE SEEN MUILTIPLE DOCTORS, TOLD I NEED YET

ANOTHER SURGERY, IN PT TWICE PER WEEK. PAIN AND STRESSS SIGNFICANTLY
IMPACTING MY ABILTTY TO SLEEP. CAN’T TAKE LIMITED LEAVE SINCE I NEED
TO SAVE MY TIME IN CASE I NEED SUREGERY. I ONLY HAVE 44 HOURS OF SICK
LEAVE DUE IN LARGE PART OF TIME TAKEN OFF FOLLOWING THE 2014 INJURY
AND BECAUSE OF BEING LATE IN THE MORNING AFTER WORKING UNTIL 2 OR
3AM BECAUSE I WAS NOT AWARE OF MY DISABLITY..
AND NOW I HAVE TO FILE ALL THESE WORKER COMP CLAIMS. AND I WILL NOT
GET COP BECAUSE OF ADMINISTRATIVE ERROR.
TENNIS ELBOW
OCCUPATIONAL DISEASE
NOV. 15, TAUBIN
SLEEP WHICH WILL BE A BATTLE
AND EVERYTHING SIN CE NOV 2-13 UNTIL OCCUPATION ILLNESS
ADJUSTMETN DISORDER
IN THE MEANTIME, LEARNED MY MOTHER HAS LIKELY TERMINAL ILLNESS
IMPACTING COGNITIVE ABLITY IN DENIAL AND I CAN’T TRAVEL BECAUSE OF
PAIN RELATED TO THE NOV. 2015 INJURY AS WELL AS THE TENDONITIS CAUSED
BY MY INTENSIVE WORK SITTING ALL DAY DURING THE TIME PERIOD JUNE 2015
THROUGH JANUARY 2016, WHEN I DID NOT HAVE A STANDING WORK STATION
AND WHEN I DID NOT KNOW I COULD GET ONE.
Need to deal with endless workers comp issues
Need to get appropriate medical care
Have pain impacting sleep
Am depressed and overwhelmed need assistance with this, too.
Have to do taxes
Can’t travel
Have pt twice per week and multiple other doctor’s appts.
And still don’t’ have a decent work station.
Pringter/fax doesn ‘t work
Lease up on car – have t buy new one
Taxes complicated.
Medication issues.
• From: von Eckartsberg, Uta

