Alleged BTOP/NTIA Fraud - $25M lawsuit filed over BTOP/NTIA funds in Florida

Electronically Filed 04/18/2013 05:32:47 PM ET

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IN THE CIRCUIT COURT OF THE TENTH JUDICIAL CIRCUIT IN AND FOR HARDEE COUNTY, FLORIDA

CIVIL DIVISION

RAPID SYSTEMS, INC., a Florida corporation,

Plaintiff, CASE NO.: DIVISION:

FLORIDA RURAL BROADBAND ALLIANCE, LLC, a Florida limited liability company, FLORIDA'S HEARTLAND REDI, INC., a Florida non-profit corporation, NORTHWEST FLORIDA BUSINESS DEVELOPMENT COUNCIL, INC., A Florida non-profit corporation, d/b/a OPPORTUNITY FLORIDA, GINA REYNOLDS, an individual, JIM BROOK, an individual, RICHARD MARCUM, an individual, AL PERRY, an individual, JOEY HOOVER, an individual, TRACY WHIRLS, an individual, PAUL MCGEHEE, an individual, CRYSTIE CAREY VOEHL, an individual, JOHNNY EUBANKS, an individual, BYRON WARD, an 5 individual, VICKIMONTFORD, an individual, n. MARCUM CONSULTING COMPANY, a Texas corporation, JOHNENE MARCUM, an individual, g GOVERNMENT SERVICES GROUP, INC., « a Florida corporation, ROBERT E. SHEETS, an individual, ^ GIGABIT SQUARED, a Delaware corporation, MARK ANSBOURY g an individual, and GRADY JOHNSON, an individual, HENRY S KUHLMAN, an individual, and FRANK KIRKLAND, an * individual. ^

Defendants. ® /

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COMPLAINT AND DEMAND FOR JURY TRIAL * (0 03 o Plaintiff, RAPID SYSTEMS, INC., by and through its attorneys, files this Complaint

against FLORIDA RURAL BROADBAND ALLIANCE, LLC, FLORIDA'S HEARTLAND

REDI, INC., NORTHWEST FLORIDA BUSINESS DEVELOPMENT COUNCIL, INC., GINA •£

REYNOLDS, JIM BROOK, RICHARD MARCUM, AL PERRY, JOEY HOOVER, TRACY

WHIRLS, PAUL MCGEHEE, CRYSTIE CARIE VOEHL, JOHNNY EUBANKS, BYRON

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WARD, VICKI MONTFORD, MARCUM CONSULTING COMPANY, JOHNENE

MARCUM, GOVERNMENT SERVICES GROUP, INC., ROBERT E. SHEETS, GIGABIT

SQUARED, MARK ANSBOURY and GRADY JOHNSON and states:

NATURE OF THE ACTION

1. This action arises out of, inter alia, actions, misrepresentations, omissions,

misappropriations, fraud, double-dipping, illegal trade practices, violation of public trust, sexual

promiscuity and other circumstances surrounding grant monies awarded to the FLORIDA

RURAL BROADBAND ALLIANCE, LLC, and administered by the National

Telecommunications and Information Administration and defined herein as the ("FRBA Fraud

Scheme")- This is an action by RAPID SYSTEMS, INC., to seek relief from the FRBA Fraud

Scheme and the deceptive actions, artifice and outright fakery of the fraudulent conspirators

defined herein.

2. RAPID SYSTEMS, INC. seeks damages against Defendants in an amount

exceeding $25,000,000.00 together with interest, costs, and attorneys' fees and where applicable

and for which there is no legal remedy, injunctive relief.

PARTIES

3. Plaintiff, RAPID SYSTEMS, INC. ("RSI"), is a corporation organized and duly

existing pursuant to applicable Florida law, having its principle places of business in

Hillsborough County and Hardee County, Florida.1

4. Defendant, FLORIDA RURAL BROADBAND ALLIANCE, LLC ("FRBA") is a

Florida limited liability company, with its principle place of business in Jackson County, Florida.

1 RSI is a full service internet and information technology company, that provides, inter alia, fixed wireless, DSL, outsourced IT services and wireless broadband engineering and installation services.

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5. Defendant, GINA REYNOLDS ("REYNOLDS") at all times material hereto was

sui juris and a managing member of FRBA and acting individually.

6. Defendant, JIM BROOK ("BROOK") at all times material hereto was sui juris

and a managing member of FRBA and acting individually.

7. Defendant, RICHARD MARCUM ("RICHARD MARCUM") at all times

material hereto was sui juris and a managing member of FRBA and acting individually.

8. REYNOLDS, RICHARD MARCUM and BROOK are the alter egos of FRBA.

9. FRBA, REYNOLDS, RICHARD MARCUM and BROOK are collectively

referred to as the "FRBA Conspirators".

