Free Notice (Other) - District Court of California - California

Case 3:07-cv-04975-WHA

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Case 3:07-cv-04975-WHA

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LAW OFFICES;

& VAN NF T
LLP
710 SAN$OME STREET SAN FRANCISCO, CA 94111-170.4 TELEPHONE: (4 ! S) 39!-1~400 FAX (415) 397-7188 WW~N.KVN.COM MICHAEL D. CELLO MCELIO~KVN.COM

,JAN ....

January 15, 2008
VIA HAND DELIVERY VIA FEDERAL EXPRESS

Mark P. Fickes, Esq. u.S. Securities & Exchange Commission 44 Montgomery Street Suite 2600 San Francisco, CA 94104 Re: SECy. Trabulse, C-07-4975 Dear Mr. Fickes and Mr. Gadawski:

Gregory A. Gadawski, CPA, CVA Financial Forensics Kruse Woods 1 5285 SW Meadows Road Suite 340 Lake Oswego, OR 97035

Please find enclosed the accounting ordered by the Court in the above-entitled action. Note that it consists of two parts: first, an accounting of the Fund's current assets provided by Ueltzen & Company, who were retained for the express purpose of providing the analysis required by the Court. Second, we have also included a separate summary of assets that Mr. Trabulse purchased with the Fahey bank accounts for himself or his family. Because the information in this second document is not information about the Fund's assets, it does not constitute part of the audit and has, instead, been authored by the individuals who are in physical possession of the items listed therein. As you know, we regard this second set of purchases as personal compensation to Mr. Trabulse. I am traveling today. Once you have each had an opportunity to review this information, please feel free to call me with any questions you have. Very truly yours,

MICHAEL D. CELIO MDC/gap Enclosures
cc: ' David Zaro, Esq. (w/o enclosures)

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UE T ZEN
COMPANY, LL P
CEKTIRED PUBLIC ACCOUNq'/uNT~

Michael G. Ueltzen, CPA, CFE [email protected]

January 14, 2007
Privileged and Confidential

Mr. Michael Celio Keker & Van Nest, LLP 710 Sansome Street San Francisco, CA 94111 RE: Alexander J. Trabulse Dear lVff. Celio: Consistent with your request, we have compiled information as to the-assets of the Fahey Fund, L.P., Fahey Financial Group, Inc., International Trade and Data, and ITD Trading (collectively referred to as the "Fund"). This compilation of financial information is consistent with the Preliminary Injunction Order and Other Ancillary Relief ("the Order") entered in the matter of the Securities and Exchange Commission v. Alexander .J. Trabulse, et al., dated December 7, 2007. Scope of the Order The Order provided that a verified accounting be submitted by Mr. Trabulse for two purposes: "(1) to identify the location and disposition of all funds received from investors, and (2) the location and value of all personal or Fund assets presently held by Trabulse under his control or over which he exercises actual or apparent investment authority." The Order further provided that the accounting must provide, at a minimum, the following: List all diamonds, pearls, rugs and other property (other than the brokerage accounts) that belong to the Fu.nd, stating the exact desc.ription and location for each; 2. Identify andprbduce all title records for all such items;
0

State the true market value of each of the items stating the basis for the value and identifying and producing all records bearing on the value; and,

3600 AMERICAN RIVER DRIVE, STE. 150 (916) 563-7790

SACRAMENTO, CALIFORNIA 95864 FAX (916) 563-7799

www, uelt~en,com

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Mr. Michael Celio Keker & Van Nest, LLP January 14, 2008
Page 2

