Respondents Wahl and Chung's Proposed Findings of Fact and Conclusions Of
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UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION ADMINISTRATIVE PROCEEDING File No. 3‐18292 In the Matter of Anton & Chia, LLP, Gregory A. Wahl, CPA, Georgia Chung, CPA, and Tommy Shek, CPA, Respondents. THE RESPONDENT’S PROPOSED FINDINGS of FACT and CONCLUSIONS OF LAW aka THE TRUTH FOR PRO SE RESPONDENTS GREGORY A. WAHL AND GEORGIA C. CHUNG 1 DEFINITION: HONEST HARDWORKING AMERICANS Gregory A. Wahl, Georgia C. Chung and Michael Deutchman, as well as endless other parties referred to throughout this brief, are independently & collectively Honest Hardworking Americans. These are the real heroes of our people, but they are routinely, wrongly and maliciously attacked and harmed with premeditated fraudulent intention, by a rogue group - The United States Securities and Exchange Commission (“SEC and/or Plaintiffs”). Today, most of this sadly misguided SEC management, narrative and policy is drowning in a terrible fake show and engaged daily in totally disgusting, anti- American values and anti-Small Business behavior. Worse, SEC Enforcement personnel receive excessive salaries and are actually bonused and/or increased in their earning power based on the level of mistreatment to the largest body of taxpayers and employers - Small Businesses and their Honest Hardworking American employees. We are disgusted that the US government pays these very bad actors, by one estimate, at least $32 to $38 million of our hard-earned tax dollars to intentionally harm what was a well-established firm of 100+ great American jobs and tens of millions of dollars in income now lost that had contributed to the U.S. economy for almost nine years and was sure to grow in economy of scale in the coming years. 2 TABLE OF CONTENTS THE INTENTIONAL AND PREMEDITATED IMPACT ON DUE PROCESS A) THE DECEMBER 4, 2017 PRESS RELEASE:………………………………………………………………………………………………………54 1) SURPRISED AND UPSET:………………………………………………………………………………………………………………………….56 2) NOT EVEN A NEGLIGENCE CHARGE:………………………………………………………………………………………………………..56 3) THE FIRM DIDN’T COMMIT FRAUD AND THE SEC ATTORNEYS KNEW IT BEFORE THE RELEASE:………………57 4) THE SEC ADOPTED THE NAPOLEONIC CODE: GUILTY BEFORE INNOCENT. DESTROY THEM BEFORE TRIAL!. .............................................................................................................................................................. 57 5) INFLICTED FURTHER DAMAGE ON KOCH’S REPUTATION:…………………………………………………………………….….57 6) HIGHLY DRAMATIC PRESS RELEASE:…………………………………………………………………………………………………….….57 THE SEC’s RACKATEERING ENTERPRISE – LET’S HOPE THEY DON’T FIGHT BACK! INCOMPETENT SEC ATTORNEYS AND ACCOUNTANTS THE SEC’S INTERNAL CONTROLS A) THE SEC’s PORN PROBLEM – RECKLESS BEHAVIOR AND CONTEMPT FOR THE TAX PAYER:……………………….….…59 B) THE SEC WITH ITS $1.82 BILLION BUDGET GETS HACKED AND CREATES A FINANCIAL FRAUD OF $4.1 MILLION:…………………………………………………………………………………………………………………………………………………..