10. Defendant, FLORDA'S HEARTLAND REDI, INC. ("FHREDI") is a non-profit

economic development corporation duly organized in Florida, with its principle place of business

in Highlands County, Florida. At all times material hereto, FHREDI was a managing member of

FRBA.

11. Defendant, REYNOLDS, at all times material hereto was sui juris and an officer

and agent of FHREDI and acting individually.

12. Defendant, AL PERRY, ("PERRY") at all times material hereto was sui juris and

an officer and agent of FHREDI and acting individually.

13. Defendant, JOEY HOOVER ("HOOVER"), at all times material hereto was sui

juris and an officer and agent of FHREDI and acting individually.

14. Defendant, TRACY WHIRLS ("WHIRLS"), at all times material hereto was sui

juris and an officer and agent of FHREDI and acting individually.

15. Defendant, PAUL MCGEHEE ("MCGEHEE"), at all times material hereto was

sui juris and a managing member of FHREDI and acting individually.

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16. REYNOLDS, PERRY, HOOVER, WHIRLS and MCGEHEE are alter egos of

FHREDI.

17. FHREDI, REYNOLDS, PERRY, HOOVER, WHIRLS and MCGEHEE are

collectively referred to as the "FHREDI Conspirators."

18. Defendant, NORTHWEST FLORIDA BUSINESS DEVELOPMENT COUNCIL,

INC., is a non-profit economic development corporation duly organized in Florida, doing

business as OPPORTUNITY FLORIDA ("OPPORTUNITY FLORIDA"). At all timed

material hereto, OPPORTUNITY FLORIDA was a managing member of FRBA.

19. Defendant, JOHNNY EUBANKS ("EUBANKS"), at all times material hereto

was sui juris and a managing member of OPPORTUNITY FLORIDA and acting individually.

20. Defendant, BYRON WARD ("WARD"), at all times material hereto was sui juris

and a managing member of OPPORTUNITY FLORIDA and acting individually.

21. Defendant, VICKI MONTFORD ("MONTFORD"), at all times material hereto

was sui juris and a managing member of OPPORTUNITY FLORIDA and acting individually.

22. Defendant, RICHARD MARCUM, is believed to be a resident of South America.

At all times material hereto, prior to leaving the United States was sui juris and as an officer of

OPPORTUNITY FLORIDA, and acting individually.

23. EUBANKS, RICHARD MARCUM, WARD and MONTFORD are alter egos of

OPPORTUNITY FLORIDA.

24. OPPORTUNITY FLORIDA, EUBANKS, RICHARD MARCUM, WARD, and

MONTFORD are collectively referred to as the "OPPORTUNITY Conspirators."

25. Defendant, MARCUM CONSULTING COMPANY ("MARCUM

CONSULTING"), is a Texas corporation having its principle place of business in Panama City,

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Florida. At all times material hereto, MARCUM CONSULTING served as a consultant to

FRBA.

26. Defendant, JOHNENE MARCUM is believed to be a resident of South America.

At all material times hereto, prior to leaving the United States, JOHNENE MARCUM was sui

juris and an officer, employee or agent of MARCUM CONSULTING and acting individually as

an accountant for FRBA and OPPORTUNITY FLORIDA.

27. Defendant, RICHARD MARCUM, prior to leaving the United States, was an

officer, employee or agent of MARCUM CONSULTING and acting individually.

28. JOHNENE MARCUM and RICHARD MARCUM are alter egos of MARCUM

CONSULTING who absconded to South America.

29. MARCUM CONSULTING, JOHNENE MARCUM, RICHARD MARCUM are

collectively referred to as the "MARCUM CONSPIRATORS."

30. Defendant, GOVERNMENT SERVICES GROUP, INC. ("GSG"), is a for profit

corporation duly organized in Florida. At all material times hereto, GSG served as a founder of

FRBA, as a consultant on behalf of FHREDI and OPPORTUNITY FLORIDA for the purposes

of organizing FRBA.

31. Defendant, Robert E. Sheets ("SHEETS") at all times material hereto was sui

juris and a director of GSG and acting individually

32. SHEETS is the alter ego of GSG.

33. GSG and SHEETS are collectively referred to as the "GSG Conspirators."

34. Defendant, GIGABIT SQUARED ("GIGABIT") is a Delaware corporation

having its principle place of business in Washington D.C. At all material times hereto,

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GIGABIT was sui juris, and served as a consultant to FRBA. At various times material hereto,

GIGABIT purported to represent RSI to the NTIA without RSI's authorization.

35. Defendant, Mark Ansboury ("ANSBOURY") at all times material hereto was sui

juris and an officer of GIGABIT and acting individually.

