Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 1 of 81 Page ID #:1162 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THOMAS EASTON CSB #109218 LAW OFFICE OF THOM AS EASTON 967 Sunset Dr Springfield OR 97477 Tel: 541-746-1335 easton3535@gmail.com JONATHAN H. LEVY CSB #158032 37 Royale Pointe Dr Hilton Head SC 29926 Tel: 202-318-2406 Fax: 202-318-2406 jonlevy@hargray.com Attorneys for Plaintiffs OF COUNSEL Richard E. Joseph, Esq. Michigan State Bar No. P39924 203 Mason St Charlevoix, MI 49720 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA DOUGLAS MATTERN, RICHARD JOSEPH, SANDRA LITTLE, CLARENCE FORCIER, K. ANN BRECKENRIDGE, ARLINE J. OLIPHINT, EWING LEE DALE, GREG TRAXLER, BETTE ANDERSON, LILLIAN CORNELIUS, STEVE FORTOSIS, LUKE E. YOUREE, BEVERLY STEWART, JAMES K BLANSCETT, LAURI (LAURENCE) WOODS, ROBIN WINGROVE, DEBORAH PROFFER, MARTIN DE COURCEY, DAVID LEMASTERS, MARC MINTZ, BENITA SANDIFER, LOWELL RADDER, HEIDI PLACH, DESMOND MENZ, BRAMWELL HESTER , PAUL MALCOLM DUFFY, MELANIE ROGERS, MARGARET GRANSHAW, NO. CV10-9860 DMG (JCx) VERIFIED SECOND AMENDED COMPLAINT CLASS ACTION JURY TRIAL REQUESTED SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 1 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 2 of 81 Page ID #:1163 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 STELLA TAN, JOSEPH KAYE, CHRIS YORKE, LES JONES II, VIRGINIA LAGOS, DEBBIE KNISLEY, ROB WILLIS, PATRICIA LEDOUX, MICHAEL SCHAETZEL, JANIS JOHNSON JOHN UYS, BARBARA POULSON, MARK MAYOTT, WAYNE & JADE DALY, husband & wife, FLORENCE MAJANIL, MARYANN BORZILLARY, DALE MATTHEWS, ESTHER LESPERANCE, ALLAN & DIANE BREIT, husband & wife, CARLYN PERONA, TYE NAKAWAGA, KAREN HOUDASHELL, JOYCE HOKE, GRACE ADELE, JAMES HORLACHER, ROBERT OLD, JR. on their own behalf and on behalf of those similarly situated, Plaintiffs, 16 v. 17 18 19 INCFORTUNE, a corporation, 20 DOT INTEL, LLC., a corporation, 21 SUCCESSRATE, INC., a corporation, 22 23 24 25 26 27 28 FINITY CONSULTING, LLC, a corporation, JOHN RAYGOZA individually and dba SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 2 of 81 PUSHTRAFFIC, dba truthdvdseries.com, recessionproofmillions.com, inc., a corporation, YOURAFFILIATESUCCESS, a corporation, JUMPLAUNCH, a corporation, FUTURE ENDEAVOR.COM, LLC, a corporation, Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 3 of 81 Page ID #:1164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15ROUNDS.COM and PUSHTRAFFIC, pushtraffic.com and SUCCESSRATE and JUMPLAUNCH and TAX GROUP CENTER, Taxgroupcenter.com, and Rich Maxwell and johnraygozaswebsites.com, TED MOLINA, DAVID SIPES individually & dba davidsipes.com, All sued herein individually & as a joint enterprise with joint & several liability, and DOES 1 to 100 including defendants, employees and contractors of the defendants who have deliberately masked their identities by using pseudonyms and falsely assuming the identities of A LDERSON, A NDREWS, B ECKTA, C OBB, D AVIES, D ENTON, K IRKLAND and others. Defendants. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 3 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 4 of 81 Page ID #:1165 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 II. FACTS COMMON TO ALL PLAINTIFFS & CLASS . . . . . . . . . . . . . . . . . . . . . . . . . 5 III. JURISDICTION & VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 IV. CLASS ACTION ALLEGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 V. FACTS PERTAINING TO FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 TABLE ONE - SUMMARY OF FRAUDULENT ACTS . . . . . . . . . . . . . . . . . . 18-27 VI. FACTS PERTAINING TO RICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 TABLE TWO - RICO PREDICATE ACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31-33 VII. PLAINTIFFS & THEIR ALLEGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 VIII. DEFENDANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 IX. PUNITIVE DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 X. EQUITABLE TOLLING & FRAUDULENT CONCEALMENT . . . . . . . . . . . . . . . . 77 XI. CAUSES OF ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 COUNT I ~ VIOLATION OF RICO § 1962(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 COUNT II ~ FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 XI. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 XII. PRAYER FOR RELIEF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 C ERTIFICATE OF S ERVICE ECF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 V ERIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 4 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 5 of 81 Page ID #:1166 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION 1. This Second Amended Complaint is a class action in which named Plaintiffs bring this action on behalf of themselves and all others similarly situated who have been victimized by Defendants. The events herein occurred from May 2007 to the present. The Second Amended reduces the number of causes of action to just two counts, Fraud and RICO, reduces the number of named Defendants and adds three Plaintiffs. 2. Defendants are all in the business of Internet Marketing and Consulting, Advertising, Search Engine Optimization, Web Hosting and similar pursuits but have also used these activities as a cover to commit fraudulent acts including but not limited to placing unauthorized charges on credit cards, wire, mail and bank fraud, extortion, money laundering, obstruction of justice and identity theft. 3. This is a civil action arising under federal law including the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. and 28 U.S.C. § 1332(d)(2)(A). II. FACTS COMMON TO ALL PLAINTIFFS & CLASS 4. The plaintiffs and class are a diverse group living on five different continents united by several common factors: (1) They all sought out a legitimate home based Internet business due to disability, retirement, unemployment or for other good reasons; (2) All were defrauded, lied to repeatedly, cruelly manipulated, and deceived over a period of time by defendants who falsely stated as fact that massive returns on their investments were assured in order to induce Plaintiffs to sign a so called "Verification" for services - a document termed a Verification and containing only the Plaintiff's signature, the primary purpose of which was deceive the PlaintiffS into believing they had no remedy at law and to mislead governmental agencies, banks, and credit card companies into believing that a legitimate and fair business transaction had occurred instead of fraud and racketeering. (3) Not a single plaintiff earned a return on their investment despite any services that were provided by defendants; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 5 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 6 of 81 Page ID #:1167 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (4) Losses to the plaintiffs are in excess of $900,000 and losses to the class are in excess of $5 million, almost all of which was financed by credit and debit card, mailed via US Postal Service or transferred by bank wire or PayPal; (5) Plaintiffs were often approached multiple times and resold on the same program or variations thereof often masquerading under various trade names controlled by the same group of defendants but all yielding the same result: No income or profits generated or tangible benefit to the plaintiff; (6) Defendants utilized false and stolen identities in inducing plaintiffs to buy their services and made unauthorized charges on credit cards; (7) Defendants on occasion utilized threats to plaintiffs including threats of lawsuits and routinely and intentionally made deceptive statements to banks, credit card companies, and government regulatory and law enforcement agencies. Defendants engaged in money laundering, interstate and international travel in furtherance of the criminal enterprise, and utilized the mails, wires and sophisticated telecommunications in the course of their activities; and Defendants falsely claimed close associations with Google, Sergey Brin, Clickbank, MasterCard, and the US Government. 5. Defendants are based in California but have worldwide reach and have physically traveled all over the United State and abroad to perpetrate their scheme. The Defendants have entered into a common scheme or criminal enterprise and each Defendant is jointly and severally liable to Plaintiffs for the actions of the others in furtherance of the RICO ENTERPRISE. 6. Defendants Ryagoza, Sipes, and Molina were all officers of the corporations: PushTraffic, IncFortune, Dot Intel, Inc, Successrate, Inc., YourAffiliateSuccess, FutureEndeavor, LLC and Jumplaunch and their various assumed and fictitious business names and websites at all times mentioned herein. Defendant Ted Molina is Raygoza’s brother and was jointly with Sipes and Raygoza in charge of sales operations at these various entities at all times mentioned herein. David Sipes is the principle officer of Finity Consulting LLC, and was with Molina and Raygoza in charge of SEO, seminars, affiliate SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 6 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 7 of 81 Page ID #:1168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sales and customer relations at all the Raygoza entities at all times mentioned herein. Regardless of how they were titled at the various RICO Enterprises, Rayoza, Sipes, and Molina jointly controlled the Defendant corporations and were not mere employees of the Defendant corporations which were their virtual alter egos. 7. The Defendants used websites, telephone boiler rooms, streaming video and audio, the US Mail, home visits, DVDs, YouTube(tm), Skype(tm), instant messaging, electronic mail, postal mail and in person seminars in Los Angeles, Malibu and Singapore to recruit and sell Plaintiffs. 8. Knowingly false statements were made to Plaintiffs by the Defendants including Raygoza, Sipes and Molina in order to gain access to their credit card and debit card accounts and place unauthorized charges. Statements varied by individual but all falsely stated guaranteed returns of some sort on their investment. Some plaintiffs, but not all them, received boilerplate documents termed Verifications to fax back to the defendants which were then used to block charge backs resulting from credit card disputes and to obstruct inquiries by the Federal Trade Commission, Los Angeles Police department and various state attorneys general public inquiry units. Defendants also assumed false or stolen identities in making false statements to the plaintiffs and offered false money back guarantees. The terms joint venture, matching funds and partnership with Raygoza and the defendants were also misused by defendants to deceive plaintiffs into buying high priced packages of dubious services from Defendants. 9. Plaintiffs who attempted to rescind the sales, even within state mandated time limits, were usually unsuccessful. Plaintiffs who disputed the credit card charges with credit card companies, banks, and regulatory agencies found themselves opposed by defendants' attorneys and paralegals who made intentionally misleading representations to the banks and state agencies that services for value had been provided but omitted mention of the false statements of fact, unauthorized credit card charges and inducements offered to Plaintiffs and the use of false and stolen identities to ensnare the Plaintiffs. 10. Plaintiffs and members of the class were sometimes provided a variety of services SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 7 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 8 of 81 Page ID #:1169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 including webinars, seminars, coaching, DVDs and materials - none of which resulted in Plaintiffs earning money but which were often used as an opportunity to remarket and up-sell Plaintiffs. 11. Some Plaintiffs and class members were transported by Defendants across state lines and internationally to attended in person seminars in California and Singapore hosted by Raygoza, Sipes and Molina. 12. Boaz Rauchwerger, a nationally known and well regarded motivational speaker, was a presenter at over a dozen of Defendants' seminars in 2008-2010, and was offered payment of up to $100,000 a month by Raygoza if he continued to cooperate with the RICO enterprise. However, Rauchwerger quit the RICO enterprise in disgust after he discovered and observed that seminar participants were highly distressed because of the false statements made by the defendants regarding guaranteed income that never manifest itself. Rauchwerger also learned Raygoza was using false testimonials and false identities to ensnare victims. Rauchwerger received many emails from desperate victims seeking help and despite offers from Raygoza of shared profits disassociated himself from the Defendants. This did not deter Raygoza who substituted a fictitious person of his own creation, Rich Maxwell, as an online pitch man in Rauchweiger’s place and usurped many of Rauchwerger's identifiable marketing mannerisms and proprietary content in order deceive existing and prospective clients. 13. The Plaintiffs were deceived through statements of guaranteed profits and refunds. The price of services provided were based on the amount of available credit the plaintiff possessed or the amount they could afford to pay or borrow and had no relationship to the actual value of any services provided. According to former employees of the Defendants, whose names cannot be revealed owing to legal intimidation by Defendants, the sales force of the Defendants would and did as a practice under the direction of Raygoza, Sipes and Molina state all manner of falsehoods and bogus inducements in order to gain access to the Plaintiffs' credit card accounts. 14. In one instance an honest marketing coaching employee, Ken Steele, was SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 8 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 9 of 81 Page ID #:1170 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 discharged by Molina and Sipes because he intervened on behalf of a class member when he prevented an obviously mentally disabled man from spending an additional $5000 with defendants. Other coaches quit in disgust after having to deal with repeated pleas by Plaintiffs and victims for return of their money or questions about the whereabouts of their guaranteed income. 15. No matter how much Plaintiffs paid, some much more money than others, all received the same return on their investment - zero. 16. Plaintiffs were led to believe they were investing in a viable and profitable business scheme as joint venturers or partners instead of purchasing services. Assuming the victim’s credit card account or resources held out, over $50,000 was at times extracted by Defendants before the victim learned that instead of an investment in a viable business, they had been sold a series of services under multiple program names that yielded no return on investment. 17. When the victim as often happened, attempted to reverse credit card charges, the Defendants instructed their legal staff to file misleading responses to consumer complaints and charge backs based on documents termed "Verficiations" that victims, but not the Defendants, signed under the influence of false oral statements of profits, duress and extortion often after their credit card accounts had already been emptied by the Defendants thus holding the victims' money hostage. Victims who persisted in complaining were threatened with defamation and extortion lawsuits by the Defendants and their attorneys who implausibly disclaimed any knowledge of the fraud committed by their salesmen or Molina, Sipes, and Raygoza. Plaintiffs reported receiving implied threats of violence and other similar threats from Raygoza, Molina and others members or employees of the Defendants. 18. An added element of the defendants racketeering involved a practice by defendants of credit card charges being assessed against Plaintiffs without their consent and then up-selling the victim with false statements that they would earn back the funds before the first credit card payment would come due thus knowingly kiting the credit card account since the statements of guaranteed returns would never materialize. Additionally, some SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 9 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 10 of 81 Page ID #:1171 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs who did not agree to purchase services or sign a Verification nonetheless were unable to reverse the unauthorized charges made to their accounts due to Defendants false protestations to banks and credit card companies that valuable services had been provided and the charges made with the consent of the victim. 19. Further, Defendants engaged in deceptive credit card practices to avoid fraud detection, in one case processing 21 separate $1,000 transactions in a short period to milk a credit card dry and increase its credit limit without the plaintiffs' knowledge. Further, at least one of Defendants' salesmen claimed the Defendants’ had an insider at a credit card network on their team. 20. Many of the Plaintiffs were vulnerable elderly (e.g. 80, 87, and 93 years old) and/or disabled (e.g. Paraplegic, stroke victim, terminally ill) and were specifically targeted by the Defendants because they did not understand the technical aspects of the Internet or the terminology utilized, could be easily led and were made to feel stupid or inadequate if they questioned the defendants’ intentions. As a practice the employees of the Defendants laughed and derided Plaintiffs who called in after the fact and were desperate for a return of their funds when the stated profits never materialized. In one case, indicative of the Defendants’ practice of abusing the elderly, the Defendants’ sales staff supervised by Molina, Raygoza, and Sipes placed an elderly individual on a speaker phone and laughed and joked as he begged for his money to be returned according to a former employee who witnessed the cruel spectacle. 21. It was a specific tactic of the Defendants to engage in and encourage financial abuse of elderly and disabled persons because it was discovered by Molina, Sipes, and Raygoza that they were easy marks that could often times be bullied or tricked into granting access to their credit card accounts and were unlikely to fight back effectively due to illness and disability. Likewise, Defendants targeted English speaking victims on five different continents since they perceived that class members from Singapore, South Africa, England, Canada, Malaysia, New Zealand, Ireland, Saipan or Australia would have no economically available legal recourse against the California based Defendants. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 10 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 11 of 81 Page ID #:1172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22. So called Verifications for services were utilized by Defendants that were often called investments or partnerships or joint ventures or trade secret protections in order to deceive plaintiffs into signing them. As a policy and practice, the Defendants did not memorialize the statements made by the Defendants’ sales force though there some conversations were recorded and are in the possession of Defendants. When a Plaintiff complained to Raygoza, Sipes, or Molina about the terms, statement or offers made by the Defendants or their agents, the Plaintiffs were falsely told the salesman no longer worked for the Defendants and that Defendants were not responsible for statements made by affiliates or employees when in fact the so called affiliates were Raygoza, Molina or their agents posing as the affiliates. When state and federal regulators and attorneys general public inquiry offices contacted the Defendants or their legal staff on behalf of victims Defendant companies, the Defendants stated as a policy that the corporations involved were no longer were in business and claimed the records were lost or destroyed in order to conceal the existence of the RICO enterprise as a whole and to obstruct justice. 23. Plaintiffs who in good faith attempted to actually follow the Raygoza get rich quick stratagem of trying to recruit further victims via essentially useless websites, invariably failed and wasted more money on advertising their websites with services like Google Adwords or had their accounts suspended by Google for violations of their anti fraud policy. The websites involved were template versions of the same website and carried copy identical or similar to: What I discovered will shock YOU! 91% of Work at Home programs are complete and utter SCAM! 6% of Work at Home Programs only really make around $500/month 3% of Work at Home programs make over $12,000 per month. Create INCOME through multiple sources and your interests Work ANYWHERE! Be YOUR OWN BOSS Have MORE TIME for your pleasures SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 11 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 12 of 81 Page ID #:1173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 John Raygoza is considered a GURU at making money from anywhere. He supports a few programs that are in that 3% mentioned above, that generates large amounts of income for people. I have found 3 of those programs and have spoken with John for Verification of the honesty level of these programs. 24. When Plaintiffs attempted to obtain refunds, mediate, dispute, negotiate or arbitrate their claims, they were met with further attempts to extort funds, new opportunities to invest money, or were abused, maligned and threatened by defendants including Raygoza, Sipes, Molina and their in-house legal staff with lawsuits for defamation, libel and extortion. 25. The Defendants also vigorously disputed credit card charge-backs which occurred when a victim disputed a credit card charge as fraudulent or unauthorized. Defendants Raygoza, Sipes, and Molina and their legal staff and lawyers were aware of the get rich quick statements made to plaintiffs by Defendants yet deliberately misled credit card companies, banks and state regulators about the nature of Defendants’ business practices and utilized the fraudulent Verification documents to oppose charge backs and legitimate requests for refunds. 26. The use of false and stolen identities was also a major feature of the Defendants RICO enterprise and sales practices. Defendants’ sales force as an established and specifically authorized practice often used pseudonyms to avoid detection or variations of their actual or one another's names. This practice also permitted the Defendants to disclaim knowledge to regulators, victims and credit card companies that a particular salesman was no longer employed or was an independent contractor. The Defendants and in particular Sipes and/or Raygoza also entered into a series of affiliate agreements with various established Internet marketers who sold reasonably priced products, usually for less than $100. The affiliates were encouraged to provide the names of software purchasers who might be interested in legitimate coaching or marketing services. Sipes, Molina, and Raygoza represented their services as legitimate and beneficial and pointed to their lavish Malibu, Singapore, and Los Angeles seminars and well known presenter such as Boaz Rauchwerger as proof of their goodwill and legitimacy. If a prospect provided by the affiliates purchased SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 12 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 13 of 81 Page ID #:1174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the defendants services the affiliate was supposed to get a commission set at 25% but often was not paid at all. Instead the defendants simply misappropriated the name of the affiliate, impersonated the affiliate and made all manner of false statements in the name of the affiliate. The advantage to defendants was that the name of the affiliate was known and trusted by the victim and in the event of a complaint; the affiliate and not defendants would face the blame and the Defendants’ attorneys were provided an opportunity for plausible deniability in response to allegations of fraud. 27. Known affiliates whose identities were stolen by Defendants from 2008 to present include Jeff Alderson, Charles Kirkland, Chris Cobb, John Denton, Ron Davies, Craig Beckta, and Jonny Andrews. When Kirkland became aware his identity had been stolen he repeatedly contacted Raygoza and Sipes who did not return his calls and continued the practice. Jeffrey Alderson contacted Raygoza in 2010 after numerous complaints by his clients but Raygoza denied stealing Alderson's identity and continued the practice. Jonny Andrews met with Raygoza and Sipes in person and when he received a complaint forwarded it to Sipes. When the impersonations continued, Andrews whose reputation and brand were damaged made ten additional cease and desist requests to Sipes which were ignored. John Denton terminated his relationship with Defendants after numerous reports that Defendants' sales staff were impersonating him. Sipes met with Craig Bectka in person and convinced him to become an affiliate. Within a month Beckta suspected defendants had stolen his identity. Sipes and Raygoza were notified by Beckta but did not respond immediately although Raygoza eventually denied any impersonation had happened. Nonetheless Beckta was not convinced and terminated his relationship with the defendants. On at least one occasion Mr. Beckta assisted a victim with a charge back against defendants. III. JURISDICTION & VENUE 28. This case arises under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq. and 28 U.S.C. § 1332(d)(2)(A). Accordingly, this Court has federal question jurisdiction over the subject matter of this action. 29. This Court has personal jurisdiction over Defendants in that they conduct for SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 13 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 14 of 81 Page ID #:1175 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 profit commerce within the State of California and/or are physically based in California and in this District. 30. Venue is proper in this Court because the Defendants are conducting business and entered into contracts in this District and may be found in this District. IV. CLASS ACTION ALLEGATIONS 31. Plaintiffs bring this action on behalf of themselves and as a class action under the provisions of Rule 23(a) and (b)(1) and (b)(2) of the Federal Rules of Civil Procedure on behalf of the following Class: All persons and entities, worldwide and domestically, that purchased services and/or products related to Internet Marketing from a Defendant between May 1, 2007 and the present (the “Class Period”) in reliance upon false statements or guarantees of: Earnings, return of investment, refunds, matching funds, false identities, false claims of association with Google, Clickbank, MasterCard, the United States government or their officers and directors or were the victims of unauthorized charges to their credit cards by the defendants. This class excludes any judicial officer who is assigned to hear any aspect of this action, governmental entities, Defendants, co-conspirators, and the present and former parents, predecessors, subsidiaries and affiliates of the foregoing. 32. Plaintiffs estimate that there are between two to three thousand of Class members as above described who are owed money by defendants, the exact number and their identities being known by Defendants, making the Class so numerous and geographically dispersed that joinder of all members in impracticable. 33. There are questions of law and fact common to the Class, which questions relate to the existence of the fraud and RICO Enterprise alleged, and the type and common pattern of injury sustained as a result thereof, including, but not limited to: (a) Whether Defendants and their co-conspirators engaged in a combination as an associated in fact enterprise to commit fraud, money laundering, wire fraud, bank and credit fraud, extortion, obstruction of justice, identity theft and other acts in furtherance of their fraud and RICO enterprise. (b) The identity of the participants in the associated in fact RICO enterprise; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 14 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 15 of 81 Page ID #:1176 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (c) The ongoing and interconnected nature of the RICO enterprise alleged in this Complaint and the nature and character of the acts performed by Defendants and others in furtherance of the RICO enterprise and fraud; (d) Whether the alleged activities of defendants violated the RICO act (e) Whether the conduct of Defendants and others, as alleged in this Complaint, caused injury to the business and property of Plaintiffs and other members of the Class due fraud by Defendants; (f) The effect of Defendants' acts on Interstate commerce; (g) The appropriate measure of damages sustained by Plaintiffs and other members of the Class. 34. Plaintiffs are all direct purchasers or were alleged by Defendants to be, of Internet Marketing Services from Defendants and their interests are coincident with and not antagonistic to those of the other members of the Class. Plaintiffs are members of the Class, have claims that are typical of the claims of the Class members, and will fairly and adequately protect the interests of the members of the Class. In addition, Plaintiffs are represented by lawyers who are competent and experienced in the prosecution of RICO and class action litigation. 35. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications under differing state and national laws. 36. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 37. A class action is superior to other available methods available for the fair and efficient adjudication of this controversy. Treatment as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently and without duplication of effort and expense that numerous individual actions would engender. The Class is readily definable and is one for which records should exist in the files of Defendants and third parties, and prosecution as a class SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 15 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 16 of 81 Page ID #:1177 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 action will eliminate the possibility of repetitious litigation. Class treatment will also permit the adjudication of relatively small claims by many Class members who otherwise could not afford to litigate against California based defendants from across the country and around the world claims such as is asserted in this Complaint. This class action presents no difficulties of management that would preclude its maintenance as a class action and is a garden variety claim for fraud and RICO remarkable only for the global scope and breadth of the Defendants actions. V. FACTS PERTAINING TO FRAUD 38. The elements of fraud under California law are a representation, usually of fact, which is false, knowledge of its falsity, intent to defraud, justifiable reliance upon the representation, and damage resulting from the justifiable reliance. Stansfield v. Starkey, 220 Cal. Appellant. 3d 59, 72 73 (1990). Federal Rule of Civil Procedure 9(b) requires fraud be plead with particularity - the fraud allegations as to each Plaintiff are set out with particularity in the section of this complaint following labeled “Plaintiffs” and “Common Facts” and herein incorporated by reference and the rudiments and pattern of fraud is further set forth in Table One infra. Due to the intentional use of false and stolen identities by the Defendants not all the true of identities of Defendants agents are known but each and every act committed was by Defendants or at their direction and the true details are known to the Defendants and Sipes, Raygoza, and Molina who were the principles among the Defendants responsible at all times for sales, seminars, affiliates, and customer service. Plaintiffs have attempted to inject precision or some measure of substantiation in order to place the Defendants on notice of their actions but in all cases the relationship between Plaintiffs and Defendants was relatively lengthy and ongoing with numerous interactions and the Plaintiffs in all instances are known to the Defendants and there is sufficient substance to the allegation to provide appropriate notice to defendants. Further the substantiating documents and records such as they exist are largely in the possession of the Defendants who maintained phone logs, phone recordings, documents, ledgers, emails, and other electronic data substantiating the substance of each and every one of the alleged transactions. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 16 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 17 of 81 Page ID #:1178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 39. The individual false statements made to Plaintiffs by Defendants regarding guaranteed profits and income that induced reliance are highlighted in bold and are contained in the fllowing section “Plaintiffs” and are incorporated herein by reference. 40. The Defendants used a variety of stock false statement or techniques to induce credible reliance by Plaintiffs including but not limited to the following: (a) Defendants obtained access to Plaintiffs’ credit card accounts by falsely claiming that they were just checking the victim’s credit worthiness or using an inside source to adjust the account in favor of the victim but instead the defendants simply placed unauthorized charges on the cards; (b) Defendants used the terms and offers of joint venture amd partnership with Raygoza when such joint ventures and partnerships as defined in the normal and legal meaning did not exist; (c) Defendants practiced up-selling and reselling to those they had initially defrauded with false stories of successor companies, new programs, or new services when in fact plaintiffs had no chance of earning money and only invested further funds because their initial funds were “held hostage” by the Defendants. (d) Defendants business claimed relationships that did not exist with Google, Sergey Brin, the United States government, Clickbank, Mastercard and their officer and directors that did not exist in fact; (e) Defendants misappropriated the identities of affiliate Internet marketers Jeff Alderson, Charles Kirkland, John Denton, Chris Cobb, Ron Davies, Craig Beckta, and Jonny Andrews to induce reliance by Plaintiffs as set forth in detail in the sections Plaintiffs and Common Facts. (f) Defendants as a practice as set forth in detail in the sections Plaintiffs and Common Facts and incorporated herein by reference made false statements that they were using so called matching funds to pay part of a Plaintiffs’ expenses or as a contribution to a partnership or joint venture with Defendants. The matching funds however did not exist and were not paid into any account or to Plaintiffs’ favor. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 17 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 18 of 81 Page ID #:1179 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (g) Defendants made a practice of inducing Plaintiffs to sign a document called a Verification by making numerous false statements of fact about trade secrets andthen utilized the Verification documents or had their law firm utilize these documents to misrepresent the situation to credit card companies, banks, agencies, and law enforcement to defeat Plaintiffs' attempts to secure refunds. (h) Defendants made false statements as to the existence of guaranteed return of income, guaranteed profits, and money back guarantees. 41. All plaintiffs lost their investments and suffered additional losses when they attempted to implement the defendants home business or implement advice provided by Defendants. All Defendants have profited to the detriment of the Plaintiffs. The actual details are plead in specificity in the Plaintiffs and Common Facts section of the complaint and the following table. 42. The following Table One summarizes the claims of each Plaintiff, the identity of the Defendants when known, the false statements or acts committed by the Defendants, and the Plaintiffs monetary loss: TABLE ONE - SUMMARY OF FRAUDULENT ACTS Plaintiff Defendant(s) or Agent Fraudulent Act or Statement 1. Guaranteed return of investment. Loss Mattern Silver $30,000 Joseph Martino 1. Guaranteed refund 2. Unauthorized charge to credit card $20,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 18 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 19 of 81 Page ID #:1180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Little “Denton” 1. Guaranteed return of investment 2. Use of stolen identity $10,000 Martino Forcier Bresckenridge “Unknown salesmen” “Jonny Andrews” 1. Guaranteed income. 1. Guaranteed income. 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized charge to credit card $5,000 $30,000 $4500 Oliphint “Ron Davies” 1. Guaranteed income. 2. Use of stolen identity. $10,000 Dale Traxler “Unknown salesmen” Tarentino 1. Guaranteed income. 1. Guaranteed income. 2. False statement of money on account in Plaintiff’s favor. $10,000 $58,000 Anderson “John Denton” 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized charge to credit card. $2000 Cornelius Verala 1. Guaranteed income. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 19 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 20 of 81 Page ID #:1181 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Fortosis Mendez 1. Guaranteed return of investment. 2. Guaranteed income. $15,000 Youree “UnknownSalesman” 1. Guaranteed income. $2400 1. Partnership with Martino Stewart “Craig Beckta” Raygoza 1. Guaranteed income. 2. Use of stolen identity. $1800 $10,000 Blanscett “John Denton” 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized withdrawal from debit card. $12,580 Woods “John Denton” Molina 1. Guaranteed income. 2. Use of stolen identity. $40,000 1. Guaranteed return Kinght Wingrove “John” of investments. 1. Unauthorized charges to credit card. $15,000 $3000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 20 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 21 of 81 Page ID #:1182 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Proffer Arturo Raygoza 1. Guaranteed profits. 2. Guaranteed return of investment. 3. Partnership with John Raygoza. 4. Matching funds. $18,000 De Courcey LeMasters Raygoza Martino 1. Guaranteed income. 1. Guaranteed return of investment. 2. Matching Funds. $10,282 $7,000 Mintz Martino Gale 1. Valuable traffic. $10,000 Sandifer Tarantino Hamilton “Jeff Alderson” 1. Use of stolen identity. 2. Guaranteed income. 3. Guaranteed return of investment. 4. Unauthorized charges to credit card.. $10,000 Radder Molina Raygoza 1. Guaranteed income. 2. Guaranteed return of investment. $25,000 Plach 23 24 Tarentino “John Denton” 1. Use of stolen identity. 2. Guaranteed income. $17,000 25 3. Guaranteed return 26 of investment. 27 4. Matching Funds. 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 21 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 22 of 81 Page ID #:1183 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Menz Law Mitchell “Jeff Alderson” 1. Guaranteed income. 2. Guaranteed refund. 3. Guaranteed return of investment. 4. Use of stolen identity. 5. False claim of affiliation with US government. $14,000 Hester Duffy Hamilton “Jeff Alderson” 1. Matching funds. 1. Use of stolen identity. $10,000 $3000 Rogers & Granshaw Murphy 1. Guaranteed income. 2. Guaranteed refund. $3400 Tan “John Denton” Bruce Raygoza Gold 1. Use of stolen identity. 2. Unauthorized charges to credit card. 3. Guaranteed refund. $24,000 Kaye Raygoza 1. Guaranteed refund. 2. Guaranteed income. $20,000 Yorke 23 24 25 26 27 28 Sainz 1. Guaranteed return of investment. $8000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 22 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 23 of 81 Page ID #:1184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Jones Raygoza 1. Joint Venture. 2. Guaranteed return of investment. 3. Matching funds. 4. Guaranteed profits. $12,500 Lagos Johnson 1. Guaranteed return of investment. 2. Unauthorized charges to credit card. $7,500 Knisely “John Denton” 1. Guaranteed income. 2. Use of stolen identity. $10,000 1. Guaranteed income. Artino 1. Guaranteed income. 2. Unauthorized Hill Willis Murphy charges to credit card. 1. Guaranteed return of investment. Ledoux Schaetzel Alhouse Robbins Knight Martino Johnson “John Denton” 1. Use of stolen identity. $50,000 1. Guaranteed income. 1. Guaranteed income. $7,000 $14,000 $10,000 $10,000 $5,000 25 26 2. Guaranteed income. 27 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 23 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 24 of 81 Page ID #:1185 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Uys Mitchell Sipes 1. Guaranteed income. 2. Guaranteed refund. $30,000 Poulsen “John Denton” 1. Use of stolen identity. 2. Guaranteed return of investment. $10,000 “Unknown IncFortune Salesman” 1. Access to credit card to check credit worthiness. 2. Unauthorized charges to credit card. 2. False claim of partnership. $20,000 Mayott Gold 1. Guaranteed income. $10,000 1. Use of stolen “Jeff Alderson” Daily “John Denton” identity. 1. Use of stolen identity. 2. Guaranteed income. Majanil Knight 1. Guaranteed income. 2. Matching funds. 3. Partnership. 4. Unauthorized charges to credit card. $6500 $18,000 $10,700 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 24 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 25 of 81 Page ID #:1186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Borzillary “John Denton” 1. Use of stolen identity. 2. Guaranteed income. 3. False relationship with Google’s founder, Sergey Brin. $1628 Matthews “John Denton” 1. Use of stolen identity. 2. Guaranteed income. 3. Matching funds. $6000 Lesperance Raygoza 1. Guaranteed income. 2. Guaranteed return of investment. $20,000 Breit Murphy Obando 1. Guaranteed return of investment. 2. Guaranteed income. $25,000 Perona Austin 1. Guaranteed income. 2. Guaranteed refund. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 25 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 26 of 81 Page ID #:1187 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nakawaga Hill Raygoza Martino 1. False relationship with Google and Clickbank claimed. 2. Access to credit card to check credit worthiness. 3. Unauthorized charges to credit card. 4. Guaranteed refund. 5. Guaranteed income. $30,000 Houdashell Hill 1. Guaranteed income. 2. Access to credit card to check credit worthiness. 3. Guaranteed retunr of investment. 4. Unauthorized charges to credit card. $21,000 Hoke Vincent 1. Unauthorized charges to credit card. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 26 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 27 of 81 Page ID #:1188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Adele Hill 1. Guaranteed income 2. Guaranteed return of investment $15,000 1. Guaranteed income Artino 1. Claimed money owed for services Knight Horlacher “John Denton” 1. Use of stolen identity. 2. Guaranteed return of investment. $6,000 $10,000 $26,000 Raygoza Sipes Old Unknown PushTraffic Salesman 1. Guaranteed income. $30,000 1. Guaranteed income $20,000 Raygoza 1. Guaranteed return of investment. 2. Unauthorized charges to credit card. TOTAL LOSSES TO PLAINTIFFS: $941,790 $11,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 27 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 28 of 81 Page ID #:1189 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. FACTS PERTAINING TO RICO 43. Plaintiffs incorporate by reference as if plead fully herein all the preceding paragraphs of the complaint and the following Sections regarding Plaintiffs and Defendants. 44. From all relevant times beginning with the founding of PushTraffic in May 2007 to present, defendants worked with one another to defraud Plaintiffs and others and to obtain the property of Plaintiffs and engaged in numerous instances of illegal conduct, including extortion, mail and wire fraud and money laundering as noted in the “Plaintiffs” section of the complaint in a pattern of racketeering activity involving interstate and international commerce. 45. Through a common scheme to defraud and racketeering activities the Defendants succeeded in taking illegally the property of Plaintiffs and other victims through an intricate pattern of individual transactions and group transactions controlled by John Raygoza, Sipes, and Molina and utilizing their Corporate entities and their various fictitious names. These same individuals, Raygoza, Molina, and Sipes also individually and through employees committed the racketeering activities both directly and indirectly. 46. The RICO Enterprise is an association in fact enterprise consisting of all the defendants regardless of their separate legal identities. The structure of each of the Corporate members of the RICO Enterprise invariably included some combination of Raygoza, Sipes, Molina or all three as principle officers united in a common purpose to defraud victims. The RICO Enterprise also worked through independent law firms and financial institutions to achieve its goals. The RICO enterprise is coherent and ongoing, still in operation using at a minimum the names JumpLaunch, John Raygoza, FutureEndevaor, IncFortune, and Finity Consulting with some combination of Raygoza, Sipes, and Molina or all three involved at all times. 47. While the Defendant corporations engaged in various racketeering activities they did also service legitimate clientele and provide marketing and web hosting services separate from the RICO enterprise. For example Future Endeavor entered into an agreement with Progressive Tax Group in 2010 to supply leads and Jump Launch provides web hosting SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 28 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 29 of 81 Page ID #:1190 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 services to many individuals unrelated to events complained of herein. The records of the Defendants will contain numerous other instances of legitimate marketing, advertising, and web hosting clientele separate from the RICO Plaintiffs or Class members. 48. In carrying out the scheme to defraud plaintiffs and other victims, Defendants engaged, inter alia, in a pattern of conduct in violation of criminal statutes including mail fraud, wire fraud, violation of the Hobbs Act, money laundering and interstate and foreign travel in aid of racketeering enterprises as follows: (a) The defendants made a series of knowingly false statements that were virtually impossible to realize in order to induce victims to transfer funds to them. The false representations were not just mere statements or expressions of opinion but were deliberately made as part of an ongoing racketeering scheme which falsely offered to deliver such things as Guaranteed Return on Investment, Money Back Guarantee, Joint Ventures and Partnerships which did not exist and return of Initial Investment before Credit Card Payments came due. The details of the fraud are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and in the section labeled Fraud and all incorporated herein by reference. (b) The Defendants engaged in a pattern of fraud by using the fraudulently obtained Verification forms to fend off charge backs and investigations by banks and credit card companies and in doing so deliberately misrepresented through attorneys and others that the Plaintiffs were merely disgruntled customers. (c) Defendants as a regular business practice placed unauthorized charges on victims’ credit and debitcard accounts and then either induced the victim to sign a Verification while their money was held hostage or simply kept the money while falsely claiming to third parties services had been provided. The details of these practices are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and Fraud and incorporated herein by reference. (d) The defendants engaged in money laundering through the practices of disguising credit card and PayPal transactions as a series of small transaction to avoid anti fraud SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 29 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 30 of 81 Page ID #:1191 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 program detection and manipulating credit card accounts to permit overcharges. The details of these practices are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and Fraud and incorporated herein by reference. (e) The activities of the Defendants in the formation and execution of the scheme and artifice to defraud, acts of extortion, and money laundering caused and continue to cause pervasive and substantial harm to persons engaged in interstate and foreign commerce, including harm to the plaintiffs, victims, and potential victims. Plaintiffs were neophyte Internet marketers or people looking for legitimate work at home opportunities. Defendants have amassed their millions almost exclusively by abusing credit card accounts of the elderly, disabled, the working poor, retired, and unemployed, all victims who can least afford these losses. The RICO Enterprise reached out to encompass victims in Malaysia, Australia, England, Ireland, Saipan, and Canada as it reckoned that foreign residents would have little or no recourse against the defendants. In committing these acts, the RICO Enterprise also utilized the US Postal Service to obtain funds from victims and mail out materials including DVDs and promotional items. 49. During the relevant times, and in furtherance of and for the purpose of executing the scheme and artifice to defraud, Defendants traveled interstate and internationally to Singapore and used the telephone and Internet technology to threaten acts of violence in furtherance of unlawful activity and to promote, manage, establish, carry on, and facilitate the promotion, management, establishment, and carrying on of unlawful activity. 50. During the relevant times, Defendants knowingly and intentionally and attempted to transport, transmit, and transfer monetary instruments and funds from inside the United States to or through a place outside the United States, and to a place in the United States from or through a place outside the United States, with the intent to promote the carrying on of specified unlawful activity and maintained an account at Wells Fargo Bank to handle incoming bank wires from overseas victims. Foreign plaintiffs have transmitted funds to accounts controlled by the Defendants within the United States by wire, electronic transfer and credit card including but not limited to Defendants' accounts with Wells Fargo, SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 30 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 31 of 81 Page ID #:1192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Authorize.net, and PayPal. 51. The following Table describes in summary the predicate criminal acts perpetrated by the Defendants. TABLE TWO - RICO PREDICATE ACTS Plaintiff(s) Horlacher Defendant(s) Raygoza Sipes Predicate Act 18 U.S.C. § 1341 Mail Fraud - Plaintiff mailed a check for $27,000 to Defendants relying upon false statements by Raygoza and Sipes that they would triple his money in 90 days. All All - use of the telephone and Internet to defraud Plaintiffs 18 U.S.C. § 1343 Wire Fraud including use of the telephone See Section following entitled “Plaintiffs” for details. May 2007 to present Date September 2010 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 31 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 32 of 81 Page ID #:1193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mattern Little Oliphint Dale Blanscett DeCourcey Lemasters Radder Hester Kaye Jones Willis LeDoux Johnson Mayott Daily Matthews Lesperance Breit Perona Houdashell Hoke Horlacher All including Raygoza, Sipes, Molina 18 U.S.C. § 1953 Interstate and foreign travel or transportation in aid of racketeering enterprises May 2007 to present Defendants caused and made arrangements for Plaintiffs to travel to Los Angeles, Malibu or Singapore. See Section following entitled “Plaintiffs” Old Breit Defendants’ employee Obando was sent to Plaintiffs homes to set 2009 June 2009 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 32 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 33 of 81 Page ID #:1194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nakawaga Raygoza Martino 18 U.S.C. § 1956 Money Laundering Transactions were disguised as a series May 2010 Houdashell Hill of many smaller transactions to avoid detection by anti fraud programs at credit card companies and PayPal. July 2009 Dale Molina Severino 18 U.S.C. § 1951. Interference with commerce by threats or violence Threats of implied violence and legal actions were made to intimidate victims and discourage them from pursuing refunds. Death threat made to Plaintiff to quell complaints. January 2010 VII. PLAINTIFFS & THEIR ALLEGATIONS 52. Plaintiffs hold all the Defendants jointly and severally liable for their losses. The following facts and allegations, however, refer to specific Defendants when and if SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 33 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 34 of 81 Page ID #:1195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 identifiable with which Plaintiffs had contact and the specific acts unique to each Plaintiff from which they complain against the Defendants individually and as class representatives. Defendants in this section specifically refers to all Defendants individually and as a combination and as a RICO enterprise. All Plaintiffs were induced to pay funds to the Defendants based on material misrepresentation of fact upon which they relied and which were knowing falsehoods made by the Defendants and in furtherance of their scheme. So there is no question that each and every Plaintiff was induced by and relied upon false statements of fact made by the Defendants, where available these exact false statements of facts are highlighted in bold letters. Where relevant the ages and/or disabilities of the plaintiffs have also been highlighted in bold to show the tendency of the Defendants to target the aged, vulnerable and infirm. 53. As a result of the practice by Defendants of using false, and stolen identities as well as multiple and interchangeable Corporate identities and fictitious business names, the exact identities of some of the Defendants are in doubt but it is not in doubt that they were all agents acting on instructions of the Defendants or the Defendants themselves using assumed identities. Further, Plaintiffs dealt with numerous Defendants and were often unsure as to which Defendant they were actually dealing with and Corporate defendants were often used interchangeably by the Defendants. The management of the Corporate defendants always however included Raygoza, Sipes, and Molina thus the Corporate entities were used interchangeably as part of the RICO enterprise and to commit fraud. 54. Douglas Mattern is a resident of Palo Alto, California. His total losses are $30,000 including $20,000 to PushTraffic and $10,000 to IncFortune. In August of 2008, he paid $5,000 and received training from PushTraffic. After two sessions he did not receive any communication for weeks. Then around March of 2009, he received a telephone call from PushTraffic through one of their salesmen named Matthew Silver. Silver made many false statements including claiming that a large amount of hits to plaintiff’s website that would be guaranteed to recover his investment in a couple of weeks and then make substantial profits. Silver cited a figure of $40,000 profit and more. Plaintiff therefore SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 34 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 35 of 81 Page ID #:1196 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 paid PushTraffic an additional $15,000 based on Silver’s false statements of profits. After plaintiff paid the $15,000, there was no communication from PushTraffic. For weeks plaintiff sent emails, postal mail, and telephone calls to PushTraffic, Matthew Silver, and John Raygoza and received no response. Finally he did get a telephone call from John Raygoza, but this came after he sent to Raygoza an email stating he had contacted his credit card bank's fraud unit. Raygoza said to Mattern that Matthew Silver did not work for PushTraffic, but was an independent salesman that gets contracts for PushTraffic and he (John Raygoza) was not responsible for any statements made to plaintiff. Raygoza than invited plaintiff to his office in Los Angeles. Plaintiff stayed in Los Angeles for two days getting training. After that visit, he again received no communication from PushTraffic until he complained again. After this he was assigned to a new trainer that led to nothing of value. Then he was told he was in the VIP group would receive personal training from John Raygoza. But after a few sessions there was no more information nor was he informed of any further seminars. This occurred on two occasions. In summary, after more than a year and $20,000 plaintiff had nothing to show for it. His account at PushTraffic showed zero commissions despite providing many leads to PushTraffic for which he was to be paid $5 each. For one project he provided 1,000 leads for Raygoza and his account still read zero. He complained about this in a telephone call to PushTraffic, but he never received an answer. During this period Plaintiff also paid $10,000 for training from IncFortune unaware it was the same entity as PushTraffic. IncFortune however provided no training or anything of value to plaintiff. Later Plaintiff, who had yet to earn a dime, was telephoned by a person who called himself John (not John Raygoza). John said that things were going to change for him, and after three breaks in the conversation (when John said he was conferring with Raygoza) John claimed things would be very positive for Plaintiff as Plaintiff had been promoted from the PushTraffic VIP team (Level III) to the partnership program with Raygoza (Level IV). To become a partner he would need to pay another $30,000, which Plaintiff declined. Around a month after that incident, Plaintiff received a call from IncFortune from a person who claimed he had purchased all of Raygoza's companies and he was going to make things SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 35 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 36 of 81 Page ID #:1197 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 right. He said that Raygoza was not involved or even in the office but after plaintiff made a few derogatory remarks about Raygoza, the call terminated. When Plaintiff recently sought a return of his $30,000, he was accused by the defendants’ attorney of record of extortion, defamation, slander, and conspiracy. In sum, Plaintiff specifically relied on several false statements made by Silver. Raygoza claimed Silver was not an employee and denied Silver's statements of a guaranteed return on investment and when confronted with this fact, Raygoza refused to provide a refund and opposed Mattern’s attempt to obtain return of his funds eventually instructing his attorneys to threaten Mattern with a lawsuit for defamation, libel and extortion. 55. Richard Joseph is an attorney in good standing in Michigan. For the past 7 years he has suffered from T6 paraplegia and currently receives Social Security Disability. Over the years as his condition has worsened, he sought a legitimate work at home opportunity. In November 2008, he was telephoned by salesman “Rob Martino” from PushTraffic’s sales force supervised by Molina. Martino gained Joseph’s trust and learned all about his disability, struggles, and goals. Martino falsely feigned an interest in Joseph’s well being and Martino even claimed his own brother was a paraplegic which was very likely a lie to gain Plaintiff’s confidence. Martino convinced plaintiff to invest $20,000 with PushTraffic but when plaintiff learned that Martino would not be his mentor, he cancelled the Verification and the $20,000 was refunded. In February 2009, Martino again began calling Plaintiff. Plaintiff’s health condition had gotten far worse and he was battling for his life with a deadly MRSA staph infection requiring hospitalization. Even though aware of this, Martino persisted until Plaintiff orally agreed to a refundable $15,000 turnkey investment with Martino and PushTraffic as Plaintiff could do no work and could not attend the seminar offered. Martino swore that if this did not work out, all he had to do was push a button and the money would be refunded. Plaintiff was briefly released by ambulance from the hospital to attend to make final arrangements as it was thought he would likely die from MRSA. Martino called Plaintiff and demanded he sign a contract, Plaintiff physically could not and Martino then pressured Plaintiff’s secretary into signing for him. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 36 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 37 of 81 Page ID #:1198 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff was in the hospital from January to May 2009 and survived the MRSA infection. He then discovered an unauthorized $20,000 charge on his credit card. Plaintiff attempted to dispute the charges but PushTraffic induced the credit card companies to uphold the charges by producing the so called Verification that had not been signed by Plaintiff. Plaintiff, who was desperately in need of funds to buy medical equipment for his recovery had relatives attempt to entreat Raygoza to refund the money, however the money was not refunded. In 2010 plaintiff has spent additional months hospitalized and in May 2010 was cold called by a person falsely posing as Denton from one of the Raygoza entities who claimed he was a friend of Martino in an unsuccessful attempt to obtain yet more funds. At all times herein, Plaintiff was in excruciating pain, heavily medicated and fighting a life threatening illness. Defendants’ actions have not only damaged Plaintiff by taking away money needed for the necessities of life but has also harmed his self esteem as an attorney who was abused by Defendants. Were it not for the false statement of a no hassle refund made by Martino, Plaintiff would not have entered into any negotiations with Defendants and in any event Plaintiff lacked the capacity to sign a Verification and in fact did not sign a Verification or authorize charges to his credit card. 56. Sandra Little, of Revelstoke, British Columbia, Canada, was victimized in the amount of $15,000 by IncFortune and DotIntel. Plaintiff was initially signed up by a salesman falsely assuming the identity of John Denton who said he was with IncFortune. For $10,000 “Denton” stated Plaintiff would be trained by experts to make $20,000 a month and would definitely make her initial investment back in one month. Based on these intentional misrepresentations she gave “Denton” $10,000. Plaintiff has no previous experience with Internet marketing and trusted “Denton” who she believed to be the real John Denton, a well known Internet marketer. This false Denton tricked plaintiff into signing a Verification. Plaintiff worked the program diligently with no success and found the training offered to be confusing and unhelpful to her. About three months into the training, she received a call from a man called “Rob Martino” working for the Defendants. Martino said that “John Denton” had noticed that she hadn’t made any money to date and that her success SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 37 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 38 of 81 Page ID #:1199 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 was very important to them. Martino said he would go into all her accounts and fine tune them so she could start making money immediately. Martino stated he would provide 30,000 client leads for her and one on one coaching. Based on Martino’s statements Plaintiff signed up for an additional $5,000 with DotIntel as an inner circle client. No services were provided except a seminar. Plaintiff was then tricked into signing a Verification document in October 2009 with JumpLaunch, Successrate and DotIntel by Martino and “Denton” in order to protect so called trade secrets. Plaintiff shortly thereafter contacted John Raygoza and David Sipes about her concerns and was told: “You signed a contract and have no remedy.” Sipes and Raygoza kept ignoring her attempts to get answers until she started threatening to expose them. At one point, Raygoza and Sipes said they would refund her the $5,000 but not the $10,000. When Plaintiff asked for a portion of the additional $10,000 she was accused through the Defendants’ current attorney of record of: extortion, defamation, slander, and conspiracy, and threatened with a lawsuit. 57. Clarence Forcier, of Bloomington, Minnesota, was victimized in the amount of $30,000 by the Defendants with the last act in April 2010. Plaintiff is age 73 1 and suffered two debilitating strokes in 2007-2008 with resulting brain damage and is classified a vulnerable person pursuant to Minnesota elder protection statutes. While looking for a work at home opportunity he happened across an ad for PushTraffic. Plaintiff was told by Defendants’ salesman: “It was $10,000 for the really big money,” in October 2008 and then it was $19,000 for “3 web sites we are building for you as we speak in January 2009.” Defendants made statements that were relied upon that guaranteed Plaintiff would recoup his investment. The $19,000 was supposed to include advertising. The Defendants provided a single website hosted by JumpLaunch. In October and November 2008 Sipes provided technical services to Forcier which seemed useless and made no sense to him. Forcier was contacted again in April 2010 inviting him to affiliate again with the Defendants. Plaintiff never received any money and was charged for web hosting by the Jumplaunch, paid $1000 1 All ages as of October 1, 2010. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 38 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 39 of 81 Page ID #:1200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to Google for advertising on Sipe’s advice and is now facing foreclosure and eviction from his home due to the false statements of the Defendants. The website provided at Plaintiff’s expense steered new victims to the Defendants. When Plaintiff attempted to complain, he was brutally intimidated by Defendants’ attorney Weitz who told him he had a “contract” and there was nothing he could do about it and Defendants’ legal staff further mischaracterized the situation to the Minnesota Attorney General as one of a disgruntled customer who had received valuable services and trade secrets. The Defendants were aware that Plaintiff was disabled and vulnerable and exploited the situation to deceive him into going into debt. Plaintiff is now suffering extreme hardship as a result of the Defendants’ actions. 58. Plaintiff K. Ann Breckenridge, of Canada, age 66, was victimized in the amount of $4,500 or $5,713 (Canadian) by PushTraffic. Plaintiff is disabled and receives a disability pension due to polio related paralysis of her right arm, and back and left shoulder problems. In April 2009, a PushTraffic salesman using the false identity of well known Internet marketer, Jonny Andrews, falsely stated plaintiff would make $50,000 in profits to her website and would not have to pay for services until the profits were achieved. “Andrews” asked and received Plaintiff’s Master Card number and immediately charged $4,500 to it placing her account into overdraft without her consent. Plaintiff never entered into a a written agreement for services and never signed a Verification, she tried to cancel immediately and has repeatedly requested a refund from both Molina and Raygoza to no avail. PushTraffic materially misrepresented the situation to Plaintiff’s credit card company when she disputed the charges by falsely claiming she had entered into a contract for services. 59. Arline J. Oliphint, of Phoenix, Arizona, was victimized in the amount of $10,000 by PushTraffic and IncFortune. In July 2009, plaintiff, who was recently widowed, received an unsolicited phone call by a man who called himself “Ron Davies” a well known Internet marketer known to Plaintiff. The bogus Ron Davies falsely stated to the Plaintiff her existing online business would quickly earn $10,000 a month if she signed up. Various other false statements were made to the Plaintiff causing her to pay a total of $10,000 to the Defendants SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 39 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 40 of 81 Page ID #:1201 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in a series of credit card transactions. She became concerned when she decided to look for the PushTraffic website and discovered there was a discrepancy between what was offered on the website and what had been verbally sold to her. At that point, she had only managed to pay $7,500 of the $10,000 that had been requested. But the website showed two packages priced at $5,000 and $10,000 respectively, with services similar to what was described on the phone. Both packages were nearly identical and both included the 3-day seminar. The only difference was that the $10,000 package included a joint venture with John Raygoza. So she asked if she could stay with the $5,000 package and get a refund of $2,500. The salesman laughed at giving a refund, then started to say the $7,500 could be adequate, but then convinced her that the $10,000 level was necessary for the VIP treatment they wanted to give her. Plaintiff, a widow, was ruined financially by the Defendants and lost all her savings. The $10,000 taken from her by Defendants was the proceeds of her late husband’s life insurance policy. 60. Ewing Lee Dale, age 70 of Jackson, Georgia, was victimized in the amount of $20,000 by PushTraffic and IncFortune. In May 2009, plaintiff who is retired and in poor health with diabetes and Parkinson's Disease was cold called by a PushTraffic salesman who convinced him to part with $20,000 in exchange for false statements of big profits. Plaintiff did not understand what he had signed up for and never earned any money. Plaintiff was targeted after dinnertime when the salesman found him to be sleepy, disoriented and agreeable to their demands In January 2010, another salesman from IncFortune cold called plaintiff after dinnertime and attempted to obtain $15,000 with similar false statements and obtained Plaintiff’s credit card number and used it to charge $15,000. Plaintiff was later able to get the $15,000 charges removed from the credit card by Chase. Plaintiff has suffered financially, his credit was damaged and he has difficulty paying medical bills. Plaintiff was repeatedly targeted by the Defendants because he was vulnerable to their lies, sick, and elderly. Plaintiff received nothing of value in exchange for his funds. When plaintiff persisted in complaining, he was threatened with death and a lawsuit by PushTraffic employee “Hernan Severino” and defendant Ted Molina. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 40 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 41 of 81 Page ID #:1202 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 61. Greg Traxler, a citizen of Colorado, was victimized in the amount $58,000 by IncFortune. In December 2009 IncFortune’s salesman, Robert Tarentino, lied repeatedly to plaintiff about guaranteed profits to obtain $30,000. Tarentino then sent a voice recording to plaintiff to assure him that $30,000 in profits was already on deposit at IncFortune in Plaintiff’s account and that it would be wired as soon as plaintiff sent another $28,000 investment and signed the fraudulent Verification with IncFortune and JumpLaunch. Tarentino falsely stated that plaintiff was a now a Partner with IncFortune. Plaintiff, believing he had no option to obtain back the initial $30,000, paid the additional $28,000 and signed the Verification in the amount of $58,000. Plaintiff provided wire transfer coordinates for the $30,000. Plaintiff received no money or anything of value from IncFortune and JumpLaunch in exchange for his $58,000 partnership investment. Sipes, using a Jumplaunch email address, then took charge of the account but provided none of the stated services or investment returns nor did he speak with the Plaintiff on February 2010 when plaintiff tried to call him. 62. Bette Anderson, of Minneapolis, Minnesota , was victimized in the amount of $2,000 by IncFortune. Plaintiff was contacted by someone falsely claiming to be John Denton. “Denton” claimed that he was a millionaire who had achieved his wealth through Internet marketing. He stated that through the program he was promoting, and that plaintiff would have a check for $5,000 by the following Friday. He talked about flying her down to Malibu, expenses paid, for one on one instruction on how to implement this program. “Denton” claimed and Plaintiff relied on his false statement that she would earn $1,000 per day, $5,000 per week and likely $175,000 per year. Plaintiff told “Denton” she was currently unemployed with little money. He emphasized how this program could change her situation. “Denton” asked about her financial accounts and credit cards and asked if she had $10,000 to get started in this endeavor. Plaintiff told him she only had two credit cards, one with a $500 credit limit and the other with a $3,000 credit limit. He said something to the effect of let’s see how much credit you have available on the higher limit card, and before she knew it, he had charged her card for $2,000 without her consent. Plaintiff voiced SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 41 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 42 of 81 Page ID #:1203 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 concern that she had bills that were auto charged to the account and that this could put her over the credit limit and that she would have no additional credit with which to charge other needed items. “Denton” further stated that to achieve the $10,000 amount he had initially wanted to charge to her account, she needed to do some leveraging. She then found out from the credit card company that he actually had attempted to charge the card an additional $500 without her knowledge or approval, but fortunately it did not go through because the credit limit was maxed. As predicted, she did sustain a $40 over limit fee due to subsequent auto charges for monthly bills. “Denton” induced her to sign a Verification with IncFortune for services which he misrepresented as a mere formality to protect trade secrets and stated in an email: “Attached is a Verification agreement to make sure that I am doing business with you, Bette. Please print out the agreement and fax it back to me so we can get your business set up immediately. My fax number is 310 634 0490.” The Verification agreement obtained by IncFortune and JumpLaunch was later used to prevent Plaintiff from successfully disputing the credit card charge. When Plaintiff attempted to rescind but IncFortune intentionally misrepresented the situation to both Capital One in June 2010 and the Minnesota Attorney General in March 2010 as a civil dispute rather than the truth which was plaintiff had been defrauded by “Denton’s” false statements of guaranteed returns. Plaintiff also discussed the matter with John Raygoza who said he would “Take care of plaintiff,” Plaintiff interpreted that as a threat based on the tone of delivery by Raygoza which was menacing. 63. Plaintiff Lillian Cornelius, age 80 of Toronto, Ontario, Canada, was victimized in the amount of $10,000 in installments by IncFortune, PushTraffic, JumpLaunch and Successrate beginning in September 2009 after relying on the false statements of a PushTraffic salesman. Pushtraffic telephone salesman Richard Verala stated to plaintiff she would earn a minimum of $2500 within 30 days to induce her to sign up. He sent an email to her stating she would recoup her investment in 30 days. Verala was aware plaintiff was elderly and knew little about the Internet in general. Plaintiff attempted to follow the advice of IncFortune, Successrate, JumpLaunch and PushTraffic but achieved SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 42 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 43 of 81 Page ID #:1204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 no results. Plaintiff complained in person to David Sipes in December 2009 about the statement made by Verala and provided a copy of the email to Sipes but received no response from Sipes. Sipes in fact was well aware of the false statements made by the Defendants’ sales force but deflected complaints about it as part of his role in the RICO enterprise. Emails to Sipes and Raygoza seeking an answer also achieved no effect instead Plaintiff was solicited by a person posing as “Jeff Alderson” who attempted to obtain more funds from her on behalf of defendants. When Plaintiff tried to follow the program as outlined by Successrate her Google Adwords account was suspended due to multiple violations of Google’s anti fraud program. The website copy provided by the Defendants in exchange for $10,000 was the usual template full of lies and deception: Avoid Scams: Make Sure You Read This Important Message. Tired of systems that don't work?? See my Top 3 Work at Home Programs. Hi, I’m Lillie. I spent 13 months and over $13,600.00 searching for honest, work at home programs. What I discovered will shock YOU! 91% of Work at Home programs are nothing but false hope! 6% of Work at Home Programs only really make around $500/month 3% of Work at Home programs make over $12,000 per month. Create MULTIPLE streams of INCOME Work ANYWHERE! I Discovered 3 Programs that I'm using to achieve my $10,000 a month goal. I spend around 12 hours per week and soon will be generating full time income [http://bestwaytomakemoneyfromhome.com last accessed 9-27-10] Plaintiff is elderly and had to borrow money from relatives to pay the credit card debt incurred. Plaintiff has further suffered emotional distress and economic hardship caused by the Defendants’ intentional and negligent actions towards her. The 80 year old Plaintiff was made an unwitting accomplice to the Defendants’ scheme which harvested the email addresses of potential victims generated by the web page paid for by the Plaintiff. Although SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 43 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 44 of 81 Page ID #:1205 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ontario lacks specific legislation regarding elder financial abuse, the Public Health Agency of Canada defines Elder Financial Abuse as a crime: “Abuse is the misuse of an older adult's money or belongings by a relative or a person in a position of trust...Financial abuse is a CRIME.” [See www.phac aspc.gc.ca/ncfv cnivf/publications/agefinancialab eng.php last visited 9/27/10]. 64. Steve Fortosis of Sarasota, Florida, was victimized in the amount of $15,000 in March 2009 by PushTraffic. PushTraffic salesman Leo Mendez relentlessly pressured plaintiff and his wife into parting with $15,000 by guaranteeing over and over again that PushTraffic knew they were total beginners online and that PushTraffic would earn back the money for them while they learned internet marketing. Mendez said the $15,000 would be recouped within a few months and that plaintiff would earn an easy $5,000 a month thereafter. Plaintiff was provided the usual template type websites hosted by JumpLaunch that falsely promised big returns on investments. When two months passed without any evidence of earning the money back, PushTraffic’s Joel Lansky said he was going to put plaintiff into a new, huge money-making project called Recession Proof Millions. PushTraffic salesman Frank Perez also attempted to get Plaintiff to invest another $15,000 with false statements that $700,000 could be earned in one year. When plaintiff asked for proof, Perez was not heard from again. Through April 2009, Plaintiff attempted to diligently utilize the PushTraffic materials and resources provided by Sipes to earn money but never earned anything. 65. Luke E. Youree, of Saint James, New York, was victimized in the amount of $4,200 by PushTraffic and Youraffiliatesuccess. Plaintiff, who is disabled and receives Social Security Disability for schizoaffective disorder, was cold called by a PushTraffic telephone salesman in August 2007. The salesman stated plaintiff would make thousands of dollars per week on his computer, working a few hours per week from home. Plaintiff paid $2,400 and received the usual useless template website and was charged hosting for it by JumpLaunch. Plaintiff diligently followed the PushTraffic program for one year and made no money. Defendants’ salesman Rob Martino contacted plaintiff in July 2008 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 44 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 45 of 81 Page ID #:1206 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and offered to put him in the inner circle or the fast track where plaintiff would work with John Paul Raygoza, personally. Plaintiff paid another $1,800 but received neither new services nor any contact from John Raygoza. Plaintiff made no money and only accrued credit card debt as a result of the Defendants’ misrepresentations and has suffered extreme financial hardship due to his limited income and inability to work. 66. Plaintiff Beverly Stewart, age 65 of Greeley Colorado, was victimized in the amount of $20,000 by PushTraffic and IncFortune from July to September 2009. Someone at PushTraffic posing as well known Internet marketer Craig Beckta called Plaintiff on July 3 2009. He said he would personally build a website for her and she’d be making money by July 10, 2009. “Beckta” said plaintiff would be going to his Malibu house to celebrate all the money she'd be making by then. Plaintiff paid $10,000 to PushTraffic but never earned any money. On July 23, 2009, Frank Perez from PushTraffic called plaintiff. He stated to plaintiff he would personally put up a website for her that would make money the next day. When she said Craig Beckta had stated the same thing but that she hadn’t made any money yet, Perez said she had signed up for the wrong program. Plaintiff paid the $10,000 but a couple hours later plaintiff called “Woody” in billing at PushTraffic and rescinded the transaction. Plaintiff was shocked on August 22, 2009 when she received her credit card statement and found out the second $10,000 had been charged without her consent. Plaintiff then spoke with both Sipes and Raygoza. Raygoza stated to plaintiff he would refund the $10,000 if she signed a Verification with IncFortune for $10,000 and then he would refund the whole $20,000. Raygoza kept the additional $10,000 and only refunded the first $10,000. Molina who identified himself as head of sales then tried to sell more services to plaintiff in September 2009 by stating she would receive, Tons of money within 15 days. Plaintiff never earned any money and her ongoing complaints are unanswered by the Defendants. In Colorado, under C.R.S. Title 18, an at risk adult is any person 60 years of age or older, or any person who is 18 years of age or older and is a person with a disability, as defined in C.R.S. 18 6.5 102(1). The Colorado Legislature has recognized that elderly are at greater risk of financial exploitation than the general SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 45 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 46 of 81 Page ID #:1207 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 population. See C.R.S. 18 6.5 101. 67. James K Blanscett, age 69 of Kennewick, Washington, was victimized in the amount of $13,800 by IncFortune. Plaintiff responded to an email ad by the actual John Denton on 21 October 2009. Plaintiff was referred to Defendants at which point Defendants' salesman assumed the name John Denton and stated many times that plaintiff would earn money until plaintiff believed him. Thereupon “John Denton” immediately referred plaintiff to John Raygoza and IncFortune/PushTraffic to join their programs and for which Plaintiff was charged $10,000. Plaintiff called the false “John Denton” a number of times with little success in obtaining assistance, expressing dissatisfaction with program, and requesting a refund. Plaintiff also had contact with David Sipes during the seminar he attended in Los Angeles on 3/4 December 2009 that was sponsored by IncFortune. Sipes conducted the seminar and made a presentation on Free Traffic Strategies. Sipes stated to Plaintiff that he was associated with IncFortune as a business partner. Presenters at the seminar included Boaz Rauchwerger, John Raygoza, Folusho Orakunle, and David Sipes. Sipes suggested Plaintiff contact him direct and provided a phone number and email address for concerns or problems. Plaintiff sent email to David Sipes (david@incfortune.com) as suggested by Sipes on 14 December 2009 requesting assistance in resolving problems and received no response. Plaintiff then sent a number of emails to David Sipes, Jack Hill, “John Denton,” and John Raygoza requesting a refund but no refund was ever received. A PushTraffic salesman also withdrew $1,380 from Plaintiff’s checking account without his consent and which resulted in an additional overdraft fee of $1,200. 