fax: (206) 628-661 1 4 attorneys for plaintiff - ufo watchdog · 1 6. upon information and belief,...

1 Rodney L. Umberger, Jr., WSBA #24948WILLIAMS, KASTNER & GIBBS PLLC

2 601 Union Street, Suite 4100Seattle, WA 98101-2380

3 Telephone: (206) 628-6600

Fax: (206) 628-661 1

4 Attorneys for Plaintiff

5

6

7 UNITED STATES DISTRICT COURTEASTERN DISTRICT OF WASHINGTON

8

CHRSTOPHER BASS, NO.9

Plaintiff, VERIFIED COMPLAINT ANDJURY DEMAND10

v.11

SEAN DAVID MORTON; DARYL12 WEBER; MELISSA MORTON; 27

INESTMENTS LLC; MAGIC EIGHT13 BALL DISTRIBUTING, INC.; V ARA

PRODUCTIONS LLC; DELPHI14 ASSOCIATES INESTMENT GROUP,

15

16

17

18 1.

Defendants.

I. INTRODUCTION

This litigation stems from a fraudulent investment scheme devised

19 and carried out by Defendant Sean David Morton and his associates.

VERIFIED COMPLAINT AND JURY DEMAND - 1 Wiliams, Kastner & Gibbs PLLC601 Union Street, Suite 4100Seattle, Washington 98101-2380

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Case 2:08-cv-00253-EFS Document 1 Filed 08/07/08

1 2. Morton holds himself out across the United States as an investment

2 expert to induce individuals to invest their money with him. Morton, however,

3 upon information and belief, misappropriated funds received from Plaintiff

4 Christopher Bass for his own personal use and enrichment. Rather than invest

5 Bass' funds as agreed, Morton appears to have used Bass' funds as he wished,

6 either for his own benefit or to perpetuate his fraudulent scheme.

7 3. Plaintiff Christopher Bass lost $217,000 that he delivered to Morton

8 to invest, and he is filing this action against Morton and his associates and the

9 limited liability companies and other entities that defendants have utilized to

10 perpetrate and perpetuate Defendants' fraudulent scheme in an effort to recover

11 the $217,000 and to obtain such other remedies as are available to him under the

12 law.

13 II. PARTIES

14 4. Plaintiff Christopher Bass ("Bass") is a resident of Washington,

15 1324 North Libert Lake Road, # 187, Liberty Lake, Washington 99019.

16 5. Defendant Sean David Morton ("Morton") and Melissa Morton

17 (collectively the "Mortons") are purportedly husband and wife and are residents

18 of California, with a last known address of 2207 Hermosa Ave, Hermosa Beach,

19 California 90254.

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1 6. Upon information and belief, defendant Daryl Weber ("Weber") is a

2 resident of Montreal, Canada.

3 7. 27 Investments LLC is a New Mexico registered limited liability

4 company, owned and operated by the Mortons and Weber, with a registered

5 address of3600 Cerrillos, Suite 714C-899, Santa Fe, New Mexico 87507. 27

6 Investments is one of the companies through which Plaintiff s money was

7 supposedly invested.

8 8. Magic Eight Ball Distributing, Inc. ("Magic Eight Ball") is a

9 California registered corporation, owned and operated by the Mortons and

10 Weber, with a registered address of 14290 Freshwater Avenue, Burbank,

11 California 91502. Magic Eight Ball is one of the companies through which

12 Plaintiff s money was supposedly invested.

13 9. Varja Productions LLC ("Varja") is a New Mexico registered

14 limited liability company, owned and operated by the Mortons and Weber, with a

15 registered address of3600 Cerrilos, Suite 714C-899, Santa Fe, New Mexico

16 87507. Varja is one of the companies through which Morton either converted

17 Plaintiff s money or invested it.

18

19


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1 III. JURISDICTION AND VENUE

2 10. The claims asserted herein arise under § § 1 O(b), 1 4( a) and 20( a) of

3 the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78j(b) and

4 78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, and

5 under Washington law for breach of fiduciary duty, abuse of control, constructive

6 fraud, unjust enrichment and gross mismanagement. In connection with the acts,

7 conduct and other wrongs complained of herein, Defendants, directly or

8 indirectly, used the means and instrumentalities of interstate commerce.