4. State the original cost of the items to the Fund, identifying and producing the bill of sale or other records needed to prove the cost. In addition, Mr. Trabulse is to provide an accou.nting for all similar items owned by himself and/or his family that were acquired directly or indirectly from the Fund's money or distribution thereon. Our compilation of information addresses the first requirement which requires an accounting for the Fund. Mr. Trabulse will submit a separate accounting for his personal assets and/or family assets. Information Provided To complete the compilation of~the accounting information required by the Order, we were provided the following information: Information provided by counsel for Mr. Trabulse which consisted of documents provided to the SEC that identified all assets of the Fund; An interview with Mr. Trabulse at which time our preliminary compilation was reviewed and discussed and additional information was obtained, directly from Mr. Trabulse. Approach Given the lack of an integrated accounting system that would be normally expected to provide such an accounting, we had 'to review all materials that were made available to us and identified all assets that could be identified from a review of the checking account, records (although not all checking accounts for all periods of time were ' available to us), .evidence of any assets (purchase documents for gems or rugs, title records, proof of ownership, or appraisals) that became evident to us for the period of 2002 through January, 2008. From this analysis, we undertook an effort to determine whether the assets that had been identified as existing during the above timeframe were currently in existence and, if so, what was their current Fair Market Value. We have also prepared a summary of assets we observed, but are no longer in existence. The accompanying schedules and analysis reflect the results of this undertaking.

~ UELTZEN & COMPAN% LLP

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Mr. Michael Celio Keker & Van Nest, LLP January 14, 2008 Page 3

Characteristics The key assertions that are presented in the accompanying schedules reflect the following assertions about account balances: ; 1. Existence - assets, liabilities and equity interests exist; 2. Rfghts and obligations - the Fund holds or contr61s the rights to assets and the liabilities are obligations of the Fund; 3. Completeness - all assets, Iiabflities and equity interests have been recorded on the schedule; 4. Valuation and Allocation - assets, liabilities and equity interest are included in the schedules at appropriate amounts, and any resulting valuation or allocation adjustments are appropriately recorded. As the accompanying schedule reflects, we have identified the following to the extent they exist: 1. Nature of the asset; 2. Cost basis; 3. Title records; 4. Proof of purchase and ownership; 5. Location; 6. Current valuation. The compilation reflects the total estimated assets of thee Fund at estimated Fair Market Value to be $10,231,289.64. Representations We met with Mr. Trabulse on January 10, 2008 in your offices. In our presence, you instructed Mr. Trabulse to be truthful, honest, and complete in response to any questions and issues we posed of Mr. Trabulse during the meeting. Mr. Trabulse also

[~ UtKTZEN & COMPANy, LLP

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Mr. Michael Celio Keker & Van Nest, LLP January 14, 2008 Page 4

confirmed that he understood that he was under your instructioh to be truthful, honest and complete in response to any questions and issues we posed. Materials Provided The following materials are included: .. .Exhibit "~ B C :"

Description Current Summary of Net Assets of the Fund Detailed Analysis of the Current Assets of the Fund Prior Assets No Longer Held By or In Existence of the Fund

In addition, we will be providing two binders of materials that will provide supporting documentation as it exists to reflect the cost, title records, proof of purchase and ownership, location, and current valuation information. Should you have any questions, please call. Sincerely, UELTZEN & COMPANY, LLP By: Michael G. Ueltzen, MGU:jer Enclosures

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EXHIBIT A
JAMES A. TRABULSE Summary of Current Value of Known Assets of the Fund

Total Current Value of. Known Assets Before Bank and Investment Accounts Total Current Bank and Investment Accounts

4,844,538.76 5,386,750.88 10,231,289,64

Total Current Value of Known Assets of Fund

Page I of 1 Ueltzen & Company, LLP

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Family and Friends distributed from Fahey Fund and from Fahey Financial Group, Inc. Details on following;worksheets Summary Fahey 2001 2002 2003 2002 2005 2006 2,600.00 3,000.00 79,363.47 169,348.20 49,500.00 149,645.77 453,457.44
39,653.05 90,641.43~ 226,928.61 150,853.~7

FFG

5108,076.36

SEE woRKSHEET Labeled 'Easter Trabulse' for items purChased through Fund bank accounts

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Distributions From the Fahey Financial Group, Inc., Bank Accounts to Family, emphasis on Catherine O'Rlley (Spouse) YEAR DATE Check # Amount Paid to and reason Check card

