Docstoc

California Department of Corporations

Document Sample
California Department of Corporations Powered By Docstoc
					 1
                                                                 FfLED
     ROBERT REED                                                 S u p e r i o r C o u r t Of Callfoiinia,
 2   IN PROPRIA PERSONA                                          Sa&ramento
     1993 DEWAR DR. #1-168                                       06/07/2011
 3   ROCK SPRINGS, WY 82901
     702-468-2935
 4                                                               By                          J Depjuty
                                                                 C a s u MumbBi':
 5

 6
                                                                 34-2011-0010451f7
 7

 8                  SUPERIOR COURT FOR THE STATE OF CALIFORNIA

 9                           FOR THE COUNTY OF SACRAMENTO

10                                                                                      Department
                                                                                       Assignments
11                                                    CASE NO.
                                                                                   Case Management 36
     ROBERT REED,                                                                    Law and Motion 53
12                                                                                 Minors Compromise 24
                        Plaintiff
13                                                          COMPLAINT FOR:
                                                            WILFULL INTENT TO DEFRAUD
14   PRESTON DUFAUCHARD, in his official capacity as (VIOLATIONS OF THE COMPUTER
     Califomia Corporations Commissioner, and               FRAUD AND ABUSE ACT, 18 U.S.C,
15   CALIFORNIA DEPARTMENT OF                               CALIFORNIA PENAL CODE 502 AND
                                                            436); FRAUD (NEGLIGENCE);
     CORPORATIONS, ALEXANDER MATTHEW
16                                                          INTENTIONAL
     CALERO, in his official capacity as an employee ofthe
                                                            MISREPRESENTATIONS AND FRAUD;
17   Cahfomia Department of Corporations, ALEXANDER INVASION OF PRIVACY; CIVIL
     MATTHEW CALERO as an individual, JON W.                CONSPIRACY; ABUSE OF PROCESS;
18   WROTEN, AKA JOHN FOX, in his officiai capacity         THEFT; INTRUSION; INTENTIONAL
     as an employee of the Califomia Department of          INTERFERENCE WITH ECONOMIC
19   Corporations and JON WROTEN as an individual,          ADVANTAGE; UNJUST
     DANIEL SHECK as an individual, DANIEL SHECK            ENRICHMENT; TRESPASS TO
20   in his official capacity as an employee ofthe Cahfomia CHATTELS; SLANDER PER SE;
     Department of Corporations, MICHAEL MANLEY as SLANDER; LIBEL PER SE; LIBEL;
21   an individual, MICHAEL MANLEY in his official          LIBEL PER QUOD;AND SLANDER PER
     capacity as an employee ofthe Califomia Department     QUOD; DAMAGES AND PUNITIVE
22   of Corporations, VAN RAINEY, and DOES 1                DAMAGES.
     THROUGH 10
23
                      Defendants                          JURY TRIAL DEMANDED
24

25

26

27

28


                                          COMPLAINT
 1
                                                   COMPLAINT
 2
             1        Plaintiff, Robert Reed, (REED ) as and for his Complamt against Defendants, and Does 1
 3

 4   through 10 alleges as follows, based on his personal knowledge, and on information and belief as to the

 5   acts of others

 6           2        An actual case or controversy has ansen between the parties The California Department

 7   of Corporations has filed litigation in the State of California, Superior Court, Civil case number 337-

 8   2008-00091291-CU-MC-CTL alleging violations of California Corporations Code. The Department of

 9   Corporations, Defendants Du Fauchard and Calero have threatened to take possession ofthe assets of
10   Plaintiff and others These statements threaten substantial injury to Plaintiff
11                                                JURISDICTION
12
             3.       This Court has jurisdiction over the subj ect matter of this matter, as most of the
13
     acts and transactions that constitute the violations and unlawfiil conduct complained of herein,
14
     mcluding the fraudulent and unlawful conduct of Defendants and the failure to disclose matenal
15
     information occuned in the State of California. At all relevant times Defendants and each of
16

17   them are residents of California. The acts and statements complamed of emanated from the

18   Department of Corporations, a State of California Agency, using resources ofthe State of

19   Califomia, therefore Jurisdiction in the State of California is proper.
20
                                                       VENUE
21

22           4.       Venue is proper as the Defendant Department of Corporations main office is located in

23   Sacramento Califomia, and Defendant DuFauchard, Scheck, Wroten, and Rainey are located within close

24   proximity Sacramento Defendants Calero and Manley are residents of California and the Agents,

25   Representatives, and Employees of Defendant DuFauchard.

26                                                 THE PARTIES

27           5.       Plaintiff Robert Reed ("Reed") is an individual, former officer and shareholder of
28


                                                     COMPLAINT
 1   Smartwear Technologies, Inc , who was a resident ofthe State of Wyoming or the State of Nevada at all

 2   times relevant to the causes of action set forth below.

 ^           6.         Defendants, DuFauchard, Calero, Manley and Sheck acted with malice,
 4
     malicious intent and with the purpose of damaging Plamtiff and m so doing, acted both inside
 5
     and outside the law. Defendants have violated 18 U.S.C 242, by acting willfiilly to depnve
 6
     Plaintiff of his nghts under color of law.
 7

 8
             7       Defendant Preston Du Fauchard (sometimes referred to herein as the "Commissioner") is
 9
     the Califomia Corporations Commissioner and is sued in his official capacity Defendants Du Fauchard
10
     conducts business out of, and can be served with process at, the office of the Department of Corporations
                                                    a
11
     located at 1515 K Street, Suite 200, Sacramento, CA 95814-4052
12

1T           8       Defendant California Department of Corporations (the "Department") is an executive

J4   department ofthe State of California. This Department, of which the Commissioner of Corporations is the

15   chief officer, is a division ofthe California Business and Transportation Agency. See Cal Corp Code §

16   25600 (Deering 2006). The Department can be served with process at 1515 K Street, Suite 200,

17   Sacramento, CA 95814-4052.

18           9       Defendant Alexander Calero, ("Calero") is an employee ofthe Califomia Department of
19   Corporations and is sued in his official capacity Defendant Calero conducts busmess out of, and can be
20
     served with process at, the office ofthe Department of Corporations located at 1350 Front Street, Room
21
     2034, San Diego, CA. 92101
22
23           10.     Defendant Alexander Matthew Calero, ("Calero") sued herein as an individual, was a

24   resident ofthe state ofCalifomia at all times relevant to the causes ofaction set forth below.

25           11.     Defendant Jon Wroten, ("Wroten") formerly an employee ofthe Califomia Department of
26
     Corporations, and is sued in his officiai capacity. Defendant Wroten conducts business out of, and can be
27
     served with process at, the office of the Division of California Occupational Safety and Health located at
28

                                                           3
                                                        COMPLAINT
 1   2424 Arden Way, Suite 135, Sacramento, CA 95825.

