Continued Misrepresentations of Larry Shultz, David Feuerborn and Thomas Jennings

As many of you know I follow a lot of the internet chatter relating to the chemical scam being perpetrated by David Feuerborn, Thomas Jennings, Larry Shultz, ESS and their co-conspirators.  I have noticed that David, Tom and Larry have taken to the internet to promulgate their lies about the solvent, and defame those that have uncovered their fraud.  This is the standard modus operandi of their scam.  They claim that the California Department of Corporations is corrupt, they claim that the Ventura County District Attorney’s Office is corrupt, they claim that the IRS and United States Attorney’s Office is corrupt, they claim that the Louisiana Attorney General’s Office is corrupt, they claim that they Texas State Securities Board is corrupt, they claim that Petro-Sog is corrupt, they claim that the Utah Partners are corrupt, and now they claim that Freestone is corrupt.  Are we beginning to see a pattern develop?   

(Personal Note: I will not give David, Tom and Larry another forum (aka this Blog) to spew their misrepresentations and lies, but I want to acknowledge some of the recent information they have been posting on the internet, and on certain government documents.  That said, out of respect to those that have been damaged by this scam I will not publish links to their posts unless they are published by the parties they have defamed.) 

Mr. Larry Shultz filed a certain document with a government agency under penalty of federal criminal violations if misstatements or omissions of facts are contained within the government document (“Government Document”).  Mr. Shultz signed the Government Document and filed it of record so he can’t retract it.  In the Government Document he claims that Freestone is corrupt. (Remember that pattern I mentioned above?)  In the Government Document he claims that he (Shultz) is now a “whistleblower” because of the amended lawsuit that Freestone recently filed against him, David, and Tom.  (The amended complaint shows additional securities violations perpetrated by Shultz.)  Shultz also states that he wants his day in court to clear his name.  He claims that rights were given to Freestone by himself, David and Tom, and that they eventually took away those rights from Freestone.  He claims that the chemical is “non-toxic” and safe, and that it can be used for EOR (pumped into the ground to extract oil).  He also claims that Freestone let “billion dollar rights” slip away.      

1) To begin, I can’t imagine that their attorney (Neil Evans) advised Larry Shultz to file this Government Document that outlined their potential argument/strategy in the Civil Case.  More importantly I am sure that their attorney knows that judges do not appreciate defendants and plaintiffs trying to argue the merits of a lawsuit outside their courtrooms.  According to my attorney, the defamation that occurred in the Government Document is also very much frowned upon by the Courts (to say the least).  In the Government Document, Shultz claims that he is some kind of “whistleblower”, and that he is using that as a pretext to defame Freestone and its management.  This is the same tactic David and Tom have used against government agencies that have uncovered their massive fraud.  They claim that these government agencies are corrupt or have corrupt officials working for them.  They claim that the multiple government agencies and the companies that have indicted/sued them are involved with a vast conspiracy against them.

2) Mr. Shultz also stated that he wants his day in court to clear his name.  Thus, I ask you, Mr. Shultz, why do you keep trying to get the Civil Case dismissed on claims that jurisdiction does not exist?  Why haven’t you answered the lawsuit?  Your actions speak louder than your words.

3) Next, Larry Shultz claims that he gave Freestone certain “rights” and then took those “rights” away because Freestone didn’t fulfill some obligation.  Let’s see, you cannot pump toxic, chlorinated chemicals into the ground (EOR) so that is a “right” that didn’t exist in the first place.  More importantly, who wants to own rights to a toxic chemical?  If these “rights” are so precious and you have the ability to grant them or take them away, and you truly care about the company that is suing you, then why are you taking rights away from them?  In one breath you say that you are trying to help and protect this company, but in the next breath you say that you took rights away from the company and you won’t give them back unless new management renegotiates with you!  This makes no sense, unless you want to take away these fictitious “rights” as an excuse to sell them to another party in order to continue the con.  This seems to be what they did to ESS investors, because the ESS “rights” seem to overlap with Freestone “rights”.  Hmmmm.  I am beginning to see another pattern develop.

4) If you are going to continue the claim under penalty of federal criminal violation (which has been refuted by multiple scientists at various state agencies and private companies) that your chemical is non-toxic and that it works, then produce your “bona fide” chemists willing to vouch for it.  I didn’t see an expert witness with a chemistry background listed on the motion in the Criminal Case.  I only saw an introducer and an investor that have a vested interest in the toxic chemical.  If your chemical is so amazing then why don’t you take the chemical to Exxon, Chevron, Shell, BP, etc.?  In the Civil Case Freestone states they wish to rescind the Agreement you signed with them.  Forgive my ignorance, but doesn’t that mean you can get all your “rights” back?  As is the case with most ESS investors I don’t think Freestone or anyone wants your “rights”.  The current actions of David, Tom and Larry don’t make any sense unless it was a scam to begin with.

**Criminal Case Update** 

The Criminal Case has been postponed until February 22, 2011.  The Government agreed to give Feuerborn and Jennings one last continuance with their agreement that they would not request any more continuances in this case.   

-ESS Investor                    

“If you drink much from a bottle marked `poison,' it is almost certain to disagree with you, sooner or later.”

Happy New Year Blog World!  Let’s pray that David and Tom will be spending 2011 behind bars so they cannot scam any more innocent victims, and hopefully this new guy, Lawrence Shultz, will be following in their footsteps.  

