The Jailhouse

[FrankNG]

Matt, here is more information on career swindler Pattinson Hayton who according to Nevada Energys Law suit which is in their SEC filings if you go to the link at the bottom of this post. To read more about Hayton please visit http://www.sec.gov/cgi-bin/txt-srch-sec?text=Hayton&mode=Simple

f. 100,000 shares (or 600,000 pre-split) on
February 18, 1997 to The Hartcourt
Companies, another company owned and
controlled by Mr. Hayton;

32. Nevada Energy received no consideration for the issuance
of any of this stock.

33. This stock was obtained from Nevada Energy as part of and
in furtherance of a scheme and artifice to defraud in violation of the mail
fraud statute, 18 U.S.C. Sec.1341, and the wire fraud statute, 18 U.S.C.
Sec.1343.

H. THE HAYTON GROUP LOSES CONTROL OF NEVADA ENERGY

34. On or about August 11, 1996, John Goold resigned as a
director of Nevada Energy, as he was concerned (quite properly) that the
instructions he was receiving by telephone or facsimile from Mr. McCloy (on
behalf of the Hayton Group) were improper.

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Mr. Goold was replaced by Stefan Tevis, whom the Hayton Group believed
(ultimately incorrectly) would do as Mr. Hayton and Mr. McCloy directed.

35. On or about August 28, 1996, Golden Chance failed to make
its scheduled payment of $500,000 under the Note. Because the board of directors
of Nevada Energy was under the control of the Hayton Group, they failed to
demand that Golden Chance make this required payment. Instead, on September 13,
1996, the then-President of Nevada Energy, Jeffrey E. Antisdel (who was
unaffiliated with the Hayton Group), wrote a letter to Golden Chance informing
it that notice of Default (as defined in the Note) was being given and demanding
the entire remaining balance as immediately due and payable. By the same letter,
Nevada Energy made a demand upon Waterford under the Guaranty as guarantor of
Golden Chance's obligations. Pursuant to the Hayton Group's scheme, neither
Golden Chance or Waterford responded to these demands.

36. On September 30, 1996, Nevada Energy's officers (Mr.
Antisdel and Richard A. Cascarilla, the Secretary and General Counsel, who also
was unaffiliated with the Hayton Group) attempted to file an electronic Form 8-K
on EDGAR with the Securities and Exchange Commission setting forth Golden
Chance's default on its obligations under the Note and the Subscription
Agreement. As the revelation of this information could have harmed the Hayton
Group's continuing scheme to loot Nevada Energy (which at the time was far from
completed), Nevada Energy's board of directors, pursuant to instructions from
Mr. Hayton and Mr. McCloy (using either or both the telephone and the mail),
immediately terminated Messrs. Antisdel and Cascarilla without cause.
Thereafter, they were replaced by

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Mr. Tevis (as President) and Kenton Bowers (as Secretary), whom the Hayton Group
perceived as being more willing to follow Mr. Hayton's and Mr. McCloy's
instructions to loot the Company.

37. As Golden Chance never made proper payments under the
Note, and the cure period for those payments had long since run, a Default
existed under the Note. On December 4, 1996, after determining that such a
Default existed, the holders of all five shares of Series B Preferred Stock
(which included Mr. Cascarilla) executed a written consent, either personally or
by proxy, electing Michael R. Kassouff (a director of Nevada Energy prior to the
closing of the Transaction and a holder of one share of Series B Preferred Stock
who also was unaffiliated with the Hayton Group) as the Series B Director
pursuant to the Certificate.

38. On or after February 3, 1997, Mr. Tevis resigned his
positions as an officer and director of Nevada Energy, because he was concerned
(appropriately) that the Hayton Group's activities were illegal. Mr. Hayton
apparently replaced Mr. Tevis as President on February 10, 1997 (although he
purported to act as President beginning as early as January 23, 1997); Mr. Tevis
never was replaced as a director.

39. On approximately February 6, 1997, Mr. Bowers was
terminated as Secretary of Nevada Energy because the Hayton Group believed (with
good reason) that he would no longer do its bidding pursuant to their illegal
scheme and instead was cooperating with various investigations into the Hayton
Group's activities. Although the Nevada Energy board previously had purported to
appoint Mr. Quinn as Secretary (on January 21, 1997), legally this appointment
could become effective only after Mr. Bowers was terminated.

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40. On February 13, 1997, three creditors of Nevada Energy
(including Mr. Cascarilla) filed a petition for involuntary bankruptcy against
Nevada Energy in the United States Bankruptcy Court for the District of Nevada
(the "Bankruptcy Court"). On or about March 3, 1997, the Bankruptcy Court
appointed a trustee in bankruptcy for Nevada Energy, over the opposition of the
Hayton Group. In connection with the appointment of a trustee, Mr Quinn
purported to appear as an attorney on behalf of the Company and Mr. Hayton, even
though both Mr. Quinn and Mr. Hayton knew that Mr. Quinn had been suspended
from the practice of law as a result of his conviction of grand theft by
embezzlement from one of his clients.

41. On approximately May 9, 1997, Messrs. Cain and Cannell
resigned as directors of Nevada Energy, leaving only Mr. Kassouff as a director.
On May 19, 1997, Mr. Kassouff filled the vacancies resulting from Messrs. Cain
and Cannell's resignations with Mr. Cascarilla and H. Lawrence Herth (who also
was unaffiliated with the Hayton Group). On May 19, 1997, the new board of
directors terminated Mr. Hayton and Mr. Quinn as officers of Nevada Energy,
replacing them with Mr. Cascarilla as President and Mr. Herth as Secretary.
Thereafter, the new management of Nevada Energy continued their investigation
into the activities of the Hayton Group, which resulted in (among other things)
this lawsuit.

42. On August 25, 1998, the Bankruptcy Court confirmed Nevada
Energy's plan of reorganization, over the (withdrawn) opposition of Mortlake,
acting on behalf of the Hayton Group. During discovery into Mortlake's
opposition to the Company's plan of reorganization, Nevada Energy learned that
the Hayton Group (led by Messrs. Hayton

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and McCloy) was actively attempting to prevent anyone from investigating its
illegal activities.

I. THE HAYTON GROUP'S ONGOING ILLEGAL SCHEME AND PATTERN OF
RACKETEERING ACTIVITY

43. The Hayton Group had good reason to fear an investigation
into its activities, because its illegal scheme was continuing, albeit with
another company.

44. In approximately October 1997, the Hayton Group began to
invest in Zulu-Tek, formerly known as Netmaster Group. The Hayton Group's scheme
with Zulu-Tek has used techniques similar to those used with Nevada Energy,
including:

a. Employing an attorney who had been suspended from the
practice of law for stealing money from clients (with Zulu-Tek, he served as the
registered agent for the company);

b. Setting up bank accounts nominally in the company's name
but actually solely under the Hayton Group's control to hold most of the
company's cash;

c. Withdrawing most of the funds from these bank accounts for
the use, directly or indirectly, of the Hayton Group;

d. Refusing to allow the proper officers of the company
access to the records of these bank accounts; and

e. Controlling the company without Mr. Hayton becoming an
officer or director.



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http://www.freeedgar.com/search/ViewFilingsData.asp?CIK=712803&Directory=950152&Year=99&...