Appendix — Millan, In Re (No. 90-155)
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90-155 _—
JOSEPH F. SPANIOL, uR,
CLERK
a a
I
No.
Im the Supreme Court
OF THE
United States
OCTOBER TERM, 1989
In re RICHARD MILLAN, Petitioner
APPENDIX TO
PETITION FOR A WRIT OF MANDAMUS/
PROHIBITION TO THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT
OF CALIFORNIA,
AND THE HONORABLE EDWARD RAFEEDIE, AND
THE HONORABLE WILLIAM J. REA, JUDGE OF
THE UNITED STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA
Richard A. Millan
Counsel of Record
In Propria Persona
12922 Harbor Blvd. #749
Garden Grove, CA 92690
(213) 661-1556
TABLE OF CONTENTS
APPENDIX TO
PETITION FOR A WRIT OF MANDAMUS/
PROHIBITION TO THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT
OF CALIFORNIA,
AND THE HONORABLE EDWARD RAFEEDIE, AND
THE HONORABLE WILLIAM J. REA, JUDGE OF
THE UNITED STATES DISTRICT COURT FOR THE
Appendix
CENTRAL DISTRICT OF CALIFORNIA
Page
A
Order (dismissing appeal and
denying Appellant's request
to stay proceedings), U.S.
Court of Appeals for the
Ninth Court, filed June l,
nn arr hoe A-1
Order Denying Leave to Amend
Complaint, U.S. District
Court, Central District of
California, dated April 19,
Res ca ee ee es eee a kee oe 0 A-3
Order Denying Motion to
Disqualify Judge Rea, U.S.
District Court, Central
District of California, dated
BES 20s SO a 6b ewe cee ees A-6
Order on Motions for Partial
Summary Judgment; Findings of
Fact and Conclusions of Law
Thereon, U.S. District Court,
Central District of
California, dated December 6,
SR es er ae ete A-9
Page
Excerpts from United States
Court of Appeals For the
Ninth Circuit Civil Appeals
Docketing Statement.......... A-26
Order (dismissing appeal),
U.S. Court of Appeals For
the Ninth Circuit, filed
February 9, 1990............. A-29
Chronological Chart for the
Years 1983-1987 To Show the
District Court the Multiple
Schemes and RICO violations
Perpetrated by Defendants
in this Aetigh.. i4.65%.00 ce A-31
Court Docket #62 Facing Page
(Plaintiff Richard Millan's
Notice of Motion and Motion
to Recuse the Hon. William J.
Rea Judge of the United
States District Court,
Affidavit of Prejudice,
Certificate of Good Faith,
Filed Concurrently with
Notice of Motion and Motion
to Disqualify and Recuse
Attorney Steven Lubell,
Declaration of Richard Millan,
Statement of Facts and Points
and Authorities. ..4sscceccria A-57
Excerpts From Professor
Brewer's "Mandamus Power,"
Buffalo Law Review, Vol. 31,
1982 at pages 68 through
Lh Prarie A-58
A-ili
Page
J Excerpts from Mercury
Service, Inc. v. Allied Bank
of Texas, 117 F.R.D. 147
(C.D. COL. TOT) ecccccccccees A-62
K First Amendment to the
United States Constitution... A-83
L Fifth Amendment to the
United States Constitution... A-84
M Excerpt from Reporter's
Transcript of Proceedings.... A-85
N Calif. Rules of Professional
Conduct, Rule 5-200.......... A-101
O Calif. Rules of Professional
Conduct, Rule 5-220.......... A-103
P Calif. Rules of Professional
ComGuct, RUG 3-300. cccccesec A-104
Q Calif. Rules of Professional
Conduct, Rule 5-310.......... A-105
R U.S. District Court Motion
Hearing on May 9, 1988....... A-107
S Excerpts of Court Record 62,
Pages 24 through 29,
paragraphs 36-45......ccccees A-109
T Local Rule 2.6.4 of the
Central District of
EI cd te 6 ee 6 6 8 604.0 68 A-119
U Calif. Rules of Professional
Cememet, RUS FrosOS.ccccvscss A-120
A-iv
BB
cc
DD
EE
Calif. Rules of Professional]
Conduct, Rule 7-107.....ccecs A-122
California Business and
Professions Code § 6068(d)...A-123
Excerpts from ABA Model Rules
of Professional Conduct...... A-124
California Business and
Professions Code § 6128...... A-126
Harassment of Opposing
, 55 POPPPeTer TETTCTCETTTTee A-128
Excerpts of Court Record 87,
page 17, paragraph 30,
through page 19, paragraph
D6 a00t en ebseeteadecemsonkesees A-137
Excerpts of Court Record 12,
page 33, lines 6 through 27,
and page 34, lines 1 through
Bs 606 664066 643006 Sb 6U4E SOOO A-140
Court Record 8l Pages 2
Through 22 Direct Rebuttal to
the Testimony of Marsha
Bennett and the List of
Predicate RICO Acts in this
Excerpts from Reporter's
Official Transcript of
Proceedings, Monday, June 13,
| SR A-229
Excerpts from Letter From
Uday R. Sawhney, CPA to Murray
Gardner Dated July 21,
ee re eee ee ee A-232
FF
Chronology of the Efforts by
Millan to Obtain an Order
From the District Court on
the Disqualification of
PS S| Pere rr rs . ree
Page
FILED JUNE 1, 1988
UNITED STATES COURT OF APPEALS
FOR THE NINTH COURT
RICHARD MILLAN 88-5972
DC# CV-87-2283-WJIR
Central California
Plaintiff-Appellant
Vv
MARSHA BENNETT
et al
ORDER
)
)
)
)
)
)
)
Defendants-Appel lees)
)
)
Before: HUG, BRUNETTI and NOONAN,
Circuit Judges
“Appellant requests that this Court
stay the district court proceedings
pending his appeal of the district
court's order entered April 21, 1988,
denying leave to amend his complaint and
refusing to extend the discovery cut-off
date. This is not a final, appealable
order under 28 U.S.C. §§ 1291, 1292 or
the collateral order doctrine.
APPENDIX A A-1
“Accordingly, this appeal is-
dismissed for lack of jurisdiction.
Appellant's request for a stay is
denied."
APPENDIX A A-2
ee
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
RICHARD MILLAN ) CV 87-2283 WIR
)
Plaintiff ) ORDER DENYING
) LEAVE TO AMEND
v ) COMPLAINT
MARSHA BENNETT,
COLLEEN S. STEIN-
BAUGH, RICHARD W.
STEINBAUGH, MURRAY
GARDNER, BONNIE
GARDNER, FASHION
EMBROIDERY, INC.
Defendants
ee ee a ee ee ee ae ee ee ee
"This matter comes before the Court
on plaintiff's motions for leave to
amend his complaint and to continue the
discovery cutoff and pretrial conference
dates. The court having considered the
papers filed in support thereof and in
opposition thereto and having heard oral
argument,
IT IS HEREBY ORDERED that the
motions are DENIED.
APPENDIX B A-3
The Court finds as follows:
"The propriety of a motion for
leave to amend is generally deter-
mined by reference to several
factors: (1) undue delay; (2) bad
faith; (3) futility of amendment;
and (4) prejudice to opposing
party. v. Retirement und
Trust etc. 648 F.2d 1252, 1254 (9th
Cir. 1981).
"The Court has previously
ordered the parties to complete
discovery by April 18, 1988.
Plaintiff seeks two weeks before
that date to amend his complaint to
add eight additional defendants and
ten additional causes of action.
Many of the same claims have
apparently been raised by plaintiff
against the same parties as cross-
claims in an older state court
APPENDIX B A-4
action. Based on these facts, the
Court finds (1) that the opposing
party would be significantly
prejudiced by the magnitude and
timing of the proposed amendment;
and (2) that the amendment is
untimely since plaintiff knew or
should have known of these claims
and parties at the time he filed
the action.
"For all the above’ reasons,
the motion for leave to amend the
complaint, as well as the motion to
continue discovery cutoff and
pretrial conference dates, are
DENIED.
“Dated: April 19, 1988
WILLIAM J. REA
UNITED STATES
DISTRICT JUDGE"
AP! ENDIX B A-5
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
RICHARD MILLAN CV 87-2283 WIR(Tx)
Plaintiff ORDER DENYING
MOTION TO
Vv DISQUALIFY
JUDGE REA
MARSHA BENNETT,
COLLEEN S. STEIN-
BAUGH, MURRAY
GARDNER, BONNIE
GARDNER, FASHION
EMBROIDERY, INC.
Defendants
"Plaintiff Richard Millan brought
this motion for a new trial and to
disqualify Judge Rea on June 13, 1988.
The Court, having carefully read and
considered the papers and pleadings. on
file and the governing law, hereby
denies plaintiff's motion.
Plaintiff moves to disqualify Judge
Rea pursuant to 28 U.S.C. § 144 on the
grounds that Judge Rea has a_ personal
bias or prejudice against the plaintiff.
A violation of § 144 requires that the
bias or prejudice of the Judge be both
APPENDIX C A-6
personal, i.e., directed against the
party, and extrajudicial.
~ In the instant case, the plain-
tiff's motion is legally insufficient.
Plaintiff fails to specifically allege
facts to support the contention that the
Judge exhibited bias or prejudice toward
the plaintiff stemming from
extrajudicial sources.
United States v. Silba, 624 F.2d 864
(9th Cir. 1980). For the same reasons,
plaintiff's claim pursuant to 28 U.S.C.
§ 455 and plaintiff's constitutional
claim are denied.
Defendants Marshal Bennett and
Colleen Steinbaugh request that the
Court impose sanctions on plaintiff
pursuant to Federal Rules of Civil
Procedure Rule ll. The Court does not
find sanctions warranted.
IT IS SO ORDERED.
'
~
APPENDIX C A
The Court further orders the Clerk
to serve copies of this order on all
parties by United States mail."
Dated: August 26, 1988
Edward Rafeedie
United States
District Judge
APPENDIX C A-8
es
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CV 87-2283 WJR
ORDER ON
MOTIONS FOR
PARTIAL SUMMARY
JUDGMENT;
MARSHA BENNETT, FINDINGS OF
RICHARD MILLAN )
)
)
)
)
COLLEEN S. STEIN- ) FACT AND
)
)
)
)
)
)
Plaintiff
Vv
BAUGH, MURRAY CONCLUSIONS
GARDNER, BONNIE OF LAW THEREON
GARDNER, FASHION
EMBROIDERY, INC.
Defendants
"This matter comes before the court
on the motions of plaintiff Richard
Millan and defendants Marsha Bennett and
Colleen Steinbaugh for partial summary
judgment. The Court having considered
the papers filed in support thereof and
in opposition thereto and having heard
oral argument,
IT IS HEREBY ORDERED that plain-
tiff's motion is DENIED and defendants’
motion is GRANTED in part, and DENIED in
part.
The Court finds as follows:
APPENDIX D A-9
BACKGROUND
Plaintiff, Richard Millan, brings
this action against Fashion Embroidery,
Inc. ("Fashion") and several individuals
who were associated with the company:
Colleen Steinbaugh (hereinafter "Mrs.
Steinbaugh"), Marsha Bennett, Murray
Gardner and Bonnie Gardner. The com-
plaint asserts several violations of the
Racketeering and Corrupt Organizations
Act ("RICO"), i8 U.&.C. Sec. 1962 et
seq., along with pendent claims for
conversion and intentional affliction of
emotional distress. Mrs. Steinbaugh and
Bennett now move jointly for summary
judgment as to the RICO claims against
them. Millan has filed a cross-motion
for summary judgment against these two
defendants.
APPENDIX D A-10
es |
Fashion was founded in 1978 by
three couples: the Gardners, the
Steinbaughs and the Williams. Each
couple was issued 30,000 shares. In
October, 1983, Millan, a potential
investor, was referred to the Williams,
who were selling their interest in the
company. Millan met with the Williams,
but alleges that he did not buy these
shares at this time because he wanted
nothing less than a controlling interest
in the company.
The Williams referred Millan to
Mrs. Steinbaugh as another prospective
seller of Fashion shares. The
Steinbaughs were in the process of
getting divorced and, according to
Millan, were devising a scheme to file
separately for bankruptcy after the
divorce and to hide their ownership of
the shares in Fashion. Millan alleges
that he was told by Mrs. Steinbaugh and
APPENDIX D A-1l
by defendant Marsha Bennett that Mr.
Steinbaugh had already achieved this by
nominally selling his 15,000 shares for
$20,000 to Mr. Gardner, who paid for the
Shares indirectly from corporate funds
and who was allegedly to give back the
Shares once the bankruptcy proceedings
ended.
Mrs. Steinbaugh was also looking
for someone to purchase here 15,000
shares. Millan met with her and,
incidentally, met Mrs. Steinbaugh's
daughter, Marsha Bennett, for the first
time. Millan and Bennett were married
two months later, in December, 1983.
Millan alleges that Bennett continually
solicited him to buy her mother's
shares. At this time, however, Millan
had yet to purchase any shares in
Fashion.
APPENDIX D A-12
In January, 1984, Millan went to a
Fashion shareholder meeting with proxies
to vote the Williams’ 30,000 shares and
Mrs. Steinbaugh's 15,000 shares. He
became Chairman and President on that
date. He then purchased Williams'
30,000 shares in exchange for a $100,000
promissory note. Millan did not pur-
chase Mrs. Steinbaugh's 15,000 shares at
this time because, he alleges, he
refused to participate in any scheme to
defraud the bankruptcy court.
In July, 1984, Bennett and Millan
were separated. A special Board meeting
was called for July 25, 1984. On that
day, Millan met with Bennett and
Steinbaugh and, in what was allegedly a
last ditch effort to save his marriage,
executed a $50,000 promissory note for
the 15,000 shares. The note was made
payable to both Bennett and Mrs.
Steinbaugh, although it appears that
APPENDIX D A-13
Mrs. Steinbaugh was still the owner of
record of the shares at the time.
Despite this move, Millan was voted out
of office at the shareholder meeting
that evening.
He never made any payments on the
$50,000 note, and never received the
15,000 shares. Millan also suspended
payment on his $100,000 promissory note
to the Williams, after making payments
totalling $17,000.
In late September, 1984, Mrs.
Steinbaugh filed a Chapter 7 bankruptcy
petition. Millan alleges that she
failed to list as assets either the
Fashion shares or the $50,000 promissory
note. The petition was withdrawn in
January, 1985; according to Millan, the
withdrawal was a result of his threats
to reveal fraud to the bankruptcy court.
Mrs. Steinbaugh and Bennett deny
any attempt to defraud, claiming that
APPENDIX D A-14
ee
Mrs. Steinbaugh did not in fact own
either the shares or the note given as
consideration of them. They allege that
Bennett had agreed some time earlier to
buy the shares from her mother for
$25,000, unless a better deal came
along.
Millan's offer was a better deal,
but since he never performed, ownership
reverted back to Bennett, not to her
mother.
Some support for this story is
found in the fact that, at the July 25
shareholder meeting, Millan himself
filled out and back-dated a bland stock
certificate to reflect Marsha Bennett's
ownership of 15,000 shares of Fashion
stock. On the other hand, as Millan
notes, there is no written record of
such an agreement between Bennett and
Mrs. Steinbaugh. Further, Murray
Gardner, then-President of the
APPENDIX D A-15
— <<<
corporation, states in his declaration
that Mrs. Steinbaugh never sold her
shares.
The motions before the Court are
directed at counts five, six, seven and
eight of the complaint, which allege
RICO violations on the part of Bennett
and Mrs. Steinbaugh. Counts five and
seven allege violations of 18 U.S.C.
Sec. 1962 subsec. (a), (b) & (c). The
alleged fraud on the bankruptcy court by
Mrs. Steinbaugh and Bennett -- and their
knowledge of Mr. Steinbaugh's alleged
acts of bankruptcy fraud -- form the
basis of the predicate act allegations
underlying these two causes of action.
The only other allegation of fraudulent
conduct pertaining to these two defen-
dants referred to in Millan's claims
under these sections involves tax forms
sent in early 1985. Bennett and Murray
Gardner allegedly sent a false Form 1099
APPENDIX D A-16
ps |
to the IRS which misstated Millan's
position with and income from Fashion
[para. 57], and also submitted fraudu-
lent state and federal tax returns for
Fashion. [paras. 58 and 59]
Bennett denies the charge, alleging
that she was not even an officer of the
corporation at that time, having re-
s gned on July 31, 1984. The declara-
tion of Murray Gardner, however, states
that Bennett never resigned at any time
and that subsequent to July, 1984, she
sent an accountant who had full access
to Fashion's books and records for
purposes of preparing tax forms and
financial statements.
Counts six and eight of the com-
plaint allege a conspiracy to violate
RICO under 18 U.S.C. Sec. 1962(d). The
factual allegations realleged by refer-
ence under the heading of Count six
aprear to be limited to those paragraphs
APPENDIX D A-17
ee
detailing the alleged bankruptcy fraud
perpetrated by Mrs. Steinbaugh. count
eight incorporates more extensive
factual allegations, realleging by
reference paragraphs 23-27 of the
complaint. These paragraphs allege a
scheme whereby Mr. Steinbaugh and the
Gardners programmatically made cash
sales to vendors and falsified Fashion's
books. It is further alleged that these
three submitted false tax records
yearly, not only as to income but also
as to employee withholdings. (Bennett's
involvement in submitting the 1985
returns is alleged to be a continuation
of this practice.) These three also
allegedly made false representations to
Millan that the books were in order and
taxes were current in order to induce
him to invest in Fashion.
ANALYSIS
- Counts Five and Seven
18 0.8.6. Sec. 1964 confers
APPENDIX D A-18
standing on "[a}ny™ person injured in
his business or property by reason of a
violation of section 1962.... A person
is therefore entitled to sue who is
injured by (1) the use of the proceeds
of a pattern of racketeering activity to
acquire an enterprise (Sec. 1962 (a)];
(2) the maintenance of an interest in or
control over an enterprise through a
pattern of racketeering activity [Sec.
1962(b)]; (3) a person who participates
in the affairs of an enterprise through
a pattern of racketeering activity [Sec.
1962(c)]; or (4) a conspiracy to violate
any of the foregoing sections.
The predicate acts underlying
counts five, six and seven, as_ alleged
in plaintiff's complaint, consist in
toto of mail, wire and bankruptcy fraud
allegations derived from tz) the
Steinbaugh's alleged attempts to hide
assets from the bankruptcy court; and
APPENDIX D A-19
(2) the submission of three false tax
returns in 1985 by Bennett. These
allegations, taken together, clearly
lack the “continuity plus relationship"
necessary to constitute a pattern of
racketeering activity, nor do they pose
a "threat of continuing activity". See
Medallion Television Ent. v. SelecTV of
California, 833 F.2d 1360, 1362-63 (9th
Circ. 1967).
Plaintiff argues at length that he
has also been injured by other conduct
constituting RICO predicate acts,
including (1) various alleged irregular-
ities ina tax lien sale of Fashion's
assets, including lack of proper notice,
and (2) various violations of securities
regulations committed by the defendants
in selling him the Fashicn stock.
Citing evidentiary rules relating to
evidence of similar acts, he also
alleges that Bennett and Mrs. Steinbaugh
APPENDIX D A-20
laid waste to their home in order to
collect insurance proceeds. None of
these allegations are to be found in
plaintiff's lengthy complaint, and the
Court will not consider them at this
late juncture.
With respect to those claims
asserted under Sec. 1962(a), plaintiff
has presented no evidence that he was
injured by the use or investment of any
proceeds the conduct alleged in the
complaint may have generated. He
therefore lacks standing to sue _ for
violations of Sec. 196€2(a). See e.g.,
NL Industries, Inc. v. Gulf & Western
Industries, Inc., 650 F. Supp. 1115 (D.
Kan. 1986).
With respect to any claims’ under
Sec. 1962(b), the bankruptcy fraud and
false tax filings alleged by plaintiff,
even if true, do not reasonably support
a conclusion that plaintiff has been
injured by the maintenance of an
a PrrawrearnrwT@qs ~ af
interest in an enterprise through a
pattern of racketeering activity.
Sec. 1962(c) requires that the
plaintiff's injury be caused by the
commission of the predicate acts’ them-
selves. Sedima, |S mm Fr Imrex
Corp., 105 8. Ct. 3275, 3285-86, 473
U.S. 479 (1985). This requirement is
satisfied only by Bennett's alleged
false tax filings in 1985, which plain-
tiff alleges have resulted in an IRS
assessment against him. These, standing
alone, do not even approach the "threat
of continuing activity" articulated by
the Medallion court as the benchmark of
a pattern of racketeering activity.
Medallion, supra, 833 F.2d at 1363.
i. Counts Six and Eight
These claims assert a conspiracy to
violate RICO under Sec. 1962(d).
Liability under this section requires
only proof of an agreement, the
APPENDIX D A-22
ee
objective of which is a_ substantive
violation of RICO (e.g. conducting the
affairs of an enterprise through a
pattern of racketeering). United States
v. Tille, 729 F.2d 615, 619 (9th Cir.
1984). Only when proof of such an
objective is lacking must the evidence
establish the defendant's participation
in the predicate offenses. Id.
As noted above, the factual allega-
tions found under count six are limited
to reallegations of those paragraphs
detailing the alleged bankruptcy fraud
perpetrated by Mrs. Steinbaugh. Having
found these insufficient to support
liability under Sec. 196Z(a), (b) or
(c), they are an inadequate basis for a
conspiracy claim under Sec. 1962(d).
Count eight, however, incorporates
by reference a more extensive pattern of
tax fraud, practiced on an annual basis
throughout Fashion's existence, as_ well
- as allegations of fraudulent
— or |
APPENDIX D
misrepresentations directed at plaintiff
to induce him to invest in the company.
These allegations arguably satisfy
Medallion's continuity requirement,
though the relationship between the
alleged predicate acts is tenuous. It
is also problematic that the complaint
alleges almost no active participation
by Bennett and Mrs. Steinbaugh, the
moving defendants, in the charges
underlying this claim. Though liability
may lie without active participation,
see Tille, supra, none of the parties
have addressed the issue of whether the
requisite agreement has. been estab-
lished.
