Docstoc

Affidavit In Support of Motion to Amend Sanction Motion in Bergeron vs. Xyience Bankruptcy case

Document Sample
Affidavit In Support of Motion to Amend Sanction Motion in Bergeron vs. Xyience Bankruptcy case Powered By Docstoc
					     Rich Bergeron
 1
     PO Box 5212
 2   Weirs Beach, NH 03247
     Telephone: (617) 209-4325
 3   Defendant as Pro Se Attorney
 4
                          UNITED STATES BANKRUPTCY COURT
 5
 6                                  DISTRICT OF NEVADA
 7
 8                                          No. BK-S-08-10474-MKN
      In Re:
 9                                          Chapter 11
      XYIENCE, INC., A Nevada Corporation
10                                          Eighth Judicial District Court
      Debtor.                               Las Vegas, Clark County, Nevada
11                                          Case No. A544781, Dept. XXIII
12    XYIENCE INCORPORATED, a               CASE NO. BK-2-08-AP-01082-MKN
13    Nevada Corporation,
      Plaintiff,                            DEFENDANT/COUNTER-
14                                          CLAIMANT RICH BERGERON’S
15    v.                                    AFFIDAVIT IN SUPPORT OF
                                            DEFENDANT/COUNTER-
16    RICHARD BERGERON, an individual       CLAIMANT’S MOTION FOR
      Defendant.                            LEAVE TO AMEND RULE 9011
17
                                            SANCTIONS MOTION
18
      RICHARD BERGERON, an
19    Individual,                           Hearing Date:
20                                          Time: 9:30 AM
      Counter-claimant,
21
      v.                                    Location: 300 Las Vegas Blvd. South
22                                          Courtroom #2
      XYIENCE INCORPORATED, a               Las Vegas, NV 89101
23
      Nevada corporation
24
25    Counter-defendant

26
27
28                                          1
 1   DEFENDANT/COUNTER-CLAIMANT RICH BERGERON’S AFFIDAVIT IN

 2        SUPPORT OF DEFENDANT/COUNTER-CLAIMANT’S MOTION FOR

 3                 LEAVE TO AMEND RULE 9011 SANCTIONS MOTION
 4
 5   Richard Edward Bergeron III, being first duly sworn, states as follows:

 6
     1. I am a pro-se representative and have been at all times in these proceedings currently
 7
     pending as Xyience, Incorporated vs. Richard Bergeron, Case #: 08-01082-MKN and
 8   currently listed as an adversary proceeding under Debtor Xyience Case #: 08-10474-
 9   MKN.
10
11   2. I make this affidavit in support of the attached motion for leave to file a second amended Rule

12   9011 Sanctions motion.

13
     3. I have personal knowledge of, and I am competent to testify to the facts contained in this
14
     Affidavit, except those matters based upon information and belief and, as to such matters,
15
     I believe them to be true.
16
17   4. On July 18, 2007 Xyience filed this case against me in Clark County District Court with
18   direct intent to silence my investigative reporting of ongoing fraudulent activity at the
19   struggling supplement company.
20
21   5. This case has been continued by all legal representatives handling it for Xyience without regard

22   for the actual facts and true, altruistic motivations behind my investigative reporting.

23
     6. The parties named in the standing amended motion are the most central perpetrators of the
24
     bankruptcy fraud, but other individuals and/or entities must be added to further the interests of
25
     justice.
26
27
28                                                       2
     7. I have discovered recent evidence revealing Michael Levy, the current CFO and COO of Xyience
 1
     Incorporated, was also embroiled in the fraud leading up to and persisting throughout the forced
 2
     takeover and bankruptcy of Xyience by Fertitta Enterprises through Zyen, LLC.
 3
 4
     8. Xyience Trustee Counsel Jon Backman (hereinafter Backman) relied on some of my information
 5   and documentation (provided to him by both email communications and during a personal visit to
 6   Bloomington in the first week of February, 2010 facilitated by the trustee’s office) to pursue various
 7   claims against certain parties named in Backman’s multiple adversary cases.
 8
 9   9. During email and telephone discussions with Backman subsequent to the February, 2010 meeting,

10   I discovered that it was his intent to assist Fennemore Craig Attorney Laurel Davis (hereinafter
     Davis) avoid culpability for clear transgressions outlined in the existing amended Rule 9011
11
     Sanctions motion.
12
13
     10. Davis herself sent an email to me telling me she had already been paid in full for her bankruptcy
14
     involvement, that this court had already denied the Rule 9011 request that is still pending, and I
15   therefore had no recourse to recover damages from her or her firm.
16
17   11. Backman indicated to me that he needed to work with Davis in the bankruptcy case and required
18   her approval to make crucial moves in the future regarding the core case and his adversary

19   proceedings.