9 11. This Court has subject matter jurisdiction pursuant to § 27 of the

10 Exchange Act, 15 U.S.C. § 78aa, as well as 28 U.S.C. §§ 1331 and 1337. This

11 Court also has supplemental jurisdiction over the state law claims asserted herein

12 pursuant to 28 U.S.C. § 1367.

13 12. This action is not a collusive one to confer jurisdiction on a court of

14 the United States, which it would not otherwise have.

15 13. Venue is proper in this District pursuant to § 27 of the Exchange

16 Act, 15 U.S.C. § 78aa, as well as 28 U.S.C. § 1391(b), due to the dissemination

17 of materially false and misleading information, or omission of material facts,

18 occurring in substantial part in this District.

19

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1 iv. FACTS

2 14. Morton holds himself out across the United States as an investment

3 expert. Morton promotes his investment expertise through a nationally

4 syndicated radio show and written newsletter, which, upon information and

5 belief, is delivered to individuals throughout the United States, including

6 individuals located and residing in the State of Washington.

7 15. On August 3,2006, Bass contacted Morton about an investment

8 fund Morton was promoting.

9 16. Bass learned about the fund through a newsletter, "the Delphi

10 Associates Newsletter" to which he subscribed.

11 17. Morton touted the fund in his July 20, 2006, and also through a mass

12 email advertisement sent to subscribers via emaiL. See attached "Exhibit 1" -

13 July 20, 2006 issue, VoL. ix, Issue #1 17, pages 4-5.

14 18. The email solicitation pretends to be a "DIRCT response to your

15 inquiries about the Delphi Associates Investment Group."

16 19. In fact, it is not a response at all but an unsolicited promotion.

17 20. Nevertheless, prompted by the email advertisement and newsletter

18 promotion, as well as Morton's claims of success during guest appearances on a

19


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1 well-known radio show entitled "Coast to Coast AM by George Noory," Bass

2 contacted Morton on August 3,2006.

3 21. During the August 3, 2006 correspondence, Morton explained that

4 27 Investments LLC is managed by Morton out of his Hermosa Beach, California

5 office. See attached "Exhibit 2" - August 3,2006 email from

6 SeanDavidMorton~ao1.com to chrs.bass5~verizon.net; Thu, 03 Aug 2006

7 18:36:56 -0400 (EDT).

8 22. Morton also explained that he had a general business partner, Daryl

9 Weber of Fraser Valley Trading, based in Canada. Bass did not find out that

10 Daryl Weber was based in Montreal, Canada until sometime later.

11 23. Based on Morton's representations that the investment fund was

12 profitable due to an unorthodox investment strategy whereby Morton predicted

13 market changes based on his psychic abilties, Bass agreed to invest money with

14 Morton.

15 24. The agreement required that Bass deposit money under the

16 possession and control of Morton, who would in turn invest Bass' money in

17 foreign currency trading through 27 Investments.

18 25. Bass and Morton agreed that they would equally share the profits on

19 the investment returns.

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1 26. Pursuant to that verbal contract, Bass wired money to Morton

2 according to Morton's instructions.

3 27.

4 28.

Morton instructed Bass to wire funds to Varj a in California.

Morton stated that once the funds were received, they would be

5 forwarded to 27 Investments for investment in foreign currency trading.

6 29. As the investments would mature according to a set schedule, the

7 profits would be divided.

8 30.

9 Varj a.

10 31.

On August 8, 2006, Bass wired $50,000, as directed by Morton, to

Through additional solicitation efforts by Morton, which included a

11 promotional event at the New Yorker Hotel in Manhattan, Morton persuaded

12 Bass to make additional investments.

13 32. In total, Bass delivered $217,000 to Morton for investment pursuant

14 to the terms of their agreement ($50,000 on August 8, 2006, $67,000 on October

15 5, 2006, and $ 1 00,000 on October 31, 2006).

16 33. During his radio shows and through his newsletter, Morton reported

17 that the fund "had done exceptionally well through the week of November 16,

18 2006."

