LocatePLUS Holdings Corp. (fka LPHCQ)

[Renee]

LPHCQ SEC Litigation:

https://www.sec.gov/litigation/litreleases/2017/lr23873.htm

[jurisper]

So both Fields & Latorella have now finished their sentences, and still no further action from the court on restitution & so no further action on the appeals. Ridiculous.

[jurisper]

It moves!

In January, after several years, the judge got around to explaining his reasons for dismissing one of the complaints against Fields. He also denied various motions to acquit, for a new trial etc.

Now the court is finally going through the restitution determination process.

Sorting these elements was a pre-condition for the appeals by prosecution and defence to proceed.

Meanwhile, Latorella's stretch finished in February, and it looks like Fields is in some kind of half-way house thing before his time finishes in August. IMO, disgraceful that this stuff wasn't handled in a timely fashion.

In his January ruling, the judge says that after due consideration, Fields' allegations of various types of badness against the prosecution were either irrelevant, de minimus or handled sufficiently at trial.

Previously he'd said he would consider whether the allegations were sufficient to warrant formal notification by him to the judge in O'Riordan's trial. After consideration:


I do not find the allegations sufficiently supported in evidence establishing a prima facie case of misconduct on which action by me may be based. Consequently, I decline to take further action than my
disposition of the defendant’s motions. In particular, I
decline to make a formal reference to Judge Wolf or any other
judicial officer or entity suggesting that there is a prima
facie case in the record before me of independently actionable
misconduct by Wild. This determination, of course, does not
foreclose the defendant or his counsel from further marshalling
a record and continuing to pursue the matter (as the record
suggests they previously have, see Doc. 427-1 at 2 (June 18,
2013 Letter to Attorney Pollack from Department of Justice))
before Judge Wolf or some other responsible person or entity.

Perhaps Fields will attempt to make more of these issues in the appeal, once it finally gets under way again.

[jurisper]

And another year goes by without any apparent progress on this - nothing on the court docket since 2013.

The judge (Douglas Woodlock) takes "senior" (ie semi-retired) status in June this year. Would be nice to think things might get resolved before then.

[mikev7]

If it's true there is an investigation of Wild, there could also be an investigation of Tom Murphy, at some point. Correct?

[jurisper]

Wonder what's going on here ... It's now more than a year since JF was convicted and almost a year since he was convicted, and the judge still hasn't completed his memo setting out his reasoning for various motion dispositions, including dismissal of the ID-theft charge.

The DoJ and JF appeals are waiting on this; and the SE case can't proceed until everything is disposed of in the criminal case. The last info rom the court docket is the judge's order from last year, reiterating his concerns about the possibility of taint:

It has come to my attention that the United States Attorneys
Office has publicly announced findings and conclusions by the
United States Department of Justice Office of Professional
Responsibility that suggestions of misconduct by Assistant United States Attorney Victor Wild related to this case “lack[] factual support and were without merit.”

This case remains under consideration in this court in
connection with the preparation of a full written explanation
sought by the parties in connection with their noticed cross
appeals concerning the grounds for disposing of post trial
motions. The action and reasoning of the Office of Professional
Responsibility are relevant and perhaps material to the
Memorandum and Order I now have in draft.

Moreover, I have indicated that to the degree the suggestions of misconduct are directed to a sentencing proceeding in a case before Judge Wolf [ie Dan O'Riordan's case],it is my intention to forward to Judge Wolf my Memorandum and Order thereby directing his attention to the relevant filings bythe parties before me. The Office of Professional Responsibility report would be relevant and perhaps material to that referral as well.


Is there some investigation of eg Wild in process?

[jurisper]

Kaiser sentenced today - $10K fine, less than the $15K plea bargain. Looks like the judge didn't think much of the case.

Kaiser's sentencing memo makes it clear that James A'Hearn was indeed the one who approached Kaiser to work for LP. Interestingly, Kaiser says that they've never met face-to-face.

Judge still hasn't made a restitution decision in the JF/JL criminal cases. Back in October he ordered the DoJ to file the internal taint investigation report on AUSA Victor Wild - the prosecutor in the O'Riordan case; initial lead on the LP/JL/JF cases; director (bizarrely) of penny-scam EVRM and/or one of its subsidiaries, alongside with LP's outside counsel who is also a Tom Murphy associate.

Text of order:

It has come to my attention that the United States Attorneys
Office has publicly announced findings and conclusions by the
United States Department of Justice Office of Professional
Responsibility that suggestions of misconduct by Assistant United
States Attorney Victor Wild related to this case “lack[] factual
support and were without merit.”

