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Stan
CATERBONE
Stan
J. Caterbone
J. Media
Medi
Caterbone
Family
Group
Grop
Group
Executive
Executive
U.S.
Press
Press
Executive
Mind
Summary
Release
Release
Summary
Control
Summary

Page
Page
Page
Page
Page
Page
123
33
84
33
32
33
33
33
of
of
ofof
51
of
51
414
50
51
453
51
51

Tuesday,
Thursday,
Tuesday,
Friday,
Tuesday,
March
Tuesday
March
December
15,
March
2016
15,
3/15/2016
July
2016
17,
15,
11,
5, 2015
2016

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=

6
$

B
.

/9

$
./ !"01

20

1987 Documents on CD-ROM by AMG 1991


TI=\FERRANTI - ISC - GUERIN - CATERBONE COMMUNICATION MATRIX (FRAUD)
IM= 310.CPR
DA= January 18, 1991
AT= AUDIO TRACKS: /ALL
PA= PAGES: 01
SU= SUMMARY: This communication matrix illustrates the flow of
information that was used in the alleged "BLACK MAIL" of
Stan Caterbone and the "ISC $BILLION DOLLAR COVERUP"
************************************************************
TI=\ISC PURCHASE
IM= 001P01.CPR
DA= September 21, 1983
AT= CORRESPONDING AUDIO TRACKS: 02/08/09
PA= PAGES:
2
SU= SUMMARY: Confirmation of the purchase of 1000 shares of
International Signal & Control bought by Stan Caterbone
on Septermber 21, 1983. This stock was recommended
and solicited by Gibson Armstrong of Individual
Securities, of Lancaster PA.
01
IM= 001P02.CPR
DI= PAGE 2
*****************************************************************
TI=\HIGH EMPLOYMENT
IM= 002P01.CPR
DA= October 25, 1985
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1

02/

SU= SUMMARY: Letter to Paul Lewis, of High Associates, subsidiary of


High Industries, requesting considerations for
Employment. Ed Gordon, controller of the Horst Group,
had reffered Stan Caterbone to High Associates.
*****************************************************************
TI=\COMMONWEALTH BANK SOLICITATION FOR EMPLOYMENT
IM= 003P01.CPR
DA= October 28, 1985
AT= CORRESPONDING AUDIO TRACKS: 02/03/04/05/06/07/08/09
PA= PAGES:
1
SU= SUMMARY: Letter to Larry Zieliski of the Commonwealth National
Bank, from Stan Caterbone requesting considerations for
Page 1

1987 Documents on CD-ROM by AMG 1991


employment in the Financial Services Department.
*****************************************************************
TI=\OWEN KUGEL ASSOCIATES EMPLOYMENT MEETING
IM= 004P01.CPR
DA= November 5, 1985
AT= CORRESPONDING AUDIO TRACKS: 03
PA= PAGES:
1
SU= SUMMARY: Letter thanking Owen Kugel for the interview with himself
and Ed Potius, for the employment considerations for raising funds for
the development projects. S. Caterbone never heard back until they wanted
funding from S. Caterbone in 1987.
************************************************************
TI=\PRO FINANCIAL GROUP, Ltd., BROCHURE
IM= 005P01.CPR
DA= April 4, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Brochure of the Pro Financial Group, Ltd., a
Penssylvania corporation owned soly by Stan Caterbone, and was
the preliminary design of Financial Management Group, Ltd.,
IM= 05P02.CPR
DI= PAGE 2
************************************************************
TI=\PARENT FEDERAL SAVINGS MORTGAGE CHECK
IM= 006P01.CPR
DA= July 12, 1986
AT= CORRESPONDING AUDIO TRACKS: 02/03/08/09
PA= PAGES:
1
SU= SUMMARY: Copy of the check for the loan proceeds for the
residence at 2323 New Danville Pike, Conestoga PA, of which Stan
and Mike Caterbone borrowed $100,000 from Parent Federal
Savings and Loan, owned by James Guerin.
************************************************************
TI=\S. CATERBONE FMG, Ltd., STOCK PURCHASE
IM= 007P01.CPR
DA= June 26, 1986
AT= CORRESPONDING AUDIO TRACKS: 02/03/05/08/09
PA= PAGES:
1
SU= SUMMARY: Initial stock certificate for Stan Caterbone
granting 40,000 shares of FNG, Ltd., stock. Stan Caterbone paid
$.50 per share or $20,000 in full on June 26, 1987.
************************************************************
Page 2

1987 Documents on CD-ROM by AMG 1991


TI=\R. KAUFFMAN FMG, Ltd., STOCK PURCHASE
IM= 008P01.CPR
DA= June 26, 1986
AT= CORRESPONDING AUDIO TRACKS: 02/03/05/06/08/09
PA= PAGES:
1
SU= SUMMARY: Initial stock certificate for Robert Kauffman. Robert
Kauffman paid $.50 per share. Mr. Kauffman recieved
60,000 shares of stock. Since Stan Caterbone was as
responsible as anyone, if not more, for the development
of FMG, Ltd., Mr. Kauffman agreed to an option agreement
to Stan Caterbone for 10,000 shares at $.50 per share.
Stan Caterbone was adement about having equal equity with
Mr. Kauffman. In addition, Mr. Kauffman had never paid
for the additional 20,000 shares he purchased. He only
paid for 40,000. This is a violation of PA Securities laws.
************************************************************
TI=\FMG, Ltd., CHARTER BUSINESS PLAN
IM= 009P01.CPR
DA= July 1, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/05/06/07/08
PA= PAGES:
20
SU= Charter Business Plan for FINANCIAL
MANAGEMENT GROUP, LTD. of Lancaster, Pa
Dated July 1, 1987, created by S. Caterbone
TABLE OF CONTENTS:
Mission Statement
Corporate Objectives
Business Strategies
Distribution Strategies
Services Strategies
Market Penetration Strategies
Planner Support Services
Corporate Standards
Initial Capitalization
Financial Highlights
Contingency Plans
The Management Group
Organizational Charts:
Exhibit A
Exhibit B
MISSION STATEMENT
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1987 Documents on CD-ROM by AMG 1991


l. To serve the people of the county, state and nation in the
handling of their finances through the support of our financial
planners and other advisors, and their personal relationships with
their clients.
2. To meet the expectations of our various constituencies:
planners, employees, stockholders, and the people residing in the
area we serve.
OBJECTIVES
l. To position the company as the major provider and servicer of
financial products and advice in the closely related fields of
investments, financial consultation, mortgage banking, life insurance,
property and casualty insurance, taxes, law, and real estate.
2. To transform the fragmented market of independent financial
planners into a quality group of outstanding professionals marketing
under one name, thus bringing order to the financial marketplace.
3. To place client interest first at all times by delivering a diversified
product through multiple sponsors so as to always deliver
high-quality and fairly priced products representing the top 25%
percentile of the marketplace.
4. To develop and maintain quality service on previously delivered
products by managing assets at a reasonable fee, thus freeing
planners from the constant pressure of making new sales.
5. To insure the growth of the business by hiring professional
planners in sufficient number so as to become the pre-eminent
financial services company in the area served.
6. To use invested capital rather than loans and long-term leases
to minimize monthly expenses and maximize profits, hereby
assuring our business growth and development.
7. To encourage
thus satisfying
value. Also to
through stronger

our planners to become stockholders in the firm,


their desire for ownership in a company of real
assure a more stable development of our business
ties with our top planners.

8. To react to changes in the marketplace ahead of our competition


in creative and thoroughly considered ways.
9. To maintain a strong professional/client relationship through
frequent personal contact while using high-technology equipment
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to enhance the quality of our work.
BUSINESS STRATEGIES
1.

CURRENT SITUATION

Dozens of small independent planners servicing dissimilar


markets through product sales.
COMPANY STRATEGY
Recruit the small, independent financial planner into our group
using a variety of motivating factors:
l. economics (reduce their expenses, expand
their resource material and backup)
2. marketplace recognition and dominance
3. company identity
4. equity ownership
5. product diversity
6. higher commissions on each sale through group
negotiation of payout
7. specially expertise in related financial areas
and reference material
2.

CURRENT SITUATION

Life insurance and brokerage businesses are suffering from poor


performance of products, bad press, and low-quality recruiting
cutting commissions; while productive veterans in these industries
are uneasy with these changes.
COMPANY STRATEGY
Recruit the most senior, productive brokers and agents who desire
to do more personal planning by providing the advantages cited in
paragraph 1 above.
3.

CURRENT SITUATION

The l986 Tax Act threatens to reduce the need for tax planning,
and tax qualified plans. Rather than seek shelters and other relief,
investors will be likely to pay tax, and invest savings, thereby
increasing the need for asset management and the creation of
wealth Through equity investment.
COMPANY STRATEGY
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Market products that are structured with lower up-front costs
and stable ongoing management renewals in order to build
revenue from service over a period of time. This will gradually
replace the heavy emphasis on new salesand give rise to a truly
responsive service oriented business.
4.

CURRENT SITUATION

Mass marketing through corporate benefit plans and the media


continues to grow as a segment of the financial services
business.
COMPANY STRATEGY
Develop corporate sales through the concept of cafeteria plans
which will change the employee benefit market by allowing
employees to target a percentage of benefit dollars to the areas of
their choice. Also, continue to emphasize seminars targeting
unique organizations which have a strong relationship with the
public for specific financial products:
EX.

Charitable organization

Counseling center

charitable giving seminars.


estate planning seminars
life planning seminars, etc.

Additionally, we will develop public awareness by constantly


advertising the corporate name via newspaper and radio.
DISTRIBUTION
1.

Current Situation

We currently have many contracts for financial planners and


other professionals whom we seek to committ to an August
occupancy in new space in Columbia, Maryland
Company Strategy
We plan to increase our Columbia group to 12 financial planners
and 4 other profesionals during the next year. While we plan to
locate and develop in new areas, we will concentrate during our
first year in our Lancaster operations.
2.

Current Situation

At the current time we know some very successful professionals


established in business for at least five years.
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Company Strategy
We will continue to seek predominately self-sufficient,
professional "veterans" of the industry. Our desire is to
appeal to their need for the freedom to plan and communicate
more effectively with their clients. We'll also offer a higher
payout, more varied products, and a more professional
enviroment. We will duplicate only the most critical brokerage
house services.
3.

Current Situation

Planners have been stable in their relationship with past


employers.
Company Strategy
We expect a very stable core of top planners in Columbia, MD.,
due to strong management, stable planners, strong local
support systems, and equity ownership. We will concentrate on
local development ahead of satellite development. We expect
our satellite retention to be outstanding where equity ownership
is strong and mediocre where equity ownership is weak.
4.

Current Situation

Planners are independent and thus use various planning


techniques, offer a limited product and differ in their areas of
expertise.
Company Strategy
The expertise and techniques of our planners and other
professionals will be pooled to provide clients with higher quality
service and a broader line of products.
SERVICES
1.

Current Situation

Investment products are predominately delivered through


captive sales organizations who manufacture their own products
and manage all monies. This leads to limited product offerings
which frequently do not entirely satisfy specific consumer needs.
It also leads to a mediocre product because there is no
market pressure to insure top quality products that are
competively priced.
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free

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Company Approach
Planners will be free to deliver the highest quality products from
among thousands of sponsors so as to work exclusively for the
benefit of the client. The planner may choose top industry
performers, solid and sizeable companies and a variety of
"niche" products to fill every client need.
2.

Current Situation

Fee-paid financial plans vary widely in price and quality and


depend most heavily on the individual developing the plan or
interpreting it. With regard to consumer expectations, the
marketplace is in disarray.
Company Approach
Fee-based plans in advance of product sales should become
simpler Due to tax reform. The majority of such plans were
originally purchased for tax planning which may no longer be
needed. Our emphasis will be on a business being revived by
tax reform - - Asset Management or Investment Monitoring.
With clients paying their taxes and investing for appreciation
rather than seeking shelters, this business is expected to boom.
We plan to have an in-house portfolio manager and market-timer.
We plan to charge clients an average of .75% for the service. As
planners gain assets under management, their annual income from
this source should alleviate pressure for new clients.
3.

Current Situation

Associated professionals such as attorneys, accountants,


bankers, and insurance and real estate agents seldom
cooperate to help clients attain their goals. The ultimate control
of the client's future business tends to become divided, making
people defensive and producing fear of exposure in the event
of error.
This often leads to professionals discrediting one another or
taking undue credit for advice leading clients to inaction.
Company Approach
In-house legal and real estate professionals will enable a planner
to get such services for his client without fear of losing the client
to outside interests. It will also help consreve revenue normally
spent for such services.
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1987 Documents on CD-ROM by AMG 1991


4.

Current Situation

Ongoing client service is a desire for most companies in our


marketplace. However, the constant pressure is applied to
planners to produce new clients and new sales as 90% of
earnings is still commission generated. The time required to
prospect and close new sales severely limits the necessary
servicing time.
Company Approach
Ongoing client service will be supplied through a semiannual
newsletter and semiannual client investment update delivered
alternately every three months. The costs of these services will
be borne by client-paid asset management fees, insurance
renewals and mutual fund trailing commissions. Although this
is an ambitious, high-tech undertaking, our basic inclination
remains toward personal client review sessions held on a regular
basis.
We also expect better crossover relationships and broadened
information base for both planners and specialists due to
common location.
Market Penetration Strategy
l. Existing Clients - - Planners and other professional joining
our group will have developed deep personal client relationships
which should allow new investment dollars to be handled by our
people. As follow-up systems are implemented we expect 65%
of all business to come from this source.
2. Seminar Presence - - We plan to present four seminars on
a joint basis with institutions such as colleges, charities,
business organizations and corporations. Our seminars include
"Successful Money Management"- - a soup-to-nuts on
investment products, "Half-Time" - - a life planning seminar,
"Charitable Giving" and Retirement Planning Seminars.
Currently our planners regularly appear at Millersville State
College, RCA, ALCOA, St. Joseph's Hospital and elswhere.
We also plan regular seminars for the general public.
3. Business and Retirement Markets - - These two markets will
be singled out for specific emphasis because of the vast
potential and strong need for planning among these groups.
Business benefit plans and specifically "cafeteria plans" will be
marketed. Retirement markets will be expanded primarily
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through increased seminar marketing.
Planner Support Services
It is our plan to provide necessary office and clerical support
services to help each Planner or affiliate conduct his or her
business.
We intend to limit our office to support services
and not to provide specific marketing services for individuals.
Our marketing efforts will be for the group at large, that is to
say that individual prospecting will be a personal expense borne
by the planner or advisor.
Inherent in our support services will be the following:
l}

Phone Handling - including the facility to forward other


business lines to our central system should a planner leave
the office.

2}

Repetitive Standard Correspondence - a sample of thank


you, referral appointment setting, data requests, and commonly
used review letters may be selected and generated. Personal
correspondence will not be handled by our staff, free of
charge.

3}

Business Processing - completed applications will be


checked, logged, copied and mailed by our cashiers.
Follow-up with broker/dealer or product sponsors will be
offered to premier producers only.

4}

Computer Services - financial plans and investment


monitoring services will be provided through data base entry.
Mass distribution and hard-copy plan generation will be done
on a piece by piece and percentage fee basis respectively.

5}

Professional Networking - our in-house affiliates in law,


accounting, tax, estate, real estate, mortgage brokerage,
portfolio management, life insurance and property/casualty
insurance stand ready to serve clients related financial
needs.

6}

Supply Stocking - prospectus, applications, trust


agreements and other forms needed to conduct business with
our major product suppliers will be maintained.

7}

Reference and Periodicals - professional journals and data


services meeting the common need of our advisors will be
purchased and will be maintained by our office staff.
Material unique to specialized areas will be provided by those
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1987 Documents on CD-ROM by AMG 1991


planners who work in those areas.
8}

Corporate Marketing - we will promote the name of our


firm along with all planner affiliates to gain public awareness
in excess of what any individual alone could achieve. We will
become the best known firm in Central Pennsylvania.

9}

Training and Education - Pooling our production will give


us additional clout with sponsors, industry trainers and those
wishing to address our membership. Cost should be lower
and quality higher. It is our plan to provide a constant flow of
information, new product profiles, and specialized planning
techniques.

10}

Gross Payout Negotiation - Size and strength of our group


should allow us to increase concessions made by sponsors
over amounts normally negotiable by individuals.

OUR STANDARDS FOR A GREAT COMPANY


Having well established business principles is critical to the
success Of any new Business. Only persistence, hard work
and sufficient capital can rival its importance. We feel the need
to state the basic values of this firm so that the basis for the
decision-making is well established and understood.
A great company..
l. Serves its customers well.
2. Treats people properly.
3. Operates on high principles.
4. Makes money regularly.
5. Guards the interests of stockholders and employees.
6. Knows its mission.
7. Knows its position in the marketplace.
8. Desires solid community and corporate citizenship.
9. Hires superior people and pays them well.
10. Will change course amidst changing times.
11. Has the vision to see opportunity.
l2. Retains entrepreneurial spirit.
l3. Has a bias for action (do it, try it, fix it).
l4. Is value driven.
l5. Regards people as its greatest asset.
16. Uses a lean staff, a simple form of management
l7. Pushes decision-making to the lowest level.
l8. Promotes deserving people, regardless of race, sex, or
religion.
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We hereby resolve to build such a company.
INITIAL CAPITALIZATION
Stock will be offered to the public at $5.00 per share until the
office opens on August 1, 1986. It is our plan to raise
$300,000 which will cover the start-up costs of furnishing the
office, capitalizing the Registered Investment Advisor and
Broker-Dealer, and funding any shortfall in operating revenues
for at least one year.
It is our intention to avoid borrowing monies if at all possible.
We believe that it is best to pay in advance and that a debt-free
status keeps monthly obligations to a minimum, thus reducing
business risk and increasing profitability. We are, likewise,
committed to low management incomes for all
principals/planners who will continue to generate personal
income from sales.
Our initial price will be discounted in order to recognize the
importance of several types of investors in our business. First,
investors who purchase in excess of 5,000 shares are
important because of our limit of 35 investors in the offering
each year.
Without sizeable investors, we will not be able to meet our
target of raising $300,000. Additionally, investors who will also
generate revenue for the business through financial services
marketing provide double value for our firm. Consequently,
we will offer shares at 3.50 to any major investor or producing
investor. If any investor proves to be both major and
producing, his price will be $2.50.
Our estimate of stock value, given recent takeover prices in the industry, would
place the
stock value at $5.60 after one year and $l0.67 after three years.
That price would be 3.5 times book value which increases with
each stock purchase. Purchases of some companies have
been based not on book value but rather on gross
commission income. The going price the last several years
has been a dollar for dollar price. Using that figure stock value
would be $l0.00 in one year, and $13.33 in three years.
Financial Service Corporation, a company reforming in l978,
is valued at $25 million dollars just eight years later. The
potential in this business is obvious, yet there are no
guarantees. This is a start-up business venture and suitable
only for long-term, equity investors.
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It is our plan to build aggressively in several areas, but to
concentrate in Pennsylvania. We see a special opportunity
with a three to five year window when banks will get into our
business through acquisitions as they continue to lose assets
through their limited banking functions. Should a great
opportunity to sell occur, we would consider it at that time.
Our continued personal planning business could give us the
luxury of cashing our investment and remaining in business.
However, it is much more likely that we will hold our
investments until retirement or pass it on to future
generations.
Our specific issue restricts sales to another party for one year
and also limits repurchases to intrastate parties.
FINANCIAL HIGHLIGHTS
* Actual Statistics as of May 30, 1987
1987
1988

1989

May '87

SALES (Millions)
CAPITAL

54 M

78.1 M

100 M

$80 M

Commissions
(GCI)

2.7 M

3.4 M

5.0 M

$3.5 M

Affiliate
Earnings

.3 M

.6 M

1.0 M

$.5 M

Total Gross
Revenues

3.0Z M

4.0 M

6.0 M

$4.0 M

Net Revenue
Less Commission

.76 M

1.01 M

1.52 M

$ N/A

Manpower
(Proffessionals)

37

43

50

48

Hires

10

12

14

14

Retention

90%

85%

85%

95%

Average Sales
(Per Professional)

$81,081

$107,500

$120,000 85 K

SALES FORCE

FINANCIALS (All Numbers in Millions of Dollars)


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1987 Documents on CD-ROM by AMG 1991


1987

1988

1989

MAY '87

Revenue

3.0

4.0

6.0

4.0 M

Net Revenue

.76

1.01

1.8

N/A

Retained
(Profits)

.21

.275

.501

N/A

Return on
Equity

70%

53.9 %

66.6 %

N/A

Capital Base

.300

.510

.785

N/A

Book Value
Begining of Year

.300

.480

.725

.300

Book Value
Per Share

1.60

1.81

3.05

4.00

Book Value
End of Year

.480

.725

1.526

N/A

Shares
Outstanding

300,000

Value/Share
(at 3.5 x book)

$5.60

Traditional
$10.00
(at 1 x Total Gross Revenue)

400,000

$6.34

$10.00

450,000 245 K

$10.67

$13.33

$14.00

$17.00

CONTINGENCY PLANS
The begining phase of most businesses phase is characterized
by erratic sales Trends, fluctuating market share, increasing
dependence on improving technological systems, and possible
cash flow losses.
We do not expect to face any of these problems because of
the established nature of the planners we are hiring. However,
we would be foolish to believe that we somehow were immune
from such potential problems and therefore need not to plan
for these eventualities.
Our very first need would be to raise capital through stock
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purchases beyond our initial capitalization requirements to the
extent of at least $100,000 to cover any initial shortfall in
revenue or budget projections.
This would protect us from going the way of most
undercapitalized businesses - - bankruptcy.
Secondly, we expect to invest heavily in state-of-the-ar
technological system so that we do not face new
hardware/software changes early in our business development.
Stan Caterbone will devote much of his management time to
this area.
Priority will be given to reviewing performance against
objectives on a monthly basis. All objectives will be
quantifiable and measuable, and as necessary adjustments
will be made and monitored accordingly.
Such scrutiny of performance will allow us to constantly assess
and respond to any possible shortcomings and to market
needs.
Our management is committed to deriving a large portion of its
personal income from serving clients as opposed to relying on
management income. This should preserve our cash flow and
insure its growth.
BIOGRAPHY OF STANLEY J. CATERBONE
Stanley J. Caterbone is currently proprietor of S. J. Caterbone
Associates, a Financial Planning Firm specializing in but not
limited to upper income individuals. He is also president and
founder of Pro Financial Group, LTD., a firm providing financial
services and contractual negotiations to Professional Athletes
and Agents.
Stan began his career with a financial subsidiary of American
Express, IDS Financial Services. He was hired by and worked
with Bob Kauffman for six months before Bob was promoted
to the Florida area.
Stan developed a practice centered around fee-based planning
that focused on the tax aspects and concerns of individuals
while they pertained to the clients investments and overall
financial situation. hile at IDS, Stan was one of the leading
planners in the nation to utilize fee based planning at its
inception. He was one of the top producers in central
Pennsylvania, and ranked number 5 in the nation in his class.
He also had closed one of the biggest estate planning cases
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in the division.
In January 1985, Stan left IDS and became independent to
provide a better Product line for his clients and to escape the
proprietary environment. He is very creative and has
developed a strong practice among physicians.
Stan has developed a variety of professional networks
throughout the country With regard to the various Sports
Professionals that he works with. He is currently working on
a joint venture with former Chief Financial Officer and Vice
President of Doubleday Publishing Company, Richard E.
Madigan. He is looking to Stan to help him manage an
annual income of $7 million from the 20 Professional Athletes
that he currently manages.
Stan has helped to develop the Central Pennsylvania Chapter
of the International Association of Financial Planning, and had
organized and attracted more than 100 persons to attend a
dinner meeting with Alexandria Armstrong, one of the more
prominent Financial Planners in the nation, who is currently
the National President of the IAFP. He is also a member of
the Estate Planning Council of the Institute of Certified
Financial Planners. Stan is currently a Certified Contract
Advisor of the National Football League Players Association
and the NBA. Stan will be an Executive Vice President
responsible for professional networking and marketing and
some of the fiscal and negotiating functions.
BIOGRAPHY OF ROBERT E. KAUFFMAN
Bob Kauffman is currently the National Sales Manager, at large,
for FSC Securities Corporation. FSC is a broker-dealer with a
l200 planner sales force. It raised over 600 million dollars of
investment capital in 1986. Bob's responsibilities include
developing a company-owned distribution system whereby
FSC products and services are delivered to the public-at-large
through FSC Financial Service Centers. Bob is also
responsible for recruiting proven financial planners throug
out the nation for Financial Service Corporation. He also
contributes to the strategic planning of sales for FSC Securities
Corporation..
Bob began his career with a financial subsidiary of the
American Express Corporation in 1976 upon his graduation
from Millersville State College in Millersville, Pennsylvania.
his four years of direct selling to the public, he became the
youngest person in the company to achieve multi-million dollar
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production status at the age of 25. Bob then began to take
on additional associates as he began to build his practice
in Lancaster, Pennsylvania. In just two years, his practice had
grown to l2 representatives handling over $l2 million dollars a
year in annual investments and managing in excess of $60
million dollars of client monies. While building this operation,
Bob continued to be the leading producer in his office and the
region.
Bob was then promoted to division manager of the West
Coast. In that position, He tripled the size of the sales force
and increased volume over 500% in a period of 2 years. His
division of American Express handled over $l00 million dollars
of investor monies.
Bob was then asked to take over the largest operation in the
southeast, located in Atlanta in l984. With over 60 financial
planners, handling an excess of $200 million dollars of
investor's monies, Bob again moved his territory into the top
echelon of the company.
With FSC since l985, Bob has opened the first three
company-owned offices and now supervises an excess of 75
employees. His operations now rank 4th in all FSC related
planning operations. Bob brings to Financial Management
Group, Inc. l0 years of experience in the financial
planning industry in both sales and sales management. He is
a member of the International Association of Financial Planners
and is in the process of completing the course work for
Certified Financial Planners designation. Bob is a frequent
speaker at both corporation and business financial planning
functions and has been quoted frequently in local and national
media publications. He continues to handle investments for
select clients.
Bob will serve as president, chairman of the board and will be
the largest stockholder. His experience in managing and
developing large financial service organizations will provide
the leadership and expertise necessary to insure the growth
we envision.
BIOGRAPHY OF MICHAEL M. HARTLETT, AFP
Mike Hartlett is currently an independent financial planner and
heads his own local firm - - Financial Planning Consultants.
Mike is a licensed securities principal and fully a licensed
securities broker. He has completed the Certified Financial
Planning program with the College for Financial Planning and
Page 17

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currently holds an Associate Financial Planner designation.
He will receive the Certified Financial Planner designation in
February 1987.
Mike began his Financial Planning career five years ago with
IDS a subsidiary of American Express. During his career with
IDS he was among the firm's top planners. He was on the
Presidents Advisory Council for IDS in 1985 and from a field
of over 5,200 IDS planners, finished among the top 66 financial
planners in the country. In 1983 and 1984 he was among the
top three in IRA/Qualified Plan Production. In September,
1985 he left IDS to form his own financial planning firm.
Mike has an extensive knowledge of corporate retirement plans
and pension programs and has excelled in retirement planning
for individuals. He conducts financial planning seminars in
several large Lancaster County corporations and is active in
promoting financial planning in Lancaster County.
Mike currently manages in excess of $14 million in client
assets. Mike is committed to delivering the highest quality
planning services to his clients. He believes that personal
attention and service are the key to a strong client/planner
relationship.
Mike will serve as Executive Vice President of Financial
Management Group, Ltd. He will be in charge of operations
and serve as chief financial officer.
FINANCIAL MANAGEMENT GROUP, LTD. (Exhibit A)
Financial Securities, Inc. ................The Broker Dealer
FMG Advisory, Inc. ........................The Registered Investment
Advisor
Financial Services Insurance Agency .......The Insurance Agency
FMG Accounting Services, Inc. .............The Accounting Firm
Financial Mortgages Services, Inc. ........The Mortgage Broker
Wealth Management Services, Inc. ..........The Portfolio
Manager & Market Timer
Financial Planning Consultants, Inc. ......The Financial Planning
Firm
AFFILIATE FIRMS (In House)
Berger Real Estate ........................Real Estate Services
O'Day & Smith .............................Legal Counsel for Business
& Real Estate
Shirk, Reist, Wagenseller & Shirk .........Legal Counsel for
Page 18

1987 Documents on CD-ROM by AMG 1991


Estate Planning
Lovell Associates, Inc. ...................Property & Casualty
Services
Pro Financial Group, Inc. .................Services for Professional
Athletes
* Please note that the above firms are currently under
negotiations and have given verbal commitment for affiliation.
****************************************************************
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TI=\FMG, Ltd., RULE 144, REG D DRAFT OFFERING
IM= 010P01.CPR
DA= July 31, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES 3
SU= SUMMARY: Correspondence from Jeff Jamouneau of McNeese,
Wallace, and Nurick, in regards to the requirments and advice
to Stan Caterbone with regards to his efforts of
writing the Offering Memorandum for Financial Management
Group, Ltd., to raise the initial capital by way of a
Regulation D, Rule 144, Private Placement Offering,
registered with the Pennsylvanial Securities and
Exchange Commission.
IM= 010P02.CPR
DI= PAGE 2
IM= 010P03.CPR
DI= PAGE 3
********************************************************************
TI=\FORM D REG 144 CORRESPONDENCE
IM= 011P01.CPR
DA= August 7, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Letter from Jeff Jamouneau to Stan Caterbone
regarding filing procedures for the FMG Ltd, Regulation D, Rule
144 Offering Memorandum, filed with the Pennsylvania
Securities Commission.
IM= 011P02.CPR
DI= PAGE 2
********************************************************************
TI=\SALE OF FMG, Ltd,. STOCK
IM= 012P01.CPR
DA= August 11, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Letter from Jeff Jamnouneau to Stan Caterbone
addressing the requirements for the actual sale of the FMG, Ltd,.
stock pursuant to Section 203(d) of the Pennsylvania
Securities Act of 1972 with respect to the Pennsylvania
Securities Commission.
IM= 012P02.CPR
DI= PAGE 02
****************************************************************
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TI=\OFFERING MEMORANDUM LEGAL DOCS (PA SEC)
IM= 013P01.CPR
DA= August 19, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Stan Caterbone to Joseph Lyden, of the
Pennsylvania Securities and Exchange Commission.
****************************************************************
TI=\LEGAL FEES FOR FMG, Ltd., FORMATION
IM= 014P01.CPR
DA= August 22, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/07/08
PA= PAGES:
1
SU= SUMMARY: Letter for the legal fees for the set up and
formulation of FMG, Ltd., to Stan Caterbone from Tim Lanza, of
O'Day and Smith, of Lancaster PA. Invoice also includes fees
for the formation of all subsidiaries.
****************************************************************
TI=\FMG Ltd., REGISTRATION WITH PA SEC
IM= 015P01.CPR
DA= August 25, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter to the Commonwealth of PA, Department of
State Corporation Bureau from attorney Tim Lanza for the
registration of FMG Securities, Inc.
***************************************************************
TI=\INVOICES FOR LEGAL FEES FOR FMG FORMATION
IM= 016P01.CPR
DA= August 22, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Invoice for the legal fees for the formation of FMG
Ltd., and its subsidiaries.
***************************************************************
TI=\FMG, Ltd., IRS EMPLOYER ID WITH PENNSYLVANIA
IM= 017P01.CPR
DA= August 25, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
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SU= SUMMARY: Copy of the application for Employer Identification
Number to the Internal Revenue Service, from attorney
Tim Lanza.
***************************************************************
TI=\REGISTERATION FOR FMG Ltd., OFFERING MEMORANDUM
IM= 018P01.CPR
DA= August 29, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
8
SU= SUMMARY: The final Subscription Agreement prepared by Stan
Caterbone with the counsel of Jeff Jamouneau of McNeese
Wallace & Nurick, of Harrisburg. Stan Caterbone prepared
the Offering Memorandum and the Subscription Agreement
with Jeff Jamouneau acting as advisor.
IM= 018P02.CPR
DI= PAGE 2
IM= 018P03.CPR
DI= PAGE 3
IM= 018P04.CPR
DI= PAGE 4
IM= 018P05.CPR
DI= PAGE 5
IM= 018P06.CPR
DI= PAGE 6
IM= 018P07.CPR
DI= PAGE 7
IM= 018P08.CPR
DI= PAGE 8
***************************************************************
TI=\FMG OFFERING MEMORANDUM LEGAL CORRESPONDENCE
IM= 019P01.CPR
DA= August 29, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from attorney Jeff Jamouneau to Stan
Caterbone enclosing the Subscription Agreement for the Offering
Memorandum of FMG Ltd.,.
***************************************************************
TI=\LANCASTER COUNTY BAR ASSOCIATION REPLY
IM= 020P01.CPR
DA= September 19, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
Page 22

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PA= PAGES:

SU= SUMMARY: This letter is the reply of the Lancaster Bar


Association as to the question of ethics if the law firm of
Shirk, Reist, Wagenseller and Shirk would formally
associate with FMG, Ltd.,. Kenelm L. Shirk, Jr., was business
associate of Stan Caterbone's whom he often would confide
business matters especially the start up of FMG, Ltd.,
IM= 020P02.CPR
DI= PAGE 2
IM= 020P03.CPR
DI= PAGE 3
IM= 020P04.CPR
DI= PAGE 4
***************************************************************
TI=\FSC COMPUTERS REQUESTS
IM= 021P01.CPR
DA= November 21, 1986
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1
SU= SUMMARY: Letter requesting the return of computers that were
originally in the FSC broker dealer deal.
***************************************************************
TI=\FISCHER LICENSE REQUEST
IM= 022P01.CPR
DA= April 29, 1987
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1
SU= SUMMARY: Letter to Hibbard Brown regarding licensing
arrangement from Fred Fischer, a FMG, Ltd., recruit of Stan
Caterbone
***************************************************************
TI=\TUCKER RIA LETTER
IM= 022P01.CPR
DA= December 31, 1986
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1
SU= SUMMARY: Letter to Thomas Tucker regarding the operations
of the Registered Investment Advisor.
***************************************************************
TI=\JOB DESCRIPTION FOR FMG, Ltd.,
Page 23

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023P01.CPR
December 4, 1986
CORRESPONDING AUDIO TRACKS:
PAGES:
1

SU= SUMMARY: Job Description of Stan Caterbone, written by Robert


Kauffman.
***************************************************************
TI=\BRAVERO LETTER
IM= 024P01.CPR
DA= January 5, 1987
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1
SU= SUMMARY: Letter to Stan Caterbone from Jerry Braver, one of
the Sattelite Offices. Letter discuss computer technologies.
***************************************************************
TI=\UMIKER WILL
IM= 025P01.CPR
DA= January 8, 1987
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from Dore Valvanes,
discussing certain strategies for the Estate Planning of Dr. William
Umiker, of which Stan Caterbone has been providing
Financial Advisory services for the past 2 years.
Dr. Umiker was the mentor for Stan Caterbone, and Stan
Caterbone was named the Tustee for his Estate, valued in
$ millions.
IM= 025P02.CPR
DI= PAGE 2
***************************************************************
TI=\FMG ADVISORY RIA
IM= 026P01.CPR
DA= January 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Letter from Pual Schwartz, Acting Director, Division
of Licensing, PENNSYLVANIA SECURITIES COMMISSION. The
letter discusses the status with the applaction of
FMG Advisory, Inc., for status of a Registered
Investment Advisor.
IM= 026P02.CPR
Page 24

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DI= PAGE 2
***************************************************************
TI=\ROYER LETTER OF INTENT
IM= 027P01.CPR
DA= January 14, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Carolyn Royer to the principals, Hartlett,
Kauffman, and Caterbone. This letter was intended to
provide motivation for Kauffman and Hartlett to comit
to compensation and a position in the brokerage
department. Caroly Royer went throuth the difficult task
of passing the test for the Series #24 license, inwhich
a position and salary would follow. Of course they
lied. Carolyn Royer resigned several weeks later.
***************************************************************
TI=\SERIES #24 EXAMINATION REPORT OF C. ROYER
IM= 028P01.CPR
DA= January 15, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Carolyn Royer's Series #24 Examination Score
Report.
***************************************************************
TI=\INSTITUTIONAL INVESTORS SOLICITATION
IM= 029P01.CPR
DA= January 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from Al Dannatt, of
Institutionl Investors, of Houston TX, requesting to form a formal
business relationship for the mortgage banking business.
All Dannatt had provided a portfolio of residential,
commercial, industrial, nursing home, minihouses, hotels,
mobile home parks and ACLF facilities. The mortgage
packages ranged from $3 million to $500 million is size,
and were as much and even more competive with at least
Famrmers First Bank, Fulton Bank, and Commonwealt Bank.
IM= 28.CPR
PAGE 2
***************************************************************
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1987 Documents on CD-ROM by AMG 1991


TI=\INSTITUTIONAL INVESTORS' LOAN PORTFOLIO
IM= 030P01.CPR
DA= January 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/07/08
PA= PAGES:
1
SU= SUMMARY: Loan Portfolio and Current Rate Quotes to Stan
Caterbone from Al Dannatt of Institutional Investors. Rates were
more competative than most local lending institutions as
well as the lending limits.
***************************************************************
TI=\HIBBARD & BROWN COMPANY -- FMG, Ltd., ACQUISITION
IM= 031P01.CPR
DA= January 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter from Robert Kauffman to Peter Hibbard of the
Broker Dealer Hibbard Brown & Co., outlining the first
draft of a proposed merger and acquisition of FMG, Ltd.,
and Hibbard Brown & Company. "I have discussed our visit
with the other two partners and the initial reactions
have been favorable".
IM= 031P02.CPR
DI= PAGE 2
***************************************************************
TI=\FMG, Ltd., BOARD MINUTES OF 01/26/87
IM= 032P01.CPR
DA= January 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Board Meeting of January 26, 1987. The Board votes
to add 2 additional Board of Directors. Alan Loss and
Bob Long are selected.
IM= 032P02.CPR
ID= PAGE 2
***************************************************************
TI=\HIGH ASSOCIATES Ltd. REQUEST FOR FINANCING
IM= 033P01.CPR
DA= February 3, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: At the request of Bob Long, Stan Caterbone writes
Page 26

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to Tom Kyle, of High Associates, whom is a Board of
Director of American Helix, which Stan Caterbone is
partners in the "Digital" technoloyies industry. Tom
Kyle had requested information of financing capabilites.
High Associates is the largest real estate developer in
Lancaster County.
***************************************************************
TI=\ROYER -- FMG, Ltd., CONFLICT
IM= 034P01.CPR
DA= February 5, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Continuing efforts by Carolyn Royer to only what she
was promised by Kauffman and Hartlett.
***************************************************************
TI=\FMG, Ltd., BOARD MINUTES OF 02/10/87
IM= 035P01.CPR
DA= February 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Robert Kauffman drafts a very "agressive" letter to
Carolyn Royer, and asks for input. Letter was
embarassing to Stan Caterbone.
FSC terminates contract with Kauffman. Kauffman had
been collecting compensation from both FMG, Ltd., and
FSC of Atlanta. Stan Caterbone had urged Kauffman to
communicate to FSC in as early as April of 1986, that
FMG, Ltd., would eventually terminate its Broker Dealer
contract with FSC. Kauffman never did in order for $$$.
IM= 035P02.CPR
DI= PAGE 2
************************************************************
TI=\SHENDEL REQUEST FOR FINANCING
IM= 036P01.CPR
DA= February 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter requesting financing for several projects.
Leonard Shendell is an investment banker, with several
different firms, located in Dressher PA. A few projects
were seriously considered. Esbestos contaminiation
had ruined one deal.
*************************************************************
Page 27

1987 Documents on CD-ROM by AMG 1991


TI=\FMG, Ltd., BOARD MINUTES OF 02/11/87
IM= 037P01.CPR
DA= February 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Mr. Peter Hibbard is introduced by Robert Kauffman
as a representative of Hibbard Brown, a broker dealer from
Washington, D.C. Kauffman aggressively pursues a merger
of FMG, Ltd., with Hibbard Brown. Stan Caterbone is
skeptical of the deal. After decisions are made to
accept deal, Stan Caterbone is dissatisfied with the
performace and administration, visits with Hibbard Brown
and demands the deal is rescinded. Stan Caterbone then
flies to Atlanta, to do a deal with Koegler Morgan.
IM= 037P02.CPR
DI= PAGE 2
************************************************************
TI=\FISHER/SPONOUGLE CO. REQUEST FOR FINANCING
IM= 038P01.CPR
DA= February 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Martin Sponaugle of Fisher, Sponaugle Investment
Group, which is the owner and landlord for 1755 Oregon Pike,
headquarters for FMG, Ltd.,. Marty Sponaugle had
requested finanacing for several projects.
************************************************************
TI=\BARRY SCHUTTLER RELIGIOUS ALLEGATIONS
IM= 039P01.CPR
DA= February 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Audrey, the administrative assistant for
Barry Schuttler, of Barry L. Schuttler Associates, a
sattelitte office of FMG, Ltd.,. Audrey will later disclose to Stan
Caterbone that Pete Hibbard is also a "Born Again" Christian, along
with To Turner, who as oprating the largest financial services district
for IDS/America Express, was reprimanded, and eventually left to join
FMG, Ltd. This information gave Stan Caterbone the real reason behind
the Hibbard Brown Deal.
************************************************************
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TI=\FMG, Ltd., ADVERTISEMENT IN LNP
IM= 040P01.CPR
DA= February 22, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Full page advertisement for the Lancaster New Era,
and the Lancaster Intelligencer Journal. Displays
portrait of FMG, Ltd., professionals.
************************************************************
TI=\FMG ADVISORY PA SEC RIA APP
IM= 041P01.CPR
DA= February 24, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
3
SU= SUMMARY: Letter from Paul Schwatz, Acting Director, Division
of Licensing of the Pennsylvania Securities Commission.
The letter acknowledges reciept of the application of
FMG Advisory, Inc. for the status of Registered
Investment Advisor, as submitted and prepared by Stan
Caterbone.
IM= 041P02.CPR
DI= PAGE 2
IM= 041P03.CPR
DI= PAGE 3
*****************************************************************
TI=\OWNEN KUGEL AND FBI INVESTIGATION
IM= 042P01.CPR
DA= February 24, 1987
AT= CORRESPONDING AUDIO TRACKS:
PA= PAGES:
1
SU= SUMMARY: Article in the Lancaster New Era regarding allegations
of improprieties of the business activities of Owen
Kugel Associates. None of the charges were substantiated
and there was question regarding the merits of any
investigations. FBI individuals have apparently been
reprimanded for starting the investigation.
The investigation eventually lead to a loss of investor
confidence in Kugel, which in turned financial troubles.
************************************************************
TI=\KUGEL FINANCE REQUEST
IM= 043P01.CPR
DA= March 2, 1987
Page 29

1987 Documents on CD-ROM by AMG 1991


AT= CORRESPONDING AUDIO TRACKS: 01/02/
PA= PAGES:
1
SU= SUMMARY: Letter from Owen Kugel to Stan Caterbone
requesting financing for several projects estimated at $10 million
in loan value. Owen Kugel was requesting both
debt and equity financing.
*************************************************************
TI=\FMG, Ltd., NEWS LETTER RE: TURNER
IM= 044P01.CPR
DA= March 24, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: FMG Newsletter that included Robert Kauffman
announcing that C.T. Turner (Tom) has joined FMG, Ltd., Tom Turner
operated one of the biggest branches for IDS/American
Express in Minneapolis MN. Tom Turner had legal problems
due to his religious overtones while conducting business.
Kuaffman also announces that FMG and Hibbard Brown & Co.
have reached agreement on the pending merger.
Coincidentely, Robert Kauffman, Peter Hibbard, and Tom
Turner are all professed "Born Again" Christians.
IM= 044P02.CPR
DI= PAGE 2
*****************************************************************
TI=\FMG, Ltd., BOARD MINUTES OF 03/26/87
IM= 045P01.CPR
DA= March 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
02
SU= SUMMARY: Board of Directors meeting discussing Hibbard
Brown deal. Board agrees to meet on a regular monthly basis
to facilitate the reorganization of FMG, Ltd.,. which
Kauffman pursued in order to get equity and control to
both Shcuttler, Hibbard, and Turner, his "Born Again"
accomplices. Meetings were scheduled with Jeff Jamouneau
by Stan Caterbone to discuss the reorganization.
IM= 045P02.CPR
DI= PAGE 2
************************************************************
TI=\FSC VS. KAUFFMAN CONFLICT
IM= 046P01.CPR
DA= March 26, 1987
Page 30

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AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Formal letter from John B. Keeble, of Financial
Service Corporation (FSC) citing the contractual
and fiduciary responsibilities of Robert Kauffman with
respect to the recent request to terminate the licensing
agreements of FMG, Ltd., and its registered
representatives and to transfer the respective license
agreements with Pete Hibbard's Hibbard Brown and Company.
FSC will take legal action against Kauffman and FMG, Ltd,
if not resolved by April 1st, 1987.
IM= 046P02.CPR
DI= PAGE 2
************************************************************
TI=\J. KEEBLE (FSC) LETTER TO ALL REPS
IM= 047P01.CPR
DA= March 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
01
SU= SUMMARY: A letter to all licensed representatives of FMG, Ltd.,
from John B. Keeble, Pres, Don Aultman, VP, and Steve
Franklin, VP of FSC, outlining legal implications of
Robert Kauffman's attempt at terminating his contract
and transferring all Registered Representatives Licensed
Agreements to Hibbard Brown, Broker Dealer. John Keeble
also enclosed the recent letter sent to Kuaffman with
regards to legal action, fiduciary responsibility, and
contractual obligations.
************************************************************
TI=\SEAPORT VILLAGE SYNOPSIS FOR POWER STATION
IM= 048P01.CPR
DA= March 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 06/
PA= PAGES:
1
SU= SUMMARY: A description of the proposed real estate project by
Tony Bongiovi and Bob Walters of Power Station Studios.
Tony had requested that Stan Caterbone consider
financing alternatives for the project, which included
the referbishment and development of an entertainment
pier along the Wildwood Boardwalk, in New Jersey.
************************************************************
TI=\KUAFFMAN LETTER TO REPS RE: FSC
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049P01.CPR
March 30, 1987
CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PAGES:
1

SU= SUMMARY: A letter from Robert Kauffman to all Licensed Reps


of FSC, and affiliated with FMG, defending the
allegations of John Keeble, and FSC, and alleviating
any uncertainties with regards to transferring to
Hibbard Brown and Company.
************************************************************
TI=\KUFFMAN LETTER TO J. KEEBLE OF FSC
IM= 050P01.CPR
DA= March 30, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Robert Kuaffman to John Keeble of
FSC, outlining his defense against FSC's legal action
concerning Robert Kauffman's contractual obligations and
his fiduciary responsiblities.
Robert Kuaffman urges that FSC restrain from any course
of legal action, because only legal representatives would
make money.
************************************************************
TI=\CLIENT COMPLAINT VS. BOB LONG
IM= 051P01.CPR
DA= April 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: A formal complaint lodged against Robert Long,
accountant and Board member of FMG, Ltd., by a dissatisfied client.
Bradley R. Singer of Conestoga Fuels complains about the
work performed by Robert Long, and alleges the
performance of FMG, Ltd., in delivering it's stated
products and services.
************************************************************
TI=\SONY STATISTICS
DA= April 14, 1987
AT= CORRESPONDING AUDIO TRACKS:01/02/03/04/05/06/07/08
SU= STATISTICS FOR SONY DEAL
Page 32

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Power Station
l.

Bon Jovi - Tony's creation


a.
b.

1% - $1 Million in l987 in Revenues

Format
Mixing

Sold 9 million albums in 6 months


2. Power Station - High Tech Award - Last 4 Years
Best in World By Peers!
3.

4 - 5 Grammys in 1987 Recorded there Steve Winwood

Others: Jagger,, B. Joel, Springsteen, Diana Ross, Madonna,


J. Lennon, on and on.
4.

Tony - Multi Track Recording


Defied Theory
Designed Sound - Voyeger
Produced Star Wars Album - Mixed

5.

II.

French Lick - MTV may sign


Free Promotion
Technology

1.

First Video, film, tv in digital.

2.

Kodak and Mitsubish - Not till end of Decade

3.

Dolby - Sony/PSDMS - $10,000 per license to any tv, film,


video, etc.,

4.

Only mix board that will mix albums/video's


Sell to all recording and film studios $300,000 - $500,000 per
console.

5.

Sony spends 9% of gross revenue on R & D


9% of billions

6.

All first for full entertainment

2 = $l80,000,000

Put Sony 5 years ahead of strategic plan


Disc players - Only 23% of consumers currently own a disc
player.
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First time to hear for how many?
III. Film/Video
l.

23,000 theaters to sell system

2.

First will sell movie and video


Add French Lick

3.

Top Gun - sold 9 million @ $30.00 - $60.00 per video


$270,000,000 +

4.

Horror International Film $20 - $60,000,000


Pay TV, Cable, TV -- ?

IV.

V.

VI.

Commercial - 180 Sec Commentary


Sony - $4,000,000 - $8,000,000 for commercial
Visa Demonstration $2 Million - $6 Million
Pepsi Paid $8,000,000 60 Second in front of "Top Gun" video.
Merchandise - Private Label
Power Station Beach Line
In movie, free by original designer and owner - "Hang Ten" swim
wear Power Station Electronics Line/Sony
Best recording in world - is it good?
Beach Accessories
Promotion in movie, video, TV
Sell all of above
Video - Mail Order, Stores
Sony
l.
a.
b.

Needs help
Low profits
Beta Bust

2.

Best name electronics Manufacture

3.

Film and video distribution (new)

4.
a.
b.
c.

Willing to work together


Share tech
Joint venture
Horizontal distribution

5.

Horror Elements and P/S name already international

Deal would involve:


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2.
3.
4.

1987 Documents on CD-ROM by AMG 1991


Retail electronics division
Professional electronic
Film distribution
Video distribution

Star Wars - "STAR WARS BY LUCASFILM, Ltd., -- $2 Billion in 10 years


30% - 50% = $600,000,000
Tony said 50/50
All costs - $4 Million
New - Film studio?/with Sony
Deal worth 100,000,000 Now??
Would Kodak or Mitsubish like deal?
Will Sony let this deal go to competition?
No - Beta BUST!
PERFECT ENDING:

Profits and Respect

Creation - 4/11/87
11:00 - 1:00 a.m.
Stan 98%
1% Scott - Call Ron Gell
Research Sony
1% Marcia - Sony give 4 million
Raise 15 Million
Call Head of video distribution
Merchandising - Hang Ten Off/Kodak
/Sony Difference test visa add in
**************************************************************
TI=\KAUFFMAN CONGRATS TO S. CATERBONE
IM= 052P01.CPR
DA= April 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/
PA= PAGES:
1
SU= SUMMARY: Congratulations letter from Robert Kauffman to Stan
Caterbone on his commissions of $86,466.11 for the
fiscal year ended March 30, 1987. FMG, Ltd, had
accumulated $815,000 om Gross Commission Income (GCI)
for the first quarter, which can be extrapolated to
approximately $3,260,000 in annualized commissions.
Historical statistics indicate that financial services
companies are often valued at One (1) times GCI or
$3,260,000 by Industry standards. This would value the
250,000 of stock at $13.00 per share.
************************************************************
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TI=\BOARD INVITATION TO SATTELITE DIRECTORS
IM= 053P01.CPR
DA= April 14, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Robert Kauffman to the Sattelite affiliates
of FMG, Ltd., inviting them to the Board of Directors
Meeting to be held at Dempsey's Restaurant, Lancaster, on
May 5, 1987. Agenda includes update of FMG, Ltd.,
Profit Participation Plan, Restructure of FMG, Ltd, to
include national expansion, and private syndications.
************************************************************
TI=\FMG ADVISORY BILLING
IM= 054P01.CPR
DA= April 21, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Memo to all affiliated persons of FMG, Ltd,. regarding
the billing procedures for the Registered Investment
Advisor, FMG Advisory, Inc., which Stan Caterbone is
President, and for FMG Accounting, of which Stan
Caterbone is responsible for the daily operations.
************************************************************
TI=\FMG, Ltd., NEWLETTER 04/14/87
IM= 055P01.CPR
DA= April 14, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
3
SU= SUMMARY: A FMG, Ltd, Newsletter to all affiliates of FMG, Ltd.,
Stan Caterbone updates his activities and the status
of the following: Insurance carriers and business;
Registered Investment Advisor, Retirement Planning
Computer Analysis; Bennet Williams Real Estate Project
and Syndication; Mortgage Banking Activities and the
Availability of Financing and Loan Packages with
a range of $3 million to $500 million and competive rates
IM= 055P02.CPR
DI= PAGE 2
IM= 055P03.CPR
DI= PAGE 3
************************************************************
TI=\FMG, Ltd.,

BOARD MINUTES OF 04/16/87


Page 36

IM=
DA=
AT=
PA=

1987 Documents on CD-ROM by AMG 1991


056P01.CPR
April 16, 1987
CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PAGES:
2

SU= SUMMARY: Board of Directors Meeting held at the offices of


McNeese, Wallace, & Nurick, Harrisburg PA. The agenda
was the restructure and reorganization of FMG, Ltd,.
with specific regards to Pete Hibbard, Barry Schuttler,
and Tom Turner ("BORN AGAIN").
Shareholder vote within next 30 days for the following:
Formation of FMG National Inc.,; Directors Liability;
Exemption of By Laws of Above; Closing Current Offering
Memorandum; a 5:1 Stock Split.
01
IM= 056P02.CPR
DI= PAGE 2
************************************************************
TI=\USEPPA PROJECT CORRESPONDENCE
IM= 058P01.CPR
DA= April 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04//07/08
PA= PAGES:
1
SU= SUMMARY: Letter from John Klemish regarding real estate
investment on Useppa Island, Pinnland, FL.
************************************************************
TI=\MAY 2, 1987 FMG, Ltd., MEMO TRANSCRIPT BY S. CATERBONE
DA= MAY 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
SU= {THE FOLLOWING IS THE AUTHENTIC TRANSCRIPT AS TRANSCRIPED
BY LYNN KREIDER OF FMG, Ltd., ON OR ABOUT MAY 10, 1987.}

