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UNITED STATES DISTRICT COURT for the NORTHERN DISTRICT OF TEXAS DALLAS DIVISION R. Lance Flores, Vicki Clarkson, Plaintiffs, v. Scott Anthony Koster, et al. Defendants. 3:11-cv-00726-M -BH CIVIL ACTION

In the Matter of: Jon A. Divens, Defendant

VERIFIED REPLY & PROVE-UP OF PREDICATE CRIMES and VERIFIED MOTION TO STRIKE JON A. DIVENSs ANSWER FOR FRAUD UPON THE COURT BY THE PERJURY AND FALSE STATEMENTS OF 1 JON A. DIVENS and MOTION TO TAKE JUDICIAL NOTICE OF THE SEC V. WILDE, ET AL. DEPOSITION OF FRANCIS E. WILDE and MOTION FOR FINDINGS OF FACT ON PLAINTIFFS PROVE-UP OF PREDICATE CRIMES and MEMORANDUM LAW

Plaintiffs mutually Reply to Defendants ANSWER OF DEFENDANT JON A. DIVENS TO PLAINTIFFS RICO COMPLAINT for the purpose of impeachment by verification, for the Prove-up of predicate crimes to which Jon A. Divens denies. Additionally Plaintiffs contemporaneously file their Verified Motion to Strike RICO Defendant Jon A. Divens Answer (hereinafter, the Defendants Answer or Divens Answer.) Plaintiffs shall separately file their Motion for Sanctions against Defendant Divens unless Court has so moved sua sponti. Plaintiffs respectfully move the Court to strike RICO Defendant Jon A. Divenss Answer,

Hereinafter, Jon A. Divens, or Jon Divens or Divens or the Defendant or the RICO Defendant.

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pursuant to Fed. R. Civ. P. 12(f) subject to the Courts discretion and inherent powers including that of the Courts dispositive authority.

I. Procedural History 1.1 On April 8, 2011 Plaintiffs filed their Original Complaint, petition for injunctive relief and other equitable relief in this matter. (Doc. 1, 1-1, and 1-2) 1.2 On March 19, 2012, Plaintiffs amended their Original Complaint with their First Amended Complaint (Doc. 36) in behalf of the Plaintiffs, and in the national economic and general public interests. Plaintiffs amended, adding additional RICO Defendants, and Nominal Defendants and removing others into statuses in delayed discovery. Plaintiffs petition for compensatory damages including a plea of a damages amount directly related to Defendants acts in violation of 18 U.S.C. 1962, et seq., (RICO violations) exceeding not less than Two-hundred Twenty Million Dollars (Doc. 36 at 187) subject to mandatory treble award, notwithstanding other compensatory, exemplary, and injunctive relief, or further calculation of damages in prove-up motions or damages affidavit. 1.3 Plaintiffs additionally support their claims pled in conformance of Fed. R. Civ. P. 9(b), with two-hundred seventy-two (272) verified exhibits, or exhibits entered as manifest fact by judicial notice, to evidence their claims. 1.4 Plaintiffs FAC pleads RICO Defendant jointly and severally liable for damages.
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RULE 12(f) Motion to Strike. The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The court may act: (1) on its own; or (2) on motion made by a party either before responding to the pleading or, if a response is not allowed, within 21 days after being served with the pleading. 3 Section 1964(c), title 18, provides that [a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including reasonable attorneys fees. 18 U.S.C. 1964(c). 4 See, e.g., United States v. Oreto, 37 F.3d 739, 752 (1st Cir. 1994) at 751-53 (finding that Congress intended to reach all who participated in the conduct of the enterprise, whether they were generals or foot soldiers and holding that the Reves test (Reves v. Ernst & Young, 507 U.S. 170 (1993) was satisfied by evidence that (continued...)
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1.5 This matter is brought pursuant to, inter alia, Section 901(a) of the Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted October 15, 1970), and codified as Chapter 96 of Title 18 of the United States Code as 18 U.S.C. 19611968; 1.6 On July 9, 2012, Divens, who was added to this action by the Plaintiffs in their First Amended Complaint (FAC), was properly and timely served. (Doc. 131) 1.7 On July 30, 2012, Divenss appearance and answer were due. 1.8 On July 30, 2012, RICO Defendant Jon A. Divens did not file an Answer nor otherwise responded to the First Amended Complaint, nor did he make an appearance in any manner. 1.9 On August 8, 2012, Plaintiffs filed Application for Clerks Entry of Default and Memorandum of Law & Verified Motion for Default Judgment Against RICO Defendant Jon A. Divens. (Doc. 153) 1.10 On August 9, 2012, the Clerk of the Court entered Jon A. Divens into default.

(...continued) the defendant collected extortion payments under the direction of leaders of an extortion collection enterprise); Napoli v. United States, 32 F.3d 31, 36 (2d Cir. 1994) (overwhelming evidence that attorneys, although of counsel to the law firm enterprise, were not merely providing peripheral advice, but participated in the core activities that constituted the affairs of the firm), cert. denied, 513 U.S. 1110, reh'g granted, 45 F.3d 680, 683 (2d Cir.) (upholding convictions of law firm investigators who were lower-rung participants whose racketeering activities were conducted under the direction of upper management), cert. denied, 514 U.S. 1084 (1995); United States v. Urban, 404 F.3d 754 (3d Cir. 2005) at 769-70 (stating that the operation or management test does not limit RICO liability to upper management because an enterprise is operated not just by upper management but also by lower-rung participants in the enterprise who are under the direction of upper management; and holding that Reves liability encompassed city employees who performed plumbing inspections and related work for the citys Construction Services Department, the alleged enterprise) (internal quotation marks and citations omitted); United States v. Delgado, 401 F.3d 290 (5th Cir. 2005) at 297-98 (same); First Capital Asset Mgmt. v. Satinwood, Inc., 385 F.3d 159, 176 (2d Cir. 2004) (RICO liability is not limited to those with primary responsibility for the enterprises affairs (citation omitted)); Baisch v. Gallina, 346 F.3d 366, 376 (2d Cir. 2003) (same and adding that [o]ne is liable under RICO if he or she has discretionary authority in carrying out the instructions of the [enterprises] principals) (citations omitted); DeFalco v. Bernas, 244 F.3d (2d Cir. 2001) at 309 (ruling that RICO liability is not limited to those with primary responsibility or to those with a formal position in the enterprise, and finding that there was sufficient evidence to satisfy the Reves test where the defendant instructed others to facilitate commission of racketeering activity) (internal quotation marks and citations omitted); United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) (finding that Reves does not require that the defendant have decision-making power, only that defendant take part in the operation of the enterprise, and holding that the defendant was liable under Reves since he bought multi-kilogram amounts of cocaine from the drug enterprise on a regular basis); United States v. To, 144 F.3d 737, 747 (11th Cir. 1998) (holding that Reves test was satisfied by evidence that the defendant planned and carried out a robbery with other members of an Asian crime gang that committed a series of robberies targeting Asian-American business owners and managers).
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(Doc. 157) 1.11 On August 10, 2012, ten days into default, Divens filed his untimely answer, and

disingenuously verified his Answer under pain of perjury. (See, Doc. 163 at 17): VERIFICATION OF JON A. DIVENS TO PLAINTIFFS FIRST AMENDED COMPLAINT I have read the foregoing Answer to Plaintiffs First Amended Complaint, and verify that the responses given in the Answer are true and correct to the best of knowledge, information and belief. I declare under penalty of perjury of the laws of the United States and the State of California that the foregoing is true and correct. Executed this 6th of August, 2012 at Los Angeles, California s/Jon A. Divens 1.12 On August 13, 2012, Hon. Irma Carrillo Ramirez, USMJ, Referring, issued an

order for scheduling proposals due on September 4, 2012 no later than 5:00 PM CST. 1.13 On August 20, 2012, Plaintiffs filed a joint Scheduling Proposal and attached a

proposed Scheduling Order. 1.14 proposal. 1.15 On August 17, 2012, Plaintiffs filed a MOTION TO TAKE JUDICIAL NOTICE OF On September 4, 2012, RICO Defendant Jon A. Divens failed to file a scheduling

FINDINGS BY THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT CALIFORNIA AND THE NINTH CIRCUIT COURT OF APPEALS (Doc. 173) and entered into evidence as manifest fact Plaintiffs Exhibit 262, the Chase Courts FFCL (Doc. 73-1) 1.16 On September 12, 2012, Plaintiffs filed a MOTION TO TAKE JUDICIAL NOTICE OF
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THE ANSWER OF BRUCE H. HAGLUND IN SEC v. WILDE, ET AL. (Doc. 200) and entered
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N.B. The Ninth Circuits Memorandum is not cited as precedence nor analysis of law, and is only referenced to established that the trial courts findings of fact and conclusion of law were not reversed nor was any issue remanded for further consideration or review. 6 United States Securities and Exchange Commission vs. Francis E. Wilde, et al., 8:11-cv-00315-DOC -AJW, U.S. Dist. Ct. CD Cal. 05/13/11 (Document 1, the SEC Complaint; cited herein as SEC v. Wilde, et al., all (continued...)
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into evidence as manifest fact Plaintiffs Exhibit 272, DEFENDANT BRUCE H. HAGLUNDS ANSWER TO COMPLAINT (Haglunds SEC Comp. Answer, ) (Doc. 200-1)