Over the holidays I read a comment posted on the VRI Board.  I thought it was a great idea.  According to the claims of David, Tom and now Lawrence, the chemical solvent is completely “non-toxic”.  ESS investors were all sold on this idea, and Freestone has shown emails, a fake MSDS and other documentation from David, Tom and Lawrence where they continue to make this claim.  If that is the case then they should be willing to let their family and friends that have assisted in the marketing and sale of this product drink a litre of it.  Then David, Tom and Lawrence should all drink a litre of it.  What better way to prove that it is not toxic!?!?

I hope the people at Freestone read this post and pass it on to their legal counsel.  If David, Tom and Lawrence say that they will not drink the product, nor will they let their friends and family drink the product, then that is definitive proof that it’s toxic stuff - case won!  Obviously you will have to watch them closely to make sure they don’t engage in anymore Parlor Tricks, and try to swap out the toxic chemical after the experiment with water or something of the like.

Only 15 days until their trial!

- ESS Investor

Criminal Case Update

A new motion was filed by the United States Attorney’s Office on December 17, 2010.  After reading the latest motion, I consulted with a criminal litigator.

Apparently the attorneys representing Feuerborn and Jennings are not complying with the Federal Rules for Criminal Procedure, and doing everything wrong.  The criminal attorney I consulted with said that this is Law School 101 stuff.  As an outsider, watching the pretrial motions via PACER, one might ask if the attorneys for Feuerborn and Jennings have ever been involved with criminal litigation.  Here are some excerpts from the Motion filed by the United States Attorney’s Office: 

“Defendants Thomas R. Jennings and David J. Feuerborn face trial on January 18, 2011, for tax fraud. Both defendants are charged with conspiracy to defraud the United States (18 U.S.C. § 371); defendant Jennings is charged with five counts of subscription to false tax returns (26 U.S.C. § 7206(1)); and defendant Feuerborn is charged with five counts of income tax evasion (26 U.S.C. § 7201).”

“To date, the government has produced approximately 43,300 pages of discovery to defendants, including witness statements under the Jencks Act, 18 U.S.C. § 3500. (Declaration of Eric D. Vandevelde ¶ 2.) The vast majority of these materials, approximately 93%, were produced on May 12, 2010, approximately three weeks after defendants’ arraignment and one day after this Court signed the protective order for discovery in this case. (Id.) The government will continue to comply with its discovery obligations as this case proceeds.”

“[T]he government repeatedly requested that defendants produce all reciprocal discovery materials mandated under Federal Rules of Criminal Procedure 16(b) and 26.2, and the Jencks Act. (Id. ¶ 3.) The government has emphasized, in particular, the need to receive expert disclosures from defendants. (Id.) To date, neither defendant has produced any discovery or made any expert disclosures to the government.”

“Accordingly, the government respectfully requests that this Court order defendants to comply with their obligations to produce reciprocal discovery materials by no later than January 10, 2011 (eight days before trial and the hearing date on this motion)” (Case 2:10-cr-00346-SJO ; Pages 575 and 576).

Below is another excerpt from the Government’s motion explaining the rules that Jennings and Feuerborn are ignoring:

“A defendant is required to produce reciprocal discovery under Federal Rules of Criminal Procedure 16(b) and 26.2, as well as under the Jencks Act. If a defendant requests discovery and the government complies and demands discovery itself, the defendant must provide the following reciprocal discovery: ‘books, papers, documents, data, photographs, tangible objects, . . . or copies or portions of any of these items if . . . the item is within the defendant’s possession, custody, or control; and the defendant intends to use the item in the defendant’s case-in-chief at trial.’ See Fed. R. Crim. P. 16(b)(1)(A).

A defendant must also produce a written summary of any expert testimony a defendant intends to offer at trial under Federal Rule of Evidence 702, 703, or 705. See Fed. R. Crim. P. 16(b)(1)(C)” (Case 2:10-cr-00346-SJO ; Page 576).

29 Days until their trial date!  It’s getting down to the wire.  Their trial would be a great place for ESS investors to meet and and exchange information.

-ESS Investor

Payday

The United States Attorney filed the “Government’s Motion to Admit Business Records Under Declarations of Custodian of Record Pursuant to 902 (11) and 803 (6)” in the Criminal Case against David Feuerborn and Thomas Jennings (Case 2:10-cr-00346-SJO: Document 53. Pages 234-239).  It was a busy weekend for me, because there were approximately 300 pages of exhibits attached to this Motion.  These exhibits give a clear picture of the fraud, and the extent of the fraud, that Feuerborn and Jennings perpetrated against ESS investors and others.  You won’t believe how much money went to friends, wives, decorators, cabinet manufacturers, etc.  It looks as if they used ESS money to buy items such as a Lexus and an RV as well.  I wanted to remain impartial, but I can’t help becoming extremely frustrated by the indisputable evidence that the U.S. Attorney’s office has compiled.

(Note: The personal information listed below was derived from the W-2 Forms published by the government as exhibits to the Motion.)

