Rule 72 Objections (Appeal to Federal District Judge) by Santos Perez

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IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Edita M. Applebaum PLAINTIFF

Case No. 2:18-cv-11023-KM-JAD Judge: Hon. Kevin McNulty, USDJ

Rule 72 Objections William P. Fabian, Laurence W. Gold, Frank Rajs, Cecilia Keh, et al.

BRIEF

DEFENDANTS

_____________________________________________________________________________ PLAINTIFFâ&#x20AC;&#x2122;S BRIEF IN SUPPORT OF F.R.C.P. 72 OBJECTIONS TO OCTOBER 30, 2020 OPINION BY MAGISTRATE JUDGE JOSEPH A. DICKSON, U.S.M.J.

____________________________________________________________________________

On the Brief: Santos A. Perez, Esq. The Perez Law Firm 151 W. Passaic St., Rochelle Park, NJ, 07662 Attorney for Plaintiff (201)875-2266 NJLawCounsel.Com

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TABLE OF CONTENTS Table of Contents…………………………………………………………………...i Table of Authorities………………………………………………………...………ii I.

INTRODUCTION…………………………………………………………...1

II.

Objections To Magistrate Judge’s Findings Of Fact: The Facts Excerpted From The PSAC By The Magistrate Judge Were Incomplete and/or Misstated: E.g., The Unsolicited, Sworn, Exclusive Certification By an Experienced Officer of the Court, In Which Said Officer Fundamentally “Altered” the Sun Bank Fraud Lawsuit, Was In Fact An Instrument Used To Deliberately Conceal or Alter A Significant Material Fact………………………………..4

III.

Futility of Amendments: Objections to Magistrate Judge’s Application, Vel Non, of Precedent. …………………………………………………………10 A. Rule 10b-5: De Facto Seller Theory - Exceptions to the Supreme Court’s Blue Chip “Birnbaum Rule” On Standing; Liability of An Attorney and His Client pursuant to Lorenzo v. SEC , 139 S.Ct. 1094 (2019)……………………………………………………………..…10 B. Fraudulent Concealment By An Officer of the Court- Attorney As Third Party Tortfeasor Under Rosenblit: The Requirement of “Reasonable” Access to Altered Material Evidence; Alteration of the the Sun Bank Fraud Lawsuit By a “Super Lawyer” Expert.………...19 C. Civil Conspiracy; Meeting of the Minds; As This is Not a Criminal Prosecution, Only Circumstantial Evidence Is Required For A Civil Conspiracy…………………………………………………………..26

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D. The Probate Exception/Litigation Privilege: Narrow Probate Exception Not Applicable Since Inter Alia Estate Remains Closed and Appellate Division Did Not Stay Ruling; Litigation Privilege Does Not Shield Fraud. ……………………..................................................….33 IV.

CONCLUSION………………………………………………………….…34 TABLE OF AUTHORITIES

Cases Barner v. Sheldon, Esq., 292 N.J.Super. 258 (1995) …………………………………….………………….25 Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975) ………………………………………………...……12, 13, 14 Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639, 656 (2008) ………………………………………………..……….18 Chevron Corp. v. Donziger, 871 F. Supp. 2d 229 (S.D.N.Y. 2012) ..………………………………………18, 27 Estate of Spencer v. Gavin, 400 N.J. Super. 220, 240 (App. Div. 2008) ………………………………………25 Hackford v. First Sec. Bank of Utah, 521 F.Supp. 541 (D. Utah, 1981) …………………………………………...……13 Heyman v. Heyman, 356 F. Supp. 958, 964–66 (S.D.N.Y. 1973) …………………………………...…13 In re Bressman, 874 F.3d 142 (3d Cir. 2017). ……………………………………………………....1

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In Re the Estate of Howard C. Hope, 390 N.J. Super. 533 (App. Div. 2007) ……………….……………….10, 14, 15, 29 James v. Gerber Products, 483 F.2d 944 (6th Cir., 1973) …………………………………………………….13 Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011) …………………………………………………..………….15 Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir.1970) ………………………………………………………12 Kirchner v. USA, 603 F.2d 234 (2nd Cir. 1978) ………………………………………………….…13 Klamber v. Roth, 425 F.Supp. 440 (SDNY 1976) …………………………………………………..13 Lorenzo v. S.E.C., 139 S.Ct. 1094 (2019) ……………………….……………………………15, 16, 17 Morgan v. Union County, 268 N.J. Super. 337, 365 (1993…...………………………………………27, 28, 30 Norris v. Wirtz 719 F.2d 256, 259 (7th Cir. 1983) …………………………………………….….14 Malack v. BDO Siedman, 617 F. 3d 743, 747 (3rd Cir. 2010) …………………………………………….…18 Rosenblit v. Zimmerman, 166 N.J. 391 (2001) …………………………………………………..20, 23, 24, 25

iii

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Three Keys Ltd. v. SR Utility Holding Co., 540 F. 3d 220, (3rd Cir 2008) ………………………………………………..11, 33 USA v. Bergrin, 650 F.3d 257 (3rd Cir 2011) …………………………………………………...1, 27 Williams v. BASF, 765 F.3d 306 (3rd Cir 2014) ………………………………………...1, 9, 18, 26, 34

Statutes and Rules FRCP 15(a)(2)..............................................................................................................19, 25

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I. INTRODUCTION

There is an important distinction between perjury that is committed by a witness and fraudulent conduct that is directed at the court by one of its own officers. The latter has a much greater likelihood of undermining the working of the normal process of adjudication because courts rely on the integrity of their officers. [Defendant] is a licensed attorney who exploited his privilege to practice before the courts by not revealing the details of a relevant [issue]. This deceit maximized his clients' recovery — and, in turn, his fee. In re Bressman, 874 F.3d 142, 152 (3d Cir. 2017). See also Williams v. BASF, 765 F.3d 306, 319 (3rd Cir 2014), (“[T]he complaint alleges[defendants] engineered the

false statements and evidence in advance of litigation. …

According to the

complaint, [defendants] were not mischaracterizing the facts; they were creating them.”) and USA v. Bergrin, 650 F.3d 257 (3rd Cir 2011) (RICO prosecution of renowned defense attorney despite his status as a lawyer.) This year represents the eight year since the passing of plaintiff’s husband, the father of her three children, with whom she built a multi-million dollar company which all but disappeared in the hands of veritable “untouchables”. To date, she has received no monetary compensation, she has received no inheritance, and she was forced to put the youngest of decedent’s two daughters through college without the financial security she had amassed with her now-deceased husband over their twenty-two year marriage. Every subsequent denial by our courts of defendants’ 1

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brazen misdeeds only serves to further obfuscate plaintiff’s otherwise incontrovertible truths.

