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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
UNITED STATES OF AMERICA, )
)
Plaintiff, )
) NO. CR01-108R
v. )
) INDICTMENT
JOHN WAYNE ZIDAR, )
ELIZABETH ANNE PHILLIPS, )
JOHN WESLEY MATTHEWS, )
WILLIAM HUGHES CRAVENS, and )
STEVEN CRAIG MORELAND, )
)
Defendants. )
)
THE GRAND JURY CHARGES THAT:
COUNTS 1 THROUGH 21
(Mail Fraud)
A. INTRODUCTION
1. Vista International, Oakleaf International and Rosewood International
purportedly were investment funds that were part of a APrivate Asset
Enhancement Program.@ These funds purportedly invested in the Aprivate
economic arena@ and provided investors with the Aopportunity of
participating in projects and programs otherwise unknown in the
public arena@ that would produce a high rate of return with virtually
no risk.
2. JOHN WAYNE ZIDAR (AZIDAR@) created Vista International, Oakleaf
International and Rosewood International and acted as the Afund
manager@ for these funds. ZIDAR was also the founder of World Diversified
Interfinancial (AWDI@) which purported to be an umbrella organization
that purportedly offered a number of services and benefits, including
access to Oakleaf International and Rosewood International. During
the course of the scheme, ZIDAR controlled the following bank accounts:
a. John W. Zidar, Bank One, Mesa, Arizona;
b. House of Issacson, Bank of America, Phoenix, Arizona;
c. Wing Productions, Wells Fargo Bank, Gilbert, Arizona;
d. Privateassets.com, ANZ Bank, Apia, Samoa;
e. Issacson Global Holdings, S.A., ANZ Bank, Apia, Samoa; and
f. Prosper International League Ltd.- PILL Trust #13005, located
in The Bahamas.
3. JOHN WESLEY MATTHEWS (AMATTHEWS@) assisted ZIDAR in establishing
Oakleaf International and Rosewood International. MATTHEWS also
acted as a promoter of Vista International, Oakleaf International
and Rosewood International and was responsible for training agents
to market investments in Oakleaf International and Rosewood International.
MATTHEWS was also the president of Privateassets.com, which was
a Aprivate club@ established in the summer or fall of 1999. During
the course of the scheme, MATTHEWS controlled the following bank
accounts:
a. Two accounts in the name of John W. Matthews, Bank One, Mesa,
Arizona;
b. Resource Group, Bank One, Mesa, Arizona;
c. House of Matthews, Bank of America, Chandler, Arizona; and
d. Prosper International League Ltd. - PILL Trust Accounts #21765,
#21766 and #13001, located in The Bahamas.
4. ELIZABETH ANNE PHILLIPS (APHILLIPS@) assisted ZIDAR in establishing
Vista International, Oakleaf International and Rosewood International.
She also acted as a promoter of Vista International, Oakleaf International
and Rosewood International. PHILLIPS acted as the Afund administrator@
for Meliorations Management Teem which administered funds invested
into Vista International, Oakleaf International and Rosewood International.
In August 1999, PHILLIPS moved from Washington State to Costa Rica.
During the course of the scheme, PHILLIPS controlled the following
bank accounts:
a. Meliorations Management Teem, Washington Mutual Bank, Lakewood,
Washington;
b. Meliorations Management Teem, Bank of America, Solana Beach,
California;
c. Meliorations Management Teem, Washington State Bank, Federal
Way, Washington;
d. Two accounts in the name of E. Anne Phillips, Key Bank, Enumclaw,
Washington;
e. Paintridge Group, Washington State Bank, Federal Way, Washington;
f. Prosper International League, Ltd. - PILL Trusts #28000 and #28001,
CIBC, located in The Bahamas; and
g. World Cultural Center - Samoa, Inc., ANZ Bank, Apia, Samoa
5. Meliorations Management Teem was a trust created by PHILLIPS
in the Turks and Caicos Islands in May 1997. ZIDAR acted as an agent
for Meliorations Management Teem. On September 5, 1997, PHILLIPS
opened a mailbox in the name of Meliorations Management Teem in
Enumclaw, Washington. On September 9, 1997, PHILLIPS opened a bank
account in the name of Meliorations Management Teem at Washington
Mutual Bank in Lakewood, Washington.
6. WILLIAM HUGHES CRAVENS (ACRAVENS@) represented that he was an
experienced banker who would establish an offshore bank for investors
in Oakleaf International and Rosewood International. In truth and
fact, CRAVENS was not an experienced banker and failed to establish
an offshore bank. Instead, CRAVENS= primary role in the fraudulent
scheme was to establish various companies in Western Samoa and to
open bank accounts under the names of these companies at ANZ Bank
in Apia, Samoa. These bank accounts were actually established for
the primary benefit of CRAVENS and the other
defendants. In excess of $25 million in investor funds were transferred
to these Samoan accounts. During the course of the scheme, CRAVENS
controlled the following bank accounts:
a. William H. Cravens, Bank of America, La Jolla, California;
b. World Cultural Center, Inc., Bank of America, La Jolla, California;
c. Andaman Management, Bank of America, La Jolla, California;
d. Privateassets.com, Bank of America, La Jolla, California;
e. World Cultural Center - Samoa, Inc., ANZ Bank, Apia, Samoa;
f. SBC, Inc., ANZ Bank, Apia, Samoa;
g. Privateassets.com, ANZ Bank, Apia, Samoa; and
h. Private International Development Bank, ANZ Bank, Apia, Samoa.
7. STEVEN CRAIG MORELAND (AMORELAND@) acted as a fund manager for
Oakleaf International and Rosewood International. Prior to his involvement
with these funds, MORELAND had operated a fraudulent investment
scheme called The Dexia Project in which investors were falsely
promised a high rate of return on their investment with little or
no risk. MORELAND persuaded Dexia investors to Aroll over@ their
investments into Rosewood International in lieu of cash payments.
During the course of the scheme, MORELAND controlled the following
bank accounts:
a. Covenant of Solomon, Bank of America, Phoenix, Arizona;
b. Freedom Enterprises, Broadway Federal Bank, Los Angeles, California;
c. Freedom Enterprises, Suisse Security Bank, The Bahamas;
d. Dexia Ltd., Suisse Security Bank, The Bahamas
e. Prosper International League Ltd. - PILL Trust #24420, Sentinel
Bank and Trust Company, The Bahamas;
f. Millennium, S.A., ANZ Bank, Apia, Samoa; and
g. Third Millennium, S.A., ANZ Bank, Apia, Samoa.
B. ESSENCE OF THE SCHEME AND ARTIFICE TO DEFRAUD
8. Beginning in or about November 1997, and continuing to at least
May 2000, in the Western District of Washington, and elsewhere,
JOHN WAYNE ZIDAR, ELIZABETH ANNE PHILLIPS, JOHN WESLEY MATTHEWS,
WILLIAM HUGHES CRAVENS, and STEVEN CRAIG MORELAND knowingly devised,
intended to devise, aided and abetted, participated in or caused
the actions in a scheme and artifice to defraud investors and for
obtaining money and property from investors by means of false and
fraudulent pretenses, representations, promises and concealment
of material facts (hereinafter the Ascheme and artifice to defraud@).
9. The essence of this scheme and artifice to defraud was to solicit
investments from individuals and organizations by falsely promising
investors that they could earn substantial profits on their investments
in the Aprivate economic arena@ with virtually no risk.
10. In truth and fact, the defendants were conducting a APonzi@
scheme in which a portion of the invested funds from some investors
were used to pay the promised returns and interest of these and
other investors, thereby decreasing the amount of funds available
for investments.
Additional portions of the investors= funds were: (a) used to pay
commissions to agents who solicited investors; (b) placed into highly
speculative ventures which were either fraudulent or so risky that
they resulted in a total loss of funds; and (c) misappropriated
by the defendants for their personal use.
11. During the course of the scheme and artifice to defraud over
2,500 individuals invested approximately $74 million into the fraudulent
investment scheme promoted by the defendants.
C. THE SCHEME AND ARTIFICE TO DEFRAUD
I. VISTA INTERNATIONAL
12. At least by November 1997, ZIDAR, MATTHEWS, and PHILLIPS were
members of Free Enterprise, a private club, based in Indianapolis,
Indiana. Free Enterprise purportedly provided its members with various
educational and financial Abenefits.@ Free Enterprise and the Abenefits@
it offered were established using a multi-level marketing model.
Thus, a Free Enterprise member who introduced another member to
the club or to a specific Abenefit@ received a portion of the second
member=s fee for joining the club or the particular Abenefit@ program.
The member also received successively-smaller portions of fees for
members signed up by that second member and by each person in the
second member=s Adownline.@
13. One of the Abenefits@ offered to Free Enterprise members was
an investment program called The Vista Club. The Vista Club promised
investors that their funds would be placed into secure investments
that would yield a high rate of return. ZIDAR, MATTHEWS and PHILLIPS
solicited others to invest in The Vista Club.
By early 1998, it was apparent that the original promoters of the
Vista Club had failed to earn the promised returns and had either
lost or misappropriated the investors= funds.
14. In late 1997 or early 1998, ZIDAR moved to Ravensdale, Washington,
and began to live with PHILLIPS.
Beginning in January 1998, ZIDAR and PHILLIPS took over the operation
of the Vista Club and changed the name to Vista International (AVista@).
ZIDAR represented that he was the AProgram/Fund Manager@ of Vista
and PHILLIPS represented that she was the AProgram Administrator@
of Vista.
15. ZIDAR and PHILLIPS prepared promotional documents describing
the Vista program which were then provided to prospective investors.
These documents stated in pertinent part:
A PRIVATE ASSET ENHANCEMENT PROGRAM
Vista International is a worldwide asset enhancement program, a
member=s private non-commercial benefit program which researches
asset enhancement opportunities for useful applications for the
benefit of the membership. These opportunities are in areas which
are not available in national publications and/or newspapers. The
information is designed for assisting the members develop [sic]
the habit of saving and it also provides the right environment for
the members= wealth building objectives and eventual financial independence.
The program provides valuable, yet strict, confidential management
of member asset accounts in the areas of private trusts, tax saving
vehicles, offshore accounts and/or various national and international
cash opportunities. Some of the opportunities, but not all, are
obtained through private offerings and closed placements not available
through normal channels of distribution.
THE MAJOR BENEFITS OF THE MEMBERSHIP ARE:
1. Opportunities regarding asset protection.
2. The opportunity of realizing a portion of the revenues - thus,
enhancement of assets.
3. The opportunity for generating and building true wealth and financial
independence.
A MUTUAL PARTICIPATION
Vista International is a collective joint venture fund. The mutual
assets of the fund provide the opportunity of participating in projects
and programs otherwise unknown in the public arena. Revenues can
be spectacular. However, the first consideration for any participation
is always:
1. Preservation of the members= capital as the primary responsibility.
2. Selective, well secured placements with the potential for high
returns.
3. Constant maintenance of member/client confidentiality and trust
against any and all unwarranted intrusion.