68. Lauri (Laurence) Woods, age 87 of Sunnybank South Queensland, Australia, was victimized in the amount of $40,000 by PushTraffic and $15,000 by IncFortune and JumpLaunch. In August 2008, plaintiff was approached by PushTraffic salesmen “Denton,” Molina, and others who eventually extracted $40,000 total from plaintiff. Plaintiff believed he was purchasing a money-making internet business based on the representations of Denton and Molina but instead earned nothing. In April 2010, Plaintiff was approached by Bruce Knight of IncFortune who falsely claimed he had nothing to with Raygoza or SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 46 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 47 of 81 Page ID #:1208 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PushTraffic in order to gain Plaintiff’s trust due to the original losses in 2008. Knight made statements he would help Plaintiff earn back his money through a hosting deal with JumpLaunch, Inc Fortune and Successrate. Plaintiff paid IncFortune $15,000 by credit card but tried to cancel within 24 hours when he became suspicious that IncFortune was affiliated with PushTraffic. IncFortune did not reverse the charges and opposed the charge back but Plaintiff eventually regained control of the $15,000 payment. Elder Abuse in Queensland, Australia is defined as follows: Any act occurring within a relationship where there is an implication of trust, which results in harm to an older person. Abuse can include physical, sexual, financial, psychological and social abuse and/or neglect. 69. Robin Wingrove, age 62 of Duffy, Australia, was victimized in the amount of $3,000 (Australian) by PushTraffic in July 2009. Plaintiff is a retired civil servant and was cold called in July 2009 by a PushTraffic salesman named “John.” When plaintiff said he did not have the $7,000 John required, John suggested that he check Plaintiff’s credit cards for the balance. Plaintiff gave their numbers to him on the very strict proviso that he was not to take any money out. About 2 minutes later, Plaintiff got a call from one of his two credit card providers asking if he had made a purchase of $3000. Plaintiff denied the charge and asked if could they stop it which they did. Plaintiff immediately telephoned his other credit card provider who informed him that a payment of $3,000 had gone through and when Plaintiff asked them if they could stop it they replied in the negative. John called Plaintiff back and stated to he was guaranteed an income of $9,000 per month and ignored Plaintiff’s protests. When Plaintiff did receive a Verification document after the charges had been made from PushTraffic, he signed it feeling he had no other remedy in Australia. Plaintiff has earned no money to date. 70. Deborah Proffer, age 50 of Advance, Missouri, is totally disabled with severe neck and back problems which make it very hard for her to function normally which Defendants and Raygoza were made aware of, and was victimized in the amount of $18,000 by PushTraffic in April 2009. In April 2009, Plaintiff was first contacted by “Rob Arturo” who signed her up for $2,500. Arturo described to Plaintiff a mentoring program to build SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 47 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 48 of 81 Page ID #:1209 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 profitable websites and coaching would be provided for her by Defendants. During the conversation he stated plaintiff would be great for their Inner Circle SEO program. An hour or two later Raygoza called plaintiff about a joint venture with him. Raygoza said he would match whatever amount of money plaintiff invested. Plaintiff stated she could not afford to lose a lot of money but Raygoza assured her he didn't want to lose money so therefore she would not lose money. Raygoza stated that Plaintiff would be receiving checks from his office for $5,000 every week from the joint venture. Plaintiff explained to Raygoza in one of many phone conversations that she was looking for a way to supplement her disability income. Raygoza assured her that she was going into a joint venture with him and she would receive a check for $5,000 a week directly from his office. Raygoza told her he would also pay her credit card bills from his office also, therefore she had nothing to loose. Plaintiff was guaranteed by Raygoza to make back money fast enough to pay the credit cards very quickly and she also wouldn't have to worry about paying them back. Raygoza made multiple false representations to plaintiff to lure her into handing over the money. Plaintiff never received a dime and never again heard about the joint venture. Plaintiff finally tracked down Raygoza and complained in a phone call. Raygoza asked when she began with PushTraffic and she gave him the date and he stated that her six months were up and said, “Tough luck.” Plaintiff became very angry and Raygoza hung up on her. 71. Martin De Courcey, of Ireland, was victimized in the amount of $10,282.74. $5,947 directly and the remainder in costs incurred trying to follow Raygoza’s plan by PushTraffic and YourAffiliateSuccess in 2007 and 2008. Plaintiff purchased a copy of the Defendants' YourAffiliateSuccess handbook for $37 on the 30th December 2007. Within a day Raygoza phoned him to encourage plaintiff to attend a seminar which he was holding in Singapore at the end of January 2008 called The Truth. He told Plaintiff that it would be life changing and guaranteed that plaintiff would be making some serious money before he even left the weekend long course. Plaintiff paid to PushTraffic $5,000 to reserve a seat at the seminar based on Raygoza’s false statements. In Singapore, Plaintiff was told by SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 48 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 49 of 81 Page ID #:1210 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Raygoza he could earn $40,000 a month. Plaintiff returned to Ireland in February 2008 after completing the three day course and made a number of phone calls to Raygoza seeking his help in trying to set up an Internet business. Raygoza provided nothing useful but did manage to extract an additional $800 from plaintiff. In July 2008 plaintiff attempted to get a refund to no avail as Raygoza told the credit card company that services had been provided. 72. David Lemasters, age 63 of Olive Hill, Kentucky, was victimized in the amount of $7,000 by PushTraffic in July 2009. Plaintiff was telephoned by PushTraffic salesman “Rob Martino.” Martino stated as a fact that plaintiff would recover his investment within 30 days (before his credit card bill would be due). Martino claimed money would arrive within a week of signing up full well knowing that plaintiff would most likely never receive any money and definitely not within thirty days. Plaintiff returned a signed Verification on July 24, 2009. However, his credit card was charged on July 23, 2009 before the Verification was received. Though the Verification was for $10,000, Martino falsely said he would cover $3,000 of it to induce Plaintiff's reliance. The $7,000 put Plaintiff’s card at its limit. The Verification provided that an instant turnkey website would be provided. Plaintiff diligently tried to work the Raygoza plan, attended training seminars, and purchased advertising as directed by the Defendants for the worthless template website that promoted the Defendants’ scheme, but the turnkey website did not earn anything for plaintiff. In December 2009 plaintiff tried to obtain a refund from Raygoza and Sipes but received no response from them. 73. Plaintiff Marc Mintz, of Monroe Township, New Jersey, was victimized in the amount of $10,080 by PushTraffic in 2008 to 2009. In November 2008, Plaintiff purchased a product called the 4 day challenge; this was promoted as a program for newbies that said anyone with a computer and basic computer knowledge could understand the program and instructions, establish a web site, use affiliate marketing with Click Bank Products to make commissions. Plaintiff could not understand the product and requested a refund of $79.99 from PushTraffic. Plaintiff then received a phone call from a man who identified himself as Dave Gale from PushTraffic, also on the phone was a Rob Martino. Dave Gale made a sales SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 49 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 50 of 81 Page ID #:1211 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 pitch regarding purchasing an affiliate marketing program with PushTraffic. Gale claimed that PushTraffic would drive valuable money -making traffic to Plaintiff’s website. In November 2008, Plaintiff paid PushTraffic $10,000 via Master Card for the so called Mastermind program. Plaintiff received the usual template websites promoting Raygoza’s fraudulent get rich quick scheme including the notorious copy: I have been involved in affiliate marketing now for over 10 years and have found that over 97% of the so called get rich quick programs are scams. . . I have personally reviewed the top 50 programs online for affiliate marketing and the only 2 or 3 that work are . . “ Plaintiff protested that this website was fraud and that there were thousands of similar websites all put up by defendants. Further Plaintiff protested he could not vouch for the veracity of such statements and did not want to be part of a fraudulent scheme but was ignored by Defendants and earned no money. Plaintiff’s wife is battling cancer and the financial loss to plaintiff has been an extreme hardship. 74. Benita Sandifer, retired and age 66 of Colchester, Essex, England, was victimized in the amount of $10,000 by IncFortune and Successrate in late 2009. Plaintiff was cold called by a salesman who called himself Robert Tarantino. He offered her one to one mentoring and coaching by experienced Internet Marketers. She said that she could not afford such help as she was retired on a pension and could not go into debt and his response was to say that they offered different levels to suit peoples' finances. She was told that she would have 6 money-making websites set up and ready to sell top products that were tested and known to make massive sales and that these millionaire marketers would be holding her hand to ensure her success. She asked why they would do this and the reply was that they were looking to set up a training company and were looking for testimonials from successful pupils. She was passed at some point onto another man who said he was Harwood Hamilton and said something to the effect that if she was serious about making money on the internet this was her big opportunity. At some point she was passed onto a man falsely identifying himself as Jeff Alderson. He asked if Plaintiff had a credit card and if SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 50 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 51 of 81 Page ID #:1212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 so he could just ascertain what her credit level would be if she gave him details. $5,000 was the sum spoken of and she was told it was nothing really just a small investment because her six websites would have three times that in her account in less than 30 days so she wouldn’t be paying any interest. Alderson (thought to be Raygoza using a stolen identity) said Plaintiff would have enough money within a week or two to go on a cruise to Alaska and she should book one straight away if she signed up. “Alderson” said he would be sending a confidentiality and Verification document to sign just to protect their secret methods from being copied. Plaintiff did this and then never heard another word from him. Embedded in the document was the price, not the $5,000 agreed to but $10,000. Plaintiff was then charged $16,000 on her credit card by IncFortune and tried to get a refund. Sipes finally refunded the $6,000 in January 2010 but not the other money and disclaimed any responsibility for statements by the Defendants sales staff. Plaintiff received nothing of value to her and earned no money. 75. Lowell Radder, age 71 of Bellingham, Washington, was victimized in the amount of $25,000 by PushTraffic in 2009. Ted Molina and John Raygoza at PushTraffic made various statements on several occasions that plaintiff would start earning money immediately which Radder relied upon but he never saw a dime. Molina and Raygoza told plaintiff he would earn all his money back before the credit card bill arrived but instead eventually gave him a template website for YourAffiliateSuccess. After Molina and Raygoza extracted $25,000 from plaintiff they ceased communication and only after Plaintiff called for days, several times a day, was he was given a seminar in Los Angeles and provided coaching but nothing came of it In the way of the stated profits. Plaintiff unwittingly managed to ensnare a few victims for the Defendants but was not paid for that either. Finally he realized he had been duped and discontinued his association with the Defendants. 76. Heidi Plach of California, was victimized in the amount of $15,000 by PushTraffic in 2009 plus another $2,000 spent on advertising. On June 30, 2009, Plaintiff was contacted by Robert Tarentino of PushTraffic. He falsely stated that “John Denton” personally had asked him to call about a website to conduct business. He told Plaintiff that SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 51 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 52 of 81 Page ID #:1213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 this would cost $10,000 which was to be used to pay for advertising for the year. He would put in another $10,000 of his own money which would guarantee her a profit of at least $180,000 for the first year. Then he put her through to some posing as “John Denton.” When she spoke with “Denton,” he falsely stated he would put in another $5,000 so plaintiff could make $250,000 her first year. Plaintiff was charged $15,000 on her credit card. When she complained, “Denton” guaranteed she would make me the $15,000 within 21 days. The $15,000 was not used for advertising, so plaintiff had to spend an additional $2,000 to promote the worthless website that was eventually provided. Plaintiff never received any money and has not heard from PushTraffic since August 2009; and still owes $15,000 plus interest on her credit card. 77. Plaintiff Desmond Menz, age 60 is a resident of Australia, was victimized in the amount of $13,000 by IncFortune in June 2009 by credit card and wire transfer. He was cold called and offered big profits by an IncFortune salesperson, “Patricia Law,” if he invested. IncFortune salesperson Patricia Law told Plaintiff of an elaborate scheme involving thousands of e-books and so called Beta platforms which would generate guaranteed income of $9,000 to $19,000 per week. Law also falsely claimed that IncFortune was a US government contractor in order to obtain the Plaintiff’s trust. When Plaintiff threatened to reverse the wire transfer, IncFortune’s employee Ruel Mitchell guaranteed the income estimate, guaranteed income within a week or two, guaranteed the $14,000 would be paid back shortly and that it was refundable. Plaintiff was also phoned by John Raygoza impersonating well known Internet marketer Jeff Alderson in an attempt to assuage Plaintiff's misgivings. According to the real Alderson in an email to plaintiff after the fact: This is terrible! These people have no right to ever call anyone and say they are me. That is fraudulent...John Raygoza's email is jraygoza@spamarrest.com. I am emailing him right now myself. I won't stand for this behavior directed at any of my customers. In July 2009 Plaintiff attempted to get a return of funds after receiving no tangible services or income. Through June 2010 Plaintiff has contacted numerous individuals at PushTraffic, including John Raygoza, but has received no refund. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 52 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 53 of 81 Page ID #:1214 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 78. Plaintiff Bramwell Hester, age 69 of San Remo, Australia, was victimized in the amount of $10,000 by IncFortune, Successrate, and JumpLaunch in 2009. Using Plaintiff’s personal information from his web hosting account at JumpLaunch, salesman Harwood Hamilton, cold called Plaintiff on behalf of IncFortune. Hamilton falsely stated he would match the $10,000 price of the training offered by IncFortune in order to make the training seem more valuable. Hamilton sold plaintiff a seminar package in Los Angeles for $10,000 around August 1, 2010. On August 16, 2010 Raygoza attempted to obtain more money from Plaintiff by calling him and stating that for another $10,000 he will take Plaintiff to his house for personal one to one coaching in the Internet business. Plaintiff however had no further funds. Plaintiff attended the seminar run by Sipes and Raygoza but found it was worthless and that individuals attending had all been charged varying amounts. Plaintiff suffered severe swelling in his legs due to the long trip from Australia which required several months of treatment. The so called seminar did not even involve use of a computer. Instead of teaching the marketing and profit making secrets of the internet as stated, Plaintiff received nothing of value to him and earned no money. Plaintiff was provided a template website touting a Raygoza program entitled Recession Proof Millions. After a brief period of time, Plaintiff removed the website as it became apparent it existed only ensnare other victims for the Defendants. The website Recession Proof Millions featured the likeness of plaintiff used without his consent and a false quotation: In the first few minutes of sitting in front of Rick as he taught with such boundless enthusiasm, I felt I loved this man! Indeed it would be hard not to. I learned so much from him then and now even more from this excellent production. If you hate wading through waffle, you will love this! The presentation is concise, accurate and step by step. I highly recommend this epic work . Bramwell Hester. Along with Plaintiff are featured the pictures of and quotes by Raygoza and Sipes as if Plaintiff is one of their associates along with the false person Rich Maxwell who was created by Defendants when Boaz Rauchwerger ceased his affiliation with Defendants. 79. Paul Malcolm Duffy, of Peacehaven, East Sussex, England, was victimized in the amount of $3,000 by IncFortune in 2009. In October 2009, Internet Marketers Charles SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 53 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 54 of 81 Page ID #:1215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Kirkland and Jeff Alderson sold Plaintiff a modestly priced product called Social Money Magnet. Following the purchase Plaintiff was given access to the download page where at the bottom of that page there was a message saying: You will get a personal call from one of my Millionaire Mentors! Plaintiff was telephoned by an IncFortune-PushTraffic-Successrate salesman who said he worked with Jeff Alderson and falsely stated Jeff personally wanted plaintiff in the program. The salesman made false statements that convinced Plaintiff the program was legitimate and he was misled into believing the call was from Jeff Alderson’s office as the salesman falsely said Jeff had just come into the office and he broke away from me to speak with Jeff about taking the last place available for coaching. With “Jeff’s” approval, the salesman hyped up the fact that Jeff wants plaintiff in and that plaintiff would lose the place if he did not take it there and then. The price was $15,000 but the salesman settled for $3,000 because that was all the credit plaintiff had on his card. IncFortune also attempted to charge a second $3,000 fee to plaintiff’s credit card without his consent. 80. Plaintiff Melanie Rogers, who has a learning disability, has received SSI and attended school through the 9th grade, and her mother Margaret Granshaw, age 70, both of Louisiana, were jointly victimized in the amount of $3,600 by defendants in 2009. In April 2009, Melanie who was unemployed received emails from John Denton advertising a money making free website for $40. Melanie purchased what she thought was a website from Denton but did not get a free website, instead she received a bill for $118 from JumpLaunch for hosting services. Melanie did not understand and called JumpLaunch. But when Plaintiff asked for a refund from Defendant JumpLaunch they said James Murphy would contact her. Murphy contacted Plaintiff and sold her CDs by John Raygoza called The Truth for $399 after she said she could not afford $5,000 to $15,000 for coaching services. In August 2009, James Murphy repeatedly called plaintiffs and falsely said he was the owner of IncFortune. Murphy told plaintiffs they would make $5,000 within 45 days and $5,000 each month thereafter. Murphy spent two hours making his pitch. More and more calls ensued and when Plaintiffs asked that they be stopped, Murphy said they would only stop when Plaintiffs paid SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 54 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 55 of 81 Page ID #:1216 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and signed a Verification with IncFortune. Plaintiff told Murphy her credit cards were maxed out but Murphy stated that if she gave him the account numbers he could extract money from them and in any event she would earn her costs back in 45 days. Murphy was able to extract money from Plaintiffs’ debit card and Plaintiffs paid IncFortune $3,400 for training based on Murphy’s assurances of a guaranteed return of investment. Plaintiffs attempted in vain to utilize the services to earn back their money but have received nothing to date and cannot comprehend the material offered to them. The so called coach was abusive when Plaintiffs could not understand him or his instructions. After several weeks Plaintiffs repeatedly complained about the lack of money. On September 14, 2009, Murphy replied: I think you are looking for a get rich quick scheme and they do not exist. Plaintiffs continued to complain on an almost daily basis as to the lack of money. Finally, on December 10, 2009, Raygoza called Plaintiff Melanie Rogers and told her she was not working her business. Plaintiff told Raygoza she had no business. Raygoza then said that people pay him $15,000 to show them how to make $20,000 or more. Raygoza asked plaintiff if she had that kind of money. When plaintiff responded to Raygoza that she had no money, he abruptly hung up the phone. Plaintiffs continued to complain to Defendants through January 2010 but achieved no results. 81. Stella Tan, age 72 of Canada, was victimized in the amount of $30,000 (Canadian) by IncFortune in July 2009. In June 2009 Plaintiff, who has a heart condition and lives on a small fixed pension, paid $97 for a software package called ExplosiveCashins from John Denton and MyEbizNow.net, Inc. of Naples, Florida, which was never fulfilled. Plaintiff at the same time was sold a hosting package at JumpLaunch for $118. Someone posing as “Denton” called Plaintiff personally to congratulate her and give his personal phone number which turned out to be the phone number for PushTraffic as Plaintiff learned when she called to complain about non fulfillment of her order. In July, plaintiff received a call from “Bruce” at PushTraffic who said he was upgrading her from the package sold her by Denton. Plaintiff believed this was a replacement of the $97 software she never received from Denton and signed the faxed Verification without carefully SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 55 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 56 of 81 Page ID #:1217 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 reading it and was instead immediately charged $4,000 on her credit card towards an obligation of $20,000. On July 20th, 2009 Raygoza contacted Plaintiff who told Raygoza that she had credit card debt problems and Raygoza said he would help her get out of debt. Plaintiff gave him 5 credit card numbers. He then charged her $20,000 and maxed out her credit cards without her consent. Plaintiff then tried to cancel and get a refund. Raygoza agreed to refund $4000 but never did. On July 27, 2009 Plaintiff was emailed by “Jeff Gold” from PushTraffic that despite the fact she would be missing out on $25,000 a month in profits, the $4000 charge would be refunded. The credit card disputes were largely unsuccessful due to intentional misrepresentations by Defendants’ attorney that plaintiff had received valuable services to the various credit card companies. Plaintiff never earned any money and was not refunded $4,000 by Gold and was unable to obtain the return of the unauthorized charges by Raygoza for $20,000. 82. Joseph Kaye, of Houston, Texas, was victimized in the amount of $20,000 by PushTraffic in May 2009. Plaintiff tried to cancel the transaction on the third business day after he was charged $20,000 by PushTraffic. But Raygoza managed to convince Plaintiff not to cancel by promising a 100% money back guarantee for a full year and that Plaintiff would be debt free in 30 days. Plaintiff went to Los Angeles for a seminar and was unconvinced and again tried to cancel in July 2009. Plaintiff was approached by “Hernan Severino,” Raygoza's personal assistant, in regards to setting up his inner circle exclusive for those coming to learn Raygoza’s inside secrets. When Plaintiff persisted in disputing the credit charges in July 2009, Severino conducted a campaign of inimidation through a series of threatening phone calls in which he repeatedly stated: You will get no further help, and will miss out on everything we are doing to help, and you are going to regret this, because we will take legal action against you and you will lose even more unless you sign a new Verification and give us valid credit card numbers, we are going to rake you over the coals. We know how to do that, we have an attorney who is a specialist in this and never loses. Severino caused plaintiff such distress with these seemngly credible threats of litigation he signed a new Verification in July 2009 and gave out SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 56 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 57 of 81 Page ID #:1218 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 his credit card number but came to his senses and was able to get the bank to rescind the second transaction. Raygoza has not refunded Plaintiff’s initial money, the Defendants have opposedPplaintiff’s attempt to clear the charge from his credit account, and Plaintiff has received nothing of value to him. 83. Plaintiff Chris Yorke, age 60 of Mosman, Australia, was victimized in the amount of $8,000 by PushTraffic in May 2009. On May 7, 2009, a representative of PushTraffic named Alex Sainz phoned plaintiff and sold him a working profitbale commercial website to be built within in 30 days. The site was to be built with the aid of PushTraffic mentors, who, Sainz claimed, had a 100% success record. Plaintiff was told by Sainz he would earn his money back in 30 days. Based on this statement, Plaintiff paid $8000 to Defendants. When PushTraffic did not perform as stated, he complained to Ruel Mitchell and Harwood Hamilton at PushTraffic and he attempted to seek a refund from Sipes but received nothing despite sending many faxes and courier letters. 84. Les Jones II, age 66 of Excelsior Springs, Missouri, was victimized in the amount of $12,500 by PushTraffic in 2009. After being prospected by several PushTraffic salesmen, Raygoza personally contacted Plaintiff and laid out an elaborate scenario regarding a Joint Venture with Raygoza and Raygoza guaranteed that plaintiff would make enough money to replace his investment after the first month and to pay back Raygoza who falsely claimed he would contribute the same amount of cash as plaintiff. Raygoza stated there would be profits of $30,000 to $50,000 after 90 days. Plaintiff paid $12,500 but heard nothing more until he complained and was invited to Los Angeles for a seminar. Plaintiff never received any money or joint venture but did receive training materials and was credited commissions from JumpLaunch’s affiliate program but was never paid the commissions. Plaintiff has a heart condition and limited mobility; defendants made off with half his retirement savings which had already been diminished due to the faltering economy. Plaintiff’s quality of life has been dramatically affected due to Defendants. 85. Plaintiff Virginia Lagos, of Sydney, Australia, was victimized in the amount of $10,000 (Australian) by PushTraffic. Plaintiff was contacted by telephone salesman “Steven SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 57 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 58 of 81 Page ID #:1219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Johnson” of PushTraffic in September 2008. The price of the proposed services was supposed to be $5,000 (US) but instead Plaintiff’s credit card was charged $7,500 (US). Johnson falsely stated on September 21, 2008 that Plaintiff would earn the money back by September 26, 2008 from the website that would be provided. Plaintiff relied on the false statement made by Johnson. Plaintiff received some coaching services which were unilaterally suspended by Sipes in August 2009 and applied to Raygoza in writing for a refund but never received an answer. Plaintiff was supposed to receive a money-making website but received only the domain greatestwebhosting.com hosted by JumpLaunch with no content. 86. Debbie Knisely, of Sale Creek, Tennessee, was victimized in the amount of $25,000 by PushTraffic and the Defendants in late 2009. In August 2009 Plaintiff ordered a product for $50 from John Denton’s MyEbizNow.NET Inc. One of Defendants’ salesman posing as John Denton of MyEbizNow.NET Inc. then called Plaintiff at work in August of 2009 and talked to her about investing $10,000 with PushTraffic, Successrate, IncFortune, and JumpLaunch. Plaintiff was told that she would start making money before the credit card bill went through. Plaintiff paid “Denton” in four consecutive installments from her debit bank card account. In September 2009 Plaintiff received an email from Sipes identifying himself as Vice President of Successrate. A month later Plaintiff went to Los Angeles where she met Raygoza who falsely stated to her that she would make big money. In December 2009, Robert Artino of PushTraffic called and talked Plaintiff into spending another $5,000 with IncFortune, YourAffiliateSuccess, and JumpLaunch, telling her he understood that she didn’t have the time and that he would treat her website as his own, do everything it needed to get it to make money. A couple of days later PushTraffic’s “Jack Hill” called Plaintiff and talked her into spending another $10,000 and again assured her that everything would be taken care of as far as getting this immensely profitable website up and running as if it was his own and that plaintiff would be part of the Inner Circle team. The $10,000 was paid in a wire transfer of $6,500 and PayPal electronic transfer of $1,500 with the understanding the balance of $2,000 would be paid once the SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 58 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 59 of 81 Page ID #:1220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 website earned money. However, Plaintiff’s credit card was immediately charged $2,000 without her consent. Plaintiff complained to Raygoza in December 2009 and tried to rescind the $10,000 transaction but Raygoza did not respond. Plaintiff was told by a JumpLaunch employee in February 2010 she was in a program called Your Site Name Affiliate. Plaintiff never earned any money and tried to obtain a refund but it was opposed by the Defendants. 87. Rob Willis, of Perth, Western Australia, was victimized in the amount of $10,000 by IncFortune in June 2009. After purchasing an inexpensive software program from Charles Kirkland & Jeff Alderson, Plaintiffs contact information was provided to IncFortune. IncFortune’s salesman “James Murphy” contacted plaintiff and sold him a two day seminar in Malibu and three ready-made cash producing websites that were guaranteed to give a return on Plaintiff’s investment within 60 days. Plaintiff relied on Murphy's false statement of Return on Investment within 60 days and entered into an agreement with Defendants. Plaintiff received a trip to Los Angeles but no websites or cash and met with Sipes who provided some seminar materials. Plaintiff eventually learned through a former PushTraffic coach that the entire program was a fraud and that victims never earned any money even if they diligently followed all the advice provided. Plaintiff attempted to obtain a refund form Murphy and Sipes but received no substantive response except that he needed to have more faith in the program. 88. Patricia Ledoux, of Lake Forest, California, was victimized in the amount of $7,000 by PushTraffic in October 2008. In October 2008 plaintiff purchased services from PushTraffic for $5,000. She was cold called by Matt Alhouse who said he was an account manager at PushTraffic, he stated that with mentoring Plaintiff would receive a free website, 25 hours of one on one mentoring along with 33 hours of group mentoring and 4 free passes to their seminar in Los Angeles. Plaintiff was told that for additional $2,000 (originally $10,000), plaintiff would receive increased traffic to her website and she agreed. PushTraffic provided neither appropriate training nor any traffic. What induced plaintiff to pay PushTraffic was that plaintiff was told by Alhouse she would generate sales of $3,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 59 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 60 of 81 Page ID #:1221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to $5,000 per week in the first 90 days. Plaintiff was provided some coaching services but after several months her coach informed her that PushTraffic was an unethical scam. Plaintiff complained to Harwood Hamilton at PushTraffic that she was not receiving services or the free passes to the seminar When Plaintiff attempted to obtain a refund or seek mediation through the Better Business Bureau, Defendants’ opposed the refund and deliberately misrepresented the situation as one of a legitimate misunderstanding to the BBB even though Defendants knew the Plaintiff had been defrauded. Plaintiff has heard nothing from PushTraffic since October 2009. 89. Michael Schaetzel, of Fond du Lac, Wisconsin, was victimized in the amount of $14,000 by PushTraffic in 2009. In June 2009, Plaintiff was initially approached by Donny Robbins of PushTraffic who obtained $1,000 from him. Shortly thereafter Bruce Knight obtained another $4,000 from plaintiff. Rob Martino obtained $9,000 more by stating plaintiff would be in an exclusive group if he paid and would make lots of money. Plaintiff relied on the representations made by Robbins, Knight, and Martino who all stated plaintiff would start making money within a month. Plaintiff became suspicious within 30 days and got in contact with a former PushTraffic mentor, Ken Steele, who warned him that PushTraffic was a fraudulent scam. Plaintiff tried to cancel in July 2009 but was threatened with legal action by the Defendant's employee Hernan Severino who said Defendants were multimillionaires with powerful lawyers who would call all the shots and that plaintiff had better do as they say or else. Plaintiff then reversed the credit card charges but Sipes convinced the credit card company to reinstate the charges with intentionally false representations that valuable services had been provided. Plaintiff received nothing of value. 90. Janis Johnson age 58 is a citizen of Texas and has a mental disability, Major Depression Chronic Syndrome and Anxiety Panic Disorder that keeps her at home most of the time. She is the care provider for elderly father. Plaintiff was telephoned by someone posing as Denton in February 2009 and she told “Denton” about her disability and he said he would help her because she had a humble heart. Instead Denton on behalf of IncFortune extracted $50,000 from plaintiff on false statements of guaranteed profits. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 60 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 61 of 81 Page ID #:1222 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff earned no money after being provided the usual services: seminar, template websites, and coaching. Plaintiff attended an IncFortune seminar at the Malibu beach house where Boaz Rauchwerger was one of the speakers. A few months later Raygoza via web conference began promoting a book by Boaz Rauchwerger called Recession Proof Millions. plaintiff noted that there was a website called hmigroupmoneymaking.com/recessionproofmillions/bonuspage.html on which Rauchwerger and others appeared. Plaintiff then noticed in early 2010 that Rauchwerger had been removed from the page as the author of the program and had been replaced by a person named Rich Maxwell who is a fictitious creation of Raygoza. On July 16, 2010 plaintiff received a phone call from a salesman named Jay Francisco who said he was representing a company named Future Endeavor. He said his company had taken over IncFortune and othe Raygozar entities and he would like to talk to Plaintiff in order to rekindle their relationship. Plaintiff told him that she didn't recognize his name or his voice and she wasn't going to talk to him. Plaintiff hung up the phone. He called Plaintiff back about 2 minutes later and she let the answering machine pick up the call. He left a message saying that he still wanted to talk to her for a few minutes and that maybe he could reimburse some of the money she had invested with the Raygoza entities. He also said he had knowledge was that she invested in 2009. Francisco called back again on June 17, 2010. Plaintiff has suffered great financial loss and extreme emotional distress due to the intentional acts of defendants. 91. John Uys of Saipan, Northern Mariana Islands, lost $40,000 to defendants and has suffered extreme privation as a result including inability to provide the necessities of life for himself such as food and shelter. His credit rating was also ruined. On June 24, 2009 Ruel Mitchell from IncFortune called Plaintiff. Mitchell said Incfortune had been training people to earn an income on the Internet since 2001, and that he was currently earning $3 to $5 million dollars a month. Mitchell stated that for a $30,000 investment plaintiff was guaranteed an income of $15,000 to $20,000 per week payable by bank wire transfer. Mitchell called by the next day and reduced the price to $15,000 to get started with a second tranche to follow. Plaintiff provided credit card number and in a series of five credit SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 61 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 62 of 81 Page ID #:1223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 card transactions IncFortune removed $15,000 from Plaintiff’s accounts. Plaintiff then received a Verification that did not reflect the statements made by Mitchell. In response to this Mitchell stated that the Verification was drawn up by lawyers and did not state the true intent and agreement of the company (IncFortune, YourAffiliateSuccess, and JumpLaunch) as it was only drawn up as a formality to protect trade secrets. Based on this reassurance, plaintiff borrowed $15,000 from his wife to pay the second tranche. To be on the safe side, plaintiff reported Mitchell’s statements to IncFortune. James Murphy responded and disclaimed Mitchell’s statement but reiterated Plaintiff would be earning big money very soon and that arrangements would be made to fly Plaintiff to Los Angeles. IncFortune made travel arrangements and transported plaintiff to the Malibu Mansion where he met Sipes and Raygoza. In Malibu Sipes reiterated that plaintiff would get back his $30,000 if he did not make $30,000 in the first month. Shortly thereafter in late July 2009 plaintiff realized he had paid $30,000 for a website template hosted by JumpLaunch that would not earn any money and that he was enmeshed in a fraudulent scheme that required him to lie to others via a false video testimonial solicited by Sipes who had said, ethics and marketing do not go together. Plaintiff demanded a refund from Sipes and Raygoza in writing due to fraud. Plaintiff sent numerous communications pleading for the return of his money due to personal circumstances and hardships. Plaintiff’s wife had demanded the return of her funds. In August 2009 Raygoza indicated he might be willing to compromise. But added: “As far as Amex, MasterCard, or Visa is concerned there is no way Visa or MasterCard will favor you in this case so we are not scared of a charge back. We’ve processed millions online and we’d be complete fools if we didn’t know how to secure our money.” Raygoza did not make an offer to compromise but instead offered to sell Plaintiff 1000 leads for $300. Plaintiff made further attempts to secure a refund to no avail. In his phone conversation with IncFortune Plaintiff noted that IncFortune representatives had stated that all calls were recorded. 92. Barbara Poulson, age 66 of Richland, Washington lost $30,000 to defendants. In July 2009 Plaintiff received many telephone calls from Defendants’ salesmen some of whom SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 62 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 63 of 81 Page ID #:1224 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 assumed the false identity of John Denton. One of these salesmen induced her to pay $10,000 to IncFortune in exchange for a guaranteed return of investment. IncFortune made arrangement for plaintiff to travel to Los Angeles where no one including Sipes would answer her question about making her money back. An IncFortune salesman in December 2009 then called Plaintiff and asked how much her limit was on her credit card. He said he only needed this because being that she was working with them as a partner they needed to know if she would be able to follow up on her end of the deal. However he assured plaintiff no payment would go to them until she earned a profit. In fact, he said she should start seeing a profit in July 2009. He said she would be working with the top people and would be getting in on a different level. The following month, January 2010, Plaintiff was mortified to see $20,000 more in unauthorized charges on her credit card to the card’s limit. She immediately called the card company and put it in dispute. After three months they said they could not or would not take it off as she had authorized payment based on the false statements of Defendants to the credit card company. To date Plaintiff has not earned a penny and is out $30,000 in credit card debt. Plaintiff incurred $30,000 in debt because of the actions of the Defendants including deliberately false representations made by the Defendants to her credit card company to cover up outright theft of $20,000. Plaintiff is retired and can ill afford to lose this money. 