 2
              12      Defendant Jon Wroten, sued herein as an individual, was a resident ofthe state of
 3
     Califomia at all times relevant to the causes ofaction set forth below.
 4
              13.     Defendant Daniel Sheck is the employee and agent ofthe Commissioner and is sued in his
 5

 6   official capacity. Defendants Sheck conducts business out of, and can be served with process at, the office

 7   ofthe Department of Corporations located at 1515 K Street, Suite 200, Sacramento, CA 95814-4052.

 8           14       Defendant Daniel Sheck ("Sheck") sued herein as an individual, and was a resident ofthe
 9
     state ofCalifomia at all times relevant to the causes ofaction set forth below
10
             15       Defendant Michel Manley ("Manley") is a fomier employee ofthe Califomia Department
11
     of Corporations and is sued in his officiai capacity Defendant Manley conducts business out of, and can
12
     be served with process at, 3605 Ray St, San Diego, Cahfomia 92104.
13

14           16.      Defendant Michael Manley ("Manley"), is sued herein as an individual, and was a

15   resident ofthe state ofCalifomia at all times relevant to the causes ofaction set forth below

16
             17       Defendant Van Ramey ("Rainey"), is sued herem as an individual, and was a resident of
17
     the state ofCalifomia at all times relevant to the causes ofaction set forth below.
18
             18       The tme names and capacities of Defendants, DOES 10, inclusive, are presently unknown
19

20   to Plaintiff Plaintiff is informed and believes, and upon such information and belief, alleges that each of

21   the Defendants designated herein as fictitiously named Defendants are in some way, manner or form, and

22   to some extent responsible for the acts, events and happenings hereinafter alleged and referred to, and that

23   each of these Defendants in some way, manner or form and to some extent caused detriment, damage and

24   injury to Plaintiff as hereinafter alleged At the time Plaintiff discovers the tme names and capacities of

25   fictitiously named Defendants, Plaintiff will seek leave to amend this Complaint Each and every

26   reference to "Defendants" is intended to be, and shall be, a reference to all Defendants in this action, and
27   to each of them, including all fictitiously named Defendants.
28


                                                      COMPLAINT
  1                                             GENERAL ALLEGATIONS

 2             19       This case centers on individuals employed by a State agency in Califomia that overtly

 3     Ignores State and Federal law and violates it repeatedly, systematically and with intent and malice to do so

 4     for unjust enrichment
 5
               20       Smartwear Technologies, Inc.("Smartwear"), a now insolvent Delaware Corporation, was,
 6
       at the time Defendants, the Department of Corporations, Du Fauchard, Calero and Wroten among others,
 7
       commenced an alleged "investigation", a promismg early stage company Investors, by virtue of their
 8
       funding of Smartwear Technologies debentures, became the beneficiaries of approximately fifteen (15) US
 9
       patent applications in the area of Radio Frequency Technology, in the U S., with additionai filings
10
       worldwide
11
               21      The technology developed by Smartwear Technologies was the subject of significant
12
       media attention, including mention on MSNBC, the Wall Street Joumal, CBS News, Market Watch, and
13
       even received requests for proposals from the offices of Senator Arlen Spector and the FAA. Smartwear
14

^,     investors have been, and continue to be, the rightful owners of these patent applications and other

Jg     intellectual properties, with registrations worldwide

1 "7            22      Smartwear Technologies, Inc. through, outside engineers, consultants, technicians and

13     programmers attended numerous meetings, engineered prototypes and proof of concept units for

19     prospective customers such as Disney, Universal Studios, Port of Los Angeles and the Los Angeles

20     County Shemff s Department, among others., until the Defendants slandered, libeled, and otherwise

21     defamed Plaintiff and Smartwear

22             23.     Defendants conducted a systematic destmction of confidence through their unsupported

 •^    allegations of illegality, making false and misleading statements not only to shareholders, but to
24
       customers, vendors, and prospective consumers ofthe technology.
25
               24.     Defendant's civil litigation in the State ofCalifomia is founded on the unlawful acts of
26
       Defendants, and were ratified and perpetuated by each of the other Defendants     Defendant's state court
27
       action seeks to unlawfully take control of Investor's assets, alleging that the Califomia Department of
28


                                                       COMPLAINT
 1   Corporations acts on behalf of the shareholders who have been wronged or defrauded This is untme. The

 2   Department does not retum monies to shareholders but rather secures funds for its own operations, as it

 3   receives no support from the State, but is a self-funded organization existing on fines and penalties. They
 4   obtain no money to be paid to shareholders Shareholders are the rightful owners of the assets of the
 5   former Smartwear and have been such owners prior to the Defendant's allegations Defendant's claims
 6
     are rooted in criminal acts, fraud and misrepresentations and have caused Plaintiff to incur substantial
 7
     legal fees and costs to protect these assets from Defendants, who seek them for their own unjust
 8
     ennchment.
 9
             25.      On July 13, 2005, in the State of California, County ofSacramento Criminal Court, case
10
     number 05M07320, People ofthe State ofCalifomia v Jon William Wroten was filed
11
             Defendant Wroten was charged with violations of PC502(c)(2) and PC 632, resulting from
12
     unlawful access "hacking" of a computer.
13
             26.     As a result of this conviction, Defendant Wroten was incarcerated and sentenced to three
14

^^   years probation following his release.

1^            27.     At all times dunng the acts for which he was convicted, his incarceration and resultant

ly   probation. Defendant Wroten was an employee ofthe State ofCalifomia Defendant Wroten's Dmg

18   Addiction resulted in the closure of the numerous Wroten corporations, that were dissolved due to his

19   dmg addiction and ensuing multi-million dollar bankmptcy filings, and revocation of his State Issued

20   Licenses Leaving his employees, creditors and shareholders of unregistered securities to suffer significant

21   loss.

22           28.     In or about June, 2007, while on probation. Defendant Wroten did in fact obtain unlawful,

 ^
 •   unauthorized access to the restricted, password protected area ofthe computer server and network.
24
     Defendant Wroten did not provide his name, a valid password or obtain access to the server and network
25
     through permission or free access and without the knowledge or authonzation of Plaintiff Plaintiff
26
     alleges that Defendant Wroten, as he has been known to do in the past, "hacked" the Smartwear
27
     Technologies server, circumvented the security ofthe password-protected network as only a computer
28


                                                    COMPLAINT
   1   hacker could, and then made false statements under oath as to the method by which he obtamed personal

  2    email,financialinformation and other private and confidential documents.