The purpose of this document is to recollect all activities that I've


been involved within Financial Planning and the formation of Financial
Management Group, to verify and document some of the activities
that I've been involved in to date.
I'm afraid that as we go further and further there will be a need for
such information especially with what has happened this past week with
our corporate officers and board. First I would like to begin back in the
very beginning so that the full scope of our activities seem to fit into
one place and also so that some of the issues that have come up
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are tied into what has happened up to this point.
First of all, I started in the Financial Planning Industry back in 1982.
After getting out of the contracting business I took six weeks and
traveled across the country and came back and decided to get into
the financial services industry. Being that several relatives have had
dealings with IDS, Investors Diversified Services, I called the local
branch in Rohrerstown upon finding the manager named Robert
Kauffman. Bob spent some time with me, decided he wished to hire
me, and that began the process.
I was actually licensed in 1982 for securities and life and was put
under the management of Bob Kauffman. Shortly thereafter, I would say
probably in June or July, Bob was promoted and took a division in
Tampa, Florida. Myself and three or four other individuals who were
under management decided that we wanted to form a group
together so we talked to another district manager, Steven H. and decided
that, if he would allow, we would like to put an office together with him.
At this time we did not have an office and he was working out of a
small office in Millersville. The people who were with me was myself, Mike
Hartlett and Alan Loss.
The three of us were very, very large producers, especially Mike and
Alan. The three of us were probably larger than Steve's district at
that time, so at that point we located an office at 255 Butler Avenue, we
walked under Steven H. district which increased his income by at
least 30% to 40% upon that transaction.
After being involved in the business I decided that financial planning
should be more objective and fee based, so I became one of the
larger fee producers using fees as well as commission income. At about
the same time, I became involved in the International Association of
Financial Planners. At that time the local chapter was just being
formed and I volunteered my services to help on the board. Members of the
board, at that time, was just being formed and headed by John
Herr.
I became executive vice president and virtually helped run the
chapter and helped build it to its largest membership. That gave me the
opportunity to meet other people, broaden my horizons and
education as far as the financial planning industry and just
how the independent planners fit into the stream of the industry. I
had quite a bit of activity and did alot for the local chapter and became
very involved.
Over the next several years I made a very good living. I was never
a very big producer, although one of the bigger ones in the Harrisburg
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division. But I was not the biggest, but the premier fee producer for
the division and was one of the leading in the country at that time.
I shortly became knowledgeable of the other products available in
the financial services industry and learned very quickly that it was
virtually impossible to have one company manufacture and produce
competitive products across the line. At this time I was setting up
a dinner meeting for the IFP that was going to showcase Alexandra
Armstrong who was one of the premier planners in the country. She
was very visible and very widely known.
I set up a dinner meeting for her which attracted close of one
hundred professionals and other people to attend. This was four or five times
larger that any other meeting the chapter had ever had. After the
meeting I was involved in a discussion with Alex regarding the
financial planning industry and my aspirations of what was outside of a
propriety environment. I told her that I was thinking of making a move and
asked her if she had any suggestions of who to speak to. At this point in
time, we were all in Butler Avenue and Bob Kauffman was in
Georgia, running a division of IDS back there. He, at this time, had become
one of the largest divisional managers and had shown very high
productive recruiting skills. He was running one the largest shops in the
South
East and was becoming very profitable for IDS.
Alex suggested that I call a gentlemen by the name of John Keeble
who was then president of Financial Services Corp. a broker/dealer
based in Atlanta, Georgia. At this time Bob Kauffman was probably, as
unfamiliar if not more unfamiliar, of the independent environment
available to the Financial Services Industry. Specifically Financial
Planners.
I phoned Bob and told him that I was going to look and see what
else was "out there." Before this time, a couple months prior, I attended
a career conference in Florida with IDS. At one point I was in a room
with Bob Kauffman and Tom Turner, who was the biggest
divisional manager at this time with IDS. I began to discuss my
dissatisfaction with the company and the way that they operate and
I suggested to them that it probably would not be too difficult to
duplicate an organization instead of being built around a proprietary
system built solely around a non-proprietary product. At the time they
both looked at me and I don't remember if they laughed, but the idea
really didn't really interest them, and it just rolled off their shoulders.
Right after this meeting is when I had the dinner meeting with Alex and I
set up the meeting in Atlanta. As I usually did, I always looked at Bob
Kauffman as my mentor.
He virtually took me off the streets and showed me a way to
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produce money in a way that I never dreamed I could produce. I always
respected Bob as a very good salesman, seeming to have a very
high financial intellect and I looked up to him as he taught me alot. So
I got on the phone and told him I was going to visit an independent
planner in Atlanta. At this time, Bob was becoming dissatisfied with the
management of IDS and was not very happy with the way they were
using him to build areas. When the areas would become profitable
to him they would move him to another distressed area to be built up.
So he was doing all the work and IDS was making all the money
because they would put in a manager for less money and so on and
so forth.
Bob then told me that he may be willing to go into the meeting with
me under the assumption that I did not tell them who he was or who he
was with. I called John Keeble and told him I wanted to come down
and visit him, being referred by Alex and he was very nice over the
phone, giving me a cordial invitation to come down and actually had
me set up the meeting with Ray Smith who was one of the sales
managers. I set up a two day meeting with myself and this
anonymous person, Bob Kauffman. We spent two days at FSC and what
essentially happened is that they became infatuated with Bob's recruiting
skills. On the spot they offered Bob a position within the company as far
as recruiting and head of sales management of FSC.
I resigned from
IDS January 1985. Bob remained at IDS and from October to March was
negotiating his position and pay and his compensation with FSC.
By March he actually decided to resign from IDS and he was absorbed
into the corporate structure of FSC. January 1st I resigned from IDS.
I was upstairs with Mike Hartlett, sharing an office space
and the rest of district with Alan Loss was still downstairs.
At this time, I began to build my independent practice of Financial
Planning. Basically I took 95% of my clients from IDS and began
working with them. Bob began working in the national recruiting for
FSC and started attracting IDS people to FSC.
By the Fall of 1985 I had became disappointed with my business life,
not learning enough, lonely being independent and I became
frustrated. I knew that no one in Lancaster was doing a very high quality
service regarding Financial Planning and Financial Services. To me,
Lancaster seemed to be a highly attractive market with alot of wealth
being spread out among alot of different players. No one was being
creative regarding their efforts it was just three or four brokerage
houses, insurance agents, banks and independent planners but no
one had a very strong position or dominance in the financial services
industry.
I visited with Bob Kauffman in the Fall of 1985 as I usually did every
couple months and told him I wished to do something else. At that
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time he asked me if I wanted to come down to Atlanta and help him
work on the concept of company owned shops. When I was down
there, he mentioned several positions in the corporation that I may
be interested in and he set up a meeting with me and Steve Franklin.
Steve apparently needed someone to manage his national sales
office so being down there I spoke to him, just to verify what was
available.
At this meeting, Steve Franklin more of less indicated that I was a
"burned out salesman" who was just looking for a place to go.
Nothing ever happened and I left the meeting with very little respect for
Steve Franklin.
Bob offered me a position within his company owned store, writing
cases doing plans, doing some other things. That was early
October. For the next three or four weeks I prepared myself, reluctantly, for
the transition and moved to Atlanta and tried to maintain clients up here
as well, and pursue whatever Bob was doing down in Atlanta. As
time went on I felt I really didn't wish to move away from the area and
that maybe the opportunity down there wasn't what I thought it was, or
wasn't what Bob said it was.
On November 27 or 28 of 1985, I had a meeting with Bob Kauffman and
Mike Hartlett at Morton's Restaurant on the Rohrerstown Road,
Lancaster, PA. The purpose of the meeting was to find out if we
could collectively put together something in Lancaster with regards to
financial planning. I would say that meeting was more of an effort on
my part than anyone especially Mike Hartlett. Mike was, at this time,
also independent, left IDS and followed me to FSC along with Bob.
The meeting was on the morning at 9:00 a.m. and we discussed
what options we had as far as putting something together in
Lancaster.
I guess the basic reason for the meeting was to see if Mike Hartlett
wished to do something together with us. At this time I was
operating my practice, Mike was operating his practice, and the only thing
we had in common was a reception room adjoining our offices. At
this time Bob saw that if we could put something together in Lancaster
he could probably fulfill some of his recruiting requirements, giving him
a place to actually recruit people to rather than using FSC in Atlanta.
So that began the process of putting together a shop in Lancaster
and Central PA. I began to recruit from that point forward into our so called
planning
firm. At this time the planning firm was going to be comprised of
financial planners. Some of the first people that
I talked to was Mona Rishel, Dick Sherbahn, and Bob Long. I spoke
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to other planners about joining our firm and then I got the idea of
adding other professionals mainly legal, accounting,
real estate and maybe insurance. It was then that I got the idea for
the one stop financial firm. To me it seemed apparent that it was
important to have all the individuals working together collectively to manage
one financial affairs. It didn't seem that difficult to accomplish that if you
had the right individuals willing to take the risk of attempting such a
project and who had the clientele where they didn't have to rely on
attracting new clientele.
Well, one thing led to another and we soon began to recruit and
attract new and sizable group of individuals. I probably was responsible for
recruiting 90% of the local people and outside people, Mike was
working with Rick Volpe in Philadelphia who he worked with at IDS,
and a host of others. The initial core was myself, Mike, Mona, Dick
Sherbahn. At this time I ran into Scott Robertson at the Three Mile
House who was working with Asset Management. I expressed the
idea to him and he became interested and became one of our
people. I also talked to Carolyn Royer who was with Pru Bache and
she was interested in joining. By February we had a fairly large
group of people who were willing to commit. First thing we had to do was
find facilities and Mike found the place available at the Oregon Pike
location which was just under construction. At first we were looking
for 2,000 square feet to house four or five individuals. At this time I
talked to Tim Lanza, people at -----------the legal firm, and Danny Berger as
far as doing something with real estate. It was supposed to be
an operation financed and supported by FSC. From December until
May FSC was promising fund to finance the operation. We needed
start up funds for furniture, computer systems, salaries for myself
and Mike for managing the operation. What happened during this time
was that FSC was constantly promising us financing and we had yet
to receive any actual money and the invoices submitted were never
paid by FSC.
Bob Kauffman was the liaison and apparently was being directed by
Steve Franklin and John Keeble. From what I have learned over the
past several years was that they never really intended to finance the
operation but they were stringing us along and using us to recruit
other people to the operation. After we recruited ten or more people
it became apparent that Mike or myself did not have the managing
skills required to manage such an operation. We also learned we lost
our financial backing, so we had to figure out what to do with
financing.
At this time we decided to raise the capital ourselves, finance the
operation ourselves with equity we raised through the planners. And
essentially we learned that no one in the industry, or very few
actually own their own business but are only a distribution for a financial
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product.
We all have seen broker/dealers being bought and sold for very
sizable amounts of money, usually in the vicinity of $l of equity for
$l of gross commission income. We began to see that we were seeing
anywhere from $l million of gross commission income per year with the
group that we had. In the group was Ken Ray and some very creative and
talented people.
Throughout our meetings and discussions which were very long,
durable and tiresome. From December to May I probably spent
every other evening with Bob in Atlanta trying to put this deal together.
Let me go over a couple of other things that had happened up to
that time that I'd like mentioned in this document, before I forget. Back
in the summer of l985, I was contacted by John Philips from Blue Ball
National Bank. Because of my visibility with the local chapter of the
IFP John wanted to call me and look at the options of Blue Ball
National Bank become involved in Financial Planning. John called a meeting
with me and I believe he was looking for someone to head a
Financial department with inside Blue Ball National Bank or contract
with someone outside. I had l-l/2 hour with John and his
subordinate, whom I can't remember his name, I believe it was Joe. He was the
vice president of the trust department, I believe. Anyway after the
meeting they did not have the faith or the confidence that I was the
right person or they didn't believe that this was really what they
wanted to do. But I have never heard from them since.
Fall of l985, before our initial meeting, after I decided that I was not
going g to relocate in Atlanta, I began to look for other options in
Lancaster. One of those were that a couple people put me in touch
with several banks. One was Joe S. with Commonwealth National
Bank and another was Meridian Bank. Both of those individuals
received phone calls from people I did business with stating that I was
looking for something and asking that they give me an interview. None of
them would even give me an interview. I received a letter from
Commonwealth stating that they had no positions open at this time,
but they would keep my name on file. From Meridian, I don't believe I
even received a letter.
This is one of the reasons that I don't have very much respect for
banks, or people who work in banks. I don't wish to dwell into this
subject, but because of several of these episodes I just don't have
much respect for bankers, or banks what so ever.
During this time that I was looking for something to do, I had a
meeting with Owen K. Owen K. was looking for someone to raise his equity
for his rehab projects and his syndications. I had one meeting with
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Owen and one with Ed Pontius and apparently they hired someone who
essentially what happened is that Owen ran into alot of trouble and
a few months ago I was given Owen's name and he wanted me to
raise both debt and equity for him. Whereas one year ago he wouldn't
even continue any conversations with me. I believe this gives you an
indication that a lot of the people in this community are very close
minded and narrow minded and unless you are a member of the
Country Club or the Hamilton Club, or unless you come from a
family of wealth, you don't receive very much attention or consideration
and you are really just another person on the street. Most of the people
in this community whom I am referring to do not have the business
savy to be able to detect opportunity when they see it.
I would like to talk about the division of labor between me, Mike and
Bob before I get to far into this. First of all, I was probably the
mediator or negotiator with putting the deal together. I was the middle man.
I was in touch with Bob and Mike and those two were not in very
close communication with each other. I was also giving Bob the
conceptional outline for the project and he was in Atlanta finding the
details, such as financial planning software. What I soon learned
was that because of Bob's management capabilities and because he has
been in management for so very long he really didn't have the
technological expertise about the business. His expertise came from
other people so it was always second and third hand and essentially
what happened with alot of the issues I had to go back and retrace
and research myself trying to get the accurate information as it was
second and third hand before it got to Bob Kauffman's hands.
The division of labor was that Bob was to be the president of the
organization - he was to be the manager. Mike was going to be the
chief financial officer, and help with a little recruiting and help with
the staff. I was going to help negotiate, recruit - I guess I was intended
to be alot of things. However, I can't remember precisely what at this
time, but I virtually had my hands in all area. One of the things that
I recognized early on was the necessity to have Bob Kauffman
actually come here and manage. When we started, Bob was supposed to
stay in Atlanta but when we started to get into substantial size, I would
not or could manage and I don't believe Mike could. The only way I
would do the deal is if Bob came up here and managed. Bob was going
to be president and in the negotiations it was very difficult because
both Bob and Mike didn't want the other getting more than
themselves.
I was always in the middle always giving more than getting and what
ended up is for Bob to come up here he had to have more; he had
to be president. With three people involved, I agreed on this because
to get three people to agree on issues is almost impossible. You need
one person to make decisions, and we decided to allow Bob to have
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this capability.
Bob was going to receive 60,000 shares, I was to receive 40,000 shares
and Mike was to receive 40,000. Also, Mike and I were to receive
$3,000 per month and Bob $5,000 per month. Bob and I had a deal
as I did not believe he should have more of the company than
I because I put it together. We had an agreement whereby I could
buy 10,000 shares of his 20,000 at anytime at cost so we would both
have 50,000 shares. I had papers drawn up to that, however, when we
began to have problems, I left things drop by the wayside.
Back in February 1986, I became good friends with Mary Lynn
DiPaolo, Kevin's sister and Mike's wife. We were always good friends, but
back then when Kevin left, we became very close because I spent alot of
time with them. Mary Lynn was at the time, 30 years old with three
children, and she was always very tied down with the kids, basically a
housewife. She never really had a job, never worked. It was hard
for her because most of her other friends were out working and had
careers. I asked her if she would like to help me out for a few hours
a week doing general clerical and typing. She was very excited. I
thought it was a chance for me to get some things done and I liked
Mary Lynn alot and we got along and I thought it was a chance for
me to get a few extra things done.
I took her on in February and before too long she was working 30
hours a week. She had a babysitter lined up for the kids, and it was
very encouraging for me to see her do this because it gave her the
confidence for the first time that she could do something other than
just have children. She was having a great time and I was having a
great time and we enjoyed working with each other. At that
time, Bob invited Mike and I down to the annual conference in
Tucson, Arizona and with the conference arrangements we were allowed to
take someone, such as your spouse. I asked Mary Lynn if she wanted to
go and I don't believe she was ever on a plane before and she
asked Mike and he said it would be good for her to meet some of these
people and get involved with a career. We ended up down at Tucson
and that was in April 2 and we spent four or five days there.
Upon meeting Bob I told him I was bringing Mary Lynn out and I
knew from the start that this was a sore spot. First of all she was
married and he couldn't understand what she was doing out there
with me. Second of all he didn't appreciate the whole situation when he
met her he said something to the effect that she looked very young.
After the second day we were all good friends and she was getting
along very well with Bob and Pam. In fact, Pam confided things in her
that I know Pam never told anyone. It looked as though they liked,
or at least pretended to like Mary Lynn and so anyway we all had a
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good time. Bob, myself, and Mike spent most of our time in individual
private meetings trying to put this deal together and work out the
details especially with FSC. I think it was back at this time we realized that
Bob was probably going to resign from management and commit and
come up to Lancaster. I think one of the reasons why Mary Lynn
and I became very close was that she reminded me so much of my
mother in the way that she handled her kids, family and I became
infatuated with that. I liked her alot. What happened was that Mike
and Bob resented the fact that we had so much fun while we
worked. We got work done, but we went out to lunch for an hour or
so and we really enjoyed things. To them that had no place in
business. For me, as long as I got my work done, I felt
better about my work and it worked out for the best. This was a
problem and will come up later.
During the Spring of 1986 when we were putting this together I had
the opportunity to move across the hall and get additional space from
another tenant. I was going to sub-let. I did this so it would give
Mike and I additional space and give operations more space so we could
get additional people before the people was done. I moved into 12 by
18 office with reception room and I had 3 or 4 additional offices.
Nancy was working for the tenant that I was subletting and she didn't
have a job and she asked me if there was anything she could do.
Mike wanted to hire her and I said let's just try it part time with no
commitments on either side to do anything permanent when we
move in and she began part time. So we now had Mary Lynn, Nancy and
Nancy A. That was the beginning of the staff problems. The staff
was always going to have staff problems in the beginning and I can't
exaggerate the problems that we had. We had so many different
personalities, three different principals, trying to give their input. So
far as the staff was concerned, mine never counted at all. Its funny,
they always considered my input for everything else, but when it came to
staff - no way, hands off. I resented this because first
of all I brought Mary Lynn in and second of all I think I had a better
vision as far as the people than Mike did and that will come out in the
future.
Mike wanted to hire Nancy M. as office manager and I didn't think she
had the qualities to do such a job and I wanted them to interview
Barbara Kinzer. Barbara was a teacher of mine back in high school,
teaching business, typing, clerical, later going on to work at Watt
and Shand in employee benefits. So it just seemed to be that she had
some of the qualities necessary to do a good job. They interviewed
her and they didn't like her because I brought her to the table. They
ended up employing Nancy as office manager. That is going to
have alot of problems.
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I believe Nancy could have been a good employee in the right
situation, but they apparently didn't see what they should have - that they
weren't organized enough to have an office manager. I suggested early on
that we not have one and that Mike do it himself rather than us
having an additional layer, not necessary. As far as the staff are concerned,
I wish to finish up the story on the staff all at one time.
It was understood that none of us were to have our own personal
secretaries which meant Mary Lynn was not going to work for me
and Nancy A. was not going to work for Mike. I didn't agree with that,
but they were dead set against having Mary Lynn involved. Part of this
was because Mary Lynn meant so much to me and they saw that as
competition in a certain way. Mary Lynn's personality is very
outgoing, a very verbal type person who is very personable and they didn't
like that.
It was to be understood that we were not to have our own girls.
We moved into the building, they would not allow Mary Lynn to be
back in my section, however, Nancy A.'s desk was right smack up
against Mike's door. This started all the problems with Mary Lynn.
She saw that and she wished to work for me, and they were not
tremendous impact on the relationship between me, Mike and Bob.
This was the straw that broke the camels back as far as our
relationship was concerned. Ever since that happened we stopped
communicating.
That was the first move in trying to rescind my input and my control
so far as the company was concerned. As far as the staff was
concerned they had a feeling that the staff should be treated as dirt and made
this understood many times to me - this is against all my philosophy of
life.
For months, because of this attitude, there were problems with the
staff. It was because of this that the staff didn't respect them, and
it was just a mess for months.
During June, July and August, Bob was still down in Atlanta and I
was doing most of the work in Lancaster. From January until January I
took one day off for Memorial Day, one day for July 4th, one day for
Labor Day and one day for Thanksgiving. Mike Hartlett took off two of
three weeks, leaving me to tend the shop. I was always the one doing
all the work, recruiting, stock offering,labor matters, drew up all the
contracts, drew up the offering memorandum with the help of the
attorney. It was funny that I was the only one raising the money probably 80% of the funds. I was the only one of the principals who
had outsiders investing in the company. The most they did; Bob
Kauffman raised $5,000 from his father in law, so not only did I put
my own money in I risked that of my clients. But they were willing to
accept that up front. A couple times it came down to either me
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getting the money from my clients or us not having the financial ability to
pay off some of the capital resources that we had.
During September we began to have problems with Mary Lynn and the
staff and me. This was the beginning of them trying to reduce and
dilute my control of the company as far as input was concerned. It
was a very emotional and draining experience after all the work I did to
put this all together to find those two were trying to push me out. It
reached the point in October or November where they actually asked
me if I wanted to "get out." They indicated that I was not right for
management, management was not right for me, that I wasn't having
fun and all this and that. Most of that was due to their action as far
as their trying to dilute me and weaken my confidence. They
constantly made fun of me in front of all the other planners at meetings and it
was just ugly.
They also tried to interrupt my relationship with Mary Lynn
which was nothing more than a very personal, deep friendship.
No one knows this, but the trauma was so heavy that I went under
the care of a psychologist at St. Joseph Hospital, beginning November
and I was suffering a severe case of depression.
Because of
schizophrenia being found in my family, I was not afraid to go seek
psychological
counseling. I was on medication for three months. In September
they had it in their minds that they were going to get rid of Mary Lynn.
And they tried every opportunity, finally in November a week before
Thanksgiving, they fired Mary Lynn. Without cause, for no reason,
other than they just wanted her out and felt she was incapable of
whatever.
It actually reached the point where Bob and Mike went around
politicking the brokers to support them that Mary Lynn was not
doing her job which was not true. She had the complete support of all the
brokers. Maybe at times there was a case where someone was
unhappy with her performance, but in general it was a ploy, a plot,
fabricated by Mike and Bob.
After their attempt to buy me out and get rid of me so far as my
control and my interest, I held out reluctantly often times wondering if I
were going to give in and by Christmas I decided I would stick it out.
There were not other alternatives, but the money they offered me to get
out was $2,50 a share which comes out to $100,0000. I wanted no parts
of it, so by January I decided to stay.
Bob had
worried
slack.
beating

several conversations with Bob Long saying that he was


about my entrepreneurial efforts and that I was becoming
The whole reason was that they were hammering me down and
me up in every way they could, destroying my confidence.
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spent time and effort and I believed in so much of what I'd done,
they were trying to take this away from me and get me out of the
picture.

and

Through November and December there were meetings between


myself, Scott Robertson, Alan Loss, Bob Long and Carolyn Royer
regarding the activities and the management styles of Mike and Bob.
They were very concerned, were not very trusting and I was always in
the middle between the management and financial planners. I had
relationships with everyone and I believe that this threatened Bob
and Mike and they tried to get me out of the picture, but the planners
would not allow this because the planners did not trust Bob and Mike
without having me to keep them on balance.
I raised most of the money, recruited most of the people, put the
offering memorandum together, put the computer system together,
worked with all the computer software, and actually came up with the
name Financial Management Group and the idea of having all the
subsidiaries doing different things. My involvement was very deep,
probably deeper than anyone in the organization.
When I was putting all this together, I was in Texas with Al Dannat. I
talked about having mortgage, banking a part of what I was doing.
Nothing ever happened between the two of us, but in January I
received a call from Al asking me to see if I could place any mortgages in the
east coast. He was willing to pay me roughly one half a point and
this was at a time, because of the activities of Bob and Mike, that I
thought I would give this a try to give me some security. Should something
fail in the company, I would have something to fall back on.
I involved Scott Robertson and Bob Long and I told them we would
form a three way partnership and we would work on a real estate
project on our own. The reason I told no one about this was that this was my
ace card
in case Bob and Mike ever really threw me out. I was not going to give
them any relationships, and I just needed some security.
What we were really doing was looking for loans of 2 million dollars
and up to refinance or finance new and existing real estate projects.
We made a few calls, finding that our rates are very competitive. Al
was more of less letting me get plugged into the major Savings and
Loans and Insurance companies. We found out there were very few people
in the area, if any at all who could acquire the terms. We began
having a great deal of success and what we found was that almost
everyone was allowing us to bid on their project. We created a company
called Creative Finance Company so that we would not expose FMG to any
liabilities as far as our activities. We agreed from the beginning that
FMG would receive a percentage of our activities and we figured
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15% was fair since we actually manufactured the product where FMG
when out and used other manufactured products. We didn't feel they were
entitled to a 20 - 30% split.
One of our contracts was with Tony Bongoivi in New York. He at one
time dated Scott's sister approximately ten years ago. Scott
maintained a loose relationship with Tony, calling him once in a while regarding
business matters and business activities. Scott called Tony one day
about a real estate project that he thought ---------------------. Tony
said no, but he may have another project that we would be interested
in. Scott asked me to go up to New York with him to talk about the
project and I asked what it was. He indicated it was a movie. I was
very reluctant and hesitant to do this because movies to me, tax
shelters, scams, not very economic type investment. Me being very
conservative was not attracted, but I decided to go anyway just to
get out of town, more or less just to get away.
When I got up there I was totally amazed at the caliber and the
people who we were associating with. What I found out was that we were
working with the leading recording studio in the world. There
credentials, their accomplishments were phenomenal- they were just it.
I'm not going to spend alot of time of this because just the bottom
line is what is important here. After seeing the project when I looked at
what Tony was doing, and from a business perspective there were
just so many elements in this project that were just truly amazing to me
so far as distribution and marketing and risk and everything else.
Bottom line was a product that was worth 15 to 20 million dollars being
made for 4 million with the ability to be one of the leading movie, video
projects of the years.
First of all you have the leading recording studio in the world working
on the sound for the project that was going to include a follow up of
Tony's previous band who was Bon Jovi who was already one of the
hottest thing in music as far as album sales. Then you have the fact
that he was going to digitize the recording which was never done
before in the movie industry at a time when the video market is just going
bananas. Not only that, but the label that signed the band owns
MTV.
You put all this together and you've got a phenomenal business with
alot of opportunity.
Seeing this, I committed myself to the project not knowing who,
where or how we were going to raise 4 million dollars but I believed in the
project so much. I guess because I saw alot of the same elements
used in FMG in this project, and even more. I got instincts when I
raised money for FMG I was still very concerned with the risk
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elements to my investors but when I looked at this project the risk was even
less. Less risk, more protection with this project so I believed in this
project.
We spent seven or eight weeks developing the packaging the product
for the investors, things have happened during that time that fell into
place perfectly - the article in Rolling Stone, the marketing. It is May
4th at 4:30 a.m. and there is no doubt in my mind with the articles
in Rolling Stone that we have the money for the movie. That project
in itself will probably put us in the forefront of the entertainment industry
within eight weeks. It is mind boggling as far as what can come of
this, but the project is done, we did something, we did not use FMG, they
will receive no split. I guess what I'm saying is that because of the
way Bob and Mike treated me or pushed me to go out and do
things, that did not involve FMG and I did not feel that they did not deserve
to become a part of these things. From the beginning I knew FMG was
going to get their piece.
Let me go back to an earlier development concerning the
Broker/Dealer. We of course thought in the beginning that we would
become our own broker/dealer. However, after long, hard
discussion, we were to the point of getting a license for broker/dealer, we
decided we did not have the administrative capacity to fulfill what we would
need to accomplish the broker/dealer. Back in November, December,
Bob started soliciting other broker/dealer, looking for three things;
service, high pay out, and equity. We knew that we had to own our
broker/dealer business. There were two players that we came across
one was Hibbard- Brown out of Washington DC and the other was
Financial Planners Group which really involves some of the premier
financial planners of the country, Bill Keogler, Wayne Webster, so on
and so forth.
The Keogler group was strong, large, young and they were doing
roughly 20 million dollars of gross commission income per year but
there were some people in the organization we did not feel
comfortable with. Hibbard Brown was a new start up, starting up when we did,
was a split from a previous broker/dealer in D.C., that involved from a
syndicator to a broker/dealer that no one knew anything about.
However, they really enticed us with a very attractive equity deal.
Bob maintained most of the communications and most of the research
involved in this project. It was brought to us in January which was
roughly 20% of their stock with 90% payout , territorial with override
for anything that we did.
One of the things I thought should be done is that someone should
be down there looking at their trading department, along with the
capability of FSC. I tried to get people down there several times and I
suggested Carolyn Royer because of what had happened to her. Finally Peter
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Poneros and Ken Ray went down, and this was probably during March.
Anyway, this whole thing was done with very little communication as far
as me, Bob and Mike. More of less, Bob would go out and do
something and would feed back to us, but we really had very little
involvement with what we intended to do with Hibbard Brown. One
thing Bob indicated was that if we went down to Hibbard Brown we
would not find much, they were just starting up, they were new, they
had roughly 10,000 sq. foot of office space, a few staff people and the
system of operation. He did feel they were capable of fulfilling our
needs.
We began the transformation of licensing from FSC to Hibbard-Brown
and we probably had 60% to 70% of the in house people to FSC, Alan
Loss, Scott Robertson, Rich Braverman, Keith Waters, Todd Dellinger,
Harry Radcliffe, along with Barry Schuttler and some of the other
satelites. At this point Tom Turner was free and clear and he was
looking for some direction.
By the week of April l9th Tom was up visiting with Bob all week
seeking that direction and he was also visiting with Hibbard Brown so it
looked like Tom would also become involved.
I also negotiated the courtship of Tony Pascoti and got him involved.
From the period of April lst on, when we began transferring license,
one of the main
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IM= 059P14.CPR
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TI=
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FMG, Ltd., BOARD MINUTES OF 05/05/87


060P01.CPR
May 5, 1987
CORRESPONDING AUDIO TRACKS: 01/02/04/06/07/08
PAGES:
3

SU= SUMMARY: Stan Caterbone updates activities of following:


FMG, Ltd., and convienence industry; Mortgage Banking
Business Activities and Availability of Funds;
Movie Project w/Tony Bongiovi & Power Station;
FMG Advisory, Inc.; and the Insurance business;
Ken Ray and Jere Bavero report problems encountered
at Hibbard Brown during visit. Barry Schuttler ("Born
Again") "NO PROBLEMS".
IM= 060P02.CPR
DI= PAGE 02
IM= 060P03.CPR
DI= PAGE 03
************************************************************
TI=\GAMILLION STUDIOS OF HOLLYWOOD REQUEST FOR FINANCING
IM= 061P01.CPR
DA= May 6, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Financial Management Group, Ltd., from
Marcia Silen's (Producer of Flatbush Films) Becky Austin,
requesting financing assistance for Gamillion Studios of
Hollywood CA. Stan Caterbone meets with Ted and Mary Gamillion
in Hollywood CA, to discuss financial alternatives, and
leaves with several documents pertaining to subject.
Stan Caterbone also meets with Becky Austin to discuss
mortgage and investment banking business in Hollywood CA.
IM= 061P02.CPR
DI= PAGE 02
************************************************************
TI=\HAMILTON LIFE SOLICITAITON
IM= 062P01.CPR
DA= May 12, 1987
AT= CORRESPONDING AUDIO TRACKS: 07/08
PA= PAGES:
1
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SU= SUMMARY: Letter to Stan Caterbone from Alexander Hamilton
Live soliciting a contract for various insurance products.
************************************************************
TI=\FMG, Ltd., BOARD MINUTES OF 05/13/87
IM= 063P01.CPR
DA= May 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/07/08
PA= PAGES:
5
SU= SUMMARY: Board Meeting set by Stan Caterbone to rescind the
deal previously consumated with Hibbard Brown & Company. Stan
Caterbone refused to let the relationship of Robert
Kauffman and Peter Hibbard compromise the financial and
legal well being of Financial Management Group, Ltd.,.
By overturning the recent Board Decision, Stan Caterbone
had for the first time gained complete control of the
Board of Directors, of which will motivate the further
criminal actions of Hartlett/Kauffman/Peneros/Long/
Robertson. Stan Caterbone later visits with Bill Koegler
IM= 063P02.CPR
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TI=\KENNEDY PROPERTIES REQUEST FOR FINANCING
IM= 064P01.CPR
DA= May 6, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from Kennedy Property
Corporation, of Turnervill NJ, requesting for
financing and mortgage assistance for several projects.
IM= 064P02.CPR
DI= PAGE 02
************************************************************
TI=\BENNETT WILLIAMS PRELIMINARY SYNDICATION PROPOSAL
IM= 065P01.CPR
DA= May 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
7
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SU= SUMMARY: Letter and prelimanary draft of the proposed deal
for the syndication of an office building for the
headquarters of Bennett Williams, as anchor tenant, and a
financial services center. Stan Caterbone will later propose the deal
to Dave Cook, of Turkey Hill Industries, who is very much
interested in deal, and has done business with Dave
Schadd in the past.
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DI= PAGE 04
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TI=\BENNET WILLIAMS FINAL SYNDICATION PROPOSAL
IM= 066P01.CPR
DA= May 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
7
SU= SUMMARY: The proposal for the syndication of the Bennett
Williams Real Estate Project, that was developed and syndicated by
Stan Caterbone.
IM= 066P02.CPR
DI= PAGE 02
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DI= PAGE 03
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DI= PAGE 04
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DI= PAGE 05
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DI= PAGE 06
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DI= PAGE 07
************************************************************
TI=\HIBBARD & BROWN SYNDICATION EFFORTS
IM= 067P01.CPR
DA= May 11, 1987
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AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Ric Brown, principal of Habbard Brown
& Company, Inc., addressing the legal requirements for
syndicating the Bennet Williams Deal.
Stan Caterbone had become dissatisfied at the response
of Hibbard & Brown regarding this matter, and both
Pete Hibbard and Ric Brown had personally visited with
Stan Caterbone at their offices when Stan Caterbone
decided to perform his own due dilligence on the pending
deal.
************************************************************
TI=\HIBBARD & BROWN SYNDICATION EFFORTS II
IM= 068P01.CPR
DA= May 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Ric Brown regarding Bennett Williams
Syndication and Real Estate Project.
************************************************************
TI=\SCOTT ROBERTSON LOAN FROM S. CATERBONE
IM= 069P01.CPR
DA= May 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Copy of the cancelled check that was issued to Scott
Robertson for the amount of $2,000.00 which was a loan
from Stan Caterbone. Scott Robertson never paid the
loan, and Stan Caterbone filed a civil suit in the
court of Murray Horton, in January 8, 1988. Stan
Caterbone had won judgement, but never collected monies.
IM= 069P02.CPR
DI= PAGE 02
************************************************************
TI=\KAUFFMAN APOLOGY OF TERMINATION TO HIBBARD & BROWN
IM= 070P01.CPR
DA= May 14, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter to Peter Hibbard from Robert Kauffman
addressing the decision to terminate the previous agreed deal.
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Robert Kauffman stated that he nor Mike Hartlett agreed
or wanted anything to do with the decision to look
to another Broker Dealer for a deal. This is why they did what they did.
*****************************************************************
TI=\RESEARCH FOR THE SONY JOINT VENTUR PROPOSAL
IM= 071P01.CPR
DA= May 18, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: A sample of the research materials used to develop
the SONY deal for the "Digital" movie.
IM= 071P02.CPR
DI= PAGE 02
IM= 071P03.CPR
DI= PAGE 03
IM= 071P04.CPR
DI= PAGE 04
************************************************************
TI=\STAN CATERBONE AND RANDY GRESPIN VISIT PLANNERS SECURITIES GROUP
IM= 332.CPR
DA+ May 18, 1987
AT= AUDIO TRACKS: /ALL
PA= PAGES: 01
SU= SUMMARY: The Planner Schedule outlines the charter flight schedule
of Stan Caterbone's plane, and his flight log to Atlanta, Georgia.
After Stan Caterbone directed FMG, Ltd., to rescind the ilegitamate
and current merger with the Hibbard & Brown Company, Stan Caterbone
decided to personally visit the Broker Dealer of William Koegler, of
Atlanta, GA. Stan Caterbone was familiar with Bill Koegler's operatation
because of his work with the International Association of Financial
Planners (IAFP). Many of the planners that served as National Chaimen
of the IAFP were part of Bill Koeglers group. Bill Koegler also was
a with John Keeble at FSC, in Atlanta. Stan Caterbone was well aware
of the quality of products and services that they had to offer.
Stan Caterbone also invited attorney Randy Grespin to accompany him in
an effort to work on the affiliation of The Underwriters Group of
Harrisburg for possible insurance product. Stan Caterbone had been
working with the president, Tony Pascotti, on a number of different
projects.
Randy Grespin had agreed to pay Stan Caterbone for 1/2 of the charter
costs for the use of Stan Caterbone's plane. Stan Caterbone would
recieve approximately $600.00 from The Underwriters Group for the
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charter service.
The meetings were very productive, and it is here that Stan Caterbone
made a personal evaluation that the Planners Group would be the best
firm to develop a merger/acquisition on the grounds of service, support,
and reputation.
This meeting set the groundwork for the proceeding merger acquisition
deal with Bill Koegler.
Immediately upon the return, Robert Kauffman made an announced visit to
the residence of Stan Caterbone outraged and yelling "Who is running this
company?" Stan Caterbone replied " I don't care who is running this
company, as long as it is for the right reasons".
Bob Kauffman then asked Stan Caterbone to approve his new management
contract, which included undeserving financial elements. Stan Caterbone
quite emphatically opposed to having Robert Kauffman being compensated
on business that was the direct and exclusive results of Stan Caterbone's
efforts.
This set the stage for Robert Kauffman to find a way to get rid of
Stan Caterbone, no matter what it would take.
************************************************************
TI=\JOINT VENTURE PROPOSAL WITH SONY FOR DIGITAL MOVIE
IM= 072P01.CPR
DA= May 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/05/06/07/08
PA= PAGES:
11
SU= SUMMARY: The original SONY deal that was developed by Stan
Caterbone for the development of feature films, video,
and thatrical productions utilizing the new DIGITAL
Technology that was developed by Tony Bongiovi and Power
Station Studios. Stan Caterbone created a business plan
that would include the manufacturing of hardware systems
for the professional recording studio, film theatres,
and consumer electronics. Films have yet to deliver
digital technologies.
SONY JOINT VENTURE PROPOSAL FOR THE DIGITAL MOVIE
I.
II.
III.
IV.
V.

INTRODUCTION
SONY'S ROLE
PRODUCT DEVELOPMENT
MARKETING AND DISTRIBUTION
APPENDIX
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INTRODUCTION
Tony Bongiovi and Power Station Studio are undertaking a
project that has the potential of revolutionizing the entertainment
industry. In the next few pages of this proposal, I will outline the
elements involved and how Sony can participate in this
landmark event.
The technology of the recording industry has been advancing by
leaps and bounds. We have seen the advances from monaural
long playing record to stereo record to compact disc. Now we
are seeing tape systems that use digital rather than analog
signals appear, matching the quality of compact discs. What
has happened to the theatre's? The audio portion of a film, is
as responsible for the sensations one experiences at a motion
picture as the visual, yet many theatre's are still
equipped only for mono sound. Why is this? We feel there are
two basic reasons.
1> The relative high cost of upgrading a theatre to be able to
incorporate the advanced technologies of the audio industry.
2> The lack of proper equipment for the film industry to
produce high quality digital audio tracks.
These two problems should not be addressed separately. There
is little motivation for upgrading until the product is available and
even less motivation to produce a product that can not be
heard.
Tony Bongiovi and Ed Evans at Power Station in New York,
have now made it possible to address these problems
simultaneously. Their creation of the new "Power Station Digital
Movie Sound" (PSDMS), will not only enable the film industry to
produce the highest quality audio tracks for film, but will also
allow theatre's to upgrade their existing sound system at a
minimal cost.
To introduce this revolutionary new sound, Bongiovi is in the
process of producing a film entitled "Mutant Mania", which is a
science fiction action horror film, shot in a small ocean resort
town in New Jersey. This film has many elements that make it
perfect for the introduction of PSDMS. The most prevalent of
these being the heavy music score by Bongiovi's latest band
"French Lick". Producing bands is definitely one of Bongiovi's
fortes. Bongiovi was instrumental in creating "Bon Jovi" who is
probably the strongest force in the rock and roll circuit today.
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"Bon Jovi's" third album "Slippery When Wet", has sold more
copies in a short period of time than any other band in history.
Another is the fact that this is a horror film. The use of audio in
horror films is important to create tension, fear, excitement etc..
Using a horror film also lessens the influence the critics have on
the audience.
By the large this film will stand on it's own merits.
PSDMS, and you have a potential block buster event.

Now add

How does Sony fit into all of this?


SONY'S ROLE
What We are seeking to do, is establish a distribution route in
which the message of Sony's new technology and its benefits
can be more easily and directly passed on to the consumer.
SONY/PSDMS
Picture a one or two minute commentary at the beginning of the
movie and home video, demonstrating the difference between
the quality of theatrical sound now and the new SONY/PSDMS
sound. This does two things. First, by demonstrating the
difference in quality of the new sound, you reinforce in the
audiences mind that it is much better, which as you will hear,
there is little doubt. Secondly it reinforces in the audience that
Sony truly is a pioneer of advanced innovative technologies.
In addition to the commentary, Sony will receive credits on the
film, ie. SONY/PSDMS. We will include in the copyright
agreement that Sony Equipment must be used to be
SONY/PSDMS.
Sony's name will also be strategically placed throughout the
film. This may be done in the form of billboards, advertisements,
or Sony equipment being utilized.
A commercial may be developed for TV promoting both the film
and Sony's contributions to advanced audio techniques in the
film industry. This could be done as a joint venture between
Sony and the distribution company for the theatrical and video
exhibition.
Inside every video tape that is sold, a coupon may be placed to
promote Sony products.
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A full line of quality equipment may be SONY/POWER STATION
labeled for consumer use to enhance marketability of Sony
entertainment products.
Sony Video Software Corporation will receive right of first refusal
on all contracts for video and theatrical distribution. We will
allow Sony a preferred 5% margin under any other distributor for
a competitive edge.
TIMING
Timing is crucial in a project that touch so many different areas.
MARKETING AND DISTRIBUTION
Most of the industry by their own admission is at least two years
away from an effort to upgrade the sound in movie theatres.
With the SONY/PSDMS system, other companies may adapt
easily and economically to produce products with digital movie
sound. With companies adapting to this process, the future
should see the prominence of the SONY/PSDMS insignia much
the same as you see the Dolby insignia today. This will act as
a constant reminder to the public that Sony truly is a pioneer of
advanced audio visual technologies.
Sony will receive exposure in the professional market place by
having the SONY/POWER STATION equipment used in theatres
and studios to produce the SONY/PSDMS sound.
The video industry is a 56 billion dollar industry that is in need
of product. When you look at the potential for a product that
will be one of the first feature films to compliment the fast paced
VCR/Stereo Entertainment components, with a musical score
that may have enough merits of its own, you have an amazing
potential for distribution.
The Digital and Disc Industry has proven to be the future
standard for recording and playing. Because of the relative
newness of the digital format, there are more people who have
yet to experience the digital sound. With the high exposure that
will come from this project, this could be the first time ever
people hear digital. How many people? 1 - 10 - 50 - 100
million?
What will be their first reaction?

I need to buy a Disc Player!

Who's name will they think of first?

SONY/PSDMS!

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PRODUCT DEVELOPMENT
Bongiovi and Evans at Power Station have developed a
revolutionary hybrid mixing console to penetrate the video post
production market. This console was developed to enable
engineers to produce high quality audio tracks for the film
industry as well as the recording industry. This new console
utilizes an automation system that can be used by both
industries. This new console is especially atractive to the
film industry, as it will greatly reduce production costs since
mixing costs in a recording studio are much less. At present
the console that is being used is a bastardized system that
utilizes components from many different pieces of equipment,
from a number of different companies, of which Sony is one.
Because we already have a working model of this console, it
would take very little time for a finished product to be
manufactured that could carry the SONY name.
The other piece of equipment that is essential to the PSDMS
process, is the box that enables the laser disc to automatically
read the synchronization track encoded on the film. This piece
of equipment can be produced at an extremely low cost. It is
this low cost and the fact that the theatres will not have to
replace their present projectors that make digital movie sound
a reality in 1988.
We feel that with consumers demanding the same quality audio
at theatres, as they have become accustomed to with their
home entertainment systems, theatre owners will have little
problem investing the nominal amount of dollars involved, to
upgrade their theatres for digital audio. This investment could
be as low as $1000.
With the cost being so low, the distribution company may want
to consider bearing the burden of this cost, if the theatre owners
agree to show Bongiovi's next three films.
FINANCIAL STRUCTURE
SONY will commit four million dollars for the production of
Bongiovi's film to be released in 1988.
We would like SONY to commit fifteen million for three to four
future products that will follow the same format as the first, so
that Bongiovi and SONY will position themselves as the pioneer
and leaders in the industry. This will not allow competition to
gain access to the marketplace until we are all firmly situated
and profitable.
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Sony will only pay for expenses to produce 60 second spots.
Tony and Power Station will utilize any and all services to help
produce the spot and will allow reimbursement for only true
costs with no mark up including all of Tony's time which will be
free.
Power Station and Power Productions I will receive a negotiated
percentage from all revenues generated from the merchandizing
campaign of the SONY/POWER STATION products and the
sale that may result to other film studios utilizing Sony/POWER
STATION equipment in the PSDMS System.
We will receive four deluxe entertainment systems - Television,
VCR, Stereo, Etc. that is top of the line to help during the
production of the film.

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The purpose of the above and all aspects of this Proposal is to


let the separate entities involved maximize their profits for their
respective talents; Bongiovi in film and music production and
Sony in manufacturing and distribution of equipment and
merchandise and later video and film distribution. END
072P02.CPR
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TI=\"BEYOND THE BIJOU" - Sophisticated Film Tecnologies For Sound


IM= 332A.CPR
DA= May 18, 1987
AT= AUDIO TRACKS: 04/05/07/08
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PA= PAGES: 7
SU= SUMMARY: In May of 1987, Stan Caterbone attended a conference sponsored
by Philadelphia Life, in Palm Springs, California. The trip was
awarded because of the high amount of business Stan Caterbone did with
the Philadelphia Life Company. Most of this business was the result of
the Estate Planning performed for Dr. William Umiker.
Upon returning, Stan Caterbone found this article in "SKY" MAGAZINE,
supplied by the airlines. The article in the Technology section
explicitly discusses the poor quality of sound that is delivered in
conventional full legnth major film productions. It also discusses
the future need for a "digital" technology to improve the overall
effect of motion pictures. The author also applaudes the work of
George Lucas, of Lucasfilm, for the "Star Wars" production, of which
Tony Bongiovi was an integral part of.
Ironically, this was another one
Especially considering that Stan
Hollywood where he disclosed his
And conviently, he finds a newly
findings of the same topic.

of those extroadinary "coincidences" ?


Caterbone had just returned from
SONY proposal to Flatbush Films.
published article supporting his

Stan Caterbone left the conference early in order to meet with Marcia
Silen, one of the producers for Flatbush Films. Stan Caterbone had
disclosed the original draft for the SONY joint venture proposal.
Stan Caterbone and Marcia Silen collaborated on the proposal and
Marcia Silen said "Stan, you are a genius".
Stan Caterbone also visited with Becky Austin, Marcia Silen's sister, and
discussed the mortgage banking business. Becky Austin was a paralegal for
one of the more active law firms specialinzing in Real Estate in Beverly
Hills. Becky and Stan discussed a strategic alliance that would result in
the development of an office in Beverly Hills for the loan portfolio of
Institutional Investors. Al Dannatt was consulted, and a futere meeting
between Stan Caterbone, Becky Austin, and Al Dannatt was agreed upon either
in Houston, Texas, or Beverly Hills, CA. Becky Austin was very experienced
in the Beverly Hills real estate busniness, and had a great of connections
that would have been required to pursue such a business.
Marcia Silen had tried to schedule a meeting between Ted Gamillion of
Gamillion Studios, and Stan Caterbone, however schedules were not
permitting. The meeting would later take place on July 21, 1987.
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332D.CPR
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************************************************************

TI=\DIGITAL MOVIE LETTOR OF INTENT


IM= 073P01.CPR
DA= May 19, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Letter of Intent for Joint Venture Participation and
contribution for the "Digital" movie. Norris Boyd of
Boyd Wilson, sharholder and client of FMG, and owner of
Olde Hickory Properties, to which Stan Caterbone had
produced a $5,000,000 loan, of which Noriss Boyd had
specifically noted that the terms were better than those
of Commonwealth National Bank, which was holding the
existing paper, which totaled more than 12,000,000, of
whom reposses Stan Caterbone's plane, 15 days before any
monies due, had agreed to invest in the movie.
IM= 073P02.CPR
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IM= 073P03.CPR
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************************************************************
TI=\POWER PRODUCITON I -- LEGAL FORMATION
IM= 074P01.CPR
DA= May 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Invoice from Richard C. Fox, Attorneys at Law in
Harrisburg, PA to Stan Caterbone for the professional
services rendered including the drafting of a Letter of
Intent for the "digital" movie "Mutant Mania", and the
stucturing of Power Productions I, the General Partner
for the movie project with Tony Bongiovi and Power
Sations Studios, of New York NY.
************************************************************
TI=\FLATBUSH FILM LETTER RE: INSURANCE BONDING
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075P01.CPR
May 21, 1987
CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PAGES:
1

SU= SUMMARY: Letter from Arlene Davidson, Associate Producer, of


Flatbush Films, Sherman Oaks CA outlining specific
bonding reguirements, budget requirements, and actual
production requirments for the "digital" movie project.
************************************************************
TI=\FLATBUSH FILM LETTER CONFIRMING SCHEDULE OF MEETINGS
IM= 076P01.CPR
DA= May 23, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter to Ellen Libman, Power Station Studios, copied
to Stan Caterbone outlining the schedule of meetings
with Marcia Silen, Barbara Peters, and Arlene Davidson,
all of Flatbush Films, the Producers for the "digital"
movie. All parties were to meet in Wildwood, NJ, the
location for the filming of the movie.
************************************************************
TI=\FINANCIAL MANAGEMENT GROUP, Ltd., CORPORATE & FINANCIAL STATUS TO DATE
IM= 313.CPR
DA= May 23, 1987
AT= AUDIO TRAKS: ALL
PA= PAGES: 1
SU= SUMMARY: Stan Caterbone had prepard a financial and corporate status
report for Financial Management Group, Ltd.,. This report was prepared
from information that Stan Caterbone had formulated along with certain
financial estimates obtained from Robert Kauffman.
This report illustrates the extroadinary comparisons of origanl growth
rates for a 3 year period that was originally projected in the original
business plan of July, 1986. By May of 1987, the report suggests that
FMG, Ltd., was almost 2 YEARS ahead of the origianl forcasts for:
capital raised; total commissions; total revenues; sales force; and
most importantly corporate equity or stock value.
Under the above assumptions, utilizing the traditional method of
valuing a financial services distribution company, the value per share
was estimated at $17.00 per share.
This method of valuation would have valued the stock of Stan Caterbone
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to be worth $686,800.00.
************************************************************
TI=\DIGITAL MOVIE MARKETING MATERIALS
IM= 077P01.CPR
DA= May 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
15
SU= SUMMARY: A copy of the marketing materials used in talking to
potential investors for the movie "MUTANT MANIA".
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IM= 077P11.CPR
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IM= 077P14.CPR
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DI= PAGE 15
************************************************************
TI=\FMG, Ltd., NEWSLETTER OF 5/26/87
IM= 078P01.CPR
DA= May 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Michael Hartlett welcomes the association of Craig
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Russel and the law firm of Russel, Kraft, Gruber, and Huber to
FMG, Ltd,. Michael Hartlett had proceeded with structuring a deal
with the Craig Russell, without any considerations by
Stan Caterbone, principal, or the Board of Directors.
IM= 078P02.CPR
DI= PAGE 02
************************************************************
TI=\W. UMIKER ESTATE PLANNING
IM= 079P01.CPR
DA= May 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter to Dore Valvanes regarding the Power of
Attorney of Dr. William Umiker.
************************************************************
TI=\FLATBUSH FILM DRAFT SCREENPLAY OF DIGITAL MOVIE
IM= 323.CPR
DA= May 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter and first draft of screenplay of the"digital"
movie in preparation for meetings in Wildwood NJ. Letter
is from Arlene Davidson of Flatbush Films to Stan
Caterbone.
************************************************************
TI=\FLATBUSH FILM MEETING SCHEDULE
IM= 081P01.CPR
DA= May 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Revised schedule of the meeting in Wildwood NJ,
with Flatbush Films, Power Station Studios, and Stan Caterbone
************************************************************
TI=\JUNE PLANNER SCHEDULE OF S. CATERBONE
IM= 082P01.CPR
DA= June 1, 1987
IM= 322.CPR
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/07/08
PA= PAGES:
1
SU= SUMMARY: Flight log of Stan Caterbone outlinging the flight to
Page 68

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William Koegler, Broker Dealer, on the 18th of June with
Randy Grespen, of the Underwriters Group, (TUG). TUG
had agreed to pay for 1/2 of the flight hours at the
rate of $250.00 per hour, approximately 7. Also outlines the
schedule of Jim Bly, of Sourc Capital to rent the airplane at the rate of $250
per hour, which
would have been approximately 6 hours of flight time.
The plane was repossesed and Jim Bly was unable to fly.
************************************************************
TI=\BUSINESS WEEK
IM= 331.CPR
DA= June 1, 1987
AT= AUDIO TRACKS:
PA= PAGES: 7

"SONY'S CHALLENGE"

04/05/08/09

SU= SUMMARY: The June 1, 1987 issue of "Business Week", features


SONY chairman Ako Morito on the Cover. The article is another
example of the incredible forsight with which the SONY joint venture
proposal was developed. The strategies and the business elements that
the SONY joint venture proposal contains, are clearly substantiated in
this feature article.
The SONY joint venture proposal for the "Digital" movie was produced
some 40 days prior to the release of this article.
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TI=\TRUMP STOCK CERTIFICATES


IM= 083P01.CPR
DA= June 3, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Rick Trump, a sattelite office of FMG,
Ltd., located in Skippack, PA, to Stan Caterbone regarding
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previous stock transactions and instructions for
Stan Caterbone regarding the titles of the stock
certificates.
************************************************************
TI=\LAST FMG, Ltd., STOCK CERTIFICATE ISSUED BY S. CATERBONE
IM= 084P01.CPR
DA= June 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Last legal Financial Management Goup, Lt,, signed
by Stan Caterbone, Secretary, Executive Vice President.
************************************************************
TI=\LANCASTER AVIATION COMPLAINT LETTER
IM= 319.CPR
DA= June 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Charles Smith, President of Lancaster
Aviation from Stan Caterbone, regarding dissatisfaction of the
conduct of Lancaster Aviation, Pete Wolfson, and the
persuation by Lancaster Aviation not to purchase the
no cash deal of Gannett Flemming, of Harrisburg, for the
purchase of the Cessna 402 B-1973 aircraft, in which
Gannett Flemming would have provided 100% financing at
approximately 1/2 the cost of the Lancaster Avition
aircraft.
IM= 319B.CPR
DI= PAGE 02
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TI=\FLATBUSH FILMS PRODUCTION SCHEDULE FOR DIGITAL MOVIE
IM= 086P01.CPR
DA= June 12, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
7
SU= SUMMARY: Letter to Stan Caterbone from Arlene Davidson of
Flatbush Films outlining the production schedule of
the "Digital" movie. Schedules begin June 28, 1987 and
are completed in Post Production in January of 1988.
Davidson also expresses concern to move everything up
15 film is to be produced this season.
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TI=\AIRCRAFT PURCHASE AGREEMENT


IM= 314.CPR
DA= June 12, 1987
AT= AUDIO TRACKS: /ALL
PA= PAGES 2
SU= SUMMARY: Following are the authentic "PURCHASE AGREEMENT" for the
1978 PA-31-325 PIPER aircraft and the "REGISTRATION" filed with
the U.S. Department of Transpertation. This agreement was authorized
by Pete Wolfson, Director of Sales with Lancaster Aviation
IM= 315.CPR
DI= PAEG 02
************************************************************
TI=\FARMERS FIRST BANK LINE OF CREDIT APPLICATION
IM= 087P01.CPR
DA= June 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Documents are in part of application for a line of
credit to Farmers First Bank, by Stan Caterbone. Pete Richter
of Farmers First was handling the loan application. Stan
Caterbone had applied for a line of credit, pledging his
stock in Fianacial Management Group, Ltd. for collateral.
However Michael Hartlett refused to provide any financial
information of Financial Management Group, Ltd., to eithr
Farmers First, or to Stan Caterbone, which according to
the bylaws and the articles of incorporation is in
violation of shareholder rights to inspect the books!
IM= 087P02.CPR
DI= PAGE 02
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TI=\WEINSTEIN DEVELOPEMENT REQUEST FOR FINANCING
IM= 088P01.CPR
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June 15, 1987
CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PAGES:
1
SUMMARY: Letter from Susan Weinstien, of Tenefly NJ
requesting financing of both debt and equity for real estate project
in the rapidly growing Hunterdon County, New Jersey,
which is in the I-78 Corridor outside New York City.
Susan was referred by Tony Bongiovi and Bob Walters.
************************************************************

TI=\PLANNERS SECURITIES -- FMG, Ltd., ACQUISITION


IM= 089P01.CPR
DA= June 18, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Planner Schedule outlining trip to Atlanta in Stan
Caterbone's plane with Randy Grespin of (TUG) The
Underwriters Group to propose deal with the Broker
Dealer of William Koegler, The Planners Security Group.
TUG was paying $250 per hour for 1/2 of trip. Stan
Caterbone recommended that FMG, Ltd., to a deal with
the Planners Group, instead of Hibbard Brown.
When
Stan Caterbone arrived back in Lancaster, Robert Kauffman
demanded an explanation as to "Who is running this show?"
Stan said "I don't care who, as long as its done right!"
************************************************************
TI=\FMG, Ltd., PATENT RESEARCH
IM= 090P01.CPR
DA= June 22, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter from Joel Goldhammer of Seidel, Gonda,
Goldhammer, & Abbott, P.C., of Philadelphia to Stan Caterbone
regarding the "Service Mark Search for "Financial
Management Group" for patent and or trademark analysis
for services of legal, accounting, real estate, insurance
stock brokerage, portfolio management, market timing,
financial planning, mortgage banking, and investment
banking. Also enclosed was the actual results of the
search done on a national basis.
IM= 090P02.CPR
DI= PAGE 02
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TI=\UMIKER MEMO
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091P01.CPR
June 22, 1987
CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PAGES:
1

SU= SUMMARY: Memo to Dr. William Umiker from Stan Caterbone


discussing the retainment of Todd Dellinger, of FMG, Ltd., as
Director of Client Affairs, for the clients of Stan
Caterbone, exclusively, due to the rapid growth of
FMG, Ltd., and the additional responsibilities of
Stan Caterbone with regards to Mortgage Banking and the
"Digital" movie.
************************************************************
TI=\LARRY RESCH (ISC) MEETING WITH STAN CATERBONE
IM= 092P01.CPR
DA= June 23, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: Planner schedule of June 23, 1987 of Stan
Caterbone, outlining the meeting initiated by Larry Resch,
partner with Jere Sullivan (personal friend of Stan Caterbone)
and Carl Jacobson, brother-in-law of James Guerin, with Stan Caterbone
at his office at FMG, Ltd.,. Upon arrival Larry Resch said that "Carl
Jacobson could not make it, we had to fly him out of the
country early this morning". Stan Caterbone went on to
describe the alleged illegal and improper business
activities of James Guerin, ISC, and thier role in the
United Chem Con case. Larry requested Stan Caterbone to
find a new facility for Chem Con, and help resuce the company .
Jere Sullivan had called Tom Caterbone, brother of Stan Caterbone, on
or about December 16, 1990, to question whether Stan Caterbone was
taking medicine, and again to allege a relapse of "insanity", as he did
back in 1987. During the month of December, of 1990, Stan Caterbone
made it known that it was time to resolve any and all issues relating to
the "Blackmail" of 1987. Stan Caterbone also specifically told Jere
Sullivan that he had talked to James Christian from Loretto State Prison
December 7th, 1990. Jere Sullivan tried to convince Stan Caterbone that
Larry Resch was a freind and "Larry would not do anything to hurt you".
Jere Sullivan also indicated that Jim Christian had told his mother that
he was responsible for calling the FBI to report criminal allegations of
James Christian, back in the summer of 1987.
************************************************************
TI=\FMG ADVISORY RIA APPLICATION
IM= 093P01.CPR
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DA= June 23, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone, from Jeff Jamouneau, of
McNeese Wallace, and Nurick enclosing a form letter to Paul D.
Schwartz of the Pennsylvania Securities and Exchange
Commission with regards to the Registered Investment
Advisor application of FMG Advisory, of which Stan
Caterbone was President, and Secretary.
IM= 093P02.CPR
DI= PAGE 02
************************************************************
TI=\INVOICE FOR LOCKS CHANGED BY RUSSEL LOCKS
IM= 094P01.CPR
DA= June 23, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Invoice from Russell Locksmith to Stan Caterbone
and FMG Advisory for changing the lock to the office of
Stan Caterbone, which was performed on June 23, 1987.
Stan Caterbone became untrusting of Robert Kauffman and
Michael Hartlett, and because of his fiduciary
responsibility as an officer, to the shareholders, and
in preservation of his own investments and business
dealings, wanted additional security while he
investigated questionable activities of Hartlett and
Kauffman. All FMG transfer records were contained herin.
************************************************************
TI=\FORGED STOCK AND BURGLARY OF S. CATERBONE'S OFFICE
IM= 096P01.CPR
DA= June 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A copy of a Stock Certificate for FMG, Ltd., for 8,000
shares made out to Peter Peneros, with the forged
signiture of Robert R. Long signing as Secretary of
FMG, Ltd., when in fact Stan Caterbone was the legal
secretary of Financial Management Group, Ltd., Robert
Kauffman also signed as President, signifying his
involvement of violations of the Articles of
Incorporation, Corporate Bylaws, Offering Memorandum, etc
Even more importantly, Stan Caterbone had all of the
records and transfer books in his locked offfice (6/23).
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************************************************************
TI=\POWER STATION PATENT RESEARCH
IM= PP1.CPR
DA= June 25, 1987
AT= AUDIO TRACKS: 04/05/08/09
PA= PAGES: 03
SU= SUMMARY: Stan Caterbone had directed patent attorney Jeff Goldhammer
to research information regarding the "Power Station" trademark for the
purpose of merchandizing various electronic equipment in both the
retail and professional video and recording markets. This was especially
important for the "Power Station Digital Music Sound" (PSDMS) that would
be an integral part for the movie.
IM= PP2.CPR
DI= PAGE 2
IM= PP3.CPR
DI= PAGE 3
************************************************************
TI=\LANCASTER AVIATION INVOICE FOR UNAUTHORIZED REPAIRS
IM= 097P01.CPR
DA= June 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: An invoice from Lancaster Aviation and Chuck Smith
to FMG, Ltd., for unauthorized repairs made to the aircraft
of Stan Caterbone. Stan Caterbone purchased the aircraft
with the prerequirments of a pre inspection, of which no
mention of any required or defficient mechanical problems
made during the settlement of the purchase of the
aircraft. Stan Caterbone had no knowledge of any work
performed on the aircraft until reciept of this invoice.
Another attempt to embezzle funds from Stan Caterbone.
IM= 090P02.CPR
DI= PAGE 02
************************************************************
TI=\LANC AVIATION INVOICE
IM= 098P01.CPR
DA= June 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Chuck Smith of Lancaster Aviation to
Stan Caterbone, demanding payment for the repairs of the
previous invoice, fuel, and pilot services. More
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importantly, Chuck Smith acknowledges that he as
taken the liberty of repossesing the aircraft, which was
why Jim Bly of Source Capital was unable lease the plane
from Stan Caterbone. However Stan Caterbone had an
unsecured line of credit with Lancasster Aviation, and
had no financial interest in the aircraft at the time of
reposession. He also verifies that the plane is insured.
************************************************************
TI=\JUNE PLANNER SCHEDULE OF S. CATERBONE
IM= 099P01.CPR
DA= June 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Stan Caterbone has a meeting at the headquarters
of Bennett Williams, of York PA, with Dave Schadd and
Bob Buehler. Stan Caterbone was about an hour late
for the meeting, and arrived at about 12:00pm. Stan
Caterbone had discussed the pending real estate deal and
specifically the interest of Dave Cook. Stan Caterbone
also discussed the seriosness of his partners recent
actions, specifically the break-in of his office. Bob
Kuaffman had made previous arrangements to sit in on
meeting, uninvited, and without Stan Caterbone's invite!
************************************************************
TI=\W. UMIKER CHECK TO LANCASTER AVIATION
IM= 100P01.CPR
DA= June 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A copy of the check from Dr. William Umiker made
payable to Lancaster Aviation in the amount of $25,000. After
Chuck Smith had knowingly deposited a post dated check
from Stan Caterbone that did not have sufficient funds,
Stan Caterboen had called Dr. William Umiker to loan the
funds until the monies were recieved from Keystone
Mutual Funds, in the account of Millard Johnson. Dr.
Umiker was repaid the following day, when the funds were
recieved from Keystone, as expected. This was another
attempt by Chuck Smith to discredit Stan Caterbone.
************************************************************
TI=\SUBPOENA FOR S. CATERBONE IN CASE VS. H. FISCHER
IM= 101P01.CPR
DA= June 30, 1987
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AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
1
SU= SUMMARY: A Subpoena to Stan Caterbone from the law offices
of Rank & Rank for the Court of Common Pleas. Katherine
H. Evers, plaintiff, had subpoena'd Stan Caterbone in
the case against Herbert Fischer, Martin Sponaugle, and
the company of Fischer-Sponaugle real estate company, the
owner of the FMG, Ltd., headqaurters, and general partner
for Eden Associates II. Stan Caterbone never new anythig
about this case, and still has no knowledge why he was
subpoena'd.
************************************************************
TI=\FMG, Ltd., SHAREHOLDERS OF RECORD (JUNE 23, 1987)
IM= 312.CPR
DA= June 23, 1987
AT= AUDIO TRACKS: ALL
PA= PAGES; 1
SU= SUMMARY: The last documented Shareholders of Record that Stan Caterbone
had prepared before FMG, Ltd., officers had ilegally obtained access to
such records.
************************************************************
TI=\FMG, Ltd., MESSAGES FOR S. CATERBONE
IM= 102P01.CPR
DA= July 1, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
9
SU= SUMMARY: Phone Messages taken by Lynn Kreider, of FMG,
Ltd., and Administrative assistant for FMG Advisroy and FMG
Accounting. The phone messages were taken for Stan
Caterbone, and reflect business as usual.
IM= 102P02.CPR
DI= PAGE 02
IM= 102P03.CPR
DI= PAGE 03
IM= 102P04.CPR
DI= PAGE 04
IM= 102P05.CPR
DI= PAGE 05
IM= 102P06.CPR
DI= PAGE 06
IM= 102P07.CPR
DI= PAGE 07
IM= 102P08.CPR
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DI= PAGE 08
IM= 102P09.CPR
DI= PAGE 09
************************************************************
TI=\LIQUID ASSETS CASH BALANCE AS OF JULY 3, 1987
IM= 103P01.CPR
DA= July 1, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
8
SU= SUMMARY: Copies of all cash accounts for Stan Caterbone, that
indicate that on July 1, 1987, Stan Caterbone had cash
balances of $15,134.10. This is quite contrary to what
the banks were indicating by thier irreprehnsible actions
toward both a borrower and competitor.
IM= 103P02.CPR
DI= PAGE 02
IM= 103P03.CPR
DI= PAGE 03
IM= 103P04.CPR
DI= PAGE 04
IM= 103P05.CPR
DI= PAGE 05
IM= 103P06.CPR
DI= PAGE 06
IM= 103P07.CPR
DI= PAGE 07
IM= 103P08.CPR
DI= PAGE 08
************************************************************
TI=\PLANNER SCHEDULE OF S. CATERBONE RE: J. RODA
IM= 104P01.CPR
DA= July 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: After learning the actions of several FMG, Ltd.,
persons in burglarizing the office of Stanley J. Caterbone,
Executive Vice Presient, Secretary, Incorporator, and
Tenant, of Finanacial Management Group, Ltd,. and
President, Incorporator, and Secretary of FMG Advisory,
and President, Incorporator, and Owner of Pro Financial
Group, Ltd., and Proprietor of Creative Finance, and
General Partner of Power Productions I, Stan Caterbone
had the fiduciary obligation and resposnibiltiy to
preserve and protect the interests of the above entities.
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************************************************************
TI=\ROMAR AVIATION
IM= 105P01.CPR
DA= July 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Reciept of Romar Aviation, confirming payment for
insurance. Stan Caterbone had decided that it would be in the best
interest of all concerned to move his files to Stone
Harbor NJ, where he could begin to inspect the records of
all of the companies that were headquarted at the
1755 Oregon Pike, Lancaster PA. However, the airplane
was convieniently reposessed with all documents held as
hostage. Stan Caterbone had instructed Romar Aviation to
store the aircraft on thier premisis, because of all the
games that Lancaster Aviation, of which Stan Caterbone
suspected foul play on many previous ocasions.
************************************************************
TI=\PLANNER SCHEDULE OF S. CATERBONE RE: J. RODA
IM= 106P01.CPR
DA= July 3, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Planner of Stan Caterbone referring to the second
day of meetings and conferences with Joe Roda. On July
3rd at apporximately 2:00pm Stan Caterbone had loaded
all relevent files and copies in his aircraft, in
preparation for the flight to Cape May County Airport NJ.
Stan Caterbone had rented a home in Stone Harbore, with
specific intent during the production of "Mutant Mania".
At apporximately 9:00pm, Stan Caterbone was in Stone
Harbor when Victor, the pilot from Romar Aviation, called
to inform that the aircraft had been repossed with the fe
************************************************************
TI=\PLANNER SCHEDULE OF S. CATERBONE RE:PLANE REPOSESSION
IM= 107P01.CPR
DA= July 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: At approximately 9:30am, Stan Caterbone had called
Joe Roda from Stone Harbor, quite upset and historical
about the plane that was illegally repossed with all of
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his files conviniently held hostage.
Joe Roda had replied "Stan you have to quit making up
these allegations"!!!!!
Stan Caterbone proceeded to the Cape May County Airport
to hire a pilot to fly to Lancaster to retrieve the files
************************************************************
TI=\RECIEPT FROM PILOT BRAD DONAHUE FOR RESCUE OF FILES
IM= 108P01.CPR
DA= July 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: In efforts to thwart a cover up, Stan Caterbone
retained the services of pilot Brad Donahue, of Capy May County
Airport to fly to Lancaster Aviation, in the Lancaster
Airport, to retrieve the files that were merely stolen
and held hostage in Stan Caterbone's airplane. The
reciept, signed by Brad Donahue, is for $400.00. Stan
Caterbone had offered Brad Donahue $200.00 if he did not
have any confrontations, and $400.00 if there were any
confrontations with Lancaster Aviation or authorities.
Brad Donahue died a few weeks later due to a suspect accd
************************************************************
TI=\PLANNER SCEDULE OF S. CATERBONE RE: ATTY. RIC FOX
IM= 109P01.CPR
DA= July 5, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Stan Caterbone had called Ric Fox in efforts to take
legal actions agains all alleged defendants. Ric Fox had
brought an attorney friend and flew into Cape May County
Airport, where they were picked up by David Porter and
driven to the residence of Stan Caterbone, 554 Berkley Rd
Stone Harbor, NJ. After Stan Caterbone discussed and
described the circumstances surrounding the last 7 days,
Ric Fox asked "What did they do wrong?". Upon leaving
he requested a retainer of $5,000 to look further into
matters.
************************************************************
TI=\COMMONWEALTH BANK NOTICE OF PLANE REPOSESSION
IM= 110P01.CPR
DA= July 6, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
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PA= PAGES:

