Including information about his associates
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Legion for the Survival of Freedom, Inc., a Texas corporation (Plaintiff), vs. Willis Carto aka Frank Tompkins aka E. L. Anderson, Ph. D.; Henry Fischer aka Henri Fischer; Liberty Lobby, Inc., a corporation; Vibet, Inc., a corporation; and DOES 1 through 50, inclusive (Defendants). |
Civil No.: N64584 General Civil Complaint for declaratory relief, injunctive relief, imposition of constructive trust, for an accounting, for money received, and for actual, punitive and/or treble damages, attorney fees and costs, for civil conspiracy to defraud, conversion, negligence, and violations of California Civil Code Section 6215 |
Comes now, Legion for the Survival of Freedom, Inc. (Legion
or plaintiff
), complaining of the defendants, both individually and severally, and in support of this Complaint does alleged as follows:
1. Venue is proper here since, on information and belief, several of the defendants live and work in the North County Branch area, and/or conduct business here, as is set forth in paragraphs 4-7, infra.
2. Plaintiff Legion is a corporation duly formed under the laws of the State of Texas on April 14, 1952 and is duly authorized to do business in the State of California. Its principal office is in Orange County, California.
3. Legion is a non-profit corporation as defined and established by the Internal Revenue Code for the United States of America and by the State of Texas.
4. On information and belief, defendant Willis Carto is an individual and a resident of Escondido, San Diego County, California, and is also known by his use of the names Frank Tompkins and E. L. Anderson, Ph. D. (hereafter Carto
).
5. On information and belief, defendant Henry Fischer is an individual and a resident of the North County Branch area of San Diego County, California, and is also known by his use of the name Henri Fischer (hereafter Fischer
).
6. On information and belief, defendant Liberty Lobby, Inc. (hereafter Liberty Lobby
) is a corporation organized under the laws of the District of Columbia with its principal place of business in Washington, D.C.; Carto is its principal shareholder or member, Treasurer and/or Chief Executive Officer; Liberty Lobby has in the past and is conducting its business through Carto in, inter alia, the North County Branch area of San Diego County, California.
7. On information and belief, defendant Vibet, Inc. (hereafter Vibet
) is a corporation organized under the laws of Switzerland with its principal place of business in the North County Branch area of San Diego County, California; Carto is its principal shareholder or member, Chairman of the Board, and/or Chief Executive Officer; Vibet has in the past and is conducting its business through Carto.
8. Plaintiff is unaware of the true names and capacities of the individuals, corporations or associations sued herein as DOES 1 through 50. Plaintiff will move to amend this Complaint when their true names and capacities are determined.
9. This action concerns assets belonging to plaintiff Legion which, on information and belief, were previously converted by and/or are still in the possession and control of the defendants. The assets consist of assets gifted to the Legion by one Jean Farrel (hereafter Farrel
), and which were the subject of now-settled disputes which previously existed between the Legion and the Farrel probate estate’s representative.
10. Farrel held considerable assets in the form of shares of stock in NECA Corporation, a Liberian corporation, stock, gold, coins, cut but unset diamonds and precious stones, and real estate. The assets were located in various sites around the world, including in a safe deposit box at the First Union National Bank branch in Henderson County, North Carolina, and in an account with the stock brokerage firm of Quilter Goodison of London, England. NECA Corporation stock was composed of twenty (20) bearer certificates.
