Business for Sale in St Maarten - DOC by zqx15399


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                    FOR THE DISTRICT OF KANSAS
                             TOPEKA DIVISION
      vs.                                       :
DAVID TANNER, Individually, and d/b/a           :
      CAPITAL ENHANCEMENT CLUB,                 :
ROCKY D. SPENCER,                               : Civil Action No.
MARROC CORP., and                               : 05-4057-RDR
RICHARD P. KRINGEN,                             :
                  Defendants,                   :
      and                                       :
MARGARET F. SPENCER,                            :
OMNIBUS LLC,                                    :
VECTRA RESOURCES, LLC, and                      :
                  Relief Defendants.            :

                       DAVID TANNER

       I, Larry E. Cook, do hereby declare under penalty of perjury, in accordance with

28 U.S.C. Section 1746, that the following is true and correct, I am competent to testify

as to matters stated herein, and this declaration is based on personal knowledge.

       1.      I am over 21 years of age. Since January 2000, I have been employed as a

fraud examiner, investigator, and consultant providing investigative and consulting

services to private and government clients nationwide. In this capacity, I have been
appointed as a Receiver in U.S. District Court in Kansas in civil actions filed by the

United States Securities and Exchange Commission.

       2.      Previous to January 2000, I was employed for twenty years as Director of

the Enforcement Division for the Kansas Securities Commissioner. During my

employment with the Kansas Securities Commissioner I was responsible for the

investigation of over fifteen hundred cases of investment fraud conducted by a staff of

investigators and auditors that reported directly to me. Prior to accepting employment

with the Kansas Securities Commissioner, I was employed as a Special Agent for the

Kansas Bureau of Investigation, police officer, and police detective for ten years. Since

January 2004 I have served as a court appointed Receiver in civil actions filed by the

Securities and Exchange Commission.

       3.      In accordance with the Court’s order relating to the Receivership, I have

located the bank accounts that received CEC investor funds. To date, I have obtained the

account records for over fifty different domestic and foreign bank accounts in order to

trace the source and use of investor funds. In addition, I have examined the account

records of six electronic currency providers who facilitated payments to and from


       4.      During the aforementioned examination of CEC related financial records,

I have attempted to locate bank or e-currency accounts under the name CEC or David

Tanner. Remarkably, although more than $15 million was raised, I have been unable to

identify any bank accounts for CEC or Tanner.

       5.      In my twenty plus years of experience investigating investment fraud

schemes, I have found the old adage of “follow the money” to be a reliable indicator of

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the identity of those responsible for planning and committing investment frauds.

Accordingly, I have used the evidence accumulated from the financial records

examination, as well as other evidence gathered from business records and interviews to

identify the person who I believe is using the alias of David Tanner to carry out the CEC


       6.      James Tucker, who is apparently an expatriate American, resides in St.

Maarten, Netherlands Antilles. Tucker, using intermediaries who actually collect CEC

investor funds and make payments at his instruction, has directed at least $18 million in

payments from funds which can be directly traced to funds deposited from CEC


       7.      Many of the early transactions directed by Tucker use E-Gold, an e-

currency provider. E-Gold records that I reviewed show that a computer and the internet

were used on December 13, 2000 to open new accounts for CEC, account #226210, and

David Tanner, account #226212. The following day, a new account was opened in the

same manner by James Tucker, account #226723. The E-Gold internet logs document

that all three accounts were opened using a computer with the same remote internet

protocol address. An internet protocol (IP) address is a unique number that devices use in

order to communicate and identify with each other on a computer network utilizing the

internet. Any participating network device must have its own unique address. An IP

address can also be thought of as the equivalent of a street address or phone number for a

device on the internet.

       8.      The CEC and Tucker accounts were used for several hundred transactions

until they were closed in July 2004, and there were approximately fifty transactions when

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the Tucker account and CEC account were used on the same day and from computers

with identical IP addresses.