Membership Enhancement Structure
$ Per Month Subscription $69.00 plus $200.00 annual administration
$ Annual Subscription $1,028.00 (1 unit)
$ Referral Bonus $200.00 per unit
$ Revenue incentives 1. Per year advance subscription (20 maximum)
2. Annual rollover (10 maximum)
///
///
///
Members give annual membership subscription in advance. Each unit
is locked into a twelve month maturity schedule.
Example:
1 Unit
($1,028)
5 Units
($5,140)
10 Units
($10,280)
20 Units
($20,560)
1 Year
2,200
11,000
22,000
44,000
2 Years
4,840
24,200
48,400
96,800
3 Years
10,648
53,240
106,480
212,960
4 Years
23,425
117,128
234,256
468,512
5 Years
51,536
257,681
515,363
1,030,726
6 Years
113,379
566,899
1,133,799
2,267,598
7 Years
249,435
1,247,179
2,494,357
--------------
8 Years
548,758
2,743,794
-----------------
---------------
9 Years
1,207,269
----------------
-----------------
---------------
10 Years
2,655,992
----------------
-----------------
---------------
Because of the uniqueness of the private asset enhancement program,
there will be a limit on the number of memberships available. They
will be filled by accepted applications, on a first come, first
served basis. Each membership application is reviewed in a careful
manner for acceptance. Vista International reserves the right of
selective membership and may refuse membership on internal membership
criteria.
16. Beginning in January or February 1998, ZIDAR, PHILLIPS, and
MATTHEWS solicited and caused to be solicited investors to invest
funds in Vista, by means of false and fraudulent pretenses, representations
and promises, including the following:
a. There exists a Aprivate economic arena@ open to very few people
and entities, which offers investment opportunities paying substantial
returns with little, if any, risk.
b. Vista was an investment fund that provided investors with an
opportunity to invest in the Aprivate economic arena.@
c. Investors= principal investment in Vista was not at risk of loss.
d. Funds invested in Vista would earn a return of 120% per year.
e. The investors= funds were locked into a one year maturity schedule.
At the end of each year, the investor could either elect to receive
payment of his principal plus the 120% return or roll the entire
investment over for up to ten years.
f. Investors were told that if they rolled over one unit of Vista
($1,028) for ten years the initial investment would be worth $2,655,992.
g. ZIDAR represented that if an investor left his or her money with
him for six years, ZIDAR would make the individual a millionaire.
h. Funds placed in Vista would be invested in the Aprivate economic
arena.@
i. Vista had been in existence for a number of years and had been
financially successful.
j. ZIDAR had successfully invested in the Aprivate economic arena@
for a number of years, had Anever lost a penny of the client=s principal@
and had previously made people millionaires.
k. Vista was open only to a limited number of investors.
l. All applications to invest in Vista would be Acarefully reviewed@
on a Afirst come, first served basis.@ The fund reserved Athe right
of selective membership and the right of refusal of membership based
on internal membership criteria.@
17. Individuals who wanted to invest in Vista were directed to complete
a Membership Application and mail it to Mail Box #124, 718 Griffin
Avenue, Enumclaw, Washington. ZIDAR and PHILLIPS had rented this
mailbox under the name of Vista International on January 7, 1998.
Investors were directed to send their funds either by mail, or by
private or commercial interstate carrier to the Enumclaw, Washington,
mailbox or by wire transfer to an account at Washington Mutual Bank,
Lakewood, Washington, that PHILLIPS had previously opened in the
name of Meliorations Management Teem (AMeliorations@).
18. Each investor who invested in Vista was provided with a certificate
bearing the investor=s name and an account number. The certificate
reflected the number of units purchased, the activation date and
the maturity date of the investment, which was twelve months after
the initial investment. Approximately one month prior to the maturity
date, the investors were sent Letters of Wishes which falsely stated
that the investors= funds had appreciated by 120%. The Letters of
Wishes provided investors with a choice of either rolling all or
a portion of the funds into Oakleaf International, or taking a disbursement
of some or all of the funds. After making his choice on the Letter
of Wishes, an investor was directed to return the Letter of Wishes
to Meliorations, along with the original certificate.
19. Vista investors who requested payment of their principal and
earnings were paid with funds obtained from subsequent investors.
II. OAKLEAF INTERNATIONAL
20. In or about March or April 1998, ZIDAR moved to the Phoenix,
Arizona, area. During this period ZIDAR, with the assistance of
MATTHEWS, PHILLIPS, and others, created another investment fund
known as Oakleaf International (AOakleaf@). Oakleaf was patterned
after and virtually identical to Vista. Like Vista, Oakleaf purported
to be a APrivate Asset Enhancement and Management Program@ which
could produce spectacular profits. A minimum investment of $1,294
was required and potential investors were promised an annual return
of 120% on their investment. Investors were also falsely assured
that their principal investment was not at risk of loss.
21. Promotional documents describing Oakleaf were prepared and provided
to potential investors. These documents, which were virtually identical
to the Vista
promotional documents stated in pertinent part:
A PRIVATE ASSET ENHANCEMENT AND MANAGEMENT PROGRAM
A Personal Invitation
Oakleaf International is a worldwide asset enhancement program.
A member=s private non-commercial benefit program which researches
asset enhancement opportunities for useful application for its membership.
These opportunities, in areas which are not available in national
publications and/or newspapers are designed not only for helping
members save, but also provide the correct environment for wealth
building and eventual economic freedom.
The program provides valuable confidential management of member
asset accounts in the areas of private trusts, tax savings vehicles,
offshore accounts and/or various national and international income
opportunities. Some of the opportunities, but not all, are obtained
through private offerings and closed placements not available through
normal channels of distribution.
The Major Benefits of Membership are:
1. Opportunities for protection of assets.
2. The opportunity for earning a portion of the profit sharing revenue
- thus, enhancement of assets.
3. The opportunity for generating and building true wealth and
financial independence.
A Mutual Participation
Oakleaf International is a collective private contract fund. The
mutual assets of the fund provide the opportunity of participating
in projects and programs otherwise unknown in the public arena.
Profit sharing can be spectacular. However, the first consideration
for any participation is always:
1. Preservation of the members= capital as the primary responsibility.
2. Selective, well secured placements with the potential for high
returns.
3. Constant maintenance of member/client confidentiality and trust
against any and all unwarranted intrusion.
A Restricted Privilege
The private asset, capital enhancement arena is highly restricted.
The few legitimate professionals there are cannot under any circumstance
solicit, advertise, promote or otherwise make public (or commercial
knowledge) the fact that such programs even exist. PLEASE respect
your non-disclosure agreement. Remain discreet and attentive in
all reference to such matters.
Membership Enhancement Structure, Profit Sharing
Annual Subscription: $250.00
Monthly Subscription: $ 87.00
Total Annual Subscription: $1,294.00 (1 Unit)
Profit Sharing Incentive: 1) Yearly Advance Payments (50 maximum)
2) Annual Rollover (10 maximum)
Members annual subscription is payable in advance; each unit is
locked in twelve month maturity schedules.
Example:
1 Unit
($1,294)
10 Units
($12,940)
20 Units
($25,880)
50 Units
($64,700)
1 Year
2,846
28,460
56,920
142,300
2 Years
6,262
62,620
125,240
313,100
3 Years
13,778
137,780
275,560
688,900
4 Years
30,312
303,120
606,240
1,515,600
5 Years
66,688
666,880
1,333,760
3,334,400
6 Years
146,713
1,467,130
2,934,260
7,335,650
7 Years
322,769
3,227,690
6,455,380
-------------
8 Years
710,092
7,100,920
-------------
-------------
9 Years
1,562,202
-------------
10 Years-
3,447,992
--------------
Because of the uniqueness of the private asset enhancement program
there will be a limit on the number of memberships available. They
will be filled by accepted applications, on a first come, first
served basis. Each membership application is carefully reviewed
for acceptance. We reserve the right of selective membership and
the right of refusal of membership based on internal membership
criteria.
22. Before an investor could obtain promotional documents describing
Oakleaf or learn anything about the program, the investor was required
to sign a Non-Circumvention and Non-Disclosure Agreement, which
precluded the investor from disclosing information about the investment
to any other individual who had not signed the same agreement.
23. Beginning in March 1998, ZIDAR, PHILLIPS, MATTHEWS and others
acting on behalf of ZIDAR, MATTHEWS and PHILLIPS solicited and caused
to be solicited investors to invest funds in Oakleaf, by means of
many of the same false and fraudulent pretenses, representations
and promises, that had been used in connection with Vista including
the following:
a. There exists a Aprivate economic arena@ open to very few people
and entities, which offers investment opportunities paying substantial
returns with little, if any, risk.
b. Oakleaf was an investment fund that provided investors with an
opportunity to invest in the Aprivate economic arena.@
c. Investors= principal investment in Oakleaf was not at risk of
loss.
d. Funds invested in Oakleaf would earn a return of 120% per year.
e. Investors= funds were locked into a one-year maturity schedule.
At the end of each year, an investor could either elect to receive
payment of his principal plus the 120% return or roll the entire
investment over for up to ten years.
f. If investors rolled over one unit of Oakleaf for ten years, the
initial investment would be worth $3,447,992.
g. Oakleaf had been in existence for a number of years and had been
financially successful.
h. ZIDAR had successfully invested in the Aprivate economic arena@
for a number of years, had Anever lost a penny of the client=s principal@
and had previously made people millionaires.
i. Oakleaf was open to only a limited number of investors.
j. All applications to invest in Oakleaf would be Acarefully reviewed@
on a Afirst come, first served basis.@ The funds reserved Athe right
of selective membership and the right of refusal of membership based
on internal membership criteria.@
24. A number of investors were recruited to act as agents or member
representatives in soliciting other individuals to invest in Oakleaf.
These agents were paid a commission of $250 per unit, representing
approximately 20% of the funds received from each investor they
signed up. ZIDAR and MATTHEWS falsely represented to the agents
that their commissions were not paid out of the investors= principal
investment, but were paid only out of the profits earned by Oakleaf.
25. Individuals who wanted to invest in Oakleaf were directed to
complete a Membership Application and send it to either Mail Box
124 or Mail Box 129, 718 Griffin Avenue, Enumclaw, Washington.
Investors were also directed to send their funds either by mail
or private or commercial interstate carrier to the Enumclaw, Washington,
mailboxes, or by wire transfer to an account at Washington Mutual
Bank, Lakewood, Washington, in the name of Meliorations. Later in
the scheme, investors were given the option of sending their funds
to bank accounts in Western Samoa or Costa Rica.
26. Each investor who invested in Oakleaf was provided with a AWelcome
Packet@ which contained, among other things, a certificate bearing
the investor=s name and an account number. The certificate reflected
the number of units purchased, the activation date and the maturity
date of the investment, which was twelve months after the initial
investment. These certificates were typically sent to investors
via United States Mail. Approximately one month prior to the maturity
date, each investor was sent a Letter of Wishes via United States
Mail which falsely stated that the investor=s funds had appreciated
by 120%. The Letter of Wishes provided the investor with a choice
of either rolling all or a portion of the funds over or taking a
disbursement of some or all of the funds. After making his choice
on the Letter of Wishes, an investor was directed to return the
Letter of Wishes to Meliorations Management.