19

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1 34. In fact, Morton overstated these profits by as much as $667,000 as of

2 November 2006.

3 35. In addition, during his August 2,2006 radio show, Morton claimed

4 to have booked a profit of approximately 35% over the prior six weeks in

5 currency trading.

6 36. Additional examples of false statements and inducements by Morton

7 include misrepresentations contained in Morton's "Delphi Associates Investment

8 Package" mailed July 28, 2006, which shows a profit in each week from the week

9 ending June 28, 2006 to the week ending July 27, 2006.

10 37. Another example of a deliberately false statement is Morton's

11 August 3, 2006, email where he claims that the worse that had happened to the

12 fund thus far was merely a number of days with no profits. See attached

13 "Exhibit 2."

14 38. Upon information and belief, these statements were deliberately

15 false and falsely made to induce Bass to forebear from taking any action.

16 39. Upon information and belief, the fund was losing money and Morton

17 was hiding those losses through deliberately false reporting, false bookkeeping,

18 and fraudulent concealment.

19


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1 40. During a telephone conversation with Bass in February 2007,

2 Morton admitted that the fund was not profitable but in fact had lost 50% of its

3 assets.

4 41. Morton's February 2007 verbal admission differs markedly from the

5 written statement Morton issued to Bass in December 2006, in which Morton

6 reported Bass's equity as $229,797.00. See "Exhibit 3" Source Investor

7 Statement reporting "Total Equity" as of i 1/30/06.

8 42. Upon information and belief, the report was false, and knowingly

9 false when made whereby Morton intended to cause Bass to forebear from

10 demanding the return of his investment.

11 43. Additional proof of the falsity of Defendants' December statement is

12 demonstrated by the March 16,2007 memorandum "from the desk of Daryl

13 Weber" emailed to Bass on March 20,2007 wherein Weber reports a $700,000

14 loss for the November 17 to December 16, 2006. See "Exhibit 4" - email from

15 Morton (a/k/a DAIG888~ao1.com)Tues 20 Mar 2007 20:47:59 EDT

16 "Memorandum 16 March 2007 From the desk of Daryl Weber(.J"

1 7 44. Thus, the March 20,2007 report by Weber on November losses,

18 contradicts the November report by Morton that Bass's total equity was, or even

19

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1 could have been $229,797.00 on November 30,2006. Compare "Exhibit 3" with

2 "Exhibit 4".

3 45. In the midst of Morton's problems, upon information and belief,

4 Morton moved the fund and renamed it.

5 46. Upon information and belief, the fund was commingled with or

6 renamed "Magic Eight Ball Distributing, Inc."

7 47.

8 48.

Magic Eight Ball is an unregistered securities fund.

Magic Eight Ball in fact is registered as a not- for-profit California

9 corporation. Morton's March 2007 email was further evidence that a fraud was

10 underway.

11 49. Consequently, upon information and belief, the March 2007 report

12 "from the desk of Weber," was part and parcel of the fraud and the effort to

13 conceal or justify the earlier false reports of equity in a Ponzi-scheme Morton

14 perpetrated upon Plaintiff and others. Compare "Exhibit 3" with "Exhibit 4".

15 50. The March 2007 report indeed details a 90% loss in Morton's

16 trading operation during the December 2006 through January 2007 period. See

1 7 "Exhibit 4."

18

19

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1 51. Upon information and belief, written reports previous to the March

2 2007 report generally reported losses of measuring only 16%, when in fact the

3 losses were much greater.

4 52. The March report in fact includes a different history of the progress

5 of 27 Investments from its August 2006 inception, when Plaintiff first entered

6 into contract with Morton, through the end of January 2007, when Plaintiff had

7 by then deposited $217,000. Compare "Exhibit 3" with "Exhibit 4".

8 53. In any event, Bass' repeated demands for the return of his money

9 back have been ignored.

10 54. An objective review of Defendants' psychic forecasting abilities

11 exposes Morton's utter lack of psychic powers generally, and his failure to

12 forecast foreign currency markets in particular.

13 55. In addition, an objective review also shows that Morton attempted to

14 conceal his hoax from the public, and also to conceal conversion of Plaintiff s

15 money for uses other than investing.

16 56. Upon information and belief, Defendants siphoned off assets,

17 including the funds received by Bass, to pay other investors in order to conceal

18 his failures to forecast and to fraudulently convert Bass' assets to Defendants'

19 personal uses.