Our honorable Courts have indeed mis-prioritized or

misinterpreted defendants’ modi operandi - a disturbing aftermath orchestrated by defendants themselves as they sought to openly conceal their chicanery through deliberate obfuscation of the record. Rulings acknowledging defendants’ vastly documented frauds are indeed scarce if they even exist - and have been systematically replaced instead by routine unworkable “solutions” targeting the victimized widow for prosecuting this case. The probate Judge thus explicitly referenced plaintiffs “useless” certifications, and then openly disinherited her as punishment for her lawsuits, in the process permanently shielding the culprits from further lawsuits. Sadly it can be said that this Court, perhaps unwittingly, has also exhibited barely-discernible empathy, as suggested by the untimely resolution of a non-dispositive motion filed nearly two years prior. This potentially adventitious procedural anomaly was then followed by an opinion which appears to have dismissively mischaracterized defendants’ litigation-based chicanery as “the sort of litigation conduct” protected by the litigation privilege, thus effectively elevating defendant’s abhorrent litigation misconduct from a clear intentional tort, to gardenvariety bona fide litigation. The opinion further appears to have dismissively suggested that learned counsel’s explicit concealment of a material fact was not merely legal - but also apparently insignificant – since plaintiff had “access” to 2

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proofs presumably sufficient to annul the formidable substantive consequences of the brazen fraud committed by an experienced officer of the Court – which fraud to date remains “of record”. In fact, learned counsel’s fraudulent concealment consisted inter alia of an unsolicited two-page sworn certification, i.e. it was not merely an inadvertent “misstatement” as part of a routine courtroom colloquy between counsel and Judge. This unsolicited substantive instrument served the following purposes: concealment of the “Sun Bank” fraud lawsuit” from a recently appointed trial Judge, concealment of the lawsuit from the appellate division, and ultimately concealment of the lawsuit from the world through a species of global white-collar gaslighting. Moreover the affiant - a purported “super lawyer” - was effectively a lawsuit expert whose opinion regarding a lawsuit carried the weight of decades of “wisdom” equal in stature only to the testimony of a hundred knowledgeable laypersons. “Uncovering” such formidable concealment – which would also entail piercing the attorney/client privilege - could presumably be achieved only with an unbiased jury, or perhaps summarily with a certification signed by an equally-qualified “super lawyer” lawsuit expert, if only plaintiff had not been summarily disenfranchised and financially starved as a specific means to permanently forestall any potential lawsuit(s) against the allegedly kindhearted defendant “victims”, regardless of merit or their culpability. 3

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II. Objections To Magistrate Judge’s Findings Of Fact The magistrate Judge in his October 30, 2020 opinion found that plaintiff had alleged, vel non, as follows: i.

“Plaintiff does not allege that Mr. Howard ‘intentionally withheld, altered, or destroyed’ any evidence.” Page 18, Oct. 30 Opinion.

ii.

“Plaintiff .. argues that Mr. Howard made misstatements regarding existing evidence.” Ibid, Page 20. (emphasis supplied).

iii.

“Plaintiff does not, however, plead any facts connecting Morey La Rue, Inc. to any of her claims in this matter.” Ibid Page 25.

The formulations below more accurately reflect the substance of these three misquoted allegations, to wit:

Plaintiff does in fact allege that Mr. Howard intentionally withheld, altered, or destroyed evidence. [SAC, Count XV, ¶¶1-90]. Specifically that Mr. Howard, a litigation “super lawyer” who could not have conceivably acted negligently, altered material evidence necessary to prove a RICO enterprise as per the RICO complaint pending on the date he made the substantive and material alterations. In addition to serving as a RICO predicate act, the (unaltered) Sun Bank lawsuit was also probative as to fraud committed by defendants generally, which would have required the probate Court to remove defendant Fabian as a fiduciary.

Such

removal would have resulted in an accurate final accounting - and plaintiff’s retention of the shares of her late husband’s company “THC” (the Todd Harris Company). Mr. Howard’s fraudulent certification (or “instrument”), was therefore

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the but-for cause of plaintiff’s formidable damages.1 To date, this fraudulent instrument remains “of record.” ii.

Plaintiff does not allege that Mr. Howard merely made “misstatements” regarding existing evidence. She posits instead that he prepared and signed a substantive instrument in order to conceal a significant material fact which was necessary for plaintiff to prevail on her request to remove the fiduciary, which fact once concealed or altered was the but-for cause of plaintiff’s formidable damages.2 [SAC, Count XV, ¶¶1-90]. To date, this fraudulent instrument remains “of record.”

iii.

In fact, plaintiff did plead - or will plead with leave of Court- that shell company Morey La Rue “Laundry” Company is intimately connected to this matter.

The

facts thus point to the use of Morey La Rue “Laundry” Company as a shell company - not legally owned by Mr. Fabian - used to launder Mr. Fabian’s holdings. [SAC, ¶86, Count I, ¶7, ¶347]. Morey La Rue thus “sold” the lucrative and profitable Linden commercial property to Toben Investments in 2011 in a transaction which saw no money flow to Morey La Rue at the closing table – the 500K sale price was instead subject to a mortgage and promissory note in the amount of the sales price. [Exhibit G]. On April 2, 2014, immediately after plaintiff filed her probate action, Toben without court approval re-sold the lucrative Linden property to the property’s tenants. [SAC, Count I, ¶389]. The property had

Absent the concealment or alteration of the Sun Bank lawsuit, an unbiased fiduciary would have been appointed - and he/she would most likely not have disinherited plaintiff – particularly given the obvious rampant fraud committed by defendants. 1

The probate court when privy to such altered evidence, which remains of record to date, may have concluded that the Sun Bank lawsuit was served but not duly filed. 2

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recently been appraised at 1.5 million dollars, but sold for only 800K. Ibid. [Exhibit B]. As the 2014 closing statement depicts, [Exhibit B], 183K dollars were paid to Morey La Rue as a payoff of its purported mortgage on or about April 2, 2014. Subpoenaed bank records further show three suspicious payments by Morey La Rue to defendant Fabian (executor), in the same amount – 183K, immediately following the “fire sale”3. [Exhibit C]. Thus, Morey La Rue “Laundry” Company effectively aided and abetted Mr. Fabian (who had previously infamously uttered that he would not disclose anything to anyone [SAC, Count I, ¶414]), to launder the proceeds of the “firesale”.

At his October 2016 deposition, Mr. Fabian in his

own words further testified that:

The down payment4 [of the 2011 sale from Morey to Toben]… was used to make…Morey LaRue’s final pension payment to the PBGC….. The balance, which was thereabouts 325, $330,000.00, was used to pay me [Fabian] as a final settlement for an employment contract valued at more than 700K, settled for the $325,030 over the course of the same

See graphic images infra. This chart depicts the 183K payments to Fabian: 4/3/14 4/3/14 4/15/14

Morey La Rue CHECK# 10044 10045 10046 TOTAL:

57,418.38 100,000.00 26,000.00

to Fabian to Fabian to Fabian

183,418.38

As to the purported “down payment” for the 2011 “sale” to Toben by Morey, there was no such down payment. Instead, a promissory note was given to Morey by Toben indicating that the “down payment” would be paid by Toben (who coincidentally now “owned” a profitable commercial property), in six monthly installments. [Exhibit G]. 6

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period of time that the mortgage between Morey and Toben was to be re-paid.5 [Exhibit A, Oct 2016 Fabian Dep.] (emphasis supplied). Mr. Fabian thus effectively concealed his receipt of the Toben proceeds from everyone, and from the Court, by inter alia not disclosing such questionable “corporate” shell company “accounting” in his final accounting, as per the admissions of probate defense counsel, Mr. Howard, who admitted at the final accounting hearing that “corporate” accounting was “separate” from estate accounting and need not be disclosed. 6 More importantly for purposes of this section of the Rule 72 brief, the foregoing shows that the Morey La Rue “Laundry” Company engaged in what appears to be racketeering conduct with Mr. Fabian – thus enabling him to launder his holdings, including his potential “off the books” ownership of Morey La Rue (this explains why Fabian deceitfully pocketed the proceeds of the 2014 fire sale.)