Importance: High
•
• I write to update the narrative below and to identify certain outstanding areas of concern.
•
• First, after speaking with SM, I believe that my preliminary conclusions as set forth
below are largely accurate. I have inserted my comments as highlighted in bold
below. I am less convinced that SM is in active collusion with MM or other criminal
elements. I note, however, a number of inconsistencies in his statements.
•
• In this regard, I think it is unfortunate that I was restrained from freely questioning the
witness as I planned. As described below, I put a lot of thought and careful
consideration into my proffer preparation. Ultimately, this proffer was not for the
benefit of the criminal authorities but rather for ours. I needed to get through a lot of
material without highlighting the major areas of concern to the witness. To the extent
my questions were leading, they related to historical background information at
most. Also, the areas that I sought to question SM on were not addressed in depth or at
all during the many interviews by the FBI and therefore, there was no real concern that
my questioning would lead to inconsistent statements. The MOI notes of this particular
proffer are not material to me or in my view to any case we bring going
forward. Moreover, I do not envision that whatever case we ultimately end up with will
in hinge upon SM’s credibility.
•
• Furthermore, in my view SM has largely corroborated my conclusions described below
that implicate racketeering, international money laundering, and organized criminal
enterprises. My guess is that the EDNY’s Organized Crime Unit will have some
interest in the evidence that I have developed
•
• In this regard, I followed up with Thomas who told me that he has not (and does not)
intend to brief Roger or Jay on any of this before he departs for an approximate six-week
training program next Tuesday.
•
New Jersey. We should plan to talk to Matt Beck in any case to update him on the IW/JH
Darbie piece as well as on some of what we’ve learned about Gellis and related entities.
investigation.
I THINKK THIS IS PERFORMANCE. NARRAVIE I FORCED ON AK. RESULTING IN
SA AWARD
See c
Ontribution stmt email 2014
Uta continued to serve as the lead and sole investigativestaff attorney on the the multiple spin-
off investigations and the underlying case in the Spongetech Delivery Systems, Inc. matter (HO-
11156). During this cycle and in all prior performance periods, Uta has worked tirelessly on
this investigation. She has voluntarily pushed scheduled vacations and has routinely
accommodated others’ (particularyly the criminal authorities’) schedule at the sacrifice of her
own. She continues to voluntarily work many hours past her scheduled duty hours on this
multifaceted scheme.
O verall, Uta’s diligence and hard work during the first part of the cycle has significantly
advanced these investigations and our ability to obtain the relief we seek from the defendants in
the underlying investigation. For example, Uta’s underlying investigative work n previous
performance period provided us with a solid factual and legal basis to seek substantial monetary
relief from the CEO of Spongetech including, but not limited, to her investigation of a complex
chain of events related to an alleged 5 million dollar loan. In addition, she has continued to
investigate and develop new and important information about the knowing misconduct of both
attorneys even when such tasks were not assigned to her thereby giving us the upper hand in
settlement negotiations including, but not limited, the opportunity to obtain full relief and
potentially a no-admit, no-deny settlement with each. For instance, while another attorney has
been assigned to assist the trial unit in winding up our lititgation by putting together a proof chart
on one of the two attorney defendants, Uta of her own voilition and largely on weekends and
evenings reexamined the entire case against the attorney identying new, highly incriminating
factual information that among other things indicates that the attorney may be valuable to the
criminal authorities as a material witness or a co-consprirator and, expanding upon our theories
of liability as against him and other of the so-called Gatekeepers.
Also building upon her work in prior performance periods, particularly as relating to her
underlying effort in connection with a 70,000 email databased produced by a cooperating witness
in a useable format. Uta took it upon herself to assign herself the task of working through the
entire database often on her own time and in addition to her assigned duties, going through the
painstaking process, reformatting, organizing, saving all seemingly material emails, and linking
email addresses to the various players in the scheme.. In doing so, she began to organically
associate certain groups together and ultimately recoginized that the Spongetech fraud was
largely orchestrated and controlled by persons other than the CEO and CFO of Spongtech.
She took on this project despite proffer statements of material witnesses that led criminal
authorities in another direction altogether demonstrating an independence of thought and healthy
skeptism that has resulted in building various cases against many parties associated with the
Spongetech fraud. In connection with her work on the email database, she took the initiative to
create complex spreadsheets and chronologies with respect to individuals and groups which have
formed the underpinnings for the successful results we have had thus far this cycle.
This cycle, Uta led four proffers.. Uta’s thorough preparation and effective questioning during
these two proffers developed a significant amount of new informatio largely corroborating the
evidence she identified and built upon in past performance periods relating to the trading cartels
and the material role of certain prospective defendants in th overall scheme. She also confirmed
her suspicions that the CW had provided less than wholly truthful or complete proffer statements
in the past regarding the brokers and transfer agents who seem to have facilitated the scheme. In
this regard, she was able for the first time to elicit from a CW an admission that the one of the
two transfer agents did have a motive for facilitating the stock distributions which if corroborated
will make a material impact on that piece of our investigation going forward.
Moreover, because of her thorough and exhaustive preparation for each of the proffer she
identified new evidence that seems to contradict the combined proffer statements of three
cooperating witnesses which may ultimately lead to a positive and material impact on the
outcome of our investigation with respect to one of the two transfer agents and related broker-
dealers.
For instance, prepares for long overdue proffer of material witness when given only one week's
advance. Because of own need to get as much mileage our if long overdue proffer transported a lot
of material on own despite a back injury incurred while transporting doc to a previous proffer
Uta had less than one week to prepare for a long overdue and long-awaited proffer with a
material witness. Her response was to work around the clock right up to the date of the proffer
to the extent that she personally transported voluminous materials to NY in disregard of a back
injury she incurred personally transporting materials to a prior proffer. This incident resulted
trigged a yet unresolved episode of acute pain which has impacted Uta’s ability to perform major
life functions such as sitting, standing, and walking. This issue has resulted in Uta’s having to
attend physical therapy on an extended basis but neither the medical condition or its treatment
has impacted Uta’s dedication, focus, or time-commitment to this investigation.
. .
Uta also demonstrated creativity and initiative in coming up in developing effective
strategies for bringing this case to a resolution as efficiently as possible. For instance, she
came up with the strategy of drafting detailed, prospective defendant-specific, subpoenas
to a number of prospective defendants believing that if the prospective defendants recived
a snapshot of the overwhelmingly incriminating evidence she had developed as to each
person and group, I these individuals would either invoked their Fifth Amendment privilege or
offered to cooperate with our investigation. She reasoned that any of those outcomes would
further our investigation and save us time on the backend. Uta’s strategy was successful
as all but one (unrepresented) prospective defendant either invoked their Fifth Amendment
privilege or offered to cooperate with our investigation. In connection with another beneficiary,
Uta led regular teleconference calls with membes of the MFWG Division-wide who were also
investigating this individual. As a result of this collaboration, she was able to obtain important
information about potential defenses by that individual and also was able to obtain a copy of a
declaration that was used in another investigation when the individual invoked the Fifth. She
immediately recognized that the use of such a decaration could potentially further our
investigation. Ultimately, each individual who indicated their intention to invoke the Fifth
Amendment, agreed to execute such declarations.
Accordingly, Uta prepared comprehensive and detailed Fifth Amendment declarations for
two of these witnesses, with key documents attached as exhibits, which highlighted the
strength of our evidence. To the extent that she was not the lead on drafting each of the
detailed affadavits due to another time-intensive project she took on a the request of the
criminal authorities as described below, she provided substantial assistance to me in
preparing certain of the declarations by identifying materially incriminating information
and emails culled from her historical investigation described about.
In drafting the affadavits assigned to her she once again demonstrated creativity and
initiative by ultilizing the same strategy she developed with respect to the underlying
subpoenas by drafting detailed, defendant-specfic affadavits attaching supporting
documents of a highly incriminating nature identified through her indendeant, ongoing
investigation. While this was an extremely time-intensive project, she put in the time due
to her belief that by giving these prospective defendants a preview of the the strength of
our evidendence against them and our knowledge of the composition of the trading groups
and related nominee accounts we will force their hand for the same reason described
above.
Building upon her work in prior performance periods as described above, Uta worked tirelessly
on these multiple facets of the case, and has identified significant documentary evidence from
multiple databases to put together these relationships and connections. Uta also has developed a
significant amount of evidence demonstrating the interrelationships between participants in the
“dump” phase of the scheme, including three well-known promoters, an attorney who is already
a defendant in our pending action, Spongetech’s Invsestment Relations company, one of the two
transfer agents and a broker-dealer some of which implicates a potentially, ongoing collusive
scheme between the target of the criminal case and a trading group. Uta also identified evidence
indicating collusive activity by these parties in connection with the potentially current conduct,
implicating the possible market-manipulation of companies other than Spongetech.
For instance, Uta identified new and important evidence fleshing out connections between
the target of the criminal authority’s investigation and a defendant attorney as well as a
group of traders. For instance, whenever she came across an email she did not recognize
she went through the painstaking process of going back through the databases to link the
address with a name. She immediately recognized the materiality of the new evidence and
its potential value to the criminal authorities in their parallel criminal investigation of a co-
conspirator. Among other things, she has developed evidence that may provide a basis for
an obstruction referral with respect to the latter parties. If she is successful in this effort it
will greatly further our investigation and it will strengthen the ultimate ultimate message
and significance of this case.
As she developed and drated the subpoenas and related affadavits, the FBI
contemporaneously requested her assistance in linking the targets of their investigation
with specifc press releases (i.e., press releases which they dictacted, revised or saw in
advance of their trading activity. Building upon her work in previous performance
periods as described above as well as upon the newly identified evidence she culled in
organizing the detailed subpoenas/affadavits, she was able to put together a detailed
chronology demonstrating this group’s primary role with respect to a series of fraudulent
press releases issued by Spongetech from July through August, 2009. This evidence is also
of significant benefit to us with respect to any potential fraud case against these prospective
defendants. During the course of her work on this project together with her work on
detailed affadavits for a different trading group she was able to link these parties together
in a coordinated scheme also implicating the attorney defendant as well as possibly
collusive efforts to evade justice and obstruct our investigation from as early as 2009 when
certain of these parties were subpoenaed and/or testified. In this regard, she has also
identified evidence suggesting that the attorney defendant may have perjured himself
during testimony and made fasle statements in various declarations that he as filed with the
Court in our case as well as in other Spongtech-related lawsuits.
de____
Moreover, in the span of just several weeks, given an fast-approaching SOL with respect to
pongetech’s first transfer agent, Uta voluntarily took on the task of drafting a
detailed,comprehensive power point spelling out the legal theories of liability together with the
the universe of evidence she has adduced over the years, including but not limited to a detailed
chronology of red flags as well as evidence suggestive of the TA’s knowing complicity in the
scheme. Uta was able to corroborate the direct and indirect evidence suggesting that the TA
knew or should have known that it was facilliting an unregistered distribution, because of her
historical work in taking the initiatve to subpoena message board and ISP providers not only for
the purpose of identifying stock promoters but also to identify those posters who reached out
directly to the transfer agent to inquire about matters constituting red flags. She also developed
a compelling evidentiary record suggesting that OM and its attorney have made knowing false
statements not just during the case of the early investigation but also in direct response to our
subpoena. Furthermore, she was able to demonstrate the strength of our case based upon the
testimony she elicited from from counsel for the transfer agent during the underlying
investigation which supports her longheld conviction that the best evidence against this TA is the
testimony of its own attorney. During the course of preparing the spreadsheet she waded
through the records he compiled over the course of a five year investigation and reorganized the
records into elecotronic folders for the ease of review by others including, but not limited to,
prospective trial counsel.
In addition, while going through this process, Uta identified new evidence indicating that the TA
by and through its counsel, provided materially false information to the staff during testimony
and in various “whistle-blower” emails to the SEC. After satisfying herself that counsel for
Olde Monmouth was not knowingly complicit in the scheme, Uta came up with the stragey of
leveraging this information (which primarily implicated a now deceased individual), well as the
evidence reflected in a comprehensive spreadsheet reflectging OM interactions with Spongetech
on a day-to-day basis culled from her review of the 70,000 email database, and evidence she had
collected based upon her diligent watch of Spongetech message boards and a subpoena thereto
regarding investor interaction with the transfer agent, to force a settlement. Uta reasoned that if
the Transfer Agent which is essentially a small, family owned business, had a sense of the
overwhelming evidence she compiled against it, particulary with respect to the potential perjury
or other expanded charges, it would want to settle. Again, Uta correctly assessed the situation.
After just a couple frank calls with counsel for the Transfer Agent whose relationship Uta had
cultivated over the years given his potential role as a material witness against SM, OM quickly
indicated its willingness to settle this matter. Subsequently, when counsel for the transfer agent
submitted what amounts to a Wells Submission, Uta was quickly able to discredit his legal
arguments and also immediately recognized that his letter undercounts the amount that OM
received for its SPNG work by a significant amount. In this regard, based on her historical
review of all the databases she quickly identified financial records which contradicted his
representation. Ultimately, we were able to confirm that the TA received checks totaling almost
$33 dollars in contrast to counsel’s representation that it recived $18,000.
Based on Uta’s work, we have initiated settlement discussions with counsel for the TA, and
hope to bring an action in the next three months that otherwise would not have been brought
without Uta’s efforts.
• Because of Uta’s investigation of two transfer agents in Spongetech, she has made the
effort to expand her knowledge base in this area as much as possible and has also sought
to serve as a source of knowledge for others by becoming an authority in that area of the
law. In this regard, after having served as member of the MFWG committee and TA
subcommittee, she was asked to serve as Enf. Chair of the MFWG sub-committeee.
Despite the time-comitment involved in accepting this offer, Uta agreed because she
knew that this position could be leveraged to further and facilate our TA investigation
particularly as it approaches the review by other Divisions phase. In serving as Enf.
Chair of the MGWG’s subcommittee Uta has built upon her own knowledge base and
serves as a primary contact for other members of the staff contemplating a transfer agent
investigation. Among other things, she has also represented the MFWG with respect ot
an ongling dialogue with GC with resepct to the potential impact of the CMKM decision
building upon her work of the past performance period when she GC requested she serve
on a moot court in advance of the CMKM oral argument before the Ninth Circuit.. As
she hoped, her role has facilitated other division review of our propsed case against the
TA given that my OCIE-Co Chair is the contact person for OCIE review of proposed Enf.
actions against TAs and to the extent I was able to get a request for TM review of our
proposed settlement directly to the head of T&M’s transfer agent group. Indeed, before
circulating her comprehensive Tranfer Agent focused power point, she passed it on to
OCIE-Co-chairs who Cindy Wong and Eric Garvey who immediately saw the potential
use of this pp as providing a roadmap for both OCIE and Enf staff on how to investigate
TAs. In order to accomplish all of this in a short period of time, Uta worked tirelessly
and well-beyond her scheduled duty hours and assigned tasks.
Morevover, Uta continues to routinely and voluntarily make substantial investigative

