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Tuesday, 10/11/2011 8:11:33 PM

Tuesday, October 11, 2011 8:11:33 PM

Post# of 312015
Another Red Flag joins the many others fluttering around JBI Inc.[JBII] -- Notice to Cease and Desist Internet Defamation

For those of you who may have missed it. First a letter from JBI legal, followed by a great response.

Re: Notice to Cease and Desist Internet Defamation

Dear Mr. Feierabend:

I have been retained by JBI Inc., a Nevada Corporation, to request that you cease and desist making defamatory attacks against the Company, its officers and directors, on various web site message boards, including, but not limited to, Investor Hub.com, and, in the alternative, to take legal action against you if you continue making such public defamatory statements.

To the best of our knowledge and belief, you are the person posting false and defamatory attacks on Investor Hub.com message boards using the name “paper prophet”.
It is hereby requested that you:

1. Immediately CEASEAND DESIST from making defamatory comments against my client on any and all web sites and message boards; ,

2. Immediately delete or remove from Investor Hub.com and any other web sites and message boards all defamatory and disparaging remarks made by you against my client; and

3. Issue a notarized letter of apology in writing to my client for the damages that your actions have brought upon it.

If you refuse to, or do not, comply with this request within 15 days of receipt of this letter, JBI Inc., its officers and directors, will have no choice but to pursue all of their legal remedies against you, including the possibility of filing actions for damages and injunctive relief.

You are further advised that your actions have resulted in damages to my client in Canada, for which you may be subject to additional legal action in that country for your defamatory conduct and activities.

YOU DO NOT HAVE PERMISSION TO PUBLISH THIS LETTER ONLINE OR IN ANY OTHER FORM OF MEDIA.

Very truly yours,
David L. Rost
January 3, 2011
[....]

THE REPLY

Dear Mr. Rost:

I acknowledge receipt of the cease and desist letter you wrote on behalf of your client, dated December 28"‘, 2010. I also acknowledge that you did not give me permission to publish the letter on the intemet. However I'm unsure on what grounds you are so deluded to believe you have the authority to restrict my publishing the letter on the internet. Copyright law? I'm completely baffled. Unless you disingenuously wrote that I don't have permission, hoping I would believe you had the authority. If it's the latter then certainly it should be no mystery to you why lawyers are often stereotyped as “sleazy.” Against your request, I am publishing it on the internet as I believe it's of interest to your client's shareholders.

You stated your client was JBI, inc.. As JBI Inc. was only a shell in which Mr. John Bordynuik purchased a controlling interest and in which he now controls every aspect, including how often and how he pays himself and others and what information is publicized, I don't have any issues with the company itself. I rarely mention JBI Inc. in my messages but I do often refer to Mr. John Bordynuik as its controlling shareholder. For the remainder of this letter I am assuming your client is really Mr. John Bordynuik. In reality it makes little difference other than Whether Mr. Bordynuik wants to pay you directly from company funds or ?rst extract invested company funds and pay you himself.

In regard to your three requests

1) Immediately cease and desist from making defamatory comments against my client on any and all web sites and message boards.

- Your first request is not applicable as to the best of my knowledge l have not made any defamatory comments against your client. I wlll remind you that for a comment to be defamatory, it must be false. Posting true comments does not make those posts defamatory, even if your client complains and protests. If I have mistakenly posted anything at all which was genuinely untrue, please notify me of my mistake with the reason it was false and I will gladly remedy it and avoid posting it in the future.

2) Immediately delete or remove from Investor Hub.c0m and any other web sites and message boards all defamatory and disparaging remarks made by you against my client; and

- Again in deference to your client, if you or your client can point me to any messages I may have posted that are truly false and dafamatory with an explanation why I was mistaken, I will certainly do everything reasonable in my power to have those posts removed. I make every reasonable attempt to be accurate.

- Regarding your use of the word “disparaging,” this is a different topic. As I am outlining later in this letter, your client, Mr. John Bordynuik, is a penny stock operator who purchased controlling interest in a shell company and is abusing the capital markets by duping naive investors with his story of producing a crude-oil equivalent or even diesel for under $10 per barrel. Your client disgusts me and it is well within my right to post my opinion regarding your client on a stock message board where the purpose is to discuss the merits of an investment in the company.

3) Issue a notarized letter of apology in writing to my client for the damages have brought upon it.