SU= SUMMARY: The letter from Larry W. Snyder, Manager of


Conusmer Loan Collections, of Commonwealth National Bank,
to Stan Caterbone, informing him of the repossesion
of his airplane, that took place on July 2, 1987, as
they confirm. There were no reasons for the reposession
that were the least bit true, and even furthermore,
was the fact that it was 23 days prior to the first
scheduled payment of the loan agreement signed on
June 12, 1987 that included $27,000 in cash paid to
Lancaster Aviation.
IM= 110P02.CPR
DI= PAGE 02
IM= 110P03.CPR
DI= PAGE 03
************************************************************
TI=\PLANNERS SECURITIES TERMINATION LETTER
IM= 111P01.CPR
DA= July 8, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Kathy A. Diehl, Registration Administrator
of the Planner's Securities Group, Inc., of Atlanta GA,
advising Stan Caterbone that his license with PSG, INC.,
has been terminated, and may no longer sell securities
with the Broker Dealer that Stan Caterbone selected to
merge with FMG, Ltd.,. The letter was copied to Robert
Kauffman. Stan Caterbone never recieved any explanations
as to the reasons for terminating his securities license,
which was as clean as his credit report, which was as
good as you can have.
************************************************************
TI=\PLANNER LOG RE: GAMILLION STUDIOS, CAPELLO & FOLEY
IM= 112P01.CPR
DA= July 8, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The planner schedule for July 8, 1987, which displays
the phone log of Stan Caterbone. Stan Caterbone had called
Bill Koegler of the Planners Securities Group, Inc., to
inform him of the Lock-Out by Robert Kauffman and Mike
Hartlett, of FMG, Ltd.,. Stan Caterbone was not very
understanding, and had questioned Bill Koegler if he
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was helping Robert Kauffman steal his company. Bill
Koegler responded with the terminating Stan Caterbone's
securities license with the Planners Securities Group.
************************************************************
TI=\PLANNER SCHEDULE RE: JOHN RODA
IM= 113P01.CPR
DA= July 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Phone log of July 9, 1987, of Stan Caterbone. Stan
Caterbone was refferred to another attorney, Lew
Schweller, of the law firm of Valore, McAllister,
Westmoreland, Gould, Vesper & Schwartz. Stan Caterbone
had called to set up a meeting, since all previous
efforts to pursue legal action had done nothing but cost
money and aggrevation. John Roda, brother of attorney
Joe Roda, had called Stan to advise him to take it easy
and to seek medical help, most likely at the request of
Joseph Roda.
************************************************************
TI=\PLANNER SCHEDULE RE: TONY BONGIOVI MEETING @ WILDWOOD
IM= 114P01.CPR
DA= July 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The planner schedule exhibits a meeting between
Stan Caterbone and Tony Bongiovi for July 10, 1987. Stan
Caterbone was trying to desperately keep any business
actiivities that he had in tact. However, the allegation
of insanity has reached virtually all of his business
contacts and network.
************************************************************
TI=\W. UMIKER TRUSTEE TERMINATION
IM= 115P01.CPR
DA= July 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Notices to Stanley J. Caterbone, from Dr. and Mrs.
William Umiker canceling the Trust Agreements dated
October 17, 1986 which had designated Stanley J.
Caterbone as Trustee and Robert F. Kauffman as
Alternate Trustee. Again, Stan Caterbone had never
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learned why such action was taken.
IM= 115P02.CPR
DI= PAGE 02
************************************************************
TI=\HARSCO PENSION PLAN DOCUMENTATION
IM= 116P01.CPR
DA= July 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
7
SU= SUMMARY: A note and information from Robert O. Ackerman of
the Mesirow Brokerage Services, Inc., regarding Stan
Caterbone's efforts at providing management services for
the $141 Million Pension Plan of Harco, of Harrisburg PA.
The pension fund was paying out over $350,000 in annual
management fees, of which Stan Caterbone was competing
for.
IM= 116P02.CPR
DI= PAGE 02
IM= 116P03.CPR
DI= PAGE 03
IM= 116P04.CPR
DI= PAGE 04
IM= 116P05.CPR
DI= PAGE 05
IM= 116P06.CPR
DI= PAGE 06
IM= 116P07.CPR
DI= PAGE 07
************************************************************
TI=\HARSCO PENSION PLAN REPORT OF EXAMINATIONS
IM= 117P01.CPR
DA= July 13, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/08
PA= PAGES:
6
SU= SUMMARY: The Report on Examinations of Financial Statements
for the Harsco Pension Fund. The report gives a detailed
accounting of all Pension funds, along with performance
results. This report was supplied by Michael Dipaolo
of while employed by Coopers & Lybrand, of Harrisburg, PA
IM= 117P02.CPR
DI= PAGE 02
IM= 117P03.CPR
DI= PAGE 03
IM= 117P04.CPR
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PAGE 05
117P06.CPR
PAGE 06
************************************************************

TI=\SOLFOLK LIBRARY RESEARCH MATERIALS RE:LENDER LIABILITY


IM= 118P01.CPR
DA= July 15, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
6
SU= SUMMARY: On July 14, Stan Caterbone and Michelle Hodge,
persoal friend, and one of few persons to believe Stan Caterbone
traveled to Boston, MA. Stan Caterbone had decided that
Boston would offer one of the better Law Libraries for
research, and would provide for a nice trip to get away
from all of the conspiracy going on. Stan Caterbone had
conducted research on the topic of lender liability, and
specifically the circumstances which constitute fair
play, illegal repossesion, and anti trust with specific
his mortgage banking business. Enclosed are samples.
IM= 118P02.CPR
DI= PAGE 02
IM= 118P03.CPR
DI= PAGE 03
IM= 118P04.CPR
DI= PAGE 04
IM= 118P05.CPR
DI= PAGE 05
IM= 118P06.CPR
DI= PAGE 06
************************************************************
TI=\KUAFFMAN LETTER TO BILL JOHNSON RE: S. CATERBONE
IM= 119P01.CPR
DA= July 16, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Robert Kauffman had sent a letter to Millard Johnson,
as well as all of the clints of Stan Caterbone. Robert
Kuaffman had alleged that Stan Caterbone will not be
servicing Financial Management Group, Ltd., clients in
the Lancaster area, and "may not handle investments
at all". Robert Kauffman had also reported that Stan
Caterbone had moved his office to Stone Harbor, NJ.
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Stan Caterbone has yet to learn motivation for such
incriminating statements, that could be construed as
freud in and of themselves.
************************************************************
TI=\NASD-SEC PHONE LOG FOR HELP
IM= 120P01.CPR
DA= July 17, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Phone log of Stan Caterbone, for the date of July
16,1987 After receiving the letter from Millard Johnson, relating
to lies that Robert Kauffman was telling the clients of
Stan Caterbone, Stan Caterbone proceeded to call the
Federal and State Authorities of the Securities and
Exchange Commissions. As with the attorneys, Stan
Caterbone recieved no help, and on the contrary recieved
more ridicule and suspicion than anything.
IM= 120P02.CPR
DI= PAGE 02
************************************************************
TI=\SCHWELLER INVOICE FOR LEGAL FEES
IM= 121P01.CPR
DA= July 17, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Invoices from attorney Lew Schweller, of the law firm
Valore, McAllister, Westmoreland, Gould, Vesper &
Schwartz.
IM= 121P02.CPR
DI= PAGE 02
************************************************************
TI=\PLANNER SCHEDULE RE: GAMILLION STUDIOS MEETING
IM= 123P01.CPR
DA= August 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The planner oulines Stan Caterbone's meeting with
Marcia Silen, of Flatbush Films, Ted Gamillion, of
Gamillion Studios, and Becky Austin, of Arlington
Properties, all of surrounding Hollywood, CA. Stan
Caterbone had traveled to Hollywood and had conducted
meetings with the above induviduals. Becky Austin
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was interested in developing a mortgage banking business.
Ted Gamillion was interested in having Stan Caterbone
restructure and refinance his film and sound studio.
Even 3,000 miles away, the efforts proved to be fruitless
************************************************************
TI=\GAMILLION STUDIOS FINANCIAL DOCSUMENTS (CENSORED)
IM= 124P01.CPR
DA= July 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: A sampling of the documents that Ted Gamillion of
Gamillion Studios had given to Stan Caterbone during his
visit of July 20, 1987 to support his efforts to
restructure and refinance Gamillion Film & Sound Studios.
Stan Caterbone and Marcia Silen had spent several hours
touring and inspecting the studios and its business
activities. The alleged allegations had eventually
traveled as far away as Hollywood, CA. This was the
last attempt to conduct any kind of business.
IM= 124P02.CPR
DI= PAGE 02
IM= 124P03.CPR
DI= PAGE 03
IM= 124P04.CPR
DI= PAGE 04
************************************************************
TI=\SCHWELLER INVOICE FOR LEGAL FEES
IM= 125P01.CPR
DA= July 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Invoices from attorney Lew Schweller, of the law firm
Valore, McAllister, Westmoreland, Gould, Vesper &
Schwartz.
************************************************************
TI=\CAPPELLO & FOLEY RECIEPT FOR MATERIALS
IM= 126P01.CPR
DA= July 21, 1987
SU= SUMMARY: Invoice dated July 21, 1987 from Joan M. Tornes, of
the law firm of Cappello & Foley, for 3 binders of documents
which Stan Caterbone had personally delivered to the
offices at 831 State Street, Santa Barbara, CA.
Cappello and Foley were discovered during the research on
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Lender Liability, as being one of the more prominent
firms to specialize in Lender Liability. Stan Caterbone
was especially abouth the activities of Commonwealth Bank
considering the Olde Hickory refinance, and also Fulton
and Farmers First.
************************************************************
TI=\RODA INVOICE FOR LEGAL FEES
IM= 127P01.CPR
DA= July 22, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Invoice from attorney Joseph Roda, for services from
July 1, 1987 through July 7, 1987, which included the
phone conversation in which Joseph Roda accused Stan
Caterbone of farbricating any and all allegations.
IM= 127P02.CPR
DI= PAGE 02
IM= 127P03.CPR
DI= PAGE 03
************************************************************
TI=\TITLE:
SOURCE CAPITAL LETTER RE: BENNET WILLIAM SYNDICATION
IM= 129P01.CPR
DA= July 24, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
10
SU= SUMMARY: A letter to Jim Bly, of Source Capital, of McLean VA
from Stan Caterbone along with the sydication deal for
the Bennett Williams project. Dave Cook and previously
expressed interest in the project, however a few days
prior, Dave Cook had informed Stan Caterbone that it
"would be better if I did not associate with you". Stan
Caterbone was about all out of business contacts that
were not convinced that he embezzled monies and was
insane.
IM= 129P02.CPR
DI= PAGE 02
IM= 129P03.CPR
DI= PAGE 03
IM= 129P04.CPR
DI= PAGE 04
IM= 129P05.CPR
DI= PAGE 05
IM= 129P06.CPR
DI= PAGE 06
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129P07.CPR
PAGE 07
129P08.CPR
PAGE 08
129P09.CPR
PAGE 09
129P10.CPR
PAGE 10
************************************************************

TI=\HARTLETT LETTER TO CREDITORS RE: S. CATERBONE


IM= 130P01.CPR
DA= July 24, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Michael Hartlett, Executive Vice President
of FMG, Ltd., to Oblenders, of Lancaster PA informing
Oblenders that "Stanley J. Caterbone is no longer an
officer of our corporation." "He was removed as
Executive Vice President on July 1, 1987". "This letter
serves notice that Stanley J. Caterbone never has had the
right to: 1) Purchase items for or through FMG.
2) Make Corporate commitments on behalf of FMG
3) Contract for or any way obligate FMG Ltd."
A third grader would be smarter than this.
************************************************************
TI=\SHIRK LETTER RE: BANKRUPTCY MATERIALS
IM= 131P01.CPR
DA= August 5, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: A letter from Dore Valvanes, of the law firm of Shirk
Reist, Wagenseller, and Shirk, of Lancaster PA to Stan
Caterbone in reference to a conversation held on the
same day of August 5, 1987. The letter indicates that
bankruptcy should be seriously considered as an
an alternative. In the letter, Dore Valvanes also gives
several reasons why the law firm of Shirk, Reist,
Wagenseller, and Shirk would rather not get invoived.
IM= 131P02.CPR
DI= PAGE 02
************************************************************
TI=\BILL TELL FAX REQUESTING DAT PURCHASE FROM JAPAN
IM= 132P01.CPR
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DA= August 5, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A copy of a fax from Stan Caterbone, while in Stone
Harbor NJ, to Bill Tell, client of FMG, Ltd., while
in Osaka, Japan. Bill Tell is the owner and president
of PDQ Industries, of Brownstown PA. The fax was to
inform Bill Tell of the Gamillion Studios refinancing.
It was thought that the project might even have more
appeal with the Japanese. Stan Caterbone also requests
the purchase of an R-DAT digital Recorder, for the
Studio.
************************************************************
TI=\COMMONWEALTH BANK SETTLEMENT RE: PLAN REPOSESSION
IM= 133P01.CPR
DA= August 7, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Stan Caterbone from John M. Wolf, Vice
President of Commonwealth National Bank, A Mellon Bank.
The letter refers to a telephone conversation between
Stan Caterbone and Mr. Irwin H. Siegel, Consumer Loan
Manager, of Commonwealth Bank regarding Stan Caterbone's
demand for a settlement of $5 Million for the numerous
lender liability violations suffered while the aircraft
was illegally repossesed. The demand was rejected
because "we are satisfied that the reposession was both
lawful and appropriate".
************************************************************
TI=\CREDIT REPORT OF S. CATERBONE IN AUGUST OF 1987
IM= CR1.CPR
DA= August 7, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A copy of the Credit Report that Stan Caterbone had
requested from Kelly Walters, of the Credit Bureau of
Lancaster County, Inc.,. Stan Caterbone was tired of
hearing all of the alleged bankrupty rumors, so he wanted
to document his actual credit rating. The Credit Report
was recieved August 7, 1987, and was considered valid
until the same. The Credit Report was absolutely
flawless, reporting that all accounts were "Pays
(or paid) within 30 days of billing, pays accounts as
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agreed".
CR2.CPR
PAGE 2
CR3.CPR
PAGE 3
CR4.CPR
PAGE 4
************************************************************

TI=\MMPI EVALUATION
IM= 135P01.CPR
DA= August 7, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
8
SU= SUMMARY: In efforts to rescind the allegations of insanity that
everyone was blatenly accusing Stan Caterbone of
posessing, Stan Caterbone had selected a Psychiatrist
from the Yellow Pages of the telephone book. He chose
Dr. Marshall Levin, of Northfield, NJ. The documents are
a sampling of the 530 question test that Dr. Levine used
to evaluate the mental state of mind of Stan Caterbone.
This meeting was conducted at 554 Berkley Road, Stone
Harbor, NJ. The test was an exercise in futiity. Dr.
Levine had ruled Stan Caterbone mentally ill.
IM= 135P02.CPR
DI= PAGE 02
IM= 135P03.CPR
DI= PAGE 03
IM= 135P04.CPR
DI= PAGE 04
IM= 135P05.CPR
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IM= 135P06.CPR
DI= PAGE 06
IM= 135P07.CPR
DI= PAGE 07
IM= 135P08.CPR
DI= PAGE 08
************************************************************
TI=\FMG, Ltd., CRIMINAL ARREST THREAT TO S. CATERBONE
IM= 136P01.CPR
DA= August 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: A letter to Stan Caterbone from the "Board of
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Directors" of FMG, which was actually signed by Robert Long. The
letter alleges the following: that Stan Caterbone is in
debt; that any future sale of his stock will be reduced
by the build up of any future debt; that any stock sale
will be reduced "by the time and costs in dealing with
either guardians or your pending bankruptcy"; and finally
FMG threatens criminal charges for attempted embezzlement
burglery, employee theft, with a long prison term. Also
the filing of the preceding charges has nothing to do wih
IM= 137P02.CPR
DI= PAGE 02
************************************************************
TI=\TITLE:
KAUFFMAN LETTER TO S. CATERBONE RE: SHUT-OUT
IM= 137P01.CPR
DA= August 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Stan Caterbone from Robert Kauffman
advising Stan Caterbone that Robert Kauffman and other FMG
management will "not personally discuss any matters
regarding your past affiliates and stock proposal with
our firm".
************************************************************
TI=\INVOICE FOR CAR PHONE INSTALLATION
IM= 138P01.CPR
DA= August 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The invoice is for the installation of a car phone in
the Volkswagen of Stan Caterbone. Warcom Inc., of
Absecon, NJ. While driving home, Stan Caterbone had
called Mary Lynn Dipaolo, who made numerous allegations
pertaining to his mental condition. Stan Caterbone had
told Mary Lynn Dipaolo that he was going back to
Hollywood to try to work on the Gamillion Studios deal.
In the proceeding document, the psychiatrists refer to
having hallucinations about being a "Film Exec".
************************************************************
TI=\SUICIDE ALLEGATIONS, IMPROSONMENT, HOSPITALIZATION
IM= 139P01.CPR
DA= August 11, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
10
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SU= SUMMARY: On August 11, 1987 Family members of Stan
Catebone had come to Stone Harbor to attempt to get Psychiatric help
for Stan Caterbone. In what turned into a heated and
excited confrontation, Stan Caterbone had ran block away
to the Stone Harbor Police Department in order to issue
a restraining order against the said family. In contrary
the Stone Harbor Police imprison Stan Caterbone, and take
him to the Berdette Tomlin Hospital, sirens and all and
admit Stan Caterbone on allegations that he "was going to
California to Kill himself, as did his brother".
Sources
have said that the phone call to the Stone Harbor Police was
was made by Jere Sullivan and/or Mary Lynn DiPaolo.
IM= 139P02.CPR
DI= PAGE 02
IM= 139P03.CPR
DI= PAGE 03
IM= 139P04.CPR
DI= PAGE 04
IM= 139P05.CPR
DI= PAGE 05
IM= 139P06.CPR
DI= PAGE 06
IM= 139P07.CPR
DI= PAGE 07
IM= 139P08.CPR
DI= PAGE 08
IM= 139P09.CPR
DI= PAGE 09
IM= 139P10.CPR
DI= PAGE 10
************************************************************
TI=\AVOLON POLICE DEPARTMENT ARREST RECORD
IM= 140P01.CPR
DA= August 14, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: On the evening of August 14, 1987, persons again
invade Stan Caterbone's house in Stone Harbor and make repeated
questions and allegations insinuating that Stan Caterbone
had done something to get into such trouble, not to
his mental state of mind. Stan Caterbone had proceeded
to the Avalon Police Department in hopes of ordering a
restraining order, as he did with the Stone Harbor
Police, a few days earlier. However, on the way Stan
Caterbone was arrested for speeding, an completely dry
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beer can under the seat, and a bottle of muscle relaxers.
140P02.CPR
PAGE 02
140P03.CPR
PAGE 03
140P04.CPR
PAGE 04
************************************************************

TI=\SCHWELLER INVOICE FOR LEGAL FEES


IM= 141P01.CPR
DA= August 18, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Invoice from attorney Lew Schweller for services up
to August 3, 1987.
IM= 141P02.CPR
DI= PAGE 02
************************************************************
TI=\BILL JOHNSON DEMAND NOTE WITH S. CATERBONE
IM= 142P01.CPR
DA= August 21, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A copy of the Confession of Judgement for the note
of $25,000 with Bill Johnson for the loan to Stan Caterbone
for the purchase of the aircraft. This note was paid in
full by July 31, 1988 by Stan Catebone.
************************************************************
TI=\KAUFFMAN LETTER RE: PATTERSON GUARDIANSHIP
IM= 143P01.CPR
DA= August 24, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Robert Kauffman to Millard Johnson
a message that Bill Jonson had left for Robert Kauffman.
Robert Kauffman had earlier tried to pursuade Bill
Johnson to provide testimony that the $25,000 that
Bill Johnson had had loaned to Stan Caterbone, was
actually monies that Bill Johnson had given to Stan
Caterbone to invest, and Stan Caterbone had actually
embezzeled the monies. Bill Johnson almost threw Robert
Kuaffman through the window. Robert Kauffman then told
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Bill Johnson that FMG was responsible for the debt.
************************************************************
TI=\LEGAL ISSUES PERCIEVED BY S. CATERBONE
IM= 144P01.CPR
DA= August 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
14
SU= SUMMARY: Stan Caterbone had formalized legal actions against
all those that were obvious members of the conspiracy.
Notice should be taken that persons from FMG, Ltd, and
the banks have completely diverted attention away from
James Guerin and ISC.
IM= 144P02.CPR
DI= PAGE 02
IM= 144P03.CPR
DI= PAGE 03
IM= 144P04.CPR
DI= PAGE 04
IM= 144P05.CPR
DI= PAGE 05
IM= 144P06.CPR
DI= PAGE 06
IM= 144P07.CPR
DI= PAGE 07
IM= 144P08.CPR
DI= PAGE 08
IM= 144P09.CPR
DI= PAGE 09
IM= 144P10.CPR
DI= PAGE 10
IM= 144P11.CPR
DI= PAGE 11
IM= 144P12.CPR
DI= PAGE 12
IM= 144P13.CPR
DI= PAGE 13
IM= 144P14.CPR
DI= PAGE 14
************************************************************
TI=\SYDER FUNERAL HOME DEAL WITH SCOTT ROBERTSON
IM= 145P01.CPR
DA= August 26, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
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SU= SUMMARY: A contract between Scott Robertson and Stan
Caterbone for the sharing of income recieved from the account
of the Chip Snyder & Associates Funeral Trust Accounts.
Chip Snyder and his family had recently vacationed in
Avalon, NJ. Chip Snyder was a friend of Stan Caterbone's
and was quite curious as to what was going on. Stan
Caterbone had described the real circumstances and events
and Doreen Snyder had actually begun to throw up after
hearing the truth. Scott Robertson in the middle of
trying to get Chip Snyder to transfer the account to FMG.
************************************************************
TI=\LETTER TO DIANE SAWYER OF 60 MINUTES BY S. CATERBONE
IM= 146P01.CPR
DA= August 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Diane Sawyer from Stan Caterbone in
efforts to recieve some kind of help regarding the conspiracy and
blackmail. By this time, all conventional methods of
pleading for help from local, state, federal, and even
legal authorities have been exhausted and have proven
fruitless, not to mention exhausting.
************************************************************
TI=\FEDERAL EXPRESS INVOICE TO 60 MINUTES
IM= 147P01.CPR
DA= August 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A Federal Express Invoice to Stan Caterbone
confirming the reciept of a letter delivered overnight to Diane
Sawyer of CBS 60 Minutes, accepted by D. Parker.
************************************************************
TI=\RODA INVOICE FOR LEGAL FEES
IM= 148P01.CPR
DA= September 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from attorney Joe Roda to Stan Caterbone
requesting payment for services rendered from July 1,
1987 to July 22, 1987. Mention was also made to the
copy charges advanced on the behalf of Stan Caterbone.
Joe Roda asked for the immediate attention of Stan
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Caterbone.
************************************************************
TI=\STATE POLICE PHONE DIRECTORY FOUND IN THE HOME OF S. CATERBONE
IM= 328.CPR
DA= September 3, 1987
PA= PAGES: 1
SU= Upon the arriving home at 2323 New Danville Pike, Conestoga, PA, from
Stone Harbor, Stan Caterbone found notes that were left by Jim Warner.
Jim Warner was living in his house upon being transfered from New Jersey.
The notes contain the phone numbers of several state police departments;
including Avondale, Philadelpia, New Jersey, Delaware, and Pennsylvania.
It should be noted that James Warner was working on the Lancaster
County Waste Management Authority Incinerator Bond Issue. The attorney
representing Mr. Warner was Steven Spinello, the same attorney that
apparently negotiated the ISC -- Ferantti Merger & Acquisition, for
James Guerin, during the summer of 1987, and settled in November of '87.
Ironcially, the firm that was awarded the underwriting for the
Bond issue was Hopper Soliday, of which Gib Armstrong is an executive.
Gib Armstrong had sold Stan Caterbone the original ISC stock, while
working for Individual Securities. Stan Caterbone had also called
Gib Armstrong in July of 1987, pleading for help, and discussing the
circumstances regarding his "Blackmail". Gib Armstrong had said he
would call the Pennsylvania Attorney General's Office, of course he
never did anything.
James Warner also had called Tom Caterbone, brother of Stan Caterbone,
on or about December 16. 19901 to question whether Stan Caterbone was
taking his medication, and to insinuate that Stan Caterbone was again
having another relaps of his "alleged insanity".
This had occured
after Stan Caterbone had publicely acknowledged that it had come time
to resolve any and all related implications that had promugated from the
"Blackmail" of 1987. Stan Caterbone had also told Jim Warner on the
evening of December 12, 1990 that he was producing an interactive
CD-ROM disc that contained all relevent documentation and all recorded
conversations pertaining to the same.
************************************************************
TI=\MANHIEM TOWNSHIP CRIMINAL CHARGES
IM= 149P01.CPR
DA= September 3, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Formal Criminal Charges of Terreoristic Threats filed by
Complaintant Detective Larry C. Siegler, of the Manheim
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Township (Political Subdivision) Police, Commonwealth of
Pennsylvania against Stanley J. Caterbone, Defendant.
A Criminal Complaint was filed on September 3, 1987 for
an alleged "Terrioristic Threat" that occured sometime on
September 1, 1987. It was so "Terrioristic" that it took
2 days to phone police, and June Kemper, who allegedly
took the call, could only recall the time between 9am-12p
************************************************************
TI=\MANHIEM TOWNSHIP CRIMINAL CHARGES II
IM= 150P01.CPR
DA= September 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Formal Criminal Charges of Burglary, Criminal Mishief
and Theft and Use of Computer, Unlawful Restraining, and
Robbery, filed by Detective Larry Mathias, Criminal
Complaintant, of the Manhiem Township (Political
Subdivision) Police, filed by District Justice Murray
Horton, Magistrtate District 02-1-02 against Stanley J.
Caterbone. All charges against Stan Caterbone are in
essence and by Pennsylvania Securities and Contract Law
are charges for burglarizing his own leased property and
stealing his own corporate and business files.
IM= 150P02.CPR
DI= PAGE 02
************************************************************
TI=\PRISON RECIEPT FOR ARTICLES AT LANC. COUNTY PRISON
IM= 151P01.CPR
DA= September 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The actual Prison Reciept of Stan Caterbone upon
being stripped of his clothing, and demanded to take a cold
shower, after which he already suffered a recurring
hyperthermia, after being "thrown" in the Manhiem
Township holding cell with little clothing, on a night of
already record low temperatures. Stan Caterbone was
denied any phone calls to attorneys or others for bail.
************************************************************
TI=\LANCASTER NEWSPAPERS REPORTS OF S. CATERBONE
IM= 152P01.CPR
DA= September 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
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PA= PAGES:

SU= SUMMARY: "CONESTOGA MAN LINKED TO THEFT" and


"EX-WORKER CHARGED IN BURGLARY AT FIRM" were the reports
published in the Lancaster New Era, and the Lancaster Intelligencer
Journal, owned by the Steinman Family. Articles read as
follows: "A 29-year-old Conestoga man was arrested
Thursday night on charges that he erased information from
a Manhiem Township company's computers, stole files and
damaged equipment. Stanley J. Caterbone 29, of 2323 New
Danville Pike, was charged with burglary, theft, unlawful
use of a computer, criminal mishief and terroristic
threats. Detective Larry Mathias said the victim, Financail
Management Group, Ltd., 1755 Oregon Pike, lost an estimated
$60,000 as a result of Caterbone's actions. Caterbone allegedly
forced a cleaning person, Stacy L. Waters, 19, of Lititz, to
accompany him through the business during the crimes. He also
was served a warrent for terroristic threats in a case involving
employee of the company, was commited to prison in lieu of
$30,000 bail.
************************************************************
TI=\PRISON REQUESTS OF S. CATERBONE
IM= 153P01.CPR
DA= September 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
10
SU= SUMMARY: "General Purpose Request Form" used to make
requests in the Lancaster County Prison that Stan Caterbone used
during his stay from September 4, 1987 to September 9,
1987. The forms continue the quest by Stan Caterbone
to recieve additional clothing and medication due to the
extreme exposure to cold that the Manheim Township Police
and the Lancaster County Prison used as a means to
intimidate Stan Caterbone. Stan Caterbone also requests
guest priveledges for attorney Tim Lanza, attorney Jeff
Jamouneau, Mary L. Dipaolo, Bill Johnsons and Diane Sawyer.
IM= 153P02.CPR
DI= PAGE 02
IM= 153P03.CPR
DI= PAGE 03
IM= 153P04.CPR
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IM= 153P05.CPR
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153P07.CPR
PAGE 07
153P08.CPR
PAGE 08
153P09.CPR
PAGE 09
153P10.CPR
PAGE 10
************************************************************

TI=\OLD HICKORY REAL ESTATE APPRAISAL


IM= 154P01.CPR
DA= May 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
14
SU= SUMMARY: The apraisal package submitted to Stan Caterbvone
from Norris Boyd of Boyd Wilson. The appraisal was performed on Olde Hickory
Properties, located on Orgon Pike. Noriss Boyd had requested a
proposal to refinance an existing mortgage held by Commonwealth National
Bank. Al Dannatt had traveled from Houston, Texas, to ispect the properties
for preliminary due diligence procedures. A propoas was officailly
submited for the procurement of approximately $5 million dollars. Noriss Boyd
had communicated to Stan Caterbone that the terms were more
favorable than those submitted by the Commonwealth National Bank, which
subsequently repossed his the Navojo Chieften aircraft, 23 days before the first
payment, at 9:30 pm on July 3, will all personal and business files on board!
IM= 154P02.CPR
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IM= 154P03.CPR
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DI= PAGE 08
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IM= 154P11.CPR
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154P13.CPR
PAGE 13
154P14.CPR
PAGE 14
154P15.CPR
PAGE 15
************************************************************

TI=\BAIL BOND FOR S. CATERBONE


DA= September 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES: 01
SU= SUMMARY: Copy of the Bail Bond, executed by Indiana
Lumbermans Insurance Company represented by Alfredo Marchio, of
529 Cherry St., Reading PA. The Bail was $20,000.00
or $1400.00 for the Surety Bond. The Bail was set up
by Mary Lynn Dipaolo. Stan Caterbone was transported
directy to the St. Joseph Hospital Mental Health Unit
BY Mike Caterbone, and Mary Lynn Dipaolo. The condition
for Stan Caterbone to get the Bail Bond, was that Stan
Caterbone must voluntarily admitt himself into the St.
Joseph Mental Health Unit, as confirmed by Robert Byers.
************************************************************
TI=\ST. JOSEPH HOSPITAL MENTAL HEALTH GUIDE
IM= 155P01.CPR
DA= September 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
7
SU= SUMMARY: A copy of the "Inpatient Mental Health Unit Patient
Guide". The guide also includes notes written by
Stan Caterbone that gives indications of guilt by
association.
IM= 155P02.CPR
DI= PAGE 02
IM= 155P03.CPR
DI= PAGE 03
IM= 155P04.CPR
DI= PAGE 04
IM= 155P05.CPR
DI= PAGE 05
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TI=\ST. JOSEPH HOSPITAL INVOICE
IM= 156P01.CPR
DA= September 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter and copy of the invoice for the Hospital bill
of Stan Caterbone for $3,064.60 for the stay from
09/09/87 to 09/14/87.
************************************************************
TI=\LETTER TO CAPELLO & FOLEY
IM= 157P01.CPR
DA= September 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Stan Caterbone, form Diane Campbell,
of law firm of Capello & Foley, Santa Barbara CA,
enclosing a copy of the newspaper articles of Stan
Caterbone's Criminal Charges, and sarcastically thanking
them for all of their help.
************************************************************
TI=\PENNSYLVANIA SECURITIES COMMISSION MEETING TRANSCRIPT
IM= 159P01.CPR
DA= September 29, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
27
SU= SUMMARY: A copy of the actual recorded transcript fron the
investigation of the Pennsylvania Securities and
Exchange Commission, conducted at 2323 New Danville Pike
Conestoga, PA. Howard Eisler conducted the meetings from
10:00am to 2:30pm. Stan Caterbone discusses all
circumstances and or events include Commonwealth Bank,
Manheim Township Police, Larry Mathias, Larry Siegler,
Joe Roda, Lancaster Aviation, Farmers First, Jeff
Jamouneau, Lancaster New Era, Kauffman, Hartlett, FMG,
Ltd., Loss, Long, Peneros, Robertson, Olde Hickory, Boyd.
DATE:

SEPTEMBER 29, 1987

TIME:

10:00 AM

PLACE:

RESIDENCE OF STAN CATERBONE


Page 101

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2323 NEW DANVILLE PIKE
CONESTOGA, PA
17543
PERSONS:

<STAN CATERBONE> COMPLAINTANT


<ROBERT BEYER> ATTORNEY REPRESENTING STAN CATERBONE
<BILL JOHNSON> CLIENT OF STAN CATERBONE & FMG, Ltd.,
<HOWARD EISSLER> INVESTIGATOR FOR PENNSYLVANIA
SECURITIES COMMISSION

<STAN CATERBONE> I still am the minor one <HOWARD EISSLER> yes, the Financial Management
Group -there is about 50 names I am dealing with here
and they are all very similar so I have to be --- Financial
Management Group Ltd. filed for 202B exemption. Now
all the security sold in PA had to be registered. Some
securities are exempt but you have to apply the
detention type of thing. It is a registration, not a
registration that __________ so the 203D exemption was
filed for. Of course we have added the security
statement - explanation of where the money is going to
be spent, how it is going to be run, who runs the
corporation and all that sort of thing. Now under the
umbrella of this Financial Management Group there is a
whole (now I am repeating what is in the 203D which I
spent some time Friday reading) - there is about 15, 14 I guess under that there is about 5 other corporations
which are going to be an insurance agency, an
investment advising agency, a group <STAN CATERBONE> now a lot of these things have
not come about. Well we simplified it.
<HOWARD EISSLER> What do you mean simplified it?
<STAN CATERBONE> They are operating but because
of the accounting procedures they would have been a
nightmare with all those stubs.
<HOWARD EISSLER> So, they are operating <STAN CATERBONE> the only one that's separate
distinction is the IRA. Everything else is operating under
Financial Management Group Limited.
<HOWARD EISSLER> So these other corporations have
not really come into being.
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<STAN CATERBONE> Technically, legally, no.
<HOWARD EISSLER> I
application for an
selling securities
came in under your

seen also, I guess there is an


investment advisor. Now, if you are
or dealing with __________. Now that
name...

<STAN CATERBONE> at that time I was President,


<HOWARD EISSLER> but now there is another
application in that is being acted on now by somebody
else.
<STAN CATERBONE> There is?
<HOWARD EISSLER> I don't know who.
<STAN CATERBONE> Is that for the advisor?
<HOWARD EISSLER> Yes, the investment advisor.
<ROBERT BEYER> Do your current records in Harrisburg
indicate that he is still an executive with FMG?
<HOWARD EISSLER> Yes, because this offering
memorandum was given back last March I think, - last
August - when I initially did it. Oh, no, pardon me. We
are talking about two different things. You are talking
about your application for the investment advisor.
<STAN CATERBONE> No, I am talking about FMG - the
offering memorandum was done last August because
that's when I started raising the money. August of 1986
is when I did the initial filing for the offering
memorandum - the 144 Reg D. Coming up this October
is the 203D, 15 months after conception.
<HOWARD EISSLER> Alright, yea.
that is due a year after -

There is a report

<STAN CATERBONE> Right, that's what is coming up <HOWARD EISSLER> to explain how much money was
raised and where it was spent with the idea then of
protecting investors. The idea of the _________ your are
limited to like 35 investors. You can't sell to 105 - you
are limited. What the state does is comes in and says,
how are you going to raise the money in your offering
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memorandum. Then a year after it is raised, or a year
after _________ they come in and say, now what did you
do with the money. You raised 4 hundred and some
odd thousand, now how did you spend it? Now that has
not been filed yet.
<STAN CATERBONE> It is due, in fact I think it is
overdue. It is due October 20. I got the letter right here.
They just sent me the letter. You guys just sent me the
letter, I have it right here.
<HOWARD EISSLER> I have nothing to do with that
end of it. I just came, well whenever I called you _____
I didn't get a hold of you the next day; it was the
following day which was Friday that we made contact.
<ROBERT BEYER> Our idea in coming here was to let
you ask whatever questions you had in terms of the
investigation. Of my limited knowledge of the type of
securities these guys deal with and securities in general,
the things that came to interest me was the fact that
there are stock certificates in here in force with names
on them that ________, that there are with the annual
report, his name is forged by someone else.
This gentleman has some involvement with the original group
and the President suggested that he make false reports
to the bonding company so that he can get money back.
They are the three things that stuck out to me as a
regular criminal attorney, that I thought you might be
interest in because, but like I say, we are here to have
you ask questions of anything that you might.
<HOWARD EISSLER> O.K., this offering then - when
Financial Management Group limited applied for their
203D, I get the idea they were going to raise four
hundred and some odd thousand dollars. At that time,
they listed Bob Kauffman at 60,000 shares and you and
Hartlett 40,000 a piece. So, Kauffman at this point is the
main factor? Or, when I was talking to you, it was really
your idea that put this whole thing together.
<STAN CATERBONE> I put it all together. I brought
him up from Atlanta to be president because I have a lot
of business interests and I didn't want to be tied down to
the day-to-day operation. Plus, I never had any
management experience. Most of my work was
consulting, business deals, this and that, so I actually
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brought him up from Atlanta to be president.
<HOWARD EISSLER> And, Hartlett - is he a complete
local person. He's local.
<STAN CATERBONE> We all started together in IDS
back in 1982.
<HOWARD EISSLER> That's your connection with
Kauffman, you know him through IDS?
<STAN CATERBONE> He's the one that got me started
in business. I am the one who took him to FSC, that
was our broker/dealer and we started putting it together.

<HOWARD EISSLER> Are they registered as FSC?


<STAN CATERBONE> Yes, that's John Keegel.
<HOWARD EISSLER> This similarity in names is a
hassle; you are going to have to bear with me because
you throw these names out at me -----.
So then, you had the public offering which you were
going to sell another 120,000 shares and raise $435,000.
That would be in addition to what you people put in.
<STAN CATERBONE> We put in 20 grand a piece.
Well, we had 5 people. You were allowed 5
shareholders - so we put in 5. Five put in 100,000 <HOWARD EISSLER> five at 20,000 you mean?
<STAN CATERBONE> No, it was a little bit more than
that. Three of us put in 20; two put in 25.
<HOWARD EISSLER> What we are talking roughly is
one half million dollars?
<STAN CATERBONE> Right.
<HOWARD EISSLER> Financial Management Group
now is responsible for maintaining proper control over
that money and it would be invested as 5 - now I don't
know how many people <STAN CATERBONE> there is roughly 18-25 - that was
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sold as a result of the public offering.
<HOWARD EISSLER> I have that here.
<ROBERT BEYER> Do you mind if I look at it.
<HOWARD EISSLER> That's o.k. I went through a half
hour of frustration to get here. I wasn't running late until
I got caught in the ______. The way you described it, I
assumed it was going to be in the country and I knew...I
stopped at the Post Office. I said where is 2300 New
Danville Pike. I don't know. I was here on Friday and I
drove past it this morning. You'll bear with me then.
This is interesting. I've got about 40 shareholders.
this as a result of the 203 deal?

Is

<STAN CATERBONE> Yes.


<HOWARD EISSLER> Did you know about that. These
are all the ones that are forged by the other guys?
<STAN CATERBONE> No, no, just one is forged.
<HOWARD EISSLER> Now, you people were acting as
your own sales _________. Were those funds all
properly accounted for? Were they all collected and put
in the bank and the people received their stock
certificates.
<STAN CATERBONE> Uh, huh.
<HOWARD EISSLER> Who all would have been in
charge of that. Mainly me. I was in charge of just about
everything. Now, we have one-half a million dollars or
there about in the bank account.
<HOWARD EISSLER> Where?
<STAN CATERBONE> They never would show me the
book - my partners - never. They never showed anyone
the books to this day. I got shut out literally.
<HOWARD EISSLER> What brought that about?
<STAN CATERBONE> They were trying to take the
company from me from day one. I had too much power,
too much control. They wanted to cheat and be
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dishonest and I wouldn't. What happened was we had
to acquire an interest in a broker/dealer to assume our
equity, to realize our equity potential. So back in
January, we drummed up this deal with a broker/dealer
called Hibbard and Brown out of DC.
The deal was we were going to acquire 20% of their broker/dealer
in return for aligning our group with them. What I found
was - I went down there after about 3 weeks of them not
doing what we needed, I got scared. I had so much
money and time into this company. I went down there
myself and found an empty shell - nothing. Now, as a
corporate office, I know how liable I am, for everything,
personally. Then what I find out is that Hebron is a bornagain, just like Kauffman.
<HOWARD EISSLER> Oh, Kauffman is <STAN CATERBONE> yes. And, Hartlett is a Jehovah
Witness. I get pissed off, so I swing the whole board,
change everything and I line us with Planner's Security
Group in Atlanta - Bill Koegler. Now, in that group is
Wade Webster, Bill Carter - all the former IFP presidents.
ISP? International Association for Financial Planners - the
big guys. So, I swing everything around, turned the
whole board over, aligned up with them.
The day after I get back from Atlanta, Kauffman calls me into
his office and goes through this spiel with "I thought I was
president, who's running the company?" I said "I don't
care who runs it, it just got to be run right and for the
right reason". Two weeks later, I am in New Jersey
working on a movie and doing some things - I had my
lock changed in my office for security reasons. I find
that they have all these stock certificates and everything
that were in my office.
<HOWARD EISSLER> You had the locks changed?
You had them changed yourself, but they still got into
your office?
<STAN CATERBONE> I don't know how. They stole
my files. July 1, I went in and took all my files out of the
office and went to an attorney, Joe Roda, and explained
what happened. Nothing. I met with attorneys in New
York, New Jersey, Boston. I found all these security
violations and everything else, but no one could help me.
Then, about four weeks later, I called the SEC, the
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NASD, the FBI, the Attorney General, Senator, Governor,
everybody. And, they all think I am bluffing.
<BILL JOHNSON> Actually, they all thought he was
crazy.
<STAN CATERBONE> They all thought I was crazy.
And that was started because of Robert Kauffman.
That's what he did. The day after I went out and got my
files out, he spread rumors that I left the company, that
I was thrown out, that I was mentally unstable, that I was
spending money. At that same time, I get blackballed by
all the local lending institutions. They repossessed my
plane three weeks before my first payment, with the files
in it, of which a brother of the broker in FMG is one of
the lending officers. It gets ugly. That was before he
spent the 5 days in jail. I tried to get arrested. I had to.
<HOWARD EISSLER> Then after you were arrested,
you were in the hospital at St. Joseph.
<STAN CATERBONE> I was coerced into going there.
<ROBERT BEYER> No, that was my idea. I wanted him
in a place where we were going to satisfy the victim so
to speak, and the police at one point, that he would still
be able to work with them. In reality, he was in the
hospital but had his car in the parking lot. He was going
to play basketball and come back. He was not
committed. He was just there.
<STAN CATERBONE> I walked in to satisfy the
bail.
<HOWARD EISSLER> Are you on medication?
<STAN CATERBONE> No.
<HOWARD EISSLER> One of the police officers
mentioned to me that he was ___________ and that you
are alright now.
<ROBERT BEYER> Again, this might be one of these
stories coming from FMG.
<STAN CATERBONE> What Kauffman did was, back
when they started doing this I had a psychiatrist that was
my client. I was depressed. I mean they were making
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a fool out of me in public; they were firing people that
were very close to me for no reason other than they were
close to me. So I went to Al Schultz, a psychiatrist,
because I was depressed. Very normal, given the
environment I was thrown in after putting this big thing
together then having these guys slam it in my face, then
take all the credit for what I did.
He diagnosed me as having bipolar, depression. My father was
schizophrenic and my brother committed suicide two years ago.
reason he diagnosed that was because I was on a low,
and at previous times he thought I was on a high when
I put this company together. So, what I did was, three
weeks before July 1, this previous July 1, I told Kauffman
that I went to see a psychiatrist because of how
depressed I was because of what he and Hartlett were
doing. They fed on that, and tried to use that to use as
their alibi for what they have done to me.
<HOWARD EISSLER> Again, the way I am getting this I didn't know anything to start with - I just happened to
make inquiry at the police office and one said that you
were taken medication
<STAN CATERBONE> I was not. __________ See, that
was all started by Kauffman. He actually he had
meetings with my family to have me committed and take
guardianship over my assets so he could buy the stocks
from them at what ever price he felt like it.
<ROBERT BEYER> Incidentally, you may want to point
out that as late as mid-August of this year, Kauffman
wanted to buy you out for $2.50 a share or something
like that. We have that documented.
<STAN CATERBONE> Eight weeks prior to that, I was
working with the attorneys to do a 5 to 1 split. That
makes the stock worth $25. Either he is ripping me off
or he is ripping the people off who are paying $25 a
share.
<HOWARD EISSLER> The offering as you people had
it was 3 ______ prices. It was $5 a share. Was that
issue completely sold - that 120,000 shares?
<STAN CATERBONE> No.
<HOWARD EISSLER> Was the best part of it?
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<STAN CATERBONE> There was 4 hundred and some
thousand sold.
<HOWARD EISSLER> Did you buy any of that stock?
<STAN CATERBONE> No, I was in the organizational
sale.
<HOWARD EISSLER> You don't know how that money
is being accounted for now.
<STAN CATERBONE> I have the corporate books.
When I went in there June 30, I mean I was in there. I
mean it is not like I went in from the outside; I had a
plane and was flying back and forth for me. In fact, what
happened was, I was granted a 60-day leave of absence
late June with pay. Really, what I wanted to do was
meet with legal counsel and find out how I was going to
resolve all these problems that I was finding.
What happened was, in June I copied everything in that office
(June 30th), and I copied the books. You see, I
developed a computer system. So I just took one of the
copies - it was a big system. I've got the books. I don't
know how accurate they are because the way that the
guys kept the records, the accounting is all screwed up
too. I have an idea, but I found a lot of money going to
people that should not have been.
<HOWARD EISSLER> In what way?
<STAN CATERBONE>What they did was, there was a
lot of Jehovah Witnesses that were hired in that firm receptionist, cleaning, etc. Then what they did was
replace all the staff people that I brought in with their
own. Then, there was money going out to a fellow by
the name of Tom Turner in Minneapolis.
Now Tom Turner was the biggest divisional
was terminated by IDS in February because
convictions - another born-again. Then I
was making $750,000 a year with IDS and I
loaning him money?

manager in IDS.
of religious
find this guy
find FMG

<HOWARD EISSLER> Is that what they are going after in the form of loans?
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<STAN CATERBONE> Yes.
<HOWARD EISSLER> And, how much money are we
talking about going to Tom.
<STAN CATERBONE> 12-15 grand.
going to Kauffman's wife.
<HOWARD EISSLER> Large amounts?
a hundred dollars?

Then, I find checks

Are you talking

<STAN CATERBONE> No, a thousand here, $800 here.


<HOWARD EISSLER> FSC, which is a registered
broker/dealer, was an entity started by you?
<STAN CATERBONE> No. What happened was, back
in 1983 I had a dinner meeting - I was running the local
chapter of the IAFC - and I drummed up a business
meeting and had Alex Armstrong. Do you know who
Alexandria Armstrong is? Yea. She was one of the
most prominent financial planners in the company, a
woman from DC. I brought her up to speak and I told
her that I wanted to get out of the proprietary business.
She said, go talk to John Keeble FSC.
Now, this is when Kauffman, Hartlett, everybody was still at IDS.
So, I went an had a meeting at FSC in Atlanta. At this time,
Bob Kauffman was the Divisional Manager for IDS in
Atlanta. The next thing I know, I left; then he was hired
by FSC to be an officer and to run their sales force.
<HOWARD EISSLER> Then the idea of the company
you are forming up here is to invest other people's
money?
<STAN CATERBONE> No, it is a one-stop financial
entity - provides services in mortgage backing,
investment backing, insurance, real estate, taxes,
lending, portfolio management, everything. I had it
researched legally by a leading patent law firm in Phila.
It is definitely the most innovative in the country. There
is not a firm in the country offering all the services that
we offer.
<HOWARD EISSLER> Now, just up the street from your
place - _______________________. They are along that
line.
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<STAN CATERBONE> I mean big. We're talking an
office of 10,000 sq. ft. right here and 35 people; then we
travel all over the country. When I say offering services,
we have 2 attorneys in there, we have 2 realtors, 4
insurance people, a portfolio manager, 8 financial
planners, 5 brokers - I mean, in depth. Before I left, I
was working on mortgage banking. I had started a
mortgage banking operation and the minimal loan I wa
looking at was $3,000,000. I bet you I bid on
$150,000,000 in the first 6 months of 1987.
<HOWARD EISSLER> These were loans that you were
going to provide the people with?
<STAN CATERBONE> You bet. Where was those
funds going to come from? They were coming from the
largest biggest insurance companies, the largest pension
funds, and some of the largest banks.
<HOWARD EISSLER> O.K, you were going to be as a
mortgage banking type of thing.
<STAN CATERBONE> That is right.
<HOWARD EISSLER> You were not lending the money;
you were putting the lenders together with the borrowers
and you get a finders fee, or whatever.
<STAN CATERBONE> Yes.
<HOWARD EISSLER> Bill, how did you get into this?
You were an initial investor?
<BILL JOHNSON> No, I've been with Stan since he
started in business in 1982. I had come into some
money and I was investing. I had lent Stan some money
and things got really screwed up with _____ and all.
FMG told me that they were responsible for the money
because Stan was an officer of the company and that
they would ______________________.
Then, after several meetings with them, they more or less asked me
to say to the bonding company (that they took out after
June 30th of this year) - they wanted me to tell the
bonding company that I gave Stan the money to invest
for me and ________ with the funds, which I flat our
refused to do. As a matter of fact, I damn near punched
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Kauffman in the mouth when he was asking me to
commit a very serious crime.
<HOWARD EISSLER> Now, Kauffman's background, is
decent, is it not?
<STAN CATERBONE> Clean on paper. I mean he
worked for - clean on paper; there's a lot of people after
that man. What he did to FSC was, he was double
dipping. He was telling FSC that we were going to stay
with FSC the rest of our lives; in reality, he was telling
me that we were telling them what I wanted them to hear
that we were going to do our own broker/dealer so we
could obtain our own equity. And then, I find out that he
is receiving a salary from FSC up until February this year.
Plus, his salary is in violation of the offering
memorandum. Two weeks before I left, he had the
Board approve a salary of about 2-3 times what is in the
offering memorandum.
<HOWARD EISSLER> Maybe this is why the 203D they're dragging their feet on this.
<STAN CATERBONE> They don't know what to do. I
did all that legal work; they don't know how to do it.
<HOWARD EISSLER>This offering memorandum we
are talking about - I just copied this. This is just happens
to be page 9 and 10 because the type of information that
is in it. That is the only thing we do not have a copy
here of. Well, we have a copy in the office if you need
one. It is public information; there is no problem with it.
<STAN CATERBONE> So are the books public - I got
thrown in jail for trying to get them.
<HOWARD EISSLER> Well, we will try to resolve this;
it is not going to happen overnight.
Who is Kauffman connected with here.
<STAN CATERBONE> He called up everybody I know
and told them I left the company; told them I was
stealing money from clients; told them I was mentally
insane. I was doing business everywhere. I was doing
business with the Japanese; I was doing business with
the President of Sony; I was doing business with High
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at New York, Boston, Houston. Everybody all over the
country heard that I was insane. Everybody.
I've been 4 months without money. I haven't paid a bill since June
30. What do I do? No one believes me. I tried going to
the unemployment office. Do you know what they did?
When I was in the hospital, that was over $3,000. They
called up the insurance carried and told them to
terminate me - my hospitalization. I have nothing. The
only thing I have is what is in this house.
Well, Kauffman comes up here from Atlanta, and he's a
born-again Christian, so he comes together with a group
up here somehow. You see, he's hiring born-again
people... Jehovah Witnesses. Hartlett is a Jehovah.
There were more Jehovah Witnesses than there was
anybody.
<HOWARD EISSLER> But Hartlett was somebody you
brought in though, wasn't he?
<STAN CATERBONE> Well, what happened was I put
everything together. But would it not be right to say that
Hartlett would be your person as opposed to Kauffman's
person. Well, it is those two against me. They are the
two that are trying to take the company from me. See,
I controlled everything. Everyone went with what I said
because I did things that were right for business and
right for people. I treated people fairly and honestly.
People respected me more than anybody.
<HOWARD EISSLER> Did Kauffman in the initial
offering that you had, the preorganizational offering each of you put up $20,000 - did Kauffman put up 20?
<STAN CATERBONE> He got more stock; he never
paid the other 10 for the remainder of the shares. He
was supposed to put in 30 for his 50 - $.50 a share. The
three of you put in 20. Then, he had a back agreement
with me to sell me 10; so we both would have 50,000
shares. I got that contract and he never fulfilled that.
said no way are you getting more shares than me when
I put it together. I said you can be equal with me.
<HOWARD EISSLER> But how did that come about?
<STAN CATERBONE> We signed a back agreement so
Hartlett wouldn't get mad. I had to write to buy about
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10,000 shares from Kauffman, 50, to give us both 50 at
anytime at $.50 a share.
<HOWARD EISSLER> You have that agreement? Yes,
he never signed it after he got his 50. It was a bad move
on your part. There is nothing wrong with the idea but
do you think at that point he was conniving to do <STAN CATERBONE> he was conniving from day one.
When we put this thing together, I was in the middle
constantly between Kauffman and Hartlett. In fact, at
one time Kauffman was going over an idea - this was
over a year ago before we moved into the office - about
how he could set Hartlett up to get him out. Then, when
he couldn't get Hartlett out then the two of them tried to
get me out.
<HOWARD EISSLER> Now, everything is in place and
it is operational? But obviously you have a lot of
contacts to make this thing go.
<STAN CATERBONE> I'm out. I haven't talked to
anybody? But you did have initially.
<HOWARD EISSLER> You already made them and they
now have the <STAN CATERBONE> yea, I spent 5 years.
<HOWARD EISSLER> But now they've picked up your
contacts really, so to speak?
<STAN CATERBONE> Exactly right. They are acting as
mortgage bankers, etc. The whole bit - everything I put
into place, they just stole away from me. See, I never
communicated with people. I couldn't, only because I
couldn't find competent legal counsel to tell me what to
do. All they did, was send me bills. I didn't even want
to send a letter to everyone explaining the situation until
I got a competent legal counsel to tell me what is right,
what is wrong, and what to do. I went to 3 attorneys and
they tell me there is no violation - and I'm in jail for 5
days for what they did to me 3 months previous.
<ROBERT BEYER> Even according to FMG, Stan was
with the company until July 1,
<HOWARD EISSLER> is that right?
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_________________
<ROBERT BEYER> Here are 2 certificates, June 25th,
signed by Bob Long, Secretary.
<STAN CATERBONE> I was the Secretary, I was a
Board Member. And, this is April 24th, 1987 SemiAnnual Report in which someone - forged my name. I
never even saw that. They never even had an Annual
Shareholder's Meeting; they never let people examine
the books that have wanted to.
<HOWARD EISSLER> Of course, all of this would boil
down to their getting money from somewhere, extracting
money. Either they are cheating somebody and putting
it in their pockets or taking exorbitant salaries - is
business that good that it could stand that?
<STAN CATERBONE> We are paced to do $4,000,000
GCI (Gross Commission Income) a year, that's a lot of
money passing through your hands.
<HOWARD EISSLER> Now the people that are
____________, doesn't it affect those people?
skeptical of what's happening?

Are they

<STAN CATERBONE> I have no idea. I know the


clients that I have talked to to, that came down from New
Jersey to find out what really went on ran the other way
as soon as they talked to me. In fact, one woman got
so sick, she went downstairs and threw up when I told
her.
<HOWARD EISSLER> Well, you know the corporation,
regardless of what the situation is when there is a
problem like this with you, or anyone, the corporation
has to continue to function? The fact that somebody has
signed your signature to a financial management semiannual report, I don't know if that is a security violation,
in that end of it. If it would be corporate law, it may be,
but not at the security end of it.
<STAN CATERBONE> Well, someone changed my
address. Who knows who gets my mail? I never
changed it.
<HOWARD EISSLER> From where?
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<STAN CATERBONE> From 1755 Oregon Pike, FMG.
It goes here; it goes down to New Jersey. I never did it;
who did it. They go through all my mail - open all my
mail, then send it to me in bunches 10 days later.
<HOWARD EISSLER> This is the Financial
Management Group that does this? Of course, it is
coming to you as one of the principals in the
corporation, and if it comes in from their standpoint, they
wouldn't know if it had to do with corporate business or
your business personally. The fact that they opened it
may not be ethical, but I don't know that -.
<STAN CATERBONE> If you change my address, that
is forgery. You got to go to the Post Office and sign to
change an address, don't you?
<HOWARD EISSLER> Well, I don't know.
longer associated with them -

If you are no

<STAN CATERBONE> who says, I am no longer


associated with them.
<HOWARD EISSLER> The Post Office doesn't know
that. If somebody comes in and says you are no longer
here, you're over there - I don't know that the Post Office
<STAN CATERBONE> somebody there should not have
done it. These are things that show this is not fabricated or
something; they are actually happening. I got so
desperate I already wrote 60 Minutes.
<HOWARD EISSLER> How much money are we
talking?
<STAN CATERBONE> Millions.
<HOWARD EISSLER> That they have taken?
<STAN CATERBONE> I was Executive Producer of the
first digital movie ever, in the world. I was to get 40% of
the profits. I could have made 100-200 million dollars.
I was ready to do a deal with the owner of Turkey Hill.
I was supposed to receive a check in July for $200,000;
after he heard the rumor, he backed off.
<HOWARD EISSLER> How much have they
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squandered?
<STAN CATERBONE> How do I know?
their books.

I can't get at

<HOWARD EISSLER> These stock certificates that you


__________ Scott Robertson, for instance, bought
42,000 shares. Stock certificates wouldn't _____________ In June of 1987, he bought 2,000 shares
of stock. Now the signature that is forged on yours is
the secretary. It should have been yours, but there is
nothing wrong with the certificate as such - aside from
the secretary signing the certificate?
<STAN CATERBONE> There is something shady about
that stock deal too. You see this is a year, not quite a
year.
<HOWARD EISSLER> Would this be part of the of 203
offering?
<STAN CATERBONE> Yes, everything is.
part of the 203D.

All stock is

<HOWARD EISSLER> What I am saying is, Scott


Robinson bought the 2,000 at $5 a share or whatever; he
put up $10,000 and he was entitled to get a certificate.
If you weren't there to sign it Telephone call - someone for Bob Kauffman
If Scott Robinson put up the money and Peter
Ponderose put up 8,000 shares, if he paid $5 a share <STAN CATERBONE> they didn't pay $5; they paid
$2.50.
<HOWARD EISSLER> Regardless, they were entitled to
the shares. If they can't get at you to sign the shares <STAN CATERBONE> why couldn't they get me?
in that office.

I was

<HOWARD EISSLER> Oh, you were still there in June.


<STAN CATERBONE> Yes.

Even according to them.

<HOWARD EISSLER> When were you actually locked


out? July 1. That's when I went in there and took my
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files, when I found out they were doing that.
<STAN CATERBONE> Because they only way they
could get the certificates was to break into my office,
because I had them.
<HOWARD EISSLER> You had the stock certificate
book?
<STAN CATERBONE> Yes, I did everything - they didn't
even know how to do any of that stuff. That's how I
caught them. I knew the law because I did it. I did the
memorandum and everything.
<HOWARD EISSLER> The thing that is wrong with
these certificates basically is the fact that Long is signing
as secretary and at that point, on the 25th of June,
you're the secretary. As far as we know, these things
could have really been negotiated at the end of July and
backdated. I am not trying to beat you down.
<STAN CATERBONE> I got them July 1 - my attorney
copied them for me. That's how I got those copies.
<HOWARD EISSLER> What you are saying, prior to
your being locked out of this place, they were already
bypassing you. They found out that I was talking to an
attorney. Now what would they be afraid of when you
were talking to the attorneys. What they were doing. Of
course, they do have control of the corporation between Hartlett and <STAN CATERBONE> I did, I controlled the Board.
That is why they threw me out. When I made a decision,
the Board followed it. But now, they are gaining control
of the Board. I have no idea. I have never heard of a
Board Meeting.
<HOWARD EISSLER> Who is on the Board of
Directors?
<STAN CATERBONE> Me, Bob Kauffman, Mike Hartlett,
Bob Long and Alan Loss.
<HOWARD EISSLER> I heard those names; I can't
remember where. They were the signatures on the semiannual report. Is Long a born-again Christian.
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<STAN CATERBONE> No, he is the accountant who
hired from Main Herdman.
<STAN CATERBONE> Were you a party to hiring all of
these. Everybody. Pete Peneros was terminated by
Shearson and I was the only person in time to give him
a job. He already had some trouble with the NASD. He
was suspended; it took about 5 months just to get him
relicensed - they had charges against him, allegations forgery - in fact what he did in June was he went and
used another persons rep number at FSC to do options
trading and that person supposedly reported him, or
wanted to report him - Dick Sherbach.
<HOWARD EISSLER> Is he from Lancaster? <STAN CATERBONE> Greek.
<HOWARD EISSLER> But he is from Lancaster?
<STAN CATERBONE> Yes, but he was working in
Harrisburg at Shearson. They fired him in November.
<HOWARD EISSLER> I saw his name but I can't
connect it. So many names came up as a result of this I'm sort of swimming trying to get everybody straight.
It's not easy, believe me. Time is one thing that I have
a lot of <STAN CATERBONE> so do I.
what can I do?