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1 v. COUNT I - SECURITIES FRAUD

2 57. Plaintiff incorporates paragraphs 1 through 56 of this Complaint and

3 by this reference as though the same were set forth herein verbatim.

4 58. Defendants were engaged in the sale of securities.

5 59. Defendants, by use of instrumentalities of interstate commerce,

6 engaged in a course of conduct designed to steal hundreds of thousands of dollars

7 from unsuspecting investors, including Plaintiff Christopher Bass.

8 60. Defendants employed devices, schemes and artifices to defraud

9 Plaintiff and engaged in acts, practices and a course of conduct that included the

10 making of, or participation in the making of, untrue and/or misleading statements

11 of material facts and/or omitting to state material facts necessary in order to make

12 the statements made about the securities not misleading.

13 61. Defendants are liable as direct participants in the wrongs complained

14 of in this complaint.

15 62. Defendants acted with scienter in that they either had actual

16 knowledge of the misrepresentations and/or omissions of material facts set forth

17 herein, or acted with reckless disregard for the truth in that they failed to ascertain

18 and to disclose the true facts, even though they were available to them.

19

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1 63. By virtue of the foregoing, Defendants violated the Exchange Act

2 and Rule 10b-5 and are jointly and severally liable to Plaintiff for all resulting

3 damages.

4 VI. COUNT II - COMMON LAW FRAUD

5 64. Plaintiff incorporates paragraphs 1 through 63 of this Complaint and


7 65. Defendants individually and collectively made, or caused to be

8 made, false statements and misrepresentations, and engaged in deceptive conduct,

9 knowing the statements, representations, and conduct were false and misleading

10 at the time made, in order to dupe Plaintiff into giving money to Defendants for

11 investing.

12 66. These false statements, representations and conduct, as described

13 above, included omissions of material fact in order to induce Plaintiff to act, or to

14 forebear from acting.

15 67. Examples of false and misleading statements, representations, and

16 conduct made by Defendants to induce Plaintiff to act or forebear from acting

17 include statements and representations, and contractual representations, that the

18 Plaintiff s funds would be used to invest in foreign currency trading.

19

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1 68. In fact, the funds were diverted from foreign currency trading and

2 deliberately converted to personal uses by Defendants Morton, Weber, and

3 Melissa Morton.

4 69. Additional false and misleading statements, misrepresentations, and

5 fraudulent conduct include numerous emails misrepresenting the true value and

6 performance of the investments.

7 70. Defendants' unorthodox trading strategy failed from the start, yet in

8 order to hide the failures, Defendants falsely represented that the investing was

9 profitable.

10 71. Upon information and belief, Defendants knew the investments had

11 failed yet conspired to present false information so that Morton's unsuccessful

12 and unorthodox strategy would remain a secret and not exposed to the public and

13 other investors as an abject failure.

14 72. In pursuit of this fraud, charts, statements, and reports were

15 deliberately falsified and presented to Plaintiff and the public in order to deceive.

16 73. By Defendants' collaborative effort to present false and misleading

17 information, Plaintiff was fraudulently induced to deposit more money or

18 forebear from withdrawing money already invested.

19

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1 74. If Defendants had truthfully and timely delivered material

2 information to Plaintiff, Plaintiff would not have invested at all, would not have

3 invested on three different occasions, or would have withdrawn his money earlier

4 and thereby suffered a lesser loss.

5 75.

6 $217,000.

7 76.

As a result of Defendants' fraud, Plaintiff invested and lost

By relying on Defendants' fraudulent conduct, false statements, and

8 misrepresentations, Plaintiff sustained monetary damages in the amount of

9 $217,000, exclusive of interest and costs.

10

11 77.

VII. COUNT II - CIVIL CONSPIRACY

Plaintiff incorporates paragraphs 1 through 76 of this Complaint and


13 78. Defendants, during all times relevant, represented themselves as

14 either managers, officer, directors, or partners involved in the investment of

15 Plaintiff s funds.

16 79. In league with one another to induce Plaintiff to invest with 27

17 Investments or forebear from withdrawing his money, Defendants conspired to

18 deceive and defraud Plaintiff of his investment.

