Free Response to Motion - District Court of Federal Claims - federal

Case 1:05-cv-00748-CCM

Document 22-4 Filed 12/29/2006 Page 1 of 4 U.S. Department of Justice
Tax Division
Please reply to: Court of Federal Claims Section P.D. Box 26

Facsimile No. (202) 514-9440 Trial Attorney: Cory A. Johnson
Attorney's Direct Line: 202-307-3046

Ben Franklin Station Washington, D.C. 20044

EJO'C:MLS:CAJohnson 154-2322 CMN 2005105383
Februar 24,2006

Via Fax and U.S. Mail
Robert E. Kolek
Hardin LLP Schiff 6600 Sears Tower Chicago, IL 60606

Re: Stobie Creek hivestments v. United States

Dear Bob:

the United States pursuant to RCFC 26(a). We make these disclosures based on the information that is currently reasonably available to us, and will supplement them as necessar pursuant to RCFC 26( e). Please note that we do not have access to matters occurng before the grand jur in the investigation now underway in the Southern Distrct òfNew York, or to matters being developed in that investigation. We are
I am wrting to provide the intial disclosures of

not disclosing, therefore, any matters protected by Fed.R.Cri.P. 6(e), or matters being

. developed in the grand jur investigation that may not, techncally, fall within the precise Rule 6(e). If and when we lear of and obtain access to such matters on which we language of reasonably intend to rely in ths case, we will supplement these disclosures.
hidividuals that May Have Discoverable Information

The individuals listed below may have discoverable information that the United States may use to defend plaintiffs claims.
1. Individuals who paricipated in the transactions at issue in this case. They

are expected to testify about the circumstances under which they paricipated in the transactions at issue, the fees they paid, the information they received, and the representations that were made about the investment potential of the year 2000 curency transactions, timing, and tax benefits, among other things. They are:
David K. Welles, Sr. Georgia B. We1les
..
:å

.
Exhibit 3

i L

~hll.çOh (7//\ q

Case 1:05-cv-00748-CCM

Document 22-4

Filed 12/29/2006

Page 2 of 4

- 2David K. Welles, Jr. Virginia Welles Jordan
Jeffey F. Welles

Peter C. Welles Chrstopher S. Welles
Steven Bores

3460 Countr Club Place Danvile, CA 94506
2. Attorneys and promoters who paricipated in aranging the transactions.

They are expected to testify about the development and strctung of the transactions at issue, the fees they received for aranging the transactions, and the representations that were made about the investment potential of the year 2000 curency transactions, timing, and tax benefits, among other things.
David F. Waterman Shoemaker, Loop & Kendrck, LLP 1000 Jackson Street
Toledo, OR

John V. Ivsan 7400 Carel Executive Park Drive, Suite 120 Charlotte, NC 28226
Donna Guerin
Irin Mayer

Paul Daugerdas
Sandy Burside
Presently

or formerly of Jenkens & Gilchrst; contact information not presently known

David Herpe McDermott, Wil & Emery
Chicago, IL

Representative(s) of Jenkens & Gilchrst 225 W est Washington
Chicago, IL

Case 1:05-cv-00748-CCM

Document 22-4

Filed 12/29/2006

Page 3 of 4

-33. Robert J. Floyd, CPA

2650 N. Reynolds Rd., # 2 Toledo, OR (419) 537-9442

Mr. Floyd prepared tax retus reporting the transactions at issue, and is expected to testify about the representations made on the returs.
4. Representative(s) of

Deutsche Ban

Deutsche Ban was the counterpar on the currency option contracts. A Deutsche Ban is expected to testify about the pricing of representative of

the options, the fees paid to Deutsch Ban, the timing of the options, the the option contracts, and the possibility of gain or loss on the terms of
offsetting contracts.

5. Representative(s) of

Kenner & Co.

New York, NY
Representative( s) of Therma- Tru Corporation Toledo, OR

On information and belief, Kenner & Co. was involved in the redemption Therma-Tru in May 2000. of shares and recapitalization of Kenner and Therma-Tru are expected to testify about Representatives of the history and timing of those transactions.
The descriptions above regarding expected testimony are not intended to limit the scope
of discovery or concede the adssibility of any evidence at tral.

Documents that the United States May Use

The documents curently in our possession, custody and control that the United States may use to defend plaintiffs claims are described below. We believe you may already have these documents. Ifnot, please let us know. copies of
1. Pleadings, briefs, memoranda, affdavits and exhibits fied in United States

v. Jenkens & Gilchrist, P.c. (N.D. Il. No. 03 C 5693);
2. Documents produced to the IRS by Jenkens & Gilchrst that relate to the Welles family members:

Case 1:05-cv-00748-CCM

Document 22-4

Filed 12/29/2006

Page 4 of 4

- 4Name
Peter Welles
Jeffey Welles

Bates Numbers
0000 - 1151

0000 - 1230
0000 - 1169 0000 - 1152 0000 - 1162
0000 - 1181

David Welles, Sr. Virginia Jordan
Chrstopher Welles

David Welles, Jr. David Welles, Sr. QAT

0000 - 1142

3. Documents produced to the IRS by Shumaker, Loop & Kendrck LLP that

relate to Stobie Creek and its purorted members. These documents bear Bates Numbers: SLK 160 - 284, SLK 317 - 336, SLK 350 - 357, SLK 1257 - 1834, SLK 2043 - 2564, SLK 2565 - 2837, SLK 3073 - 3252, SLK 3382 - 3393, SLK 1-004681 - 004931, and SLK 1-004932 - 005808;
4. Tax retus for Stobie Creek for the years ending April 30, 2000, and

December 31, 2000;
5. Tax retus for the purorted members of Stobie Creek for the years

ending December 31, 2000;
6. Documents produced by Welles famly members in response to IRS

hiformation Document Requests 001, 002, and 003;
7. Documents produced to the IRS by Deutsche Ban AG that relate to the Welles famly members. These documents bear Bates Numbers DB Welles 0001 - DB Welles 0134.

If you have any questions regarding these disclosures or want copies of the documents described, please do not hesitate to call me.

cc: Stuar D. Gibson

i 555966. i