I can't do anything else,

<HOWARD EISSLER> Did you ever hear of a _____ or


_______ organization? Some years ago, there was
some outfit - New Environmental Technology Remember when that was floating around. They had a
big shindig down at the Strasburg Inn. A lot of people
from New York came in. The whole thing fell through
although Environmental Technologies are is a local
corporation in business and they were trying to merge
with ___________ Shell Corporation out of New York.
<STAN CATERBONE> I am not familiar with it.
<HOWARD EISSLER> Again, it was a lot of born-again
people that would meet; they would push on the idea
that all things stock up. Well, I know he is running
advertisements on the radio that deals with the religious
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sect.
Now, that they are set up, does the Financial
Management Group need money or do they have
enough money to operate.
<STAN CATERBONE> No, they've got money.
<HOWARD EISSLER> They are a self-sustaining
operation then; anything they get from selling securities
they will pick up the commission, if there is brokered
mortgages they will pick up the commission on the
mortgages, and that's enough to keep them going, right?
<STAN CATERBONE> Oh, yea.
<HOWARD EISSLER> They are not pressed for money?
<STAN CATERBONE> No.
<HOWARD EISSLER> Have the handled the
customers/investor's money correctly.
<STAN CATERBONE> No.
<HOWARD EISSLER> You have mentioned they've
given money to Tom Turner and Kauffman's wife, what
else have they mishandled?
<STAN CATERBONE> I know the Federal people
wanted to investigate Kauffman's books, of his stock
book that he was managing.
<HOWARD EISSLER> This is when he was down at
Atlanta?
<STAN CATERBONE> No, this is now. That's why they
wanted him to liquidate his mutual funds so he could
manage it for him.
<HOWARD EISSLER> They wanted you to liquidate
your mutual funds?
<BILL JOHNSON> I told him that I was a little unhappy
with the performance of the mutual funds that I had; he
wanted me to liquidate it and go into the stock market
and let him work it for me.
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<HOWARD EISSLER> He was going to act as your
financial planner?
<BILL JOHNSON> I would imagine, yea, broker, buy
and sell stock.
<HOWARD EISSLER> Have they acted as financial
planners? - Now there license has not been approved
yet. Is the one that you <STAN CATERBONE> there is over $100,000 of our RIA
fees that they have collected last year - illegally.
<HOWARD EISSLER> Did you say RIA?
Investment Advisor.

Registered

<STAN CATERBONE> Do you want to see it?


<HOWARD EISSLER> Yea, let me.
now?

Who is registered

<STAN CATERBONE> No one is registered. I was that


close to getting it registered when I got shut it. It was all
ready set to go; I got the papers. I think it was just
some questions.
<HOWARD EISSLER> Were you working with
Jamineau?
<STAN CATERBONE> Yea, he is the corporate attorney
that I got - and I think he is very _______. He is good.
<HOWARD EISSLER> There's no problem with him.
<STAN CATERBONE> No, Jeff's a good guy.
taught me securities law.

He

<HOWARD EISSLER> I am trying to think, this


application here? Paul Short is who I was working with.
I asked to see the file quickly on Friday - I didn't know it
was there.
<STAN CATERBONE> Now I am still President of FMG
Advisory.
<HOWARD EISSLER> O.K., now wait a minute - let me
see, FMG Advisory comes in yet.
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<STAN CATERBONE> They threw me out of the
Financial Management Group; they never mentioned
FMG Advisory which I was President of.
<HOWARD EISSLER> Is this the one that applied to oh, alright, you're using the initials FMG, that's Financial
Management Group?
<STAN CATERBONE> Right.
it would be consistent.

I set up an umbrella so

<HOWARD EISSLER> What threw me off was, when


Financial Management Group was registered there was
a whole lot of other entities involved which used the
initial FMG Advisory Service, Accounting Service.
<STAN CATERBONE> That was for continuity.
<HOWARD EISSLER> O.K., then FMG Advisory Service
was never really, up to now, was never really registered
as an investment advisor, right?
<STAN CATERBONE> Correct. They were registered
_______ but not with the state?
Right _______.
<HOWARD EISSLER> But, now, during this time - from
the time they are in business, from August of 1986 until
now, they have done investment advisory services and
these are the fees that they collected?
<STAN CATERBONE> I charged some.
<HOWARD EISSLER> You are allowed to charge up to,
what is it - 14 people?
<STAN CATERBONE> I think it is only 5. I was careful
about that one. I know I only charged 5 clients, I am
sure of it. The SEC really gave me a rough time getting
that thing filed - I couldn't even understand their
questions half of the time. They are a mess, they really
are. I must have spent 100 hours.
<HOWARD EISSLER> I agree with you, there is a lot of
attorneys work in the Harrisburg, and the question is the
application - the question is about that long and the
answer is Not Applicable.
<STAN CATERBONE> Yea, it takes you 3 hours to
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figure out that you don't answer it.
<HOWARD EISSLER> I agree with you.
tendency to want to throw it away.

I have a

<STAN CATERBONE> Well, after 5 months of fooling


with it myself, I called Jeff up and said, Jeff, you got to
help me get through this thing. I got to get this
registered. I called Jeff on the RIA probably in January no, probably February or March.
<HOWARD EISSLER> So, June 1987 was the last
correspondence you had.
<STAN CATERBONE> Yea, right there it is.
it was done on June 23.

Right there,

<HOWARD EISSLER> I am going to want a copy of


this.
<STAN CATERBONE> I need to get a copier in here
and copy it for you. I can't leave these out of here
without copying them. These files are just to valuable to
me - if they get lost or whatever. You can attach it to
whatever you want, but I want to get a copier in here and
make copies for you and you can just run. I don't know
where I am going to get money for a copier but --. Well,
these files have been literally all over the country. In fact,
most of these files are in 2 law firms in California and
New Jersey. I was all over the place.
<HOWARD EISSLER> This is the application for your
registration as an investment advisor.
<STAN CATERBONE> I would like to see what the new
one says on it.
<HOWARD EISSLER> As you can see, they are all like
a standard form. Like I said, I have difficulty looking at
these things. If I am looking at something I can find it,
but just to look over and say its alright or whatever.
<STAN CATERBONE> But I would like to see who they
have listed on as officers.
<HOWARD EISSLER> I just looked at it Friday and
didn't take particular notice other than I knew that
Kauffman and Hartlett were some of the people.
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<STAN CATERBONE> My name wasn't on it.
<HOWARD EISSLER> Oh, no, no, your name wasn't on
it.
<STAN CATERBONE> Well if they are using FMG
Advisory, I am still President of that company.
<HOWARD EISSLER> Well, I don't know in corporate
law what it takes to do away with a President at the
Board of Directors meeting.
<STAN CATERBONE> I'll tell you what it takes. ----that's exactly right, but they didn't have a Board of
Directors Meeting. No, the shareholders must vote on
the Board. Shareholders must vote and approve, and
shareholders must exempt people on the Board.
Shareholders have to vote to remove someone from the
Board. Yes, but the Board of Director would be elected
for a year to two years, whatever the situation would be.
So that corporate officer would be there for that entire
period. The three of us were elected to the board for a
period of 3-5 years. The initial Board members -this was
one of Kauffman's move to gain control over a one-year
term. Me, Kauffman, and Hartlett were 3-5 year terms.
<HOWARD EISSLER> When did that take place?
<STAN CATERBONE> We did that back in June of 86
when we started the company.
<HOWARD EISSLER> Your only connection with the
company now is the fact that?
<STAN CATERBONE> I have no connection. They will
not let me - and I have personal belongings in that office,
and they owe me money.
<HOWARD EISSLER> That is something that you two
are going to iron out. See, my involvement is criminal
charges - that's how I am involved. And my involvement
is going to be the mishandling of investor's money.
Well, all of these other financial management groups are
100% stock holders - FMG Advisory Inc - 100%
stockholders?
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<STAN CATERBONE> Yea, what it is, the shareholders
own Financial Management Limited; Financial
Management Limited owns all the other subs.
<HOWARD EISSLER> O.K., 100% - there is no other
involvement?
<STAN CATERBONE> That's right.
<HOWARD EISSLER> Financial Management Group's
Semi Annual Report - I think there would be some
financial information <STAN CATERBONE> that's right, they won't give it to
anybody - not even me.
<HOWARD EISSLER> You had mentioned that there
are offices throughout the country. How are those
people connected here?
<STAN CATERBONE> Shareholders and they are
aligned with us through the broker/dealer. They go
through us to the broker/dealer, rather than direct. We
own 5% of Planner's Security Group in Atlanta. We get
the same deal that we 're supposed to with Hibbard &
Brown with this outfit in Atlanta. They are a fairly large
broker/dealer. They are doing about 15-20 million
dollars a year right now, Gross Commission Income
(GCI).
<HOWARD EISSLER> Is it Hibbard?
<STAN CATERBONE> No, they are the born-agains that
I left, I moved away from.
<HOWARD EISSLER> What's the name of the Atlanta
Group?
<STAN CATERBONE> Planners Security Group - Bill
Kegler.
<HOWARD EISSLER> There's nothing wrong with that
group?
<STAN CATERBONE> Yea, they terminated me for no
reason.
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<HOWARD EISSLER> As a registered rep?
<STAN CATERBONE> Yep. I am sure they will come
up with a reason; there is a reason why they did it
because with the NSAD they had to file. I would like to
know why?
<HOWARD EISSLER> You know, you were terminated
because you were sick or, you know there is going to be
a reason. Whether it is true or not.
<STAN CATERBONE> Lying has become an accepted
norm for all of this.
<HOWARD EISSLER> Well, in their compliance
department, all of these broker/dealers should and
generally do keep very good close track of their sales
people.
<STAN CATERBONE> How can they when I did the
deal?
<HOWARD EISSLER> But Financial Management
Group owns 5% of Planners Security?
<STAN CATERBONE> Bill Kegler was with FSC and got
angry when he couldn't run FSC 3 years ago. Then he
started his own broker/dealer.
<HOWARD EISSLER> This is with Planners Security?
<STAN CATERBONE> That's right. He left John Keebel
because of a power struggle with them.
<HOWARD EISSLER> But now, other than terminating
you when they shouldn't have, they are not doing
anything bad?
<STAN CATERBONE> How do I know?
<HOWARD EISSLER> Do you suspect they are?
<STAN CATERBONE> Yea, they terminated me, you
bet. You better believe I suspect. If they are doing that
to me, what are they doing to the poor clients who don't
know anything. The same thing with FMG - if they are
doing all this to me, what are they doing to the clients
that don't know anything. My clients are pissed.
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<HOWARD EISSLER> So, what they could do is
withdraw their money from the organization whether its
in the form of stock or whatever, but there is nobody
making investments ____________. Your money is
invested through ____________?
<STAN CATERBONE> I've got the former Medical
Director of St. Joseph Hospital that owns 10,000 shares
with FMG that is very upset about all of this. He is away;
I couldn't get him last night to come to the meeting.
They got $35,000 of his. He went through everything
from that company <HOWARD EISSLER> but he still owns the stock?
What did they offer you $2 a share or something?
<STAN CATERBONE> They didn't offer me anything.
<HOWARD EISSLER> But in that letter they did.
<STAN CATERBONE> They offered me when it came
time for me to get the check because they knew what I
was going to do.
<HOWARD EISSLER> Well, you wouldn't have taken
the $2 a share would you, because you were talking
about a 5-1 split. I would have taken it but I would have
pursued my civil and legal rights and sued them for the
rest. I went 5 days without food - I was starving. I had
no money - 5 days without food - people look at me
and laugh. Did you ever go 5 days without food? when
you are worth a considerable amount of money?
<BILL JOHNSON> Kauffman told me that he was going
to offer Stan $1-1.25 a share to settle it out, to buy his
stock and out of the proceeds of that he was going to
pay me the money that is owed to me first, right off the
top, I was his first consideration - that he wouldn't buy
the stock unless my note was satisfied.
<HOWARD EISSLER> You have a note with First
Financial Group claiming they are liable for it.
<STAN CATERBONE>
it into ? No, I
either has it or
from me, I don't

So you took the money and put


don't know who has the money. A bank
Lancaster Aviation. It was embezzled
know who has it.
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<HOWARD EISSLER> But they are acknowledging that
they have custody of it? They were acknowledging
liability for it.
<STAN CATERBONE> We don't know who has it.
Either Commonwealth Bank has it or Lancaster Aviation,
I don't know.
<HOWARD EISSLER> But you put it in the bank?
<STAN CATERBONE> No, I didn't put it anywhere.
<HOWARD EISSLER> He gave you the money, what
did you do with it?
<STAN CATERBONE> I gave it to Lancaster Aviation for
the airplane. Then they repossessed the airplane before
my first payment for, I don't know why. And I don't
know where the $25,000 down payment is. He don't
have it and I don't have it.
<HOWARD EISSLER> But the $25,000 went to him, not
as an officer of the corporation?
<STAN CATERBONE> To me personally.
<HOWARD EISSLER> The airplane is not part of this
corporate complex?
<STAN CATERBONE> No.
<HOWARD EISSLER> But now Financial Management
Group is saying they will pay you back that $25,000?
<STAN CATERBONE> Uh, huh.
my creditors.

They sent letters to all

<BILL JOHNSON> They told me that on 3 different


occasions - before they suggested I go to the bonding
company. Then they gave me a letter saying basically
that if I wanted to talk about it, talk to their attorney.
<STAN CATERBONE> Well, did you tell him about the
bonding company?
<BILL JOHNSON> Yea. They wanted you to sort of
make the allegation that I gave Stan the money to invest
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for me and that he had scuffled the money - they wanted
me to tell the bonding company that, which I refused to
do.
<STAN CATERBONE> They took out the bond after July
1. I got a thing in the mail about a bond; I thought what
is going on. Then he told me about a week later - I said
that's what that is - a $4,000,000 bond.
<HOWARD EISSLER> You know the bonding
company?
<STAN CATERBONE> Fidelity.
<HOWARD EISSLER> Of course, I am thinking from
their standpoint - Financial Management Group has not
seen the $25,000.
<STAN CATERBONE> No, I don't know, maybe they
have it. They might have it.
<HOWARD EISSLER> Well, the only way they could get
it is if it were a reimbursement made on the airplane.
<STAN CATERBONE> They were the ones calling the
bank and the Aviation Company about the plane, asking
what I was doing with it, where I was going? They were
the ones that initiated all the conspiracy with the lending
institutions. My credit rating was excellent up until
August - "01" down the line, never owed anybody
anything.
<HOWARD EISSLER> This is going to drag out; I will
keep in touch with you. Now, you also have investments
through mutual funds through Financial Management
Group? And how much money are we talking about
roughly?
<BILL JOHNSON> About 170,000.
<HOWARD EISSLER> Now, do you have the certificates
for this.
<BILL JOHNSON> No, they were never issued.
are held in ________ with the broker,

They

<HOWARD EISSLER> and the broker in this case was?


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<STAN CATERBONE> His probably weren't transferred
yet, it was probably FSC.
<HOWARD EISSLER> So, it would still be a monthly
statement from them - so there is no problem with it
disappearing.
<BILL JOHNSON> I don't
it from Keystone - FSC
am sure. I doubt that
I get the interest off
month.

get anything from FSC, I get


is noted as the broker/dealer, I
they went yet to Planners Security.
that money, I get a check every

<HOWARD EISSLER> But your investment is not in


jeopardy now, as far as you know.?
<STAN CATERBONE> No, but he is on disability and 25
grand meant a lot to him.
<HOWARD EISSLER> Now, Kauffman wants you to sell
these the mutual funds and give him the $100,000 to
invest as a broker?
<BILL JOHNSON> Right.
<HOWARD EISSLER> Of course, you are reluctant to
do that because you still have confidence in Stan.
<BILL JOHNSON> I have confidence with Stan and I
am not very comfortable dealing in the stock market just
now. I like more settled investments - the stock market
idea and I don't get along very well. I am looking for
safety of my investments. Like Stan said, I am on
disability and I do need income.
<HOWARD EISSLER> And Kauffman promised you a
fortune if you made this transaction?
<BILL JOHNSON> He didn't come right out and
promise me a fortune but he insinuated that I could do
a lot if I let him work the stock market.. He was doing all
options, that's all he does. Well, I don't want no damn
parts of options.
<STAN CATERBONE> You look at his client files; they
are all option accounts. All of them, little old ladies down
to --.
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<HOWARD EISSLER> Here again, which you know, the
broker when he is talking to you, or the registered rep
when he is talking to you, should file a form as to what
you want. Now you just mentioned to me that you are
a conservative of man. I had him in government
securities. - And they should have these on file.
Now, if you are conservative and you give him the money and
he starts dealing in options, he is really violating the trust
that the government and the NAFC is trying to establish
between the client.
<BILL JOHNSON> I tell you what. I feel sorry for you
guys. You guys got a hell of a nightmare. Stan always
backed me up; there were times I pulled my investments
out and put them in CDs for a while because I was just
not comfortable with what was happening.
<STAN CATERBONE> And, I tell him what CDs to buy
at local banks.
<BILL JOHNSON> I have the utmost confidence in
Stan. Mr. Kauffman tried extremely hard to shake that
confidence.
<STAN CATERBONE> He tried to shake up my own
family. He had my own family believing. Do you want
to know something. In August, I was on my way to
Hollywood to the film studio and to see some legal
clients I was working with one day - that night I come
back to my house to get a night's rest. I get thrown in jail.
I go to the police station to get a restraining order
against my family that didn't understand what was going
on - I get retained in the police station for two hours, get
taken to a hospital. That day, someone called the Stone
Harbor police and said I had a gun and was running to
the beach to kill myself. This thing is ugly.
<BILL JOHNSON> As a matter of fact, I would believe
I am the only one left to believe Stan is still sane. Well,
I caught on real quick. I don't believe he had anyone to
talk to except me.
<STAN CATERBONE> I didn't. I could talk to him every
other day since April; someone had to believe what was
going on. I have tapes - I have a tape of Bob Kauffman
July 3 telling a, supposedly client of mine - it was actually
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my brother - that I was mentally ill, spending money that
I shouldn't been, and wasn't taking care of my clients.
<BILL JOHNSON> He told me the same thing. - that
Stan had wasted away somewhere between $45,000 and
$70,000 of his own money, just throwing it away on
frivolous things.
<STAN CATERBONE> Every minute I have ever spent
and every dollar I have ever spent, I've made money on
anything. I got my brothers in profootball - held my own
free agent camp. And, they were both picked up last
week, as a matter of fact. I was involved in that too.
Right there.
<HOWARD EISSLER> I thought I heard - is he
connected with the Eagles?
<STAN CATERBONE> Eagles and Dolphins.
<HOWARD EISSLER> I just heard it on the news - one
of those things - I heard the name mentioned, it is not
that common a name, and I heard the name mentioned
in the newscast of the NFL strike and it was like - what
was that, but it was too late. That Thursday, right after
I called you, was when I got the call.
<BILL JOHNSON> Stan held his own free agent camp
so that the players who didn't get chances in the bigger
camps had an opportunity to do it.
<STAN CATERBONE> 50 people showed up, from all
over the country. The most innovative camp - I taped
the camp, sent the tape to all 3 leagues - 55 teams.
<HOWARD EISSLER> When was that, 84?
<STAN CATERBONE> Yes, right there it is.
<HOWARD EISSLER> And some of them got picked up
as a result of this?
<STAN CATERBONE> Only one, my brother. I guess
they had to have some body. Yea, that was a fun day
that day. That camp cost me 5 grand and generated so
far $200,000.00 in salaries for my brother.
That airplane that I bought would have made me $3,000
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net profit a month, leasing it out. I had at least 20 hours
of leasing every month for 350 a month at $7,000, and
my payment was $1500.00.
<HOWARD EISSLER> You were leasing it to?
<STAN CATERBONE> My contacts, my network.
<HOWARD EISSLER> With you as a pilot, you mean?
<STAN CATERBONE> No. It's a big plane. I hired my
own pilot. When I'm doing business all over the country
I can't fly commercially. In three weeks, my charter bill
was 4 grand for using another person's plane 5 times.
<HOWARD EISSLER> Then, you bought this, and
before the first payment was due they grabbed it back.
Can they do that?
<STAN CATERBONE> No they can't. Why do you think
I've got a large lawsuit against 3 banks. One of the
reasons they said they did it was because it wasn't
properly insured, but he had insurance. The other
reason they said, he took it to Florida. Now I don't know
why you would buy $100,000 airplane and leave it at the
airport. Do you know why I was taking it to Florida?
I bought a place on an island, another very good
investment. Now they are suing me because I couldn't
settle because I got blackmailed 2 months later. They
said I was going to Florida to run away and hide. I was
going to Florida to settle my property. They had to come
up with a reason so that's the reason that was around I
guess. But, Pete Peneros's brother works for
Commonwealth National Bank. Plus, do you know
anything about United ChemCon? They are being
investigated right now by the FBI and Attorney General.
<ROBERT BEYER> Chemcon is the big local minorityheld corporation that was doing a lot of defense
contracts - it was associated with ISC. They went under
last Spring, beginning of the summer, and there was a
lot of criminal allegations made, none of them
substantiated.
<STAN CATERBONE> And I was connected with that.
They sent a Board Member in to see me a week before
this happened. Why, I don't know.
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<HOWARD EISSLER> Is this Lancaster based.
<STAN CATERBONE> Yes, Jim Christian owned it now I hear rumors that I was tied to ISC and I am close
to several people in that organization. Why they sent
someone to California to see me, I don't know. They
won't answer me.
<HOWARD EISSLER>

Who is this, the FBI?

<STAN CATERBONE> No, this is Chemcon. I said if you ever come


back or you have someone else call me, I want a $10,000 retainer fee.
Never heard from them since. Then, two weeks ago, Jim
Christian called me while I was in the hospital. That guy
hated my guts for five years. Why, he called me, I don't
know.
<HOWARD EISSLER> What did he want?
<STAN CATERBONE> I don't know.
<HOWARD EISSLER> You didn't speak to him to find
out?
<STAN CATERBONE> I spoke to him, he said nothing.
The same thing the Board Member said when he came
from California. Asked if I could go get ChemCon
another building; asked if I would be interested in saving
the company from bankruptcy - I was working with a guy
from Belgium, they wanted me to talk to, a guy from DC
and New York, a guy from the Caribbean. I don't know
what the hell is going on.
Then I find out the Commonwealth Bank went and nailed ChemCon.
Commonwealth Meridian said Christian personally signed
for the $18,000,000 that was invested or lost of the
governments money for these contracts. I don't know.
I am sick of asking questions and people lying to me.
<HOWARD EISSLER> You don't have any connection
with that, other than you knew some people?
<STAN CATERBONE> No, I've got their files, I got their
financial statement, everything - they wanted me to do
something.
<HOWARD EISSLER> But you're not connected with
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You're not an investor?

<STAN CATERBONE> No, I sold my ISC stock June 8.


<ROBERT BEYER> A lot of people were saying that
ChemCon, which is a minority - Christian is a black guy was getting all the minority government contracts
because he was one of the leading minority defense
contractors around, and actually the supposition was - I
don't know how true it would be - is that it was a front for
ISC.
<STAN CATERBONE> It was, I'll tell you why. Because
when ChemCon was started, back to their inception, you
look at ISC's book. They didn't have any money. Well,
the first thing ChemCon did, was they went and got all
that free money from the government and you look and
see where that money went. I bet you I know where it
went.
This guy named Geurin, James Geurin. And I know that
they were selling contracts back. He runs ISC and he
also has his fingers pretty deeply in ChemCon. He's the
one who started ChemCon, Geurin is the one who
started it.
<HOWARD EISSLER> Wasn't there some allegations
about a tie with Wedtack.
<STAN CATERBONE> You bet. They were tied, you'd
better believe they were tied with Wedtack. The same
guys in Wedtack were involved with ISC and ChemCon.

<HOWARD EISSLER> ISC is that an over the ______ exchange_.


is a London Exchange. International Signal and Control?

ISC

<STAN CATERBONE> I owned a thousand shares. I sold it when things


started to hit the FAN. Now they just did a multibillion dollar
merger with a company in London. They probably think
it is going to cover their tracks.
<HOWARD EISSLER> You mean United ChemCon is
a local corporation.
<ROBERT BEYER> Yes, they went bankrupt as of this
last 3 months. What was it, $18,000,000 in liabilities?
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<STAN CATERBONE> What they did was, they fronted
all that money and started the contracts, went bankrupt,
now the government is stuck for $18,000.00.
<ROBERT BEYER> They weren't paying employees,
they weren't producing the product, they weren't paying
their unemployment and everything else.
<HOWARD EISSLER> Did they pay the withholding
taxes?
<ROBERT BEYER> No. It turns out that Christian, who
I have had a few dealings with, had an office that would
be would be suiting of any AT&T executive - Amazing.
Had these racquetball things in his office. 4 or 5 cars,
thousands <STAN CATERBONE> let me tell you about Jim
Christian now. I know right now in this town's viewpoint,
I stole money, I am insane, and I am a lunatic. I tell you
I will not condemn Jim Christian until he tells me to my
face what happened. I was framed and set up and I
know
<HOWARD EISSLER> (I see what you mean, your
experience).
<STAN CATERBONE> I don't know, maybe Jim Christian doesn't
have the money. Maybe Geurin has it or somebody
else. $18,000,000 is a lot of money and he is broke
because he lives with one of my best friends, ________.
I mean they don't have money. And, I would think that
if he took it, he would have something.
<BILL JOHNSON> You're pretty nice, Stan, to
somebody who has hated your guts for 5 years.
<STAN CATERBONE> I know what I am going through,
and who knows, maybe he was innocent too. Is this
Christian you are talking about. Yes.
<HOWARD EISSLER> You were going to make copies
of these.
<STAN CATERBONE> I can't make copies, I can fax
them to you. I will make copies for you, in fact, what I
should do is get everything copied for you.
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<HOWARD EISSLER> Well, no, because that is a
tremendous expense. I would rather, if you have the
time, or can stick me in the corner somewhere, maybe
say, this and this, and this, I am sure we can eliminate
half of it.
<STAN CATERBONE> O.K. but you should tell me what
you want and I will make copies. I just don't want this
stuff to leave my hands anymore. I can let them to you
overnight.
<HOWARD EISSLER> Well, there is nothing we can do
overnight. I can't elevate your problem as far as being
out of the corporation <STAN CATERBONE> oh, I thought you were going to
give me a check before you leave.
<HOWARD EISSLER> So, anything that I would be
involved in is going to be long and drawn out; it is not
going to be an answer to your immediate problem.
<STAN CATERBONE> I know, but I had to get
someone involved. I had to get authorities to start taking
action for me.
______________ the SEC <HOWARD EISSLER>well, he is the one I am talking
about mostly.
<BILL JOHNSON> They said they were sending 2 guys
up here last week for 2 days.
<HOWARD EISSLER> Did you talk to them about what
was going on? How did you happen to talk the SEC.
<BILL JOHNSON> I was just trying to get my money
back. They promised me my money and they didn't
come up with it. So, I called them.
<HOWARD EISSLER> So basically, you have
_________. If they came there, I think their attitude
would be well, -----<BILL JOHNSON> no, they were curious as to some of
the other things that were going on. I talked to them a
couple of times. They were curious for one thing,
Kauffman wanting to take my investment and putting it in
the stock market and working it for me, they were
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curious about that. They were curious about the
allegations of Stan's alleged insanity and forcing him out
of the corporation, and I think they were a little confused
about why they would accept liability for the money if it
wasn't there liability. That would be a question that I
would ask. I think that aroused their curiosity, but he
also said that they have never been checked, and they
are about due, so we might just as well go up there and
dig into it and find out what was going on.
<HOWARD EISSLER> As far as I know, that is what
they did, what they call a compliance examination. I
don't know that they were there looking -. Since your
allegations were made, I am sure they looked into some
items like that, but I think basically it was just a
compliance examination.
<STAN CATERBONE> What did they find?
<HOWARD EISSLER> I don't know.
<STAN CATERBONE> They were there though?
<HOWARD EISSLER> There was two people supposed
to be up there.
<STAN CATERBONE> Were they there last week?
<HOWARD EISSLER> Well, it was recent, the report
isn't even written, but the report I think will be more on
the lines that they don't have a client complaint form filed
- compliant type examination. Proper procedures, etc.
<ROBERT BEYER> I am still interested as to how you
were alerted to it.
<HOWARD EISSLER> I have yet to get it - I was
coming down as an appointment last Tuesday or
Wednesday, which ever day, it was the next day I called
you. I had an appointment here in Lancaster. I had
gotten a call about 4:30 in the afternoon from the Phila
office, and my supervisor down there said there is a
newspaper clipping of your break-in of the Financial
Management Group. I don't know whether to make an
investigation out of it or not. It seems there are some
securities involved.
<ROBERT BEYER> The only 2 articles that appeared
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are right over there and none of them say anything about
it.
<STAN CATERBONE> They just know my name, right?
They just knew that I was involved with the company? it doesn't say anything about securities there.
<HOWARD EISSLER> Nothing at all? Then how it
came to our office I don't know, unless somebody sent
it.
<STAN CATERBONE> Even if they sent the articles,
there is nothing in there to indicate who - they just called
me an ex-worker. That is the interesting thing about it.
"burglary, theft, unlawful restraint, robbery, unlawful use
of computer, criminal mischief, and terroristic threats."
<HOWARD EISSLER> I've never seen the article.
<ROBERT BEYER> There it is, pull them down.
<HOWARD EISSLER> No, that's alright. They were
supposed to send it up to me and they didn't.
<STAN CATERBONE> I'm leasing that building and
accused of burglarizing my own building.
<HOWARD EISSLER> See, he called me and said, you
are going down to Lancaster. See if we should start an
investigation. Stop up to the -- exemployee. Christian,
I think was the arresting officer? Mathias, they said
Lancaster Detective Mathias.
<ROBERT BEYER> He's not, he's Manheim Twp.,
<HOWARD EISSLER> fortunately I found that out.
<STAN CATERBONE> I called Township 2 months ago
and they didn't help me. Then they throw me in jail
when my partners call.
<HOWARD EISSLER> So anyhow, I stopped up that
evening, Tuesday or Wednesday night, the next day I
called you but did not get you until Thursday or Friday,
so that is my association. They were supposed to send
up the newspaper clipping or whatever it was they had.
But the only thing I know is that your name was
associated in our office computer file with Financial
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Management Group.
<STAN CATERBONE> Your not telling me anything
new.
<HOWARD EISSLER> But you see I was supposed to
have this. Why I don't, I don't know because they were
supposed to send it up. But the state in their own way
to save a .40 postcard, they have a messenger service
to Harrisburg. So, its alright if you get it in the mail, like
if I was in the office this morning and put it in the mail
before 10:00 it goes to the central office and gets
distributed -then the next day it goes down and would be
there the next day. But if you miss that 10:00 mail, it
don't leave our office until the next day then the next day
in the central file, then somebody drives it down to
Philadelphia.
<STAN CATERBONE> I should buy you guys some
stamps.
<HOWARD EISSLER> I had to deal with the State that
long so you know these are just little quirks that keep
popping up every now and then.
<ROBERT BEYER> I'll tell you an interesting part that I
had when I went out to view -they had to __________and Manheim Twp. called in to Hartlett as I was there.
I was there to get property returned to Stan, and Hartlett
started going through things and paying a lot of attention
to what was there, and had already admitted wasn't his.
There was a lot of correspondence there, he was very
interested in, and the policeman even came to my aid
and made him not be nosey, even its yours or it isn't,
and he released everything to me.
<STAN CATERBONE> Do you know what I took out of
the office was on the books, everything that I wanted to
see.
<HOWARD EISSLER> Did they let you keep that?
<ROBERT BEYER> No, no, in fact the inventory from
the service warrant, just about everything on here is
Stan's files, even labeled as such. Then I found a
______ checking account, K & H Enterprises, KauffmanHartlett Enterprises, they returned that to Kauffman.
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<STAN CATERBONE> K & H, what do you think that
stands for? Kauffman and Hartlett.
<HOWARD EISSLER> Well, that's what the initials stand
for but what type of business?
<STAN CATERBONE> I never heard of it.
<HOWARD EISSLER> You don't know what it would
be?
<STAN CATERBONE> I can imagine what it would be.
A brokers business somehow? It's something fishy. I
can't remember the bank, I think it was Hamilton Bank.,
Probably Hamilton or Farmers First.
<HOWARD EISSLER> In looking at these, the only thing
I can say, as far as I know Philadelphia is the only
information they had. Now maybe it came in
anonymously. I know a lot of people in Philadelphia.
This involves Financial Management Group or something
or involves securities, because the guy I talked to said,
you know, should we be involved in it at all? Ask what
it is, see if there is securities involved? And that's what
I did and that's when I came up Mathias and of course
he mentioned ____________-.
<STAN CATERBONE> Well, who mentioned to you
about medicine.
<ROBERT BEYER> It wasn't Mathias; Seigler was
involved.
<STAN CATERBONE> Why, how did they get wind of
that?
<ROBERT BEYER> Harlett and I were there and Hartlett
was talking about you taking your medicine.
<STAN CATERBONE> What medicine?
that's a bunch of crap.

___________,

<ROBERT BEYER> That's what Hartlett was telling him.


And Hartlett was saying is he taking care of himself and
all of this stuff.
<STAN CATERBONE> That son of a bitch.
painting a nice picture.

He is really

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<ROBERT BEYER> Well, the cops didn't really buy it
because they asked Hartlett to leave and they gave me
the information that they told Hartlett they weren't going
to give me.
Yea, well they mentioned the things that you had taken,
a couple of items, that they had given back and allowed
you to have them. They gave all the files back to FMG
before we were involved and then he gave me the
personal correspondences, but they kept his camera.
Apparently, Stan was doing the policeman's work when
he was in there the night he was accused of burglarizing
the place. He took pictures of all his files in their office
and they said they had better keep that.
<STAN CATERBONE> This is June 30th. It is my files
in their office. That's the night I left.
<HOWARD EISSLER> Who's taking the pictures?
<STAN CATERBONE> A friend of mine.
<HOWARD EISSLER> You were with someone? This
was 3 o'clock in the morning. Oh, you weren't arrested
on the premises, were you?
<STAN CATERBONE> No, but this is when I was in the
office. This is when they stole my files out of my locked
doors.
<ROBERT BEYER> He was arrested September 3rd I
believe it was <STAN CATERBONE> this is June 30th.
<ROBERT BEYER> They don't know he was in there
then, I guess.
<HOWARD EISSLER> These aren't the films that you
are talking about?
<STAN CATERBONE> No, the films he is talking about
I took of my files again in their office, and attorneys say
they didn't do anything wrong - explain why I was in jail
for 5 days.
This is the stock certificate book here,
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<HOWARD EISSLER> this big black book?
<STAN CATERBONE> Yea.
<HOWARD EISSLER> You are still connected with the
company here?
<STAN CATERBONE> This is June 30th. The funny
thing is, even the second one is not breaking in - well,
the girl left me in and she's a friend of mine.
<ROBERT BEYER> He is still President and at the time
he was still Secretary I guess. I don't think the police
feel too awfully strong that they have a burglary type
charge.
<HOWARD EISSLER> I know.
<STAN CATERBONE> Well, I tell you what, they abused
me the night they arrested me._________ Well, the cop
that picked me up here left me ride on the front seat and
everything. When I get to Township, handcuffed me, put
my hands to the belt, threw me in a cell, bounced me
around the car. They wouldn't even listen to who I was.
I had all the documents that told them that I was lease
holder of the building - wouldn't even look at it. They
didn't ask me anything. I know why they are acting nice
now. They are going to hear from my attorney.
I don't know who even made the complaint, whether it
was the girl who made the complaint.
<HOWARD EISSLER> You were arrested the next day?
<STAN CATERBONE> No, that night. I told 5 people
that I wanted to arrested that night. I had to.
<HOWARD EISSLER> But then somebody had to call
the Manheim police. Do you know what they did?
<STAN CATERBONE> They called up the police that
day and said 3 days previous to that, that I made a
bomb threat to that building - that's what the police
picked me up for.
<HOWARD EISSLER> Oh, really?

_____________
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<STAN CATERBONE> That's what the police picked me
up for. Then, while I was there they charged me with the
burglary. They initially picked me up for a terroristic
bomb threat, that took FMG three days to report, they
couldn't even remember when the phone call was, and
the person that reported it, I don't even know who she is
- never saw her, never heard of her.
<HOWARD EISSLER> You were at the premises there
roughly what time?
<STAN CATERBONE> I went there about 10:30
Thursday night;
<HOWARD EISSLER> you were there an hour?
<STAN CATERBONE> Not even that, about a half hour.
I left and dropped off at _________, had a drink, and got
a girl to take the car I had, I borrowed somebody's car
because my cars were in New Jersey - I flew back, and
got this girl to drive me here and as soon as I pulled in
Conestoga police were right behind me. I said, great,
they're here. And when the Conestoga Twp. cop, I said,
let me take all these files with me so I can show you
guys who I am and what I was doing. Well, they just
took everything and threw me in the cell and that was it arrested.
<HOWARD EISSLER> Well, let me get started.
read these letters yet.

I didn't

<STAN CATERBONE> Read that one letter right there.


That's right we have that other thing now.
<ROBERT BEYER> Yea, he's being sued civilly for this
office furniture here which was purchased from FMG.
But FMG then tells the Office Supply Store that he has
not connection with us.
<STAN CATERBONE> When they have my suite of
furniture in that building.
<HOWARD EISSLER> Oh, that what the pictures, is that
your personal furniture?
<STAN CATERBONE> You bet. I purchased this in
June to go down to Stone Harbor; see the movie that I
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was working on, FMG was to get 15% of the profit for my
endeavors down there. This was purchased as an agent
of Financial Management Group.
(Bob Byers left meeting)
<STAN CATERBONE> On the back of that letter you
were just reading is the name of the person he was
communicating to.
My name was the only one on all the checking accounts,
authorized to disburse money. Hartlett was on a couple
with Kauffman_, but I was on all of them - the only one.
Kauffman was on some; Hartlett was on some - we were
common, but I was on all of them.
<HOWARD EISSLER> Do those checks take 2
signatures?
<STAN CATERBONE> No, one.
<HOWARD EISSLER> What accounts would you have
been on alone.
<STAN CATERBONE> All FMG Advisory - I took care of
all that.
<HOWARD EISSLER> They use the term "gunjumping"
like a broker/deal wants to come into Pennsylvania before he could sell he - you can to sell to 5 people, before you get into the problem area.
Now, when you
are selling to one or two people, you should apply for a
registration with PA. Now, say a broker/dealer sells 5,
people, 10 people, 15 -then all of a sudden, he says,
hey, maybe I'd better register. Now he goes to register
with PA and they say, how many people did you sell to,
and of course he has an extra 10 people - that's called
"gunjumping." So, again, how serious is the crime?
Sometimes they'll say, o.k., because you gunjumped, we
are going to register you but you going to have a 5-day
suspension, that way it is on the record that he did
gunjump. The same situation is going to happen here.
They were not registered investment advisors and,
obviously from the paper they were giving investment
advisory work and soliciting from you so they have really
done a violation there. Of course, with you, you had
applied for the investment advisory registration - it didn't
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go through. They closed the thing by abandonment, like
all the questions weren't answered. Now they are
applying again, so they are in the process of registration.
I could throw a question at you, is there any reason now
why they should not be registered as investment
advisors?
<STAN CATERBONE> Here, again, if they are abusing
me what are they doing to the clients?
<HOWARD EISSLER> Granted, and that is the end I am
going to work on. Can you give me any specific
information - they've done you dirty.
<STAN CATERBONE> They've done me as well as
others.
<HOWARD EISSLER> Who else have they done?
<STAN CATERBONE> Do you want names?
<HOWARD EISSLER> Yes.
<STAN CATERBONE> Bill Umiker.
<HOWARD EISSLER> In what respect would this be?
He is a shareholder. And, what have they done to him?
<STAN CATERBONE> They don't let him shoot books they shut him out?
<HOWARD EISSLER> How about you, I hate to drink
your coffee. You are operating on a shoestring, here.
Well, how are you now? Can you survive?
<STAN CATERBONE> No, I can't survive.
<HOWARD EISSLER> What are you going to do, are
you here by yourself?
<STAN CATERBONE> That's a good question; I've
been working on this for 3 months. I sell a piece of
furniture.
<HOWARD EISSLER> You don't have an investment
portfolio of your own that you can fall back on?
<STAN CATERBONE> Yea, FMG.

Is that the only one


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you have? I have no cash. That is a good question,
what do I do? Why have I paid taxes for the last 28
years?
<HOWARD EISSLER> Then you had a substantial
income once?
<STAN CATERBONE> I never made a lot of money. I
never wanted cash because they I had to invest it.
equity.

I took

<HOWARD EISSLER> So, it's not paying off now?


<STAN CATERBONE> I bought this house for $90 - it
was appraised at $180 after a year. But everything I
have put my - everything fell apart because of what these
guys did, everything at one time just fell. Like I say, I
was coming into a half million dollars in cash this
summer on a project. You know these projects take
time, and time, and time.
<HOWARD EISSLER> You had mentioned a movie
down in Stone Harbor, what was this?
<STAN CATERBONE> The first digital movie ever in the
history of the world.
<HOWARD EISSLER> Digital movie, meaning not on
film?
<STAN CATERBONE> No, it's on film but all the sound
is digital. Kodak and Mitschubiti won't have this
technology for 5 years. I was working with the leading
recording studio in the world. I was named Executive
Vice President of a major film studio in Hollywood 60
days ago, but I can't do anything.
<HOWARD EISSLER> Was this film being made in
Stone Harbor?
<STAN CATERBONE> Yea, that's why I was down.
But, it never got off the ground because of what
happened to me.
<HOWARD EISSLER> You mentioned this Bill Umiker,
are there any others? He is one of the investors as a
result of __________ deal,
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<STAN CATERBONE> right? The film studio in
Hollywood needed my help to raise funds. They had
some lenders and some investment companies commit
some allegations. They want me to come in and help
clean it up and get things resolved. They're hurting. My
family's hurt. My family is deeply hurt. My mother's a
nervous wreck. My name is mud everywhere and I was
a very visible person - a giving person. My life is ruined.
<HOWARD EISSLER> You are contemplating, I am
sure, taking action against them for spreading this <STAN CATERBONE> I have been contemplating on
that for 90 days - no one believes me. All the attorneys
do is want to suck me up with fees and do nothing. The
first attorney I went to on June 30th told me to quit
fabricating these allegations and spend my time and
energy on other useful things. Was that Joe Roda? My
cousin. Then sent me a bill for $500, and two weeks
prior to that he told me a check was in the mail for a
client I sent to him. Never got the check but I got two
bills so far for $500. Now how can your attorney say that
you are lying? This is your cousing yet, don't forget that.
<HOWARD EISSLER> You're right.
<STAN CATERBONE> I talked to Gib Armstrong, the
Senator, back in July. He told me he was going to have
the attorney general call me - never. That's why I went
to 60 Minutes. 60 Minutes has everything. I told 60
Minutes what happened; I told them who I went to everybody, the attorney general, the FBI, the SEC, the
NASD. Diane Sawyer, I wrote her a personal note a
week and a half before I got arrested, out of desperation.
I was desperate. To me, my life was threatened. It still
is threatened and no one gives a damn, but Bill.
<HOWARD EISSLER> Has anything happened to you;
you say your life is threatened?
<STAN CATERBONE> My house was broken into in
Stone Harbor. My phone was tapped, I know it was
tapped.
<HOWARD EISSLER> Do you think it would be
Kauffman.
<STAN CATERBONE> Who knows, I am involved in so
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many things all over the place, who knows. Put it this
way, I know Kauffman and Hartlett were the _________
but I was a big threat to the banks around here. I beat
them on a $15,000,000 deal here in Lancaster prior to
them repossessing my plane. I was a big threat to all
the banks. They couldn't compete with me.
<HOWARD EISSLER> They didn't lose $15,000,000?
<STAN CATERBONE> They were going to lose a
$15,000,000 mortgage because of me.
<HOWARD EISSLER> You mean, you placed the
mortgage with someone else?
<STAN CATERBONE> It never got placed.
all at the same time.

It happened

<HOWARD EISSLER> But on the idea of doing that,


you as an investment banker or whatever, you could get-?
<STAN CATERBONE> A half a point.
<HOWARD EISSLER> Then the people ultimately did
have to get the mortgage place somewhere.
<STAN CATERBONE> They never got it placed yet.
They are still trying to get it placed with my mortgage
banking operation through FMG people that are stealing
that from me.
<HOWARD EISSLER> So, they have taken your sales
commission type away from you? <STAN CATERBONE> where's my salary?
<HOWARD EISSLER> Were you a salaried person until July 1?
<STAN CATERBONE> You bet. And I was granted a
90-day leave of absence with pay. I told them that I was
going to just to clean up my other deals but I was really
taking time off to seek an attorney and pursue.
<HOWARD EISSLER> This is prior to July 1?
<STAN CATERBONE> Yes, I was scared because I
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knew how liable I was as an officer of that corporation.
When I found the stuff that was going on, I was scared.
I didn't want to be tied up in all --------------END
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TI=\RUSSELL, GRUBER & HUBER TRESPASS NOTICE TO S. CATERBONE


IM= 160P01.CPR
DA= October 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
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SU= SUMMARY: A trespass notice from Financial Management Group,
Ltd., to Stan Caterbone noticing that Stan Caterbone is not
licensed nor priveledged to enter or remain on the
premisis at Financial Management Group, Ltd., 1755 Oregon
Pike, Eden Park II, Manheim Township, Lancaster,
Pennsylvania, which premisis are the sole and exclusive
property of Financial Management Group, Ltd.,. signed by
attorney Christine Housner for Craig Russell.
IM= 160P02.CPR
DI= PAGE 02
IM= 160P03.CPR
DI= PAGE 03
************************************************************
TI=\ATTY. MCDONALD CONFERENCE
IM= 161P01.CPR
DA= October 4, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: A copy of actual notes taken by Mike McDonald
during a meeting with Stan Caterbone, at 2323 New Danville Pike,
Conestoga PA, at the request of Stan Caterbone. Stan
Caterbone became suspicious of the lack of aggressive
legal actions taken by attorney Robert Byers concerning
the legal issue of Stan Caterbone's lease agreement,
Unsubstantiated and paperless termination, interests in
companies headquarted at 1755 Oregon Pike, that was the
soley owned by Stan Caterbone, as well as others. Mike
McDonald was of no help either.
IM= 161P02.CPR
DI= PAGE 02
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162P01.CPR
October 5, 1987
CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PAGES:
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SU= SUMMARY: Waiver of Arraignment for the criminal charges of


theft, criminal mischief; and unlawful use of computers. The
trial was scheduled for the January, 1988 term.
was schduled to begin 14 days from November 25, 1987.
Attorney Robert Beyer had filed the document.
***************************************************************
TI=\MANHEIM TOWNSHIP vs. S. CATERBONE PRELIMANARY HEARING
DA= October 2, 1987
AT= CORRESPONDING AUDIO TRACKS: 02/03/04/05/06/07/08/09
SU= {AUTTHENTIC TRANSCRIPT OF PRELIMINARY HEARING AS
TAKEN BY CHARLES A. LONG, RPR, OFFICIAL COURT REPORTER}
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IN THE COURT OF COMMON PLEAS OF


LANCASTER COUNTY, PENNSYLVANIA
CRIMINAL
COMMONWEALTH 0F PENNSYVANIA :
VS.
STANLEY J. CATERBONE
PRELIMINARY HEARING
October 2, 1987
1.00 p.m.
MURRAY HORTON, District Justice
TAKEN BY:
Charles A. Long RPR
Official court Reporter
LOCATION:
District 02-1-02
2205 Oregon Pike
Lancaster,Pennsylvania
APPEARANCES:
DATE:

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ROBERT D. BEYER, ESQ.


110 East King Street
Lancaster, Pennsylvania 17602
On Behalf of the Defendant

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1
WITNESS
STACY LYNN WATERS
ROBERT E. KAUFFMAN
DANIEL ANTHONY BERGER

INDEX TO WITNESSES
DIRECT CROSS REDIRECT
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LARRY G. MATHIAS
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JUNE KEMPER
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LARRY C. SIEGLER
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P R 0 C E E D I N G S
MR. BEYER: Good afternoon, Your honor.
THE DISTRICT JUSTICE: Good afternoon. We
have two Criminal Complaints charging the Defendant
Stanley J. Caterbone, here at the moment.
The charges were read at this time.
DETECTIVE MATHIAS: I understand Detective
Siegler, he is enroute.
THE DISTRICT JUSTICE: we can't proceed on
that until he is here, but we certainl can roceed on
the other. Do you have a copy of both charges?
MR. BEYER: Yes. I want to bring something to
both your attention in case I misheard it. When you
were referring to the first Complaint I think you said
it was your number 202. I don't have a number on the
first Complaint but my second complaint says 202. I
want it so we are straight.
THE DISTRICT JUSTICE: They all have the same
number.
MR. BEYER: Okay.
THE DISTRICT JUSTICE: All right. Do you have
a copy of the one filed by Detective Mathias?
MR. BEYER: Yes. And I waive that reading,
Your Honor.
THE DISTRICT JUSTICE: All right. Who is our

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first witness?
DETECTIVE MATHIAS: First, Your Honor, we
would like to dismiss the robbery charge. In consultin
with the District Attorney's Office, I was directed tha*
that would be the proper thing to do in this case.
THE DISTRICT JUSTICE: In other words, you're
going to withdraw the robbery?
DETECTIVE MATHIAS: Co*rect.
THE DISTRlCT JUSTICE: And not pursue that.
Cross it off, everyone on their Com laint. And who is
the District Attorney who authori*e* that?
DETECTIVE MATHIAS: District Attorney Totaro.
THE DISTRICT JUSTICE: T-0-T-A-R-0?
DETEcTIVE MATHIAS: Fi*st name is Donald.
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THE DISTRICT JUSTICE: The others stand, do

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they?
DETECTIVE MATHIAS: Yes.
THE DISTRICT JUSTICE: Now, we will have the
first witness.
DETECTIVE MATHIAS: At the re*uest of the
defense, we are *oing to se*uester the witnesses.
MR. BEYER: That's correct, Your *onor.
THE DISTRICT JUSTICE: All ri ht.
STACY LYNN WATERS, called as a witness,

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being duly sworn or affirmed, was examined and testified


as follows.
Q
THE DISTRICT JUSTICE: Last name?
A
Waters.
THE DISTRICT JUSTICE: Stacy Lynn Waters. Go
ahead.
DIRECT EXAMINATION
BY DETECTIVE MATHIAS:
Q
Miss Waters, would ou lease tell us what
you do for a living, where do you work?
A
I work for my mother at cleaning at FMG and
other buildings.
FMG. Do you know the location of that?
A
755 Oregon Pike.
Where do ou live at?
A
In Lititz' 204 Queens ate Road.
Could you explain what occurred on the
evening of the 4th of September, 1987 while you were
working at FMG? It may have been the 3rd, 4th of
September. In that area there.
A
Okay. I was workin at FMG. I heard a knock
on the window I looked to see who it was and it was Stan
and I went to the door to say hello and when I opened
the door, he walked in. Then I realized that he wasn't
really supposed to be in, so I told him that he

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couldn,t
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It was Stan Caterbone?


Stan Caterbone.
Is Stan Caterbone known to you?
yes.
Is that erson in the courtroom now?
Yes.
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Would you point to that person?
Pointing.
That would be the person seated next to

Q
counsel?
A
Yes.
Q
Okay. How long have you known Mr. Caterbone?
A
About a year-and-a-half.
Q
So it was clearl him? T
question in your mind it was Mr. Caterbone that you were
talking to that night?
A
No.
Q
What night was it; do you know?
A
A Thursday night.
Q
Thursday. Did you -- did something happen
that evening after that, after you left Stan into the
building?
A
Yes. He told me that he had come to take
some files that were his and take some pictures and so
7
He went into Mike Hartlett's -Q
Mike Hartlett?
A
His office.
Q
As a result of what ha pened that ni ht with
Mr. Caterbone, were the police called? As an end result
of that happened, whatever you're going to tell us right
now, were the police notified?
A
Yes.
Q
Okay. Did you provide the police with a
statement?
A
Yes.
THE DISTRICT JUSTIcE: can you say when were
the police notified? Like a year later
0r that very
night? Or do you know when?
A
I didn't notify the police
BY DETECTIVE MATHIAS:
Q
They were notified within an hour or two of
what you are talking about now?
A
Yes.
DETECTIVE MATHIAS: Okay. The reason I'm
asking, Your Honor, is she provided a statement and I
think it is a very complicated case and I would like to
introduce her statement so she has it with her.
THE DISTRICT JUSTICE: The police were
notified almost immediately then, is what you are

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saying?
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DETECTIVE MATHIAS: The police were notified
within a reasonable time frame of the crime.
THE DISTRICT JUSTICE: Now she stopped that
Stan went into Mike's office.
DETECTIVE MATHIAS: Right. She supplied us
with a statement. I have it here. I'd like to have it
there. That's what I'm tryin to get at.
THE DISTRIcT JUSTICE: Show it to him. Do you
have a copy?
MR. BEYER: I don't have a copy. I think the
proper way would be for her to be able to refresh her
recollection with this statement, but I don't believe
she could sit there and read from it.
DETECTIVE MATHIAS: She already has reviewed
it. I think she would like to have it with her in case
there is somethin about dates or times, et cetera. It
is a seven page statement.
THE DISTRICT JUSTICE: Go ahead. Stan went
into Mike's office.
DETECTIVE MATHIAS: May I give this to here
THE DISTRICT JUSTICE: Yes.
DETECTIVE MATHIAS: Would you like to see
this, Your honor?
THE DISTRICT JUSTICE: No. Go ahead. live it

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to the witness.
DETECTIVE MATHIAS: 0kay.
BY DETECTIVE MATHIAS
Is this the statement that you given to
the police and to me, as a matter of fact, on the date
of this incident?
A
Yes.
Q
I want you to have that so you have it there
with you for your reference if you need it. Now would
you continue. What happened that evening, if you can
explain?
A
0kay. Then he had a screwdriver. He pried
open Mr. Hartlett's desk.
Q
When Stan came to the building you said you
left Stan Caterbone into the buildig?
A
Yes.
Q
And then you said he went into someone else's
office? Or some office?
A
Yes.
Q
How did he get into that office?
A
It was open.
Q
Okay. At any time did he go into any offices
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that weren't open that he had no ritht to be in?
A
None that were not open.
Q
Did he go into any offices that were locked?
10
A
No.
Q
At any time did he go in?
A
To the basement, but that was the only one
that had to be unlocked. The hallway that we were in
was locked.
Q
I see. How did he get into the hallway?
A
I had the keys and he got them out of your
hands and unlocked it.
Q
He took the keys from you*
A
Yes.
Q
You didn't give them to him?
A
No.
Q
If he would have asked you for the keys,
would you have given in?
MR. BEYER: I object. That's speculative.
DETECTIVE MATHIAS: Okay.
THE DISTRICT JUSTICE: Somebody is going to
ask the question. Did he forcibly take them from you
A
Yes.
THE DISTRICT JUSTICE: Go ahead.
BY DETECTIVE MATHIAS:
Q
After he took the keys from you?
A
Yes.
Q
What happened?
A
Then we went -- well, we walked around and he

PAGE 11
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showed me some things that he had in a bag, papers.
2
Q
What were they that he showed you?
3
A
That he had in a bag with him.
4
Q
That he had with him?
5
A
Yes.
We went into an office, he showed me
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these things.
They were papers of charges that he had
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against Financial Management Group and I don't remember
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the other things.
And then we went to Mr. Hartlett's
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room -- office.
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Q
Explain if you can -- what we want you to
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understand, see, some if the people here don't have any
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idea what happened that evening at all and we are trying
13
to explain the story to them so they understand that
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happened.
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A
Okay .
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Q
Okay .
Now he went into Mr. Hartlett's
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office?
A
Yes.
Q
That happened there?
A
Then he took out a screwdriver and he pried
open the desk and started taking files out.
Q
He did?
A
Yes.
Q
Did he remove an thin
from those desks?
A
The files.

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Q
What happened to those files?
What did he do
2
with those files?
3
A
He carried them with him as we went to
4
another office and then we took the files out to the car.
5
car.
6
Q
Okay.
You're saying he took the files to his
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vehice,
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his car?
8
A
Yes.
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THE DISTRIcT JUSTICE: He or We?
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A
He.
I was with him but, I mean, he carried
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the stuff.
I was with him the whole time.
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THE DISTRICT JUSTICE: You went out to his
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car?
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A
Yes.
He had me -- he had my arm.
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BY DETECTIVE MATHIAS:
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Q
What do you mean?
He forced you to go with
him?
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him.
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MR. BEYER:
I obiect to the form of the
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question.
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THE DISTRICT JUSTICE: Well, just tell the
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young lady to tell us exacty what happened.
22
DETECTIVE MATHIAS:
Yes.
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BY DETECTIVE MATHIAS:
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Q
You said you went to the car with him?
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A
Yes.
PAGE 13
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Q
Why did you go to the car with him?
2
A
Because we didn*t
o to the car ri ht
3
Mr. Hartlett's office.
First we went to Mr. Kauffman's
4
office.
He took
ictures of some files and
oo
5
more files.
We went into the computer room. He took a
6
disk.
And when I went to use the phone
then he took
7
my arm 'cause he didn't want me to call anyone.
Then he
8
had me with him the rest of the time and then I
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accompanied -- was with him when he went out to the car.
Q
You said you went to call someone
A
Yes.
The police.
Q
Why were you going to call the police?
A
Because, I mean, I was told that he was not
to be in there.
And he was taking files.
Q
What happened then?
A
Then he came out and he took me by the arm
and took me back to the office with him.
Q
He took
ou back?
If you would have
wanted to leave, could you leave?
MR. BEYER:
I obiect to that it's speculative too.
THE DISTRICT JUSTICE:
Rephrase it.
BY DETECTIVE MATHIAS:
Q
Why didn't you leave?
A
Why didn't I leave?
Because he had my
arm.

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Q
And he wouldn't allow you to leave?
Is that
2
what you are saying?
3
A
No.
he didn't want me to go call anyone
4
Q
So, you didn't call the police?
5
A
No
I didn't.
6
Q
What happened then?
7
A
Then, well we had to make two trips out to
8
the car to take files out and then he wanted to go down
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to the basement and so we went down there and I didn't
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know I even had a key that unlocked it, but he unlocked
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Then he ripped out some phone lines. We went back
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upstairs and we went into the computer room and he
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THE DISTRICT JUSTICE:
Did she say cut?
15
A
No. He ripped them out, just ripped them
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out.
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THE DISTRICT JUSTICE: You said ripped
18
phone lines?
19
A
Yes.
And we went up to the computer
20
room and he turned the key on the computer. I don't
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know if it turns it off or what it does. I don't know.
22
And he tore some other things out of the wall there.
22
then we went to another office. He ripped some -- tore
24
some lines out from an ADP machine and then -25
Q
what is an ADP machine? Do you know?
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A
2
quotes.

It is what stock brokers use for their


I don't know what all it does.
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THE DISTRICT JUSTICE:
Did she say again
what he did to that?
A
He tore some of the cords out from it.
THE DISTRICT JUSTICE:
Electrical cords?
A
Yes.
THE DISTRICT JUSTICE:
Okay.
BY DETECTIVE MATHIAS:
Q
While this was going on, while this occurred
with Stan Caterbone being in the office areas, were you
scared?
A
I was scared to a point twice. The first
time was in Mr. Kauffman's office and he had my arm and
I was just kind of fighting to get away and trying to
get him to stop and just to leave. And he just -- he
said that I was putting up pretty much of a fight.
He
threatened to knock me out.
And then the second time was when we went down
to the basement and I was scared because it was dark
but he said that if he was going to do anythin to me he
would have done it by then.
Q
If you would have wanted to leave?
A
Yes.
Q
While Mr. Caterbone was going into these

PAGE 16
1
offices, could you have left?
2
A
No.
3
Q
Why?
4
A
Because he had a Hold of my arm. Not always
5
tight, but when I did try to get away, then he did grab
6
it tighter.
It didn't hurt me or anything.
7
Q
So, he held you?
Is that what you are
8
saying ?
9
A
Yes.
10
Q
At what point did you finally get free?
11
A
when he -- when he was leaving
out at his
12
car.
13
Q
Can you explain?
14
A
He had my keys and -- and so he had to give
15
them back but he made me go out with him and then he
16
gave me my keys back and then he made suree got back
17
in the office okay and he left.
18
Q
Is there anything you would like to say about
19
what has happened here that I haven't asked you that you
20
just want to make a comment about this whole story,
21
this whole incident?
22
A
No.
23
DETECTIVE MATHIAS:
One moment.
I have
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two questions.
BY DETECTIVE MATHIAS:

PAGE 17
1
Q
One, you said that you saw him tearing things
2
out of the phone downstairs?
3
A
Yes.
4
Q
You saw this with your own eyes?
5
A
Yes.
6
Q
Okay.
And who did that property belong to;
7
do you know?
8
A
I don't know. I quess it belongs to whoever
9
owns the building.
10
Q
Okay. You said he had taken a disk out of a
11
computer upstairs.
12
A
from a file, yes.
13
Q
Actually removed it from the computer?
14
A
No.
It was in the file.
15
Q
What happened to that disk; do you know?
16
A
H took it with him. I don't know what
17
happened.
18
Q
To the car?
19
A
Yes.
20
Q
And you said he removed items from disks
21
in the offices, one of those desks he had actually
22
opened with a screwdriver.
He took things and he took
23
them with him as well?
24
A
Yes.
25
Q
In his car?
PAGE 18
1
A
Yes.
2
Q
And left.
When he left you to come back in
3
and watched that you safely returned to the building, he
4
actually left with those items?
5
A
Yes.
6
DETECTIVE MATHIAS:
I have no more
quesions.
7
THE DISTRICT JUSTICE:
Before you go ahead,
8
clarify something for me.
The Defendant didn't have you
9
by the hand all the time from the moment you let him in
10
the door -11
A
No.
12
THE DISTRICT JUSTICE:
-- until he finally
13
released you outside to go back into the office and
14
assisted out or whatever?
Is there a reason why you
15
didn't walk out the door?
Or call the police?
Or do
16
something?
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A
Because until that I was *ust trying to get
him -- I wanted him to just leave and I was Just trying
to talk him out of taking things.
THE DISTRICT JUSTICE:
Go ahead.
DETECTIVE MATHIAS:
You do bring up the
poinT.
THE DISTRICT JUSTICE:
I wanted clarification
here.
Did he have her by the hand all the time?
BY DETECTIVE MATHlAS:
Q
After Stan grabbed your arm or held your
arm,

PAGE 19
1
from that point on?
2
A
Yes.
3
Q
Did he ever let you go that you could have
4
left until the very end, when he gave yuor keys back?
5
A
He didn't -- oh, he had like his arm around
6
my arm but when I, you know, tried to get away then he
7
held tighter.
So, I mean, I did try a couple of times.
8
Q
So could you have gotten free if you would
9
have wanted to?
10
A
No.
11
DETECTIVE MATHIAS:
0kay.
12
MR. BEYER:
My turn?
13
DETECTIVE MATHIAS:
Yes.
14
CROSS-EXAMINATION
15
BY MR. BEYER:
16
Q
Good afternoon.
You've known Stan for
17
about a year-and-a-half, I think?
18
A
Yes.
19
Q
How did you first meet Stan?
20
A
I met him first when I was doing some work
21
for my dad when he was with IDS.
22
Q
Then you knew that Stan was the executive
23
vice president of Financial Management Group?
24
A
Not at that time, I don't think so.
That was
25
a little before, but, yes.
PAGE 20
1
2
3
4
5
6
7
8

q
A
Q
A
Q
A
Q
A

At one time you worked for FMG, didn't you?