…….61 C) SEC REQUESTS BUDGET INCREASE TO DESTROY ANOTHER 250+ JOBS:…………………………………………………………64 D) THE PCAOB:…………………………………………………………………………………………………………………………………………………..66 ANTON & CHIA, LLP BUSINESS PLAN A) CREATION:…………………………………………………………………………………………………………………………………………………….66 B) LIFE OF THE PARTY:……………………………………………………………………………………………………………………………………….67 C) ENFORCEMENT:…………………………………………………………………………………………………………………………………….……,…67 3 D) CONTROLLED GROWTH:…………………………………………………………………………………………………………………….………….68 E) ANTON & CHIA SUPPORTED AMERICAN SMALL BUSINESS:………………………………………………………….………………..70 ANTON & CHIA, LLP GROWTH OPPORTUNITIES A) KING KONG (SEC) BEATING UP ON AN ANT – START UP (A&C):…………………………………………………………………….71 B) COMPETITIVE ADVANTAGES:………………………………………………………………………………………………………………………..71 C) THE BOOT STRAP:…………………………………………………………………………………………………………………………….….…………72 D) TURNOVER – DOESN’T EVERY CPA FIRM HAVE TURNOVER?:………………………………………………………….…………….72 E) CPA’s WORK:…………………………………………………………………………………………………………………………………….………….79 F) THE BEST PLACE TO WORK: …………………………………………………………………………………………………………….……….…..80 G) AFFIRMATION OF ANTON & CHIA’S BUSINESS PLAN – A SUCCESFUL ORGANIZATION:………………….………………80 ANTON & CHIA’s INTERNAL CONTROLS: A) A&C’s PROCESS FOR FINALIZING AN AUDIT AND SECOND PARTNER RESPONSIBILITY:…………………………………..99 B) ANTON & CHIA HAD AN ANNUAL INTERNAL INSPECTION PERFORMED BY AN INDEPENDENT CPA:…………….100 MORE OF DEVOR’S NONSENSE: A) RECKLESS DEVOR:……………………………………………………………………………………………………………………………………….100 B) RULE 702 TESTIMONY BY EXPERT WITNESS:……………………………………………………………………………………………….101 C) DAUBERT:……………………………………………………………………………………………………………………………………………………102 D) DEVOR’S BUMBLING & STUMBLING: ………………………………………………………………………………………………………….105 E) DEVOR LOVES PRIVATE COMPANY SMELLY GAAS NOT PUBLIC COMPANY STANDARDS:……………………………..106 F) DEVOR’S TESTIMONY PROVIDES FURTHER SUPPORT FOR HIS LACK OF KNOWLEDGE FOR THIS CASE AND IN DOING SO VIOLATES THE AICPA AND PENNSYLVANIA CPA CODE OF PROFESSIONAL CONDUCT!:……………….106 G) DEVOR DOESN’T UNDERSTAND THAT SMALL CAP COMPANY REVERSE MERGERS CREATE VALUE!:…………….107 4 H) DEVOR DOESN’T RESEARCH THE INDUSTRY AND IN DOING SO VIOLATES THE AICPA AND PENNSYLVANIA CPA CODE OF PROFESSIONAL CONDUCT, AGAIN!:………………………………………………………………………………………………108 I) DEVOR’S IMPROPER METHODOLOGY:………………………………………………………………………………………………………………………………………….108 J) DEVOR IS NOT RELIABLE NOT RELEVANT:…………………………………………………………………………………………………….109 K) RULE 56 (e):…………………………………………………………………………………………………………………………………………………110 L) DEVOR’S ARGUMENTATIVE DISHONEST MISTATEMENTS:………………………………………………………………………..…110 M) NEGATIVE DAUBERT HISTORY FOR DEVOR: ………………………………………………………………………………………………..113 N) MOTIONS FILED BY HONEST HARDWORKING AMERICANS TO DENY DEVOR; DOTY SCOTT AND JAMES STEWART TESTIMONY AND EVIDENCE:………………………………………………………………………….……………………………116 O) DEVOR CANT FIND HIS BILLINGS:…………………………………………………………………………………………………………………116 P) DEVOR IS BIASED – THE SEC IS HIS LARGEST CLIENT (SEE ENRON, WORLDCOM):………………………………………..117 Q) DEVOR’S DELUSIONS ON GAAP AND GAAS:…………………………………………………………………………………………………119 R) DEVOR’S MISREPRESENTATIONS RELATED TO CANNAVEST:……………………………………………………………………….119 S) DEVOR’S MISREPRESENTATIONS ON ACCELERA:…………………………………………………………………………………………126 T) NO INVESTOR LOSSES:…………………………………………………………………………………………………………………………………127 U) DEVOR’S MISREPRESENTATIONS RELATED TO PREMIER:…….