2001,

No Family distributions 11.08.01 1231 2,600.00 Dlsiribution !o O'Riley 2,600,00

20O2
01.16.02 01.31.02 02,20,02 03.07.02 06.12.02 07.25.02 08.26.02 08.29.02 12,18.02 1240 1243 t255 1256 1278 1300 Wire Out 1310 1327 8,982.83 3,400,00 3,50Q.00 1,000~00 10,000.00 15,000.00 17,480.64 10,.000.00 10,000.00 79,363.47 PHOTO EQUIPME~ for wedding and for photographer PHOTO EQUIPMENT fo[ wedding and for photographer PHOTO EQUIPMENT for wedding and for p.hotogi;apher PHOTO EQUIPMENT for wedding and for photographer Distdbulion to O'PJley Distribution to O'Ri~ey PEARSONS SMALL ENGINE-wood chipper for home Distfibulion to Oistr;bu.l!on to O'Rile~

2003

No Family distributions 01.22.03 04.23.03 05.19.03 06.06.03 06.09.03 07.21.03 11.26.03 12.12.03 . Wire Out 1348 1357 9055 9007 1367 Wire Out t381 2,000.00 5,000.00 10,000,00 4,000,00 ~,000,00 25,000.00 20,000,00 8,000.00 79,363,47 3,000.00 3.000.00 Dislfibutlon to O'Rtlay Distribution to O'Riley Distribulion to O'PJley Eesa Mokd Rugs Eesa Mokd Rugs Distribulion to O'Rlley Distribution to O'Riley Dislfibutton to O'RJley

2004 07.16.02 !292:1

Catherine O~RJiey 02.24.04 03.09.04 03.22.04 04.23.O4 05.06.04 06.28,04 07.20.04 07.26.04 06.18.04 10.20.04 12.14.04 12.16.04 12.21.04 2005 02.23,05 08.15.05 11.07.05 2006 06.14.06 11.22.06 Wire Out Wire Out Wire Out Wile, Out Wire Oui 25,000,00 Distribution to O'P~ey . 12,000.00 BNP Disldbution to O'PJley t2,500.00 BNP Distribution to O'PJley 49,500.00 24,000,00 Dolores Wilson nursing home for Trabulse M0ther 24,000.00 Dolores Wilson nursing home for Trebulse Mother 48,000.00 9080 1389 Wire Out 1393 Wile, Out Wile. Out Wire Out Wire Out Wire Out 9074 B#nk Debll Wire Out Wire Out Wire Out Eesa Mokri Rugs Distribution to O'Riley Garreck Beck Indian Potte.~ Distribution Io,O'Riley Distribution to O'Riley Distribution to O'Riley Garreck 3,6~.~ooBeck Indian Polte~"y 15,000.00 Dtstn'butlon lo O'Riley 2,500.01 BNP Pars 22,000,00 Eesa Mokri Rugs 23,000.00 Eesa Mokri Rugs 4,998.19 BNP Pets 3,000.00 Garreck Beck indian Pottery 20,000,00 Distdbulion to O'PJley 166,348.20 8,500.00 15,000.00 3,500.00 15,000.00 15,000.00 15,000.00

CathefineO'PJley 04.17.06 Wire Out 06.14.06 Wire Out Wire Out 06.26.06 07.28,06 Wire Out

65,000.00 12.500.00 9,999.99 14,145.78 101,645.77

O'Rlley modgage payQff At Home Theater BNP Oislr~butfon to O'PJtey At Home .Theater

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Distributions From the Fahey Fund Bank AcCounts to Family, emphasis on Catherine O'Riley (spouse) YEAR DATE Check # Amount Paid to and reason Check card

2001 2002 2003

none none

4/1/2q~3 10/10/2003
Catherine O'Rtloy 4/2412003 1~3~'03 6/27103 6/27/03 12/12/2003 .