Yes.
What position did you have at FMG?
I was a receptionist.
When did you start working there?
July of last year.
Of '87?
Yes.
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And who hired you ?
Mike Hartlett.
Did you work with Stan there?
I worked for Stan.
I did some things for

him.
Q
And you and Stan were pretty good friends,
I believe ?
A
He talked once in a while.
Q
And you went down to the shore to visit him
at his house?
A
No
I didn't go down
him.
I saw him there once.
Q
All right.
when did you terminate your
employment with Financial Mana ement Group?
A
I think July this year, '87.
Q
And why did you terminate that employment?
A
Because my mom had a cleanin business and

PAGE 21
1
she needed heop and I was going to work for her.
2
Q
There was a point when you were told Mr.
3
Caterbone wasn't allowed in that building - is that
4
accurate?
5
A
yes.
6
Q
Who told you that?
7
A
Mike Hartlett.
8
Q
Did you know when he was officially removed
9
as an executive or anything like that? Or you were Just
10
following Hartlett's orders?
11
A
Yes.
He told us that he was removed as
12
executive.
13
Q
Hartlett told you that?
14
A
Yes.
15
Q
All right.
Now
when Stan knocked on
l6
window that evening I think your initial reaction was
17
you were glad to see him? is that a fair state*ent?
18
A
Yes.
19
Q
And you had never had any trouble with Stan
20
before that?
21
A
No.
22
Q
And when he first came in the door did he
23
have something with him?
24
A
I don't remember.
I quess he had the blue
25 bag.
**
PAGE 22
1

Okay.

He was carrying
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hand?
A
Yes.
Q
Would it be safe to say that Stan was rather
excited that night?
A
Yes.
Q
And he wanted to show you a lot of things in
the building?
A
Yes.
Q
And he was taking you around from office into
office saying, look at these files in this office, look
at these files in that office?
A
Yes.
Q
And, in fact, he told you look, that Kauffman
is now in my office and here are all his files.
He
showed you that, didn't he?
A
Yes.
Q
And, you had also been aware that Kauffman
had all the locks changed on his office, didn't you?
A
I had thought that Stan had the locks
changed.
The outside of the doors, yes, the locks were 22
changed.
Q
But, you're aware that before Stan took his
business operations to New Jersey that he had the locks
changed on his own office?

PAGE 23
A
yes.
1
2
Q
But then Kauffman had them rechanged, I
3
guess right?
4
A
Not that I know of.
5
Q
Okay.
Did you guys go in that office?
6
A
Yes.
7
A
Had it been locked?
8
A
No.
9
Q
So, if that door was unlocked it was unlocked
10
before you got there that evening?
11
A
I unlocked it when I got there.
12
Q
And where did you get your set of keys?
l3
A
I have them for cleaning for Mr. -- I think
14
it is Mike.
Stan gave me a key to his door.
15
Q
Stan gave you a key to his office?
l6
A
Yes.
17
Q
All right.
Now, as he is going from office
18
to office picking up files, what was he doing with them?
19
A
Taking them.
20
Q
Where was he putting them?
21
A
He held them in his hands and then Just
22
Mike's, just Mr. Hartlett's files.
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Q
A
Q

Was he carring them.


He was carrying them.
Now, he was carrying those and also carrying

PAGE 24
1
his Blue bag.
2
A
I don't remember if he had sat it
3
somewhere or if he had it with him.
4
Q
Okay.
can you estimate how much he had
taken
5
from Mr. Hartlett's office in terms of si*e?
6
A
About like that much.
7
Q
And that's what he was carryin with him?
8
A
Yes.
9
Q
Now, how long do you think Stan was in the
10
building that day?
11
A
It was not quite an hour.
Almost an hour.
12
Q
You were aware that Stan and the partners in
13 the business were having a problem between them
14
you?
15
A
Yes.
l6
Q
And you were aware that Stan felt as though
17
the company had taken many things that belonged to
him
18
A
I didn't know what the situation was. I
19
thought that it had calmed down and that it was pretty
20
much over by that time.
21
Q
But you're aware that Stan felt that most of
22
the stuff in there was his?
23
A
I didn't know what -- I mean nobody talks
24
about it.
I didn't know what was goint on.
25
Q
He was sayin it that night?
PAGE 25
1
A
That night, yes, he felt that things were
2
his.
3
Q
And your desire was to try to talk him out of
4
taking anything because you didn't thing it was really
5
right?
6
A
I didn't know and I didn't -- yes.
7
Q
Where else did he get files?
8
A
From Bob Kauffman's office.
9
Q
And that's Stan's old office?
10
A
Yes.
11
Q
The one he had the locks changed on?
One
12
Stan had the locks changed on?
l3
A
Right
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1987 Documents on CD-ROM by AMG 1991


How much did he take from Kauffman's office?
He took, oh, I don't know how much.
He

took
a wastepaper basket and had it filled.
He made two
trips.
Q
Okay.
How did he carry the wastepaper
basket
to his car?
A
How?
Q
Yes.
A
Around his arm.
Q
What about his blue bag?
A
I don't remember where that was, if he had
with him or if he got it when he came back in.

PAGE 26
1
Q
Okay.
You indicated there were two points
2
when you were kind of scared.
3
A
Yes.
4
Q
The one was *oing do*n to the basement and
5
it was dark, right?
6
A
Right.
7
Q
Had you ever been down in the basement.
8
before?
9
A
No.
10
Q
And when was the other one?
11
A
When we were in Bob's office and I was trying
12
to get him to quit and to leave and I was trying to get
13
my arm from him and he Just said that I was putting up
14
a fight and that he would knock me out and I didn't now
15
if he was serious.
16
Q
From your experience with Stan, you were
17
pretty sure he wasn't serious, he wasn't going to knock
18
you out, weren't you?
19
A
I didn't know because of the things I had
20
been told about Stan.
People had said, you know, that
21
I didn't know what to expect.
22
Q
But, I guess your initial answer was you
23
weren't sure if he was serious or not?
24
A
I wasn't sure.
25
Q
All right.
when you made the first trip to
PAGE 27

PAGE 27
1
the car, what did he take with him?
2
A
The first trip?
He took files.
3
Q
Was the trash can involved in that first
4
trip?
5
A
I don,t remember.
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Q
Okay.
If he took files, was he carring them
in one hand?
A
Yes.
Q
What about his blue bag?
A
I don't remember what happened to the blue
bag.
I really don't.
I don't know if he had sat it
down, picked it up on the way out or what.
Q
And you went out to his car with him?
A
Yes.
Q
Did he put the stuff in the car?
A
Yes.
Q
And where were you when he was
uttin
the
stuff in the car?
Just standing there watching him do
it?
A
When he was putting it in the car, I was
standing there.
Q
Okay.
A
He had -- I was with him when he went out.
Q
He wasn't still holding you out at the car
was he?

PAGE 28
1
A
No, not out at the car he was not.
2
Q
You could have ran there if you wanted to,
3
but at that point you weren't really afraid of him?
4
A
I guess I could have.
5
Q
And, then you went back in with him for the
6
second trip?
7
A
Yes.
8
Q
And the second trip he took everything else
9
that he hadn't taken on the first trip I take it?
10
A
Yes.
11
Q
And then he gave your keys back?
12
A
Yes.
13
Q
And he waited to make sure you could get
14
back into the buildings safely because it was dark
outside?
15
A
Yes.
16
Q
And, in fact, I think the two of you might
17
have kissed goodbye?
Or a peck on the cheek? See you
18
later?
Take care?
19
A
There was a peck on the cheek.
20
Q
Okay.
21
MR. BEYER:
Thank you, Stacy.
22
DETECTIVE MATHIAS:
Recross this for a
second.
23
MR. BEYER:
Redirect.
24
DETECTIVE MATHIAS:
Called redirect?
25
MR. BEYER:
Yes.
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PAGE 29
1
DETECTIVE MATHIAS:
Thanks.
2
REDIRECT EXAMINATION
3
BY DETECTIVE MATHIAS:
4
Q
You commented on the first trip to the car
5
you could have ran, you said I guess.
The question was
6
asked of you, could you have run.
You said I guess?
7
A
I supose I could have at that time.
I mean
8
he had more things to get and I stayed with him to see
9
what he was doing.
10
Q
Why didn't you run?
11
A
I didn't have my keys
for one thing
and I
12
wasn't going to leave him with my keys.
13
DETECTIVE MATHIAS:
May I get a question 14
in here that's off the record for the sake of the case?
15
THE DISTRICT JUSTICEOnly wiht no
objection.
16
DETECTIVE MATHIAS:
For your sake.
17
MR. BEYER:
I think it is for my sake.
18
DETECTIVE MATHIAS:
It is for your sake.
19
There was a brief discussion
20
held off the record at this time.
21
MR. BEYER:
This is on the record.
22
THE DISTRICT JUSTICE:
On the record.
23
DETECTIVE MATHIAS:
On the record.
24
BY DETECTIVE MATHIAS:
25
Q
Right now, the obiective of the questioning
PAGE 30
1
taking place is to determine whether or not you were in
2
fear of being harmed by Stan Caterbone and whether or
3
not you were being unlawfully restrained by him, meaning
4
you could not leave of your own free will.
Do you
5
understand?
6
A
Yes.
7
Q
The
uestion I have is, could you have
one
8
and today, as you sit here, do you feel and believe that
9
you could have left and do you feel that -- or do you
10
feel that you were being unlawfully restrained by Stan
11
Caterbone?
12
A
While we were in the building I didn't think
13
I could have left.
I don't think I could have left.
14
When I was out at the car, by that time it was all over
15
and my main concern was that he didn't leave with the
16
keys.
17
RECROSS-EXAMINATION
18
BY MR. BEYER:
19
Q
were you in fear for your life?
20
A
For my life?
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Yes.
No.
MR. BEYER:
Okay.
No more queestions.
THE DISTRICT JUSTICE:
If at the car at the
first trip when he was using both of his hands to put
Q
A

PAGE 31
1
stuff into his vehicle, if you did flee -- how much do
2
you weigh?
3
A
Ninetey pounds.
4
THE DISTRICT JUSTICE:
So he is bigger
5
lot bigger, a lot faster, could easily overtake you?
6
A
Yes.
7
THE DISTRICT JUSTICE:
Did that thought
8
to you at all?
9
A
Yes.
10
THE DISTRICT JUSTICE: It did?
11
A
Yes.
I mean, I knew he was bigger than I was
12
and I wasn't going to -13
THE DISTRICT JUSTICE:
The thought did
occur
14
to you that if you did try to flee, if he wanted to stop
15
you it would be rather easy?
16
A
Yes, if he wanted to stop me, yes.
17
THE DISTRICT JUSTICE:
Is that one
18
things that prevented you from fleeing there? 0r is it
19
Just the keys?
20
A
Well, yes, he could easily have -21
THE DISTRICT JUSTICE:
I mean, is that one
22
of the factors?
23
A
Yes.
24
BY MR. BEYER:
25
Q
Were you afraid at this point?
Or you
wanted
PAGE 32
1
your keys?
2
A
At this point he had done what he was going
3
to do, I felt, and I wanted the keys so he couldn't go
4
back in.
5
Q
Through your experience knowing Stan
6
personally all this time, were you afraid for your life?
7
from him?
8
A
I was not afraid for my life.
9
MR. BEYER:
Thanks.
10
THE DISTRICT JUSTICE:
That's all.
Thank
you.
11
Do you want her to stay in the courtroom?
12
MR. BEYER:
I have no obJection to her being
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dismissed.
you want to

THE DISTRICT JUSTICE:


She can leave.
Do
go back to work or whatever?
Thank you.

ROBERT E. KAUFFMAN, called as a witness,


bein duly sworn or affirmed, was examined and testified
as follows:
THE DISTRICT JUSTICE:
Robert E. Kauffman.
Two F,s?
Q
**** * *******.
THE DISTRICT JUSTICE:
Two N's?
A
One N.
THE DISTRICT JUSTICE:
You may go ahead.

PAGE 33
1
DIRECT EXAMINATION
2
BY DETECTIVE MATHIAS:
3
Q
Mr. Kauffman, would you pleaes Give Your
4
address and your business, what is your vocatton?
5
A
1755 Oregon Pike, Lan*aster.
6
Q
Is that your business address?
7
A
Business address and we are in the Financial
8
services business, investment sales.
9
Q
Okay, sir.
Could you explain to those
10
present what occurred on or about the third and fourth
11
of September, 1987?
12
A
Well, I got a call late at night from Karen
13
Loss, the wife of one of our representatives, about
14
eleven-thirty at night.
She explained to me that she
15
had received a call from Stacy Waters who claimed to
16
have been held by Stan, that he had entered the building
17
against her will, that he had -18
MR. BEYER:
I obJect to the hearsay stuff.
If
19
he could get to what he knows about it.
20
THE DISTRICT JUSTICE:
You don't know
wheter
21
she did or not, but based on information relayed to you
22
you must have done something.
What did you do?
23
A
Yes.
I was advised that perhaps I should go
24
down to the property and look around, which I did and
25
when I got there, I met at least one detective and
PAGE 34
1
Stacy, Allen Loss was there and I was asked to assess
2
the damage and Stacy went around with me and told me
3
what Stanley had done while on the premises primarily
4
and I relayed that information to the detectives and
5
that was it, as far as that night was concerned.
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BY DETECTIVE MATHIAS:
Q
You said damages.
What had occurred at
your business?
A
Well --MR. BEYER: I object to that. I think he can
testify to what he observed.
DETECTIVE MATHIAS:
Right.
BY DETECTIVE MATHIAS:
Q
What did you observe?
What did you see?
A
First thing that I saw was first place we
went was to my office and I noted there were some files
missing.
Second place I believe was the computer room
where a key was missing to our main file server and it
was explained to me that -MR. BEYER:
I obiect to that.
THE DISTRICT JUSTICE:
Does he understand
about hearsay?
DETECTIVE MATHIAS:
BY DETECTIVE MATHIAS:
Q
You can only testify to what you saw.

PAGE 35
1
A
Okay.
2
Q
Or what you know for a fact.
3
A
All right.
4
THE DISTRICT JUSTICE:
Not what was
5
explained to you.
6
A
Got you.
I saw that there were -- the wires
7
had been pulled out of the wall in the computer room,
8
that a key was missing to the mind frame of our computer
9
system, that our ADP, or Quotron emquipment as it is
10
called, was tampered with, that our computer system was
11
down in all the rooms and that they had been dislodged
12
probably -- well, at that point in time we felt broken -13
I was ushered into Mike Hartlett's office where I saw
14
that the desk was broken into, that some files were
15
missing, that I was then taken downstairs where a
16
basement door had been opened and I saw that wires had
17
been torn out of our phone system.
I also noted that
18
our burglar alarm was going off for one reason or
19
another.
20
Q
You said your phone system
21
A
Yes.
22
Q
The wires that were tampered with or pulled
22
were your property?
24
A
I'm not a phone technician.
I don't know a
25
whole lot about the installation.
At the time there
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PAGE 36
1
were three or four -- as you lool at a phone system, you
2
see three or four large panels with hundrees of wires
3
what I knew was -- that there was several hundred of
4
those wires pulled out and that our phones were in fact
5
dead.
That's all I know.
I'm not a technician.
6
Q
Were there any items stolen from your office?
7
A
From my office, what was missing was about
8
twenty-five odd files, I would imagine, and some papers
9
from my desk.
Nothing much other than that, that I
10
could recall.
11
Q
Yhere are computers in your business?
12
A
Yes.
13
Q
Were these computers tampered with or
14
damaged?
15
A
Well there were essentially, what I recall
16
from that night with -- that our two backup tapes had
17
been taken, which contained all of our information, data
18
on thousands of clients and that from looking at the
19
main computer system and the key being missing, et
20
cetera, I could only assume that that had also been
21
tampered with and what we had feared was that we may
22
have lost our entire data base and there may have beeen
23
some irreparable damage to the main computer frame.
24
Q
As a result of these computers having been
25
tampered with, was the operation affected?
Did it
PAGE 37
1
interfere with normal operations then?
2
A
Well, the very next day, essentially we were
3
without the service whereby we quote stock and bond
4
prices for the best part of the day, which I'm sure did
5
cause us some revenue damage.
6
We also were without a phone system till
7
somewhere around noon, which can also be a problem.
But
8
I was surprised at how quickly they were able to restore
9
service in both of those cases.
The backup tapes that
10
enable us to operate our internal computer systems were
11
recovered very quickly and that enabled us to pretty
12
much run our operation without a whole lot of problem.
13
Q
Was there a monetary loss to the company or
14
to you personally as a result of these damages that you
15
were seeing?
Or these changes?
16
A
There is no question that there were.
We got
17
a -- we have a repair bill in our phone system.
18
Q
What was that? do you know?
19
A
I believe I saw a seven hundred thirteen
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dollar bill for that one.
We had the people from ADP come to our office
to restore our Quotron equipment.
We don't have a bill
from them yet but it is two hundred fifty dollars when
the
walk on the premises and then goes from there as
to how long it takes them to fix it.
And they were there

PAGE 38
1
all day long.
I would suspect that bill would be
2
Fifteen hundred dollars or more.
3
We were able to recover, as I said, the backup
4
tapes but they were worth an awful lot of money to us,
5
would take several thousand man hours to restore the
6
data that is contained on our main computer system.
7
Q
Where did you recover these tapes?
8
A
I recovered them from the Manheim Township
9
Police about 3:00 a.m.
10
Q
On what date- do you know?
11
A
It would have been that same night.
12
Q
Sir, do you know a Stanley caterbone?
13
A
Yes, I do.
14
Q
Is Stanley Caterbone privileged to be in your
15
business after closing hours?
16
A
No, he's not.
17
Q
Was he privileged to be in your business on
18
the date of this offense?
19
A
No, he was not.
20
Q
Did Stan Caterbone have any ri ht to enter
21
into your office or any other office of FMG?
22
A
No, he didn't.
23
Q
Did he have any right to remove any items
24
from that business?
25
A
No, he didn't.
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Q
Did he have any right to alter or interfere
with your normal operating procedures when it came to
the computer system?
A
No, he didn't.
Q
Did he have any right to destroy any property
within your business?
A
No, he didn't.
Q
To the best of your recollection or
knowledge, did he have keys or was he capable of
entering into your business after closing hours?
A
No, he didn't have keys. The locks were
changed over two months earlier and Stan was not even
a
key.
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Q
At one time did he have a key to the
business?
A
At one time he did.
Q
Why would he have a key to the business?
A
Well, at one time he was involved in the
business as an officer, director of the company and he
was also a sales re repentative for us.
Q
When would he have changed from having
privileges of those properties and the privilege of
being on your property or the property, to the status of
not being privileged to be there?
A
That happened on July lst.

PAGE 40
1
Q
Of 1987?
2
A
That's correct?
3
DETECTIVE MATHIAS:
I have no further
4
questions of this witness.
5
CROSS-EXAMINATION
6
BY MR. BEYER:
7
Q
As you have been testifying on direct
8
exaxination you have been referring to a small piece of
9
paper on your lap.
May I see that, please?
10
A
I don't know.
There is nothing on it, but
11
you may see it.
12
THE DISTRICT JUSTICE:
Are they Just notes
13
to refresh your memory?
14
A
That's correct.
15
MR. BEYER:
There are several dates and
16
names on there.
17
THE DISTRICT JUSTICE:
Dates to refresh your
18
memory?
19
Q
That's correct.
20
THE DISTRICT JUSTICE:
It is quite all right
21
to have them.
He is allowed to see them also.
22
BY MR. BEYER:
23
Q
When did you first start working for
24
Financial Management Group?
25
A
August lst of 1986.
PAGE 41
1
Q
How did you come to work for Financial
2
Management Group?
3
A
It was a -- I made a decision to join
4
Financial Management Group several weeks before that.
5
I had spoken with both Stan and Mike Hartlett over a
6
period of months before that about beginning an
7
investment services firm in Lancaster.
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Q
And when you say in Lancaster, I assume that
you were somewhere else at the time?
A
That's correct.
Q
You were in at Lancaster that day?
A
Correct.
Q
And, through your past business relationships
with Stan and maybe Mr. Hartlett, you were brought to
Lancaster or you came to Lancaster to engage in
business with them? is that accurate?
A
Correct.
Q
And that business was kno*n as *inancial
Management Group?
A
Correct.
Q
And when did that incorporate?
A
August lst.
Q
Of 1986?
A
To the best of my knowledge.
Q
And upon incorporation what was your office?
42
A
Q
A

I was the President of the firm.


And what was Mr. Caterbone's position?
He waw an executive vice resident of the

parent firm.
Q
What is the Parent firm?
A
Financial Management Group, Limited.
Q
Right. What's the corporate setup in terms
of persons and offices of the parent firm, Financial
Management Group, Limited?
A
Parent firm, I'm the president of the firm.
At that time Stan and Mike were -- equally had a
position Just below mine. Their title was executive
vice president. Mike reported to me on part of their -the business operations and Stan on another part.
Q
All right. In October of 1986, there was a
public offering made is that accurate?
A
Correct.
Q
And what was the name of that entity?
A
Financial Management Group, Limited.
Q
And in that entity you again are president?
A
Correct.
Q
And you were a shareholder of sixty thousand
shares?
A
Correct.
Q
And Mr. C*aterbone was a shareholder of forty

PAGE 43
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thousand shares?
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Correct.
And to the best of your knowledge -THE DISTRICT JUSTICE: Excuse me one second.
Go ahead. Pbulic offering in October of -MR. BEYER: 1986.
BY MR. BEYER:
Q
And Mr. Caterbone at that time was executive
vice president. He had forty thousand shares and to
our knowledge, he still maintains those shares at this
time?
A
correct.
Q
Who is the secretary of Financial Mana*ement
Group, Limited?
A
I believe it was Stanley.
Q
And when did he stop being secretary of
Financial Management Group, Limited?
A
The -- he ceased being -- he ceased bein an
officer at our regular Monday morning meeting which
would have been the following Monday. I believe that
would have been July 6th.
Q
So up through July 6th, Mr. Caterbone was the
executive vice president and secretary of Financial
Management Group, Limited?
A
correct.
A
Q

44
Q
And in June of '87 he was also holding that
Position officially?
A
June of '87?
Yes.
A
Correct.
Q
Now, when was the last ti*e you had a board
of directors meetin* go prior to September 4th?
A
Our board meets on an ever Monday morning
basis and has since its inception of August of, 1986.
Q
Did you have a shareholders' meeting prior to
September of 1987?
A
No, We didn't.
Q
Who attended the meeting in July in which Mr.
Caterbone was removed as a board member?
A
Robert Long, Allen Loss, myself, Mike
Hartlett.
Q
And it was the decision of those persons who
you Just named that Mr. caterbone would be removed as
executive vice president and as secretary is that an
accurate statement?
A
What we were advised by our legal counsel.
I'm not asking you that. I'm askin you if
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that decision was made by those persons present at that
time?
A
Decision was made to remove him as an officer

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of the corporation at that time by those people.
Q
All rirht. Now, again you indicated Mr.
Caterbone still has fort thousand shares of your stock
to the best of your knowledge?
A
To the best of my kno*ledge.
Q
And, as late as Aguust of 1987, am I correct
in saying that you offered Mr. Caterbone two dollars and
fifty cents per share of that?
A
That's an oversimplification of what the
arran ement was. It was a complicated -- it was a
com licated arrangement
Q
In terms of stock per dollar price that's
accurate, correct? Regardless of the other things
around it, price per share of stock is that correct
A
That is the price that we offered on that
day.
Q
Okay. Now, the inability for you to quote
the stocks and bond prices on September 4th was as a
result of the ADP and not the computer machine, correct?
A
That's correct.
Q
And, in fact, you found out that your
computer wasn't damaged as a result of what happened
that night isn't that correct?
A
That is substantially correct.
Q
In fact, you back up your information every

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46
single day, which is on the commputer. It anything would
have been lost it would have only been for a day?
A
That's not entirely correct in that what we
were -- just so hap*ens that the one night Lisa didn't
get to the safe deposit box with our backup tapes and
our actual live copy backup tapes were both in on the
premises the night that the office was entered.
Q
Did you lose any information?
A
Not when the tapes were recovered.
Q
Okay. Now, who owns the building in which
you're located?
A
I don't know the exact name of the group.
That's Herb Fisher Sponaugle, I guess. I guess they
have a subsidiary.
Q
FMG rents that from them, I assu*me?
A
Correct.
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How long have you been renting that building?
Since August. *ell, August l*t woul* be *y*-I mean, was a staged entry but probably August lst is
what's on the -Q
Of 1986*
A
Correc .
Q
And that would be a five ear lease*
A
It is a five year lease.
Q
And the rent per month is approximately nine
Q
A

PAGE 47
1
thousand dollars, maaybe eight and change?
2
A
Correct.
3
MR. BEYER: I request to show this to the
4
witness, the lease for the remises.
5
THE DISTRICT JUSTICE: Go ahead.
6
BY MR. BEYER:
7
Q
I'm showing you what we will call Defendant'
8
Exhibit No. 1. Are ou able to identif that?
9
A
Sure.
10
Q
Would that appear to be the lease for the
11
premises which you are occupying right now?
12
A
Sure is
13
Q
And the same premises which were being
14
occupied on September 4th of 1987?
15
A
Sure.
16
Q
And the name of the lease as individuals is
17
who?
18
A
Hartlett, Caterbone and myself.
19
Q
Mr. Caterbone is in fact listed as an
20
individual as the lessee of this property, is that
21
accurate?
22
A
Well, I'm -- here again, I'm not a scholar
23
but I will say that it was evident that three of us
24
si ned for the corporation and there was a personal pass
25
through to our personal assets should the corporation
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48
not have been able to pay the rent. I do, as myself, I
mean I don't consider that as an individual that I have
any claim to that space. It is a corporate lease.
Q
Right. however, you will agree that you
would be individually responsible if in fact that
business failed?
A
No question about that.
Q
And as would an bod else listed as a lessee*
A
No question.
Q
And Mr. Caterbone, for the record, has signed
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that?
A

Oh, yes he is responsible.


should something happen to our bussiness he is
Q
Are you familiar wth that
signature?
A
Oh, yes.
Q
Mr. Kauffman I'm showing your financials
marked Financial Management Group, Ltd,
1987 the time during which you told us that Mr.
Caterbone was in fact executive vice president of your
corporation. As a board member, would you please tell
me who signed his name to this?
A
Looks like his si nature to me
Q
Are you saying you don't know who signed
that Are you saying it is your understanding he signed it?

PAGE 49
1
it?
2
A
It was definitely my understanding he signed
3
it. That looks like his signature to me.
4
MR. BEYER: Thank you, Mr. Kauffman.
5
DETECTIVE MATHIAS: Is that all the *uestions
6
you have?
7
MR. BEYER: That's all.
8
DETECTIVE MATHIAS: May I redirect?
9
THE DISTRICT JUSTICE: Go ahead.
10
REDIRECT EXAMINATION
11
BY DETECTIVE MATHIAS:
12
Q
Did Stan Caterbone have any right to enter
13
into your office or remove any item from your office,
14
from your property?
15
A
No.
16
Q
At any time, even as a artner would he have
17
had a right to do that?
18
A
Well, the answer to that is, you know, I -- I
19
certainly don't have the ability to go in and destroy
20
things that belong to the corporation, nor do I have the
21
ability to remove things that belong to the corporation
22
from the premises and, you know, that would be -23
Q
You say able to?
24
A
I mean the right.
25
Q
Okay. You don't have the right?
PAGE 50
1
A
No.
2
Q
Just by good judgement? Or you don't have the
3
right because of some written law?
4
MR. BEYER: I obJect to that.
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A
I think it is a different legal issue, but we
have responsibilities to the corporation as officers of
the corporation which would prevent me from doing that.
There is certainl nothin on the remises that is
outside of my personal office and my personal files that
belongs to me. Everything else belongs to the
corporation.
Q
And were any of your personal files taken?
A
Yes, they were.
DETECTIVE MATHIAS: No further questions.
RECROSS-EXAMINATION
BY MR. BEYER:
Q
You brought something up here. When I use
the word office in the next few questions, I mean our
specific office, enclosed space.
A
Yes.
Q
How long have you been in the office in which
you are now in, meaning the enclosed office of Mr.
Kauffman?
A
Since -- I don't know, maybe August l of
1986.

PAGE 51
1
Q
You have been in the same office?
2
A
I mean of '87.
3
Q
1987?
4
A
Correct.
5
Q
Who had that office before you?
6
A
St
did
7
Q
In fact, he had the loc*s changed so no one
8
could go in there. However, you had them changed *ga*n
9
so that you could use that office* is that accurate?
10
A
That's incorrect. He had left ke s with
11
several staff eo le and the lock is the sam* as the one
12
Stanley has ch*nged that I use. In fact, have the same
13
ke .
14
Q
Upon your agreement that Mr. caterbone no
15
lon er wo*ks for ou, ou took over his office* is that
16
accurate?
17
A
It is kind -- that's an oversimplification
18
but it's ot a de ree of -- I mean, it is accurate. We
19
turned my office into a conference room to better
20
utilize the space and since Mr. Caterbone was not
21
returning, I used his office.
22
Q
You bring up one thing. You were first
23
alerted to this by Mrs. Loss?
24
A
we -- well, the break-in on September 3rd,
25
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1
Q
And isn't it true that you were also aware
2
that Mr. Caterbone had called a meeting for the 4th of
3
September to include Allen Loss, Bob Long, himself, Scot
4
Robertson... in fact, everybody other than you and Mr.
5
Hartlett and you were aware of that? isn't that right?
6
A
I was -- I'm going to say, yes and I was not
7
aware of all those -- I was aware of all those names.
8
Q
You were aware that the meetin was called.
9
You weren't asked to attend?
10
A
Yes. It didn't sur rise me 'cause Stan
11
hasn't spoken to me since the day he left.
12
MR. BEYER: Thank you.
13
THE DISTRICT JUSTICE: What was the date of
14
the board action wherein he was removed?
15
A
The date of the board action was the
16
following Monday, which I believe is the 6th.
17
THE DISTRICT JUSTICE: Of July?
18
A
July.
19
THE DISTRICT JUSTICE: That's all. Thank you.
20
BY MR. BEYER:
21
Q
Did you invite Mr. Caterbone to that meeting?
22
A
Mr. Caterbone had a standing invitation to
23
e*ery board meeting since the day we opened on every
24
Monday morning.
25
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THE DISTRICT JUSTICE: That's all.
MR. BEYER: He may be released as far as I'm
concerned.
THE DISTRICT JUSTICE:

Go back to business.

Thank you
DANIEL ANTHONY BERGER, called as a witness,
being duly sworn or affirmed, was examined and testified
as follows:
DIRECT EXAMINATION
BY DETECTIVE MATHIAS:
Q
Would you please tell us where ou live and
what you do for a living, where you are employed?
A
I am currently living at clock Towers
Apartments. I'm employed by Berger Real estate as a
realtor associate.
Q
could you please explain to those present
what occurred on the 3rd or 4th of September, 1987 in
the evening hours?
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A
Okay. I was at Cousteau's Restaurant
approximately ten-thirty in the evening. Stan Caterbone
entered the bar. I immediately, you know, noticed him
coming in. He conversed with several people in the bar
and it was brought to my attention that he had told
individuals that he had Just broken into the office of
54
Financial Management Group.
Subsequently, after a period of time, I
a roached Stan, asked him what exactly happened, why he
did what he had done. You know, I guess we had an
exchange of words to the effect I felt he was acting
very stupidly as far as handling whatever grievance he
mi *t have with Financial Management Group and
su*se*uently he left and from there I left shortly
thereafter.
I left Cousteau's myself and immediately went
out to the office of Financial Manage*ent Group to see
what had taken lace and in fact, notified the police
that he had, if they had not already been notified.
Q
I'm a little bit confused. Did Stan
Caterbone actually tell you he had done something?
A
Yes. He admitted through our conversation
that he had done this.
Q
Done what?
A
That he had gone in, taken files of which he
supposedly had in the car. He had, you know, torn out
computer lines to sabota e the office.
Q
Did he actually use the word sabotage?
A
No, but, you know, in fact, you know, a
business of that nature, to destroy their computer
network would be.

PAGE 55
1
Mr. BEYER: I object to that. That's
2
speculative.
3
BY DETECTIVE MATHIAS:
4
Q
You know Stan Caterbone?
5
A
Yes.
6
Q
Is he here now?
7
A
Yes.
8
Q
Would you please point to him?
9
A
Doing same.
10
DETECTIVE MATHIAS: Seated next to counsel.
11
BY DETECTIVE MATHIAS:
12
Q
Has any mention made concernin an air lane?
13
A
Yes. At one time Stan had, to the best of my
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knowledge, purchased an aircraft from Lancaster
Aviation. Subse*uently, to the best of my knowledge, I
understand it was repossessed due to failure of payment
and he has mentioned to Harry Lutz, who was a friend of
mine, that he was guest bartender, ou know, he was
bartending that evening and he had requested Harry to
steal the plane for him.
Q
For any specific reason? What were they
going to do with this plane?
A
He felt it was -MR. BEYER: I obJect to that. He doesn't know
what he felt. If he knows something he can state it.
56
BY DETECTIVE MATHIAS:
Q
Did Stan Caterbone actuall make a comment to
you that he was oin to take this plane?
A
I don't know that it was -- that subject was
never directly mentioned to me by Stan.
DETECTIVE MATHIAS: Fine.
MR. BEYER: Thank you.
CROSS-EXAMINATION
Q
Mr. Berger, you also have an association with
Financial Management Group?
A
That is correct.
Q
How lon have ou had that association?
A
On and off for--the last approximately twelve
months.
Q
Who was the first person to get you involved
with Financial Management Group?
A
Stan.
Q
Oka . And this conversation at Cousteau's
took place around ten-thirty in the evening?
A
No. It was later than that.
Q
Later than that?
A
Yes.
MR. BEYER: Thank ou.
THE DISTRICT JUSTICE: Are you the person that
called the police?

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A
No.
2
THE DISTRICT JUSTICE: Do ou know who did?
3
A
I believe it was the young lady that was
4
cleaning the offices that evening.
5
THE DISTRICT JUSTICE: Okay. Thank you.
6
That,s all
7
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No, I don't.
MR. BEYER: Thank you. He may be excused.
I'm finished. You can leave' Thank you.
DETECTIVE MATHIAS: I,m the next witness. Do
you want me to stay here or go up there?
THE DISTRICT JUSTICE: If you have thousands
of papers that you have to constantly refer to by going
back and forth, then, why, your request is granted. If
you don't, then everybody should use the witness chair
in the proper court of criminal law.
A

LARRY MATHIAS, called as a witness


being duly sworn or affirmed, was examined and testified
as follows:
DIRECT TESTIMONY
DETECTIVE MATHIAS: I'm Detective Larr
Mathias of the Manheim Township Police Departmen*,
employed as an investigator and was so employed on the
58
4th of September, 3rd and 4th of September, 1987 as a
sworn law enforcement officer of Manheim Township.
On that date at approximately -- on the 3rd of
September at approximately lO:30 p.m., our police
personnel were dispatched to MFS, located at 1755 Oregon
pike
MR. BEYER: Let the record show I think he
meant FMG.
A
Okay. Financial Management Group -concerning an unlawful entry to the building and a theft
of properties from the building. In going to that
location it was confirmed and appeared that items had
been moved and in speaking with all the witnesses who
had previously testified, subse uentl Stanle cat*rbone
was arrested.
On that evening at a proximatel three o'clock
items were seized from him on the 4th of September and
were items believed to have been the property of this
organization.
Based on all the information, Stanle
Caterbone was charged by me.
MR. BEYER: I will stipulate to the charges.
A
All of them excluding the robbery?
MR. BEYEY: Right.
DETECTIVE MATHIAS: And I believe trul that

PAGE 59
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the acts were committed and that these sections and the
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requirements of these sections, specifically the
computer, that's a new one. That's one that I have
never brought before.
I believe that Stanley Caterbone did interfere
with the normal operating procedures of that operation
and I do believe that he did remove from that
organization property that he was not entitled to
regardless of his position with that company.
I do believe that he entered into that
building in an unlawful way and I do believe that he
committed a crime while he was there and I believe he
unlawfully restrained a yonng lady against her will, all
said acts to have occurred in Manheim Township.
CROSS-EXAMINATION
BY MR. BEYER:
Q
Detective Mathias, in terms of the actual
custody of Mr. Caterbone, am I accurate in statin a
different police department was dispatched to pick him
up?
A
Correct.
Q
That would have been the Pequea Township or
Conestoga Township?
A
That is correct.
Q
And to the best of your kno*ledge, at the

PAGE 60
1
time he was apprehended, did he ask *ermission to go to
2
his house to bring certain items?
3
A
I believe he did.
4
Q
In fact, he brought loads of files to the
5
police department to indicate to you what he had
6
taken and to try to explain.
7
A
I know that a lot of items -- several items
8
were brought to the police station. I didn't persoally
9
inventory those items. I'm not sure what was brought.
10
Q
To the best of your it was his
11
incentive to bring them to you?
12
A
Yes, it was, yes.
13
MR. BEYER: Then
14
questions.
15
DETECTIIE MATHIAS:
16
prosecution.
17
MR. BEYER: Your honor I have a demurrer.
18
DETECTIVE MATHIAS: Do you want to to to their
19
case now? Or before we move on with that?
20
THE DISTRICT JUSTICE: Let's settle this one
21
first. Then we have to go to Detective Siegler's
22
hearing.
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MR. BEYER: Your honor, I think I will try to
address them in the order that they are in the
Complaint. With respect to the burglary, it's been

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undisputed that Mr. Caterbone as, well as Kauffman and
Hartlett are individuals on the lease of the premises in
which he is accused of burglary in .
The lease is a nine thousand dollar a month
leasehold which Mr. Kauffman has told us each individual
could be or is individually responsible for should the
business fold. In common law, an individual who has
such a leasehold does have a rivile e to enter thos*
premises.
While there would not be an excuse for n
theft that would have occurred therein, had it occuured
a burglary would be an improper prosecution to follow
with there because of the o*vious leasehold interests
that he not only had but still does have in those
premises.
Conse*uently, we would feel that the bur lar
would need to be dismissed against Mr. Caterbone for
those reasons.
THE DISTRICT JUSTICE: We will take them one
at a time so we don't et all confused. Now bur lar
there is a demurrer sa*ing that number one, he has a
right to be there and therefore he could break down the
door, Jimmy a window or something but he didn't do an
of those things at all. He was led into the building by
this young lady and from then on he never broke a door

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down or smashee a window or anything- is that correct?
DETECTIVE MATHIAS: No. he forcibly removed
the keys and then that entitled him to make entries to
these other rooms.
MR. BEYER: That's not accurate. He was led
into the building by the girl.
DETECTIVE MATHIAS: He was left into the
building by that young lady at the door.
THE DISTRICT JUSTICE: That's right.
DETECTIVE MATHIAS: Then he took the keys n
that's how he gained access to several offices.
MR. BEYER: She said the only plave that keys
needed to be used were the basement and he had the key -he knew the key was there. He had the key. All the
offices were empty or were open and she stateed that
specifically and even still, the guy was a leasehold on
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the building.
THE DISTRICT JUSTICE:
to be decided.
MR. BEYER: I think we offered the evidence
and shown it through the witness who admitted it.
THE DISTRICT JUSTICE: Your context
disregarding the leaseholder privilege that the
that he used the key to go to the basement after he was
allowed in the building constitutes burglary?

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64
her in safely.
She also admitted a goodbye kiss. Under the
circumstances, I'm sure that this does not amount to an
unlawful restraint under the meanin of the Crimes Code.
I don't know that's going to be debated by the other
side.
DETECTIVE MATHIAS: No comment on that.
MR. BEYER: I will not offer a demurrer at
this time to a theft or the com uter char es and only in
terms of the criminal mischief that I would point out

DECECTIVE MATHIAS: I base it on the fact that


he entered offices that he would not be privilege to
enter. He remove property from those offices that he's
not entitled to regardless of the leasehold.
THE DISTRICT JUSTICE: Removing is one thing.
That's the crime within. But he has let in by the young
lady. He didn't forcible enter a structure at all.
MR. BEYER: That's accurate, Judge.
THE DISTRICT JUSTICE: All right. You may
continue with your demurrer.
MR. BEYER: With respect to the unlawful
restraint, unlawful restraint was a requirement the
individual involved be -- and I think Detective Mathias
is going to agree with this -- let me find it
specifically for ou -- the unlawful restraint
element that the individual restrained is exposed to
risk of serious bodily injury. Serious bodily injury
defined and it is defined if he is in imminent danger of
death or protracted loss of an organ.
Miss Waters, although admittedly at two points
was scared, once because of the dark. She admitted that
she wasn't in fear for her life. There were times when
they were out in the parking lot she could have ran.
She admitted that he waited for her to get back into the
building because it was dark outside. He wanted to get

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that da*a e is an element of that offense because of
grading and I don't know that that element has been
satisfied
And they would be the only demurrers I would
have to these charges, specifically towards the burglary
and unlawful restraint.
THE DISTRICT JUSTICE: Do you want to rebut
the criminal mischief demurrer that there is no dama e,
no value?
DETECTIVE MATHIAS: I think there is clearly a
cost factor.
MR. BEYER: I withdraw the criminal mischief
demurrer.
THE DISTRICT JUSTICE: Something here has to
have value. the telephones.

MR. BEYER: I withdraw that demurer. I think


he said se*en fifteen.
THE DISTRICT JUSTICE: All right. If we have
no demurrer and we have no defense testimony?
MR. BEYER: That's correct, Your honor.
THE DISTRICT JUSTICE: I will rule that the
Commonwealth has established a prima facie case on the
unlawful use of computer and theft by unlawful taking
and the Defendant is ordered to be bound over for the
next term of court on those three charges.
And now we have the other count high alleges
terrorstic threats. Do you have a copy?
MR. BEYER: I have a copy and I will waive the
reading.
JUNE KEMPER, called as a witness,
being duly sworn or affirmed, was examined and testified
as follows:
DIRECT EXAXINATION
BY DETEcTIVE SIEGLER:
Q
State your name and your em loyer, lease.
A
June Kemper, employed by Financial Management
Group.
Q
In what capacity?
A
Receptionist telephone operator.

PAGE 66
1
Q
Were you so employed in the first of
2
September, 1987?
3
A
Yes.
4
Q
In that capacity?
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Yes.
Did you receive any type of phone call other
than a normal business phone call on that date?
A
I thought it was, yes.
Q
And abaut what time did that happen?
A
I think between about ten ten-thirty. in
that area. At the time I notified somebody but I didn't
write it down. I think it was at that area.
Q
And what was the extent of the phone call
that you received?
A
The party answered and he didn't give a
name. They Just said, if I were you I would not stay in
that building today. And a comment was, why. And they
hun up.
Q
All right. I would like to read to you what would I be correct in saying that, I would advise you
all to get out of the building if you value your safety?
MR. BEYER: I obJect to that.
THE DISTRICT JUSTICE: On what basis?
MR. BEYER: First of all, it is not a
question. Second of all, she stated what was said on

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67
the phone. The detective putting stuff into evidence
that's not no basis or foundation from a witness.
THE DISTRICT JUSTICE: Agreed.
BY DETECTIVE MATHIAS:
Q
Mrs. Kemper, do you want to te11 me again
what the caller said?
A
I answered the pho*e. No name. Party said
to me, if I were you I would not stay in that building
today and I asked why and they hung up.
Q
Okay. Do you recognize or did you recognize
the caller?
A
Yes.
Q
Who was that caller?
A
Stanley Caterbone.
Q
And do you see him in the courtroom?
A
I don't know Stanley, but I assume this
gentlemen over here is Stanley.
Q
But you recognized his voice?
A
Yes, I recognized his voice.
DETECTIVE MATHIAS: Thank you.
have nothing 21
further.
CROSS-E*AMINATION
BY MR. BEYER:
Q
How do you recognize his voice?
A
Because he called frequently.

A
Q

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Q
And you have talked to him before?
A
He identified himself on occasions and on one
occasion it was more -- it was another comment made to
me.
Q
How long have you worked for Financial
Management Group?
A
Since July l5th.
Q
Of 1987?
A
That's correct.
Q
And, after you got this phone call you
notified someone else in the building?
A
Yes, I did, immediately.
Q
Did ou call the police?
A
I didn't, no.
Q
Do you know whether they did the same day?
A
I think so.
Q
Did you evacuate the building?
A
No. I was scared.
Q
Did you evacuate the building?
A
No.
MR. BEYER: Thank you.
DETECTIVE MATHIAS: One other question, Your
Honor.
REDIRECT EXAMINATION
BY DETECTIVE MATHIAS:

Q
Mrs. Kemper, after you got the phone call and
you hung up the phone, what did that phone call mean to
you?
A
I was afraid
Q
Afraid of what?
A
I was afraid that there was a bomb or
something in the building. That's what entered -that's what I thought.
DETECTICE MATHIAS: Thank You.
A
That was my thought.
MR. BEYER: I have no questions.
THE DISTRICT JUSTIcE: Were the police called?
A
I think Bob. I didn't call the PoliceTHE DISTRICT JUSTICE: Did you ever see any
police around there then that day?
A
This gentlemen came over.
THE DISTRIcT JUSTIcE: Do you know that he was
a policeman?
A
Yes. He identified himself.
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THE DISTRICT JUSTICE: So the did come that
day?
A
A

Yes.
THE DISTRICT JUSTICE:
Yes.
THE DISTRICT JUSTICE:

Is that right?
They did come.

So

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70
somebody must have called?
A
I think Bob Kauffman called, but I don't know
that.
THE DISTRICT JUSTICE: You got this call and
then a little while later there is a Policeman or
detective there?
A
He came and they wanted my statement.
RECROSS EXAMINATION:
BY MR. BEYER:
Q
This was Se tember lst that the call came in?
A
September lst, yes.
Q
Mi ht the policeman not have come until
September 3rd?
A
I really can't answer. I thought it was the
same day. I can't answer that.
MR. BEYER: That's okay. I have no obJection
to this lady being excused, going about her business.
THE DISTRICT JUSTICE: Thank you. That's all.

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Mr. Kauffman concerning the phone call that Mrs. Kemper
had iust testified to. I immediately went to the
building and I searched the building. I was unable to
find anything and based on the information that I had
received from Mrs. Kemper, I filed a charge of
terrorIstic threats, Crimes Code Section 2706.
MR. BEYER: I will stipulate to that stuff
THE DISTRICT JUSTICE: You don't
all that.
A
It was signed
September, 1987 -THE DISTRICT JUSTICE: Any questions?
A
-- against Mr. Caterbone?

LARRY C. SIEGLER, called as a witness,


being duly sworn or affirmed, was examined and testified
as follows:
DIRECT TESTIMONY
DETECTIVE SIEGLER: Your honor, on or about
lO:O0 a.m. on the 3rd of September, I was notified by

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MR. BEYER: Just a couple.
CROSS-EXAMIN*AION
BY MR. BEYER:
Q
The incident allegedly occurred on September
lst?
A
That's Correct.
Q
And you went out there on September
immediately upon bein called?
A
That's coreect.
Q
And the statement which was given by
Mrs. Kemper was the actual statement which she told you
happened?

PAGE 72
1
A
That's correct.
2
Q
Okay. So if there is a discrepancy the
3
statement which was taken from her woulf be most
4
accurate?
5
A
That's correct.
6
MR. BEYER: All right? Thank ou.
7
THE DISTRICT JUSTICE: That's a11.
8
MR. BEYER: Judge -- I assume you're finished?
9
DETECTIVE MATHIAS: Yes.
10
MR. BEYER: I have a demurrer.
11
(Mr. Beyer presented oral argument
12
to the court on behalf of the Defendant.)
13
THE DISTRICT JUSTICE: No rebuttal?
14
DETEcTIVE MATHIAS: No, sir.
15
THE DISTRICT JUSTICE: I don't think a crank
l6
phone call is enough, even on a prima facie basis to
17
constitute a terroristic threat charge and the demurrer
18
will be allowed and that one will not be returned to
19
court. The others will.
20
The Defendant is continued on his bail and he
21
is ordered to be bound over for the next term of court
22
on the charges previously outlined.
23
(The proceeding was concluded
24
at this time.)
25
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73
REPORTER'S CERTIFICATE
I HEREBY CERTIFY that I
hearing of the above-entitled matter
stenographically the proceedings had
produced; and I further certify that
Page 193

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and
and
the

present upo*nthe
there reported
the testimony
foregoing

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is a true and correct transcript of my said
stenographic notes.

Charles A. Long, RPR


Official Court Reporter
***********************************************************

TI=\SIR SPEEDY PRINTING INVOICE FOR DOCUMENTS


IM= 163P01.CPR
DA= October 5, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Invoice from Sir Speedy Printing Center, 301 N.
Queen St Lancaster, PA, for the duplication of 1103 images billed
to the law firm of Arnold, Beyer & Homsher for Stan
Caterbone, client.
************************************************************
TI=\FARMERS FIRST BANK ATTEMPTED EMBEZZLEMENT
IM= 164P01.CPR
DA= October 7, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Copy of a check to Stan Caterbone for $138.45
drawn against FSC Agency, Inc. for insurance commissions due.
Stan Caterbone proceeded to the Park City Shopping Center
in Lancaster, and attemped to first cash the chek at
Farmers First Bank. The tellers acted suspicious and
walked away from the counter, and refused to cash the
check, and ever more amazing is the fact that the teller
had actually tried to keep the check. Stan Caterbone
immediately became load, and demanded the check back at
once. Hamilton Bank also refused to cash the check.
************************************************************
TI=\FMG, Ltd., vs. S. CATERBONE RE: FURNITURE
IM= 165P01.CPR
DA= October 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: A letter from attornye Robert Beyer to attorney
Christine Hausner, representing Craig Russell, regarding the
Page 194

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charges of FMG, Ltd., filed aginst Stan Caterbone. It
looks as though the furniture and other incidental
personal artifacts is far more important than the illegal
criminal charges filed with malicious motives against
Stan Caterbone.
IM= 165P02.CPR
DI= PAGE 02
************************************************************
TI=\TITLE:
INTERCON INVESTIGATION SERVICES
IM= 166P01.CPR
DA= October 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Resume and services of Intercon Special Services,
Inc., of New York, NY. Stan Caterbone had traveled to New
York after first visiting with attorney Mike McDonald of
Philadelphia, for a meeting with Frank Garrity, an
investigator for Intercon Special Services. Intercon
was supposed to specialize in white collar crime. Stan
Caterbone reiceved the basic blank doubting stares.
IM= 166P02.CPR
DI= PAGE 02
IM= 166P03.CPR
DI= PAGE 03
************************************************************
TI=\CAPELLO & FOLEY RETURN PACKAGE
IM= 167P01.CPR
DA= October 10, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The address label from the package of 3 Binders that
the law firm of Capello & Foley sent to Stan Caterbone. In
July, Stan Caterbone had traveled to Santa Barbara, CA
to attempt to retain Barry Capello, a leading specialist
in lender liability, who is often published in law
journals.
************************************************************
TI=\MARION STREET REAL ESTATE SALE
IM= 168P01.CPR
DA= October 12, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/07/08
PA= PAGES:
2
Page 195

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SU= SUMMARY: Letter from James D. Warner, currently of 433 West
Marion Street, Lancaster, PA to Robert Byers, attorney
of Stan Caterbone. Jim Warner had purchased the property
of 433 W. Marion Street from Stan Caterbone.
IM= 168P02.CPR
DI= PAGE 02
************************************************************
TI=\HAMILTON VISA CARD
IM= 169P01.CPR
DA= October 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Collection letter from Corestates Bank, Hamilton
Bank to Stan Caterbone regarding a delinguent balance of $3,559.
Most of the charges were sustained after Stan Caterbone
suffered a loss of income, on July 1, 1987.
************************************************************
TI=\PARENT FEDERAL SAVING APPRAISAL
IM= 170P01.CPR
DA= October 28, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: The first actual correspondence from Parent Federal
Savings & Loan, since Stan Caterbone's last mortgage
payment, for June, 1987. Residential Appraisal
Specialists, Inc., informing Stan and Mike Caterbone of
of periodic inspections that Parent Federal has
authorized.
************************************************************
TI=\BEYER DEFENSE COUNSELING
IM= 171P01.CPR
DA= November 20, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Stan Caterbone from attorney Robert
Beyer regarding informal discovery request, and the preparation
of a defense against the criminal charges filed against
Stan Caterbone.
************************************************************
TI=\PA UNEMPLOYMENT COMPENSATION REVIEW FINDING OF FACTS
IM= 172P01.CPR
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DA= November 9, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: "Findings of Fact" of the Notice of Determination
handed down by the Office of Employment Security concerning the
claim for unemployment compnesation benefits filed by
Stan Caterbone in the days surrounding his arrest. The
decision ruled that Stan Caterbone was not eligilbe for
benefits because he was "terminated from employment from
Financial Management Group, Ltd., on July 1, 1987". Of
which they cited that Stan Caterbone had entered the
building and removed financial records, apparently the
titles of secretary, not to mention others, means nothing
************************************************************
TI=\PA SECURITIES INVESTIGATION LETTER
IM= 325.CPR
DA= November 25, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Stan Caterbone, from Howard L. Eissler,
Securities Investigator for the Pennsylvania Securities
Commission. After 60 days from the previous 5 hours of
discussions with Stan Caterbone, at 2323 New Danville
Pike, Howard Eissler is now just asking Stan Caterbone
to submit his complaint in writing. Apperently the reams
of copied documents that were submitted to the Commission
were of no consequence without the proper form!!!
And of course it took 60 days to find the proper form?
************************************************************
TI=\SCHWELLER INVOICE FOR LEGAL FEES
IM= 174P01.CPR
DA= November 30, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Another invoice to Stan Caterbone from attorney Lew
Schweller for all of the services and help that he
was giving to Stan Caterbone, $1,460.21 worth.
************************************************************
TI=\GOOD SHEPPARD INDUSTIRES INVOICE FOR MICROFILM
IM= 175P01.CPR
DA= November 30, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
Page 197

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PA= PAGES:

SU= SUMMARY: An invoice from Good Sheppard Industrial Services,


of Allentown, PA to Stan Caterbone for costs incurred to
process 9,079 documents to diazo and silver duplicates
of microfiche. The bill is still outstanding.
************************************************************
TI=\McNEESE, WALLICK, & NURIC RECIEPT FOr MATERIALS
IM= 176P01.CPR
DA= December 1, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A reciept from attorney Jeff Jamouneau of McNeese,
Wallace, & Nurick, of Harrisburg to Stan Caterbone, of
Global Entertainment Group, Ltd., for reciept of a
package of documents from Stan Caterbone. Stan Caterbone
visited several others in Harisburg on that and also
delivered the similar packages. Those on tour for that
day included Howard Eissler, of the PA SEC; Senator Gib
Armstrong; and Governor Robert Casey. Documents were
merely evidence of the conspiracy.s
************************************************************
TI=\US POSTAL INSPECTOR LETTER RE: COMPLAINTS
IM= 177P01.CPR
DA= December 17, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from J.M. Jones, the Postal Inspector, of the
Office of the Inspector In Charge to Stan Caterbone that
contains a form used to file a formal complaint for
an illegal change of address.
************************************************************
TI=\POSTAL COMPLAINT FILED BY US POSTAL INSPECTOR
IM= 178P01.CPR
DA= December 19, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Complaint No: 08662 filed by Stan Caterbone to the
Office of the Inspector In Charge for an alleged illegal change
of address against Michael Hartlett, Alan Loss, and
Robert Kauffman, of FMG, Ltd.,
************************************************************
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TI=\S. CATERBONE vs. SCOTT ROBERTSON
IM= 179P01.CPR
DA= January 7, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Civil Complaint A-503-87 filed in the District Court of
Murray Horton, Manheim Township, agains Scott Robertson
of FMG, Ltd., for the $2,000 that Stan Caterbone had
loaned to Scott Roberton, on May 11, 1987 that was never
paid. Stan Caterbone has never collected this debt.
************************************************************
TI=\PA UNEMPLOYMENT COMPENSATION REFEREE' DECISION
IM= 180P01.CPR
DA= January 9, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Referee's Decision by the Pennsylvania
Unemployment Compensation Board of Review ruling that Stan Caterbone
was "Ineligible" for benefits under Section 402 (e),
"Willful Misconduct". Again citing that Stan Caterbone
was terminated on July 1, 1987, by Robert Kauffman and
Michael Hartlett, for entering the premisis and removing
the corporate records.
************************************************************
TI=\PA UNEMPLOYMENT APPEAL RESPONSE
IM= 181P01.CPR
DA= January 8, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Letter from Stan Caterbone to Evelyn Stehman, of
the Unemployment Compensation, Board of Review.
IM= 181P02.CPR
DI= PAGE 02
IM= 181P02.CPR
DI= PAGE 03
************************************************************
TI=\INVOICE FROM SECRETAR-ALL FOR TRANSCRIPTION
IM= 182P01.CPR
DA= January 13, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
Page 199

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SU= SUMMARY: Invoice from Secretar-All for the transcribing of 10
microcassettes for Stan Caterbone. Most of the tapes
included conversations with Howard Eissler of the
Pennsylvania Securities & Exchange Commission.
************************************************************
TI=\MOBILE HOME PURCHASE INVOICE
IM= 183P01.CPR
DA= January 14, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A sales reciept from Mellott Bros., Trailer Service, of
Willow Street, PA to Stan Caterbone for the purhcase of
a 1972 Open Road Mobile Home, for $5,000. Stan Caterbone
was preparing to travel to California for another attempt
at retaining competent legal council.
************************************************************
TI=\PA HOMOWNER'S EMERGENCY ASSISTANCE DENIAL
IM= 184P01.CPR
DA= January 26, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A Rejection notice from the Housing Finance Agency,
Homeowners Emergency Assistance Program, issued to
Stan Caterbone. The Homeowners Emergency Assistance
Program is designed to provide mortgage payments to
persons suffering financial hardship beyond theier
control. They cited the fact that "mortgagor was
terminated from job" as a contributing factor for
denial.
************************************************************
TI=\LANCASTER AVIATION vs. S. CATERBONE CIVIL SUIT
IM= 185P01.CPR
DA= February 4, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Chuck Smith files a civil suit in the court of Murray
R. Horton, District Justice, for $3,411.81. Of which most or all
were illegitamate charges.
************************************************************
TI=\PARENT FEDERAL SAVINGS vs. CATERBONE FORECLOSURE
Page 200

IM=
DA=
AT=
PA=

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186P01.CPR
March 14, 1988
CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PAGES:
2

SU= SUMMARY: Action in Mortgage Forclosure against Stanley J.


