7430 Creek Road, Suite 303 Sandy, Utah 84093-6160 Telephone: (801) 322-2002 Facsimile: (801) 912-0320 E-Mail: [email protected]
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Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 1 of 105 DAVID W. SCOFIELD - 4140 PETERS š SCOFIELD A Professional Corporation 7430 Creek Road, Suite 303 Sandy, Utah 84093-6160 Telephone: (801) 322-2002 Facsimile: (801) 912-0320 E-mail: [email protected] Attorneys for Brian Bagley and L. Carol Bee, Creditors IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH In re: BARRY DON HUNTER; and Bankruptcy Case No. 12-26860WTT KIMBERLY CHAMPLIN HUNTER, (Chapter 7) Debtors. ________________________________ BRIAN BAGLEY AND L. CAROL BEE, Plaintiffs, FIRST AMENDED COMPLAINT TO DENY -vs- DISCHARGE UNDER 11 U.S.C. § 727, TO DETERMINE NON-DISCHARGEABILITY BARRY D. HUNTER; KIMBERLY CHAMPLIN PURSUANT TO 11 U.S.C. § 523 AND HUNTER; PORTFOLIO MANAGER FURTHER RELIEF INTERNATIONAL L.L.C.; ONEIROS TECHNOLOGIES L.C.; MICHAEL J. WRIGHT; CYNTHIA L. WRIGHT; GREGORY B. MADSEN; LUCIDITY MANAGEMENT, LLC; VOLITION TRADING COMPANY, LLC; CHURCH OF SCIENTOLOGY OF UTAH; Adv. Proc. No. 12-02544 CYNTHIA L. WRIGHT; CHURCH OF SCIENTOLOGY MISSION OF SALT LAKE Honorable William T. Thurman CITY; CHURCH OF SCIENTOLOGY INTERNATIONAL; TOM BURTON; JAMES D'AREZZO; ALAN S. FARR; GEORGE [FILED ELECTRONICALLY] HITES; GREG KINGDON; DAVID PETERSEN; ROBBY J. STOWE; SANDOR SZANISZLO, JURY TRIAL DEMANDED Defendants. Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 2 of 105 Plaintiffs Brian Bagley (“Bagley”) and L. Carol Bee (“Bee”), for their claims against defendants Barry D. Hunter (“Hunter”); Kimberly Champlin Hunter (“Kimberly”); Portfolio Manager International L.L.C. (“PMI”); Oneiros Technologies L.C. (“Oneiros”); Michael J. Wright (“Wright”); Cynthia Wright (“Cynthia”); Gregory B. Madsen (“Madsen”); Lucidity Management, LLC (“Lucidity”); Volition Trading Company, LLC (“Volition”); Church of Scientology of Utah (“Utah Church”); Cynthia L. Wright (“Cynthia”); Church of Scientology Mission of Salt Lake City (“Utah Mission”); Church of Scientology International (“Church”); Tom Burton (“Burton”); James D’Arezzo (“D’Arezzo”); Alan S. Farr (“Farr”); George Hites (“Hites”); Greg Kingdon (“Kingdon”); David Petersen (“Petersen”); Robby J. Stowe (“Stowe”); Sandor Szaniszlo; (“Szaniszlo”), allege as follows: PARTIES 1. Bagley is an individual residing in the State of Utah. 2. Bee is an individual residing in the State of Utah. 3. Hunter is an individual residing in the State of Utah who, at all times through the dissolution of PMI in October, 2011 was its sole or majority owner. Upon the dissolution and winding up of PMI, the assets of PMI were required to be treated in accordance with UTAH CODE ANN. § 48-2c-1308, which provides: (1) After dissolution, and during winding up, the assets of the company shall be applied to pay or satisfy: (a) first, the liabilities to creditors other than members, in the order of priority as provided by law; (b) second, the liabilities to members in their capacities as creditors, in the order of priority as provided by law; and (c) third, the expenses and cost of winding up. (2) Company assets remaining after application under Subsection (1) shall be allocated and 2 Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 3 of 105 distributed to the members as provided in the articles of organization or operating agreement, or if not so provided, in accordance with the members' final capital account balances after allocation of all profits and losses including profits and losses accrued or incurred during winding up.” In all his acts alleged, Hunter acted as an agent for each of the conspiracy, the Church, the Utah Church, the Utah Mission, Wright, Oneiros and PMI, and he acted within the course and scope of that agency. 4. Kimberly is an individual residing in the State of Utah, is a Co-Debtor in the main bankruptcy case, having filed a joint voluntary petition for relief under Chapter 7 of Title 11 of the UNITED STATES CODE on May 25, 2012. At material times hereto, Kimberly was a member of the Board of Directors of the Utah Mission and controlled its operations under the oversight of the Utah Church and the Church. At all times, Kimberly acted as an agent for the Church, the Utah Church and the Utah Mission and she acted within the course and scope of that agency. 5. PMI is a Utah limited liability company that was formed on June 21, 2005 and which expired on October 4, 2011. At all material times in its existence, PMI held an exclusive license from Oneiros to allegedly valuable software technology invented by Wright and owned by Oneiros. PMI at all times was an alter ego of Wright, Oneiros, the Church, the Utah Church and the Utah Mission and an agent of the conspiracy which acted within the course and scope of that agency. 