Confusion

In light of the recent Motions filed by Neil Evans, I have to assume he is confusing the two fraud cases (the Civil Case and Criminal Case) filed against his clients. 

The Criminal Case deals with Tax Fraud in which David Feuerborn and Thomas Jennings paid themselves large management fees with investor money without filing, or incorrectly filing, tax returns on the money they received.  They also created bogus bank accounts where they funneled investor money to themselves to purchase condominiums, exotic cars, interior decorating, RVs, motorcycles, etc. in order to hide these expenditures from ESS employees.  The IRS and U.S. Attorney’s Office did not seek a grand jury indictment on the chemical fraud (most likely because the statute of limitations had expired).  Instead they are using the Al Capone theory, and they are going after these fraudsters for Tax Fraud, and Tax Evasion.  Combined David and Tom owe the IRS approximately $850,000 dollars.

Meanwhile a company based out of Dallas, Texas (Freestone) is suing David Feuerborn, Larry Shultz, Thomas Jennings, and ESS for their chemical fraud.  Namely Freestone is claiming that the chemical was misrepresented to them, and that it contains hazardous chemicals.  They are also claiming that David, Larry, Tom and ESS attempted to extort Freestone in order to get more stock, committed stock fraud, gave Freestone false and fake documents, that the defendants represented that the solvent was patented and patent pending, etc.  Many of the allegations made by Freestone are listed in the Desist and Refrain Order issued by the California Department of Corporations, because they were using the same misrepresentations to investors in California and Louisiana.  David Feuerborn has already been sued successfully in Harris County, Texas for the chemical fraud where the Judge in that case determined that David Feuerborn, “committed actual fraud against the Plaintiff, [Petro-Sog]". 

On January 10, 2011 Neil Evans filed a motion in the Criminal Case requesting to enter into evidence documentation about the chemical’s effectiveness.  If Feuerborn and Jennings are not indicted by the Grand Jury for chemical fraud then why would this matter in the Criminal Case?  Also, his witnesses that wish to testify on the chemical’s “effectiveness” are two individuals with a vested interest in the chemical.  These individuals include Paul Sicotte who invested a “substantial amount of money” in the chemical without achieving any profitable results, and Larry Shultz who is the front man for David and Tom, and whom Freestone is suing for fraud relating from the toxic chemical they are peddling. 

Where are the credentialed chemists willing to testify on behalf of Feuerborn and Jennings?  Even though it is inappropriate in the Criminal Case to call such a witness this is good news for Freestone, because they have indicated that they do not have any bone fide chemists willing to validate their claims that the chemical is non toxic.  Larry Shultz has already stated that he is just an “introducer” in his Civil Case Hearing testimony.  What qualifications does an “introducer” have? 

Neil Evans Motions:

In my last post I published information contained in the motions filed by Neil Evans.  I wanted to go into more detail on those motions in today’s post.  When Neil realized that he would not get a continuance for his parents illnesses (the same excuse he has used the last four times) he added another reason.  He states that he discovered a computer and hard drive tower with exculpatory evidence relating to why David and Tom had their accountant reclassify ordinary income as “loans”.  He claims the information on the computer gives “justifications for such conduct, actions, and beliefs on a contemporaneous basis” (case 2:10-cr-00346-SJO ; Page ID 761). 

I would like to pose this question:  David Feuerborn, Thomas Jennings, and Larry Shultz did a deal with Freestone where they received certain cash payments for their “Licensed Technology” correct?  There is indisputable documentation that Freestone made payments to these individuals.  Why didn’t they use that money to pay back the “loans” if they were, in fact, real “loans?”  Additionally I must assume that the Canadian Joint Venture paid David, Tom and Larry.  So, why didn’t they use the Elemax funds to repay their “loans” if they were in fact “loans?”  Also, if I was the IRS I would research if they paid income taxes on the money they received from Freestone and Elemax.  I doubt they did.

The answer is simple.  They were never interested in paying this money back, and the only reason they classified their ordinary income as loans was to avoid paying income taxes on the investor money they secretly funneled to themselves. 

Patents Mentioned in Neil Evans’ Motions:

The U.S. Attorney states that, “[i]t appears that [Defendant Feuerborn] intends to introduce evidence of four patents awarded to Defendant [Feuerborn], two of which relate to a self-ejecting compact disc case and two of which relate to a flexing safety shield for hypodermic needles, to establish that defendant Feuerborn is an inventor.”

First, I must assume, facetiously, that inventors do not have to pay income taxes.  What does his occupation as an inventor have to do with income tax evasion?  What do these patents have to do with his chemical?  At least this gives Freestone an idea of what’s to come. 

So now we have an “expert introducer”, and some flawed logic that “inventors” (if you can even call Feuerborn an inventor) don’t have to pay income taxes.

I am not sure if the scheduled hearing took place yesterday on all these absurd motions, but as soon as I get any new information I will make it available. 

-ESS Investor