Let’s first look at Suzanne Jennings from Anaheim, CA.  She is the wife of Tom Jennings and for some reason she received $35,000 from ESS Environmental, Inc. in 2005 (Case 2:10-cr-00346-SJO: Document 53-4. Page 299).  I’d like some explanation of what she did for ESS to deserve that money.  I would also like an explanation as to why Suzanne and Tom purchased an RV that cost $62,143 with money diverted from ESS (Case 2:10-cr-00346-SJO: Document 53-4 and 53-5. Page 310 and Page 333 respectively).  There are also copies of checks written from “Ecologic” to Trinity Cabinetry by Tom Jennings for a new set of cabinets for their house.  If you don’t remember, Eco-Logic is the company that was purportedly building an oil sand machine.  They had ESS investors believe that they were paying the real Eco-Logic while they were actually diverting money into the fake “Ecologic” bank account they created so they could buy an RV and cabinets for their house (Case 2:10-cr-00346-SJO: Document 53-5. Pages 322-324).

Do you remember my blog entry that listed a company called Jewelry by Asa?  I didn’t know what the connection was.  (Note:  When I Googled the Lantana address David Feuerborn used for the "Cleansal" domain name "Jewelry by Asa" came up under the same address.)  Well, I found that connection buried within these exhibits.  Asa Kilander of Camarillo, CA was paid $28,000 dollars by ESS Environmental, Inc.  Somehow she is connected to Dave and Tom and the chemical scam (Case 2:10-cr-00346-SJO: Document 53-4. Page 300).  What if her “Swedish jewelry and clothing business” was a front company to hide ESS money?  What if there is hidden ESS money in Sweden?!?!  I find it odd that her website no longer exists. 

I am anxious to see the exhibits that will be filed in the Civil Case.  While the Criminal Case deals with tax evasion and tax fraud, the Civil Case deals directly with the chemical scam.  Once both cases make some more progress I think ESS investors will have a lot of information to sift through. 

-ESS Investor          

Courtroom Drama

I put a phone call in to Freestone’s office to ask if anyone from the company attended the hearing on Wednesday.  I spoke to an individual at the company that attended the hearing, and he gave me a play-by-play of what occurred.  I will keep his identity anonymous out of respect for his privacy.  I have no ill will towards their company, because they have been hurt by this scam just as all the ESS investors have been hurt.    

Usually federal court hearings are pretty bland, but I am told that this one had a little excitement.  To begin, David Feuerborn and Thomas Jennings did not show up.  Neil Evans (David Feuerborn’s criminal attorney) was present as well as the new third partner, Larry Shultz. 

It sounds as if this hearing was more exciting than an episode of Law & Order.  I would have loved to have been a fly on the wall at this hearing, because according to my source at the company Larry Shultz was thrown out of the courtroom by Judge O’Connor for speaking out of turn while in the gallery.  Now I am more inclined than ever to get a transcript of the proceedings so I can find out exactly what was said that angered the Judge.  Shultz wasn’t just warned.  He was thrown out!  Not the best first impression on a Judge that will be presiding over your case if you ask me.  I wonder if the Judge knows about the criminal charges that have been brought against Feuerborn and Jennings by the U.S. Attorney's Office.  It looks as if this guy Shultz is now completely intertwined in their chemical scam, and if he has been involved in raising money for them he might be involved in their criminal activities which include defrauding the federal government, and tax fraud.  I hope someone investigates and follows the recent money transactions.    

   

(Note: The Judge allowed Shultz to come back in to testify as a witness in the hearing.  While on the stand Shultz apologized for his outburst.  It will be interesting to see what he said on the stand, and if it conflicts with any information that is known about the chemical scam.)

After the discovery of this news I am going to order a complete transcript of the proceedings.  I will update everyone when I get it. 

-ESS Investor

Bench Warrant Issued for David Feuerborn

This blog post will have nothing to do with the chemical scam perpetrated by David Feuerborn, Thomas Jennings, Larry Shultz and others, but instead I will focus on some past legal documentation I found during an internet search on David Feuerborn.  While this case has no direct connection with the chemical scam, it does give some insight into the behavior of David.  The subsequent events that occurred after the divorce might have a direct connection with his legal battles on the chemical scam.       

I discovered a very messy divorce proceeding and child custody battle.  It looks as if a bench warrant was issued due to his contempt of court:

5/28/2003

ORDER TO SHOW CAUSE RE CONTEMPT AGAINST DAVID JOHN FEUERBORN FILED BY COUNTY OF VENTURA

BENCH WARRANT ISSUED

 

According to this documentation he had some cash flow issues that related to his payment of child support.  I wonder if that is why he went on the road to Louisiana and other states in order to raise money with the chemical scam.  Maybe these seemingly unrelated events are very much related.

Maybe David didn’t want to file a tax return so that he looked destitute and would not have to pay child support. 

It looks as if David has always had money issues, and instead of making money through hard work and a normal job he decided to take the easy way out and use his parlor tricks to scam investors into investing into the chemical scam.  Very interesting how this is all finally coming together.  

- ESS Investor

Arthur Mark Feuerborn

Has anyone ever noticed that when you Google the name "David Feuerborn" a paid advertisement comes up for the Law Offices of Arthur Mark Feuerborn?  There is also a disclaimer on his website that states, "Arthur Feuerborn has been dismissed from all actions involving ESS Environmental and related entities as he has not been involved in those companies, except as a nominal shareholder in the two entities.  He has had no involvement in the management, direction, control, or operations of any ESS-related entity nor has he received compensation or benefit" (Disclaimer LInk).

We are assuming Mark is the brother of David.  They look strikingly similar.  According to the District Attorney's office of Ventura County Arthur is mentioned as one of the parties that was originally indicted in Louisiana for racketeering, securities fraud, and criminal conspiracy.  