11. On August 11, 1985, Farrel died in Lutry, Switzerland.
12. Several legal disputes arose between the personal representative of the estate of Farrel (Joan Althaus), who also was a beneficiary, and the Legion, largely concerning the appropriateness of what Legion contended had been the earlier transfer by Farrel of NECA bearer certificates to the Legion. Litigation was commenced in Henderson County, North Carolina, in London, England, and in the Civil Court of the Cantonal Court of Yaud, Switzerland. The disputes were ultimately resolved by entry into a Settlement Agreement, a Mandate Agreement, and a Distribution Agreement (all on July 17, 1990) (hereafter the agreements
), filed in the Civil Court of the Cantonal Court of Yaud, Switzerland, and by issuance of appropriate related Orders, entered in the various locations where the disputes were filed, to carry out the agreements. By the terms of the agreements, certain assets were to be turned over to a Swiss public notary (notaire
), a Mr. Roland Rochat, and, after payment of certain taxes and expenses, were to be distributed by him forty-five percent (45%) to Plaintiff Legion and fifty-five percent (55%) to Joan Althaus. (On information and belief, a true copy of the Agreements is attached hereto as Exhibit A, and is identical to the originals except for signatures which appear on the originals at each signature line but which are omitted, in part, on the copies.)
13. Plaintiff is informed and believes and theron alleges that pursuant to and as called for by the agreements, Roland Rochat thereafter obtained and held certain identifiable assets in trust for the benefit of plaintiff Legion, including gold, diamonds, other gems, securities and/or specific deposits kept at financial institutions, all totaling at least $7,585,189.00 in value (hereafter the assets
).
14. Defendant Carto had served as a member of the Board of Directors of plaintiff Legion prior to 1984. On or about September 18, 1985, Carto was appointed by the Legion as the limited agent, for the purpose of representing its interests re: the gifts of Farrel and her estate, and the later prosecution of the litigation between Joan Althaus and the Legion concerning such interests. At all times between such appointment and the execution of the agreements settling the litigation, Carto acted as an authorized agent of the Legion regarding the gifts of Farrel, and the litigation. Furthermore, Carto had been associated with the Legion for such same period, and through September 24, 1994, by his occupying the same suite of offices as the Legion, working as a volunteer on the business of the Legion, and advising officers and employees of the Legion concerning the business transactions of the Legion.
15. In June 1993, for the first time, the Legion began to suspect that Carto was acting to benefit himself rather than the Legion, as a result of Carto’s informing the Legion’s employee Marcellus that the assets were being transferred to good causes.
On September 24, 1993, Legion’s Board of Directors formally terminated Carto’s limited agency.
16. At all such times from September 18, 1985, through the termination of his limited agency, a confidential relationship existed between plaintiff and defendant Carto, in that defendant Carto was appointed by the Legion and agreed to and did serve as the agent of the Legion regarding the gifts made to the Legion by Farrel and the litigation regarding said gifts.
17. Until the summer of 1993, plaintiff Legion believed in the integrity and truthfulness of defendant Carto, and reposed trust and confidence in him to make full disclosure to the Legion’s officers and directors concerning protection of the Legion’s assets. Until June 1994, the Legion was unaware of any of the true facts regarding the disposition and location of most of the assets, since Carto failed to make full disclosure thereof; even now the Legion has been kept in the dark concerning the location of most of its own assets.
18. Plaintiff is informed and believes and thereon alleges that sometime between 1986 and 1994, inclusive, unbeknownst to the Legion, Carto, and Fischer as Carto’s agent, caused a secret disposition of the assets. On information and belief, defendants Liberty Lobby, Inc. and Vibet, Inc. at all relevant times have been controlled by Fischer and/or Carto and participated in such disposition of the assets, including by receiving them along with the other defendants.
19. On information and belief, at some presently unknown time between 1986 and the present, all of the defendants conspired to conceal the true information regarding the assets from the Legion, and to convert the assets to their own use and benefit. In particular, on information and belief, one or more of the defendants have caused the transfer of One Hundred Thousand Dollars ($100,000) of the assets to the defendant Liberty Lobby, for no consideration. On information and belief, defendants still have most of the assets, at least in some form traceable to the assets, and continue to convert and dispose of the assets at will. Legion’s Board has never authorized any distribution of the assets to the defendants nor to anyone else, and never authorized the defendants to dispose of the assets or remove them from their custody with Roland Rochat.
