Doc. 153-1 -- Affidavit of R. Lance Flores

United States District Courtfor the

Northern District of TexasDallas Division

R. Lance Flores,Vicki Clarkson,

Plaintiffs,

v.

Scott Anthony Koster, et al.Defendants.

C i vi l Ac t i on

№ 3:11-cv-00726-M -BH

PLAINTIFFS’ DAMAGES PROVE-UP

AFFIDAVIT OF R. LANCE FLORES

My name is Rudolph Lance Flores (hereinafter “R. Lance Flores” the “Affiant”), a

plaintiff in the above-styled and -numbered cause. I am competent to make this

declaration and hereby certify under penalty of perjury as provided by 28 U.S.C. §

1746, and further state that the facts stated herein, and the verified and sworn

evidence in exhibit attached hereto or otherwise entered into the record of the

Court by the Plaintiffs, are within my personal knowledge. If called upon to testify

upon the statement, facts and evidence stated herein, I would competently testify to

same set forth herein:

DECLARATION

1. Several months prior to April 14, 2008, I initiated the funding for a screenplay

and film project I had written and developed having a then net present value (NPV)

of between $4-5million to be produced and filmed and produced in Detroit

qualifying for Michigan Film Industry Tax Incentive (“MFITI”) program. (doc. 115 at

1

Case 3:11-cv-00726-M-BH Document 153-1 Filed 08/08/12 Page 1 of 13 PageID 2228

13) Prior to the application and signing of the MFITI by Gov. Jennifer Granhol, I

began working with Janet Lockwood the Director of the Michigan Film Office

Michigan Film Office, along with the Michigan Film Office Advisory Council.

2. About July of 2007, I began negotiations with several finance companies that

provided factoring service for film tax/grant services. (e.g., doc. 114 at 8) My

purpose for purchasing an SBLC to was to secure Non-recourse Loan & Trade

Funding1 available from a number of registered commodity/financial trading and

financial management/trading companies for my 2009/2010 film slate and a San

Antonio studio/sound stage facility.

3. I expanded the project into a film slate (doc. 116) in order to make it more

attractive to financing enterprises by adding a range of low to medium budget films

in popular movie genres with high probability profit margins and distribution of

risk. This strategy yielded opportunities to lever film slate project using project

assets as collateral for non-recourse financing and trade programs as the majority of

legitimate trade programs with guarantees required project sizes of $100,000,000

or greater.

4. After examination of several financing proposals the first proposal considered

was for a loan financing with Prosperity International LLC (“Prosperity”). The early

1 Non-recourse Loan & Trade Funding (NRCL/Trade). The process and prerequisites for this structured

funding is essentially constructed by three financial activities. The client (MFI & Flores’ co-signer) secures aline-of-credit, typically a standby-letter-of-credit or “SBLC”, in this case, the SBLC purchased from the cash assetfrom the factoring of the $8million film incentive receivables. The second activity is the non-recourse loanwhich the provider assumes the loan and proceeds for trade. The client (borrower) exchanges the use of theloan assets for trade by the provider (lender) for a defined period, in the instant case, twelve months. In turn,for the use of client’s loan, the provider guarantees a proportional payout of the loan funds to the client overthe period, and initiates his trades. At the end of the period, Client’s loan is retired without any recourse(repayment) and provider keeps the earnings from the trades over the amount of the loan retirement amount.

In essence, the MFI/Flores secures the loan with their assets and the provider (lender/trading company)makes scheduled payments to the Client, pays off the loan from the trades and keeps after-loan-payoff profitsfrom trades.

2


discussions negotiated for a 5-10 year note for the Burgess/Prosperity loan. At the

same time I was negotiating the terms with a registered commodities trading

company, through Dave Svec and Hoang Nguyen with Minh Da Nguyen the President

and C.E.O. of MC Commodities Trading, Inc. (doc. 111 at 54) MC Commodities

Trading, Inc. (“MCCT”) would joint venture with Prosperity using MCCT their trade

facilities to payoff the loan. However MCCT, after its due diligence processes, could

not verify Prosperity’s information and Burgess refused to provide verifications of

pertinent information. The joint venture with Prosperity was then dissolved. It

would be later learned that Michael Burgess the principal of Prosperity was stealing

funds from clients and was eventually convicted and sentenced to fifteen years in

federal prison.2

5. Following the Burgess/Prosperity due diligence failure, MCCT offered a larger

NRCL/Trade for Two-hundred Fifty million dollars ($250,000,000) for the funding

of the Film Slate and the purchase and initial development of the Loan Star Brewery

property as a motion-picture/video media production facility. Additionally, the net

present value of the assets were to be further increased by the incentive benefits

offered by the City of San Antonio for the construction, operation, and employment

related to the facility which would bring in an estimated One-hundred Million

Dollars to the San Antonio economy annually increasing over time as the facility

matured. Projections estimated that the studio/sound stage facility would bring two

to three hundred million dollars into the local economy annually as it matured. More