findings with respect to the underlying cases against the attorneys even when she is not
technically assigned to work on those matters. For instance, recently another attorney was
assigned the task of preparing a proof chart with respect to one of our defendant attornies.
Given Uta’s full plate, she was relieved of any responsibilities in preparing the chart. Once she
saw it, however, she understood immediately that some of it was inconsistent with the evidence
we have compiled since we sued the attorney.
Thus, working nights and weekends, Uta took upon herself to review the entire evidentiary
record as to this attorney including, but not limited to, the transcript of his testimony and his
responsive production. In doing so, she has now identified previously unknown or undeveloped
evidence linking the attorney directly to one goupo of traders and identified the fact that they
share common counsel. In this regard, she has now identified additional evidence suggesting
expanding our theory of liablitiyt against the attorney and likely putting us in a position to obtain
full relief as we see fit. In addition, she has identified evidence that is suggestive of the attorney
conspiring with others to obstruct our investigation by providing false testimony and withholding
material documents and information in response to our investigative supboenas. She also
identified evidence demonstrating that undisclosed to the Commission, Halperin represented
certain prospective defendant/beneficiaires while simultaneously representing Spongetech
thereby likely profiting on both sides of the illegal distributions. This evidence also ties
Halperin directly to the target of the parallel criminal investigation. Uta voluntarily pushed back
her scheduled vacation in an effort to collect and package as much of this information as possible
before her departure. Uta also identified evidence suggesting that Halperin’s co-conspirators
worked closely with Spongetech CFO on other pump-and-dumps at the same time as the
Spongetech fraud and that some of this conduct may be ongoing and implicate current pump-
and-dumps. She has also developed new evidence along the same lines as relating to the target
of the criminal investigation building upon her work in prior performance periods which focused
on identifigy the trading groups and gathering as much information as possible about any other
securities-related misconduct that they may have been involved with.
Uta is also responsible for developing the evidentiary record with respect to the single proposed
defendant who has not indicated an intention to invoke the Fifth and who is currently
unrepresented. Uta has already built a record indicative of this individuals seeming effort to
evade the detection of his role in the Spongetech fraud based upon additional evidence she has
discovered linking him to certain trading groups on unrelated cases as well as evidence indicative
of ongoing misconduct. Again, she is in a position to quickly identify and misstatements which
provide support for our theory of liability against him based upon the work she performed this
cycle and in prior performace periods including the preparation of a spreadsheet conflating
illegal trading activity with incriminating emails and wire transfers.
viewed a To prepare this presentation, Uource. r. Uta has accomplished this while dealing
with a medical issue that has required her to devote time to physical therapy and devoting
significant time to her work on the Local Labor Management Forum.
My medical Chrono
Chrono
●2009 through May 2010:
Performedsignificant physical labor at my job several times particularly in 2009-2010
(case closing project, case closing generally, repeated office moves) over the past 5 years
or so and have in each instance aggravated my back although I just engaged in self-care
by taking a day or two off. I rarely even took an aspirin. Since the most recent case
closing effort when I was assigned six cases to close in very short order, I began notice
tailbone pain when sitting. It appeared to be hormonally related so I assumed that it had
something to do with my fibroid tumors swelling at certain times and perhaps pressing on
my sciatic nerve. Not that big of a deal and came and went. Also, every time I had to
travel for work I ended up in some pain and over the past year began curtailing my
workout routine to give my back a chance to heal. The problem is that I simultaneously
began having to work even more intensely at my computer for up to 14 hours a day
sitting almost immobile the whole time. I realize now that I really stopped working out
because I didn’t feel good due to the back issues the effects of which had been slowly
growing over time. Up to the November 20 incident, however, other than curtailing my
workout routine significantly I really didn’t have horrible pain – I rarely even took
aspirin.
Nov. 19, 2013. Traumatic Injury
my interview materials including my laptop, a large binder of materials and other
assorted materials adding at least an additional 20 lbs. to my luggage which included my
personal handbag, a carry-on bag, my computer bag, and a large rolling suitcase. When
we arrived at Penn Station and I exited the train there was a long line behind me. I had
requested Red Cab assistance to get off the train but none was available. Accordingly, I
needed to quickly grab all three pieces of luggage off the storage rack and then step off
the train down onto the platform of the train station.
Because there was a huge line of people behind me I had no choice in that moment but to
step down onto the platform, then twist back, bend, and lift my heavy suitcase (while
holding my computer bag , my purse, and my carryon bag on my shoulder) off the train
onto the platform. In that moment, I felt something pull in my back and I suffered from
significant pain from then onward. The next day, I had to get a car to take me from the
hotel to the interview site not more than three blocks away simply because I was in too
much pain to try to walk there myself.
●On top of this, I was late to the interview which I was leading so I then had lug my
suitcases up a concrete stairwell at the location of the interview.
Nov. 20 through mid-December, 2013:
●Upon returning to DC on Nov. 20, learned my brother had been the victim of a drunk
rather than myself. The pain was bad but not horrible at that time. It was significantly
more acute than what I had ever before experienced – particularly when sitting. The
pain was acute and stabbing at times and went entirely down my leg to my foot. At
times it more of an constant deep ache.
●Simultaneously, the massive and complex investigation that I have led since July, 2009,
evolved to into a more complex and significant matter as a result of my investigative and
due to lack of staff resources the demands upon my time became greater. .
●As a result, it was necessary for me to spend 4 to 8 hours a day at my computer
sometime not even leaving for a ladies room break on a daily basis. I often worked (and
continue to work) nights and weekends, too.
●Due to my office set up from 2010 through March 2014, my body was twisted at my
computer. It was not possible to sit in an ergonomically correct position.
●Accordingly, the pain and stiffness began to increase and I started feeling significantly
more pain/discomfort in my tailbone as well as sciatic pain in my leg.
Nov. or Dec. 2013
Dr. Johnson : pain, back, annual: “just getting old” Result: Delayed further medical
care until ___
Mid December, 2013:
●Required to return to NYC for another interview of a material witness in mid-
December. Again, due to budget and travel restrictions I needed to travel alone and
personally transport significant materials with me. It was a difficult journey and my pain
and stiffness became significantly worse and it became increasingly difficult to sit for any
length of time particularly in my office given the setup.
August 2013: See F:\2013 employee stuff\CHRONO/Sathish
See hard copy records. Because of work on SAUSA Program and Adam S., referred to
then Jennah. M. in charge of contracting at the time. Did that extra work so I could get help –
paralegal. See email somewhere I informed Alec. I also rasied it at the last Associate meeting I
went to w/TU. AK was pissed he had to get Spnge. Someone. I had to do all his work for
months on justifications, etc. Not within my job classification duities.
Early January 2014:

●Then in early January, I was required to move the materials, files and folders in my
office that had gathered up over the course of a then-3 year complex and massive
investigation to another office in order to free up space in mine. Given that my back
issues did not seem to impact my ability to lift (versus sitting and walking), I performed
the physical labor of lifting all those materials including heavy binders and moving them
to another office.
●Subsequently, the sciatic pain increased significantly as did the stiffness and discomfort
at the facet joints.
MTF DATED. 6.22.201. AFTER I LEARNED ABOUT SLEEP DISORDER F:\2013

employee stuff\CHRONO
these issues.
February – March 2014

●After I learned that my investigation of a complicit gatekeeper was in danger of being
shut-down due to my need to prioritize then other-more important defendants and
potential defendants, I worked around the clock – literally for 3 weeks in ____ I put
together a complex and voluminous record going back decades in power point form. By
the time I completed the project, I could no longer sit at my desk for any period of time
without significant pain. I immediately reported the same to my supervisor and
scheduled an appointment with my PCP.
March 2014:
●Dr. Joel Taubin; Couldn’t sit without pain, stiffness like since recently 11/14
illosomas muscles. Diagnosis possible Fawcett Joint Syndrome, Degenerative Disk
Desease, and herniated disc consistent with the symptoms including sciatica which I
experienced only after the Nov. 19 traumatic injury.
●No diagnostic test at the time due to my anxiety. Referred me to Physical Therapy and
prescribed a Medrol pack.
●March __, 2014: Dr. submitted a disability accommodation request to my
employer describing the symptoms as impacting major life activities such as sitting,
walking, lifting and bending.
●I established disability on ____- when the request for ergonomic
furniture/equipment was granted.
March through September 2014:
PT: MedStar at least three months (had back pain like I have now and occasional then-
believed to be referred pain on my right leg in addition to left. Extended PT. Sciatica
enough for discharge after traction.
Accupuncture: With Medstar PT for another couple months until end of May 2014.
June 2014: Developed painful and now chronic TE due to specific case demands.
August through September: Double U
Back/sciatica extremely painful and tennis elbow to the point of almost inability to type
Septemer __, 2014:
Dr. James Gasho: Sent me for MRI. Steroid shot for elbow. Did not resolve entirely
nor completely.
● Jan. 01, 2015 (L/S MRI) (see Report/film) small Ruptured Disc
Dr. Gahso referred for LSE
● January through March 2015: Three L/S epidural injection procedures for
sciatica/lower back pain. Dr Bradley Dick. Suburban. Fibroid specialist as well as
top radiologist.;
● When I only obtained partial relief after two ESI’s, Dr. Dick referred me to another
MRI to determine if large fibroid tumors could be compressing nerves.
● Feb. 04, 2015 (Pelvic MRI # 1, w/wo contrast) (see Report/Film)
● Mar. 9, 2015 (Pelvic sonogram) (see Report/Film)
● Mar. 18, 2015: Corr. Spies to H. Johnson (then-OB/GYN) ( Corr. attached)
referencing back pain; nerve compression primary concern
● April 9, 2015 (UFE, GUH, Spies) (see Report)
● May 9, 2015 – to present: (sloughing or possible expulsion of pedunculated,
submucosal fibroid(s) –on alert from that date onward of potential risk of life-
threatening infection (i.e., sepsis) requiring three (3) days intravenous antibiotics
and/or hysterectomy )
● ● May 19, 2015 (Pelvic MRI #2 w/wo contrast) (Spies) (see Report /Film)
●PC Spies: I emphasized need for collaboration. Asked him
● May 20, 2015 (Corr. Spies to H. Johnson) (see attached)
JUNE 2015: Dr. Kass and Dr. Emsellem learn
June 28, 2015 write Dr. Kim
iPhone
Begin forwarded message:
From: Uta Von eckartsberg <uvoneck@icloud.com>