20. On information and belief, from July 1990 to the present, Carto and Fischer have represented themselves to the notary Roland Rochat, including by delivery of materially false and/or unauthorized Legion records, as being authorized to receive the assets that were supposed to be distributed to the Legion; they instructed Roland Rochat to distribute the assets for the defendants’ benefit, i. e., specifically, to, inter alia, either a Swiss attorney named Patrick Foetisch, improperly acting for them rather than the Legion through its authorized directors and officers, or to an account in the name of the Legion but improperly controlled by the defendants, specifically, to account number 12167300 as opened with the Banque Cantrade in Lausanne, Switzerland (the bank account
).
21. On information and belief, as a result of the above fraud and deception, at various times between July 17, 1990, and June 30, 1994, Roland Rochat delivered from the assets to one or more of the defendants, instead of to the Legion, the true owner thereof, cash and assets in the amount of at least Seven Million One Hundred Thousand Dollars ($7,100,000), for no consideration to the Legion. For example, on information and belief, on or about November 10, 1993, Roland Rochat delivered to defendants cash is the amount of Three Million Two Hundred Thousand Dollars ($3,200,000). On information and belief, on or about July 30, 1992, Roland Rochat also delivered to one or more of the defendants unset precious stones with an approximate value of Five Hundred Thousand Dollars ($500,000). On information and belief, at the time defendants received such and the other assets, said assets were owned by the Legion, and even now they (or assets traceable to them) remain subject to imposition of a trust in favor of the Legion as the rightful owner. Indeed, to date the Legion has received only Two Hundred Fifty Thousand Dollars ($250,000) from the assets, even though the assets are believed to have totalled more than $7.5 million when they were assembled in full by Roland Rochat for distribution to the Legion as required by the agreements.
22. On information and belief, by obtaining the assets from Roland Rochat and others who were in possession of such assets, and by falsely representing to such parties that the assets would be delivered by the defendants to the Legion, defendants obtained the property through fraud and deceit.
23. Plaintiff has made repeated demands for the immediate return of the assets from Carto and Fischer, but they have failed and refused, and continue to fail and refuse, to return such property. At no times have defendants delivered to plaintiff any of the assets which they have, on information and belief, received, nor have defendants given any accounting to plaintiff of the assets. In refusing to deliver said assets to the Legion, defendants have, on information and belief, converted such assets as have been delivered to each of them.
24. On information and belief, by virtue of their fraudulent acts and the breach of trust by Carto, defendants hold the assets (or assets traceable to them) as constructive trustees for plaintiff Legion’s benefit. The corporations and entities, other than Liberty Lobby and Vibet, which, with them, participated in the fraud and conspiracy and are now in possession of or hold title to the assets of plaintiff Legion, are named herein as DOES 1 through 20. The individuals, other than defendants Carto and Fischer, who, with them, participated in the fraud and conspiracy and are in possession of or hold title to the assets of plaintiff, are named herein as DOES 21 through 50.
25. Plaintiff is informed and believes and thereon alleges that since approximately July 1, 1993, defendants have caused and continue to cause injury to the assets, and to plaintiff’s beneficial interest therein, by committing waste of such assets, including by transferring them to other entities owned by the defendants, by spending them on personal uses such as travel, by funding various lawsuits engaged in by defendants, and/or by secreting the assets from detection. Plaintiff is further informed and believes that defendants have contacted plaintiff’s agents (e. g.; lawyers) and purported to give such agents orders, falsely representing their authority to act for plaintiff.
26. Plaintiff is thus informed and believes and thereon alleges that plaintiff’s beneficial interest in the property will be further wasted and converted unless defendants’ conduct is forthwith enjoined.
27. Plaintiff restates and realleges the allegations of paragraphs 1 through 26, supra, inclusive.
28. Because of the aforementioned civil conspiracy, plaintiff has been defrauded, and is, on information and belief, continuing to be defrauded, out of the assets, proximately causing plaintiff damages in a sum in excess of Seven Million One Hundred Thousand Dollars ($7,100,000), the exact amount to be proved at trial.
29. Defendants’ acts were, on information and belief, committed with fraud, wilfulness, wantonness, malice, and oppression, entitling plaintiff to an award of its above-noted actual damages, plus punitive damages, in a presently unspecified sum, dependant in part on defendants’ net worth, all to be shown at trial. Such damages should be awarded to plaintiff, along with imposition of a constructive trust over the assets, and over the assets ultimately traceable to the assets.