36. ANSBOURY is the alter ego of GIGABIT.

37. GIGABIT and ANSBOURY are collectively referred to as the "GIGABIT

Conspirators."

38. Defendant, CRYSTIE CAREY VOEHL ("VOEHL"), at all times material hereto,

was sui juris and served as general counsel for FRBA and GSG, and mislead RSI that she and

her firm was representing their interests as she engaged in a pattern of malfeasance, sex and

promiscuity with RSI employees (ultimately leading to marriage to a RSI employee) to mislead

RSI while providing improper and inappropriate legal advice for RSI and preparing documents

on behalf of RSI.

39. At all times material hereto, John Doe(s) are yet unnamed co-conspirators, agents,

law firms and fiduciaries who acted contrary to their authority, interest and duty in furtherance of

one or more aspects of the FRBA Fraud Scheme.

40. FRBA, FRHREDI, OPPORTUNITY FLORIDA, MARCUM CONSULTING,

GSG AND GIGABIT are all mere instrumentalities, employed for improper purposes, including

but not limited to missapropriation of Federal grant monies, double dipping, for the betrayal of

trust of RSI and to perpetuate a fraud against RSI.

41. The FRBA Conspirators, the FHREDI Conspirators, the OPPORTUNITY

Conspirators, the MARCUM Conspirators, the GSG Conspirators, the GIGABIT Conspirators

and the VOEHL are defined herein as the "Fraud Conspirators."

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42. Defendant, GRADY JOHNSON ("JOHNSON") is a resident of Hardee County, a

FRBA board member, a former deputy police officer, boat captain and mouthpiece and has

nefariously acted with the Fraud Conspirators to injure RSI while misleading and therefore

violating the public trust.

43. At all times material hereto, all actions of the Fraud Conspirators, the John

Doe(s), VOEHL and JOHNSON were actions of each other and of the other both individually,

jointly and severally, in multiple combinations thereof, contrary to their authority, interest and

duty to further the Fraud Scheme and damage RSI and to secure an advantage as a group over

RSI that they could not have attained by acting individually.

44. At all times material hereto, RSI has complied with all conditions precedent with

bringing this action.

45. RSI has retained undersigned counsel and are required to pay them a reasonable

fee for their services.

JURISDICTION AND VENUE

46. This Court has jurisdiction over this matter for damages in excess of Twenty Five

Million Dollars ($25,000,000.00), exclusive of interest, costs, and attorney's fees.

47. Venue is proper in Hardee County because the causes of action asserted herein

accrued in Hardee County.

FACTUAL BACKGROUND

Hardee County EDA Grant and RSI Performance Based Transfer Agreement

48. The Hardee County Economic Development Authority ("HC EDA") pursuant to

Florida Statutes, is authorized to establish the Infrastructure/Job Creation Grant Program to

provide grants to qualified for-profit and not-for-profit entities to fund projects that provide

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economic development, opportunities, job creation and infrastructure within the geographic

boundaries of Hardee County.

49. The Hardee County Industrial Authority ("HC IDA") is authorized under Florida

Statutes, as a public instrumentality for the purposes of industrial development, to finance and

refinance projects for public purposes to foster economic development in Hardee County.

50. On November 13, 2009, the HC IDA and RSI submitted an EDA Joint

Application to the Hardee County Board of County Commissioners for the construction and

maintenance of broadband infrastructure, and related services to serve Hardee County, and the

operation of affordable broadband services to residences, businesses and anchor institutions in

Hardee County, Florida, ("HC BROADBAND NETWORK").

51. On February 2, 2010, the HC EDA by way of a Grant Award Agreement ("Grant

Award Agreement") awarded the HC IDA a $2 million reimbursement grant for funding of the

HC Broadband Network project. A true and correct copy of the Grant Award Agreement is

attached hereto and incorporated herein as Exhibit "A."

52. Appended to the Grant Award Agreement as Exhibit B, is a Synopsis of Hardee

Broadband Project, which clearly reflects that the award was subject to a "[performance based

contract between the Industrial Development Authority and Rapid Systems including transfer of

infrastructure."

53. In March, 2010, consistent with the Grant Award Agreement, HC IDA entered

into a performance based equipment transfer agreement ("Transfer Agreement") with RSI to

describe the rights, interests and obligations of HC IDA and RSI regarding the HC

BROADBAND NETWORK. A true and correct copy of the Transfer Agreement is attached

hereto as Exhibit "B."

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54. The Transfer Agreement states that contingent upon RSI's satisfactory

performance of its requirements for a 3 year period, after such period, title to and ownership of

equipment purchased for the HC BROADBAND NETWORK will transfer from the HC IDA to

RSI.