The use of an “employment contract” to disguise (or launder) a purported “off the books” debt is not altogether different from Mr. Fabian’s use (in Court) of an “employment contract” to disguise “consulting” fees and loans he alleges were owed by THC. [SAC, Count I, ¶130-139, ¶163-170, ¶180-199]. Indeed, Mr. Fabian in 2013 prior to being sued repeatedly asserted that the THC payroll payments were essentially bogus – as they were meant to repay him purported “consulting” fees and high-interest loan debts. [SAC, Count I, ¶289, 296, 366, 425]. By the time the case made its way to probate court, he (and Mr. Howard), began using the purported employment contract to disguise the alleged debts as “payroll payments”. [SAC, Count I, ¶295, Count II, ¶16]. The scrivener of the employment agreement all but called that instrument a fraud. [SAC, Count XV, ¶12, Count I, ¶189-194]. 6

This was effectively one of their many schemes for concealment – the use of shell company “accounting,” which they maintained they did not have to disclose in the final accounting (which itself contained many questionable redactions). 7

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Exhibit C: Morey La Rue 183K Payoff At Closing of Commercial Property “Fire Sale” (April 2, 2014 Closing Statement)

Exhibit C: 183K Payments to Fabian By Morey La Rue Immediately After Commercial Property “Fire Sale”

In addition to the foregoing, the October 30 opinion is replete with formalities which can result in further obfuscation of the record. For instance, the opinion places “quotes” around words which, when so quoted, suggest deceit by plaintiff, e.g. October 30 Opinion, page 7, states that “plaintiff contends that defendants have 8

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twice moved to ‘disinherit’ her”7. A second formality in the opinion which can further obfuscate the record is the magistrate Judge’s apparent tendency to excerpt and seemingly (mis)prioritize irrelevant or marginally relevant facts, to wit, at page 3 of the opinion the Magistrate Judge cites to the decedent’s death as an “event of default” which itself triggered the Sun Bank lawsuit after “fraudulent” withdrawals were made. This restatement of plaintiff’s allegations obfuscates an uncontroverted RICO fact- that the Sun Bank fraud lawsuit was premised on forgery allegations. [SAC, Count I, ¶25]. The opinion also appears to dismissively assert, at page 18, that the creation by a lawyer of a substantive instrument of concealment is the “sort of litigation conduct that would be protected under the litigation privilege.”8 This misguided conclusion regarding applicability of the litigation privilege only serves to further shield from scrutiny the brazen substantive fraud committed by defendants.

In fact, the probate court Judge summarily glossed over a ten thousand dollar expert report which had valued THC shares considerably higher than defendant’s valuation. If the status quo remains intact - plaintiff will be paid circa 200K for the shares, a loss of millions of dollars and hence de facto disinheritance, particularly given that she would remain insolvent. Moreover, a ten year delay in obtaining her inheritance cannot be characterized as a windfall for plaintiff under any circumstance. 7

See Williams v. BASF, 765 F.3d 306, 318 (3rd Cir 2014). (“But New Jersey's Supreme Court has never recognized the litigation privilege to immunize systematic fraud, let alone fraud calculated to thwart the judicial process.”) 9

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III. Futility of Amendments: Objections to Magistrate Judge’s Interpretation or Application of Precedent; A. Rule 10b-5: De Facto Seller Theory Exceptions to the Supreme Court’s Blue Chip “Birnbaum Rule” At page 12 of the opinion, the Magistrate Judge cites to plaintiff’s Rule 10b5 proposed cause of action, and summarizes the securities fraud – the sale of plaintiff’s 40% stake in her late husband’s “THC” company, under the guise of her purported ability to “destroy” the company with her whistleblower activities9. Specifically, Fabian and Howard’s repeated misrepresentations, sometimes under

Defendants inter alia set forth the following as constituting the reasons to disinherit plaintiff: that she would destroy the company with her lawsuits, that she was “digging for dirt,” and that she “stared” at the company men. [SAC, Count I, ¶427, Count III, ¶18]. To be sure, prior to the filing of the RICO lawsuit, Fabian at his deposition admitted that plaintiff was no longer a “threat” to THC– that the affiant defendants no longer had animosity towards her, and she was now “welcomed” at the company. [SAC, Count IV, ¶83]. Notwithstanding – after the RICO complaint was filed and in apparent revenge therefor - Mr. Howard did not disclose this new development to the probate Court. Instead, he continued to assert with outdated affidavits that plaintiff was a danger to the company and must be disinherited. [SAC, Count I, ¶318-332, Count XV, ¶61]. Mr. Howard also invoked precedent which he knew – given his “super lawyer” credentials - did not support his propositions, as the sale of THC shares clearly required plaintiff’s (and not the trustee’s) objection to in-kind distribution. See In Re the Estate of Howard C. Hope, 390 N.J. Super. 533 (App. Div. 2007). When plaintiff’s counsel in Court pointed out these weaknesses in Mr. Howard’s “arguments” – the probate Judge specifically instructed the parties to file “supplemental” briefs, as it was clear that the Judge wanted plaintiff disinherited, even without precedential -or factual - support. 10

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oath, that the only way to forestall her disruptive lawsuits – and to prevent future prospective litigation and the “destruction” of THC – was to disinherit her by selling her shares at an effectively discounted rate.10

The magistrate Judge found that

plaintiff lacked Rule 10b-5 standing to assert a claim, as she was not a “seller,” and that the narrow probate exception also prohibited her claims as a beneficiary. First, as to plaintiff’s status as a seller or buyer – relevant precedential authority establishes that a beneficiary may be deemed to be a de facto “seller” of securities. Second, the probate exception does not apply for two prominent reasons: (i) there is no estate which can trigger the exception – since the trial judge explicitly closed the estate – and the appellate division and Supreme Court both explicitly denied a request to stay that decision11 and, (ii) the probate exception was considerably narrowed in the seminal Marshall decision cited by the Magistrate Judge.12 As to the first point (de facto seller), the Magistrate Judge in his October 30, 2020 opinion, in finding that plaintiff lacked standing to assert a Rule 10b-5 claim,

[SAC, Count I, ¶318-332, Count XV, ¶61]. Plaintiff also filed a ten thousand dollar expert valuation report which had valued her shares considerably higher than defendant’s valuation. The probate judge summarily glossed over plaintiff’s valuation, and permitted the sale using defendant’s much lower expert valuation. 11

See Exhibit F, Appellate Division and Supreme Court Denial of Stay.