93. Mark Mayott of Vancouver, Canada, who works as a parking lot attendant, was called by Jeff Gold who falsely represented that he owned IncFortune on July 8, 2009. Gold said: “Hi, Mark I see you are looking for an online business?” Plaintiff answered in the affirmative. Gold asked how old Plaintiff was and about his children. Gold then asked if plaintiff had credit cards, their numbers and how much available credit on each one. Gold stated Plaintiff was guaranteed income and a weekly check beginning in 7 days. Gold told Plaintiff that if he signed a document he would fax over that the income stream would begin immediately. Plaintiff signed up and was charged $10,000 by PushTraffic. The income stream did not start. However Plaintiff was transported to Los Angeles for a seminar by Defendants. Sipes and Raygoza presented at the seminar. When plaintiff returned SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 63 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 64 of 81 Page ID #:1225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 home he was called by someone posing as Jeff Alderson who convinced Plaintiff he was in the wrong program and charged him $18,000 to join IncFortune so he could get immediate income and a turnkey website business. Plaintiff has never received a single cent of income and has been unsuccessful in getting a refund. The credit card companies have garnisheed his earnings to pay back the $28,000 debt. 94. In early 2009, Wayne and Jade Daily were contacted by someone who had assumed the name of John Denton who stated to them they would earn $10,000 to $15,000 a month if they purchased personal training from Raygoza. Based on this inducement, plaintiffs paid $10,000 to PushTraffic through their credit cards. Raygoza made arrangements for plaintiffs to be transported to Los Angeles for his seminar. Plaintiffs then received coaching services March through July 2009 and spent $700 additional on advertising the usual template website. In July 2009 plaintiffs had not received the money mentioned by “Denton” and realized they had been scammed when Google Adwords barred them from advertising because the website copy provided by the Defendants was contrary to their anti fraud policies. Plaintiffs applied for a refund to Raygoza. Raygoza’s response was to refer him to his so called Verification. Plaintiffs then attempted to dispute the credit card charges but Defendants’ attorney misrepresented the situation to the credit card companies by claiming valuable services were provided. Plaintiffs’ losses total $10,700. 95. Florence Majanil of Kota Kinabalu, Sabah, Malaysia received a call on August 22, 2009 from PushTraffic salesman Bruce Knight. Knight stated to Plaintiff that she would have a website that earned $3500 a week for free. The only catch would be that PushTraffic would get 25% of the profits. Knight stated as fact she would make money in 21 to 45 days. Knight also claimed he would match the money plaintiff put into the scheme. Knight obtained Plaintiff’s credit card numbers to check ger creditworthiness as partner and while she was on the phone placed an unauthorized charge for $6500 on her credit cards to the credit of PushTraffic and IncFortune. He faxed plaintiff a Verification to review without telling her the credit card had already been charged. Plaintiff signed and sent the Verification back to Knight believing it reflected the non existent partnership. She was SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 64 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 65 of 81 Page ID #:1226 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 then contacted by JumpLaunch and sold a hosting contract. Plaintiff was provided a website http://myprofitableinternetbusiness.com. The website content however shocked plaintiff because it was blatant fraud and stated: Hi, I’m Florence Majanil. I spent 15 months and over $17,600.00 searching for honest, work at home programs. What I discovered will MAKE YOU MAD! On August 30, 2009 Knight requested Plaintiff travel to Los Angles for a seminar. But on September 6, 2009 Knight asked for another $1000. When plaintiff refused, Knight and PushTraffic ceased communication with her. However, someone who had assumed the identity of Denton then called Plaintiff in mid September 2009 and tried to sell her a website. He claimed he was not associated with PushTraffic but when she refused, he correctly said, “Don’t you have four credit cards?” Plaintiff hung up. As a result of Defendants’ deliberate actions, Plaintiff has been financially ruined and has suffered a heart attack due to stress. 96. In August 2009, Maryann Borzillary who lives in Rochester, New York was called by a salesman of Defendants posing as Denton and sold her a website to be managed and hosted by PushTraffic and JumpLaunch in a series of transactions between April 29, 2009 and May 7, 2009. The false Denton claimed he was a millionaire and was a personal friend with Sergey Brin who owns Google. Denton said he would fly plaintiff to California and shake her hand. Denton also told plaintiff he was going to be adding money to Plaintiff’s account every week or every other day and he would be speaking to her everyday. Based on these lies, plaintiff paid $1,628 to defendants. Plaintiff attempted to work the program provided but the mentor/coach Ken Steele provided by PushTraffic became aware she had very limited cognitive skills. After three weeks Plaintiff became convinced she had been cheated by “Denton” and attempted to dispute the credit card charges but Defendants opposed the charge backs and reinstated the charges. The loss of $1,628 was an extreme hardship to plaintiff. 97. Dale Matthews of Bucyrus, Ohio purchased a product on the Internet for $7 from the real John Denton. He received a call on or about May 2009 from Bruce Knight who said he was calling for Denton, who was the man behind the $7 product, and they were offering to SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 65 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 66 of 81 Page ID #:1227 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 take a select few of the members and personally tutor them. Knight convinced plaintiff to upgrade his membership for less than $100. A salesman of Defendants using the false identity of John Denton then called plaintiff the same day. “Denton” said that he was looking for 6 to 8 people to personally train and said that Bruce Knight had contacted him and had referred plaintiff as a good candidate. “Denton” said that he wanted to bring plaintiff and a few others to his home in Los Angeles for three days of personal training. Denton stated that he wanted plaintiff to upgrade to the VIP level at a cost of $10,000. Plaintiff told him there was no way he could pay that amount since he had just lost his job. Denton stated that plaintiff could put it on his credit card and that Denton would build a web site and would drive traffic to the site so that plaintiff could be earning money within a week and to expect a check within the next two weeks. After determining that plaintiff didn’t have $10,000 worth of credit available Denton said that he would accept $6,000 and that he would make up the rest out of his pocket. Denton then emailed plaintiff a Verification from IncFortune and asked him to sign it and send it to the email address (jgold@yahoo.com) so he could get started building his web site. Denton called a few more times and said he would be in contact with plaintiff throughout the process and was anxious to meet and shake plaintiff’s hand when he arrived in Los Angeles. But after plaintiff signed and emailed the Verification back he never received any more calls from Denton. He was however transported by Defendants to a seminar in Los Angeles in September 2009. Plaintiff never received any traffic to his site from Denton and never received a check. Plaintiff made several unsuccessful attempts to contact Denton 98. Esther Lesperance of Winnipeg, Canada lost $20,000 to Defendants. In March 2009 plaintiff purchased a DVD called The Truth by John Raygoza. On April 3, 2009 she received a phone call from a salesman at PushTraffic promising plaintiff could earn thousands of dollars selling e-books on the Internet. Then Raygoza got on the phone and offered plaintiff annual income of $60,000 if she agreed to pay $5000 now. Plaintiff received services from PushTraffic but earned no money. On August 20, 2009 plaintiff received another phone call from Raygoza saying he had a very exciting offer for her SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 66 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 67 of 81 Page ID #:1228 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and if she only paid $20,000 he would treat her website like his own, Raygoza claimed he would personally guarantee that she would get all her money back by the end of 2009 but extra money was needed to advertise her site. Raygoza assured her that this worked every time, since he was a millionaire at the age of 26 years old and he loved to help people. Based on these lies plaintiff paid IncFortune $15,000. On September 23, 2009 Plaintiff was flown to Los Angeles by Defendants for a 2 day seminar hosted by Raygoza to learn Internet Marketing. The Boaz Rauchwerger website was used at the seminar as an example of what could be done for Plaintiff. Here she met other people who had a very similar story with varying amounts of money paid to attend the seminar but none had ever earned any money from the Defendants’ scheme. They all complained to Hernan Joel Severino, but his response was: “What do you want me to do about it, I only arrange the seminars.” In October 2009 Hernan Joel called plaintiff and said Raygoza and Sipes were in the room and that all her money ($15,000) had been used up on coaching services. However the $15,000 had never been set aside by defendants and this was a lie. Finally, on November 30, 2009 Plaintiff received another call from Jack Hill of IncFortune offering a wonderful new opportunity to work personally with John Raygoza and Folusho Orakunle. Hill offered to make Plaintiff a junior partner of the company, the same as “John Denton.” Plaintiff was to run the Canadian division but in order for her to do this they needed her credit rating to be better than it was at this point. So Jack Hill said please get me your highest maxed out credit card number so that we can decide how to proceed to put your rating back to having a green flag instead of the current red flag. Plaintiff knew someone using the name John Denton had scammed $15,000 from Heather Paredes. John Raygoza got on the phone for a minute to distract Plaintiff while Hill charged her credit card account up to the maximum without her consent. Plaintiff started crying and said she never authorized any withdrawal and Hill said: “Oh, other people have cried as well but they are very thankful to us now because this system works and you must believe and have faith because these people are now earning $30,000 a month and are very happy.” In the end Hill relented and withdrew the unauthorized charge but plaintiff did not know so for a week and SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 67 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 68 of 81 Page ID #:1229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 suffered intense emotional distress. Plaintiff attempted to get her other money refunded but Defendants’ legal staff lied to the state attorney general and credit card companies that legitimate services had been provided to Plaintiff. Most recently, the Defendants’ attorney threatened plaintiff with a lawsuit for defamation, slander, extortion and conspiracy if she continued to seek a refund. 99. Allan and Diane Breit, husband and wife, of Echo, Wisconsin were cold-called in May 2009 by James Murphy representing IncFortune. Murphy offered the Breit’s a turnkey Internet business provided by IncFortune and stated they would earn back their entire $15,000 in 30 days. The Breits were taken in by Murphy’s lie and agreed to pay $15,000. IncFortune then transported the Breit’s to Los Angeles for a seminar at which Sipes was a presenter as well as motivational speaker, Boaz Rauchwerger. In June 2009, Murphy sent a technician named Louis Obando to the Breit’s home in Wisconsin to set up their turnkey internet business that Obando said would require only one hour of work per week. Obando charged the Breits $10,000. The Breit’s believed Murphy and Obando and paid the $10,000. However nothing came of these efforts and plaintiffs never earned a penny. 100. Carlyn Perona of Reno, Nevada was telephoned on July 1, 2009 by salesman Brent Austin of PushTraffic who offered her the Mastermind and Inner Circle programs for $15,000. Austin stated as fact that within one year she would be making over $100,000 and within two years over $1,000,000. Austin furthered made a money guarantee and stated she would earn her entire investment back before her next credit card statement came due. Austin was able to convince plaintiff to invest $10,000 from her credit card with PushTraffic and JumpLaunch. Plaintiff was transported to Los Angeles by PushTraffic for a seminar. However by October 23, 2009, plaintiff was yet to see a penny in income and emailed Sipes and Raygoza demanding a refund. Sipes and Raygoza did not respond. On November 2, 2009 plaintiff wrote yet again to Sipes and Raygoza who did not reply. Plaintiff to date has been unable to obtain a refund from the Defendants. 101. Tye Nakawaga, age 74 of Laveen, Arizona, whose sole source of income is a monthly Social Security Retirement check of $997 was called by a salesman Jack Hill from SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 68 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 69 of 81 Page ID #:1230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IncFortune on March 26, 2010. Hill falsely claimed he represented Google and Clickbank and that according to their records, Plaintiff was looking for a profitable home based business. Plaintiff was looking to supplement her income and Hill’s lies disarmed her suspicions. Hill falsely claimed Google and Clickbank would provide a profitable website for plaintiff but she had to produce her credit cards to show her credit worthiness. Plaintiff supplied her credit card account number but did not authorize charges and Hill said he would not use them. Hill said he was interested in her MasterCard accounts because he knew someone on the inside there. Hill then and there without authorization charged $30,000 on her credit cards nearly causing plaintiff a heart attack. Hill then said John Raygoza who had just finished a telephone call with his friend the CEO of Google, wanted to speak with plaintiff. Raygoza spoke to plaintiff and said she would get all her money back in three months and convinced plaintiff to sign a Verification. However, Plaintiff called back the night of March 26, 2010 and cancelled. Raygoza called Plaintiff back on March 27, 2010 and personally guaranteed plaintiff’s investment. IncFortune then provided plaintiff the usual template website that they gave to all their victims. Plaintiff complained and was provided another website for a weight loss product she was unfamiliar with. On April 16, 2010 Rob Martino called Plaintiff and told her that he had a new product that would be guaranteed to earn back all her money. Martino stripped the desperate Plaintiff’s Discover and American Express cards of an additional $27,000. Plaintiff became unnerved as her credit was ruined and her only income was $997 a month from Social Security. Plaintiff soon realized she had been scammed and tried to get a refund which was refused. She was, however, able to obtain refunds totaling $30,000 from American Express, Discover Card, and PayPal. The PayPal transaction had been disguised by defendants as a series of small transactions to avoid detection by PayPal's anti money laundering and anti fraud programs. But plaintiff still owes $30,000. When plaintiff disputed the charges and reported IncFortune to the state attorneys general of Arizona and California, Defendants intentionally misrepresented as recently as August 2010 that the situation was one of valuable services received when in fact they knew plaintiff had been scammed and would never see a return of SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 69 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 70 of 81 Page ID #:1231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 her investment. 102. Karen Houdashell of Richardson, Texas lost $21,000 to the defendants. Plaintiff is the care provider for her elderly relative which makes it difficult for her to take a full time job. On July 21, 2009, Plaintiff received a phone call from a salesman identifyinghimself as John Hill from John Raygoza's Underground Seminars. He informed Plaintiff that by the end of the month she could have 10 to 15 profitable websites and would be trained in how to manage the accounts. He said that the ball would roll quickly. He said that she would have two dedicated coaches and she would have the flexibility of working from anywhere with her laptop. Hill said that she would receive checks every two weeks and he asked for her home address which plaintiff provided. Hill inquired about Plaintiff’s debt situation and found he she had not worked full time since 2006. He sent an agreement to review. He told her she would be selling computer software and data marketing and that she needed to think like Bill Gates and she would have to use money to make money and to qualify for a marketing platform for 2 or 3 websites. He asked if plaintiff had a Visa or MasterCard. She said yes, but they were maxed out. He said she should start with credit cards (Visa, MasterCard, or American Express). Plaintiff agreed to a $3,000 initial investment. Hill said that the initial investment would be paid off in 3 to 6 months, as well as the current balances on all of the other cards. She gave Hill her Visa, MasterCard, and American Express numbers. He informed plaintiff that PushTraffic had special arrangements with all the leading credit cards (MasterCard, Visa, and American Express) and the companies knew that people associated with PushTraffic would be paying of all their total debt in 2 to 6 months. He had Plaintiff on hold for a little while he conferred with the “finance department” and then came back on the line. Hill told Plaintiff that there was $3,000 available credit on her MasterCard, none on her Visa, and maybe some on her American Express card. Hill then charged $3,000 on her MasterCard but said she would need another $7,000 to go to the Malibu Mansion seminar. Later that evening Hill called again and informed her that through a special arrangement with MasterCard, he had charged $18,000 more on her Diner’s Club MasterCard, something she had not authorized. Plaintiff was stunned but signed an SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 70 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 71 of 81 Page ID #:1232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 agreement not knowing what else to do. The next day after a sleepless night, on July 21, 2009 plaintiff called Diner’s Club MasterCard to find out what happened, and learned there was no special relationship with defendants, instead Hill had engaged in money laundering by disguising the $18,000 transaction as 21 separate transactions. Hill called plaintiff to tell her she would now be receiving 100 profitable websites and that she should partner with Jeff Alderson and Brent Austin neither of whom were actually partners of defendants. PushTraffic transported plaintiff to Los Angeles on August 19-21, 2009 for a seminar and plaintiff discussed her situation with Raygoza. Raygoza assured her it would be a walk in the park. Plaintiff however never received a penny. 103. Joyce Hoke lives in California and is over age 60. On April 21, 2009, plaintiff was contacted by a person calling themselves “Michael Vincent” who said he worked for PushTraffic and was offering a chance to make a lot of money working from home. “Vincent” asked next about her credit cards and Plaintiff said they were almost maxed out. Plaintiff told “Vincent” she needed money because she had a lot of bills and a daughter ill with cancer. Vincent offered her a turnkey Internet business and without her consent managed to charge $10,000 on her credit card after obtaining the account numbers from plaintiff. Plaintiff was so upset she could not eat or sleep. PushTraffic provided some coaching and transported plaintiff to Malibu for a seminar. She was provided the web site quickwebcashprofit.com which was the usual template pushing Defendants’ program. Plaintiff tried to complain to the Better Business Bureau with no result. But for Vincent's unauthorized charges on her credit card accounts and Plaintiff's fear she would lose her funds, Plaintiff would not have entered into any relationship with defendants. 104. Grace Adele, age 63 of Elkhart, Indiana is a sole proprietor of a tax and accounting home based business. She invested $47,000 in 3 transactions with Defendants as follows. On February 10, 2010, she received a phone call from Jack Hill. Hill said that Jeff Alderson, a well known Internet marketer, had provided her name as someone interested in Internet income. Alderson had in fact ceased all relationships with Defendants in January 2010 and requested they cease and desist from using his name in relation to their activities SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 71 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 72 of 81 Page ID #:1233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 due to identity theft of his name by defendants’ sales force who were impersonating Alderson. Plaintiff had previously purchased software from Alderson and recognized the name. Hill related that IncFortune had a program which would pay off her initial investment in 90 days, would provide leads, and would be a viable business within 180 days. Hill asked plaintiff about her business ideas and then said he needed to talk with Raygoza who he claimed was in the room, after a brief pause Hill came back on the line and said Raygoza thought those were all great money making ideas. Hill then sold her the Successrate program for $15,000. Within 3 weeks Defendants managed to extract an additional $35,000 from Plaintiff's credit cards in a series of phone calls touting guaranteed profits and by using a document called a General User/Confidentiality/Verification Agreement but was signed only by Plaintiff and whose primary purpose was to prevent credit card charge backs and defeat investigations by state attorneys general. Plaintiff never earned any money. 105. James Horlacher of Myrtle Beach, South Carolina was telephoned on August 23, 2009 by a salesman of Defendants pretending to be John Denton. The false “Denton” said he had made millions of dollars online and could do the same for Plaintiff when Plaintiff said he might be interested, he was telephoned two days later by Rob Tarentino of PushTraffic who stated to Plaintiff he would earn back his investment of $10,000 in three to six months. Based on this representation, Plaintiff paid $10,000. On September 22, 2009, plaintiff attended a seminar in Los Angeles where he met Raygoza and Sipes who both told plaintiff that for $30,000 additional he could triple his money in 90 days. Plaintiff paid $3,000 on his credit card and mailed a check for $27,000 to defendants. Plaintiff followed Raygoza's advice and wasted an additional $3,000 on expenses but never earned any money for a total loss of $40,000. 106. Robert Old, Jr. of Bonham, Texas was born September 17, 1917, thus is 93 years old, and supports himself with a Social Security Retirement check of slightly more than $900 a month and is the sole caretaker for his wife who has Alzheimer's disease. Defendants took $20,000 from Mr. Olds in May 2009 and another $11,000 in September SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 72 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 73 of 81 Page ID #:1234 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2009. A PushTraffic salesman took the initial $20,000 from the Plaintiff for a surefire investment in a website called besthealthyheart.com guaranteed to make money. Defendants demanded Plaintiff come to Los Angeles for a seminar which he could not because of his wife's Alzheimer condition. PushTraffic’s Obando instead came to Texas for three days to set up a website that earned no money at all. In September 2009 Raygoza phoned Plaintiff and told him that if he provided his credit card number, Raygoza would replace the worthless website with one that would earn back the $20,000. Raygoza then made unauthorized charges of $11,000 on the credit card which exceeded its limit. Raygoza provided no $20,000 or website and refused to respond to a request for a refund. VIII. DEFENDANTS 107. The RICO Enterprise consists of eight California corporations directly controlled by Raygoza, Molina, and Sipes: PushTraffic, IncFortune, Dot Intel, LLC. Successrate, Inc., YourAffiliateSuccess, Future Endeavor.com, LLC, and JumpLaunch and Finity Consulting, LLC. The Defendants have also utilized a wide variety of fictiitious names some of which are noted in the case caption. While the all entities may have a separate legal existence to one they are all associated in fact as a common enterprise. Defendants are sued individually and jointly and severally as co-conspirators. 108. John Raygoza is a resident of California. Raygoza claims to be have become millionaire at age 26 and grosses upwards of $10 million a year through his companies. In Raygoza’s own words: “Discover How I've Made Over $4.1 MILLION Dollars... In Just 365 Days... With A System That Has Never Yet Failed!” Excerpted from www.thetruthdvdseries.com/ [Last visited October 2, 2010]. 109. David Sipes, a resident of California, is Raygoza’s partner in fact and a resident of California. In Sipe’s own words: “You will find me traveling a lot and working with my good friend and Internet Marketing Expert himself, John Paul Raygoza, CEO of Push Traffic. Together we are building a sales and coaching program like no other which is focused only helping Internet Marketers maximize their backend and providing their clients SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 73 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 74 of 81 Page ID #:1235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 with our one of a kind VIP coaching service.” Excerpted from davidsipes.com/about_me/about_me.htm. Sipes supervised the coaching staff and ran the seminars among other duties. Sipes as an officer of the various corporations also handled customer complaints. 110. Ted Molina, a resident of California is John Raygoza’s brother and Director of Sales for the Raygoza controlled Enterprises and helped along with Raygoza and Sipes develop the sales pitches and programs used to ensnare plaintiffs. Molina along with Sipes and Raygoza jointly directly supervised the salesmen as General Manager of the defendant corporation sand helped implement and carry out the use of false and stolen identities by Defendants' sales force. Raygoza was also the “enforcer” for the Defendants. When former CE coaching employee Ken Steele prevented a disabled man from being cheated of $5,000 by Defendants’ sales staff, Molina demanded Steele go get His $5,000 back. Molina also made threats to various Plaintiffs and was involved with a death threat to Plaintiff Dale. 111. PushTraffic was incorporated in California in May 2007 and its president is John Raygoza. In a July 15, 2010 letter to the California Department of Justice, IncFortune claimed it was PushTraffic’s successor in interest: “That company is no longer operating and all records of payments, goods shipped, or services provided are not retrievable.” In fact all the Corporate entities are controlled by the same principals and were used interchangeably and often operated from the same physical addresses and utilized the same personnel. It was operating procedure by Defendants to establish multiple entities to confuse government agencies and consumers alike and when a particular operation received too much negative, its operation were simply succeeded by IncFortune, FutureEndeavor, or Finity Consulting. The entities however were simply multiple personas of the same combination of enterprises all controlled by Defendants Raygoza, Sipes, and Molina. 112. IncFortune was incorporated in February 2009 as a so called successor to PushTraffic and its president is John Raygoza. 113. Dot Intel, Inc. was incorporated in California in August 2009 and was converted to a LLC in September 2009. It purports to have been founded by an individual named Rob SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 74 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 75 of 81 Page ID #:1236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Artino. Dot Intel in fact is controlled by Raygoza, Sipes, and Molina while Artino works for the RICO enterprise of Defendants. 114. Successrate, Inc. was incorporated in California in June 2009 and its president is John Raygoza. 115. Youraffiliatesuccess was incorporated in California in July 2007 and its president is John Raygoza. As of June 2010, Youraffiliatesuccess claims to be: “SOLD OUT Due to the overwhelming response from people all across the world, Singapore, Australia, Europe, UK, Canada, and the United States. YourAffiliateSuccess is now closed.” 116. JumpLaunch was incorporated in California in December 2007. Its president is John Raygoza. In addition to being part of the RICO enterprise and fraudulent acitivites, JumpLaunch does provide legitimate web hosting services. 117. FutureEndeavor.com, LLC is a California corporation incorporated October 2, 2009. It’s principle officer is John Raygoza. In addition to being part of the RICO enterprise the company does service commercial clients’ unrelated to the matters herein in the field of marketing. 118. Finity Consulting, LLC is a California corporation incorporated November 30, 2007. The only listed partner with the California Secretary of State is David Sipes although the website listed Marina Skegin as the CEO of the corporation in August 2010. The content website of the defendant Dot Intel is virtually the same as Finity Consulting. Finity Consulting is part of the RICO enterprise in that it provides the same services as the other Defendants, has the same principle and has been used an alter ego corporation utilizing the same personnel and practices as the other members of Defendants’ RICO Enterprise despite its separate Corporate identity. For example in 2010, after the commencement of this action, Finity entered into an arrangement with two Utah corporations to sell Internet Marketing programs that falsely stated guaranteed returns which was merely a continuation of the existing RICO Enterprise under different names to avoid the adverse publicity generated by this lawsuit. 119. Plaintiffs are unaware of the true names and capacities of defendants sued herein SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 75 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 76 of 81 Page ID #:1237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as DOES 1 through 100, inclusive, and therefore sues these defendants by such fictitious names. Plaintiffs will amend this complaint to allege their true names and capacities when ascertained. Plaintiffs are informed and believe and therefore allege that each of the fictitiously named defendants are responsible in some manner for the occurrences herein alleged, and that Plaintiffs’ injuries as herein alleged were proximately caused by such defendants. These fictitiously named Defendants are herein referred to collectively as defendants and include agents, employees, affiliates, paralegals and lawyers associated with the Defendants’ RICO enterprise, many of whom have used fictitious names in dealing with plaintiffs to mask their actual identities. IX. PUNITIVE DAMAGES 120. Punitive damages are warranted under California Code of Civil Procedure § 3249 as follows: (1) The Defendants targeted elderly including up to age 93, infirm, and disabled victims including one his apparent death bed and victims out of the state and country who had little recourse to legal assistance; (2) The Defendants engaged in a regular pattern of such malicious and despicable conduct such as making threats of death and groundless lawsuits, and mocking victims who attempted to seeks refunds; (3) The Defendants deprived victims of the necessities life including food and shelter by financially ruining them and causing individuals on fixed incomes and pensions to endure crushing debt. (4) The Corporate defendants ratified the above conduct and encouraged it; (5) The Defendants such as Finity Consulting, IncFortune, and Future Endeavor have continued to engage in this conduct even after the service of the lawsuit and must be punished to deter further and continuing conduct of this nature. (A) In particular: Defendants placed a distressed elderly class member on a speaker phone and laughed at him when he attempted to seek a refund; (B) Defrauded Joseph, a paraplegic, while he was in the hospital with a near SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 76 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 77 of 81 Page ID #:1238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fatal staph infection and made an unauthorized charge on his credit and refused to refund money even when it was known plaintiff needed the money for medical equipment. (C) Defrauded Forcier, a stroke survivor, who is now facing eviction from his home due to his financial losses caused by defendants; (D) Defrauded Oliphint, of the proceeds of her husband's life insurance policy; (E) Defrauded 80 year old Cornelius and 87 year old Woods; (F) Defrauded 72 year old Tan by obtaining five of her credit card account numbers by claiming Defendants would get out of debt but instead placed charges on them; (G) Defrauded Uys of $40,000 causing him such hardship that he could not afford food or shelter; (H) Defrauded Mayott, a Canadian parking lot attendent, of $28,000 causing his wages to be garnisheed; (I) Defrauded Majanil of Malyasia of so much money that she suffered a heart attack due to stress and shame; (J) Defrauded 74 year old retiree Nakawaga who lived on a fixed income of $997 a month and caused her to incur $30,000 in debt she can not pay back; (K) Defrauded 93 year old Old of $20,000 which forced plaintiff to borrow against his life insurance to pay off the credit card debt incurred. X. EQUITABLE TOLLING & FRAUDULENT CONCEALMENT 121. Throughout the Class Period, Defendants and their co-conspirators affirmatively and fraudulently concealed their unlawful conduct. 122. Neither Defendants nor their co-conspirators told Plaintiffs or other Class members that they were engaging in racketeering or fraud and in fact strenuously denied these allegations to plaintiffs, government agencies, banks, credit card companies and law enforcement. Accordingly, many of the Plaintiffs and Class members could not have discovered full truth and extent the violations alleged herein earlier until shortly before the filing of the Second Amended Complaint in the actions comprising this litigation because Defendants and their co-conspirators conducted their conspiracy secretly, concealed the SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 77 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 78 of 81 Page ID #:1239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 nature of their unlawful conduct and acts in furtherance thereof, and fraudulently concealed their activities through various other means and methods designed to avoid detection including the use of stolen identities which was only recently verified. 123. Defendants and their co-conspirators engaged in a pattern of racketeering and fraud by concealing their activities and conducting them in secret and using false and stolen identities while also engaging in legitimate marketing and Internet activities. As a result of Defendants and their co-conspirators’ fraudulent concealment, all applicable statutes of limitations affecting the Plaintiffs’ and the Class’s claims have been tolled. 124. Plaintiffs and the Class members did not discover, nor could have discovered through reasonable diligence, that Defendants and their co-conspirators were using stolen identities until October 2010, when this lawsuit was filed by a few individual plaintiffs against former defendants such as Denton who secured counsel who investigated and revealed the scope and breadth of the stolen identity use by defendants. 125. As a result of the fraudulent concealment of the fraud and RICO enterprise, Plaintiffs assert the tolling of the applicable statute of limitations affecting the causes of action by Plaintiffs and the members of the Class. XI. CAUSES OF ACTION COUNT I ~ VIOLATION OF RICO § 1962(c) 126. Plaintiffs incorporate by reference all the preceding paragraphs as if set out in full including the section “RICO” above. 127. All individual defendants conducted and participated in the conduct of the RICO Enterprise through a pattern of racketeering activity along with certain law firms, lawyers, and paralegals. The RICO enterprise included companies involved in legitimate business enterprise and effected interstate commerce. 128. The pattern of racketeering included predicate acts of mail, and wire fraud, money laundering, violations of the Travel Act, extortion, and other illegal acts as set forth above and in the Plaintiffs section of the complaint in particularity. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 78 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 79 of 81 Page ID #:1240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 full. 189. As a direct and proximate result of above Defendants racketeering conduct, Plaintiffs have lost a minimum of $941,790 and the class of victims have suffered damages in an amount in excess of $5,000,000. COUNT II ~ FRAUD 129. Plaintiffs incorporate by reference all the preceding paragraphs as if set out in 130. Defendants made numerous, intentionally false and misleading material representations to Plaintiffs about income and business potential including guaranteed income, reurn of investment, money back guarantees, and matching funds and Plaintiffs relied to their detriment thereon as detailed under each individual Plaintiff in the Plaintiffs section of the lawsuit wherein the fraudulent inducements are in bold Vide supra. 131. Defendants used intentionally false statements regarding checking creditworthiness, partnerships, joint ventures, and matching funds to induce Plaintiffs to permit defendants to strip their credit card and other accounts of all available funds and to sign Verifications. 132. Defendants made numerous other intentionally false and misleading statements to Plaintiffs and third parties such as banks, credit card companies, and government agencies about the existence of service agreement and fabricated relationships with Google, Sergey Brin, ClickBank, master Card, and the US government, upon which Plaintiffs relied to their detriment. 133. Defendants’ entire business model was based on a pattern of lies and intentional and spectacular distortions of the truth designed to ensnare plaintiffs and empty their bank and credit card accounts rather than provide legitimate services. Some of the fraud detailed in the Plaintiffs' section, the specific fraudulent practices included: (a) Use of the stolen identities of ALDERSON, ANDREWS, BECKTA, COBB, DAVIES DENTON, and KIRKLAND when making false representations to plaintiffs in order deceive plaintiffs into believing they were dealing with known and trusted Internet marketers; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 79 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 80 of 81 Page ID #:1241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (b) The use of pseudonyms and impersonations to mask the true identities of those of the defendants and their employees committing fraud so that plaintiffs were left no remedy and to provide defendants deniability that fraud had occurred; (c) A practice of making false representations including guaranteed return of investment and profits, money back guarantees when no such income, profits, or guarantees existed in order to induce plaintiffs to part with their money; (d) A pattern and practice of placing unauthorized charges on Plaintiffs’ credit cards; (e) The misuse of Verifications to defeat charge backs and other attempts by Plaintiffs to obtain refunds. 134. As a direct result of Defendants fraud Plaintiffs have lost a minimum of $941,790 and the Class have suffered damages in excess of $5 million. XI. JURY TRIAL 135. Plaintiffs request a trial by jury. XII. PRAYER FOR RELIEF WHEREFORE, plaintiffs pray that the Court: 1. Award compensatory damages in an amount to be proven at trial, and for treble damages, costs and attorney fees under the RICO Act; 2. Award punitive damages in that defendants have utilized fraud, oppression, and malice as particularized above including but not limited to exploiting the elderly, disabled and unemployed in such a manner that individuals are no longer able to provide the necessities of life due to indebtedness caused by defendants and that punitive damages are required as an example be set to deter future conduct of this sort; 3. Award plaintiffs the costs of this action, including attorney and expert fees; and other reasonable expenses; 4. Grant such other and further relief as shall seem just to the Court. DATED: January 30, 2011. s/ Thomas Easton, Esq THOMAS EASTON s/ Jonathan Levy, Esq. JONATHAN LEVY SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 80 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 81 of 81 Page ID #:1242 1 2 3 CERTIFICATE OF SERVICE 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Of Attorneys for Plaintiffs I hereby certify that a true and correct copy of the forgoing document has been filed with the Courts’ CM/ECF filing system on this 30th day of January, 2011, which will provide service on all counsel of record. s/Thomas Easton, Esq. Thomas Easton Page 81 of 81
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Proposed Second Amended Class Action

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Proposed Second Amended Class Action Complaint in Mattern v. PushTraffic