20
     12. Backman intimated to me that he knew Davis and other attorneys involved in the bankruptcy
21
     fraud were culpable for their actions, but procedure and courtesy among lawyers precluded him from
22
     lashing out against them legally in his capacity as trustee’s counsel.
23
24
     13. Backman also expressed to me his frustration with the vast spread of corruption involved in the
25   bankruptcy lead-in and execution. He explained that this scenario made it difficult for him to file all
26   appropriate and necessary claims against all possible parties under such a strict deadline schedule
27   that he faced at the outset of his being named as liquidating trustee counsel.
28                                                       3
     14. Backman also assisted Fennnemore Craig attorneys by allowing them all to be paid in full for
 1
     their services, even those billed hours that were in furtherance of the entire bankruptcy scheme and
 2
     willfully executed with obvious intent to defraud the original Xyience shareholders.
 3
 4
     15. These billable hours included the time spent by these lawyers addressing my case alone, although
 5   Davis herself admitted in one of her pleadings that she knew that keeping the instant case alive
 6   against me was a waste of the estate’s resources.
 7
 8   16. I cut off communication with Backman and blocked his email addresses when previous

 9   negotiations broke down and his behavior supporting the culpable lawyers became too offensive and

10   egregious for me to tolerate.

11
     17. Despite my disapproval of Backman’s methodology, willingness to look the other way when it
12
     came to fellow lawyers, and his refusal to demonstrate even a basic knowledge of my case
13
     paperwork, I am compelled to release the estate itself from Rule 9011 claims so as to focus on the
14
     major culpable individuals and entities driving the fraud from day one.
15
16   18. I still intend to explore the possibility of naming Backman himself and Liquidation Trustee
17   David Herzog as individuals to the amended sanctions motion if this type of obstructionist behavior
18   in regard to Fennemore Craig attorneys and other issues persists.

19
20   19. Backman promised on multiple occasions to take action to dismiss the initial claim against me
     filed by Xyience, but recently he revealed to me he was not even aware of what the initial claim
21
     entailed or who the judge on the instant case was.
22
23
     20. Since the filing of this bankruptcy and the removal of the instant case to this Court, I have been
24
     in contact with multiple sources, both inside and outside of Xyience’s day to day operations.
25
26   21. One insider currently within the company shared details of a recent (November, 2010) meeting in
27   which my name was brought up, and an announcement was made pertaining to a new employee who
28                                                        4
     would be paid a sum of $25,000 to push my Xyiencesucks.com (see attached Exhibit 3 Google
 1
     search results) Web-site listing off the first page of Google’s search engine results for the term
 2
     “Xyience.”
 3
 4
     22. Another insider who maintained an office next to key company officials during the ramp up to
 5   the fraudulent bankruptcy provided an extensive and detailed background report regarding the
 6   motivations and methodology behind the drive to bankruptcy.
 7
 8   23. This report has been entered as an exhibit before this court and was also shared with Backman.

 9
10   24. The litigation stream in turn persists against me even while the Trustee’s office is aware the
     initial case has no merit and knew as early as December 29, 2009 that the complaint against me
11
     should be dismissed. (See Exhibit 1, initial e-mail from Backman regarding dismissing initial case
12
     filed by Xyience)
13
14
     25. I have contact information on dozens of key shareholders, but many of them have been told lies
15   about me by company principals at one time or another, and they therefore either never cooperated or
16   took a long time for me to gain their trust.
17
18   26. The entire class of shareholders I am fighting for has been duped by the entire bankruptcy

19   process, and in order for Fertitta Enterprises to even be in any position to accomplish the alienation

20   of these shareholders from the company they built, I had to be silenced by the instant case.

21
     27. I am working on acquiring additional affidavits from shareholders who have not yet provided
22
     them, and I also plan to re-submit more complete affidavits from those shareholders who already
23
     provided testimony. This is to ensure that a wider group of injured parties is represented and also to
24
     provide evidence to show that the further passage of time since their first affidavits has only caused
25   these individuals further injury.
26
27   28. Some of the new affidavits I will submit if permitted leave to amend the sanctions motion
28                                                      5
     include at least one from a representative of a major shareholder.
 1
 2
     29. Some of the new affidavits and evidence I will provide in the event I am allowed to amend the
 3
     pending sanctions motion will include descriptions and documentation of how Michael Levy
 4
     participated in the fraud involved in the Xyience bankruptcy and aftermath.
 5
 6   30. I recently discovered that Jon Pearson is no longer an employee of Fennemore Craig and now
 7   works for the Las Vegas Office of Ballard Spahr, LLP.
 8
 9   31. Exhibit 2 consists of communications from two insiders who witnessed fraud perpetrated by Kirk