Date: June 28, 2015 at 8:25:13 PM EDT
To: uvoneck@icloud.com
Subject: Worker comp sum FOR CA 7. SENT TO PSYCH. THIS IS DRAFT BECAUSE I
DON’T SEND ANYTHING WITHOUT LOTS OF THOUGHT THESE DAYS.
Tennis elbow chronic

Sciatica
Ruptured disc
Sleep disorder.
Dr Kim:
More importantly, I think I've finally some pieces together. I think I'm suffering from chronic
sleep deprivation because I have essentially been working double shifts every day including
holidays and weekends for almost five years.
In the past 2 or 3 years since I put the big picture of case together, my nocturnal work has
escalated.
Combined with a genetic defect, historical sleep issues, aging, the fact the resistance to sleep has
become more engrained and habitual.
I think a lot of the frantic anxiety I exude is a direct consequence of long term sleep
deprivation. Just FYI, it's not about my ADD meds. I can't sleep even when I take vacations
from those meds.
Anxiety.
Depression
Sent from my iPhone
● Monday, July 6, 2015: Learned upon receiving a call from Sibley that I was
scheduled for surgery two days later on Wed. Scrambled to make arrangements:
work, family, dog, et.
●Because of my many clear and repeated concerns re: close collaboration
between Dr. Spies and Dr. J, I hoped she would tell him that I was going to
have this surgery. Had she done that, he would v. likely have reiterated the
need for antibiotic therapy pre-and post surgery. Would have been a safety
net. This was not done. Because I had less than 24 hours notice pre-surgery,
I did not do it myself. [ONGOING ISSUE WHICH SHOULD BE
CLEARLY REFLECTED IN NUMEROUS EMAILS BETWEEN D. J’s
assistants and staff.
●Based upon my internet research on July 21, 2015, I see that I should have
started oral antibiotics three days before surgery. Given the less than 48
hour notice, it’s now obvious that the need for antibiotics was not even on Dr.
J’s radar by that time. I was not aware of nor told of the need to begin
proprolactic [sp] antibiotic treatment in advance of the procedure.
● July 8, 2015: (DC and Hoscopy – Sibley at 2:45pm – ●
● July 8- 9, 2015: Phone call to Dr. Reiter. Got JoAnn Jackson. See
online review posted several days ago – first ever review online.
● July 9, 2015 (Pelvic MRI #3) (Spies) MRI indicates changes since May 19
MRI. Spies findings:
●Potential intracavity communication between large prominent Intramural
fibroid and uterus;
●Large prominent intramural cluster moving downward and prolapsing
uterus and potentially compressing nerves;
●The concern is that the manipulation of the uterus during the
D&C/hysteroscopy caused the intramural fibroid to slide downward and
towards or into the uterus.
e.
● June 2015: Referred to neurologist by ENT. Told work hours back to back shifts
for five years had caused CSD and DSSD EXTRAORIDARILOY SENDENTARY
LIFESTYLE UNBEKNOWST TO ME
From: "<von Eckartsberg>", Uta <von_EckartsbergU@SEC.GOV>

Date: Thursday, June 18, 2015 at 2:25 PM
To: SEC <SmithK@SEC.GOV>, SEC <DisabilityAccommodation@sec.gov>
Subject: Disability Accommodation Program (personal and confidential)
Hi Karen,
Hope you are well. I am addressing this to you because I assume you are still managing the
Program. If not, please let me know. I ask because I’m having difficulty obtaining current
information through the HR website and cannot access the Disab Program link despite having
tried several times over the past few days.
Will you please send me the link to the current Disab. Accom. Program home page? I am
considering requesting schedule modifications on a temporary and permanent basis for various
medical conditions I am currently struggling with. As an initial matter, I just need to get
information and make sure I understand the current procedure. I am meeting with one
physician later today regarding this issue and would to like to at least be able to hand off a copy
of the current info sheet for doctors. All I have in my historical file is the attached.
Thanks and again hope all is well!
From: Smith, Karen

Sent: Thursday, June 18, 2015 3:48 PM
Subject: Re: Disability Accommodation Program (personal and confidential) DFM 01215
Uta – I have attached the full procedures for requesting disability accommodation. Our
home page is under reconstruction so this is the most up to date information.
Please reply with a detailed description of your requests so I can provide an intake notice.
In the meantime, the instructions for obtaining medical information to support requests is
below the line.
CONFIRMATION of RECEIPT REQUESTED

Karen MacRae Smith
Disability Program Manager
WorkLife WorkSmart & Disability Program Branch
Office of Human Resources
• Disability Accommodations
• Family Medical Telework
• Family Medical Leave
Use DFM number assigned in subject line of all correspondence.
Medical Information requested by SEC officials should go only

to: ConfidentialMedical@SEC.gov
DFM 01215
RE: Medical Information to Support Disability Accommodation Request
Medical information is required to evaluate your request for a disability
accommodation. The disability accommodation request timeline is suspended until medical
information has been received.
Instructions for Obtaining Medical Information and Submitting to Disability
Accommodation Program
List all accommodations you are requesting at * so your health care professional can limit
the medical information to address only the accommodations requested.
Provide the notice to your health care provider.
Send medical information you obtain from your health care provider
to: ConfidentialMedical@SEC.gov.
Use secure email if sending from non-SEC email account – include “SMAIL” in the subject
line.
Do NOT copy your supervisor and do not include descriptions of your medical condition in
any communications with your supervisor.
TO: Health Care Provider of SEC Employee Requesting Disability Accommodation
The U.S. Securities and Exchange Commission's Disability Program Manager will use the
confidential medical information requested below to determine whether the requested
accommodations should be provided to enable your patient to perform sedentary work in an
office setting for the U.S. Securities and Exchange Commission (the SEC). Your patient is
requesting the following as accommodation for your patient’s medical condition/disability:
* Describe accommodation(s).
Requested confidential medical information should be based on an evaluation of your patient
performed within the past six months.
Confidentiality: Medical information will not be disclosed to any officials at the SEC other
than those who have a need to know about it to evaluate the disability status of your
patient. Ordinarily this is limited to the Disability Program Manager and Disability Program
Officer in the Office of Human Resources. No disclosures will be made to others without
advance notice to your patient.
Format: Provide the information to your patient in any way that SEC’s Disability Program
Manager can verify as coming from you or your office. Explain any abbreviations. Print
information
Transmission to SEC: Your patient is responsible for sending the information to the SEC by
email.to ConfidentialMedical@SEC.gov. The SEC will not contact you for clarification- all
communication will be through your patient or your patient’s authorized health care
representative.
Genetic Information Nondiscrimination Act of 2008 (GINA) Notice:
The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other
entities covered by GINA Title II from requesting or requiring genetic information of an
individual or family member of the individual, except as specifically allowed by this law.
To comply with this law, we are asking that you not provide any genetic information when
responding to this request for medical information. “Genetic information,” as defined by GINA,
includes an individual’s family medical history, the results of an individual’s or family member’s
genetic tests, the fact that an individual or an individual’s family member sought or received
genetic services, and genetic information of a fetus carried by an individual or an individual’s
family member or an embryo lawfully held by an individual or family member receiving assistive
reproductive services.
For more GINA information, see
http://www.hhs.gov/ocr/privacy/hipaa/understanding/special/genetic/ginafinalrule.pdf
Information Requested to Evaluate Request for Disability Accommodation
• Patient’s Full Name:
• Health Care Provider’s Name, Title and/or Professional Practice Area:
• Optional: Health Care Provider’s email address or web site:
1. Conditions: What condition(s) limit(s) the patient’s activities?
2. Limitations: What activities are limited by the patient’s condition(s)?
Describe the degree of limitation.