Because the parties have failed to
address the ramifications of the broader
factual allegations incorporated under
count eight or the distinct legal
analysis applicable to RICO conspiracy
allegations, the Court finds denial of
APPENDIX D A-24
defendant's motion without prejudice
appropriate with respect to this claim.
For all the above reasons, defen-
dants' motion for summary judgment is
GRANTED as to counts five, six and
seven, and DENIED without prejudice as
to count eight. Plaintiff's motion for
summary judgment is DENIED."
Dated: December 6, 1988
William J. Rea
United States
District Judge
APPENDIX D A-25
EXCERPTS FROM
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CIVIL APPEALS DOCKETING STATEMENT
Reproduced in part:
wer ee eee H. Brief Description of the
Nature of Action and the Result
Below:
Plaintiff filed this action on
April 4, 1987. 6 RICO counts of
bankruptcy, mail and wire fraud,
and conspiracy with 2 pendant state
claims were sustained by the
District Court on July 20, °987.
Attorney Steven Lubell entered into
the case on June 12, 1987 and began
an unconscionable plan or _ scheme
which was designed to improperly
influence the Court in its deci-
sions against Plaintiff, a non-law-
yer acting in pro se. Mr. Lubell
began by hiding Defendant Marsha
Bennett from service of process and
APPENDIX E A-26
then hiding her true identity from
Plaintiff. There followed S
deliberate pattern and plan of
deception by withholding the
identities of parties and documents
from discovery. The scheme went
further to include perjury and
subornation of perjury in deposi-
tion, interrogatories, and requests
for admissions by attorney Steven
Lubel 1 and Defendant Marsha
Bennett. In February 1988, upon
learning the true name of Marsha
Bennett, Plaintiff also learned the
identities, actions, and culpabili-
ty of the other parties and Plain-
tiff immediately moved to amend his
complaint for the first time on
March 14, 1988. No trial date had
been set, discovery had not closed
and no trial conference had been
held. At the oral arguments on
APPENDIX E A-27
ee
this motion, attorney Lubell so
misrepresented the record of this
case and prior cases that the
District Court denied Plaintiff's
motion to amend. The Court found
in part that defendants would be
prejudiced even though defendants
stated in open court that they
would not be prejudiced. That the
amendment was untimely since
Plaintiff knew or should have known
of these claims and parties at the
time the action was filed. Fur-
ther, a prior state case had
nothing to do with this present
case, and Plaintiff will prove the
above was misrepresented to the
District Court by attorney Lubell."
APPENDIX E A-28
FILED 2/ 10
UNITED STATES COURT OF APPEALS
POR THE NINTH CIRCUIT
U.S. Court of Appeals Docket Number:
88-6624
Lower Court Docket Number :
CV-87-2283-WJIR
Short Title: Millan v. Bennett
ORDER
"A review of the file in this
case reveals that the appellant has
failed to perfect the appeal as
prescribed by the Federal Rules of
Appellate Procedure.
“Pursuant to Ninth Circuit
Rule 42-1, this appeal is dismissed
for failure to comply with the
rules requiring processing the
appeal to hearing.
“A certified copy of this
order sent to the district court,
APPENDIX F A-29
agency or Tax Court shall act as
and for the mandate of this court.
FOR THE COURT:
Cathy A. Catterson
Clerk of Court
By: Joseph Williams
Deputy Clerk
APPENDIX F A-30
MILLAN COMPILED THE POLLOWING
CHRONOLOGICAL CHART FOR THE YEARS
1983-1987 TO SHOW THE DISTRICT COURT THE
MULTIPLE SCHEMES AND RICO VIOLATIONS
PERPETRATED BY THE DEFENDANTS IN THIS
ACTION AND REFERENCED THIS CHART TO
DOCUMENTS AND COURT RECORDS NOW OF FILE
WITH THE COURT:
PATTERN AND CONTINUITY
OF RICO VIOLATIONS
CR: 87, pages 27 through 47
RICHARD STEINBAUGH
COLLEEN STEINBAUGH
(APRIL 1983)
C)
76.4 4
[ JACK PETERS ATTY REFERS
[ RICHARD AND COLLEEN STEINBAUGH
[ TO BANKRUPTCY ATTY. RICHARD
[
[
STOPHER. (APRIL 1983)
EXHIBIT 65 PAGE 503 PAR 2 LN 25
EXHIBIT 76 PAGE 5°71
EXHIBIT 5 PAGE 93 PAR 20(a)
EXHIBIT 24 PAGE 375
EXHIBIT 4 ao? he PAR 2 (a)(b)
RICHARD STEINBAUGH AND ]
COLLEEN STEINBAUGH ]
SET SCHEME 1-2 TO DEFRAUD ]
BANKRUPTCY COURT IN MOTION. ]
(APRIL 1983)
]
]
Je td od Od
()
CO-CONSPIRATORS MARSHA BENNETT
MURRAY GARDNER AND BONNIE GARDNER
JOIN SCHEME TO DEFRAUD BANKRUPTCY ]
COURT. (APRIL 1983) ]
APPENDIX G A-31
a
[ ]
9m
[ SCHEME 1 SOLICITATION TO SELL
{ 15,000 SHARES OF FASHION OWNED
{ BY RICHARD STEINBAUGH
[
[
)
J
]
]
(APRIL 1983---AUGUST 1983) }
J
[
COURT R. 4 PAGE 4 PAR 13-14
COURT R. 3 PAGE 4 PAR 13-14
COURT R. 2 PAGE 4 PAR 13-14
COURT R.19 PAGE 4 PARA 13-14
a=
[ SCHEME 2 SOLICITATION TO SELL ]
{ 15,000 SHARES OF FASHION OWNED ]
[ BY COLLEEN STEINBAUGH ]
! ]
| (APRIL 1983---SEPTEMBER 1983) |]
[ ]
COURT R. 17 PAGE 4 PAR 13
COURT R. 17 PAGE 5 PAR 14
COURT R. 3 PAGE 4 PAR 13-14
COURT R. 2 PAGE 4 PAR 13-14
COURT R. 4 PAGE 4 PAR 13-14
COURT R. 19 PAGE 4 PAR 13-14
()
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
Sn
SCHEME 1 DEFRAUD BANKRUPTCY
COURT:
RICHARD STEINBAUGH USES INTER-
STATE TELEPHONE LINES TO HIS
SISTER JOLENE RUNNER IN FLORIDA
TO ACQUIRE $20,000.00 TO FUND
SCHEME TO CONCEAL HIS OWNERSHIP
OF 15,000 SHARES OF FASHION
EMBROIDERY INC. SHARES FROM
U.S. BANKRUPTCY COURT.
qOQ(ronrorore
V—e—n—orer ero ree eee
7 7 ow be tk Lk
APPENDIX G
A-32
[
[ (APRIL 1983-AUGUST 1983) ]
]
COURT R.
4 PAGE 5 PAR 16
EXHIBIT 10 PAGE 231 PAR 7 AND
EXHIBIT 12 PAGE 273 PAR 7
DECLARATION OF RICHARD MILLAN --
PAGE 22 PAR 74
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE ll U.S.C.
VIOLATION OF SECURITIES LAWS
VIOLATION OF TITLE 18 USC 1343
EBs
COURT:
CHECK
rr ra ees ses esses eee rear r ee ee
SCHEME 1
DEFRAUD BANKRUPTCY
RICHARD STEINBAUGH RECEIVES
$20,000.00 BY U.S. MAIL FROM
SISTER JOLENE RUNNER IN FLORIDA
MURRAY GARDNER DEPOSITS $20,000
IN FASHION BANK ACCOUNT,
R. STEINBAUGH THEN WRITES
FASHION CHECK FOR $20,000 TO M.
GARDNER, WHO DEPOSITS $20,000
IN HIS CHECKING ACCOUNT AND
WRITES R. STEINBAUGH $20,000.
FROM GARDNERS ACCOUNT
(AUGUST
—
26 1983)
a eS SS)
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
16
27
28
23
24
PAGE
PAGE
PAGE
PAGE
PAGE
334
378
379
374
375
arr Frsrs es
VIOLATIONS OF
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE ll U.S.C.
VIOLATION OF SECURITIES LAWS
VIOLATION OF TITLE 18 USC 1343
RICO TITLE 18 USC 1962
APPENDIX G A-33
a a ee ee S|
Sian
SCHEME 6 DEFRAUD COMMONWEALTH
]
FINANCIAL: ]
COMMONWEALTH FINANCIAL SUES ]
COLLEEN STEINBAUGH FOR THE HOME]
SHE AND MARSHA BENNETT LAID ]
WASTE TO ON SEPTEMBER 21, 1983 ]
]
EXHIBIT 4 PAGE 58 PAR 10(a)
EXHIBIT 73 PAGE 548-563
EXHIBIT 74 PAGE 564-569
[
_
RICHARD MILLAN MEETS WITH THEDA]
AND MATTHIAS WILLIAMS TO ]
DISCUSS SALE OF THEIR 30,000 ]
SHARES OF FASHION STOCK TO ]
MILLAN. OCTOBER 1983 ]
]
COURT R. 1 PAGE 12-13 PAR 41-42
DECLARATION OF RICHARD MILLAN-
PAGE 9-10 PAR'S 30-36
i a ee ee) ee ee ee | oe | ee | ee ee ce |) ee | eee | ee
i iens
SCHEME 3: DEFRAUD MILLAN ]
RE: FASHION EMBROIDERY STOCK ]
THEDA WILLIAMS TELEPHONES ]
COLLEEN STEINBAUGH TO COME AND ]
MEET MILLAN AT HER HOME. ]
STEINBAUGH ARRIVES AND TALKS ]
ABOUT HER COMING BANKRUPTCY ]
AND DIVORCE FROM R. STEINBAUGH ]
DISCUSSES WITH MILLAN HER PROXY]
FOR 15,000 SHARES OF FASHION ]
STOCK SHE OWNS. AGREES TO MEET]
WITH MILLAN AT THE LAW OFFICE ]
OF ERIC DEAN THE FOLLOWING WEEK]
OCTOBER 1983 ]
]
COURT R. 17 PAGE 7 PAR 23
EXHIBIT 9 PAGE 217 PAR 4-10
EXHIBIT 8 PAGE 195 PAR 1-2
C]
APPENDIX G A-34
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
roe) gee | ge gee | ee | ee | eee | oe | ee ee ee ee | ee oe ce | ee are ee
=
SCHEME 3: DEFRAUD MILLAN ]
RE: FASHION EMBROIDERY STOCK |]
COLLEEN STEINBAUGH MEETS WITH ]
MILLAN AT THE OFFICE OF ERIC ]
DEAN. INTRODUCES MILLAN TO HER]
DAUGHTER MARSHA BENNETT. TALKS]
ABOUT HER COMING BANKRUPTCY }
AND DIVORCE FROM R. STEINBAUGH ]
DISCUSSES WITH MILLAN HER PROXY]
FOR 15,000 SHARES OF FASHION ]
STOCK SHE OWNS. AGREES TO GIVE]
MILLAN HER PROXY TO VOTE HER ]
SHARES OF FASHION AT A MEETING ]
TO BE CALLED IN FUTURE ]
(OCTOBER 1983) ]
]
COURT R. 17 PAGE 7 PAR 24
COURT R. 19 PAGE 6 PAR 24
EXHIBIT 9 PAGE 217 PAR 4-10
EXHIBIT 8 PAGE 195 PAR 1-2
C]
ara earos ee eee Og ee
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C]
SCHEME 3: DEFRAUD MILLAN
RE: FASHION EMBROIDERY STOCK
MARSHA BENNETT BEGINS TO
SOLICIT MILLAN TO BUY HER
MOTHERS 15,000 SHARES OF STOCK
IN FASHION EMBROIDERY INC.
(OCTOBER/NOVEMBER 1983)
oa oo |
APPENDIX G A
33
ee S|
DECLARATION OF RICHARD MILLAN
PAGES 16-17 PAR'S 48-49 AND PAGE
19 PAR 58
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
[
[
[
[
[
f
C]
[ SCHEME 4: DEFRAUD MILLAN RE:
[ CERTIFIED TANK MFG. INC.
[ MARSHA BENNETT TELEPHONES
[ MILLAN AT HIS HOME ON THE NIGHT
[ ON OR ABOUT NOVEMBER 26, 1983
[ DISCUSSES AMONG OTHER THINGS
[ HER MOTHER'S COMING BANKRUPTCY
[ AND DIVORCE FROM R. STEINBAUGH
[ DISCUSSES WITH MILLAN THE SALE
[ 15,000 SHARES OF FASHION STOCK
[ OWNED BY COLLEEN STEINBAUGH.
[ SOLICITS MILLAN TO BUY HER
[ MOTHERS 15,000 SHARES OF STOCK
[ IN FASHION EMBROIDERY INC.
[ (NOVEMBER 26, 1983)
[
D
P
4 ed sb ls Ld Lb ts bs
ECLARATION OF RICHARD MILLAN
AGE 19 PAR 58
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
tiie
SCHEME 4: DEFRAUD MILLAN RE: ]
CERTIFIED TANK MFG. INC. ]
MARSHA BENNETT AND MILLAN MEET ]
AT BENNETT'S HOME ON NOVEMBER ]
27, 1983. BENNETT OFFERS TO
SELL MILLAN 1/2 INTEREST IN
maar maa araes
APPENDIX G A-36
[
[
[
[
[
[
[
[
CERTIFIED TANK MFG. INC. FOR
$500,000.00. EXCLAIMING:
"TRUST ME RICHARD, TRUST ME,
ITS WORTH IT". THAT NIGHT
BENNETT PROCEEDED TO SEDUCE
MILLAN.
(NOVEMBER 27, 1983)
DECLARATION OF RICHARD MILLAN
PAGES 19-20 PAR'S 59-66
C]
[
[
[
MARSHA BENNETT AND MILLAN WERE
MARRIED ON (DECEMBER 2, 1983)
wt
DECLARATION OF MARSHA BENNETT
PAGE 3 DOCUMENT PAGE 42 PAR 7
DECLARATION OF RICHARD MILLAN
PAGE 21 PAR 72
C]
[
[
[
[
[
[
[
[
[
D
P
SCHEME 1 DEFRAUD BANKRUPTCY
COURT:
MARSHA BENNETT AND COLLEEN
STEINBAUGH REVEAL TO MILLAN
THE WAY THE SCHEME WORKS THAT
RICHARD STEINBAUGH IS USING TO
DEFRAUD THE U.S. BANKRUPTCY
COURT. (DECEMBER 10, 1983)
thd Od dd
ECLARATION OF RICHARD MILLAN
AGE 22 PAR 73
(]
eee ee | ee | ee eee
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
ee | oe fe | ee |
C]
SCHEME 1 DEFRAUD BANKRUPTCY
COURT:
MARSHA BENNETT AND COLLEEN
STEINBAUGH CAUSE MILLAN
TO WRITE LETTER TO RICHARD
APPENDIX G
a a
A-37
a |
[ STEINBAUGH ASKING HIM SPECIFIC ]
[ QUESTIONS RELATED TO HIS SCHEME]
{ TO TO DEFRAUD THE BANKRUPTCY ]
]
]
[ COURT. (DECEMBER 19, 1983)
[
DECLARATION OF RICHARD MILLAN
PAGE 22 PAR 73
EXHIBIT 30 PAGES 382-384
EXHIBIT 3 PAGES 8-12
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
VIOLATION OF TITLE 18 0.S.C. 1341
(Tr rae
C]
SCHEME 1: DEFRAUD BANKRUPTCY ]
COURT. ]
RICHARD STEINBAUGH ISSUES ]
FASHION EMBROIDERY INC. STOCK ]
]
]
]
TO MURRAY GARDNER. M. GARDNER
SIGNS PROMISSORY NOTE FROM
FASHION EMBROIDERY INC. IN
FAVOR OF JOLENE RUNNER, PAYMENT]
BY U.S. MAIL BEGIN TO JOLENE
RUNNER, RICHARD STEINBAUGH BUYS]
EXEMPT PROPERTY. ]
(SEPTEMBER 1983--DECEMBER 1983) ]
]
Aros eee eee eee
EXHIBIT 25 PAGE 376
EXHIBIT 20 PAGE 371
EXHIBIT 21 PAGE 372
EXHIBIT 10 PAGE 232-234 LN 16-31
EXHIBIT 12 PAGE 274-276 LN 16-31
C]
SCHEME 4: DEFRAUD MILLAN RE: ]
CERTIFIED TANK MFG. INC. ]
MARSHA BENNETT CONCEALS FROM ]
]
]
]
MILLAN THAT THE STATE OF
CALIFORNIA FRANCHISE TAX BOARD
HAS SUSPENDED CERTIFIED TANK
aaa
APPENDIX G A-38
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
MFG. INC. FROM DOING BUSINESS
IN CALIFORNIA ON (JANUARY 4,
1984).
|
[
[
[
[
E
XHIBIT 8 PAGE 198 PAR 12
C]
SCHEME 3: DEFRAUD MILLAN ]
RE: FASHION EMBROIDERY STOCK ]
FASHION EMBROIDERY INC. ]
SHAREHOLDERS MEETING CALLED ]
MARSHA BENNETT, MURRAY GARDNER ]
RICHARD MILLAN ELECTED TO BOARD]
OF DIRECTORS AND AS OFFICERS OF]
FASHION EMBROIDERY INC. MILLAN]
VOTES 15,000 SHARE PROXY FOR
SHARES OWNED BY COLLEEN STEIN-
BAUGH AND 30,000 SHARE PROXY
FOR SHARES OWNED BY THEDA AND
MATTHIAS WILLIAMS.
(JANUARY 11, 1984)
td 0 os 8 8
EXHIBIT 2 PAGE 18 LN 1-24
EXHIBIT 17 PAGE 368
EXHIBIT 18 PAGE 369
mas
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
mamas rs aera
C]
SCHEME 4: DEFRAUD MILLAN RE:
CERTIFIED TANK MFG. INC. ]
Mé °2SHA BENNETT CONCEALS FROM
M.LLAN HER TRANSFER OF OWNER- ]}
SHIP INTEREST IN THE PROPERTY ]
430 LECOUVIER STREET, WILMINGTON
CALIFORNIA, THE SITE OF CERT- ]
IFID TANK MFG. INC. TO DOUGLAS ]
MARTIN AS A GIFT ON JANUARY 16, ]
1984 WHILE SHE IS MARRIED TO i‘
MILLAN AND ABOUT TO RE-MARRY
APPENDIX G A-39
— a | |
[ MILLAN IN THE CRYSTAL CATHEDRAL]
[ ON (JANUARY 21, 1984) ]
[ JANUARY 16, 1984 ]
[ ]
s
E EXHIBIT 3 THIS DOCUMENT
C]
{ MARSHA BENNETT AND MILLAN WERE ]
[ RE-MARRIED ON JANUARY 21,1984 |]
{ AT THE CRYSTAL CATHEDRAL ]
( ]
DECLARATION OF RICHARD MILLAN
PAGE 21 PAR 71
EXHIBIT 8 PAGE 197 PAR ll
C]
[ RICHARD MILLAN PURCHASED ]
{ 30,000 SHARES OF FASHION ]
[ EMBROIDERY STOCK FROM THEDA AND]
[ MATTHIAS WILLIAMS FOR $100,000. ]
(FEBRUARY 1984) ]
EXHIBIT 67 PAGE 508 PAR 14-15
EXHIBIT 68 PAGE 511 PAR 9-10
; =
SCHEME 4: DEFRAUD MILLAN RE:
CERTIFIED TANK MFG. INC.
MARSHA BENNETT CONCEALS FROM
MILLAN THE OWNERSHIP INTEREST
OF DOUGLAS MARTIN IN CERTIFIED
TANK MFG. INC. AND MILLAN TRIES
TO LEARN OF THAT INTEREST BY
A LETTER FROM ERIC DEAN TO
DOUGLAS MARTIN ON FEBRUARY 24,
1984
tee Le ee ee |
4 ow te ke Lk
ora r
XHIBIT 26 PAGE 377
C]
SCHEME 4: DEFRAUD MILLAN RE:
CERTIFIED TANK MFG. INC.
MARSHA BENNETT CONCEALS FROM
MILLAN THE ACQUISITION OF THE
PROPERTY ON SIGSBEE AVENUE
WILMINGTON, CALIFORNIA IN
JOINT OWNERSHIP WITH DOUGLAS
ra Fees Fe |=
ee ee ee ee ee
APPENDIX G A-40
| eee) ee | ee eee | ee
MARTIN.
NO. 84-617223 DATED MARCH 19,
1984 AND RECORDED ON MAY 23,
1984 IN THE LOS ANGELES COUNTY
RECORDERS OFFICE.
QUIT CLAIM DEED
SEE EXHIBIT 13 THIS DOCUMENT
C]
SCHEME 1
COURT:
DEFRAUD RUPTCY
RICHARD STEINBAUGH FILES
CHAPTER 7 BANKRUPTCY PETITION
COURT APRIL 12 1984 WITHOUT
DISCLOSING THE FRAUD HE HAS
COMMITTED ON
(APRIL 12,
[
[
[
IN UNITED STATES BANKRUPTCY
[
[
[
THE COURT.
1984)
ay oe ee SSeS
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
OUNnwMnuwn oo oo
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
PAGE
104 PARA B-3/0
104 PARA B-2/0
104 PARA B-2/T
103 PARA (M)
102 PARA (T)
95
92 PARA 14AB
105 PARA
87 PARA M
90 PARA 9
73 THROUGH 109
88 PARA 1(D)
C]
RICO
VIOLATIONS OF RICO TITLE 18
PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
USC 1962
(]
rmF Fae Fa FAFA
SCHEME 1 DEFRAUD BANKRUPTCY
COURT:
COLLEEN STEINBAUGH CONSULTS
WITH BANKRUPTCY ATTORNEY
EUGENE DUNNINGTON AND BEGINS
APPENDIX G
tY+eutiiwt
A-41
a SE)
[ THE FILING OF HER PETITION ]
[ UNDER CHAPTER 7, US BANKRUPTCY ]
[ CODE, (ON MAY 10, 1984) ]
[
EXHIBIT 4 PAGE 60 PAR 15(a)
{ VIOLATIONS OF RICO TITLE 18 USC 1962
[ RICO PREDICATE ACTS
[ VIOLATION RICO 1962 (d)
{ VIOLATION OF TITLE 11 U.S.C.