27. Oakleaf investors who requested payments of their principal
and earnings were paid with funds obtained from subsequent investors.
III. ROSEWOOD INTERNATIONAL
28. Sometime in the summer or fall of 1999, ZIDAR announced that
the Oakleaf fund was closing to new investors because the fund had
grown too large. ZIDAR announced that a new fund called Rosewood
International (ARosewood@) would be available for new investors.
Rosewood was virtually identical to Oakleaf and Vista in that:
a. Rosewood was represented to be a APrivate Asset Enhancement and
Management Fund@ offering investors a high rate of return with little
or no risk;
b. Rosewood investors were required to sign a Non-Circumvention
Non-Disclosure agreement before investing;
c. An investor was required to purchase a minimum investment of
at least one unit at a cost of $1,294;
d. Many of the same false representations set forth in paragraph
23 above were used in inducing individuals to invest in Rosewood;
e. Agents who marketed Rosewood were paid a commission of $250 per
unit, which was paid out of the investor=s principal investment;
f. Investor funds were for the most part deposited into the Meliorations
Management account at Washington Mutual Bank, although some investors
sent their funds directly to accounts in either Western Samoa or
Costa Rica;
g. Each Rosewood investor received a AWelcome Packet@ which contained,
among other things, a certificate bearing the investor=s name and
an account number. The certificate reflected the number of units
purchased, the date of purchase and the maturity date of the investment,
which was twelve months after the initial investment. These certificates
were typically sent to investors via United States Mail.
29. Rosewood was opened to new investors in approximately September
1999. At about this same time the Securities and Exchange Commission
began an investigation into Oakleaf. Thereafter, Rosewood was promoted
differently than Oakleaf. These differences included the following:
a. Potential Rosewood investors were required to join Privateassets.com,
a private club. The membership fee for joining Privateassets.com
was $40. A substantial portion of these fees were deposited into
an account at Bank of America, La Jolla, California, in the name
of Privateassets.com. This account was established by CRAVENS on
January 19, 2000, and he was the sole signer on the account.
b. The Rosewood Non-Disclosure agreement contained new provisions
including the following:
1. The Parties hereby agree that I/we are not an official, employee,
informant and/or representative of, and/or otherwise associated,
in a direct and/or indirect way, with a government agency and/or
quasi-government jurisdiction.
2. The Parties hereby agree that the contemplated transaction is
just one of private placement and is in no way related with the
United States Securities Act of 1933 and/or related regulations
and does not involve the sale of registered securities. I/we agree
that the private placement is not available for the public and materials
are just for private use of the Privateassets.com, F.M.C.C. Club
members.
c. The promotional materials describing Rosewood did not include
a grid or matrix as is depicted in paragraph 21 above which reflected
an annual growth rate of 120% on an investment in Rosewood.
d. Agents and others marketing Rosewood were more cautious in guaranteeing
an annual return of 120% and in assuring the investor=s principal
against loss. Instead, potential investors were generally told that
Rosewood was the mirror image of Oakleaf and that the funds had
been in existence for a number of years and they had historically
paid an annual return of 120%. Additionally, potential investors
were told that although there might be some risk of loss, this risk
was minimal because the fund manager had never lost a client=s principal.
IV. STEVEN MORELAND=S ROLE IN THE SCHEME
30. In or about July 1999, ZIDAR, MATTHEWS, PHILLIPS, CRAVENS and
MORELAND attended a meeting in Arizona. During that meeting, MORELAND
was introduced as a ZIDAR protege who was going to be responsible
for acting as a Afund manager@ for Oakleaf and Rosewood. During
this meeting, ZIDAR falsely represented that MORELAND had a successful
business career and had been one of the top 10 consultants in the
world. In truth, MORELAND was only a high school graduate who had
worked for several years as an insurance agent.
31. During the July 1999 meeting, ZIDAR represented that MORELAND
had successfully managed an investment fund known as the Dexia Project.
In truth, the Dexia Project was a fraudulent investment scheme,
much like Vista, Oakleaf and Rosewood. MORELAND induced investors
to place money in Dexia by falsely representing that the investors
would secure returns of 50 to 100% with no risk to their principal.
A number of individuals had invested money into Dexia based on MORELAND=s
false representations. By the summer of 1999, several of these investors
were demanding payment from MORELAND.
32. Shortly after the July 1999 meeting, MORELAND began to advise
Dexia investors that they could roll their investments over into
the Rosewood fund. Dexia investors who accepted this offer were
provided with certificates reflecting that they owned units in a
ASpecial Managed Account Program@ bearing the number of the Dexia
project into which investors had previously placed funds. These
certificates were prepared by employees of Meliorations and sent
to the investors from Enumclaw, Washington.
33. As a fund manager for Oakleaf and Rosewood, MORELAND placed
investor funds into highly speculative and risky investments which
resulted in a total loss.
V. THE FAILED ATTEMPT TO ESTABLISH AN OVERSEAS BANK
34. On or about January 14, 1999, CRAVENS established a nominee
corporation in Western Samoa called World Cultural Center - Samoa,
Inc. On or about January 15, 1999, CRAVENS established a bank account
at ANZ Bank in Western Samoa in the name of the World Cultural Center
- Samoa, Inc. (AWCC-Samoa@).
35. In or about February 1999, CRAVENS was introduced to ZIDAR and
learned that ZIDAR was acting as a fund manager for an investment
program that offered people a high rate of return with little or
no risk. Thereafter, CRAVENS met with ZIDAR in Arizona and agreed
to establish an overseas bank and overseas bank accounts in Western
Samoa that could be used for investor funds. In or about April 1999,
PHILLIPS became the sole signer on the WCC-Samoa account, although
ANZ Bank regularly provided CRAVENS with information reflecting
the account=s balance and deposits.
36. In or about June 1999, CRAVENS and PHILLIPS traveled to Western
Samoa for the purpose of establishing a bank in Western Samoa. On
or about June 23, 1999, CRAVENS and PHILLIPS submitted an application
to the Samoan Government for an off-shore banking license to operate
a bank called Samoa International Bank Corporation (ASIBC@). The
application submitted by CRAVENS and PHILLIPS contained the following
representations:
a. The principals, presently, through affiliated organizations manage
more than 500 client=s [sic] funds in excess of US $18 million.
The bank=s initial depositors will be drawn from this client base.
All clients are currently under non-disclosure, non-circumvention
and non-solicitation and all funds are Aclean@, clear of liens and
encumbrances and are of non-criminal origin;
b. The promoters of the bank have a client base of U.S. investors
that need to place their money in an environment that is essentially
free of fiscal and exchange controls. The objective will be to provide
a better than market return on depositors [sic] funds while maintaining
a strong liquidity position of the bank=s [sic] monetary return;
c. Mr. Cravens [sic] experience is extensive in the international
banking field; and
d. Mrs. Phillips has had an extensive management background. Her
current work with Meliorations Management Teem is managing investment
funds for clients. . . Mrs. Phillips has been given the charge and
fiduciary responsibility of placing the funds in secure financial
institutions. These funds are derived from mutual fund managers
and investment managers from qualified investors. Presently, Mrs.
Phillips has deposited funds in banks throughout the world including
Samoa that in any given day the funds range between US $15,000,000
to US $20,000,000.
37. Also, as part of the application process, CRAVENS provided a
misleading description of his employment history, as well as a misleading
financial statement. PHILLIPS submitted letters of references from
ZIDAR and MATTHEWS. The letter from ZIDAR, which was written on
the letterhead of AJ.W. Zidar & Associates,@ stated in part:
I have known Anne Phillips professionally and personally for nearly
3 years. Under private management contract, she has successfully
represented the financial interests of my client base, both domestic
and international. Anne is without question the most trustworthy
financial administrator with whom my associates and I have ever
had the good fortune to become associated. I give E. Anne Phillips
my highest recommendation for any position in the field of finance,
financial administration and management and/or trusteeship.
38. After the application for SIBC was submitted, Western Samoan
banking officials began to raise a number of questions and concerns
about the application. These questions and concerns related primarily
to the identity of Meliorations and the role that Meliorations was
going to play in the bank. Rather than completely respond to these
questions and concerns, a new application was submitted on September
21, 1999, which
removed PHILLIPS as a director and shareholder of the bank. The
new application stated in pertinent part that
The principals will look to promote the bank=s services and products
to a potential client base known to the promoters through both personal
and professional contacts. It is estimated that without requiring
to engage in any form of direct marketing or solicitation, that
through these contacts and affiliated organizations, the bank will
have the potential of attracting more than 500 clients, whose initial
deposit funds are estimated to be in the region of US $18 to US
$30 million. All clients will be subjected to a strict vetting process
to ensure that all funds are Aclean,@ clear of liens and encumbrances
and are of non-criminal origin.
39. On December 24, 1999, the Prime Minister of Western Samoa notified
CRAVENS that the bank application had been denied.
40. Beginning in or about February 2000, CRAVENS unsuccessfully
attempted to establish a bank in the Territory of American Samoa.
To that end he established a corporation in the Territory of American
Samoa called the Private International Development Banc of American
Samoa, Inc (APIDB@). On or about February 25, 2000, The Territory
of American Samoa issued a business license to PIDB authorizing
PIDB to engage in Afinance.@ PIDB was never chartered as a bank
nor authorized to act as a bank.
41. On or about March 8, 2000, CRAVENS caused to be opened a bank
account at ANZ Bank in Western Samoa in the name of PIDB. Although
CRAVENS controlled the account, his daughter and son-in-law were
the signers on the account. Once the bank account was opened, investors
were falsely led to believe that PIDB was a real bank, instead of
a shell corporation with a bank account, and were induced to send
their funds to the PIDB account at ANZ bank.
42. On or about November 1, 2000, the Governor of the Territory
of American Samoa revoked PIDB=S Certificate of Incorporation because
PIDB was not authorized to act as a bank.
VI. THE USE OF OVERSEAS BUSINESSES AND BANK ACCOUNTS IN WESTERN
SAMOA, COSTA RICA, AND THE BAHAMAS TO FURTHER THE SCHEME.
43. Between on or about June 10, 1999, and on or about December
22, 1999, CRAVENS caused the following International Business Corporations
(AIBCs@) to be established in Western Samoa for his use and the
use of the other defendants:
DATE OF INCORPORATION NAME OFFICERS/DIRECTORS
6/8/99 SBC, Inc. Nominees
6/22/99 We Three Group Nominees
6/22/99 The Bridge Fund Nominees
7/22/99 Millennium S.A. CRAVENS/MORELAND
7/22/99 Privateassets.com S.A. Nominees
8/23/99 Third Millennium S.A. CRAVENS/MORELAND
12/22/99 Isaacson Global Holding S.A. Nominees
44. CRAVENS then caused to be established the following bank accounts
at ANZ Bank, Western Samoa, to be used for the benefit of the defendants:
DATE OPENED ACCOUNT NAME AND NUMBER ACCOUNT SIGNERS
6/9/99 SBC, Inc. 2152940 Nominees
6/23/99 We Three Group 2160406 Nominees
6/23/99 The Bridge Fund 2160382 Nominees
7/22/99 Privateassets.com 2176959 Nominees
7/22/99 Millennium SA 2176948 MORELAND
8/24/99 Third Millennium SA 2193635 Nominees
12/23/99 Issacson Global Holding S.A. Nominees
2287004
45. Between May 6, 1999, and April 5, 2000, $14,050,300 in investor
funds from the Meliorations account at Washington Mutual were wire
transferred to the following accounts that CRAVENS had established
at ANZ Bank:
DATE OF TRANSFER AMOUNT TRANSFERRED ACCOUNT
5/6/99 $ 500,000 WCC-Samoa
5/14/99 $ 400,000 WCC-Samoa
6/17/99 $ 700,000 WCC-Samoa
7/7/99 $ 240,000 SBC, Inc.