II. Background & Predicative Facts 2.1 RICO Defendant Jon A. Divens, is a California lawyer, Bar 145549, was admitted to The State Bar of California on January 9, 1990, is presently Active and eligible to practice law as of the date of this filing. Divens has two Disciplinary and Related Actions pending in the State Bar of California attorney discipline system against him: 12/14/2010 Notice of Disc Charges Filed in SBCt 09-O-12921 10/19/2010 Notice of Disc Charges Filed in SBCt 09-O-12063 2.2 In Divens Answer (Doc. 163) he admits: 5.2.2 With respect to the allegations contained in Paragraph 5.2.2, Defendant admits the Cobalt CMO was transferred into an account the Law Offices of Jon Divens & Associates, LLC (JDA) maintained with UBS, and that Defendant 7 controlled that account. 2.3 In CHASE INVESTMENT SERVICES CORP., (Chase) the trial court (the Chase Court) gave no weight to the testimony of Jon Divens, and found his testimony wanting for credibility. The Chase Courts found in its FINDINGS OF FACT AND CONCLUSIONS OF LAW a pattern of Divens schemes, that included defrauding persons, stealing their assets and concealing the stolen assets in domestic and foreign banks including Bank of America and UBS (Swiss Private Bank) bank accounts.
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(...continued) proceedings thereto related, cumulatively, the SEC Action), also (Document 4, the Haglunds SEC Comp. Answer). 7 See, Divenss Answer, at 4 5.2.2. 8 CHASE INVESTMENT SERVICES CORP. (Plaintiff in Interpleader), v. LAW OFFICES OF JON DIVENS & ASSOCIATES, LLC, et al., 2:09-cv-09152-SVW-MAN (U.S. Dist. Ct. CD Cal. Oct. 14, 2010) 9 Chase, Findings of Fact and Conclusions of Law (FFCL), 2:09-cv-091S2-SVW-MAN Document 120, Oct. 14, 2010; Pla. Exhibit 262 (Doc. 173-1)
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Hon. Stephen V. Wilson, J. : As a preliminary matter, the Court notes that resolution of many of the factual disputes between the parties turns in large part on the credibility of the witnesses. In that regard, the Court finds that Divens's testimony was wholly incredible. The Court does not believe that Divens had any agreement with any representative or agent of Betts and Gambles or Amedraa that entitled Divens or JDA to the interest generated by the Cobalt CMO or the FNMA [Fannie Mae] Series CMO. Instead, Divens acquired the CMOs under the false promise that he would act solely as an escrow agent with regard to the CMOs. Once the CMOs were in Divens's possession, he absconded with the assets, moving them to different accounts at different institutions so they could not be located and stealing the interest generated from the CMOs for his own personal use. In short, the Court finds that Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their assets. His testimony is not credible. (Id. at 6, ln 2; notation added) Divens testified that after he learned about Betts and Gambles in February or March 2009, Betts and Gambles orally agreed on a phone call with Divens that Divens could place the Cobalt CMO into a trade program. The Court does not find this [Divens] testimony credible. Divens has not presented any evidence, other than his self-serving testimony, that any such agreement existed.3" (id. at 8, ln 15) 2.4 Jon A. Divens appealed the final order of the trial court in the aforementioned case, which was heard by Tallman and N.R. Smith, Circuit Judges, and Benson, District Judge for the U.S. District Court for Utah, sitting by designation; styled and numbered: CHASE INVESTMENT SERVICES CORP., Plaintiff - Appellee, BETTS AND GAMBLES INVESTMENTS, INC.; et al. Defendants - Appellees, AMEDRAA, LLC, Defendant-cross-claimant-Appellee, v. LAW OFFICES OF JON DIVENS & ASSOCIATES, LLC, et 10 al. Defendant cross-claimant Appellant No. 10-56785 D.C. No. 2:09-cv-09152-SVWMAN 2.5 The Divens/JDA appeal took issue with, inter alia, the district courts credibility determinations of Divens, three of its findings of fact, and three of its conclusions of law. The Ninth Circuit affirmed the trial courts findings.

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Plaintiffs Exhibit 263, Doc. 173-2.

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Averments Facts Manifest Fact Evidence Incorporated by Reference or Judicial Notice 2.6 Plaintiffs incorporate by reference the following subparagraphs, and hereby re-aver and re-allege, for all purposes, with the same force and effect, as if set forth verbatim herein in: 2.6.1 Plaintiffs FIRST AMENDED COMPLAINT (Doc. 36), and 2.6.2 the Chase Courts FFCL.
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Plaintiffs Exhibit 262 (Doc. 173-1); and

2.6.3 the Appellate Courts findings in Divens Ninth Circuit Appeal. Plaintiffs Exhibit 263 (Doc. 173-2), and further 2.6.4 the Plaintiffs move the Court to take judicial notice of Plaintiffs Exhibit 273: DEFENDANTS MATRIX HOLDINGS LLC, FRANCIS E. WILDE AND RELIEF DEFENDANTS SHILLELAGH CAPITAL CORPORATION AND MAUREEN WILDE ANSWER TO COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAW, SEC v. Wilde, et al. (U.S. Dist. Ct. CD Cal. 8:11-cv00315-DOC -AJW Document 19 Filed 08/17/11) and take notice of Plaintiffs 2.6.5 motion to take judicial notice of SEC v. Wilde, et al. DEPOSITION OF FRANCIS E. WILDE (Plaintiffs Exhibit 274): In the Matter of: MATRIX HOLDINGS, LLC WITNESS: Francis E. Wilde PAGES: 1 through 221 File No. HO-1098l-A PLACE: Securities and Exchange Commission 100 F Street, Northeast Washington, D.C. 20549 DATE: Tuesday, April 8, 2010

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Defined in FN 9 at 5.

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Offer of Admissions Evidence (From Divens verified Answer)

2.7 Admissions from Divenss Answer: 2.7.1 Divens First Admission: 5.2.5 Defendant admits the allegations contained in this paragraph. FAC 5.2.5 While the Cobalt CMO was in the CISC Account, the incoming interest payments generated by the CMO were automatically reinvested in a money market mutual fund in the CISC Account 5, 11, 12, 14, 15. (Divens's Tr. Exh. 28 [Declaration of Michele Fanner 9].) Divens frequently instructed Michele E. Fanner, a Financial Advisor and Vice President of Investments at ClSC, to liquidate the money market funds and wire the cash balance to Divens's outside account at Bank of America. (Id.) The last of such wire transfers took place on October 27, 2009. (Id.) [footnote(s) omitted] 2.7.2 Divens Second Admission at 5.2.6 Defendant admits the allegations contained in this paragraph. FAC 5.2.6 Divens testified36 that he used these interest payments for his personal use. [footnote(s) omitted] 2.7.3 Divens Third Admission: 5.3.6 Defendant admits the allegations contained in this paragraph. FAC 5.3.6 1//2009-3//2009 Divens testified that the FNMA Series CMO was transferred to the JDA UBS Account in January 2009. Between February and March 2009, Divens transferred the FNMA Series CMO to an account in JDA's name at JP Morgan 5, 11, 12, 14, 15. 2.7.4 Divens Fourth Admission: 5.3.7 Defendant admits the allegations contained in this paragraph. FAC 5.3.7 3-4//2009 In March or April 2009, Divens once again transferred the FNMA Series CMO to an account at Smith Barney 5, 11, 12, 14, 15.

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2.7.5 Divens Fifth Admission: 5.3.13 Defendant admits the allegations contained in this paragraph. FAC 5.3.13 Summer//2009 In the summer of 2009, Divens transferred the FNMA series CMO twice more; first to a Capstone account 5, 11, 12, 14, 15, and shortly thereafter, to an account with a brokerage firm called Matrix 5, 11, 12, 14, 15. Finally, in or about September 2009, Divens transferred the FNMA Series CMO to the CISC Account 5, 11, 12, 14, 15. (Trial, 06/25/10, at 95:18-97:5.) [footnote(s) omitted] 2.7.6 Divens Sixth Admission: 5.3.14 Defendant admits the allegations contained in this paragraph. FAC 5.3.14 1//2009-10//2009 Divens and his law firm engaged in numerous predicate crimes by unlawfully moving LJNs FNMA Series CMO out of the law firms UBS Account into five different financial institutions in order to conceal the whereabouts, use and status of the financial instrument from its owner. LNJ Enterprise LLC was therefore unable to locate the CMO. 2.7.7 Divens Seventh Admission: 5.3.15 Defendant admits the allegations contained in this paragraph. 5.3.15 The Chase Court found the Law Offices of Jon Divens & Associates, LLC (JDA) and Attorney Jon Divens, jointly and severally liable for converting the interest income earned on LNJ Enterprise, LLCs FNMA Series CMO 5, 11, 12, 14, 15 , a savoir : While LNJ entrusted the FNMA Series CMO to JDA, and not to Divens personally, Divens actively participated in and directed the acts of conversion ! Divens directed the specific acts of conversion. Divens testified that he received several demands from Savor, Harris, and Evelyn Amedraa that the FNMA Series CMO be returned to LNJ. In response to these demands, Divens lied to Savor and told him that the FNMA Series CMO had already been entered into trade, when in fact the CMO was never successfully entered into any trade programs. Divens then authorized the transfer of the FNMA Series CMO out of the JDA UBS Account in which it was originally held to five different financial institutions so that LNJ could not locate the CMO. From January 2009 to October 2009, Divens personally gave instructions to the securities intermediaries managing these accounts to transfer the interest income generated by the FNMA Series CMO into JDA's Bank of America business account. Divens used all of this interest income for Page 9

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his own personal needs. On this record, Divens is personally liable for conversion of the FNMA Series CMO. Emphasis added. Chase Invmt Serv. Corp., at 48. 2.7.8 Divens Eighth Admission: 5.3.15 Defendant admitted in testimony before the Chase Court by and through deposition which was entered into the record as evidenced by the Chase Court and rendered in the courts Findings of Fact and Conclusions of Law the following admission: [FN4] On April 8, 2010, Divens testified that the Cobalt CMO was in the JDA UBS Account in approximately March 2009. From there, the Cobalt CMO was transferred to a Smith Barney account where it remained for 2 months. In the Spring of 2009, the Cobalt CMO was transferred to an account with a company called Capstone, and then it was transferred again in the summer of 2009 to an account with a company called Asset Enhancement Management. In the late summer, Divens transferred the Cobalt CMO to an account with a firm called Matrix. Finally, in September 2009, Divens transferred the Cobalt CMO to the CISC Account. (See Divenss Depo., dated April 8, 2010, at 114:14-121:23.). (id. 10, ln 22) Offer of Evidence from Manifest Fact Chase FFCL
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2.8 Manifest Fact 1: As a preliminary matter, the Court notes that resolution of many of the factual disputes between the parties turns in large part on the credibility of the witnesses. In that regard, the Court finds that Divens's testimony was wholly incredible. The Court does not believe that Divens had any agreement with any representative or agent of Betts and Gambles or Amedraa that entitled Divens or JDA to the interest generated by the Cobalt CMO or the FNMA [Fannie Mae] Series CMO. Instead, Divens acquired the CMOs under the false promise that he would act solely as an escrow agent with regard to the CMOs. Once the CMOs were in Divens's possession, he absconded with the assets, moving them to different accounts at different institutions so they could not be located and stealing the interest generated from the CMOs for his own personal use. In short, the Court finds that Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their
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Footnote 9 at 5; Pla. Exhibit 262 (Doc. 173-1).