It would seem as if he is totally distancing himself from the chemical scam at this point in time.  Why else would he need that disclaimer on his Website?  

Also, it doesn't look as if he is representing his brother in the Criminal Case.      

- ESS Investor

Death and Taxes

“In this world nothing is certain but death and taxes.” – Benjamin Franklin

How true this quote must ring to David Feuerborn and Thomas Jennings.  I have been asked why the United States would indict David and Tom for tax fraud rather than indict them for their chemical fraud scheme.  If you talk to David and Tom I am sure you will hear responses such as, “these are trumped up charges” and, “they are only going after us on tax fraud because they can’t prove our chemical business was a scam.”  One should ignore those biased responses.

Instead it is well known that tax fraud is very easy to prove.  Take for instance the criminal case that brought down the infamous mobster Alphonse Gabriel “Al” Capone.  Al Capone was a ruthless gangster, but the tax evasion charges are what finally put him away for good.  The tax fraud might be the best way for ESS investors to finally get justice.  So the government will need to prove the following in the Criminal Case against David Feuerborn and Thomas Jennings:

1.        Did David file a tax return in the past five years?  If he did it should be on file with the IRS.  If he didn’t then it won’t be on file.  That is very easy for the Government to prove.  I don’t think the excuse “it got lost in the mail” will work this time.

2.       Did Thomas Jennings file his tax returns incorrectly over the past five years?  All the Government needs to show is that he misstated his income based on the forensic accounting of their bank accounts. 

3.       Did Feuerborn and Jennings open a bank account with the name “Ecologic”?  (This is spelled deceivingly similar to a company that built a machine that is currently who-knows-where.  The real company is spelled “Eco-Logic” with a hyphen.)  The government is alleging that they created this “bogus” bank account in order to divert money into their personal accounts without investor knowledge. 

4.          Did Dave and Tom ask their CFO to classify the ESS money paid to them as “loans” so they wouldn’t have to record it as regular income?  I am sure they have sworn testimony of the CFO to validate this allegation.  The IRS doesn’t take kindly to loans that have no term or interest rate.

5.       Did Tom pay for interior decorating at Interiors by KC, Inc. with investor money?  That should be easy to prove.

6.       Did Dave by motorcycles and/or cars at Hahm Motorsports with investor money?  That should be easy to prove.  (Grand Jury Indictment, Page 1-25; Case: CR 10-00346)

Do you see how easy it is to prove tax fraud?

The U.S. Attorney had indicted them for tax fraud, but I am sure he will use a broad brush to paint a picture that includes the chemical fraud as well.  The U.S. Attorney has already used the Civil Case in his motions, and he can continue to use it.  He can also use the sworn testimony and additional discovery gathered in the Civil Case.  Additionally, one has to ask if they paid taxes on the money paid to them by Freestone.  I doubt it.  This shows a continued effort to defraud the U.S. Government.      

Thus, there is little gray area when it comes to tax fraud.  If convicted, one might assume that they will go back to their chemical scam after they get out of prison because that is all they know.  Here is my analysis of that scenario.  If Dave and Tom go to prison they are looking at terms of up to 20-30 years.  If they get the minimum sentence or a decreased sentence and they return to their chemical scam then the Civil Case might be the answer.  Freestone can ask certain questions in their interrogatories and discovery portion of the litigation that can prove that criminal acts took place and even bring the new guy, Larry Shultz, into the mix.  If they try to perpetrate the chemical scam again, then the U.S. Attorney can go after another indictment based on the sworn testimony gathered in the Civil Case.  This may happen anyway if enough evidence is amassed.  Only time will tell.   

- ESS Investor 

Arrogance is Bliss

I've decided to use this blog post to analyze the mindset of David Feuerborn and Thomas Jennings as it relates to the chemical scam and the problems they have encountered in the 20+ years they have been at it. 

Arrogance:

I can attest that David Feuerborn and Thomas Jennings are extremely arrogant individuals.  Take for instance Dave’s arrogance towards the Internal Revenue Agency.  He hasn’t filed a tax return in the last 5 years and he thinks he can get away with it!  That’s arrogance. 

Dave and Tom know there are hazardous chlorinated chemicals in their “solvent” yet they think they can forge Material Data Safety Sheets and other government regulated documentation so that everyone thinks it’s as safe as water.  This is a federal offense!  That’s arrogance. 

Dave and Tom also get people to front for them so that due diligence research doesn’t reveal their identities and past scams.  In Louisiana they used paid actors to pitch the solvent to would-be investors, and they used an individual named Larry Shultz to sell the “solvent” to Freestone.  That’s arrogance.

They set up bogus bank accounts at Wells Fargo with names almost identical to the vendors building their “machines” so they could funnel money to their personal bank accounts and investors would think the money was going to the machine manufacturers.  That’s arrogance. 

They are still trying to sell their “solvent” under different names and different corporations even though they have been criminally indicted by the state of Louisiana, criminally indicted by the U.S. Federal Government, successfully sued by Petro-Sog, civilly sued by Freestone Resources (ongoing), and issued a Desist and Refrain order from selling securities by both Texas and California.  That’s arrogance. 