7/30/99 $ 510,800 Millennium SA
9/16/99 $1,000,000 WCC-Samoa
10/14/99 $1,000,000 WCC-Samoa
10/15/99 $1,000,000 WCC-Samoa
11/1/99 $ 750,000 WCC-Samoa
11/2/99 $ 700,000 WCC-Samoa
11/23/99 $ 750,000 WCC-Samoa
12/29/99 $ 500,000 Privateassets.com
12/31/99 $1,000,000 Privateassets.com
1/4/00 $ 500,000 Privateassets.com
1/24/00 $1,000,000 WCC-Samoa
1/25/99 $ 999,500 WCC-Samoa
3/1/00 $1,000,000 WCC-Samoa
3/7/00 $1,000,000 WCC-Samoa
4/5/00 $ 500,000 WCC-Samoa
These funds that were transferred to ANZ Bank were used by the defendants
for their personal benefit and to promote the scheme and artifice
to defraud. 46. On or about July 26, 1999, investor funds in the
amount of $1 million were transferred from the Meliorations account
at Washington Mutual to CRAVENS= World Cultural Center, Inc. account
at Bank of America in La Jolla, California. On or about July 29,
1999, CRAVENS transferred this $1 million to the Millennium SA account
at ANZ Bank in Samoa.
47. Additionally, some individuals who were investing in Oakleaf
or Rosewood, were instructed to wire transfer their funds directly
into the WCC-Samoa account or the PIDB account which had been established
by CRAVENS at ANZ Bank in Western Samoa.
48. Between June 3, 1998, and March 7, 2000, $2,334,126 in investor
funds were transferred from the Meliorations account at Washington
Mutual Bank to accounts at banks in Costa Rica.
49. Between February 2, 2000, and April 5, 2000, $3,075,000 in investor
funds were transferred from the Meliorations account at Washington
Mutual Bank to an offshore trust account in the Bahamas which was
controlled by PHILLIPS.
VII. DIVERSION OF INVESTOR MONEY
50. During the course of the scheme and artifice to defraud over
2,500 individuals invested approximately $74 million into Vista,
Oakleaf and Rosewood. Rather than placing these funds into secure
investments which paid a high rate of return, the defendants used
the funds for the following purposes:
(a) Investor funds were used for the personal benefit of the defendants
or transferred to accounts controlled by the defendants, including
the following transactions:
1. $2,000,000 in investor funds were transferred to the Privateassets.com
account at ANZ Bank, Apia, Samoa, which was controlled by ZIDAR.
Of this amount over $720,000 in investor funds were used to purchase
two homes in Arizona for ZIDAR. One home was occupied by ZIDAR and
the other home was placed in the name of Mass Realty Trust;
2. $271,000 in investor funds were used to purchase a home in Arizona
for MATTHEWS;
3. $56,000 in investor funds were used to pay off the mortgage on
PHILLIPS= residence in Ravensdale, Washington;
4. $54,000 in investor funds were used to purchase a 2000 Corvette
for MATTHEWS;
5. $28,000 in investor funds were used to purchase a 1999 Ford Expedition
for ZIDAR;
6. $10,948 in investor funds were used to purchase a 1999 Ford 150
Pickup for ZIDAR;
7. $12,860 in investor funds were used to pay off the balance owed
on a Mercury vehicle for ZIDAR;
8. $320,000 in investor funds were transferred to ZIDAR=s House
of Issacson bank account;
9. $30,000 in investor funds were transferred to ZIDAR=S Wing Production
account and were then used to purchase land in St. Johns, Arizona,
for ZIDAR;
10. Over $290,000 in investor funds were transferred to ZIDAR=s
personal account at Bank One;
11. $10,000 in investor funds were used to pay legal fees for ZIDAR
and PHILLIPS;
12. Over $90,000 in investor funds, in the form of checks to ZIDAR,
were turned into cash by ZIDAR;
13. $3,075,000 in investor funds were transferred to an offshore
account in the Bahamas controlled by PHILLIPS;
14. $9,000 in investor funds were transferred to PHILLIPS= Meliorations
account at Bank of America;
15. Over $100,000 in investor funds were transferred to PHILLIPS=
Key Bank accounts;
16. $27,000 in investor funds were transferred to a moving company
and a horse transfer company in connection with PHILLIPS= move to
Costa Rica;
17. Over $22,000 in investor funds, in the form of checks to Acash@
and to PHILLIPS, were turned into cash by PHILLIPS;
18. $29,216 in investor funds were transferred to MATTHEWS= House
of Matthews bank account;
19. $130,000 in investor funds were transferred to MATTHEWS= accounts
at Bank One and to accounts at Bank One for MATTHEWS= benefit;
20. $40,000 in investor funds were transferred to an account controlled
by MATTHEWS and two other individuals. These funds were then used
to purchase land in St. Johns, Arizona;
21. $21,000 in investor funds were transferred to offshore accounts
in the Bahamas controlled by MATTHEWS;
22. Over $400,000 in investor funds in the form of checks to MATTHEWS
were turned into cash by MATTHEWS;
23. $135,000 in investor funds were transferred to CRAVENS= World
Cultural Center bank account at Bank of America, La Jolla, California;
24. $2,240,000 in investor funds were transferred to the SBC Inc.
account at ANZ Bank, Apia, Samoa, which was controlled by CRAVENS;
25. Over $900,000 in investor funds were transferred to an
offshore account in the Bahamas controlled by MORELAND;
26. $2,500,000 in investor funds were transferred to the Third Millennium
account at ANZ Bank, Apia, Samoa, which was controlled by MORELAND.
Of this amount $750,000 in investor funds were transferred to MORELAND=s
Covenant of Solomon bank account;
(b) At least 20% of the investor funds were used to pay commissions
to agents and brokers who solicited new investors;
(c) Investor funds were used to pay earlier investors their promised
returns, thereby falsely leading investors to believe that their
investments had actually returned a profit; and
(d) Investor funds were diverted as gifts or placed into highly
speculative and risky ventures. None of these ventures have produced
the promised high returns and for many of the ventures the funds
invested have been lost without the payment of any return. Some
of the gifts and ventures consisted of the following:
1. Free Enterprise Train - On or about March 9, 1998, $20,700 of
investor funds were used to purchase Atickets@ for the Free Enterprise
Train, which was itself a Ponzi scheme. $10,692 subsequently was
received in payments from the Free Enterprise Train; the balance
of the investor funds were lost.
2. Nigerian Venture - Between on or about July 31, 1998, and on
or about February 4, 1999, approximately $270,000 of investor funds
were used to pay various fees and expenses that supposedly were
required to obtain payment of a $70 million construction contract
in Nigeria. Despite the payment of these fees and expenses, the
contract has not been paid and the investor funds have not been
returned.
3. Interdyne - On or about September 3, 1998, $300,000 of investor
funds were transferred to Interdyne Limited to be placed into a
AHigh Yield privately placed investment program@ which promised
a high rate of return with no risk. Neither the invested funds nor
the promised high returns have been paid.
4. ED&F Mann - Between September 10, 1998, and April 5, 1999,
$350,000 of investor funds were transferred to a brokerage account
at ED&F Mann and invested in stocks and commodities. Approximately
$280,000 of the invested funds have been lost.
5. Merrydale Corporation - On or about May 25, 1999, $1,000,000
of investor funds were transferred to Merrydale Corporation to be
placed into a trading program involving the Apurchase and re-sale
of Investment Grade, bank issued debt and credit instruments.@ This
trading program promised to pay a high rate of return with no risk.
Neither the invested funds nor the promised high returns have been
paid.
6. Performance Motor Racing - Between July 12, 1999, and March 27,
2000, $2,000,000 of investor funds were invested in Performance
Motor Racing, LLC. to be used to finance the operation of two racing
cars. Meliorations received an ownership interest in Performance
Motor Racing, LLC. and was entitled to receive a portion of the
net profits earned by the racing cars. Performance Motor Racing
has failed to earn any profits and no distributions have been made
to Meliorations.
7. Nigerian Venture - Between on or about August 18, 1999, and on
or about March 30, 2000, almost $900,000 of investor funds were
used to pay various fees and expenses that supposedly were required
to obtain payment of a $30.5 million construction contract in Nigeria.
Despite the payment of these fees and expenses, the contract has
not been paid and the investor funds have not been returned.
8. Gold and Silver Reserve - Between on or about September 2, 1999,
and on or about March 7, 2000, $2,450,000 of investor funds were
used to purchase stock in Gold and Silver Reserve, a non-public
company. There is no public market for this stock and no dividends
or other distributions have been paid.
9. CRP Group - On or about September 14, 1999, $1,000,000 in investor
funds were transferred from the Meliorations account at Washington
Mutual Bank to an account in the name of Andaman Management at Bank
of America, La Jolla, California. CRAVENS had opened this account
and was the sole signer on this account. On or about November 12,
1999, CRAVENS caused the $1,000,000 in investor funds to be transferred
from the Andaman Management account to an account in the name of
CRP Group at Marine Air Federal Credit Union, Irvine, California.
CRAVENS also caused an additional $4 million in funds to be transferred
to the CRP Group account. These additional funds were sent directly
to the Andaman Management account by another investor. The $5 million
transferred to the CRP account were to be placed into a high yield
investment program which promised a substantial return within 30
to 60 days. Neither the invested funds nor the promised returns
have been paid, although CRAVENS received a commission of $450,000
paid out of the investors= funds.
In approximately late March or early April 2000, CRAVENS advised
the investor who had placed $4 million that the investor=s funds
had been frozen but that the freeze would be lifted shortly and
the investor would receive his funds plus a 100%
return on the investment. The investor was then given the option
of rolling his funds into Rosewood. The investor agreed to do this.
Although no funds were ever returned to the investor or transferred
into Rosewood, ZIDAR and PHILLIPS caused Rosewood certificates to
be issued to the investor falsely reflecting that the investor had
purchased $8 million worth of units in Rosewood. In order to create
the false appearance that these certificates were backed by funds
CRAVENS issued a promissory note on or about April 12, 2000, purportedly
on behalf of Private International Development Banc of American
Samoa, which falsely promised to pay $4 million to Meliorations.
At the time this promissory note was issued, the balance in the
Private International Development Bank account at ANZ Bank was $3,066,302.53,
all of which belonged to other investors.