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assets. His testimony is not credible. (Chase FFCL. at 6, ln 2; notation and added) 2.9 Manifest Fact 2: Divens testified that after he learned about Betts and Gambles in February or March 2009, Betts and Gambles orally agreed on a phone call with Divens that Divens could place the Cobalt CMO into a trade program. The Court does not find this testimony credible. Divens has not presented any evidence, other than his self-serving testimony, that any such agreement existed.3" (id. 8, ln 15) [FN3] Divens presented trial exhibit 35, which appears to be a draft agreement dated March 2009 that purports to authorize Divens to enter the Cobalt CMO into trade and to split the profits with Betts and Gambles and up Right Holdings. However, this agreement was never signed by anyone from Betts and Gambles or up Right Holdings. ( 8, ln 25) 2.10 Manifest Fact 3: Jon Divens moves the stolen cash (interest payments)

from the owner/beneficiary accounts to his own domestic business account at Bank of America N.A. and foreign Swiss account at UBS, and used the stolen monies for personal benefit: From February 2009 to September 2009, Divens transferred the Cobalt CMO from his UBS [Swiss] Account to several other securities accounts at different institutions prior to moving the Cobalt CMO to the CISC Account.4 From February 2009 to the end of October 2009, Divens received a total of $241,980.43 in interest from the Cobalt CMO. Divens admitted that he never paid any of this interest to Betts and Gambles. Divens further testified that at various points between February and October 2009, he transferred the interest earned on the Cobalt CMO out of the various securities accounts where the Cobalt CMO was held and into his business account at Bank of America [N.A.].5 Divens testified that he used these interest payments for his personal use." (Chase at 10, ln 10; emphasis and notation added) [FN4] Divens testified that the Cobalt CMO was in the JDA UBS Account in approximately March 2009. From there, the Cobalt CMO was transferred to a Smith Barney account where it remained for 2 months. In the Spring of 2009, the Cobalt CMO was transferred to an account with a company called Capstone, and then it was transferred again in the summer of 2009 to an account with a company called Asset Enhancement
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Management. In the late summer, Divens transferred the Cobalt CMO to an account with a firm called Matrix. Finally, in September 2009, Divens transferred the Cobalt CMO to the CISC Account. (See Divenss Depo., dated April 8, 2010, at 114:14-121:23.). (id. 10, ln 22) [FN5] Divens frequently instructed Michele E. Fanner, a Financial Advisor and Vice President of Investments at ClSC, to liquidate the money market funds and wire the cash balance to Divens's outside account at Bank of America. (10, ln 26; emphasis added) 2.11 Manifest Fact 4: The Francis E. Wilde, Steven E. Woods, and Jon Divens

theft of Amedraa LLC/LNJ Enterprise LLC joint ventures Fannie Mae Series CMO: in talking with others about investing CMOs, Savor was forewarned not to do business with a man named Frank [Francis E.] Wilde ("wilde") or a company called Matrix Holdings. (id. at 11, ln 23; emphasis added) 2.12 Manifest Fact 5:

The Asset Management Agreement Between LNJ and Wiseguy's Investments LLC (WGI) In December 2008, Savor entered into negotiations with Steve Woods, the principal of Wiseguy's Investments LLC ("WGI"), regarding entering the FNMA Series CMO into an investment program. Woods represented to Savor that WGI had established credit lines and relationships with various financial institutions that would allow WGI to use the value of FNMA Series CMO combined with other assets to buy bank debt, which debt could then be sold for a greater value than the book value of the CMO. (id. at 12, ln 1; emphasis added) 2.13 Manifest Fact 6:

The Asset Management Agreement made some mention of the name Matrix Holdings [Matrix Holdings, LLC; Francis E. Wilde principal and owner]/WGI. When Savor noticed this name in the contract, he questioned Woods extensively as to whether Frank Wilde had any involvement with the Asset Management Agreement. Savor told Woods that he wanted nothing to do with Wilde [Francis E. Wilde]. Bethel Harris ("Harris"), counsel for LNJ, also questioned Woods to make sure that Wilde was not involved in the transaction. Woods unequivocally told Savor and Harris that Wilde was not involved. (id. at 12, ln 26)

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2.14

Manifest Fact 7:

Divens admitted at trial that his role with regard to the CMOs controlled by LNJ, including the FNMA Series CMO, was to act as an escrow agent until the advance payment was disbursed to LNJ. Divens testified: "Essentially, [I] was going to keep the CMOs under my control until a payment had been made." Further, Divens admitted that he had no agreement with LNJ prior to March 2009 that authorized him to invest or trade the FNMA Series CMO.7" (id. at 14, ln 3) 2.15 Manifest Fact 8:

At that point, because the advance payment had not been made and because Divens had moved the CMOs without notifying Savor, Savor made an oral request for the return of the CMOs. Divens told Savor that he would have to speak with Woods about returning the CMOs. When Savor spoke to Woods, Woods told him that WGI had been unable to place the CMOs in a trading program and that WGI could not perform under the Asset Management Agreement. Woods told Savor to talk to Divens about getting the CMOs returned to LNJ. In or about the third week of January 2009, Savor spoke to Divens on the phone and Divens agreed to return the CMOs to LNJ. However, Divens failed to do so. (id. at 14, ln 19; emphasis added) 2.16 Manifest Fact 9:

Savor told Wilde that LNJ did not have an agreement with wilde to trade the CMOs and that by keeping the CMOs and entering them into trade, Wilde and Divens were stealing property. Wilde said there was nothing he could do because the CMOs were already in trade and it would cost a lot of money to get them back. The call ended without a resolution.9 (id. at 15, ln 8; emphasis added) [FN9] Divens testified that Wilde had acted as Divenss business partner in several prior deals and that Wilde was acting as a business partner of Steve Woods and WGI in the transaction involving the FNMA Series CMO. Divens testified that Wilde was attempting to enter the FNMA Series CMO into a trade program consistent with the Asset Management Agreement between LNJ and WGI. Regardless of whether Wilde and WGI were in fact business partners in connection with the Asset Management Agreement, the Court believes that no such relationship was ever disclosed to Savor. Further, there is no evidence that Divens ever disclosed his prior business relationships with Wilde prior to entering into the Escrow Agreement with LNJ. Divens also testified that, in this same conversation, Savor agreed to enter into a joint venture agreement with wilde and Divens regarding
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trading the FNMA Series CMO. (id. at 15, ln 24; emphasis added) 2.17 Manifest Fact 10:

On or about February 2, 2009, Savor had a telephone conversation with a broker who worked with a joint venture partner of LNJ. The broker told Savor that he had been contacted by Frank Wilde [Francis E. Wilde] and that Wilde had tried to sell the broker certain CMOs, including the FNMA Series CMO owned by Amedraa. Savor was shocked. (id. at 15, ln 13) 2.18 Manifest Fact 11:

Thus, on February 16, 2009, LNJ's counsel, Bethel Harris, emailed Jon Divens and Steve Woods, stating: "As per the escrow agreement, since WGI was unable to place the CMOs in a private placement platform, we are requesting that the bonds be returned." Harris stated that Savor would be sending wiring coordinates for the transfer of the CMOs. On the same day, Savor sent Divens and Wilde an email reminding them that they had no authority to trade or encumber the CMOs. Divens responded to Harris and Savor via email on February 17, 2009. The email stated in its entirety: per the instructions of the contracted parties the cmo package address [sic] in you [sic] email was sent out to a trade program. Please contact mr. frank wilde for further details. Divens did not return the CMOs to Savor. (id. at 17, ln 2; emphasis added) 2.12 Manifest Fact 12:

Savor wrote: At this point I have no other alternative than to take the position that the two of you (Jon Divens, Frank Wilde) have stolen property that does not belong to you and violated numerous laws in doing so. Savor also made it clear that he never agreed to allow Divens or Wilde to trade the FNMA Series CMO and that the only contract Savor ever had regarding investment of the FNMA Series CMO was with WGI, which Woods confirmed was now void. On February 23, 2009, Savor and Harris traveled to Los Angeles in the hopes of meeting with Divens and Wilde in person to find out what had happened to the FNMA Series CMO and the other assets entrusted to Divens. Savor called and sent numerous text messages and emails to Divens and Wilde to set up a meeting, but neither Divens nor Wilde responded. While in Los Angeles, Savor contacted the Beverly Hills Police Department regarding Divens's theft of the FNMA Series CMO. Savor also contacted the United States Attorney, the SEC, and the FBI.

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On February 23, 2009, Evelyn Aardema, the principal of Amedraa LLC 14 sent Divens and Wilde a formal cease and desist letter. The letter stated that Amedraa was the owner of the FNMA Series CMO; that neither Divens nor Wilde were authorized to trade the CMO; that the Asset Management Agreement with WGI was void due to WGI's inability to place the CMOs into trade; and that Divens and Wilde were ordered to immediately return the FNMA Series CMO to LNJ. On February 26, 2009, Savor left phone messages for Divens and Wilde stating that Savor had contacted the Beverly Hills Police Department about theft of the CMOs. Wilde responded to the message via email, stating that Divens would not release the FNMA Series CMO to LNJ unless LNJ agreed to a trade deal with Wilde and Divens.10 Divens, Wilde, Harris, and Savor then had a phone conference regarding the terms of the trade program into which Divens and Wilde had purportedly placed the FNMA Series CMO. However, Wilde and Divens would not give Savor any specific information about where Divens had sent the FNMA Series CMO. (id. at 18, ln 2; emphasis added) 2.19 Manifest Fact 13:

In late March 2009, JDA and Matrix [Matrix Holdings, LLC] had not made any payments under the March 2009 Agreement. Additionally, JDA had not paid LNJ any of the interest earned on the FNMA Series CMO since January 2009. (id. at 20, ln 16; notation added) 2.20 Manifest Fact 14:

Divens made repeated promises to pay LNJ the amounts due under the March 2009 Agreement, but JDA never did so. (id. at 21, ln 1) 2.21 Manifest Fact 15:

It is undisputed that JDA never made any payments to LNJ under the 11 March 2009 Agreement. (id. at 21, ln 10) 2.22 Manifest Fact 16:

In total, JDA moved the FNMA Series CMO to at least six different financial institutions between January 5, 2009 and September 2009,11 (21, ln 15) [FN11] Divens testified that the FNMA Series CMO was transferred to the JDA UBS Account in January 2009. Between February and March 2009, Divens transferred the FNMA series CMO to an account in JDA's name at JP Morgan. In March or April 2009, Divens once again transferred the FNMA Series CMO to an account at Smith Barney. In the summer of 2009, Divens transferred the FNMA series CMO twice more - first to a Capstone account, and shortly thereafter, to an account with a brokerage firm called Matrix. (id. at 21, ln 19)
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2.23

Manifest Fact 17:

Divens admitted at trial that JDA never paid any of this interest to LNJ or Amedraa. Divens further testified that he withdrew all of the interest earned on the FNMA Series CMO from each account where the CMO was held until ClSC froze the ClSC Account in November 2009. Divens transferred these interest payments to his business account at Bank of America and used it for his personal needs. (id. at 22, ln 13) 2.24 Manifest Fact 18:

Divens admitted at trial that JDA never paid any of this interest to LNJ or Amedraa. Divens further testified that he withdrew all of the interest earned on the FNMA Series CMO from each account where the CMO was held until ClSC froze the ClSC Account in November 2009. Divens transferred these interest payments to his business account at Bank of America and used it for his personal needs. (id. at 22, ln 13) 2.25 Manifest Fact 19: [28] Betts and Gambles has pled claims against both Divens and JDA; however, the testimony received at trial (through the Declaration of Mr. Betts) indicates that the oral escrow agreement pursuant to which Betts and Gambles transferred the Cobalt CMO to Divens was made with Divens personally that is, Jon Divens was to act as the escrow agent. Further, Divens personally misappropriated the interest earned on the Cobalt CMO for his own use. Thus, the claim appears to be against Divens in his individual capacity. (id. at 39, footnote 28) 2.26 Manifest Fact 20 (Divens Theft of the Cash Assets):

In sum, Betts and Gambles has established (1) that it owned the Cobalt CMO and that Divens received interest payments from the Cobalt CMO which were for Betts and Gambless benefit; (2) that Divens took the interest and used it for his personal benefit; and (3) that Divens refused to return such interest. (id. at 42, ln 23) 2.26 Manifest Fact 21 (Divens Personal Liability):