30. Restates and realleges the allegations of paragraphs 1 through 26, supra, inclusive.
31. In addition to the assets described above, Carto and/or Fischer, on information and belief, have converted the Legion’s records and corporate seal to their own use and benefit, and have failed and refused to deliver them to the Legion.
32. Plaintiff had no reason to know or suspect any conversion of the assets until beginning in, at the earliest, June 1993, as noted supra. The conversion of the Legion’s records and corporate seal was not suspected by the Legion until September-October 1993, when Carto refused to turn over to the Legion its assets and records.
33. Due to the value of the above-described converted assets of the Legion, plaintiff Legion has been directly and proximately damaged in the amount of at least $7.1 million, plus interest since each conversion occurred, the exact sum to be proved at trial.
34. Between the time of defendants’ conversion of the above-mentioned assets to their own use, and the filing of this action, plaintiff has expended time and incurred expenses in the amount of at least Six Thousand Five Hundred Dollars ($6,500) in the proper pursuit of the recovery of the converted assets; such expenses are increasing with the passage of time.
35. The aforementioned acts of defendants were fraudulent, willful, wanton, malicious, oppressive, and were undertaken with the intent to defraud plaintiff, a public-interest corporation; such acts justify the awarding to the plaintiff of exemplary or punitive damages, in a sum to be shown at trial. On information and belief, defendants received the assets, which were stolen, knowing them to be stolen, or defendants concealed, sold, withheld, or aided in concealing, selling, or withholding them from the Legion with knowledge that they were stolen, entitling plaintiff, in the alternative to punitive damages, to treble damages, costs, and reasonable attorneys’ fees, as allowed under California Penal Code Section 496.
36. Restates and realleges the allegations of paragraphs 1 through 34, supra, inclusive.
37. A sufficient and reasonable time has elapsed since defendants have received the assets, but defendant Carto has neglected and refused, and still neglects and refuses, to render to plaintiff a just and true account of the assets, although demand therefor was duly made on Carto, and although the disposition of the assets has occurred due to Carto’s violation of his limited agency powers and despite the termination thereof. Defendant has also neglected and refused to pay over or deliver to the Legion any of such assets or any part thereof, all to plaintiff’s damage, in the sum of more than $7.1 million, the exact sum to be proved at trial. Defendant should be ordered to provide an accounting of the assets and assets traceable to them.
38. Restates and realleges the allegations of paragraphs 1 through 26, supra, inclusive.
39. Defendant Carto had a duty to manage the affairs of the Legion entrusted to him with reasonable skill, ordinary diligence, and in good faith.
40. In the alternative to the allegations of intentional misconduct as made supra, the actions of Carto were negligent, directly and proximately causing foreseeable damages to plaintiff in the amount of at least $7.4 million plus interest, the exact amount to be proved at trial.
41. Restates and realleges the allegations of paragraphs 1 through 26, supra, inclusive.
42. On information and belief, the assets are constituted in large part by money owned by the Legion and had and received by the defendants since July 17, 1990.
43. Defendants should be ordered to pay the Legion such sums as each has received, with interest at the maximum legal rate, the exact sum of which will be shown at trial, which is presently unknown but believed to exceed $7.1 million in total.
44. Restates and realleges the allegations of paragraphs 1 through 26, supra, inclusive.
46. On information and belief, Carto removed, erased, or cancelled, with the intent to deceive, a Legion corporate record; and/or made, delivered, issued, or published a materially false Legion corporate record with knowledge of its falsity; and/or he participated in the making, delivery, issuance, or publication of such record. Such acts, on information and belief, occurred at the time of and to induce the participation of others in the aforesaid acts of conversion and during and part of the civil conspiracy to defraud, in violation of California Civil Code Section 6215, proximately causing the Legion damages in the sum of at least $7.1 million, plus the legal rate of interest, the precise amount to be shown at trial.