………………………………………………………………………130 V) WHERE IS THE WRITER OF THE OIP?: ………………………………………………………………………………………………………….131 CANNAVEST: THE PLAYERS: A) WAHL KNOWS US GAAP AND GAAS 1) WAHL UTILIZED APPROPRIATE PROFESSIONAL CONDUCT:…………………………………………………………………….133 5 2) ANTON & CHIA REVIEWED ALL ASSETS AND LIABILITES:………………………………………………………………………..133 3) HONEST HARDWORKING AMERICANSTOOK THEIR JOB VERY SERIOUSLY: …………………………………………….133 4) WAHL EXPLAINS ANALYTICS TO THE SEC: ……………………………………………………………………………………………..134 5) THE SEC DOESN’T UNDERSTAND THAT CLIENT CONTRACTS ARE PART OF THE WORK PAPERS:……………..135 6) WAHL EXPLAINS BUSINESS COMBINATION ACCOUNTING AND PURCHASE PRICE ALLOCATION:……………135 7) WAHL AND A&C HAD VARIOUS DISCUSSIONS WITH MANAGEMENT PLUS MORE: ………………………………...136 8) HONEST HARDWORKING AMERICAN STOOK THEIR JOBS VERY SERIOUSLY:……………………………………………136 9) WAHL IS DILIGENT:………………………………………………………………………………………………………………………………..137 10) EVERYONE KNOWS THE AMOUNTS ARE PROVISIONAL AND MANAGEMENT’S BEST ESTIMATE:…………….137 11) THE PHYTOSPHERE TRANSACTION WAS AN ORDERLY TRANSACTION BETWEEN MARKET PARTICIPANTS:………………………………………………………………………………………………………………………………………137 12) ITS NOT UNCOMMON FOR COMPANIES TO HAVE SIGNIFICANT GOODWILL:…………………………………………139 13) ANALYZED THE INDUSTRY; OTHER TRANSACTIONS; INQUIRIES WITH MANAGEMENT = FAIR MARKET VALUE: ………………………………………………………………………………………………………………………………………………….139 14) ANALYTICS AND QUALITATIVE FACTORS:……………………………………………………………………………………………….139 15) MANAGEMENT’S OPTIMISM:………………………………………………………………………………………………………………..140 16) THERE IS NO REQUIREMENT FOR AN IMPAIRMENT ANALYSIS: ……………………………………………………………..140 17) HONEST HARDWORKING AMERICANSHAVE THE EXPERIENCE NOT DEVOR OR THE SEC: ………………………..141 18) IGNORANT QUESTION, AS USUAL, JUST LIKE QUALLS SCREAMING “WHO WROTE THE REP LETTER!”:…..141 19) ANOTHER ONE OF THOSE LA OFFICE SEC QUESTIONS………………………………………………………………………….…141 20) PROCESS OF DOING A RISK ASSESSMENT, MET WITH CANOTE AND MIKE MONA:………………………………..141 21) NOT NECESSARILY. ITS OUR WORK PAPERS NOT YOURS!. ............................................................................. 142 22) AFTER 6 YEARS 24 SEC ATTORNEYS AND ACCOUNTANTS STARING AT THE WORKING PAPERS. THEY STILL CANT FIGURE OUT THE PRODUCTION FROM A&C: …………………………………………………………………………………143 6 23) MORE LA OFFICE QUESTIONS:……………………………………………………………………………………………………………….143 24) PREPARD BY A CPA THAT HAD PUBLIC COMPANY EXPERIENCE:……………………………………………………………..143 25) WE MADE SURE THE UNDERLYING NUMBERS MADE SENSE:………………………………………………………………….144 26) WAHL EDUCATING THE SEC ON HOW TO DETERMINE GOODWILL, AGAIN: ……………………………………………144 27) THEIR UNIQUE CANNIBIS PHARMACEUTICAL SOLUTION WAS EXPECTED TO CURE 9 VARIOUS DISEASES:…………………………………………………………………………………………………………………………………………….. 144 28) AGAIN NO INDICATOR OF IMPAIRMENT. HIGHER REVENUES: QUALITATIVE FACTORS US GAAP AND GAAS:……………………………………………………………………………………………………………………………………………………145 29) IN THE SECOND QUARTERLY REVIEW ‐ WE REVIEWED ACTUAL EVIDENCE OF REVENUES – INVOICES, SHIPPING DOCUMENTS:………………………………………………………………………………………………………………………..145 30) ANOTHER EINSTEIN QUESTION FROM THE SEC. WAHL EXPLAINS IT AGAIN: ………………………………………….146 31) MANAGEMENT HAD EXPECTED SALES AND PROFITS: ……………………………………………………………………………146 32) MANAGEMENT IS RESPONSIBLE FOR PREPARING THE FINANCIAL