Broadband Technology Opportunities Program

55. The Broadband Technology Opportunities Program ("BTOP") is a $4.7 billion

competitive grant program funded through the American Recovery and Reinvestment act of 2009

and administered by the National Telecommunications and Information Administration

("NTIA").

56. The NTIA administers the BTOP within three project categories, to wit, 1)

comprehensive community infrastructure; 2) public computer centers; and 3) sustainable broad

band adoption. The awards are intended to facilitate the integration of broadband and

information technology into state and local economies.

Florida Rural Broadband Alliance

57. On March 16, 2010, FHREDI, OPPORTUNITY FLORIDA, VOEHL and GSG,

created FRBA. FRBA was formed with the purported goal and purpose of building a broadband

network to provide Broadband Services to the rural and economically disadvantaged

communities known as rural areas of critical economic concern located throughout 15 counties

within the State of Florida (The Northwest RACEC is commonly referred to as the NWRACEC

and the Southern Central RACEC is commonly referred to as the SCRACEC..

58. The NWRACEC includes Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson,

Liberty and Washington Counties. The SCRACEC is comprised of DeSoto, Glades, Hardee,

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Hendry, Highlands and Okeechobee Counties as well as the unincorporated area of Immokalee in

Collier County and the tribal lands of the Seminole Tribe of Florida.

59. On March 23, 2010, FRBA, through GSG, submitted a Broadband Infrastructure

Application ("Grant Application") for project funding under BTOP for the purpose of building

a wireless broadband middle mile network ("FRBA PROJECT").

60. Generally, BTOP requires at least a 20 percent non-Federal match toward the total

eligible project costs ("Match Requirement"). With regard to the Grant Application, FRBA

needed a total of $10,456,000.00 in matching contributions to satisfy its Match Requirement. Of

that amount, $6,000,000.00 was to be paid in cash by a strategic partner, XIOCOM Wireless.

The remaining $4,456,000.00 was to come in the form of "in kind" contributions by HC IDA and

RSI contributing the full use of and availability of the HC BROADBAND NETWORK.

The FRBA Fraud Scheme

61. In order to induce HC IDA to participate in as a "project partner" with FRBA on

the FRBA PROJECT, FRBA, on March 23, 2010, entered into a Memorandum of Understanding

with HC IDA regarding HC IDA's contribution to FRBA of an indefeasible right of use of the

completed HC BROADBAND NETWORK ( HC IDA MOU"). In return, FRBA, on behalf of

HC IDA, was to provide and pay for third party providers for "backbone capacity" for the FRBA

PROJECT and the HC BROADBAND NETWORK for a five year term. Further, FRBA was to

use its "partnership" with HC IDA to facilitate the location of a data center within Hardee

County. A true and correct copy of the HC IDA MOU is attached hereto as Exhibit "C."

62. In order to induce RSI to participate as "project partner" with FRBA on the FRBA

PROJECT, FRBA, also on March 23, 2010, entered into a Memorandum of Understanding with

RSI regarding RSI's commitment to provide a matching investment of cash, equipment and in-

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kind services ("RSI MOU"). In return, FRBA was required to engage RSI to deploy and operate

the FRBA PROJECT. A true and correct copy of the RSI MOU is attached hereto and

incorporated herein as Exhibit "D."

63. The HC IDA MOU and the RSI MOU became a guise for FRBA to splice into

the HC BROADBAND NETWORK so as to exempt the FRBA PROJECT from environmental

assessment requirements, thereby enabling FRBA to tout the "shovel ready" nature of the FRBA

PROJECT. As more fully illustrated below, FRBA never intended to fulfill its obligations under

the HC IDA MOU or the RSI MOU.

64. On August 1, 2010, FRBA was awarded the amount of $23,693,665 ("Grant

Award"). Following the Grant Award, GSG initially served as the General Manager of the

FRBA PROJECT for a consulting fee of $10,000.00 per month.

65. Under Federal law, with regard to the Grant Award, at all times material hereto

FRBA was known as a "recipient" and was subject to strict reporting requirements and award

conditions regarding "subrecipients" and "contractors". The roles of each are characterized as

follows:

A subrecipient is involved in the substantive activities of the awarded project to accomplish BTOP purposes. Terms and conditions from the grant award flow down to the subrecipient; and

A contractor provides goods and services to benefit the grant recipient. A contractor does not seek to accomplish a public benefit; rather, it pursues its own commercial objectives.

66. At all times material hereto, FRBA was aware of RSI's equitable ownership of the

HC BROADBAND NETWORK transmission equipment pursuant to the Transfer Agreement,

and was further aware that RSI could not, without authorization from NTIA, be simultaneously

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characterized as a "contractor" pursuing payment for goods and services while simultaneously

characterized as a subrecipient receiving a grant award.