In sum, Amedraa has proven: (1) that at all relevant times it owned the FNMA Series CMO and had the absolute right to possess the interest payments generated from the CMO; (2) that JDA held the interest payments earned on the FNMA Series CMO in trust for LNJ (on behalf of Amedraa) and not for its own benefit; (3) that JDA and Divens refused to turn over the interest payments earned
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on the FNMA Series CMO to LNJ despite numerous demands from both LNJ and Amedraa; (4) that JDA and Divens, without Amedraas consent, transferred the FNMA Series CMO to several different financial accounts so as to hide the asset; and (5) that Divens misappropriated the interest income for his personal benefit. (id. at 47, ln 6) 2.27 Manifest Fact 22 (Divens Personal Liability):

Divens controlled all of the accounts in JDAs name in which the FNMA Series CMO was held. Divens admitted that he was the only person authorized to conduct business on behalf of JDA. (id. at 48, ln 27) 2.28 Manifest Fact 23 (Undisputed Testimony Wildes implication of
13

Divens involvement with the Wilde Mob element of the Syndicate

through his

participation in Matrix Holding LLC) SEC v. Wilde, et al. DEPOSITION OF FRANCIS E. WILDE (Plaintiffs Exhibit 274): U.S. Dist. Ct. CD Cal. Case 8:11-cv-00315-DOC -AJW Document 29-1 Filed 09/14/12 Page 24 of 39 Page ID # 253 : (Depo. page 190) MR DENEVE: I'm sorry. Which email are we looking at? MR. NEE: I'm sorry. It's the second one down. Not the one that Mr. Mooney is forwarding. September 10th, email from Mr. Wilde. THE WITNESS: Yes I recall it. BY MR. NEE: Q And you say, "Gentlemen, attached for your review is a deposit slip and copy of a CD that was delivered to the Morgan Stanley office in Los Angeles just prior to closing yesterday by my attorney. Our lender had provided us a CD that we would like deposited in the Matrix 539-107-009-042 account as soon as possible and we need your guidance on how to best expedite this." Do you recall this CD?
13

The Amenpenofer Syndicate, the Syndicate, description. See, Plaintiffs First Amended Complaint (Doc. 36). The Milaca Gang (Koster, Childs, Emre, inter alios, thru the Alicorn Capital Management LLC enterprise), see Comp. at 34, 36, 37, 178, 182; the Atlanta Family (Hall, Christine Wong-Sang, Vladimir Pierre-Louis, inter alios, thru the Berea Inc. and Success Bullion enterprises), Comp. at 67, 164, 178, 182; the Contra Costa Family (Childs and Childs d/b/a IGM, inter alios, yet identified) Comp. at 67, 164, 178; the Wilde Mob (Francis Wilde, Haglund, Divens, Linder, Gelazela, Reynolds, Woods thru Matrix Holdings LLC, BMW Majestic LLC, Wiseguys Investments LLC, Idlyc Holdings Trust LLC, Idlyc Holdings Trust, NZ, enterprises), Comp. at 32, 33, 164, 178, 182; Amenpenofer Syndicate (the Syndicate), Comp. FN-24 at 43, 53, 178.
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A I do. Q Can you explain to me exactly what it is you were attempting to do with this CD? A This CD was provided to us by this company AAIB International. Q When you say provided to us, what do you mean? (Depo. page 191) A Provided to Matrix -- excuse me - okay. They physically handed it to John Divens in Los Angeles. And we wanted to - excuse' me. And Morgan Stanley said that if it was a CD, that it could possibly qualify as a, you know, personal loan account, okay. So we, John Divens and our - excuse me. Our financial advisor said that, when I talked to him on the phone that if you want to expedite getting this in, you take it to - you have it delivered to the Morgan Stanley office in Los Angeles and we'll then get it deposited to your account. Q Okay. You mentioned AAIB provided this physically to John Divens. Well, maybe you idn't say that. Who provided it physically to John Divens? A A gentleman who worked for AAIB International provided it directly to John Divines? Q Do you know that individual's name? A I don't remember his name right now. Q Had John divens met him first and introduced him to you or were you asking John Divens to pick up this CD? A John divens had met him first. So I asked him to, you know, pick up the CD. Q Do you know how John Divens met him? A I don't know specifically. I know John Divens met him in Los Angeles because they were both located in Los Angeles. III. Reply to Rico Defendant Divenss Denial of Predicate Acts by Plaintiffs Prove-up of Jon A. Divens Rico predicate Crimes 3.1 RICO Defendant Jon A. Divens Answer. Doc. 163 at 12, lines 15-17: 7. With respect the consolidated RICO predicate acts alleged in this cause of action of the FAC against this answering Defendant, this Defendant denies the allegations of this section. With respect to the consolidated RICO predicate acts alleged against the other Defendants in this section, Defendant lacks information to allow him to either admit or deny the allegations, and therefore denies them. (Referring to Plaintiffs FAC 7 Consolidated RICO 14 Predicate Acts (Doc. 36 at 176-78, Acts 26-86): 3.1.1 RICO Defendant Divens verified his Answer (N.B. 1.11 at 4.)

3.1.2 Plaintiffs First Amended Complaint has been incorporated reference above
14

Total of sixty (60) predicate crimes.

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at 2.6.1, at 7, and for the purposes of this section, incorporate pages 176 through 178 here. 3.1.3 Plaintiffs address, and establish proof of the RICO predicate acts directly related to the alleged predicate crimes alleged against Divens to which the Defendant denies. The table to which the Defendant refers, consolidates the alleged predicated crimes and related verified evidence in exhibit, or evidence established by manifest fact, and identifies same by relating the Crime Key, instance Divens). 3.1.4 RICO Defendant Divens Does Not Have a Meritorious Defense. The important consideration is whether the defendant has a meritorious defense. Even if the Court takes a permissive stance, a defense is only meritorious and there is some possibility that the outcome of the suit after a full trial will be contrary to the result achieved by a default judgment,
16 15

Statute, Description, Actor (in this

or a motion for judgement on the pleadings, or a

summary judgment or at trial; AND, only if it is good at law, regardless of whether the defense is actually likely to succeed on the merits. 3.1.5 However, in light of Divens declaration by oath under of pain of perjury (Divens Answer), he does not present any facts, let alone specificity, in his denial that would rebut, or otherwise impeach Plaintiffs consolidated RICO predicate acts alleged in this cause of action of the FAC against [the] answering Defendant. In essence, Divens only verifies that has made a denial, not that he denies the specificity of facts and allegations the Plaintiffs have alleged in the FAC which correspond to the list of consolidated predicate acts. 3.1.6 N.B. Notwithstanding, the afore insufficiency of Divens denials of the

Crime Key identified in FAC Legend (Doc. 36, at 4). resulting from Plaintiffs motion for default judgment (I. Procedural History 1.9, supra), and Clerks entry of default (1.10, supra).
16
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consolidated RICO predicate acts, Plaintiffs must consider that the Court may reckon that the Defendants denials in his verified answer under pain of perjury, to be construed as a motion of judgment on the pleading nonetheless. Thus, Plaintiffs are forced to respond in kind, by presentation of sufficient proof to overcome Defendant thinly shielded check of his denial of the predicate crimes asserted against him.

WHEREFORE, in consideration thereof, the Plaintiffs proceed to the impeachment of Defendants denial(s) and Plaintiffs prove-up to Defendants denial as follows:
17

of each specific RICO predicate act related

IV. Argument, Offer of Evidence & Memoranda of Law Plaintiffs replead and incorporate herein by this reference, as though fully set forth, each and every, all and singular, generally and specifically, the facts allegations thus far pled by the Plaintiffs in the Record of the Court, each and every admission made by Jon A. Divens in his Answer to the Plaintiffs First Amended Complaint, each and every manifest fact found by the aforementioned Chase Court taken by this Court under judicial notice, including remaining allegations contained in each and every fact plead herein, in response to Jon A. Divens admission and denials asserted in RICO Defendants verified ANSWER OF DEFENDANT JON A. DIVENS TO PLAINTIFFS RICO COMPLAINT. Plaintiffs note that the courts have often recognized that the secretive nature of a criminal conspiracy means that direct proof is seldom available and the required unlawful agreement may be inferred from circumstantial evidence. United States v. Zang, 703 F.2d 1186, 1191 (10th Cir.); Jordan v. United States, 370 F.2d 126, 128 (10th Cir.).

N.B., Plaintiffs impeachment evidence lies in the incontrovertible manifest fact set forth in the findings of the fact finders Findings of Fact and Conclusions of Law, recorded in the United States District States District Court for the Central District of California, FN 5, supra; also Divens admissions verified by oath under pain of perjury.
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4.1 Plaintiffs aver that Divens along with his racketeering partners established a pattern of criminal methods that became so contentious, pervasive and effective for so long, that it became the template used continuously throughout their racketeering and racketeering conspiracy activities including those activities that continued from the CMO asset thefts to the present.

The Fraud-Theft of Cash and Securities Assets by Jon A. Divens, Francis E. Wilde and Steven E. Woods 4.2 The findings of the Chase Court, inter alia, attests to the collaboration, and/or the direction of the racketeering conspiracy, racketeering actions and the related predicate crimes by Divens, Wilde,
18

and Woods.

4.3 By taking possession and moving the assets belonging to the owners of those assets without their permission and the exercising of control over those properties without consent, and with the criminal intent to deprive the owner of rights and benefits of ownership, constitutes theft. The Chase Court found it to be so.
19

4.4 In that Divens was the prime actor and mover of the fraud theft relating to the stolen CMOs and cash payout of interest payments (an ancillary benefit), while Wilde and Woods designed, planned, aided, and abetted the criminal act, and because the theft act originated and was orchestrated by Divens in the State of California, we apply California law, taking the definition from Californias general theft statute, which provides in relevant part:

See Manifest Fact 10, 14, supra. Once the CMOs were in Divens's possession, he absconded with the assets, moving them to different accounts at different institutions so they could not be located and stealing the interest generated from the CMOs for his own personal use. In short, the Court finds that Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their assets. Manifest Fact 1;
19
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Every person who shall feloniously steal, take, carry, lead, or drive away the personal property of another, or who shall fraudulently appropriate property which has been entrusted to him or her, or who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money, labor or real or personal property, or who causes or procures others to report falsely of his or her wealth or mercantile character and by thus imposing upon any person, obtains credit and thereby fraudulently gets or obtains possession of money, or property or obtains the labor or service 20 of another, is guilty of theft. Cal. Penal Code 484(a).