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Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 1 of 81 Page ID #:1162 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THOMAS EASTON CSB #109218 LAW OFFICE OF THOM AS EASTON 967 Sunset Dr Springfield OR 97477 Tel: 541-746-1335 easton3535@gmail.com JONATHAN H. LEVY CSB #158032 37 Royale Pointe Dr Hilton Head SC 29926 Tel: 202-318-2406 Fax: 202-318-2406 jonlevy@hargray.com Attorneys for Plaintiffs OF COUNSEL Richard E. Joseph, Esq. Michigan State Bar No. P39924 203 Mason St Charlevoix, MI 49720 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA DOUGLAS MATTERN, RICHARD JOSEPH, SANDRA LITTLE, CLARENCE FORCIER, K. ANN BRECKENRIDGE, ARLINE J. OLIPHINT, EWING LEE DALE, GREG TRAXLER, BETTE ANDERSON, LILLIAN CORNELIUS, STEVE FORTOSIS, LUKE E. YOUREE, BEVERLY STEWART, JAMES K BLANSCETT, LAURI (LAURENCE) WOODS, ROBIN WINGROVE, DEBORAH PROFFER, MARTIN DE COURCEY, DAVID LEMASTERS, MARC MINTZ, BENITA SANDIFER, LOWELL RADDER, HEIDI PLACH, DESMOND MENZ, BRAMWELL HESTER , PAUL MALCOLM DUFFY, MELANIE ROGERS, MARGARET GRANSHAW, NO. CV10-9860 DMG (JCx) VERIFIED SECOND AMENDED COMPLAINT CLASS ACTION JURY TRIAL REQUESTED SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 1 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 2 of 81 Page ID #:1163 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 STELLA TAN, JOSEPH KAYE, CHRIS YORKE, LES JONES II, VIRGINIA LAGOS, DEBBIE KNISLEY, ROB WILLIS, PATRICIA LEDOUX, MICHAEL SCHAETZEL, JANIS JOHNSON JOHN UYS, BARBARA POULSON, MARK MAYOTT, WAYNE & JADE DALY, husband & wife, FLORENCE MAJANIL, MARYANN BORZILLARY, DALE MATTHEWS, ESTHER LESPERANCE, ALLAN & DIANE BREIT, husband & wife, CARLYN PERONA, TYE NAKAWAGA, KAREN HOUDASHELL, JOYCE HOKE, GRACE ADELE, JAMES HORLACHER, ROBERT OLD, JR. on their own behalf and on behalf of those similarly situated, Plaintiffs, 16 v. 17 18 19 INCFORTUNE, a corporation, 20 DOT INTEL, LLC., a corporation, 21 SUCCESSRATE, INC., a corporation, 22 23 24 25 26 27 28 FINITY CONSULTING, LLC, a corporation, JOHN RAYGOZA individually and dba SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 2 of 81 PUSHTRAFFIC, dba truthdvdseries.com, recessionproofmillions.com, inc., a corporation, YOURAFFILIATESUCCESS, a corporation, JUMPLAUNCH, a corporation, FUTURE ENDEAVOR.COM, LLC, a corporation, Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 3 of 81 Page ID #:1164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15ROUNDS.COM and PUSHTRAFFIC, pushtraffic.com and SUCCESSRATE and JUMPLAUNCH and TAX GROUP CENTER, Taxgroupcenter.com, and Rich Maxwell and johnraygozaswebsites.com, TED MOLINA, DAVID SIPES individually & dba davidsipes.com, All sued herein individually & as a joint enterprise with joint & several liability, and DOES 1 to 100 including defendants, employees and contractors of the defendants who have deliberately masked their identities by using pseudonyms and falsely assuming the identities of A LDERSON, A NDREWS, B ECKTA, C OBB, D AVIES, D ENTON, K IRKLAND and others. Defendants. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 3 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 4 of 81 Page ID #:1165 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 II. FACTS COMMON TO ALL PLAINTIFFS & CLASS . . . . . . . . . . . . . . . . . . . . . . . . . 5 III. JURISDICTION & VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 IV. CLASS ACTION ALLEGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 V. FACTS PERTAINING TO FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 TABLE ONE - SUMMARY OF FRAUDULENT ACTS . . . . . . . . . . . . . . . . . . 18-27 VI. FACTS PERTAINING TO RICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 TABLE TWO - RICO PREDICATE ACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31-33 VII. PLAINTIFFS & THEIR ALLEGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 VIII. DEFENDANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 IX. PUNITIVE DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 X. EQUITABLE TOLLING & FRAUDULENT CONCEALMENT . . . . . . . . . . . . . . . . 77 XI. CAUSES OF ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 COUNT I ~ VIOLATION OF RICO § 1962(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 COUNT II ~ FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 XI. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 XII. PRAYER FOR RELIEF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 C ERTIFICATE OF S ERVICE ECF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 V ERIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 4 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 5 of 81 Page ID #:1166 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION 1. This Second Amended Complaint is a class action in which named Plaintiffs bring this action on behalf of themselves and all others similarly situated who have been victimized by Defendants. The events herein occurred from May 2007 to the present. The Second Amended reduces the number of causes of action to just two counts, Fraud and RICO, reduces the number of named Defendants and adds three Plaintiffs. 2. Defendants are all in the business of Internet Marketing and Consulting, Advertising, Search Engine Optimization, Web Hosting and similar pursuits but have also used these activities as a cover to commit fraudulent acts including but not limited to placing unauthorized charges on credit cards, wire, mail and bank fraud, extortion, money laundering, obstruction of justice and identity theft. 3. This is a civil action arising under federal law including the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. and 28 U.S.C. § 1332(d)(2)(A). II. FACTS COMMON TO ALL PLAINTIFFS & CLASS 4. The plaintiffs and class are a diverse group living on five different continents united by several common factors: (1) They all sought out a legitimate home based Internet business due to disability, retirement, unemployment or for other good reasons; (2) All were defrauded, lied to repeatedly, cruelly manipulated, and deceived over a period of time by defendants who falsely stated as fact that massive returns on their investments were assured in order to induce Plaintiffs to sign a so called "Verification" for services - a document termed a Verification and containing only the Plaintiff's signature, the primary purpose of which was deceive the PlaintiffS into believing they had no remedy at law and to mislead governmental agencies, banks, and credit card companies into believing that a legitimate and fair business transaction had occurred instead of fraud and racketeering. (3) Not a single plaintiff earned a return on their investment despite any services that were provided by defendants; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 5 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 6 of 81 Page ID #:1167 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (4) Losses to the plaintiffs are in excess of $900,000 and losses to the class are in excess of $5 million, almost all of which was financed by credit and debit card, mailed via US Postal Service or transferred by bank wire or PayPal; (5) Plaintiffs were often approached multiple times and resold on the same program or variations thereof often masquerading under various trade names controlled by the same group of defendants but all yielding the same result: No income or profits generated or tangible benefit to the plaintiff; (6) Defendants utilized false and stolen identities in inducing plaintiffs to buy their services and made unauthorized charges on credit cards; (7) Defendants on occasion utilized threats to plaintiffs including threats of lawsuits and routinely and intentionally made deceptive statements to banks, credit card companies, and government regulatory and law enforcement agencies. Defendants engaged in money laundering, interstate and international travel in furtherance of the criminal enterprise, and utilized the mails, wires and sophisticated telecommunications in the course of their activities; and Defendants falsely claimed close associations with Google, Sergey Brin, Clickbank, MasterCard, and the US Government. 5. Defendants are based in California but have worldwide reach and have physically traveled all over the United State and abroad to perpetrate their scheme. The Defendants have entered into a common scheme or criminal enterprise and each Defendant is jointly and severally liable to Plaintiffs for the actions of the others in furtherance of the RICO ENTERPRISE. 6. Defendants Ryagoza, Sipes, and Molina were all officers of the corporations: PushTraffic, IncFortune, Dot Intel, Inc, Successrate, Inc., YourAffiliateSuccess, FutureEndeavor, LLC and Jumplaunch and their various assumed and fictitious business names and websites at all times mentioned herein. Defendant Ted Molina is Raygoza’s brother and was jointly with Sipes and Raygoza in charge of sales operations at these various entities at all times mentioned herein. David Sipes is the principle officer of Finity Consulting LLC, and was with Molina and Raygoza in charge of SEO, seminars, affiliate SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 6 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 7 of 81 Page ID #:1168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sales and customer relations at all the Raygoza entities at all times mentioned herein. Regardless of how they were titled at the various RICO Enterprises, Rayoza, Sipes, and Molina jointly controlled the Defendant corporations and were not mere employees of the Defendant corporations which were their virtual alter egos. 7. The Defendants used websites, telephone boiler rooms, streaming video and audio, the US Mail, home visits, DVDs, YouTube(tm), Skype(tm), instant messaging, electronic mail, postal mail and in person seminars in Los Angeles, Malibu and Singapore to recruit and sell Plaintiffs. 8. Knowingly false statements were made to Plaintiffs by the Defendants including Raygoza, Sipes and Molina in order to gain access to their credit card and debit card accounts and place unauthorized charges. Statements varied by individual but all falsely stated guaranteed returns of some sort on their investment. Some plaintiffs, but not all them, received boilerplate documents termed Verifications to fax back to the defendants which were then used to block charge backs resulting from credit card disputes and to obstruct inquiries by the Federal Trade Commission, Los Angeles Police department and various state attorneys general public inquiry units. Defendants also assumed false or stolen identities in making false statements to the plaintiffs and offered false money back guarantees. The terms joint venture, matching funds and partnership with Raygoza and the defendants were also misused by defendants to deceive plaintiffs into buying high priced packages of dubious services from Defendants. 9. Plaintiffs who attempted to rescind the sales, even within state mandated time limits, were usually unsuccessful. Plaintiffs who disputed the credit card charges with credit card companies, banks, and regulatory agencies found themselves opposed by defendants' attorneys and paralegals who made intentionally misleading representations to the banks and state agencies that services for value had been provided but omitted mention of the false statements of fact, unauthorized credit card charges and inducements offered to Plaintiffs and the use of false and stolen identities to ensnare the Plaintiffs. 10. Plaintiffs and members of the class were sometimes provided a variety of services SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 7 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 8 of 81 Page ID #:1169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 including webinars, seminars, coaching, DVDs and materials - none of which resulted in Plaintiffs earning money but which were often used as an opportunity to remarket and up-sell Plaintiffs. 11. Some Plaintiffs and class members were transported by Defendants across state lines and internationally to attended in person seminars in California and Singapore hosted by Raygoza, Sipes and Molina. 12. Boaz Rauchwerger, a nationally known and well regarded motivational speaker, was a presenter at over a dozen of Defendants' seminars in 2008-2010, and was offered payment of up to $100,000 a month by Raygoza if he continued to cooperate with the RICO enterprise. However, Rauchwerger quit the RICO enterprise in disgust after he discovered and observed that seminar participants were highly distressed because of the false statements made by the defendants regarding guaranteed income that never manifest itself. Rauchwerger also learned Raygoza was using false testimonials and false identities to ensnare victims. Rauchwerger received many emails from desperate victims seeking help and despite offers from Raygoza of shared profits disassociated himself from the Defendants. This did not deter Raygoza who substituted a fictitious person of his own creation, Rich Maxwell, as an online pitch man in Rauchweiger’s place and usurped many of Rauchwerger's identifiable marketing mannerisms and proprietary content in order deceive existing and prospective clients. 13. The Plaintiffs were deceived through statements of guaranteed profits and refunds. The price of services provided were based on the amount of available credit the plaintiff possessed or the amount they could afford to pay or borrow and had no relationship to the actual value of any services provided. According to former employees of the Defendants, whose names cannot be revealed owing to legal intimidation by Defendants, the sales force of the Defendants would and did as a practice under the direction of Raygoza, Sipes and Molina state all manner of falsehoods and bogus inducements in order to gain access to the Plaintiffs' credit card accounts. 14. In one instance an honest marketing coaching employee, Ken Steele, was SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 8 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 9 of 81 Page ID #:1170 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 discharged by Molina and Sipes because he intervened on behalf of a class member when he prevented an obviously mentally disabled man from spending an additional $5000 with defendants. Other coaches quit in disgust after having to deal with repeated pleas by Plaintiffs and victims for return of their money or questions about the whereabouts of their guaranteed income. 15. No matter how much Plaintiffs paid, some much more money than others, all received the same return on their investment - zero. 16. Plaintiffs were led to believe they were investing in a viable and profitable business scheme as joint venturers or partners instead of purchasing services. Assuming the victim’s credit card account or resources held out, over $50,000 was at times extracted by Defendants before the victim learned that instead of an investment in a viable business, they had been sold a series of services under multiple program names that yielded no return on investment. 17. When the victim as often happened, attempted to reverse credit card charges, the Defendants instructed their legal staff to file misleading responses to consumer complaints and charge backs based on documents termed "Verficiations" that victims, but not the Defendants, signed under the influence of false oral statements of profits, duress and extortion often after their credit card accounts had already been emptied by the Defendants thus holding the victims' money hostage. Victims who persisted in complaining were threatened with defamation and extortion lawsuits by the Defendants and their attorneys who implausibly disclaimed any knowledge of the fraud committed by their salesmen or Molina, Sipes, and Raygoza. Plaintiffs reported receiving implied threats of violence and other similar threats from Raygoza, Molina and others members or employees of the Defendants. 18. An added element of the defendants racketeering involved a practice by defendants of credit card charges being assessed against Plaintiffs without their consent and then up-selling the victim with false statements that they would earn back the funds before the first credit card payment would come due thus knowingly kiting the credit card account since the statements of guaranteed returns would never materialize. Additionally, some SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 9 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 10 of 81 Page ID #:1171 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs who did not agree to purchase services or sign a Verification nonetheless were unable to reverse the unauthorized charges made to their accounts due to Defendants false protestations to banks and credit card companies that valuable services had been provided and the charges made with the consent of the victim. 19. Further, Defendants engaged in deceptive credit card practices to avoid fraud detection, in one case processing 21 separate $1,000 transactions in a short period to milk a credit card dry and increase its credit limit without the plaintiffs' knowledge. Further, at least one of Defendants' salesmen claimed the Defendants’ had an insider at a credit card network on their team. 20. Many of the Plaintiffs were vulnerable elderly (e.g. 80, 87, and 93 years old) and/or disabled (e.g. Paraplegic, stroke victim, terminally ill) and were specifically targeted by the Defendants because they did not understand the technical aspects of the Internet or the terminology utilized, could be easily led and were made to feel stupid or inadequate if they questioned the defendants’ intentions. As a practice the employees of the Defendants laughed and derided Plaintiffs who called in after the fact and were desperate for a return of their funds when the stated profits never materialized. In one case, indicative of the Defendants’ practice of abusing the elderly, the Defendants’ sales staff supervised by Molina, Raygoza, and Sipes placed an elderly individual on a speaker phone and laughed and joked as he begged for his money to be returned according to a former employee who witnessed the cruel spectacle. 21. It was a specific tactic of the Defendants to engage in and encourage financial abuse of elderly and disabled persons because it was discovered by Molina, Sipes, and Raygoza that they were easy marks that could often times be bullied or tricked into granting access to their credit card accounts and were unlikely to fight back effectively due to illness and disability. Likewise, Defendants targeted English speaking victims on five different continents since they perceived that class members from Singapore, South Africa, England, Canada, Malaysia, New Zealand, Ireland, Saipan or Australia would have no economically available legal recourse against the California based Defendants. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 10 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 11 of 81 Page ID #:1172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22. So called Verifications for services were utilized by Defendants that were often called investments or partnerships or joint ventures or trade secret protections in order to deceive plaintiffs into signing them. As a policy and practice, the Defendants did not memorialize the statements made by the Defendants’ sales force though there some conversations were recorded and are in the possession of Defendants. When a Plaintiff complained to Raygoza, Sipes, or Molina about the terms, statement or offers made by the Defendants or their agents, the Plaintiffs were falsely told the salesman no longer worked for the Defendants and that Defendants were not responsible for statements made by affiliates or employees when in fact the so called affiliates were Raygoza, Molina or their agents posing as the affiliates. When state and federal regulators and attorneys general public inquiry offices contacted the Defendants or their legal staff on behalf of victims Defendant companies, the Defendants stated as a policy that the corporations involved were no longer were in business and claimed the records were lost or destroyed in order to conceal the existence of the RICO enterprise as a whole and to obstruct justice. 23. Plaintiffs who in good faith attempted to actually follow the Raygoza get rich quick stratagem of trying to recruit further victims via essentially useless websites, invariably failed and wasted more money on advertising their websites with services like Google Adwords or had their accounts suspended by Google for violations of their anti fraud policy. The websites involved were template versions of the same website and carried copy identical or similar to: What I discovered will shock YOU! 91% of Work at Home programs are complete and utter SCAM! 6% of Work at Home Programs only really make around $500/month 3% of Work at Home programs make over $12,000 per month. Create INCOME through multiple sources and your interests Work ANYWHERE! Be YOUR OWN BOSS Have MORE TIME for your pleasures SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 11 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 12 of 81 Page ID #:1173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 John Raygoza is considered a GURU at making money from anywhere. He supports a few programs that are in that 3% mentioned above, that generates large amounts of income for people. I have found 3 of those programs and have spoken with John for Verification of the honesty level of these programs. 24. When Plaintiffs attempted to obtain refunds, mediate, dispute, negotiate or arbitrate their claims, they were met with further attempts to extort funds, new opportunities to invest money, or were abused, maligned and threatened by defendants including Raygoza, Sipes, Molina and their in-house legal staff with lawsuits for defamation, libel and extortion. 25. The Defendants also vigorously disputed credit card charge-backs which occurred when a victim disputed a credit card charge as fraudulent or unauthorized. Defendants Raygoza, Sipes, and Molina and their legal staff and lawyers were aware of the get rich quick statements made to plaintiffs by Defendants yet deliberately misled credit card companies, banks and state regulators about the nature of Defendants’ business practices and utilized the fraudulent Verification documents to oppose charge backs and legitimate requests for refunds. 26. The use of false and stolen identities was also a major feature of the Defendants RICO enterprise and sales practices. Defendants’ sales force as an established and specifically authorized practice often used pseudonyms to avoid detection or variations of their actual or one another's names. This practice also permitted the Defendants to disclaim knowledge to regulators, victims and credit card companies that a particular salesman was no longer employed or was an independent contractor. The Defendants and in particular Sipes and/or Raygoza also entered into a series of affiliate agreements with various established Internet marketers who sold reasonably priced products, usually for less than $100. The affiliates were encouraged to provide the names of software purchasers who might be interested in legitimate coaching or marketing services. Sipes, Molina, and Raygoza represented their services as legitimate and beneficial and pointed to their lavish Malibu, Singapore, and Los Angeles seminars and well known presenter such as Boaz Rauchwerger as proof of their goodwill and legitimacy. If a prospect provided by the affiliates purchased SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 12 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 13 of 81 Page ID #:1174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the defendants services the affiliate was supposed to get a commission set at 25% but often was not paid at all. Instead the defendants simply misappropriated the name of the affiliate, impersonated the affiliate and made all manner of false statements in the name of the affiliate. The advantage to defendants was that the name of the affiliate was known and trusted by the victim and in the event of a complaint; the affiliate and not defendants would face the blame and the Defendants’ attorneys were provided an opportunity for plausible deniability in response to allegations of fraud. 27. Known affiliates whose identities were stolen by Defendants from 2008 to present include Jeff Alderson, Charles Kirkland, Chris Cobb, John Denton, Ron Davies, Craig Beckta, and Jonny Andrews. When Kirkland became aware his identity had been stolen he repeatedly contacted Raygoza and Sipes who did not return his calls and continued the practice. Jeffrey Alderson contacted Raygoza in 2010 after numerous complaints by his clients but Raygoza denied stealing Alderson's identity and continued the practice. Jonny Andrews met with Raygoza and Sipes in person and when he received a complaint forwarded it to Sipes. When the impersonations continued, Andrews whose reputation and brand were damaged made ten additional cease and desist requests to Sipes which were ignored. John Denton terminated his relationship with Defendants after numerous reports that Defendants' sales staff were impersonating him. Sipes met with Craig Bectka in person and convinced him to become an affiliate. Within a month Beckta suspected defendants had stolen his identity. Sipes and Raygoza were notified by Beckta but did not respond immediately although Raygoza eventually denied any impersonation had happened. Nonetheless Beckta was not convinced and terminated his relationship with the defendants. On at least one occasion Mr. Beckta assisted a victim with a charge back against defendants. III. JURISDICTION & VENUE 28. This case arises under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq. and 28 U.S.C. § 1332(d)(2)(A). Accordingly, this Court has federal question jurisdiction over the subject matter of this action. 29. This Court has personal jurisdiction over Defendants in that they conduct for SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 13 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 14 of 81 Page ID #:1175 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 profit commerce within the State of California and/or are physically based in California and in this District. 30. Venue is proper in this Court because the Defendants are conducting business and entered into contracts in this District and may be found in this District. IV. CLASS ACTION ALLEGATIONS 31. Plaintiffs bring this action on behalf of themselves and as a class action under the provisions of Rule 23(a) and (b)(1) and (b)(2) of the Federal Rules of Civil Procedure on behalf of the following Class: All persons and entities, worldwide and domestically, that purchased services and/or products related to Internet Marketing from a Defendant between May 1, 2007 and the present (the “Class Period”) in reliance upon false statements or guarantees of: Earnings, return of investment, refunds, matching funds, false identities, false claims of association with Google, Clickbank, MasterCard, the United States government or their officers and directors or were the victims of unauthorized charges to their credit cards by the defendants. This class excludes any judicial officer who is assigned to hear any aspect of this action, governmental entities, Defendants, co-conspirators, and the present and former parents, predecessors, subsidiaries and affiliates of the foregoing. 32. Plaintiffs estimate that there are between two to three thousand of Class members as above described who are owed money by defendants, the exact number and their identities being known by Defendants, making the Class so numerous and geographically dispersed that joinder of all members in impracticable. 33. There are questions of law and fact common to the Class, which questions relate to the existence of the fraud and RICO Enterprise alleged, and the type and common pattern of injury sustained as a result thereof, including, but not limited to: (a) Whether Defendants and their co-conspirators engaged in a combination as an associated in fact enterprise to commit fraud, money laundering, wire fraud, bank and credit fraud, extortion, obstruction of justice, identity theft and other acts in furtherance of their fraud and RICO enterprise. (b) The identity of the participants in the associated in fact RICO enterprise; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 14 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 15 of 81 Page ID #:1176 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (c) The ongoing and interconnected nature of the RICO enterprise alleged in this Complaint and the nature and character of the acts performed by Defendants and others in furtherance of the RICO enterprise and fraud; (d) Whether the alleged activities of defendants violated the RICO act (e) Whether the conduct of Defendants and others, as alleged in this Complaint, caused injury to the business and property of Plaintiffs and other members of the Class due fraud by Defendants; (f) The effect of Defendants' acts on Interstate commerce; (g) The appropriate measure of damages sustained by Plaintiffs and other members of the Class. 34. Plaintiffs are all direct purchasers or were alleged by Defendants to be, of Internet Marketing Services from Defendants and their interests are coincident with and not antagonistic to those of the other members of the Class. Plaintiffs are members of the Class, have claims that are typical of the claims of the Class members, and will fairly and adequately protect the interests of the members of the Class. In addition, Plaintiffs are represented by lawyers who are competent and experienced in the prosecution of RICO and class action litigation. 35. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications under differing state and national laws. 36. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages. 37. A class action is superior to other available methods available for the fair and efficient adjudication of this controversy. Treatment as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently and without duplication of effort and expense that numerous individual actions would engender. The Class is readily definable and is one for which records should exist in the files of Defendants and third parties, and prosecution as a class SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 15 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 16 of 81 Page ID #:1177 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 action will eliminate the possibility of repetitious litigation. Class treatment will also permit the adjudication of relatively small claims by many Class members who otherwise could not afford to litigate against California based defendants from across the country and around the world claims such as is asserted in this Complaint. This class action presents no difficulties of management that would preclude its maintenance as a class action and is a garden variety claim for fraud and RICO remarkable only for the global scope and breadth of the Defendants actions. V. FACTS PERTAINING TO FRAUD 38. The elements of fraud under California law are a representation, usually of fact, which is false, knowledge of its falsity, intent to defraud, justifiable reliance upon the representation, and damage resulting from the justifiable reliance. Stansfield v. Starkey, 220 Cal. Appellant. 3d 59, 72 73 (1990). Federal Rule of Civil Procedure 9(b) requires fraud be plead with particularity - the fraud allegations as to each Plaintiff are set out with particularity in the section of this complaint following labeled “Plaintiffs” and “Common Facts” and herein incorporated by reference and the rudiments and pattern of fraud is further set forth in Table One infra. Due to the intentional use of false and stolen identities by the Defendants not all the true of identities of Defendants agents are known but each and every act committed was by Defendants or at their direction and the true details are known to the Defendants and Sipes, Raygoza, and Molina who were the principles among the Defendants responsible at all times for sales, seminars, affiliates, and customer service. Plaintiffs have attempted to inject precision or some measure of substantiation in order to place the Defendants on notice of their actions but in all cases the relationship between Plaintiffs and Defendants was relatively lengthy and ongoing with numerous interactions and the Plaintiffs in all instances are known to the Defendants and there is sufficient substance to the allegation to provide appropriate notice to defendants. Further the substantiating documents and records such as they exist are largely in the possession of the Defendants who maintained phone logs, phone recordings, documents, ledgers, emails, and other electronic data substantiating the substance of each and every one of the alleged transactions. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 16 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 17 of 81 Page ID #:1178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 39. The individual false statements made to Plaintiffs by Defendants regarding guaranteed profits and income that induced reliance are highlighted in bold and are contained in the fllowing section “Plaintiffs” and are incorporated herein by reference. 40. The Defendants used a variety of stock false statement or techniques to induce credible reliance by Plaintiffs including but not limited to the following: (a) Defendants obtained access to Plaintiffs’ credit card accounts by falsely claiming that they were just checking the victim’s credit worthiness or using an inside source to adjust the account in favor of the victim but instead the defendants simply placed unauthorized charges on the cards; (b) Defendants used the terms and offers of joint venture amd partnership with Raygoza when such joint ventures and partnerships as defined in the normal and legal meaning did not exist; (c) Defendants practiced up-selling and reselling to those they had initially defrauded with false stories of successor companies, new programs, or new services when in fact plaintiffs had no chance of earning money and only invested further funds because their initial funds were “held hostage” by the Defendants. (d) Defendants business claimed relationships that did not exist with Google, Sergey Brin, the United States government, Clickbank, Mastercard and their officer and directors that did not exist in fact; (e) Defendants misappropriated the identities of affiliate Internet marketers Jeff Alderson, Charles Kirkland, John Denton, Chris Cobb, Ron Davies, Craig Beckta, and Jonny Andrews to induce reliance by Plaintiffs as set forth in detail in the sections Plaintiffs and Common Facts. (f) Defendants as a practice as set forth in detail in the sections Plaintiffs and Common Facts and incorporated herein by reference made false statements that they were using so called matching funds to pay part of a Plaintiffs’ expenses or as a contribution to a partnership or joint venture with Defendants. The matching funds however did not exist and were not paid into any account or to Plaintiffs’ favor. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 17 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 18 of 81 Page ID #:1179 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (g) Defendants made a practice of inducing Plaintiffs to sign a document called a Verification by making numerous false statements of fact about trade secrets andthen utilized the Verification documents or had their law firm utilize these documents to misrepresent the situation to credit card companies, banks, agencies, and law enforcement to defeat Plaintiffs' attempts to secure refunds. (h) Defendants made false statements as to the existence of guaranteed return of income, guaranteed profits, and money back guarantees. 41. All plaintiffs lost their investments and suffered additional losses when they attempted to implement the defendants home business or implement advice provided by Defendants. All Defendants have profited to the detriment of the Plaintiffs. The actual details are plead in specificity in the Plaintiffs and Common Facts section of the complaint and the following table. 42. The following Table One summarizes the claims of each Plaintiff, the identity of the Defendants when known, the false statements or acts committed by the Defendants, and the Plaintiffs monetary loss: TABLE ONE - SUMMARY OF FRAUDULENT ACTS Plaintiff Defendant(s) or Agent Fraudulent Act or Statement 1. Guaranteed return of investment. Loss Mattern Silver $30,000 Joseph Martino 1. Guaranteed refund 2. Unauthorized charge to credit card $20,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 18 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 19 of 81 Page ID #:1180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Little “Denton” 1. Guaranteed return of investment 2. Use of stolen identity $10,000 Martino Forcier Bresckenridge “Unknown salesmen” “Jonny Andrews” 1. Guaranteed income. 1. Guaranteed income. 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized charge to credit card $5,000 $30,000 $4500 Oliphint “Ron Davies” 1. Guaranteed income. 2. Use of stolen identity. $10,000 Dale Traxler “Unknown salesmen” Tarentino 1. Guaranteed income. 1. Guaranteed income. 2. False statement of money on account in Plaintiff’s favor. $10,000 $58,000 Anderson “John Denton” 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized charge to credit card. $2000 Cornelius Verala 1. Guaranteed income. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 19 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 20 of 81 Page ID #:1181 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Fortosis Mendez 1. Guaranteed return of investment. 2. Guaranteed income. $15,000 Youree “UnknownSalesman” 1. Guaranteed income. $2400 1. Partnership with Martino Stewart “Craig Beckta” Raygoza 1. Guaranteed income. 2. Use of stolen identity. $1800 $10,000 Blanscett “John Denton” 1. Guaranteed income. 2. Use of stolen identity. 3. Unauthorized withdrawal from debit card. $12,580 Woods “John Denton” Molina 1. Guaranteed income. 2. Use of stolen identity. $40,000 1. Guaranteed return Kinght Wingrove “John” of investments. 1. Unauthorized charges to credit card. $15,000 $3000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 20 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 21 of 81 Page ID #:1182 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Proffer Arturo Raygoza 1. Guaranteed profits. 2. Guaranteed return of investment. 3. Partnership with John Raygoza. 4. Matching funds. $18,000 De Courcey LeMasters Raygoza Martino 1. Guaranteed income. 1. Guaranteed return of investment. 2. Matching Funds. $10,282 $7,000 Mintz Martino Gale 1. Valuable traffic. $10,000 Sandifer Tarantino Hamilton “Jeff Alderson” 1. Use of stolen identity. 2. Guaranteed income. 3. Guaranteed return of investment. 4. Unauthorized charges to credit card.. $10,000 Radder Molina Raygoza 1. Guaranteed income. 2. Guaranteed return of investment. $25,000 Plach 23 24 Tarentino “John Denton” 1. Use of stolen identity. 2. Guaranteed income. $17,000 25 3. Guaranteed return 26 of investment. 27 4. Matching Funds. 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 21 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 22 of 81 Page ID #:1183 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Menz Law Mitchell “Jeff Alderson” 1. Guaranteed income. 2. Guaranteed refund. 3. Guaranteed return of investment. 4. Use of stolen identity. 5. False claim of affiliation with US government. $14,000 Hester Duffy Hamilton “Jeff Alderson” 1. Matching funds. 1. Use of stolen identity. $10,000 $3000 Rogers & Granshaw Murphy 1. Guaranteed income. 2. Guaranteed refund. $3400 Tan “John Denton” Bruce Raygoza Gold 1. Use of stolen identity. 2. Unauthorized charges to credit card. 3. Guaranteed refund. $24,000 Kaye Raygoza 1. Guaranteed refund. 2. Guaranteed income. $20,000 Yorke 23 24 25 26 27 28 Sainz 1. Guaranteed return of investment. $8000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 22 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 23 of 81 Page ID #:1184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Jones Raygoza 1. Joint Venture. 2. Guaranteed return of investment. 3. Matching funds. 4. Guaranteed profits. $12,500 Lagos Johnson 1. Guaranteed return of investment. 2. Unauthorized charges to credit card. $7,500 Knisely “John Denton” 1. Guaranteed income. 2. Use of stolen identity. $10,000 1. Guaranteed income. Artino 1. Guaranteed income. 2. Unauthorized Hill Willis Murphy charges to credit card. 1. Guaranteed return of investment. Ledoux Schaetzel Alhouse Robbins Knight Martino Johnson “John Denton” 1. Use of stolen identity. $50,000 1. Guaranteed income. 1. Guaranteed income. $7,000 $14,000 $10,000 $10,000 $5,000 25 26 2. Guaranteed income. 27 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 23 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 24 of 81 Page ID #:1185 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Uys Mitchell Sipes 1. Guaranteed income. 2. Guaranteed refund. $30,000 Poulsen “John Denton” 1. Use of stolen identity. 2. Guaranteed return of investment. $10,000 “Unknown IncFortune Salesman” 1. Access to credit card to check credit worthiness. 2. Unauthorized charges to credit card. 2. False claim of partnership. $20,000 Mayott Gold 1. Guaranteed income. $10,000 1. Use of stolen “Jeff Alderson” Daily “John Denton” identity. 1. Use of stolen identity. 2. Guaranteed income. Majanil Knight 1. Guaranteed income. 2. Matching funds. 3. Partnership. 4. Unauthorized charges to credit card. $6500 $18,000 $10,700 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 24 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 25 of 81 Page ID #:1186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Borzillary “John Denton” 1. Use of stolen identity. 2. Guaranteed income. 3. False relationship with Google’s founder, Sergey Brin. $1628 Matthews “John Denton” 1. Use of stolen identity. 2. Guaranteed income. 3. Matching funds. $6000 Lesperance Raygoza 1. Guaranteed income. 2. Guaranteed return of investment. $20,000 Breit Murphy Obando 1. Guaranteed return of investment. 2. Guaranteed income. $25,000 Perona Austin 1. Guaranteed income. 2. Guaranteed refund. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 25 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 26 of 81 Page ID #:1187 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nakawaga Hill Raygoza Martino 1. False relationship with Google and Clickbank claimed. 2. Access to credit card to check credit worthiness. 3. Unauthorized charges to credit card. 4. Guaranteed refund. 5. Guaranteed income. $30,000 Houdashell Hill 1. Guaranteed income. 2. Access to credit card to check credit worthiness. 3. Guaranteed retunr of investment. 