Summary#expandContractAll updated: 5 May 2020

Plaintiff: Jonathan Walker...EXPAND CONTRACT
Jonathan Walker is a Plaintiff in this lawsuit. Professionally, he has an academic and commercial background in IT.
  • Knowledge 2000 Founder
    The Plaintiff was the founder of Knowledge 2000 (referred to herein as 'K2000', see below).
  • Prostate Cancer
    In 2001, the Plaintiff was diagnosed with prostate cancer, and underwent a radical prostatectomy at Cottonwood hospital on 31st January, 2001 by Dr. Mark Byard. At the time his prognosis was not good, and forced him leave K2000 in November 2002, and to return to his native Australia in 2003 in order to get support from his extended family.

Defendant: Wendy Heald...EXPAND CONTRACT
Wendy Heald is the ex-wife of the Plaintiff, and is the Defendant in this lawsuit.
Contact Information
  • Address: 285 El Camino Grande, Sedona 86336
  • Email: wpheald@gmail.com
Divorced in April 2000 -- Main cause was her alcoholism, which clashed with the Plaintiff`s lifestyle preferences.
Professional Experience -- In her working life, she had worked in the following roles:
  • Law -- The Defendant was a "legally-savvy" person, having worked in Law Offices throughout her lifetime. In the 1990s, she singlehandedly sued her own boss, an experienced lawyer, and obtained successful judgement. She was easily competent enough to evaluate a situation for potential illegality.
  • K2000 -- She had been worked in various roles in K2000 and was knowledgeable about its history, its marketing initiatives, and its financial condition. In November 2002, she was well aware of the surge in sales that began a decade long sales rise.
Family -- The Defendant comes from a wealthy Connecticut family. In the 1960s her grandfather, William D. Maus, was Chairman of Marsh and McLennan, the world`s largest insurance brokerage firm.
The Defendant received a very substantial inheritance after the death of her mother in 2003, and again after the death of her brother in 2018. Notwithstanding, expect that she will feign to be impoverished, which couldn`t be further from the truth.

Key Player: Ted Foley EXPAND CONTRACT
Ted Foley was a wealthy retired TRW executive in his mid-seventies. He was an original investor in K2000 and a K2000 corporate officer.
He was also the orchestrator of the fraudulent elimination of the Plaintiff`s (sons') financial interest in K2000`s business assets. (see Share Elimination Fraud)
He died in 2013.
  • Investor...EXPAND CONTRACT
    When the Plaintiff had originally conceived of founding K2000, he enthusiastically supported it, provided business advice, and made an investment (50,000 shares).
  • K2000 Roles (director and officer)...EXPAND CONTRACT
    Living locally, and with time on his hands, he enthusiastically offered to take on key company roles (initially, financial, investment, investor relations, and later marketing, and sales) without salary.
    Recognising that expertise like his was very important to running the business, and having worked on several successful projects with him, the Plaintiff accepted wholeheartedly. In addition, it saved valuable investor capital and it left him freer to concentrate on building the company`s technologies and products.
    Ted Foley was also a director of the company, and took a lead role in managing board business and meetings.
    • Management of the Business Side of the Company EXPAND CONTRACT
      From early on, Ted Foley managed all the business/financial side of the Company. He managed the bookkeeping, payroll, payroll taxes, business planning, investment offers, investor relations, and the relationship with K2000`s authors. His home was nearby K2000`s offices and he maintained the Company`s records in his home office.
      In fact, he ran every aspect of the Company except R & D, product development, and product support. This freed the Plaintiff to focus on these areas exclusively.
    • K2000 Board EXPAND CONTRACT
      Ted Foley was on the board and ran the board. He called all the Board meetings, set the agenda, ran the meetings, and took the minutes.
    • Business Plans & Investment Offers EXPAND CONTRACT
      Ted Foley helped the Plaintiff develop the initial business plan for raising seed capital. Thereafter, he managed the development of all business plans and investment offers.
    • Marketing & Sales EXPAND CONTRACT
      After K2000`s product was developed, he managed marketing and sales, until in 2001 the Plaintiff shifted the marketing focus onto Internet marketing.
  • Shortcomings, Downside, Dark Side EXPAND CONTRACT
    Despite his valuable business talents and experience, Ted Foley had a dark side. He was a type-A personality who tended to dominate group meetings;
    • Board Meetings EXPAND CONTRACT
      He insisted on setting the agenda and taking the minutes, that frequently expressed his spin rather than what had actually been decided.
    • Big Corporation Mindset EXPAND CONTRACT
      Coming from a corporate giant like TRW, he tended to want to do things in a big way, which led to wasted investment capital on untested marketing ideas.