This case remains under consideration in this court in
connection with the preparation of a full written explanation
sought by the parties in connection with their noticed cross
appeals concerning the grounds for disposing of post trial
motions. The action and reasoning of the Office of Professional
Responsibility are relevant and perhaps material to the
Memorandum and Order I now have in draft.

Moreover, I have indicated that to the degree the suggestions of misconduct are directed to a sentencing proceeding in a case before Judge Wolf [ie Dan O'Riordan's case],it is my intention to forward to Judge Wolf my Memorandum and Order thereby directing his attention to the relevant filings bythe parties before me. The Office of Professional Responsibility report would be relevant and perhaps material to that referral as well.

Consequently, the government is hereby ORDERED to submit, on
or before October 28, 2013 for docketing in this case, subject to
a motion to seal if impoundment is sought, the report of the
Office of Professional Responsibility regarding Assistant United
States Attorney Wild.


The DoJ filed the report under seal.

[jurisper]

Kaiser plea agreement with DoJ filed - he'll plead guilty; penalty will be $15K fine. No indication of any DoJ interest in digging deeper.

I wonder if this will have any bearing on JF's appeal. That is still stalled, waiting on judge's decision on restitution in the criminal case.

[jurisper]

Ha! Kenneth Kaiser has now been officially charged with ethics violations for this LP stuff: http://bostonherald.com/news_opinion/local_coverage/2013/09/former_boston_fbi_chief_faces_federal_ethics_charges

Why did he do it? Just for the money? Because he's a meat-head?

[thecrusher2011]

More convincing than any non con-artist I must say.

[jurisper]

Full transcript of JF sentencing now available, including his statement to the court:

THE DEFENDANT: Today I stand before you, your Honor,
in a situation in which there is no way to express in my words
the regret at how sorry I am and how -- and that I have hurt so
many people. Before all this happened I never could have
imagined I would do the things that I have done, and it's been
a sobering realization coming to terms with the failings in my
own character, the failings that allowed me to do the wrong
that I've done.
Nothing I say today is an excuse for what I did. To
the investors who lost money, I am truly sorry and I hope that
I am able to right my wrongs in some way. I have violated a
trust bestowed upon me. For other victims that were hurt, I am
also sorry. For these things I am prepared to pay my debt.
To those who love me and cared about me, I'm sorry I
let you down, disappointed you and especially any hurt I have
caused.
And to my parents, particularly, not a day goes by I
don't wish there was something I could do to make you suffer
less will all of this. You've always been there, and I'm sorry
not only to let you down but cause so much pain.
This is not the person I set out to be in life. From
as early as I can remember, my parents always taught me right
from wrong and that there were consequences for doing wrong. I
learned to do the right thing, and I was surrounded by people
that supported making the right choices.