19

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1 80. Defendants engaged in conduct designed to induce Plaintiff into a

2 fraudulent investment scheme presented as a successful, albeit unorthodox,

3 foreign currency trading strategy.

4 81. While Plaintiff knowingly invested in a fund employing an

5 unorthodox strategy, the conspiracy that bilked Plaintiff of his funds was not the

6 unorthodox trading strategy but conversion, a Ponzi-scheme, and an outright

7 fraud.

8 82. Plaintiff was duped into investing in this supposedly wildly

9 successful fund when, in fact, his money was used to repay earlier investors,

10 avert or settle pending lawsuits, cover up losses, pay expenses, or simply satisfy

11 the greed of Defendants.

12 83. The conspiracy was a deliberate, calculated, and successful effort to

13 dupe Plaintiff into wiring defendants $217,000, believing his money would be

14 used exclusively to trade foreign currencies.

15 84. To achieve this fraud on Plaintiff and others, Defendants used the

16 mail, email, interstate wires, promotional materials, radio show promotions, and

17 other forms of marketing.

18 85. Because Defendants acted in concert to perpetrate and perpetuate a

19 fraud, and because Defendants profited from that fraud, Defendants are jointly


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1 and severally liable to Plaintiff for damages of$21 7,000 exclusive of interest and

2 costs.

3

4

VIII. COUNT IV - FRAUDULENT CONVERSION

86. Plaintiff incorporates paragraphs 1 through 85 of this Complaint and


6

7 personal uses.

8

87. Defendants deliberately converted Plaintiff s funds to their own

88. Plaintiff was led to believe Defendants would and were investing his

9 funds in foreign currency trading based on Morton's psychic abilties.

10 89.

11 funds.

12 90.

13 months.

14

In reality, Defendants had misappropriated and converted Plaintiff s

In addition, Defendants concealed the conversion for over four

91. As a direct and proximate result of Defendants' fraudulent

15 conversion, Plaintiff has sustained monetar damages in the amount of$21 7,000

16 exclusive of interest and costs.

17

18

IX. COUNT V - BREACH OF CONTRACT

92. Plaintiff incorporates paragraphs 1 through 91 of this Complaint and

19by this reference as though the same were set forth herein verbatim.

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1 93.

2 currencies.

3 94.

Defendants entered into a verbal contract to invest in foreign

Pursuant to the terms and conditions of the verbal contract Plaintiff,

4 providing $217,000 at the time and place required.

5 95. Defendants breached the contract by failing to invest in foreign

6 currencies and instead, immediately violated the terms and conditions of the

7 verbal contract by misappropriating and converting Plaintiff s funds to uses other

8 than foreign currency trading.

9 96. As a direct and proximate result of Defendants' breach of contract,

10 Plaintiff has sustained monetary damages in the amount of$21 7,000, exclusive of

11 interest and costs.

12

13 97.

x. COUNT VI - UNJUST ENRICHMENT

Plaintiff incorporates paragraphs 1 through 96 of this Complaint and


15 98. Defendants were bound by express and implied contractual terms

16 and conditions to invest Plaintiff s fuds in foreign currency trading.

17 99. Defendants breached the terms and conditions of a verbal contract

18 with Plaintiff by defrauding Plaintiff and converting his investment money into

19 personal uses.

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1 100. Defendants were thereby unjustly enriched.

2 101. As a direct and proximate result of Defendants' unjust enrichment,

3 Plaintiff has sustained monetary damages in the amount of $2 1 7,000, exclusive of

4 interest and costs.

5 XI. COUNT VII - BREACH OF FIDUCIARY DUTY

6 102. Plaintiff incorporates paragraphs 1 through 101 of this Complaint,

7 and by this reference as though the same were set forth herein verbatim.

8 103. Fiduciary duties and relationships arise between individuals and

9 partners particularly where one part relies upon the other's superior knowledge,

10 experience, and skil.

11 104. Plaintiffs deposit of$21 7,000 with Defendants demonstrated his

12 reliance upon Defendants to invest his money as promised.

13 105. Defendants thereby assumed a fiduciary duty to invest the funds as

14 promised.