6. Wright is an individual residing in the State of Utah who created a Utah limited liability company named Portfolio Manager, L.C., in 2002. At times material to this adversary proceeding Wright was the President of the Utah Church, in charge of all of its operations and the oversight of the Utah Mission under the direction of the Church. 3 Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 4 of 105 Wright also owns, with Cynthia, the building from which the Utah Church, the Utah Mission, PMI and Oneiros operated. In all his acts alleged, Wright acted as an agent for each of the Church, the Utah Church, the Utah Mission, Hunter, Oneiros and the conspiracy, and he acted within the course and scope of that agency. 7. Madsen is an individual residing in the State of Utah who created a Utah limited liability company named Portfolio Manager, L.C., in 2002. Madsen was responsible, along with Wright, for the design and programming of Oneiros’ purported investment software by which the co-conspirators sought to solicit investment in PMI as part of their high-yield investment scheme. Madsen was also involved in discussions as early as 2004 with the co-conspirators to establish PMI as a source of soliciting investment funds. 8. Oneiros is a Utah limited liability company that was formed on April 23, 2002 under the name Portfolio Manager, L.C., with Wright and Madsen as its members. On March 21, 2006, Madsen executed Articles of Amendment changing the company’s name to Oneiros Technologies L.C. Oneiros thereafter expired on or about July 31, 2007. Oneiros remained expired at least through January 26, 2010, thereby subjecting both Wright and Madsen to personal liability for all conduct of Oneiros between at least those dates. By May 2, 2011, Oneiros had been brought current and on that date Articles of Amendment were filed to allow Oneiros to engage in FOREX trading activities involving the trading of foreign currencies in futures markets. That same date, Oneiros filed its Annual Report, changing the principal address of Oneiros to the former principal business address of PMI, 353 East 400 South, Suite 302, Salt Lake City, Utah and changing the registered agent from Madsen to Wright. On information and belief, 4 Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 5 of 105 PMI had spent approximately $1 million purportedly building out those premises, when it occupied them. Oneiros at all times was an alter ego of Hunter, Wright, PMI, the Church, the Utah Church and the Utah Mission. 9. Lucidity is a Utah limited liability company created on May 19, 2008, by Christopher David Hales (“Hales”), a convicted felon now serving time in a federal penitentiary, Benjamin J. Davis (“Davis”) and Daniel Mark Burbank (“Burbank”). One purpose for the formation of Lucidity was for it to operate as a source of solicitation and procurement of investor funds directly for PMI and to funnel other funds obtained illicitly to PMI and others. Lucidity dissolved on September 1, 2009. For all intents and purposes, Lucidity was and is the alter ego of Wright, Oneiros, PMI and Hunter. Lucidity at all times was an alter ego of or agent acting for and within the scope of the agency granted by Hunter, Wright, PMI, Oneiros, the Church, the Utah Church and the Utah Mission. 10. Volition Trading Company, LLC is a Utah limited liability company created on June 3, 2010 by convicted felon Hales and a putative Nevada corporation named Epicenter Trading, Inc. One purpose for the formation of Volition was for it to operate as a source of solicitation and procurement of investor funds directly for PMI and to funnel other funds obtained illicitly to PMI and others. Volition dissolved on October 4, 2011, the same day that PMI expired. For all intents and purposes, Volition was and is the alter ego of Wright, Oneiros, PMI and Hunter. Epicenter Trading, Inc.’s principals include Kevin W. Jones and Matthew E. Poll, who, together with Epicenter Trading, Inc., are also the principals of a company known as Freedom Wealth Group, LLC (FWG). FWG, not coincidentally, offers to teach investors how to FOREX trade and uses an 5 Case 12-02544 Doc 39 Filed 04/26/13 Entered 04/26/13 16:49:33 Desc Main Document Page 6 of 105 advertisement that claims to reduce the amount of risk in FOREX trading just as PMI claimed to eliminate the risk in stock trading. FOREX trading, as stated above, is the new business of Oneiros. Two FWG marketing agents are currently under an administrative order to show cause from the Division of Securities of the Department of Commerce of the State of Utah why they should not be, among other things, ordered to cease and desist their commission of securities fraud.1 Volition at all times was an alter ego of or agent acting for and within the scope of the agency granted by Hunter, Wright, PMI, Oneiros, the Church, the Utah Church and the Utah Mission.