From an early age I was very involved with my church.
In fact, along with another family and our church the family
ran a halfway house helping people put their lives together. I
tried to help and set up to lead a good life. Up until I
joined Locateplus I had a spotless record. I think, at most, I
had maybe one speeding ticket maybe at one time in my life, and
despite having been offered and pressured by peers while
growing up, I refused to try any drugs. In fact, I never
touched any alcohol until I was of a legal age and drank
infrequently until this time in my life.
I had planned and set out on a path to be successful
in a law-abiding way. I saw how my parents had struggled
financially while growing up and it motivated me to want to do
well enough so that some day I would be able to help them out.
I put myself through college taking full-time course load while
working 50 hours a week.
It was at this time I married a woman that I met in my
teens. We met working at a fast food restaurant. After
graduation we both started out on our career paths. This
eventually led us to Boston, where we both earned graduate
degrees and both had progressively increased roles of
responsibility. For all intents and purposes, we were living
out the path of a good life.
I took my first job after graduate school, and after
about a year and a half I found myself unemployed when the
company was sold. This is when, much to my regret today, I was
introduced to Locateplus. For all its initial appearances, it
looked like a great opportunity. It had an exciting
Internet-based product, an impressive customer base with law
enforcement and what seemed like experienced management, but as
it turns out, I entered what became my perfect storm. I found
myself surrounded by individuals that didn't support making the
right choices. In fact, I was surrounded by people who
encouraged making bad decisions in many aspects of my life, and
I went along with it. I compare it much to a frat house
environment among many of the people there. To call what
happened here the biggest and worst ordeal in my life would be
such an understatement.
My marriage of 11 years came to an end shortly after
joining, drinking began to take over, and I lost a sense of who
I was. The only sense of praise or approval that seemed to
reach me was the feedback that I could be effective at helping
the business. I found myself justifying a small compromise
that led to justifying a bigger compromise that led to another
and another until I was buried in my bad decisions. It makes
me sick to think of how I gained comfort and a sense of
fulfillment at that time from things like driving a Hummer or
calling myself an executive.
As time went on and I got deeper and deeper in, I felt
the only way out was to ride out the storm and hope that
somehow in the future I could fix it. When I was in the
situation I couldn't see the forest for the trees, but when it
was laid out in display in this case for the world to see it
was clear there was never any justification. It makes me sick
to look back and think about how warped my perceptions were of
myself, others, my choices and conduct. This is not an excuse
for my behavior, because there is no excuse. It was
inexcusable. I only tell this to explain the insight I have
gained on my personal journey to understand how I came to fail.
I lost sight of what it really meant to lead a good life,
something I seemed to know naturally early in life, which I've
worked to regain the past years. I'm not at all implying that
I have ever lived the perfect life, but before joining
Locateplus I would have never even imagined contemplating and
engaging in the events that happened here, and I know I will
never let anything like this happen again.
When I became aware of the investigation, I chose to
meet the Government agents in mid-2007. I met with them on
five different days over a few months' time. It wasn't easy,
but as it went on it was somewhat of a relief to start getting
things off my chest, but by then the bad choices and conduct
had led to other bad choices and conduct. Talking about it
started making me feel a little like my old self, however, a
lot of time kept passing without any resolution or conclusion,
and I just couldn't understand why. My life seemed to be
largely on hold.
As the cloud of this impending prosecution loomed, I
went through some very dark times personally, experienced bouts
of depression, thoughts of suicide. It was only when I let
control over my situation go that I was able to work to
understand and try to move on. It was at this time in 2010
that I was introduced to someone who became my sponsor and gave
me an opportunity for work. I started a low-level position
handling phone calls and doing some clerical work. I also
entered therapy, where I started to understand more about the
values at the times I felt better about myself and the
circumstances that led to my choices. I'm once again
surrounding myself with good people who support making good
choices, and I am so far from the person I was when I worked at
Locateplus. Not a day goes by that I don't wish I could go
back and change what I did. I know now that if I am ever faced
with another situation like Locateplus I will not continue to
associate with or be influenced into making bad decisions.
At trial, the picture drawn of me, which
understandably colors the views of me, was constructed from a
set of events representing the most horrible decisions I've
ever made in my life, but those events don't capture all or
even most of who I am. Unfortunately, but understandably, this
is the only view prosecutors had of me. The prosecutors at
trial never had a chance to meet me or get to know me other
than in the courtroom, and for me when it came to any plea
negotiations it was overwhelming to have to contemplate the
loss of my liberty in terms of what seemed like one-dimensional
negotiations of numbers without any consideration of so many
other things about me, especially in light of so much
excruciating personal darkness I had gone through waiting for a
resolution.
When I was presented with the potential package deal
last spring, I chose not to accept being sentenced with my
co-defendant as a unit. I chose not to accept what seemed to
be a sentence predetermined by prosecutors who never really met
me. The main reason I couldn't accept the package deal is I
wanted to be considered fully as an individual with all
relevant factors and have the Court determine the most
important resolution of events in my life. I do admit, once I
made the decision to go to trial, I had hoped I would be
acquitted of some or all of the charges, and for that I
apologize for putting any burden on the Court.
While I have come to terms in so many ways with what
has led me here, not a single day in the nearly six years since
2007 have I been free of the realization that consequences are
still waiting. I can assure your Honor that I will never make
choices or engage in conduct contrary to my good values again.
I have prepared myself for the punishment the Court
deems appropriate. In fact, I am more concerned about the
effect on those who care about me than I am about myself. I
have caused my family and others so much pain I cannot describe
how committed I am to making something good come from all of
this. I am truly sorry. I promise your Honor that any mercy
will be returned with only good going forward.

[jurisper]

Partial transcript of JF's sentencing hearing released. The judge believed that JL's plea deal was too generous; he would have given JL something harsher if his hands hadn't been tied.

On the other hand, JF's blizzard of support letters convinced the judge that JF had confronted his sinful past & was determined to reform etc etc. JF was in the position of an easily-led youth finding himself in a toxic frat house - and so on. This despite the judge's belief that JF and JL were equally responsible for the crimes at the time they were committed.

These factors outweighed the considerations arising from JL's guilty plea vs JF's robust defence, and the 28 or whatever counts versus one count aspect.

So not appropriate to use JL's 5 years as any kind of benchmark to be added to for JF's lack of admission of guilt etc etc. The 5 years for JF is just right, in the judge's view, and the 5 years for JL was too light, in the larger scheme of things.

The judge makes IMO valid points about threading what he sees as the common Scylla & Charybdis of judges empathizing too much with white-collar defendants with similar socio-economic backgrounds to themselves versus "hitting for the bleachers" in sentencing to show how tough they are.

It's all thoughtful & intelligent but the gaping hole for me is the judge's ready reliance on all of those support letters JF got people to write.