See, e.g., Three Keys Ltd. v. SR Utility Holding Co., 540 F. 3d 220, (3rd Cir 2008). 11

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cited Third Circuit authority which in turn cited the seminal 1975 Blue Chip13 decision by the Supreme Court, to wit, Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478 (3d Cir.1998). In Trump Hotels, the Court considered whether prior Third Circuit precedent which had “carved out” an exception to the Birnbaum Rule14 had survived the seminal Blue Chip decision. Specifically, whether the “relaxed standing rule” exception 15 to the Birnbaum rule as set forth by the Third Circuit in 1970,16 had survived the Supreme Court’s 1975 Blue Chip decision, which itself had ratified the Birnbaum rule as the law of the land. Although the Trump Hotels Court acknowledged that it was not clear whether the “relaxed standing rule” had survived Blue Chip, the Court did not say that it did not. Courts nationwide, however, have specifically found that the “de facto seller” exception to Birnbaum did survive.

Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 747, 95 S.Ct. 1917, 1931, 44 L.Ed.2d 539 (1975). 14

The Birnbaum rule generally allows suits only by actual purchasers or sellers of securities. 15

The exception had permitted Rule 10b-5 suits for litigants seeking injunctive relief although the plaintiffs were neither seller nor buyer. It was a specific exception to the Birnbaum Rule, which rule the Supreme Court formally adopted in 1975 in Blue Chip Stamps. 16

Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir.1970) 12

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“De facto” sellers of securities include sellers who are beneficiaries of a trust.17 In a post-Blue Chip decision, Klamber v. Roth, 425 F.Supp. 440 (SDNY 1976), the court further stated that the “majority of decisions concerning the type of Birnbaum case presently before the Court holds that the ‘beneficiary of a trust has standing . . . to assert a 10b-5 claim against a trustee, at least where the actions challenged are not arms-length transactions by the trustee.’ Id. at 442. In Hackford v. First Sec. Bank of Utah, 521 F.Supp. 541 (D. Utah, 1981), a post-Blue Chip decision, the Court further held that while “the trust beneficiaries did not perform the mechanics of the sale of their stock, they were not the bystanders contemplated by Blue Chip. They are separate from the public at-large. It was stock in which they had a beneficial interest which was sold.” Ibid. at 549 (emphasis supplied).18 In a seminal post-Blue Chip decision, the Seventh Circuit Court of Appeals also found that the Supreme Court’s ratification of the Birnbaum rule in Blue Chip had not modified prior case law which had afforded standing to beneficiaries of privately-held stock who were victims of a fraudulent sale by an executor:

Heyman v. Heyman, 356 F. Supp. 958, 964–66 (S.D.N.Y. 1973) (trust beneficiary had standing to seek relief under section Rule 10b-5 without the purchase or sale of a security because the beneficiary had been a de facto seller.) See also James v. Gerber Products, 483 F.2d 944 (6th Cir., 1973) (accord). 18

See also Kirchner v. USA, 603 F.2d 234 (2nd Cir. 1978) (finding standing to sue by a beneficiary of a municipal pension fund). 13

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The Birnbaum rule requires that a private party have actually dealt in a security, either as a purchaser or a seller, to have standing to bring a federal cause of action for damages. …. In this case, the actual sales of the securities held in trust were made by the co-executors of plaintiff's father's estate, and not by plaintiff. …the district court, …concluded that the plaintiff was a seller even though she did not — and indeed could not — personally perform the mechanics of the sale. The rationale behind the decision is that the plaintiff experienced the direct impact of the securities transaction, for she was the beneficiary of the trust involved. ..The plaintiff is not a bystander as contemplated in Blue Chip Stamps and to grant standing under these circumstances seemingly does not threaten the concerns expressed in Birnbaum…. James Norris' will states that the co-executors are to have full power to dispose of the estate's assets and to settle claims against it in the ordinary course of administration, but with an eye, of course, toward fulfilling the primary testamentary intention of funding plaintiff's and plaintiff's mother's trusts from the residue of the estate.... ..In this case, plaintiff was clearly the beneficial owner of the securities held by the estate and had the authority to disapprove their sale to an individual trustee. Norris v. Wirtz, 719 F.2d 256, 259 (7th Cir. 1983).19

The Norris Court found standing adequate, although the dissent had argued that plaintiff had no authority to approve/disapprove of the sale, to wit: “I must dissent because in my opinion the plaintiff did not have the power to control the trustee's investment decisions necessary to create federal jurisdiction under the Securities Exchange Act…”. Ibid. at 261. In the case at bar, plaintiff as the sole beneficiary of 40% of THC shares through the residuary clause of the last will and testament, did have such control or authority with respect to the sale of 40% THC shares. See In Re the Estate of Howard C. Hope, 390 N.J. Super. 533 (App. Div. 2007). 19

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In the case at bar, all parties indeed agree that the plaintiff was the sole beneficiary of the residuary of the estate – which included her 40% shares in THC. [SAC, Count I, ¶466]. Since New Jersey case law clearly requires a beneficiary’s specific objection to in-kind distribution before a fiduciary is allowed to distribute in-cash,

In Re the Estate of Howard C. Hope, 390 N.J. Super. 533 (App. Div.

2007), plaintiff had the undisputed right to disapprove of the sale as the sole beneficiary of 40% of THC. Ergo, she has standing to sue both Mr. Thomas Howard and Mr. Fabian under Rule 10b-5. Liability of An Attorney and His Client pursuant to Lorenzo v. SEC , 139 S.Ct. 1094 (2019) Securities and Exchange Commission Rule 10b-5 makes it unlawful for a person “(a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit, in connection with the purchase or sale of any security.” Lorenzo v. S.E.C., 139 S.Ct. 1094 (2019). In Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135, 131 S.Ct. 2296 (2011), the Supreme Court all but foreclosed liability determinations under subsection (b) against Mr. Howard as it relates to the “pleadings to disinherit” plaintiff, as it held that only the “maker” of a statement, and not his or her agent,

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could be held liable pursuant to subsection (b)20. In Lorenzo, the Court considered whether an agent such a lawyer could be held liable under subsections (a) and (c). In ruling affirmatively with respect to that inquiry, the Lorenzo Court set forth that: After examining the relevant language, precedent, and purpose, we conclude that (assuming other here-irrelevant legal requirements are met) dissemination of false or misleading statements with intent to defraud can fall within the scope of subsections (a) and (c) of Rule 10b5, as well as the relevant statutory provisions. [139 S.Ct. 1101]

In our view, that is so even if the disseminator did not "make" the statements and consequently falls outside subsection (b) of the Rule. It would seem obvious that the words in these provisions are, as ordinarily used, sufficiently broad to include within their scope the dissemination of false or misleading information with the intent to defraud. These provisions capture a wide range of conduct.