How do they get away with it?:

If you talk to Dave and Tom then you hear the excuse that they have been through all this trouble because “people are trying to steal their ‘solvent’”, or that “people are just jealous of their miracle cleaner.”  Let’s take a look at that argument:

Petro-Sog only wanted to recover money that they paid to Feuerborn when they found out that Feuerborn had made multiple misrepresentations about the chemical and its toxicity.  They wanted nothing to do with the “solvent” when they discovered it had carcinogenic, chlorinated chemicals contained in it. 

Freestone just wants to recover their stock and money that they paid to Feuerborn, Jennings, Shultz and Environmental Services and Support, Inc.  They are asking for a rescission of their Agreement because they made the same discoveries made by Petro-Sog, which indicates that they want nothing to do with this hazardous “solvent” either. 

Then one must ask if the Internal Revenue Service, the state of Louisiana, the California Department of Corporations or the Texas Securities Commission wanted to steal their “solvent”.  This is the most laughable of them all.  I know Dave and Tom blame their Louisiana prosecution on corrupt local officials, but the fact still remains that many investors lost hundreds of thousands of dollars on this scam.  It sounds to me as if they people they scammed were just well connected.  None of the documentation or disclosures they made to Louisiana investors discussed the carcinogenic chemicals that are contained within the “solvent”.  

These guys think they are above the law.  They don’t care if people get hurt because they don’t make the proper disclosures about their “solvent's" toxicity.  The only thing on the minds of Feuerborn and Jennings is how they can make some quick cash without working for it.  It looks as if the chickens are finally coming home to roost.      

- ESS Investor

The Eyes of Texas are Upon You

It looks as if we have some life in the Civil Case.  Judge Reed O’connor has ordered both parties (Plaintiff and Defendants) to appear for a hearing on November 17, 2010 to hear verbal arguments on the jurisdiction challenge submitted by Neil Evans, the attorney for David Feuerborn, Thomas Jennings, Larry Shultz, and Environmental Services and Support, Inc. (“Defendants”). 

On November 17^th Freestone will argue that the Defendants had the minimal contact needed in the state of Texas to keep the jurisdiction in the Northern District Court in Texas.  According to my research, minimal contact is usually all one needs to prove in order to keep the original jurisdiction in which the complaint was originally filed.  According to Freestone’s response to the Motion to Dismiss, the Defendants had minimal contact with Texas in that they originally solicited a Freestone consultant and resident of Texas while he was in Texas, made multiple phone calls to Freestone’s Texas office, sent multiple emails to Freestone’s Texas office, visited Freestone’s office in Texas on multiple occasions where they gave misrepresentations during demonstrations of the solvent, a demonstration trip in Houston, and the Petro-Sog case indicating that at least one of the Defendants (David Feuerborn) has previously directed this scam at the state of Texas.

Neil Evans, the attorney for Feuerborn in the Criminal Case, argued that he didn’t have enough time to prepare a proper defense for his client, and requested a continuance multiple times in the Criminal Case.  Now, how are we supposed to believe that he has time to travel to Texas to represent all of the Defendants in the Civil Case?  What are the odds that he will come up with some obtuse reason to postpone the jurisdiction hearing in the Civil Case?  But then again the Judge must to approve his reason before he will allow the hearing to be postponed.  I have a feeling that Judge O’connor will not have a lot of patience for these guys if they attempt delay tactics when he hears about their criminal indictment. 

So now the Defendants’ attorney is going to fly back and forth between California and Texas on ESS investors’ funds.  This is the biggest travesty of them all.  On a phone conference with ESS investors David Feuerborn claimed he was looking for a joint venture partner, and that construction was underway on another machine.  Instead, it looks like any new money that might come into this venture will be spent on defending David Feuerborn and Thomas Jennings.    

Personally, I would like both cases to move forward as quickly as possible.  My goal is to collect any and all evidence in the Criminal Case and Civil Case that proves that Feuerborn and Jennings used fraud in their chemical scam in the hopes that an ESS class action can be put together.  If there is evidence that criminal actions have occurred then the authorities might even get involved and stop them once and for all!  No one else needs to get hurt by these guys and their scam. 

-          ESS Investor    

Parlor Tricks

Happy Monday everyone!  I decided to devote this blog entry to explaining how David Feuerborn, Thomas Jennings and Larry Shultz have been so successful at this con.   I deem it a successful con because according to the Criminal Case they have raised a substantial sum of money with this "chemical".

To begin, Feuerborn discovered one very hazardous and chlorinated chemical has the ability to separate hydrocarbons from solids.  We derive this information based on the California Department of Corporations Desist and Refrain Order and the Petro-Sog Case.  We have to assume that this discovery was made in the early 1990s according to the information discovered in the Petro-Sog Case.   Due to the extreme toxicity of the chemical, and the fact that only one chemical comprised Feuerborn's "solvent", it was necessary to create some mystique and, most importantly, fake documentation.

So What is the Sales Pitch?:

When I purchased ESS stock I was told that there was a special blending method and a multitude of chemicals were used to create R6000 (the name of the solvent when it was sold to ESS investors).  From my discussions with other ESS investors I have been apprised of stories that they tell to non-chemists.  These stories range from shocking the chemical in order to change its polarity to the utilization of a special "black box" that blends the chemicals in a certain order to remove toxicity.  This is all garbage.  While I am a Bio-Engineer, I have a background in rudimentary chemistry.  I can tell you that shocking an organic substance will not change its polarity and blending multiple organic chemicals together will not make a toxic chemical non-toxic.  If this had been Feuerborn's sales pitch when I purchased the ESS stock I would have walked out of the room immediately.  (I almost did walk out of the room because Tom was so arrogant at the meeting.)  If the two organic chemicals are miscible in one another then they might alter the main chemical's properties (flash point, boiling point, etc.), but that is it.