  ^
  •            29.     Thereafter, Defendant Calero, basing allegations my misquoting Wroten's declaration,
  4    falsely stated the information was "available to the general public and downloadable by anyone " It is
  5    notable that even Defendant Wroten's declaration did not go so far as to say this.
  6
               30      Plaintiff alleges that had Defendant Wroten not obtained unlawful access, through
  7
       hacking ofthe computer server, then filed declarations under oath regarding the availability ofthe
  8
       matenals contained on the Smartwear server and which Defendant Calero falsely represented Wroten's
  9
       declaration by stating Smartwear had used "general solicitation"; and had Defendants DuFauchard and
10
       Calero not ratified and amplified the actions of their employee and agent, the Desist and Refrain and civil
11
       litigation in the State ofCalifomia would never have existed
12
               31      In or about August, 2007, already in possession ofthe hacked investor information
13
       obtained unlawfully by Wroten, Defendants Department of Corporations, Du Fauchard and Calero caused
14

^,     a subpoena for records of Smartwear Technologies to be issued and allegedly served upon Smartwear in

1^     an attempt to legitimize their possession of Smartwear investor's personal and confidential email,

1y     information and other stolen materials;

13             32.     Subsequent to Defendant Wroten's unlawful access to the Smartwear Technologies server

19     and network, the compromised, hacked server suffered a total failure, resulting in data loss. This type of

20     complete data loss is typically associated with the planting of a computer vims or other computer

21     contaminant. Plaintiff has been unable to completely recover all documents and information that were

22     once stored on these servers and network. However, Defendants are in possession of documents and other

•'-'   information that was only maintained on the network and servers of Smartwear Technologies Prior to the
24
       data loss, this was the only source ofthis information, and which could only have been delivered to
25
       Defendants by their unlawful and unauthorized access to proprietary, confidential, financial, medical,
26
       insurance and trade secret information
27
               33.     Plaintiff believes and thereon alleges that this was Defendant's attempt to validate and
28
                                                            7
                                                       COMPLAINT
 1   support lawful possession of these same records through Subpoena so that they might then utilize these

 2   private investor documents and email in furtherance of theirfraudulentscheme to obtain the assets of

 3   Smartwear's investors for their own benefit The issuance ofthe Desist and Refrain and filing of civil
 4   litigation and the dissemination to shareholders and consumers of false and misleading accusations of
 5   wrong-domg is the ultimate and proximate cause that Smartwear has been rendered insolvent and Plaintiff
 6
     and Smartwer investors have incurred substantial damages and threatened loss of their assets to the benefit
 7
     of Defendants Department of Corporations, DuFauchard and Calero.
 8
                                                  INTRODUCTION
 9

10           34       This case is brought by Plaintiff Robert Reed, whose inventions and subsequent

11   business model were founded on a portfolio of intellectual properties, patents pending, technologies,

12   techniques and solutions for personal protection, anti-abduction, tracking and locating of individuals and

13   assets and which had significant potential, contracts under negotiation and shareholders across the United

14   States until the unlawfiil activities ofthe Cahfomia Department of Corporations, by and through their

15   agents and employees, including convicted computer hackers , dmg addicts and known stock

16   manipulator's resulted in the failure of Smartwear.
17
                                FIRST CAUSE OF ACTION
18                                INTENT TO DEFRAUD
          (VIOLAION OF COMPUTER FRAUD AND ABUSE ACT USC 18 , SECTION 1030 AND
19                    CALIFORNIA PENAL CODE SECTIONS 502 AND 436)
20
             35.      Defendant Wroten a Departmet of Corporations employee, willfully violated the
21
     Computer Fraud and Abuse Act ("CFAA") 18 U S.C. 1030, when he "knowingly and with mtent to
22
     defraud violated the private, confidential, protected. Network of Smartwesr Technologies, Inc.
23
     Defendant Jon Wroten, a failed Security guard, whose numerous Cahfomia corporations were closed
24
     through bankmptcy, leavmg the holders of his unregistered securities with worthless stock, was employed
25
     by Defendant DuFauchard through the Department of Corporations as a "senior investigator" Wroten,
26
     who admits in unrelated cases, to utilizing false identities, and allegations of inflated net worth to
27
     misrepresent himself as an "accredited investor", all while possessing no investigator or other license or
28
                                                           8
                                                      COMPLAINT
 1   permit to authorize such actions and lies, attempted to obtain access to the private, privileged documents

 2   of Smartwear Technologies      Wroten was declined and denied lawful access to these documents by

 3   Smartwear Technologies, on the basis ofthe company having no previous relationship with Wroten or his
 4   alias Wroten then, with the full support of Defendants DuFauchard, Calero and the Department of
 5   Corporations, obtained access by means of illegal hackmg into the web servers and network belonging to
 6
     Smartwear Technologies and its shareholders, and then delivered the fmits of his unlawful activities to
 7
     DuFauchard, Calero and the Califomia Department of Corporations A violation of the Computer Fraud
 8
     and Abuse Act, 18 USC Section 1030, (a felony) and Califomia Penal Code Sections 502(c) and 436
 9
     Defendant Wroten acted both inside and outside the law, in violation of 18 U S C 242, by acting willfiilly
10
     to deprive Plaintiff of his rights by acting under "color of law"
11
                                               SECOND CAUSEOF ACTION
12                                                     FRAUD

13           36      This practice of utilizing the talents ofa criminal hackers and addicts to target young

14   companies, who are known to be raising growth capital, and steal intemal documents, draft copies and
15   other private, proprietary documents from web servers, in addition, other agents such as Defendants
16
     Manley and Sheck utilize stolen passwords and false identities, and author declarations to support this
17
     criminal activity has become the hallmark of investigations by the Cahfomia Department of Corporations
18
             37.     The result ofthese unlawful activities by Defendants resulted in the alleged
19
     "investigation," the issuance of a Desist and Refrain against the company stating "Reed and Smartwear
20
     Technologies, Inc failed to file a Form D exemption notice and filing fee with the Califomia Corporations
21
     Commissioner pursuant to Califomia Corporations Code section 25102 1 (d)" alleging further that
22
     Smartwear "ignored the registration requirements" while knowing full well that the Sacramento office of
23
     the Commissioner had acknowledged receipt of the filing and payment of fees As well as the filing with
24
     SEC , which made these "covered securities" Thereafter, Calero stated to counsel for Smatrwear that he
25
     "deemed" the Form D "not filed" giving no explanation for his arbitrary decision , Defendants ultimately,
26
27   some seven months later filed civil litigation supported by a declaration of Alex Calero, stating Reed and

28   Smartwear "ignored the registration requirements " of Califomia Corporations Code, and "failed to pay

                                                           9
                                                      COMPLAINT
 1     the required fees" Thereafter, Calero has issued numerous declarations, under oath ,as well as personally

 2     stating to mvestors , among others ,that "Smartwear failed to register its securities"," Smartwear offered

 ^     and sold unregistered securities". Reed violated Califomia Securities laws" and "committed Securities
 4     Fraud" These statements were willfully and intentionally false , fraudulent and misleading
 5
       representations to the court and witnesses.
 6
                                     THIRD CAUSE OF ACTION
 7                                        NEGLIGENCE
                      DEFENDANTS NEGLECTED TO APPLY THE PROVISIONS OF NSMIA
 8
                38      Plaintiffs hereby incorporate by reference the preceding paragraphs in this claim for
 9
       relief
10
                39      In 1996, Congress enacted NSMIA, which eliminated the dual system of regulation for
11
       certain securities offerings and prohibited states from requiring the registration of such secunties See 15
12
       U.S C. § 77r (1997), Temple v Gorman, 201 F Supp 2d 1238, 1243 (S D Fla 2002)
13
                40.     The NSMIA "Exemption from State Regulation of Securities Offerings" provides. No
14
       law, mle, regulation, or order or other administrative action ofany State or any political local division
15
1 (•   thereof — requiring, or with respect to, registration or qualification of securities transactions, shall directly

