Case 2:12-cv-00799-RJS Document 50 Filed 07/03/13 Page 1 of 66 Marcus Mumford (12737) MUMFORD RAWSON, LLC 15 West South Temple, Ste 1000 Salt Lake City, Utah 84101 Tel: 801-428-2000 Email:
[email protected] Attorney for Plaintiffs IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION ISLET HOLDINGS, INC., a Texas FIRST AMENDED COMPLAINT corporation, ISLETECH, INC., a Nevada corporation, Case No. 2:12-CV-00799-BSJ Plaintiffs, REDACTED VERSION v. (UNREDEDACTED VERSION WITH EXHIBITS FILED UNDER SEAL) ISLET SCIENCES, INC., a Nevada corporation, JOHN STEEL, an individual, JURY TRIAL DEMANDED CHARLES DANIEL RHODES, an individual, JONATHAN LAKEY, an individual, and John Does 1 through 5, Defendants. For their first amended complaint, Plaintiffs hereby complain and allege as follows: 1. Beginning the in the spring of 2009, Defendants worked with Plaintiffs to acquire, on behalf of Plaintiffs, certain assets of MicroIslet, Inc., out of bankruptcy, in order to develop and sell them. In their efforts, Plaintiffs expended over $750,000, with a significantly greater investment of time and resources. Plaintiffs acquired the MicroIslet assets, including significant intellectual property assets, and relied on Defendants Steel, Rhodes, and Lakey, as fiduciaries, to develop the assets for future sale. Since that time, Plaintiffs have become aware of an extensive plot on the part of Defendants to frustrate Plaintiffs’ business and take Plaintiffs’ property for 1 Case 2:12-cv-00799-RJS Document 50 Filed 07/03/13 Page 2 of 66 Defendants’ own benefit. Defendants’ fraudulent actions include numerous instances of mail and wire fraud, fraudulent misrepresentations made in Islet Sciences’ filings with the Securities and Exchange Commission, obstruction of justice, including threats and intimidation of witnesses, and even including false representations made by their attorneys in this Court.