Without them, it's pretty clear the judge would have hit JF with a double-digit sentence. It's seems like a very fragile basis for such a differential in sentencing. Would kind of diligence did the court do on the quality of those letters - anything? I'm following another case where the defendant has produced a similar blizzard letters - some of them from people who are obviously complicit with the defendant in other shady stuff, to anybody who digs into things.

[jurisper]

Fields is appealing the conviction.

And the prosecution is appealing the dismissal of the identity-theft count, and (I think) the sentence.

[jurisper]

JF's attorney has blog posts focusing on some of the more bizarre features of the LP story, viz:

- The initial prosecutor, Victor Wild, was apparently a director of a pennyscam company (EVRM) for which LP's outside counsel/old associate of TM was also a fiduciary. The MA US attorney didn't see anything wrong with this & kept him on the LP case. As JF's attorney says: Wow!

Wild led the O'Riordan prosecution, "forgot" to tell the judge that O'Riordan had perjured himself & helped set the scene for O'Riordan getting a wrist-slap in return for singing nicely against JF & JL.

- Kenneth W. Kaiser left his job as head of national criminal investigation for the FBI and went to work for LP, immediately meeting with Wild and FBI agents on the LP case, apparently in violation of federal statutes barring retired FBI execs from involvement in cases for which they previously had supervisory responsibility. He apparently worked closely with LP's outside counsel, the one involved with Wild in EVRM, and also TM.

Why would Kaiser leave a prestigious national law-enforcement position to go work for a basket case like LP, and why would he put himself at risk of criminal prosecution for violating a federal statute? Again, wow.

http://www.psdfirm.com/government-misconduct-blog-should-a-federal-prosecutor-facilitate-conflicts-of-interest-contrary-to-18-u-s-c-207-part-2-of-a-3-part-series-on-simple-questions/

[jurisper]

Fields' attorney has this blog post giving some excerpts from the sentencing hearing: http://www.psdfirm.com/government-misconduct-blog/

It's interesting, but would need to see the whole transcript to really get a handle on the judge's positions. As stated, it seems to call into question plea-bargaining in general.

Fields is appealing the conviction.

[Renee]

LPHCQ: SEC Litigation:

http://www.sec.gov/litigation/litreleases/2013/lr22629.htm

[jurisper]

Will be interesting to see the transcript.

Sentencing form gives evidence of rehabilitation and need to maintain some consistency with JL's sentence as reasons for downward departure from the guidelines.

From that it seems like JF's blizzard of support letters probably worked well for him.

Interesting piece on the same kind of thing: http://dealbook.nytimes.com/2013/02/25/the-challenge-of-sentencing-white-collar-defendants/

[BPoll]

End of an era for you Jurisper. The transcript might change some of your views.

[jurisper]

Huh - so JF gets 5 years, the same as JL. Be interesting to see the transcript of the sentencing hearing.

ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock:Sentencing DAY 2 held on 2/25/2013 as to James Fields (2); Court makes parties aware of the materials/submissions it will rely on for purposes of todays hearing; further objections to PSR addressed; applicable sentence-guideline range calculated; sentence recommendations heard; defendants right of allocution exercised; on Count(s) 1, 2, 3-10, 11-19, 20-26, 27, and 31, defendant sentenced to 60 months incarceration followed by 3 years supervised release with standard and special conditions. $2,800 special assessment. No Fine; defendant shall surrender for service of sentence at the institution designated by the Bureau of Prisons as late as 4/22/13; proposals re restitution due by 3/11/13; defendant advised of right to appeal. (Attorneys present: AUSAs Lelling and Levenson for the Gov't; Pollack, Solomon, and Colmey for the deft) (Sr. USPO: J. Sinclair)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 02/26/2013)

[jurisper]

JF's sentencing continued to Feb 25th. Court has dismissed one idnetity-theft count, presumably on JF's previous arguments to do with statute of limitations etc.

[jurisper]

Prosecution's sentencing memo filed, not under seal fortunately.

- Asking for 9 years jail plus restitution of $7.5M (jointly & severally wih JL).

- Lower than their & probation's calculation of guideline range of 20+ years, but they made clear at JL's sentencing that they believe the guidelines are too severe & the judge tended to agree.

- The restitution would be to named investors, rather than to everybody buying LP stock over the period covered by the charges. Not really sure of the equity of this. Most of the amount would be to professional investors - Special Situations Fund, Greenberg etc. The memo says SSF performed substantial diligence but that's dubious. If some schmo positing on a message board (eg, me) could easily see that Omni, ASR, Paradigm & other activities not charged were obvious frauds just from LP's filings and simple searches, why couldn't they? About $1M of the $7.5M would go to LP itself, but that would get soaked up by LP's creditors; nothing for small investors.