67. On November 11, 2010, entered into an amendment to its Management

Agreement with GSG, authorizing payment to GSG of a Capital Improvement Program

Administrative Fee equal to 13% of the Grant Award and 2) payment of 3% of the Grant Award

to GSG as a "grant compliance fee." Thus, GSG was to be compensated for consulting fees in

the amount of $10,000 per month 16% of the total Grant Award, the unconscionable sum of

$3,790,986.40.

68. On December 1, 2010, FRBA and RSI entered into a Contract for

Consulting/Professional Services ("Consulting Contract") relative to the FRBA PROJECT. A

true and correct copy of the Consulting Contract is attached hereto as Exhibit "E." However, at

all times FRBA was aware that it would not be able to secure payment for RSI's services as a

"contractor" without further authorization from NTIA in light of its "in-kind contribution".

69. With knowledge as to the Federal requirements, it appears that FRBA's real

purpose was to embark on a clandestine, fraudulent course of conduct, including self-dealing and

double-dipping, intended to misappropriate monies from the Grant Award, thereby enriching

itself and the other FRBA Conspirators, while simultaneously fraudulently deceiving RSI as to

its status on the Project.

70. In furtherance of FRBA's fraudulent course of conduct, while paying consulting

fees totaling $10,000.00 per month to GSG, plus the unconscionable monthly pro rata "grant

compliance fee" FRHEDI and OPPORTUNITY FLORIDA were being paid fees in the amount

of $8,500 per month to themselves cloaked as administrative and community outreach funds.

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71. From January through April 2011, FRBA continued its deceptive charade and

issued work authorizations to RSI, so as to continue to fraudulently procure RSI's services on the

Project. True and correct copies of the work authorizations are attached hereto as Composite i

Exhibit "F."

72. In July 2011, GSG was terminated by FRBA as manager of the Broadband

Development Project. Continuing the pattern of misappropriation of the Grant Award, FRBA

brought in another consultant, Gigabit Squared, for a monthly fee of $50,000.00.

73. On September 15, 2011, FRBA and RSI executed a letter of intent regarding

entering into a formal subrecipient agreement.

74. On January 4, 2012, VOEHL misrepresented to RSI that she was the principle

point of contact with RSI regarding to negotiating a subrecipient contract with NTIA.

75. On January 8, 2012 VOEHL misrepresented to RSI that NTIA required that any

RSI subrecipient contract must have a termination clause for convenience.

76. On January 13, 2012 Doug Kinkoph, BTOP CCI Director for the NTIA sent a

Performance Improvement Plan (PIP) Letter to FRBA stating FRBA must provide a copy of a

fully executed subrecipient agreement with RSI by February 27,2012.

77. On January 31, 2012 FRBA commissioned RSI as a contractor, via a Purchase

Order, to slice into the HC Broadband Network in order to supply wireless broadband service to

Highlands County and initiate the incorporation of the FRBA Project into the HC

BROADBAND NETWORK. In good faith reliance upon the Purchase Order, RSI removed the

equipment owned by HC BROADBAND NETWORK and replaced it with FRBA equipment.

No payments were made by FRBA for the engineering, operation, monitoring or removal of the

equipment ("Disputed Equipment").

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78. On February 3, 2012, FRBA continued its misrepresentations to RSI and issued

RSI an Award Decision letter emailed February 8, 2013 but dated February 3, 2012,

("Deployment Award Letter") relative to the following services:

• Construction Management portions of scope excluding Project Management; • Outside Plant Site/Tower Engineering and Professional Engineering Services; • Engineering Drawings /Build Plans • Data Center Installation

79. On February 27, 2012, VOEHL, prepared a memorandum on RSI's behalf to

NTIA to get approval for RSI to work as a vendor with the NTIA.

80. In furtherance of the FRBA Fraud Scheme, FRBA, on February 27,2012 obtained

authorization from the NTIA to classify Rapid Systems role in the project as that of a contractor

rather than a subrecipient. Thus, while purporting to act in the best interests of RSI so as to

secure payment on RSI's behalf, FRBA was actually positioning RSI for termination without

payment.

81. In March 2012, FRBA fraudulently represented to RSI that it was willing to enter

into a Construction Management, Deployment Engineering and Data Center Installation

Agreement ("Deployment/Data Center Agreement"). A true and correct copy of the

Deployment/Data Center Agreement is attached hereto as Exhibit "G." The Deployment/Data

Center Agreement was never executed by the parties.