2 USA v. Burgess, 6:10-cr-00161-ACC-GJK (U.S. Dist. Ct. MD Florida, Orlando Div. 2011); also, Ex-business

manager who owes $94M gets 15-year federal prison sentence, November 23, 2011|By Amy Pavuk, OrlandoSentinel:http://articles.orlandosentinel.com/2011-11-23/news/os-michael-burgess-prosperity-international-senten-20111123_1_federal-prison-sentencing-hearing-federal-money-laundering-case

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specifically, I had face-to-face discussions with San Antonio City Council Member

David Medina3 concerning the development of the Federal Empowerment Zone

within his district and the education, training, and employment of the financially

depressed community of his district and the development of the South Side of San

Antonio.

6. The funding structure of the MCCT funding would occur in such a manner in

which I and MFI would pledge assets and assign our cash assets and properties and

MCCT would trade the instruments. The commodities trading company would then

fund us 66% of the $250MM (165MM)in equal amounts ($13,750,000/month).

7. Again, in exchange for the use of our debt instrument and use of assets our

debt would be retired at the thirteenth month.

8. The loss of $165,000,000 funds, damages, were unquestionably, directly and

proximately caused by the RICO Defendants actions and conspiracy as alleged and

more fully set forth in the Plaintiffs’ FIRST AMENDED COMPLAINT and the

corresponding sworn evidence attached thereto.

9. I, the Affiant, having the ownership of all MFI assets, rights, and property

returned to me, and being the guarantor of all loans and debts incurred in and by all

financial transactions, and Vicki Clarkson, also having unencumbered standing,

brought this matter before this Court pursuant to, inter alia, Section 901(a) of the

Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted October

15, 1970), and codified as Chapter 96 of Title 18 of the United States Code, 18 U.S.C.

§ 1961–1968; and

10. that Plaintiffs specifically brought an action pursuant to 18 U.S.C. § 1962(a),

3 http://www.sanantonio.gov/Council/d5/

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(c), (d), and other causes of action elucidated below:

1. COUNT 1– 18 U.S.C. §§ 1962(c) (Against the RICO Defendants),

2. COUNT 2 – 18 U.S.C. §§ 1962 (a) (Against the RICO Defendants),

3. COUNT 3 – 18 U.S.C. §§ 1962 (d) (Against the RICO Defendants),

4. COUNT 4 – Fraud in the Inducement (Against all Except Cook and Divens),

5. COUNT 5 – Common Law Fraud, (Against all Defendants),

6. COUNT 6 – Negligent Misrepresentation and Deceit (Against all Defendants),

7. COUNT 7 – Fraud by Non-disclosure (Against all Defendants),

8. COUNT 8 – Aiding and Abetting Fraud (Against all Defendants),

9. COUNT 9 – Breach of Confidential or Special Relationship (Against all

Defendants),

10. COUNT 10 – Promissory Estoppel (Against all Defendants),

11. COUNT 11 – Intentional Infliction of Emotional Distress (Against all

Defendants),

12. COUNT 12 – Civil Conspiracy (Against all Defendants).

11. That Plaintiffs’ Compensatory Actual Damages result from Defendants'

intentional and willful acts that directly or proximately caused, inter alia, the

following damages:

12. Direct and Proximate Caused Actual Damages inflicted by the RICO

Defendants exceed an amount greater than $220,000,000 and, in fact, is

$357,014,558 as itemized:

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Source $ Assets Description & Reference

MC Commodities Trading, Inc.Minh Da Nguyen,President/C.E.O. Non-recoursefunding & trade.

‡

$165,000,000 66% × $250,000,000 BG = $165,000,000monetized; Exs Vol. 10, Exs 212, 213, 221,222, 231, 232.