1y     or indirectly apply to a security that... is a covered security, or . . shall directly or indirectly prohibit,

13     limit, or impose conditions, based on the ments ofsuch offering or issuer, upon the offer or sale ofany

19     [covered security] 15 U.S.C. § 77r(a)

20              41      The purpose of NSMIA was to "further and advance the development of national

21     securities markets and eliminate the costs and burdens of duplicative and unnecessary regulation by, as a

22     general mle, designating the Federal govemment as the exclusive regulator of national offerings of

23     securities " See H R. Rep. No. 104-622, at 16 (1996); Temple, 201 F Supp. 2d at 1243
24
                42.     "Where a Form D is filed with the SEC for a transaction that purports to merit an
25
       exemption from federal registration pursuant to Regulation D, [states cannot] require duplicative
26
       registration or a transactional exemption from registration " See Temple, 201 F. Supp. 2d at 1243
27
                43      Smartwear Technologies filed with the SEC a Form D with respect to the sale of
28

                                                              10
                                                         COMPLAINT
  1    debentures m Smartwear Technologies, Inc Therefore, even ifthe sale ofthe debentures were securities

 2     transactions, (which Plaintiff has consistently maintained they are not), the debentures fall within the

 •^    definition of "covered secunties" The Federal govemment - not the State of Cahfomia - is the only party
 4     authonzed by Congress to scmtmize the merits of Plaintiffs' offering. If California, or any other state, had
 5
       the authonty to challenge the basis for a party's Form D filing, particularly for a State-securities-
 6
       registration violation, there would exist an incongmous system of securities regulation that would
 7
       eliminate a party's ability to rely upon a Form D filmg under Rule 506 This is exactly what NSMIA was
 8
       intended to eliminate
 9
               44.      Plaintiff request that this Court declare, pursuant to 28 U S C. § 2201(a), that because
10
       Smartwear Technologies, Inc , and its officer, (Plaintiff), filed Forms D under Rule 506 with respect to
II
       the sale ofthe debentures together with other qualifymg federal exemption NSMIA prohibits the
12
       Commissioner from requinng that Plaintiffs comply with Califomia's registration requirements with
13
       respect to the sale of debentures , ignoring the fact that Smartwear DID I fact file a form D with the
14
       Cahfomia Department of Corporations, and DID pay the required fees
15
, zr           45.      A declaratory judgment is appropriate because it will serve the useful purpose of

ly     clarifying and settling the legal issue of whether the Commissioner is preempted by NSMIA from

13     challenging the merits of Smartwear Technologies, Inc's, Form D filing, and, if answered in the

19     affirmative, whether the Commissioner is prohibited by NSMIA from imposing registration requirements

20     on Smartwear Technologies, Inc , which the Commissioner has inferred to Plaintiff Robert Reed, with

21     respect to the sale ofthe debentures (in light ofthe Form D filings under Rule 506), A declaratory

22     judgment is also appropnate because it will terminate and afford Plaintiff Reed relief from the

23     impermissibly issued D&R and the Defendants Civil Action
24
                                       FOURTH CAUSE OF ACTION
25
                               INTENTIONAL MISRPRESENTATION AND FRAUD
26
               46      Plaintiff hereby incorporate by reference the preceding paragraphs in this claim for relief
27
       Defendant Calero has repeatedly stated in his swom declarations that Smartwear's officers have been the
28

                                                             11
                                                        COMPLAINT
 1   subject of disciplinary actions in Pennsylvania and Texas for securities fraud. Plaintiff was the only

 2   officer of Smartwear and he was not named in that matter, nor was he affiliated with that company nor was

 3   there any allegation of fraud and the only allegation from the Pennsylvania Department was that a

 4   company named U S Market Development may have "cold- called" one potential investor               NO
 5   FRAUD! Again, as stated, Plamtiff was the only officer of Smartwear and he has never been in Texas,
 6
     never been associated with that company, and has never personally offered or sold a security for any
 7
     company. These statements were willfully and intentionally false and misleadmg representations to the
 8
     court, shareholders and witnesses to perpetuate Defendant fraudulent scheme. Defendant Calero acted
 9
     both inside and outside the law, in violation of 18 U S C 242, by acting willfully to deprive Plaintiff of his
10
     rights by acting under "color of law". Plaintiff has suffered irreparable damage as a result of Defendants
11
     intentional misrepresentations and fraud and should be compensated by an award of punitive damages
12
                                            FIFTH CAUSE OF ACTION
13                                           INVASION OF PRIVACY
14
             47       Plaintiff hereby incorporate by reference the preceding paragraphs in this claim for relief
15
             48       Calero, in violation of Utah privacy laws and Califomia Code of Civil Procedure and the
16
     Uniform Deposition and Discovery Act, has obtained, unlawfully, without notice to consumer or
17
     opportunity for objection, secured bank and financial records of an entity known as "Applied Digital
18
     Technologies, Inc", named only as a "Relief-Defendant", in the Cahfomia State Court action. Defendant
19
     Calero has stated, in open court that this "Relief-Defendanf has committed no wrongdoing and is not
20
     accused ofany wrong.
21
             49.     Defendants violated pnvacy and other laws having no legitimate or legal access to private
22
»-   financial records of an unrelated bank account on which Plaintiff was a signator. This violation of law

24   constituted a denial of due process, denial of civil rights and an invasion of privacy

25                                          SIXTH CAUSE OF ACTION
                                               CIVIL CONSPIRACY
26
             50      Upon unlawfully obtaining this confidential financial information through his surreptitious
27
     methods. Defendant Calero then secretly, shared the information with witnesses in the Cahfomia state
28
                                                           12
                                                      COMPLAINT
 1   court action. One such witness had already been served with a notice of deposition, and only through

 2   accidental disclosure during the deposition did Plaintiff become aware that Defendant Calero had

 3   corruptly influenced and "tampered "with this witness.
 4           51      Defendant Calero knew this witness to be under extreme personal duress, was
 5   expenencing financial and family breakdown and was ripe for manipulation by a skilled attomey who has
 6
     been shown to subom perjury to win at all costs .
 7
             52      Defendant Calero admonished this witness that this information could not legally be
 8
     shared and that he was unable to provide the witness with copies just yet, but generously shared
 9
     selections fi-om the financial records with at least one witness whose deposition was already scheduled,
10
     and with co-defendant Van Rainey, who immediately broadcast it over the intemet
11
             53      Defendant Calero then gratuitously attached these financial records, which included
12
     Plaintiffs social security number, to his self servmg declaration in an unrelated pleading for the sole
13
     purpose of making them "public records".
14
            54.      Defendant Calero then mailed a package of documents containing a "time line" and the
15
     financial records to this very same witness, whose deposition was now imminent, in spite of the fact that
16
17   this witness had no interest whatsoever in the matter in which Calero had issued his declaration or the

18   attached financial records.