82. On April 30, 2012 FRBA representatives met with the principles of RSI. FRBA

represented to RSI that the meeting was an attempt to mutually resolve the outstanding payments

owed to RSI. Once again, FRBA and RSI negotiated a Compensation Agreement

("Compensation Agreement") and an Asset Management Agreement, true and correct copies of

which are attached hereto as Exhibit "H." Notwithstanding reaching agreement during the

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meeting, FRBA intentionally failed and refused to execute the Compensation Agreement and the

Asset Management Agreement and no payment was made to RSI.

83. Unbeknownst to RSI at the time, on June 24, 2012, VOEHL forwarded an email

to the NTIA and GIGABIT which reveals FRBA's fraudulent intent to dishonor its commitments

to RSI under the RSI MOU, the Deployment Award Letter and the above referenced letter of

intent and purchase orders. A true and correct copy of the email is attached hereto as Exhbit "I."

84. On August 15, 2012, FRBA, in furtherance of its fraudulent scheme, submitted

notice to RSI, (purportedly pursuant to the unexecuted Deployment/Data Center Agreement) of

RSI's suspension from the FRBA Project and requesting all of RSI's work product relating to the

FRBA Project ("Suspension Letter"). A true and correct copy of the Suspension Letter is

attached hereto as Exhibit "J.

85. On September 10, 2012 REYNOLDS sent a complaint to the FCC alleging that

FRBA administrated FRBA FCC licenses without FRBA permission. The license to which she

was referring was not FRBA's license. JOHNSON and REYNOLDS have been constantly

calling the FCC in a further attempt to damage RSI's reputation in our industry."

86. On or about September 13, 2012, FRBA made demand to HC IDA that certain

equipment on the HC IDA towers be returned to FRBA and further notified HC IDA that it

would be terminating Level 3 service.

87. On November 16, 2012 Highlands County notified RSI to remove every piece of

equipment in Highlands County. Upon information and belief, FRBA is continuing to disparage

RSI and interfere with RSI business relationships and customers.

88. In January, 2013, FRBA, by letter to the HC IDA and Hardee County Board of

County Commissioners ('Termination Letter"), FRBA fraudulently represented that 1) FRBA

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had terminated RSI from the FRBA Project; 2) the NTIA had required FRBA to seek an alternate

for its matching funds obligation; and 3) it intended to terminate the "backbone capacity" for

Hardee County. A true and correct copy of the Termination Letter is attached hereto as Exhibit

"K." However, as an "in-kind contributor" RSI could not merely be terminated from the Project

without FRBA facing the possibility of losing its matching funds obligation.

89. At no time prior to January 2013 had NTIA required FRBA to obtain an alternate

for its matching funds obligation. Therefore, the Termination Letter contains a bold face

misrepresentation to both the HC IDA and Hardee County Board of Commissioners and

evidences FRBA's nefarious intent to hijack the HC BROADBAND NETWORK without

meeting its obligations under either the HC IDA MOU or the RSI MOU.

90. While the Termination Letter was provided to the FHREDI Board Members and

the OPPORTUNITY FLORIDA Board Members, it was not provided to RSI, reflecting FRBA's

continuing pattern of clandestine, deceitful and fraudulent actions against RSI.

91. On January 24, 2012, FRBA filed State of Florida Uniform Commercial Code

Financing Statements among the public records of Hardee County, Instruments numbered

201325000483 and 201325000502, thereby encumbering the Disputed Equipment and subject

towers and effectively hijacking the HC BROADBAND NETWORK. A true and correct copy

of Instrument 201225000483 is attached hereto as Exhibit "L."

COUNT I - BREACH OF CONTRACT

FRBA

92. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.

93. This is an action against FRBA for breach of contract.

94. On date RSI and FRBA entered into the Compensation Agreement attached

hereto as part of Composite Exhibit "H."

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95. FRBA breached the Settlement agreement and has failed to pay Rapid Systems

pursuant to the terms of the Settlement Agreement.

96. As a result of FRBA's breach RSI has been damaged.

97. Rapid Systems has retained the undersigned attorney and is required to pay them

a reasonable fee associated with bringing this action.

WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURAL

BROADBAND ALLIANCE, LLC, for all damages it has sustained including but not limited to

compensatory damages, exemplary damages, special damages, and its attorneys' fees and costs.

COUNT II - SLANDER OF TITLE

FRBA


99. This is an action for slander of title against FRBA.

100. RSI owns an equitable interest in the Disputed Equipment and operates the HC

BROADBAND NETWORK.

101. FRBA has taken the position in litigation pending in Hardee County that it has a

lien on the Disputed Equipment and network towers. Specifically, FRBA has sought to quash

RSI liens associated with the equipment claiming some superior right and title.

102. These statements have disparaged RSI's title in the Disputed Equipment and

rights regarding the HC BROADBAND NETWORK.

103. These statements are not true as RSI has never surrendered its title to the Disputed

Equipment or its rights regarding the HC BROADBAND NETWORK as it has not been paid for

that Disputed Equipment.