Mockingbird Films International2009/2010 Slate production

$170,350,200 Net Profits. Ex. Vol. 15 “Slate Summary” pg 4of 54. Does not include 2010/2011 and2011/2012 production slate revenues.

Michigan Film Incentive Rebatefor The Black Messiah Murders

$7,972,149 Ex. Vol. 14, Ex. 258. Usable for slate pre-funding through Fallbrook (Exs. Vol. 13, Ex.252) to purchase MC Commodities Trading,Inc. SBLC.

Texas Film Incentive Grant forAlter Ego

† and Killing Frank

$1,996,345 Ex. Vol. 13, Ex. 251; Ex. Vol. 15, Ex. 259 at33, 51 (see also references below)

††

City of San Antonio - Lone StarBrewery (Studio) Incentive Pkg.

Ex. Vol. 13, Ex. 251. Value of benefit packageestimated at $17MM, not calculated.

St. George’s Project Inc.,studio/sound stage facilityfunding

Value of $510MM funding benefit & value offully developed property losses, notcalculated.

Lone Star Studio Lost Revenues $11,508,864 Loss of studios and sound-stage 1 yearrevenues $13,539,840 at 85% use.

Vicki Clarkson $187,000 $90,000 funding plus agreed film profitsharing($80,000 BG purchase to Alicorn CapitalMgt)

Damages $357,014,558 Actual Direct & Proximately CausedDamages

† Alter Ego (Brennert/Hart, 2009)originally scheduled for Louisiana shoot anticipating 30% taxcredit rebate w/approx. net of 20% tax credit benefit.†† Both Alter Ego and Killing Frank (Holland, 2009) rescheduled for production in Texas.‡ Combines two financial processes. 1) MFI purchases an SBLC and collateralize a loan where thelender is only entitled to repayment from the profits of the project the loan is funding, not fromother assets of the borrower; 2) then the instruments are traded much like CMO (collateralizedmortgage obligations) are traded.

13. Consequential Compensatory Damages. Plaintiffs’ plead damages of Three-

million Dollars ($3,000,000) for consequential compensatory damages awarded by

virtue of the losses suffered by the Plaintiffs resulting from the Defendant's

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intentional and willful criminal and tortuous acts causing injury to the Plaintiffs’

physical health, infliction of extreme mental anguish, and harm to Plaintiffs’

professional reputations as to lower them in the estimation of the community,

deterring third persons from associating or dealing with them throughout the

industry, and additionally impugning their integrity and standing in society.

14. Exemplary Damages resulting from Defendants' malice and criminal acts

greatly harmed the Plaintiffs, producers, crews, talent, employment in the City San

Antonio and Texas communities, revenues to ancillary business, and City of San

Antonio, Texas tax revenues.

15. Pre/Post- Judgment Interest. Plaintiffs also seek pre- and post-judgment

interest on damages and taxable costs of court.

16. Attorneys' Fees are not applicable in this instance, but should not be deemed

waived as Plaintiffs anticipate attorneys' fees to be incurred following the summons

and complaint service of the balance of the RICO and Nominal Defendants at which

time Plaintiffs shall hand over the prosecution of this case to their Dallas law firm.

17. that Plaintiffs were harmed directly and proximately by the Defendant’s

RICO predicate crimes and violations, resulting in actual damages for which Plaintiff

are entitled to mandatory treble damages in the amount of not less than

3 × $220,000,000 plus other compensatory relief, attorneys fees and costs.

18. that Plaintiffs shall attach hereto their verified evidence in exhibit, affidavits

and in support thereof, and proposed order on Plaintiffs’ Prove up and motion for

entry of judgment;

19. that Mark A. Gelazela after accepting Wilde's offering of an opportunity to

engage in the operations and rewards of Wild’s organizations, Gelazela subscribed

Koster, Childs and Emre, the Milaca Gang, into the criminal fold;

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20. that at all time material to this case Koster, Childs, and Emre were engaged in

illegal activities internationally and within this District. Defendants operate,

promote, facilitate and sell financial instruments and services on their, and others'

Internet websites existing under their various Domain Names in direct

telemarketing and e-mail marketing activities acquiring prospect information

through intelligence gathering efforts in various industries that use the same or

similar financial instrument and services which are promoted and marketed by the

Defendants;

21. that Francis E. Wilde, by and through the Wilde Mob, engaged Bruce H.