Feuerborn and Jennings also boasted that the chemical passed an aquatic toxicity test.  This is my favorite con of them all.  Let's assume that they really used R6000 in the test.  (I wouldn't be surprised if they didn't even use it to conduct the test.)  If you have a toxic chemical that is not soluble in water and has a specific gravity that is heavier than water then it can pass this misleading test.  The chemical will rest on the bottom of the fish tank and the fish are not exposed to the chemical's toxicity.   This doesn't mean that the chemical is non-toxic.  Personally I think this was a forged test, but even if it wasn't there is a way that a toxic chemical can successfully pass the aquatic minnow test.

I believe Feuerborn began learning from his mistakes and altered the con accordingly.  In the Petro-Sog Case one of David's partners told a Petro-Sog employee what was in the "solvent".   Thus, Petro-Sog sued Feuerborn because it is extremely toxic stuff.   They have learned that no matter how deep a company gets involved with them that they cannot disclose the chemical's makeup, because the fraud will be immediately uncovered.  Also, how would the EPA allow a machine to operate anywhere in the U.S. if there is a risk that carcinogenic chemicals will escape into the atmosphere. 

Next, when I purchased my ESS stock I was told that the solvent was patent pending.  Others have been told that it's held in a trade secret.  The patent pending claim was a complete lie.  If Feuerborn patented the solvent then the toxicity would be revealed.   Also, I was told it was patent pending in the early 2000s and  there is still nothing posted on the USPTO website.  The California Department of Corporations Desist and Refrain Order also states that this was a lie told to investors.  According to the Civil Case Complaint this same lie was told to Freestone by David Feuerborn.  Personally, I am shocked at the audacity of Feuerborn, Jennings and Shultz by perpetuating this lie as recently as last year!

That's all for today folks.  I will be back with more information soon!

-ESS Investor

   

Criminal Case Update 09/30/2010

A Stipulation was filed on September 29, 2010 that grants David Feuerborn and Thomas Jennings a continuance of their Criminal Case (No. 10-346-SJO) until November 30, 2010.  The Court has previously continued their Criminal Case from June 8, 2010 to November 9, 2010, but it looks as if they were granted one more continuance.  Both the attorneys for the United States and for Feuerborn and Jennings agreed to the November 30, 2010 continuance date.

The stipulation goes on to state, "[d]ue to the nature of the prosecution, including the charges in the indictment and the voluminous discovery materials, this case is so unusual and so complex that it is unreasonable to expect adequate preparation for pretrial proceedings or for the trial itself within the Speedy Trial Act time limits" (Criminal Case Page 190, Lines 10-15).

The United States has "approximately 43,000 pages of discovery and numerous audio recordings of interviews" (Criminal Case Page 190, Lines 8-9).

The Honorable Judge Otero is holding another hearing tomorrow (October 1, 2010) in chambers to discuss the potential conflict of interest pertaining to Neil C. Evans (Feuerborn's legal counsel in the Criminal Case) and his dual representation of both defendants in the Civil Case.

-ESS Investor

New Promotion of ESS Solvent

We uncovered a blog post that was made on a site called The Eco Eye.  I believe David Feuerborn is the individual in the demonstration video and Larry 411 is Lawrence Shultz. Here is the text from the YouTube video:

"This close-up chemical demonstration shows the basic process steps that are inherent to any continuous flow Oil Extraction Machine using the EncapSol chemicals: (1) Insert the feedstock Tar Sands (2) Add EncapSol liquids in the reactor (3) Gravity-separate the water, the heavier EncapSol liquids encapsulating the oil and the even heavier sands and solids, (4) Dry out the sands with low-temperature process waste-heat, (5) Evaporate the EncapSol liquids to recover the hydrocarbon/oil for sale, and (6) Condense the evaporated gaseous EncapSol back into a liquid to start the whole closed-loop process all over again in a continuous flow reaction that can extract oil from oil-infused rocks and sands.

With the push for Arctic drilling, the fact that oil normally congeals in cold and freezing temperatures tis a big problem that is very costly because it consumes too much fuel energy in the process just to get the oil flowing.

However, as EncapSol demonstrates in this video -- unlike any other oil industry solvent being used, EncapSol can uniquely and cost-effectively break hydrocarbon molecular bonds so as to make heavy, immobile, 8-API gravity oil flow like water for easier extraction, even in freezing temperatures.

Whether it is TAR SANDS from Utah or OIL SHALE from Colorado or waste-oil sludge pits, oil spills or storage tank bottom sludge -- EncapSol literally can cleanly dissolve the liquid hydrocarbons from the solids that strand it.

Please note that in the process, the EncapSol solvent is fully recovered with greater than 99% efficiency -- which recovered solvent is re-used in the next cycle.

All separated water, sand, gravel, clay and rocks are delivered clean, free of any remaining oil or residual solvent.