[ VIOLATION OF SECURITIES LAWS
C]
SCHEME 4: DEFRAUD MILLAN RE:
CERTIFIED TANK MFG. INC.
MARSHA BENNETT CONCEALS FROM
[
[ MILLAN THE LAWSUIT FILED
[ AGAINST HER AND DOUGLAS MARTIN
[ BY LLOYD R. HAFFENER IN LOS
[ SUPERIOR COURT SOC 73644 FOR
(
[
[
[
[
E
BREACH OF CONTRACT, SPECIFIC
PERFORMANCE, CONSTRUCTIVE TRUST
& DECLARATORY RELIEF ON (JUNE
20, 1984)
hd bt bk kl
XHIBIT 12 THIS DOCUMENT
C]
SCHEME 3: DEFRAUD MILLAN RE:
FASHION EMBROIDERY INC. STOCK
MARSHA BENNETT DEMANDS MILLAN
BUY 15,000 SHARES OF FASHION
STOCK FROM HER MOTHER COLLEEN
STEINBAUGH AND JOIN HER IN
CONCEALING THE SALE OF THE
THE STOCK FROM THE UNITED
STATES BANKRUPTCY COURT
(JANUARY 1984--JULY 24, 1984)
rr eee se see ee
Jed bk hl hk
DECLARATION OF RICHARD MILLAN
PAGE 34 PARA. 104
PAGE 35 PARA. lll
PAGE 38 PARA. 127
C]
APPENDIX G A-42
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
7 & 4 oe tt
MARSHA BENNETT AND MURRAY
GARDNER ON JULY 23, 1984
SEND MILLAN A TELEGRAM CALLING
A BOARD OF DIRECTORS MEETING
AND A SPECIAL SHAREHOLDERS
MEETING ON JULY 25, 1984
[
[
[
[
[
f
[ :
| Oe eo
[
[
[
!
[ (JULY 23, 1984)
14 2 4 0 8
DECLARATION OF RICHARD MILLAN
PAGE 38 PARA. 129
EXHIBIT 26 PAGE 377
DECLARATION OF MARSHA BENNETT
PAGE 43 LINES 4 THROUGH 9
DECLARATION OF PAUL SCHMIDT
OPPOSITION TO DEFENDANTS SUMMARY
JUDGEMENT MOTION EXHIBIT 6 P. 40.
()
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
VIOLATION OF TITLE 18 USC 1341
VIOLATION OF TITLE 18 USC 1343
a eS |)
MARSHA BENNETT DEMANDS MILLAN
BUY 15,000 SHARES OF FASHION
STOCK FROM HER MOTHER COLLEEN
STEINBAUGH AND OUTLINES AN
AGREEMENT WHEREBY MILLAN WILL
QVnermemerTrlrmrar neater rarrer
e+ ev to tS tt
APPENDIX G A-43
ee °°
GIVE THEM A PROMISSORY NOTE FOR]
$50,000.00 FOR THE 15,000 ]
SHARES OF FASHION EMBROIDERY ]
INC., STOCK OWNED BY HER MOTHER]
COLLEEN STEINBAUGH. MILLAN ]
SIGNS AND GIVES THE PROMISSORY ]
NOTE TO BENNETT. ]
(JULY 25, 1984) ;
rar rn Fs eases eee
DECLARATION OF RICHARD MILLAN
PAGE 38 PARA. 130
DECLARATION OF MARSHA BENNETT
PAGE 44 LINES 6 THROUGH 17
DECLARATION OF COLLEEN STEINBAUGH
PAGE 50 LINES 2 THROUGH 8
SCHEME 3: DEFRAUD MILLAN RE:
FASHION EMBROIDERY INC. STOCK
MARSHA BENNETT AND MURRAY
GARDNER VOTE MILLAN OUT OF
OFFICE ON JULY 25, 1984 AT
A BOARD OF DIRECTORS MEETING
AND A SPECIAL SHAREHOLDERS
MEETING ON JULY 25, 1984
(JULY 25, 1984)
Ce eee | cee Dee | ee ee te 1 ee | oe fee |
Red ed ed ed Bd hd hd ed
DECLARATION OF MARSHA BENNETT
PAGE 43 LINES 4-8
DECLARATION OF RICHARD MILLAN
PAGE 39 PAR. 133-134
(J
VIOLATIONS OF RICO TITLE i8 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
ra rar = FSF" 98
MARSHA BENNETT, MURRAY GARDNER,
: -J
FASHION EMBROIDERY INC. STOCK ;
BONNIE GARDNER AND COLLEEN ]
-—eorers
APPENDIX G A-44
STEINBAUGH TAKE CONTROL OF
FASHION AND CONVERT MILLAN'S
30,000 SHARES OF FASHION STOCK
TO THEIR OWN USE. MURRAY
GARDNER CLAIMS 66% OWNERSHIP OF
FASHION EMBROIDERY INC., AND
MARSHA BENNETT CLAIMS OWNERSHIP
OF 44% OF FASHION EMBROIDERY.
(JULY 25, 1984)
Morea rrr rare
XHIBIT 46 PAGE 437 HISTORY
()
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE ll U.S.C.
VIOLATION OF SECURITIES LAWS
MARSHA BENNETT, MURRAY GARDNER,
BONNIE GARDNER AND COLLEEN
STEINBAUGH TAKE CONTROL OF
FASHION EMBROIDERY INC.,
MARSHA BENNETT IS A DIRECTOR
AND IS THE CORPORATE SECRETARY
AND TREASURER. BENNETT KEEPS
Qnrfermrrteareroa rere rosea erere rere
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT 2
EXHIBIT 2
EXHIBIT
COURT R.
COURT R.
COURT R.
EXHIBIT
THOSE OFFICES
NEVER RESIGNS
ANY TIME.
( JULY
AND TITLES AND
ANY OF THEM AT
25, 1984)
hh Oe ed Od
46
53
17
PAGE
PAGE
PAGE
PAGE
PAGE
34 PAGE
17 PAGE 4 PAR
17 PAGE 5 PAR 14
19 PAGE 4 PAR'S 13-14
9 PAGE 217 PAR 4
437 HISTORY
465
368
8 LINES 10-22
18 LINES 7-21
389
13
APPENDIX G
A-45
EXHIBIT 9 PAGE 218 PAR 7
EXHIBIT 9 PAGE 225 PAR 43
EXHIBIT 8 PAGE 203 PAR 34
EXHIBIT 67 PAGE 507 PAR 3-5
EXHIBIT 68 PAGE 511 PAR 3-5
EXHIBIT 65 PAGE 504 PAR 6
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE ll U.S.C.
VIOLATION OF SECURITIES LAWS
(]
aaoaaoaro
ee
MARSHA BENNETT, MURRAY GARDNER,
BONNIE GARDNER AND COLLEEN
STEINBAUGH TAKE CONTROL OF
FASHION AND IMPLEMENT A PLAN
TO FORCE THE SALE OF FASHION
EMBROIDERY ASSETS BY THE U.S.
INTERNAL REVENUE SERVICE TO A
COMPANY THEY SET UP IN NEVADA
CALLED FASHION GROUP LTD.
CENTRAL TO THEIR SCHEME IS TO
NOT PAY FEDERAL EMPLOYMENT
TAXES AS THEY ARE DUE AND OWING
(JULY 25, 1984)
ee De ce De 0 ee De De 0 ee De Dee | ee | ee | ee | ee fee | ee | ee | mee fee |
Jt 6 8 td 8 0 dd sd
DECLARATION OF RICHARD MILLAN
PAGE 42 PAR 150-155
()
{ VIOLATIONS OF RICO TITLE 18 USC 1962
[ RICO PREDICATE ACTS
{ VIOLATION RICO 1962 (d)
( VIOLATION OF TITLE ll U.S.C.
SS ee
APPENDIX G A-46
VIOLATION OF SECURITIES LAWS
C]
SCHEME 6 DEFRAUD COMMONWEALTH
FINANCIAL:
MARSHA BENNETT, COLLEEN STEIN-
BAUGH & RICHARD MILLAN SUED BY
COMMONWEALTH FINANCIAL FOR BAD
FAITH WASTE IN STATE COURT.
(SEPTEMBER 11, 1984)
es A oe Kee To Kee oe J are
XHIBIT 73 PAGE 548
C]
SCHEME 2 DEFRAUD BANKRUPTCY ]
COURT: ]
COLLEEN STEINBAUGH FILES ]
CHAPTER 7, U.S. BANKRUPTCY ]
PETITION ON SEPTEMBER 20, 1984 ]
CONCEALS THE SALE OF HER 15,000]
SHARES OF STOCK IN FASHION ]
]
]
]
]
]
EMBROIDERY INC., CONCEALS THE
PROMISSORY NOTE FOR $50,000.
AND CONCEALS THE SALE AGREEMENT
WITH RICHARD MILLAN.
(SEPTEMBER 20, 1984)
aaa roesirsiesersese
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
EXHIBIT
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PAGE 37 PARA B-3/B
PAGE 37 PARA B-2/0
PAGE 69 PARA T
PAGE 68 PARA M
PAGE 61 PARA 9
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PAGE 35 PARA
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a
LAL AL LAL HL LHL bh hb hb h
[ VIOLATIONS OF RICO TITLE 18 USC 1962
[ RICO PREDICATE ACTS
[ VIOLATION RICO 1962 (d)
[ VIOLATION OF TITLE 11 U.S.C.
APPENDIX G A-47
Ss |
VIOLATION OF SECURITIES LAWS ]
C]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
MARSHA BENNETT, COLLEEN STEIN-
BAUGH, MURRAY GARDNER, BONNIE
GARDNER INTENTIONALLY WITHHOLD
PAYMENT OF $13,086.23 IN
FEDERAL EMPLOYMENT TAXES
(SEPTEMBER 30, 1984)
rs
J
td Od Od Od od hd hd
Pies aeaeaeaeaeoer
XHIBIT 58 PAGE 485
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C]
SCHEME 6: DEFRAUD COMMONWEALTH
[
[
[
[
[
[
[
[ FINANCIAL
[ COMMONWEALTH FINANCIAL PURSUES
[
[
[
[
[
(
E
ee ae
]
COLLEEN STEINBAUGH, MARSHA ]
BENNETT & RICHARD MILLAN INTO ]
BANKRUPTCY COURT IN ADVERSARY |]
PROCEEDING LA 84-52804CA ]
(OCTOBER 18, 1984) ]
]
XHIBIT 4 PAGE 49
: C]
[ MILLAN ANSWERS COMMONWEALTH
[ FINANCIAL ADVERSARY COMPLAINT
[ IN PROPRIA PERSONA.
[
[
(OCTOBER 1984)
SS |
DECLARATION OF RICHARD MILLAN
PAGE 40 PAR. 140
C]
( SCHEME 2: DEFRAUD BANKRUPTCY ]
[ COURT. J
APPENDIX G A-48
'
.
'
MARSHA BENNETT ANSWERS
COMMONWEALTH FINANCIAL ADVER.
COMPLAINT USING ERIC DEAN,
MILLANS FRIEND AND LAWYER TO
REPRESENT HER AGAINST MILLAN'S
INTEREST IN THE BANKRUPTCY
COURT.
(OCTOBER 1984)
Pe Sr Fees |S ee
EXHIBIT 4 PAGE 49
DECLARATION OF RICHARD MILLAN
PAGE 41 PAR'S 141-143
C]
SCHEME 2: DEFRAUD BANKRUPTCY
COURT.
MILLAN LEARNS OF ERIC DEANS' ]
DEANS TREACHERY AND DEMANDS ]
THAT ERIC DEAN WITHDRAW FROM ]
REPRESENTING BENNETT IN THE ]
BANKRUPTCY PROCEEDING ON DEC.
4, 1984. DEAN CONTACTS EUGENE ;
]
]
]
]
]
DUNNINGTON ATTORNEY FOR COLLEEN
STEINBAUGH AND ADVISES HIM OF
MILLAN'S DEMANDS TO REVEAL TO
THE COURT THE FRAUD THAT IS
BEING COMMITTED ON THE COURT.
DUNNINGTON PREPARES MOTION FOR
VOLUNTARY DISMISSAL OF PETITION]
BY COLLEEN STEINBAUGH AND FILES]
SAME ON DECEMBER 4, 1984. ]
(DECEMBER 2, 1984)
ECLARATION OF RICHARD MILLAN
AGE 41 PAR. 142
C]
SCHEME 2: DEFRAUD BANKRUPTCY
fe)
]
COURT. ]
MILLAN IS SERVED BY DUNNINGTON ]
WITH STATE COURT COMPLAINT ]
]
]
]
]
tg uo aaa rere rearesea es esrseeeseee J
IN THE UNITED STATES COURTHOUSE
IN AN EFFORT TO INTIMIDATE
MILLAN FROM ATTENDING THE
BANKRUPTCY PROCEEDINGS THAT
CD 8 an Pee ee
APPENDIX G A-49
[ MORNING EUGENE DUNNINGTON
[ ADVISES JUDGE ASHLAND THAT Cc.
[ STEINBAUGH HAS FILED A MOTION
[ TO VOLUNTARILY WITHDRAW HER
[ PETITION. JUDGE ASHLAND TELLS
[ DUNNINGTON THAT HE IS GOING TO
[ RULE AGAINST THE ADVERSARY
[ PROCEEDING. DUNNINGTON INSISTS
[ ON THE MOTION FOR VOLUNTARY
[ DISMISSAL OF THE PETITION.
[ (DECEMBER 4, 1984)
DECLARATION OF RICHARD MILLAN
PAGE 41 PAR 144
PAGE 42 PAR'S 145-146
EXHIBIT 4 PAGE 49
C]
( SCHEME 5 DEFRAUD MILLAN AND
{ INTERNAL REVENUE SERVICE
[ MARSHA BENNETT, COLLEEN STEIN-
[ BAUGH, MURRAY GARDNER, BONNIE
[ GARDNER INTENTIONALLY WITHHOLD
( PAYMENT OF $13,086.23 IN
[
[
[
E
FEDERAL EMPLOYMENT TAXES
(DECEMBER 31, 1984)
ee ee ee oe |
XHIBIT 58 PAGE 485
C]
[ VIOLATIONS OF RICO TITLE 18 USC 1962
f RICO PREDICATE ACTS
[ VIOLATION RICO 1962 (d)
{ VIOLATION OF TITLE 11 U.S.C.
[ VIOLATION OF SECURITIES LAWS
[
ee
C]
SCHEME 7 DEFRAUD MILLAN BY
]
FILING FRAUDULENT 1099 TAX ]
FORMS WITH THE INTERNAL REVENUE]
]
]
[
:
[ SERVICE AND THE STATE OF CALIF.
[
[
[
STATING NON-EMPLOYEE INCOME
BY MILLAN FOR THE TAX YEAR 1984]
OF $33,727.33 AND THEN ALTERING]
APPENDIX G A-50
EE |
[
[
[
[
[
[
[
THE FORM TO READ $38,158.23 ]
THEN SENDING THE FORMS BY U.S. ]
MAIL TO THE I.R.S. AND TO THE ]
STATE OF CALIFORNIA FRANCHISE
TAX BOARD. ]
(JANUARY 1985- APRIL 1985)
]
SEE EXHIBIT 7 ON PAGE 45
OPPOSITION TO DEFENDANTS MOTION
FOR SUMMARY JUDGEMENT
C]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
FASHION GROUP LTD. INCORPORATED
MARCH 7, 1985 IN STATE OF
NEVADA. NEVADA SECRETARY OF
STATE LISTS OFFICERS AS MURRAY
GARDNER PRESIDENT, MICHAEL P.
JESSICK SEC/TREASURER.
(MARCH 7, 1985)
[
[
[
[
[
[
[
[
[
[
E
XHIBIT 58 PAGE 485
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
MARSHA BENNETT, COLLEEN STEIN-
BAUGH, MURRAY GARDNER, BONNIE
GARDNER INTENTIONALLY WITHHOLD
PAYMENT OF $1,580.00 IN
FEDERAL EMPLOYMENT TAXES
(JUNE 30, 1985)
tes ll
[
[
[
[
[
[
[
[
[
[
[
[
[
[
[
E
XHIBIT 58 PAGE 485
C]
APPENDIX G A-51
a
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
[
[
[
[
[
[
C]
[ SCHEME 5 DEFRAUD MILLAN AND
[ INTERNAL REVENUE SERVICE
[ MARSHA BENNETT, COLLEEN STEIN-
[ BAUGH, MURRAY GARDNER, GIVE TO
[
(
[
(
[
[
[
[
E
i) td Od he) Od
MICHAEL JESSICK POWER OF ATTY
OVER ALL OF FASHION OPERATIONS
WITHOUT NOTIFYING MILLAN OR
CALLING A SHAREHOLDERS MEETING
AS REQUIRED UNDER THE CORPORA-
TION BY-LAWS.
(DECEMBER 2, 1985)
aS ee | Se |
XHIBIT 36 PAGE 392
C]
[ SCHEME 5 DEFRAUD MILLAN AND
[ INTERNAL REVENUE SERVICE
[ MARSHA BENNETT, COLLEEN STEIN-
[ BAUGH, MURRAY GARDNER, BONNIE
[ GARDNER INTENTIONALLY WITHHOLD
[ PAYMENT OF $17,679.76
[
[
[
E
FEDERAL EMPLOYMENT TAXES
(DECEMBER 31, 1985)
eS ee |
XHIBIT 58 PAGE 485
C]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
MURRAY GARDNER AND MICHAEL
JESSICK ENTER AGREEMENT ON THE
OWNERSHIP OF FASHION GROUP LTD
(MARCH 3, 1986)
J Ld bd bd
Pareles rcorrs
XHIBIT 66 PAGE 505
C]
[ VIOLATIONS OF RICO TITLE 18 USC 1962 ]
APPENDIX G A-52
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
UDAY RAJ SAWHNEY THE PRESENT
HUSBAND OF MARSHA BENNETT MEETS
WITH MICHAEL JESSICK AND I.R.S.
(FEBRUARY 11, 1986)
SS SS eS
[
[
[
[
[
[
[
[
[
[
[
[
E
XHIBIT 42 PAGE 407
C]
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C)
SCHEME 5 DEFRAUD MILLAN AND
SERVICE
INTERNAL REVENUE
MARSHA BENNETT, COLLEEN STEIN-
BAUGH, MURRAY GARDNER, BONNIE
GARDNER INTENTIONALLY WITHHOLD
PAYMENT OF $7,634.99
FEDERAL EMPLOYMENT TAXES
(MARCH 31, 1986)
it 8
[
[
[
f
[
[
[
[
[
[
[
[
t
[
[
E
XHIBIT 58 PAGE 485
0)
Cm rae Fe ee
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
C)
SCHEME 5: DEFRAUD THE U.S. }
APPENDIX G A-53
INTERNAL REVENUE SERVICE
BY CONCEALING THAT FASHION
GROUP LTD. WAS OWNED BY THE
SAME PEOPLE THAT PLANNED NOT TO
PAY THE $66,000.00 OWED TO THE
I.R.S. BY FASHION EMBROIDERY
INC., AND CONCEALING THE FACT
THAT FASHION GROUP LTD. WAS
A FRONT FOR BENNETT, M. GARDNER
B. GARDNER, C. STEINBAUGH AND
MICHAEL JESSICK. THE ABOVE
CO-CONSPIRATORS SUCCEEDED IN
BUYING THE ASSETS OF FASHION
EMBROIDERY INC., AT A FORCED
U.S. INTERNAL REVENUE SALE FOR
AN AMOUNT OF LESS THAN $11,000.
AND SUCCESSFULLY MAKING MILLANS
STOCK IN FASHION EMBROIDERY INC
WORTHLESS. AT NO TIME WAS
MILLAN EVER NOTIFIED OF THE
I.R.S. LIENS, SEIZURE, SALE OR
SUBSEQUENT PURCHASE BY FASHION
GROUP LTD.
(MAY 1987)
me Doe De De) ee De De 0 ee 0 ee 0 et ee | oe | ee | ee 1 ee | ee | een | oe | cee | aon | en fee Bt een Pe)
EXHIBIT 37 PAGES 393-395
EXHIBIT 39 PAGE 398
EXHIBIT 51 PAGE 461
EXHIBIT 57 PAGES 476-482
EXHIBIT 58 PAGES 483-486
EXHIBIT 59 PAGES 487-492
EXHIBIT 60 PAGES 493-496
EXHIBIT 41 PAGES 404-405
EXHIBIT 8 PAGE 212 PAR'S 66-67
EXHIBIT 67 PAGE 509 PAR 16
EXHIBIT 68 PAGE 512 PAR ll
[
]
SCHEME 5 DEFRAUD MILLAN AND
INTERNAL REVENUE SERVICE
MILLAN HAS LEARNED THAT MURRAY
GARDNER AND MICHAEL JESSICK
HAVE MADE FASHION GROUP LTD. A
NEVADA CORPORATION INTO A
Fra ra Free
APPENDIX G
— ss | Bad Ra hid Rem Rd Rell Rll Reel Cl Rend Ral Rael Rell eel Rill Ree Beeld Reel Beeld heel been
SS ee)
cu
,
ui
>
DEFUNCT CORPORATION AND CREATED]
A NEW CALIFORNIA CORPORATION ]
CALLED FASHION SPECIALTIES INC. ]
THE CALIFORNIA SECRETARY OF ]
STATE DOES NOT LIST ANY OFFICER]
NAMES AS YET, HOWEVER THE AGENT]
FOR SERVICE IS ONE NICOLAS ]
SANTANGELO AT 1278 GLENNEYRE ]
LAGUNA BEACH, CALIFORNIA. ]
THE ADDRESS ABOVE IS ALSO THE
ADDRESS FOR MICHAEL JESSICK J
FASHION SPECIALTIES WAS INCORP-]
ORATED ON (AUGUST 26, 1988). J
]
(J
AAA Mmmm me rss srs oe oe Le | oe De | oe Pon Lan 1 eee eee Lee Lee oe ee ee ee ee ee
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
AND THE STATE OF CALIFORNIA
THE REPERCUSSIONS FROM THE
FRAUDULENT FILING OF THE 1099
TAX FORM BY THESE DEFENDANTS
ARE CONTINUING TO THIS DAY. ON
AUGUST 14,1988, MILLAN WAS
NOTIFIED BY HIS EMPLOYER THAT
THE STATE OF CALIFORNIA
FRANCHISE TAX BOARD HAD PLACED
A LIEN ON MILLAN‘S WAGES FOR
$4,196.49 BASED ON THE FILING
OF THE FASHION EMBROIDERY 1099
TAX FORM FOR THE TAX YEAR 1984.