It is clear, however, that Mr. Howard (attorney) was the “maker” of the fraudulent Sun Bank lawsuit certification – which Mr. Howard filed just prior to one of the proceedings seeking removal of the executor (his client) for fraud. To the extent there is a foreseeable causal connection between that certification and the pleadings to disinherit, Mr. Howard’s certification is actionable under Rule 10b-5. It is respectfully set forth that there is such a causal connection, since it is clear that butfor that fraudulent Sun Bank certification by Mr. Howard (and Mr. Gold), the executor would have been removed as a fiduciary. The new fiduciary would have likely not persisted with the nefarious pleadings to disinherit a widow, as they clearly lacked merit – particularly in view of the executor’s more recent deposition testimony, just prior to the RICO lawsuit, that plaintiff was “welcomed” at her husband’s company. [SAC, Count IV, ¶83]. As stated supra, Mr. Howard did not disclose this deposition testimony to the Court, and instead opted to disinherit plaintiff using the outdated “affiant” statements, Exhibit D, which had all but been rendered useless by the executor’s subsequent deposition testimony. 16

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Lorenzo v. S.E.C., 139 S.Ct. at 1101(emphasis supplied). In the case sub judice, it is clear that plaintiff has standing since she is alleging that Mr. Howard, and Mr. Fabian, both employed a device, scheme, or artifice to defraud” and/or engaged in an “act, practice, or course of business which operates or would operate as a fraud or deceit,” in connection “with the purchase or sale of any security”, to wit, the sale of plaintiff’s shares under the purported guise of her ability to “destroy” the THC company. [SAC, Count I, ¶318-332, Count XV, ¶61]. Mr. Howard is further liable since, but-for his fraudulent Sun Bank certification21, the executor would have been removed and the frivolous pleadings to disinherit would not have been filed. Further, he knowingly failed to disclose more recent testimony from his client Mr. Fabian, [SAC, Count IV, ¶83], which had all but rendered the outdated “affiant” affidavits Mr. Howard relied upon as useless. And Mr. Howard also knowingly filed the outdated (untrue) “affiant” affidavits to advance his frivolous disinheritance arguments. [SAC, Count I, ¶318-332, Count XV, ¶61]. Mr. Howard is thus liable per Lorenzo v. S.E.C., 139 S.Ct. 1094 (2019)

Mr.Gold’s attempt to conceal the Sun Bank lawsuit, [SAC, Count XV, ¶70-85], also operated as a bar to removal of the fiduciary (in addition to exonerating him from potential bank fraud). And, it was foreseeable that if the fiduciary would not be removed, plaintiff would lose her inheritance by virtue of the pleadings to disinherit. [SAC, Count I, ¶318-332, Count XV, ¶61]. 21

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although he may not have been the “maker” of the misrepresentations in the outdated affidavits, which were rendered useless by more recent testimony by his own client. To the extent the element of reliance becomes an issue, that element is better served by a thorough brief in connection with the (imminent) motion to dismiss, since reliance may, or may not, become an issue at that stage.22

Plaintiff will advance various reliance theories. To wit, Williams v. BASF Catalysts LLC, 765 F.3d 306, 323 (3d Cir. 2014) (“[t]he tort [of fraudulent concealment] does not require reliance on an adversary's representations. Indeed, a lawyer … who destroys or conceals evidence may be liable even if he ... makes no representations to his ... adversaries at all”); Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639, 656 (2008) (a RICO plaintiff can be directly injured by a misrepresentation even where ‘a third party, and not the plaintiff, ... relied on it’.) (emphasis supplied). See also Chevron Corp. v. Donziger, 871 F. Supp. 2d 229 (S.D.N.Y. 2012) (finding third-party reliance in the context of a RICO suit against a Harvard-educated attorney in connection with his rampant litigation fraud) and Malack v. BDO Siedman, 617 F. 3d 743, 747 (3rd Cir. 2010) (“The Supreme Court has held that a presumption of reliance exists in two circumstances. The first means for establishing a presumption of reliance .. [posits that] positive proof of reliance is not a prerequisite to recovery in cases involving primarily a failure to disclose material facts by defendants obligated to disclose such facts.”) 18

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B. Fraudulent Concealment By An Officer of the Court- Attorney As Third Party Tortfeasor Under Rosenblit: The Requirement of “Reasonable” Access to Altered Material Evidence; Alteration of the the Sun Bank Fraud Lawsuit By a “Super Lawyer” Expert; Attorney/Client Privilege As A Barrier in the Probate Court.

The Magistrate Judge’s opinion alludes to both the litigation privilege – as well substantive state court jurisprudence - to conclude that proposed Count XV, Fraudulent Concealment, would be futile. The Court’s opinion, however, is silent as regards proposed RICO predicate acts premised on fraudulent concealment allegations, and it further does not discuss the

Noerr-Pennington doctrine’s

applicability or inapplicability. Moreover, the Magistrate Judge did not discuss or propose mail fraud or wire fraud causes of action as vehicles for asserting new RICO predicate acts premised on the fraudulent concealment allegations23. In this section, plaintiff will discuss the fraudulent concealment substantive law.

In light of the Court’s role in liberally permitting amendments “when justice so requires”. FRCP 15(a)(2). The proposed RICO amendments in relation to Mr. Howard were embedded in Predicate Act VI, [SAC, ¶238-336] (perjury, “litigation fraud”). Moreover, PSAC ¶¶335-336, which sought fraudulent concealment and Rule 10b-5 RICO predicate act amendments, can readily be amended/edited further to allege mail and wire fraud. In fact, the first amended complaint also cited mail fraud as a predicate act in relation to predicate act I [SAC, ¶18] (bank fraud), predicate act IV [SAC, ¶122] (payroll fraud), predicate act V [SAC, ¶229] (401K Fraud), and predicate act VII [SAC, ¶337] (sale of commercial “Linden” property). Since “justice so requires” – this court should permit mail and wire fraud amendments to be used as vehicles to allege RICO predicate act(s) based on the fraudulent concealment allegations. 19

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The Court begins its analysis at page 17 by setting forth elements of the tort of fraudulent concealment as per the seminal Rosenblit24 case. Of notable reference for the Rule 72 objections is element #3, that plaintiff “could not have reasonably obtained access to the evidence from another source.” The Magistrate Judge in his opinion rightfully notes that the Sun Bank fraud lawsuit against the estate was essentially common knowledge – referenced in nearly every document, hearing, and deposition. It was indeed clear that the lawsuit “existed”.

That is not to say that

it was impossible for a party to “alter” that fact with “new” evidence – such “new” evidence being inaccessible for any reason – including as in this case because of the attorney client privilege and/or work product doctrine(s). This Court may thus take judicial notice that Mr. Thomas Howard is an experienced, learned “super lawyer” with stellar academic credentials, NYU School of Law. It is a veritable impossibility for him – or any other attorney for that matter – to have somehow overlooked the Sun Bank Fraud lawsuit, particularly given its prominence in the probate litigation, wherein it was invoked ad nauseam. This lawsuit was indeed compelling third party fraud evidence, and Mr. Howard knew that it had been served and filed. He was also most certainly aware of its prominence. Indeed, it doesn’t take “super lawyer” status to so notice – but “super lawyer” status

Rosenblit v. Zimmerman, 166 N.J. 391 (2001). 20

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naturally discards negligence as the culprit – leaving only the scienter of an intentional tort. Mr. Howard’s approach in contesting the Sun Bank Lawsuit was remarkable for its simplicity- which itself helped to conceal his misdeed.