[jurisper]

JF's sentencing due on Feb 14th.

He's filed a blizzard of letters of support from family/friends/co-workers/ex-lovers/etc which leaves one wondering how he found time to conspire in a series of frauds over many years while digging out people's driveways, looking after their kids, paying their rents, helping them with their spreadsheets, saving their kittens from trees etc etc etc.

Disappointingly, his sentencing memo will be filed under seal - hopefully the prosecution's won't be.

Sentencing will be interesting - ~30 counts versus JL's one count; no guilty plea. On the other hand, I can't see the judge throwing the whole gadzillion-year book at him. A hard call, I think.

[jurisper]

A little insight into history. The prosecution says this in a footnote in a response to post-trial motions by JF's attorney for acquittal, dismissal etc:

The government initially thought the case would focus on Geoffrey Eiten, a stock promoter who had worked with Locateplus and who was the subject of the Massachusetts Securities Division’s ongoing investigation. Latorella’s and Fields’s proffer sessions, however,
coupled with documentary evidence the agents steadily uncovered, helped shift the government’s focus to events at Locateplus itself.

It seems from various court filings that in these multiple proffer sessions with the DoJ, JL & JF more-or-less admiited to everything they were eventually charged with, in substantial detail.

One of JF's attorney's arguments is that this means that JF, rather than O'Riordan, should have been offered a sweet plea deal. The prosecution scoffs at this:

During their proffers, Latorella and Fields both (eventually) admitted to perpetrating a brazen securities fraud, which in part led the government to give them closer attention. Later, the government better ascertained O’Riordan’s role and approached him as well. It soon became clear that, of these three co-conspirators, O’Riordan was the least culpable. The evidence at trial bore this out.

BTW, the DoJ so far doesn't seem to have charged poor ole Geoff Eiten with anything. The SEC has pinged him on non-LP matters (I think there might have been statute of limitations issues with suing him for LP, Paradigm etc) but that case seems pretty comatose at the moment.

[mikev7]

Looks like TM is Mr Teflon. Can't seem to find anything else on the subject on the net. Who knows. Maybe the DOJ will pick something up from the transcripts. If JF's lawyer was trying to get TM pinged, JL's lawyer was probably looking at the same thing. Could JLs plea agreement have included something on TM being brought in on JL's testimony?

[jurisper]

Don't think so. JF's lawyer has banged away over & over again asking why TM & others haven't been pinged, trying to dilute JF's guilt. I'm pretty sure he called TM as a witness in order to interrogate him in front of the jury, more or less.

[mikev7]

That's too bad. TM must have agreed to being a witness for JF in exchange for not being accused.

[lucky, mydog]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81681891

[jurisper]

TM is Mr Teflon.

The LP administrator dismissed the case against him when he settled with Gulabtech. The guy working out the distribution trust doesn't seem to be taking any action against him. No sign of SEC or DoJ action.

From the court docket, TM is one of the four witnesses JF called - be interesting to see a transcript of that, but anyway it obviously didn't do him any good.

[mikev7]

What happened to Murphy, internal auditor?

Wasn't he the internal auditor to locateplus when JL and JF were doing their shenanigans? And didn't Gallagher mention to him he thought JL/JT were cooking the books? Seems he didn't do anything about it. The DOJ even named him as an unindicted co-conspirator. I would have thought JL and JT would have rolled over on him as part of a plea deal.

When JL/JF were removed and new management and board came in, wasn't he involved? They're the ones who repeatedly failed to file the new forms the SEC was asking for. Isn't that correct?

Also, from the yahoo message board, I remember reading he also got involved with Gupta(?) and gave him confidential info from his second stint at locateplus. The trustee was investigating both of them. What happened with all of that?

That Murphy guy dipped into so many troughs, I'm amazed he's getting away scott free.

[jurisper]

Jury quickly finds JF guilty on all 31 counts; sentencing set for Feb next year.

What a fiasco for him. If he'd taken the plea deal he, like JL, would have had all but one count dismissed & been sentenced to five years. For the whole 31 counts he's looking at 20+ years according to the sentencing guidelines. I doubt the judge will give him that much but it's going to be ugly for him.