15 106. Plaintiff necessarily reposed a special confidence in Defendants, and

16 Defendants knew Plaintiff depended on their guidance, knowledge, and expertise.

17 107. In addition to the individual and collective fiduciary duty owed to

18 Plaintiff by Defendants, the deposit by Plaintiff of $2 17,000 into Defendants'

19 custody and control signified the existence of a fiduciary relationship.

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1 108. Plaintiff in fact acted specifically on Defendants' advice and

2 direction in turning over the $217,000.

3 109. Accordingly, Plaintiff expected that Defendants would adhere to a

4 fiduciary standard in their dealings with Plaintiff.

5 110. Defendants individually and collectively breached their fiduciary

6 duty by failing to act according to a fiduciary standard.

7 1 1 1. None of the Defendants acted according to the fiduciary duty owed

8 to Plaintiff.

9 1 12. If anyone of the Defendants acted in accordance with the requisite

10 fiduciary duties, Plaintiff would not have suffered any loss or would have

11 suffered a lesser loss.

12 1 13. Instead, Defendants acted in concert to keep their individual and

13 collective misappropriation and conversion of Plaintiff s fuds secret through

14 various deceptions, avoidances, and false representations as described above and

15 incorporated by reference herein.

16 1 14. As a direct and proximate result of Defendants' breach of fiduciary

17 duty, Plaintiff has sustained monetary damages in the amount of$21 7,000,

18 exclusive of interest and costs.

19

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1 115. Defendants are therefore jointly and severally liable for Plaintiffs

2 damages, which measure in excess of$21 7,000, and exclusive of interest and

3 costs.

4 XII. COUNT VIII - AIDING AND ABETTING BREACH OF FIDUCIARYDUTY

51 16. Plaintiff incorporates paragraphs 1 through 1 15 of this Complaint,

6and by this reference as though the same were set forth herein verbatim.

71 17. During all times relevant, Defendants knew or should have known

8that a fiduciary relationship existed between Plaintiff and Defendants.

9118. Knowing that a fiduciary relationship existed between Plaintiff and

10Defendants, awareness by any fiduciary that another fiduciary was in breach of a

11fiduciary duty owed to Plaintiff, compelled action by alerted fiduciary to act on

12behalf of Plaintiff.

131 19. The lack of action on the part of the informed fiduciary aware of a

14breach of another fiduciary's duty constitutes aiding and abetting breach of

15fiduciary duty, particularly when the informed fiduciary profits directly or

16indirectly from the breach.

17120. Elements of aiding and abetting a breach of fiduciary duty require

18the existence of a fiduciary duty, knowledge of the breach of fiduciary duty by

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1 the aider and abettor, and substantial assistance or encouragement by the aider

2 and abettor in effecting that breach.

3 121. Defendants individually and collectively knew or should have

4 known that there was a fiduciary relationship between Plaintiff and Defendants

5 by virte of fact that Plaintiff placed $217,000 under the possession and control.

6 122. Defendants nevertheless allowed Plaintiff s funds to be diverted

7 from foreign currency trading and converted to uses, which they knew were not

8 expected by Plaintiff and in breach of contract.

9 123. By so doing, Defendants aided and abetted Morton's breach of

10 fiduciary duty.

11 124. As a direct and proximate result of Defendants aiding and abetting

12 the breach of fiduciary duty, Plaintiff has sustained monetary damages in the

13 amount of $217,000 exclusive of interest and costs.

14 XIII. COUNT IX - RESPONDEAT SUPERIOR AND VICARIOUSLIABILITY

15125. Plaintiff incorporates paragraphs 1 through 124 of this Complaint,


17126. Defendants Weber and Melissa Morton acted with actual and

18apparent authority as partners and within the course of their duties and

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1 responsibilities as agents, representatives, and employees of Morton, 27

2 Investments, or Magic Eight Ball Investments.

3 127. As agents, representatives, employees, partners or officers of

4 Morton, Life Products, 27 Investments or Magic Eight Ball Investments, Morton,

5 Life Products, 27 Investments or Magic Eight Ball Investments are vicariously

6 liable, jointly and severally, under the theory of Respondeat superior for their

7 individual and collective wrongful actions, and the damages caused Plaintiff.