- Not applicable. Your client has suffered no damages due to me, neither veri?able nor per se. Posting the truth about your client might have even caused a few shareholders to re-think their position in JBl Inc., but my posts weren't false to the best of my knowledge nor are any of my posts misleading. I strive to be accurate and genuine. I stand by my statements. There will be no notarized letter of apology to your client.

I'm also going to assist you in compiling your case against me...not because I have to but because I think it's appropriate that you understand my position. You may also compile my messages on the message boards if you wish but this will give you an overview.

I will give you a background on your client as l understand to be Mr. John Bordynuik, not JBI lnc.. Your client purchased controlling interest in a shell company with few to no operations in early 2009. Your client had a story that he stumbled upon a recipe for a catalyst which would transform the simple process of pyrolysis into a process which could make oil — and even diesel — from plastic for less than ten dollars a barrel which then could be sold for three dollars under the price of crude oil — a quality which, if true, would allow his pyrolysis oil to surpass the value of regular pyrolysis oils by orders of magnitude. He claimed he could get paid to take plastic for free to feed his process as well.

This claim would be considered ridiculous to most of the informed and experienced investing public. To make a hydrocarbon-only fuel similar to diesel, hydrocarbon-only plastics would have to be used, plastics which carry a market price of several hundred dollars per ton in non-trivial quantities thereby eliminating any chance of being able to produce such a fuel for less than ten dollars per barrel. If mixed plastic was used, still carrying a price tag which would likely refute the ten dollars per barrel claim, the resulting pryrolysis oil would contain signi?cant elemental oxygen rendering it a much less valuable oil than crude oil—unless your client also decides to claim that his secret catalyst can also resolve that issue.

However, Mr. Bordynuik's claims of producing for less than ten dollars per barrel and being able to sell as diesel or as a crude oil-equivalent don't seem ludicrous to the naive penny stock investors targeted by Mr. Bordynuik. Those investors reason that since plastic is made from oil then the reverse must be attainable and they believe that Mr. Bordynuik has discovered the secret»even though Mr. Bordynuik has provided no reasonable basis in fact to support his ridiculous claims nor any reasonable basis in fact that he can produce an oil for under ten dollars per barrel which could be sold for any price, let alone the price of crude oil which is currently over ninety dollars per barrel.

While I admit that your client has shied away from making the outlandish cost and price claims for over half a year, he also has never retracted those claims and the message boards devoted to his stock make it clear that his faithful investors still believe that he can make a crude oil equivalent or even diesel for less than ten dollars per barrel.

The following are very direct reasons why Ihave called Mr. Bordynuik a liar on more than one occasion.

- In April of 2010, Mr. Bordynuik told investors that he had an offer to purchase his oil from Somerset Re?nery in Kentucky. Somerset Re?nery had been defunct for two months prior to Mr. Bordynuik's statement. It would be naive to believe there ever was an offer and if there were, Mr. Bordynuik made no disclosure that the offer was no longer valid – material information for those shareholders who believed him.

- Mr Bordynuik released a press release saying that he was filing for patent protection in wording that made it clear that filing was underway. In SEC ?lings a year later, it was disclosed no patent protection was ever sought.

- Mr. Bordynuik gave input or allowed media credits to be put in the balance sheet at a value of $10 million. Again it would be naive to believe that Mr. Bordynuik had any basis for his valuation of those media credits. He isn't so naive a man to believe he can get $10 million of assets for virtually nothing.
- In July of this year Mr. Bordynuik stated that commercial production of his oil would begin immediately after an air permit was received from the state of New York. On receipt of the air permit, Mr. Bordynuik release or caused to be released a press release saying that JBI “commences commercial operations.” This was clearly designed to play on the expectations he had communicated to shareholders and, indeed, the price rallied from the mid $0.5O's to over $1.30. Since then it's become clear that any real commerce simply has not occurred.

- Mr. Bordynuik stated that he expected production to begin in the ?rst quarter of 2010, the second quarter of 2010, the third quarter of 2010 and then the fourth quarter of 2010. It's clear that Mr. Bordynuik was lacking any reasonable or factual basis whatsoever for stating those timelines. The odds of so many of Mr. Bordynuik's expectations falling ?at would be a statistical impossibility. Often the information he gives to shareholders appears to lack any reasonable basis in fact whatsoever.

- Mr. Bordynuik announced in June of 2009 that he was beginning operations with a “volume processor” and referred to P20 as a “profit center.” His aim was clearly to give the impression that commerce was at hand. While puf?ng seems to be extensively used, that and other press releases appear to have had signi?cant 'wordsmithing' to communicate information which was materially different from reality.