(AUGUST 14, 1988)
ry ey ee eee) ey ee ee ee ee ee eee
C]
APPENDIX G A-55
i
me ce Doe De De ee De De De ee 0 ce De ee 0 ee ee | ee 9 ee Fe Foe | ra rr Fn F Fe FF Se
VIOLATIONS OF RICO TITLE 18 USC 1962
RICO PREDICATE ACTS
VIOLATION RICO 1962 (d)
VIOLATION OF TITLE 11 U.S.C.
VIOLATION OF SECURITIES LAWS
VIOLATION OF TITLE 18 USC 1343
VIOLATION OF TITLE 18 USC 1341
C]
SCHEME 5: DEFRAUD THE U.S.
INTERNAL REVENUE SERVICE
AND MILLAN BY NOW TAKING THE
ASSETS OF FASHION EMBROIDERY
INC., THAT WERE FRAUDULENTLY
OBTAINED THROUGH THE I.R.S.
SALE BY FASHION GROUP LTD., AND]
NOW TRANSFERRING THOSE ASSETS TO]
AN ENTITY CALLED FASHION ]
SPECIALTIES LTD. OWNED BY THESE]
SAME DEFENDANTS AND CO-CONSPIR-]
ATORS. MILLAN LEARNED OF THIS ]
FURTHER ASSET TRANSFER ON ]
SEPTEMBER 23, 1988. IT IS ]
CLEAR THAT THESE DEFENDANTS ]
]
]
]
]
ee eee ee
ARE ATTEMPTING TO MAKE THEM-
SELVES JUDGEMENT PROOF.
(SEPTEMBER 23, 1988)
APPENDIX G A-56
i td hd kk
COURT DOCKET #62 FACING PAGE:
CIVIL ACTION NO. 87-2283 WIR (TX)
PLAINTIFF RICHARD MILLAN'S
NOTICE OF MOTION AND MOTION TO
RECUSE THE HON. WILLIAM J. REA
JUDGE OF THE UNITED STATES
DISTRICT COURT
AFFIDAVIT OF PREJUDICE
CERTIFICATE OF GOOD FAITH
FILED CONCURRENTLY WITH NOTICE
OF MOTION AND MOTION TO
DISQUALIFY AND RECUSE
ATTORNEY STEVEN LUBELL
DECLARATION OF RICHARD MILLAN
STATEMENT OF FACTS AND
POINTS AND AUTHORITIES
DATE: July 11, 1988
TIME: 10:00 A.M.
PLACE: COURTROOM 10
JUDGE: HON. WILLIAM J. REA
CONCURRENT MOTIONS
APPENDIX H
A-57
EXCERPTS FROM PROFESSOR BREWERS
“Mandamus Power,” Buffalo Law Review,
Vol. 31, 1982 at pages 68 through 70:
“One group that is not hesitant to file
mandamus petitions, on grounds of delay
or otherwise, is pro se litigants. Pro
se petitions represented about one-half
of all of those that were filed during
these three years. There are probably
various reasons to explain this. Such
litigants undoubtedly have less stake in
maintaining + favorable long-term
relationship with a judge than does an
attorney, so perhaps they have less
inhibition about using a procedure that
might offend the district judge.
Secondly, such litigants are generally
considered extremely litigious and
willing to file numerous legal papers.
Moreover, they are probably less
familiar with normal modes of procedure
and consequently would not view an
interlocutory petition to the appellate
APPENDIX I A-58
court as particularly extraordinary.
Finally, most of these pro se petitions
are filed by prisoners who have
initiated habeas corpus or 28 U.S.C. §
2255 petitions, or civil rights actions
under 42 U.S.C. § 1983. Often, these
end up being filed in great numbers in a
few districts, thereby causing delay and
leading to mandamus petitions. This
delay is undoubtedly exacerbated by some
degree of dislike for this barrage on
the part of the judges in those
districts.
In any event, the most important
point is not the precise reason for this
large number of pro se petitions, but
the fact that it exists. Removing these
pro se petitions gives a better picture
of the number of mandamus petitions
<iled by attorneys. The attorney-filed
petitions are the primary concern of
this Article since their numbers, more
APPENDIX I A-59
than pro se petitions, are likely to be
influenced by the standards for
entertaining mandamus petitions
established by the courts.
This does not mean, however, that
pro se petitions should be ignored
entirely. A significant percentage of
them can best be described as
incomprehensible or frivolous. But of
those I examined, forty petitions were
complaining of the district court's
failure to act. Of these, fifty percent
(twenty) were denied as moot, the court
having taken the action or being about
to do so. Another twenty-five percent
(ten) of this group, received some
implicit promise of relief: one was
denied on the condition that the
district court act by a certain date,
and the other nine were denied without
prejudice to their renewal within a
certain period of time (thirty, sixty,
APPENDIX I A-60
or ninety days). Presumably, the
message to the district court was fairly
clear. The remaining twenty-five
percent (ten) were simply denied. Once
again it is established that the filing
of a mandamus petition is an effective
avenue for claims of delay, and in this
instance, in a very large number of
cases. The mandamus power viewed in its
total breadth provides an institutional
control on district judges' failure to
act within reasonable time periods.
This is especially true for prisoner
petitioners, an area in which such
control is particularly necessary.”
APPENDIX I A-61
MERCURY SERVICE, INC. and
Mercury Refueling, Inc.
Plaintiffs,
V.
ALLIED BANK OF TEXAS, Defendant
No. CV 85-4503 WJR
United States District Court
C.D. California.
August 14, 1987
Cite as 117 F.R.D. 147
(C.D. Cal. 1987)
A
Rea, J., held in part: ™. .
"III. SANCTIONS FOR THE FILING OF
ELDRED'S DECLARATION
“Pursuant to Federal Rule of
Civil Procedure Aas plaintiffs
request sanctions of $74,915.39
against the defendant and its
counsel for the filing of the
Eldred Declaration. They claim
this sum represents the fees for
the discovery they would have
APPENDIX J A-62
avoided had Mr. Eldred and the bank been
initially candid.
A. Rule 11 Sanctions
"Rule 11 requires parties or
attorneys to file pleadings,
motions and other papers that are
“well grounded in fact and
warranted by existing law or a good
faith argument for the extension,
modification, or reversal of
existing law, and = not
interposed for any improper
purpose, such as to harass or to
cause unnecessary delay or needless
increase in the cost of
litigation.” If a party or his
counsel files a paper in violation
of this Rule, the Rule further
provides that "the court ... shall
impose upon the person who signed
it, a represented party, or both,
an appropriate sanction, which may
APPENDIX J A-63
include an order to pay to the
other party ... the reasonable
expenses incurred because of the
filing of the ... paper, including
a reasonable attorney's fee."
"[9] Under Rule 1l, sanctions
are appropriate at, measured
objectively, a motion or paper is
frivolous, legally unreasonable, or
without factual foundation.
Zaldivar v. City of Los Angeles,
780 F.2d 823 (9th Cir. 1986).
Subjective good faith is not a
defense to a Rule 11 motion. ia.
at 829 (quoting with approval
Schwarzer, Sanctions Under the New
Federal Rule 11 - A Closer Look,
104 F.R.D. 181, 187 (1985): “There
is no room for a pure heart, empty
head defense under Rule aa.” )
Instead, the rule creates a new
“affirmative duty of investigation
APPENDIX J A-64
both as to law and as to fact
before motions are filed." Golden
Eagle Distributing Corp. Vv.
Burroughs Corp., 80l P.26@ i531,
1536 (9th Cir. 1986).
"(10] A district court has a
mandatory duty to impose sanctions
for a violation of Rule 11, though
the court has discretion on the
appropriate amount or natur~ of the
sanction. Golden Eagle
Distributing Corp. Vv. Burroughs
Corp., 801 F.2d at 1538; Eastway
Constr. Corp. v. City of New York,
762 F.2d 243, 254 n. 7 (2d Cir.
1985) (“Unlike the statutory
provisions that vest the district
court with ‘discretion’ to award
fees, Rule 11 is clearly phrased as
a directive. Accordingly, where
strictures of the rule have been
transgressed it is incumbent upon
APPENDIX J A-65
the district court to fashion
proper sanctions." )
"[1l] A basic purpose of Rule
ll, as the Ninth Circuit and the
Advisory Committee which drafted
the Rule have observed, is to
““reduce frivolous claims, defenses
Or motions’ andto deter “costly
meritless maneuvers,’ ... [thereby]
avoidf{ing] delay and unnecessary
expense in litigation." Golden
Eagle Distributing Corp. Vv.
Burroughs Corp., 801 F.2d at 1536;
Advisory Committee Note, 97 F.R.D.
165, 192 (1983). While expediting
litigation is a basic purpose of
Rule 11, it is not the sole
purpose. In appropriate
circumstances, a district court may
impose a punitive sanction for the
filing of a paper that lacks
factual foundation and is intended
APPENDIX J A-66
to mislead the Court and opposing
parties, even if the paper does not
significantly delay proceedings,
because of the disrespect shown the
judicial process.
"Defendant argues that a court
may not award sanctions for 4a
merely punitive purpose, but is
limited to imposing a sanction that
will compensate the opposing party
for the harm inflicted by conduct
that violates Rule ll. Defendant
cites In re Itel Securities
Litigation, 596 F.Supp. 226, 234
(N.D. Cal. 1984) which states:
"Rule I contemplate[s]
reimbursement for the expenses
necessarily incurred because
of the misconduct. [It]
dofes] not contemplate an
award of punitive sanctions.
In other words, in making an
award pursuant to ... Rule ll,
the Court can only award fees
and sanctions for expenses
APPENDIX J A-67
incurred in responsive or
defensive actions." :
“Defendant further relies on a
Ninth Circuit Court of Appeais
decision, In re Matter of Yagman,
796 F.2d 1165 (9th Cir.), amended
On other grounds, 803 F.2d 1085
(9th Cir. 1986). Defendant's
reliance on In re Yagman is
misplaced, however. In that case,
the Ninth Circuit only held that
"When the sanctions award is based
upon attorney's fees and related
expenses, ... [rJecovery should
never exceed those expenses and
fees that were reasonably necessary
to resist the offending action."
796 F.2d at 1184-85 (emphasis
added). In making this
observation, the Ninth Circuit
implied an assumption that
Sanctions under Rule 1l other than
APPENDIX J A-68
an award of the attorney's fees
generated in opposing a frivolous
action or motion may be
appropriate. This is the logical
reading of Rule ll, which states
that a court may impose "an
appropriate sanction, which may
include ... the reasonable expenses
incurred because of the filing of
the Pes paper, including a
reasonable attorney's fee"
(emphasis added). The implication
is that an award of attorney's fees
is one, but not the only sanction
that a court may impose.
"Defendant's counsel attempted
to mislead the Court into finding
that In re Yagman holds. broadly
"recovery should never exceed those
expenses and fees that were
reasonably necessary to resist the
offending action.” Counsel further
APPENDIX J A-69
declined to cite the substantial
authority running contrary to In re
Itel. While this in itself is not
Sanctionable conduct, Golden Eagle
Distributing Corp., 801 F.2d at
1541-42, it is not conduct
appreciated by the district courts.
“There is substantial
authority within the Ninth Circuit
holding that Rule 1l does
contemplate an award of punitive
sanctions. This is the position of
a district court judge in the
Northern District of California,
Judge Schwarzer. Schwarzer,
Sanctions Under the New Rule 11--A
Closer Look, 104 F.R.D. 181, 185
(1985); Kendrick v. Zanides, 609
F.Supp 1162, 1173 (D.c.cal. 1985);
Huettig & Schromm_ v. Landscape
Contractors Council, 582 F.Supp.
1519 (N.D.Cal. 1984), aff'd 790
APPENDIX J A-70
F.2d 1421 (9th Cae « 1986);
Heimbaugh v. City & County of San
Francisco, 591 F.Supp. 1573
(N.D.Cal. 1984). The approach to
Rule 11 outlined by Judge Schwarzer
in his Federal Rules Decisions
article has been generally held
persuasive by the Ninth Circuit.
See In re Yagman, 796 F.2d at
1182-85 (not discussing whether
Rule 11 sanctions are punitive in
nature, but generally approving
Judge Schwarzer's article).
Furthermore, one scholar has
observed that Judge Schwarzer's
punitive approach to Rule ll "is at
least partially consistent with the
advisory committee ‘s notes
"The words “sanctions” in the
caption, for example, stresses 4
deterrent orientation in dealing
with improper pleadings, motions,
APPENDIX J A-71
or other papers." Nelken,
Sanctions under Amended Federal
Rule 1l--some “Chilling” Problems
in the Struggle between
Compensation and Punishment. 74
Georgetown L.J. 1313, 1324 (1986).
“Judge Schwarzer's punishment
view has support from several
reported decisions in which
district courts have imposed Rule
11 sanctions facially designed more
to punish the transgressor that to
compensate the opposing party for
wasted effort and associated costs
and attorney's fees. Such
Sanctions have included paying
money into court, Barton Vv
Williams, 38 Fed.R, Serv.2d 966
(N.D. Ohio 1983), Dore vy Schultz,
982 F.Supp. 154 (S.D.N.Y¥. 1984);
dismissal, Valle v. Taylor, 587
F.Supp. 514 (D.N.D. 1984); deeming
APPENDIX J A-72
i
certain allegations of the
complaint admitted, Johnson ij
Department of Health, 587 F.Supp.
1117 (D.D.c.1984); and placing a
reprimand in the court's file on
attorneys admitted to its bar,
Allen v. Faragasso, 585 F.Supp.
1114 (N.D.Cal. 1984) (by Schwarzer,
J.).
“Further support for a
punitive view of Rule ll can be
found in Golden Eagle Distributing
Corp. In that case, the Ninth
Circuit reversed a district court's
imposition of sanctions upon
counsel who had argued a motion
without revealing controlling
adverse avthority. A key fact in
this outcome was the district
court's overlooking whether the
attorney knowingly misrepresented
the law. The Ninth Circuit held
APPENDIX J A-73
that "an earnest advocate
exaggerating the state of the
current law" should not be
Sanctioned under Rule ll. 801 F.2d
at 1540. The Court implied,
however, that sanctions against
“the unscrupulous lawyer knowingly
deceiving the court" are
appropriate. Id.
“sans B. The Court's
Inherent Power to Sanction Bad
Faith Conduct
"In addition to their
authority under Rule Ado the
federal court's have authority to
impose sanctions under their
“inherent powers” “which are
necessary to the exercise of a]1]
others." Roadway Express, Inc. v.
Piper, 447 U.S. 752, 764, 100 S.Ct.
2455, 2463, 65 L.Ed.2d 488 (1980);
in re Yagman, 803 F.2d 1085.
APPENDIX J A-74
Roadway Express and Ninth Circuit
authority provide that a court may
sanction "bad faith conduct under
the court's inherent power, it
[that is] found to be appropriate.”
In re Yagman, 803 F.2d at 1085; see
Roadway Express, 447 U.S. at 766,
100 S. Ct. at 2464. Id. at 765, 100
S.Ct. at 2463. The Court observed
that these inherent powers include
but are not limited to the contempt
sanction, "which a judge must have
and exercise ... in maintaining the
authority and dignity of the
court." Id. at 764, 100 S.Ct. at
2463. Sanctioning a party or its
counsel for the filing of false or
seriously misleading affidavits is
appropriate under these inherent
powers, whether the Court makes a
specific contempt finding or not,
APPENDIX J A-75
to maintain the authority and
dignity of the Court.
S. Sanctions Upon Allied Bank and
Its Counsel Are Appropriate
"In arguing that the Eldred
Declaration is not sanctionable
under Rule 11, counsel for Allied
Bank boldly states, "There is no
false statement in the Eldred
Declaration." Calais is well
aware, however, that, at a minimum,
Mr. Eldred made one false statement
in his Declaration - that he had
personal knowledge of all the
matters stated therein. In truth,
he lacked personal knowledge of
virtually every assertion in the
Declaration.
"Defendant's counsel tries to
convince’ .the Court that Mr.
Eldred's near total lack of
knowledge on the matters in his
APPENDIX J A-76
Declaration is unimportant by
observing, "To the extent the
statements in the Eldred
Declaration were not based on his
personal knowledge, they were based
on the personal knowledge of
others, such as in-house counsel,
and the statements are accurate."
“Even assuming that all
statements are true in the Eldred
Declaration except Eldred's
statement that he had personal
knowledge of the matters’ stated,
Rule 11 sanctions seem appropriate,
though a smaller sanction would be
in order than if some of the other
statements are false, too. Rule ll
: and the cases under it state that a
court shal] impose sanctions for
filing a paper which is “without
factual foundation." JZaldivar, 780
F.2d at 831. This Declaration at
APPENDIX J A-77
least partially lacked factual
foundation. It was clearly
unethical for in-house’ counsel
Charles Pickett to advise Mr.
Eldred to sign the Declaration, and
it was further unethical for the
local attorneys appearing in this
action to offer the Declaration in
support of their Motion ‘to Dismiss.
In addition to being unethical, the
filing of the Declaration put the
plaintiffs to some unnecessary
work. At a minimum, Mr. Eldred's
Declaration misled the plaintiffs
into believing that Mr. Eldred was
the person within Allied Bank who
should be deposed to discover the
facts concerning the bank's
contacts with California. Thus,
the Declaration had the tendency to
steer the defendants away from
deposing the personnel who actually
APPENDIX J A-78
had the relevant knowledge.
Furthermore, in preparing this
Declaration, defendants attempted
to avoid the added effort of
discovering who within Allied had
personal knowledge of the relevant
facts and preparing their (perhaps
several) Declarations - leaving
plaintiffs to ferret out who within
the corporation had the relevant
knowledge. Also, the Declaration
had the effect of leading the Court
and the plaintiffs to falsely
believe that a high officer within
Allied with an overview of the
bank's operations personally knew
that Allied had no contacts with
California, and the plaintiffs had
to expend effort to disprove this.
"In addition to the false
representation of Eldred's personal
knowledge, however, the Declaration
APPENDIX J A-79
contains other misleading if not
outrightly false statements. In
his Declaration, Mr. Eldred stated
that the bank has a philosophy of
doing business locally with people
who have local sredit references.
He added that the bank does not
accept deposits or make loans in
California and owns no real
property here. These statements in
their context imply that the bank
has no contacts with California
whatsoever. This is misleading.
While the bank might not physically
accept deposits or make loans in
California, the bank has
substantial loans to California
businesses, has guarantees on large
loans from California citizens, and
has Fr profitable depository
relationship with Customer Number
One, a California business. While
APPENDIX J A-80
the bank might not currently have
fee simple title to real property
in California, it has security
interests in California real and
personal property and will obtain
fee simple title to California real
property should parties default on
certain loans. As for the bank's
“philosophy” of doing only regional
business, bank officers have made
trips to California to service
existing business relationships
with California citizens and to
encourage them to expand their
business.
"[13] Pursuant to Rule 11 and
its inherent powers, the Court
finds that sanctions are
appropriate both because the
statement that Eldred had personal
knowledge is false and because the
representations about the bank's
APPENDIX J A-81
California contacts are misleading.
The Declaration is a paper filed
without factual foundation that led
to otherwise unnecessary inquiries
and arguments by the plaintiffs.
Furthermore, its filing warrants
punishment to deter similar conduct
that demonstrates disrespect for
the dignity and authority of the
courts."
APPENDIX J A-82
rs
FIRST AMENDMENT TO THE UNITED STATES
CONSTITUTION
“Congress shall make no law
respecting an establishment of religion,
or prohibiting the free exercise
thereof; or abridging the freedom of
speech, or of the press; or the right of
the people peaceably to assenbie; and to
petition the Government for a redress of
grievances.”
* APPENDIX K A-83
FIFTH AMENDMENT TO THE UNITED STATES
CONSTITUTION:
"No person shall be held to answer
for a capital, or otherwise infamous
crime, unless. on a presentment or
indictment of a Grand Jury, except in
cases arising in the land or naval
forces, or in the Militia, when in
actual service in time of War or public
danger; nor shall any person be subject
for the same offense to be twice put sin
jeopardy of life or limb; nor shall be
compelled in any criminal case to be a
witness against himself, nor be deprived
of life, liberty, or property, without
due process of law; nor shall private
property be taken for public use,
without just compensation.”
APPENDIX L A-84
EXCERPT FROM REPORTER'S TRANSCRIPT OF
PROCEEDINGS:
“Por the Court's record, plaintiff now
submits (Exhibit C) which is an excerpt
of pages 17 through 26 of the Reporter's
Transcript of Proceedings of Monday,
September 26, 1988:
"25. Reprinted in part starting
from page 17, line 24 is the
conversation between this Court and
counsel as recorded by Sherrill Boutte,
C.S.R.:
MR. MILLAN: Yes. Last week I
received a telephone call from Mr. Scott
-~- from a Mr. Scott Gilmore from the law
firm of Hill, Farrer & Burrill. He is
the counsel for Bonnie and Marie Gardner
and Fashion Embroidery.
This telephone call troubles
me because it goes right to the fairness
of these hearings.