19          55.      These acts of unlawful access to records, obtaining mformation through improper

20   methods, in violation of Utah privacy law, and the Uniform Interstate Deposition and Discovery Act,

21   amounting to an "end mn" around the Constitution ,and then disclosing confidentiai and prejudicial

22   information was only done to cormptly influence and taint witnesses, whose swom testimony was

23   imminent, and in violation of 18 U.S.C § 1512.This is only one example of Calero's devious and
24   unlawful tactics   there are many more.
25          56       The actions of Defendants and each of them have rendered Smartwear Technologies, Inc
26
     and Its officer insolvent.    Defendant Wroten, in addition to obtaining unlawful access to email,
27
     personal and private documents, accessed medical records subject to HIPPA protection Another
28
                                                          13
                                                      COMPLAINT
  1    violation of the Stored Communications Act 18 USC 2701-11. Defendants Manley, Sheck, Wroten and

 2     others using stolen passwords, fake identities and "bmte force" hacking to gain unauthorized access to

 3     computer systems is a violation of 18 U.S C 1030. Defendant Calero using information obtained through

 4     crimmal acts and other violations ofthe law and cormptly influencing and attempting to influence
  5    witnesses is a violation of 18 U S C. 1512. Defendant's Manley, Sheck and Wroten, acted both inside
 6     and outside the law, in violation of 18 U S.C 242, acting willfully to deprive Plaintiff of his rights by
 7
       acting under color of law
 8
              57       Defendants acted m concert in the obtaining and dissemination ofthese private records by
 9
       conspiring together to use what ever means available to them, whether hacking, corrupting influencing
10
       witnesses, or stealing passwords all to discredit, defame, and destroy plaintiff, to further their quest for
11
       fines and penalties, all in violation of 18 U.S.C. 241, which states m part. "This statute makes it unlawful
12
       for two or more persons to conspire to injure, oppress, threaten or intimidate any person ofany state,
13
       territory or district m the free exercise or enjoyment ofany right or privilege secured to him by the
14
       constitution or the laws ofthe United States "
15
16                                         SEVENTH CAUSE OF A CTION
                                               ABUSE OF PROCESS
17
              58.     Plaintiff alleges that Defendant, DuFauchard, Corporations Commissioner, through his
18
      agents and employees have alleged false claims of violations of California Corporations Code against
19
      Plaintiff, and others named in his civil action to purportedly enforce violations of Cahfomia Corporations
20
      Code Sections 25110 and 25401. It should be noted that Smartwear Technologies had been absorbed by a
21
      publicly traded company some five (5) months pnor to the filing of their civil complaint purportedly
22
      seeking an injunction against a company which no longer was viable          Both Plaintiff and Smartwear had
23
      offered, through counsel, a permanent injunction and stipulation in full satisfaction of any alleged
24
^-    violations ofCalifomia Corporations Code, thus obviating the reason for legal action.

2(.           59.     Calero, in one of his many declarations, has stated that Plaintiff, and or Smartwear offered

2y    secunties in Global General Technolgies, Inc.

23            60.      This statement is false' It is factually impossible to offer, in a private offering, stock
                                                            14
                                                        COMPLAINT
 1   which IS trading on the public market.

 2           61.      These statements by Defendant Calero which again he knew to be false are an integral part

 3   of Defendants Civil Action and are patently an abuse ofthe legal Process.
 4                                        EIGHTH CAUSE OF ACTION
                                                  THEFT
 5

 g           62.      Plaintiff hereby incorporates by reference the preceding paragraphs in this claim for

 y   relief Many ofthese allegations are based on statements of Wroten, Sheck and Manley in their capacity

 8   as employees ofthe Department of Corporations, whose fimctions are to target small, start-up companies

 9   seeking capital, by scouring the intemet and other media for vulnerable victims Wroten and others falsely

10   claim Smartwear Technologies was engaged m "general solicitation " and thus not covered by the "safe

11   harbor' provisions of Rule 506 The evidence does not support this allegation.

^2           63       Defendant Wroten, using the alias "John Fox", being an unknown to the company, was
13
     refused access to any investor information when he filled out a contact form on the Smartwear
14
     Technologies website Wroten provided fraudulent information and identity in his efforts to gain access.
15
     He was declined Thereafter, Wroten, forcibly "hacked" the password protected information, which was
16
     behind a firewall, utilizmg his alias, false information and outright lies, and conducting his unlawful
17
     hacking usmg a State ofCalifomia computer's official intemet protocol address. Defendant Wroten
18
     gained unlawful access to Smartwear Technologies server.
19
             64      Defendants Sheck and Manley did not use "bmte force" tactics but utilized instead
20
     confidential, unauthorized passwords and user accounts provided only to legitimate persons and stolen
21
     from the issuer, which are felonies, and which provided them unlawful access to company computers and
22
     networks
23
„.           65.      Records show that Defendant's access did not originate from any actual customer

2^   location, but rather the access originated from the State of Califomia's official "IP" addresses Defendants

25   gained repeated, unauthorized and unlawful access, in many cases by means of pretextual customer log

27   in credentials. These actions by Defendants was a violation not only of Cal. Penal Code Section 502(c),

28   but also of Federal Statute 18 U.SC 1030

                                                          15
                                                     COMPLAINT
  1                66.    From these incursions. Defendants copied and swept thousands of proprietary and

 2     confidential matenals to the Department of Corporation's own servers. This storehouse of stolen, personal,
 3     confidential and intellectual property enabled Defendants Du Fauchard and his agents to not only invade
 4     the personal records of investors, but revealed confidential negotiations between companies and third
 5     parties. These acts by Defendants were violations of the Computer Fraud and Abuse Act, 18 USC 1030 et
 6     seq, receipt of stolen property, Cal Penal Code Section 496, unauthorized access to computers, Cal Penal
 7
       Code Section 502(c) and violation ofthe Stored Communications Act USC 2701-11 . Defendants'
 8
       conduct also constitutes trespass to chattels, intentional interference with prospective economic
 9
       advantage, negligent interference with prospective economic advantage, conversion and unjust
10
       ennchment
11
                                            NINTH CAUSE OF ACTION
12                                                INTRUSION
13
                67.      Plaintiff hereby mcorporates by reference the preceding paragraphs in this claim for
14
       relief
15
                68.      Smartwear's password protected web-site allowed customers, who had been
16
       supplied with a usemame and password to access and download copyrighted, proprietary
17

, J,   matenals. This web-site was never "available to the general public and downloadable by anyone'

19              69.      This scheme by the Department of Corporations, the Commissioner and its

20     employees and agents has been perpetuated over and over again against unsuspectmg members of

       the general public.
22
                70.      Even those who have a password are limited to certain information and in no way are ever
23
       allowed to view email,financial,medical or other personal mformation or propnetary, intellectual
24
       material.
25
                71       After illegally obtaining privileged information. Defendants passed it on to Defendants
26

27     DuFauchard and his assistants, who then proceeded to concoct a Civil Complaint alleging the violations

28     aforesaid

                                                            16
                                                        COMPLAINT
 1              72.     Dunng the activities set forth above Jon Wroten, ( acting as DuFauchard's agent) was on

 2     probation after being convicted of violation of California penal code section 502c, and having been

 3     incarcerated for said offense, and again he violated said penal code section and the terms of his probation

 4     all while being employed by the Department of Corporations
 5
                73.     In addition, Wroten using his alias and other false information, which were all untme
 6
       statements of material facts , offered to purchase Smartwear Debentures in violation ofCalifomia
 7
       Corporations Code , this is another violation ofthe law by Wroten. Section 25401.Cal. Corp Code
 8
       Defendants have violated Califomia Penal Code § 502(c)(2) by knowingly and fraudulently, and without
 9
       permission, accessing, taking, copying, and making use of programs, data, and files from Smartwear's
10
       computers, computer system, and/or computer network
11                                                                                             .ft

12              74      Defendants have violated Califomia Penal Code § 502(c)(3) by knowingly, fraudulently,

13     and without permission accessing and using Plaintiffs computer services.