He essentially

performed a bogus online “search” for the company THC (and not his client or the estate), and based on that one search, “concluded” and certified, three times, that the lawsuit had never been filed. [SAC Count XV, ¶45]. Essentially, that the bank’s prominent attorneys were either negligent, or rookies. The proofs, of course, show that Mr. Howard was aware of the docket number [SAC Count XV, ¶34-36], so that this falsehood could have been “uncovered” – if only the probate court Judge would not have explicitly characterized plaintiff’s certifications as “useless” and “fake news”25, a fact which Mr. Howard in his “expertise” exploited as a “tactic”. Mr. Howard was indeed aware that plaintiff’s “fake news” certifications carried little weight with this Judge, and that his “super lawyer” status gave his certifications

Transcript of August 10, 2018 hearing, showing the probate’s Judge disdain for plaintiff generally – and his reference to her “useless” certification and her “fake news” – is attached as [Exhibit H] (page 33, reference to “useless”, and page 51, reference to “fake news”). The comprehensive certification by plaintiff that the Judge called “useless” had excerpted the deposition transcript of a banker who would have called the FBI had she known of the concealment. When plaintiff’s counsel cited to the certification at the hearing, the probate Judge called the certification “useless” (not knowing what plaintiff’s counsel was about to assert). A few minutes later, he characterized plaintiff’s proofs generally as “fake news”. 21

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ironclad credibility. He was also aware that the probate Judge had only been recently appointed, and that said Judge had not participated in prior hearings in which Mr. Howard had underscored the prominence of the Sun Bank fraud lawsuit - mainly that it was nearly-catastrophic and, but-for the “bailout”, the THC company would not have survived said fraud lawsuit26. Given this favorable context, Mr. Howard prepared, signed, and filed, using electronic and mail communications, a certification which essentially repeatedly set forth that the Sun Bank fraud lawsuit against the estate had never been filed. The probate Judge accepted this certification without hesitation, and it is more likely than not that he premised his draconian decisions, at least partially, on said instrument (certification by an attorney).27

Plaintiff – under the foregoing conditions – could not reasonably “access” the clearly-altered Sun Bank fraud lawsuit evidence. She could not pierce the attorney/client privilege or the work-product doctrine to ask Mr. Howard questions,

Specifically, and without limitation (since Mr. Howard has been in this case since its inception], Mr. Howard at a May 22, 2014 hearing with a prior (now retired) probate Judge asserted that Sun Bank fraud lawsuit was nearly-fatal [SAC Count XV, ¶39]. 27

In fact – the Probate Judge never ruled that the certification was false or otherwise fraudulent. Moreover, Mr. Howard stood in silence when confronted in Court with the fraud, and the Judge most notably did not ask him any questions. Further, Mr. Howard never retracted the certification, and to date it remains “of record”. 22

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and Mr. Howard himself stood conspicuously silent in probate court when accused of the fraud.

Moreover – the Probate Judge had in fact called plaintiff’s

certifications “useless” and, given his aversion towards plaintiff, would not have permitted a hearing28 to determine whether the privileges should be pierced to uncover the truth behind Mr. Howard’s alteration of the Sun Bank fraud lawsuit. Since plaintiff was therefore unable to reasonably access the “altered” Sun Bank lawsuit evidence, her fraudulent concealment claim is meritorious. Indeed, the seminal Rosenblit decision, infra, supports the proposition that there is a remedy for any and all of various classes of victims of spoliation. In the seminal Rosenblit v. Zimmerman, 166 N.J. 391 (2001) case on fraudulent concealment, the New Jersey Supreme Court thus identified three categories of cases, two of which support a specific fraudulent concealment cause of action: In sum, where an adversary has intentionally hidden or destroyed (spoliated) evidence necessary to a party's cause of action and that misdeed is uncovered in time for trial, plaintiff is entitled to a spoliation inference that the missing evidence would be unfavorable to the wrongdoer and may also amend .. her complaint to add a claim for fraudulent concealment... Where the hiding or destruction is not made known until after the underlying litigation, in which plaintiff's case has been lost or impaired 28

Indeed, despite three motions which were ignored until the final account phase, the Judge never ordered the deposition of the company CPA (accountant). When the Judge did finally rule on the various motions for the deposition, he denied same as “untimely”. 23

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due to the missing evidence, a separate tort action for fraudulent concealment will lie. In both situations, discovery sanctions also may be awarded where appropriate in light of the jury verdict. Where, as here, [defendant] tried to destroy Rosenblit's medical records but she was fortunate enough to obtain the original records prior to trial, neither a spoliation inference nor a separate tort action for fraudulent concealment is appropriate. Rosenblit's remedies are the introduction of evidence of Dr. Zimmerman's misdeeds before the jury at a new malpractice trial pursuant to Rule 803(b), along with discovery sanctions. Id at 402. Although seemingly lacking clarity, the Rosenblit Court set forth three categories of cases, to wit (1) cases whereby the spoliation is uncovered “in time for trial” – which would entitle the plaintiff to an amended cause of action for fraudulent concealment29, (2) cases where the spoliation is uncovered after the underlying litigation – and plaintiff lost the case due to the “missing” evidence – which would entitle plaintiff to a “separate tort action” for fraudulent concealment, and (3) cases whereby the original, unaltered evidence is obtained prior to trial – which would not permit plaintiff to invoke the tort of fraudulent concealment, but would entitle plaintiff to present the “altered” evidence to a jury in a (new) malpractice action.

Rosenblit is not clear on what would occur if plaintiff failed to exercise her right to amend the complaint. However – it does not say that she would be without a remedy in such a case. 24

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In the case at bar, plaintiff’s case is either Rosenblit category (1) or (3) – and in both cases the Supreme Court dictated that the plaintiff was not without a remedy. It is respectfully submitted that if plaintiff is in category (3), she can avail herself of case law which specifically imposes a tort duty on lawyers in relation to beneficiaries of an estate in “egregious” situations such as fraud. 30 Moreover, she may also assert federal mail or wire fraud causes of action – broad “catchall” fraud statutes which would permit her to assert the fraudulent concealment facts as a separate cause of action, as well as separate RICO predicate acts.

As per

Rosenblit, she would then be able to introduce as evidence the certification denying or altering the Sun Bank lawsuit. If plaintiff on the other hand is in Rosenblit category (1), then Rosenblit is clear that she may assert a fraudulent concealment cause of action. What is clear under any circumstance is that plaintiff is not, and ought not be, without a remedy in such “egregious” situations.