Key Entities ... EXPAND CONTRACT
Knowledge 2000, Inc (K2000) EXPAND CONTRACT
In late 1996 the Plaintiff founded K2000, an Arizona corporation, with the mission to build a Web-based eLearning technology to support products for the CPA Exam Review market.  He raised $1,500,000 from 40+ individual investors. K2000 commenced operations in Jan 1997 with offices in Sedona, AZ.

Efficient Learning Systems (ELSco) EXPAND CONTRACT
Efficient Learning Systems was an Arizona corporation founded in 2003 by Ted Foley and was used by him to covertly plunder K2000`s business assets and to adjust the shareholder equity distribution to favor Ted Foley and his close circle, and to disadvantage all other K2000 shareholders.
ELSco was sold to John Wiley & Sons in November 2012 for $24 million.


Case Overview
The following are an executive summary of the major facets of this case.
  • Claims... EXPAND CONTRACT
    The following is a summary of Plaintiff`s claim. Details are provided in a separate webpage (see link under  Claims  on the Left Sidebar) The following is a summary of Plaintiff`s two claims.
    Breach of Child-Support Collateral Terms... EXPAND CONTRACT
    The Plaintiff claims that the Defendant breached the terms of use of the 50,000 K2000 Child-Support collateral shares that the plaintiff had reserved for her to cover his child-support obligation.
    It is further claimed that this breach meets the legal elements of fraud.

    Her misuse took the form of
    • Violation of Intended Purpose... EXPAND CONTRACT
      Upon consummation in 2004, the 50,000 K2000 Child-Support collateral shares carried a mandate that they be used to fully or partially retire the Plaintiff`s child-support debt.
      The Defendant chose to ignore this explicitly stated intended purpose, and instead used them to enter into an agreement with Ted Foley to convert the 50,000 K2000 Child-Support collateral shares into 23,500 ELSco shares as a personal investment.(See Conversion Deal)
    • Hiding of Actions & Decisions... EXPAND CONTRACT
      Because of the "Usage Mandates" associated with the 50,000 K2000 Child-Support collateral shares, the Defendant had a obligation to report to the Plaintiff and the Division of Child-Support any action or decision that would materially deviate from those mandates. Instead, the Defendant chose to ignore that obligation, and to collude with Ted Foley to hide the Conversion Deal from both the Plaintiff and the Arizona Division of Child-Support.

    The above two actions resulted in the Plaintiff`s Child-Support debt accumulating though compound interest for over a decade. It also denied him the opportunity in 2004 to discover further wrongdoing.