14              75      Defendants have violated Cahfomia Penal Code § 502(c)(6) by knowingly, fraudulently.

^^     and without permission providing, or assisting in providing, a means of accessing Smartwear's computers,

1 /-   computer system, and/or computer network

1y              76      Defendants have violated Califomia Penal Code § 502(c)(7) by knowingly, fraudulently,

18     and without permission accessing, or causing to be accessed, Smartwear's computers, computer system,

19     and/or computer network

20              77      Smartwear and its shareholders own the data that comprises the propnetary and

21     intellectual properties obtained by Defendants as alleged above

22              78.    As a direct and proximate result of Defendants' unlawful conduct withm the meaning of

       Cahfomia Penal Code § 502, Defendants have caused damage to Plaintiff in an amount to be proven at
24
       trial. Plaintiff is also entitled to recover its reasonable attomeys' fees pursuant to Califomia Penal Code §
25
       502(e)
26
                79.    Plaintiff alleges that the aforementioned acts ofthe Defendants were willfiil and malicious
27
       in that Defendants' acts descnbed above were done with the deliberate intent to injure Plaintiffs business
28

                                                             17
                                                        COMPLAINT
 1    value and improperly secure Plaintiffs assets for their own benefit Plaintiff is therefore entitied to

 2    punitive damages.

 3             80     Plaintiff has also suffered irreparable injury from these acts, and due to the continuing
 4    threat ofsuch injury, has no adequate remedy at law, entitling Plaintiffs to injunctive relief
 5
                                    TENTH CAUSE OF ACTION
                     EVTENTIONAL INTERFERENCE WITH ECONOMIC ADVANTAGE
 6

 y             81.    Plaintiff hereby mcorporates by reference the preceding paragraphs in this claim for

 3    relief

 9             82.     Plamtiff bnngs this lawsuit after discovering the systematic illegal access to and taking

10    from computer systems certain proprietary information and intellectual properties belonging to the

11    shareholders, as well as the false, inaccurate and misleading basis and resultant Desist and Refrain issued

12    by the Department of Corporations, its employees and agents.

^•^            83.    Plaintiff has further leamed that Department of Corporations has shared certain
14
      proprietary information, information gathered through subpoena and other confidential information which
15
      is alleged to be part ofthe Department of Corporations "investigation" with one Van Rainey, a known
16
      stock manipulator as well as a Smartwear Technologies shareholder and contract employee to the State of
17
      Cahfomia. This information was provided to Van Rainey by Defendant Alexander Calero with the intent
18
      of Rainey disseminatmg this information within public message boards such as "Investor Hub", "Raging
19
      Bull" and other stock manipulator message boards with the sole intent to fiirther damage the value of
20
      Smartwear Technologies and enrage shareholders. These acts were Intentional Interference with
21
      Prospective Economic Advantage
22
23             84     Plaintiff believes and thereon alleges that these actions were done for the economic gain

24    and unfair advantage to Defendants and each of them and to the damage and detriment of Plaintiff and the

25    former Smartwear Shareholders..

25             85.    The Cahfomia Department of Corporations is a self-funded organization, existmg solely

2y    on the revenues, fines, penalties and settlements they are able to seize from the backs of small companies

28    who dare do business within the boundaries ofthe State ofCalifomia

                                                           18
                                                      COMPLAINT
  1           86      Defendant Rainey, who had executed a confidentiality agreement with Smartwear

 2    Technologies, did in fact trade on insider information he obtained from both the unlawfiil shanng of

 3    information with Defendant Calero and information obtained from Smartwear pursuant to the properly
 4    executed "insider" and "confidentiality agreements" These actions by Rainey were a violation ofthe
 5
      Securities Act of 1933.
 6
              87.     Plamtiff had an expectancy of continuing an advantageous economic relationship with
 7
      prospective purchasers and licensees of Smartwear's technology.
 8
              88.     These relationships contamed the probability of fiiture economic benefit in the form of
 9
      profitable support service contracts and licenses. Had Defendants refrained from engaging in the
10
      unlawfiil and wrongful conduct described in this complaint, there is a substantial probability that
11

,2    Smartwear's customers and prospective customers would have initiated, renewed, or expanded

13    licenses with Smartwear for the benefit of its shareholders

14            89.     Defendants were aware ofthese economic relationships and intended to interfere with

15    and dismpt them by wrongfiilly gaining unauthonzed access to Plaintiffs computer systems through

^"    the Smartwear's password-protected website in violation ofthe terms of service agreements
17
      goveraing such access; gaining unauthonzed access to the confidential, propnetary intellectual
18
      properties, financial and medical records and other matenals available on Plaintiffs computer system,
19
      in violation of the agreements goveming such access, including by using log in credentials with no
20

21    right or license to access the information and materials taken by Defendants; breaching the

22    agreements goveming access to, and use of, the website and the materials available through it.

2-5   misleading Plaintiffs customers and shareholders by making statements regarding Plaintiffs inability

24    to fulfill contractual obligations, uUlizing information that was only possible because of Defendants'

25    improper access to, and taking from, Smartwear's computer systems through, and, using mformation

26    obtained through the improper access to, and taking from. Plaintiffs computer systems

27

28

                                                         19
                                                     COMPLAINT
 1           90.     Defendants' conduct was wrongful by a measure beyond the fact of the mterference

 2   itself Defendants gained unauthorized access to Plaintiffs computer systems through the Smartwear
 3   password-protected website, breached the agreements goveming access to, and use of said website
 4
     and materials available through it, and wrongfully used the materials that they found there to falsely
 5
     allege a contention of "general solicitation" and that documents were available to the "general public"
 6
     in an attempt to conceal their illegal access and wrongfully obtained information and access to
 7
     confidential documents and matenals.
 8

 n           91.     This conduct, as alleged above, constitutes violations of numerous state and federal

10   statutes and codes, including, but not limited to, violation ofthe Federal Computer Fraud and Abuse

11   Act, 18 U S.C. § 1030 etseq., receipt of stolen property, Cal. Penal Code § 496, unauthorized access

12   to computers, Cal. Penal Code § 502, § 1962, fraud and related activity in connection with an access

^3   device, 18 U.S.C. § 1029, and violation ofthe Stored Communications Act, 18 U S C. §§ 270I-.
14
             92.     Defendants' conduct also constitutes trespass to chattels, breach of contract, and
15
     unjust enrichment
16
             93.     As a result of Defendants' acts, the above-described relationships have been actually
17

18   dismpted, causing ineparable harm to Plaintiff and fiirther caused Plaintiffsto incur unnecessary and

19   substantial legal fees in defending improperly filed litigation, rendering Smartwear insolvent and its

20   shareholders investment valueless.