104. These statements have caused RSI to be damaged.

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105. RSI has retained the undersigned attorney and is required to pay them a

reasonable fee associated with bringing this action.


BROADBAND ALLINCE, LLC, for all damages it has sustained including but not limited to

compensatory damages, exemplary damages, special damages, and its attorneys' fees and costs.

COUNT III - FLORIDA'S UNFAIR AND DECEPTIVE TRADE PRACTICES ACT

FRBA


107. This is an action under the Florida Deceptive and Unfair Trade Practices Act

("FDUTPA") against FRBA.

108. The FDUTPA renders unlawful unfair methods of competition, unconscionable

acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or

commerce.

109. FRBA engaged in unfair practices and/or deceptive acts by representing to RSI

that it was it was intending to pay RSI for the engineering, installation, maintenance and use of

the FRBA PROJECT, the Disputed Equipment, the HC BROADBAND NETWORK while

simultaneously fraudulently seeking to exclude RSI from ever operating the FRBA Project.

110. FRBA's actions have caused RSI actual damages in excess of Twenty Five

Million Dollars ("$25,000,000.00).





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compensatory damages, exemplary damages, diminution in value, special damages, and its

attorneys' fees and costs.

COUNT IV-TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONSHIP

FRBA


113. This is an action for tortuous interference with contractual relationship against

FRBA.

114. RSI entered into the Transfer Agreement dated March 19, 2010, with IDA,

attached hereto as Exhibit B. This agreement memorialized their extensive business relationship.

115. RSI has certain legal rights as a result of the agreement.

116. FRBA intentionally and without justification interfered in that ongoing business

relationship.

117. FRBA was without justification or privilege in interfering in the business

relationship.

118. RSI has been damaged as a result of the breach to this business relationship.





compensatory damages, exemplary damages, diminution in value, special damages, and its

attorneys' fees and costs.

COUNT V - ACCOUNTING

FRBA


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121. This is an action for an accounting against FRBA.

122. The various executed and unexecuted agreements between RSI and FRBA

involved extensive and/or complicated accounts, specifically the delineation of Federal grant

funds and other assets associated with the financing, operation, purchasing, installation, and

management of the FRBA PROJECT and the related network and equipment.

123. It is not clear that the remedy at law is a full, adequate and expeditious as it is in

equity.

124. RSI is entitled to an accounting of all FRBA funds.

WHEREFORE Rapid Systems, Inc., demands an accounting from FLORIDA RURAL

BROADBAND ALLIANCE, LLC, for all funds it has received, dispersed, and otherwise

controlled as part of the grant.

COUNT VI - CONSTRUCTIVE TRUST


126. This is an action for constructive trust against FRBA.

127. FRBA made a both an express and implied promise to RSI, that it would engage

RSI to deploy and operate the FRBA middle mile network in the SCRACEC.

128. In reliance thereon, RSI provided a commitment to FRBA of RSI's matching

investment of cash, equipment and in-kind services relative to the HC BROADBAND

NETWORK.

129. At all times material hereto and RSI and FRBA had a confidential relationship

pursuant to the RSI Memorandum and its relationship with FRBA as a "project partner" relative

to the Grant Application.

130. RSI has been unjustly enriched as a result of the transfer.

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WHEREFORE Rapid Systems, Inc., demands a constructive trust on all funds, equipment,

networks associated with the Grant Award to FLORIDA RURAL BROADBAND ALLIANCE,

LLC.

COUNT VII - DEFAMATION

Grady Johnson


132. This is an action against JOHNSON for defamation.

133. JOHNSON made the following false and defamatory statement of and concerning

RSI:

That RSI was under a criminal investigation;

That RSI was utilizing RSI's in-kind contribution to pull the rug out from under

the total project

134. JOHNSON made these statements without reasonable care as to truth or falsity of

those statements.

135. JOHNSON'S statements caused actual damage to RSI.

WHEREFORE Rapid Systems, Inc. demands judgment against GRADY JOHNSON for

all damages for defamation.

COUNT VIII - BREACH OF FIDUCIARY DUTY

FRBA

136. Rapid Systems realleges and reavers paragraphs 1 through 81 as if" fully set forth

herein.

137. This is a cause of action against FRBA for breach of fiduciary duty.

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138. At all times material hereto and RSI and FRBA had a confidential relationship

pursuant to the RSI mou and its relationship with FRBA as a "project partner" relative to the

Grant Application.

139. FRBA breached that fiduciary duty by its participation in the Fraudulent Scheme.

140. Rapid Systems has been damaged as a result of this breach.

WHEREFORE Rapid Systems demands judgment against FLORIDA RURAL

BROADBAND ALLIANCE, LLC, for all damages it has incurred as a result of the breach of

fiduciary duty including but not limited to compensatory damages, together with interest, costs

and such other relief as the Court deems just and proper.