This is a closed-loop zero-discharge system."

http://theecoeye.com/?p=6740

Back to the Basics: The Civil Case

Let's take a look at the Civil Case currently pending in the Northern District of Texas: 

On July 9, 2010 Freestone (the "Plaintiff") filed a lawsuit in the United States District Court for the Northern District of Texas, Dallas Division, Civil Action Number 3:10-cv-01349-O against Lawrence Shultz, Environmental Services and Support, Inc. (“ESSI”), David Feuerborn and Thomas Jennings (the "Defendants").  The Plaintiff is alleging that the Defendants committed "fraud by nondisclosure, the common law tort of conversion by pretext and swindling, deceptive trade practices, common law fraud and fraud by misrepresentation/statutory fraud."

On August 3, 2010 documents were filed with the Court to show that all of the Defendants had been served.  The documents indicate that the Defendants (and members of their families or live in companions) tried to avoid service by either denying their identities, or claiming a false identity.  (The service documents can be read on PACER under Pages 81-88.)

On August 19, 2010 a Stipulation was filed with the Court by Neil C. Evans, esq. who is representing all Defendants in the Civil Case.  (Note: He is also David Feuerborn's attorney in the Criminal Case.  Evans has also filed documents on behalf of Tom Jennings in the Criminal Case.)  The Stipulation states, "all Defendants will file their responsive pleadings to the Complaint in this action by Thursday, August 19, 2010" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 1).  Further it states that, "all Defendants waive any objection to process service" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 2).  (Note:  A response to the Complaint has never been filed by the Defendants.)

On August 19, 2010 the Defendants filed a "Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction" with the Court.  The Defendant's main argument is that "the Defendants lack the requisite contacts with the state of Texas" (Civil Case, Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction. Page #91, Paragraph 1).

On September 9, 2010 the Plaintiff filed a Response to the Defendant's Motion to Dismiss.  This Response states the Plaintiff's belief that jurisdiction is proper in the Northern District of Texas, because (i) Lawrence Shultz was working as a finder and consultant for Feuerborn and Jennings and made multiple unsolicited calls to a consultant working for the Plaintiff in order to pitch their solvent and structure a deal, (ii) Feuerborn and Shultz called and sent multiple emails to the Plaintiff before and after the Stock Purchase Agreement was signed, (iii) Jennings made multiple calls to the Plaintiff, (iv) Feuerborn and Shultz made multiple visits to both Houston and Dallas where the fraud occurred and the aforesaid misrepresentations were made to the Plaintiff and others, and (v) Feuerborn made business cards with the Plaintiff's address.  (Civil Case, Plaintiff's Response and Brief in Opposition to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction (Docket #10). Pages #106-115)  The Response goes into further detail, but those are the main points I noticed.

The parties are now awaiting a ruling from the Judge hearing the Civil Case.


-ESS Investor

Petro-Sog, Ltd Lawsuit filed in 1994

I came across a lawsuit filed in 1994 in Texas.  The lawsuit is titled "Petro-Sog, Ltd v. Federation of Research Chemical Engineering, Inc., Bahman Abtahi, Bruce Akbari, and David Feuerborn" ("Petro-Sog Case").  This case was filed in Texas State Court in Harris County, Texas in the 280th Judicial District as Case # 96-50513.  The Petro-Sog Case is not listed on PACER because it was filed in Texas state court, but it can be found at the Harris County Courthouse or by using their online document retrieval website.  It took some digging, but I have summarized the relevant information below.

Case Summary:

Feuerborn, Akbari and Abtahi were operating under the company Federation of Research Chemical Engineering, Inc. ("FORCE") that had a solvent called Reneu.  Reneu is the product that ESS investors know as R6000.  David Feuerborn was the President of FORCE which was based out of Baldwin Park, California.  Reneu purportedly, "has an ability to separate hydrocarbons from liquids, separate hydrocarbons from solids, separate sulfur from hydrocarbons, and to act as a de-emulsifying agent" (Petro-Sog Case, Original Petition Page #4, Paragraph 10).  The Original Petition goes on to state that FORCE "sought to sell a large interest in its technology" (Petro-Sog Case, Original Petition Page #4, Paragraph 11).  The Original Petition goes on to state the following:

"On October 14, 1994, [FORCE] shared its technology and trade secrets regarding Reneu with a representitive of [Petro-Sog].  During this meeting, [Petro-Sog] learned that [FORCE], Abtahi, Akbari, and Feuerborn had made certain representations regarding Reneu that were false and untrue to induce [Petro-Sog] to enter the Agreement.  Among other things, [FORCE], Abtahi, Akbari, and Feuerborn falsely represented to [Petro-Sog] that Reneu had certain characteristics and abilities that it did not have or posses.  In particular, [FORCE], Abtahi, Akbari, and Feuerborn falsely represented that:

a.       Reneu and its reactants and products did not represent an environmental risk;

b.      Reneu and its reactants and products did not have any special disposal requirements;

c.       Reneu and its reactants and products did not have special handling and storage requirements;

d.      Reneu and its reactants and products did not require special EPA testing and/or approval;

e.      Reneu and its reactants and products did not possess chlorinated solvents; and 

f.    Reneu and its reactants and products are ready for commercial production” (Petro-Sog Case, Original Petition Page #5, Paragraph 15).

Judge Ruling:

"The Court found and now finds that each of the Defendants, [FORCE], Bahaman Abtahi, Bruce Akbari and David Feuerborn, committed actual fraud against the Plaintiff, [Petro-Sog]" (Petro-Sog Case, Final Judgment Page #1, Paragraph 2).