APPENDIX M A-85
Your clerk telephoned Mr.
Lubbell, told him about these
proceedings today.
THE COURT: Told him that we
weren't going to go ahead with his
motion.
MR. MILLAN: Let me --
THE COURT: I think is what he
said. Go ahead.
MR. MILLAN: Let me tell you,
please, what Mr. Gilmore relayed to me.
THE COURT: Now who is he?
MR. MILLAN: He is the counsel
for Fashion Embroidery, Marie Gardner
and Bonnie Gardner. He is a partner in
the law firm of Hill, Farrer & Burrill.-
THE COURT: Okay, but what do
they have to do with this case?
MR. MILLAN: They were parties
here.
THE COURT: Are they parties
now?
APPENDIX M A-86
MR. MILLAN: They have not
been. We have settled. We settled
Friday.
THE COURT: All right.
MR. MILLAN: Mr. Gilmore
advised me this: He advised me that he
had received a telephone call from Mr.
Lubbell earlier in the day. He advised
me that Mr. Lubbell had been contacted
by the court. He advised me that the
court would not rule on the motions for
summary judgment today.
He advised me the Court would
set a briefing schedule for the motions
to be rebriefed, which is what is
happening now.
He advised me the Court was
taking these actions because Richard
Millan was in pro per and this Court did
not want to be reversed by the Ninth
Circuit. That’s number three.
APPENDIX M A-87
He also advised me that
communications between Steven Lubbell
and the Court was to remain confidential
and Millan was not to be told about it.
.
That's number four.
MR. LUBBELL: Your Honor, I
object to this.
MR. MILLAN: -Let me finish.
THE COURT: Let him have his
Say because we're going to set this
record straight right now.
MR. MILLAN: That's all I've
been asking is for fairness, so let me
THE COURT: Go ahead, go
ahead.
MR. MILLAN: That was the
fourth one.
Now, I asked oo I was
Surprised. I was amazed by what he told
APPENDIX M A-88
me. I asked him to repeat it. He
repeated it three times.
I called him back the next
day. I said, "Would you tell me again.
I really want to get this clear. What
did you tell me yesterday?" And he told
me again.
That afternoon I called Marva
Dillard, and this is what we talked
about.
Number one, I said had the
Court tried to communicate with
plaintiff Millan. Ms. Dillard said no.
THE COURT: We'll find out in
a minute.
MR. MILLAN: Number two --
THE COURT: As a matter. of
fact, let's stop right there. Here's my
clerk. He's the one that made the call.
Harry, did you try to reach
Mr. Millan?
THE CLERK (HARRY): No, I
didn't.
THE COURT: No? All right,
okay, then, that's correct.
MR. MILLAN: The second point
was - that I asked her - was the hearing
on September 26, 1988 still on calendar?
Her answer: Yes, subject to change.
Then I asked her: Was there
anything Millan should know about the
hearing on September 26, 1988?
Answer, Marva Dillard: If
there was something you should know, you
will be contacted by the Court. Why do
you ask?
Number’ four. My reply: I
received a very strange message on the
telephone regarding the 26th.
Marva Dillard: Was the call
from the Court?
Millan: No.
APPENDIX M A-90
_—
Who was it from? Marva
Dillard.
Millan: I can't say at this
time. I wasn't sure what was going on.
Seven. Marva Dillard: If the
Court has anything to say to you, it
will contact you.
The Court didn't.
I came today -- I didn't know
what was going on here.
THE =COURT: Well, you know
now, don't you?
MR. MILLAN: But that's not
the point, your Honor.
THE COURT: All right. -
MR. MILLAN: The point is --
THE COURT: What is your
point?
MR. MILLAN: -- is that if --
if I am counsel of record in this case,
which I am, then I am entitled to
APPENDIX M A-91
whatever communication is issued from
this Court to the parties.
THE COURT: All right. I am
going to now, in rebuttal, first of all,
ask my clerk what he did, because I
cannot speak for him fully.
Harry, would you just tell us
what you did with respect to advising
these gentlemen about this matter this
morning? I think my instruction to you
was that the pleadings were so
convoluted, and because we didn't find
any opposition by Mr. Millan to the
motion, I think you came to me and said
what will we do, and I said: Well,
look, even though he hasn't this
Opposition, I suppose we had better
treat his cross-claim in some way as
Opposition to it, because if I don't
treat it in that fashion, then the Ninth
Circuit probably will say you should
APPENDIX M A-92
have treated it as an opposition to the
motion.
And then I said to yov I
believe, that under these circumstances,
I don't think the hearing should proceed
on Monday. I think we better get this
cleared up so that Mr. Millan can tell
us Monday why he didn't file opposition
rather than file his own cross-claim,
and that because the pleadings were so
confused, I asked you to advise counsel
that we would not proceed with the
hearing this morning but we would set
another date for a hearing.
Isn't that about, in effect,
what I told you?
THE CLERK (HARRY): That's my
recollection of events.
THE COURT: Now, would you
just advise us what it was you did after
I talked to you about it?
APPENDIX M A-93
THE CLERK (HARRY): What I did
was call Mr. Lubbell and tell him that
because there was a problem with motions
not being responsive to each other that
it was our intent to -- at the hearing
to continue it to a later date in order
to permit the parties to respond to each
other.
Then I asked him if he had any
strong objections tto his. motion being
put off in that manner, inasmuch as it
had not been responded to.
THE COURT: So apparently no
one -- you didn't ask him to advise Mr.
Millan of that, is that --
THE CLERK (HARRY): No, I
didn't ask him to advise Mr. Millan. I
also did not advise him to keep it
confidential.
THE COURT: Well, all right,
then I guess. Mr. Lubbell, why did you
not -- why did you call the attorney
APPENDIX M A-94
from Hill, Farrer's office and not call
Mr. Millan?
MR. LUBBELL: I called Mr.
Gilmore with the respect that for the
last month, Mr. Millan has been telling
Mr. Gilmore he's going to be dismissing
some of the defendants that Mr. Gilmore
is representing.
I, in contacting Mr. Gilmore
with the respect that if he is not
dismissed, he needs to participate in
jury instructions. And I called him,
and I have been calling him almost
daily: Are you out, are you in, what
are you doing? Because he's had this
posture since the beginning of the case.
We've never been quite sure what his
position was.
I had told him I had received
a telephone call -- this is in
conversation now -- with respect to
today's motion, that the Court asked me
APPENDIX M A-95
if there would be an objection from me
with respect to it being continued since
we can't tell who's on first base with
the papers. This is all in conversation
now.
Mr. Gilmore -- we were talking
about it and I. said to Mr. Gilmore: I
Suppose that the reason that the Court's
doing this is that Mr. Millan is pro per
and that he does not want -- the Court
would not want this and I don't want
this having to go on and on and on to
the Ninth Circuit. Mostly myself. It's
becoming a very expensive burden to my
clients. :
There was no talk about this
conversation being kept confidential.
My concern today was coming in here
today to find out what days we're to
respond to the motions to.
THE COURT: Well, did you
think about calling Mr. Millan?
APPENDIX M A-96
MR. LUBBELL: No, I did not,
your Honor. I thought if the court
found it necessary -- this was a very ~~
THE COURT: Well, why would
you contact the other attorney and not
Mr. Millan?
MR. LUBBELL: I wasn't
contacting him with respect to today's
motion. I was contacting him whether
"Are you out, because the jury
instructions were due that day. I was
Federal Expressing them to Mr. Millan.
This was general conversation.
THE COURT: Okay. Now, Marva,
did you try to reach Mr. Millan?
Somebody told me they tried to reach
him.
THE CLERK (MARVA): Mr. Millan
called me. However, at the time that he
called me, I didn't know that
tentatively it may be placed off. So
APPENDIX M A-97
when he called me, I knew nothing about
it, so that's --
THE COURT: Okay. Well, Mr.
Millan, apparently there was a breakdown
in communication somewhere along the
line and you weren't told about what the
Court was going to do today, so from
that standpoint, I guess it's correct.
Now, I never advise anyone
that this should be kept confidential.
I mainly was concerned with letting, I
guess, Mr. Lubbell know that we weren't
going to rule on this motion today, and
because your motion wasn't timely filed
- at least in our opinion it wasn't -
your motion couldn't be ruled on.
So I just assumed that you
would both be here today, which you are,
and we're going to go ahead and set up a
briefing schedule. I don't see where
anybody is hurt and why we're making
APPENDIX M A-98
such a big deal out of this. I don't
understand.
I guess, in looking back now,
I suppose we should have called you and
told you that the motion wouldn't be
heard, but that apparently wasn't done.
I guess I owe you an apology for not
advising you of that fact. I guess we
didn't do it.
MR. MILLAN: Your Honor, being
in pro per in Federal Court is not a
nasty word. Being in pro per is a right
given to me by the Federal Constitution
and by the Federal Rules of Civil
Procedure.
THE COURT: All right. Well
let's put that behind us. I know that.
MR. MILLAN: Mr. Lubbell uses
pro per as a dirty word. It's not. Ae
are entitled to be heard. We're
entitled to fair treatment.
APPENDIX M A-99
THE COURT: Of course you are.
There's no doubt about that.
MR. MILLAN: I have no
objection to rebriefing, to resetting,
to any of this. My concern was that --
was that your court was contacting
Opposite counsel, was not contacting me.
THE COURT: Okay. Well,
that's correct. You should have been
advised as well. I think that's
correct. I accept that as a proper
complaint and we will see to | ae t
doesn't happen again.
APPENDIX M A-100
California Rules of Professional
Conduct:
RULE 5-200. TRIAL CONDUCT
"In presenting a matter to 4
tribunal, a member:
(A) Shall employ, for the purpose
of maintaining the causes confided to
the member such means only as are
consistent with truth;
(B) Shall not seek to mislead the
judge, judicial officer, or jury by an
artifice or false statement of fact or
law;
(C) Shall not intentionally
misquote to a tribunal the language of a
book, statute, or decision;
(D) Shall not, knowing its
invalidity, cite as authority a decision
that has been overruled or a statute
that has been repealed or declared
unconstitutional; and
APPENDIX N A-101
(E) Shall not assert personal
knowledge of the facts at issue, except
when testifying as a witness."
APPENDIX N A-102
California Rules of Professional
Conduct:
RULE 5-220. SUPPRESSION OF EVIDENCE
"A member shall not suppress. any
evidence that the member or the member's
client has a legal obligation to reveal
or to produce."
APPENDIX O A-103
California Rules of Professional
Conduct:
RULE 5-300. CONTACT WITH OFFICIALS
er A member’ shall not
directly or indirectly communicate with
Or argue to a judge or judicial officer
upon the merits of a contested matter
pending before such judge or judicial
officer, except:
(1) In open court; or
(2) With the consent of all other
counsel in such matter; or
(3) In the presence of all other
counsel in such matter; or
(4) In writing with a copy thereof
furnished to such other counsel; or
(5) In ex parte matters.
(C) As used in this rule, the
phrase ‘judge or judicial officer' shall
include law clerks, research attorneys,
or other court personnel who participate
in the decision-making process."
APPENDIX P A-104
California Rules of Professional
Conduct:
RULE 5-310. PROHIBITED CONTACT WITH
WITNESSES
A member shall not:
(A) Advise or directly or
indirectly cause a person to secret
himself or herself or to leave the
jurisdiction of a tribunal for the
purpose of making that person
unavailable as a witness therein.
(B) Directly or indirectly pay,
offer to pay, or acquiesce in the
payment of compensation to a witness
contingent upon the content of the
witness's testimony or the outcome of
the case. Except where prohibited by
law, a member may advance, guarantee, or
acquiesce in the payment of:
(1) Expenses reasonably incurred
by a witness in attending or testifying.
APPENDIX Q A-105
(2) Reasonable compensation to a
witness for loss of time in attending or
testifying.
(3) A reasonable fee for the
professional services of an expert
witness.
APPENDIX Q A-106
U.S. DISTRICT COURT MOTION HEARING ON
MAY 9, 1988:
On May 9, 1988, at a motion hearing
in this Court, * (Appendix R, page
A-107°), the following was reported by
the court reporter.
Mr. Millan: "I have in many, many
motions in front of this court asked
this court to investigate the misconduct
of Mr. Steven Lubell. Not only in----"
The Court: "You are going to have
to take that to the State Bar. This
lor. 51: M/O Plts motn for wvr of
local rule 2.8.1 & motn to declar
DENIED. Pltfs motn for certification
under R-54 DENIED. Plts motn for writ of
supersedeas DENIED. Crt allows pltf to
complete depo of Marsha Bennett. Said
depo shall be completed in 3 hrs.
(Footnote not included in original
text.) (5-9-88)
2See: Reporter's Transcript of
Proceedings, page 8, lines 9-14.
APPENDIX R A-107
court is not here to investigate attor-
neys in the way they practice law."
(Italics added. )
APPENDIX R A-108
EXCERPTS OF COURT RECORD 62, PAGES 24
THROUGH 29, PARAGRAPHS 36-45:
36. Plaintiff contends that this Court
is in error in several respects:
(1) The Local Rule 2.6.4 of the
Central District of California mandates
action to be taken when "any person"
brings to the attention of the Court the
“unprofessional conduct of an attorney
practicing before it.
LOCAL RULE 2.6.4:
"Disciplinary Investigations. The
Standing Committee on Discipline shall
investigate any charge or information,
whether referred by one of the judges or
otherwise coming to its attention, that
any attorney has been guilty of
unprofessional conduct------
APPENDIX S A-109
37. Plaintiff further contends that
this Court is duty-bound to prevent the
misconduct that has been brought to its
attention by this Plaintiff.
“COURT'S ABILITY TO REGULATE THE
BAR--It is well recognized that -
federal district court has the inherent
authority and responsibility to regulate
and supervise the bar practicing before
it." Fred Weber, Inc. v. Shell Oil Co.,
566 F.2d 602 (8th Cir 1977); Hull v.
Celanese Corp., 513 F.2d 568 (2nd Cir.
1975).
38. Attorney Steven Lubell by his
actions has violated the rules of this
Court and the California State Bar Rules
and California Business and Professions
Code 6068(d).
Rules of Professional Conduct (In
General )
APPENDIX §S A-110
Rule 7-105: In presenting a matter to a
tribunal, a member of the State Bar
shall:
(1) Employ, for the purpose of
maintaining the causes confided to him
such means only as are consistent with
the truth, and shall not seek to mislead
the judge, judicial officer or jury by
an artifice or false statement of fact
or law. A member of the State Bar shall
not intentionally misquote to a judge or
judicial officer the language of a book,
statute or decision; nor shall he with
knowledge of its invalidity and without
disclosing such knowledge, cite as
authority a decision that has been
overruled or a statute that has been
repealed or declared unconstitutional. A
member of the state bar shall refrain
from asserting his personal knowledge of
the facts at issue, except when
testifying as a witness.
APPENDIX S A-1ll
(2) Disclose, unless privileged or
irrelevant, the identities of the
clients he represents.
Rule 7-107. Contact with Witnesses
A member of the State Bar. shal]
not:
(A) Suppress any evidence that he
or his client has a legal obligation to
reveal or produce.--------
39. In California the Business and
Professions Code spells out the attorney
candor much more clearly. Section
6068(d) says that an attorney has’ the
duty not to mislead the judge or
judicial officer with a false statement
of fact or law. An Appeals court has
interpreted the law to include an
obligation to alert the court when false
information is communicated."
APPENDIX S A-112
40. Further attorney Steven Lubell has
violated the American Bar Association's
Model Rules of Professional Conduct:
“Under the ABA model rules, “it is
professional misconduct for a lawyer
to...engage in conduct involving
dishonesty, fraud, deceit or
misrepresentation [or to] engage in
conduct that is prejudicial to the
administration of justice.” ABA Model
Rule 8.4(c), (d). The U.S. Court of
Appeals for the Federal Circuit has also
said, “Distortion of the record, by
deletion of critical language in
quoting from the record, reflects a lack
of the candor required by the Model
Rules of Professional Conduct, Rule 3.3
(1983)." Amstar Corp. v. Envirotech
Corp. (Fed. Cir. 1984) 730 F.2d 1476,
1486.
In Amstar, Envirotech layers, on
appeal, distorted a quotation from the
APPENDIX & A-113
prosecution file in 4 patent
infringement case, then presented an
estoppel argument based on that
distortion. For sanctions, the court of
appeals made Envirotech pay twice the
amount of Amstar's costs. 730 £.2d at
1486.
Similarly, Rule 3.4 of the Model
Rule (entitled Fairness to Opposing
party and Counsel") admonishes lawyers
to compete fairly and forbids the
unlawful obstruction or concealment of
material facts.”
41. The disqualification and withdrawal
of attorney Steven Lubell is mandatory
in California under Rule of Professional
Conduct 2-111(b)(2)
"Withdrawal is mandatory in
California under Rule of Professional
Conduct 2-111(b)(2) if an attorney knows
or should know that his continued
APPENDIX S A-114
representation of a client will result
in a violation of the rules or the State
bar Act. Presenting false testimony
violates rule 7-105(1) and Business and
Professions Code Section 6068(d), which
require an attorney to utilize only
procedures that are consistent with
truth, and Section 6128(a), which
prohibits practicing any deceit on the
court or other party.”
42. In this instant action attorney
Steven Lubell has knowingly allowed his
client to perjure herself and has taken
no action to prevent the perjury. In a
similar case (Comm. on Professional
Ethics and Conduct of the Iowa State Bar
Ass'n v. Crary (1976) 245 N.W.2d 298,
306):
"To the disappointment of the Iowa
Supreme, he did not try to persuade his
client to correct her testimony or not
APPENDIX S A-115
to lie again, advise the senior partner
about her lying or withdraw from the
case, However, as soon as Crary's
partner confirmed his suspicions that
all was not pure and true, he withdrew
the firm as attorney of record. The
court concluded that by failing to stop
Curtis from lying, Crary knowingly
violated his duty as an attorney to
employ only means that are consistent
with truth. His “vice” was not in
failing to disclose the truth, "but in
participating in the corruption of the
fact-finding system by knowingly
permitting” Curtis to lie.” Comm. On
Prof , 1 _Ethi i Conduct of
Iowa State Bar Ass'n ov Crary, (1976)
245 N.W.2d 298, 306. For this
transgression and for assisting his
client (who later became Mrs. Crary) in
nullifying a child custody decree,
Crary's license was revoked.
APPENDIX S&S A-116
court reporter present. Lubell asked
Millan to wait for the Court Reporter
and Millan waited for an extended period
and no court reporter ever showed up.
Millan left Lubell's office.
Millan contends that there was
never any deposition intended of Millan
and Millan bases this on the following.
Immediately after leaving Lubell's
office, Millan telephoned the Law Office
of Mr. Scott Gilmore, the other defense
counsel in this case. Millan, spoke to
Mr. Gilmore and asked him if he had been
noticed by Lubell of the deposition of
Millan. Mr. Gilmore searched his files
_ found that no notice of the
deposition had been received at his
office from Lubell and that he would
have certainly attended Millan's
deposition if he had been aware of such
a deposition.
APPENDIX Z A-130
‘nee
Millan also cannot find any record
of the above Notice of Deposition on
file in the Court Docket.
Lubell made Millan attend A
fictional deposition and made him travel
some 40 miles to his office and 40 miles
back to Millan's office in Orange County
California on a wild goose chase.
Ze On May 1988, during the trial
setting conference hearing, the Hon.
Judge William Rea set the original trial
date of this case for September 15,
1988. When Millan heard the judge
announce the date, Millan told Judge Rea
in the presence of opposing counsel and
in open court that Millan and his family
had planned to be in Seoul, Korea for
the Olympics and since the trip had been
planned for more than a year and airline
and hotel reservations had been paid
for, Millan requested that the Court set
APPENDIX Z A-i33
the trial date for October 1988 on a
date after Millan returned from the
Olympics. Millan was granted the time
to go to the Orient and attend the
Olympics. Millan understood that there
would be no hearing or motions in his
absence since Millan was bound by the
Local Court Rule 110-13 below.
Local Court Rule 110-13
Persons Appearing Without an
Attorney --In Propria Persona
"Any person who is representing
himself or herself without an
attorney must appear personally for
such purpose and may not delegate
that duty to any other person,
including husband or wife, or
another party on the same side
appearing without an attorney. Any
person so representing himself
without an attorney is bound by
these rules of court and by the
F.R.Civ.P. Failure to comply
therewith may be ground for
dismissal or judgment by default."
Millan prepared to leave for Korea
and was completely surprised by a Motion
For Summary Judgement filed by Lubell on
September 2, 1988 and noticed for
APPENDIX Z A-132
September 26, 1988 during the middle of
the Olympic Games.
Lubell deliberately filed the
motion for summary judgment during that
period of time so that Millan would
either be forced to cancel his trip to
the Olympics or be forced to substitute
counsel in his place.
To compound his treachery, Lubell
had an ex parte conversation with the
law clerk "Harry™ and concealed the fact
from Millan, thus forcing Millan to
attend the hearing on September 26, 1988
at a great loss in money and the
cancellation of the trip to the
Olympics.
3. During the period of time that
Lubell has been in this case he has
tried to show Millan in a false light
before the Court. On September 26, 1988
as recorded in the Reporter's Transcript
APPENDIX Z A-i33
of Proceedings, page 28 lines 14-25 and
page 29 lines 1-18, Lubell attempted to
show that false light in open court with
the following result:
THE COURT: Now then, in
reply, I'm going to give you, Mr.
Lubell, until the 7th of October to file
any additional documents you want to
file.
MR. LUBBELL: Your Honor,
could we have an order that those
documents are to be served on my office
on that day? I'm having a problem with
documents being mailed from Santa Ana
and getting them five or six days later
from the day when they're supposed to be
filed.
MR. MILLAN: Your Honor --
THE COURT: Well, just 2
minute now.
MR. MILLAN: I have one thing
here to say. When my messenger went to
APPENDIX Z A-134
Mr. Lubbell's office a week ago to
deliver the plaintiff's jury
instructions, because we have had
trouble like this before, I wanted a
receipt for the jury instructions.