See e.g., Estate of Spencer v. Gavin, 400 N.J. Super. 220, 240 (App. Div. 2008). (“However, we recognized ‘the possibility that circumstances might arise where an attorney would have such a duty’ to beneficiaries. See also [Barner v. Sheldon, Esq., 292 N.J.Super. 258 (1995)] (positing that such a duty may be owed to beneficiaries "in an egregious situation" such as fraud, collusion or malice, or where a separate duty to those beneficiaries has been undertaken).’) (Note: Barner case was cited and quoted by Estate of Spencer case). As plaintiff is not without a remedy, she may amend the federal complaint, Count XV, to assert a claim pursuant to this duty. FRCP 15(a)(2). 25

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C. Civil Conspiracy With respect to the conspiracy amendments, the magistrate Judge in his opinion found that plaintiff “contends that both proposed Defendant Howard and Defendant Gold independently and knowingly misrepresented the existence of the Sun National Bank lawsuit,” and that “it appears that the closest thing to coordinated activity that Plaintiff has identified is that Mr. Howard either prepared or relied upon Mr. Fabian's certifications regarding the payroll fraud issue. (Id. at Count XV at 87). To the extent Plaintiff bases her conspiracy claim on the fact that an attorney worked with his client representative to prepare documents for filing in the State Court Litigation, that conduct is protected by the litigation privilege.” October 30, 2020 Opinion, Page 23. This proposed “solution” to plaintiff’s misfortunes is unworkable for a number of reasons, including that the litigation privilege clearly does not immunize systematic fraud. Williams v. BASF, 765 F.3d 306, 318 (3rd Cir 2014). (“New Jersey's Supreme Court has never recognized the litigation privilege to immunize systematic fraud, let alone fraud calculated to thwart the judicial process.”). Ergo, there can be an actionable conspiracy between attorney and client – and the only remaining issue would be whether there was a substantive conspiracy, and whether

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the attorney/client privilege’s well known crime-fraud exception can be invoked31. Proper review of the elements of a (substantive) conspiracy admittedly entails a more through exposition, infra. In Morgan v. Union County, 268 N.J. Super. 337, 365 (1993), the court thus set forth the elements of civil conspiracy, indicating that: A civil conspiracy is "a combination of two or more persons acting in concert to commit an unlawful act, or to commit a lawful act by unlawful means, the principal element of which is an agreement between the parties `to inflict a wrong against or injury upon another,' and àn overt act that results in damage.'" …. The gist of the claim is not the unlawful agreement, "but the underlying wrong which, absent the conspiracy, would give a right of action." [citation omitted]. It is "well known that the nature of a conspiracy is such that more often than not the only type of evidence available" is circumstantial in nature. … Absent the testimony of a co-conspirator, it is unlikely that direct evidence of an unlawful agreement will exist… "Thus, the question whether an agreement exists should not be taken from the jury in a civil conspiracy case so long as there is a possibility that the jury can ìnfer from the circumstances [that the alleged conspirators] had a meeting of the minds and thus reached an understanding' to achieve the conspiracy's objectives.” [citation omitted]. A plaintiff seeking redress need not prove that each participant in a conspiracy knew the "èxact limits of the illegal plan or the identity of all participants.'" [citation omitted] The unlawful agreement need not be express. The participants in the conspiracy "must share the general conspiratorial objective, but ... need not know all the details of the plan designed to achieve the objective or possess the same motives for desiring the intended conspiratorial result." Ibid. To establish a 31

It is noteworthy that at least two prominent cases were premised on a RICO conspiracy by an attorney and his clients, to wit, Chevron Corp. v. Donziger, 871 F. Supp. 2d 229 (S.D.N.Y. 2012) and USA v. Bergrin, 650 F.3d 257 (3rd Cir 2011). 27

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conspiracy, "it simply must be shown that there was `a single plan, the essential nature and general scope of which [was] known to each person who is to be held responsible for its consequences.'" [citation omitted].. Morgan, 268 N.J. Super. at 365. The foregoing makes it clear that the existence of a conspiracy is one for a jury to decide in most cases – and that it need not be proven by direct evidence. In the case sub judice, the “plan” to disinherit plaintiff as punishment for her lawsuits was conspicuously laid out in detail in the pleadings to disinherit, [SAC, Count I, ¶318-332, Count XV, ¶61], as well as in open court by probate defense counsel who repeatedly asserted that plaintiff would literally “destroy” the company and should therefore be disinherited. [SAC, Count IV, ¶85-87]. All parties – including the CPA Mr. Gold, the “affiant” employees, and Mr. Fabian and his counsel, had a vested and articulated interest in that outcome (disinheritance).32 Further, Mr. Gold and the affiants would be assured further work at THC, and Mr. Fabian would be assured

The affiants were specifically worried about losing their job because of plaintiff, and executed affidavits regarding her association with the company [Exhibit D]). Mr. Fabian also executed various certifications, [SAC, Count I, ¶139, 295, Count IV, ¶45, 116], explicitly setting forth his intention to sell plaintiff’s minority shares – and he specifically relied on the affiants for same. Mr. Gold ‘s certification concealing the Sun Bank lawsuit during the fiduciary removal proceedings, [SAC Count XV, ¶78], can also be interpreted as a “meeting of the minds” with respect to disenfranchising plaintiff – since a new fiduciary would likely not have disenfranchised plaintiff. 28

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that his payroll fraud would continue until the vast sums he claimed he was owed were paid in full. Mr. Howard would also be assured payment of his exorbitant fees if plaintiff were disinherited – and his submission of bills to the estate are probative of same. His October 30, 2018 Sun Bank lawsuit concealment certification, used to prevent removal of the executor, [SAC Count XV, ¶45], indeed can be interpreted as a tool to prevent a new fiduciary from retracting the pleadings to disinherit – thereby safeguarding Mr. Howard’s exorbitant fees.33 As such, it is a not given that Mr. Gold’s concealment of the Sun Bank lawsuit as well as Mr. Howard’s personal concealment of that same material fact, were entirely disjointed independent acts not driven by a common “plan” or agenda. In fact – there is no other plausible reason to for Mr. Gold to conceal the Sun Bank

Mr. Howard in his pleadings to disinherit also failed to disclose the recent deposition testimony of Mr. Fabian, [SAC, Count IV, ¶83], which would have shortcircuited his attempts to rely on five-year-old outdated affidavits, Exhibit D, to disinherit plaintiff “for cause”. [SAC, Count I, ¶318-332, Count XV, ¶61]. Said affidavits had been in fact been rendered all but useless by his own client’s subsequent deposition testimony (prior to the RICO lawsuit) that plaintiff was no longer a threat to the company [SAC, Count IV, ¶83]. Mr. Howard also used his legal “prowess” to frivolously “convince” the probate Judge that the sole on-point case (law) applicable to the facts (In Re the Estate of Howard C. Hope, 390 N.J. Super. 533 (App. Div. 2007)), permitted a trustee and company officer to object to in-kind distribution (thus permitting the sale of the asset), when in reality In Re Estate of Hope required only a beneficiary’s objection. All parties agree that plaintiff was the sole beneficiary of the asset (40% shares). 29

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lawsuit other than to assure the “survival” of his client (THC)34, and to put a lid on further efforts to uncover his alleged bank fraud by a new fiduciary.35 Moreover, the affiant affidavits [Exhibit D], all prepared by the same attorney on or about the same date, also suggest a “meeting of the minds” as between the affiants, Mr. Fabian, and Mr. Howard, since they all expressed concern with plaintiff’s continued association with the company, Mr. Howard going so far as to literally repeatedly claim that plaintiff would “destroy” the company with a 40% stake.36

In addition, it may be that Mr. Gold wanted to “hide” the Sun Bank lawsuit in order to protect himself from potential criminal prosecution for bank fraud related to his concealment of the lawsuit from Wells Fargo in 2013. If so, there is a meeting of the minds between Mr. Gold and Mr. Fabian, since Mr. Fabian also specifically admitted at the June 2013 “crisis meeting” attended by Mr. Gold, that “we’re not reporting anything to anybody at the end of the day.” , [SAC, Count I, ¶73]. Since Mr. Howard also personally concealed the Sun Bank lawsuit – a jury may find a “meeting of the minds” as between Mr. Howard, Mr. Gold and Mr. Fabian with respect to the deliberate concealment of this material fact. See Morgan v. Union County, 268 N.J. Super. 337, 365 (1993) (“The participants in the conspiracy ..need not ..possess the same motives for desiring the intended conspiratorial result.”) 35