21           94.     As a direct and proximate result of Defendants' actions. Plaintiff has suffered

22   economic harm, including, but not limited to, loss of profits from sales or licenses of Plaintiff s

23   intellectual properties, products and solutions. Defendants' wrongfiil conduct was a substantial factor
24
     in causing this harm.
25
             95      Defendants interference with Plaintiffs prospective economic advantage with its
26
     fiiture customers, as described above, was willful, and malicious and Plaintiff is therefore entitled to
27

28
                                                        20
                                                    COMPLAINT
 1   an award of pumtive damage to punish their wrongful conduct and deter fiiture wrongful conduct in

 2   an amount not less tiian $25,000,000
 3

 4                                     ELEVENTH CAUSE OF ACTION
                                          UNJUST ENRICHMENT
 5
              96.     Plaintiff hereby incorporates by reference the preceding paragraphs in this claim for
 6
     relief
 7
              Defendant Van Rainey is a contract employee to the State of Califomia, with his principal place of
 8
     business located at a private mail drop facility located in Livermore, Califomia
 9
              97      Defendant Rainey has been issued repeated letters to cease and desist the manipulating of
10
     public stocks thiough anonymous message boards
11

,2            98      On or about April 4, 2007, Defendant Rainey executed a "confidentiality agreement" and

Y3    "Non-Compete" documents with Smartwear Technologies, Inc , whereby he would have access to

14   proprietary and confidential information for the purposes of his appointment to the Board of Advisors, and

15   his prospective employment.

16            99      Defendant Rainey, pursuant to the terms of these agreements, was baned from purchasing

17   shares, selling shares, investing, loaning or in any manner whatsoever trade on the information he

18   obtained pursuant to these agreements

^"            100    Defendant Van Rainey did in fact enter into transactions which provided him with
20
     financial gain and whereby he obtained an unfair advantage over other shareholders and the general
21
     public, pursuant to information improperly obtained through insider disclosure
22
              101    Once Defendant Rainey had traded on the information improperly obtained, he then
23

24   provided this confidential information to his co-conspirator. Department of Corporations employee, Alex

25   Calero

26            102.   Plaintiff IS informed and thereon alleges, that Defendant Rainey has gathered confidential

27   information first for his ownfinancialgain, and second to share with Defendant Calero in fiirtherance of
2o   their conspiracy to damage Plaintiffs

                                                         21
                                                     COMPLAINT
  1             103     Defendant Van Rainey unjustly received benefits at the expense of Plaintiff through his

 2     wrongful conduct, including Defendant Ramey's breach ofthe agreements and interference with

 3     Smartwear and Plaintiffs business relationships and other unfair business practices, as well as benefiting

 4     from Defendant Wrotens' trespass on, and computer fraud conceming the proprietary and intellectual
 5     properties and other materials, which took substantial time and money for Plaintiffto develop.
 6
                104.    Defendant Rainey continues to unjustly retain these benefits at the expense ofPlaintiff It
 7
       would be unjust for Defendant to retain any value he obtained as a result of his wrongfiil conduct.
 8
               105.     Defendant Rainey interfered with Plaintiffs business and registration of its shares of stock
 9
       by contacting attomeys, customers, vendors, market makers, accountants, consultants, employees and
10
       other shareholders as well as postmg false and misleadmg information on public message boards, all in an
11
       attempt to damage Plaintiff in his business and secure a supenor position for Defendant Rainey in the eyes
12
       ofthe State ofCalifomia, with which he is a contract employee
13
               106      Plaintiff is informed and thereon alleges that Defendants Rainey mampulated stock values
14
       through the use of illegally obtained information and then using that information, purchased and sold stock
15
1 z-   to his own advantage over all other shareholders.

ly             107      Plaintiff IS accordingly entitled to full restitution of all amounts in which Defendant

13     Rainey has been unjustly enriched at Plaintiffs expense.

19             108      Defendant Calero, obtaining confidentiai information through subpoena, under the guise

20     of "administrative investigation" has received information related to Plaintiff without benefit of notice to

21     Plaintiff Notice to Consumer or service of a copy ofthe Subpoena or opportunity for objection

22     Defendant Calero has then shared the products of these "secret subpoenas" , obtained by operating outside

^•^    the law, with Defendant Rainey, who then disseminates parsed selections amongst certain shareholders,

24     postings on public message boards and through email communications All designed to fiirther damage
25     Plaintiff and taint shareholders against one another prior to civil tnal dates
26             109.     Plaintiff alleges that Defendants Du Fauchard, together with employees, agents and others
27
       have utilized the services of Defendant Rainey, a contract employee ofthe State ofCalifomia, to initiate
28
                                                             22
                                                        COMPLAINT
 1   contact with the investors and prospective customers of Smartwear Technologies Inc. and Global General

 2   Technologies to solicit information and exert negative influence to persuade said persons to complain to

 3   the Department of Corporations, as well as communicate interstate with vanous persons throughout the

 4   US
 5
              110     Defendants Rainey, as is evidenced by his own admissions, maintains constant contact
 6
     with Defendant Du Fauchard's office by email and telephone to report his success in enlisting
 7
     complainants and to receive his instmctions and confidential information, which he then disperses to the
 8
     public by way of the intemet.
 9
              111     Defendant Rainey, armed with the information supplied by and from Defendants Du
10
     Fauchard, Calero and Wroten, used said information for his own personal gain By leaming in advance of
11
     the Department of Corporation's plans regarding Smartwear and Global General Technologies, Inc , (a
12
     public trading company) Rainey would either bash or promote the stock, which he would then either buy
13
     or sell (at a profit )after publishing on the intemet information gained from the Department of
14

^^    Corporations.

1g            112      Defendant Rainey has provided declarations to the Department of Corporations, upon

ly   which orders affecting Plaintiff have been predicated. Rainey knew his statements to be false and

13   misleading, and Defendants DuFauchard and Calero knew or should have known these statements to

19   contain false and misleading information, yet they were proffered to the court and caused fiirther damage

20   to Plaintiff, which continues to this date.