3. Expected Duration: How long is patient likely to be limited to the extent described above?
06.18.2015. KMS to me attaching 2015 SEC DISAB ACCOM NEW.FORMAT DOX

these issues.
July 7, 2015
From: "von Eckartsberg, Uta" <von_EckartsbergU@SEC.GOV>

Date: Tuesday, July 7, 2015 at 11:56 AM
To: SEC <SmithK@SEC.GOV>
Subject: RE: Disability Accommodation Program (personal and confidential) DFM 01215
Hi Karen,
Thank you for the information. I received and submitted the accommodation request to the
Confidential Medical email address this date. [SEE EXH ____ LTR FROM DR. E.]
Shall I forward the same to you for your intake process?
Thanks.
Uta
From: Smith, Karen

I can access it in Confidential Medical, so you do not have to forward the information to me.
Karen

Date: Tuesday, July 7, 2015 at 4:57 PM
To: SEC <SmithK@SEC.GOV>
Great. Thanks. Please do not hesitate to contact me or my doctor if you require any additional
info or have any questions.
If you need to reach me, please call me at home 301.986.7959 (my manager is allowing to me to
telecommute at this time). In this regard, I am having (minor) surgery tomorrow for reasons
unrelated to the current request so I may be out-of-pocket for a few days.
Hope all is well in your world.
Thank you.
Uta
From: Smith, Karen
From: Smith, Karen

No worries. I just wanted you to be aware of the availability of that schedule either temporarily
or indefinitely.
Hope all goes well tomorrow.
KS
Sent with Good (www.good.com)

To: Smith, Karen
Thanks, Karen. I really appreciate your looking out for me.  And thanks also for the good
wishes. I’m sure it will be go fine tomorrow but it has definitely been a tough year from a
medical perspective. [NO FOLLOW UP POTENTIAL LIMIATATIONS FUNCTIONS]
Have a great night and thanks again for all!
Uta
● July 9- 12, 2015 (Admitted GUH (Spies) (Ob/Gyns D. Caseida (sp?) and Jon
Shilberman (sp?) brought in as consultants); Advised of need for emergency if
infection not controlled by course of Intravenous antibiotics);
Almost died. Had to be recussitated. Then had to scramble for major surgery. Dr. failed
to give me antibiotics Horrible because lost all friends and always anxious
AK knew right away. I reported. He emailed me at home.

Date: Tuesday, August 4, 2015 at 2:04 PM
To: Microsoft Office User <SmithK@sec.gov>
Hi Karen,
Just wanted to touch base because neither I nor my manager have heard anything in response to
the accommodation request. I know it takes a while sometimes to get a response but it’s been
almost a month now (July 7, 2015). No rush to get back to me but please let me know if there is
a problem or something else that I need to do. [I UNDERSTOOD I SUBMITTED A FORMAL
REQUEST ACCOMODATION THAT WOULD BE GRANTED OR DENIED AND THAT I
WOULD HAVE TO FILE A CLAIM WITH OFFICE EEOC IF DENIED BECAUSE I KNEW I
WAS ENTITLED TO REASOB. ACCOMODATION.
Thank you and hope all is well!
Uta
From: Smith, Karen

Uta – I have been on vacation for the past two weeks – I am looking into your request to see who may be
working on it. [ONLY ONE PERSON HER – AND LIZ HAMMET. I DON’T KNOW WHAT RACHEL
WAS DOING] I should have an update for you tomorrow.
Karen
Karen MacRae Smith
Work Life / WorkSmart / Disability Program
OHR
202-551-6003
Calendar is on Outlook
M-F 8-4

To: Smith, Karen
Hi Karen,
Thanks. No rush. I'm having another surgery next week and will be out most if not all of the
week. [NO IDENTIFICATION OF LIMITATION OR MEDICAL CONDITION REQUIRING
ACCOM]
And my manager is out of vacation as of today and will not be in the office again until the 18th.
In advance of an approved accommodation, he's allowed me to work the schedule my physician

recommends. I just reached out to you to ensure that the request was still on someone's
radar....[AFRAID TO MAKE WAVES. I KNEW THAT I WAS BEING RETALIATED
AGAINST. I REALIZED WHEN I MET WITH MY SLEEP DOCTOR THAT IT WAS
CRAZY WHAT I WAS DOING AND THE FACT THAT MY HOURS HAD IMPACTED MY
HEALTH AND THAT IN RETURN I GOT ONLY AVERAGE OR LOW PERFORMANCE
EVALUATIONS AS I GOT SICKER AND SICKER. I FELT THEN AND STILL FEEL NOW
A SEVERER ADJSUTMENT TYPE DISORDER, STRESS, AND AXIETY. I COULD NOT
GO BACK TO WORK BECAUSE I JUST DIDN’T KNOW WHAT THEY WOULD DO
NEXT AND I KNEW AK WOULD KEEP MAKING ME WORK AROUND THE CLOCK
BECAUSE HE LITERALLY DID NOT CARE IF I KILLED MYSELF.
Thanks again!
Uta
--------------------------
From: Smith, Karen

Sent: Thursday, August 06, 2015 4:00 PM
Uta -
Thank you for sending me this timely message – I had just gone up to your office to see if you were in today.
I want to be sure I know what your current and anticipated needs for accommodation will be. I understand that
it involves a combination of temporary expanded telework and schedule adjustments based on the letter from
last month prior to your procedure. [THAT NOT WHAT THE LTR SAID]
We will handle your request this month so that there is not a gap between what your supervisor has approved
and what you will need after your next surgery.
Karen
Karen MacRae Smith

WorkLife WorkSmart & Disability Program Branch
Office of Human Resources
• Disability Accommodations
• Temporary Medical Telework
• Family Medical Leave
Include assigned Reference number “ DFM #####” in subject line of all correspondence related to requests.
Medical Information should be sent only to: ConfidentialMedical@SEC.gov