117 163

3,000.00 4,500.00 7,500.00

Susan Trabuise Susan Trabu~se

t19 125 132 141 142 Checksord

2,716,32 5,000.00 10,000,00 10,000.00 1.936.73 32.153.05

Anything in Ca.nvas-O'P31oy house Anything in Canvas-O'Riley house Dis~butJon to O'R~ay Distribution to O'Rliey DisL~but]on to O'Riloy Nomad Rugs

2004
1/15/2004 3/26/2004 6/30/2004 9/30/2004 164 218 231 259 4,500.00 6 6,000.00 6,0(~0.00 22,500.0O

Susan'Trabulse Susan Trabulse Susan Trabu]se Sus,~'Trabulse

Catherine O'Riley 1/27/2004 192 2/17/2004 201 2/17/2004 ' 200 2/17/2004 Checkcard 202 2/16/200~4 2/23/2004 Checkcard 6/7/2004 225 6/25/2004 2,33 6~26/2004 234 6/2412004 238 6/311:~004 249 ! 9/13/2004 251 10/7/2004 Checkcard 11117/2004 Checkcard 1 t/22/2004 Checkcard 12/2./2004 . Checkcard 12/6/2004 ' Checkcl~'d

5,000.00 1,500,00 5,083.50 1,700.00 908.39 15.000.00 3,175;00 870.00 15,000~00

643.60 1,080,2g 242.51 300.38 1,137.71 68,141.43

Dabbah Jewel-emeralds to Easter Rock Our Wodd Rock our World U~ltad ,~,lr Jim Trabuise - Gems Travel DIsldbution to O'Riley Blu~ Mountain Tradin~.-personal Distribution to O'Rtiay D~sffibugon to O~Rtiey J. Trabulse Indian Jewelry Dls~bu0on to O'Riley' Blue Mountain Trading-Indian Jewelry Air France Garrick Beck: Stone O'Rtiey Windhorse Rugs United Air Susan Tmbulse Susan Trabulse Susan Tz;abulse Susan Trabulse Susan T~bu~se

2005
1116/2005 4/6/2005 4/14/2005 6/26/2005 9/27/2005 267 313 315 342 379 6,000.00 4,500.00 7.50.0~00 25,500.00
3,B72.88 t,000.o0 2,250.00 10,000.00 885.00 1,100,00 5,317.85 30,355.85 15,000~0D 15,000.00 15,000.00 524.00 745.00 200.00 524,00 327.00 15,000,00 t,305,00 149.90

Catherine O'Rltey 2/7/2005 Checkcard 2/8/2005 Check~ard 2/9/2005 Checkc~rd 2/9/2005 286 2/1412005 Checkc~rd 2~.17/2005 291 2/24/2005 292 3/17/2005 303 3/30/2005 314 4119/2005 322 5/31/2005 332 ~ 6/3/2005 Checkcard 6113/2005 Checkcard 6/t6/2005 Chockcard 6/17/2005 Checkc~rd 6/22/2005 Checkc~rd 6/3012005 348 6/30/2005 338 7/28/2005 Checkcard

Mike's Tools Rock our World-BOoties for O'Rlley Atishah Rugs & Art-Odley Dlstr~butloh to O'Ri[ey Gemas N.O.-Ring..Odlay Naturat Stones-g~,n O'Rtiey Rock our Wo~d,.ge0de O'Rlley :Import Motors used 2004 auto DIs~fibul~on to O'Rlley OisLdbutton to O'Rtiey Distribution to O'Riley Gemday J ewelers-O'Riley Gemday Jewele~s-O'Rtiey Ge~dpy J~Ne!ars'O'Ri!~y Gernd~y Jewelers*O'Riley Gemday Jewelers.-O'Riley DIst,'fbugon to O'R~ley Esalen Gemday Jawalers-O'Rtiey