10. Liberty Works Radio Network - Between September 29, 1999, and
April 27, 2000, $1,325,000 of investor funds were provided as a
gift to Liberty Works Radio Network.
11. Simpe Disbursing- Between on or about October 14, 1999, and
on or about March 3, 2000, approximately $700,000 of investor funds
were given to Simpe Disbursing. The majority of this money was used
to fund a presidential campaign for Eric Madsen.
12. Carnegie Equity Partners - On or about November 30, 1999, approximately
$5,800,000 of investor funds were transferred to purchase defaulted
1913 Chinese bonds and to make other similarly speculative investments.
This investment was secured by a ACertificate of Deposit@ issued
by Carnegie Equity Partners which guaranteed the return of the principal
plus 12% interest. None of the invested funds have been returned.
13. Ecuadoran Gold Mine - Between December 23, 1999, and February
16, 2000, $300,000 of investor funds were invested in a gold mine
in Ecuador. No returns on this investment have been paid.
14. Norfed - On or about February 2, 2000, $100,000 of investor
funds were given to Norfed to be used for the purpose of establishing
a redemption center through which Federal Reserve Notes could be
converted to an alternate currency called American Liberty Currency
which was purported to be backed by gold.
D. EXECUTION OF THE SCHEME AND ARTIFICE TO DEFRAUD
51. On or about the dates set forth below, within the Western District
of Washington and elsewhere, for the purpose of executing this scheme
and artifice to defraud investors and for obtaining money and property
by means of false and fraudulent pretenses, representations, and
promises and attempting to do so, the defendants named below knowingly
and willfully caused to be sent and delivered by the United States
Postal Service and private or interstate carrier according to the
directions thereon, the following mail matter, each of which constitutes
a separate count of this Indictment.
Count
Defendants
Date
Sender
Addressee
Item Mailed
1
Zidar, Phillips, Matthews
12/18/97
Ernest Brock Puyallup, WA
The Vista Club
Indianapolis, IN
Vista Club membership application and check in the amount of $1,028
payable to The Vista Club
2
Zidar, Phillips, Matthews
2/2/98
Joan Kirkman, Grand Rapids, MI
Meliorations Management Enumclaw, WA
Cashier's Check in the amount of $10,280 payable to Meliorations
Management
3
Zidar, Phillips, Matthews
6/15/98
Richard and Debra Royal
Coventry, RI
Meliorations Management
Enumclaw, WA
Check in the amount of $5,176 payable to Meliorations Management
4
Zidar, Phillips,
Matthews
11/5/98
Meliorations Management, Enumclaw, WA
Jonathan Harraden
Adams, MA
Welcome Packet containing Oakleaf Certificate for one unit
5
Zidar, Phillips, Matthews, Cravens, Moreland
10/28/99
Meliorations Management, Enumclaw, WA
Jonathan Harraden
Adams, MA
Letter of Wishes
6
Zidar, Phillips, Matthews, Cravens, Moreland
8/30/99
John Azevedo
Riverbank, CA
Meliorations Management
Enumclaw, WA
Personal Check in the amount of $1,294 payable to Meliorations Management
7
Zidar, Phillips, Matthews, Cravens, Moreland
9/30/99
Meliorations Management, Enumclaw, WA
Mark &/or Karen Frederichs
Issaquah, WA
Rosewood Certificate for 20 units
8
Zidar, Phillips, Matthews, Cravens, Moreland
11/2/99
Burke Dambly, Newport Beach, CA
Meliorations Management Enumclaw, WA
Cashier's Check in the amount of $9,058, payable to Meliorations
Management
9
Zidar, Phillips, Matthews, Cravens, Moreland
11/3/99
Meliorations Management, Enumclaw, WA
Burke A. Dambly
Newport Beach, CA
Rosewood Certificate for 7 units
10
Zidar, Phillips, Matthews, Cravens, Moreland
12/1/99
Michael Moore
Fredericktown, OH
Meliorations Management
Enumclaw, WA
Completed Letter of Wishes
11
Zidar, Phillips, Matthews, Cravens, Moreland
12/28/99
Meliorations Management, Enumclaw, WA
Manuel and Patricia Calvelo
Pittsburgh, PA
Rosewood Certificate for 325 units
12
Zidar, Phillips, Matthews, Cravens, Moreland
2/14/00
Meliorations Management, Enumclaw, WA
William L. Dudley
Raleigh, NC
Project #60/104 Certificate Special Managed Account Program
13
Zidar, Phillips, Matthews, Cravens, Moreland
2/14/00
Meliorations Management, Enumclaw, WA
Kenneth Weaver
Middlebury, IN
Project #105 Certificate Special Managed Account Program
14
Zidar, Phillips, Matthews, Cravens, Moreland
2/17/00
Meliorations Management, Enumclaw, WA
Brian Evans
Bellingham, WA
Project #101 Certificate Special Managed Account Program
15
Zidar, Phillips, Matthews, Cravens, Moreland
2/21/00
Brian Evans, Bellingham, WA
Meliorations Management
c/o Non-Domestic Mail, Tyler, TX
Documents rolling over Dexia investment into Rosewood
16
Zidar, Phillips, Matthews, Cravens, Moreland
2/25/00
Midway Ventures Foundation
American Fork, UT
Meliorations Management, Enumclaw, WA
Cashier's Check in the amount of $25,880 payable to Meliorations
Management
17
Zidar, Phillips, Matthews, Cravens, Moreland
2/28/00
Meliorations Management, Enumclaw, WA
Midway Ventures Foundation, American Fork, UT
Rosewood Certificate for 20 units
18
Zidar, Phillips, Matthews, Cravens, Moreland
3/20/00
Naveen and Michele Khurana, Alachua, FL
Meliorations Management, Enumclaw, WA
Cashier's Check in the amount of $64,700, payable to Meliorations
Management
19
Zidar, Phillips, Matthews, Cravens, Moreland
3/23/00
Naveen and Michele Khurana, Alachua, FL
Meliorations Management, Enumclaw, WA
Cashier's Check in the amount of $46,584, payable to Meliorations
Management
20
Zidar, Phillips, Matthews, Cravens, Moreland
4/11/00
Meliorations Management, Enumclaw, WA
Heinz O.H. Zunker Beaumont, TX
Welcome Packet containing Rosewood Certificate for 3091 units
21
Zidar, Phillips, Matthews, Cravens, Moreland
4/30/00
Meliorations Management, Enumclaw, WA
Heinz O.H. Zunker Beaumont, TX
Rosewood Certificate for 3091 units
All in violation of Title 18, United States Code, Section 1341 and
Section 2.
COUNTS 22 THROUGH 51
(Wire Fraud)
1. The Grand Jury realleges and incorporates as if fully set forth
herein paragraphs 1 through 50 of this Indictment as constituting
the scheme to defraud.
2. Beginning in or about November 1997 and continuing until May
2000 in the Western District of Washington and elsewhere, JOHN WAYNE
ZIDAR, ELIZABETH ANNE PHILLIPS, JOHN WESLEY MATTHEWS, WILLIAM HUGHES
CRAVENS and STEVEN CRAIG MORELAND knowingly devised, intended to
devise, aided and abetted, participated in, or caused the actions
in, a scheme to defraud and to obtain money and property by means
of false and fraudulent material pretenses, representations, and
promises, and the concealment of material facts.
3. On or about the dates set forth below, within the Western District
of Washington, and elsewhere, for the purpose of executing this
scheme and artifice to defraud investors, and for obtaining money
and property by means of false and fraudulent pretenses, representations,
and promises and attempting to do so, the defendants named below
knowingly
and willfully caused to be transmitted by wire communication in
interstate and foreign commerce writings, signs, signals, pictures,
and sounds, that is, the wire transfer of funds to and from the
Meliorations Management Account at Washington Mutual Bank, Lakewood,
Washington (AMeliorations Management Account@), hereinafter described,
each of which constitutes a separate count of this Indictment.
Count
Defendants
Date
Sender/Item Transferred
Recipient
22
Zidar, Phillips, Matthews
5/8/98
Wire Transfer in the amount of $25,880, from the account of Frieda
Pearle, National Financial Services Corp., Boston, MA
Meliorations Management Account
23
Zidar, Phillips, Matthews
5/29/98
Wire Transfer in the amount of $29,762 from the account of Gene
May, State Bank of Park Rapids, Park Rapids, MN
Meliorations Management Account
24
Zidar, Phillips, Matthews
10/6/98
Wire Transfer in the amount of $32,350 from the account of Vanessa
Ross, Citizens Bank, Kilgore, TX
Meliorations Management Account
25
Zidar, Phillips, Matthews
11/19/98
Wire Transfer in the amount of $12,940, from the account of Hurlburt
Dwyer, MacDill AFB CU, Odessa, FL
Meliorations Management Account
26
Zidar, Phillips, Matthews
12/21/98
Wire Transfer in the amount of $12,940, from the account of Hurlburt
Dwyer, MacDill AFB CU, Odessa, FL
Meliorations Management Account
27
Zidar, Phillips, Matthews, Cravens,
4/20/99
Wire Transfer in the amount of $45,290, from the account of Hurlburt
Dwyer, MacDill AFB CU, Odessa, FL
Meliorations Management Account
28
Zidar, Phillips, Matthews, Cravens,
6/24/99
Wire Transfer in the amount of $12,940, from the account of Hurlburt
Dwyer, MacDill AFB CU, Odessa, FL
Meliorations Management Account
29
Zidar, Phillips, Matthews, Cravens,
3/15/99
Wire Transfer in the amount of $64,700, from the account of Linda
Gong, Charles Schwab, San Francisco, CA
Meliorations Management Account
30
Zidar, Phillips, Matthews, Cravens
4/29/99
Wire Transfer in the amount of $142,340 from the account of Jacobs
Third Family Ltd. Partnership, Harris Trust & Savings, Chicago,
IL
Meliorations Management Account
31
Zidar, Phillips, Matthews, Cravens,
7/1/99
Wire Transfer in the amount of $7,764, from the account of Melanie
Martin, New Milford Bank, Milford, CT
Meliorations Management Account
32
Zidar, Phillips, Matthews, Cravens, Moreland
9/24/99
Wire Transfer in the amount of $51,760 from the account of Ralph
White, Bank of America, Prescott, AZ
Meliorations Management Account
33
Zidar, Phillips, Matthews
6/22/98
Wire Transfer in the amount of $5,000 from the Meliorations Management
Account
Bank One, Mesa Arizona, account in the name of John W. Zidar
34
Zidar, Phillips, Matthews
11/3/98
Wire Transfer in the amount of $30,194.10 from the Meliorations
Management Account
Wells Fargo Bank, Gilbert, Arizona, account in the name of Wing
Productions
35
Zidar, Phillips, Matthews
11/3/98
Wire Transfer in the amount of $6,171.79 from the Meliorations Management
Account
Bank One, Mesa, Arizona, account in the name of John W. Matthews
36
Zidar, Phillips, Matthews
12/2/98
Wire Transfer in the amount of $4,000 from the Meliorations Management
Account
Bank One, Mesa, Arizona, account in the name of John W. Matthews
37
Zidar, Phillips, Matthews, Cravens
3/16/99
Wire Transfer in the amount of $75,000 from the Meliorations Management
Account
Bank of America, La Jolla, California, account in the name of World
Cultural Center, Inc.
