CEC Timeline
October 2004 Starting around this date, the Defendants began their investment HYIP scam and defrauded investors of at least $19 million through the fraudulent offer and sale of securities referred by the name Capital Enhancement Club (CEC) and known as a “private joint venture investment”.
On May 4, 2005, the SEC filed their first Complaint alleging that David Tanner masterminded a scheme to defraud investors and of the $15,000,000 million investors had sent CEC, only about $300,000 was accounted for in US banks. There were NO other assets and no legitimate business activity at all. The entire operation was a ponzi scheme.
Attorneys for Defendant David Tanner, which included one local Topeka lawyer Thomas D. Haney from Wright, Henson, Clark, Hutton, Mudrick & Gragson, L.L.P. , and two high priced legal eagles - Robert L. Herskovits and Michael F. Bachner from the New York City office of Bachner & Herskovits filed a response to the SEC complaint.
What did all those lawyers have to say on behalf of David Tanner?
Most of it went like this…”Pursuant to…all matters are denied about which Tanner is without knowledge or information sufficient to form a belief concerning the truth thereof…Tanner denies the allegations.”
In response to discovery requests served with the Complaint, Tanner’s Lawyers produced a sworn declaration indicating “Tanner’s” intention to assert his Fifth Amendment right against self- incrimination.
About One Year Later
On March 2006, the court set a deadline by which all CEC investors must have completed a claim form via the Receiver’s website. That ‘claims bar date’ of April 28, 2006, was approved and was considered, “… a full, fair and informed opportunity to investors who have not already filed a claim, without adding undue delay to the proceedings.”
Early June 2006, the SEC moves to modify the Court’s Scheduling Order and permit them some additional time for discovery in order to, “…determine the true identity of the person or persons who masterminded the CEC scheme and effectively stop defendant “David Tanner” from: (1) defrauding the Court, and (2) using a bogus identity to escape the demands of previously-entered judgments”
A memorandum filed at the same time showed facts suggesting that “Tanner” was an alias for James Tucker!
The court documents explain that up until this time for well over a year, the Plantiff, the SEC, had identified David Tanner through CEC materials as CEC’s managing partner and webmaster. He had also opened e-gold accounts using that same Tanner name plus the website was registered and posted in that name. Unfortunately, all of these items are very easy to do requiring no identification.
6/7/05 Preliminary Report - 6/20/06 Motion to Reopen Discovery
Between June 7, 2005 and June 20, 2006 the Securities Exchange Commission and the Receiver either filed or had received from attorney’s representing defendants a total of 40 (forty) separate court documents all addressing David Tanner.
All of these documents identified the mastermind and defendant as David Tanner. Both law firms representing this defendant, recognized him as David Tanner.
If you look back to May 2005, Tanner’s counsel submitted his sworn declaration indicating Tanner’s intention to assert his Fifth Amendment Right against self-incrimination. It was no surprise that declaration had on it what was prostituted as Tanner’s original signature!
They were all chasing a ghost!
June 20, 2006 the courts were now delaying the action in order to find out exactly who David Tanner really was…. 6/20/2006, SEC Memorandum to Open Discovery to Establish Real Identity of David Tanner
As it turns out, both the SEC and the Receiver deposed a gentleman named Phillip Risby who was the Relief Defendant in another scam called Dynamic Environmental Solutions (“DES”). Risby testified that funds traced from CEC investors to DES were the result of an investment from a person named “James Tucker,” not Tanner.
While Tanner’s Counsel filed an answer essentially denying each of the allegations directed at Tanner, the Receiver’s evidence showed different.
- Many of the early transactions directed by Tucker were executed in E-Gold. E-Gold records show that a computer and the internet were used on December 13, 2000 to open new accounts for CEC, account #226210, and David Tanner, account #226212. The following day, a new account was opened in the same manner by James Tucker, account #226723. The E-Gold internet logs that all three accounts were opened using a computer with the same remote internet protocol address. The CEC and Tucker accounts were used for several hundred transactions until they were closed in July 2004, and there were approximately fifty transactions when the Tucker account and CEC account were used on the same day and from computers with identical IP addresses.
- Another identifying items appears when Tucker directed money transferred to Dynamic Environmental Solutions (DES), a Puerto Rican company. The Marroc Corp bank account records allowed the tracing of $900,000 in funds from CEC investors to DES. The president of DES, Phillip Risby, confirmed that his company received an investment in DES by James Tucker.
- Further examination of CEC bank accounts identified payments totaling $675,000 wired directly to James Tucker at the St. Maarten Commercial Bank and to Paritate Bank in Riga, Latvia to pay credit card bills of James Tucker.
- Tanner’s counsel has received seven payments totaling approximately $400,000. Three of the seven payments, totaling $227,000 originate from RBTT Bank located in the Caribbean and with a branch in St. Maarten.
- While the Receiver can demonstrate that Tucker received or directed payment of approximately $18 million of CEC investor funds—the Receiver has yet to uncover even one financial account indicating that anyone named “David Tanner” obtained or controlled significant CEC funds.
I think its important to point out the the e-gold database properly identified the location and the name James Tucker. E-gold accounts hold vast amounts of data which can be used to track down, identify and prosecute someone who misuses their system. With their database, e-gold identified whom the SEC could not.
There are about a dozen ‘identifying’ money transactions showing the connection to James Tucker in St. Maarten. Consequently, the Receiver concluded and declared under penalty of perjury that David Tanner was an alias for James Tucker, whose last known location was St. Maarten, Netherlands Antilles.