    Share Elimination Conspiracy... EXPAND CONTRACT
    The Plaintiff claims that the Defendant conspired to assist Ted Foley to fraudulently eliminate the Plaintiff`s (sons') financial interest in K2000`s business assets. It is further claimed that this conspiracy was based on several acts that meet the legal elements of fraud. (see Conspiracy Fraud)
    In 2017, the Plaintiff`s eldest son was surprised to discover documents and emails on the Defendant`s computer that ultimately led to the Plaintiff uncovering of frauds associated with the expropriation of K2000`s business assets. These frauds were devised to entirely eliminate his financial interest (his sons' financial interest) in those assets in order to enrich the perpetrators of those frauds.
    The Defendant`s assistance in these frauds took the form of
    • Hiding of the Conversion Deal from Plaintiff to Prevent Discovery... EXPAND CONTRACT
      Bound by the "Usage Mandates" associated with the 50,000 K2000 Child-Support shares, the Defendant had an obligation to report any action or decision that would materially deviate from those mandates. Instead, she chose to ignore those mandates, and to collude with Ted Foley to hide the Conversion Deal from the Plaintiff (and the Arizona Division of Child-Support).

    • Hiding the elimination of the Plaintiff`s (Sons') financial interest in K2000`s Business Assets... EXPAND CONTRACT
      At least by 2012 with the discovery of the ELSco-JohnWiley Stock Purchase Agreement governing the sale of ELSco to John Wiley & Sons, the Defendant would have realized from the Capitalization Table in that agreement that the Plaintiff`s (sons') K2000 shares had never been "converted" to ELSco shares, and therefore their interest in K2000`s business assets had been eliminated.
      Furthermore, she had learned from Notification Of Collateral Shares email in 2003 that the Plaintiff had transferred his K2000 shares to his sons. Nevertheless, she decided not to contact the Plaintiff to seek answers to how their interest in K2000`s business assets had been eliminated.
      This act directly protected against the discovery of the criminality underlying the Share Elimination Fraud.

    • Nonfeasance with respect to the Initiation of a claim ... EXPAND CONTRACT
      Indemnity Claims -- Also, in the ELSco-JohnWiley Stock Purchase Agreement governing the sale of ELSco to John Wiley & Sons, there is a clear recognition in its Indemnity clause of potentially valid claims by those K2000 shareholders who had not participated in the 2003 conversion of their K2000 shares to ELSco shares [the only K2000 shares that had not been "converted" were the Plaintiff`s original K2000 shares (51%) that he had transferred to his sons]. $3.5M was set aside to cover such claims with payout delayed by two years until 2014, presumably to allow some time for such claims to emerge.
      Cognizant of Unconverted Shares -- From the text of that agreement, the Defendant knew that none of the Plaintiff`s (sons') K2000 shares had been converted to ELSco shares and that therefore owners of those shares (the Plaintiff`s sons) were eligible to make a claim against that $3.5M held in escrow until 2014.
      Failure to Investigate or Take Action -- The Defendant failed to take any action to investigate why the Plaintiff`s (sons') K2000 shares had not been converted to ELSco shares, nor did she precipitate any claim for their sons against that escrowed $3.5M. Initiating such a claim successfully would have necessarily required contacting the Plaintiff to gather the exact details of the transfer of his K2000 shares to their sons.
      Reluctance to Risk Exposure -- Contacting the Plaintiff with such a request would ultimately have exposed the Share Elimination Fraud when the Plaintiff discovered that his sons owned no ELSco shares (when they should have been the majority shareholders of ELSco).
      But at the same time it would also have exposed her Breach of Child-Support Collateral Terms and other criminality relevant to the Second Lawsuit.
      Thus, the Plaintiff believes that to protect herself against being exposed, the Defendant chose to maintain her allegiance to Ted Foley`s agenda to protect against discovery 1) of his perfidy with respect to the expropriation of K2000`s business assets, and 2) of the elimination of the Plaintiff`s (son`s) stock interest in those assets.

      This deliberate nonfeasance provides compelling evidence of the Defendant`s complicity in the Share Elimination Conspiracy. It resulted in the Plaintiff`s ignorance of the possibility of such a claim. Thus, her own sons were significantly injured by being denied a multi-million dollar inheritance while she was guaranteed of a second payout of ~$13K from that $3.5M in 2014.