38
Zidar, Phillips, Matthews, Cravens
5/3/99
Wire Transfer in the amount of $60,000 from the Meliorations Management
Account
Bank of America, La Jolla, California, account in the name of World
Cultural Center, Inc.
39
Zidar, Phillips, Matthews, Cravens
6/30/99
Wire Transfer in the amount of $271,071.31 from the Meliorations
Management Account
Bank One, Phoenix, Arizona, account in the name of 1st American
Title
40
Zidar, Phillips, Matthews, Cravens, Moreland
8/17/99
Wire Transfer in the amount of $20,049.11 from the Meliorations
Management Account
Suisse Security Bank, Nassau Bahamas, account in the name of Dexia
Ltd.
41
Zidar, Phillips, Matthews, Cravens, Moreland
9/15/99
Wire Transfer in the amount of $32,985.40 from the Meliorations
Management Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
42
Zidar, Phillips, Matthews, Cravens, Moreland
10/12/99
Wire Transfer in the amount of $36,636.38 from the Meliorations
Management Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
43
Zidar, Phillips, Matthews, Cravens, Moreland
11/10/99
Wire Transfer in the amount of $10,948.26 from the Meliorations
Management Account
Bank of America, Mesa Arizona, account in the name of Berge Ford
44
Zidar, Phillips, Matthews, Cravens, Moreland
11/16/99
Wire Transfer in the amount of $44,157.75 from the Meliorations
Management Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
45
Zidar, Phillips, Matthews, Cravens, Moreland
12/10/99
Wire Transfer in the amount of $54,630.20 from the Meliorations
Management Account
Bank of America, Tempe, Arizona, account in the name of Chapman
Chevrolet
46
Zidar, Phillips, Matthews, Cravens, Moreland
12/14/99
Wire Transfer in the amount of $38,228 from the Meliorations Management
Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
47
Zidar, Phillips, Matthews, Cravens, Moreland
12/23/99
Wire Transfer in the amount of $39,000 from the Meliorations Management
Account
Bank of America, Gilbert, Arizona, account in the name of House
of Isaacson
48
Zidar, Phillips, Matthews, Cravens, Moreland
1/10/00
Wire Transfer in the amount of $107,900 from the Meliorations Management
Account
Bank of America, Gilbert, Arizona, account in the name of House
of Isaacson
49
Zidar, Phillips, Matthews, Cravens, Moreland
1/10/00
Wire Transfer in the amount of $53,950 from the Meliorations Management
Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
50
Zidar, Phillips, Matthews, Cravens, Moreland
2/16/00
Wire Transfer in the amount of $82,550 from the Meliorations Management
Account
Bank of America, Gilbert, Arizona, account in the name of House
of Isaacson
51
Zidar, Phillips, Matthews, Cravens, Moreland
2/17/00
Wire Transfer in the amount of $41,275 from the Meliorations Management
Account
Suisse Security Bank and Trust, Nassau Bahamas, account in the name
of Freedom Enterprises
All in violation of Title 18, United States Code, Section 1343 and
Section 2.
COUNTS 52 THROUGH 75
(MONEY LAUNDERING - PROMOTE)
1. The Grand Jury realleges and incorporates as if fully set forth
herein paragraphs 1 through 50 of Counts 1 through 21 of this Indictment.
2. On or about the dates listed below, in the Western District of
Washington and
elsewhere, the defendants named below did knowingly and willfully
conduct and caused to be conducted the financial transactions listed
below affecting interstate and foreign commerce, to wit, the transfer
of funds from the Meliorations Management Teem account at Washington
Mutual Bank, Lakewood, Washington (AMeliorations Account@) through
and to a financial institution which was involved in interstate
and foreign commerce, which involved the proceeds of a specified
unlawful activity, that is mail fraud in violation of Title 18,
United States Code, Section 1341, and wire fraud in violation of
Title 18, United States Code, Section 1343, with the intent to promote
the carrying on of these specified unlawful activities and while
conducting and attempting to conduct such financial transactions,
knew that the property involved in the financial transactions set
forth below represented the proceeds of some form of unlawful activity.
COUNT
DEFENDANTS
DATE
AMOUNT
FINANCIAL TRANSACTION
NATURE OF TRANSACTION
52
Zidar, Phillips, Matthews
9/25/98
6,480.00
Wire transfer to account of Kensley Brighton Group at Wells Fargo
Bank, TX
Commission Payment
53
Zidar, Phillips, Matthews
10/21/98
15,230.00
Wire transfer to account of Kensley Brighton Group at Wells Fargo
Bank, TX
Commission Payment
54
Zidar, Phillips, Matthews, Cravens, Moreland
10/4/99
21,745.00
Transfer of funds by Meliorations Management check #6677 payable
to Banco Elca
Commission Payment
55
Zidar, Phillips, Matthews, Cravens, Moreland
12/14/99
25,755.40
Wire transfer to account of Bentley International, Bank of Nevis
International Ltd., Nevis, West Indies
Commission Payment
56
Zidar, Phillips, Matthews, Cravens, Moreland
1/6/00
56,251.00
Transfer of funds by Meliorations Management check #7864 payable
to Banco Elca
Commission Payment
57
Zidar, Phillips, Matthews, Cravens, Moreland
1/21/00
511,500.00
Wire transfer to account of Olomana Ventures, Bank of Montreal,
Vancouver, B.C.
Commission Payment
58
Zidar, Phillips, Matthews
7/30/98
13,792.00
Transfer of funds by Meliorations Management check #4120 payable
to Joan Kirkman
Return to Investor
59
Zidar, Phillips, Matthews
9/11/98
25,880.00
Transfer of funds by Meliorations Management check #4175 payable
to Art Groveman
Return to Investor
60
Zidar, Phillips, Matthews
9/16/98
26,728.00
Wire transfer to account of Ira Kaufman at Chevy Chase Savings,
Greenbelt, MD
Return to Investor
61
Zidar, Phillips, Matthews
11/23/98
10,344.00
Transfer of funds by Meliorations Management check #4821 payable
to James Sciaretta
Return to Investor
62
Zidar, Phillips, Matthews, Cravens
3/11/99
4,396.00
Transfer of funds by Meliorations Management check #5109 payable
to Dominic Lewis
Return to Investor
63
Zidar, Phillips, Matthews, Cravens
5/11/99
20,638.00
Transfer of funds by Meliorations Management check #5454 payable
to P.I.L. #13805
Return to Investor
64
Zidar, Phillips, Matthews, Cravens, Moreland
7/14/99
28,125.00
Transfer of funds by Meliorations Management, check #5854, payable
to David Post
Return to Investor
65
Zidar, Phillips, Matthews, Cravens, Moreland
8/18/99
52,705.02
Transfer of funds by Meliorations Management, checks #6110-6115,
payable to Edward J. Villanueva
Return to Investor
66
Zidar, Phillips, Matthews, Cravens, Moreland
9/2/99
2,796.00
Transfer of funds by Meliorations Management check #6275 payable
to Clyde Bob Dark
Return to Investor
67
Zidar, Phillips, Matthews, Cravens, Moreland
4/17/00
155,155.00
Transfer of funds by Meliorations Management checks #9263 &
#9264 payable to Linda Gong
Return to Investor
68
Zidar, Phillips, Matthews
9/24/98
9,576.73
Transfer of funds by Meliorations Management check #4486 payable
to Dobson Ranch Inn
Conference Fees
69
Zidar, Phillips, Matthews, Cravens
5/14/99
22,600.00
Wire transfer to the account of Asiaciti Trust ANZ Bank Apia, Samoa
Fees to set up IBCs
70
Zidar, Phillips, Matthews, Cravens, Moreland
1/13/00
6,631.98
Transfer of funds by Meliorations Management check #8072 payable
to Wyndham Buttes Resort
Conference Fees
71
Zidar, Phillips, Matthews, Cravens, Moreland
1/14/00
7,791.65
Transfer of funds by Meliorations Management check #8076 payable
to Wyndham Buttes Resort
Conference Fees
72
Zidar, Phillips, Matthews, Cravens, Moreland
7/12/99
500,000.00
Wire transfer to account of Performance Motor Racing at South Trust
Bank, GA
Sponsor Porsche Racing Team
73
Zidar, Phillips, Matthews, Cravens, Moreland
10/7/99
500,000.00
Wire transfer to account of Performance Motor Racing at South Trust
Bank, GA
Sponsor Porsche Racing Team
74
Zidar, Phillips, Matthews, Cravens, Moreland
11/24/99
500,000.00
Wire transfer to account of Performance Motor Racing at South Trust
Bank, GA
Sponsor Porsche Racing Team
75
Zidar, Phillips, Matthews, Cravens, Moreland
2/28/00
200,000.00
Wire transfer to account of Performance Motor Racing at South Trust
Bank, GA
Sponsor Porsche Racing Team
All in violation of Title 18, United States Code, Section 1956(a)(1)(A)(i)
and Section 2.
COUNTS 76 THROUGH 99
(MONEY LAUNDERING - FOREIGN TRANSFERS)
1. The Grand Jury realleges and incorporates as if fully set forth
herein paragraphs 1 through 50 of Counts 1 through 21 of this Indictment.
2. On or about the dates listed below, in the Western District of
Washington and
elsewhere, the defendants named below, did knowingly and willfully
transfer and caused to be transferred the funds listed below from
a place in the United States, that is, an account in the name of
Meliorations Management Teem at Washington Mutual Bank, Lakewood,
Washington to places outside the United States which are listed
below:
a. With the intent to promote the carrying on of a specified unlawful
activity, that is mail fraud in violation of Title 18, United States
Code, Section 1341, and wire fraud in violation of Title 18, United
States Code, Section 1343; and
b. Knowing that funds involved in each transfer listed below represented
the proceeds of some form of unlawful activity and knowing that
such transfer was designed in whole or in part to conceal and disguise
the nature, source, ownership and control of the proceeds of specified
unlawful activity, that is mail fraud in violation of Title 18,
United States Code, Section 1341, and wire fraud in violation of
Title 18, United States Code, Section 1343.