Sent: Thursday, August 06, 2015 6:20 PM
To: Smith, Karen
Karen, please feel free to call me at home (301.986.7959). I think there is some confusion
here. To clarify, the medical condition for which I require surgery is not related (other than the
impact on my overall health) to the reasonable accommodation request submitted by my
physician. She is treating me only for the conditions she describes in her correspondence.
I have no idea at this time what, if any, needs I will have post-surgery. It is possible that I will
have a need for additional accommodation and/or that the outstanding request will be expanded
given various challenges I’m facing at the moment. That said, I am primarily just focused on
trying to meet the demands of my job while dealing with these various issues. Most importantly
I am just focused on getting through this next surgery (which will hopefully resolve the
underlying issue for once and for all).
I apologize for any confusion. My situation is a bit complicated at the moment and I’m a bit
overwhelmed. [AGAIN NOTHING IN RESPONSE CONSISTENT WITH BEST PRACTICES
Please don’t hesitate to call me if you have any questions.
Thanks for your concern and assistance.
UtA
From: Disability Accommodation

Sent: Friday, August 07, 2015 8:15 AM
Uta –
I understand that surgery is not one of the treatments for the condition described in Dr. Emsellem’s
June 29, 2015, letter that outlines the following temporary accommodations for 90 days:
• Telework only on a schedule of 10AM to 6:30 pm
• No business travel that would interfere with your ability to maintain these hours.
The limited time span of 90 days/three months makes your request one for Temporary
Accommodation. Temporary Accommodations may be granted by your supervisor after consultation
with the Disability Program Manager in
OHR. See https://collaboration/sites/OCOO/ohr/hr4me/PDF%20Resources/2015%20June%20SEC%20Disabi
lity%20Accommodation%20Procedures%20-%20New%20Format%20508.pdf at page 15.
\
[SEE DISAB. POLICY NO. 2. AVAILABLE TODAY. APPROVED BY NTEU AND HR

I am sending a separate email to your supervisor Alexander Koch
at kocha@sec.gov (202.551.4762) asking him to consult with me about your
temporary accommodation needs when he returns from vacation. Since he has already been
approving them for July, the only matter to discuss is whether the approval can extend until the
end of September. You also may be required to enter your request for Temporary Medical
Telework into the WorkSmart system.
If you have any other or additional accommodation requests, whether related to your condition or
the surgery, please let me know so that I can assist you with them.
Karen
Karen MacRae Smith
Work Life / WorkSmart / Disability Program
OHR
202-551-6003
Calendar is on Outlook

Sent: Friday, August 07, 2015 12:59 PM
To: Disability Accommodation
Karen,
Thank you. If my physician requests an extension of the 90 day time period, should such
correspondence be directed to my supervisor or to the Disability Program?
Uta

Sent: Friday, August 07, 2015 3:40 PM
To: Disability Accommodation
Karen, I left you a vm message asking to speak to you today if possible. I am

also writing in case you are not in the office. Do you have any availability today?
Thanks,
Uta
--------------------------
Sent: Sunday, August 09, 2015 2:14 AM
Karen,
Since we were unable to connect Friday and since my day Monday will be short given that I have
major surgery the next day, I’m getting back to you now with some preliminary questions and
clarifications.
I read the update guidance which as far as I can largely mirrors the guidance you sent me
initially. First, Alec has already approved 5 day per week commute for more than three
months (since approximately May 20 to the present). The accommodation which pre-dates
Dr. Emsellem’s letter was in respect to a different condition (for which I will be undergoing
a third surgery on Tuesday).
Accordingly, my understanding of the guidance is that accommodation request would have

to go through your office and be formally approved because my supervisor only has
authority to grant such accommodation for 90 days. I recognize that the accommodation
began (and continues) for a different medical condition but I do not see any exceptions to
general rule in this regard. Am I missing something?
Second, while the medical conditions that I am dealing with are not directly related (in
some instances) they are indirectly related to the extent that the chronic sleep deprivation
and related sleep disorder are impacting my overall health and thus negatively impacts all
my medical conditions. For instance, since the accommodation was submitted
approximately 30 days ago, I underwent a surgery and developed as severe, life-threatening
post-operative infection which landed me in the hospital for almost a week. My extremely
poor post-operative condition was absolutely impacted by conditions described by Dr.
Emsellem. In any event, since getting out of the hospital on July 12, I have been running
from doctor to doctor while trying to meet the demands of my case which are
unrelenting. And now because of the complications of first two surgeries, I have to
undergo a third (major) surgery in two days from now. I am not sleeping and I have not
had an opportunity to focus on what I need to do to get better. I will need the requested
accommodation until at least November 1.
Lastly, my physician requested a temporary accommodation only because I asked her to do

so. I do not want to give up a schedule I fought for years to get. I don’t plan to stay on a
five day per week TC schedule unless I have no choice and I don’t know that I am willing
to give up my flex schedule. I am pretty traumatized by all the new and acute medical
issues and I have not time to make any decisions about what is needed in the long term.
I previously explained to you why I thought it was best that the accommodation request be
formalized. There are other reasons as well which I am happy to discuss with you post-
surgery. I did previously read the guidance and because the accommodation given to me
by my supervisor was already more than 90 days I did not think it was applicable. And I
don’t really understand why that was not previously communicated to me given our earlier
discussions. I also don’t understand why it took more than 20 days to get a response on
the request.
If I must request another letter from Dr. Emsellem (or any my physicians) in order to
obtain an extension, please do let me know. I will not be able to attend to it until after my
surgery this week but I can do so then. extension request from my physician or from
several
COMPARED FIRST V. WITH V. OF NTEU APPROVED COMBINED V. NOTE THAT THE

V. I WAS GIVEN STATED AS FOLLOWS:
• A - Standard Practice: Accommodations are provided as soon as practicable

and within twenty (20) business days from date request is made unless
exceptions described in Part 4 B apply
• Accommodations are provided as soon as practicable and within maximum time limit for
applicable circumstances as determined by DPM or DPO.
• DPM and other SEC officials with responsibilities for processing accommodation requests and
providing accommodations will take reasonable steps to ensure that their temporary absence
will not delay providing accommodations.
• B - Exceptions Affecting Time to Provide Accommodations
• Special Circumstances: Accommodations Expedited
Provided within four business days if requested for:
• Applicants to apply for employment
• Employees to attend meetings or training for which employees had less than twenty days
notice
• Employees to receive medical attention or other assistance during an emergency
• Extenuating Circumstances: more than twenty (20) days needed Extenuating