4. Unauthorized charges to credit card. $21,000 Hoke Vincent 1. Unauthorized charges to credit card. $10,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 26 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 27 of 81 Page ID #:1188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Adele Hill 1. Guaranteed income 2. Guaranteed return of investment $15,000 1. Guaranteed income Artino 1. Claimed money owed for services Knight Horlacher “John Denton” 1. Use of stolen identity. 2. Guaranteed return of investment. $6,000 $10,000 $26,000 Raygoza Sipes Old Unknown PushTraffic Salesman 1. Guaranteed income. $30,000 1. Guaranteed income $20,000 Raygoza 1. Guaranteed return of investment. 2. Unauthorized charges to credit card. TOTAL LOSSES TO PLAINTIFFS: $941,790 $11,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 27 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 28 of 81 Page ID #:1189 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. FACTS PERTAINING TO RICO 43. Plaintiffs incorporate by reference as if plead fully herein all the preceding paragraphs of the complaint and the following Sections regarding Plaintiffs and Defendants. 44. From all relevant times beginning with the founding of PushTraffic in May 2007 to present, defendants worked with one another to defraud Plaintiffs and others and to obtain the property of Plaintiffs and engaged in numerous instances of illegal conduct, including extortion, mail and wire fraud and money laundering as noted in the “Plaintiffs” section of the complaint in a pattern of racketeering activity involving interstate and international commerce. 45. Through a common scheme to defraud and racketeering activities the Defendants succeeded in taking illegally the property of Plaintiffs and other victims through an intricate pattern of individual transactions and group transactions controlled by John Raygoza, Sipes, and Molina and utilizing their Corporate entities and their various fictitious names. These same individuals, Raygoza, Molina, and Sipes also individually and through employees committed the racketeering activities both directly and indirectly. 46. The RICO Enterprise is an association in fact enterprise consisting of all the defendants regardless of their separate legal identities. The structure of each of the Corporate members of the RICO Enterprise invariably included some combination of Raygoza, Sipes, Molina or all three as principle officers united in a common purpose to defraud victims. The RICO Enterprise also worked through independent law firms and financial institutions to achieve its goals. The RICO enterprise is coherent and ongoing, still in operation using at a minimum the names JumpLaunch, John Raygoza, FutureEndevaor, IncFortune, and Finity Consulting with some combination of Raygoza, Sipes, and Molina or all three involved at all times. 47. While the Defendant corporations engaged in various racketeering activities they did also service legitimate clientele and provide marketing and web hosting services separate from the RICO enterprise. For example Future Endeavor entered into an agreement with Progressive Tax Group in 2010 to supply leads and Jump Launch provides web hosting SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 28 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 29 of 81 Page ID #:1190 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 services to many individuals unrelated to events complained of herein. The records of the Defendants will contain numerous other instances of legitimate marketing, advertising, and web hosting clientele separate from the RICO Plaintiffs or Class members. 48. In carrying out the scheme to defraud plaintiffs and other victims, Defendants engaged, inter alia, in a pattern of conduct in violation of criminal statutes including mail fraud, wire fraud, violation of the Hobbs Act, money laundering and interstate and foreign travel in aid of racketeering enterprises as follows: (a) The defendants made a series of knowingly false statements that were virtually impossible to realize in order to induce victims to transfer funds to them. The false representations were not just mere statements or expressions of opinion but were deliberately made as part of an ongoing racketeering scheme which falsely offered to deliver such things as Guaranteed Return on Investment, Money Back Guarantee, Joint Ventures and Partnerships which did not exist and return of Initial Investment before Credit Card Payments came due. The details of the fraud are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and in the section labeled Fraud and all incorporated herein by reference. (b) The Defendants engaged in a pattern of fraud by using the fraudulently obtained Verification forms to fend off charge backs and investigations by banks and credit card companies and in doing so deliberately misrepresented through attorneys and others that the Plaintiffs were merely disgruntled customers. (c) Defendants as a regular business practice placed unauthorized charges on victims’ credit and debitcard accounts and then either induced the victim to sign a Verification while their money was held hostage or simply kept the money while falsely claiming to third parties services had been provided. The details of these practices are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and Fraud and incorporated herein by reference. (d) The defendants engaged in money laundering through the practices of disguising credit card and PayPal transactions as a series of small transaction to avoid anti fraud SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 29 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 30 of 81 Page ID #:1191 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 program detection and manipulating credit card accounts to permit overcharges. The details of these practices are contained in the sections of the complaint labeled Plaintiffs & Their Allegations, Common Facts and Fraud and incorporated herein by reference. (e) The activities of the Defendants in the formation and execution of the scheme and artifice to defraud, acts of extortion, and money laundering caused and continue to cause pervasive and substantial harm to persons engaged in interstate and foreign commerce, including harm to the plaintiffs, victims, and potential victims. Plaintiffs were neophyte Internet marketers or people looking for legitimate work at home opportunities. Defendants have amassed their millions almost exclusively by abusing credit card accounts of the elderly, disabled, the working poor, retired, and unemployed, all victims who can least afford these losses. The RICO Enterprise reached out to encompass victims in Malaysia, Australia, England, Ireland, Saipan, and Canada as it reckoned that foreign residents would have little or no recourse against the defendants. In committing these acts, the RICO Enterprise also utilized the US Postal Service to obtain funds from victims and mail out materials including DVDs and promotional items. 49. During the relevant times, and in furtherance of and for the purpose of executing the scheme and artifice to defraud, Defendants traveled interstate and internationally to Singapore and used the telephone and Internet technology to threaten acts of violence in furtherance of unlawful activity and to promote, manage, establish, carry on, and facilitate the promotion, management, establishment, and carrying on of unlawful activity. 50. During the relevant times, Defendants knowingly and intentionally and attempted to transport, transmit, and transfer monetary instruments and funds from inside the United States to or through a place outside the United States, and to a place in the United States from or through a place outside the United States, with the intent to promote the carrying on of specified unlawful activity and maintained an account at Wells Fargo Bank to handle incoming bank wires from overseas victims. Foreign plaintiffs have transmitted funds to accounts controlled by the Defendants within the United States by wire, electronic transfer and credit card including but not limited to Defendants' accounts with Wells Fargo, SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 30 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 31 of 81 Page ID #:1192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Authorize.net, and PayPal. 51. The following Table describes in summary the predicate criminal acts perpetrated by the Defendants. TABLE TWO - RICO PREDICATE ACTS Plaintiff(s) Horlacher Defendant(s) Raygoza Sipes Predicate Act 18 U.S.C. § 1341 Mail Fraud - Plaintiff mailed a check for $27,000 to Defendants relying upon false statements by Raygoza and Sipes that they would triple his money in 90 days. All All - use of the telephone and Internet to defraud Plaintiffs 18 U.S.C. § 1343 Wire Fraud including use of the telephone See Section following entitled “Plaintiffs” for details. May 2007 to present Date September 2010 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 31 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 32 of 81 Page ID #:1193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mattern Little Oliphint Dale Blanscett DeCourcey Lemasters Radder Hester Kaye Jones Willis LeDoux Johnson Mayott Daily Matthews Lesperance Breit Perona Houdashell Hoke Horlacher All including Raygoza, Sipes, Molina 18 U.S.C. § 1953 Interstate and foreign travel or transportation in aid of racketeering enterprises May 2007 to present Defendants caused and made arrangements for Plaintiffs to travel to Los Angeles, Malibu or Singapore. See Section following entitled “Plaintiffs” Old Breit Defendants’ employee Obando was sent to Plaintiffs homes to set 2009 June 2009 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 32 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 33 of 81 Page ID #:1194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nakawaga Raygoza Martino 18 U.S.C. § 1956 Money Laundering Transactions were disguised as a series May 2010 Houdashell Hill of many smaller transactions to avoid detection by anti fraud programs at credit card companies and PayPal. July 2009 Dale Molina Severino 18 U.S.C. § 1951. Interference with commerce by threats or violence Threats of implied violence and legal actions were made to intimidate victims and discourage them from pursuing refunds. Death threat made to Plaintiff to quell complaints. January 2010 VII. PLAINTIFFS & THEIR ALLEGATIONS 52. Plaintiffs hold all the Defendants jointly and severally liable for their losses. The following facts and allegations, however, refer to specific Defendants when and if SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 33 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 34 of 81 Page ID #:1195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 identifiable with which Plaintiffs had contact and the specific acts unique to each Plaintiff from which they complain against the Defendants individually and as class representatives. Defendants in this section specifically refers to all Defendants individually and as a combination and as a RICO enterprise. All Plaintiffs were induced to pay funds to the Defendants based on material misrepresentation of fact upon which they relied and which were knowing falsehoods made by the Defendants and in furtherance of their scheme. So there is no question that each and every Plaintiff was induced by and relied upon false statements of fact made by the Defendants, where available these exact false statements of facts are highlighted in bold letters. Where relevant the ages and/or disabilities of the plaintiffs have also been highlighted in bold to show the tendency of the Defendants to target the aged, vulnerable and infirm. 53. As a result of the practice by Defendants of using false, and stolen identities as well as multiple and interchangeable Corporate identities and fictitious business names, the exact identities of some of the Defendants are in doubt but it is not in doubt that they were all agents acting on instructions of the Defendants or the Defendants themselves using assumed identities. Further, Plaintiffs dealt with numerous Defendants and were often unsure as to which Defendant they were actually dealing with and Corporate defendants were often used interchangeably by the Defendants. The management of the Corporate defendants always however included Raygoza, Sipes, and Molina thus the Corporate entities were used interchangeably as part of the RICO enterprise and to commit fraud. 54. Douglas Mattern is a resident of Palo Alto, California. His total losses are $30,000 including $20,000 to PushTraffic and $10,000 to IncFortune. In August of 2008, he paid $5,000 and received training from PushTraffic. After two sessions he did not receive any communication for weeks. Then around March of 2009, he received a telephone call from PushTraffic through one of their salesmen named Matthew Silver. Silver made many false statements including claiming that a large amount of hits to plaintiff’s website that would be guaranteed to recover his investment in a couple of weeks and then make substantial profits. Silver cited a figure of $40,000 profit and more. Plaintiff therefore SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 34 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 35 of 81 Page ID #:1196 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 paid PushTraffic an additional $15,000 based on Silver’s false statements of profits. After plaintiff paid the $15,000, there was no communication from PushTraffic. For weeks plaintiff sent emails, postal mail, and telephone calls to PushTraffic, Matthew Silver, and John Raygoza and received no response. Finally he did get a telephone call from John Raygoza, but this came after he sent to Raygoza an email stating he had contacted his credit card bank's fraud unit. Raygoza said to Mattern that Matthew Silver did not work for PushTraffic, but was an independent salesman that gets contracts for PushTraffic and he (John Raygoza) was not responsible for any statements made to plaintiff. Raygoza than invited plaintiff to his office in Los Angeles. Plaintiff stayed in Los Angeles for two days getting training. After that visit, he again received no communication from PushTraffic until he complained again. After this he was assigned to a new trainer that led to nothing of value. Then he was told he was in the VIP group would receive personal training from John Raygoza. But after a few sessions there was no more information nor was he informed of any further seminars. This occurred on two occasions. In summary, after more than a year and $20,000 plaintiff had nothing to show for it. His account at PushTraffic showed zero commissions despite providing many leads to PushTraffic for which he was to be paid $5 each. For one project he provided 1,000 leads for Raygoza and his account still read zero. He complained about this in a telephone call to PushTraffic, but he never received an answer. During this period Plaintiff also paid $10,000 for training from IncFortune unaware it was the same entity as PushTraffic. IncFortune however provided no training or anything of value to plaintiff. Later Plaintiff, who had yet to earn a dime, was telephoned by a person who called himself John (not John Raygoza). John said that things were going to change for him, and after three breaks in the conversation (when John said he was conferring with Raygoza) John claimed things would be very positive for Plaintiff as Plaintiff had been promoted from the PushTraffic VIP team (Level III) to the partnership program with Raygoza (Level IV). To become a partner he would need to pay another $30,000, which Plaintiff declined. Around a month after that incident, Plaintiff received a call from IncFortune from a person who claimed he had purchased all of Raygoza's companies and he was going to make things SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 35 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 36 of 81 Page ID #:1197 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 right. He said that Raygoza was not involved or even in the office but after plaintiff made a few derogatory remarks about Raygoza, the call terminated. When Plaintiff recently sought a return of his $30,000, he was accused by the defendants’ attorney of record of extortion, defamation, slander, and conspiracy. In sum, Plaintiff specifically relied on several false statements made by Silver. Raygoza claimed Silver was not an employee and denied Silver's statements of a guaranteed return on investment and when confronted with this fact, Raygoza refused to provide a refund and opposed Mattern’s attempt to obtain return of his funds eventually instructing his attorneys to threaten Mattern with a lawsuit for defamation, libel and extortion. 55. Richard Joseph is an attorney in good standing in Michigan. For the past 7 years he has suffered from T6 paraplegia and currently receives Social Security Disability. Over the years as his condition has worsened, he sought a legitimate work at home opportunity. In November 2008, he was telephoned by salesman “Rob Martino” from PushTraffic’s sales force supervised by Molina. Martino gained Joseph’s trust and learned all about his disability, struggles, and goals. Martino falsely feigned an interest in Joseph’s well being and Martino even claimed his own brother was a paraplegic which was very likely a lie to gain Plaintiff’s confidence. Martino convinced plaintiff to invest $20,000 with PushTraffic but when plaintiff learned that Martino would not be his mentor, he cancelled the Verification and the $20,000 was refunded. In February 2009, Martino again began calling Plaintiff. Plaintiff’s health condition had gotten far worse and he was battling for his life with a deadly MRSA staph infection requiring hospitalization. Even though aware of this, Martino persisted until Plaintiff orally agreed to a refundable $15,000 turnkey investment with Martino and PushTraffic as Plaintiff could do no work and could not attend the seminar offered. Martino swore that if this did not work out, all he had to do was push a button and the money would be refunded. Plaintiff was briefly released by ambulance from the hospital to attend to make final arrangements as it was thought he would likely die from MRSA. Martino called Plaintiff and demanded he sign a contract, Plaintiff physically could not and Martino then pressured Plaintiff’s secretary into signing for him. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 36 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 37 of 81 Page ID #:1198 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff was in the hospital from January to May 2009 and survived the MRSA infection. He then discovered an unauthorized $20,000 charge on his credit card. Plaintiff attempted to dispute the charges but PushTraffic induced the credit card companies to uphold the charges by producing the so called Verification that had not been signed by Plaintiff. Plaintiff, who was desperately in need of funds to buy medical equipment for his recovery had relatives attempt to entreat Raygoza to refund the money, however the money was not refunded. In 2010 plaintiff has spent additional months hospitalized and in May 2010 was cold called by a person falsely posing as Denton from one of the Raygoza entities who claimed he was a friend of Martino in an unsuccessful attempt to obtain yet more funds. At all times herein, Plaintiff was in excruciating pain, heavily medicated and fighting a life threatening illness. Defendants’ actions have not only damaged Plaintiff by taking away money needed for the necessities of life but has also harmed his self esteem as an attorney who was abused by Defendants. Were it not for the false statement of a no hassle refund made by Martino, Plaintiff would not have entered into any negotiations with Defendants and in any event Plaintiff lacked the capacity to sign a Verification and in fact did not sign a Verification or authorize charges to his credit card. 56. Sandra Little, of Revelstoke, British Columbia, Canada, was victimized in the amount of $15,000 by IncFortune and DotIntel. Plaintiff was initially signed up by a salesman falsely assuming the identity of John Denton who said he was with IncFortune. For $10,000 “Denton” stated Plaintiff would be trained by experts to make $20,000 a month and would definitely make her initial investment back in one month. Based on these intentional misrepresentations she gave “Denton” $10,000. Plaintiff has no previous experience with Internet marketing and trusted “Denton” who she believed to be the real John Denton, a well known Internet marketer. This false Denton tricked plaintiff into signing a Verification. Plaintiff worked the program diligently with no success and found the training offered to be confusing and unhelpful to her. About three months into the training, she received a call from a man called “Rob Martino” working for the Defendants. Martino said that “John Denton” had noticed that she hadn’t made any money to date and that her success SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 37 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 38 of 81 Page ID #:1199 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 was very important to them. Martino said he would go into all her accounts and fine tune them so she could start making money immediately. Martino stated he would provide 30,000 client leads for her and one on one coaching. Based on Martino’s statements Plaintiff signed up for an additional $5,000 with DotIntel as an inner circle client. No services were provided except a seminar. Plaintiff was then tricked into signing a Verification document in October 2009 with JumpLaunch, Successrate and DotIntel by Martino and “Denton” in order to protect so called trade secrets. Plaintiff shortly thereafter contacted John Raygoza and David Sipes about her concerns and was told: “You signed a contract and have no remedy.” Sipes and Raygoza kept ignoring her attempts to get answers until she started threatening to expose them. At one point, Raygoza and Sipes said they would refund her the $5,000 but not the $10,000. When Plaintiff asked for a portion of the additional $10,000 she was accused through the Defendants’ current attorney of record of: extortion, defamation, slander, and conspiracy, and threatened with a lawsuit. 57. Clarence Forcier, of Bloomington, Minnesota, was victimized in the amount of $30,000 by the Defendants with the last act in April 2010. Plaintiff is age 73 1 and suffered two debilitating strokes in 2007-2008 with resulting brain damage and is classified a vulnerable person pursuant to Minnesota elder protection statutes. While looking for a work at home opportunity he happened across an ad for PushTraffic. Plaintiff was told by Defendants’ salesman: “It was $10,000 for the really big money,” in October 2008 and then it was $19,000 for “3 web sites we are building for you as we speak in January 2009.” Defendants made statements that were relied upon that guaranteed Plaintiff would recoup his investment. The $19,000 was supposed to include advertising. The Defendants provided a single website hosted by JumpLaunch. In October and November 2008 Sipes provided technical services to Forcier which seemed useless and made no sense to him. Forcier was contacted again in April 2010 inviting him to affiliate again with the Defendants. Plaintiff never received any money and was charged for web hosting by the Jumplaunch, paid $1000 1 All ages as of October 1, 2010. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 38 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 39 of 81 Page ID #:1200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to Google for advertising on Sipe’s advice and is now facing foreclosure and eviction from his home due to the false statements of the Defendants. The website provided at Plaintiff’s expense steered new victims to the Defendants. When Plaintiff attempted to complain, he was brutally intimidated by Defendants’ attorney Weitz who told him he had a “contract” and there was nothing he could do about it and Defendants’ legal staff further mischaracterized the situation to the Minnesota Attorney General as one of a disgruntled customer who had received valuable services and trade secrets. The Defendants were aware that Plaintiff was disabled and vulnerable and exploited the situation to deceive him into going into debt. Plaintiff is now suffering extreme hardship as a result of the Defendants’ actions. 58. Plaintiff K. Ann Breckenridge, of Canada, age 66, was victimized in the amount of $4,500 or $5,713 (Canadian) by PushTraffic. Plaintiff is disabled and receives a disability pension due to polio related paralysis of her right arm, and back and left shoulder problems. In April 2009, a PushTraffic salesman using the false identity of well known Internet marketer, Jonny Andrews, falsely stated plaintiff would make $50,000 in profits to her website and would not have to pay for services until the profits were achieved. “Andrews” asked and received Plaintiff’s Master Card number and immediately charged $4,500 to it placing her account into overdraft without her consent. Plaintiff never entered into a a written agreement for services and never signed a Verification, she tried to cancel immediately and has repeatedly requested a refund from both Molina and Raygoza to no avail. PushTraffic materially misrepresented the situation to Plaintiff’s credit card company when she disputed the charges by falsely claiming she had entered into a contract for services. 59. Arline J. Oliphint, of Phoenix, Arizona, was victimized in the amount of $10,000 by PushTraffic and IncFortune. In July 2009, plaintiff, who was recently widowed, received an unsolicited phone call by a man who called himself “Ron Davies” a well known Internet marketer known to Plaintiff. The bogus Ron Davies falsely stated to the Plaintiff her existing online business would quickly earn $10,000 a month if she signed up. Various other false statements were made to the Plaintiff causing her to pay a total of $10,000 to the Defendants SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 39 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 40 of 81 Page ID #:1201 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in a series of credit card transactions. She became concerned when she decided to look for the PushTraffic website and discovered there was a discrepancy between what was offered on the website and what had been verbally sold to her. At that point, she had only managed to pay $7,500 of the $10,000 that had been requested. But the website showed two packages priced at $5,000 and $10,000 respectively, with services similar to what was described on the phone. Both packages were nearly identical and both included the 3-day seminar. The only difference was that the $10,000 package included a joint venture with John Raygoza. So she asked if she could stay with the $5,000 package and get a refund of $2,500. The salesman laughed at giving a refund, then started to say the $7,500 could be adequate, but then convinced her that the $10,000 level was necessary for the VIP treatment they wanted to give her. Plaintiff, a widow, was ruined financially by the Defendants and lost all her savings. The $10,000 taken from her by Defendants was the proceeds of her late husband’s life insurance policy. 60. Ewing Lee Dale, age 70 of Jackson, Georgia, was victimized in the amount of $20,000 by PushTraffic and IncFortune. In May 2009, plaintiff who is retired and in poor health with diabetes and Parkinson's Disease was cold called by a PushTraffic salesman who convinced him to part with $20,000 in exchange for false statements of big profits. Plaintiff did not understand what he had signed up for and never earned any money. Plaintiff was targeted after dinnertime when the salesman found him to be sleepy, disoriented and agreeable to their demands In January 2010, another salesman from IncFortune cold called plaintiff after dinnertime and attempted to obtain $15,000 with similar false statements and obtained Plaintiff’s credit card number and used it to charge $15,000. Plaintiff was later able to get the $15,000 charges removed from the credit card by Chase. Plaintiff has suffered financially, his credit was damaged and he has difficulty paying medical bills. Plaintiff was repeatedly targeted by the Defendants because he was vulnerable to their lies, sick, and elderly. Plaintiff received nothing of value in exchange for his funds. When plaintiff persisted in complaining, he was threatened with death and a lawsuit by PushTraffic employee “Hernan Severino” and defendant Ted Molina. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 40 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 41 of 81 Page ID #:1202 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 61. Greg Traxler, a citizen of Colorado, was victimized in the amount $58,000 by IncFortune. In December 2009 IncFortune’s salesman, Robert Tarentino, lied repeatedly to plaintiff about guaranteed profits to obtain $30,000. Tarentino then sent a voice recording to plaintiff to assure him that $30,000 in profits was already on deposit at IncFortune in Plaintiff’s account and that it would be wired as soon as plaintiff sent another $28,000 investment and signed the fraudulent Verification with IncFortune and JumpLaunch. Tarentino falsely stated that plaintiff was a now a Partner with IncFortune. Plaintiff, believing he had no option to obtain back the initial $30,000, paid the additional $28,000 and signed the Verification in the amount of $58,000. Plaintiff provided wire transfer coordinates for the $30,000. Plaintiff received no money or anything of value from IncFortune and JumpLaunch in exchange for his $58,000 partnership investment. Sipes, using a Jumplaunch email address, then took charge of the account but provided none of the stated services or investment returns nor did he speak with the Plaintiff on February 2010 when plaintiff tried to call him. 62. Bette Anderson, of Minneapolis, Minnesota , was victimized in the amount of $2,000 by IncFortune. Plaintiff was contacted by someone falsely claiming to be John Denton. “Denton” claimed that he was a millionaire who had achieved his wealth through Internet marketing. He stated that through the program he was promoting, and that plaintiff would have a check for $5,000 by the following Friday. He talked about flying her down to Malibu, expenses paid, for one on one instruction on how to implement this program. “Denton” claimed and Plaintiff relied on his false statement that she would earn $1,000 per day, $5,000 per week and likely $175,000 per year. Plaintiff told “Denton” she was currently unemployed with little money. He emphasized how this program could change her situation. “Denton” asked about her financial accounts and credit cards and asked if she had $10,000 to get started in this endeavor. Plaintiff told him she only had two credit cards, one with a $500 credit limit and the other with a $3,000 credit limit. He said something to the effect of let’s see how much credit you have available on the higher limit card, and before she knew it, he had charged her card for $2,000 without her consent. Plaintiff voiced SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 41 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 42 of 81 Page ID #:1203 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 concern that she had bills that were auto charged to the account and that this could put her over the credit limit and that she would have no additional credit with which to charge other needed items. “Denton” further stated that to achieve the $10,000 amount he had initially wanted to charge to her account, she needed to do some leveraging. She then found out from the credit card company that he actually had attempted to charge the card an additional $500 without her knowledge or approval, but fortunately it did not go through because the credit limit was maxed. As predicted, she did sustain a $40 over limit fee due to subsequent auto charges for monthly bills. “Denton” induced her to sign a Verification with IncFortune for services which he misrepresented as a mere formality to protect trade secrets and stated in an email: “Attached is a Verification agreement to make sure that I am doing business with you, Bette. Please print out the agreement and fax it back to me so we can get your business set up immediately. My fax number is 310 634 0490.” The Verification agreement obtained by IncFortune and JumpLaunch was later used to prevent Plaintiff from successfully disputing the credit card charge. When Plaintiff attempted to rescind but IncFortune intentionally misrepresented the situation to both Capital One in June 2010 and the Minnesota Attorney General in March 2010 as a civil dispute rather than the truth which was plaintiff had been defrauded by “Denton’s” false statements of guaranteed returns. Plaintiff also discussed the matter with John Raygoza who said he would “Take care of plaintiff,” Plaintiff interpreted that as a threat based on the tone of delivery by Raygoza which was menacing. 63. Plaintiff Lillian Cornelius, age 80 of Toronto, Ontario, Canada, was victimized in the amount of $10,000 in installments by IncFortune, PushTraffic, JumpLaunch and Successrate beginning in September 2009 after relying on the false statements of a PushTraffic salesman. Pushtraffic telephone salesman Richard Verala stated to plaintiff she would earn a minimum of $2500 within 30 days to induce her to sign up. He sent an email to her stating she would recoup her investment in 30 days. Verala was aware plaintiff was elderly and knew little about the Internet in general. Plaintiff attempted to follow the advice of IncFortune, Successrate, JumpLaunch and PushTraffic but achieved SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 42 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 43 of 81 Page ID #:1204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 no results. Plaintiff complained in person to David Sipes in December 2009 about the statement made by Verala and provided a copy of the email to Sipes but received no response from Sipes. Sipes in fact was well aware of the false statements made by the Defendants’ sales force but deflected complaints about it as part of his role in the RICO enterprise. Emails to Sipes and Raygoza seeking an answer also achieved no effect instead Plaintiff was solicited by a person posing as “Jeff Alderson” who attempted to obtain more funds from her on behalf of defendants. When Plaintiff tried to follow the program as outlined by Successrate her Google Adwords account was suspended due to multiple violations of Google’s anti fraud program. The website copy provided by the Defendants in exchange for $10,000 was the usual template full of lies and deception: Avoid Scams: Make Sure You Read This Important Message. Tired of systems that don't work?? See my Top 3 Work at Home Programs. Hi, I’m Lillie. I spent 13 months and over $13,600.00 searching for honest, work at home programs. What I discovered will shock YOU! 91% of Work at Home programs are nothing but false hope! 6% of Work at Home Programs only really make around $500/month 3% of Work at Home programs make over $12,000 per month. Create MULTIPLE streams of INCOME Work ANYWHERE! I Discovered 3 Programs that I'm using to achieve my $10,000 a month goal. I spend around 12 hours per week and soon will be generating full time income [http://bestwaytomakemoneyfromhome.com last accessed 9-27-10] Plaintiff is elderly and had to borrow money from relatives to pay the credit card debt incurred. Plaintiff has further suffered emotional distress and economic hardship caused by the Defendants’ intentional and negligent actions towards her. The 80 year old Plaintiff was made an unwitting accomplice to the Defendants’ scheme which harvested the email addresses of potential victims generated by the web page paid for by the Plaintiff. Although SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 43 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 44 of 81 Page ID #:1205 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ontario lacks specific legislation regarding elder financial abuse, the Public Health Agency of Canada defines Elder Financial Abuse as a crime: “Abuse is the misuse of an older adult's money or belongings by a relative or a person in a position of trust...Financial abuse is a CRIME.” [See www.phac aspc.gc.ca/ncfv cnivf/publications/agefinancialab eng.php last visited 9/27/10]. 64. Steve Fortosis of Sarasota, Florida, was victimized in the amount of $15,000 in March 2009 by PushTraffic. PushTraffic salesman Leo Mendez relentlessly pressured plaintiff and his wife into parting with $15,000 by guaranteeing over and over again that PushTraffic knew they were total beginners online and that PushTraffic would earn back the money for them while they learned internet marketing. Mendez said the $15,000 would be recouped within a few months and that plaintiff would earn an easy $5,000 a month thereafter. Plaintiff was provided the usual template type websites hosted by JumpLaunch that falsely promised big returns on investments. When two months passed without any evidence of earning the money back, PushTraffic’s Joel Lansky said he was going to put plaintiff into a new, huge money-making project called Recession Proof Millions. PushTraffic salesman Frank Perez also attempted to get Plaintiff to invest another $15,000 with false statements that $700,000 could be earned in one year. When plaintiff asked for proof, Perez was not heard from again. Through April 2009, Plaintiff attempted to diligently utilize the PushTraffic materials and resources provided by Sipes to earn money but never earned anything. 65. Luke E. Youree, of Saint James, New York, was victimized in the amount of $4,200 by PushTraffic and Youraffiliatesuccess. Plaintiff, who is disabled and receives Social Security Disability for schizoaffective disorder, was cold called by a PushTraffic telephone salesman in August 2007. The salesman stated plaintiff would make thousands of dollars per week on his computer, working a few hours per week from home. Plaintiff paid $2,400 and received the usual useless template website and was charged hosting for it by JumpLaunch. Plaintiff diligently followed the PushTraffic program for one year and made no money. Defendants’ salesman Rob Martino contacted plaintiff in July 2008 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 44 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 45 of 81 Page ID #:1206 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and offered to put him in the inner circle or the fast track where plaintiff would work with John Paul Raygoza, personally. Plaintiff paid another $1,800 but received neither new services nor any contact from John Raygoza. Plaintiff made no money and only accrued credit card debt as a result of the Defendants’ misrepresentations and has suffered extreme financial hardship due to his limited income and inability to work. 66. Plaintiff Beverly Stewart, age 65 of Greeley Colorado, was victimized in the amount of $20,000 by PushTraffic and IncFortune from July to September 2009. Someone at PushTraffic posing as well known Internet marketer Craig Beckta called Plaintiff on July 3 2009. He said he would personally build a website for her and she’d be making money by July 10, 2009. “Beckta” said plaintiff would be going to his Malibu house to celebrate all the money she'd be making by then. Plaintiff paid $10,000 to PushTraffic but never earned any money. On July 23, 2009, Frank Perez from PushTraffic called plaintiff. He stated to plaintiff he would personally put up a website for her that would make money the next day. When she said Craig Beckta had stated the same thing but that she hadn’t made any money yet, Perez said she had signed up for the wrong program. Plaintiff paid the $10,000 but a couple hours later plaintiff called “Woody” in billing at PushTraffic and rescinded the transaction. Plaintiff was shocked on August 22, 2009 when she received her credit card statement and found out the second $10,000 had been charged without her consent. Plaintiff then spoke with both Sipes and Raygoza. Raygoza stated to plaintiff he would refund the $10,000 if she signed a Verification with IncFortune for $10,000 and then he would refund the whole $20,000. Raygoza kept the additional $10,000 and only refunded the first $10,000. Molina who identified himself as head of sales then tried to sell more services to plaintiff in September 2009 by stating she would receive, Tons of money within 15 days. Plaintiff never earned any money and her ongoing complaints are unanswered by the Defendants. In Colorado, under C.R.S. Title 18, an at risk adult is any person 60 years of age or older, or any person who is 18 years of age or older and is a person with a disability, as defined in C.R.S. 18 6.5 102(1). The Colorado Legislature has recognized that elderly are at greater risk of financial exploitation than the general SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 45 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 46 of 81 Page ID #:1207 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 population. See C.R.S. 18 6.5 101. 67. James K Blanscett, age 69 of Kennewick, Washington, was victimized in the amount of $13,800 by IncFortune. Plaintiff responded to an email ad by the actual John Denton on 21 October 2009. Plaintiff was referred to Defendants at which point Defendants' salesman assumed the name John Denton and stated many times that plaintiff would earn money until plaintiff believed him. Thereupon “John Denton” immediately referred plaintiff to John Raygoza and IncFortune/PushTraffic to join their programs and for which Plaintiff was charged $10,000. Plaintiff called the false “John Denton” a number of times with little success in obtaining assistance, expressing dissatisfaction with program, and requesting a refund. Plaintiff also had contact with David Sipes during the seminar he attended in Los Angeles on 3/4 December 2009 that was sponsored by IncFortune. Sipes conducted the seminar and made a presentation on Free Traffic Strategies. Sipes stated to Plaintiff that he was associated with IncFortune as a business partner. Presenters at the seminar included Boaz Rauchwerger, John Raygoza, Folusho Orakunle, and David Sipes. Sipes suggested Plaintiff contact him direct and provided a phone number and email address for concerns or problems. Plaintiff sent email to David Sipes (david@incfortune.com) as suggested by Sipes on 14 December 2009 requesting assistance in resolving problems and received no response. Plaintiff then sent a number of emails to David Sipes, Jack Hill, “John Denton,” and John Raygoza requesting a refund but no refund was ever received. A PushTraffic salesman also withdrew $1,380 from Plaintiff’s checking account without his consent and which resulted in an additional overdraft fee of $1,200. 