      This shocking act of betrayal provides further evidence of her deliberate decision to block any information that could result in the Plaintiff`s discovery of the Share Elimination malfeasances. For mainly financial reasons (but perhaps also to avoid criminality exposure), it was more important to her to protect herself against potential discovery rather than enable her sons' to receive a multi-million dollar payout.

  • Background... EXPAND CONTRACT
    This is a brief summary of the overall context surrounding the case. Note however that there is a more detailed chronology tailored to the events that are revelant to the claim in this case. This is a brief summary of the overall context surrounding the case. Note however that, with each of the two claims of this lawsuit, there is a separate associated chronology tailored to the events that are revelant to each claim.
    • Marriage & Divorce -- The Plaintiff and the Defendant (the "couple") were married for 14 years with two sons. They were divorced in 2000.
    • Knowledge 2000 (K2000) -- The Plaintiff founded a start-up company in 1996 to create an eLearning technology and to build and market products based on the technology. The Plaintiff raised $1.5M from ~40 individual investors. The Plaintiff had a 51% stake in K2000.
      • Ted Foley -- A trusted friend of the Plaintiff, Ted Foley was wealthy retired TRW executive and an original 1% investor, who took on the running of the business side of K2000. He was a highly skilled CPA.
    • Prostate Cancer -- In 2001, the Plaintiff was diagnosed with prostate cancer, and underwent a radical prostatectomy at Cottonwood Hospital on 31st January, 2001. At the time his prognosis was not good, which forced him to leave K2000 in November 2002, and to return to his native Australia in 2003 in order to get support from his extended family.
    • Child-Support Collateral Shares -- Before leaving, the Plaintiff agreed to add 50,000 K2000 Child-Support collateral shares to the couple`s property settlement agreement, with the purpose of meeting his child-support obligation up to and beyond 2004.
      • "Usage Mandates" -- The collateral shares were contrained by a set of "Usage Mandates", which defined how the Defendant could consummate ownership of the shares, and which also specified that the shares were to be sold for the purpose of mitigating the Plaintiff`s child-support obligation up to and beyond 2004.
    • "Getting Affairs in Order" -- Impelled by a poor health prognosis, the Plaintiff submitted orders to Ted Foley to transfer all of his K2000 shares to his sons. He also mailed to the Defendant an unsigned share certificate for the above mentioned child-support collateral shares.
    • Efficient Learning Systems (ELSco) -- Recognising an opportunity presented by the Plaintiff`s poor health prognosis, Ted Foley
      • founded a new company, ELSco,
      • moved K2000`s business assets into it,
      • deceived K2000 investors into accepting a significant dilution of the stake in ELSco through an Exchange Deal, and
      • eliminated the Plaintiff`s(his sons`) stake in ELSco entirely.
    • Conversion Deal -- In 2004, the Defendant approached Ted Foley to consummate the 50,000 K2000 child-support collateral shares, and contrary to the Usage Mandates attached to those shares, she entered into an agreement to acquire 23,500 ELSco shares using those 50,000 collateral shares.
    • Not Reported -- The Defendant did not report her perfidious actions to either the Plaintiff or the Arizona Division of Child-Support, which resulted in the accrual of the Plaintiff`s child-support debt for over a decade.
    • ELSco Sale -- In 2012, ELSco was sold to John Wiley & Sons for $24M.
    • Discovery -- In August 2017, one of the Plaintiff`s sons (Anthony) discovered a trove of documents and emails exposing the Defendant`s wrongdoings and forwarded them to the Plaintiff. Anthony tried to get answers from the Defendant (his mother), but was dismissed and accused of "spying on her for your father".
    • Lawsuit Assistance -- In September 2017, the Plaintiff approached the Defendant asking for cooperation in helping to draft up a lawsuit related to the sale of ELSco to John Wiley (ELSco-JohnWiley Lawsuit), but was rebuffed by the Defendant (see Plaintiff-Defendant Emails ).
    • 2nd Attempt -- Over the next 12 months, the Plaintiff sought further evidence and in 2018 used a legal firm in Phoenix to help formulate a draft lawsuit. In August 2019, the Plaintiff and his sons once again approached the Defendant to solicit her cooperation with the promise to forgive all of her transgressions, but unfortunately was once again rebuffed (see Plaintiff-Defendant Emails ).
    • Impetus for this Lawsuit -- The Plaintiff and his sons collectively made the decision to delay the ELSco-JohnWiley Lawsuit (see below) and instead to proceed with this lawsuit against the Defendant with the hope of getting a settlement that will support the ELSco-JohnWiley lawsuit, and on the off-chance of getting some future cooperation from the Defendant.
  • Motivation/Intent... EXPAND CONTRACT
    Defendant`s Motivations... EXPAND CONTRACT
    The Plaintiff asserts the following:
    THAT the Defendant`s perfidy was driven by the following two sets of motivations:
    • Financial Motivations -- THAT she was motivated by the following two financial opportunities:
      • Lucrative Stock Investment -- to secure an investment in the ELSco company that she knew was growing rapidly, and
      • Interest-bearing Asset -- to seek additional financial benefit by ensuring that the Plaintiff`s child-support debt to her would grow significantly at a high interest rate over time. The longer she hid her actions, the greater would be her financial return from the interest.
    • Avoidance of the Discovery of Potential Civil Exposure & Criminality
      THAT by 2012 the Defendant would have had precise information that her sons had not received any ELSco shares. At that time it would have been "normal" for her to have raised the issue with the Plaintiff.
      Civil Liability Exposure -- THAT as a legally savvy person, she would have also realized that the majority (~80%) of the original K2000 investors had also been injured by a 66% reduction in their interest in K2000`s business assets through the Share Exchange Deal, and that her Conspiracy Actions would have impacted not only the Plaintiff and their sons, but also the majority of K2000`s original investors. She would have realized that she had civil liability exposure.
      Criminal Liability Exposure -- THAT she would also have been savvy enough to realize that her actions could be viewed as potentially criminal.
      THAT by 2012, she was in too deep to "blow the whistle" which would mean that she would certainly lose the above two financial opportunities, and potentially still face criminal proceedings.
    Context
    Required a Change of Loyalty
    The Plaintiff further asserts the following:
    THAT after the Plaintiff started K2000 but before their divorce, the Defendant`s loyalty was firmly with her family. K2000 was the couple`s joint "dream". However, after their divorce and in the course of pursuing financial gain from her "Child-Support Breach" wrongdoings, she switched her loyalty from her family to Ted Foley... EXPAND CONTRACT
    Initial Fiduciary Allegiance was to Her Sons... EXPAND CONTRACT
    THAT from the Plaintiff`s Notification Of Collateral Shares email, the Defendant was directly informed that the Plaintiff had transferred his K2000 shares to his sons. She denies every receiving the subsequent mailing containing the paperwork associated with the transfers. That may or may not be the case. Nevertheless, from just that email alone she knew directly from the Plaintiff about the transfer.
    In all four of the K2000 transfer orders that the Plaintiff submitted, he had specifically made her the trustee of their sons' K2000 shares and he had stipulated to K2000 management that all communications were to be handled by her. As an example, one of those four transfer orders is below... EXPAND CONTRACT
    FROM the Plaintiff`s OWN RETAINED RECORDS
    TRANSFER OF ONE MILLION K2000 SHARES TO ANTHONY WALKER TRUST
    ...EMBED FILE: TransferOfOneMillionK2000SharesToAnthonyWalkerTrust.pdf