- ESS Investor

Criminal Case Update

Happy Monday everyone!  This blog entry will be a long one so bear with me.  First I will go through the motions that have been filed by the United States Attorney and by the attorneys representing David Feuerborn and Thomas Jennings.  If the judge has already ruled then I will also give his ruling.

"Conflict of Interest"

On August 23, 2010 the United States Attorney filed a "Notice to the Court of Potential Conflicts of Interest and Request for Hearing."  In summary, the Notice stated that there might be a potential conflict of interest on the part of the counsel representing David Feuerborn (Neil C. Evans, esq.) in the Criminal Case and his dual representation of both David Feuerborn and Thomas Jennings in the Civil Case.  The U.S. Attorney states that there is a potential overlap of the Criminal Case and the Civil Case because Feuerborn and Jennings used the same pitch to Freestone that they used to the ESS investors in order to induce an investment.  The U.S. is further alleging that the ESS money was then funneled to Feuerborn and Jennings, whereupon they didn't pay taxes on that money.  Thus, the potential conflict arises because both cases "arise out of similar conduct -- namely, misrepresentations to investors regarding defendant's companies...and the technology defendants and those companies claim to have developed" (Criminal Case Page #98, Lines 22-26).

On September 2, 2010 Neil C. Evans filed a response to the U.S. Attorney's Notice.  In summary, Evans argues that the two cases are completely unrelated.  He also states that his clients have signed waivers of conflict.  His main argument is that the allegations in the Civil Case occured after the allegations in the Criminal Case.

On September 20, 2010 the Honorable Judge Otero stated that he wanted supplemental briefs from the defendants and that this matter would be continued until October 1, 2010.

On September 24, 2010 Neil C. Evans filed his supplemental briefs where he states that, "[t]he alleged potential conflict of interest asserted by the Persecutor in this case, does not involve the joint representation of Defendants by an attorney in the instant case" (Criminal Case Page #179, Lines 7-10).  (Personal Note: Evans has filed motions on behalf of Jennings in the Criminal Case.)

Lastly, the main reason that the U.S. Attorney made this notice is to avoid any appellate argument that the Defendants Feuerborn and Jennings did not have "conflict free" counsel.  I will update everyone once the Judge's ruling has been posted on PACER.

"Application to Travel"

On September 3, 2010 Evans filed an "Ex Parte Application to Expand Travel Restrictions as Conditions of Release" on behalf of Feuerborn AND Jennings.  Currently, Feuerborn and Jennings are restricted to the Central District of California, Texas and Louisiana prior to the trial date in the Criminal Case.  Evans asked that the restriction be modified so that Feuerborn and Jennings can travel throughout the continental United States.

On September 3, 2010 the U.S. Attorney responded by stating that, "publicly available records indicate that defendant's 'business' activities are fraudulent in nature" (Criminal Case Page #146, Lines 18-19).  Thus he asked that the court deny this request to expand travel privileges.   The U.S. Attorney cites the following:

http://www.ssb.state.tx.us/Enforcement/files/1499.pdf | http://da.countyofventura.org/091505.htm | http://www.corp.ca.gov/ENF/pdf/2006/ess.pdf

On September 20, 2010 the Judge vacated their application and directed them to the Pretrial Service Office.  (Personal Note: We are unclear if the Pretrial Service Office has the ability to extend their travel privileges.)

"Continuance Request"

On September 20, 2010 Neil C. Evans filed an "Ex Parte Application to Continue Trial" citing that, [his] ability to devote time to [the Criminal Case], which includes about 50,000 pages of documents produced by the Prosecutor, was materially affected by personal events" (Criminal Case Page #154, Lines 25-28).

On September 24, 2010 the Judge vacated this application as well.  (Personal Note:  We are unsure if there has been any continuance granted, but as of now the trial date is still scheduled for November 9, 2010.  Also, despite his request for a continuance in the Criminal Case, Mr. Evans is still the only counsel representing them in the Civil Case.)

Personal Note:  I have observed that Neil C. Evans is the only attorney filing anything in the Criminal Case, and Steven M. Neimand, esq. (attorney representing Jennings) has yet to file anything.  Additionally, an attorney named Dennis Berry attempted to "specially appear" for Jennings on the hearing that occurred on September 20, 2010.  The Court stated that special appearances were not allowed and ordered Neimand appear.  I just think that this is very odd, and, as an outsider looking in,  it appears that one attorney is representing both Feuerborn and Jennings in the Criminal Case.
 

The Defendants (including Feuerborn and Jennings) in the Civil Case asked the court to dismiss the case because they claim that Freestone does not have jurisdiction over them.  Freestone filed a response giving their reasons why they do, in fact, have jurisdiction over them.  This has yet to be ruled on, and I will read both the motion and response to give a detailed account of the Civil Case as well.

-ESS Investor

ESS Investor Information

Hello and welcome!  I am an investor in ESS Environmental, a company started by David Feuerborn and Thomas Jennings.  I invested money in a process that purportedly extracts oil from contaminated waste sites.  Unfortunately, it was later discovered that the "solvent" used in the process I invested in was extremely toxic (more toxic than the oil).   I created this blog in order to give the 600+ ESS investors a place to discuss their trials and tribulations.  I have been following the criminal and civil cases of Mr. Feuerborn and Mr. Jennings and I will provide updates as they come in.  I don't know if we can get our money back, but at least we have a place where we can talk and discuss strategies.