68. Lauri (Laurence) Woods, age 87 of Sunnybank South Queensland, Australia, was victimized in the amount of $40,000 by PushTraffic and $15,000 by IncFortune and JumpLaunch. In August 2008, plaintiff was approached by PushTraffic salesmen “Denton,” Molina, and others who eventually extracted $40,000 total from plaintiff. Plaintiff believed he was purchasing a money-making internet business based on the representations of Denton and Molina but instead earned nothing. In April 2010, Plaintiff was approached by Bruce Knight of IncFortune who falsely claimed he had nothing to with Raygoza or SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 46 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 47 of 81 Page ID #:1208 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PushTraffic in order to gain Plaintiff’s trust due to the original losses in 2008. Knight made statements he would help Plaintiff earn back his money through a hosting deal with JumpLaunch, Inc Fortune and Successrate. Plaintiff paid IncFortune $15,000 by credit card but tried to cancel within 24 hours when he became suspicious that IncFortune was affiliated with PushTraffic. IncFortune did not reverse the charges and opposed the charge back but Plaintiff eventually regained control of the $15,000 payment. Elder Abuse in Queensland, Australia is defined as follows: Any act occurring within a relationship where there is an implication of trust, which results in harm to an older person. Abuse can include physical, sexual, financial, psychological and social abuse and/or neglect. 69. Robin Wingrove, age 62 of Duffy, Australia, was victimized in the amount of $3,000 (Australian) by PushTraffic in July 2009. Plaintiff is a retired civil servant and was cold called in July 2009 by a PushTraffic salesman named “John.” When plaintiff said he did not have the $7,000 John required, John suggested that he check Plaintiff’s credit cards for the balance. Plaintiff gave their numbers to him on the very strict proviso that he was not to take any money out. About 2 minutes later, Plaintiff got a call from one of his two credit card providers asking if he had made a purchase of $3000. Plaintiff denied the charge and asked if could they stop it which they did. Plaintiff immediately telephoned his other credit card provider who informed him that a payment of $3,000 had gone through and when Plaintiff asked them if they could stop it they replied in the negative. John called Plaintiff back and stated to he was guaranteed an income of $9,000 per month and ignored Plaintiff’s protests. When Plaintiff did receive a Verification document after the charges had been made from PushTraffic, he signed it feeling he had no other remedy in Australia. Plaintiff has earned no money to date. 70. Deborah Proffer, age 50 of Advance, Missouri, is totally disabled with severe neck and back problems which make it very hard for her to function normally which Defendants and Raygoza were made aware of, and was victimized in the amount of $18,000 by PushTraffic in April 2009. In April 2009, Plaintiff was first contacted by “Rob Arturo” who signed her up for $2,500. Arturo described to Plaintiff a mentoring program to build SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 47 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 48 of 81 Page ID #:1209 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 profitable websites and coaching would be provided for her by Defendants. During the conversation he stated plaintiff would be great for their Inner Circle SEO program. An hour or two later Raygoza called plaintiff about a joint venture with him. Raygoza said he would match whatever amount of money plaintiff invested. Plaintiff stated she could not afford to lose a lot of money but Raygoza assured her he didn't want to lose money so therefore she would not lose money. Raygoza stated that Plaintiff would be receiving checks from his office for $5,000 every week from the joint venture. Plaintiff explained to Raygoza in one of many phone conversations that she was looking for a way to supplement her disability income. Raygoza assured her that she was going into a joint venture with him and she would receive a check for $5,000 a week directly from his office. Raygoza told her he would also pay her credit card bills from his office also, therefore she had nothing to loose. Plaintiff was guaranteed by Raygoza to make back money fast enough to pay the credit cards very quickly and she also wouldn't have to worry about paying them back. Raygoza made multiple false representations to plaintiff to lure her into handing over the money. Plaintiff never received a dime and never again heard about the joint venture. Plaintiff finally tracked down Raygoza and complained in a phone call. Raygoza asked when she began with PushTraffic and she gave him the date and he stated that her six months were up and said, “Tough luck.” Plaintiff became very angry and Raygoza hung up on her. 71. Martin De Courcey, of Ireland, was victimized in the amount of $10,282.74. $5,947 directly and the remainder in costs incurred trying to follow Raygoza’s plan by PushTraffic and YourAffiliateSuccess in 2007 and 2008. Plaintiff purchased a copy of the Defendants' YourAffiliateSuccess handbook for $37 on the 30th December 2007. Within a day Raygoza phoned him to encourage plaintiff to attend a seminar which he was holding in Singapore at the end of January 2008 called The Truth. He told Plaintiff that it would be life changing and guaranteed that plaintiff would be making some serious money before he even left the weekend long course. Plaintiff paid to PushTraffic $5,000 to reserve a seat at the seminar based on Raygoza’s false statements. In Singapore, Plaintiff was told by SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 48 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 49 of 81 Page ID #:1210 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Raygoza he could earn $40,000 a month. Plaintiff returned to Ireland in February 2008 after completing the three day course and made a number of phone calls to Raygoza seeking his help in trying to set up an Internet business. Raygoza provided nothing useful but did manage to extract an additional $800 from plaintiff. In July 2008 plaintiff attempted to get a refund to no avail as Raygoza told the credit card company that services had been provided. 72. David Lemasters, age 63 of Olive Hill, Kentucky, was victimized in the amount of $7,000 by PushTraffic in July 2009. Plaintiff was telephoned by PushTraffic salesman “Rob Martino.” Martino stated as a fact that plaintiff would recover his investment within 30 days (before his credit card bill would be due). Martino claimed money would arrive within a week of signing up full well knowing that plaintiff would most likely never receive any money and definitely not within thirty days. Plaintiff returned a signed Verification on July 24, 2009. However, his credit card was charged on July 23, 2009 before the Verification was received. Though the Verification was for $10,000, Martino falsely said he would cover $3,000 of it to induce Plaintiff's reliance. The $7,000 put Plaintiff’s card at its limit. The Verification provided that an instant turnkey website would be provided. Plaintiff diligently tried to work the Raygoza plan, attended training seminars, and purchased advertising as directed by the Defendants for the worthless template website that promoted the Defendants’ scheme, but the turnkey website did not earn anything for plaintiff. In December 2009 plaintiff tried to obtain a refund from Raygoza and Sipes but received no response from them. 73. Plaintiff Marc Mintz, of Monroe Township, New Jersey, was victimized in the amount of $10,080 by PushTraffic in 2008 to 2009. In November 2008, Plaintiff purchased a product called the 4 day challenge; this was promoted as a program for newbies that said anyone with a computer and basic computer knowledge could understand the program and instructions, establish a web site, use affiliate marketing with Click Bank Products to make commissions. Plaintiff could not understand the product and requested a refund of $79.99 from PushTraffic. Plaintiff then received a phone call from a man who identified himself as Dave Gale from PushTraffic, also on the phone was a Rob Martino. Dave Gale made a sales SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 49 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 50 of 81 Page ID #:1211 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 pitch regarding purchasing an affiliate marketing program with PushTraffic. Gale claimed that PushTraffic would drive valuable money -making traffic to Plaintiff’s website. In November 2008, Plaintiff paid PushTraffic $10,000 via Master Card for the so called Mastermind program. Plaintiff received the usual template websites promoting Raygoza’s fraudulent get rich quick scheme including the notorious copy: I have been involved in affiliate marketing now for over 10 years and have found that over 97% of the so called get rich quick programs are scams. . . I have personally reviewed the top 50 programs online for affiliate marketing and the only 2 or 3 that work are . . “ Plaintiff protested that this website was fraud and that there were thousands of similar websites all put up by defendants. Further Plaintiff protested he could not vouch for the veracity of such statements and did not want to be part of a fraudulent scheme but was ignored by Defendants and earned no money. Plaintiff’s wife is battling cancer and the financial loss to plaintiff has been an extreme hardship. 74. Benita Sandifer, retired and age 66 of Colchester, Essex, England, was victimized in the amount of $10,000 by IncFortune and Successrate in late 2009. Plaintiff was cold called by a salesman who called himself Robert Tarantino. He offered her one to one mentoring and coaching by experienced Internet Marketers. She said that she could not afford such help as she was retired on a pension and could not go into debt and his response was to say that they offered different levels to suit peoples' finances. She was told that she would have 6 money-making websites set up and ready to sell top products that were tested and known to make massive sales and that these millionaire marketers would be holding her hand to ensure her success. She asked why they would do this and the reply was that they were looking to set up a training company and were looking for testimonials from successful pupils. She was passed at some point onto another man who said he was Harwood Hamilton and said something to the effect that if she was serious about making money on the internet this was her big opportunity. At some point she was passed onto a man falsely identifying himself as Jeff Alderson. He asked if Plaintiff had a credit card and if SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 50 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 51 of 81 Page ID #:1212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 so he could just ascertain what her credit level would be if she gave him details. $5,000 was the sum spoken of and she was told it was nothing really just a small investment because her six websites would have three times that in her account in less than 30 days so she wouldn’t be paying any interest. Alderson (thought to be Raygoza using a stolen identity) said Plaintiff would have enough money within a week or two to go on a cruise to Alaska and she should book one straight away if she signed up. “Alderson” said he would be sending a confidentiality and Verification document to sign just to protect their secret methods from being copied. Plaintiff did this and then never heard another word from him. Embedded in the document was the price, not the $5,000 agreed to but $10,000. Plaintiff was then charged $16,000 on her credit card by IncFortune and tried to get a refund. Sipes finally refunded the $6,000 in January 2010 but not the other money and disclaimed any responsibility for statements by the Defendants sales staff. Plaintiff received nothing of value to her and earned no money. 75. Lowell Radder, age 71 of Bellingham, Washington, was victimized in the amount of $25,000 by PushTraffic in 2009. Ted Molina and John Raygoza at PushTraffic made various statements on several occasions that plaintiff would start earning money immediately which Radder relied upon but he never saw a dime. Molina and Raygoza told plaintiff he would earn all his money back before the credit card bill arrived but instead eventually gave him a template website for YourAffiliateSuccess. After Molina and Raygoza extracted $25,000 from plaintiff they ceased communication and only after Plaintiff called for days, several times a day, was he was given a seminar in Los Angeles and provided coaching but nothing came of it In the way of the stated profits. Plaintiff unwittingly managed to ensnare a few victims for the Defendants but was not paid for that either. Finally he realized he had been duped and discontinued his association with the Defendants. 76. Heidi Plach of California, was victimized in the amount of $15,000 by PushTraffic in 2009 plus another $2,000 spent on advertising. On June 30, 2009, Plaintiff was contacted by Robert Tarentino of PushTraffic. He falsely stated that “John Denton” personally had asked him to call about a website to conduct business. He told Plaintiff that SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 51 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 52 of 81 Page ID #:1213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 this would cost $10,000 which was to be used to pay for advertising for the year. He would put in another $10,000 of his own money which would guarantee her a profit of at least $180,000 for the first year. Then he put her through to some posing as “John Denton.” When she spoke with “Denton,” he falsely stated he would put in another $5,000 so plaintiff could make $250,000 her first year. Plaintiff was charged $15,000 on her credit card. When she complained, “Denton” guaranteed she would make me the $15,000 within 21 days. The $15,000 was not used for advertising, so plaintiff had to spend an additional $2,000 to promote the worthless website that was eventually provided. Plaintiff never received any money and has not heard from PushTraffic since August 2009; and still owes $15,000 plus interest on her credit card. 77. Plaintiff Desmond Menz, age 60 is a resident of Australia, was victimized in the amount of $13,000 by IncFortune in June 2009 by credit card and wire transfer. He was cold called and offered big profits by an IncFortune salesperson, “Patricia Law,” if he invested. IncFortune salesperson Patricia Law told Plaintiff of an elaborate scheme involving thousands of e-books and so called Beta platforms which would generate guaranteed income of $9,000 to $19,000 per week. Law also falsely claimed that IncFortune was a US government contractor in order to obtain the Plaintiff’s trust. When Plaintiff threatened to reverse the wire transfer, IncFortune’s employee Ruel Mitchell guaranteed the income estimate, guaranteed income within a week or two, guaranteed the $14,000 would be paid back shortly and that it was refundable. Plaintiff was also phoned by John Raygoza impersonating well known Internet marketer Jeff Alderson in an attempt to assuage Plaintiff's misgivings. According to the real Alderson in an email to plaintiff after the fact: This is terrible! These people have no right to ever call anyone and say they are me. That is fraudulent...John Raygoza's email is jraygoza@spamarrest.com. I am emailing him right now myself. I won't stand for this behavior directed at any of my customers. In July 2009 Plaintiff attempted to get a return of funds after receiving no tangible services or income. Through June 2010 Plaintiff has contacted numerous individuals at PushTraffic, including John Raygoza, but has received no refund. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 52 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 53 of 81 Page ID #:1214 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 78. Plaintiff Bramwell Hester, age 69 of San Remo, Australia, was victimized in the amount of $10,000 by IncFortune, Successrate, and JumpLaunch in 2009. Using Plaintiff’s personal information from his web hosting account at JumpLaunch, salesman Harwood Hamilton, cold called Plaintiff on behalf of IncFortune. Hamilton falsely stated he would match the $10,000 price of the training offered by IncFortune in order to make the training seem more valuable. Hamilton sold plaintiff a seminar package in Los Angeles for $10,000 around August 1, 2010. On August 16, 2010 Raygoza attempted to obtain more money from Plaintiff by calling him and stating that for another $10,000 he will take Plaintiff to his house for personal one to one coaching in the Internet business. Plaintiff however had no further funds. Plaintiff attended the seminar run by Sipes and Raygoza but found it was worthless and that individuals attending had all been charged varying amounts. Plaintiff suffered severe swelling in his legs due to the long trip from Australia which required several months of treatment. The so called seminar did not even involve use of a computer. Instead of teaching the marketing and profit making secrets of the internet as stated, Plaintiff received nothing of value to him and earned no money. Plaintiff was provided a template website touting a Raygoza program entitled Recession Proof Millions. After a brief period of time, Plaintiff removed the website as it became apparent it existed only ensnare other victims for the Defendants. The website Recession Proof Millions featured the likeness of plaintiff used without his consent and a false quotation: In the first few minutes of sitting in front of Rick as he taught with such boundless enthusiasm, I felt I loved this man! Indeed it would be hard not to. I learned so much from him then and now even more from this excellent production. If you hate wading through waffle, you will love this! The presentation is concise, accurate and step by step. I highly recommend this epic work . Bramwell Hester. Along with Plaintiff are featured the pictures of and quotes by Raygoza and Sipes as if Plaintiff is one of their associates along with the false person Rich Maxwell who was created by Defendants when Boaz Rauchwerger ceased his affiliation with Defendants. 79. Paul Malcolm Duffy, of Peacehaven, East Sussex, England, was victimized in the amount of $3,000 by IncFortune in 2009. In October 2009, Internet Marketers Charles SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 53 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 54 of 81 Page ID #:1215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Kirkland and Jeff Alderson sold Plaintiff a modestly priced product called Social Money Magnet. Following the purchase Plaintiff was given access to the download page where at the bottom of that page there was a message saying: You will get a personal call from one of my Millionaire Mentors! Plaintiff was telephoned by an IncFortune-PushTraffic-Successrate salesman who said he worked with Jeff Alderson and falsely stated Jeff personally wanted plaintiff in the program. The salesman made false statements that convinced Plaintiff the program was legitimate and he was misled into believing the call was from Jeff Alderson’s office as the salesman falsely said Jeff had just come into the office and he broke away from me to speak with Jeff about taking the last place available for coaching. With “Jeff’s” approval, the salesman hyped up the fact that Jeff wants plaintiff in and that plaintiff would lose the place if he did not take it there and then. The price was $15,000 but the salesman settled for $3,000 because that was all the credit plaintiff had on his card. IncFortune also attempted to charge a second $3,000 fee to plaintiff’s credit card without his consent. 80. Plaintiff Melanie Rogers, who has a learning disability, has received SSI and attended school through the 9th grade, and her mother Margaret Granshaw, age 70, both of Louisiana, were jointly victimized in the amount of $3,600 by defendants in 2009. In April 2009, Melanie who was unemployed received emails from John Denton advertising a money making free website for $40. Melanie purchased what she thought was a website from Denton but did not get a free website, instead she received a bill for $118 from JumpLaunch for hosting services. Melanie did not understand and called JumpLaunch. But when Plaintiff asked for a refund from Defendant JumpLaunch they said James Murphy would contact her. Murphy contacted Plaintiff and sold her CDs by John Raygoza called The Truth for $399 after she said she could not afford $5,000 to $15,000 for coaching services. In August 2009, James Murphy repeatedly called plaintiffs and falsely said he was the owner of IncFortune. Murphy told plaintiffs they would make $5,000 within 45 days and $5,000 each month thereafter. Murphy spent two hours making his pitch. More and more calls ensued and when Plaintiffs asked that they be stopped, Murphy said they would only stop when Plaintiffs paid SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 54 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 55 of 81 Page ID #:1216 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and signed a Verification with IncFortune. Plaintiff told Murphy her credit cards were maxed out but Murphy stated that if she gave him the account numbers he could extract money from them and in any event she would earn her costs back in 45 days. Murphy was able to extract money from Plaintiffs’ debit card and Plaintiffs paid IncFortune $3,400 for training based on Murphy’s assurances of a guaranteed return of investment. Plaintiffs attempted in vain to utilize the services to earn back their money but have received nothing to date and cannot comprehend the material offered to them. The so called coach was abusive when Plaintiffs could not understand him or his instructions. After several weeks Plaintiffs repeatedly complained about the lack of money. On September 14, 2009, Murphy replied: I think you are looking for a get rich quick scheme and they do not exist. Plaintiffs continued to complain on an almost daily basis as to the lack of money. Finally, on December 10, 2009, Raygoza called Plaintiff Melanie Rogers and told her she was not working her business. Plaintiff told Raygoza she had no business. Raygoza then said that people pay him $15,000 to show them how to make $20,000 or more. Raygoza asked plaintiff if she had that kind of money. When plaintiff responded to Raygoza that she had no money, he abruptly hung up the phone. Plaintiffs continued to complain to Defendants through January 2010 but achieved no results. 81. Stella Tan, age 72 of Canada, was victimized in the amount of $30,000 (Canadian) by IncFortune in July 2009. In June 2009 Plaintiff, who has a heart condition and lives on a small fixed pension, paid $97 for a software package called ExplosiveCashins from John Denton and MyEbizNow.net, Inc. of Naples, Florida, which was never fulfilled. Plaintiff at the same time was sold a hosting package at JumpLaunch for $118. Someone posing as “Denton” called Plaintiff personally to congratulate her and give his personal phone number which turned out to be the phone number for PushTraffic as Plaintiff learned when she called to complain about non fulfillment of her order. In July, plaintiff received a call from “Bruce” at PushTraffic who said he was upgrading her from the package sold her by Denton. Plaintiff believed this was a replacement of the $97 software she never received from Denton and signed the faxed Verification without carefully SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 55 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 56 of 81 Page ID #:1217 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 reading it and was instead immediately charged $4,000 on her credit card towards an obligation of $20,000. On July 20th, 2009 Raygoza contacted Plaintiff who told Raygoza that she had credit card debt problems and Raygoza said he would help her get out of debt. Plaintiff gave him 5 credit card numbers. He then charged her $20,000 and maxed out her credit cards without her consent. Plaintiff then tried to cancel and get a refund. Raygoza agreed to refund $4000 but never did. On July 27, 2009 Plaintiff was emailed by “Jeff Gold” from PushTraffic that despite the fact she would be missing out on $25,000 a month in profits, the $4000 charge would be refunded. The credit card disputes were largely unsuccessful due to intentional misrepresentations by Defendants’ attorney that plaintiff had received valuable services to the various credit card companies. Plaintiff never earned any money and was not refunded $4,000 by Gold and was unable to obtain the return of the unauthorized charges by Raygoza for $20,000. 82. Joseph Kaye, of Houston, Texas, was victimized in the amount of $20,000 by PushTraffic in May 2009. Plaintiff tried to cancel the transaction on the third business day after he was charged $20,000 by PushTraffic. But Raygoza managed to convince Plaintiff not to cancel by promising a 100% money back guarantee for a full year and that Plaintiff would be debt free in 30 days. Plaintiff went to Los Angeles for a seminar and was unconvinced and again tried to cancel in July 2009. Plaintiff was approached by “Hernan Severino,” Raygoza's personal assistant, in regards to setting up his inner circle exclusive for those coming to learn Raygoza’s inside secrets. When Plaintiff persisted in disputing the credit charges in July 2009, Severino conducted a campaign of inimidation through a series of threatening phone calls in which he repeatedly stated: You will get no further help, and will miss out on everything we are doing to help, and you are going to regret this, because we will take legal action against you and you will lose even more unless you sign a new Verification and give us valid credit card numbers, we are going to rake you over the coals. We know how to do that, we have an attorney who is a specialist in this and never loses. Severino caused plaintiff such distress with these seemngly credible threats of litigation he signed a new Verification in July 2009 and gave out SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 56 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 57 of 81 Page ID #:1218 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 his credit card number but came to his senses and was able to get the bank to rescind the second transaction. Raygoza has not refunded Plaintiff’s initial money, the Defendants have opposedPplaintiff’s attempt to clear the charge from his credit account, and Plaintiff has received nothing of value to him. 83. Plaintiff Chris Yorke, age 60 of Mosman, Australia, was victimized in the amount of $8,000 by PushTraffic in May 2009. On May 7, 2009, a representative of PushTraffic named Alex Sainz phoned plaintiff and sold him a working profitbale commercial website to be built within in 30 days. The site was to be built with the aid of PushTraffic mentors, who, Sainz claimed, had a 100% success record. Plaintiff was told by Sainz he would earn his money back in 30 days. Based on this statement, Plaintiff paid $8000 to Defendants. When PushTraffic did not perform as stated, he complained to Ruel Mitchell and Harwood Hamilton at PushTraffic and he attempted to seek a refund from Sipes but received nothing despite sending many faxes and courier letters. 84. Les Jones II, age 66 of Excelsior Springs, Missouri, was victimized in the amount of $12,500 by PushTraffic in 2009. After being prospected by several PushTraffic salesmen, Raygoza personally contacted Plaintiff and laid out an elaborate scenario regarding a Joint Venture with Raygoza and Raygoza guaranteed that plaintiff would make enough money to replace his investment after the first month and to pay back Raygoza who falsely claimed he would contribute the same amount of cash as plaintiff. Raygoza stated there would be profits of $30,000 to $50,000 after 90 days. Plaintiff paid $12,500 but heard nothing more until he complained and was invited to Los Angeles for a seminar. Plaintiff never received any money or joint venture but did receive training materials and was credited commissions from JumpLaunch’s affiliate program but was never paid the commissions. Plaintiff has a heart condition and limited mobility; defendants made off with half his retirement savings which had already been diminished due to the faltering economy. Plaintiff’s quality of life has been dramatically affected due to Defendants. 85. Plaintiff Virginia Lagos, of Sydney, Australia, was victimized in the amount of $10,000 (Australian) by PushTraffic. Plaintiff was contacted by telephone salesman “Steven SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 57 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 58 of 81 Page ID #:1219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Johnson” of PushTraffic in September 2008. The price of the proposed services was supposed to be $5,000 (US) but instead Plaintiff’s credit card was charged $7,500 (US). Johnson falsely stated on September 21, 2008 that Plaintiff would earn the money back by September 26, 2008 from the website that would be provided. Plaintiff relied on the false statement made by Johnson. Plaintiff received some coaching services which were unilaterally suspended by Sipes in August 2009 and applied to Raygoza in writing for a refund but never received an answer. Plaintiff was supposed to receive a money-making website but received only the domain greatestwebhosting.com hosted by JumpLaunch with no content. 86. Debbie Knisely, of Sale Creek, Tennessee, was victimized in the amount of $25,000 by PushTraffic and the Defendants in late 2009. In August 2009 Plaintiff ordered a product for $50 from John Denton’s MyEbizNow.NET Inc. One of Defendants’ salesman posing as John Denton of MyEbizNow.NET Inc. then called Plaintiff at work in August of 2009 and talked to her about investing $10,000 with PushTraffic, Successrate, IncFortune, and JumpLaunch. Plaintiff was told that she would start making money before the credit card bill went through. Plaintiff paid “Denton” in four consecutive installments from her debit bank card account. In September 2009 Plaintiff received an email from Sipes identifying himself as Vice President of Successrate. A month later Plaintiff went to Los Angeles where she met Raygoza who falsely stated to her that she would make big money. In December 2009, Robert Artino of PushTraffic called and talked Plaintiff into spending another $5,000 with IncFortune, YourAffiliateSuccess, and JumpLaunch, telling her he understood that she didn’t have the time and that he would treat her website as his own, do everything it needed to get it to make money. A couple of days later PushTraffic’s “Jack Hill” called Plaintiff and talked her into spending another $10,000 and again assured her that everything would be taken care of as far as getting this immensely profitable website up and running as if it was his own and that plaintiff would be part of the Inner Circle team. The $10,000 was paid in a wire transfer of $6,500 and PayPal electronic transfer of $1,500 with the understanding the balance of $2,000 would be paid once the SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 58 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 59 of 81 Page ID #:1220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 website earned money. However, Plaintiff’s credit card was immediately charged $2,000 without her consent. Plaintiff complained to Raygoza in December 2009 and tried to rescind the $10,000 transaction but Raygoza did not respond. Plaintiff was told by a JumpLaunch employee in February 2010 she was in a program called Your Site Name Affiliate. Plaintiff never earned any money and tried to obtain a refund but it was opposed by the Defendants. 87. Rob Willis, of Perth, Western Australia, was victimized in the amount of $10,000 by IncFortune in June 2009. After purchasing an inexpensive software program from Charles Kirkland & Jeff Alderson, Plaintiffs contact information was provided to IncFortune. IncFortune’s salesman “James Murphy” contacted plaintiff and sold him a two day seminar in Malibu and three ready-made cash producing websites that were guaranteed to give a return on Plaintiff’s investment within 60 days. Plaintiff relied on Murphy's false statement of Return on Investment within 60 days and entered into an agreement with Defendants. Plaintiff received a trip to Los Angeles but no websites or cash and met with Sipes who provided some seminar materials. Plaintiff eventually learned through a former PushTraffic coach that the entire program was a fraud and that victims never earned any money even if they diligently followed all the advice provided. Plaintiff attempted to obtain a refund form Murphy and Sipes but received no substantive response except that he needed to have more faith in the program. 88. Patricia Ledoux, of Lake Forest, California, was victimized in the amount of $7,000 by PushTraffic in October 2008. In October 2008 plaintiff purchased services from PushTraffic for $5,000. She was cold called by Matt Alhouse who said he was an account manager at PushTraffic, he stated that with mentoring Plaintiff would receive a free website, 25 hours of one on one mentoring along with 33 hours of group mentoring and 4 free passes to their seminar in Los Angeles. Plaintiff was told that for additional $2,000 (originally $10,000), plaintiff would receive increased traffic to her website and she agreed. PushTraffic provided neither appropriate training nor any traffic. What induced plaintiff to pay PushTraffic was that plaintiff was told by Alhouse she would generate sales of $3,000 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 59 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 60 of 81 Page ID #:1221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to $5,000 per week in the first 90 days. Plaintiff was provided some coaching services but after several months her coach informed her that PushTraffic was an unethical scam. Plaintiff complained to Harwood Hamilton at PushTraffic that she was not receiving services or the free passes to the seminar When Plaintiff attempted to obtain a refund or seek mediation through the Better Business Bureau, Defendants’ opposed the refund and deliberately misrepresented the situation as one of a legitimate misunderstanding to the BBB even though Defendants knew the Plaintiff had been defrauded. Plaintiff has heard nothing from PushTraffic since October 2009. 89. Michael Schaetzel, of Fond du Lac, Wisconsin, was victimized in the amount of $14,000 by PushTraffic in 2009. In June 2009, Plaintiff was initially approached by Donny Robbins of PushTraffic who obtained $1,000 from him. Shortly thereafter Bruce Knight obtained another $4,000 from plaintiff. Rob Martino obtained $9,000 more by stating plaintiff would be in an exclusive group if he paid and would make lots of money. Plaintiff relied on the representations made by Robbins, Knight, and Martino who all stated plaintiff would start making money within a month. Plaintiff became suspicious within 30 days and got in contact with a former PushTraffic mentor, Ken Steele, who warned him that PushTraffic was a fraudulent scam. Plaintiff tried to cancel in July 2009 but was threatened with legal action by the Defendant's employee Hernan Severino who said Defendants were multimillionaires with powerful lawyers who would call all the shots and that plaintiff had better do as they say or else. Plaintiff then reversed the credit card charges but Sipes convinced the credit card company to reinstate the charges with intentionally false representations that valuable services had been provided. Plaintiff received nothing of value. 90. Janis Johnson age 58 is a citizen of Texas and has a mental disability, Major Depression Chronic Syndrome and Anxiety Panic Disorder that keeps her at home most of the time. She is the care provider for elderly father. Plaintiff was telephoned by someone posing as Denton in February 2009 and she told “Denton” about her disability and he said he would help her because she had a humble heart. Instead Denton on behalf of IncFortune extracted $50,000 from plaintiff on false statements of guaranteed profits. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 60 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 61 of 81 Page ID #:1222 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff earned no money after being provided the usual services: seminar, template websites, and coaching. Plaintiff attended an IncFortune seminar at the Malibu beach house where Boaz Rauchwerger was one of the speakers. A few months later Raygoza via web conference began promoting a book by Boaz Rauchwerger called Recession Proof Millions. plaintiff noted that there was a website called hmigroupmoneymaking.com/recessionproofmillions/bonuspage.html on which Rauchwerger and others appeared. Plaintiff then noticed in early 2010 that Rauchwerger had been removed from the page as the author of the program and had been replaced by a person named Rich Maxwell who is a fictitious creation of Raygoza. On July 16, 2010 plaintiff received a phone call from a salesman named Jay Francisco who said he was representing a company named Future Endeavor. He said his company had taken over IncFortune and othe Raygozar entities and he would like to talk to Plaintiff in order to rekindle their relationship. Plaintiff told him that she didn't recognize his name or his voice and she wasn't going to talk to him. Plaintiff hung up the phone. He called Plaintiff back about 2 minutes later and she let the answering machine pick up the call. He left a message saying that he still wanted to talk to her for a few minutes and that maybe he could reimburse some of the money she had invested with the Raygoza entities. He also said he had knowledge was that she invested in 2009. Francisco called back again on June 17, 2010. Plaintiff has suffered great financial loss and extreme emotional distress due to the intentional acts of defendants. 91. John Uys of Saipan, Northern Mariana Islands, lost $40,000 to defendants and has suffered extreme privation as a result including inability to provide the necessities of life for himself such as food and shelter. His credit rating was also ruined. On June 24, 2009 Ruel Mitchell from IncFortune called Plaintiff. Mitchell said Incfortune had been training people to earn an income on the Internet since 2001, and that he was currently earning $3 to $5 million dollars a month. Mitchell stated that for a $30,000 investment plaintiff was guaranteed an income of $15,000 to $20,000 per week payable by bank wire transfer. Mitchell called by the next day and reduced the price to $15,000 to get started with a second tranche to follow. Plaintiff provided credit card number and in a series of five credit SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 61 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 62 of 81 Page ID #:1223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 card transactions IncFortune removed $15,000 from Plaintiff’s accounts. Plaintiff then received a Verification that did not reflect the statements made by Mitchell. In response to this Mitchell stated that the Verification was drawn up by lawyers and did not state the true intent and agreement of the company (IncFortune, YourAffiliateSuccess, and JumpLaunch) as it was only drawn up as a formality to protect trade secrets. Based on this reassurance, plaintiff borrowed $15,000 from his wife to pay the second tranche. To be on the safe side, plaintiff reported Mitchell’s statements to IncFortune. James Murphy responded and disclaimed Mitchell’s statement but reiterated Plaintiff would be earning big money very soon and that arrangements would be made to fly Plaintiff to Los Angeles. IncFortune made travel arrangements and transported plaintiff to the Malibu Mansion where he met Sipes and Raygoza. In Malibu Sipes reiterated that plaintiff would get back his $30,000 if he did not make $30,000 in the first month. Shortly thereafter in late July 2009 plaintiff realized he had paid $30,000 for a website template hosted by JumpLaunch that would not earn any money and that he was enmeshed in a fraudulent scheme that required him to lie to others via a false video testimonial solicited by Sipes who had said, ethics and marketing do not go together. Plaintiff demanded a refund from Sipes and Raygoza in writing due to fraud. Plaintiff sent numerous communications pleading for the return of his money due to personal circumstances and hardships. Plaintiff’s wife had demanded the return of her funds. In August 2009 Raygoza indicated he might be willing to compromise. But added: “As far as Amex, MasterCard, or Visa is concerned there is no way Visa or MasterCard will favor you in this case so we are not scared of a charge back. We’ve processed millions online and we’d be complete fools if we didn’t know how to secure our money.” Raygoza did not make an offer to compromise but instead offered to sell Plaintiff 1000 leads for $300. Plaintiff made further attempts to secure a refund to no avail. In his phone conversation with IncFortune Plaintiff noted that IncFortune representatives had stated that all calls were recorded. 92. Barbara Poulson, age 66 of Richland, Washington lost $30,000 to defendants. In July 2009 Plaintiff received many telephone calls from Defendants’ salesmen some of whom SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 62 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 63 of 81 Page ID #:1224 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 assumed the false identity of John Denton. One of these salesmen induced her to pay $10,000 to IncFortune in exchange for a guaranteed return of investment. IncFortune made arrangement for plaintiff to travel to Los Angeles where no one including Sipes would answer her question about making her money back. An IncFortune salesman in December 2009 then called Plaintiff and asked how much her limit was on her credit card. He said he only needed this because being that she was working with them as a partner they needed to know if she would be able to follow up on her end of the deal. However he assured plaintiff no payment would go to them until she earned a profit. In fact, he said she should start seeing a profit in July 2009. He said she would be working with the top people and would be getting in on a different level. The following month, January 2010, Plaintiff was mortified to see $20,000 more in unauthorized charges on her credit card to the card’s limit. She immediately called the card company and put it in dispute. After three months they said they could not or would not take it off as she had authorized payment based on the false statements of Defendants to the credit card company. To date Plaintiff has not earned a penny and is out $30,000 in credit card debt. Plaintiff incurred $30,000 in debt because of the actions of the Defendants including deliberately false representations made by the Defendants to her credit card company to cover up outright theft of $20,000. Plaintiff is retired and can ill afford to lose this money. 