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8/3/2005 Checkcmd 8/10/2005 Checkcard 8/22/2005 ' Checkcard 9/7/2005 1111/2005 389 11/3/20(}5 388 11,r/12005 3~0 11/14/2005 393 11114/2005 Checkca~'d 11/14/2005 Checkcard 11/15/2005 394 11/25/2005 Checkcard 11/28/2005 Checkcai'd 2006
1/11/2006 2/28/2006 4/~2006 5/8/2006 6/28/2006 6/28/2005 7/25/2006 7/2~2006 8~30/2006 9/28/2006 9/29/2006 452 468 512 527 544 652 558 562 611 601 564

59.g5 1.704:85 288.73 15,000.00 15.000.00 ~367.00 10,000.00 7~00.00 2,012,20 2`708.18 5,000.00 4~222~2 6.340.g0 201~28.61 7,500,00 2.000,00 5.000.00 1,500.00 8,500.00 1,500,00 1,O00.00 1,500.00 1,500.00 1,500.00 7,500.00 3g,co0.00

Gemday Jewelers-O'Riley Air France Mike's Toots-O'Ritey h~se Dls~u~an lo O'Rlley Dts~bu~on m O'R]ley D~Ibu~on to O'Riley Magic Ca~et-~gs lo O'Rlley Magic Casings to O'Riley ~s~bu~on to O'~ey Magic Ca~et=mgs to O'~1~ U~que Gems and J~ew-To O'~ley

S, TrabFlse M. Goodman M. Goodman M, Goodman S. Trabulse M. G~odman M. Goodman M. Goodman M. Goodman M. Goodman S. Trabulse

Catherine O'Rlley 1/312006 CheckC~KI 113/2006 CheckCard 1/g/2006 459 1/17/2006 CheckCard 111712006 CheckCatd 1/20/2006 CheckCard 1/20/2006 CheckCard :' 1/20/2006 CheckCard 1/25/2006 CheckCard 1/26/2006 CheckC~d 3/20/2006 470 .3/28/2000 474 4/11/2006 517 6/29/2008 548 7/3/2006 554 Checkcard 7/31/2006 8/28/2006 606 9/19/2006 567 9/25/2006 Checkcard

158.00 Hawaiian Air 15g.00 Haw~ian Air 25,000,00 Dislributlan to O'Riley 1,B60.82 Jim Say)or Jewelers-pearls to O'PJlay 3,655.00 Jim Saylor Jewelars-pea~s to O'Rtlay 885,42 Jtm Saylor Jewelers-pearls to O'Rltey 1,4i4.40 Jim Sayfor Jewaie.rs-paarls to O'Riley 2,145.81 Savage Peads-.peads to O'Riiey 1,246.88 Hawaiian Trading-pearls t.o O'Riley 411,46 Hawaiian Trading-pearls to O'Riley 2,007.00 Magic Carpet-rugs=to'O'Rl~ey 2,147.50 Magic Carpet-rugs to O'Riley 15,000.00 Dlsldbu6on to O'Rlley 20,000.00 D~stdbutlon to O'Rfley 10,O00,00 Distribution to O'Rlley 7,659.17 Air F~:ance 1,61o.63 . Magic Ca~et*ruga to o'Ri!ey
15,000.00 ' Distdbut~on to O'R!)ey 1,493.1B Air France 111,853.27

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The following are or have been in the possession of Easter Trabulse. And were purchased with fund held in i=ahey Bank accounts. Easter Trabulse QTY Pearl Strands One Ak.oya Baroque P~arls Fres hadama Ring Earrings Jewelry Necklace-peridot Pendant tourmaline rings
Rugs

Cost 1 3' 4 1 4 3,000.00 6,000.00 1,600.00 500.00 3,200.00 800.00 900.00 12,800.00

1 1 16

(on loan fro.m collection) Baktiari Harise Personal Auto =~ 1994 BMW5301 emeralds (Tucson Gem show) earrings , crystal (loose) Espresso machine + grinder) Furniture tea che~t chest of drawers dining table book case matress sofa chairs

1 1
10 14,000.00 Aug-04 9,500.00 2OO4 3,000.00 1,000.00 2OO7 1,600.00 375.00 1,350.00 1,200.00 600.00 1,700.00 495.00 1,725.00 65,345.00

2