8 128. The wrongful conduct and the extent Defendants knew or should

9 have known of the other's wrongful conduct, was continuous, repeated, and

10 collective, and thereby constitutes intentional, outrageous, and malicious conduct,

11 for which Plaintiff is entitled to both compensatory, and punitive damages from

12 the principles.

13 129. As a direct and proximate result of the conduct for which

14 Defendants are liable under Respondeat superior and vicarious liability, Plaintiff

15 has sustained monetar damages in the amount of $2 1 7,000, exclusive of interest

16 and costs.

17 xiv. COUNT X-DEMAND FOR AN ACCOUNTING BY ALLDEFENDANTS

18130. Plaintiff incorporates paragraphs 1 through 129 of this Complaint


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1 13 1 . Prior to Plaintiff s deposit of $217,000 in an account designated by

2 Defendants, upon information and belief, Defendants planned to convert and

3 misappropriate Plaintiff s funds.

4 132. Defendants had no intention whatsoever of investing Plaintiffs

5 funds according to the terms and conditions of an oral contract between Plaintiff

6 and Defendants.

7 133. Upon information and belief, immediately upon receipt of Plaintiffs

8 funds, Defendants misappropriated the funds and disbursed various conversions

9 and payments to various parties and themselves.

10 134. In addition, upon information and belief, Defendants made

11 disbursements to earlier investors who knew or should have known that the

12 money they received was not part of a return on investments or money

13 legitimately raised by Defendants.

14 135. Therefore, Defendants should be ordered to provide Plaintiff with an

15 accounting of all funds disbursed from August 2006 through November 2006.

16 xv. RESCISSION

17 136. Plaintiff incorporates paragraphs 1 through 135 of this complaint,

18 and by this reference as though the same were set forth herein verbatim.

19

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1 137. By way of alternative relief, Plaintiff seeks rescission due to the

2 unlawful conduct of Defendants.

3 138. Plaintiff seeks rescission of the verbal contract between himself and

4 Morton, and the return of his contribution to the contract in the amount of

5 $217,000 in addition to interest attorney fees and costs.

6 PRAYER FOR RELIEF

7 WHREFORE, Plaintiff demands judgment as follows:

8 Awarding money damages against all Defendants, jointly anda.

9 severally, for all losses and damages suffered as a result of the acts and

10 transactions complained of herein, together with pre-judgment interest, to ensure

11 Defendants do not participate therein or benefit thereby;

12 b. Directing all Defendants to account for all damages caused by them

13 and all profits and special benefits and unjust enrichment they have obtained as a

14 result of their unlawful conduct, including all salaries, bonuses, fees, stock

15 awards, options and common stock sale proceeds and imposing a constructive

16 trust thereon;

17 Ordering the imposition of a constructive trust over Plaintiffs funds;c.

18 d. Awarding punitive damages; and

19 Such further relief as the Court deems just and equitable.e.


23 I 9077. I


1 REQUEST FOR JURY TRIAL

2 Plaintiff Christopher Bass hereby demands a trial by jury.

3 DATED this 7th day of August, 2008.

4 s/ Rodney L. Umberger, Jr.Rodney L. Umberger, Jr., WSBA #24948Dana A. F erestien, WSBA #26460Attorneys for PlaintiffWILLIAMS, KASTNER & GIBBS PLLC601 Union Street, Suite 4100Seattle, WA 98101-2380Telephone: (206) 628-6600Fax: (206) 628-6611

Email: rumberger~wiliamskastner.com;dferestien~willamskastner .com

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(206) 628-6600

23 190771


VERIFICATION

Pursuant to 28 U.S.C § 1746. Christopher Bass hereby declares undcr penalty of perjury

that he has read the alJegations set forth in the above complaint and that he believes thcm to be

accurate and true.

Executed on this~

day of August, 2008.

Christopher Bass

VERIFIED COMPLAINTAND JURY DEMAND - 27

Wiliams. Kaslner & (;ìbbs PI.I.('601 Unnün Street Suite 4100Sealtk W¡¡shiiginn 9!\ IÜ i-23!\O

(206) 628-6600


fax: (206) 628-661 1 4 attorneys for plaintiff - ufo watchdog · 1 6. upon information and belief,...

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