93. Mark Mayott of Vancouver, Canada, who works as a parking lot attendant, was called by Jeff Gold who falsely represented that he owned IncFortune on July 8, 2009. Gold said: “Hi, Mark I see you are looking for an online business?” Plaintiff answered in the affirmative. Gold asked how old Plaintiff was and about his children. Gold then asked if plaintiff had credit cards, their numbers and how much available credit on each one. Gold stated Plaintiff was guaranteed income and a weekly check beginning in 7 days. Gold told Plaintiff that if he signed a document he would fax over that the income stream would begin immediately. Plaintiff signed up and was charged $10,000 by PushTraffic. The income stream did not start. However Plaintiff was transported to Los Angeles for a seminar by Defendants. Sipes and Raygoza presented at the seminar. When plaintiff returned SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 63 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 64 of 81 Page ID #:1225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 home he was called by someone posing as Jeff Alderson who convinced Plaintiff he was in the wrong program and charged him $18,000 to join IncFortune so he could get immediate income and a turnkey website business. Plaintiff has never received a single cent of income and has been unsuccessful in getting a refund. The credit card companies have garnisheed his earnings to pay back the $28,000 debt. 94. In early 2009, Wayne and Jade Daily were contacted by someone who had assumed the name of John Denton who stated to them they would earn $10,000 to $15,000 a month if they purchased personal training from Raygoza. Based on this inducement, plaintiffs paid $10,000 to PushTraffic through their credit cards. Raygoza made arrangements for plaintiffs to be transported to Los Angeles for his seminar. Plaintiffs then received coaching services March through July 2009 and spent $700 additional on advertising the usual template website. In July 2009 plaintiffs had not received the money mentioned by “Denton” and realized they had been scammed when Google Adwords barred them from advertising because the website copy provided by the Defendants was contrary to their anti fraud policies. Plaintiffs applied for a refund to Raygoza. Raygoza’s response was to refer him to his so called Verification. Plaintiffs then attempted to dispute the credit card charges but Defendants’ attorney misrepresented the situation to the credit card companies by claiming valuable services were provided. Plaintiffs’ losses total $10,700. 95. Florence Majanil of Kota Kinabalu, Sabah, Malaysia received a call on August 22, 2009 from PushTraffic salesman Bruce Knight. Knight stated to Plaintiff that she would have a website that earned $3500 a week for free. The only catch would be that PushTraffic would get 25% of the profits. Knight stated as fact she would make money in 21 to 45 days. Knight also claimed he would match the money plaintiff put into the scheme. Knight obtained Plaintiff’s credit card numbers to check ger creditworthiness as partner and while she was on the phone placed an unauthorized charge for $6500 on her credit cards to the credit of PushTraffic and IncFortune. He faxed plaintiff a Verification to review without telling her the credit card had already been charged. Plaintiff signed and sent the Verification back to Knight believing it reflected the non existent partnership. She was SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 64 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 65 of 81 Page ID #:1226 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 then contacted by JumpLaunch and sold a hosting contract. Plaintiff was provided a website http://myprofitableinternetbusiness.com. The website content however shocked plaintiff because it was blatant fraud and stated: Hi, I’m Florence Majanil. I spent 15 months and over $17,600.00 searching for honest, work at home programs. What I discovered will MAKE YOU MAD! On August 30, 2009 Knight requested Plaintiff travel to Los Angles for a seminar. But on September 6, 2009 Knight asked for another $1000. When plaintiff refused, Knight and PushTraffic ceased communication with her. However, someone who had assumed the identity of Denton then called Plaintiff in mid September 2009 and tried to sell her a website. He claimed he was not associated with PushTraffic but when she refused, he correctly said, “Don’t you have four credit cards?” Plaintiff hung up. As a result of Defendants’ deliberate actions, Plaintiff has been financially ruined and has suffered a heart attack due to stress. 96. In August 2009, Maryann Borzillary who lives in Rochester, New York was called by a salesman of Defendants posing as Denton and sold her a website to be managed and hosted by PushTraffic and JumpLaunch in a series of transactions between April 29, 2009 and May 7, 2009. The false Denton claimed he was a millionaire and was a personal friend with Sergey Brin who owns Google. Denton said he would fly plaintiff to California and shake her hand. Denton also told plaintiff he was going to be adding money to Plaintiff’s account every week or every other day and he would be speaking to her everyday. Based on these lies, plaintiff paid $1,628 to defendants. Plaintiff attempted to work the program provided but the mentor/coach Ken Steele provided by PushTraffic became aware she had very limited cognitive skills. After three weeks Plaintiff became convinced she had been cheated by “Denton” and attempted to dispute the credit card charges but Defendants opposed the charge backs and reinstated the charges. The loss of $1,628 was an extreme hardship to plaintiff. 97. Dale Matthews of Bucyrus, Ohio purchased a product on the Internet for $7 from the real John Denton. He received a call on or about May 2009 from Bruce Knight who said he was calling for Denton, who was the man behind the $7 product, and they were offering to SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 65 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 66 of 81 Page ID #:1227 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 take a select few of the members and personally tutor them. Knight convinced plaintiff to upgrade his membership for less than $100. A salesman of Defendants using the false identity of John Denton then called plaintiff the same day. “Denton” said that he was looking for 6 to 8 people to personally train and said that Bruce Knight had contacted him and had referred plaintiff as a good candidate. “Denton” said that he wanted to bring plaintiff and a few others to his home in Los Angeles for three days of personal training. Denton stated that he wanted plaintiff to upgrade to the VIP level at a cost of $10,000. Plaintiff told him there was no way he could pay that amount since he had just lost his job. Denton stated that plaintiff could put it on his credit card and that Denton would build a web site and would drive traffic to the site so that plaintiff could be earning money within a week and to expect a check within the next two weeks. After determining that plaintiff didn’t have $10,000 worth of credit available Denton said that he would accept $6,000 and that he would make up the rest out of his pocket. Denton then emailed plaintiff a Verification from IncFortune and asked him to sign it and send it to the email address (jgold@yahoo.com) so he could get started building his web site. Denton called a few more times and said he would be in contact with plaintiff throughout the process and was anxious to meet and shake plaintiff’s hand when he arrived in Los Angeles. But after plaintiff signed and emailed the Verification back he never received any more calls from Denton. He was however transported by Defendants to a seminar in Los Angeles in September 2009. Plaintiff never received any traffic to his site from Denton and never received a check. Plaintiff made several unsuccessful attempts to contact Denton 98. Esther Lesperance of Winnipeg, Canada lost $20,000 to Defendants. In March 2009 plaintiff purchased a DVD called The Truth by John Raygoza. On April 3, 2009 she received a phone call from a salesman at PushTraffic promising plaintiff could earn thousands of dollars selling e-books on the Internet. Then Raygoza got on the phone and offered plaintiff annual income of $60,000 if she agreed to pay $5000 now. Plaintiff received services from PushTraffic but earned no money. On August 20, 2009 plaintiff received another phone call from Raygoza saying he had a very exciting offer for her SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 66 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 67 of 81 Page ID #:1228 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and if she only paid $20,000 he would treat her website like his own, Raygoza claimed he would personally guarantee that she would get all her money back by the end of 2009 but extra money was needed to advertise her site. Raygoza assured her that this worked every time, since he was a millionaire at the age of 26 years old and he loved to help people. Based on these lies plaintiff paid IncFortune $15,000. On September 23, 2009 Plaintiff was flown to Los Angeles by Defendants for a 2 day seminar hosted by Raygoza to learn Internet Marketing. The Boaz Rauchwerger website was used at the seminar as an example of what could be done for Plaintiff. Here she met other people who had a very similar story with varying amounts of money paid to attend the seminar but none had ever earned any money from the Defendants’ scheme. They all complained to Hernan Joel Severino, but his response was: “What do you want me to do about it, I only arrange the seminars.” In October 2009 Hernan Joel called plaintiff and said Raygoza and Sipes were in the room and that all her money ($15,000) had been used up on coaching services. However the $15,000 had never been set aside by defendants and this was a lie. Finally, on November 30, 2009 Plaintiff received another call from Jack Hill of IncFortune offering a wonderful new opportunity to work personally with John Raygoza and Folusho Orakunle. Hill offered to make Plaintiff a junior partner of the company, the same as “John Denton.” Plaintiff was to run the Canadian division but in order for her to do this they needed her credit rating to be better than it was at this point. So Jack Hill said please get me your highest maxed out credit card number so that we can decide how to proceed to put your rating back to having a green flag instead of the current red flag. Plaintiff knew someone using the name John Denton had scammed $15,000 from Heather Paredes. John Raygoza got on the phone for a minute to distract Plaintiff while Hill charged her credit card account up to the maximum without her consent. Plaintiff started crying and said she never authorized any withdrawal and Hill said: “Oh, other people have cried as well but they are very thankful to us now because this system works and you must believe and have faith because these people are now earning $30,000 a month and are very happy.” In the end Hill relented and withdrew the unauthorized charge but plaintiff did not know so for a week and SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 67 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 68 of 81 Page ID #:1229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 suffered intense emotional distress. Plaintiff attempted to get her other money refunded but Defendants’ legal staff lied to the state attorney general and credit card companies that legitimate services had been provided to Plaintiff. Most recently, the Defendants’ attorney threatened plaintiff with a lawsuit for defamation, slander, extortion and conspiracy if she continued to seek a refund. 99. Allan and Diane Breit, husband and wife, of Echo, Wisconsin were cold-called in May 2009 by James Murphy representing IncFortune. Murphy offered the Breit’s a turnkey Internet business provided by IncFortune and stated they would earn back their entire $15,000 in 30 days. The Breits were taken in by Murphy’s lie and agreed to pay $15,000. IncFortune then transported the Breit’s to Los Angeles for a seminar at which Sipes was a presenter as well as motivational speaker, Boaz Rauchwerger. In June 2009, Murphy sent a technician named Louis Obando to the Breit’s home in Wisconsin to set up their turnkey internet business that Obando said would require only one hour of work per week. Obando charged the Breits $10,000. The Breit’s believed Murphy and Obando and paid the $10,000. However nothing came of these efforts and plaintiffs never earned a penny. 100. Carlyn Perona of Reno, Nevada was telephoned on July 1, 2009 by salesman Brent Austin of PushTraffic who offered her the Mastermind and Inner Circle programs for $15,000. Austin stated as fact that within one year she would be making over $100,000 and within two years over $1,000,000. Austin furthered made a money guarantee and stated she would earn her entire investment back before her next credit card statement came due. Austin was able to convince plaintiff to invest $10,000 from her credit card with PushTraffic and JumpLaunch. Plaintiff was transported to Los Angeles by PushTraffic for a seminar. However by October 23, 2009, plaintiff was yet to see a penny in income and emailed Sipes and Raygoza demanding a refund. Sipes and Raygoza did not respond. On November 2, 2009 plaintiff wrote yet again to Sipes and Raygoza who did not reply. Plaintiff to date has been unable to obtain a refund from the Defendants. 101. Tye Nakawaga, age 74 of Laveen, Arizona, whose sole source of income is a monthly Social Security Retirement check of $997 was called by a salesman Jack Hill from SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 68 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 69 of 81 Page ID #:1230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IncFortune on March 26, 2010. Hill falsely claimed he represented Google and Clickbank and that according to their records, Plaintiff was looking for a profitable home based business. Plaintiff was looking to supplement her income and Hill’s lies disarmed her suspicions. Hill falsely claimed Google and Clickbank would provide a profitable website for plaintiff but she had to produce her credit cards to show her credit worthiness. Plaintiff supplied her credit card account number but did not authorize charges and Hill said he would not use them. Hill said he was interested in her MasterCard accounts because he knew someone on the inside there. Hill then and there without authorization charged $30,000 on her credit cards nearly causing plaintiff a heart attack. Hill then said John Raygoza who had just finished a telephone call with his friend the CEO of Google, wanted to speak with plaintiff. Raygoza spoke to plaintiff and said she would get all her money back in three months and convinced plaintiff to sign a Verification. However, Plaintiff called back the night of March 26, 2010 and cancelled. Raygoza called Plaintiff back on March 27, 2010 and personally guaranteed plaintiff’s investment. IncFortune then provided plaintiff the usual template website that they gave to all their victims. Plaintiff complained and was provided another website for a weight loss product she was unfamiliar with. On April 16, 2010 Rob Martino called Plaintiff and told her that he had a new product that would be guaranteed to earn back all her money. Martino stripped the desperate Plaintiff’s Discover and American Express cards of an additional $27,000. Plaintiff became unnerved as her credit was ruined and her only income was $997 a month from Social Security. Plaintiff soon realized she had been scammed and tried to get a refund which was refused. She was, however, able to obtain refunds totaling $30,000 from American Express, Discover Card, and PayPal. The PayPal transaction had been disguised by defendants as a series of small transactions to avoid detection by PayPal's anti money laundering and anti fraud programs. But plaintiff still owes $30,000. When plaintiff disputed the charges and reported IncFortune to the state attorneys general of Arizona and California, Defendants intentionally misrepresented as recently as August 2010 that the situation was one of valuable services received when in fact they knew plaintiff had been scammed and would never see a return of SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 69 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 70 of 81 Page ID #:1231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 her investment. 102. Karen Houdashell of Richardson, Texas lost $21,000 to the defendants. Plaintiff is the care provider for her elderly relative which makes it difficult for her to take a full time job. On July 21, 2009, Plaintiff received a phone call from a salesman identifyinghimself as John Hill from John Raygoza's Underground Seminars. He informed Plaintiff that by the end of the month she could have 10 to 15 profitable websites and would be trained in how to manage the accounts. He said that the ball would roll quickly. He said that she would have two dedicated coaches and she would have the flexibility of working from anywhere with her laptop. Hill said that she would receive checks every two weeks and he asked for her home address which plaintiff provided. Hill inquired about Plaintiff’s debt situation and found he she had not worked full time since 2006. He sent an agreement to review. He told her she would be selling computer software and data marketing and that she needed to think like Bill Gates and she would have to use money to make money and to qualify for a marketing platform for 2 or 3 websites. He asked if plaintiff had a Visa or MasterCard. She said yes, but they were maxed out. He said she should start with credit cards (Visa, MasterCard, or American Express). Plaintiff agreed to a $3,000 initial investment. Hill said that the initial investment would be paid off in 3 to 6 months, as well as the current balances on all of the other cards. She gave Hill her Visa, MasterCard, and American Express numbers. He informed plaintiff that PushTraffic had special arrangements with all the leading credit cards (MasterCard, Visa, and American Express) and the companies knew that people associated with PushTraffic would be paying of all their total debt in 2 to 6 months. He had Plaintiff on hold for a little while he conferred with the “finance department” and then came back on the line. Hill told Plaintiff that there was $3,000 available credit on her MasterCard, none on her Visa, and maybe some on her American Express card. Hill then charged $3,000 on her MasterCard but said she would need another $7,000 to go to the Malibu Mansion seminar. Later that evening Hill called again and informed her that through a special arrangement with MasterCard, he had charged $18,000 more on her Diner’s Club MasterCard, something she had not authorized. Plaintiff was stunned but signed an SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 70 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 71 of 81 Page ID #:1232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 agreement not knowing what else to do. The next day after a sleepless night, on July 21, 2009 plaintiff called Diner’s Club MasterCard to find out what happened, and learned there was no special relationship with defendants, instead Hill had engaged in money laundering by disguising the $18,000 transaction as 21 separate transactions. Hill called plaintiff to tell her she would now be receiving 100 profitable websites and that she should partner with Jeff Alderson and Brent Austin neither of whom were actually partners of defendants. PushTraffic transported plaintiff to Los Angeles on August 19-21, 2009 for a seminar and plaintiff discussed her situation with Raygoza. Raygoza assured her it would be a walk in the park. Plaintiff however never received a penny. 103. Joyce Hoke lives in California and is over age 60. On April 21, 2009, plaintiff was contacted by a person calling themselves “Michael Vincent” who said he worked for PushTraffic and was offering a chance to make a lot of money working from home. “Vincent” asked next about her credit cards and Plaintiff said they were almost maxed out. Plaintiff told “Vincent” she needed money because she had a lot of bills and a daughter ill with cancer. Vincent offered her a turnkey Internet business and without her consent managed to charge $10,000 on her credit card after obtaining the account numbers from plaintiff. Plaintiff was so upset she could not eat or sleep. PushTraffic provided some coaching and transported plaintiff to Malibu for a seminar. She was provided the web site quickwebcashprofit.com which was the usual template pushing Defendants’ program. Plaintiff tried to complain to the Better Business Bureau with no result. But for Vincent's unauthorized charges on her credit card accounts and Plaintiff's fear she would lose her funds, Plaintiff would not have entered into any relationship with defendants. 104. Grace Adele, age 63 of Elkhart, Indiana is a sole proprietor of a tax and accounting home based business. She invested $47,000 in 3 transactions with Defendants as follows. On February 10, 2010, she received a phone call from Jack Hill. Hill said that Jeff Alderson, a well known Internet marketer, had provided her name as someone interested in Internet income. Alderson had in fact ceased all relationships with Defendants in January 2010 and requested they cease and desist from using his name in relation to their activities SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 71 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 72 of 81 Page ID #:1233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 due to identity theft of his name by defendants’ sales force who were impersonating Alderson. Plaintiff had previously purchased software from Alderson and recognized the name. Hill related that IncFortune had a program which would pay off her initial investment in 90 days, would provide leads, and would be a viable business within 180 days. Hill asked plaintiff about her business ideas and then said he needed to talk with Raygoza who he claimed was in the room, after a brief pause Hill came back on the line and said Raygoza thought those were all great money making ideas. Hill then sold her the Successrate program for $15,000. Within 3 weeks Defendants managed to extract an additional $35,000 from Plaintiff's credit cards in a series of phone calls touting guaranteed profits and by using a document called a General User/Confidentiality/Verification Agreement but was signed only by Plaintiff and whose primary purpose was to prevent credit card charge backs and defeat investigations by state attorneys general. Plaintiff never earned any money. 105. James Horlacher of Myrtle Beach, South Carolina was telephoned on August 23, 2009 by a salesman of Defendants pretending to be John Denton. The false “Denton” said he had made millions of dollars online and could do the same for Plaintiff when Plaintiff said he might be interested, he was telephoned two days later by Rob Tarentino of PushTraffic who stated to Plaintiff he would earn back his investment of $10,000 in three to six months. Based on this representation, Plaintiff paid $10,000. On September 22, 2009, plaintiff attended a seminar in Los Angeles where he met Raygoza and Sipes who both told plaintiff that for $30,000 additional he could triple his money in 90 days. Plaintiff paid $3,000 on his credit card and mailed a check for $27,000 to defendants. Plaintiff followed Raygoza's advice and wasted an additional $3,000 on expenses but never earned any money for a total loss of $40,000. 106. Robert Old, Jr. of Bonham, Texas was born September 17, 1917, thus is 93 years old, and supports himself with a Social Security Retirement check of slightly more than $900 a month and is the sole caretaker for his wife who has Alzheimer's disease. Defendants took $20,000 from Mr. Olds in May 2009 and another $11,000 in September SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 72 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 73 of 81 Page ID #:1234 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2009. A PushTraffic salesman took the initial $20,000 from the Plaintiff for a surefire investment in a website called besthealthyheart.com guaranteed to make money. Defendants demanded Plaintiff come to Los Angeles for a seminar which he could not because of his wife's Alzheimer condition. PushTraffic’s Obando instead came to Texas for three days to set up a website that earned no money at all. In September 2009 Raygoza phoned Plaintiff and told him that if he provided his credit card number, Raygoza would replace the worthless website with one that would earn back the $20,000. Raygoza then made unauthorized charges of $11,000 on the credit card which exceeded its limit. Raygoza provided no $20,000 or website and refused to respond to a request for a refund. VIII. DEFENDANTS 107. The RICO Enterprise consists of eight California corporations directly controlled by Raygoza, Molina, and Sipes: PushTraffic, IncFortune, Dot Intel, LLC. Successrate, Inc., YourAffiliateSuccess, Future Endeavor.com, LLC, and JumpLaunch and Finity Consulting, LLC. The Defendants have also utilized a wide variety of fictiitious names some of which are noted in the case caption. While the all entities may have a separate legal existence to one they are all associated in fact as a common enterprise. Defendants are sued individually and jointly and severally as co-conspirators. 108. John Raygoza is a resident of California. Raygoza claims to be have become millionaire at age 26 and grosses upwards of $10 million a year through his companies. In Raygoza’s own words: “Discover How I've Made Over $4.1 MILLION Dollars... In Just 365 Days... With A System That Has Never Yet Failed!” Excerpted from www.thetruthdvdseries.com/ [Last visited October 2, 2010]. 109. David Sipes, a resident of California, is Raygoza’s partner in fact and a resident of California. In Sipe’s own words: “You will find me traveling a lot and working with my good friend and Internet Marketing Expert himself, John Paul Raygoza, CEO of Push Traffic. Together we are building a sales and coaching program like no other which is focused only helping Internet Marketers maximize their backend and providing their clients SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 73 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 74 of 81 Page ID #:1235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 with our one of a kind VIP coaching service.” Excerpted from davidsipes.com/about_me/about_me.htm. Sipes supervised the coaching staff and ran the seminars among other duties. Sipes as an officer of the various corporations also handled customer complaints. 110. Ted Molina, a resident of California is John Raygoza’s brother and Director of Sales for the Raygoza controlled Enterprises and helped along with Raygoza and Sipes develop the sales pitches and programs used to ensnare plaintiffs. Molina along with Sipes and Raygoza jointly directly supervised the salesmen as General Manager of the defendant corporation sand helped implement and carry out the use of false and stolen identities by Defendants' sales force. Raygoza was also the “enforcer” for the Defendants. When former CE coaching employee Ken Steele prevented a disabled man from being cheated of $5,000 by Defendants’ sales staff, Molina demanded Steele go get His $5,000 back. Molina also made threats to various Plaintiffs and was involved with a death threat to Plaintiff Dale. 111. PushTraffic was incorporated in California in May 2007 and its president is John Raygoza. In a July 15, 2010 letter to the California Department of Justice, IncFortune claimed it was PushTraffic’s successor in interest: “That company is no longer operating and all records of payments, goods shipped, or services provided are not retrievable.” In fact all the Corporate entities are controlled by the same principals and were used interchangeably and often operated from the same physical addresses and utilized the same personnel. It was operating procedure by Defendants to establish multiple entities to confuse government agencies and consumers alike and when a particular operation received too much negative, its operation were simply succeeded by IncFortune, FutureEndeavor, or Finity Consulting. The entities however were simply multiple personas of the same combination of enterprises all controlled by Defendants Raygoza, Sipes, and Molina. 112. IncFortune was incorporated in February 2009 as a so called successor to PushTraffic and its president is John Raygoza. 113. Dot Intel, Inc. was incorporated in California in August 2009 and was converted to a LLC in September 2009. It purports to have been founded by an individual named Rob SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 74 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 75 of 81 Page ID #:1236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Artino. Dot Intel in fact is controlled by Raygoza, Sipes, and Molina while Artino works for the RICO enterprise of Defendants. 114. Successrate, Inc. was incorporated in California in June 2009 and its president is John Raygoza. 115. Youraffiliatesuccess was incorporated in California in July 2007 and its president is John Raygoza. As of June 2010, Youraffiliatesuccess claims to be: “SOLD OUT Due to the overwhelming response from people all across the world, Singapore, Australia, Europe, UK, Canada, and the United States. YourAffiliateSuccess is now closed.” 116. JumpLaunch was incorporated in California in December 2007. Its president is John Raygoza. In addition to being part of the RICO enterprise and fraudulent acitivites, JumpLaunch does provide legitimate web hosting services. 117. FutureEndeavor.com, LLC is a California corporation incorporated October 2, 2009. It’s principle officer is John Raygoza. In addition to being part of the RICO enterprise the company does service commercial clients’ unrelated to the matters herein in the field of marketing. 118. Finity Consulting, LLC is a California corporation incorporated November 30, 2007. The only listed partner with the California Secretary of State is David Sipes although the website listed Marina Skegin as the CEO of the corporation in August 2010. The content website of the defendant Dot Intel is virtually the same as Finity Consulting. Finity Consulting is part of the RICO enterprise in that it provides the same services as the other Defendants, has the same principle and has been used an alter ego corporation utilizing the same personnel and practices as the other members of Defendants’ RICO Enterprise despite its separate Corporate identity. For example in 2010, after the commencement of this action, Finity entered into an arrangement with two Utah corporations to sell Internet Marketing programs that falsely stated guaranteed returns which was merely a continuation of the existing RICO Enterprise under different names to avoid the adverse publicity generated by this lawsuit. 119. Plaintiffs are unaware of the true names and capacities of defendants sued herein SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 75 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 76 of 81 Page ID #:1237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as DOES 1 through 100, inclusive, and therefore sues these defendants by such fictitious names. Plaintiffs will amend this complaint to allege their true names and capacities when ascertained. Plaintiffs are informed and believe and therefore allege that each of the fictitiously named defendants are responsible in some manner for the occurrences herein alleged, and that Plaintiffs’ injuries as herein alleged were proximately caused by such defendants. These fictitiously named Defendants are herein referred to collectively as defendants and include agents, employees, affiliates, paralegals and lawyers associated with the Defendants’ RICO enterprise, many of whom have used fictitious names in dealing with plaintiffs to mask their actual identities. IX. PUNITIVE DAMAGES 120. Punitive damages are warranted under California Code of Civil Procedure § 3249 as follows: (1) The Defendants targeted elderly including up to age 93, infirm, and disabled victims including one his apparent death bed and victims out of the state and country who had little recourse to legal assistance; (2) The Defendants engaged in a regular pattern of such malicious and despicable conduct such as making threats of death and groundless lawsuits, and mocking victims who attempted to seeks refunds; (3) The Defendants deprived victims of the necessities life including food and shelter by financially ruining them and causing individuals on fixed incomes and pensions to endure crushing debt. (4) The Corporate defendants ratified the above conduct and encouraged it; (5) The Defendants such as Finity Consulting, IncFortune, and Future Endeavor have continued to engage in this conduct even after the service of the lawsuit and must be punished to deter further and continuing conduct of this nature. (A) In particular: Defendants placed a distressed elderly class member on a speaker phone and laughed at him when he attempted to seek a refund; (B) Defrauded Joseph, a paraplegic, while he was in the hospital with a near SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 76 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 77 of 81 Page ID #:1238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fatal staph infection and made an unauthorized charge on his credit and refused to refund money even when it was known plaintiff needed the money for medical equipment. (C) Defrauded Forcier, a stroke survivor, who is now facing eviction from his home due to his financial losses caused by defendants; (D) Defrauded Oliphint, of the proceeds of her husband's life insurance policy; (E) Defrauded 80 year old Cornelius and 87 year old Woods; (F) Defrauded 72 year old Tan by obtaining five of her credit card account numbers by claiming Defendants would get out of debt but instead placed charges on them; (G) Defrauded Uys of $40,000 causing him such hardship that he could not afford food or shelter; (H) Defrauded Mayott, a Canadian parking lot attendent, of $28,000 causing his wages to be garnisheed; (I) Defrauded Majanil of Malyasia of so much money that she suffered a heart attack due to stress and shame; (J) Defrauded 74 year old retiree Nakawaga who lived on a fixed income of $997 a month and caused her to incur $30,000 in debt she can not pay back; (K) Defrauded 93 year old Old of $20,000 which forced plaintiff to borrow against his life insurance to pay off the credit card debt incurred. X. EQUITABLE TOLLING & FRAUDULENT CONCEALMENT 121. Throughout the Class Period, Defendants and their co-conspirators affirmatively and fraudulently concealed their unlawful conduct. 122. Neither Defendants nor their co-conspirators told Plaintiffs or other Class members that they were engaging in racketeering or fraud and in fact strenuously denied these allegations to plaintiffs, government agencies, banks, credit card companies and law enforcement. Accordingly, many of the Plaintiffs and Class members could not have discovered full truth and extent the violations alleged herein earlier until shortly before the filing of the Second Amended Complaint in the actions comprising this litigation because Defendants and their co-conspirators conducted their conspiracy secretly, concealed the SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 77 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 78 of 81 Page ID #:1239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 nature of their unlawful conduct and acts in furtherance thereof, and fraudulently concealed their activities through various other means and methods designed to avoid detection including the use of stolen identities which was only recently verified. 123. Defendants and their co-conspirators engaged in a pattern of racketeering and fraud by concealing their activities and conducting them in secret and using false and stolen identities while also engaging in legitimate marketing and Internet activities. As a result of Defendants and their co-conspirators’ fraudulent concealment, all applicable statutes of limitations affecting the Plaintiffs’ and the Class’s claims have been tolled. 124. Plaintiffs and the Class members did not discover, nor could have discovered through reasonable diligence, that Defendants and their co-conspirators were using stolen identities until October 2010, when this lawsuit was filed by a few individual plaintiffs against former defendants such as Denton who secured counsel who investigated and revealed the scope and breadth of the stolen identity use by defendants. 125. As a result of the fraudulent concealment of the fraud and RICO enterprise, Plaintiffs assert the tolling of the applicable statute of limitations affecting the causes of action by Plaintiffs and the members of the Class. XI. CAUSES OF ACTION COUNT I ~ VIOLATION OF RICO § 1962(c) 126. Plaintiffs incorporate by reference all the preceding paragraphs as if set out in full including the section “RICO” above. 127. All individual defendants conducted and participated in the conduct of the RICO Enterprise through a pattern of racketeering activity along with certain law firms, lawyers, and paralegals. The RICO enterprise included companies involved in legitimate business enterprise and effected interstate commerce. 128. The pattern of racketeering included predicate acts of mail, and wire fraud, money laundering, violations of the Travel Act, extortion, and other illegal acts as set forth above and in the Plaintiffs section of the complaint in particularity. SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 78 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 79 of 81 Page ID #:1240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 full. 189. As a direct and proximate result of above Defendants racketeering conduct, Plaintiffs have lost a minimum of $941,790 and the class of victims have suffered damages in an amount in excess of $5,000,000. COUNT II ~ FRAUD 129. Plaintiffs incorporate by reference all the preceding paragraphs as if set out in 130. Defendants made numerous, intentionally false and misleading material representations to Plaintiffs about income and business potential including guaranteed income, reurn of investment, money back guarantees, and matching funds and Plaintiffs relied to their detriment thereon as detailed under each individual Plaintiff in the Plaintiffs section of the lawsuit wherein the fraudulent inducements are in bold Vide supra. 131. Defendants used intentionally false statements regarding checking creditworthiness, partnerships, joint ventures, and matching funds to induce Plaintiffs to permit defendants to strip their credit card and other accounts of all available funds and to sign Verifications. 132. Defendants made numerous other intentionally false and misleading statements to Plaintiffs and third parties such as banks, credit card companies, and government agencies about the existence of service agreement and fabricated relationships with Google, Sergey Brin, ClickBank, master Card, and the US government, upon which Plaintiffs relied to their detriment. 133. Defendants’ entire business model was based on a pattern of lies and intentional and spectacular distortions of the truth designed to ensnare plaintiffs and empty their bank and credit card accounts rather than provide legitimate services. Some of the fraud detailed in the Plaintiffs' section, the specific fraudulent practices included: (a) Use of the stolen identities of ALDERSON, ANDREWS, BECKTA, COBB, DAVIES DENTON, and KIRKLAND when making false representations to plaintiffs in order deceive plaintiffs into believing they were dealing with known and trusted Internet marketers; SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 79 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 80 of 81 Page ID #:1241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (b) The use of pseudonyms and impersonations to mask the true identities of those of the defendants and their employees committing fraud so that plaintiffs were left no remedy and to provide defendants deniability that fraud had occurred; (c) A practice of making false representations including guaranteed return of investment and profits, money back guarantees when no such income, profits, or guarantees existed in order to induce plaintiffs to part with their money; (d) A pattern and practice of placing unauthorized charges on Plaintiffs’ credit cards; (e) The misuse of Verifications to defeat charge backs and other attempts by Plaintiffs to obtain refunds. 134. As a direct result of Defendants fraud Plaintiffs have lost a minimum of $941,790 and the Class have suffered damages in excess of $5 million. XI. JURY TRIAL 135. Plaintiffs request a trial by jury. XII. PRAYER FOR RELIEF WHEREFORE, plaintiffs pray that the Court: 1. Award compensatory damages in an amount to be proven at trial, and for treble damages, costs and attorney fees under the RICO Act; 2. Award punitive damages in that defendants have utilized fraud, oppression, and malice as particularized above including but not limited to exploiting the elderly, disabled and unemployed in such a manner that individuals are no longer able to provide the necessities of life due to indebtedness caused by defendants and that punitive damages are required as an example be set to deter future conduct of this sort; 3. Award plaintiffs the costs of this action, including attorney and expert fees; and other reasonable expenses; 4. Grant such other and further relief as shall seem just to the Court. DATED: January 30, 2011. s/ Thomas Easton, Esq THOMAS EASTON s/ Jonathan Levy, Esq. JONATHAN LEVY SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Page 80 of 81 Case 2:10-cv-09860-DMG -JC Document 80 Filed 01/30/11 Page 81 of 81 Page ID #:1242 1 2 3 CERTIFICATE OF SERVICE 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECOND AM ENDED COM PLAINT ~ CV10-9860 DMG (JCx) ~ Of Attorneys for Plaintiffs I hereby certify that a true and correct copy of the forgoing document has been filed with the Courts’ CM/ECF filing system on this 30th day of January, 2011, which will provide service on all counsel of record. s/Thomas Easton, Esq. Thomas Easton Page 81 of 81
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