11/19/2012 329 ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock: Jury Trial DAY 17 as to James Fields (2) held on 11/19/2012; jury deliberations continued; jury question no. 1 received; hearing held with counsel; jury exhibit no. one marked; jury in and further instructed; deliberations continue; Jury Verdict returned finding the deft Guilty of all counts; jury is discharged; Sentencing is set for 2/14/13 at 2:00 PM; deft released on same bail terms and conditions; trial exhibits returned to respective parties. (Attorneys present: AUSA's Lelling and Levenson for Gov't; Pollack and Colmey for the deft)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 330 REMARK: Trial exhibits electronically stored in Jury Evidence Recording System (JERS) as to James Fields (2). (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 331 JURY VERDICT as to James Fields (2) Guilty on Counts 1,2,3-10,11-19,20-26,27,28,29-31. See 323 Notice re renumbering. (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 332 Judge Douglas P. Woodlock: ORDER entered. PROCEDURAL ORDER re sentencing hearing as to James Fields (2): Sentencing set for 2/14/2013 02:00 PM in Courtroom 1 before Judge Douglas P. Woodlock. (Lovett, Jarrett) (Entered: 11/19/2012)

[jurisper]

Nope, I'm wrong - he's letting it go to trial.

10/22/2012 286 ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock: Jury Trial DAY 1 as to James Fields (2) held on 10/22/2012; hearing held with counsel; 279 and 280 Defendant's Motions in Limine are DENIED; further pretrial issued addressed and ruled on by the Court on the record; venire sworn; voir dire conducted; peremptory challenges exercised by the Gov't and deft; jury of 12 with 3 alternates selected; jury excused; trial continued until 10/23/12 at 9:00 AM in Courtroom 1 before Judge Douglas P. Woodlock. (Attorneys present: AUSA's Lelling and Levenson for Gov't; Pollack, Colmey and Solomon for the deft)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 10/22/2012)

This should be interesting.

[jurisper]

The court has released the transcript of Latorella's sentencing hearing: http://www.scribd.com/doc/110669952/Jl-Sentencing-Transcript

[jurisper]

JF's trial starts Monday.

I'd guess he will cop a plea before it starts.

[jurisper]

JF's motion to compel denied. I guess that now they either agree on the plea deal as offered by the govt (same as JL's) or the case goes to trial in mid-Oct.

[jurisper]

And the curtain falls ...

http://www.sec.gov/litigation/admin/2012/34-67530.pdf

Accordingly, it is hereby ORDERED, pursuant to Section 12(j) of the Exchange Act, that registration of each class of Respondent’s securities registered pursuant to Section 12 of the Exchange Act be, and hereby is, revoked.

[jurisper]

Court has approved plan trustee's motion for settlement with SEC, so presumably a revocation order will be coming along soon.

Bye bye, Locateplus stock.

On the criminal front, court will hold a hearing in Aug on JF's attorney's motion to compel the govt to enter into a formal plea deal allowing JF to argue for minimal slammer time. FWIW, I'd be amazed if that works.

[jurisper]

Plan trustee asking the bankruptcy court to approve a settlement with the SEC which would see the registration of all LP securities revoked. As expected.

[samsamsamiam]

SENTENCED TO 60 MONTHS’ IMPRISONMENT FOR SECURITIES FRAUD



U.S. SECURITIES AND EXCHANGE COMMISSION
http://www.sec.gov/litigation/litreleases/2012/lr22394.htm

Litigation Release No. 22394 / June 18, 2012
United States v. Jon Latorella and James Fields, No. 1:10-CR-1038- DPW (D. Mass November 10, 2010)
Securities and Exchange Commission v. LocatePlus Holdings Corporation, Jon Latorella and James Fields, No. 1:10-CV-11751-DPW (D. Mass. October 14, 2010)
FORMER CHIEF EXECUTIVE OFFICER OF MASSACHUSETTS-BASED LOCATEPLUS HOLDINGS CORPORATION SENTENCED TO 60 MONTHS’ IMPRISONMENT FOR SECURITIES FRAUD
The Commission announced today that, on June 14, 2012, the Honorable Douglas P. Woodlock of the United States District Court for the District of Massachusetts sentenced Jon Latorella of Marblehead, Massachusetts, to 60 months’ imprisonment, to be followed by three years of supervised release, and the payment of restitution to be determined at a later hearing. Latorella is the former chief executive officer of LocatePlus Holdings Corporation (“LocatePlus”), a Massachusetts-based information technology company that sold on-line access to public record databases for investigative searches. On November 10, 2010, the United States Attorney’s Office for the District of Massachusetts (“USAO”) charged Latorella and former LocatePlus chief financial officer James Fields with conspiracy to commit securities fraud for their role in a scheme to fraudulently inflate revenue at LocatePlus as well as a scheme to manipulate the stock of another company.

On November 10, 2010, the same date on which the indictment against Latorella and Fields was unsealed, the Securities and Exchange Commission (“Commission”) amended a previously-filed civil injunctive action against LocatePlus arising out of the same conduct, to add Latorella and Fields as defendants. The Commission’s civil injunctive action is stayed until the conclusion of the criminal case, which remains pending against both Fields and LocatePlus.

