Tracking Down The Real Internet Crooks Capital Enhancement Club (CEC) pt3 Timeline

CEC Timeline
October 2004 Starting around this date, the Defendants began their investment HYIP scam and defrauded investors of at least $19 million through the fraudulent offer and sale of securities referred by the name Capital Enhancement Club (CEC) and known as a “private joint venture investment”.

On May 4, 2005, the SEC filed their first Complaint alleging that David Tanner masterminded a scheme to defraud investors and of the $15,000,000 million investors had sent CEC, only about $300,000 was accounted for in US banks. There were NO other assets and no legitimate business activity at all. The entire operation was a ponzi scheme.

Attorneys for Defendant David Tanner, which included one local Topeka lawyer Thomas D. Haney from Wright, Henson, Clark, Hutton, Mudrick & Gragson, L.L.P. , and two high priced legal eagles – Robert L. Herskovits and Michael F. Bachner from the New York City office of Bachner & Herskovits filed a response to the SEC complaint.

What did all those lawyers have to say on behalf of David Tanner?

Most of it went like this…”Pursuant to…all matters are denied about which Tanner is without knowledge or information sufficient to form a belief concerning the truth thereof…Tanner denies the allegations.”

In response to discovery requests served with the Complaint, Tanner’s Lawyers produced a sworn declaration indicating “Tanner’s” intention to assert his Fifth Amendment right against self- incrimination.

About One Year Later

On March 2006, the court set a deadline by which all CEC investors must have completed a claim form via the Receiver’s website. That ‘claims bar date’ of April 28, 2006, was approved and was considered, “… a full, fair and informed opportunity to investors who have not already filed a claim, without adding undue delay to the proceedings.”

Early June 2006, the SEC moves to modify the Court’s Scheduling Order and permit them some additional time for discovery in order to, “…determine the true identity of the person or persons who masterminded the CEC scheme and effectively stop defendant “David Tanner” from: (1) defrauding the Court, and (2) using a bogus identity to escape the demands of previously-entered judgments”

A memorandum filed at the same time showed facts suggesting that “Tanner” was an alias for James Tucker!

The court documents explain that up until this time for well over a year, the Plantiff, the SEC, had identified David Tanner through CEC materials as CEC’s managing partner and webmaster. He had also opened e-gold accounts using that same Tanner name plus the website was registered and posted in that name. Unfortunately, all of these items are very easy to do requiring no identification.

6/7/05 Preliminary Report – 6/20/06 Motion to Reopen Discovery

Between June 7, 2005 and June 20, 2006 the Securities Exchange Commission and the Receiver either filed or had received from attorney’s representing defendants a total of 40 (forty) separate court documents all addressing David Tanner.

All of these documents identified the mastermind and defendant as David Tanner. Both law firms representing this defendant, recognized him as David Tanner.

If you look back to May 2005, Tanner’s counsel submitted his sworn declaration indicating Tanner’s intention to assert his Fifth Amendment Right against self-incrimination. It was no surprise that declaration had on it what was prostituted as Tanner’s original signature!

They were all chasing a ghost!

June 20, 2006 the courts were now delaying the action in order to find out exactly who David Tanner really was…. 6/20/2006, SEC Memorandum to Open Discovery to Establish Real Identity of David Tanner

As it turns out, both the SEC and the Receiver deposed a gentleman named Phillip Risby who was the Relief Defendant from a legitimate company known as Dynamic Environmental Solutions (“DES”). Risby testified that funds traced from CEC investors to DES were the result of an investment from a person named “James Tucker,” not Tanner. *please see the correction below on DES (Commission’s claims against DES were dismissed with prejudice. Along with the dismissal, $65,000 previously frozen by the Court was returned to DES. DES was NOT associated with CEC my apologies to Mr. Risby)

While Tanner’s Counsel filed an answer essentially denying each of the allegations directed at Tanner, the Receiver’s evidence showed different.

1. Many of the early transactions directed by Tucker were executed in E-Gold. E-Gold records show that a computer and the internet were used on December 13, 2000 to open new accounts for CEC, account #226210, and David Tanner, account #226212. The following day, a new account was opened in the same manner by James Tucker, account #226723. The E-Gold internet logs that all three accounts were opened using a computer with the same remote internet protocol address. The CEC and Tucker accounts were used for several hundred transactions until they were closed in July 2004, and there were approximately fifty transactions when the Tucker account and CEC account were used on the same day and from computers with identical IP addresses.
2. Another identifying items appears when Tucker directed money transferred to Dynamic Environmental Solutions (DES), a Puerto Rican company. The Marroc Corp bank account records allowed the tracing of $900,000 in funds from CEC investors to DES. The president of DES, Phillip Risby, confirmed that his company received an investment in DES by James Tucker.
3. Further examination of CEC bank accounts identified payments totaling $675,000 wired directly to James Tucker at the St. Maarten Commercial Bank and to Paritate Bank in Riga, Latvia to pay credit card bills of James Tucker.
4. Tanner’s counsel has received seven payments totaling approximately $400,000. Three of the seven payments, totaling $227,000 originate from RBTT Bank located in the Caribbean and with a branch in St. Maarten.
5. While the Receiver can demonstrate that Tucker received or directed payment of approximately $18 million of CEC investor funds—the Receiver has yet to uncover even one financial account indicating that anyone named “David Tanner” obtained or controlled significant CEC funds.

I think its important to point out the the e-gold database properly identified the location and the name James Tucker. E-gold accounts hold vast amounts of data which can be used to track down, identify and prosecute someone who misuses their system. With their database, e-gold identified who the SEC could not.

There are about a dozen ‘identifying’ money transactions showing the connection to James Tucker in St. Maarten. Consequently, the Receiver concluded and declared under penalty of perjury that David Tanner was an alias for James Tucker, whose last known location was St. Maarten, Netherlands Antilles.

The newer court documents showed that James Tucker, who is apparently an expatriate American, resides in St. Maarten, Netherlands Antilles.

An investigative report by Peter Woglom, Director of Investigations at Control Risks Group, LLC a prominent world-wide private investigative firm, uncovered that James Tucker was living on the Island of St Maarten residing at 13 Greenstarshell Road and described the house as “unapproachable”. His report said the “fortress” includes 24-hour security, six canine units, and security cameras “everywhere.” Tucker, rarely leaves the villa.

On May 10, 2007 the SEC moved to modify the judgment against David Tanner….and you won’t believe what it concluded!

Parts 1, 2, 3, 4

CORRECTION: My original story characterized DES in a less than favorable light and possibly associated with CEC. This was incorrect and I’ve received email from Phillip Risby who was representing Dynamic Environmental Solutions (“DES”). He has directed me to the Litigation Release from the SEC No. 19325 dated August 4, 2005 where the The Securities and Exchange Commission announced that on July 26, 2005, the Honorable Sam A. Crow of the United States District Court for the District Of Kansas approved a settlement between the Commission and Dynamic Environmental Solutions, Inc. (DES). Under the terms of the settlement, the Commission’s claims against DES were dismissed with prejudice. Along with the dismissal, $65,000 previously frozen by the Court was returned to DES and the court-appointed Receiver kept $190,439.62 for the benefit of defrauded investors.

My sincere apology to Mr. Risby.