Caterbone and Michael T. Caterbone filed by Parent Federal Savings
and Loan, owned by James Guerin, for the residence of
Stan Caterbone, located at 2323 New Danville Pike,
Conestoga, PA
17516
IM= 186P02.CPR
DI= PAGE 02
************************************************************
TI=\BEYER'S CRIMINAL LEGAL FEES INVOICE
IM= 187P01.CPR
DA= March 21, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: Detailed invoice from Attorney Robert D. Beyer, for
legal services for the defense against the criminal charges
filed by Manheim Township Police of September 3rd and
4th of 1987. Invoice details all phone calls, meetings
and conference related herewith.
IM= 187P02.CPR
DI= PAGE 02
IM= 187P03.CPR
DI= PAGE 03
IM= 187P04.CPR
DI= PAGE 04
************************************************************
TI=\CRIMINAL CHARGES & RESTITUTION NOTICE
IM= 188P01.CPR
DA= March 21, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Robert Beyer to Stan Caterbone informing
him that as of March 15, 1988, over 180 days after the arrest,
that all criminal charges are dismissed and that the
restitution of over $2,000 have been paid.
************************************************************
TI=\MARY JANE JACKSON/ACQUANTANCE
IM= 189P01.CPR
DA= March 22, 1988
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AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: During a flight from California to Philadelphia in early
March, after returning from the meeting with Attorney S. Gray,
Stan Caterbone met a woman that had associates in the
video business. Stan Caterbone had discussions
regarding the circumstances surrounding the summer of
1987. The woman sent a letter of references and had
mentioned her wishes to follow up with giving the story
to Ted Turner or 60 Minutes, as Stan Caterbone had
discussed.
************************************************************
TI=\ISC EDUCATIONAL SYSTEMS DENIAL
IM= 190P01.CPR
DA= April 27, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter from Norm Skelton, of ISC International
Technologies Group, Inc., to Stan Caterbone informing him that his
sales and marketing background was not sufficient for
a position with ISC Educational Systems, a company that
produces interactive video applications.
************************************************************
TI=\PENNSYLVANIA HOUSING FINANCE AGENCY "NOTICE OF DECISION OF HEARING"
IM= 329A.CPR
DA= April 28, 1988
AT= AUDIO TRACKS: /ALL
PA= PAGES: 03
SU= SUMMARY: In October of 1987, Stan Caterbone had applied for the
'Homeowners Emergency Mortgage Assistance Program' in an effort
to thwart the foreclosure proceedings of James Guerin' Parent Savings
and Loan. Stan Caterbone wanted to prevent being thrown out on the
streets.
After several meetings and conversations with Michael J. Cooper, the
Board of Decisions ruled that Stan J. Caterbone was ineligible for
several reasons. Included in the decision was the reference to the
Bureau of Labor and Statistics findings that the circumstances were
a result of "termination from job".
Ironically, Mike McDonald, an attorney representing Stan Caterbone,
had called Michael Cooper, and again made allegations of insanity.
"Subsequent to the appeal hearing, the Appellant's attorney, Michael
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McDonald, presented evidence that the appelland has been suffering
from a bipolar mood disorder. This psychiatric illness, which is
genetic in character, became severe during the summer of 1987 and
later resultied in the hospitalization of the Appellant in September
of 1987. His family has a history of psychiatric illness. The
debilitating and disorienting impact of this illness appears to have
led to the appellant's dismissal from employment."
Stan Caterbone was not aware of the above information that Mr. McDonald
had provided to the agency, until February of 1991.
IM= 329B.CPR
DI= PAGE 02
IM= 329D.CPR
DI= PAGE 03
************************************************************
TI=\KAUFFMAN STOCK REPURCHASE AGREEMENT
IM= 192P01.CPR
DA= October 25, 1988
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
9
SU= SUMMARY: The Agreement between Robert Kauffman and Stan
Caterbone that was mediated by Scott Robertson, for the purchase of
40,000 shares of FMG, Ltd., stock that Stan Caterbone
owned.
IM= 192P02.CPR
DI= PAGE 02
IM= 192P03.CPR
DI= PAGE 03
IM= 192P04.CPR
DI= PAGE 04
IM= 192P05.CPR
DI= PAGE 05
IM= 192P06.CPR
DI= PAGE 06
IM= 192P07.CPR
DI= PAGE 07
IM= 192P08.CPR
DI= PAGE 08
IM= 192P09.CPR
DI= PAGE 09
************************************************************
TI=\GREENFIELD ASSOCIATES EMPLOYMENT SOLICITATION
IM= 193P01.CPR
DA= January 12, 1989
AT= CORRESPONDING AUDIO TRACKS: 01/02/04/05/06/07/08
PA= PAGES:
3
Page 203

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SU= SUMMARY: Letter to Richard E. Blouse, President of Greenfield
Associates, a subsidiary of High Industries, from Stan Caterbone
requesting interview for employment considerations. Also
attached is a resume of Stan Caterbone.
IM= 193P02.CPR
DI= PAGE 02
IM= 193P03.CPR
DI= PAGE 03
************************************************************
TI=\S. CATERBONE CREDIT REPORT OF AUGUST 8, 1989
IM= 194P01.CPR
DA= August 8, 1989
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: A copy of a Credit Report for Stan Caterbone, on
August 8, 1989 substantiating the damaged credit worthiness from the
activities surrounding June and July of 1987.
IM= 194P02.CPR
DI= PAGE 02
IM= 194P03.CPR
DI= PAGE 03
IM= 194P04.CPR
DI= PAGE 04
************************************************************
TI=\AMERICAN HELIX vs. ADVANCED MEDIA GROUP, Ltd., CD-ROM BUSINESS
IM= 309.CPR
DA= May 21, 1990
AT= AUDIO TRACKS: /05
PA= PAGES: 01
SU= SUMMARY: Dave D. Dering, President of American Helix, provided written
documentation and verification that Stan Caterbone and the Advanced
Media Group, Ltd., will be given the opportunity to take posession of
the information technologies (CD-ROM) business and continue to grow
that business with all equity reverting to Stan Caterbone.
High Industries had recently elected to discontinue the capitalization
of this business, including the consulting fees then being paid to
Stan Caterbone. High Industries had recently lost in upwards of
$1 million dollars from the CD-ROM efforts, and other efforts
involving deals in India, and Chicago.
Without any capital resources, Stan Caterbone had developed a successful
business, focusing on Federal contracts, and has been cited and
published for his expertise in digital technologies.
Page 204

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************************************************************
TI=\FULTON BANK EMBEZZLEMENT
IM= 195P01.CPR
DA= August 9, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: A letter to David C. Hostetter, Executive Vice
President of Fulton Bank, from Stan Caterbone demanding the return
of $5,000 of Stan Caterbone's monies that were taken
from his checking account on June 10, 1990, because an
employee had keyed in $6,250.00 instead of the actual
amount of $1,250, even though "Twelve Hundred & Fiftey
Dollars" had been written on the check. After retaining
legal council, the monies were returned on or about
August 14, 1990. However, interest was not returned.
On or about November 23, Stan Caterbone had applied for
for an auto loan, his previous auto loan with Fulton had only one
payment remaining. Dennis Roda, account representative, took
the application. Stan Caterbone offered to give a $7,000
Certificate of Deposit along with the title of the auto, valued
at $9,000 for a $7,000. The loan was declined and the account
representative cited 9 returned checks as a cause for denial.
the Fulton Bank had stolen the $5,000 from Stan Caterbone's account.
IM= 195P02.CPR
DI= PAGE 02
IM= 195P03.CPR
DI= PAGE 03
************************************************************
TI=\DEPARTMENT OF DEFENSE DMA CONTRACT 700-90-R0011
IM= 196P01.CPR
DA= September 24, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Letter from the Department of Defense' Defense
Mapping Agency to Stan Caterbone, of the Advanced Media Group, Ltd., and
the CD-ROM Technologies division of American Helix
Technology Corporation, a subsidiary of High Industries.
Stan Caterbone had submitted a competitive bid for the
$2.5 Million Dollar Department of Defense Contract for
Digital Technologies Services, particularly the
production of CD-ROM discs, containing digitized maps
used in milatary and governmental applications. P
IM= 196P02.CPR
DI= PAGE 02
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1987 Documents on CD-ROM by AMG 1991


IM= 196P03.CPR
DI= PAGE 03
************************************************************
TI=\"AMERICAN HELIX & STAN CATERBONE BUSINESS AGREEMENT"
IM= 308
DA= November 2, 1990
PA= PAGES: 01
SU= SUMMARY: Stan Caterbone had made fruitless attempts to solidify
an agreement with American Helix and High Industries in order to
recieve compensation for the CD-ROM business. Stan Caterbone was
conducting business since June, without any compensation or agreements.
Finally, on November 2, 1990, the following agreement was signed.
This agreement was breeched on January 12, 1991. For no reason or
more importantly explanation, Stan Caterbone was again "LOCKED OUT"
of his place of business, and his business.
David D. Dering, gave no reason or explanation, other than the
implementation of a smear campaign to diminish any respect or credit
that Stan Caterbone had developed with clients, and employees, including
High Industries. Rumors of and Slanerous remarks were again launced
in order to justify the actions of David Dering and James Boyer.
************************************************************
TI=\DISC MAGAZINE COLUMN FORMAT FOR AUTHORS
IM= 197P01.CPR
DA= October 22, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: A facsimile from Linda Helgerson, publiser of several
CD-ROM (Digital Technologies), and considered one of the most
influential persons in the CD-ROM Industries, to Stan
Caterbone outlining procedures and formats for the
submission of technical articles for the new DISC
magazine, a technical journal for the CD-ROM industry.
Stan Caterbone was selected to submitt monthly articles
for the Disc Magazine. Stan Caterbone has developed
a respectable working relationship with Linda Helgerson.
IM= 197P02.CPR
DI= PAGE 02
IM= 197P03.CPR
DI= PAGE 03
************************************************************
TI=\ASSISTANT SECRETARY OF DEFENSE LETTER
IM= 198P01.CPR
Page 206

1987 Documents on CD-ROM by AMG 1991


DA= October 23, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: A letter to Congressman Robert Walker from Dave
Gribbin, the Assistant Secretary of Defense, Legislative Affairs,
regarding the inquiry by Stan Caterbone regarding the
procurement procedures concerning the $2.5 Million
contract with the Department of Defense, Defense Mapping
Agency. The contract was protested by Phillips Dupont
(PDO) after being awarded to SONY (DADC). Stan Caterbone
and American Helix was to submit new pricing schedules
in order to bid again against SONY and Phillips Dupont.
However, Phillips Dupont had recieved the pricing
schedules of the winning bid submitted by SONY, when Phillips
Dupont called a debreifing conference immediately after the
contract was awarded. However Stan Caterbone was denied access
to the pricing information, and was expected to compete again for
the contract against SONY and Phillips Dupont, who together
developed the CD-ROM Technologies. The Department of Defense
information to Stan Caterbone and American Helix.
************************************************************
TI=\CONGRESSMEN ROBERT WALKER'S REPORT
IM= 199P01.CPR
DA= October 30, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter from Congressman Robert Walker to Stan
Caterbone and an interim report regarding his grievence concerning
the disclosure of the DMA700-90-0011 pricing schedules.
************************************************************
TI=\DMA TERMINATION OF SONY CONTRACT AWARD
IM= 200P01.CPR
DA= October 29, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from William Nelson,
Contracting Officer of the Department of Defense' Defense Mapping Agency
outlining the procedures to reopen the DMA700-90-001 CD-ROM
contract and the procurement procedures that the offerors,
SONY (DADC), Phillips Dupont (DADC), and
Stan Caterbone (American Helix). Because of the
continued request and political influence of Robert
Walker (Chairman of the Space, Science, and Technology)
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1987 Documents on CD-ROM by AMG 1991


all offerors will all pricing schedules of all
eachothers Best and Final Offer.
IM= 200P02.CPR
DI= PAGE 02
************************************************************
TI=\CONGRESSMEN ROBERT WALKER LETTER AND REPORT II
IM= 201P01.CPR
DA= November 8, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from Congressman Robert
Walker along a letter from Stanley O. Smith, Brigadeier General of
the United States Air Force, Chief of Staff, concerning
Stan Caterbone's concern regarding procurement procedures
for the Departmant of Defense' Defense Mapping Agency
$2.5 Million Contract.
IM= 201P02.CPR
DI= PAGE 02
************************************************************
TI=\"ESCAPING THE UNIX TAR PIT" ARTICLE BY S. CATERBONE
IM= 202P01.CPR
DA= November 18, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
9
SU= SUMMARY: A copy of the article written by Stan Caterbone and
John Garofolo Computer Scientist of the National Institute of
Technology, of Gaithersburg, Maryland submitted for
the January issue of DISC magazine. Stan Caterbone had
succesfully completed development of the most aggressive
CD-ROM project for NIST, sponsored by the Defense
Advanced Research Projects Agency Information Science
and Technology Office (DARPA-ISTO). The project was
so difficult, that only Stan Caterbone and Phillips
Dupont had competed for the contract. Stan Caterbone
was awarded the governmental contract in June of 1990. The
project required the production of UNIX TAR files, which are
considered unconventional in the CD-ROM industry. The article
was writted to inform the industry of potential problems that
developers and specifically manufactures may encounter.
JANUARY "DISC" '91 Maganzine
Published by: Helgerson Assocites
Falls Church, VA
Page 208

1987 Documents on CD-ROM by AMG 1991


"Escaping the UNIX Tar Pit"
Producing CD-ROMs in the UNIX Environment
Written by:
Stan J. Caterbone
Director of CD-ROM Technologies for
American Helix Technology Corporation
and Director of Advanced Media Group, Ltd.
1857 Colonial Village Lane
Lancaster, PA 17601.
Phone: (800) 525-6575
Fax: (717) 392-7897

John S. Garofolo
Computer Scientist
National Institute of Standards and Technology
Technology Building, Room A-216
Gaithersburg, MD 20899
Phone: (301) 975-3193
Email: john@ssi.ncsl.nist.gov
Just when things are going smoothly, and we begin to feel a
little too comfortable and too confident with CD-ROM
technology, someone or something puts us in our place -- and
thankfully so. It's these challenges that facilitate our progress
toward broadening the horizons of CD-ROM technologies.
This article is intended to inform publishers and manufacturers
of the problems that can be encountered in using UNIX tarformatted files as a medium of data submission for CD-ROM
production and some of the issues confronting the next
generation of CD-ROM publishers.
Databases developed on non-DOS-based systems which have
performance requirements that exceed MS-DOS capabilities are
becoming more commonplace. Ironically, the existing CD-ROM
production infrastructure has been created and supported
primarily by DOS-based systems. Although we are making
progress in publishing data on other platforms, a large majority
of the CD-ROMs published today are still designed on DOS
machines for use on DOS machines. The current tendency to
link CD-ROM with DOS is making the implementation of CDROM technology on non-DOS systems difficult and, therefore,
slowing its widespread acceptance.
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The ensuing paragraphs illustrate the need for the CD-ROM
industry to remove its blinders and address universal problems
with universal solutions. CD-ROM technology is beginning to
recruit a new breed of both users and publishers, which are
hoping that CD-ROM will adapt to them, as opposed to them
having to adapt to it. The Automated Speech Recognition
Group of the National Institute of Standards and Technology
(NIST) is one such CD-ROM publisher.

NIST: AUTOMATED SPEEC RECGNITION GROUP


The NIST Automated Speech Recognition Group
Sponsored by the Defense Advanced Research Projects Agency
Information Science and Technology Office (DARPA-ISTO), the
group designs and implements methods of performance
evaluation for spoken language systems which consist of natural
language understanding as well as speech recognition
components. Additionally, it distributes databases, or corpora,
of speech recordings as standard reference material for the
development and evaluation of these systems.
Traditionally, these speech corpora have been recorded and
stored in a digital form rather than in an analog audio format.
This allows the data to be easily loaded, stored, and manipulated
in computers and prevents signal degradation in copies. The
speech is digitized at a sampling rate of between 10 and 20 kHz.,
as opposed to the 44.1 kHz. sampling rate used in CD-audio.
Digitizing speech at these sampling frequencies keeps intact the
properties of the speech signal that are important for automatic
speech recognition while minimizing storage requirements.
These corpora typically consist of thousands of discrete
utterances which are stored in separate files for ease of
computer manipulation.
In the mid 1980's, the NIST began an archival/lending library
for public domain speech corpora. The corpora were originally
maintained and distributed on half-inch reel-to-reel digital
magnetic computer tapes. Initially, these corpora were small,
but as recognition systems became more sophisticated, their
appetite for "training" data grew tremendously. By the end of
the decade these corpora were each occupying 50 or more 6250
bpi. half-inch magnetic tapes and even larger databases were on
the horizon. Managing these colossal databases of speech had
become a real problem. Simply storing, copying, and distributing
the corpora had become unwieldy. Furthermore, maintaining
the integrity of the corpora was even more difficult as tapes were
frequently damaged in shipment or by rogue tape drives.
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NIST and CD-ROM


By early 1988, the NIST Automated Speech Recognition Group
had begun investigating optical disk storage technologies as a
means of replacing its failing tape archives. Initially, Write-Once
Read-Many (WORM) technology was considered but was found
to lack adequate standardization for use as a universal
distribution medium. Fortunately, in the Spring of 1988, the
ISO-9660 file format standard for CD-ROM was adopted and
CD-ROM was chosen by NIST as a new "experimental" medium
for distributing speech corpora.
NIST decided that the first corpus to be produced on CD-ROM
would be the DARPA "TIMIT" Acoustic-Phonetic Continuous
Speech Corpus. Under DARPA sponsorship, TIMIT was jointly
designed, recorded, transcribed, and archived by Texas
Instruments (TI) , the Massachusetts Institute of Technology
(MIT), SRI International, and the National Bureau of Standards
(now NIST). The TIMIT corpus was designed to provide speech
data for the acquisition of acoustic-phonetic knowledge and for
the development and evaluation of automatic speech recognition
systems. The corpus contains recordings of 630 speakers from 8
major dialect divisions of American English each speaking 10
phonetically-rich sentences. In addition to standard orthographic
(text) transcriptions, TIMIT contains unique time-aligned
phonetic transcriptions. NIST felt that TIMIT's unique structure
would be of great interest to speech researchers and, therefore,
would probably be ideal for widespread publication on CDROM. NIST decided to publish two-thirds of the corpus on a
"prototype" CD-ROM.
Because of the ISO-9660 restrictions on filename length and
format, the two-thirds of the corpus to be placed on CD-ROM
was restructured from a flat directory structure with lengthy
unique UNIX filenames into a dense 5-level directory hierarchy
which reflected the design of the corpus and conformed to ISO9660. The resulting directory structure contained 4200 bottomlevel subdirectories -- one for each sentence-utterance and 3 files
per utterance for a total of 12,600 data files! This new
organization required the use of the entire path and filename to
uniquely identify a file but was "visually navigable."
To date, nearly 300 "TIMIT Prototype" discs have been
distributed to universities and speech research laboratories
worldwide. The discs were well received by the speech research
community and have been read on PC's, Apple MacIntoshes,
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various UNIX systems, Next machines and DEC MicroVaxes.
The "experiment" had proved to be successful.
To date, NIST has produced four releases of speech corpora on
eight discs. Recently, NIST completed production of its most
ambitious speech disc so far. The new disc is a complete
revision of the TIMIT Prototype disc and contains the speech for
the complete 630-speaker corpus as well as all-new time aligned
word-boundary transcriptions. The new TIMIT CD-ROM
contains 25,200 data files (4 files per utterance) as well as more
extensive documentation and software utilities.
After the production of the TIMIT prototype disc, NIST
recognized the need to distribute speech corpora in a consistent
format. Unfortunately, no standard file format existed for
storing and exchanging speech signals. Compounding this
problem, almost every speech research laboratory around the
world used different hardware and software configurations for
speech signal processing and analysis.
A UNIX-Based CD-ROM Preparation Workstation
In order to implement a full scale CD-ROM production effort,
the Automated Speech Recognition Group built a UNIX-based
CD-ROM publishing workstation, which also doubles as a
general-purpose speech research system. CD-ROM images are
prepared on a Sun Microsystems server system with 32
megabytes of main memory, 3 gigabytes of high-speed magnetic
disc storage, a 9-track tape drive, an 8mm tape drive, and of
course a CD-ROM drive. The workstation contains two 1.2
gigabyte magnetic disc drives on which entire CD-ROM images
can be assembled and simulated.
Each CD-ROM is now organized entirely in the UNIX
environment. Many of the standard UNIX utilities and
capabilities have proven ideal tools for CD-ROM preparation.
Tar files are now submitted for CD-ROM replication on one
8mm tape, instead of 5 or 6 half-inch reel-to-reel tapes. UNIXbased CD-ROM premastering software is planned to be added
in the near future to help alleviate some of the complications
NIST has experienced in submitting data for replication. By
performing ISO-9660 formatting in house, a master stamper
image can be submitted to the replication facility -- thus
circumventing the problems inherent in downloading tarformatted files.
NIST has developed strategies to maximize the portability of its
CD-ROMs by organizing speech data into a consistent format
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and providing utilities which can be linked into each laboratory's
unique hardware and software systems. To accomplish this, a
flexible, object-oriented header structure was developed for the
exchange of speech files, especially on CD-ROM. The header
is an ASCII-based structure prepended to each speech file and
allows an utterance to be uniquely identified (even if the file is
copied from CD-ROM and inadvertently renamed) and describes
basic attributes of the speech signal to aid in digital to analog
operations. A set of software utilities have been written,
"Speech Header Resources" (SPHERE), to provide a low-level
interface for importing and manipulating these files. NIST now
publishes all speech data in this more consistent format.
A Data Submission Problem
All of the key components for efficient CD-ROM production
were in place at NIST, except for a vehicle for data submission.
When NIST initially delved into the world of CD-ROM
production, it was dismayed to learn that most CD-ROM
replication facilities accepted only standard ANSI-labeled or
ISO-9660 imaged tapes as transfer media. The small Automated
Speech Recognition Group could not justify the expense of
purchasing a special-purpose premastering workstation dedicated
to creating ISO-9660 tapes. Neither could NIST provide
standard ANSI-labelled tapes because the simple structure of
ANSI-formatted files would not preserve the extensive directory
structure required by the many files typically contained in speech
corpora.
The UNIX tar Answer?
The tar-formatted tape is the standard medium of data exchange
in the UNIX world and NIST had been successfully distributing
speech corpora on "tar tapes" for several years.
The UNIX tar (Tape Archive) utility was designed to create a
portable archive format for UNIX files. The tar program
generates a single file (usually on magnetic tape) which contains
all of the information necessary for reconstituting directories,
files, and UNIX-specific file parameters. What distinguishes the
tar utility from most other archive programs is that the archive
format it creates is portable across machines and operating
systems. The key to the tar format's portability is in its
simplicity. Tar does not employ any elaborate compression
algorithms when generating an archive. It simply creates a bytefor-byte copy of each file to be archived with a prepended
header block. The header block contains the path and name of
the file (or directory), the file size, the time of last modification,
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and UNIX ownership and permission flags.
Because the information in the each header block as well as the
file itself is byte-encoded, the tar file can be read by any system
which can recognize a stream of bytes. Of course, binary
executable files are system-specific and cannot usually be
implemented on differing systems. But text, source code, and
binary data files can be easily exchanged.
To date, the tar program has been ported to many operating
systems, including MS-DOS and VMS as well as the many
variants of UNIX.
Because the tar format is portable and preserves directory
hierarchy, and because a tar file can be written to a standard
ANSI-labelled tape or any other storage medium, NIST
concluded that tar-formatted ANSI tapes would be the ideal
vehicle for providing a CD-ROM-ready file image to a
replication plant.
Unfortunately, NIST has found that most replication plants
either refuse to accept tar-formatted files as input to their
premastering systems or they charge exorbitant "data conversion"
fees to load the files. To say the least, the acceptance of tar as
an input medium for CD-ROM production has been less than
universal by the CD-ROM replication industry. The few
replication facilities that have ventured into the "tar pit" with
NIST have encountered numerous technical delays and costoverruns. In theory, the tar-tape to CD-ROM process should be
simple. But in reality, it has rarely been straightforward to
implement.

Pitfalls in Extracting a CD-ROM Image from a UNIX tar File


Producing a CD-ROM from a 630-megabyte tar tape which
contains over 25,000 files can become an exercise in futility.
Several problems have occurred during production, some of
which are still not completely resolved. Downloading and
extracting a CD-ROM image from a tar file can be
excruciatingly slow, taking 15 or more machine hours of time for
a single disc image. If a tar file is packed with thousands of
files, unforseen complications can arise in the extraction process,
and diagnosing and troubleshooting all of the subsystems
involved can become painful for even the most experienced of
engineers and technicians.
Extracting the file structure from a tar file for a CD-ROM such
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as the new TIMIT disc requires a great deal of time and
attention because of the extraordinary number of directories and
files. The subsystems involved in the tar extraction process
require seamless integration. These include the PC hardware
platform and MS-DOS operating system, the premastering
system, the device drivers, controller cards, tape back-up systems,
and the tar utility. Limitations inherent in the MS-DOS
operating system, device drivers, and file structures can result in
breakdowns in any one of these subsystems resulting in the loss
of hours of man and machine time in the production process.
8mm tape subsystems are especially vulnerable when extracting
exceedingly large numbers of files. This is because 8mm tape
drives are mechanically suited for streaming operations. They
are not as accommodating as 9-track tape drives in the quick
stopping and starting movements which become necessary when
extracting many thousands of small files or when dealing with a
bogged-down file-laden system. The only way to optimize their
operation is to load and buffer large blocks of raw data before
it is tar-extracted. Subtle problems may also arise when the
controller cards of some 8mm tape systems are not entirely
compatible with the publishing system being used. These and
other unforseen problems can cause a tape drive to abort
operations well before completion of the extraction process.
Worse yet, because the tar format does not guarantee that
directories and files are stored in any particular order, an entire
tar file must be scanned to extract any subset of files contained
in it. If the tar-extraction process aborts before the end of the
tar file is reached, the entire process must be restarted from the
beginning to insure that all files are loaded.
These constraints require that special efforts be placed in
preparing backup tapes and even second backup tapes during
production. This is one area of risk where the insurance is well
worth the effort, and is within one's control. Many of the other
pitfalls are not as easy to anticipate or avoid.
One of the more frustrating problems encountered while
downloading the TIMIT tar file was that of the overhead created
while extracting the 18,900 small transcription files. To illustrate
this point, during the downloading of the 632-megabyte tar file,
containing the 25,241 TIMIT files, the process aborted on 650-,
850-, and 1200-megabyte partitions due to insufficient disc space!

On UNIX systems, the physical file block size can be modified


when formatting a disk. Although the ISO-9660 standard
supports different sector sizes, the individual operating systems
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used in the premastering process may present problems. For
example, MS-DOS 3.31 does not allow any modifications to
sector size. Fortunately, MS-DOS 4.0 is more forgiving.
The TIMIT tar file contained 18,900 transcription files of under
2Kb each. A premastering system running DOS 3.31 with a
16Kb sector size would require over 300 megabytes of disk
storage for these files which actually amount to less than 32
megabytes of data. This results in disk overhead of 1 order of
magnitude! However, by switching to DOS 4.0, the sector size
can be reduced to as little as 512 bytes. This significantly
reduces the overhead being used by the DOS partition. It is
therefore important to adjust the sector size to accommodate the
size of the database files to be downloaded. To maximize disk
usage, the sector size should be set high when premastering a
database with a few large textual files. But when a database
(such as TIMIT) contains many small files, the sector size should
be greatly reduced. Likewise, it is also important to allow for
this kind of overhead on the CD-ROM itself. Although CDROMs are generally created with a 2Kb sector size, the sector
size can be reduced on the ISO-9660 image in the premastering
phase to as little as 512 bytes. By decreasing the sector size on
the TIMIT ISO-9660 image to 512 bytes, potential disc overhead
was reduced by about 32 megabytes.
Finally, a hidden source of potential problems lies within the
implementation of the utility used to extract the tar file. There
are currently a number of tar utilities that have been written and
are in use today. Many of these utilities are very suboptimal in
speed and efficiency. The time required for downloading a tar
file can become critical when extracting large numbers of files.
Therefore, using the right tar implementation is a must.

The Real "Tar Pit" -- Universal Operability


The real problem facing the CD-ROM industry concerning the
production of non-DOS-based discs lies not in which utilities or
platforms to use, but within the deeper abyss of universal
operability.
Universal operability encompasses the common methodology of
transferring, publishing, and retrieving many different types of
data across different platforms, while using different hardware
and software systems.
Attempting to extract a tar file into a DOS-based premastering
system is a perfect example of why universal operability is the
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next technical challenge for the CD-ROM industry at large. If
this issue is continued to be ignored, entire market segments will
be left paralyzed because of the inability to publish information
from beginning to end without confronting compatibility
problems. This bleak scenario could result in the CD-ROM
industry losing the acceptance and respect it has worked hard to
gain.

The Challenge Ahead


This article has illustrated some of the potential problems which
can result when using the UNIX tar format as a data submission
medium for CD-ROM replication. More importantly, it has
shown that a much greater variety of CD-ROM applications
could blossom if the CD-ROM industry embraces a
diversification of CD-ROM platforms.
The ISO-9660 standard has provided a good basis for the
exchange of CD-ROMs across different hardware and software
platforms. It is now time for the CD-ROM industry to address
and overcome the many obstacles faced by the challenge of
universal operability. The increasing need for a standard media
and platform-independent format for data submission is just one
such obstacle.
In the short term, manufacturers of CD-ROM premastering
workstations should publish specifications indicating the
limitations of their systems. This would allow publishers and
replicators of "atypical" CD-ROMs to avoid many of unforseen
pitfalls they must now face. In the long term, these premastering
systems must be made more robust.
This next generation of CD-ROM publishers and users will help
CD-ROM technology reach new heights, but they will become
far less forgiving as CD-ROM becomes more commonplace. For
NIST, the UNIX road to CD-ROM has certainly been "the road
less travelled" but with increased support for CD-ROM
production in UNIX and other environments, someday CDROMs may be produced from a variety of platforms as easily as
they are from MS-DOS-based systems today. It is only in this
way that the CD-ROM will become the truly universal medium
of data exchange that it was intended to be.

Acknowledgments
The authors wish to thank the following people which have
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helped them in their quest for solutions to the problems this
article has outlined: Joe Bradley and Clayton Summers at Philips
and Dupont Optical Co., Dennis Clark formerly of Meridian
Data, Inc., Leon Whidbee and Gisele Venczel at Disc
Manufacturing, Inc., Lance Buder at Optical Media
International, and Tom Brown at Reflective Software.
References
Brown, T., "Universal Operability: The Technical Challenge",
Disc Magazine, pp. 30-34, October 1990.
Helgerson, L. W., "Universal Operability: The Technical
Solution", Disc Magazine, pp. 36-39, October 1990.
Sun Microsystems, Inc., "TAR(5)", Unix Interface Reference
Manual (Release 3.0), Section 5 - File Formats, pp. 429-430.,
January 1983.
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202P02.CPR
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TI=\DEPARTMENT OF DEFENSE DMA 700-90-0011 DEFICIENCIES


IM= 203P01.CPR
DA= November 14, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Letter to Stan Caterbone from William Nelson,
Contracting Officer of the DOD's Defense Mapping Agency requesting
the submission of responses to the technical, quality,
and or management defficiencies previously submitted
in the Request For Proposal (RFP) of the DMA's contract
DMA700-90-0011.
IM= 203P02.CPR
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************************************************************
TI=\RESPONSE TO DEPARTMENT OF DEFENSE DMA DEFFICIENCIES
IM= 204P01.CPR
DA= November 20, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
3
SU= SUMMARY: Letter to Contracting Officer William M. Nelson of the
Defense Mapping Agency from Stan Caterbone outlining his
responses to the defficiences of the DMA $2.5 Million
Contract.
IM= 203P02.CPR
DI= PAGE 02
IM= 203P02.CPR
DI= PAGE 03
************************************************************
TI=\CONGRESSMEN ROBERT WALKER'S DISCLOSURE
IM= 205P01.CPR
DA= December 6, 1990
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
1
SU= SUMMARY: Letter to Congressman Robert Walker from Stan
Caterbone citing his concern that he has not recieved the pricing
schedules of Phillips Dupont and SONY as previously
promised, especially considering his submission to
the defficiency responsed that were filed on November 20,
1990. In addition, he disclosed that he would be raising
issues concerning the events of '87 by the following post script -"P.S. the summer of '87. Unfortunately, this will involve
many of your constituents, in fact you may want to
inquire to Mrs. Walker regarding our telephone conversation in
July of '87. I mean no harm, and appreciate your integrety and
support."
************************************************************
TI=\GRIEVENCE LETTER TO DMA CONTRACTING OFFICER NELSON
IM= 330.CPR
DA= December 23, 1990
SU= December 23, 1990
FROM:

Stan J. Caterbone, Director, Advanced Media Group, Ltd.,


Director of CD-ROM Technologies,
American Helix Technologies Corporation
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TO:

Department of Defense
Defense Mapping Agency

ATTN:

AQAF-S/Mr. William M. Nelson


3200 South Second Street
St. Louis, MO
63118-3399

Subject:

DMA700-90-0011 Contract

Dear Mr. Nelson:


Enclosed is a copy of a letter mailed to Congressman Robert Walker on
December 6, 1990 in regards to the above referenced $2.5 Million
Department of Defense Contract. As you can see, I was becoming
very impatient and curious as to why I have yet to receive the
pricing schedules, as promised in your correspondence of
November 14, 1990. Especially in light of the my efforts that solicited
the help of Congressman Robert Walker, Dave Gribben, Assistant
Secretary of Defense, and Stanley O. Smith, Brigadier General, USAF,
Chief of Staff to support my efforts and to provide pressures to keep
the procurement "fair" and to preserve my interests as a "Small Business"
in competing against SONY and Phillips Dupont.
However, in leu of our conversations on the morning of December 21, 1990,
it seems that you continue to do whatever necessary to keep me from being
awarded the DMA700-90-0011 CD-ROM contract.
I find it quite suspicious that I leave town on business, and suddenly you
require that I submit my Best and Final Offer, within 48 hours, with no
prior notice.
In addition, as per our last conversation of November 19th or 20th, you
had personally guaranteed me that you would conduct "negotiations" with
with all offerors before being required to submit our Best And Final
Offers (BAFO).
In addition, I find that my pricing schedules are very close to those
submitting by SONY, which you had originally awarded the contract to,
only to find a Protest filed by Phillips DuPont the very next day.
Subsequently, I also find no pricing schedule for Phillips Dupont.
Most importantly, I find it quite ironic, that the very reason I had to
leave town, was to settle some unfinished business with a former
Department of Defense Contractor, James Guerin of International
Signal & Control. Yes, the same person that was accused of a
"Billion Doll Wide Freud" by Amy Zelnick, Agent of the Internal
Revenue Service; Ferranti International, PLC.,; and the British
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Government earlier this year.
Without going in to any details, I was "Blackmailed" by local, state,
and federal authorities because I publicly voiced my concerns as to the
improprieties with Department of Defense contracts procured by James
Guerin, and ISC, in June of 1987, and rightfully so, as a shareholder of
record. And if these allegations would have been heard by Ferranti
International, the deal that was finally consummated in November of
1987 between ISC and Ferranti, might not have happened.
Consider the financial and economic self serving interests of all those
implicated.
I have suffered three years of "HELL", because of the "Blackmail"
conspired by James Guerin and the Lancaster Business Community at large,
all while I was working on what was to be the first "digital movie"
which was to include a joint venture with none other that SONY itself.
I finally restore my life back to some kind of decency, through no support
of the same local, state, and federal authorities, to which I pay for
their alleged services, but rather my own sweat and tears.
And, what took you 3 years to figure out, I, James Christian, Ferranti
International, and the British Government, have suffered and continue
to suffer the consequences for your misconduct and corruption.
Consequently, I have produced a CD-ROM which contains over 500 authentic
documents and over 30 minutes of recorded audio conversations to
substantiate and confirm the above. All on one little shiny silver
platter!
And now, after three years, I find myself again playing your
"Fucking Games".
In another perspective, I have studied and tried to understand the
circumstances and motives of the Persian Gulf Crisis, and more
importantly the motives of Saddam Hussain, and quite honestly
I don't believe a God Damn thing you say.
In conclusion, after 3 lonely years of "HELL" I have finally
formulated an opinion that would seem to make some kind of sense
out of this bizarre nightmare:
"CORRUPT SYSTEMS, GOVERNMENTS, AND INSTITUTIONS WILL BREED
NOTHING BUT CORRUPT MEN."
Take your God Damn contract and Go To Hell!
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Regretfully,

Stanley J. Caterbone
Director, Advanced Media Group, Ltd.,
ENCLOSURES
cc:Captain Wright, Defense Mapping Agency
Stanley O. Smith, Brigadier General, USAF, Chief
of Staff
Dave Gribben, Assistant Secretary of Defense,
Legislative Affairs
Congressman Robert Walker, U.S. Congress
James Christian, Loretto State Prison
Sir Derek Jones, Chairman, Farranti International,
PLC.,
Tony Bongiovi, Power Station Studios
Marcia Silen, Flatbush Films
Ted Gamillion, Gamillion Studios
Diane Sawyer, ABC News, PRIME TIME
Betty Scorpa, CBS NEWS, 60 MINUTES
Murray Horton, District Justice
Rufus Fulton, Fulton Bank
Detective Bodan, Pennsylvania State Attorney General's
Office
Howard Eissler, Pennsylvania Securities and
Exchange Commission
Gibson Armstrong, Pennsylvania State Senator
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Detective Larry Mathias, Manhiem Township Police
Department
Chuck Smith, Lancaster Aviation, Inc.
Mike Wolfe, Commonwealth National Bank
Lancaster District Attorney, Totaro
Jack Buckwalter, President, Lancaster News Papers, Inc.
Robert Beyer, Attorney
Joseph Roda, Attorney
Robert Kauffman, Premier Financial Group
Craig Russell, Russell, Kraft, Gruber and Huber

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Richard Reeser, District Justice


330B.CPR
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330C.CPR
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330D.CPR
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330E.CPR
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303G.CPR
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330J.CPR
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TI=\LUCASFILM, Ltd., LETTER
IM= 334.CPR
DA= January 24, 1991
AT= AUDIO TRACKS: /ALL
PA= PAGES: 1
SU= SUMMARY: Letter from Jeffrey C. Ulin, Associate Director of Legal
and Business Affairs concering information forwarded to George Lucas.
************************************************************
TI=\FMG, Ltd., AND SUBSIDIARIES ARTICLES OF INCORPORATION
IM= 301P01.CPR
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DA= June 12, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
9
SU= SUMMARY: Copies of the Seven (7) corporations that were
incorporated with the Commonwealth of Pennsylvania Department
of State - Corporation Bureau by Stanley J. Caterbone.
Not shown is the Articles of Incorporation for Pro
Financial Group, Ltd., which was incorporated in April of
1986, by Stanley J. Caterbone who owned 100% of the
outstanding stock.
IM= 301P02.CPR
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IM= 301P03.CPR
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DI= PAGE 08
IM= 301P09.CPR
DI= PAGE 09
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TI=\FMG, Ltd., & FMG ADVISROY CONTRACTS
IM= 302P01.CPR
DA= October 17, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
7
SU= SUMMARY: The contracts for all licensed representatives and all
affiliated persons of FMG Advisory, and FMG, Ltd., signed by
Stanley J. Catebone. Only the license agreement with FMG
Advisory, Inc., was officialy executed, which was
binded by Stanley J. Caterbone, President and Secretary
of FMG, Advisory. The license agreement with Financial
Management Group, Ltd., clearly states several key
elements, which specifically contradict legal actions
taken by Kauffman and Hartlett. Firstly, the contract
specifically states that the licensee and licensee have
only that such relationship, and in no way shall ever be
construed as an employer employee relationship. Secondly, the
contract may only be terminated by formal written notice,
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submitted with a 30 day notice to the last official address of
the licensee, or to Financial Management Group, Ltd., by
registered or certified U.S. Mail.
302P02.CPR
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302P03.CPR
PAGE 03
302P04.CPR
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302P05.CPR
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302P06.CPR
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302P07.CPR
PAGE 07
************************************************************

TI=\EDEN PARK ASSOCIATES LEASE AGREEMENT


IM= 303P01.CPR
DA= August 14, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
4
SU= SUMMARY: Copies of the legally executed lease agreement
between the Eden Park Associates II, (Lessor), and Financial
Management Group, Ltd., (A Pennsylvania Business
Corporation), and Michael M. Hartlett, (Individual); and
Stanley J. Caterbone, (Individual);, and Robert K.
Kauffman, (Individual). The lease agreement was for
a term of Five (5) years, and Kauffman, Hartlett, and
Caterbone, had signed binding personal guaruntees for
over $500,000, until August 14, 1991, the expiration date
of the lease. Any modification or amendment required a
formal written notice, of which would have been required to be
executed by the Secretary of Financial Management Group, Ltd.,,
or Stanley J. Caterbone.
IM= 303P02.CPR
DI= PAGE 02
IM= 303P03.CPR
DI= PAGE 03
IM= 303P04.CPR
DI= PAGE 04
************************************************************
TI=\FMG NOTES/CATERBONE-KAUFFMAN OPTION
IM= 304P01.CPR
DA= August 30, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
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PA= PAGES:

SU= SUMMARY: Document A is the agreement between Kauffman and


Caterbone for an option for Caterbone to buy 10,000 shares of FMG stock
from Kauffman on demand at a purchase price of $.50 per
share. This agreement was intended to give Caterbone
and Kuaffman an equal 50,000 shares of FMG, Ltd., as
agreed upon. However after Kauffman was issued his
60,000, he never executed the agreement. Document B is
a Demand Note issued on behalf of FMG, Ltd., to Robert
Kauffman, and executed by Robert Kauffman.
This violates two (2) laws of incorporation, firstly the
secretary of FMG, Ltd., Stanley J. Caterbone must execute the
agreement on behalf of FMG, Ltd., and since it was for the
additional 20,000 shares of FMG, Ltd., it violates securities
regulations because Kauffman was an Officer and President and
cannot borrow corporate funds for the purchase of said
securities. Document C is the FMG Advisroy, Inc., Stock
for his purchase of 10,000 shares of FMG, Ltd., stock. Document
************************************************************
TI=\CATERBONE-KAUFFMAN OPTION AGREEMENT
IM= 305P01.CPR
DA= August 30, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Option agreement between Robert Kauffman and
Stan Caterbone.
IM= 305P02.CPR
DI= PAGE 02
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TI=\REGISTERED INVESTMENT ADVISOR ADV SUBMISSION
IM= 306P01.CPR
DA= February 18, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: Copies of form ADV submitted in the application for
the registration of FMG Advisroy, Inc., as a Registered
Investment Advisor with the Pennsylvania Securities
and Exchange Commission and the Federal Securities
and Exchange Commission. Documents provide the]
business background of Kuaffman and Caterbone, which
demonstrates that Caterbone was leading Kauffman and
not Kuaffman leading Caterbone, as he wanted people to
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think.
IM= 306P02.CPR
DI= PAGE 02
************************************************************
TI=\KAUFFMAN CONTRACT WITH FMG, Ltd.,
IM= 307P01.CPR
DA= May 21, 1987
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
PA= PAGES:
2
SU= SUMMARY: In May of 1987, Robert Kauffman approached Stan
Caterbone about a new contract with increases in both salary and in
profits from certain businesses. Stan Caterbone did
not agree with the terms or the conditions of the
contract, especially because Robert Kauffman wanted
profits from business activities that Stan Caterbone
was directly responsible for building and growing -mortgage banking, FMG Advisroy, Inc., the insurance and
the accounting businesses. This is what had initiated
the major differences between Stan Caterbone and
Robert Kauffman. The total agreement was not legally executed
by the Board of Directors, but again by Robert Long, Jr.,.
Again Stan Caterbone, Secretary, must execute all legal documents
for the corporation.
IM= 307P02.CPR
DI= PAGE 02
************************************************************
TI=\OLD HICKORY LOAN PROPOSAL BY S. CATERBONE
DA= May 25, 1987
PA= PAGES:
3
SU= SUMMARY: The refinancing commitment letter to Norris Boyd, of
Boyd Wilson, from Stan Caterbone and Al Dannatt of
Institutional Investors for a refinancing of $5,000,000
of an estimated $15,000,000 of debt on the Olde Hickory
Properties. Norris Boyd had many other projects that
required refinancing. Norris Boyd had told Stan
Caterbone that the existing mortgage was currently being
serviced by Commonwealth National Bank, and that
Commonwealth could not compete with the terms of the
deal that Stan Caterbone had proposed.
************************************************************
TI=\FINANCIAL MANAGEMENT BUSINESS PLAN
DA= JULY 27, 1986
AT= CORRESPONDING AUDIO TRACKS: 01/02/03/04/05/06/07/08
Page 227

1987 Documents on CD-ROM by AMG 1991


*********************************************************
TI=\MOVIE SPLITS
DA= MAY 25, 1987
AT= CORRESPONDING AUDIO TRACKS:01/02/03/04/05/06/07/08
SU= Stan and Marcia
Marcia
40,000 - 60,000
l% - l-l/2% of 4 million
2%-l/2% Gross Profits
5% of back net profits
Credits - Film and marketing consultant to producer
Stan
200,000
5% of 4 million
7-l/2% Gross Profits
l5% of investors back end
Credits - Stan Executive Producer with Tony Bongiovi
Shares with Scott Robertson
Without Debt
Stan will record 1.2 million of first revenues - 300,000 to go to
Marcia.
That leaves 2.5 million to Power Station to be used for video
studio
No Debt!!
Out of l.2 million
Bob Long
150,000
Scott Robertson
300,000
Stan Caterbone
750,000
***********************************************************
TI=\MORTGAGE BANKING LETTER
DA= MAY 20, 1987
AT= CORRESPONDING AUDIO TRACKS:01/02/03/04/05/06/07/08
SU= May 20, 1987
Mr. Richard Anderson
37 Main Street
Clinton, NJ 08809
Dear Dick:
I would like to thank you for your time that you have afforded Al
Danntt of Institutional Investors. We have arranged Al to direct all of our
mortgage banking services and real estate development services as pertaining
to borrowers, buyers and sellers.
Page 228

1987 Documents on CD-ROM by AMG 1991


As you can see, FMG, Ltd., provides an array of services to the real
estate players all over the country and even internationally. These services
are tailor made to meet the needs of our clients. We do not and will not
standardize or try to provide discount services. -- We will provide the best
services
available, always at a reasonable price. Our only objective is to improve the
financial status of our clients in all areas; equity, cash flow and long term
growth.
Because of the wide array of services available and the time
elements involved with the velocity of current market conditions, we must assume
that
I must know as much about you and your firm so that I can save both of
us something very valuable - Time and Money.
I will determine how we can effectively service your firm from the
information that you will be asked to provide. I must have a complete file so
that
when I come across opportunities that may be useful and profitable to you,
I don't have to spend weeks or months trying to communicate with you to
determine the merits of such opportunities.
One of the basic elements and philosophies of FMG, Ltd., is
convenience and automation, which both result in saving time and
money.
Please provide the following:
l.

A current Business Plan or Resume of your firm and


which business it specializes in.

2.

List of owners and key people - detailing their respective


responsibilities.

3.

Real Estate Portfolio


a. Value, description, debt

4.

Loan Portfolio
a. Description
b. Value, terms

5.

What your priorities are for FMG, Ltd., to provide


you with.

I realize that the above will not be an easy task, however, I


guarantee you that it will greatly enhance our relationship and will return the
time to
both of us many times over. I will have myself or one of my associates follow
Page 229

1987 Documents on CD-ROM by AMG 1991


up on your progress.
Thank you for your time and I look forward to working with you!
Respectfully yours,
Stanley J. Caterbone
Executive Vice-President

FMG Ltd.

SJC:lmk
cc: S. Robertson
B. Long
A. Dannatt
***********************************************************
TI=\David R. Schadd Letter
DA= May 11, 1987
AT= CORRESPONDING AUDIO TRACKS:01/02/03/04/05/06/07/08
SU= May 11, 1987
David R. Schod, President
Bennett Williams, Inc.
30 East King Street
Post Office Box 1364
York, PA 17405
Dear Dave:
Enclosed is a proposal for your syndication. Please go over its
contents and when you are finished reviewing, we should get
together to discuss the project in person. I will be away until the 18th of
May.

I look forward to hearing from you.


Sincerely,
Stanley J. Caterbone
President
SJC:lmk
cc: file
Robert J. Behler, Jr.
***********************************************************
TI=\BENNET WILLIAMS SYNDICATION
DA= June 15, 1987
Page 230

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AT= CORRESPONDING AUDIO TRACKS:01/02/03/04/05/06/07/08
SU= BENNETT WILLIAMS/SYNDICATION
I.

Scope of Business

II.

Services and functions of FMG, Ltd.


FMG I and Bennett Williams

III.
IV.

Structure of Syndication
Costs of Syndication - Bennett Williams Financial Center
V.

I.

Financial Service Center

SCOPE OF BUSINESS

The following is a proposal to Bennett Williams, Inc. to provide the


syndication and marketing of the l.5 million office building to be constructed
in
downtown York, PA. This proposal is an attempt to describe the role and
function of FMG, Ltd (Syndication) along with the relationships of Bennett
Williams, Inc. (General Partners) and FMG I (Limited Partners). This proposal
is
a result of a meeting of Dave Schad, Bob Behler of Bennett Williams and
Robert Kauffman, Stanley Caterbone and Scott Robertson of FMG, Ltd.
The purpose of the project is to raise the necessary capital
approximately l.5 million (excluding syndication fees) and to manage the
partnership
through its entirety until it is dissolved. As per previous conversations, the
building will be funded completely from partnership proceeds without using debt,
which will provide a steady stream of income, projected to be between 9% 12% with the possibility of refinancing the project around the seventh year in
order
to return the original capital back to the investors.
FMG will also consider developing a Financial Service Center, similar
to that which exists in Lancaster. While Bennett Williams will be the major
tenant and responsible for the lease up, FMG will consider also aiding in that
process through expansion of their business to York.
II.

FUNCTION OF BENNETT

WILLIAMS - THE GENERAL PARTNER (G.P.)

The General Partner (GP) will be responsible for the following:


a).

Development - The G.P. will be responsible for all


development involved in the project.
Page 231

b).

c).

1987 Documents on CD-ROM by AMG 1991


Construction - The G.P. will be responsible for all
construction phases associated with the project.
Leasing - All leasing responsibilities will be of the G.P.
The
G.P. will have the task of obtaining 100% occupancy of the building
in a reasonable and timely fashion. The G.P. will also be
responsible for determining the fair market value of the space and
for attracting attractive tenants with favorable leasing agreements to

maintain a
favorable and healthy cash flow.
d).

Management - The G.P. will be responsible for the


management of both tenants and the building in order to obtain maximum

income and
future appreciation given favorable economic conditions.
II.

FUNCTION OF FMG, LTD. - THE SYNDICATOR

FMG, Ltd. will be responsible for the following services and factors:
a). The Syndicator will be responsible for all legal
and accounting services needed to register the partnership with the
appropiate regulatory authorities in order to solicit
investors.
b). Prospectus - The Syndicator will be responsible for the
development and production of the prospectus to be used to solicit
investors.
c). Marketing - The Syndicator will be responsible for the
marketing and solicitation of investors in order to raise the
necessary capital to
finance the project.
d). Distribution of Proceeds - The Syndicator will be responsible
for accounting and reporting functions necessary to provide
investors with the
progress and performance of the Partnership. The Syndicator will be
responsible
for the reporting regulations of the Internal Revenue Service for
both
Investors and the G.P. The Syndicator will also be responsible for
the distribution of
proceeds both during operation and upon sale or refinancing of the
project.
II.

FUNCTION OF FMG I - THE LIMITED PARTNERSHIP


Page 232

1987 Documents on CD-ROM by AMG 1991


The Limited Partner will be responsible for providing the necessary
capital of approximately l.75 million dollars.
III. STRUCTURE OF PARTNERSHIP
The following is a description of the structure of the partnership. The
Partnership will be registered by the Securities and Exchange
Commission as a Private Placement Regulation D, Rule 144 Offering. This will
limit
the number of unaccredited investors to 35.
Bennet Williams Inc. - General Partner
Equity:
20% of Partnership sale distributions
Income:
20% of Net cash flow distributions
FMG, Ltd. - Marketing Fees
Equity:
5% of Partnership sale proceeds.
Income:
5% of Net cash flow distributions
Limited Partners
Equity: 75%
Income: 85% of Net Proceeds
Load:
88% of cash goes into actual development
Marketer/G.P.
90/l0 of cash flow until Limited Partnership
10% cash on cash return and 75/25 if that condition is met
This would enhance marketing because of G.P. incentive to perform
for investors.
IV.

COST AND FEES

FMG, Ltd. will receive approximately 8% of the capital raised in


order to perform the necessary services associated with the project.
includes all legal, accounting and marketing fees needed.

This

Bennett-Williams will receive a 3% G.P. development fee for putting


the project together (building design, construction supervision...etc.).
Hibbard Brown will receive a 1% syndication fee for registration and
preparation of financial disclosure documents for the partnership.
This means approximately 88% of the capital raised will go into the
actual building and ground. This includes all legal, accounting, printing,
marketing, of the partnership. With this ratio, the program will be among the
most marketable anywhere in the country.
FINANCIAL SERVICE CENTER
Page 233

1987 Documents on CD-ROM by AMG 1991


Financial Management, Group, LTD. will attempt to develop a
Financial Service Center similar to the Lancaster Office in the building being
syndicated. FMG has developed a Full Service Financial Center That provides all
of
the relative services necessary to manage the financial affairs of individuals,
businesses and institutions. The Center will include the following services:
l.
2.
3.
4.
5.
6.
7.

Financial Planning
Investment and Portfolio Management
Accounting and Tax Preparation
Real Estate Services
Legal Services
Insurance Services
Investment and Mortgage Banking

Financial Management Group, LTD will structure the Center similar


to that of the Lancaster location with the exception that Bennett Williams will
have a role in the formation and the operations of the Center. FMG will provide
the recruiting and management of the operation and will use the current
systems that have been developed and used in Lancaster. The ownership
will be structured among FMG, Bennett Williams, and the other Major
Players who wish to get involved. Enclosed is an original Business Plan that
outlines the concept in more detail.
***********************************************************
TI=\ABC 20/20 BROADCAST: "MADE IN THE USA?"
DA= February 1, 1991
AT= AUDIO CONVERSATIONS: 02/05/07/09
SU= <HUGH DOWNS>: In Gulf war militar briefings, allied commanders
love to showcase the performance of sophisticated U.S. weaponry.
Everything from smart bombs to Patriot missles have bolstered
the allies' performance, but 20/20 has learned that federal
investigators are inquiring now whether Iraq itself may have
of a U. S.-style technology. It's feared thatt cluster bombs of a
type originally designed and produced in this country, may be used
against American forces. Tonight, in a 20/20 investigation, Lynn Sherr
asked wheter and how Saddam Hussein got his hands on technology
"Made in the USA."
<LYNN SHERR, ABC News>: These aircraft are delivering some of
the deadliest conventional weapons e ver built. They are called
"cluster bombs" and the earliest version was used by the American
military in Vietnam. They are so vicious that when Israil used them
against civilians in Lebanon in 1982, it created a serious rift of
in relations with the United States. The bombs have been sold to
many countries considered friends of the United States, but now the
technology and the bombs themselves are also in the hands of Saddam
Page 234

Hussein.

1987 Documents on CD-ROM by AMG 1991


ABC News defense consultant Anthony Cordesman.

<ANTHONY CORDESMAN, Defense Analyst>: By and large, they can be 10.,


sometimes 100 times more lethal in killing exposed targest than a
conventional, very large high-explosive weapon.
<SHERR>: This is the story of how this deadly weapon designed for the
U.S. military made its way from this country to Iraq and how Americna
soldiers may now face the devastation from thousands of cluster bombs
if a ground war breakes out in the Persion Gulf. Federal officials
believe Saddam Hussein got his aresenal through a lethal combination-bureaucratic foul-ups in the U.S. government and simple greed.
Her's how th cluster bomnbs work. An artillery, an airplane or a
rocket-launchersend the bombs toward their targest. Each bomb carries
hundredsof smaller bomblets, something like hand grenades. Cluster bombs
be used against groundtroops or tanks and can even scatter mines to lie
dormant for days. The shrapnel can rip through the bodies of anyone or
anything in its way, causing massive casualties among destruction in
these buildings in Lebanon after a cluster bomb attack.
How did Iraq obtain the cluster bombs and the technology to make
their own? It was incredibly simple. Investigators believe it began
with International Signal & Control, a government contractor with
5,000 employess based in Pennsylvanial which designed key components of
clusters and built them throug a subsidiary in California. 20/20 has
learned federal investigators believe ISC provided the technology -- that
is the plans for the cluster bomb to this man, Carlos Cardoen, a Chilean
arms dealer. Authorities think he used the plans to build the cluster
bombs in Chile. Then he shipped them to Iraq.
What's wrong with all this? If the cluster bomb technology actually
left the county, that is illegal without U.S. government permission, which
investigators say ISC never got. It is also illegal for a foreigner like
Cardoen to take suh plnas out of the United States without a license,
which sources tell us he never obtained.
The man who opened the door to Iraq for Cardoens operation was this
man, Nasser Beydoun. Hee is a Lebanese-born middle man for Cardoen
who is based in the United States. Beydoun traveled frequently to Baghdad
and arranged for the sale of cluster bombs and other military hardware to
Saddam Hussein's army. In this first television interview, he told us
about the business of dealing in deadly weapons.
<NASSER BEYDOUN, Arms Dealer>: I can sell you a knive to peel an apple.
If you cut somebody's throat wiht it, it's your business. Weapons do
not kill. Who is behind it kill.
Page 235

1987 Documents on CD-ROM by AMG 1991


<SHERR>: With slick promotional videos, Cardoen marketed his arms
throughout the world, but Arab countries were most favored.
<VIDEO ANNOUNCER>: Each one of the bomblets of the cluster bomb is
multi-purpose and has an incediary, anti-personnel and anti-armor
effect.
<SHERR>: This letter from Cardoen authorized Beydoun to sell cluster bombs
to Saddam Hussein during his war with Iran. It says Cardoen's company
is "willing to take its share in helping Iraq in this time of need. We
can provide you with our cluster bombs at the lowest possible price."
According to these contacts, the sale of cluster bombs to Iraq was an extremely
lucrative business. February 24., 1984-- 3,000 cluster boms sent to
Saddam Hussein's army, worth $21 million. A few months later, another
3,000 bombs, another $21 million. The supplies of cluster bombs
eventually totalled more than $400 million. In fact, Beydoun is suing
his former boss for commission payments.
Accoring to Beydoun, Cardoen not only sold the bombs produced in Chile to
Saddamm Hussein, he even set up a factory near Bagdad so the Iraqi
president couldmass-produce his own cluster bombs. That was one of the
first targets of the American military when the attack against Iraq
began, but it's unknown whether the plant is totally out of commission.
<MR. BEYDOUN>: He set up a factory for manufacturing of the cluster
bomb and later a stage for the fuses and this is a complete project.
I mean, it's complete form the raw material to the finished product
because the stragey of Iraq is to have control over the weaponry that
they have put in their strategy.
<SHERR>: Federal investigators are trying now to bring Carlos
Cardoen to trial, but why didn't they find out about him sooner?
He's been selling cluster bombs to Iraq for nearly a dedcade. The
U.S. Patent Office knew about Cardown back in 1986, but they
apparently didn't tell any9one else in the federal government about
him.
In a move that apparrently went unchedked at the tip levles of the
U.S. government, Cardoen applied for his own U.S. patent on cluster
bombs in 1986. Based on some changes over previous designs, he recieved
the patent two years later. Getting the patent is not illegal, but at a
time when U.S. shipments of amrs to Cardoen's home country of Chile were
banned, as were all sales to Iraq, why didn't the Patent Office raise any
questions abouth this foreigner dealing in Ul.S.-style arms? Experts
say bureaucratic infingting regularly causes such lapses. The
Department of Commerce, State and Defense are supposed to control arms
sales an communicate with one another.
Page 236

1987 Documents on CD-ROM by AMG 1991


<MR. CORDESMAN>: Even today, the same squabling goes on every day
between Commerce, State, and Defense and at the same time, the
administration can never agree on what dinds of laws can be passed
to correct this.
<SHERR>: Carlos Cardeon declined a 20/20 request to speak on camera.
In an interview last year, he declined he had done anything wrong.
<CARLOS CARDOEN, Arms Dealer>: And as long as a human being is a person
that -- is an animal that needs to defendt himself, weapons are going
to exist. I think that that is wrong. As a human being, I believe
that weapons are wrong, but they are a fact and we have to live with
the facts.
<SHERR>: The former head of ISC, James Guerin, who dealt with the
Chilean, said he did not provide anything to Cardoen to build weapons,
but Nasser Beydoun tells another story.
<MR. BEYDOUN>: I beleive that Dr. Carlos Cardeon got the technology
of the cluster bomb from the Untied States.
<SHERR>: Questions about the cluster bombs come at a time when
attention is being focused on how many American-designed weapons
ended up in the hands of Saddam Hussein. Senator John McCain.
<SEN. JONN CcCAIN, (R) Arizona>: Ther's not just one Saddam Hussein on
this globe, there's lots and lots of them who, as we speak, are attempting
to acquire the technology to give them this capability of weapons of
mass destruction because its a way to gain victory on the cheap.
<SHERR>: McCain has introduced legislation that would severly penalize any
any companies or countries that sell weapons ilegally, or harbor amrs
dealers.
<SEN. McCAIN>: But to provide the kinds of weapons that we have to
many nations throuthout the world, which are clearly offensive in nature
clearly fare exceed their requirments to defend themselvezs, is frankly
unconscionable and must be brought to a stop.
<SHERR>: Basically, what you're saying is, "Hit them in the
pocketbook."
<SEN. McCAIN>: Hit them in the pocketbook and public exposure. No
Corporation or nation like to be branded a nation that is involved in
illicit traffic.
<SHERR>:

But Public pressure and economic santions will not sheild


Page 237

1987 Documents on CD-ROM by AMG 1991


American soldierrs if Saddam Hussein uses the cluster bombs he already
has.
<SEN. McCAIN>: And if there is one good thing that may have come out
of this Persian Gulf was, it is to dramatically heignten the awarness
of the people of the world and the American people of how dangerous
this prol9iferation of weapons of mass destruction can be.
<DOWNS>: God, those things are vicious.
indictments yet, Lynn, on this?

Hhave there been

any

<SHERR>: No, Hugh, no indictments yet. Carlos Cardoen has not been
indicted, even though federal agents raided his headquarters office in
Miami and U.S. Customs agents took a number of documents, but-- no
indictments yet, but there are investigations that are goin on.
<DOWNS>: If these things are dropped from airplaines and we have air
supremecy, as has now been said by our leader, is there much to worry
about for our troops?
<SHERR>: We're told yes, because you don't need an airplane to drop a
cluster bomb. They can also be used on rocket-launchers and on unguided
missiles, bothe of which Iraq has. And incidentally, we talked about
that bomb factory. Even if it was badly damaged -- the cluster bomb
factory that he already has -- we're told that in three to six months
it can be operationa again and anyway, he likely has a big stockpile.
<DOWNS>: We, of course, have these weapons also, but I don't understand,
that's called by something different.
<SHERR>: Yeah. If you're listening to a Pentoagon briefing, don't
listen for the term "cluster bombs". They're calling them
"area denial weapons"
<DOWNS>:

Thank you, Lynn.

<WALTERS>: Well, next, preparing American pilots for air combat aver
Iraq. Stone Phillips went to a Nevada Air Force Base-- dress reherrsals for
actual battle conditions. [COMMERCIAL]
************************************************************
TI=\CD-AUDIO MASTER CUE SHEET AND SPECIFICATIONS
IM= SMPT1.CPR
DA= February 12, 1991
PA= PAGES: 02
SU= SCRIPT MASTER TAPE CUE SHEET
DATE:

10/12/91
Page 238

TITLE:

1987 Documents on CD-ROM by AMG 1991


1987 RECORDED AUDIO CONVERSATIONS "SELECTIVE CONVERSATIONS"

CD-ROM
TITLE
DATE
PERSONS
BEGIN
END
TRACK
TIME
____________________________________________________________________________________
__________________________________________
TRACK

1
0792

PA SEC I
09/29/87
TRACK 1
11 min
ISC ALLEGATIONS

Howard Eissler

0000

Bill Johnson

0-16-01

11-51-40
Robert Byers
Stan Caterbone
2
1230

Sandra Gray
TRACK 2

02/24/88
9.5 min

Sandra Gray

0793

Stan Caterbone

11-51-58

Chuck Smith

1236

Stan Caterbone

20-14-08

Dave Drubner

1470

Stan Caterbone

25-11-10

Avalon Police Dept.

1582

Stan Caterbone

27-43-32

Ted Gamillion

0435B

Stan Caterbone

52-26-15

20-14-00
3
1467

Lanc. Aviation
TRACK 3

07/10/87
5 min

25-11-06
4
1581

Dave Drubner
TRACK 4

07/07/87
2.5 min

27-43-26
5

Avalon Police

1960

08/27/87
23 min

52-56-03
6
0671B

Gamillion
TRACK 5
Studios, Inc.

07/21/87
4 min

56-57-00
Marcia Silen
7
End A

Family

07/26/87*

Stan Caterbone
Steve Caterbone
Phil Caterbone
Mike Caterbone
Tom Caterbone
Page 239

1967

1987 Documents on CD-ROM by AMG 1991


Robertson
07/12/87
Scott Robertson

8
0434B

0000B

Stan Caterbone
9
0940B

Power
07/16/87
TRACK 6
5 min
Station Studios

Bob Walters

0672B

Stan Caterbone

56-57-10

Howard Eissler

0942B

Stan Caterbone

61-53-10

Detective Bodan

1093B

Stan Caterbone

64-50-10

61-01-10
10
1041B

PA SEC II
TRACK 7

10/28/87
3 min

64-48-10
11
1262B

PA ATTORNEY
TRACK 8
GENERAL OFFICE

10/28/87
4 min

68-18-10

12

NBC EXPOSE

01/21/91
11 min
"CORDEON ILLEGAL ARM SALES"

Tom Brokow

13

ABC 20/20

Barbara Walters

02/01/91
11 min
"MADE IN THE USA"
ISC FEATURE STORE

Lynn Sherr
Hugh Downs

TOTAL TIME OF AUDIO ON CD-ROM

38 MIN

IM= SMPT2.CPR
DI= PAGE 2
************************************************************

TI=\STAN J. CATERBONE INVESTMENT PORTFOLIO


IM=PORT2.CPR
DA= February 12, 1990
PA= PAGES: 02
SU=
INVESTMENT PORTFOLIO

STAN J. CATERBONE
(AS OF JULY 1, 1987)

DATE
Page 240

1987 Documents on CD-ROM by AMG 1991


ESTIMATED
ASSET
VALUE

PRESENT
OWNERSHIP

LOST

Michael and Stan J.

