There were four declarations attached to the New York Class action couldn’t be covered in the last post. I planned to cover all four of them here, but the two from the investors don’t really add anything we didn’t already know, so I think I’ll leave them off for now. I’ve also left out information stated in yesterday’s post since these are all a part of that filing but some repeated information was included for context.
In a shocking turn of events, Ed is actually helping the victims. Or screwing over a former co-conspirator. I doubt either is being done out of the goodness of his heart. As you know he’s been at Terminal Island, but what you may not have heard is that he’s been living in the infirmary because he requires “frequent medical attention.” He’s doing this declaration because he “may not survive in prison long enough to testify in person.” My heart bleeds.
Ed says that they kept investor files in file cabinets at NASI. These files generally included the purchase and lease agreements, proof of payments from the investor, copies of correspondence to and from the investor, copies of some monthly Investor Summary reports and other pieces of information related to the investor. Some of the reports? SOME of the reports? This may be why the Receiver had a hard time piecing this noise together.
He confirms the suspicion that Fitzwilliam was not the first person to oversee the bank accounts at CNB, but he doesn’t recall who did it before. In any event, this employee was replaced by Fitzwilliam sometime in the mid-2000s.
NASI overdrafted on a regular basis. Fitzwilliam asked Ed on many occasions to explain the reason for overdrafting and the source of the funds which would fix the problem. After Fitzwilliam invested in NASI he asked if they had bank accounts at any other bank. They did not. They also never fixed any overdrafts by transferring from another bank.
On that fated week in August 2014, when a massive amount of investor checks bounced, Fitzwilliam was on vacation and a district manager was at the branch. Ed eloquently points out that this was a “liquidity issue.” I call it “turning your checkbook into a superball.” Anyway, the district manager told him that she refusing to cover the checks. I’m assuming that the only checks that cleared that day essentially drained the account.
For those who have never overdrafted an account or overdrafted by more than one transaction, banks have rules about what will clear first. I looked up City National Bank’s overdraft policy, for shits and giggles. I’m always good for that. Checks at that bank clear low to high – smallest value to largest value. This ensures that the maximum amount of checks that can clear, do. And some of you might have looked at that overdraft policy and are wondering about the deposits/transfers that supposedly clear first. I’m thinking that the deposits wouldn’t clear fast enough. Those deposits contained checks that were over $10k each and even my bank, which has a policy about making funds available same day, will hold checks like that for a day to make sure it clears the other bank first. So, by the time Ed’s deposits cleared, it would already be too late. A transfer from another account might have been a different story, but we’ll never know.
Ed then says, “As a consequence of her refusal, NASI bounced…” Yeah, damn those people who do their jobs right!
You know those two $60k checks that Fitzwilliam got that supposedly were made for his participation in covering up this scam? Yeah, Ed claims that he sold back five ATMs each time. Uh huh.
Ed confirms that he threatened to take NASI’s business to another bank if CNB continued to ask questions. That’s hilarious. What are the odds that he would have been able to find another bank to funnel his dirty money through? They really lucked out with Fitzwilliam, who came on board right around the time that they allegedly went full Ponzi. Taking their business elsewhere would have effectively shut NASI down and Fitzwilliam’s profit from it. Mutually Assured Destruction.
He claims that the $5 million that they transferred to Fuel Doctor was for development and sales. We know that he directed Fitzwilliam to watch Fuel Doctor’s accounts as he did NASI’s accounts. In November 2012, Dickwad Duo removed themselves as signers on the Fuel Doctor accounts.
Ed states outright that if Fitzwilliam didn’t float the rubber checks, NASI would have collapsed a lot sooner.
For some reason, we have a job history. I don’t really care what he did for work in 1993. Or 2003. I care what he was doing maybe right before his contact with NASI. And he takes all of thirty words to get there. That’s time I will never get back. So, in 2008 he was hired as a consultant for a company that required him to travel back and forth to Manila to “to hire, train and motivate a sales force of approximately 600 people.”
In 2009, he learned about the Fuel Doctor doohickey. He then obtained the distribution rights for it in North America. In early 2009 his CPA, Fucking Ed, set up an investment meeting with him and Joel. Dickwad Duo agreed to fund Fuel Doctor personally and through NASI. In May of that same year, they started Fuel Doctor LLC and opened accounts at CNB. While Dickwad Duo provided the funding, Soffa supplied the product, the distribution rights, and the test results. He makes it a point to mention that he paid for those results personally. No one cares, Mark. The product doesn’t work.
Also in May of 2009, he started working part-time for Fuel Doctor as a consultant. But the company was having issues “getting off it’s feet.” Might have something to do with your grammar and metaphors, Mark. So, he was asked to take over as CEO at $25k per month – that’s $300k a year, plus a car. He managed to sell the product to some pretty big names, like Best Buy and Sharper Image and claims that it produced income. So, while Dickwad Duo was in charge of Fuel Doctor for three months, the company was struggling. Lotsa business acumen between the two of them.