Mr. Lubbell's secretary
refused to sign a receipt and Mr.
Lubbell refused.
THE COURT: Well, why is that,
Mr. Lubbell? What's wrong with
acknowledging receipt of these papers?
MR. LUBBELL: Your Honor --
THE COURT: Well, look. I
don't want to get involved with this.
MR. LUBBELL: That's the whole
problem, we're going to get into --
THE COURT: Well, look. They
are ordered to be delivered to your
office and if I hear that you will not
acknowledge receipt of them, then I am
going to have to take some action
against you or your law firm. I don't
APPENDIX Z A-135
know what it will be, but I'm going to
take some action against you.
APPENDIX Z A-136
EXCERPTS FROM COURT RECORD 87, PAGE 17,
PARAGRAPH 30 THROUGH PAGE 18, PARAGRAPH
31:
"30. Defendants Bennett and 6.
Steinbaugh then go further to quote
California Architectural Bldg. Products
v. Franciscan Ceramics, Inc.,
"In California Architectural Bldg.
Products v. Francisc eramics Inc.,
818 F.2d 1466 (9th Cir. 1987) the 9th
Circuit Court of Appeals recognized that
RICO‘s continuity requirement is not
satisfied if plaintiffs have merely
alleged "a single fraud perpetrated on a
Single victim. California Architectural
818 F.2d at 1469 (citing Schreiber 806
F.2d at 1388).
31. Defendants are DEAD WRONG, THE
NINTH CIRCUIT HAS FIRMLY REJECTED THE
SEDIMA FOOTNOTE AND CONTINUITY.
"Franciscan replies by
expanding the focus of inquiry. In
its view the alleged acts of mail
APPENDIX AA A-137
and wire fraud do not consitute [sic] a
"pattern" of racketeering activity
because they pertain to a single alleged
criminal episode, the closing of
Franciscan. Z “pattern” Franciscan
points out, requires “continuity plus
relationship". Sedima, _§.P.R.L. v.
Imrex Co., 473 U.S. 479, n. 14, 105
S.Ct. 3275, 3285 n.14, 87 L. Ed.
346 (1985) (quoting S.Rep. No. 617,
S9lst Cong., lst Sess. 158 (1969).
Continuity is lacking, Franciscan
insists, when acts pertain to -
single criminal episode. Under
these circumstances there is no
ongoing illegal activity.”
[5] “This approach is not without
its appeal. However, the plain
words of RICO preclude it. RICO
defines “pattern of racketeering
activity” without mentioning
continuity. SEE 18 U.S.C. Section
1961(5) (emphasis added). There is
no suggestion that the underlying
illegal acts must be part of
different criminal episodes. The
dictum in Sedima is suggestive,
but, without additional explication
by the Supreme Court, we decline to
follow its lead. (emphasis added).
Nor does our recent decision in
Schreiber Distributing Co. v. Serv
Well Furniture 806 F.2d 1393 (9th
Cir. 1986), require us todo so.
There we held that plaintiffs
failed to state a RICO claim by
alleging acts of mail and wire
fraud relating to the diversion of
a single shipment of products. Id.
at 1399. That was a single fraud
perpetrated on a single victim. By
APPENDIX AA A-138
contrast, here the dealers allege
that Franciscan made multiple
fraudulent sales to them as
multiple victims. California
Architectural Bldg. Products ..
Franciscan Ceramics, Inc., 818 F.2d
1466 (9th Cir. 1987)."
APPENDIX AA A-139
EXCERPTS OF COURT RECORD 12,” page 33,
lines 6 through 27, and page 34, lines 1
through 15:
[A] "5. Defendant mislead Plaintiff
into believing that another attorney was
representing her who would file an
answer for her. On June 15, 1987
approximately 1:15 P.M. I telephoned Mr.
Scott Gilmore ESQ at (213) 620-0460.
(Exhibit 3). Mr. Gilmore informed me
that he was representing Colleen
Steinbaugh. He also told me he would be
speaking to Marsha Bennett regarding
representing her also. Mr. Gilmore
asked me if I had served Marsha Bennett
and I replied that I had not. Mr.
Gilmore told me he would ask Marsha
Bennett if he could accept service for
her. I then requested a date for the
3c.R. 12: Memo in oppos to motn to
dismiss and/or quash service,
insufficient service filec by deft
colleen Steinbaugh. pltf. (7-6-87).
APPENDIX BB A-140
early meeting of counsel. Mr. Gilmore
set the date of June 24, 1987.
“On June 23, 1987 I again tele-
phoned Mr. Gilmore to discuss the
meeting of counsel set for the next day
and I asked Mr. Gilmore if he had spoken
to Marsha Bennett about authorizing him
to accept service for her. Mr.
Gilmore's reply was that he had been
told that Marsha Bennett was not going
to make things easy for you (Plaintiff)
so you better serve her. Mr. Gilmore
and Plaintiff agreed to file a stipula-
tion with the Court requesting an
extension of time for the early meeting
of counsel. Plaintiff was to write the
stipulation and send it to Mr. Gilmore
for signature and Mr. Gilmore was to
file it with the clerk. This was
prepared June 23, 1987 (Exhibit 4.) Mr.
Gilmore said he would file an answer for
Colleen Steinbaugh before the deadline.
APPENDIX BB A-141
I received motion to dismiss on June 27,
1987 from a Steven kK. Lubell which had
been filed on June 24, 1987.
"Plaintiff contends based on
information and belief that Defendant
mislead Mr. Gilmore into believing he
was representing her while she went
shopping around to find an attorney that
would contest the service of Complaint
and Summons. This contention is made
based on a telephone conversation with
Mr. Gilmore on June 15, 1987 where he
stated that "He would not stand for any
hide and seek games," then he told
Plaintiff that he would ask Marsha
Bennett if he could accept service for
her.
APPENDIX BB A-142
[B] On July 24, 1987, c.R. 33,* at page
6, lines 12 through 27, and page 7,
lines 1-2:
". « « @t 3345 P.M. Plaintiff
telephoned Mr. Scott Gilmore, the
attorney for R. STEINBAUGH, M. GARDNER
B. GARDNER, and FASHION EMBROIDERY INC.
During the conversation Mr. Scott
Gilmore informed Plaintiff that Mr.
Steven Lubell, the attorney for COLLEEN
STEINBAUGH, would be the attorney for
MARSHA BENNETT when we served her. Mr.
Gilmore related a conversation he had
with a man who identified himself as the
husband of MARSHA BENNETT. This husband
of MARSHA BENNETT angrily instructed Mr.
Gilmore not to speak to Plaintiff or
communicate with Plaintiff in any way.
Sour. 33: Notc of mot & mot for lv
to a/c; extn of discvy date; cont ptc.
pltf,retbl 4/4/88 at 10am. pltf.
(3/14/88)
APPENDIX BB A-143
43. In California, if the attorney,
rather than the client, initiates the
false testimony, the attorney may be
prosecuted for subornation or
solicitation of perjury. California
Penal Code Section 127 provides that
every person who willfully procures
another person actually to commit
perjury is guilty of subornation. If
perjury is not actually committed, the
person who unsuccessfully solicited the
perjury may be guilty of solicitation of
perjury. California Penal Code Section |
653£(a).
44. In California, if the attorney does
not attempt to stop or have the client
correct perjured testimony and allows
the trier of fact to rely onit, the
attorney commits a crime. Business and
Professions Code Section 6128(a)
provides that an attorney who is “guilty
APPENDIX S A-117
Se
of any deceit or collusion, or consents
to any deceit or collusion, with intent
to deceive the court or any party"
commits a misdemeanor. The punishment
is imprisonment not exceeding six
months, a fine not exceeding $2.500.00
or both imprisonment and a fine.
45. Allowing a client to testify
falsely constitutes deceit or collusion,
a New York court in People v_ Salquerro
(1980) 433 NYS 2d 711, 713, stated that
an “attorney who knowingly presents
perjured testimony is practicing a fraud
on the tribunal." Collusion is a
"secret combination, conspiracy or
concert of action between two or more
persons for fraudulent or deceitful
purpose. Hone v Climatrol Industries
Inc., (1976) 59 CA3d 513, 522, 130 CR
770.
APPENDIX S A-118
PUBLISHERS NOTE:
PAGE (S) IN ORIGINAL MISSING
CALIFORNIA RULES OF PROFESSIONAL
CONDUCT, RULE 7-105:
Rule 7-105: In presenting a matter toa
tribunal, a member of the State Bar
shall:
(1) Employ, for the purpose of
maintaining the causes confided to him
such means only as are consistent with
the truth, and shall not seek to mislead
the judge, judicial officer or jury by
an artifice or false statement of fact
or law. A member of the State Bar shall
not intentionally misquote to a judge or
judicial officer the language of a book,
statute or decision; nor shall he with
knowledge of its invalidity and without
disclosing such knowledge, cite as
authority a decision that has been
overruled or a statute that has been
repealed or declared unconstitutional. A
member of the state bar shall refrain
APPENDIX U A-120
from asserting his personal knowledge of
the facts at issue, except when
testifying as a witness.
(2) Disclose, unless privileged or
irrelevant, the identities of the
clients he represents.
APPENDIX U A-1i21
CALIFORNIA RULES OF PROFESSIONAL
CONDUCT, RULE 7-107:
Rule 7-107. Contact with Witnesses
A member of the State Bar _ shall
not:
(A) Suppress any evidence that he
or his client has a legal obligation to
reveal or produce.--------
APPENDIX V A-122
CALIFORNIA BUSINESS AND PROFESSIONS CODE
§ 6068(d):
§ 6068. Duties of attorney
"It is the duty of an attorney to
do all of the following:
(d) To employ, for the purpose of
maintaining the causes confided to him
or her * * * such means only as are
consistent with truth, and never to seek
to mislead the judge or any judicial
officer by an artifice or false
statement of fact or law.
(Emphasis added. )
APPENDIX W A-123
EXCERPTS FROM AMERICAN BAR ASSOCIATION'S
MODEL RULES OF PROFESSIONAL CONDUCT:
ABA Model Rule 8.4(c), (d):
“Under the ABA model rules, “it is
professional misconduct for a lawyer
to...engage in conduct involving
dishonesty, fraud, deceit or
misrepresentation [or to] engage in
conduct that is prejudicial to the
administration of justice."
The U.S. Court of Appeals for the
Federal Circuit has also said,
“Distortion of the record, by deletion
of critical language in quoting from
the record, reflects a lack of the
candor required by the Model Rules of
Sretensions’ Gendest, Rule 3.3 (1983)."
Amstar Corp. v. Envirotech Corp. (Fed.
Cir. 1984) 730 F.2d 1476, 1486.
APPENDIX xX A-124
In Amstar, Envirotech lawyers, on
appeal, distorted a quotation from the
prosecution file in a patent
infringement case, then presented an
estoppel argument based on that
distortion. For sanctions, the court of
appeals made Envirotech pay twice the
amount of Amstar's costs. 730 £.2d at
1486.
Similarly, Rule 3.4 of the Model
Rule (entitled Fairness to Opposing
party and Counsel”) admonishes’ lawyers
to compete fairly and forbids the
unlawful obstruction or concealment of
material facts.”
APPENDIX X A-i25
The California Business and Professions
Code § 6128 states:
"§ 6128. Deceit, collusion, delay of
suit and improper receipt of money as
misdemeanor
Every attorney is guilty of
misdemeanor who either:
(a) Is guilty of any deceit or
collusion, or consents to any deceit or
collusion, with intent to deceive the
court or any party.
(b) Willfully delays his client's
suit with a view to his own gain.
(c) Willfully receives any money
or allowance for or on account of any
money which he has not laid out or
become answerable for.
, tolati =" cc ¢
this section is punishable __ by
, Ein ¢) ty jai)
APPENDIX Y A-126
exceec’nc six months, or by a fine not
exceeding two thousand five hundred
do 500 by both.
(Amended by Stats.1976, p. 5029, §
2.$.)”
APPENDIX Y A-127
HARASSMENT OF OPPOSING PARTY
THIS CASE HAS SEEN THE HARASSMENT
OF THE OPPOSING PARTY BY DEFENDANT
BENNETT AND COUNSEL STEVEN LUBELL GROW
TO SUCH AN EXTENT THAT THE LOSSES OF
TIME AND MONEY HAVE BECOME CONSIDERABLE
AND THE PREJUDICE TO MILLAN'S CASE HAS
GROWN WITH EACH INCIDENT. THE COURT HAS
BEEN MADE AWARE OF EACH INCIDENT AND NO
ACTION HAS BEEN TAKEN BY THE COURT.
2. On 1988, Lubell, served Millan
with the following notice of deposition:
Steven K. Lubell
Attorney at Law
1234 Sixth Street, Suite 203
Santa Monica, California 90401
Telephone (213) 451-9904
Attorney for COLLEEN STEINBAUGH &
MARSHA BENNETT
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
RICHARD MILLAN
Plaintiff
CIVIL ACTION NO 87-2283
NOTICE OF DEPOSITION
vs.
MARSHA BENNETT
~~ SS Oe
APPENDIX Z A-128
ET AL. )
Defendants )
)
TO PLAINTIFF RICHARD MILLAN (IN PROPER)
NOTICE IS HEREBY GIVEN that pursuant to
Federal Rules of Civil Procedure Section
30(b), defendants, MARSHA BENNETT and
COLLEEN STEINBAUGH will take the
deposition of plaintiff RICHARD MILLAN,
on April 11, 1988 at 10:00 a.m. at the
Law Office of Steven K. Lubell located
at 1234 Sixth Street, Suite 203, Santa
Monica, California 90401. Please take
further notice that this deposition will
be stenographically recorded and will go
from day to day until completed.
Dated March 4, 1988.
STEVEN K. LUBELL
Attorney for Defendants
MARSHA BENNETT &
COLLEEN STEINBAUGH.
Millan appeared for the deposition
at the appointed time and there was no
APPENDIX Z A-129
Mr. Gilmore then told the “husband of
MARSHA BENNETT" not to tell him how to
practice law.
"16. On July 21, 1987, Plaintiff
telephoned Mr. Steven Lubell and asked
him if he was the attorney for MARSHA
BENNETT. Mr. Lubell responded that he
had been consulted by her but had not
been retained. Mr. Lubell further
stated that any information about him
and MARSHA BENNETT was privileged."
[C] The privilege that Mr. Lubell was
exercising was a privilege to conceal
material witnesses and facts and to
assist defendant Bennett in committing
perjury in the following manner:
a On January 22, 1988 Mr. Lubell
served on this Plaintiff his
Supplementary Response to Interrogato-
ries and Supplementary Answers to
APPENDIX BB A-144
Requests for Admissions of defendants
MARSHA BENNETT and COLLEEN STEINBAUGH.
"25. Directing this Court's atten-
tion to INTERROGATORIES PROPOUNDED BY
PLAINTIFF RICHARD MILLAN TO DEFENDANT
MARSHA BENNETT. SET 1 NUMBERS 1 TO 30.
lodged with this Court.
At page 3 line 10.
2. State: (a) your name; (b)
your present married name; (c) every
name you have used in the past; (d) the
dates you used each name.
ANSWER TO INTERROGATORY 2.
(a) MARSHA BENNETT
(b) OBJECTION. THIS
REQUEST IS AN INVASION OF THE PRIVACY OF
THIS ANSWERING DEFENDANT, COMPLIANCE
WOULD BE OPPRESSIVE.
(c) MARSHA BENNETT,
MARSHA MILLAN
APPENDIX BB A-145
(d) WITH RESPECT TO THE
NAME MARSHA MILLAN FROM THE TIME PERIOD
OF JANUARY 1984 TO JULY 1984. ¢
[D] "26. Directing this Courts
attention to the DEPOSITION OF MARSHA
BENNETT ON TUESDAY, FEBRUARY 23, 1988
AND LODGED WITH THIS COURT.
At page 10 lines 11 through 23.
By Mr. Millan
Q. STATE YOUR MARRIED NAME, PLEASE.
Mr. Lubell: OBJECTION ON THE
FIRST AMENDMENT RIGHT TO PRIVACY.
Mr. Millan: ARE YOU INSTRUCT-
ING YOUR WITNESS NOT TO ANSWER?
Mr. lLubell: ASKED AND AN-
SWERED ALREADY COUNSEL. I'VE ALREADY
INSTRUCTED THE WITNESS ON THE QUESTION.
Mr. Millan: WILL YOU CITE THE
WITNESS PLEASE. .. ."
APPENDIX BB A-146
a
tae « o Plaintiff directs the
Court's attention to the date that
Plaintiff first spoke to Mr. Lubell by
telephone on July 21, 1987 and the date
of the above deposition February 23,
1988. Seven full months have passed and
still Plaintiff could not find out what
Defendant MARSHA BENNETT'S true married
name was. The question is WHY? What
were they hiding?" The answer to that
question is simply that Defendant Marsha
Bennett and attorney Steven Lubell were
hiding a material witness to this case.
That witness was Uday Raj Sawhney. The
concealment of this material witness
completely prejudiced Millan's case.
The concealment of Uday Raj Sawhney
also led to the decision by the United
States District Court to deny Millan
leave to file his first "and only"
amended complaint. It was also
instrumental in the decision of the
APPENDIX BB A-147
District Court to grant a partial
summary judgment to the defendants in
this case. Uday Raj Sawhney was hidden
because he was the husband of Marsha
Bennett. He was also the accountant and
auditor that audited the books of
defendant Fashion Embroidery Inc. He
was also the person who negotiated the
tax problems of Fashion Embroidery Inc.
with the United States Internal Revenue
Service after July 1984. Also the fact
that Uday Raj Sawhney was the accountant
hired by Millan to investigate the worth
of Certified Tank Manufacturing Inc., a
company owned by Bennett and offered for
sale to Millan by Bennett. Bennett and
Lubell concealed the facts that Uday Raj
Sawhney had complete access to all the
books and financial records of Fashion
Embroidery Inc. after July 1984. In the
following paragraphs, Millan will
outline for this Court the path that
APPENDIX BB A-148
al
this concealment and perjury took.
Millan will be quoting from C.R. 33,
Supra.
ae Plaintiff found out why on
February 25, 1988 why defendant MARSHA
BENNETT and her counsel Steven Lubel]
were trying to hide her true married
name."
([F] "29. PLAINTIFF RESPECTFULLY
REQUESTS THIS COURT TO REVIEW THE
FOLLOWING FOR OBSTRUCTION OF THE PROCESS
OF THIS COURT, PERJURY AND SUBORNATION
OF PERJURY BY DEFENDANT MARSHA BENNETT
AND HER COUNSEL STEVEN LUBELL."
"oe. Both Defendant MARSHA BENNETT
and her counsel signed the Responses to
Interrogatories and Request for Admis-
sions served on Plaintiff on January 22,
1988. Further Mr. Lubell was present at
APPENDIX BB A-149
the Deposition of MARSHA BENNETT and
allowed her to perjure herself. Mr.
Lubell knew that the testimony that
MARSHA BENNETT was giving in her deposi-
tion was not the truth and Mr. Lubell
knew the name of a person who had
knowledge and possession and of the
existence of documents that had been
subpoenaed and still he and his client
have refused to produce them.
‘os “Ga, Directing this Court's
attention to the DEPOSITION OF MARSHA
BENNETT ON TUESDAY, FEBRUARY 23, 1988
AND LODGED WITH THIS COURT.
At page 28 lines 19 through 23.
By Mr. Millan
Q. DO YOU KNOW OF ANY PERSONS THAT
HAVE RECORDS OF FASHION EMBROIDERY,
INCORPORATED, OTHER THAN MURRAY GARDNER,
BONNIE GARDNER, FASHION EMBROIDERY,
INCORPORATED, OR RICHARD MILLAN?
APPENDIX BB A-150
A. NO. [MARSHA BENNETT]
at > £ ATTORNEY STEVEN LUBELL HAS
CLAIMED THAT TO GIVE PLAINTIFF THE TRUE
MARRIED NAME OF DEFENDANT MARSHA BENNETT
IS AN INVASION OF PRIVACY. THE TRUE
FACTS ARE THAT ATTORNEY STEVEN LUBELL
HAS BEEN HIDING UDAY RAJ SAWHNEY AND
DOCUMENTS FROM PLAINTIFF AND ALLOWING
DEFENDANT MARSHA BENNETT TO COMMIT
PERJURY IN THESE COURT PROCEEDING. WHEN
PLAINTIFF LEARNED THE TRUE MARRIED NAME
OF DEFENDANT MARSHA BENNETT, THE NATURE
OF THE MISCONDUCT BY ATTORNEY STEVEN
LUBELL WAS MADE VERY CLEAR.
at > F Plaintiff has been trying for
months to obtain the financial records,
stock registers, books of accounts,
customer files and lists, computer print
outs of defendant FASHION EMBROIDERY
INC. Defendant MARSHA BENNETT IS THE
APPENDIX BB A-151
CORPORATE SECRETARY AND TREASURER OF
defendant FASHION EMBROIDERY INC., in
March of 1986, Attorney Karen Donahoe of
the Law firm of Mayer and Glassman
subpoenaed the records and stock regis-
ters from defendant FASHION EMBROIDERY
INC., for use in the divorce trial of
MILLAN V. MILLAN the above records were
turned over to MARSHA BENNETT AND HER
ATTORNEYS BY DEFENDANT MURRAY GARDNER
AND NEVER RETURNED TO THE CORPORATION BY
DEFENDANT MARSHA BENNETT. DEFENDANT
MARSHA BENNETT DENIES HAVING THE
RECORDS.
"a4. Plaintiff learned on March 4,
1988 that UDAY RAJ SAWHNEY, the current
husband of defendant MARSHA BENNETT was
the certified public accountant of
defendant FASHION EMBROIDERY INC. U.R.