4.4.1 Plaintiffs further maintain, because 484(a) sweeps more broadly than generic theft under 1101(a)(43)(G), this Court should apply Corona Sanchez,
21

in

considering the issue of Divens, Wildes and Woods theft of the CMO, interest assets, and the RICO Defendants subsequent fraud-thefts that followed these instant actions; i.e., those predicate crimes and criminal acts that followed after the formation of the

If the subsequent conduct of the accused is such that an intent to convert another's money to his own use can be inferred therefrom, a conviction for that element of theft formerly termed larceny may be sustained, notwithstanding an undisputed avowal of the accused that at the time he took the money from his intoxicated friend, he did so to protect him from "rollers." People v. Hansen (1890) 84 Cal 291, 24 P 117, 1890 Cal LEXIS 806. In that type of theft formerly termed obtaining property under false pretenses, the owner must intend to part with title and possession when transferring custody to the offender. People v. Martin (1894) 102 Cal 558, 36 P 952, 1894Cal LEXIS 686. The identity of the perpetrator of a crime is not a part of the corpus delicti. People v. Mainhurst (1945, Cal App) 67 Cal App 2d 882, 155 P2d 843, 1945 Cal App LEXIS 1224. It is unnecessary to prove that defendant benefited [sic] personally from fraudulent acquisition. People v. Ashley (1954)42 Cal 2d 246, 267 P2d 271, 1954 Cal LEXIS 171, cert den (1954) 348 US 900, 75 S Ct 222, 99 L Ed 707, 1954 US LEXIS 1437. In prosecution for grand theft of county welfare funds, defendant's representations respecting lack of knowledge of her husband's whereabouts were material, since grant of aid to her was based on fact that she and her husband were living separate and apart, eligibility for such grant depending on whether or not there was clear "dissociation" of normal family relationship. People v. De Casaus (1961, Cal App 4th Dist) 194 Cal App 2d 666, 15 Cal Rptr 521, 1961 Cal App LEXIS 1863. Reasonable conclusion to be drawn from evidence that magazine subscription solicitors represented to persons solicited that they were veterans, orphans or epileptics, was that there was reasonable cause to believe that solicitors were not as represented, though there was no direct evidence they were not as represented. People v. Conlon (1962, Cal App 1st Dist) 207 Cal App 2d 86, 24 Cal Rptr 219, 1962 Cal App LEXIS 1885. 38. 21 Corona Sanchez, 291 F.3d at 1205 (quoting Hernandez-Mancilla v. INS, 246 F.3d 1002, 1009 (7th Cir. 2001)).
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Syndicate.

22

Among other things, 484(a) criminalizes aiding and abetting, which

includes Wildes and Woods promotion and instigation of theft.. RICO statutes essentially reinforce 484, resulting from consideration of the Reves Test.
23

Theft of property under Cal. Penal Code 484(a)includes larceny, embezzlement, larceny by trick, and theft by false pretenses. People v. Shannon, 78 Cal. Rptr. 2d 177,179 (Ct. App. 1998). Larceny, larceny by trick, and embezzlement involve taking anothers personal property from the owners possession, without the owners consent . . . .Id. 4.4.2 Therefore, Divens, Wildes and Woods (including unnamed co-conspirators) Civil RICO liability or subsequent conviction under Criminal RICO for any of the following described concepts of theft. Moreover, Divens and his co-conspirators theft by false pretenses, was accomplished by their intentional misrepresentation, and fraud to obtain the CMO owners consents. 4.4.3 Theft by false pretenses has three elements: (1) a false pretense or representation, (2) the intent to defraud the owner of his or her property, and (3) the false pretense or representation materially influenced the owner to part with the property. People v. Levine, 2007 WL 4248775 at *10 (Cal. Ct. App. Dec. 5, 2007) (citing People v. Ashley, 267 P.2d 271, 279 (Cal. 1954)). Theft by false pretenses does not require that the defendant take the property; it requires that the defendant use false pretenses to induce the other to give the property to him. Shannon, 78 Cal. Rptr. 2d at 179. The owner must intend for the defendant to become the unconditional and unrestricted owner of the property for it to be theft by false pretenses. People v. Traster, 4 Cal. Rptr. 3d 680, 687 (Cal. Ct. App. 2003). 4.4.4 When the owners of the various CMOs entrusted that property to Divens, et

al., to hold in trust, they never intended that Divens become the unconditional owner; thusly, Jon Divens taking of the asset property and any ancillary benefit, with the owners consent under false pretenses was a crime. People v. Chung, 2007 WL 1463455

22 23

Desc., the Syndicate (q.v.), footnote 13 at 17. See Reves, footnote 4 at 2.

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at *15 (Cal. Ct. App. May 18, 2007) ([T]heft by false pretences [sic] involves fraudulently taking possession and obtaining title with the consent of the owner.). 4.4.5 Under California law, a persons false pretenses do not necessarily vitiate the owners consent except when, as in this instance, Divens actions involved fraud in fact, because he intended to steal the ownership identity of the assets to benefit himself, Wilde, Woods and other members of the criminal enterprise. Analytically we pose that: there are two kinds of fraud, fraud in the fact and fraud in the inducement. The distinction between the two is as follows: where there is fraud in the fact, the victim is fraudulently induced to consent to the doing of act X; the perpetrator of the fraud, in the guise of doing act X, actually does act Y (this is the case of Divens taking); in fraud in the inducement, the victim is fraudulently induced to consent to the doing of act X and the perpetrator of the fraud does commit act X. Fraud in the fact, it has been said, vitiates consent. One can commit theft by false pretenses when he or she intentionally passes a bad check and thereby fraudulently obtains possession and title to merchandise . . . . Chung, 2007 WL 1463455 at * 15 (citations omitted). 4.4.6 Plaintiffs further contend that Divens taking of the CMO assets and the subsequent taking of the Plaintiffs monies, both investment and earnings, were devised and executed with criminal intent, where: Proof of intent to commit theft may consist of reasonable inferences drawn from affirmatively established facts. People v. Ambrose (1962, Cal App 2d Dist) 202 Cal App 2d 73, 20 Cal Rptr 584, 1962 Cal App LEXIS 2447. Intent to defraud can be inferred from all facts and need not be proved by direct evidence. People v. Hambleton (1963, Cal App 2d Dist) 218 Cal App 2d 479, 32 Cal Rptr 471, 1963 Cal App LEXIS 1807. Because the specific intent to commit theft is rarely shown by direct proof, circumstantial evidence may be used to provide this proof. People v. Brown (1967, Cal App 2d Dist) 253 Cal App 2d 820, 61 Cal Rptr 368, 1967 Cal App LEXIS 2409. In a prosecution for theft, intent is rarely susceptible of direct proof and must be inferred from a consideration of all of the facts and circumstances shown by the evidence, and proof of intent may consist of reasonable inferences drawn from affirmatively established facts.
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People v. Crain (1967, Cal App 2d Dist) 255 Cal App 2d 726, 63 Cal Rptr 494,1967 Cal App LEXIS 1334. Proof of theft requires proof of a specific intent to convert the property to the thief's own use (Pen C 484). People v. Dabney (1968, Cal App 5th Dist) 260 Cal App 2d 786, 67 Cal Rptr 455, 1968 Cal App LEXIS 1918. The intent to defraud is a question of fact to be determined from all the facts and circumstances of the case, and may be, and usually must be, inferred circumstantially. People v. Hedrick (1968, Cal App 2d Dist) 265 Cal App 2d 392,71 Cal Rptr 352, 1968 Cal App LEXIS 1632. 4.4.7 Plaintiffs therefore allege that, pursuant to the relevant California criminal code, that Divens, along with Wilde and Woods, committed theft of the CMO properties by false pretenses, just as they stole the Plaintiffs investment and earnings under Cal. Penal Code 484(a). Obtaining Property by Fraud Under California law: [F]raud is a species of theft. People v. Sanchez, 6 Cal. Rptr. 3d 271, 277 (Cal. Ct. App. 2004). Other than Cal. Penal Code 484(a). Theft under Cal. Penal Code 484(a) includes the taking of property through fraud. See Cal. Penal Code 484(a) (Every person . . . who shall fraudulently appropriate property . . . or who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of . . . personal property, or who causes or procures others to report falsely of his or her wealth . . . and . . . thus . . . obtains credit and thereby fraudulently gets or obtains possession of . . . property . . . is guilty of theft.) (emphasis added); cf. Sanchez, 6 Cal. Rptr. 3d at 278 (holding that a conviction for receiving stolen property and a conviction for operating a chop shop would be duplicative, even though one could be convicted of the latter when vehicles are obtained exclusively through fraud); People v. Rodriguez, 2004 WL 2486649 (Ct. App. Nov. 4, 2004); People v. Nguyen, 2003 WL 23002715 (Ct. App. Dec. 23, 2003); People v. King, 96 Cal. Rptr. 2d 817 (Ct. App. 2000).

4.5 Organized Crime Control Act of 1970, Pub.L. No. 91-452, 84 Stat. 923 (1970). As the Ninth Circuit commented in United States v. Rone, 598 F.2d 564, 571 (9th Cir.): "[t]here is nothing in the RICO statutory scheme which would suggest that Congress intended to preclude separate convictions or consecutive sentences for a RICO offense and the underlying or predicate crimes which make up the racketeering pattern." Indeed, Congress specifically stated that "[n]othing in this title shall supersede any provision of
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Federal, State, or other law imposing criminal penalties or affording civil remedies in addition to those provided for in this title." Pub.L. 91-452 Sec. 904(b). Further support is found in the statutory definition of a "pattern of racketeering" activity which "requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity." Pub.L. 91-452 Sec. 901(a) (emphasis added). Although we do not imply as other courts have that a conviction on the predicate acts is necessary for a substantive RICO conviction, United States v. Brown, 583 F.2d 659 (3d Cir.), we do read the above provision to indicate that Congress envisioned that a RICO conviction and sentence could be based upon a predicate crime for which the defendant has already been punished. The above cited evidence of Congress' intent to authorize cumulative punishments for substantive RICO violations and the predicate offenses requires us to conclude the district court properly imposed consecutive sentences upon appellant. United States of America v. Gene Edward Hampton, 786 F.2d 977 (CA 10TH Cir. No. 84-2704 March 11, 1986). 4.6 Predicate Acts 26 thru 50 (Doc. 36 at 52): 5.2.3 3/6/2009 On or after March 6, 2009, Divens unlawfully transferred the Cobalt CMO to accounts in JDA's name at five different financial institutions: Smith Barney 5, 11, 12, 14, 15, Capstone 5, 11, 12, 14, 15, Asset Enhancement Management 5, 11, 12, 14, 15, Matrix 5, 11, 12, 14, 15, and CISC 5, 11, 12, 14, 15. Each of these transfers was made after Divens had notice of Betts and Gambles's adverse claim. Racketeering Counts 26, 31, 36, 41 & 46 (18 U.S.C. 1344 Financial Institution Fraud) Racketeering Counts 27, 32, 37, 42 & 47 (18 U.S.C. 1956 Laundering of Monetary Instruments) Racketeering Counts 28, 33, 38, 43 & 48 (18 U.S.C. 1957 Engaging in monetary transactions in property derived from specified unlawful activity) Racketeering Counts 29, 34, 39, 44 & 49 (18 U.S.C. 2314 Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting) Page 26

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Racketeering Counts 30, 35, 40, 45 & 50 (18 U.S.C. 2315 Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps) 4.6.1 Evidence Offered: Divens Eighth Admission (2.7.8); Manifest Fact 1 (2.8) ; Manifest Fact 2 (2.9) Manifest Fact 3 (2.10). 4.6.2 Argument:
24