Haglund, Atty at Law into the Association-in-Fact as the mob’s Money Man;

22. that Francis E. Wilde engaged the services of Haglund as escrow attorney for

a trust account; and that Woods and Gelazela were offered the opportunity to bring

clients into the program and arranged for Haglund's involvement;

23. that during or prior to the Fall of 2009, RICO Defendants Koster, Childs and

Emre operated through Koster's company, Alicorn Capital Management LLC, a

"Legal Entity" and RICO Enterprise, referred also as the "Alicorn Enterprise;" that

the association of Alicorn's principal, Scott Koster and non-principals,

non-employees Childs, Emre, and legal counsel, the Thomas P. Harlan, formed the

Association-in-Fact Enterprise, or otherwise the "Milaca Gang"; and that the group

used the legal entity Alicorn Enterprise as their operational vehicle for

confederating with the Wild Mob;

24. that the Syndicate for purpose of profiting from expanded participations in

the Syndicate's ongoing activities, extended and continued the fraud, predicate

crimes and overt criminal acts in furtherance of the conspiracy and racketeering

with newly engaged criminal organizations;

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25. that RICO Defendants, each having joint and several criminal and civil

liability, through their various legal enterprises, association-in-fact enterprises, and

by their direct individual and collective racketeering acts and conspiracy, did secure

$18,000,000,000 or more in negotiable securities (doc. 36 at 168), other cash assets

located in domestic and foreign banks, and have purchased assets with those funds,

e.g., a $90,000 Land Rover purchased by Francis Wilde (doc. 36 at 50) and $800,000

deposited in a bank account of his wife Maureen O’flanagan Wilde, &c.; further

26. that from both the pre-discovery investigations of the Plaintiffs’ and the

Securities and Exchange Commission (Washington D.C. and Los Angeles) it was

found that Woods, notwithstanding receiving and possessing other illicit monies

from his active involvement in conspiracies of the related RICO enterprises, received

from Wilde by wire through Haglund, $565,000 as a commission fee for the

solicitation and collection on the securities offering by the “Syndicate” related to the

same RICO acts involving the members of the Milaca Gang (doc. 80 at 222);

27. that the Plaintiffs’ pre-discovery investigation uncovered that RICO

Defendants used the Plaintiffs’ cash assets to acquire at least one of ten or more

financial instruments including bonds, of which one domestically acquired $3 billion

bond and a European $5 billion bond4 with total face value equal to or exceeding

eight-billion dollars ($8 billion USD). (doc. 36 at 42)

28. that a European $5 billion bond referenced (doc. 36 at 168) is directly

4 Bank of America and KFW Bank - Financial services Headquarters Frankfurt, Germany. KFW banking

group is a German government-owned development bank, based in Frankfurt. Its name originally comes fromKreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute. It was formed in 1948 after WorldWar II as part of the Marshall Plan. It is owned by the Federal Republic of Germany (80%) and the States ofGermany (20%). It is led by a five-member Managing Board headed by Ulrich Schröder, which in turn reportsto 37-member Supervisory Board chaired by Philipp Rösler, Federal Minister of Economy and Technology,since May 2011.

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associated with the Plaintiffs’ investment funds. The HSBC pre-advise transaction

code and the bank transmission confirmation was presented to the Plaintiffs as

proof and verification of the instrument that was acquired (doc. 1-4 at 21), in part,

from their funds in behalf of the Plaintiffs. Since the purchase the Five-Billion Dollar

instrument the Plaintiffs have located its tracking and note that the bond has

matured, and

29. that there were, or still are, at least nine MTN5 offshore instruments, that

were acquired. The various instruments are either European or Pacific Rim financial

instruments secured by the Syndicate using investors’ money, and never paying out

their earning or returns, just as Divens had done previously in stealing the Cobolt

CMO interest from Betts and Gambles. (doc 36 at 169);

30. that Plaintiffs’ calculations estimate that the face value sum of all

instruments for which they have become aware, includes another four to ten billion

dollars, totaling not less in value, than eighteen billion U.S. Dollars ($18,000,000,000

or €14,428,854,000);

31. that the RICO Defendants and Nominal Defendants collectively, by and

through, inter alios, various legal, criminal association-in-fact enterprises, criminal

enterprises, and unnamed RICO Co-conspirators including:

1. Alicorn Capital Management LLC, Berea Inc.,

2. BMW Majestic LLC,

5 Investopedia explains 'Medium Term Note - MTN'

“1. Notes range in maturity from one to 10 years. By knowing that a note is medium term, investorshave an idea of what its maturity will be when they compare its price to that of other fixed-income securities.All else being equal, the coupon rate on medium-term notes will be higher than those achieved on short-termnotes.