I have other examples including these where Mr. Bordynuik either lied, lied by omission, used scienter, misled investors or made statements with reckless disregard for the truth.
Please note, again, that it wasn't me who defamed Mr. Bordynuik by calling him a liar. I labeled him based on the definition of a liar—Mr. Bordynuik has on various occasions directly communicated information to shareholders which didn't appear to have any reasonable basis in fact or which were outright lies. By definition that makes him a liar.

In addition I will remind you that there are three criteria for fraud.

I) A person has made false or misleading statements either intentionally or with reckless disregard for the truth

2) Others relied on those false or misleading statements and

3) those other suffered damages because of their reliance.

Unless Mr. Bordynuik has some reasonable excuse why he believed he had a reasonable basis for making many of the incorrect or false statements that he made, it's clear that Mr. Bordynuik left the realm of puffing with meaningless adjectives (e.g. “high quality”) and suggestion and has crossed well over the line into fraud. You can see in just the examples which I listed to where fraud may have occurred. I have often stated my opinion on message boards that I believe Mr. Bordynuik is a typical penny stock swindler. There is currently no shortage of swindlers running penny stock schemes where the operators solicit investment monies from naive investors. They all seem to operate the same way by misleading shareholders and getting them to believe something materially different from factual reality in order to get them to buy shares and, similarly, never o?‘er much, if any, basis to back up their often ridiculous claims of revolutionary technologies.

I've worked with startup companies and entrepreneurs in the past. Universally from what I've seen those who are honest tend to expend significant effort in trying to provide a proof-of-concept to prove their claims are valid. Those who make no effort or who in fact actually avoid any such effort to provide evidence of value typically aren't in the business of honest commerce. Mr. Bordynuik falls into that category of never attempting to provide any evidence that his cost and price claims are true. I would ?nd it difficult to believe that Mr. Bordynuik is merely too naive or bungling to properly run a startup business which, based on his claims, would have nearly 90% gross margins.

However I cannot do much other than sit by and watch unwitting investors lose their money. Twice I have reported Mr. Bordynuik to the Securities Exchange Commission for his scienter but it's clear to me from my previous communications with the SEC regarding other companies that the SEC's resources are stretched thin.

As I have never had any financiall interest in JBI, Inc., I also did not suffer any damages so I cannot take him to court to prevent him from running his scheme based on personal damages. I very much believe Mr. Bordynuik is a criminal but I simply have no ability to stop him by due process.

However in a defamation suit, I would certainly be able to bring evidence in front of a court to back up what I am saying. I would consider it a public service to use my time to either assist in bringing a fraud suit against Mr. Bordynuik or to at least make it easier for his investors to sue him in the future by making the discovery process much easier. I would guess that Mr. Bordynuik would argue that any reasonable man would have readily have come to the conclusion that his process really could produce an oil for less than ten dollars per barrel which re?neries would be happy to purchase for near the price of crude oil. I would guess that he gets constant affirmation and believes that he's clever enough to convince a court that he was reasonable in his claims as well. However l have enough faith in our justice system to where I am certain Mr. Bordynuik wouldn't be lucky enough to ?nd a judge so gullible to believe that Mr. Bordynuik really can produce or had any reasonable basis for believing that he can produce a crude oil-equivalent or diesel for under ten dollars a barrel. And as you know, judges can initiate a new suit for probable malfeasance that comes to their attention during a trial.


I'm certain you will get paid well— Mr. Bordynuik was able to solicit several million dollars from naive investors who invested in his company through the private investments Mr. Bordynuik orchestrated earlier this year and as controlling shareholder, Mr. Bordynuik has full control and access to JBI's accounts. I am also certain I will get reimbursed for any expenses I may incur during this case. With a little luck, this will also result in a felony charge against Mr. Bordynuik with resulting incarceration and some disgorgement for his shareholders before the money is completely spent. The shareholders who tell for Mr. Bordynuil<'s story do not realize it now but they will be grateful in the future if this is successful.

Please correct your suit to name JBI Inc.'s controlling shareholder, Mr. John Bordynuik, as the plaintiff in this defamation suit instead of JBI, Inc.. As I said, I rarely even mention the company itself — the company itself is just a tool which Mr. Bordynuik is using. I have no interest in making any comments of wrongdoing against a non-sentient company which is for many intents and purposes still a shell company. Shells by themselves don't swindle people.

Please feel tree to use this full letter in its entirety in any way you see fit as you and your client move forward with litigation against me.

Kurt Feierabend