4.6.3 Jon A. Divens association, and participation in the acts, as well as his complicity in the planning and direction or control and influence the racketeering activities of various Syndicate enterprises is established throughout the testimony of his co-conspirator and partner Francis E. Wilde. That testimony further attests to Divens joint and several liability testimony in SEC deposition:
26 25

in this action. E.g., Extract from Francis E. Wildes

A [Wilde] This CD was provided to us by this company AAIB International. Q [By Nee (SEC)] When you say provided to us, what do you mean? (Depo. page 191) A Provided to Matrix [Holdings LLC] -- excuse me - okay. They physically handed it to John Divens in Los Angeles. And we wanted to - excuse' me. And Morgan Stanley said that if it was a CD, that it could possibly qualify as a, you know, personal loan account, okay. So we, John Divens and our - excuse me. Our financial advisor said that, when I talked to him on the phone that if you want to expedite getting this in, you take it to - you have it delivered to the Morgan Stanley office in Los Angeles and we'll then get it deposited to your account. Q Okay. You mentioned AAIB provided this physically to John Divens. Well, maybe you idn't say that. Who provided it physically to John Divens? A A gentleman who worked for AAIB International provided it directly to John Divens? Q Do you know that individual's name?
24

This section relating to Predicate Acts 26 thru 50 only relates to the security instrument assets and does not relate to the movement or fraudulent acquisition of the cash interest payments taken by Divens. 25 See, 1.4, and footnote 4. 26 Undisputed deposition testimony of Francis E. Wilde. 2.28, supra.
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A I don't remember his name right now. Q Had John divens met him first and introduced him to you or were you asking John Divens to pick up this CD? A John divens had met him first. So I asked him to, you know, pick up the CD. Q Do you know how John Divens met him? A I don't know specifically. I know John Divens met him in Los Angeles because they were both located in Los Angeles. Case 8:11-cv-00315-DOC -AJW Document 29-1 Filed 09/14/12 Page 24 of 39 Page ID#:253 [emphasis and notation added] 4.6.3.1 Divens Eighth Admission establishes, by his own sworn testimony, that he unlawfully transferred stolen security assets belonging to other persons without their knowledge or permission, and fraudulently moved those assets (security instruments) into the various accounts in JDA's name.
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Each instance Divens

transferred the assets from each of his accounts to another of his accounts by fraudulently representing to each financial institution that he had the authority or inferring ownership of the assets to do so, he violated 18 U.S.C. 1344.
28

4.6.3.2 Therefore, in each instance that Divens transferred the subject assets by i.) concealing the whereabouts from the owners, or ii.) preventing the emplacement of those assets from being seen or discovered by the owners, or bank/financial institution transmitting or receiving the asset, or iii.) preventing the discovery of the ownership of, title to, the assets being transmitted or received by a bank/financial institution by fraud, or iv.) moving those assets in and out of Divens/JDAs accounts under the aforementioned conditions and representations described herein, with criminal intent to benefit from those transfers, including receiving the benefits of his fraudulent pretense of ownership including the receipt of cash from the interest
"Divens controlled all of the accounts in JDA's name in which the FNMA Series CMO was held. Divens admitted that he was the only person authorized to conduct business on behalf of JDA." Manifest Fact 19 ( 2.25 at 16) 28 18 U.S.C. 1344 - Bank fraud. Whoever knowingly executes, or attempts to execute, a scheme or artifice (1) to defraud a financial institution; or to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
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paid or any other monetary or financial credit benefit, Divens violated 18 U.S.C. 1344,28 18 U.S.C. 1956, 18 U.S.C. 2315.
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18 U.S.C. 1957,

30

18 U.S.C. 2314,

31

and

18 U.S.C. 1956 - Laundering of monetary instruments (a) (1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity (A) (i) with the intent to promote the carrying on of specified unlawful activity; or (ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or (B) knowing that the transaction is designed in whole or in part (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both. For purposes of this paragraph, a financial transaction shall be considered to be one involving the proceeds of specified unlawful activity if it is part of a set of parallel or dependent transactions, any one of which involves the proceeds of specified unlawful activity, and all of which are part of a single plan or arrangement. et seq. (b) Penalties. (1) In general. Whoever conducts or attempts to conduct a transaction described in subsection (a)(1) or (a)(3), or section 1957, or a transportation, transmission, or transfer described in subsection (a)(2), is liable to the United States for a civil penalty of not more than the greater of (A) the value of the property, funds, or monetary instruments involved in the transaction; or (B) $10,000. 30 18 U.S.C. 1957 - Engaging in monetary transactions in property derived from specified unlawful activity (a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b). (b)(1) Except as provided in paragraph (2), the punishment for an offense under this section is a fine under title 18, United States Code, or imprisonment for not more than ten years or both. (2) The court may impose an alternate fine to that imposable under paragraph (1) of not more than twice the amount of the criminally derived property involved in the transaction. (c) In a prosecution for an offense under this section, the Government is not required to prove the defendant knew that the offense from which the criminally derived property was derived was specified unlawful activity. 31 18 U.S.C. 2314 - Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting Whoever transports, transmits, or transfers in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; or Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transports or causes to be transported, or induces any person or persons to travel in, or to be transported in interstate or foreign commerce in the execution or concealment of a scheme or artifice to defraud that person or those persons of money or property having a value of $5,000 or more; et seq. Shall be fined under this title or imprisoned not more than ten years, or both. 32 18 U.S.C. 2315 - Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps Whoever receives, possesses, conceals, stores, barters, sells, or disposes of any goods, wares, or merchandise, securities, or money of the value of $5,000 or more, or pledges or accepts as security for a loan any goods, wares, or merchandise, or securities, of the value of $500 or more, which have crossed a State or United States boundary after being stolen, unlawfully converted, or taken, knowing the same to have been stolen, unlawfully converted, or taken; Shall be fined under this title or imprisoned not more than ten years, or both.
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4.7 Predicate Acts 51 thru 55 (Doc. 36 at 53, 54): 5.2.5 While the Cobalt CMO was in the CISC Account, the incoming interest payments generated by the CMO were automatically reinvested in a money market mutual fund in the CISC Account 5, 11, 12, 14, 15. (Divens's Tr. Exh. 28 [Declaration of Michele Fanner 9].) Divens frequently instructed Michele E. Fanner, a Financial Advisor and Vice President of Investments at ClSC, to liquidate the money market funds and wire the cash balance to Divens's outside account at Bank of America.[footnote omitted] (Id.) The last of such wire transfers took place on October 27, 2009. (Id.)35 5.2.6 Divens testified36 that he used these interest payments for his personal use.[footnote omitted] (id. at 54) Racketeering Counts 51 (18 U.S.C. 1344 Financial Institution Fraud) Racketeering Count 52 (18 U.S.C. 1956 Laundering of Monetary Instruments) Racketeering Count 53 (18 U.S.C. 1957 Engaging in monetary transactions in property derived from specified unlawful activity) Racketeering Count 54 (18 U.S.C. 2314 Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting) Racketeering Count 55 (18 U.S.C. 2315 Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps)

4.7.1 Evidence Offered: Divens First Admission (2.7.111), Divens Second Admission (2.7.211), Manifest Fact 1 (2.812), Manifest Fact 3 (2.1012), Manifest Fact 17 (122.23) Manifest Fact 19 (122.25), Manifest Fact 20 (122.25). 4.7.2 Argument: 4.7.2.1 The evidence offered attests to Divens theft of the Cobalt CMO, and that during the period the stolen assets were in the CISC Account, the incoming interest payments generated by the illegally taken CMO were automatically reinvested in a
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money market mutual fund in the CISC Account. Divens haven stolen the assets by fraud, advance the theft by fraud by misrepresentation of his authority, and control of the assets to Michele Fanner, a Financial Advisor and Vice President of Investments at ClSC. Divens then used his presumed authority to instruct Ms. Fanner, to liquidate the money market funds and wire the cash balance to Divens' outside account at Bank of America. 4.7.2.2 Therefore, in each instance that Divens transferred the subject assets by i.) concealing the whereabouts from the owners, or ii.) preventing the emplacement of those assets from being seen or discovered by the owners, or bank/financial institution transmitting or receiving the asset, or iii.) preventing the discovery of the ownership of, title to, the assets being transmitted or received by a bank/financial institution by fraud, or iv.) moving those assets in and out of Divens/JDAs accounts under the aforementioned conditions and representations described herein, with criminal intent to benefit from those transfers, including receiving the benefits of his fraudulent pretense of ownership including the receipt of cash from the interest paid or any other monetary or financial credit benefit, Divens violated 18 U.S.C. 2314, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 2314, and 18 U.S.C. 2315.

Predicate Acts 56 thru 66 (Doc. 36 at 56): 5.3.6 1//2009-3//2009 Divens testified that the FNMA Series CMO was transferred to the JDA UBS Account in January 2009. Between February and March 2009, Divens transferred the FNMA Series CMO to an account in JDA's name at JP Morgan 5, 11, 12, 14, 15. 5.3.7 3-4//2009 In March or April 2009, Divens once again transferred the FNMA Series CMO to an account at Smith Barney 5, 11, 12, 14, 15 Racketeering Count 56 (18 U.S.C. 1344 Financial Institution Fraud)

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Racketeering Counts 57 & 62 (18 U.S.C. 1956 Laundering of Monetary Instruments) Racketeering Counts 58 & 63 (18 U.S.C. 1957 Engaging in monetary transactions in property derived from specified unlawful activity) Racketeering Counts 59 & 64 (18 U.S.C. 2314 Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting) Racketeering Counts 60 & 65 (18 U.S.C. 2315 Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps) Racketeering Count 66 (18 U.S.C. 1343 Fraud by wire, radio, or television {wire fraud}) 4.7.3 Evidence Offered: Divens Third Admission (2.7.3), Divens Fourth Admission (2.7.4), Divens Sixth Admission (2.7.6), Manifest Fact 1 (2.8), Manifest Fact 16 (2.22), Manifest Fact 21 (2.26), Manifest Fact 22 (2.27) and Manifest Fact 23 (2.28) 4.7.4 Argument: 4.7.4.1 The evidence offered through Divens Third Admission attests to Divens theft of the FNMA CMO to the JDA UBS Account then shortly thereafter moving the assets to an account in JDA's name at JP Morgan. 4.7.4.2 Divens Sixth Admission establishes that he moved the FNMA CMO in and out of five or six different financial institutions in order to conceal the whereabouts, use, and status of the financial instrument from its owner. LNJ Enterprise LLC was therefore unable to locate the CMO. 4.7.4.3 Manifest Fact 1 establishes from the findings of the Chase Court that Divens absconded
33