2. This type of debt program is used by a company so it can have constant cash flows coming in fromits debt issuance; it allows a company to tailor its debt issuance to meet its financing needs. Medium-termnotes allow a company to register with the SEC only once, instead of every time for differing maturities.”

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3. Bush Law Center LLC,

4. Colker-Childs-IGM,

5. Law Offices of Jon Divens & Assoc. LLC,

6. Matrix Holdings LLC,

7. Success Bullion LLC,

8. Wiseguy's Investments LLC, and

9. the Amenpenofer Syndicate (the aggregate international

association-in-fact enterprises of the Wilde Mob), the Milaca Gang, the Atlanta

Family, and the Contra Costa Family, as identified and fully described in

Plaintiff’s First Amended Complaint, transacted through, own, held, or

continued to hold their ill-gotten, tainted, or otherwise criminally acquired

cash assets and negotiable securities, in or through the following financial

institution/bank accounts from which, inter alia, the Plaintiffs may recover

damages from those institutions identified in Appendix A, hereto enclosed.

ACKNOWLEDGMENT

EXECUTED under penalty of perjury as pursuant to 28 U.S.C. § 1746 on

Wednesday, June 27, 2012.

s/

R. LANCE FLORES

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APPENDIX A

Account Holder, Signatory or

Beneficiary

Bank SWIFT or

Routing

Account Number Transaction

Code

SIN/CUSIP

Bruce Haglund Wells Fargo Bank 121000248 2301

Bruce Haglund Wells Fargo Bank 121000248 UZW1

Trask Corporation Limited or

Assigns

Deutsche Bank DEUTCNSHPBC 20711

Dale Briggs & Associates

IOLTA

Wells Fargo Bank WFBIUS6S 8259

Steven Woods Wachovia Bank

(LA, California)

Steven Woods Ozark Mountain Bank 81518375 5676

James Linder Bank of America 26009593 60191

Maureen Wilde Bank of America 26009593 8395

Falcon International Holdings Citizen's Bank 21313103 3194

MM5 LLC M&T Bank 52000113 6352

O'Melveny & Myers Citibank 21000089 0224

James Wan & Company OCBC Bank OCBCSGSG 1301

Hing Teik Choon / BMWT /

Falcon International

HSBC HSBCHKHHHKH 7-888

Baker McKenzie LLP Barclays Bank 26002574

Hing Teik Choon Unicredit Bank DEKRUA22

Lufti Abdulhaq Wakid Citibank International

Banking PLC

CITI059AUS N677

Hing Teik Choon JP Morgan Chase Bank CHASUS33 CUSIP:

Matrix/BMW/Hing Teik

Choon/New Eurasia Impex

Limited

KFW Bank ISIN:

Hing Teik Choon / New

Eurasia Impex Limited

Bank of America ISIN:

Altofin Bancorp Ltd Volksbank Hungary

Private Ltd

MAVOHUHB

0008

Altofin Bancorp Ltd Volksbank Hungary

Private Ltd

MAVOHUHB

0007

0

Deutsche Bank ISIN:

Deutsche Bank ISIN:

Deutsche Bank ISIN:

Deutsche Bank ISIN:

Deutsche Bank ISIN:

Deutsche Bank ISIN:

Deutsche Bank ISIN:

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Deutsche Bank ISIN:

Deutsche Bank ISIN:

CW Capital CUSIP:

JP Morgan Chase Bank CUSIP:

FannieMae CUSIP:

Francis Wilde or Assigns Falcon Bank (Switzerland) 114915803

Francis Wilde or Assigns Wegelin Bank

(Switzerland)

WEGECH2GXXX

Francis Wilde or Assigns Rosbank

(Moscow, Russia)

UNEICHGGXXX

Scott Anthony Koster TCF Bank 7813

Kerim S. Emre US Bank 7523

John Childs Citibank 1911

Winston J Cook Sun Trust 2100

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Doc. 153-1 -- Affidavit of R. Lance Flores

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