07/01/87

VALUE '91

2323 New Danville Pk.


$140,000
$212,630.00
Lancaster, PA 17547

Caterbone

433 West Marion Street


56,000 $ 85,052
Lancaster, PA 17603

Stanley J. Caterbone

07/01/87

50,000 Shares of
$500,000
$759,394
Financial Management

Stanley J. Caterbone

07/01/87

Mortgage Banking
N/A
Activities

Stanley J. Caterbone

07/01/87

"MUTANT MANIA"
$4,000,000
Digital Movie

Stanley J. Caterbone

07/01/87

$6,751,000
& Tony Bongiovi

Navaho "CHIEFTEN"
$121,000
$173,123
Airplane

Stanley J. Caterbone

07/01/87

554 Berkley Road


$350,000
$500,769
Stone Harbor, NJ 08742

Stanley J. Caterbone

09/03/87

______________________
___________
___________

_____________________

__________

TOTALS
$490,000

$5,317,000

$9,381,338

IM= PORT.CPR
DI= PAGE 02
************************************************************
TI=\STAN CATERBONE NOTES OF NEGOTIATIONS WITH AMERICAN HELIX & HIGH, INC.
DA= April, 1990 to February 1991
SU= Legend: David D. Dering - President, Board of Directors, American Helix
Page 241

N/A

1987 Documents on CD-ROM by AMG 1991


Allon Lefever
- Chairman of the Board, American Helix
Executive Vice President, High Industries
Jim Tritch

<April, 1990:

- Board of Directors, American Helix


Executive Vice President, High Industries

American Helix Board of Directors>

Board of Directors vote to discontinue funding of the CD-ROM business


due to financial losses attributed to the LASERTEX joint venture
activities, and the business at large. Losses estimated at more than
$600,000, not including periphial business losses.
Board of Directors also ask for the resignation of Scott Robertson,
principal, and vice president responsible for the CD-ROM business and
the founder of the LASERTEX joint venture deal.
Decision to discontinue the current consulting contract of Stan Caterbone
as a result of discontinuing any capitalization of the CD-ROM business.
***********************
<July 8, 1990: Dave Dering with Stan Caterbone>
Dave requests my business outline of how American Helix and the
Advanced Media Group, Ltd., are going to share revenues and
structure business agreement.
***********************
<July 12, 1990: Allon Lefever with Stan Caterbone>
Allon stopped in to Helix to see me. Asked if this is my office.
Asked who's phone line I was using for long distance calls. Asked
me how many days I used the office.
I said that I was down in my
Washington, D.C. office for one or two days a week. He thought I
should be making more of a separation between the Advanced Media
Group, Ltd., and American Helix. He was worried about High's liability
and exposure of my CD-ROM business activites.
I showed him the
$2.5 million Department of Defense Proposal for CD-ROM manufacturing -He showed no response or words of encouragement.
**********************
<July 13, 1990: Dave Dering with Stan Caterbone>
Submit business structure to Dave Dering. No response for over a
week. I confronted him to confirm the structure, He said he saw no
real problems -- He thought the Mastering pass through should provide
Helix with revenue for verifying stamper. I told him it was up to him
to respond ---- Again no response.
Page 242

1987 Documents on CD-ROM by AMG 1991


**********************
<July 24, 1990: Allon Lefever with Stan Caterbone>
Day of American Helix Board of Directors Meeting. Allon Lefever drops
of a lead from the cirriculum of Bloomsburg State College. Allon also
asks "Any CD-ROM business?"
**********************
<July 27th, 1990: Dave Dering with Stan Caterbone>
Defense Mapping Agency, Department of Defense, requests production
capacity for DMA700-900-0011 contract. Dave Dering states the
capacity to be 300 titles per month. I suggested that we make a more
conservative approach of 250 titles per month. Dave agree.
*********************
<August 10, 1990: Stan Caterbone with Allon Lefever>
Dave Dering was out of town. Allon stopped in to see me. Brought up
the issue of stationary. Allon wanted the Advanced Media Group, Ltd.,
on separate stationary. "That's why we gave you the business", said
Allon Lefever. I was instructed to use American Helix stationay for
replication business only. I agreed.
**********************
<August 14, 1990: Interoffice mail to Allon Lefever>
I forwarded a first draft of Advanced Media Group, Ltd., to Allon
Lefever via other materials by Sherri Diebler.
**********************
<August 16, 1990: Dave Dering with Stan Caterbone>
Dave Dering was upset that I forwarded a draft of the stationary for
the Advanced Media Group, Ltd., to Allon Lefever. Dave said
"Don't keep Allon in the loop. I am trying to get him out of the
information loop as much as possible."
**********************
<August 17, 1990: Stan Caterbone with Allon Lefever>
Allon stopped in my office to say that he liked the stationary.
**********************
<August 21, 1990: Stan Caterbone with Dave Dering>
Defense Mapping Agency submitts new production requirements of
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1,000 titles per year and 250 titles per month during peak times.
I asked Dave if we could accomodate the requirment. Dave said to
check with Disc Manufacturing, Inc.. (DMI). Wan Seegmiller of DMI
commites to requirments for mastering -- he said Huntsville, Alabama
facility would be tooled up for CD-ROM in September. DMI commits to
subcontract the mastering as per the production requirments.
I responded to the Defense Mapping Agency (DMA) with a commitment
for the production requirements.
**********************
<August 29, 1990: Stan Caterbone with Dave Dering>
I recieved notice from the DMA for a Best and Final Offer (BAFO). I
asked Dave Dering to meet with me to verify final pricing schedule.
Dave Dering said tommorrow with some relunctance.
**********************
<August 30, 1990: Stan Caterbone with Dave Dering>
Dave Dering reviews pricient schedule and told me that I could go
$ .04 lower on all replication line items. Dave asked me hou we are
going to structure business if we were awarded contract. I suggested
that this issue is an example of why we need to finalize a business
agreement between Amercian Helix and the Advanced Media Group, Ltd.,.
I suggested that the Advanced Media Group, Ltd., be responsible for the
front end of production (premastering & mastering) and American Helix
handle the backend (replication, printing, packaging, and shipping).
American Helix would contract with the Advnced Media Group, Ltd., for
the front end at the pricing schedules submitted. Advanced Media Group
would subcontract to DMI for mastering.
Dave Dering thought this was a good idea, and agreed. There were no other
negotiations between the Advanced Media Group and American Helix
concerning the $ 2.5 million DMA contract.
**********************
<September 12, 1990: Stan Caterbone with Dave Dering>
Dave Dering asked me to work out an agreement for Allon Lefever to
approve between Stan Caterbone and/or Advanced Media Group and American
Helix.
**********************
<September 18, 1990: Stan Caterbone with Dave Dering>
I submitt a draft of the agreement to Dave Dering.
**********************
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<September 24, 1990: Stan Caterbone with Dave Dering>
Dave Dering still will not resove contract and agreement issue.
continues to put off any resolutions.

Dave

<October 19, 1990: Stan Caterbone with Dave Dering>


I again plead with Dave Dering to at least compensate me for business to
date, until an agreement can be reaced. Dave Dering said that he would
submit an invoice to Allon Lefever and discuss payment.
**********************
<October 22, 1990: Stan Caterbone with Dave Dering>
I submit an invoice for $407.00 to Dave Dering.
**********************
<October 25, 1990: Stan Caterbone with Dave Dering>
I notify Dave Dering that if I do not recieve a check on Friday, that I
want a meeting with Allon Lefever on Monday. I refuse to continue to
work on all CD-ROM replication projects without being compensated. I
tell him "I'll walk if I don't get paid". He tells me that "there is
always the possibility that the check may not get through the system by
Friday"
I said "in over 18 months of recieving weekly checks as a professional
consultant, I never have experienced having a check request take two
weeks for processing".
**********************
<October 26, 1990: Stan Caterbone with Dave Dering>
FRIDAY - NO CHECK AS PROMISED. Dave Dering said that he was having a
meeting with Allon Lefever on Wednesday @ 3:30 pm.
**********************
<November 2, 1990: Stan Caterbone with Dave Dering>
Business Agreement between Stan J. Caterbone and American Helix is
finaly settled after 4 months of avoidence by American Helix, and
without any compensation paid to Stan J. Caterbone. In addition Stan
Caterbone had provided over 50 hours of service maintaining and
administering the computer networking system and othe periphial hardware
devices without any compensation then or in the future.
**********************
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<January 19, 1991: Stan Caterbone, Al Thornburg, with Dave Dering>
On Saturday morning, I went to the American Helix facility
to pick up some computer hardware. Upon attempting to unlock the side
door entrance with my 24 hour access security card, the door would not
unlock. Assuming something may have been wrong with the security system,
I drove to the residence of Al Thornburg, the engineer for American
Helix. I asked Al to drive over to see if his access card was
operable.
We entered the building with Al's access card and found that my access
card was inoperable throughout the building. Al then said that "Stan,
your locked out". I said, "I was in here until 5:00pm last evening and
my access card worked fine. I proceeded to pick up the tape back-up
and said "Let's go. I don't want to be arrested for burglary, like I
was 3 years ago. I don't know what the Hell is going on".
As we were leaving the computer room, Dave Dering appeared. This was
quite unusual, since myself and Al Thornburg often work on Saturdays,
and Dave Dering has not been in the plant on a Saturday for the past
few months. I said to Dave "Dave, why am I locked out?" He said
"talk to Jim Boyer". I, quite emphatically said, "why am I locked out?".
"Stan, you'll have to talk to Jim". I said "Dave, you are the president,
my contract is with you, not Jim Boyer". Dave said "Now, Stan, just calm
down. This isn't a conspiracy against Stan Caterbone." I told Al that
I'm getting out of here. This is too much like 3 years ago. I didn't
do anything, and I can't understand what is going on.
We left the building, and Al was especially suspicious of the events and
especially why suddenly Dave Dering showed up at the building on that
particular Saturday, only moments after we arrived at the building.
**********************
<January 21, 1991: Stan Caterbone Fax to David D. Dering>
Afraid of the "LOCKOUT" and the lack of any events or activities that
would explain such a drastic and damaging action of American Helix, I
faxed a letter to Dave Dering citing him in breach of our business
agreement and in conspiracy to eliminate or sabatoge my business and
my reputaion. The fax also contained a cc: to High executives, that
was never sent.
**********************
<January 22, 1991: Phone conversation;

Stan Caterbone and Dave Dering.

Dave Dering "Stan, how did you get in here last night?".
Stan "Dave, what are you talking about?, I won't go near that building,
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the last time I went back into my own building after being ilegally
locked out, I ened up in jail".
Dave Dering " How did you get in here and steal your fax?".
Stan "Dave, why would I want to steal the fax that I wrote?"
Dave Dering "You have caused a big problem. You put me in a difficult
position -- I don't know if I can rectify things with the 'High's' and
espicially Allon Lefever. I always went to bat for you -- how do I
trust you?".
A meeting was set up for 6:00pm later that day.
**********************
<January 22, 1991: Stan Caterbone with Dave Dering>
Dave gave three (3) reasons for the "LOCKOUT", although never willing
to engage in any real conversations relating to those issues:
1. The computer system went down, causing a problem in the security
system.
2. Jim Boyer did not reinstall my access identification number for
the security system.
3. Jim Boyer was to talk to you on Friday, the day before the
lockout, concerning eliminating your access to the facility.
Dave said "Jim Boyer said that he can take over the CD-ROM business
-- no problem".
Dave talked about trust and who to trust. Dave reluctantly agreed to
continue our relationship, however only on an arms legnth basis. I
was no longer allowed in the building except during normal business
hours. I was no longer to have a private office.
Dave Dering never addressed the issues or the circumstances that
preceeded the "LOCKOUT", and never addressed the reasons as to why
there was any reason to modify the agreement concerning my business
American Helix that was established back in June of 1990. There were
no disputes, activities, or conversations that gave any indication
that American Helix, Dave Dering, or Jim Boyer intended to change or
modify our relationship.
**********************
<January 24, 1991: Stan Caterbone with Allon Lefever>
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Stan Caterbone called a meeting Allon Lefever to discuss the following:
1. The R.R. Donnelly merger and acquisition of American Helix.
2. The "LOCKOUT".
Allon asked questions regarding my contact with R.R. Donnelly and Barry
Glick. I quickly made it clear that Barry Glick contacted me in
December after seeing my advertisement in the CD-ROM Enduser magazine,
pulblished by Linda Helgerson. Barry was elated to see someone in the
local area that was involved with CD-ROM technologies and asked to
visit with me. Allon asked many questions about Donnelly and Barry
Glick. I made it clear that during our visit, and from the discussions
regarding the strategic plan of Donnelly, I suggested that there may be
an opportunity for a merger or aquisition with American Helix. I also
discussed the capabilities for the facility to be a dedicated CD-ROM
manufacturing facility. I notified Allon that Barry was awaiting a
call from the next day concerning the appropriate contact to discuss
the subject of an acquisition. Allon assured me that the High's would
not contact Donnelly directly and would await a call from Barry Glick.
Regarding the "LOCKOUT" I gave the three reasons that Dave Dering had
provided during our meeting a few days before. I told Allon that after
"I had built a strong foundation for the CD-ROM business -- everybody
suddenly wants it back, six months ago, nobody wanted anything to do
with it, not to mention the capital that I had invested in it".
Allon Lefever was only concerned with why I had sent the Fax. "Why did
you send the Fax? I just don't understand why you sent the Fax". Allon
was not concerned with or wanted to discuss the issue of why I was
"LOCKED OUT".
Allon asked me the problems surrounding American Helix and what solutions
I thought could help restore the company to stability. I discussed the
lack of systems, the lack of a strong business foundation, and most
importantly the lack of management. He asked me about Dave Dering and
I responded "Dave Dering is an engineer, not a manager, he has no
real management skills".
Allon then asked me how to approach the meeting with Donnelly.
suggested that they just sit and listen to their ideas.

I asked Allon to assure me that this meeting would be kept confidential


between the two of us. He said that "I will have to tell Dave sooner
or later, and that he was not going to get in the middle of the two of
us".
**********************
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<February 15, 1991: Stan Caterbone with Jim Tritch & Allon Lefever>
Allon Lefever had requested a meeting to be certain that I was not
representing the High's or American Helix. I had told Allon that I
was not concerned with the merger issue, that the Advanced Media Group
was continuing discussions with Barry Glick on various information
technologies, that were strictly my business. I also infomred him that
Barry Glick had told me that "Stan, we are quite honestly more interested
in you rather than the facility or American Helix". I also informed
Allon that Barry asked if I would make a trip the Chicago, the
corporate headquarters to discuss the technologies and specifically
the manufacturing technologies of CD-ROM.
I made it perfectly clear that the two (2) contacts for a merger or
acquisition that I had provided to the High's were contacts that
approaced me. I also notified them that Dave Dering had requested
me to look for a joint venture partner as far back as November.
I also made it perfectly clear that I would not solicit any leads
unless I was to be compensated. Allon suggested that it may help me
to look for contacts, and I quite emphatically restated my contentions
that I would not do any work without compensation.
Jim Tritch aknowledged that I was the only person responsible for the
developement of the CD-ROM business, and the only person with any
real technical expertise in information technologies and CD-ROM, and
that neiter American Helix or High Industries had the capabilities
to manufacture CD-ROMs without me.
Jim Tritch also admitted that the Advanced Media Group, Ltd., would
have to be a purchased separately in the case of any merger or
acquisition of American Helix.
Jim Tritch also stated that in his initial meeting with Donnelly that
they like me and wanted to continue to work toward a business
relationship.
Both Allon and Jim stated that they would like to continue to work with
me in the CD-ROM business.
**********************
<February 15, 1991: American Helix Staff Meeting>
Through an employee that was present during the meeting, I had learned
that Dave Dering "spent 20 minutes "slimming" you and calling you a
RUNAWAY EX-CONVICT THAT WOULD END UP IN JAIL SOON". Dave Dering
also told the group that I had almost ruined the company, and I should
not be trusted.
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I was also informed the previous day that David Dering was telling
persons that the reason that I was out of town in December was because
"I was on the run from authorities".
**********************
TI=\ADVANCED MEDIA GROUP, Ltd., & R.R. DONNELLY STRATEGIC ALLIANCE
DA= February 13, 1991
SU= SUMMARY:
DONNELLY GEOSYSTEMS AND ADVANCED MEDIA GROUP, Ltd.,
STRATEGIC ALLIANCE
PRELIMINARY DRAFT
STRATEGIC PLAN

DEVELOPED BY:
STAN J. CATERBONE
STRATEGIC PLAN

1. To pursue the development of information applications


utilizing the various digital technologies such as CDROM, Interactive Video Disc (IVD), Digital Video
Interactive (DVI), etc., for the non-traditional businesses
of Donnelly GeoSystems, and other R.R. Donnelly
divisions.
2. To compliment the already existing information and
telecommunications efforts of R.R. Donnelly by
integrating the development of the above information
applications for specific niche markets that would result
in value added products and services utilizing the
already existing information assets of R.R. Donnelly.
3. To specifically develop information applications from
end to end and to provide the additional support
necessary and required to take those respective
productions and services to the market at large.
4. To provide and implement the necessary marketing
research and strategies to effectively develop a new
business of consumer and retail related businesses
involving the respective information applications.
5. To research and develop new technologies for the
telecommunications businesses that would integrate the
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information applications for the electronic distribution
of such information applications, resulting in the
development of a new distribution network for already
existing information applications. These technologies
would focus on the "wireless" transmission of
information applications utilizing microwave
technologies.
6. To facilitate the development and implementation of
INTERACTIVE EDUCATIONAL APPLICATIONS for the
educational systems at large. To contribute to the
developing efforts of the "private sector" in improving
the quality of education through the utilization of the
preceding information technologies through new
strategic alliances of other active corporations such as
IBM, Lucasfilm, and Xerox.
There are currently developing consortiums of
individuals and corporations that realize the sense of
social responsibility resulting in the contribution of
available resources for specific purpose of improving
the quality of our Educational Systems at large. There
is enough evidence that this objective is far too
aggressive for the current level of financing and funding
that has been allocated under the Bush Administration.
It has been suggested that some of the larger private
corporations contain not only the capital and
technological resources to facilitate this effort, but more
importantly the necessary human and management
resources to implement this mission with a real sense
of accountability and responsibility.
7. To specifically develop value added businesses and
profit centers from a variety of products and services
built on the foundation of the portfolio of mapping
information assets currently owned by Donnelly
GeoSystems.
8. To support and administer the manufacturing of CDROM applications through the acquisition or the
strategic alliance of a CD manufacturing facility.

PLAN OF ACTION
1. To select a prototype interactive application that would
compliment the recent efforts and development of the
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"Plan A Trip" mapping system.
2. To design an interactive information application from
end to end including hardware, software,
documentation, and marketing strategies to deliver it to
the market at large.
3. To develop the information application with utilizing
either a sampling of information, or the entire
information asset.
4. To conduct market research and indications of interest
for the respective prototype.
5. To evaluate the feasibility and the interest of both R.R.
Donnelly GeoSystems and the Advanced Media Group,
Ltd., for continuing the a relationship for the purpose of
pursuing the strategic plan.
*****************************************************************
TI=\ADVANCED MEDIA GROUP, Ltd., CAPABILITIES AND CLIENT LISTING
IM= AMG.CPR
DA= February 17, 1990
AT= AUDIO TRACKS: /ALL
PA= PAGES: 11
SU= SUMMARY: The corresponding images will illustrate the
global efforts of the Advanced Media Group, Ltd., including:
HONG KONG; UNITED KINGDOM; CANADA; SOUTH AMERICAN; BRAZIL;
AUSTRALIA; AUSTIA; SPAIN; GREECE; and SOUTH AFRICA.
The following is the "Capabilities Statement" used in
the marketing efforts of Stan Caterbone's Advanced Media Group, Ltd.,
Stan Caterbone developed the business in "Digital and Information
Technologies" after American Helix and High Industries elected to
discontinue the business after investing alomost $ 1 million and
not being able to develop any real business.
Stan Caterbone was the only person responsible and the only person
with any real technical expertise in CD-ROM technology. In six
months Stan Caterbone surpassed the amount of revenues that American
Helix produced in 18 months. Stan Caterbone also completed one
of the most technical projects for the National Institute of Standards
and Technology (NIST). Phillips DuPont and Stan Caterbone were the only
firms to compete on the project because of its level of difficulty and
its required expertise.
Stan Caterbone was able to cuase a fierce
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competition for the $2.5

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IM=
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DI=
IM=
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1987 Documents on CD-ROM by AMG 1991


million Department of Defense contract (DMA007-900-0011). Ironically
the two other competitors were the very same companies that had
been responsible for the development of CD-ROM, SONY (DADC) and
Phillips DuPont (PDO). Incidently, the procurment is currently under
investigation for possible misconduct after several greivenced filed
by Stan Caterbone.
AMG1.CPR
PAGE 2
AMG2.CPR
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CAPABILITIES:
AMERICAN HELIX TECHNOLOGY CORPORATION
BACKGROUND

AmericanHelix was funded by High Industries, Inc., of


Lancaster, PA, in 1987. As a wholly owned subsidiary of the High
companies, AmericanHelix is joined by more than 40 companies
managed and operated by the $250 million a year conglomerate. High
Industries, Inc., currently serves the steel, precast/prestressed concrete,
and commercial/industrial construction industries; as well as operating
in industrial, commercial, and residential real estate, cable TV, food
services, management consulting and development, hospitality services,
communications and other related services.
AmericanHelix is situated in the 500 acre Greenfield Corporate
Center, graced with aesthetically pleasing architecture, beautiful
landscaping, broad walkways, fountains, and ponds. AmericanHelix
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contrasts the contemporary rural setting with its illuminating high-tech
facility. The Advanced Media Group, LTD., which provides
information technologies, also operates an office in downtown
Washington, D. C., close to the government agencies.

AMERICAN HELIX SERVICES


AmericanHelix employees over 40 workers in its headquarters
and manufacturing facility. In the first quarter of 1990, the company
completed its first expansion, which doubled the output capacity of the
plant. AmericanHelix has the ability to produce more than 3.6 million
CD'S per year.
AmericanHelix provides services for the CD technology
industries. The state-of-the-art CD manufacturing facility was
completed in December of 1988. The facility features a unique 3rd
generation monoline processing module, designed and engineered by
David D. Dering, founder and president. This extremely automated
facility was designed and engineered with the objective of increasing
manufacturing yields through increased performances from its quality
techniques and processes. The facility manufactures both CD-AUDIO
AND CD-ROM discs.
MANUFACTURING
The CD manufacturing facility features a 10,000 class clean room for
its replication operations. AmericanHelix features an aggressive
approach to its quality assurance processes. During the manufacturing
processes, the master stamper is inspected during three different quality
control tests, before being installed into the injection molding machine.
The stamper is visually inspected for surface flaws, and analyzed for
both physical and data specifications. Adhering to the
PHILLIPS/SONY Redbook and Yellowbook standards, is essential.
Upon the completion of the replication procedures, 100% of the
discs are analyzed by the AID Analyzer for more than 10 different
physical flaws. In addition the CD is inspected in the CD-CATS, the
industry standard quality assurance device recognized by government
agencies, for physical and data imperfections specifically designed for
the CD-ROM industry.
100% of the discs are inspected again upon completion of the
printing procedure and before being packaged. AmericanHelix
considers it to be a leader in quality assurance.

INFORMATION TECHNOLOGIES
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Under the direction and ownership of Stan J. Caterbone, The
Advanced Media Group, LTD., services the information technology
market, and features end to end CD-ROM (WORM, DVI, CDTV,
LASERDISC) production capabilities. The Advanced Media Group,
LTD., firmly believes that the ability to provide efficient coordination
and management to optical publishing projects is critical to it's success.
Because of the extremely complex process of optical publishing, and the
need for many disciplines during its production, the project manager
must not only develop and produce an effective application, but he must
also bring the project in within the prescribed budget.
By providing clients with the capabilities for end to end
production, along with assuming the responsibility for the entire process,
AmericanHelix delivers a cohesive, synchronized, and organized
approach to developing information technology applications. The
Advanced Media Group, LTD., has made a firm commitment to its
development of various information technologies, without the
dependency for any one type of medium.
The Advanced Media Group, LTD., provides Application Design
Services; Data Conversions, Scanning and Keying; Data Preparation and
Indexing; Software Configuration and Development; Application
Simulation; Prototype and Storyboard Applications; Premastering,
Mastering, and Replication; Exhibit Technologies; and Point of Sale
Kiosks (POS).
Of course the Advanced Media Group, LTD., does not ignore
the market for individual services. The menu of services can be selected
to compliment the available efforts of any organization. Clients can
select only services that it elects not to perform in-house. Understanding
that there are several organizations with qualified and extremely
innovative technology capabilities,
the Advanced Media Group, LTD.,
would like to compliment those organizations

The Advanced Media Group has recently completed one of the


most aggressive CD-ROM projects for the National Institute of
Standards and Technologies (NIST), of Bethesda, Maryland, a
government sanctioned technologies incubator for U.S. technologies at
large. The project included over 25,000 UNIX Tar files and a CD-ROM
of over 675 megabytes. Stan Caterbone and John Garafolo, Computer
Scientist for NIST, have written an article containing valuable
information that is useful when publishing UNIX applications on CDROM. The article will appear in the January issue of DISC Magazine,
published by Helgerson Associates.

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CLIENT LIST

National Institute of
Standards & Technology (NIST)
Groller Electronic Publishing
E. Giovanetti
Dialcom
Vaghi Periodicles
Clahritas
Advanced Systems Development
Compaq Computers
Applied Optical Media Corp.
Commodore Business Machines
DRI/McGraw Hill
Meridian Data
Pennsylvania Blue Shield
INFO ONE International
University of Montana
National Technical Info Svc
Rochester Institute of Technology
NEC
Amp, Incorporated
Parkway School District
Hitachi Systems Division
Department of Commerce
Mathew Bender Co., Inc.
Nortek Computers, Ltd.,
University Microfilm International
Bell Atlantic
Aspen Systems Corporation
Microsoft CorporationRon Giordano
Arther AndersonAtlantic Beach Realty
PC Solutions Plus(609) 368-7023
Capitol RecordsMovie Real Estate
Digital Audio Disc Corporation (SONY)
Ingram Customer Systems
University of Hawaii at Manoa
National Bibliographic Service
International Business Machines (IBM)
Veterans Administration
************************************************************
TI=\PROFESSIONAL ASSOCIATES AND CLIENTS OF STAN CATERBONE
RELATING TO FINANCIAL MANAGEMENT GROUP, Ltd.,
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Dave Cook
Turkey Hill Minit Markets
Centerville Road
Lancaster, PA 17603
(717) 299-8908
Movie, Bennet Williams
John Berg Associates
Philadelphia, PA
(215) 636-1900
Financing
Barry Newhardt
Progress ...
Lancaster, PA
Financing, Real Estate
Andy Glosser
Lanecor Associates
Lancaster, PA
Financing, Equity
Marylin Berger
Daniel Berger
Berger Real Estate
E. New Street
Lancaster, PA
Financing, Real Estate
Jim Bly
Source Capital
6725 Curran Street
McLean, VA
22102
Financing, Movie, Airplane
Rental $250/HR
Norris Boyd
Boyd Wilson
Olde Hickory
Lancaster, PA 17601
(717) 569-0484
Financing, Movie
Fidelity Mortgage
Michael Long
Philadelphia, PA
(215) 424-3100
Financing
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Bill Tell
PDQ Industies, Inc.,
Brownstown, PA
(717) 656-4281
(717) 656-6892 FAX
0118163030550 (Japan Fax) R-DAT
Financing, Movie,
Vic
Romar Aviation
Lancaster Airport
Lancaster, PA
17601
(717) 569-8296
Pilot, "involved in
reposesstion"
Tony Pascatti
Underwriters Advisory
3605 N. Progress Ave.
Harrisburg, PA 17110-9697
(717) 652-6686
Movie, Financing, FMG
Insurance contracts
Al Dannat
Institutional Investors
777 North Eldridge
Parkway, Suite 730
Houston, TX 77079
(713) 497-8010
Morgage Banker
Dave Schaad
Bennet Williams Realty
York, PA
(717)
Real Estate Partnerships,
Birtcher Real Estate
Bob Spicer
Philadelphia, PA
(215) 503-8537
Financing, Equity
Madelin Wooten
John Keeble, President
Financial Service Corp.
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Atlanta, GA
Bill O"Hara
554 Berkley Road
Stone Harbor, NJ
(609) 884-7199
Landlord,
Jack Mann
Shelter Haven Rlty
Stone Harbor, NJ
Real Estate, Finanancing
Reg Pattey
Burle Industries
New Holland Ave.
Lancaster, PA
Finanancing for Burle
Ned Grove
Lancaster, PA
Finanancing
Jerry Miller
GEM Development
Lancaster, PA
Finanancing, Equity
Tom Kyle
High Associates
High Industries
Lancaster, PA
17601
Financing, Partnerships,
Movie
James Christian
United Chem Con
Lancaster, PA
Financing, Movie,
Jules Goldfarb
G/N Associates
2316 Dairy Road
Lancaster PA
17601
David M. McClatchy
MaClatchy
630 West Chestnut Street
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1987 Documents on CD-ROM by AMG 1991


17601

Ed Vinson
10749 Falls Road
Suite 202
Lutherville MD

21093

Len Shendell
Columbia Asset Management
Twining Office Center
715 Twining Road
Dresher PA
19025
Jeff Springer
Diversified Investment Asso.
16 South Calvert Street
Suite 400
Baltimore MD
21202
Sal Belluardo
John G Berg Asso.
1 Logan Square
Suite 1105
Philadelphia PA

19107

Jeff King
National Properties Inc.
150 East Swedesford Road
Wayne PA
19087
Bob Fields
Manor Group
1377-C Spencer Avenue
Lancaster PA
17603
Mr.Rosenblatt
Max Gomburg
Gomburg Associates
995 Greentree Road
Pittsburgh PA
15220
Joel & Mimi Baron
Baron
601 East Chestnut Street
Lancaster PA
17602
RELATING TO THE ACTIVITIES OF THE DIGITAL FILM ("MUTANT MANIA")
Page 260

1987 Documents on CD-ROM by AMG 1991


Gene Clair
Clair Bros Studios
Lititz, PA
Sound Production
Barbara Peters
Arlene Davidson
Marcia Silen
Flatbush Films
4334 Stern Ave.
Sherman Oaks, CA 91423
(818) 995-3417
Movie Producers
Rhema
Video Service
Philadelphia, PA
(215) 738-3751
Movie Production
Tony Bongiovi
Bob Walters
Ellen Lipman
Power Station Studios
New York, NY
Movie Partners
Ted Gammilion
Mary Gamillion
Gamillion Studios
1137 N. McCadden Pl.
Hollywood, CA
90038
Mike Wolfe
Commonwealth Bank
(717) 780-3092
Loan Officer, Airplane
Mr. Cohouet
Mellon Bank
(412) 234-5000
Discussed Law Suit
regarding reposssession
ATTORNEYS AT LAW
Joseph Roda, PC
Page 261

1987 Documents on CD-ROM by AMG 1991


301 Cipher Building
36 E. King Street
Lancaster, PA
17602
(717) 397-3791
Robert D. Beyer
Arnold, Beyer, Homsher
110 E. King Street
Lancaster, PA
17602
(717) 394-7204
Lewis J. Schweller
Valore, McAllister,
Westmorland, Gould,
Vesper & Schwartz
Mainland Professional
535 Tilton Road
Northfield, NJ
08255
(609) 645-1111
Rick Fox, Attorney
Underwriters Group
Progr ess Ave
Harisburg, PA
Jeff Jamounou
McNesse, Wallice & Nurick
Front Street
Harrisburg, PA
Barry Cappello
Diane Cambell
Coppello & Foley
831 State Street
Santa Barbara, CA
(805) 564-2444
Mike McDonald
Lancaster, PA

93101

17604

Joel Goldhammer
Sidel, Gonda, Goldhammer & Abbot
Philadelphia, PA
(215) 568-8383
Kerry Steigerwalt, ESQ.
5450 Kirkwood Dr. K-3
San Diego, CA 94521
Page 262

1987 Documents on CD-ROM by AMG 1991


Sandy Gray
c/o Kerry Steigerwalt
San Diego, CA
AUTHORITIES
Intercon Special Svc.
Frank Garrity
60 E. 42nd Street
Suite 1045
New York, NY
(212) 370-4430
Gib Armstrong
(717) 786-862
Cris Mele
Attorney General Office
(717) 782-4482
Corporate Acconting Office
P.O. Box Drawer 671
Dunkirk, NY
14048
11/25/87 Return
972386104
85 B48 10
Lancaster Chamber of Commerce
Dave Wouols
Lancaster, PA
State Police
Lincoln Hwy East
Lancaster, PA
Lancaster Police
N. Queen Street
Lancaster, PA
Governer Robert Casey
Harisburg, PA
Federal Bureau of
Investition, (FBI)
Fred Martin
(717) 232-8686
Pennsylvania Attorney General's Office
Page 263

1987 Documents on CD-ROM by AMG 1991


Detective Boden
Admitted Partners had a
Power of Attorney, talked
to him in July

PERSONAL REFERENCES (Witness to Activities of '87)


Linda Davis Vega
Orlando, Fl
Tuesday Barnette
431 S. Plum Street
Mount Joy, PA
(717) 653-4570
Rob Clark
West Palm Beach, FL
Maggy Brodesser
Cape May, NJ
(609) 886-6035
(609) 886-2782
Mike Orstein
York College
York, PA
(717) 560-0627
Tammy
Cape May, NJ
(609) 884-3425
Rudolph Valentino
(717) 299-1473
Ric Obrect
Calico Cat
Stone Harbor, NJ
(717) 394-8320
Bill Johnson
Lancaster, PA
(717) 285-3685
Michelle Hodge
Middletown, DE
(302) 378-4762
Page 264

1987 Documents on CD-ROM by AMG 1991


(609) 465-7924

CLIENTS OF STAN CATERBONE FOR FINANCIAL ADVISORY SERVICES


Dr. William Umiker
1350 Hillcrest Road
Lancaster, PA
17603
(717) 394-9936
Millard Johnson
Duff Ave.
Lancaster, PA
717) 285-3685
Richard Elson
East Petersburg, PA
Dickie Coho
Lancaster, PA
RELATING TO THE ACTIVITIES OF DIGITAL TECHNOLOGIES
David D. Dering
James Boyer
American Helix
1857 Colonial Village Lane
Lancaster, PA 17601
(717) 392-7840
Allon Lefever
Jim Tritcsh
High Industries, Inc.
William Penn Way
Lancaster, PA
17601
Linda Helgerson
Helgerson Associates
Publishers
510 N. Washington St.
Falls Church, VA 22046
(703) 237-0682
Steve Swan
Data Development
42 Flagler Ave
Stuart, FL 34995
(407) 288-7226
Page 265

1987 Documents on CD-ROM by AMG 1991


Gil Bowen
Data Development
19th & L Street, N.W.
Washington, DC
(202) 785-8822
Slavek R. Rotkiewicz
American Bankers Bond
New York, NY 10004
(212) 943-4202
Tom Vreeland
Amy Kovarick
Ann Richards
NETWORK TECHNOLOGIES
Springfield, VA
(703) 866-9000
Marshall Mathews
Terry Harple
Ferranti International
Lancaster, PA
(717) 285-7151
Charles Bauer, Sr.
Skip Strovel
B&B Information & Image
8325 Marlboro Pike
Upper Marlboro, MD
(301) 735-3690
Lucy Griffen
Joan Gervino
American Bankers
Association
1120 Conneticut Ave. N.W
Washington, DC 20036
(202) 663-5491
Dr. William Sailer
Trinity Church
205 N. Railroad St.
Myerstown, PA 17607
(717) 866-5775
Mike Kawahara
Commodore Computers
Page 266

1987 Documents on CD-ROM by AMG 1991


1200 Wilson Drive
West Chester, PA 19380
(215) 431-9452
Mike Grubbs
Tandy Electronics
Houston, TX 76102
(817) 390-3693
Lloyd E. Lewis
Library of Congress
Washington, DC
20541
(202) 707-1308
Dave Benfer
EXXON Production Research
3120 Buffalo Speedway
Houston, TX
77252-2189
Ed Bauergard
Amp, Inc.
2909 Fulling Mill Rd
Middletown, PA
(717) 986-7455
Harry Needleman
Labott Anderson
NASA Library
Washington, DC
Thomas Thiel
Scott
Kathey McKosky
Advanced Systems Development
Arlington, VA
Ken Rudolph
American Helix
Lancaster, PA
Kenneth Clark
Bell Atlantic
Democracy Blvd
Bethesda, MD 20817
(301) 493-3541
Carmen J. Martin
Ford New Holland
Page 267

1987 Documents on CD-ROM by AMG 1991


500 Diller Ave
New Holland, PA
(717) 355-1638

17557

Wayne Landis
PC Solutions
159 Windy Hill Road
Duncannon, PA 17020
(717) 834-9227
Jan L. Kloiber
Arthur Anderson
69 West Washington St.
Chicago, IL 60602
(312) 507-2548
Bruce Kline
Mike Hess
Miracle Concepts
Lancaster, PA
(717) 299-7382
Leroy J. Tuscher, Ph.D.
Lehigh University
111 Research Drive
Mountain Campus
Bethleham, PA
18015
(215) 758-3231
Earl H. Horton, Ed.D.
Superintendant
Hempfield School District
Landisville, PA 17538
(717) 898-5560
Cogressman Robert Walker
House of Representatives
Washington, D.C. 20515
Dave Gribbin
Assistant Secretary of Defense
Washington, D.C. 20301
OSD # 19043
William M. Nelson
Contracting Officer
Defense Mapping Agency
Department of Defense
Page 268

1987 Documents on CD-ROM by AMG 1991


3200 S. Second St.
St. Lois, MO 63118
(314) 263-8502
Stanley O. Smith
Brigadier General,
US AIR FORCE, CHIEF OF STAFF
Department of Defense
Defense Mapping Agency
Fairfax, VA
22031
John Garofolo, C.S.
Dr. David Pallet, Ph.D
Sandy Ressler
NIST (NATIONAL INSTITUTE OF STANDARDS & TECHNOLOGY)
Gaithersburg, MD
(301) 975-3193
Alan Hamerslee
Gisele Vencel
Leon Whidbee
Ash Pawha
Wan Segemiller
Disc Manufacturiing, Inc
1120 Cosby Way
Anahiem, CA
(714) 630-6700
Lance Buder
Sylvester Pufek
Optical Media Int'l
Los Alamos, CA
Bill Tufte
Standard Technology, Inc.,
6116 Executive Blvd
Rockville, MD 20852
(301) 770-2800
Pat Tomes
Paul A. Will
National Association of Clock Collectors
514 Poplar Street
Columbia, PA 17512
(717) 684-8261
Michael Morgatta
Technomic Publishing
Page 269

1987 Documents on CD-ROM by AMG 1991


851 New Holland Ave.
Lancaster, PA
(717) 291-5609
Dr. Barry Glick
RR Donelly & Sons
Cardiographic Division
53 West James Street
Lancaster, PA
17603
(717) 393-8806
Susan Shiner
ISC EDUCATIONAL SYSTEMS, INC.
FERRANTI INTERNATIONAL SIGNAL, INC.
3700 Electronics Way
Lancaster, PA
17604-3040
(717) 898-0890
************************************************************
TI=\NEWS REPORTS
SU= THE FOLLOWING NEWS REPORTS ARE ACCOUNTS OF THE
ACTIVITIES OF JAMES GUERIN AND INTERNATIONAL
SIGNAL & CONTROL (ISC) AND OTHER KEY PERSONS
INVOLVED WITH THE ISC SCANDEL.
IM= 1.CPR
DI= DATE DI= PAGE 1

January 5, 1990
"THE FERRANTI FRAUD"

IM= 2.CPR
DI= PAGE 2

"THE FERRANTI FRAUD", continued

IM= 3.CPR
DI= PAGE 3

"THE FERRANTI FRAUD", LARRY RESCH, continued

IM= 4.CPR
DI= PAGE 4

"THE FERRANTI FRAUD", continued"

IM= 5.CPR
DI= DATE DI= PAGE 5

January 24, 1990


"GUERIN: CLARK SAID HE COULD PUT ME IN PRISON FOR 50 YEARS"

IM= 6.CPR
DI= DATE DI= PAGE 6

January 24, 1990


"ILLEGAL CONTIBTIONS TO HAIG ALLEGED"
Page 270

1987 Documents on CD-ROM by AMG 1991

IM= 7.CPR
DI= DATE DI= PAGE 7

January 24, 1990


"HAIG DONATIONS", "FERRANTI SUES", "KEITH MARTIN"

IM= 8.CPR
DI= PAGE 8

"HAIG DONATIONS", continued

IM= 327.CPR
DI= DATE - May 15, 1990
DI= PAGE 9 "U.S. AGENT CHARGES GUERIN DIRECTED WORLDWIDE FRAUD"

IM= 10.CPR
DI= DATE - May 16, 1990
DI= PAGE 10 "JACOBSON GETS JAIL FOR ROLE IN BRIBE SCAM"

IM= 11.CPR
DI= DATE - May 16, 1990
DI= PAGE 11 "FBI TIES GUERIN TO ILLEGAL MILITARY SALES"

IM= 13.CPR
DI= DATE - May 16, 1990
DI= PAGE 13 "CHRISTIAN ANGERED BY JACOBSON'S SENTENCE"

IM= 14.CPR
DI= DATE - May 17, 1990
DI= PAGE 14 "COURT TOLD ATTORNEY CLARK TRIED TO STOP ISC 'CROOKS'"
IM= 15.CPR
DI= PAGE 15 "CLARK, GUERIN", continued

IM= 16.CPR
DI= DATE - May 18, 1990
DI= PAGE 16 "GUILT IS ADMITTED BY GUERIN COMPANY", PARENT INDUSTTIES, INC.,

IM= 17.CPR
DI= DATE - June 18, 1990
DI= PAGE 17 "JUDGE TELLS GUERIN TO PAY $189 MILLION"
IM= 18.CPR
DI= PAGE 18 "GUERN LOSES CASE", continued
Page 271

1987 Documents on CD-ROM by AMG 1991

IM= 19.CPR
DI= DATE - May 18, 1990
DI= PAGE 19 "GUERIN COMPANY GUILTY"

IM= 20.CPR
DI= DATE - January 14, 1991
DI= PAGE 20 "PROBERS FINDING ISC'S S. AFRICAN TIES WERE CLOSE", ED SYSTEMS
IM= 21.CPR
DI= PAGE 21 "ISC:CLOSE TIES TO SOUTH AFRICA PROBED", continued

IM= 22.CPR
DI= DATE - February 7, 1991
DI= PAGE 22 "GUERIN vs. CLARK 'BLACKMAIL' TAPES REVEALED"
IM= 23.CPR
DI= PAGE 23 "'BLACKMAIL'", continued

IM= 24.CPR
DI= DATE - Febryary 9, 1991
DI= PAGE 24 "LACASTER AVIATION FILES FOR BANKRUPTCY"

IM= 25.CPR
DI= DATE - February 3, 1991
DI= PAGE 25 "GUERIN BREAKS SILENCE OVER '20/20' REPORTING"

IM= 27.CPR
DI= DATE - February 2, 1991
DI= PAGE 27 "STORY: DEALS BY ISC SENT IRAQ BOMBS, BUT GUERIN DENIES SALES"

IM= 29.CPR
DI= DATE - February 9, 1991
DI= PAGE 28 "JUDGE DELAYS HEARING IN GUERIN-CLARK DISPUTE OVER CASH"

IM= STOCK.CPR
DI= DATE - February 14, 1991
DI= PAGE 29 "MANAGER ACQUITTED OF LYING IN SALE OF FERRANTI STOCK"
************************************************************
Page 272

1987 Documents on CD-ROM by AMG 1991


TI=\IMPLICATED PERSONS EXEMPLIFYING MISCONDUCT AND IMPROPRIETIES
DA= February 17, 1991
SU= IMPLICATED PERSONS AND OR ENTITIES

COMMONWEALTH BANK,

MIKE WOLF

LANCASTER AVIATION, CHUCH SMITH, PETE WHOLFSON


ROBERT KAUFFMAN, FINANCIAL MANAGEMENT GROUP, Ltd.,
MICHAEL HARTLETT, FINANCIAL MANAGEMENT GROUP, Ltd.,
ROBERT LONG, FINANCIAL MANAGEMENT GROUP, Ltd.,
PETER PENEROS, FINANCIAL MANAGEMENT GROUP, Ltd.,
P. ALAN LOSS, FINANCIAL MANAGEMENT GROUP, Ltd.,
DETECTIVE LARRY MATHIAS, MANHEIM TOWNSHIP POLICE DEPARTMENT
DETECTIVE LARRY SIGLER, MANHEIM TOWNSHIP POLICE DEPARTMENT
MURRAY HORTON, DISTRICT JUSTICE (MANHEIM TOWNSHIP)
RICHARD REESER, DISTRICT JUSTICE, (NEW HOLLAND)
ARRESTING OFFICERS (MANHEIM TOWNSHIP POLICE DEPARTMENT)
CRAIG RUSSEL, ATTY, RUSSSEL, CRAFT, GRUBER, & HUBER
LANCASTER NEWSPAPERS
STATE SENATOR GIB ARMSTRONG
JOSEPH RODA, ATTORNEY
MANHEIM TOWNSHIP POLICE DEPARTMENT
AVOLON POLICE DEPARTMENT, NEW JERSEY
STONE HARBOR POLICE DEPARTMENT, STONE HARBOR
FULTON BANK
PETER RICHTER, FARMERS FIRST BANK,
*******************************************
Page 273

1987 Documents on CD-ROM by AMG 1991


"THE ENERGIES AND EFFORTS OF THIS PROJECT ARE DEDICATED
TO MY BELOVED BROTHER --- SAMMY, GOD REST HIS SOUL"
laid to rest on december 25, 1985

Page 274

STATEMENT IN ACCOUNT WITH

DOMINICK INVESTOR SERVICES

CTSY IYDIVIbUlrLS SECUPITIES LTI


@'NORTH QUEFN S T
bbnc4sTER
P A 175i

CORPORATION

W BROADSmEET.NM YOllU. N.Y. 1


II2.W.IDO

CUSTOMER ACCOUNT NO.

ACCOUNT EXECUTIVE

280 1QeOO3 452

I'A6E

1'OF

ARMSTRONG SLICK

STATEMENT PaRIoD

STIWLEY K CATERBONE
4331WEST' 14RION ST:
LANCAS T FR

DATE

OEGINNING

PA

17603

SOLDDEUVSREO
ORWORT

'WWHT.RICEIVEO

on LW(I

12-01-83
*mOlWTEIIEm

ENDING

Tw4aR.

DtSCRIPTION

m a OR e m v

.ML

IMEREST :REBITE0 "0 YOUR Al:COUNT. I N 1 9 8 3 , WAS- r k i i i b l

64.75C

AMOUNT CHARGED

AMOUNT CREOITEI

THE' YTb C l E O I T IWT REST TOT, LS SHOVW OW. TNfSJ ST4RHENT U :LL' BE REPORT EO TO THE I R S
AND ANY ACPROpRIAT STBTE T hX' AUfAORITY'fll' LZFU' JF' FEDER bL: IWFORWATtON RETURN 1099
1

ALL1 PROCEEDS- OF' SA ES TRlNS KTIONS U f t L ' M l R E W I I E O TO T:WE IRS FOR THE PERXOD 8E61NWtN6
7-139. THtIJ' 12-31-13 I N LPEI'OF F E O E R A L ~ M W R R A T ~ ~ ~ ~1 0
~ 9F9O
8~~~

* *
12-3 0-83

utxvxr

FOR THIS

PER~OD

**

rnr
tLUV5t
'ROll 1 1 / 3 0 TO 1 2 / 2 9
:.2129BAL
SWiBlCR
(LVS 8ALi
SBbi6lCR

*
1000

**

POSITIONS

:WTERYlTfOWAL SISNAL
i CONTROL GROUP PLC
I;EIJSQR~~ATTC'COA LTQ

400

I R t PRICE

PORTFOLIO V4tUES

1
WCF

*.

4.019

16ot.60

r
I

EE REVERSE SIDE FOR IMPORTANT INFORMATION

***

High Assaiates LTD.


1861 W i l l i a m Perm Way
Lamaster, PA 17601
Attn: Paul Lewis

Deat Mr. Lewis:

i
k

i
%

I have beenrefarred to ynu fran EdwaxdGordcnof the HorstC;rollp. I am


ccnsiderirq making a career change into the real estate devalopnent i d u s t r y
an3 I warld U k a to have yaur -t
amsmtims. I have almys
ctmsiderd the real estate inQstry exciting an3 chllengirrg, especially
after beomdng mpe faniliar with it through limited ips MB tax
shelters.Wofthereasa~~farthecareer-inUghtofaverygmd
home, is the lack of enthudam and hspiraion that I gat frun vatching
tax retmm an3 financial s t a w t s cbange withait s6eitig any material
evi.dm=eof pmgmss, md-t as a newly developed tact of land, or a
rehabilitated darntom building or mall. I do not fear or krdc any
~ t a d b q o f t h e a n a l y t i c a l a s p e c t s o f b u s i n w s , ~ t h e y t e n a tbe
o
mare stjnulating and meanirrgN ipn applied to material prochjcts ar

me.

L!
t
.
d

I have several
that warld enable me to slake a very fast and easy
trahsitiar into the industry. I tau3 good aoanuniaticn akilb and I an
very cnafcctable dealing w i t h at-,
acmmtmb, bankers, private
husinees arnere, etc.. I have sane experieme in qrdicaticne and capital
f~ticnfmmr#aeoftheworkthatIhwedDneinthespontsindustry. I
haveagreatdealofknowle&geandexperienceinuorkingwithtaxlareand
regulations c c m m h g the private irmestcPr. I also feel quite c u n S e
wcPrking w i t h the amlytical aapeds of the bmineas
as feasakdity
analysis, cust mections, bu3gets, etc.. I have had paet expriencc in
the efforts of sub aontzadors far different m e c t s .

~~

resune and @xmemmber wtrre I may he reached. 1f


I wculd appeciate the. d m ~ to
~ =met
you have any msihle -ties
with YOU. 1 -iate
your time and csnsideratM, and wish ycu the best
in your future ventures.
Ehlosed you will find my

Stanley J. C a t e r k e
4)

P.S. This inquiry is in strictest confidence.

--

r
,

'

55 Butler Ave.
Lancaster, PA 17601
(717) 299-5958

M r . Larry Zielinski, V i c e President


Ommmealth Naticmal Bank
28
Square
Lancaster, PA 17603
1

Dear Mr. Z i e l i n s k i :
As per

our conversation this past mxuntng, enclosed you will find my


resune. One of the main ream^^ for my decision to make a career cfirrnge is

thatIwouldliketo n w e m a e ~ t h e d i r e c t i c n o f ~ t e f ~ a n d
I am firding that
m
t cccupatian is taMng me further fran that
objective. I have been dealing in the financial in3ustq far the past 4
years, since graduatirq frcm odlege. I have beenvery mtmaskl inmy
field, hmmx I feel that this is a critical time in my cmeer in that it
is only going to b e a h m o r e d i f f i c u l t to make the transiticnas timegoes

on.

BecauseofthefactthatComnaarealthhas~mnesalesand~
driven due to the carpetiticn in the financial services im%stry, my past
sales experience and reoord would be of significant benefit regarding a
transiticn into ycnu -tian.
I have learned the b d m i c a l aspects of
an-prate finance i n mae of an idirect m y thm@~my education regarding
aaprate stru&ums and strategies as relatirq to investmer~ts. I am
familiar w i t h the f h a m i a l statenents of carpanrations, and have a very
broad~tanaingandexperienwin~iness.

Iwouldbeveryinterestedin~mneabauttheopporhrnitiesthatyou
I am lcoking for a salary in the $30,000

new have within ycur organization.

range.

L
L
I

I want t o thank y m

for y a m time and m i d e r a t i o n .

OK P r c p x t i e s

i
h

39 North m k e t Street

Lancaster, PA 17603
ATIN: Don K. lJ@xse

Iwouldliketo thankycu forycurtimaandaonsideraticnregardingthe


positicn that is currently vacant in the crganization. I sense that (ken
Kugal m i a t e s is a very dynanic and exciting cqmizaticn that is lrnving
and graring very rapidly. The positim that you are trying to f i l l would be
a very challenging and interesting project. I feel very amfident that I
carld be very effective and h
e
l
w to ycur m z a t i c n in beirrg
regpanswe for the equity ne.ds for your p?mjecb. I would bc int%rested
in prtsuFng ax e i a t i a n s for the pos5ticn. lhere are a few queetians
that I have, ha*ever until ycu and ycur assodates +each a Badsian, I w i l l
wait to hear fran ycu. I would ilks to review th-,
andwill
leturn it to you in the very near future.
Please eend my thanks to Ed and Owen for thier ansidemticns.
Again, thanks, and I look faa*wrd to w i b l y WXking with yrxl in the

future.

-t

Regards,

HOW TO USE
OUR SERVICES

-\

Our services may be retained in any combinaIn necessary to benefit the athlete or to ysist the
ntract advisor in handling the financial affairs
the most competent and efficient manner. We
ve all heard of the horror stories of the famous
Irs and athletes; however, there are far more
bries of less publicized athletes that we never
ar which are the result of improper financial ade. We must remember that as the longevity of a
lyers career siiortens; due to
~ipetition,injury, attrition, and
.momic conditions affecting the
~fessionalsports industry, it
:omes even more important to manage the
ancial affairs in the most prudent manner
iilable.

PRO FINANCIAL
6ROUP, LTD.

-7'

OUR COMMITMENT
Ve guarantee that any and all services rendered
the behalf of any Contract Advisor or Profeslal Athlete will be performed in a satisfactow
nner or we will refund any and all fees. W;
ntain that our services will not only benefit the
:ers of the athletes. but will also enhance the

,
\..

--\.

1755 Oregon Pike


Lancaster, PA 17601
(717) 299-5958

"Dedicated to Performance"
/'

,,

OUR SERVICES
*

Pro Financial Group, LTD., is a highly


phisticated network of various professional ad;ors needed to perform financial advisory ser:es specifically for the professional athlete. The
twork consists o f several attorneys, accounnts, a Financial Planning Consulting Firm, a
zgistered Investment Advisor, a Broker Dealer
pport organization for some of the most compe11 Financial Planners in every state, and a group
investment advisors.

*
*
*

Estate Investments.

: ,

,. .
,

,:

, ,

: ..

. .
..
. . .*:..

. -

..
'

Dore Valnvanw. ESQ.: Representing the h w Firm


of Shirk. Relst, Wagenseller, & Shirk,
Legal Counsel for Estate Planning.

Our purpose is to provide Financial Advisory


rvices to professional athletes and support ser:es to other contract advisors that d o not have
:necessary resources to provide sound financial
vice. We wish to work right along with your
ntract negoliations to ensure the best financial
ckage given the athlete's individual situation.
e d o not wish to get involved in the actual
gotiations; howcver, we d o feel that it is impori t to realize the financial implications of certain
ategies in conjunction with given situations.

Tax Planning

* Cash Management

Flnsnclai Plsnnlng Consullane. R.I.A..


FPC is the Rcgirtcrcd lnvcslmcnl Advisor, and is
a firm that provides various financial services for individuals and small businesses.
Financial Sewices Cotporatlon, of Atlanta. Gs.,
FSC is a Broker Dealer and support organization
for Independent Financial Planning Firms in all 50
states. They have a very large and sophisticated due
diligence department for life insurance products, investments and tax shelters. They also provide a network of some of the nations most competent Independent Financial Planning Firms that will be
available for your use.
Stanley 1. Caterbone. Certified Contracl Advisor,
NFLPA,
Responsible for all coordination of services and
President of S.J. Caterbone Associates, an indcpcndent Financial Planning firm catering to upper income individuals and small businesses.
Carl J. Frederick, M.E.D..
Strength Coordinator.

'
'

*
*
*

Individual Portfolio Management


Due Diligence Services for Tax Shelters and
Insurance Contracts
Third Party Negotiations for Deferred
Compensation Packages
Retirement Planning
Business Planning and Negotiations in
Mergers and Acquisitions
Real Estate Investment & Feasability Analysis
Estate Planning
Contract Advisory Services
Third Party Representation for Professional,
Business and Labor Contracts

THE FOUNDERS
Pro Financial Group, LTD. is an outgrowth of
S. J. Caterbone Associates, a Financial Planning
Consulting Firm. S. J. Caterbone Associates
specializes in managing the financial affairs of upper income individuals, small businesses and the
professional athlete. Because of the demand for
an array of diverse and extremely competent advisors in managing the financial affairs of the professional athlete, we feel that our success is due to
the large and ever-expanding information network
that we have developed. After discussing the needs
of several contract advisors across the country, we
have learned that we offer a very unique and
highly qualified financial support system. Pro
Financial Group, LTD. is now in the position to
provide the benefits of this support system to
other contract advisors.

mdt eral
......

SAVINGS- --'&
~

~~

PAY
TO T H E
ORDER

OF

>+

002530
JIM '12 86

.. .
. . ..

BANK

'

8-1
4:

DATE

TIMOTHY LANZA, ATTY.


AND STANLEY J. CATERBONE
AND MICHAEL T. CATERBONE

FEDERAL
HOME L O A N
BANK

1Ie002 5 3011'

oF PmTTsmumo*
PITTSBURTH. PA

C O L 3 0 0 L2 3 51:
D E T A C H A N D R E T A I N T H I S STATEMENT

PARENT FEDERAL SAVINGS BANK


DATE

6/12/86

3s IN P A I M E N T O F l T e H S D E S C R l m E D O E L O I .
o r c o a a E C r P L E I S E N O T I F Y U S PROMPTLY. N O RECEIPT O E S t R E D .

TIlE ATTACHED C H E C K

I FN

DESCRIPTION

LOAN 0 0 1 0 0 7 8 9

CATERBONE S.

DEBIT 1 0 1 0 - 0 1 FIRST CONVL MORTGAGE LOAN

AMOUNT

100,000.0(

The shares represented by this certificate have not been registered

CYWTER BUSINESS PlAN

FDR

JULY 1. 1986

LWGBER. PA -TION

TABLE OF CDKTENE:

Mission S t a W

Page 2

Corporate Objectives

Page 3

Eusiness Strategies

Pase 4

Distrifiutim Strategies

Page 6

Services Strategies

Page 8

Market R n e t r a t i m Strategies

Page 10

Planner Support Services

Page 11

Coqwrate Stanrlards

Page 13

I n i t i a l Capitalization

Page 14

Financial Iiiaights

Page 15

Contingency Plans

Page 16

=P -g-

Q-arp

Page 17

Organizational

(harts:

Wit A

Page 20

Wit B

Page 21

in
1. To m e the people of the caurty, state and ~ t i m
the hanjlirq of their finances through the m r t of azr financidl
planners ard other advisors, and their persond relationships with their
clients.
2 . To meet the expectations of our various constituercies:
planners, eaployees, stockholderr, and the people residing in the area we
serve.

rr~npany
as the major provider an3 setvicer of
financial prducts and advice in the clasely related fields of
invesb-m-~ts,financial mnsultation, mortgage banking, l i f e irmmnce,
prcrPertY and d t y in=-=,
taxes, law, ard real estate.

1. lb position the

2.

!Ib transform

the fra-ted

market of independent financial planners

into a quality group of clutstanling professionals nezketing under one


name, thus bringing order to the financial marketplace.
To place client interest first a t a l l times by delivering a
diversified prcduct through multiple qxmsors so as to always deliver
high-quality and fairly priced products representing the top 25%
3.

percentile of the matketplace.


4. Tb dwelop and maintain quality m i c e on previcllsly delivered
products by nranaging assets a t a reasoMble fee, thus freeing planners
frcaa the constant pressure of lMking new sales.

Fa insure the g-rwth of the business by hiring professional planners


in sufficient number so as to become the preeminent financial micc~npanyin the area served.

5.

6. !Ib use invcapital rather than loans and long-term leases to


minimize monthly expmses ard maximize profits, hereby assuring our
business gmwth and dwe1cpm-k.

7 . 'Ib enolxuage our planners t o beome stockholders in the finn, thus


satisfying their desire for mnazhip in a ccanpany of redl value. Also to
assure a more stable d e v e l o p a t of cur business through stronger ties
w i t h cxlr top planners.
8. To react to changes in the marketplace ahead of cur amptitim in
creative and thomqhly considered ways.

9. To maintain a strong professional/client relationship throuqh frequent


prsondl c o n t a d while using high-ted-oxrlcqy
.
.
. equipnent to enhance the
-

quality of our work.

corporate benefit plans and the media


continues to g m as a s q n e n t of the financial services business.

Mass m.rM5.q

Dwelap wrprate sales thrmgh the concept of cafeteria plans


hhich will dvlnge the enployee benefit mrket by a l l w i g
employees to w e t a prcentage of benefit dollars to the areas of
their choice. Also, continue to en@asize seminars targeting unique
organizations hhich have a strong relationship with the pblic for
specific financial products:

M. Charitable organization
Counseling center

charitable g i v w s e m b a r s .
estate planning s e m b r s
life planning seminars, etc.

Additionally, we will develop plblic awarmess by constantly advertiskg


the corporate mme via nekspaper ard radio.

1. Current Situation

W e crurently have 14 financial plannezs and 5 other pmfessiondls


Wtted to an August campncy in cur new space on the Oregon Pike
y anwng
,
the 16 people involved, we
i n Lancaster. ~ t i ~ l fman
have selected m g e r s for w offiin ,
lewkhq,
Reading an3 Landale. Based on l a s t year's business by those
dLready irnrolved, we e x p z t to g-te
2.7 millicsl dollin

revenue, and invest 54 million dollars in 1987.

an lancaster staff to 18 financial plWe plan to


6 othes p m f e s i d s . W e we plan t o locate and devela;, in
areas, we will OYIEentrate during w first year on w
operati-.
,

2.

Cuzlwt

and

w d

Situation

A t least 80% of our staff is caprcanprised of professiumls established

in business for a t least f w years.

We will m n t h to seek predaninately self-sufficient,


professional lVeteranstl of the industry. (Xrr desire is to
agpeal to their need for the fnxdan to plan and ccumnmicate rmre
effectively with their clients. We'll also offer a higher paycut,
mre varied products, Md a mre professiondl envkment. We w i l l
duplicate d y the msst criticdl brokexage house semi-.

PI-rn

Current Situation

(Continued)

-.

Planners have been stable in their relationship with past employers.

a very stable core of top planners in Lancaster, Pa., due


We
to strong nnnagement, staSle planners, strong local w
r
t systems,
an3 equity mmrship. We will m m t r a t e on local development
ahead of satellite dwelqment. We
a x satellite retention
*ere equity vmership is strong and mediocre
to be
where equity a n w d ~ pis weak.