with the various assets, moving them to different accounts at

abscond is both transitive (to hide away, conceal (anything) [OED] and intransitive (to depart secretly or suddenly; to hide oneself). The latter is more common in modern contexts A Dictionary of MODERN LEGAL USAGE, Bryan A. Garner, New York Oxford, Oxford University Press 1987.
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different institutions so they could not be located and stealing the interest generated from the CMOs for his own personal use. The court also found that Divens created a scheme to defraud Betts and Gambles and Amedraa and to steal their assets. From examination at the bench trial, the court found that Divens testimony not be credible. 4.7.4.4 Manifest Fact 16 proves that Divens continued to moved the assets eventually to at least five different financial institutions. In this instant admission, Divens admits that after the initial delivery to JDAs UBS account, he had the assets moved to an account in JDA's name at JP Morgan, then again transferred the assets to an account at Smith Barney, then in the summer of 2009, transferred the assets twice more - first to a Capstone account, and shortly thereafter, to an account with a brokerage firm called Matrix. 4.7.4.5 Manifest Fact 21 attests: 1) that Amedraa at all relevant times owned the Fannie Mae CMO and had the absolute right to possess the interest payments the assets generated from that CMO establishing that the interest payments were stolen by Divens and his co-conspirators through the enterprise of Law Offices of Jon Divens & Associates; 2) that JDA kept the interest payments for its own benefit; 3) that once it was discovered that JDA and Divens had stolen the cash, Divens refused to return the stolen cash, despite numerous demands from both LNJ Enterprise LLC and Amedraa LLC; 4) that the purpose of Divens movement of the assets without Amedraa's consent to conceal the whereabouts of Amedraas financial assets; 5) and that Divens deliberately, with scienter, misappropriated the interest cash income for his personal benefit." 4.7.4.6 Manifest Fact 22 unequivocally proves that Jon A. Divens used the JDA enterprise he individually controlled, to advance the fraud-in-fact and criminal taking of assets in the evolving association-in-fact enterprise expressed in Manifest
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Fact 23 (fr the SEC v. Wilde, et al. DEPOSITION OF FRANCIS E. WILDE; Plaintiffs Exhibit 274). 4.7.4.7 Therefore, in each instance that Divens transferred the subject assets by i.) concealing the whereabouts from the owners, or ii.) preventing the emplacement of those assets from being seen or discovered by the owners, or bank/financial institution transmitting or receiving the asset, or iii.) preventing the discovery of the ownership of, title to, the assets being transmitted or received by a bank/financial institution by fraud, or iv.) moving those assets in and out of Divens/JDAs accounts under the aforementioned conditions and representations described herein, with criminal intent to benefit from those transfers, including receiving the benefits of his fraudulent pretense of ownership including the receipt of cash from the interest paid or any other monetary or financial credit benefit, Divens violated 18 U.S.C. 2314, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 2314, and 18 U.S.C. 2315.

Predicate Acts 67 thru 81 (Doc. 36 at 58): 5.3.13 Summer//2009 In the summer of 2009, Divens transferred the FNMA series CMO twice more; first to a Capstone account 5, 11, 12, 14, 15, and shortly thereafter, to an account with a brokerage firm called Matrix 5, 11, 12, 14, 15. Finally, in or about September 2009, Divens transferred the FNMA Series CMO to the CISC Account 5, 11, 12, 14, 15. (Trial, 06/25/10, at 95:18-97:5.)41

Racketeering Count 67 & 72 (18 U.S.C. 1344 Financial Institution Fraud) Racketeering Count 68 & 73 (18 U.S.C. 1956 Laundering of Monetary Instruments) Racketeering Count 69 & 74 (18 U.S.C. 1957 Engaging in monetary transactions in property derived from specified unlawful activity) Racketeering Count 70 & 75 (18 U.S.C. 2314 Transportation of stolen goods, securities, moneys,
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fraudulent State tax stamps, or articles used in counterfeiting) Racketeering Count 71 & 76 (18 U.S.C. 2315 Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps) 4.7.5 Evidence Offered: Divens Fifth Admission (2.7.5), Divens Sixth Admission (2.7.6), Manifest Fact 1 (2.8), Manifest Fact 16 (2.22), Manifest Fact 21 (2.26), Manifest Fact 22 (2.27). 4.7.6 Argument: 4.7.6.1 The evidenced offered makes evident that Divens transferred the FNMA series CMO twice more; first to a Capstone account and then shortly after that time, he transferred the Fannie Mae CMO to the financial account of Matrix. The instrument was later transferred by Divens around September of 2009 to the CISC Account. 4.7.6.2 By engaging in the aforementioned conduct, and in each instance that Divens transferred the subject assets by i.) concealing the whereabouts from the owners, or ii.) preventing the emplacement of those assets from being seen or discovered by the owners, or bank/financial institution transmitting or receiving the asset, or iii.) preventing the discovery of the ownership of, title to, the assets being transmitted or received by a bank/financial institution by fraud, or iv.) moving those assets in and out of Divens/JDAs accounts under the aforementioned conditions and representations described herein, with criminal intent to benefit from those transfers, including receiving the benefits of his fraudulent pretense of ownership including the receipt of cash from the interest paid or any other monetary or financial credit benefit, Divens violated 18 U.S.C. 2314, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 2314, and 18 U.S.C. 2315.

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Predicate Acts 82 thru 86 (Doc. 36 at 58): 5.3.15 The Chase Court found the Law Offices of Jon Divens & Associates, LLC (JDA) and Attorney Jon Divens, jointly and severally liable for converting the interest income earned on LNJ Enterprise, LLCs FNMA Series CMO 5, 11, 12, 14, 15 , a savoir : While LNJ entrusted the FNMA Series CMO to JDA, and not to Divens personally, Divens actively participated in and directed the acts of conversion ! Divens directed the specific acts of conversion. Divens testified that he received several demands from Savor, Harris, and Evelyn Amedraa that the FNMA Series CMO be returned to LNJ. In response to these demands, Divens lied to Savor and told him that the FNMA Series CMO had already been entered into trade, when in fact the CMO was never successfully entered into any trade programs. Divens then authorized the transfer of the FNMA Series CMO out of the JDA UBS Account in which it was originally held to five different financial institutions so that LNJ could not locate the CMO. From January 2009 to October 2009, Divens personally gave instructions to the securities intermediaries managing these accounts to transfer the interest income generated by the FNMA Series CMO into JDA's Bank of America business account. Divens used all of this interest income for his own personal needs. On this record, Divens is personally liable for conversion of the FNMA Series CMO. Emphasis added. Chase Invmt Serv. Corp., at 48. Racketeering Count 82 (18 U.S.C. 1344 Financial Institution Fraud) Racketeering Count 83 (18 U.S.C. 1956 Laundering of Monetary Instruments) Racketeering Count 84 (18 U.S.C. 1957 Engaging in monetary transactions in property derived from specified unlawful activity) Racketeering Count 85 (18 U.S.C. 2314 Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting) Racketeering Count 86 (18 U.S.C. 2315 Sale or receipt of stolen goods, securities, moneys, or fraudulent State tax stamps) 4.7.7 Evidence Offered: Divens Second Admission (2.7.2), Divens Seventh Admission (2.7.7), Manifest Fact 1 (2.8), Manifest Fact 3 (2.10), Manifest Fact
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13 (2.19), Manifest Fact 14 (2.20), Manifest Fact 15 (2.21), Manifest Fact 17 (2.23), Manifest Fact 18 (2.24), Manifest Fact 21 (2.26). 4.7.8 Argument: The evidenced offered makes evident that Divens stole the cash from the interest income earned on Amedraa CMO. 4.7.8.1 By engaging in the aforementioned conduct, and in each instance that Divens transferred the subject assets by i.) concealing the whereabouts from the owners, or ii.) preventing the emplacement of those assets from being seen or discovered by the owners, or bank/financial institution transmitting or receiving the asset, or iii.) preventing the discovery of the ownership of, title to, the assets being transmitted or received by a bank/financial institution by fraud, or iv.) moving those assets in and out of Divens/JDAs accounts under the aforementioned conditions and representations described herein, with criminal intent to benefit from those transfers, including receiving the benefits of his fraudulent pretense of ownership including the receipt of cash from the interest paid or any other monetary or financial credit benefit, Divens violated 18 U.S.C. 2314, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 2314, and 18 U.S.C. 2315.

4.8 With respect to all RICO Defendants, the well-established and verified manifest fact in the Plaintiffs First Amended Complaint and the Record of the Court, give historical evidence to an unmistakable pattern of mutual and complotted conduct replete with fraud, lies, misinformation, purposeful misdirection, and concealment by the RICO Defendants. 4.9 Further, the overwhelming evidence offered in direct support of the alleged federal crimes of Divens predicate acts exceed the higher second tier standard of proof of clear and convincing evidence required of a civil RICO action, and meets the criminal standard of proof beyond reasonable doubt. Thusly, the Plaintiffs have clearly impeached Jon A. Divens verified Answers denial of the predicate crimes alleged against him.
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V. Plaintiffs Motion to Strike Answer for Defendants Fraud Upon the Court 5.1 The question before the Court is whether RICO Defendant Divens has engaged in conduct by the extensive fraud exhibited by his false statements and perjury, and whether Defendant Divens is deserving of having his Answer stricken and due additional sanctions. 5.2 The Court may impose further sanctions on a latter motion from the Plaintiffs or on the Courts own motion. Plaintiffs statement of fact and argument will show, unambiguously, that Divens Answer is intentionally false, willfully blind to the truth and misleading, and deserving of sanction. 5.3 Because Defendants Divens actions are directed at the judicial machinery, and that they demonstrate, at a minimum, a reckless disregard of the truth, the Plaintiffs request an expedited action to address these serious issues, by striking Defendants Answer which has severely prejudiced, harassed, and oppressed the Plaintiffs. 5.4 In support thereof Plaintiffs show the following: 5.5 FRAUD UPON THE COURT COUNT 1 PERJURY COUNT 1 OBSTRUCTION OF JUSTICE COUNT 1 5.5.1 RICO Defendants Divens Answer. Doc. 163 at 4, line 9. Defendant denies the allegations contained in this paragraph. (5.2.3) [Divens denies he moved the funds to various accounts of his choosing without the permission, or authorization of the owners of the assets 34 (CMOs) .] 5.5.2 Referring to Plaintiffs FAC (Doc. 36 at 52): 5.2.3 3/6/2009 On or after March 6, 2009, Divens unlawfully transferred the Cobalt CMO to accounts in JDA's name at five different financial institutions: Smith Barney 5, 11, 12, 14, 15, Capstone 5, 11, 12, 14, 15, Asset Enhancement Management 5, 11, 12, 14, 15, Matrix 5, 11, 12, 14, 15, and CISC 5, 11, 12, 14, 15. Each of these transfers was made after Divens had notice of Betts and Gambles's adverse claim.
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Collateralized Mortgage Obligations.