10   Sanford and Karim Maskatiya at Global Cash Access and in direct business transactions with a
     company called Infonox.
11
12
     32. The communications included are redacted to protect the sources I have cultivated, who will be
13
     safer if permitted to be anonymous at this point.
14
15   33. These descriptions of ongoing fraud related to cash transaction software and hardware companies
16   are very troubling considering the partnerships developed between these individuals and the Station-
17   Casino-owning Fertitta brothers (Frank III and Lorenzo).
18
19   34. I am convinced upon extensive investigation that the money Maskatiya “invested” into Xyience

20   and the cooperation of his nephew Omer Sattar and his protégé Kirk Sanford in the Xyience
     bankruptcy was part of a further framework of money laundering and possible international
21
     skimming operations.
22
23
     35. The Maskatiya and Global Cash Access connection to the Xyience bankruptcy is troubling
24
          considering that Frank Fertitta Jr., who is now deceased, has been implicated as one of the
25        individuals involved in a massive skimming operation in Las Vegas popularized by the book
26        “Casino” by Nicholas Pilleggi, which was then made into a feature film.
27
28                                                       6
     36. Maskatiya, Sanford, and Sattar (along with other associates who were not engaged in the Xyience
 1
     situation) also have a history of being involved in new wave skimming efforts and fraudulent activity
 2
     related to their activities at Global Cash Access (hereinafter GCA). All of these individuals are no
 3
     longer associated with Global Cash Access as a result.
 4
 5   37. Exhibit 5 consists of an announcement in regard to a class action settlement reached to allow
 6   GCA shareholders over $5 million in recovery funds due primarily to the fraud perpetrated at that
 7   company immediately prior to the above named individuals (some of whom were named defendants
 8   in that class action) transitioning to Xyience so seamlessly.

 9
10   38. My investigation into this scenario leads me to conclude the modus operandi of the Fertittas and
     their associates in this type of fraudulent activity appears to be rooted in making corrupt partnerships
11
     with individuals who control and/or have a vast understanding of electronic cash transfer software
12
     and hardware.
13
14
     39. It is clear to me that these partnerships have been formed to help this collective group manipulate
15   such financial systems for pure profit, knowing if they are caught they may only face stiff fines
16   and/or easy to defend civil suits that will be covered by insurance like the GCA settlement was.
17
18   40. The series of investigative reports I authored detailing the Xyience case over the years represent

19   one of the most complicated, stressful, albeit earnest efforts I’ve ever undertaken in my life.

20
     41. This collection of detailed reports I created will someday make up a detailed book project or
21
     documentary, but the ability to get the ball rolling in that realm will require me to completely
22
     exonerate myself from all claims against me in this court.
23
24
     42. I have made several serious claims of impropriety and downright criminality regarding the
25   behavior of certain officials operating and/or owning Xyience throughout my reporting on the
26   company, but none of the individuals and entities I’ve named have filed any civil action to object to
27   my reporting.
28                                                      7
 1
     43. Thus far, only Xyience filed any suit disputing my reports, and then only to dispute a very narrow
 2
     set of claims posted within an email I received from a third party and subsequently published, not an
 3
     actual report I wrote myself.
 4
 5   44. I have always gone out of my way to find out the true facts and provide supporting evidence and
 6   documentation beyond anonymous sources in this case.
 7
 8   45. The only evidence of any kind Xyience offered throughout this litigation comes from lawyers

 9   who cannot testify for their clients and Adam Frank, who is named in both my Rule 9011 motion and

10   multiple claims filed and recently settled by the Trustee in the core bankruptcy proceedings.

11
     46. Exhibit 6 consists of a news report written by John G. Edwards in March of 2008, describing
12
     Levy’s position of influence over Xyience’s affairs in the time leading up to and during the
13
     bankruptcy.
14
15   47. Exhibit 6 also includes a picture of Levy standing among a stockpile of Xenergy that was held in
16   limbo just so the Fertitta-owned Zuffa Marketing, LLC could work out a favorable fee to allow
17   Xyience to keep selling the cans of energy drink which still had the UFC (also Fertitta-owned) logo
18   on them.

19
20   48. These cans of Xenergy being kept out of the marketplace was a huge contributing factor to the
     company being forced to file for bankruptcy, and the Fertittas could have easily hammered out a
21
     favorable deal to allow for the sale of this product if in fact they did want it to be sold.
22
23
     49. Instead of selling this product to save the company, a scheme was perpetrated to prevent the sale
24
     of this multi-million dollar stockpile of Xenergy, which would ultimately benefit the Fertittas and
25   their other outside business interests.
26
27   50. Exhibit 4 consists of an article from Bevnet.com illustrating how company officials, under
28                                                        8
 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28   9

				
DOCUMENT INFO
Description: This is Rich Bergeron's Affidavit in support of a motion to amend a prior amended sanctions motion in bankruptcy court in Las Vegas Nevada against Xyience, Inc. and Fertitta Enterprises. Check out http://www.xyiencesucks.com to learn more about this incredible tale of greed, corruption, and legal wrangling.