SAWHNEY NOT ONLY AUDITED THE BOOKS AND
RECORDS OF DEFENDANT FASHION EMBROIDERY,
APPENDIX BB A-152
BUT HE ALSO WAS INSTRUMENTAL IN REPORT-
ING THE FINANCIAL CONDITION OF DEFENDANT
FASHION EMBROIDERY INC. TO FINANCIAL
INSTITUTIONS AND CREDIT REPORTING
AGENCIES SUCH AS DUN AND BRADSTREET
CORPORATION. MR. SAWHNEY WAS ALSO
INSTRUMENTAL IN THE FRAUD INVOLVING THE
OWNERSHIP OF STOCK IN DEFENDANT FASHION
EMBROIDERY INC. PLAINTIFF BY THIS
MOTION INTENDS ALSO TO GIVE NOTICE TO
MR. U.R. SAWHNEY THAT A SUBPOENA FOR ALL
RECORDS, FILES, CORRESPONDENCE, FINAN-
CIAL BOOKS, JOURNALS, STOCK LEDGERS,
COMPUTER PRINTOUTS AND ANY BUSINESS
DEALINGS IN WHATEVER FORM BETWEEN
FASHION EMBROIDERY INC., OR ANY PERSON
ASSOCIATED WITH FASHION EMBROIDERY INC.,
AND MR. UDAY RAJ SAWHNEY WILL BE ISSUED.
DEFENDANT MARSHA BENNETT'S DENIAL OF ANY
KNOWLEDGE OF ANY PERSON WHO HAD RECORDS
OF FASHION EMBROIDERY INC., WAS A CLEAR
ATTEMPT BY DEFENDANT MARSHA BENNETT AND
APPENDIX BB A-153
HER ATTORNEY STEVEN LUBELL TO HIDE THE
IDENTITY AND PARTICIPATION OF HER
HUSBAND UDAY RAJ SAWHNEY.
[H}) “35. Counsel Steven Lubell on
November 12, 1987 was put on notice that
Plaintiff would amend his complaint to
add the married name of MARSHA BENNETT
and include the following persons and
entities; DOUGLAS MARTIN, MARTIN TANK
MFG. INC. and CERTIFIED TANK MANUFACTUR-
ING INC. Ever since that day Mr Lubell
has obstructed discovery and the pro-
ceedings of this Court by the following.
+i *® 1. Directing this Court's
attention to INTERROGATORIES PROPOUNDED
BY PLAINTIFF RICHARD MILLAN TO DEFENDANT
MARSHA BENNETT, SET 1 NUMBERS 1 TO 30,
lodged with this Court.
At page 3 line 10.
APPENDIX BB A-154
INTERROGATORY NO. 7
Have you ever been named as a
defendant in a civil action in either
State or Federal Courts? If so, for
each action state:
(a) the city and state where
the action was filed;
(b) the Court and case number;
(c) the names and ADDRESSES of
each plaintiff;
(d) the nature of the com-
plaint;
(e) the disposition or
judgment of the action.
RESPONSE TO INTERROGATORY NO. 7 BY
MARSHA BENNETT.
(a) Answering party is at-
tempting to obtain information
requested. In the interest of
discovery, answering defendant answers
with the known information. Los
Angeles, California.
APPENDIX BB A-155
(b) Los Angeles Superior Court
(c) Haffner v. Bennett
(d) Business dispute
(e) Case dismissed
we iP Directing this Courts atten-
tion to the DEPOSITION OF MARSHA BENNETT
ON TUESDAY, FEBRUARY 23, 1988 AND LODGED
WITH THIS COURT.
At page 10 lines 11 through 23.
By Mr. Millan
Q. (READING: )
"NO. 20. MARSHA BENNETT
IS REQUESTED TO PRODUCE ANY AND ALL
NAMES OF CASES IN WHICH SHE WAS EITHER A
PLAINTIFF OR DEFENDANT IN EITHER STATE
OR FEDERAL COURT IN WHATEVER
JURISDICTION SUCH JURISDICTION SUCH CASE
WAS FILED.”
Mr Lubell: We have answered that
guestion in one of your interrogatory
requests. It‘s already been answered.
APPENDIX BB A-156
U WER 0 OV AR
AS FOLLOWS.
"38. COMMONWEALTH FINANCIAL V.
COLLEEN STEINBAUGH, MARSHA BENNETT AND
RICHARD MILLAN--LOS ANGELES SUPERIOR
COURT, CENTRAL DISTRICT C473743.
ACTION BROUGHT AGAINST COLLEEN
STEINBAUGH AND MARSHA BENNETT FOR
DESTROYING AND GUTTING A HOME
REPOSSESSED BY COMMONWEALTH FINANCIAL
FROM RICHARD AND COLLEEN STEINBAUGH
BEFORE RICHARD MILLAN HAD EVER MET
MARSHA BENNETT AND COLLEEN STEINBAUGH.
THIS CASE FOR BAD FAITH WASTE,
CONSPIRACY TO CAUSE BAD FAITH WASTE, AND
CONVERSION OF PERSONAL PROPERTY STILL
PENDING IN SUPERIOR COURT.
2. HARMIER V. DOUGLAS MARTIN,
MARSHA BENNETT AND CERTIFIED TANK MFG.
3.-MARSHA BENNETT SAWHNEY V.
MAYER & GLASSMAN LAW CORPORATION. LOS
APPENDIX BB A-157
ANGELES SUPERIOR COURT C658214. THIS
CASE FOR LEGAL MALPRACTICE WAS FILED BY
MARSHA BENNETT IN AUGUST, 1987. HER
ATTORNEY OF RECORD WAS STEVEN LUBELL.
THE EXISTENCE OF THIS CASE RECORD WAS
WITHHELD FROM PLAINTIFF IN BOTH THE
INTERROGATORIES OF MARSHA BENNETT AND
THE SUBPOENA FOR DOCUMENTS AT DEPOSITION
SERVED ON MARSHA BENNETT ON FEBRUARY 6&8,
1988. THE WITHHOLDING OF THIS CASE FROM
PLAINTIFF WAS DONE INTENTIONALLY BY
ATTORNEY STEVEN LUBELL TO PREVENT
PLAINTIFF FROM LEARNING THE TRUE MARRIED
NAME OF DEFENDANT MARSHA BENNETT.
€) ie | P Directing this Court's
attention to INTERROGATORIES PROPOUNDED
BY PLAINTIFF RICHARD MILLAN TO DEFENDANT
MARSHA BENNETT, SET 1 NUMBERS 1 TO 30,
lodged with this Court.
At page 3 line 10.
INTERROGATORY NO. 27.
APPENDIX BB A-158
Within the past fifteen years
have you owned any real estate with
Douglas Martin? If so, for each real
estate parcel state:
(a) the location of the real
estate records;
(b) the ownership interest in
each real estate parcel.
(c) the address of each parcel
of real estate;
(d) the date each was pur-
chased by you;
(e) the date each was sold by
you,
(e) the type of deed transfer;
(£) the city and county of
each real estate parcel.
ANSWER TO INTERROGATORY 27 BY
MARSHA BENNETT.
27. ANSWER: NO
APPENDIX BB A-159
[Kk] “PLAINTIFF DIRECTS THIS COURTS
ATTENTION TO THE FOLLOWING EXHIBITS:
40. 1. LOS ANGELES COUNTY DEED OF
TRUST DOCUMENT NO. 81-381907 (EXHIBIT 6)
THIS DEED OF TRUST READS IN
PART: "For value
Received, the undersigned
hereby grants, assigns and transfers to
DOUG MARTIN, An Unmarried Man and
MARSHA BENNETT, A Single Women,
as Joint Tenants all beneficial interest
under that certain Deed of Trust dated
April 13, 1981 executed by VICTOR M. MC
BETH, A Single Man and JANET L. BAILEY,
A SINGLE WOMAN.....
2< LOS ANGELES COUNTY DEED OF
TRUST DOCUMENT NO. 81-542869 (EXHIBIT 7)
THIS DEED OF TRUST READS IN
PART:
This deed of trust, made this
31 day of March, 1981 between LLOYD C.
“APPENDIZ B’ A-160
DES ROCHES, a married man, and RUTH F.
DES ROCHES, a married woman, herein
called trustor, and DOUG MARTIN, An
Single Man and MARSHA BENNETT, A_ Single
Women, herein called beneficiary........
3. LOS ANGELES COUNTY DEED OF
TRUST DOCUMENT NO. 81-253623 (EXHIBIT 8)
THIS DEED OF TRUST READS IN
PART:
This deed of trust, made this
10 day of December, 1980 between JUAN
JESUS RODRIGUEZ, a married man, and
MARIA D LA LUZ RODRIGUEZ, a married
woman, herein called trustor , and DOUG
MARTIN, An Single Man and MARSHA
BENNETT, A Single Women, herein called
beneficiary........
4. LOS ANGELES COUNTY DEED OF
TRUST DOCUMENT NO. 80-1011418 (EXHIBIT
9)
THIS DEED OF TRUST READS IN
PART:
APPENDIX BB A-161
cea aaa eae iis
This deed of trust, made this
24 day of August, 1980 between JUAN
RODRIGUEZ, a married man, and MARIA
RODRIGUEZ, a married woman, herein
called trustor , and DOUG MARTIN, An
Single Man and MARSHA BENNETT, A_ Single
Women, herein called beneficiary........
TP LOS ANGELES COUNTY DEED OF
TRUST DOCUMENT NO. 82-627625 (EXHIBIT
10)
THIS DEED OF TRUST READS IN
PART:
This deed of trust, made this 9
day of November, 1981 between LUCAS
VILLAPUEDA, a married man, and RUFINA
VILLAPUEDA, a married woman, herein
called trustor, and DOUG MARTIN, An
Unmarried man and MARSHA BENNETT, A
Single Women, herein called beneficia-
APPENDIX BB A-162
[L]) "41. Directing this Court's
attention to DEPOSITION SUBPOENA SERVED
ON DEFENDANT MARSHA BENNETT ON
FEBRUARY , 1988, SCHEDULE A.
At page 4 line 12
11. ANY AND ALL RECORDS SHOWING
OWNERSHIP INTEREST IN CERTIFIED TANK
MANUFACTURING INC., BY DOUGLAS MARTIN
FOR ANY PERIOD OF TIME SINCE ITs
INCORPORATION TO THE PRESENT DAY.
14. ANY AND ALL FINANCIAL RECORDS
OF ANY AND ALL FINANCIAL TRANSACTIONS
BETWEEN MARSHA BENNETT AND DOUGLAS
MARTIN FOR THE PERIOD OF 1980 THOUGH
1988.
NO RECORDS AS REQUESTED ABOVE WERE
PRODUCED AT DEPOSITION BY MARSHA
BENNETT.
a Directing this Court's atten-
tion to the DEPOSITION OF MARSHA BENNETT
APPENDIX BB A-163
ON TUESDAY, FEBRUARY 23, 1988 AND LODGED
WITH THIS COURT.
At page 20 lines 1 through 5
By Mr. Millan
Q. DID YOU BRING ANY AND ALL
RECORDS SHOWING ANY OWNERSHIP INTEREST
IN CERTIFIED TANK MANUFACTURING
INCORPORATED, BY DOUGLAS MARTIN FOR ANY
PERIOD OF TIME SINCE ITS INCORPORATION
TO THE PRESENT DAY?
ANSWER By Marsha Bennett:
A. NO
"43. On or about October 3, 1980 a
truck was delivered to the facility of
MARTIN TANK MANUFACTURING INC., a
corporation owned by Marsha Bennett and
Douglas Martin, in Long Beach, Califor-
nia for repairs.
APPENDIX BB A-164
"44. On or about October 5, 1980
the truck was stolen from the facility
of MARTIN TANK MANUFACTURING INC.,
"45, On October 27, 1981 Allianz
Insurance filed a suit against MARTIN
TANK MANUFACTURING INC. IN LOS ANGELES
SUPERIOR COURT SOC 629064 asking for
damages in the amount of $83,555.56.
"46. On November 6, 1981 MARSHA
BENNETT took the assets of MARTIN TANK
MANUFACTURING INC., and using those
assets incorporated CERTIFIED TANK
MANUFACTURING INC., in a sham transac-
tion left MARTIN TANK MANUFACTURING
INC., a shell and judgment proof.
(MARTIN TANK re-activated in February
1987)
"47. MARSHA BENNETT then hid
DOUGLAS MARTIN from the world, she kept
APPENDIX BB A-165
all his bank accounts, insurance,
property and expenses in her name.
Joint wills were made out leaving each
other the beneficiary in case of the
death of either party. DOUGLAS MARTIN
was hidden from his creditors and from
any judgments by MARSHA BENNETT.
"48. The "Modus Operandi™ of MARSHA
BENNETT and DOUGLAS MARTIN was to
manipulate companies, bank accounts, and
properties while keeping the ownership
interests of DOUGLAS MARTIN hidden from
view.
"49. CERTIFIED TANK MANUFACTURING
INC., was their vehicle for separating
the unwary from their money. Anytime
that trouble came the assets were
removed and the company was left bare
and judgment proof.
APPENDIX BB A-166
"30. CERTIFIED TANK MANUFACTURING
INC., was allegedly sold by DOUGLAS
MARTIN to TONY G. CARRASCO for a
$700,000.00 note. (SEE EXHIBIT 11)
MARSHA BENNETT later was substituted as
trustee on that note for DOUGLAS MARTIN.
(SEE EXHIBIT 12)
mY TONY G. CARRASCO went into
default on the $700,000.00 note given to
MARSHA BENNETT for the sale of CERTIFIED
TANK MANUFACTURING INC. On September
10, 1987, attorney Steven Lubell filed
document No. 87-1456221 (SEE EXHIBIT 13)
in the Los Angeles County Recorder's
Office -- NOTICE OF DEFAULT "NOTICE IS
HEREBY GIVEN: THAT MARSHA BENNETT is
duly appointed trustee under a Deed of
Trust dated JANUARY 16, 1985 executed by
TONY G. CARRASCO and RUTH P. CARRASCO,
husband and wife as joint tenants as
trustor, to secure certain obligations
APPENDIX BB A-167
in favor of DOUGLAS HUGH MARTIN as
Beneficiary.......
"$2. Attorney Steven Lubell then
caused to be filed as document no.
87-2004442 (SEE EXHIBIT 14) in the Los
Angeles County Recorder's office -- the
following document. NOTICE OF TRUSTEE'S
SALE: YOU ARE IN DEFAULT UNDER A DEED
OF TRUST, DATED JANUARY 16, 1985 UNLESS
YOU TAKE ACTION TO PROTECT YOUR
PROPERTY, IT MAY BE SOLD AT A PUBLIC
SALE. IF YOU NEED AN EXPLANATION OF THE
NATURE OF THE PROCEEDING AGAINST YOU,
YOU SHOULD CONTACT A LAWYER.
ON JANUARY 15, 1988, AT 1:00 P.M.,
MARSHA BENNETT as duly appointed Trustee
under and pursuant to Deed of Trust
recorded January 25, 1985 as instrument
no. 85-92245 book n/a, of Official
Records in the office of the County
APPENDIX BB A-168
Recorder of Los Angeles County, Califor-
mia executed by Tony G. Carrasco and
Ruth P. Carrasco, husband and wife as
joint tenants.
WILL SELL AT PUBLIC AUCTION TO HIGHEST
BIDDER FOR CASH, CASHIER'S CHECK OR
CERTIFIED CHECK, (Payable in lawful
money of the United States) at the
entrance to the building located at 1234
Sixth Street., City of Santa Monica,
State of California. (This address is
the office of Steven Lubell, the attor-
ney of record for Marsha Bennett. )
all right, title and interest conveyed
to and now held by it under said Deed of
Trust in the property situated in said
County and State described as
LOTS 3, 5, AND 7, IN THE RESUBDIVISION
OF BLOCK 18, RANGE 5 WILMINGTON, IN THE
CITY OF LOS ANGELES, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 6 PAGE 179 OF MAPS, IN
APPENDIX BB A-169
THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY. cccccccccccessccces “(This
is the location of Certified Tank
Manufacturing, Inc.)
a TTTTTY TRUSTOR OR RECORD OWNER: TONY G.
CARRASCO AND RUTH CARRASCO.
BENEFICIARY: DOUGLAS HUGH MARTIN."
"$3. PLAINTIFF HAS SHOWN THIS COURT
THE OBSTRUCTION TACTICS OF MARSHA
BENNETT AND HER COUNSEL STEVEN LUBELL.
THEY DELIBERATELY FAILED TO PRODUCE THE
ABOVE DOCUMENTS AND MR LUBELL HID THE
FACT THAT HE WAS HOLDING THE SALE OF THE
PROPERTY OF CERTIFIED TANK MANUFACTURING
INC., AT HIS OFFICE ON JANUARY 15, 1988.
MR LUBELL AND MARSHA BENNETT WERE PUT ON
NOTICE ON NOVEMBER 12, 1987 THAT PLAIN-
TIFF WOULD NAME DOUGLAS MARTIN, MARTIN
TANK MFG. INC.. CERTIFIED TANK MANUFAC-
TURING INC., IN HIS FIRST AMENDED
APPENDIX BE A-170
COMPLAINT AND THEY WITHHELD DOCUMENTS
AND INFORMATION FROM PLAINTIFF.">
{[M]) 7. Defendant Bennett and her
counsel Steven Lubell misrepresented
material matters that led to the
prejudicial denial of Millan's motion to
amend the complaint in deposition, and
interrogatories and Court, said action
completely prejudiced Millan's case and
resulted in the order denying Millan
leave to amend complaint, continue
discovery and pretrial conference dates.
9. The original state action in 1984
came aS a cross-complaint to an action
filed by Marsha Bennett against Millan.
The basic causes of action were related
to Breach of Contract, constructive
>see: C.R. 33: paragraphs 24
through 27 and paragraphs 28 through 53.
APPENDIX BB A-171
trust, injunction, etc. In July of
1985, Millan was seriously injured and
required hospitalization for a few
months. On July 17, 1985 the Honorable
Robert H. O'Brien granted Millan a 30
day leave to amend his second amended
cross-complaint. [Exhibit 3] On July
26, 1985, Millan was involved in an
industrial accident which required an
operation and hospitalization for
several months. In August of 1986
Millan was given a further extension to
file the amended cross-complaint.
Millan's injuries prevented him from
filing the amended cross-complaint.
10. MR. LUBELL IS ALSO COUNSEL FOR
BENNETT IN THE STATE CASE. HE WAS WELL
AWARE OF WHAT HAD TRANSPIRED IN THE
STATE CASE. THE FOLLOWING IS HOW MR.
LUBELL MISREPRESENTED THOSE FACTS TO THE
JUDGE REA IN U.S. DISTRICT COURT:
APPENDIX BB A-172
—————————————EEOeeee—O—OEOEOeeeeeeeeeeeeEeEeEeEeEeEE———EE—EE
11. Mr. Lubell stated in his opposition
to amend complaint "After two State
Court Demurrers and two Amended com-
plaints Plaintiff, Millan was left with
a cross-complaint alleging four (4)
causes of action against defendant,
Bennett and the ten (10) additional
defendants
12. THIS WAS TOTALLY FALSE, MILLAN WAS
NOT THE PLAINTIFF IN THIS CASE, BENNETT
WAS, AND THE ONLY PERSONS LEFT IN THE
CASE WERE BENNETT, C. STEINBAUGH AND
MARTIN. THE OTHER DEFENDANTS WERE OUT
OF THE CASE. THE FOLLOWING PROPOSED
DEFENDANTS DID NOT APPEAR IN ANY PRIOR
CASE: UDAY RAJ SAWHNEY, MICHAEL JESSICK,
DEBRA K. JESSICK, FASHION GROUP LTD.AND
ANGELTOWN INC.[Exhibit 3]
a3. Mr-.. Lubell stated to Judge Rea
the following: "The amended complaint to
APPENDIX BB A-173
this action includes those names and
many of the causes of actions that on a
demurrer were denied with the exception
of a breach of contract, a constructive
trust specific performance and
declaratory relief and all we are doing
is rehash. It's already been decided in
the state court.
The Court: ™ You mean there is a
demurrer sustained without leave to
amend?
Mr. Lubell: “Correct”
Mr. Millan: “No it's not correct”
Mr. Lubell: "Demurrer with 30 days
to amend and the 30 days went beyond----
cooee " [Exhibit 3].
The Court:"-------- but what about
the pendent claims for conversion and
intentional infliction of emotional
distress?
Why should they be addressed in
this Rico case?"
APPENDIX BB A-174
Mr. Lubell: "They were dismissed
in the state court action on the first
‘demurrer and second demurrer. I don't
believe they are proper here if they
have already been dismissed based upon
the same set of facts in the state court
action."
The Court: "I don't really know
why they were dismissed. I asked you:
Were they dismissed or a demurrer
sustained?
Mr. Lubell: "Sustained"
The Court: "But you told me that
it was sustained with leave to amend.
Do you know why it was never amended?"
Mr. Lubell: "No. . Without being
able to produce evidence in a summary
judgment motion or without atrial, it
is difficult to explain it in this type
of a hearing.”
APPENDIX BB - A-175
14. THE TRUE FACTS ARE THAT MR.
LUBELL REPRESENTS BENNETT IN THE STATE
CASE, HAS ALL OF MILLAN'S MEDICAL FILES
AND ALL OF THE STATE CASE RECORDS. Mr.
Lubell is well aware that there are only
three people remaining in the state case
and that none of additional counts
Millan is seeking to amend into his
complaint have anything to do with the
state case.
(N] 15. THE COURT STATED THAT THE
AMENDMENT WAS UNTIMELY SINCE MILLAN KNEW
OR SHOULD HAVE KNOWN OF THESE CLAIMS AND
PARTIES AT THE TIME THE TIME HE FILED
THE ACTION."
16. Mr. Lubell misrepresented the
following facts to the Court:
The Court: "Well, how long do you
believe that he's known of these persons
other that the new name of his ex-wife?
APPENDIX BB A-176
Mr. Lubell: "Since May 29, 1985
when the second amended complaint was
filed.”
17. THE TRUE FACTS ARE THAT THE
PROPOSED AMENDED COMPLAINT WAS FOR
EVENTS THAT HAPPENED FROM 1985-1987,
EVENTS THAT MILLAN HAD NO KNOWLEDGE OF
UNTIL HE RECEIVED DOCUMENTS FROM DEFEN-
DANT MURRAY GARDNER IN FEBRUARY OF 1988.