For further information, see Litigation Release No. 21474 (April 2, 2010); Litigation Release No. 21692 (October 14, 2010); Litigation Release No. 21735 (November 10, 2010); Litigation Release No. 21763 (December 6, 2010); Securities Exchange Act Release No. 64607 (June 6, 2011).





http://www.sec.gov/litigation/litreleases/2012/lr22394.htm

[jurisper]

Latorella gets five years. From the docket:

06/14/2012 ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock:Sentencing held on 6/14/2012 for Jon Latorella (1), Government's recommendation heard; Victim Impact Statement given; defendant's recommendation heard; defendants right of allocution exercised; on Count 1, defendant sentenced to 60 months incarceration followed by 3 years supervised release with standard and special conditions. $100 special assessment. No Fine. Defendant shall self-surrender at the institution designated by the Bureau of Prisons on 9/30/12. Defendant advised of right to appeal. (Attorneys present: AUSA's Lelling and Levenson for the Gov't; Goldstein and Weinberg for the deft) (USPO: L. Paiva)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 06/14/2012)

[jurisper]

From the prosecution's sentencing memo:

The investor list essentially memorializes Latorella’s wholesale betrayal of the women unlucky enough to get involved with him: he misappropriated the names, dates of birth and social security numbers of no less than six women .. half of whom had been junior employees at Locateplus [and BTW, most of whom ended up bearing his children - 8 of them at last count ...]

As to one of them .. he went further, pressuring the mother of two of his children to commit fraud by opening a brokerage account based on fake information, and then telling her to sell Paradigm stock from the account as he directed. ..

Nor was Latorella’s contempt reserved for colleagues, intimates and the dead. For example, .. Christopher Romeo, Latorella’s longtime personal attorney and a Locateplus board member .. urged Latorella to tell the board that the IRS was looking into Latorella’s dealings. Latorella replied, roughly, “I am so fucking far ahead of these idiots, they got nothing on me.”

[jurisper]

Latorella sentencing memo's filed.

It seems that there's a 5 yr statutory max for the one count JL is to be sentenced on. The probation dept came up with a recommendation for 235 - 293 months, but I think this is just notional, given the 5 yr cap? Anyway, we'll see what the judge does with it next week.

In another of the odd-seeming situations where the prosecution is softer than the probation dept, they calculate the guideline range as 151 - 188 months.

Part of the discrepancy comes from the prosecution not asking for an obstruction of justice upwards revision. This is because the DoJ "inadvertantly" failed to ask for such a revision in O'Riordan's sentencing and feels that it therefore can't ask for it in JL's case. Bizarre. One more fishy element in the O'Riordan deal.

Other points of interest:

- JL's prescription drug of choice is apparently Xanax and he drinks himself into oblivion every day (according to his attorneys).

- DoJ asking for restitution of $6.8M. The bulk of this represented by Austin W. Marxe's Special Situation Fund's loss of $4.9M. They include interview transcripts, emails etc which for me serve mainly to illustrate SSF's utterly inadequate diligence.

Eg: Supposedly despite intense review of LP's SEC filings nobody from SSF picked up on the array of red flags which festooned these from the earliest registration statement onwards. When ex-director Gallagher told them about the Omni fraud etc, they accepted as sufficient comfort an emal from JL and the report of a conversation between JL and the broker from shady Laislaw & Co (UK) who intro'd the deal to them originally. Nothing here about SSF's investment mainly going straight out the door to pay off debt to Laurus which they would surely have known was going to happen. Etc etc etc.

- No hint that anybody connected with LP except JL, JF and O'Riordan) were anything but victims. The shadows of Tom Murphy and Geoffrey Chalmers flit through the records in various places but nothing to bring them into the spotlight.

[jurisper]

Old YHOO board still accessible here, at least for now: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_L/messagesview?bn=75005

[jurisper]

Latorella's sentencing is scheduled for June 14th. No sentencing memoranda filed yet, but there is a letter from his older brother Henry, the SUNY professor who used to run the Metrigenics thing, asking the judge for clemency for JL.

There's no point in picking holes in Henry's representation of the circumstances - you expect a brother to have a favorable viewpoint.

It does support one thing I've always thought about pennyscammers - ie that they are usually addicted to alcohol, drugs and/or gambling. Henry thinks JL has the first two (based on the sheer volume of cash he burned away, I think he's probably got the third also). It'll be interesting to see what the sentencing memo's have to say on the point, assuming the court doesn't seal the damn things.

JL has eight kids from a bunch of different partners, apparently (very tough for them). His first wife left him due to a "gender preference reconsideration".

Whatever, I think he's lucky to be looking at 5 years max.

In the meantime, JF's attorney still keeps up the fight; no ruling yet on his last motion to get the court to more-or-less enforce an agt where the DoJ's bid will be capped at 5 yrs in the slammer and he will be able to argue for zero. I really can't see that working but you never know ...