COUNT
DEFENDANTS
DATE
AMOUNT
FINANCIAL TRANSACTION
76
Zidar, Phillips, Matthews, Cravens
5/6/99
500,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
77
Zidar, Phillips, Matthews, Cravens
5/14/99
400,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
78
Zidar, Phillips, Matthews, Cravens
6/17/99
700,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
79
Zidar, Phillips, Matthews, Cravens, Moreland
7/7/99
240,000.00
Wire transfer to SBC Inc., ANZ Bank, Samoa
80
Zidar, Phillips, Matthews, Cravens, Moreland
7/30/99
510,800.00
Wire transfer to Millennium SA, ANZ Bank, Samoa
81
Zidar, Phillips, Matthews, Cravens, Moreland
9/16/99
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
82
Zidar, Phillips, Matthews, Cravens, Moreland
10/14/99
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
83
Zidar, Phillips, Matthews, Cravens, Moreland
10/15/99
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
84
Zidar, Phillips, Matthews, Cravens, Moreland
11/1/99
750,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
85
Zidar, Phillips, Matthews, Cravens, Moreland
11/2/99
700,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
86
Zidar, Phillips, Matthews, Cravens, Moreland
11/23/99
750,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
87
Zidar, Phillips, Matthews, Cravens, Moreland
12/29/99
500,000.00
Wire transfer to Privateassets.com SA, ANZ Bank, Samoa
88
Zidar, Phillips, Matthews, Cravens, Moreland
12/31/99
1,000,000.00
Wire transfer to Privateassets.com SA, ANZ Bank, Samoa
89
Zidar, Phillips, Matthews, Cravens, Moreland
1/4/00
500,000.00
Wire transfer to Privateassets.com SA, ANZ Bank, Samoa
90
Zidar, Phillips, Matthews, Cravens, Moreland
1/24/00
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
91
Zidar, Phillips, Matthews, Cravens, Moreland
1/25/00
999,500.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
92
Zidar, Phillips, Matthews, Cravens, Moreland
2/9/00
425,000.00
Wire transfer to PILL Trust Account #28000, CIBC Bahamas Ltd, Nassau
Bahamas
93
Zidar, Phillips, Matthews, Cravens, Moreland
2/16/00
375,000.00
Wire transfer to PILL Trust Account #28000, CIBC Bahamas Ltd, Nassau
Bahamas
94
Zidar, Phillips, Matthews, Cravens, Moreland
2/28/00
300,000.00
Wire transfer to PILL Trust Account #28000, CIBC Bahamas Ltd, Nassau
Bahamas
95
Zidar, Phillips, Matthews, Cravens, Moreland
3/1/00
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
96
Zidar, Phillips, Matthews, Cravens, Moreland
3/7/00
1,000,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
97
Zidar, Phillips, Matthews, Cravens, Moreland
3/14/00
730,000.00
Wire transfer to PILL Trust Account #28000, CIBC Bahamas Ltd, Nassau
Bahamas
98
Zidar, Phillips, Matthews, Cravens, Moreland
4/5/00
500,000.00
Wire transfer to WCC - Samoa, ANZ Bank, Samoa
99
Zidar, Phillips, Matthews, Cravens, Moreland
4/5/00
500,000.00
Wire transfer to PILL Trust Account #28000, CIBC Bahamas Ltd, Nassau
Bahamas
All in violation of Title 18 United States Code Section 1956(a)(2)(A)
and (B)(i) and Section 2.
COUNT 100
(Conspiracy)
A. THE AGREEMENT
Beginning in or about November 1997, and continuing to at least
May 2000, within the Western District of Washington and elsewhere,
JOHN WAYNE ZIDAR, ELIZABETH ANNE PHILLIPS, JOHN WESLEY MATTHEWS,
WILLIAM HUGHES CRAVENS, and STEVEN CRAIG MORELAND (AThe Defendants@)
did willfully and knowingly combine, conspire, confederate and agree
among themselves and each other to commit offenses in violation
of the laws of the United States, to wit: mail fraud, in violation
of Title 18, United States Code, Section 1341 and Section 2; wire
fraud in violation of Title 18, United States Code, Section 1343
and Section 2; and money laundering in violation of Title 18, United
States Code, Section 1956 (a)(1)(A)(i), (a)(2)(A) and (B)(i) and
Section 2.
B. THE PURPOSE OF THE AGREEMENT
The purpose of the conspiracy was to solicit investments from individuals
and organizations by falsely promising investors that they could
earn substantial profits on their investments in the Aprivate economic
arena@ with virtually no risk. In truth and fact, the defendants
were conducting a APonzi@ scheme in which a portion of the invested
funds from some investors were used to pay the promised returns
and interest of these and other investors, thereby decreasing the
principal amount of the investments. Additional portions of the
invested funds were: (a) used to pay commissions to agents who solicited
investors; (b) placed into highly speculative Ainvestments@ which
were either fraudulent or so risky that they resulted in a total
loss of funds; and (c) misappropriated by the defendants for their
personal
use. During the course of the conspiracy over 2,500 individuals
invested approximately $74 million into the fraudulent investment
scheme promoted by the defendants.
C. THE MANNER AND MEANS BY WHICH THE AGREEMENT WAS EXECUTED
This fraudulent scheme was to be executed in the manner and through
the means set forth in Paragraphs 1 through 50 of Counts 1 through
21 of this Indictment.
D. OVERT ACTS IN FURTHERANCE OF THIS AGREEMENT
For the purpose of furthering the conspiracy and to effect the objects
thereof, the defendants committed numerous overt acts, including
the acts set forth below in the Western District of Washington and
elsewhere:
1. The defendants did, and caused to be done, the acts set forth
in Counts 1 through 99 of this Indictment, all of which are incorporated
by reference and alleged as separate overt acts as if set forth
in full herein.
2. In or about February 1998 ZIDAR and PHILLIPS created promotional
documents describing the Vista APrivate Asset Enhancement Program.@
3. On or about February 11, 1998, ZIDAR conducted a teleconferencing
call in which he told prospective Vista investors that their investment
in Vista was assured and would return 120%. ZIDAR also promised
potential investors that if they left their money with him for six
years, he would make them millionaires.
4. In or about March 1998, ZIDAR, MATTHEWS, PHILLIPS and others
created Oakleaf.
5. On or about March 18, 1998, ZIDAR represented that Oakleaf paid
a return of 120% Aguaranteed for up to a maximum of ten years.@
6. In or about March 1998, ZIDAR and MATTHEWS conducted a training
session in Phoenix, Arizona, to train individuals to market Oakleaf.
7. On or about May 9, 1998, PHILLIPS represented that Oakleaf Ahas
been going for about eleven years [and that] Oakleaf guarantees
120% per annum.@
8. In or about June 1998, ZIDAR and MATTHEWS conducted a training
session in Orlando, Florida, to train individuals to market Oakleaf.
9. On or about August 28 and August 29, 1998, ZIDAR and MATTHEWS
conducted a training session to train individuals to market Oakleaf.
10. In or about February 1999, CRAVENS traveled to Arizona to meet
with ZIDAR.
11. In or about June 1999, CRAVENS and PHILLIPS traveled to Western
Samoa for the purpose of establishing a bank in Western Samoa.
12. Between June 1999 and March 2000, CRAVENS established seven
IBCs in Western Samoa.
13. Between June 10, 1999, and March 8, 2000, CRAVENS established
eight bank accounts at ANZ Bank in Western Samoa.
14. In or about July 1999, ZIDAR, PHILLIPS, MATTHEWS, CRAVENS and
MORELAND conducted a meeting in Arizona, during which MORELAND was
introduced as being a new fund manager for Oakleaf and Rosewood.
15. In or about August 1999, PHILLIPS moved to Costa Rica.
16. In or about January 2000, ZIDAR, MATTHEWS, CRAVENS and MORELAND
conducted a meeting in Phoenix, Arizona.
17. In or about March 2000, MATTHEWS conducted a training session
to train individuals to solicit investors in Rosewood.
18. In or about May 2000, ZIDAR, MATTHEWS, CRAVENS and MORELAND
conducted a conference in Las Vegas, Nevada, during which ZIDAR
represented that the organization was working on its Asecond billion@
in investments.
19. In or about May 2000, MORELAND traveled to Costa Rica to meet
with PHILLIPS.
All in violation of Title 18, United States Code, Section 371 and
Section 1956(h).
COUNT 101
(Criminal Forfeiture)
1. The Grand Jury realleges and incorporates, as if fully set forth
herein, the allegations of Counts 1 through 100 of this Indictment.
2. As the result of committing one or more of the money laundering
offenses in violation of Title 18 United States Code, Section 1956,
alleged in Count 52 through 100 of this Indictment, defendant(s)
JOHN WAYNE ZIDAR, ELIZABETH ANNE PHILLIPS, JOHN WESLEY MATTHEWS,
WILLIAM HUGHES CRAVENS, and STEVEN CRAIG MORELAND shall forfeit
to the United States pursuant to Title 18, United States Code, Sections
982 and 984, all property, real and personal, involved in the money
laundering offense(s) and all property traceable to such property,
including but not limited to the following:
A. MONEY JUDGMENT
A sum of money equal to $74,184,295 in United States currency, representing
the amount of proceeds involved in and obtained as a result of the
offenses charged in this Indictment for which the defendants are
jointly and severally liable.
B. REAL PROPERTY
1. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at 2263 E. San Tan Street,
Chandler, Arizona, more particularly described as: Lot 275, of DOBSON
PLACE PARCEL 9B, according to the plat of record in the office of
the County Recorder of Maricopa County, Arizona, recorded in Book
451 of Maps, Page 25.
2. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at 1200 W. Chatham Drive, Payson, Arizona, more particularly
described as: Lot 4, of MANZANITA HILLS, PHASE ONE, according to
the plat of record in the office of the County Recorder of Gila
County, Arizona, recorded in Map No. 658.
3. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at 528 E. Brookwood Ct., Phoenix, Arizona, more particularly
described as: Lot 73, of Parcel 11-E, Phase 2 At THE FOOTHILLS,
according to the plat of record in the office of the County Recorder
of Maricopa County, Arizona, recorded in book 380 of Maps, Page
01; EXCEPT all oil, gases and other hydrocarbon substances, helium
or other substances of a gaseous nature, coal, metals, minerals,
fossils and fertilizers of every name and description, together
with all uranium, thorium, or any other material which is or may
be determined by the laws of the United States or of this state,
or decisions of the courts to be peculiarly essential to the production
of fissionable materials, whether or not of commercial value and
the exclusive right thereto, on, in or under the above described
lands, shall be and remain and are hereby reserved in and retained
by the State of Arizona in Patent recorded June 20, 1981 in Docket
15392, Page 317.
4. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at 29921 321st Avenue SE, Ravensdale, Washington, more particularly
described as: Lot C, King County Short Plat Number 674107, recorded
under Recording Number 7605130689, being a portion of the southeast
quarter of the southeast quarter of Section 4, Township 21 North,
Range 7 East, Willamette Meridian, in King County, Washington, together
with an easement for road and
utility purposes as described in instruments recorded under Recording
Numbers 7407050487, 7407250078, and 7501300034, and except any portion
thereof lying within the main parcel above.
5. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 230, River Springs Ranch, Unit VI, Tax Parcel
No. 202 37 230, Apache County, Arizona, more particularly described
as: Parcel 230, RIVER SPRINGS RANCH, UNIT VI, being in Sections
17, 20 and 21, Township 12 North, Range 29 East of the Gila and
Salt River Base and Meridian, Apache County, Arizona, according
to Book 7 of Land Surveys, pages 79 through 84, records of Apache
County, Arizona; EXCEPT all the coal and other minerals as set forth
in the Patent to said land (Affects the SE1/4NW1/4, SW1/4SW1/4,
NE1/4NE1/4, S1/2NE1/4, N1/2SE1/4, SW1/4SE1/4 of Section 20 and the
SW1/4NW1/4 of Section 21, Township 12 North, Range 29 East, G&SRB&M,
Apache County, Arizona.); AND EXCEPT all mineral rights as reserved
in Deed recorded in Docket 44, pages 596-599; AND EXCEPT all geothermal
resources, all hydrocarbon substances and gases, all nonhydrocarbon
substances and gases, and all minerals whatsoever, as such term
is used in the Stock Raising Homestead Act of December 29, 1916
(43 U.S.C. Secs. 291-302) as reserved in instrument recorded in
Docket 905, pages 205-209.
6. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 59, River Springs Ranch, Unit I, Tax Parcel No.
202 32 059, Apache County, Arizona, more particularly described
as: Parcel No. 59, RIVER SPRINGS RANCH, UNIT I, being a portion
of Section 13, Township 13 North, Range 28 East of the Gila and
Salt River Base and Meridian, Apache County, Arizona, according
to Book 6 of Land Surveys, pages 86-91, records of Apache County,
Arizona; EXCEPT all mineral rights as reserved in Deed recorded
in Docket 44, pages 596-599; and EXCEPT all geothermal resources,
all hydrocarbon substances and gases, all nonhydrocarbon substances
and gases, and all minerals whatsoever, as such terms is used in
the Stock Raising Homestead Act of December 29, 1916 (43 U.S.C.
Secs. 291-302) as set forth in instrument recorded in Docket 814,
pages 341-344.
7. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 60, River Springs Ranch, Unit I, Tax Parcel No.
202 32 060, Apache County, Arizona, more particularly described
as: Parcel No. 60, RIVER SPRINGS RANCH, UNIT I, being a portion
of Section 13, Township 13 North, Range 28 East of the Gila and
Salt River Base and Meridian, Apache County, Arizona, according
to Book 6 of Land Surveys, pages 86-91, records of Apache County,
Arizona; EXCEPT all mineral rights as reserved in Deed recorded
in Docket 44, pages 596-599; and EXCEPT all geothermal resources,
all hydrocarbon substances and gases, all nonhydrocarbon substances
and gases, and all minerals whatsoever, as such terms is used in
the Stock Raising Homestead Act of December 29, 1916 (43 U.S.C.
Secs. 291-302) as set forth in instrument recorded in Docket 814,
pages 341-344.
8. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 172, River Springs Ranch, Unit V, Tax Parcel No.
202 36 172, Apache County, Arizona, more particularly described
as: Parcel No. 172, RIVER SPRINGS RANCH, UNIT V, being a portion
of Section 7, Township 12 North, Range 29 East of the Gila and Salt
River Base and Meridian, Apache County, Arizona, according to Book
7 of Land Surveys, pages 36 through 39, records of Apache County,
Arizona; EXCEPT all mineral rights as reserved in Deed recorded
in Docket 44, pages 596-599; and EXCEPT all geothermal resources,
all hydrocarbon substances and gases, all nonhydrocarbon substances
and gases, and all minerals whatsoever, as such terms is used in
the Stock Raising Homestead Act of December 29, 1916 (43 U.S.C.
Secs. 291-302) as set forth in instrument recorded in Docket 814,
pages 341-344.
9. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 173, River Springs Ranch, Unit V, Tax Parcel No.
202 36 173, Apache County, Arizona, more particularly described
as: Parcel No. 173, RIVER SPRINGS RANCH, UNIT V, being a portion
of Section 7, Township 12 North, Range 29 East and a portion of
Section 12, Township 12 North, Range 28 East of the Gila and Salt
River Base and Meridian, Apache County, Arizona, according to Book
7 of Land Surveys, pages 36 through 39, records of Apache County,
Arizona; EXCEPT all mineral rights as reserved in Deed recorded
in Docket 44, pages 596-599; and EXCEPT all geothermal resources,
all hydrocarbon substances and gases, all nonhydrocarbon substances
and gases, and all minerals whatsoever, as such terms is used in
the Stock Raising Homestead Act of December 29, 1916 (43 U.S.C.
Secs. 291-302) as set forth in instrument recorded in Docket 814,
pages 341-344.
10. All that lot or parcel of land, together with its buildings,
appurtenances, improvements, fixtures, attachments and easements,
located at Parcel 199, River Springs Ranch, Unit VI, Tax Parcel
No. 202 37 199, Apache County, Arizona, more particularly described
as: Parcel No. 199, RIVER SPRINGS RANCH, UNIT VI, being in Section
19, Township 12 North, Range 29 East of the Gila and Salt River
Base and Meridian, Apache County, Arizona, according to Book 7 of
Land Surveys, page 79 through 84, records of Apache County, Arizona;
EXCEPT all mineral rights as reserved in Deed recorded in Docket
44, pages 596-599; AND EXCEPT all geothermal resources, all hydrocarbon
substances and gases, all nonhydrocarbon substances and gases, and
all minerals whatsoever, as such terms is used in the Stock Raising
Homestead Act of December 29, 1916 (43 U.S.C. Secs. 291-302) as
reserved in instrument recorded in Docket 905, pages 205-209.
C. CONVEYANCES
1. 1999 Ford Expedition, VIN No. 1FMPU18L7XLA41740.
2. 1999 Ford F150 Pickup, VIN No. 1FTRX18L5XNC36051.
3. 2000 Chevrolet Corvette, VIN No. 1G1YY32G7Y5112549.
4. 1994 Kawasaki Vulcan 750 Motorcycle, VIN No. JKAVNDA1XRB52632.
5. 1996 Honda Shadow Motorcycle, VIN No. 1HFSC320XTA100299.
6. Honda Magna Motorcycle, VIN No. JH2RC434VM200222
7. 1999 Polaris Ranger ATV, VIN No. 4XARF50A9XD210036.
8. 2000 Polaris Expedition ATV, VIN No. 4XACK42AXYA174112.
9. 2000 Polaris SP500 ATV, VIN No. 4XACH50A0YA183005.
10. 1999 Carson Hiway Cargo Trailer, VIN No. 4HXHC2020YC017477
D. FUNDS SEIZED FROM BANK ACCOUNTS
1. Approximately $4,847,117.20 in United States currency, and all
proceeds therefrom, seized from account number 5043100429 at Washington
Mutual Bank, Lakewood, Washington, on or about May 10, 2000, pursuant
to a warrant issued in the Western District of Washington.
2. Approximately $58,116.00 in United States currency, and all proceeds
therefrom, seized from account number 202002584 at Washington State
Bank, Federal Way, Washington, on or about June 15, 2000, pursuant
to a warrant issued in the Western District of Washington.
3. Approximately $1,000,000.00 in United States currency, and all
proceeds therefrom, from account number 2072291, ANZ Bank, Apia,
Samoa, seized at ANZ Bank, New York, New York, on or about May 17,
2000, pursuant to a warrant issued in the Western District of Washington.
4. Approximately $91,577.72 in United States currency, and all proceeds
therefrom, seized from account number 004671681579 at Bank of America,
Phoenix, Arizona, on or about May 10, 2000, pursuant to a warrant
issued in the District of Arizona.
5. Approximately $42,429.79 in United States currency, and all proceeds
therefrom, seized from account number 01709-08847 at the Bank of
America, La Jolla, California, on or about June 22, 2000, pursuant
to a warrant issued in the Western District of Washington.
6. Approximately $1,726,338.83 in United States currency, and all
proceeds therefrom seized from account number 601 093 007, at the
Marine Air Federal Credit Union, San Dimas, California, on or about
January 24, 2000, pursuant to a warrant issued in the District of
South Carolina.
7. Approximately $102,671.58 in United States currency, and all
proceeds therefrom, seized from account number 601 093 007 at the
Marine Air Federal Credit Union, San Dimas, California, on or about
June 23, 2000, pursuant to a warrant issued in the Western District
of Washington.
E. GOLD AND SILVER COINS
349 gold and silver coins each weighing approximately one ounce
or one troy ounce.
F. FOREIGN BANK ACCOUNTS
1. Samoa. All United States currency funds or other monetary instruments,
and all proceeds therefrom, credited to the following accounts located
at the ANZ Bank, Apia, Samoa:
(a) Approximately $6,710,077.44 , more or less, in account number
2072291 in the name of WCC - Samoa (Samoa), Inc.;
(b) Approximately $815,618.73 , more or less, in account number
2152940 in the name of SBC Inc.;
(c) Approximately $1,329,044.24, more or less, in account number
2176959 in the name of Privateassets.com;
(d) Approximately $6,742,712.75, more or less, in account number
2303876 in the name of Private International Development Bank;
(e) Approximately $525,673.23, more or less, in account number 219365
in the name of Third Millennium SA; and
(f) Approximately $3,004.56, more or less, in account number 2176948
in the name of Millennium SA.
2. Bahamas. All United States currency funds or other monetary instruments,
and all proceeds therefrom, held on behalf of any of the defendants
and Meliorations Management Teem under account number 0100202259,
(sub accounts PT 28000 and 28242-13) at CIBC Bahamas Ltd., located
at Shirley Street, Nassau, Bahamas.
3. Costa Rica. All United States currency funds or other monetary
instruments, and all proceeds therefrom, held on behalf of any of
the defendants and Meliorations Management Teem, in the following
accounts located at Banco Uno in San Jose, Costa Rica:
(a) Account Number 36023626 in the name of Vistana Florida, S.A.
(b) Account Number 100500795 in the name of Abesx Del Norte, S.A.
G. SECURITIES AND BROKERAGE ACCOUNTS
1. All funds, securities and financial assets of any kind held in
Accounts numbered E718-21BA-22297; E718-218A-22537; and 57216390-2,
in the name of Meliorations Management Teem, located at ED&F
Mann and Company, New York, N.Y.
2. Approximately 12,973 shares in Homestake Mining Co., Inc.
3. 450,000 shares in Gold and Silver Reserve, Inc.
4. 237,000 shares in AlphaCom.
H. OTHER PROPERTY
1. The ownership interest of Meliorations Management Teem in a joint
venture known as Performance Motor Racing, Atlanta, Georgia.
2. 1990 Canon Copier, Serial No. CYR24809.
If any of the above-described forfeitable property, as a result
of any act or omission of the defendant(s):
(1) cannot be located upon the exercise of due diligence;
(2) has been transferred or sold to, or deposited with, a third
person;
(3) has been placed beyond the jurisdiction of the Court;
(4) has been substantially diminished in value; or
(5) has been commingled with other property which cannot be subdivided
without difficulty;
it is the intent of the United States, pursuant to Title 18, United
States Code, Section 982(b), to seek forfeiture of any other property
of said defendant(s) up to the value of the above forfeitable property.
All in violation of Title 18, United States Code, Section 982, Section
984 and Section 1956.
A TRUE BILL:
DATED:
__________________________
FOREPERSON
________________________________
KATRINA C. PFLAUMER
United States Attorney
________________________________
ROBERT WESTINGHOUSE
Assistant United States Attorney
________________________________
CARL BLACKSTONE
Assistant United States Attorney
ANDREW C. FRIEDMAN
Assistant United States Attorney
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