    THAT therefore, if she had have received the transfer paperwork, the Defendant would have had a fiduciary allegiance to her sons with respect to her sons' K2000 financial interests. But given that she did not receive the mailing containing the paperwork associated with the transfers, it is still reasonable to expect that her allegiance (as their mother) would have naturally prioritized her sons' interests over Ted Foley`s interests.
    Ultimately Switched Allegiance to Further Her own financial interests... EXPAND CONTRACT
    THAT the opportuntiy of the Conversion Deal changed everything. It provided the financial incentive for the Defendant to switch her allegiance to Ted Foley. But it meant that she would have to align with his agenda to protect against the discovery 1) of his perfidy with respect to the expropriation of K2000`s business assets, and 2) of the elimination of the Plaintiff`s (sons`) stock interest in those assets.
    • Occluding the primary communication channel to discover Malfeasances ... EXPAND CONTRACT
      THAT both the Defendant and Ted Foley would have known that the Plaintiff represented the only major risk for exposing the Share Elimination Fraud.
      THAT no one else would have had the required knowledge to expose the frauds.
      Accordingly, it was clear that occluding the communication of any information that would potentially result in exposure of the Share Elimination Fraud would have been an important objective for them. At the same time, the Defendant would have known that occluding that channel of communication was also essential to preventing the exposure of the Child-Support Fraud.
      THAT both of them knew that the Plaintiff`s cancer prognosis was not good, requiring his return to Australia to get support from his extended family. So, if the Plaintiff died, their risk of exposure would have evaporated.
      Hypothetical Example of Discovery -- If, in 2005, the Plaintiff had known the details of the above described Conversion Deal, the Plaintiff would have been able immediately to discover these frauds and been able to initiated appropriate legal action to prosecute them. One detail (of many) is the fact that the Conversion Deal involved a "conversion" of 50,000 K2000 shares for 23,500 ELSco shares (rather than 50,000) would have immediately raised red flags with the Plaintiff that would have required his investigation.
    • Evidence of switched allegiance ... EXPAND CONTRACT
      Direct Expressions of Thanks, "Dream come True", & Gratitude
      The following emails exchanged in September 2012 between the Defendant and Ted Foley provide evidence of her switched allegiance to Ted Foley and his gratitude for her onside participation... EXPAND CONTRACT
      ... EMBED FILE: ThanksForTheConversion.pdf