[Smokey100]

A shame to say the least for the company! I hate to see a company being ruined by a few people.

As for JF, he should of plead out before JL, IMO it looks like James is the leader of the mess in the courts eyes and I am not sure that is really the case. I do know that JF attorney is a outspoken, risk taker and somewhat flamboyant, which will not help JF.

As for good time in a federal system, it is 52 days a year served with 6 months in a halfway house. Example if JL gets 5 years he will have 260 days knocked off plus 6 months in the halfway house. For JF to not have dealt long before JL was a bad move on his lawyer IMO. Then again, just because the prosecutors agree with the lawyers on a time does not mean that the judge will go along with the prosecutors, both could be looking at a longer time to serve.

[jurisper]

JF is at risk of getting more than JL. His attorney really does seem to have botched the plea deal bargaining and as of now JF is headed for trial on all 31 counts in October. (Although I would bet 20c most likely outcome is that he gets a new attorney and cuts a deal before then - his position at trial would be disastrous for him, IMO.)

BTW, I don't think you can get more than a few months time off for good behavior in federal prison.

The company is defunct, operationally. All of its operating assets have been sold. The remaining cash and the proceeds from any future suits brought against insiders etc etc by the trustee get shifted into a trust to pay off the creditors. The shareholders will almost certainly get nothing. The court approved all of these plans of the trustee in a hearing today.

There will shortly be an SEC admin hearing on revoking the registration of the stock which I am sure the trustee will not contest. So in a little while I expect LPHCQ will essentially cease to exist.

[Smokey100]

Well I hope you are right with this information. Murphy cannot come out of this untouched at all. If Murphy did take shares or (given) with the promise to pay them back and never did, shame on JL but shame on Murphy and then to be on the audit committee. IMO is as bad as JL/JF. If that money was not paid back it would appear to me that Murphy had something on JL or they were sharing the profits together. Who knows. As they say "follow the money" if that is possible this many years later.

JF's attorney is fishing but also trying to keep his client out of prison. I am not sure what they have on JF for evidence but my guess he will see the same amount of time as JL. IMO not as much time as they should of got. 5 years will have them out in 3.5 years with good time, hardly the time we all thought they would get.

Besides the no trading and bankruptcy, what is the status of the company? Is there still a company in place? Who is running it?
Thankfully I do not have any stock with this company.

[jurisper]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75522579

The LP Ch.11 trustee in court pleadings says that he may take action against Murphy and other directors.

In the criminal case, apparently Murphy and others are "unindicted co-conspirators". JF's attorney of course has tried to paint the investigation and prosecution as tainted by efforts by Kaiser, Wild etc to protect Murphy, Chalmers etc.

Maybe the SEC will take some action, perhaps after the criminal case closes and the stay on the SEC case is lifted. Not holding my breath ....

[Smokey100]

There is a lot of mention of previous CEO/CFO information about trials and sentencing. Lets not forget about the board of directors that allowed most of what happened at LP happen. Mostly Tom Murphy, probably the most seasoned board member they had. Hmmm, Murphy should be investigated himself if he has not already, perhaps the statue of limitations excused him, who really knows. Word was that he took quite a few shares or were given back when the IPO went out and he NEVER repaid them. Also, Murphy did his part in trying to wrestle the company away from Latorella for his own gain, perhaps for the shell for other ventures he was involved with.

I bet if someone took the time to really look into Murphy they would see him for he really was. Then again, I guess it is possible that him and Latorella were tighter than let on. That board during the Latorella days was set up for his own good and manipulation but Murphy seemed to be at the head of the line.

Come on SEC, look into this board but more so Murphy, there is more behind the curtain, pull it back and really see whats there.

A name you don't hear much of taking over LP was Geoff Lee, another Latorella pawn. There from the early days, he leaves and LP buys out his company and then comes back to be CEO. Don't be fooled though, it really was Murphy running the show while Geoff worked from CA in a CEO position.

So again we can sit and look at Latorella/Fields at what they did and we do. Lets not forget what happened after they left. Murphy was a snake. What a joke!

IMO

[jurisper]

James Field's plea agreement drama: Proecution says that the arguments of his attorney (ie basically that the prosecution's draft offer of a min 4 year/max 5 year deal should actually be construed as min 0 year/max 5 year) are nonsense. They say JF's attorney has by these games in effect rejected the offer and that the only thing now is to get ready for trial in October.

I read a subtext inviting JF to get a new attorney if he wants to cut a deal.

[jurisper]

Trustee takes the expected line, essentially, and also says that Nachef was fully involved in the process, not just Knoblock. The confirmation hearing is on 14th May and these issues will be addressed.