Further, plaintiff sought Mr. Gold’s deposition no less than three times (by motion), and the probate court Judge simply glossed over the motions – until the very end when they were peculiarly denied as “untimely”. Assuming arguendo that the federal cause of action goes forward, his deposition may shed some further light on the overall conspiracy. 36

The affiants all expressed concern with plaintiff’s association with THC and with her lawsuits. Affiant Alexa-Applebaum-Varro on May 12, 2014 thus stated that “I do not see anything positive coming from this (probate) lawsuit. It will ruin many families, not only my own.” [Exhibit D]. Affiant Michael Lackey, on March 9, 2014 30

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Most prominent among the proofs showing a “meeting of the minds”, is the the “NO UCC” bailout promissory note signed by defendants Gold, Fabian, and Rajs. Specifically, when Mr. Fabian provided the bailout funds in order to resolve the Sun Bank lawsuit, he was given in return a promissory note and a UCC security interest THC’s chattels or inventory. [SAC ¶12, and Exhibit E]. The note had been annotated with “NO UCC”, in a clear effort to prevent the public recording of the note – and disclosure of the bailout, effectively concealing the Sun Bank lawsuit which prompted the note. See images infra. Since Mr. Howard also personally sought to conceal the Sun Bank lawsuit, there was a clear meeting of the minds between Mr. Howard, Mr. Gold, Mr. Fabian, and Mr Rajs (the signatories of the note). To wit:

[INTENTIONALLY LEFT BLANK]

also stated “If Frank and Jimmy are no longer allowed to run the company. I feel 99% confident that I would leave and find a new job. It is my opinion that most of the guys would leave too.” [Exhibit D]. Mr. Howard went one dramatic step further and claimed that plaintiff should not only be physically barred from the company, (by virtue of her discharge in December of 2013), but also that she should not receive her non-controlling 40% THC shares inheritance. He did so despite more recent testimony by Mr. Fabian (prior to the RICO lawsuit), that the affiants no longer saw plaintiff as a “threat”, supra, and despite the unreasonableness of suggesting plaintiff could assert any modicum of control over THC with a 40% interest. 31

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Exhibit E – “NO UCC” Promissory Note Signed by Defendants Fabian, Gold, and Rajs

Lastly, and no less significantly, Mr. Fabian admitted in August of 2013 that Mr. Rajs and Mr. Gold both “agreed” with the payroll fraud. [SAC, Count I, ¶135137], which payroll fraud in fact was ratified at a board meeting by Mr. Rajs. [SAC, ¶14, Count I, ¶¶129-133 and Count XV, ¶17]. Further, at his September 7, 2017 deposition, defendant Fabian specifically inculpated defendants Rajs and Keh as regards the Sun Bank lawsuit. [SAC, Count I, ¶31]. The foregoing shows a clear “meeting of the minds”. As Mr. Howard did not disclose these incriminating items to the probate court, he was in agreement that the payroll fraud should be suppressed. And he did so suppress or conceal the payroll fraud, by specifically relying on a

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bogus employment contract, supra, to justify the bogus payroll payments.37 Further, counsel’s concealment of the Sun Bank lawsuit can be said to be in “agreement” with the objective of continuing the concealment of the payroll fraud, by preventing the appointment of a new, unbiased, fiduciary who would have certainly “uncovered” the fraud, all frauds for that matter. D. The Probate Exception/Litigation Privilege; RICO Objections, and Objection Regarding FRCP 19: Narrow Probate Exception Not Applicable Since Inter Alia Estate Remains Closed and Appellate Division Did Not Stay Ruling; Litigation Privilege Does Not Shield Fraud. The narrow probate exception, a jurisdictional limitation, is inapplicable since the probate Judge explicitly closed the estate, and the appellate division and the Supreme Court both denied a stay of that ruling. [Exhibit F]. Moreover, the exception is indisputably narrow38, and is routinely levied against fiduciaries accused of fraud.39

In fact, it seems Mr. Howard colluded with Mr. Fabian in order to use the bogus employment contract – which was nearly called a fraud by its scrivener [SAC, Count XV, ¶12, Count I, ¶189-194], in order to conceal the payroll fraud. Because defendant Rajs and defendant Melnick both signed this clearly bogus instrument – the conspiracy extends to them as well. 38

See, e.g., Three Keys Ltd. v. SR Utility Holding Co., 540 F. 3d 220, (3rd Cir 2008) and Marshall v. Lauriault, 372 F.3d 175, 180-82 (3d Cir.2004). 39

See e.g., Kennedy-Jarvis v. Wells, 113 F. Supp. 3d 144 (D.C. 2015) (“[t]he probate exception can no longer be used to dismiss `widely recognized torts' such 33

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The litigation privilege, in turn, has never been held to immunize systematic fraud. Williams v. BASF, 765 F.3d 306, 319 (3rd Cir 2014).

IV. CONCLUSION As regards the proposed RICO predicate acts, which the magistrate Judge did not rule upon [PSAC ¶¶335-336], it is respectfully submitted that in light of case law which prohibits Rule 10b-5 RICO allegations, PSAC ¶335 (Rule 10b-5 predicate act) will be withdrawn, leaving only a Rule 10b-5 “de facto” seller claim (Count XII), amended as requested by this Court to reflect a de facto seller transaction as per this brief.

As to PSAC ¶336, the fraudulent concealment RICO predicate act,

it is respectfully submitted that the plaintiff has set forth a legally cognizable fraudulent concealment claim.

In the event this court finds that fraudulent

concealment, Count XV, has been inadequately plead, the plaintiff requests leave to add additional allegations reflective of the theories advanced in this brief (i.e. that plaintiff could not “access” the concealed evidence from Mr. Howard, since the evidence was protected under the attorney/client privilege , which privilege could not be pierced under the crime-fraud exception during his representation of Mr. Fabian in probate court). To the extent this Court finds the theory of fraudulent

as breach of fiduciary duty or fraudulent misrepresentation merely because the issues intertwine with claims proceeding in state court.”) 34

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concealment advanced in this brief as wholly unsupported by case law, the plaintiff requests leave to nonetheless amend to PSAC ¶336, the fraudulent concealment RICO predicate act, to more clearly reflect perjury, obstruction of justice, mail fraud, wire fraud, and/or the theories advanced with respect to a lawyer’s duty to third parties, as vehicles to assert the fraudulent concealment allegations as a RICO predicate act and/or as a distinct cause of action. The civil conspiracy claims, it is respectfully submitted, were adequately plead and include Mr. Howard, Mr. Fabian, Mr. Gold, Mr. Rajs, and the other affiant defendants.

To the extent Count XVI’s allegations are inconsistent with the

allegations advanced in this brief, leave is respectfully requested to further amend Count XVI to clarify the civil conspiracy elements as set forth herein.

Respectfully submitted. Dated: November 13, 2020