circumstances are limited situations in which unforeseen or unavoidable events prevent SEC from
providing accommodations within twenty business days. Temporary accommodations will be
provided if possible until requested accommodations can be provided. Examples of extenuating
circumstances affecting decision on request:
• Required information has been requested by DPM during the interactive process and either has
not been promptly provided by Requestor or is incomplete or not what was requested.
• Medical information requires extensive review by medical professional chosen by SEC. Examples
of extenuating circumstances affecting provision of accommodations after request is granted
because accommodations involve
● August __ : LVH
● August: AT HOME THOUGHT NO COMPRESSION. NOT ERGONAMIC.
CONSTANT PRESSURE. WORKING 8 HRS STRAIGHT AND ON WEEKENDS.
November __ 2016
Disablity #2 established.
Traumatic Injury #2 As a result of my being required to implement my own
accommodation and as a result of HR failure to acknowledge existing limitation and
established disability despite notice of the same. See all earlier emails to KMS.
Gasho
Tabuin
O’briend
Snienel
PT
Schwartz: MRI
SAME LAB NOW THREE BULGING DISCS AND THREE PREVIOUSLY
UNDETECTED ANNULAR FISSURES. PAIN AND EXAMPLES OF
MISDIAGNOSES EXACTLY LIKE WHA T I have experience.
Refreshing my memory on the employment laws and understanding that you never got any in-
depth training in this regard; I rescind this request of you/Rachel because I do not think another
doctor’s letter is necessary under these circumstances..
Using words that have meaning within the ADA, I am suffering from known and obvious
disabilities (Back and CSD and DSSD, and chronic elbow caused by excessive typing without
ergonomic support. In light of these known, obvious disabilities you have always
accommodated my needs for therapy since 2013 when I reported the injury incurred what
transporting materials to a proffer. After the three week OM project, during which time I was
obviously completely sendentory for weeks for up to 14-18 hours per day, I stood up felt sharp
shooting pain down my leg and immediately reported that you. Subsequently, you have
accommodated my needs to take time off work beginning last You subsequently accommodated
my schedule when I went through a long course of physical therapy including
acupuncture. When those remeb
n non-ergonomic y back known and obvious injury which impacts the major l
activities of daily life sitting, standing, bending, lifting, and sleeping; for which I require
accommodation per my office equipment. And since January 2015, when conservative
measures The fact that I’ve continued to suffer from never pain since the Nov. 14, 2013, is also
known and obvious given my ongoing need for adaptive furniture and assistive equipment at
work. And at home where pre-accommodation everything was structure to provide me much
support as possible.

Sent: Thursday, February 04, 2016 3:33 PM
Subject: RE: Halperin memo
I have not heard from her, but am happy to reach out. Will let you know what she says once I
connect.

Sent: Thursday, February 04, 2016 3:26 PM
To: Koch, Alexander
Subject: RE: Halperin memo
Thanks. It is much better and probably the best we can do with the monitors. I would not
physically have been able to do that by myself. I really appreciate your help. Thanks again so
much for coming by.
Relatedly, I would like to be able to focus on my work including Halperin and Kramer, etc.) as
a first priority. However, I cannot do that for the reasons we discussed but perhaps you can help
with this, too. If you agree, I think that your calling Rachel directly and telling her that you
support whatever period of extension my doctors recommend as well as my request for extension
of the Feb 9 deadline I can have so that I can a have a little more time to obtain the letters I need
from my physicians would be extraordinarily helpful. Given the number of material
challenges I am facing which are not of my doing and mostly not within my control, I don’t see
how anyone can deny that the request to extend the Feb. 9 deadline is reasonable and the need
for the extended accommodations obvious (i.e., new work-related injury and fall-out, OIT
technical hassles/delay, new MRI-related issues, PT, problems with HR/Worker’s Comp delay
resulting in my inability to get COP stats, need to file those papers asap per HR (and given your
impending departure), brother’s hospitalization), the pain I experience when sitting/driving, etc.,
and the related inability to travel/care for mom/brother, the MRI confirming new injury/damage,
need to see more specialist in light of MRI and ongoing pain; endless deadlines and pressure on
SPNGE, and the obvious impact of consistent stress, pressure, and pain is having on my ability
to sleep and to focus/prioritize my treatment the sleep disorders). The delay and HR-imposed
deadlines impact you almost as much as it does me in terms of managing Toni’s and the TU’s
expectations of us. What do you think? Has Rachel by any chance reached out to you. I
thought we’d hear from her by now so that we could set up the call with Andrew at
least…. Thanks.

Sent: Thursday, February 04, 2016 10:29 AM
Subject: Halperin memo
Here is the redline reflecting Cheryl’s and Toni’s comments, and a couple of minor nits I
made. Let’s discuss after you’ve had a chance to review.
Thx
(How’s the adjusted work station working?)
M. Alexander Koch
Assistant Director
100 F Street, N.E.
Ph: (202) 551-4762
Fax: (202) 772-9227
This e-mail message (and any attachments) from the United States Securities and Exchange Commission is for the
exclusive use of the intended recipient(s) and may contain confidential and privileged information. If you are not the
intended recipient, please do not read, distribute, or take action in reliance upon the message. If you have received this
message in error, please notify the sender immediately by return e-mail and promptly delete this message and its
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Spongetech Lack of Coordination

●2009 through May 2010:

Events Occurring on and after March 11, 2009 MTF

Performed significant physical labor at my job several times particularly in 2009-2010

2012 - F:\2013 employee stuff\CHRONO

July 2, 2010: Investigation resumes.

(May 1, 2009 through January 31, 2010)

Other Cases and Contributions:

September 16, 2010:

To Do in Anticipation of Rule 26 Obligations

• Delete entire “Branch File”

• Locate all document production cover letters.

• Consider creating new databases designated as:

• Create “Michael Snarski” database and load files;

• Create databases for Walgreens, Kroger, and Speranza;

TRANSFERRED TO AK IN JUNE. 2010 IMMEDIATELY POST-

Rob and Lorin:

From: Reisner, Lorin L.

The individual defendants in our case are:

Michael Metter, former CEO

For your information, the lit release link is:

July 19, 2011: MTF for mid-year meeting

From: von Eckartsberg, Uta

Creating unnecessary work for Staff

Eval: Work on TU responsibilities. Substantive, facts, law, OL – every substantive response,

One year ago!

Preventing me from meeting my investigative goals. No 26, no interrog, no discovery requests,

Enabling – no favor to him or to anyone else.

----- Original Message -----

----- Original Message -----

From: von Eckartsberg, Uta

Please find the revised and original versions attached.

From: von Eckartsberg, Uta

Please find my narrative attached. Thank you for granting me an extension.

Please let me know if you have any questions.

From: von Eckartsberg, Uta

Fyi, please see the P.S. below.

Have a wonderful weekend.

From: Koch, Alexander

From: von Eckartsberg, Uta

ISSAC WINEHOUSE MANIPULOATION CARTELS

Returned from SM proffer Tuesday night.

Against, my better judgment I allowed my supervisor to convince me to show CHS emails

From: von Eckartsberg, Uta [EXCLUDING]

JH Darbie call ultimately conducted by SS and AK concurrent with this email:

I previously identified numerous evasive and/or outstanding responses to the JH Darbie

From: von Eckartsberg, Uta

Alec and Paul,

J:\HO-10700 to HO-11199\HO-11156\INVESTIGATIVE FILES\MSN DOX SM\csh

Update: SM denies any knowledge of Clearview. He also denies that he or anyone he

I have more information which we can discuss in person.

MTF 06.26.2012 3:52PM

File F:\2013 employee stuff\HISTORICAL MAT INFO

Depending on the conversation, I may tell him my view on all:

Mismanagement me and my case

What I intend to say about the FBI is this:

From: von Eckartsberg, Uta