This is about when The Duo started scrambling to force growth on Fuel Doctor in an effort to make it more profitable. When does that ever not backfire?
In January of 2011, Dickwad Duo decided that Fuel Doctor should be publicly traded. That’s laughable. It was two years old. Soffa, oddly having more common sense than the Duo, tried to fight against this idea. But then they threw their financial weight around and Soffa caved. They then did a reverse merger with a company named Silver Hill Management. On September 25, 2011, Fuel Doctor got its exchange symbol.
Around November 2011, Soffa was added to NASI’s payroll. You see, the consultant that they hired to go public in the US needed Soffa’s salary to be $15k per month to improve the company’s financial health. Unfortunately, he could not live on $180k a year so he told them that he’d have to leave Fuel Doctor and get a different job. They added him to NASI’s payroll for $23k per month ($276k per year).
They started selling stock in May of 2012, but it didn’t do well. You could say that…
So, given their huge success in the American market, in January 2013, Dickwad Duo got a consultant and tried to raise capital in the European market. They formed Environmental Energy Solutions, of New Brunswick, Canada to this end. This company then acquired the rights of Fuel Doctor LLC. By February 2014, it fell through. From March 2014 to July 2014, the consultant assured Soffa that they could get into the Australian Exchange.
Soffa had constant contact with Fitzwilliam. He saw him at least a couple times a week and either called or texted him 4-5 times a week. In the beginning of the relationship, Soffa contacted Fitzwilliam to let him know about Fuel Doctor account issues and activity. Fitzwilliam basically told him that he had it handled.
He goes on to say that he assumed that Fitzwilliam’s interest in NASI was because they were a large client and that if he’d seen any impropriety that he would not assist them. He was wrong.
Let’s get back to his role at NASI. Because he was being paid by NASI, he volunteered to modernize their record system. From July 2013 to August 2014 he built a bunch of Excel files to track investors and payments. Each investor would get their own Excel file.
Right about now, many of you are screaming murder at how long the Receiver has taken to do something similar. Soffa was not building a complete record of books which involves each piece of information locking perfectly into other pieces of information. Soffa did not have the bank statements, for instance. He was entering information that was completely fabricated from the word “go” and had no idea.
He explains how sending out investor checks worked:
- He would receive the list of current investors from Joel. The address would be printed with a label format on a spreadsheet. I’m already finding this physically painful to read and/or type.
- Ed would send him the checks which were already written and stamped with Joel’s signature.
- Joel would send him the Investor Summary Reports electronically.
- He would then take those reports to Kinkos to print them and have them tri-folded. Holy hell. NASI had a leased copier. Depending on how good it was, it could have folded those, too. Or a paper folder for about $270 will do the trick. Pays for itself after a few months, I’m sure. He claims this was a major printing job each month. Yes, one that could have been done in-house for less.
- Under his direction, the employees would then match the statement with the check and put it in the envelope with the mailing label. They would sometimes also include notices from Joel. He’s really over-complicating this. It does not take top-notch supervisory skills to oversee a few people stuffing envelopes.
He claims that due to his improvements, they cut the process down from two weeks to a few days and improved the accuracy from 130 to 8 per month. “I did such a good job that NASI rewarded me with a nice holiday bonus check in December of 2013.” I can’t even with this guy.
Joel allegedly told him that he would consider slowly stepping down from NASI and having Soffa run the company with his son-in-law, Jeff.
But I guess we’re temporarily skipping back to the summer of 2009. Since that time, Soffa and the Dickwad Duo frequently had breakfast together before work. The arrangement involved not discussing business during breakfast. Despite that, he overheard the Duo discussing CNB wanting to see NASI’s business records. We’ve heard it all before, except that Ed essentially said that he “told Brian [Fitzwilliam] to tell the bank that NASI was a private company that has passed California State Franchise audits.” I highly doubt that they could pass an audit of their first aid kits, much less any kind of business audit.
And finally, in August 2014, Joel told Soffa that NASI was being terminated from CNB. Ed told him that he walked into the bank and had a heated argument with Fitzwilliam. Soffa went to the bank, inquired as to the status and was assured that his accounts were fine. He said that Fitzwilliam looked tired and disheveled. Then this:
When the topic of the termination of NASI’s accounts came up in the conversation, I said to Fitzwilliam “I heard that Ed stormed out of here swearing up a storm, how could you do that to them after all these years?” Fitzwilliam said to me “I just couldn’t cover for them anymore.”
I honestly hadn’t realized that Soffa had as much involvement with NASI as he did.