The newer court documents showed that James Tucker, who is apparently an expatriate American, resides in St. Maarten, Netherlands Antilles.
An investigative report by Peter Woglom, Director of Investigations at Control Risks Group, LLC a prominent world-wide private investigative firm, uncovered that James Tucker was living on the Island of St Maarten residing at 13 Greenstarshell Road and described the house as “unapproachable”. His report said the “fortress” includes 24-hour security, six canine units, and security cameras “everywhere.” Tucker, rarely leaves the villa.
May 10, 2007 the SEC and the Receiver jointly move to modify the Agreed Order of Permanent Injunction and Order of Disgorgement Against David Tanner which was originally created almost two years earlier in September 2005.
Enough detailed information was now a part of the court records to establish that “David Tanner” and “James Tucker” were both aliases of Scott Fraiser Klion, formerly of Copperas Cove, Texas. He was also now being labeled “a recidivist securities law violator.”
Court document show that modifying the injunction to reflect Klion’s true identity and ordering him, not Tanner or Tucker, to pay back all that money would, “… promote justice, serve the best interests of the investing public and improve the Receiver’s ability to collect and preserve receivership assets.”
A full two years after the start of the original case, the SEC and the Receiver were now filing evidence demonstrating Klion’s use of various aliases, including the names “David Tanner” and “James Tucker,”
- The photo of Tucker matches the expired Texas driver’s license photo of Klion
- Multiple witnesses who met with Tucker in the Antilles reported meeting a female companion named Liz or Elizabeth who has a daughter named Patricia Alaniz. A woman named Elizabeth Alaniz was identified as Klion’s co-defendant girlfriend
- When the Cen-Tex receiver took possession of Klion’s house in 1998, he found information on obtaining “economic citizenship” from the Lesser Antilles Island of Dominica. Tucker purportedly holds a passport from the Island of Dominica
- Multiple witnesses who met Tucker described that he wore a distinctive Virginia Military Institute (“VMI”) ring and discussed being a VMI graduate. Klion is a VMI graduate and the Cen-Tex receiver identified the VMI ring from the Tucker photograph.
- An individual who personally met the person going by the name James Tucker identified him as Scott Klion.
As of today’s date[10-24-07], no one has disputed the new Scott Klion identity claim and ALL of Tanner’s three prior attorneys, for unspecified reasons, have all withdrawn from the case.
Klion has been involved in at least three cases initiated by the Commission.
In the Receiver’s eighth status report fill with the court on May 10, 2007 we find out exactly where they stand with their recovery and collection efforts.
“…the Receiver has recovered approximately $6.1 million in investor funds. The Receiver has also identified and obtained orders directing the return of an additional $8 million in investor funds deposited in US and European Banks. Furthermore, the Receiver has pending motions for the turnover of approximately $1.4 million in investor funds transferred to a foreign bank. The Receiver has also recovered two properties in Dayton, Nevada which have been listed for sale with a Nevada real estate agent.”
The orders directing the return of $8 million in US and European Banks includes a balance of $4.9 million still owed by Seaforth Meridian. Seaforth Meridian is a defendant in a separate, similar and somewhat connected securities fraud receivership.
Klion was also named as the primary defendant in SEC v. Scott Klion, d/b/a Cen-Tex Alchemy Guild, et al. No. 6:98-CV-186, USDC. Another civil case.
According to the Commission’s complaint, Klion and his fiancee, Alaniz(now also residing in St.Maarten), raised approximately $2.7 million from at least 1,400 investors in several states through the offer and sale of interests in a fraudulent Pure Contract Trust investment program. Klion and Alaniz represented to investors that their money was pooled and then used to make a variety of foreign or offshore investments that Klion and Alaniz claimed were not subject to the jurisdiction of any Agent or Agency of the U. S. Government. The complaint alleges that Klion and Alaniz told investors that these secret investments would generate gross returns of 400% or more, that virtually all of the investments were guaranteed by Top 100 banks, and that the remainder were backed by either unidentified wealthy individuals or the governments of foreign countries. The complaint further states that the trading programs do not exist and that, in fact, the defendants used funds obtained from current investors to pay purported profits in the form of monthly dividends to prior investors, in an obvious Ponzi scheme, and for their own personal expenses, including a $30,000 engagement ring that Klion purchased for Alaniz.*lawhost.com
After the SEC began the Cen-Tex case, Klion fled to St. Maarten. Despite being enjoined from further securities laws violations in the Cen-Tex case, Klion, under the alias David Tanner, formed Capital Enhancement Club, the ponzi scheme.
The Receiver has subpoenaed thousands of pages of bank records and other documents related to the e-currency firms in order to trace the flow of investor funds into CEC and back out to various individuals and companies. The Receiver has deposed several e-currency firms and payment processors related to CEC, several of whom have asserted a Fifth Amendment right not to answer any of the Receiver’s questions.*ceclubreceiver.com
Tanner/Klion enticed at least 1146 investors into the CEC scheme and received net investor funds totaling $19,800,974
As of today, Mr. Klion has refused to engage in meaningful settlement discussions or provide any information needed for the Receiver to recover additional investor funds.
However, a modified copy of this new court order was sent via email to Scott Klion aka James Tucker aka David Tanner at:
jtucker52@hotmail.com, 1234mnbv@safe-mail.net and fjejhw@mail2world.com
Wow.
All the authorities can do is send him an angry email!
Sources:
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