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5.6 IMPEACHMENT OF RICO Defendant Divenss Answer. Doc. 163 at 4, line 9: 5.6.1 The aforementioned is impeached by the Chase Courts FFCL (Doc. 120 at 10, footnote 4); Pla. Exhibit 262 (Doc. 173-1 at 10 [FN 4]). [4] Divens testified that the Cobalt CMO was in the JDA UBS Account in approximately March 2009. From there, the Cobalt CMO was transferred to a Smith Barney account where it remained for 2 months. In the Spring of 2009, the Cobalt CMO was transferred to an account with a company called Capstone, and then it was transferred again in the summer of 2009 to an account with a company called Asset Enhancement Management. In the late summer, Divens transferred the Cobalt CMO to an account with a firm called Matrix. Finally, in September 2009, Divens transferred the Cobalt CMO to the CISC Account. (See Divenss Depo., dated April 8, 2010, at 114:14-121:23.) 5.6.2 The aforementioned is further impeached by the Chase Courts FFCL (Doc. 120 at 36, lines 4-8); Plaintiffs Exhibit 262 (Doc. 173-1 at 36 lines 4-8). After March 6, 2009, Divens transferred the Cobalt CMO to accounts in JDAs name at five different financial institutions: Smith Barney, Capstone, Asset Enhancement Management, Matrix, and CISC. Each of these transfers was made after JDA had notice of Betts and Gambless adverse claim. Thus, Section 8502 does not protect JDAs securities entitlements from Betts and Gambless adverse claims. 5.7 Divens statement is wholly fraudulent, unsupported by any verifiable material evidence, lacks authentication and is wholly and unquestionably controverted, thusly impeached, by the Chase Court and upheld by the United States Ninth Circuit Court of Appeals.

VI. Denouement 6.1 The record evidence clearly and convincingly establishes that Jon A. Divens has engaged in a pattern of misconduct in this litigation that includes making false statements to the Court by means of his overt act of perjury. There is no escaping that when Divens signed his Answer to this Court under pain of perjury, that he knew he was about to file a

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perjured document. He was well aware that his answer to this Court contradicted what he declared in another, the U.S. District Court in California. 6.2 Additionally, Divens specific denial of the predicate crimes alleged against him have been persuasively and incontestably impeached. Plaintiffs arguments, offerings of evidence, and conclusions, stand on all fours. 6.3 Plaintiffs attest that RICO Defendants motion was supported by false statements by and through perjury, sent over the interstate wires in a deliberate and wanton attempt to obstruct justice. 6.4 The RICO Defendant Divens false statements were submitted with scienter, knowingly made, in a material declaration by oath made under pain of perjury,
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and

submitted in a proceeding before this Court. Divenss fraud upon the Court was intentional, willfully blind to the truth, and fraught with Defendants reckless disregard for the law. 6.5 Defendants fraud upon the Court is found in his claims that contradict manifest fact, previous declaration and physical evidence where such perjury and false statements are evident on the face of Divens Answer. Divens knew, that his verified Answer submitted to the Court was material to the First Amended Complaint and issues at hand. Divens intended his false statement to become the gravamen of his denials, and these most serious disputes would give grave concern to the Court and alter the outcome of the case against him. Divens was well aware that his false statements and perjury would have a natural

United States v. Gorman, 613 F.3d 711, 715-16 (7th Cir. 2010)(To support a conviction for perjury beyond a reasonable doubt, the government had the burden of proving that (1) the defendant, while under oath, testified falsely before the grand jury; (2) his testimony related to some material matter; and (3) he knew that testimony was false); United States v. Hasan, 609 F.3d 1121, 1134 (10th Cir. 2010)(To establish guilt under the statute, the government must prove beyond a reasonable doubt that: (1) the defendant made a declaration under oath before a grand jury; (2) such declaration was false; (3) the defendant knew the declaration was false and (4) the false declaration was material to the grand jurys inquiry); United States v. Safa, 484 F.3d 818, 821 (6th Cir. 2007)(To convict an individual of a violation of 18 U.S.C. 1623, the government must prove beyond a reasonable doubt that the defendant: (1) knowingly made, (2) a materially false declaration (3) under oath (4) in a proceeding before or ancillary to any court of the United States); United States v. Pagan-Santini, 451 F.3d 258, 266 (1st Cir. 2006); United States v. Hirsch, 360 F.3d 860, 864-65 (8th Cir. 2004).
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tendency to influence, or was capable of influencing, the decision of the fact finder, in this instance, the Magistrate Judge (referring) and the Presiding Judge. patently offensive to the Courts bench and bar. 6.6 The record evidence shows clearly and convincingly that Divens was not truthful and knowingly made misrepresentations in his pleadings, i.e. false statements within his Answer, and deliberately presented a perjured instrument, in order to explain away his commission of predicate crimes and participations in the actions of the various criminal enterprises. The record unequivocally establishes by clear and convincing evidence that Divens committed fraud upon the Court by overt acts of perjury. 6.7 Accordingly, Divens's conduct falls squarely within the definition of fraud on the court
37 36

Divenss Answer is

and is a clear abuse of the judicial process.


39

38

An appropriate sanction is

warranted

as there is no question that Divens's conduct constitutes a serious abuse of the

litigation process. 6.8 The inherent authority of a court to impose sanctions for bad-faith, if not criminal conduct, reaches RICO Defendant, where Divens in his Answer presents extensive fraud to the Court. Were the rule otherwise, a charging party would have a powerful incentive to commit fraud, perjury, and to suborn that perjury, for in that event, a charging party could engage in discovery fraud with impunity and if successful the charging party would obtain
36

See, United States v. Brown, 459 F.3d 509, 529 (5th Cir. 2006), citing, United States v. Gaudin, 515 U.S. 506, 509 (1995), and Kungys v. United States, 485 U.S. 759, 770 (1988); see also United States v. Benkahla, 530 F.3d 300, 310 (4 Cir.2008); United States v. McKenna, 327 F.3d 830, 839 (9th Cir. 2003); United States v. Lee, 359 F.3d 412, 417 (6 Cir.2003); United States v. Durham, 139 F.3d 1325, 1329 (10th Cir. 1998). 37 See, e.g., Nichols v. Klein Tools, 949 F.2d 1047, 1048-49 (8th Cir. 1991) (imposing sanctions for "fraud on the court" where plaintiff concealed a material fact); Yanez v. America West Airlines, 2004 U.S. Dist. LEXIS 20706, at *19 (D. Md. Oct. 13, 2004) (holding that plaintiff perpetrated a "fraud on the court" by providing intentionally false deposition testimony and deliberately failing to meet discovery obligations to hide evidence of obvious high relevance to his claim for damages). 38 A federal court has the inherent authority to impose sanctions for fraud on the court or abuse of the litigation process. See, United Slates v. Shaffer Equip. Co., 11 F.3d 450,462 (4th Cir. 1993) ("[W]e recognize here that when a party deceives a court or abuses the process at a level that is utterly inconsistent with the orderly administration of justice or undermines the integrity of the process, the court has the inherent power to dismiss the action.") 39 Cf. Chambers v. NASCO, Inc., 501 U.S. 32 (1991).
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an unfair advantage in the litigation.

VII. PRAYER It is Plaintiffs belief and contention that additional sanctions should be awarded for reasonable costs associated with preparing and tiling this Motion to Strike. Plaintiffs shall effect notice of sanctions for which they shall separately file pursuant to the Rules unless Court has spoken to such as the Court has the inherent authority to award costs or other sanction when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
40

Moreover, it appears that Divens has the financial means to pay an award of

monetary sanctions for this Motion. Further, permitting such an award would likely dissuade Divens and other defendants that have demonstrated the same conduct identified in the Plaintiffs First Amended Complaint from pursuing similar conduct and demeanor in these proceedings.

WHEREFORE, the Plaintiffs pray an appropriate Order will issue from this Court striking completely, RICO Defendant Jon A. Divenss ANSWER OF DEFENDANT Jon A. Divens TO PLAINTIFFS RICO COMPLAINT with prejudice and for any other sanction or relief the Court deems appropriate .

Respectfully Submitted on Thursday, September 20, 2012.

40

Id., at 45-46.

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s/ R. LANCE FLORES Lead Attorney 3314 Pleasant Drive Dallas, Texas 75227 USA Tel. (Dallas): +1 (214) 272-0349 Tel. (Fax): +1 (210) 519-6528 ECF & Case Management E-mail: LF_legaldept@MockingbirdFilms.com Attorney for the Plaintiff

s/ VICKI CLARKSON 2416 - 36 Street SW Calgary, AB T3E 2Z5 Tel. (Calgary): +1 403-244-9980 Tel. (Fax:) +1 (403) 246-3331 ECF & Case Management E-mail: VC_LegalDept@MockingbirdFilms.com Attorney for the Plaintiff

VERIFICATION OF CLARKSON I, Vicki Clarkson hereby declare, verify and certify under penalty of perjury as provided by 28 U.S.C. 1746 that I am a Plaintiff in the above-styled and -numbered cause of action, that I have read the foregoing instruments presented herein, that I am familiar with the contents therein, and that the matters contained in the motions are true and correct to my own knowledge, except those matters herein stated to be alleged on information and belief and, as to those matters, I believe them to be true and correct. SUBSCRIBED AND EXECUTED on Thursday, September 20, 2012 pursuant to 28 U.S.C. 1746:

s/ VICKI CLARKSON

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VERIFICATION OF FLORES I, R. Lance Flores hereby declare, verify and certify under penalty of perjury as provided by 28 U.S.C. 1746 that I am a Plaintiff in the above-styled and -numbered cause of action, that I have read the foregoing instruments presented herein, that I am familiar with the contents therein, and that the matters contained in the motions are true and correct to my own knowledge, except those matters herein stated to be alleged on information and belief and, as to those matters, I believe them to be true and correct. SUBSCRIBED AND EXECUTED on Thursday, September 20, 2012 pursuant to 28 U.S.C. 1746:

s/ R. LANCE FLORES

CERTIFICATE OF SERVICE On Thursday, September 20, 2012, I electronically submitted the foregoing document with the Clerk of Court for the U.S. District Court, Northern District of Texas, using the electronic case filing system (CM/ECF) of the Court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal rule of Civil Procedure 5 (b)(2). For the Plaintiffs:

s/ R. LANCE FLORES

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CERTIFICATE OF CONFERENCE Plaintiffs Clarkson and Flores certify that on Friday, August 31, 2012, Plaintiffs jointly attempted to confer with Jon A. Divens. Plaintiffs called the phone number provided by RICO Defendants John Divens, Bruce Divens, Francis Wilde, and Nominal Defendant Maureen Wilde. Mr. Divens answered the Plaintiffs phone call, however, he refused to speak with Plaintiffs after being informed that Plaintiffs were calling to confer with him, Bruce Divens, Francis Wilde, and Maureen Wilde, concerning Plaintiffs motion for extension of time and their sanctions motions. None of the aforementioned Defendants came to the phone. Mr. Divens placed the call on hold and a Mr. Irving Parchman took the call. He was informed of Plaintiffs need to speak and confer with the defendants whose phone numbers given in their answers as (310) 601-3168, the number which Plaintiffs had called. Mr. Parchman spoke with Plaintiffs and stated he would leave messages with defendants Jon A. Divens, Francis E. Wilde, and Maureen Wilde, but did not call the defendants to the phone. Since that time Plaintiffs have not been able to contact any of the aforementioned defendants, nor have the aforementioned defendants returned Plaintiffs calls or responded to Plaintiffs request for conference. Plaintiffs also made subsequent calls to confer. Plaintiffs last placed a call and left a message requesting conference on Wednesday, September 19, 2012,

Thursday, September 20, 2012: s/ R. LANCE FLORES

s/ VICKI CLARKSON

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