       9.      An example of a Tucker directed transaction is money transferred to

Dynamic Environmental Solutions (DES), a Puerto Rican company and relief defendant

in this case. From bank account records of defendant Marroc Corp., I was able to trace

$400,000 of funds from CEC investors were paid to DES. On May 17, 2005 the

president of DES, Phillip Risby, appeared for a deposition and confirmed that his

company actually received at least $900,000, which he claimed was an investment in

DES by James Tucker. Later, I discovered more bank records, from another intermediary

used by Tucker, to confirm the total CEC funds sent to DES was $900,000. A copy of

relevant portions of Risby’s deposition transcript are attached as Ex. A.

       10.     As a second example, during my examination of bank accounts used to

deposit and hold investor funds, I identified payments totaling approximately $1.8

million of CEC investor funds to seven jewelers located in Los Angeles and New York.

The information furnished by two of these firms indicated the purchases involved

expensive jewelry ordered by Ballerina Jewelry located in St. Maarten. I conducted a

telephone interview of Peter Mirpuri, the owner of Ballerina Jewelers located in

Phillipsburg, St. Maarten. Mirpuri stated he recalled ordering the merchandise for James

Tucker and that Tucker made arrangements with the jewelry suppliers to pay them

directly with Mirpuri receiving a commission for each sale.

       11.     As a third example, I identified payments totaling approximately $5

million of CEC investor funds to Server to Go Inc. located in New York, NY. On

February 8, 2006 the president of Server to Go Inc, Paul Pak testified that he received the

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$5 million from James Tucker, who hired him to develop internet banking software. Pak

further claimed he made several trips to St. Maarten to meet with Tucker and discuss the

development process.

       12.     As a fourth example, during my examination of bank accounts used to

deposit and hold CEC investor funds, I identified payments totaling $675,000 wired

directly to James Tucker at the St. Maarten Commercial Bank and to Paritate Bank in

Riga, Latvia to pay the credit card balances of James Tucker.

       13.     As a fifth example, during my examination of bank accounts used to

deposit and hold CEC investor funds, I identified two $50,000 payments to Seaforth

Meridian Ltd, (“Seaforth”) a hedge fund in New York. I contacted Jerry Catuzzi, the

general counsel for Seaforth Meridian and learned (a) the $100,000 transfers represented

an investment in the SF fund by James Tucker; (b) James Tucker was a Founder and

Managing Member of Seaforth (a fact which is confirmed by Seaforth’s offering

materials distributed to investors); and (c) an additional $9 million (which was

subsequently traced to CEC investors) was wired to Seaforth accounts in the US,

Switzerland, and Scotland. The intermediary who sent the Seaforth funds, Mark Zarubi,

claimed in an interview that the money was wired after he had received an e-mail from

James Tucker who promoted Seaforth as a good investment.

       14.     Seaforth has also produced in this case the investigative report of Peter

Woglom, Director of Investigations at Control Risks Group, LLC (“CRG”). CRG is a

prominent world-wide private investigative firm. CRG, at the direction of Seaforth,

actually investigated two individuals on the Island of St Maarten named James Tucker.

The relevant James Tucker, reports CRG:

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            Resides at 13 Greenstarshell Road,

            Is described as “unapproachable” by neighbors, and

            Lives in a “fortress” that includes 24-hour security, six canine units, and
             security cameras “everywhere.”

A copy of the investigative report is attached as Ex. B.

       15.      David Tanner has hired counsel in the United States to defend him in this

action. Pursuant to a subpoena issued to his counsel for all billing and payment records, I

have received a copy of the payment detail regarding Tanner’s legal fees. Tanner’s

counsel has received seven payments totaling approximately $400,000. Three of the

seven payments, totaling $227,000 originate from RBTT Bank located in the Caribbean

and with a branch in St. Maarten. The only individual related to CEC with any

geographic connection to St. Maarten is James Tucker.

       16.      Based on my experience as a fraud investigator and the evidence described

above, I have concluded that David Tanner is an alias for James Tucker, whose last

known location was St. Maarten, Netherlands Antilles.

       I declare under penalty of perjury the foregoing is true and correct:

       Date: June 19, 2006                                     ________________________
                                                                     Larry E. Cook

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