      Rejection of Appeal to Cooperate
      When in 2017 the Plaintiff uncovered the Share Elimination Fraud, he emailed the Defendant and beseeched her to help in pursuing a lawsuit against the perpetrators of those frauds. At the time, she just stonewalled him. [The Plaintiff has retained those emails]
      He decided to move forward with the investigation without her and to seek legal help in formulating a lawsuit.
      After almost 2 years of investigative work with legal help, the Plaintiff had made significant progress on that case (see below). In August 2019, the Plaintiff again approached the Defendant and shared some of the details of the lawsuit with her. He asked her to join with him and their sons to help prosecute and finance the lawsuit.
      "Circling the Wagons"
      Shockingly, she rejected his overtures, told him to never contact her again, and informed him that she was blocking any further communication with him.
      Their two sons were devastated!       [The Plaintiff has retained those emails]

    Ted Foley`s Motivations... EXPAND CONTRACT
    The Plaintiff asserts the following:
    Occluding Discovery -- THAT Ted Foley`s primary motive was to block the possibility of the Plaintiff`s discovery of the Share Elimination Fraud, and his biggest risk avenue for exposure would have been through communications of the Defendant with the Plaintiff.
    THAT it was imperative that the Defendant not enter into any communications with the Plaintiff that could possibly lead to his discovery of those frauds.
    High Risk of Exposure -- THAT if Ted Foley had not acted to offer to "convert" the 50,000 K2000 Child-Support collateral shares, the Defendant would certainly have contacted the Plaintiff about how to monetize them to cover her child-support entitlement from him. That contact would have triggered his investigations that would then have led to the exposure of the Share Elimination Fraud.
    THAT therefore, Ted Foley was highly incentivized to consummate the Conversion Deal with the Defendant in order to preempt her communication with the Plaintiff about the matter.

