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

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    

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