46. Restates and realleges the allegations of paragraphs 1 through 45, supra, inclusive.
47. Plaintiff has no adequate remedy at law, and will be irreparably injured absent issuance of an order, pendante lite and then permanently: prohibiting defendants from representing to plaintiff’s trustees and agents (such as banks, attorneys, and Mr. Rochat) that defendants have authority to act for plaintiff; and requiring the restraint on defendants of any transfer of Legion records, corporate seal, and any interest in the assets (or assets traceable to them). Plaintiff is also entitled to issuance of a writ of possession of the corporate seal and records, and any of the assets which are still tangible. Upon entry of judgment, the Court should also order turnover of the Legion’s records, corporate seal, and the assets (and assets traceable to them) to plaintiff, and prohibit defendants from interfering with plaintiff’s exercise of all rights of control, possession, and ownership over them.
48. Restates and realleges the allegations of paragraphs 1 through 45, supra, inclusive.
49. The Legion contends that it owns the bank account, that it has the right to control the amount on deposit in such account, and that it has sole right to obtain the sums which were to be distributed to the Legion under the agreements from Mr. Rochat, wherever such assets are located.
50. The Legion is informed and believes that the defendants contend to the contrary of the allegations in paragraph 49, supra, and that they instead contend that one or more of them have such rights.
51. On information and belief, there is a dispute requiring a Declaration from the Court that the Legion has the rights as asserted in paragraph 49, supra.
1. Imposition of a constructive trust over the assets, records, and seal, in favor of plaintiff.
2. An award of actual damages, of at least $7.1 million, plus interest at the maximum legal rate, in a sum to be proved at trial.
3. Punitive damages in a sum to be proved appropriate at trial;
4. Costs of suit; and
5. Such other and further relief which the Court views as proper.
1. For actual damages in a sum unique to each defendant for the value of what they converted, plus interest at the maximum legal rate, in sums presently unknown, but totalling at least $7.1 million.
2. For punitive damages in a sum to be proved appropriate at trial;
3. In the alternative to punitive damages, treble damages, costs, and reasonable attorneys’ fees, under California Penal Code Section 496, in a sum to be proved at trial;
1. For an accounting of the assets’, records’, and corporate seal’s disposition;
2. Costs of suit; and
3. Such other and further relief which the Court views as proper.
1. An award of actual damages, of at least $7.1 million, plus interest at the maximum legal rate, in a sum to be proved at trial;
2. Costs of suit; and
3. Such other and further relief which the Court views as proper.
1. For actual damages in a sum unique to each defendant to be proved at trial, for which of the assets they received, plus interest at the maximum legal rate, in sums presently unknown, but totalling at least $7.1 million;
2. Costs of suit; and
3. Such other and further relief which the Court views as proper.
1. For actual damages unique to each such defendant as a result of their acts concerning Legion’s records, in a presently unknown sum, but which damages total at least $7.1 million, plus interest at the maximum legal rate;
2. Costs of suit; and
3. Such other and further relief which the Court views as proper.
1. For a temporary restraining order, and a temporary and permanent injunction, prohibiting the transfer of any interest in the assets, or assets traceable to them, and of Legion’s records and seal; and prohibiting defendants from holding themselves out to anyone as having authority to act or speak for plaintiff;
2. For a writ of possession and permanent injunction requiring the transfer to plaintiff of the assets, or assets traceable to them, and Legion’s records and corporate seal;
3. Costs of suit; and
4. Such other and further relief which the Court views as proper.
1. For a declaration: that the Legion is the owner of the bank account and alone has all rights associated with such ownership, such as the right to receive bank statements, obtain transaction records, and receive and disburse such funds as are on account; that the Legion has and had the sole right to any and all of the assets which were are subject to collection and disbursement by Mr. Rochat to the Legion under the agreements, including in assets traceable to the assets.
Wherefore, Judgment should be entered in favor of plaintiff and against defendants.
Dated: July 21, 1994
Jacques Beugelmans
Thomas Musselman
Attorneys for Plaintiffs