COUNT IX - QUIET TITLE

FRBA


142. This is an action for quiet title against FRBA.

143. RSI holds equitable title to the Disputed Equipment.

144. FRBA has clouded or a asserted a claim on Rapid Systems superior ownership

interest in the property by filing State of Florida Uniform Commercial Code Financing

Statements as more fully set forth in paragraph 91 herein.

145. It is unclear that RSI has an appropriate remedy at law as it does in equity.


BROADBAND ALLIANCE, LLC for all damages it has incurred as a result of the cloud and

claim it has placed on the property and demands removal of all claims, associated therewith.

COUNT X - RICO CIVIL

FRBA Fraud Conspirators


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147. This is an action for violation of Florida Statutes §772.103, civil RICO violations

against the Fraud Conspirators.

148. The Fraud Conspirators were part of an enterprise which they were associated

with in committing various crimes including, but not limited to, perjury, double-dipping Grant

Award monies and misappropriating and converting Grant Award monies.

149. As part of this enterprise and in furtherance thereof, the Fraud Conspirators

engaged in a pattern of racketeering activity.

150. This activity included the Fraudulent Scheme, the Fraud Conspirators having the

same accomplices, results, or intents.

151. RSI was damaged as a result of this activity.

WHEREFORE Rapid Systems, Inc. demands judgment against the Fraud Conspirators,

for violation of Florida Civil RICO statues §§772.103 et al. including all compensatory damages,

together with interest, costs and such other relief as the Court deems just and proper.

COUNT XI - CIVIL CONSPIRACY

FRBA Fraud Conspirators

152. RSI realleges and reavers paragraphs 1 through 91 and 136 through 140 as if fully

set forth herein.

153. This is an action for civil conspiracy against the Fraud Conspirators.

154. The Fraud Conspirators acted in concert to accomplish an unlawful purpose or

accomplish some purpose by unlawful means, namely, the breach of fiduciary duty and the acts

set forth herein in furtherance of the FRBA Fraud Scheme.

155. Each of the Fraud Conspirators acted overtly in pursuance of the conspiracy.

156. Each act done in support of a conspiracy by one of the Fraud Conspirators is an

act for which each is jointly and severally liable.

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157. As a result, RSI has been damaged.

WHEREFORE Rapid Systems demands judgment against the Fraud Conspirators for

civil conspiracy including compensatory damages, together with interest, costs, and such other

and further relief as the Court deems just and proper.

COUNT XII - BILL OF DISCOVERY


159. This is an action for discovery against Henry Kuhlman ("Kuhlman") and Frank

Kirkland ("Kirkland").

160. Kuhlman and Kirkland have had significant dealings with the JOHNSON and the

other Fraud Conspirators and RSI believes they have made disparaging statements about RSI in

furtherance of the Fraud Scheme.

161. To date RSI has been unable to verify Kuhlman and Kirkland's statements and

extent of involvement in the FRBA Fraud Scheme.

162. RSI is informed and believes that Kuhlman and Kirkland have possession of

records regarding their involvement in the Fraud Scheme as well as communications with JOHN

Doe(s) and other third parties (yet unknown to RSI) that are disparaging and defamatory to RSI.

163. RSI has no means of discovery of this information.

164. RSI intends to bring an action for defamation, tortious interference with business

relationships, and civil conspiracy, but does not know the names of the persons, specific

statements, and other relevant facts that are being concealed by Kuhlman and Kirkland.

WHEREFORE RSI demands judgment against Henry Kuhlman and Frank Kirkland

permitting discovery and or depositions to obtain the information requested and granting it any

and all other relief the court deems just and proper under the circumstances.

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JURY TRIAL DEMAND

RSI demand a trial by jury on all issues so triable.

Dated this 18lh day of April 2013.

Respectfully submitted,

Is/ Philip A. Beach DANIEL A. NICHOLAS, ESQ. Florida Bar No.: 847755 BRADLEY S. BELL, ESQ. Florida Bar No.: 184306 DOUGLAS J. COLLINS, ESQ. Florida Bar No.: 025838 WILLIAM A. TIEDER, ESQ. Florida Bar No.: 063451 PHILIP A. BEACH, ESQ. Florida Bar No.: 750751 NICHOLAS & BELL, P.A. 201 E. Kennedy Blvd., Suite 850 Tampa, FL 33602 Telephone: (813)637-9200 Facsimile: (813) 464-2925 Attorneys for Plaintiff

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Alleged BTOP/NTIA Fraud - $25M lawsuit filed over BTOP/NTIA funds in Florida

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