18. Millan had no knowledge that
Bennett was even married until July
1987. There is no way that Millan could
have known of her new husband Uday Raj
Sawhney in May of 1985 since they were
married sometime after March of 1986.
There is no way that Millan could have
known of the slander by Bennett in May
of 1985 since it was not done until
November of 1985 and remained unknown to
Millan until the documents were sent to
APPENDIX BB A-177
him by STEVEN Lubell in November of
1987. The transactions between Martin
and Bennett and Lubell were not until
September of 1987.
[0] 19. LUBELL CONCEALED THE TRUE NAME
OF BENNETT DURING THESE PROCEEDINGS FROM
MILLAN BY CLAIMING FIRST AMENDMENT
PRIVILEGE "INVASION OF PRIVACY" IN ORDER
TO HIDE THE COMPLICITY OF HER NEW
HUSBAND UDAY RAJ SAWHNEY, THE ACCOUNTANT
FOR FASHION EMBROIDERY INC., A COMPANY
ONE THIRD OWNED BY MILLAN.
[P] 20. Defendant Bennett and her
counsel Steven Lubell misrepresented the
record in the divorce proceedings of
Millan vs. Millan (Bennett) and the
state court action of Bennett vs. Millan
and this prejudicial testimony was used
by the District Court to base his
decision to deny Millan's motion for
APPENDIX BB A-178
leave to amend, continue the discovery
and pretrial conference dates.
21. At Court: "Mr. Lubell: There
is a final order in the dissolution
action saying that the parties shouldn't
annoy or harass each other and it seems
that this federal proceeding is just a
way of circumventing the court order
that they shouldn't have contact with
each other. [Exhibit 1 page 39
paragraph L] aisrepresentaticn is
consistently being used by Mr. Lubell to
portray Millan in a false light before
the court.
22. THE TRUE FACTS ARE AS FOLLOWS:
Bennett at her specific instruction
entered upon the settlement agreement in
Millan v. Millan a requirement that the
litigation between the two parties
should not be a part of the settlement
APPENDIX BB A-179
agreement. Mr. Lubell is the counsel
for Bennett in the state court action
and he is well aware of the following.
"Pursuant to oral stipulation of the
parties, Petitioner, Marsha Bennett, and
Respondent, Richard Millan, on March 27,
11986 entered into on that same date and
time in Department 67 of the above-enti-
tled Court, as reflected and set forth
in the reporter's transcripts of
proceedings, It is Further Ordered: (1)
The Court Finds that Petitioner now owns
certain assets as her sole and separate
property, that Respondent disclaims and
waives all right, title and interest in
these assets, and therefore confirms
them to Petitioner. These assets are as
follows: "------- 1. Any and all recovery
awarded Petitioner Marsha Bennett in Los
Angeles Superior Case No. C525013.
APPENDIX BB A-180
There was no such requirement advanced
by Millan in his side of the divorce
settlement. Bennett clearly intended to
continue the litigation between the
parties.
[Q] 22. Defendant © Bennett and her
counsel Steven Lubell concealed parties,
documents, names and events from Millan
in deposition, subpoenas to produce
documents, interrogatories, that preju-
diced Millan's attempt to discover the
needed evidence and facts in this
action. Said misconduct resulted in
delaying the filing of the motion to
amend, continue the discovery and
pretrial conference dates.
23. On February 8, 1988, a Notice
of Deposition and Subpoena for Documents
Was issued to defendant Bennett.
APPENDIX BB A-181
24. On February 23, 1988 at the
deposition of defendant Bennett, the
subpoenaed documents were not produced
and Bennett was cited by the Court
Reporter. Defendant Bennett perjured
herself about the following material
matters and concealed documents and
concealed the direct involvement of
attorney Steven Lubell in the affairs of
Certified Tank. Mr. Lubell knew she was
responding untruthfully and concealing
documents and Mr. Lubell knew that
Bennett was concealing his active
involvement in the business affairs of
Certified Tank, and in the business
affairs of Douglas Martin. Mr. Lubell
allowed his client to continue to
respond untruthfully
Deposition of Marsha Bennett
Q. Did you bring any and all
records showing any ownership interest
APPENDIX BB A-182
in Certified Tank Manufacturing, Inc, by
Douglas Martin for any period of time
Since its incorporation to the present
day?
A. No. [MARSHA BENNETT]
Q. Are there any such
records?
A. Mr. Martin's records are
his own records.
Deposition of Marsha Bennett
Q. “Did you bring any and a}l
financial records of any and all finan-
cial transactions between Marsha Bennett
and Douglas Martin for the period of
1980 through 1988?"
A. (Bennett) " I do not have any
financial records of financial transac-
tions between myself and Mr. Martin.”
Deposition 6f Marsha Bennett
APPENDIX BB A-183
Q. “Miss Bennett, is Anthony
Carrasco, Senior the President of
Certified Tank Manufacturing Incorporat-
ed?"
A.(Bennett) "I have no knowl-
edge of the workings of Certified Tank.
I sold the company. It is their company
to do with as they please: run it,
operate it, and conduct themselves as
they please.
24. THE CONCEALMENT OF THE RECORDS
SUBPOENAED OF DOUGLAS MARTIN AND CERTI-
FIED TANK MFG. INC., AND THE DISCLAIMER
OF KNOWLEDGE OF THE OPERATIONS OF
CERTIFIED TANK MFG. BY BENNETT IN THE
PRESENCE OF ATTORNEY LUBELL CAN ONLY BE
CLASSIFIED A COMPLETE FALSEHOOD AND
PERJURY. MILLAN DIRECTS THIS COURTS
ATTENTION TO THE DOCUMENTS AT [EXHIBIT
4]. Lubell filed this document in the
Los Angeles County Recorders office on
APPENDIX BB A-184
September 10, 1987, for Bennett in favor
of ‘Douglas Martin. Directing the
Court's attention to [Exhibit 5]. This
document was filed by Lubell on Septem-
ber 10, 1987 with the Los Angeles County
Recorder for Bennett in favor of Douglas
Martin. Further directing this Court's
attention to [Exhibit 6]. This document
filed by Lubell at the Los Angeles
County Recorders office is a notice of
sale of the property that Certified Tank
Mfg. Inc., was located on, again for
Bennett in favor of Douglas Martin.
This sale was to be held on January 15,
1988 at 1234 Sixth Street., City of
Santa Monica. 1234 Sixth Street is the
address of Attorney Steven Lubell.
([R] 25. Deposition of Marsha Bennett
By Mr. Millan: Q. "Do you know of
any persons that have records of Fashion
APPENDIX BB A-185
Embroidery, Incorporated, other that
Murray Gardner, Bonnie Gardner, Fashion
Embroidery, Inc., or Richard Millan?
Answer(Bennett) No.
26. THE TRUE FACTS ARE THAT
DEFENDANT MARSHA BENNETT AND ATTORNEY
STEVEN LUBELL CONCEALED THE FACT THAT
MARSHA BENNETT'S HUSBAND UDAY RAJ
SAWHNEY WAS THE ACCOUNTANT FOR FASHION
EMBROIDERY INCORPORATED AND HE WAS
RESPONSIBLE FOR THE FINANCIAL REPORTS
AND RECORDS OF FASHION EMBROIDERY INC.
THE CONCEALMENT OF AND THE PERJURY IN
THE ABOVE PARAGRAPH OF MATERIAL FACTS
WAS INSTRUMENTAL IN PREVENTING PLAINTIFF
FROM COMPLETING HIS DISCOVERY IN THIS
ACTION.
APPENDIX BB A-186
COURT RECORD 81 PAGES 2 THROUGH 22
DIRECT REBUTTAL TO THE TESTIMONY OF
MARSHA BENNETT AND THE LIST OF PREDICATE
RICO ACTS IN THIS CASE
STATEMENT OF FACTS
—~ Defendants in this action in their
reply memorandum to opposition to motion
for summary judgment have demanded that
plaintiff produce affidavits to support
his claims. Plaintiff set forth his
Declaration in his Motion for Summary
Judgement and each and every statement
of fact was with direct knowledge of the
subject matter therein.
However, in order to put
defendants’ wild pleadings to rest and
to put a finish to some of the
implausible defenses that Mr. Luhell in
his wisdom has put forth, Plaintiff
places before this Court the
Declarations of Murray R. Gardner,
Bonnie Gardner, and Paul Schmidt in
support of Plaintiff's Opposition to
APPENDIX CC A-187
Defendants’ Motion For Summary
Judgement.
Re The following is a direct rebuttal
“E6--the testimony given by Defendant
Marsha Bennett ("Bennett") in her
declaration in support of her motion for
summary judgment against plaintiff
Richard Millan. Plaintiff was able to
secure the following declarations from
defendants Murray Gardner and Bonnie
Gardner on September 23, 1988 and both
declarations are attached herewith as
Exhibits 1 and 2.
2. Defendants Murray Gardner ("M.
Gardner") and Bonnie Gardner ‘ee =
Gardner") were in the original group of
incorporators of Defendant Fashion
Embroidery Inc.,("Fashion"). They have
been throughout the entire time since
incorporation to the present day a part
APPENDIX CC A-188
NN nae ia iii a
of every event in the life of Fashion.
M. Gardner has served as an officer,
President, Vice President, Secretary and
on the Board of Directors of Fashion.
He has been a shareholder since the
incorporation and better than any other
person knows each and every event that
has transpired within Fashion and is
highly competent to testify at this
trial about tthe business affairs of
Fashion.
2. Defendant Bonnie Gardner is the
wife of M. Gardner and also a
Shareholder of Fashion. B. Gardner has
worked at Fashion in many capacities
Since its incorporation, and was. privy
to every meeting, decision and event in
Fashion corporate life. B. Gardner
participated in every meeting and
discussion involving Marsha Bennett and
Fashion business subsequent to the
APPENDIX CC A-189
departure of Plaintiff Richard Millan in
July of 1984. See declaration of Murray
Gardner page 2 paragraph 2.
[(2)] " I was president of Fashion
Embroidery, Inc. after July 31, 1984
until the corporation's ultimate demise.
Plaintiff will take excerpts from
the Declaration of Marsha Bennett and
immediately follow with paragraphs from
the Declarations of Murray Gardner and
Bonnie Gardner.
Quoting excerpts from Declaration
of Marsha Bennett ("Declare M.B.") 1
lines 16 through 19.
4. "The initial Directors of the
Corporation were Theda Williams;
Matthias L. Williams; Murray Gardner;
Bonnie Gardner; Richard W. Steinbaugh;
Colleen Steinbaugh."
APPENDIX CC A-190
EEE
5. "Colleen Steinbaugh is my natural
mother. Richard W. Steinbaugh was my
step-father. In or around May of 1983
my mother, Colleen Steinbaugh stated to
me that she was contemplating a
dissolution of her marriage to Richard
W. Steinbaugh. My mother figured that
half of the community estate belonged to
her. On that basis I entered into an
agreement with my mother, Colleen
Steinbaugh in which I would give her
$25,000.00 in return for her 15,000
shares of stock in the corporation. I
made this agreement with my mother with
the full understanding that there had
not been a final judgment, nor a_ final
settlement of the community property in
4 dissolution of their marriage.
[Declare. M.B. Page 2 lines 3 through
14].
Declaration of Murray Gardner page
3 para. 11 and 12.
APPENDIX CC A-191
[(11)]. "Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
[(12)]. “Colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January 11, 1984.
Declaration of Bonnie Gardner page
3 para. 7 and 8.
((7)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter.”
[(8)]. “Colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January 11, 1984."
6. [(9)]. ae never used any
interstate telephone calls to discuss
any part of any agreement with Richard
Millan with respect to the 15,000 shares
of stock. I never used the United
APPENDIX CC A-192
States mail to communicate any agreement
or offer or any other communication with
respect to the alleged sale and/or
transfer of the 15,000 shares of stock.
[Declare M.B. page 6 para. 9]
Declaration of Murray Gardner at
page 3 para. 13,
"[(13)] “Marsha Bennett and I. sent
Richard Millan a Western Union telegram
regarding the special director
shareholders meeting scheduled on July
25, 1984. Also see Exhibit 3.
vw "On July 25, 1984, I called along
with the other Directors, pursuant to
the By-laws of the Corporation, a
special meeting of the Board of
Directors at which time I voted to
remove Richard Millan as the Director of
the Corporation. [Declare M.B. page 4
lines 4-8 ].-
APPENDIX CC A-193
Declaration of Murray Gardner at
page 3 para. 13,
"[(13)] “Marsha Bennett and I. sent
Richard Millan a Western Union telegram
regarding the special director
shareholders meeting scheduled on July
25, 1984. Also see Exhibit 3.
8. On July 31, 1984, I resigned as’ the
Director of the Corporation. [Declare
M.B. page 4 lines 8-9].
Declaration of Murray Gardnerat
page 2 paragraphs 3, 4, & 5.
[(3)]. “Marsha Bennett was an
officer of Fashion Embroidery Inc.,
after July 31, 1984. (emphasis mine).
[(40]. “Marsha Bennett did not
resign as a director of Fashion
Embroidery, Inc., on July 31, 1984 or at
any other time thereafter.” (Emphasis
mine)
APPENDIX CC A-194
[(5)]. "Marsha Bennett did not
resign as secretary/treasurer of Fashion
Embroidery, Inc. on July 31, 1984 or at
any other time thereafter.
Declaration of Bonnie Gardnerat
page 2 paragraphs 3, 4, & 5.
€b 5% F "Marsha Bennett was an
officer of Fashion Embroidery inc.,
after July 31, 1984. (emphasis mine).
[(40]. "Marsha Bennett did not
resign as 6 director of Fashion
Embroidery, Inc., on July 31, 1984 or at
any other time thereafter." (emphasis
mine)
[(5)]. "Marsha Bennett did not
resign as secretary/treasurer of Fashion
Embroidery, Inc. on July 31, 1984 or at
any other time thereafter.
9. Richard Millan filled out the
certificate in his own hand, and he
himself back dated the certificate to
APPENDIX CC A-195
May 13, 1983, which of course was the
date of the transfer between my mother
and myself. It is difficult for me to
understand how Richard Millan can allege
that my mother hid her alleged ownership
of the 15,000 shares from the bankruptcy
court, when Richard Millan himself
acknowledged by the execution of this
share certificate that the stock had
previously been transferred to me over a
year before my mother filed her
bankruptcy petition. [Declare M.B. page
5-6 lines 28, 1-10.]
See Plaintiffs’ Response to
Defendants Marsha Bennett and Colleen S.
Steinbaugh's Opposition to Motion to
Recuse Judge William J. Rea and to
Disqualify Attorney Steven Lubell, pages
15 through 18, at paragraphs 30 through
36 filed with this court on July 5,
1988.
APPENDIX CC A-196
See Declaration of Murray Gardner
page 3 para. 1l and 12.
[(11)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
[(12)]. “colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January 1l, 1984.
See Declaration of Bonnie Gardner
page 3 para. 7 and 8.
((7)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
[(8)]. “colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January ll, 1984.
10. “The allegations of the pleadings
State that -I knew and assisted my
mother, Colleen Steinbaugh in defrauding
APPENDIX CC A-197
the United States Bankruptcy Court in
that allegedly my mother did not list
her 15,000 shares of stock in a
bankruptcy petition that she filed with
the Court on a date that I believe was
September 10, 1984."
See Declaration of Murray Gardner
page 3 para. 1l and 12.
[(11)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter.”
[(12)]. “Colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January ll, 1984.
See Declaration of Bonnie Gardner
page 3 para. 7 and 8.
[(7)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
APPENDIX CC A-198
[(8)]. “Colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January ll, 1984.
ll. “As I have indicated, my mother,
Colleen Steinbaugh, in May of 1983, had
transferred her shares to me for
$25,000.00." [Declare M.B. page 7 lines
4-6.]
See Declaration of Murray Gardner
page 3 para. 1l and 12.
((11)]. “Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
[(12)]. “colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January 1l, 1984.
See Declaration of Murray Gardner
page 3 para. 7 and 8.
[(7)]. -“Marsha Bennett did not
purchase Colleen Steinbaugh's shares of
APPENDIX CC A-199
of stock in Fashion Embroidery, Inc. in
May of 1983 or at any time thereafter."
[(8)]. “Colleen Steinbaugh owned
15,000 shares of Fashion Embroidery
Inc., stock on January ll, 1984.
12. "The allegations of the pleadings
state that I caused and filed a
fraudulent 1099 form with the Internal
Revenue Service with respect to Richard
Millan.” [Declare M.B. page 7 lines
11-13.)
See Declaration of Murray Gardner 3
lines 14-16.
[(10)]. "Either Marsha Bennett,
Uday Raj Sawhney or both, created the
Fashion Embroidery, Inc. 1099 tax form
in regards to Richard Millan for the tax
year 1984."(Uday Raj Sawhney is
Bennett's current husband).
See Declaration of Bonnie Gardner 3
lines 14-16.
APPENDIX CC A-200
[(10)]. “Either Marsha Bennett,
Uday Raj Sawhney or both, created the
Fashion Embroidery, Inc. 1099 tax form
in regards to Richard Millan for the tax
year 1984."(Uday Raj Sawhney is
Bennett's current husband).
a3. "I never had any control over the
employees books and records during my
tenure with the Corporation." [Declare
M.B. page 7 lines 13, 14 and 13..3
See Declaration of Murray Gardner
pages 2 & 3 paragraphs 6-9:
[(6)]. " Some time after July
31, 1984, I was instructed by Marsha
Bennett to allow Uday Raj Sawhney to
perform an "audit" of all of the books
and records of Fashion Embroidery, Inc.
Pursuant to Marsha Bennett's
instruct ons, I allowed Mr. Sawhney
access to all the books and records of
Fashion Embroidery, Inc. To the best of
APPENDIX CC A-201
my recollection, Mr. Sawhney spent
approximately one week at the Fashion
Embroidery, Inc.‘s offices reviewing all
of the financial information. Mr.
Sawhney subsequently issued a financial
statement for Fashion Embroidery, Inc.
for the period ending December y >
1985."
Le aer "Following this work by
Mr. Sawhney, and the issuance of the
financial statement, I received
telephone calls from time to time from
Mr. Sawhney requesting information about
the financial status of Fashion
Embroidery, Inc. At all times, it was
my understanding that Mr. Sawhney was
seeking this information on behalf of
Marsha Bennett and as her
representative."
[(8)]. "Mr. Sawhney was also
involved in representing Fashion
APPENDIX CC A-202
Embroidery, Inc., with the Interna]
Revenue Service during the year 1986."
14. "In any event, I had resigned from
the Corporation on July 31, 1984; this
date was the date Prior to when the
allegations of the filing of the 1099
form took place." [Declaration of Marsha
Bennett page 7 lines 15-18.
Declaration of Murray Gardner at
page 2 paragraphs 3, 4, & 5.
[(3)]. “Marsha Bennett was an
officer of Fashion Embroidery tac.,
after July 31, 1984. (emphasis mine).
{(4)]. "Marsha Bennett did not
resign as a director of Fashion
Embroidery, Inc., on July 31, 1984 or at
any other time thereafter."(emphasis
mine)
((5)]. "Marsha Bennett did not
resign as secretary/treasurer of Fashion
APPENDIX CC A-203
Embroidery, Inc. on July 31, 1984 or at
any other time thereafter.
[(10)]. "Either Marsha Bennett,
Uday Raj Sawhney or both, created the
Fashion Embroidery, Inc. 1099 tax form
in regards to Richard Millan for the tax
year 1984."(Uday Raj Sawhney is Bennetts
current husband).
Declaration of Bonnie Gardner at
page 2 paragraphs 3, 4-6.
[(3)]. "Marsha Bennett was an
officer of Fashion Embroidery Inc.,
after July 31, 1984. (emphasis mine).
[(4)]. "Marsha Bennett did not
resign as 2 director of Fashion
Embroidery, Inc., on July 31, 1984 or at
any other time thereafter." (emphasis
mine )
[(5)]. “Marsha Bennett did not
resign as secretary/treasurer of Fashion
Embroidery, Inc. on July 31, 1984 or at
any other time thereafter.
APPENDIX CC A-204
CO
[(6)]. "Either Marsha Bennett,
Uday Raj Sawhney or both, created the
Fashion Embroidery, Inc. 1099 tax form
in regards to Richard Millan for the tax
year 1984," (Uday Raj Sawhney is
Bennett's current husband).
15. "The allegations of the pleadings
State that I assisted and false and
fraudulent United States Tnternal
Revenue Service Tax Returns in behalf of
the Corporation. I never had any thing
to do with the filings of the Federal
Tax Return for the Corporation. I have
reviewed the evidence that was provided
by the other defendants, besides my
mother, this evidence Clearly
established that my name did not appear
on any of the Federal or for that matter
the State Tax Returns. This evidence, I
understand, was al] Provided to Richard
APPENDIX CC A-205
Millan. [Declaration of Marsha Bennett
page 7 lines 19 through 28.
See Declaration of Murray Gardner
pages 2 & 3 paragraphs 6-9:
[(6)]. " Some time after July
31, 1984, I was instructed by Marsha
Bennett to allow Uday Raj Sawhney to
perform an “audit" of all of the books
and records of Fashion Embroidery, Inc.
Pursuant to Marsha Bennett's
instructions, I allowed Mr. Sawhney
access to all the books and records of
Fashion Embroidery, Inc. To the best of
my recollection, Mr. Sawhney spent
approximately one week at the Fashion
Embroidery, Inc.'s offices reviewing all
of the financial information. Mr.
Sawhney subsequently issued a financial
statement for Fashion Embroidery, Inc.
for the period ending December >
1985."
APPENDIX CC A-206
ToRae “Following this work by
Mr. Sawhney, and the issuance of the
financial statement, I received
telephone calls from time to time from
Mr. Sawhney requesting information about
the financial status of Fashion
Embroidery, Inc. At all times, it was
my understar.ding that Mr. Sawhney was
seeking this information on behalf of
Marsha Bennett and as her
representative."
[(8)]. "Mr
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