    Imperative to Hide -- THAT even without having seen the "Usage Mandates" of the 50,000 K2000 Child-Support collateral shares shown on the back of the Unsigned Child-Support Certificate, nevertheless, Ted Foley would have been fully aware of them from the Reservation Order that was in his possession. Therefore, Ted Foley knew that the Defendant`s consummation of the Conversion Deal was a misuse of the 50,000 K2000 Child-Support collateral shares, and consequently that she would have an imperative to hide it from the Plaintiff.

    Conspiracy Partnership Bonded by Fraud -- THAT with the Defendant hiding the Conversion Deal from the Plaintiff, and Ted Foley also hiding it by becoming an accomplice in the Child-Support Fraud through the abrogation of his fiduciary responsibility to disclose it to the Plaintiff, a conspiracy partnership between them was formed around a mutual interest in protecting all of their wrongdoings against discovery.

    But, the most important thing about it was that the deal would align both his and her imperatives to block discovery by the Plaintiff.

  • Damages... EXPAND CONTRACT
    Proceeds From Sale of the Defendant`s 23,500 Elsco Shares $103,127
    Interest on the Defendant`s Payout

    $93,289
    + Monthly interest during 2020
    The Reassessment of Child-Support Property Division

    House Title
    + House Contents
    + Reconciliation of Child Support payments

    Loss of Plaintiff`s(sons') Financial Interest in K2000`s Business Assets

    $4,523,750
  • Statute of Limitations... EXPAND CONTRACT
    The Child-Support Breach claim in this case is based on a fraud. The key discovery event was in August 2017 when, by chance, the Plaintiff`s son discovered incriminating documents and emails on the Defendant`s computer and then passed them onto the Plaintiff. Both claims in this case are based on frauds that are detailed under each claim. In both claims the key discovery event was in August 2017 when, by chance, the Plaintiff`s son discovered incriminating documents and emails on the Defendant`s computer and then passed them onto the Plaintiff.
    An initial key document was the ELSco-JohnWiley Stock Purchase Agreement" which enabled the Plaintiff to discover that the Defendant had acquired ELSco shares, and that the Plaintiff`s sons had not received any ELSco shares. By October 2017, discovery of further documents and emails led to further information relevant to this lawsuit.

Second Lawsuit (K2000-ELSco Lawsuit)
The Plaintiff plans to pursue a second lawsuit against the parties who fraudulently eliminated the Plaintiff`s financial interest in the business assets of K2000. The following is an exposition on how the frauds associated with the second lawsuit are related to this lawsuit... EXPAND CONTRACT
Identified Frauds -- Through his investigations relevant to the second lawsuit, the Plaintiff has identified the following three interrelated frauds:
  • Share Elimination Fraud
    This fraud was devised to eliminate the Plaintiff`s financial interest (and his sons' financial interest) in K2000`s business assets. This fraud is relevant to the claim in this lawsuit. This fraud is directly relevant to the above "Share Elimination Conspiracy" claim in this lawsuit.
  • Insolvency Fraud
    This fraud was devised to deceive K2000 shareholders into accepting that K2000 was insolvent, when in fact it was experiencing record sales. This fraud is only peripherally relevant to this lawsuit.
  • Transfer Fraud
    This fraud was devised to dilute the financial interests of most K2000 shareholders by 66%, whilst the Perpetrators significantly increased their stakes. This fraud is only peripherally relevant to this lawsuit.
Relevance -- As indicated above, only the Share Elimination Fraud is relevant to this lawsuit with respect to the Defendant`s actions and her knowledge, intent, and motivations. However, in this website, information uncovered during the Plaintiff`s investigations that is related to the other two frauds is noted, but not incorporated into the basis of the case, mainly because it is not essential to prosecuting this lawsuit, but also because the Plaintiff has no proof that the Defendant had intimate knowledge of those frauds at the time that they were committed. They are prosecuted in the Second Lawsuit.