21            113.    Through this Complaint Plaintiff seeks to stop the Department of Corporation's illegal

22   intmsions and theft and pursuing the fallacious civil action using the illegally acquired material and to

^^   recover damages and attomey fees
24                                        TWELFTH CAUSE OF ACTION
                                           TRESPASS TO CHATTELS
25
25            114     Plaintiff hereby incorporates by reference the preceding paragraphs in this claim for

2y   relief

28

                                                          23
                                                     COMPLAINT
 1            115.   At all times mentioned in this complaint, Smartwear Technologies had legal title to and

 2   actual possession of its access-restricted intemet and network systems

 3            116.   Defendants Du Fauchard and his agent Jon Wroten mtentionally interfered with
 4   Smartwear's use or possession of both Smartwear's intemal data bases and systems.
 5            117.   Defendants' trespass and interference proximately caused damage to the functionality of
 6
     Smartwear's computer system and data , damage to Smartwear's nghts to dominion and control over its
 7
     property, and damage to the confidential nature ofthe information on the web-site. As a result Defendants
 8
     caused Smartwear's property to greatly dimmish in value and deprived Smartwear ofthe intended use of
 9
     its computer systems
10
              118    Plaintiff IS entitled to recover any and all damages sustained as a result of such trespass, in
11
     an amount to be detennined at trial.
12
              119    Defendants' trespass interfered with, and damaged, the integrity and fimctionality of
13
     Plaintiffs computer system and data Defendants will continue to commit such acts, preventing Plaintiffs
14
     from using their systems and data for their intended purpose Defendants' trespass therefore threatens to
15
     cause ineparable harm to Plaintiff for which Plaintiffs remedy at law is not adequate to compensate it for
16
17   the injuries inflicted and threatened Plaintiffs entitled to an injunctive order preventing Defendants and

18   their agents from accessing, or interfering with any of Plaintiff s computers, computer systems, networks

19   or servers or obtaining pnvate, propnetary, confidentiai information in any manner whatsoever

20
                                   THIRTEENTH CAUSE OF ACTION
21                          SLANDER, SLANDER PER SE, LIBEL, LIBEL PER SE,

22                              SLANDER PER QUOD AND LIBEL PER QUOD

23            120.   Plaintiff hereby mcorporates by reference the preceding paragraphs in this claim for

24   relief

25            121    In addition to numerous oral communications which are set forth below in more detail, the

26   Corporations Commissioner has published on the intemet, for the world to see, untme, defamatory

27   statements regarding both Plaintiff and Smartwear Technologies, among others, which publications

28   include, but are not limited to a "Desist and Refrain" Order containing false statements, which statements
                                                          24
                                                     COMPLAINT
 1   have caused Plaintiff to be ridiculed, embanassed, humiliated and emotionally distressed, and caused

 2   extreme financial reversals.
 3           122.    Defendant, Alex Calero has verbally stated to many persons who were the former
 4
     Smartwear shareholders, among others, that Plaintiff was the subject of disciplinary actions for "security
 5
     fraud"; that Plaintiffhad sold "unregistered securities" in violation ofCalifomia security laws; that
 6
     Plaintiffhad "ignored registraUon requirements; " that Plaintiff had made untrue statements in the
 7
     "Executive Summary" for Smartwear; that Plamtiff was a party to a "Cease and Desist" order issued
 8
     by the State of Texas, or named in the order issued by the State of Pennsylvania, among other things;
 9
10   that Plaintiffhad "committed secunties fraud"; that Plaintiff "used fraudulent business practices"; all

11   of which are untrue and have caused Plaintiff extreme physical, emotional-,* mental and financial

12   embanassment and distress.

13           123.    These pubhshed, wntten statements by Defendants Alex Calero and the Department of
14   Corporations are defamatory because the language carries a meaning that Plaintiffs conduct was
15
     illegal, fraudulent and harmful to others.
16
             124.    That these wntten statements by Defendant, Calero and the Department of
17
     Corporations were understood by those who saw and heard it to mean that Plaintiffhad in the past and
18
     was continuing to commit fraudulent acts.
19
             125.    That these wntten statements by Defendant, Calero and the Department of
20
     Corporations were libelous and patently false because Plaintiff was not a party to any orders issued
21
22   by the State of Texas, was not a named party to any orders issued by the State of Pennsylvania and

23   had not offered for sale "unregistered secunties".

24           126.    That these published wntten statements by Defendant Calero and the Department of

25   Corporations, published on the World Wide Web, were available to the general public and
26   downloadable by anyone.
27
28
                                                          25
                                                    COMPLAINT
 1                 127.   As a proximate result of the above-descnbed publication. Plaintiff has suffered loss of

 2     his reputation, shame, mortification, and hurt feelings all to his general damage in a sum to be proven
 3
       at trial.
 4
                   128.   As a fiirther proximate result of the above-described publication. Plaintiff has suffered
 5
       special damages in that PlainUff has been branded a person responsible for "secunties fraud", without
 6
       any formal hearing, legal conclusion or finding of fact. Defendant's Calero and Department of
 7
       Corporations continue to publish selective documents on their website and omit any exculpatory
 8
 Q     pleadings or findings of fact or hearings that result in a denial of claims of Calero and the Department

IQ     of Corporations in an effort to fiirther damage Plaintiffto the general public through a scheme of

11     false, misleading, selective and libelous publications.

12                 129.   The above descnbed publications were published by Defendants Calero and

^ -*   Department of Corporations with malice, oppression and fraud in that the acts of Defendant, Calero,
14     were done with the knowledge that the statements were false and for the sole purpose of revenge, to
15
       influence the decisions of Court and the shareholders of Smartwear Technologies, and to cause
16
       Plaintiff distress and aggravation all due to Defendant, Calero's ill will and hatred towards Plaintiff
17
       Plaintiff, therefore, seeks an award of punitive damages in the an amount of $25,000,000.
18
19     WHEREFORE, Plamttff prays:
20
       1. A Judgment which declares that Plaintiff and Smartwear did not offer or sell unregistered
21
       secunties in violation ofthe law,
22
       2. A Judgment which declares that Plaintiff did not omit to disclose material facts to Investors;
23

24     3. A Judgment which declares Plaintiff was not disciplmed for fiaud in any State:

25     4. A Judgment which declares Plaintiff was not the subject ofany disciplmary action in any State,

26     5. An award of $50,000,000 for loss of economic advantage;
27
       6. An award for punitive damages of $25,000,000;
28
                                                            26
                                                        COMPLAINT
 1   7. For a Prelunmary and permanent injunction prohibiting Defendants from fiirther commission
 2   ofthe wrongfiil acts alleged herem;
 3
     8. For an order impoundmg and destroying any and all infnngmg or unlawfiilly obtained
 4
     matenals 17 U.S.C 503.;
 5
     9. Prejudgment Interest;
 6
 y   10. For costs of suit herem

 8   1 1 . For such other and fiirther relief as the Court may deem just and proper.

 9

10

II
     DATED June 6, 2011
12                                                                               Respectfiilly submitted,

13

14

15

16
                                                                  ROBERT REED
17                                                                IN PROPRIA PERSONA
                                                                  1993 DEWAR DR #1-168
18                                                                702-468-2935
                                                                  ROCK SPRINGS, WY 82901
19

20

21

22

23

24

25

26

27

28

                                                     27
                                                 COMPLAINT