Current Situation
are independent and thus use various p1amb-q txxhniques,
Planoffer a limited
ard differ in their areas of expertise.

~~

Zhe w i s e a d techniqaes of cau planners ard ather professionals


wjll be p l e d to provide clients with higher quality m i c e and
a broader line of products.

1. current Situation

Invesbnent products are predceninately delivered t k a q h captive


prcducts and manage
sales organizatims who manufacture their
which
all mmies. 'Ihis leads to limited product offerfrequently do not entirely satisfy specific mnsumer needs. It
also leadsto a d o n e product because there is no free mket
pressure to insme top qmlity products that are axpetively
priced.

planners w i l l be free to deliver the highest quality prcducts fran


of sponsors so as to work exclusively for the
mong
-fit
of the client. Zhe p l m my chccse top h % s t r y
pzrforuers, solid ard sizeable mopanies and a variety of ~~nichevt
products to f i l l wery client need.
2.
-

Current Situation

Fee-paid financial plans vary widely i n price and quality and


deperd mmt heavily on the individual developing the plan or
inteqxeting it. With regard to oonsumer expedations, the
marketplae is in disarray.

Fee-bsd plans in advance? of prduct sales shculd beccme sinpler


due t o tax reform. Ihe mjority of ad,plans were originally
purrhased for tax planning wfiich my no longer be needed. (Xlr
eqhsis w i l l be an a business being revived by tw r e f m
Asset m g e m m t or InvMonitoring. With clients paying
their taxes ard investing for appreciation rather than seeking
shelters, this business is eqected to bocmn. We plan to have an
in-hportfolio manger and mket-tk. W e plan to charge
clients an average of .75% for the service. A s planners gain
assets under nwagement, their annual h a m e fmn this ~ x l r c e
should alleviate pressure for new clients.

--

Currmt Situation

Associated prufessirmals sucfi as attorneys, acamtants, bankers,


and insuranoe a d real estate agents seldcan -te
to help
clients attain their g d s . Ihe ultimate contrul of the
lusiness tends to bacome divided, m a k b q pecrple
client's
defensive ard prducing fear of e x p u r e in the event of error.
Zhis often leads to professionals dxaditing one another or
taking W e nedit for advice leading clients to inaction.

In-hmse legal and real estate professionals will eMble a p l m


to get sudr services for his client witha-t fear of losing the
It will also help omsreve revenue
client to artside .
n
i
normally spent for sucfi mi-.

Current

Situaticxr

Ongoing client m i c e is a desire for m s t &es


in wr
marketplace. H m e r , the amstant pressure is a~pliedto plmlers
to produce new clients and new sales as 90% of eKnings is still
. camnission generated. Ihe t i m e required to praspert and close new
sales severely limits the necessary servicing time.

a &annual
Ongoing client m i c e will be =lied
newsletter anl sadannual client investmnt @te
delivered
?he
costs
of
these
services will
altermtely every three months.
be borne by client-paid asset m g e r w t fees, innzrance renewals
an3 mtml furd trailing oamnissions. Althmqh this is an
ambiticus, high-tech undertaking, our basic inclination remains
persondl client review ssqsions held on a regular basis.
We also expsct better crossover r e l a t i d p s and broadened
information base for both planners and specialists due to amon

laation.

m k e t Penetration Strateqy

1. Ekisting Clients

--

Planners an3 other professional joining

aur g-rw.xp w i l l have dwelaped deep perrcaral c l i e n t relationship

which a d d allw new investment dollto be handled by w


people. A s f o l l w systems are inp1ement.d we
65% of dl
businesstoccPnefmanthissalrce.

2. -presence-We plan to present fax seminars on a


joint basis with institutions mch as mlleges, wities, business
organizations and corporations. Cur semirrars include
vl,successful1 4 m Manaclemen++"- a sauptc-nuts on invproducts, vtpalf4mew
a l i f e planning s e n k a , wolaritable
and Retirenent Plannim S m h z ! s . CUrrently aur plarrners
regularly a p p e ~a t Millersville State CBllege, RCA, AZIXIA, St.
Jcseph's limpitdl ard e l m . W e also plan regular seminars for
the general public.

--

--

'Ihese t w o markets w i l l be
3. Business and Retirement Markets
singled cut for specific eqhasis because of the vast potential and
strcsrg reex3 for planning axrg these grou~s. Business benefit plans
and specifically "cafeteria plansv1w i l l be rwketed. RetireJrPnt
mrkets w i l l be expam3ed p r k i l y t 3 m q h increased sedmr
marketing.

Planner Sumort S w i c e s
It is cur plan to pruvide necwary office and clericdl m
r
t
services to help each planner or a f f i l i a t e d c t his o r her business.
W
e into limit w office to w r t services and not t o pruvide
-ific
marketim sexvices for individuals.
marketing efforts
will be for the gmup a t large, that is t o say t h a t individual
prospecting w i l l be a m n a l expmse borne by the planner or advisor.

Inherent in cur e r t services w i l l be the follwing:

1) Phone H a n d l i r q
including the f a c i l i t y to forward other
business lines to cnu c ~ t r a system
l
should a planner leave the
office.

a sample of tbank you,


referral appointrent setting, data requests, and ammnly
wd review l e t t e r s m y be selected and generated. Rzsonal
mrnsprdence w i l l
handled by our s t a f f , frea of charge.

2) m t i t i v e S t a m l a r d Bn-esmndence

3)

Business process^ ompleted applications w i l l be checked,


logged, oopied and m i l e d by aur cashiers. F o l l w p with
broker/dealer or p r d u c t qonsors w i l l be offered to premier
pIDducers only.

4)

cmwter Services
financial plans and invesbwmt rmnitoring
services w i l l be prarided through data base entry. Yass
distritution an3 hardplan generation w i l l be done on a

piece by piece and pmentage fee basis respectively.

5) p D f e s s i o ~ Networkinq
l
our in-house a f f i l i a t e s in law,
accounting, tax, estate, real estate, mortgage brukerage,
portfolio mamgement, l i f e innrranCe and pxqertq/casualty
insurance stand ready to serve clients related financial needs.

6)

Suwlv S c c k i m p m z p d u s , applications, trust a-ts


and
other forzs needed to conduct kusinesS w i t h cur r&
prcduct
suppliers w i l l be maintained.

7)

Reference and Pericdicals professiondl journals an3 data


services meet* the ammn need of cur advisors w i l l be
plrchased and w i l l be mintdine3 by cur office s t a f f .
Material unique to specialized areas w i l l be provided by those
planners K+-IO work in those areas.

8)

Cornrate Marketinq we w i l l p m t e the me of our firm along


w i t h all planner a f f i l i a t e s to gain p&lic awareness in wiess
of k h a t any irdividtual alone cauld achieve. W
e w i l l become the
best h m f
in Central Pennsylvania.

9)

minim and Education

Ro1h-g cur production will give us


additional lcut with sponsors, i r d u s t q t d m r s ard those
wishing to address cur e
p
. (bst shculd be 1ard
quality higher. It is cur plan to provide a mnstant f l u s of
information, new product profiles, ard specialized p 1 a m . h ~
techniques.

Size and strength of cur gmup should


allw us to t
Dirrcreaseconoessions made by sponsors wer m t s
m d l y negotiable by M v i d u a l s .

10) G m s Pavout Neaotiation

--

(XTR

ST-

FQR A GREAT CCMPANY

.'

Having w e l l established busprinciples is critical to the


m
y
p
e
r
s i m , hard vork an3
success of any new business.
sufficient capital oan rival its impJrtance. W e feel the need to state
the basic values of this firm so that the basis for the decision-making is
well established ard urdersbx5.
A great ampmy..

...l.

Serves its

custarrers well.

m hi* principles.

3.

~EG&PS

4.

Makes

5.

taa.rds the interests of stakholders and


emplw-.

m ~ ~ l regularly.
g r

6. ~nanrsits mission.
7.

KnaJs its p i t i o n i n the nar-lace.

8.

~ e s i r e s s o l i dommmity ard corpxate


citizenship.

9.

Hires mprior people ani pays than vell.

lo. Will cha.qe carne innidst cfvlngirq tines.


11.

Has the vision to see cpprtunity.

12.

Retains- .

13.

Has a bias for action (do it, try it,


fix i t ) .

14.

Is value driven.

spirit.

15. Regards people as its greatest asset.


16. Uses a lean staff , a shple f o m management

laJest level.

17.

pus.'les d e ~ i ~ i ~ - m a k jto
n gthe

18.

W t e s deserving people, rqaxdless


of race, sex, or religion.

3We hereby resolve to W d such a t x n p n y .

'Ihe abo\~epages have been mitted due to the legality of precedbg


the O f f e r h I~~~
in mnjunction with Federal and State Securities
Regulations. An Offerins P I e m o w w i l l be issued to a l l htere&&
parties upon registration w i t h the apprapriate authorities. 'Ihir; M c l
happen on or before August 1, 1986.

The begining phase of n o s t businesses phase is dma~teriZdby


erratic sales trerds, fluctuating m k e t share, increashq dependence on
inproving technological systems, and possible cash flm losses. We do not
exped to face any of these pmblems because of the established nature of
the planners we are hiring. H-er,
we wauld be foolish to believe that
we scnnehm were inmme fmm such potentidl pmblems and therefore need not
to plan for these wentudlities.
(Xzr very first need a
d be to raise capital thrmgh stock plrcXases
beyonrl cur initial capitalization t
s
to the extent of at least
$loo,OOo to cover any initial shortfall in revenue or budget projections.
'Ibis wmld protect us from going the way of nwst mdercapitalized
businesses---.
m y , we e q e t to invest heavily in state-of-the-art
technological s y s k m so that we do not face ned hardware/sofbare charges
e ~ l yin cur business developwlt. Stan Catertune will devote m r h of his
mamgenent tine to this area.
h-iority will be given to rwiewiq perfoOmarm against objectives on
a m t h l y basis. All abjectives will be quantifiable aid measuable, ard
as necesaq adjustments will ke made and mnitored accordbqly. Such
scrdiny of perfomaxe will allw us to oonstantly assess and respand to
any pmsible s h o ~ i r g aid
s to market needs.
C u r mgement i
s d t t e d to deriving a large portion of its
personal i x a ~
fmpn serving clients as crpposed to relying on managemmt
i . . 'Ihis should preserve w cash flm and insure its grcrJth.

Stanley J. Catertam is axrently proprietor of S. J. Q W n e


Associates, a Financial Planning Firm specializing in but not limited to
upper inwne individuals. He is also president and founder of Pro
Financial Grarp,
, a firm prwiding financial -ices
and amtractual
negotiations to Professid Athletes an3 Agents.

Stan began his career with a financial sdxidiary of m i c a n


Express, I E Financial Services. He was hired by and worked w i t h Bob
Kauffmm for six mths before Bab was prcnmted to the Florida area. Stan
developed a practice center& around fee-p l m that fowed on
the tax aspects and conoerns of individuals while they pertained to the
clients investmenk and werall financial situation. While at ID6, Stan
was one of the leading planners in the nation to utilize fee based
plannirq at its inception. He was one of the tap producers in centtal
Rennsylvania, an3 ranked rnnnter 5 in the nation in his class. He also had
closed one of the biggest estate planning cases in the division.

f
i

In January 1985, Stan left I13S and became ird@ent


to provide a
better product line for his clients and to escape the pqxietary
s very creative and has developed a sbmq practice
environment. He i
ammg physicians.

Stan has dwelaped a variety of professid networks thmu@xut the


country with rqaxd to the various Sports Professionals that he works
with. He is currently working on a joint venture with fornrer Chief
Financial Officer and Vice President of jloubledav Fu?Aishina m,
Richard E. Madigan. He i
s lookhg to Stan to help him manage an annudl
inamne of $7 million fron the 20 Professional Athletes that he auwrtly
IMMges.

Stan has helped to develop the Central m l v a n i a Chapter of the


Internaticmal Association of Financial Planning, and had organized and
nieeting with Alexandria
attracted nwre than 100 m a t oattend a
Amstrong, one of the more pnahlnent Financial P1arvm-s in the nation, who
is cxlrrently the National President of the IMP. He is also a mPmber of
the Estate Planning Council of the Instiof Certified Financial
P l m . Stan is currently a Certified Contract Advisor of the National
Fwtbdll League Players Association an3 the NBA. Stan will be an
Exative Vice President respnsible for professional networking and
market*
and sate of the fiscal and negotiating functions.

Fbb Kauffman is wrrmtly the National Sales Manager, at large, for


FSC Seolrities (brporation. FSC is a b r o k e r M e r with a 1200 planner

sales force. It raised wer 600 million dollars of investment capital in


1986. Bob's respnsibilities include dweloping a ccanpany-amd
distribution system wi-~er&y FSC pralucts and services are delivered to the
pblic-at-large Umqh FSC Financial Service Centers. E& is also
reqmnsible for recruiting pmven financial planners thrcqhout the natior.
for Financial Senrice Corporation. He also contributes to the strategic
planning of sales for FSC m i t i e s Corporation..
Bob began his career with a financial subsidiary of the American
Wress Corporation in 1976 upon his graduation frcan Millersville S t a t e
College in Mill-ille,
Zknnsylvania. In his f a r years of direct
selling to the plblic, he became the y q e s t perscm in the a m p n y to
achieve multi-million dollar praluction status at the age of 25. Bob then
began to take on additional assxiates as he began to huild his practice
in Lancaster, PP-mqlvania. In j u s t two years, his pzlctice had gru.m to
12 representatives handling wer $12 million dollars a year in annual
investnmts and managing in ex-s
of $60 million dollars of client
mnies. W e building this operation, Bob continued to be the leading
producer in his office and the region.

Bob was then pmmoted to division mnager of the West Coast. In eat
position, he tripled the size of the sales force an3 increase3 volume wer
500% in a period of 2 years. His division of American Express handled
w e r $100 million dollars of investor mnies.
Bob was then asked to take wer the largest operation in the
scutheast, located in Atlanta in 1984. With wer 60 financial planners,
ha7dling an wcess of $200 million dollars of investor's mmies, Bob again
simed his territory into the top echelon of the ccnnpany.

With FSC since 1985, Bob has opened the first three aapny-mnd
offices and nm supervises an excess of 75 qloyees. His qmations new
rank 4th in all FSC related planning -ti=.
Bob brings to Financial
Management G r o u p , Irc. 10 years of experience in the financial planning
industry in both sales and sales -gment.
He is a member of the
International Association of Financial Planners and is in the process of
capleting the cwrre wok for r i f i e d FFinancial Planners designation.
Bob is a frequent speaker at both corporation and business financial
planning functions and has been quoted frequently in local an3 national
media pblications. He continues to hardle investments for select
clients.
Bob will serve as president, chaof the board and will be the
largest s ~ o l d e r . Kis e x p r i m in - g i q
and developing large
financial service organizations will pmvide the leadership and expertise
necessary to insure the growth we envision.

BICGFAWY OF M I ( H P S . M. HAKIZEIT. AFP

Mike Hartlett is a r r e n t l y an irdepdent financial planner and heads his


om l d firm
Financial Plannbq Bnsultants. Mike is a licensed
m i t i e s principal and fully a l i e searrities broker. He has
ccanpleted the Oertified Financial Planning program with the College for
Financial Planning and currently holds an Associate Financial Planner
designation. He w i l l m i v e the Certified Financial Planner designation
in Feb1987.

--

Mike began his Financial Planning career f i v e years ago with ILS a
subsidiary of m i c a n Mp-.
IXlrhq his career w i t h ILS he
amnq
the firm's top planners. He was on the Presiderrts Advisory Cavril for
I= i n 1985 and f m a f i e l d of wer 5,200 lX6 planners, finished amg
the tap 66 financial planners in the cwuntry. In 1983 am3 1984 he was
amg the top three in IR?&Llified
Plan Frcduction. In Septanber, 1985
he left ILS to f o n n h i s om financial planning firm.

Mike has an extensive knmledge of corporate retirement plans ard pension


prograns and has excelled in retirement planning f o r individuals. He
auxlucts financial plin several large fancaster &mty
corporations and is active in prancrting financial planning in fancaster

-'a'.
Mike currently m g e s i n excess of $14 million in c l i e n t assets.

Mike is carmLitted to deliver* the highest quality p1armis-g sewices to


his clients. He beliwes that m
r
n
l attention and sexvie are the key
t o a strong client/planner relationship.
Mike w i l l sewe as Executive Vice President of Financial Manag&
Group,
Ltd. He w i l l be in charge of operations and serve as chief financial
offi-.

Firrancia. Securities, Inc.

............... .?he Broker Dealer

Em Advisory, ........................

..The Registered Investment Advisor

.......The Insumme Agency


In=. .............?he Acamting Finn

Financial Savims Insurance Agemy


EM; Acmmting Sezvices,

Financial tbrtqages Services, Inc. ........?he


Wealth MaMgement Semi-,

..

..........The

Financial PlarPling &msultants, Inc. ......We

Mortgage Bmkmqe Firm

Portfolio MaMger
Financial Pla-

&

Market Timer

Finn

mmTE FmG (In Hause)


Eager Real Estate

........................Redl Estate Services

O'my ti smith .............................Legal

Counsel for Business

&

Xeal Estate

.........Legal cavrsel for Estate Planning


W e l l Associates, Inc. .................. .Property 6 Casualty Servicrs
Pro Financial harp, Inc. .................Servicc5 for Profe55ional Athletes
Shirk, Reist, Wagenseller

&

Shirk

Please note that the W e f i n s are currently wrler nqotiations and have given
ve.rhl amnnitment for affiliation.

STLI1L!*C

"OSCS n . " O S c * * c ~
.RT*"l
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In re:

July 31. 1986

Financial Management Group. Ltd.


Draft Offering Memorandum

Mr. Stanley J. Caterbone


255 Butler Avenue
Lancaster. PA
17601
Dear Stan:

I have now reviewed the draft Offering Memorandum for Financial


Management Group, Ltd. which I received several days ago, and my connnents
follow.
The cover page indicates that stock will be sold at two different
prices, but it should include reference to the fact that the lesser priced
shares will be offered to persons who will affiliate with one or more of the
subsidiaries. This can be done by a brief notation on the cover, together
with a cross-reference to the section in the Memorandum where is subject
will be discussed more fully. There should be a rather full discussion
somewhere in the document indicating the qualifications and requirements
pertaining to persons who desire to become affiliated, and as we discussed,
this also should be incorporated into a form of agreement or agreements
which should be attached as an exhibit. In this connection, should people
who affiliate and later terminate be required to sell their stock back to
the corporation?
than shares of
the cover page should clear1
clear on that point, and co
The Memorandum should be much more descriptive in outlining the
proposed activities of each of the subsidiaries. In that connection, I
suggest with respect to each subsidiary the following information:

Mr. Stanley J. Caterbone


July 31. 1986
Page 2
Reference to the fact that the subsidiary has not yet
1.
begun business, as well as the date by which it is reasonably
anticipated that some business activities will begin.
Xore detailed information on just what each subsidi2.
ary will do.

,-

.2

Likewise, where applicable, more spec1fic information


3.
as to licenses and regulatory requirements (if any) which must be
met and continually observed by the subsidiary.
A discussion identifying the directors and officers
4.
and also who will manage its business operations. If formal
arrangements have been made with specific persons, so indicate;
if the business will be operated by an employee or independent
contractor yet to be designated, give details, including the
terms of employment that are expected for any such person.

In this connection. I would think you would indicate the possible difficulty
of retaining such persons as one of the risk factors. Also, if such persons
will continue to operate or be connected with the businesses from which they
come, you will have to point out the possibility of a conflict of interest
on their part. Further, it is my impression that these businesses are
highly competitive. All in all. you should discuss among yourselves what
type of information about the proposed businesses a sophisticated potential
investor would want to know, and then state your response in vriting.
Obviously, I would err in favor of more, rather than less, discussion.
With reference to the parent corporation, you should give detail sirnilar to that you will give for the subsidiaries. Further, you may want to
discuss how the parent will "manage" the subsidiaries; that is, whether each
subsidiary will be largely autonomous or whether parent company officers
personnel will be directly involved with the subsidiaries' activities.
With further reference to "risk factors". I would think you would add
a section stating that a11 of the business activities are in fields that are
highly competitive. Also. I would think you should state that, while the
founders have had considerable experience in certain of the activities, they
have not had such experience with respect to all of the other subsidiariesr
proposed businesses; further. I presume none has had experience in managing
a group of companies and business activities such as is contemplated in this
case.
,.

'?'

2'

With respect to the use of proceeds, you should consider a further


breakdovn of at least some of the components "working capital" category for
which $187,000 is allocated which is a relatively large amount. Among other

Mr. Stanley J. Caterbone


July 31. 1986
Page 3
thoughts, you might refer to the lease obligation (and any other present or
contemplated contractual-obligations), wages for secretaries and the like.
and professional expenses (e.g.. legal and accounting).
As discussed, and in relation to the use of proceeds. you will have to
with the matter of the salaries to be paid to key management personnel.
I note your disclosure that each will receive a salary not exceeding
$60,000. but that raises the possibility that virtually all of the vorking
capital could be used for that purpose. If I were a prospective investor. I
rant additional infomation, as I would be concerned about the potenof a large part of the proceeds to pay salaries. I would also ask
to what extent revenues generated by the businesses would be able to pay
part or all of the salaries. Perhaps one approach, if agreeable, would be
to disclose that not more than half (for example) of the salaries paid
during the two years would be from proceeds of the offering.
Under the "Business" discussion, you make reference to legal services
as o m k e fiel-ds of activity for the corporation. You will want to
check with legal c2mae-l wvho would be involved, but I am doubtful that under
cal standards your corporation can offer legal services.

prOfessio
As I review the "Business" section, and as a potential investor. I
would want to horj more about how solid the arrangements are with " p l a q
and affiliatesw. and also have some idea of the timetable by which the
c/
corporation believes it can begin to engage in business.

With reference to "Management", you need to identify the Board of


Directors. Also, you should indicate whether management will provide
time services, and if not, what approximate percentage of their time is
,expected to be devoted to the organization's business.

v-

'

iI
I!

The biographical summaries, in my view, should be toned down in order


to be somewhat more "matter of fact" in tone. In this section, as in the
rest of the document, you must be able to support each fact that is stated.
and some of the disclosures are a bit vague. An example is the reference to
Bob Kauffman "handling o7er $12,000,000 of investment ponies per year" and
having "an asset base of up to $60,000,000". Also, while you do indicate
the functions each of the three of you will have. I think it would be useful
to be a bit more specific.
With respect to "Certain Transactions', you must be sure to disclose
fully any arrangement or situation pnrsuant to which any director or officer will have dealings directly or indirectly with the corporation. For
example, if any
will continue to be retained by your present employer

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In Re:

O. "CMLLI

1
.
1.
1
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S

August 7. 1986

Financial Management Group. Ltd.


Our File No: 11489-001-5

Stanley J. Caterbone. Executive


Vice-President
Financial Management Group. Ltd.
1755 Oregon Pike
Lancaster. PA 17601
Dear Stan:

1
As we discussed, it will be necessary to file five copies of Form
D not later than 15 days after the first sale of securities in the
proposed limited offering. This requirement is sunnnarized in the first
paragraph of Form D, a partially completed copy which is enclosed. We
will discuss the actual mechanics of filing, as well as completion of
the form, after you have reviewed the enclosed.
Please also note from that paragraph that it is necessary to make
one or more additional filings as the offering progresses and is completed.
This will be your responsibility, as only you will know how long the
offering will continue and when it is completed. It is most important
to make these filings in a complete and timely manner, as failure to
do so will make the exemption under SEC Regulation D unavailable, and
therefore may result in a violation of the registration provisions of
the Securities Act of 1933 and, consequentially, potential liability
for the directors and officers.
You will note that in several places I did not have sufficient
information to complete the form, and I will rely on you to supply this
information. I have marked where these items appear. In particular.
you will have to complete Page 5, which requires you to itemize the
offering expenses, and then allocate the use of proceeds. You will note

Stanley J. Caterbone. Executive


Vice-President
August 7. 1986
Page 2

that it is permitted to estimate these emounts, although in the supplemental


filings the estimates should be revised to reflect actual figures.
Please review this document closely. as it is my strong suggestion
that the document should be complete and ready for filing before I leave
for vacation. You will then be in a position to file the five copies
directly with the SEC as soon as the first sale has occurred. Your signature
should go at the end of the form vhere indicated, but please do not date
the form.
Sincerely.
McNEES. WALLACE 6 NURICK

WJJ: jp

Enclosures

MCNEES. WALLACE & NURICK


ATTORNEYS AT LAW
100 PINE STREET
P. 0.BOX 1166

HARRISBURG. PA. 17108-1166


T c ~ r w o ~(717)
r 232 - ~ o O O

August 11. 1986

In Re:

Financial Uanagement Group. Ltd.


Our File No: 11489-001-5

Mr. Stanley J. Caterbone


Financial Management Group, Ltd.
1755 Oregon Pike
Lancaster. PA
17601

Dear Stan:

1
The purpose of this letter is to address generally the requirements
you must meet in connection with the actual offer and sale of securities
by the corporation pursuant to the exemption under Section 203(d) of
the Pennsylvania Securities Act of 1972 with respect to which a filing
has been, or is about to be, made with the Pennsylvania Securities
Commission.

As an initial matter, as you are aware no sales may occur until


the materials have been "cleared" by the Pennsylvania Securities
Commission. That will occur initially via a telephone call from the
Cornmission staff to our office, at which point we will advise you.
Thereafter, the staff will send a letter of confirmation. Alternatively.
as we have discussed, it may be necessary to deal with one or more staff
coments before clearance can be obtained.
At the point clearance has been obtained, you may distribute copies
of the Offering Memorandum subject to the numerical limitations of Section
203(d) and regulations thereunder. As we discussed, the Memoranda should
be numbered consecutively, and the number and name of the recipient
of each copy should be recorded in your records and written on the
upper-right hand comer of the Memorandum in the spaces provided.

Mr. Stanley J. Caterbone


August 11. 1986
Page 2

Under ~ e A n s ~ l v a n iSae c u r i t i e s Commission regulations, you a r e required


t o keep t h i s type of record; s p e c i f i c a l l y , you must maintain a l i s t
showing ( i ) t h e name and address of each o f f e r e e , ( i i ) t h e name of t h e
person making t h e o f f e r , and ( i i i ) t h e d a t e t h e o f f e r i s made. As we
previously discussed, t h e numerical r e s t r i c t i o n s a r e t h a t a maximum of
90 o f f e r s and 35 s a l e s may be made t o Pennsylvania r e s i d e n t s i n any
t v e l v e month period.
The foregoing r e l a t e s only t o o f f e r s and s a l e s made i n Pennsylvania.
and i n t h e w e n t you intend t o make any o f f e r s o r s a l e s elsewhere. it
v i l l be necessary f o r a review t o be made of t h e applicable s t a t e "blue
skyw s e c u r i t i e s law. C e r t a i n of such s t a t e s t a t u t e s permit a small
number of o f f e r s and/or s a l e s t o be made without requiring any f i l i n g s ,
while o t h e r s t a t e s r e q u i r e f i l i n g s t o be made e i t h e r before o r a f t e r
o f f e r s o r s a l e s a r e made. I n a l l events, you should be very a l e r t t o
t h i s matter, and determine s t a t e s e c u r i t i e s law requirements before
approaching prospective i n v e s t o r s i n o t h e r j u r i s d i c t i o n s .
As f a r a s f e d e r a l s e c u r i t i e s laws a r e concerned, a s ve have discussed
i t v i l l be necessary t o f i l e Form D with t h e S e c u r i t i e s and Exchange
Commission not l a t e r than 15 days a f t e r t h e i n t i t i a l s a l e is made i n
t h e offering. We must r e l y on you t o a l e r t us vhen such i n i t i a l s a l e
has occurred, a s of course we have no independent means of knowing vhen
t h a t has occurred. Accordingly, please c a l l Mike Jarman o r me a s soon
a s t h e f i r s t s a l e a c t u a l l y occurs.

Section 203(d) of t h e Pennsylvania S e c u r i t i e s Act p r o h i b i t s "public


media advertisement" and "aIass mailing" i n connection with t h e s o l i c i t a t i o n
of investors. Similarly. SEC Regulation D, vhich i n e f f e c t provides
t h e exemption from f e d e r a l r e g i s t r a t i o n upon vhich r e l i a n c e i s being
made, p r o h i b i t s "any form of general s o l i c i t a t i o n o r general advertising".
including published o r broadcast ads o r n o t i c e s and seminars whose attendees
have been i n v i t e d by any general s o l i c i t a t i o n o r advertising.

As t h e o f f e r i n g continues, t h e o f f e r i n g materials must be updated


by supplement o r amendment t o advise i n v e s t o r s of m a t e r i a l changes
a f f e c t i n g any of t h e disclosures.
I hope t h i s general o u t l i n e v i l l be of use, and of course i f you
have any questions o r need any f u r t h e r information, please l e t us know.
Sincerely,

BY

August 19, 1986

Mr. Joseph Lyden


Pennsylvania Securities and Exchange C m i s s i o n
333 Market Street
Harrisburg, PA 17101

Dear Mr. Lyden:

Enclosed is the edited offering memorandum for the Financial Management


Group, Ltd. Please note that we are in the process of assming the RIA
of Bravero Financial Services of Lewisburg.

If you have any further questions please call.

Sincerely,

SJC/mld
Enclosure

LAW OFFICES

O'DAY0

SMITH

243 NORTH DUKE SIKEET

LANCASTER, PA 17602

2QO4 NORTH BROAD STREET

MICHAEL P. O ' M Y
EDWARD H. SMlTH

PHIUDELPHLh.PA IS121
1215b763-5280

17171 393-4001

T I M O M A. IAN-

005 WEST MAIN STREET

M O W JOY, PA 17552

17V)653-8131

A u g u s t 2 2 , 1986

M r . S t a n l e y J. Caterbone
F i n a n c i a l Management G r o u p , L t d
1755 Oregon P i k e
L a n c a s t e r , PA 17601
Dear S t a n :
Enclosed herewith p l e a s e f i n d i n v o i c e p e r t a i n i n g t o t h e
f o r m a t i o n o f F i n a n c i a l Management Group a n d i t s s u b s i d i a r i e s
t o g e t h e r w i t h a n i t e m i z a t i o n o f a l l c o s t s and e x p e n d i t u r e s
made.
If you h a v e a n y q u e s t i o n s , p l e a s e f e e l f r e e t o c o n t a c t

me.
Very t r u l y y o u r s ,
h SMITH

,A+&Timothy A.
TAL:djg
Enclosure

tinza

LL--

I h W OFFICES

O'DAY0 SMITH
243 u o n T n DUKE STREET

LANCASTER, PA 17602

2004 NORTH BROAD STREET


MIlADELR(IA.PA 19121
I215b763.5280

,717) 393--1

eo5 VEST

MAIN m E E T

MOUNT JOI. PA 175%


lfVb653-0131

A u g u s t 25, 1986

Commonwealth o f PA
Department o f S t a t e
Corporation Bureau
308 N o r t h O f f i c e B u i l d i n g
H a r r i s b u r g , PA 17120
Gentlemen:
E n c l o s e d h e r e w i t h p l e a s e f i n d A r t i c l e s of I n c o r p o r a t i o n f o r
a p r o p o s e d b u s i n e s s c o r p o r a t i o n t o b e known a s FMC S e c u r i t i e s ,
lnc.,

R e g i s t r y S t a t e m e n t i n t r i p l i c a t e and check i n t h e amount o f

$75 r e p r e s e n t i n g f i l i n g f e e s f o r same.
I t r u s t you w i l l f i n d e v e r y t h i n g t o b e i n o r d e r .

V e r y t r u l y yours,,
O'DAY

.,I .\I.
,

:djg

Timothy A.
.

Er~closures
cc:

& SMITH

Mr. S t a n l e y J . C a t e r b o n e

Lanza

MICHAEL P. O'DAY
EDWARD H. SMITH
TIMOTHY A. UNU

243 NORTH DUKE STREET


LANUSTER, PA 17642
3934CQ1

805 WEST MAIN STREET

August 22, 1986

1
Mr. Stanley J . Caterbone
F i n a n c i a l Management Croup, L t d .
1755 Oregon Pike
Lancaster, PA 17601

-I

- ---

~ r o f e s s i o n a ls e r v i c e s r e : F i n a n c i a l Management Group. L t d . . and


s u b s i d i a r y c o r p o r a t i o n s , including: ~ o n s u l t a t i o n sand advice;
preparation and f i l i n g of A r t i c l e s of Incorporation f o r F i n a n c i a l
Management Group, L t d . and nine s u b s i d i a r y c o r p o r a t i o n s ; prepar a t i o n and placement of l e g a l n o t i c e s .
Costs: 1 ) F i l i n g f e e s t o Corporation Bureau
nine c o r p o r a t i o n s a t $75 each '
$675 .OQ
2) Legal Notices ( s e e a t t a c h e d i n v o i c e s )
402.05
Financial
3 ) Corporation o u t f i t
76.32
Management Group, L t d .
4 ) Additional s t o c k c e r t i f i c a t e s
Finan45.76
c i a l Management Group, L t d .
T o t a l Costs
Total f e e s and c o s t s
Less c o s t s r e t a i n e r
Balance Due.

MOUNT JOY. PA 17552


U3-9131

LAW OFFICES

O'DAY 0

SMITH

W N O R M DULL ITNEET

LANCASTER, PA 17602

NILH A E L P. O D A Y

~ w h w . rI ~i .

SMITH
1 1 # . 4 ~ 1IIY
1
A. U N L A

17171 393-4UOI

2001 NORTH BROAD STUEET


PnllADELPtllh.PA 10121
121517L1J.51BO

005 VEST MAIN STREET


Y O U M JOY. PA 17552
1717,653-9131

A u g u s t 2 5 , 1986

I n t e r n a l Revenue S e r v i c e C e n t e r
P h i l a d e l p h i a , PA 19255
Gentlemen:

E n c l o s e d h e r e w i t h p l e a s e f i n d A p p l i c a t i o n f o r Employer
I d e n t i f i c a t i o n Number f o r F i n a n c i a l Management Croup, L t d . and
F i n a n c i a l S e r v i c e Insurance Agency, I n c .
I t r u s t you w i l l f i n d
e v e r y t h i n g t o be i n o r d e r .
Very t r u l y y o u r s ,

O ' D A Y & SMITH

T i m o t h y A . Lanza

Enclosures
cc:

Mr. 2 t a n i e y J . C a t e r b o n e
..

..

FINANCIAL MANAGEMENT GROUP, LTD.


(a Pennsylvania Business Corporation)

TO:

Financial Management Croup, Ltd.


1755 Oregon Pike
Lancaster, Pennsylvania 17601

Gentlemen:
The undersigned, intending to be legally bound, hereby irrevocably
Shares of Common Stock, no par
tenders this subscription for
value, of Financial Management Group, Ltd. (the "Shares"), at a purchase
in the aggregate), including
per share ( $
price of $my check for the latter amount.

,I

This subscription may be 'rejected by the Company in its sole discretion. If this subscription is rejected, or if it is determined that this
offering will not be consunanated for any reason, the payment tendered by the
undersigned will be returned to the undersigned, without interest, as soon
thereafter as practicable.

i
-

The Company will sell the Shares to the undersigned in reliance upon
the following representations, warranties and agreements of the undersigned,
which the undersigned hereby makes in favor of the Company:
(a) The undersigned has received the Offering Memorandum dated
August-,
1986, prepared solely by the Company, and, prior to signing this
Subscription Agreement, has carefully reviewed the Offering Memorandum, and
has relied solely on the information contained therein, information
otherwise provided to him or it in writing by its officers, or information
from books and records of the Company. The undersigned understands that all
documents, records and books pertaining to this investment have been made
available for inspection by his or its attorney.and/or his or its accountant
and/or his or its purchaser representative, and himself. The undersigned
and/or purchaser representative(s) has had a reasonable opportunity to ask
questions of and receive answers from the officers, concerning the offering
of the Shares and all such questions have been answered to the full
satisfaction of the undersigned. No oral representations have been made or
oral information furnished to the undersigned or his or its purchaser
representative(s) in connection with the offering of the Shares which were
in any way inconsistent with the Offering Memorandum.

(b) The undersigned (i) has adequate means of providing for his or
its current need and possible personal contingencies, (ii) has no need for
liquidity in this investment, (iii) is able to bear the substantial economic
risks of an investment in the Shares for an indefinite period, and (iv) at
the present time, could afford a complete loss of such investment. The
undersigned together with his or its purchaser representative, if any, has

such knowledge and experience in financial, tax and business matters as to


enable him or it to utilize the information made available in connection
with the offering of the Shares to evaluate the merits and risks of the
prospective investment and to make an informed investment decision with
respect thereto. The undersigned recognizes that the Shares as an investment involve significant risks.

(c) The undersigned is acquiring the Shares for his or its own
account for investment, and not with a view to distribution or resale, and
understands that the sale of the Shares has not been registered under the
Securities Act of 1933, as amended (the "Act"), or under any state
securities laws in reliance upon exemptions therefrom for non-public offerings. The undersigned understands that the Shares must be held indefinitely
unless the sale thereof is subsequently registered under the Act and under
certain state securities laws, or an exemption or exemptions from such
registration are available, and that the Company is not required to register
the Shares under the Act, or to take any steps to perfect any exemption
therefrom for any resale of Shares pursuant to Rule 144 under the Act or
otherwise. The undersigned further understands that (i) the Company is
under no obligation to register the Shares on his behalf or to assist him or
it in complying with any exemption from registration, and (ii) the certificates representing the Shares (and representing shares of common stock upon
conversion of the Shares) will bear a legend summarizing the foregoing
restrictions and the 12 month prohibition of sale provided in the Pennsylvania Securities Act of 1972.

(d) The undersigned understands that no federal or state agency has


made any finding or determination as to the fairness of this investment.
(e) The undersigned realizes that the Shares are being purchased by
the undersigned solely for purposes of investment for the undersigned's own
account and not for the account of any other person and not for distribution, assignment or resale to others and the undersigned represents that no
other person has a direct or indirect beneficial interest in such Shares.
(f) The undersigned realizes that he or it may not be able to sell
or dispose of the Shares as there will be no public market available. The
undersigned agrees not to sell or otherwise transfer the Shares unless they
are registered under the Act, and under any applicable securities laws, or
an exemption or exemptions from such registration are available.
(g) All information which the undersigned has provided to the
Company concerning himself or itself, his or its financial position and his
or its knowledge of financial and business matters, is correct and complete
as of the date set forth on the signature page hereof.

PENNSYLVANIA PURCHASER STATEMENT

- PENNSYLVANIA INVESTORS ONLY.

The undersigned represents and agrees that he or it will not sell his
Shares for a period of twelve months from the date of purchase. The
undersigned understands that he or it has the right to cancel the purchase
of the Shares within two business days after making payment therefor.
The undersigned understands that he or it (A) has the right to withdraw his or its subscription, without incurring any liability to the
Company, and to cancel his purchase of the Shares within two (2) business
days after he or it enters into a binding contract of purchase by executing
and delivering the Subscription Agreement, or within two business days after
the exemption of this offering from registration under the Pennsylvania
Securities Act becomes effective, whichever is later, and (B) cannot sell
his or its Shares for a period of 12 months from the date of purchase if his
or its subscription is not timely withdrawn.

To accomplish this withdrawal, a purchaser need only send a letter or


telegram to the Company indicating his or its intention to withdraw. Such
letter or telegram should be sent and postmarked prior to the end of the
aforementioned second business day. It is prudent to send such letter by
certified mail, return receipt requested, to insure that it was received.
If the request is made orally, a written conformation that the request has
been received should be requested.

ACCREDITED INVESTOR STATUS:

INDIVIDUAL

If you are an individual and meet any of the following tests, please
initial in the appropriate spaces below.
I certify that I am an accredited investor because
1.
I had individual income (exclusive of any income attributable to my spouse) of more than $200,000 in 1984 and 1985 and
I reasonably expect to have an individual income in excess of
$200,000 in 1986. ("Individual income" means adjusted gross
income, as reported for federal income tax purposes, less any
income attributable to a spouse or to property owned by a
spouse, increased by the following amounts (but not including
any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any tax exempt interest income under
Section 103 of the Internal Revenue Code (the "Code") received,
(ii) the amount of losses claimed as a limited partner in a
limited partnership as reported on Schedule E of Form 1040,

(iii) any deduction claimed for depletion under Section 611 of


the Code, and (iv) amounts contributed to an IRA or Keogh
retirement plan).

I have an individual net worth, or my spouse and I have a


combined net worth, in excess of $1,000,000. ("Net worth" means
the excess of total assets at fair market value, including home,
home furnishings and automobiles, over total liabilities.)
2.

ACCREDITED INVESTOR STATUS:

ENTITY

The authorized representative of any entity executing this Subscription Agreement should initial in the appropriate spaces below if the entity
meets any of the following tests.
The undersigned entity is
1.

A bank, as defined in Section 3(a)(2) of the Securities


Act of 1933, whether acting in an individual or a fiduciary capacity.

2.

An insurance company, as defined in Section 2(13) of the


Securities Act of 1933.

3.

An investment company registered under the Investment


Company Act of 1940.

4.

A business development company, as defined in Section


2(a)(48) of the Investment Company Act of 1940.

5.

A small business investment company licensed by the U.S.


Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.

6.

An employee benefit plan within the meaning of Title I of


the Employee Retirement Income Security Act of 1974 and
the investment is made as a plan fiduciary, as defined in
Section 3(21) of such Act, and the entity is a bank,
insurance company or a registered investment adviser, or
has total assets in excess of $5 million.

7.

A private business development company as defined in


Section 202(a)(22) of the Investment Advisers Act of 1940.

8.

An organization described in Section 501(c)(3) of the


Internal Revenue Code, with total assets in excess of $5
million.

9.

An entity in which all of the equity owners and accredited


investors and meet one of the criteria for individual
accredited investors listed above.

If you checked (g), please complete the following part of


this question:

10.

(a)

List all equity owners:

(b)

What is the type of entity?

(c)

Attach a copy of your resolutions or other evidence


of the entity's authority to make this investment.

(d)

Have each equity owner respond individually to the


accredited investor criteria tests listed above.

An entity which is subscribing to purchase at least


$150,000 of securities, which amount is no more than 20%
of the net worth of the entity.

This Subscription Agreement constitutes the entire agreement between


the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties hereto.
This Subscription Agreement shall be binding upon the parties hereto
and their respective heirs, legal representatives, successors and assigns
and shall be enforced, governed and construed in all respects in accordance
with the laws of the Comonwealth of Pennsylvania.
The undersigned further represents and warrants that the residence set
forth below is his true and correct residence. The undersigned understands

and agrees t h a t t h i s subscription is made s u b j e c t t o the condition t h a t the


Company s h a l l have the r i g h t t o accept o r r e j e c t i t i n whole o r i n p a r t .

Individuals:
P r i n t o r Type Name

Signature

Date

Soc. Sec. No.

P r i n t o r Type Name

Signature

Date

Soc. Sec. No.

Residence Address
J o i n t Tenancy

Tenants

Common

Print or Type Name

Taxpayer I.D. No.

Signature

Print or Type Name and Indicate T i t l e


or Position with Entity

Date

ive. if

Purchaser ~e~resentat-ivehas read this Subscription Agreement, and to


the best of Purchaser Representative's knowledge, all of the information,
warranties and representations made by Subscriber in this Subscription
Agreement are correct.

Print or Type Name

Address

Taxpayer I..

No.

Date

Signature

Print or Type Name and Indicate Title


or Position with Entity
ACCEPTED FOR THE COMPANY BY:

Stanley J. Caterbone, Secretary and


Executive Vice President
Dated:

1986

"05L5 I " 0 S C " ~ t l C


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MCNEES.WALLACE & NURICK

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ROBLIT W. CHCRRY
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L I U I t C C A. ,"lllLl
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ATTORNEYS AT LAW
100 PINE STREET
P. 0.SOX 1 1 6 6

HARRISBURG.PA.

171oe-11e6

lrrcr*o*r (717) 232-BOO0

..

*.

Mr. Stanley J. Caterbone. Secretary


and Executive Vice President
Financial Management Group. Ltd.
1755 Oregon Pike
Lancaster, PA 17601
Dear Stan:
Enclosed is a copy of the Subscription Agreement prepared for use in
connection with the limited offering you now are conducting. I have reviewed
the document, and it appears to be in good order and does not contain reference
to warrants. Of course, you should review the document to be sure you deem
it suitable.
We sent Form D to the Securities and Exchange Commission by certified
mail. return receipt requested. on August 27, 1986. As you are aware, such
filing is a requirement of the exemption from registration under federal
securities law, and one or more additional filings will be required as well.
as we previously discussed. In general, the requirements are that another
filing must be made every six months while the offering continues, and not
later than 30 days after the last sale of stock. As you will have this
information, and we will not, it will be your responsibility to stay on top
of these future filing requirements. For your use, an extra blank copy of
Form D is enclosed, which you can photocopy in order to provide additional
copies for use.
Sincerely.
WALLACE 6 NURICK

BY
WJJ/sg
Enclosures

Jamouneau

100 south Street. post m i c e

BOX

486

Harrisburg. PA 17408

Telephone 1747) 238-6715

COMMITTEE ON LEGAL
ETHICS AND PROFESSIONAL
RESPONSIBILITY
Chairrnon
M#Ch.,F A a,:>*
Vice Choirman
.lom-~
'j "=:%*?"

PBA Liaison
,%.IC
;=: :ae,

September 19, 1986

PERSONAL AND CONFIDENTIAL


Keneim L. Shirk. Jr.. Esciuire
Shirk, Reist, wagensellei and Shirk
P.O. Box 1552
Lancaster, Pennsylvania 17603-1552
Dear Ken:

This letter is in reply to your inquiry of August 6, 1986


which inquiry enclosed a copy of the 'Charter Business Plan for
The Financial Management Group, Ltd.' dated July 1, 1986. You
have requested advice concerning the ethical implications for a
lawyer associating with The Financial Management Group, Ltd.
Briefly, in review of the materials which you provided,
seeks to position
The Financial Management Group, Ltd. ('FMG')
itself as a "major provider and servicer of financial products
and advice in the closely-related fields of investments,
financial consultation, mortgage banking, life insurance,
property and casualty insurance, taxes, law, and real estate..
It is the intention of FMG to retain in-house legal and real
estate professionals to assist financial planners in rendering
advice to clients, in the words of the Plan, .without fear of
losing the client to outside interests.'
Identified as part of
the "Support Services' which FMG intends to provide to clients,
is so-called 'professional networking' described by FMG as the
use of "in-house affiliates in law, accounting, tax", etc., to
serve clients and their related financial needs. The FMG
proposals specifically identify so-called 'affiliate firms'
which include a real estate entity and two law firms, one of
whom is identified as 'Legal Counsel for Business b Real
Estate' and the other firm is identified as .Legal Counsel for
Estate Planningg. A true and correct copy of the Charter
Business Plan of FMG is attached hereto and incorporated herein
as Exhibit "A".

Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 2

At the outset of our evaluation, certain points should be


made clear. First, a lawyer is entitled to engage in
businesses other than the practice of law provided that the
lawyer keeps such enterprises entirely separate from the
lawyer's independent practice of law. One of the problems
which an 'affiliatedg lawyer may face in associating with any
such financial services provider is the importance under the
Code of Professional Responsibility of maintaining the lawyer's
independent professional judgment on behalf of a client where,
for example, it may be argued that the lawyer can be said to
benefit because the tendering of advice may give rise to the
purchase of financial service products from FMG. Under those
circumstances, the lawyer may be subject to charges of
conflicts of interest arising under DR 5-101 which provides, in
pertinent part, that: "a lawyer shall not accept employment if
the exercise of his professional judgment on behalf of his
client will be or reasonably may be affected by his own
financial, business, property, or personal interests.'
Of equal concern is the ethical requirement prohibiting
in-person solicitation of a prospective client with whom the
attorney does not enjoy a present or former attorney-client
relationship. There appears to be a likelihood that FMG will
directly solicit, on an in-person basis, clients with whom your
law firm has no present or past attorney-client relationship
which may subject you to the charge that PMG has done for you
indirectly what you are prohibited from doing directly.
Certainly, we cannot opine that there is no risk of violation
based on the foregoing assumed facts.
Additionally, one must take care to avoid any ownership
interest in PMG mindful of the prohibition contained in DR
5-107 that a lawyer shall not engage in the practice of law for
profit if a non-lawyer owns any interest therein. Accordingly,
compensation for legal services rendered should be made on a
fee for service basis or other objective format, avoiding any
possible charge of joint ownership of the venture.

Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 3

.............................

It is also important that the confidentiality of


information developed during the course of the client
rtprssentatisn by your lax fir3 be held secret and confidentiai
in accordance with DR 4-101. Accordingly, disclosure of the
estate planning needs of clients should be done with the
express written consent of the client, particularly where a
charge may later be made by a disgruntled client that such
information was misutilized in order to induce the client to
purchase financial services products sold by FMG (on which FMG
may be entitled to commissions or fees). Moreover, to the
extent FMG earns such fees or commissions, full disclosure of
FMG's interest in the sale of such financial services products
should be made by the attorney pursuant to the attorney's
independent obligation to provide the client with competent
advice and a duty of loyal representation.
As you may sense, this brief reply to your inquiry
identifies only some of the ethical problems which may exist in
connection with the proposed structure.
It is not intended, by this letter, however, to
discourage such enterprises. To the contrary, it is believed
that, carefully structured, lawyers are free to participate in
such ventures. Should you require a more detailed opinion, we
request that you provide us with specific questions about
proposed courses of conduct so that we may be responsive to
them.
Should you have any questions concerning this preliminary
reply, please contact me. I remain
Sincerely,

pdh
Enclosure

Kenelm L. Shirk, Jr., Esquire


September 19, 1986
Page 4

.............................

Caveat: Each person requesting an opinion from this Committee


must be informed that this not an official opinion of the
Disciplinary Board of the Supreme Court of Pennsylvania and
that any opinion rendered will be afforded only as much weight
as the reviewing authority may choose to give it.

November 2 1 ,

1986

M r . Stanley J. Caterbone
Executive Vice President
F i n a n c i a l Management G r o u p , L t d .
E d e n P a r k I1
1 7 5 5 Oregon P i k e
Lancaster. Pennsylvania
17601

Dear S t a n l e y ,

I r e c e i v e d your l e t t e r d a t e d O c t o b e r 29, 1986 w h i c h accompanied


t h e Compaq c o m p u t e r w i t h a v i d e o m o n i t o r .
I also received the
S o f t b r i d g e system.
I assume you i n t e n d t o k e e p t h e :
E p s o n m o d e l FX-286
HP l a s e r j e t

dot matrix printer

printer

2 4 0 0 b a u d H a y e s modem
DOS 3 . 1

9=s'L

( S e r i e s 300H) S b /

r7Yd

and C r o s s t a l k X V I

/'$6

I f t h e e q u i p m e n t and s o f t w a r e m e n t i o n e d a b o v e was t o b e i n c l u d e d
w i t h t h e p a c k a g e s y o u s e n t me, p l e a s e l e t me know i m m e d i a t e l y .
Sincerely,

4Jig,*-

R . B r a d f o r d Thomas
Vice President1
D i r e c t o r o f MIS

cc:

R o b e r t E . Kauffman
Steve Franklin

Advisory, Inc.
m m w m w
IN',.'

*"N"Gr*E*r

OID",.

Eden Park 11. 1755 Oregon Pike

Lancarter, PA 17601

717-569-4100

LID

STANLEY J. CATERBONE
PRESIDENT

December 31, 1986

Mr. Thomas TucKer


221 Lincoln Way East
Chambersburg, PA 17201
Dear Tom:
Attached are updated R.I.A.
Kits for your use.
Please
note that we amended the ADV to include Asset Monitoring
and also changed the client agreement to include Market
Timing. Please discard your previous kits.
If you have any questions or concerns, please call
Sincerely,

Stanley J. Caterbone
President
SJC: lmk
CC

Executive Vice-President
Stanley Caterbone
Acts as Marketing Officer, Supervision of Registered Investment
Advisor, Supervision of Computers and Word Processing,
Insurance Product Selecsion
1.

Manages all Advertising - Radio and Newspaper, Seminars


and Corporation promotion

2.

Manages computer and word processing, letter and proposal


generation, Insurance proposals, Software review, IFS System,
data input, hardware and software maintenance

3.

Manages Registered Investment Advisor, Compliance with NASD


laws for R.I.A., set up and maintain files and review plans

4.

Supervision of casewriters, coordination of efforts

5.

Supervises computer technician, oversees the above functions

6.

Advise on hardware acquisitions for all reps and train all


reps in the use of all network software

7.

Acts as Corporate secretary, keeps corporate minutes and


issues stock certificates

Jerry Ehvem, President


Registered R e p r e ~ n t a t i

"tnnovarton m ~ l n o n c ~ srralegres"
al
.

Bennington Financial Group, Inc.


21 South Fourth Smec
Levusburg. PA 17837
7 17-513-3118

January 5, 1987

Pcnsionr

dn , fkt

Financial Management Group, Inc


1755 Oregon Pike
Lancaster, Pa. 17601

heft

Ikfind Contribution
P d t Sharing

ATTENTION:

Kmuglis

Dear Stan:

IRA'S

STAN CATERBONE

I have received the programs that I wrote to you


about on November Zlst, and I want to thank you very much
for the quick service. 1.expect that they will be very
helpful. !

Auet Manngrment

I was wondering if there is a manual that explains


these programs and how to best utilize them. If such a
guide exists, I would very much appreciate receiving a
copy of it.
I also need instructions for loading the
programs on my computer. I have a Leading Edge computer
with a fixed disk, which is compatible with the IBM P.C.;
therefore,
I need to know the proper method to use to
install and run the programs on this type of system.

Oil & Gas

If you have any questions regarding the above,


please don't hesitate to give me a call.

Emphyrr &n&t
Plans .

I'm looking forward to hearing from you soon.

Employee Communicption

Booklets

Thank you for your help.

L n t e Planning
College Funding m

Charitabk Giving

Foun&tlonr

Securiticr Tmnsactions through ~ S C


Sccu;irics Corporation
*.~-~L~
.,A=..

A Rrgirrcmd BrokcrlD?lcr

''

1
2 .

K. L SHIRK, SR. (1915-1956)

NELM L SHIRK, JR
3CER S REIST
DAVID WAGENSELLER. Ill
KENELM L SHIRK. 111

ATTORNEYS A T LAW

P.0

WILLIAM J PELHAN
STEPHEN R GIBBLE
DORE C VALAVANES
SAMUEL M MECUM
BARBAM RElST DILLON

LANCASTER,

BOX 1 5 5 2

PENNSYLVANIA17603-1552

January 8, 1987

PRINCIPAL OFFICE
132 E. CHESTNUT STREET
AREA CODE 717
LANCASTER-394-7247
AKRON-859-1742

I N REPLY REFER TO:

C0127 WO2DV U M I l
Stanley J. Caterbone
Executive Vice President
Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster PA 17601
Re:

Dr. and Mrs. Vlilliam Umiker

Dear Stan:
Hope you had a merry Christmas and a good start to your new
year.
Just wanted to let you know that the Umikers paid their bill
within a week,after it was sent. That made me feel better. Thanks
,
: so much for your guidance.
I had a thought before I close the file. Do the Umikers have
powers of attorney? They really should. Given that so many of their
assets are not jointly titled, the incompetency of either one of them
would create enough complications that the appointment of a guardian
would probably be necessary. On the other hand, they might rather go
to that expense at that time than have a power of attorney instrument
done at this point. They could limit the power of attorney to each
other, if that would make them feel better.
At this point in time, we are billing people an average of
about $1,000.00 for appointment of a guardian, as a hearinq is necessary. On the other hand, a power of attorney instrument costs about
$50.00 to $75.00, and so it is obvious why we advise people of its
wisdom.

I know that you are well familiar with the uses, advantages
and disadvantages of a power of attorney, so if you would like to
briefly discuss those concepts with the Umikers and get back to me,
please do so. If you do not feel it is necessary or you have discussed it previously, just let me know. If they wish to discuss it
with me, that is fine. The powers that are now available under the

OTHER OFFICES
107 WEST MAIN STREET
EPHRATA, PENNSYLVANIA 17522-2014
717-733-2588
117-626-2404

4 0 2 SOUTH BROAD STREET


LITITZ. PENNSYLVANIA
17543-2602
717-626-2775

2 5 0 MAPLE AVENUE
QUARRWILLE. PENNSYLVANIA 17566-132C
717-786-1123

S t a n l e y J. C a t e r b o n e
~ x e c u t i v eV i c e P r e s i d e n t
January 8, 1987
P a g e Two

new l a w ( a b o u t two y e a r s o l d ) a r e b r o a d e r a n d t h e y may w a n t t o know


about t h a t .
Thank y o u .
Sincerely,
SHIRK, -3EIST, WAGENSELLER AND SHIRK

COMMONWEALTH OF PENNSYLVANIA

ROBERT M. IAM
Chairmin
I

DICKTHORNBURGH
Governor

FREDERICK H. PLANK
Commi~sioner
LORI HEISER
Commissioner

--

--

Pennsylvania Securities Commission


333 Market Street
Harrisburg, PA 17101-2209
Telephone: (717) 787-8061

January 13, 1987


Stanley J. Caterbone, President
F M G Advisory, Inc.
1755 Oregon Pike
Lancaster, PA 17601
ADVISER APPLICANT:

DATE OF FILING:

F M G Advisory, Inc., (FKU)


1755 a e g o n Pike
Lancaster, PA 17601
Septenher 25, 1986

Dear M r . Caterbone:

This w i l l a c b l e d g e receipt of your'sutmission on December 18. 1986, in


response t o our letter dated October 24, 1986. In this respect, before
f u r t h e r consideration can be given, it w i l l be n e c e s s a q t o provide the
following:

1. Effective date of Applicant's r e g i s t r a t i o n with t h e U.S.


Securities and Exchange Cemnission under Section 203 of the
Investmnt Advisers A c t of 1940.

2.

Reference is made t o t h e disclosure on Schedule F f o r 'Item 8(C)'


wherein it s t a t e s "A potential c o n f l i c t of interest rnsy arise
from t h e fact the Financial Management Group, Ltd., w h i c h ow^
a l l the outstanding stock of the Applicant, a l s o has an i n t e r e s t
in a f f i l i a t e d ~ a n p a n i e swhich o f f e r products m services similar
In this respect, p r w i d e
t o those t h a t might be r e c m n d e d . '
an opinion as t o why these ' a f f i l i a t e d canpanies" have not been
i d e n t i f i e d under question 8.C., Fonn ADV-Part 11. AmMd
Form ADV if appropriate.

3.

With reference t o Financial Management Group, Ltd. (-)


p r w i d e a detailed and mnprehensive description of the nature
and scope of EMGL's plan of business and t h e relationship, if
any, between this e n t i t y and t h e Applicant.
With respect t o Robert E. Kauffman and Michael M. H a r t l e t t , who
are individuals with control and l i s t e d as Vice R e s i d e n t and
Secretary, respectively, p r w i d e an opinion as t o why their
educational and business background has not been disclosed an
Schedule F under question 6, Form ADV-Part I f . .

4.

-.---.--

-'

1109 STATE OFFICE BUILDING. PHILADELPHIA. PA 19130-4088:Tele~hone215-560-20

Stanley J. Caterbone
F M G Advisory, Inc.
3&1uuy.13, 1987
Page 2

5. With respect t o the f a c t t h a t Messrs Caterbone, Kauffman and


H a r t l e t t are registered representatives with FSC Securities
Corporation (FSC), p r w i d e an undertaking signed by an officer
of FSC, s t a t i n g that F5C has reviewed and has no objection t o
the follwing:
a.

The Applicant's plan of business, method of


operation, (including but not limited t o f e e
s t r u c t u r e ) as we11 as c o n f l i c t of interest disclosure, s e t forth i n Applicant's Form AW as
f i l e d with this agency;

b.

The tenns, conditions and disclosure s e t f o r t h i n


t h e Applicant's proposed investment advisory cont r a c t (s)/agree~r~=nt
(s); and

The inv&tment advisory a c t i v i t i e s of the above


namsd individuals, as disclosed in t h e Applicant's
Fonn AW, while registered as agents f o r FSC.
6: After review of t h e Schedule D f o r Michael Hartlett, it is noted
t h a t Mr. Hartlett is a planner f o r Financial Planning Consultants
(FFC), Lancaster, Pa. In this respect, p r w i d e a detailed
description bf FPC's plan of business to incl*
the duties and
r e s p o n s i b i l i t i e s of Michael Hartlett as a planner f o r that firm.
7. Fbrnish specimen w p i e s of a l l f o m of contracts and/or agreem t s t o be used by the Applicant f o r its investment adviser
c l i e n t s i n Pennsylvania.
8. Reference is m d e t o the disclosure cn Schedule F f o r
" I t e n 13(B)' wherein it indicates t h a t the Applicant w i l l &
cash payrents t o s o l i c i t o r s . I n this respect, amend Form ADVPart I1 in order t o p r w i d e an affirmative response t o question
13.B.

c.

..

In t h e event a canplete response t o the information requested above is not


received within t h i r t y (30) days frcxn receipt of this l e t t e r , t h e application
rnay be placed before t h e Ccmnission so that it m y consider issuing a Denial
f o r Abandonment Order pursuant t o Section 602.022 of the Pennsylvania
Securities A c t of 1972.

Paul M. Schwartz, ~ c t i n kDirector


~ i v i s i o nof Licensing

CERTIFIED W L
RETURN RECEIPT REQUESTED

Bob Kauffmn,

Mike M e t t , and

S t a n Caterbum

Frow: Qrolyn D Royer

As you Iomw, I have f u l l f i l l e d the initial step in my 1987 plan by obtahhg


my series #24 lisc. lherefore a t this time I feel I shcdd recap my g a d s as
W as the time table for the inP,lementation. I am basing much of the time
table on information that has am to liqht since I passed my test on m&y,
1/12/87, and as always Upaates and champs can be expsct&.

Pr*

Goal: lb E?e m
i
n
t
e
d President of FIG Emker/D=aler

Secondary Goal: To Continue To


SupplanerM Perscolal Earnings.

In The Year 1987.

Fursue A Firm Client Base An3 -te

I reaffirm my primary goal w i t h the


that the firns desire a t the
present time is that I work on my prsmal production and pit the B/D
Presidency cn hold until such time as I am notified by the firm that this goal
f i t s the corporation goals and objectives.

In the
I w i l l continue to familiarize myself w i t h any detail w h i c h may
aid the hplementation of the B/D while taking no direct responsibility for B/D
pmcessing or hpleinmtaticn.
I k w l d like to continue in the licensing of the Series 114, the Reg. wens
Principal and am requesting that the firm pay for the ticket sim3y mterial and
thecranlc~xlrse~.

I feel that my request for remmemtion was f a i r tut feel that an alternative
would be to eliminate the base salary and increase the over ride to a lwel of
3% for a t least the f i r s t year of operation. This is just a mggesticn and of
c u r s e muld have to be discussed in more detail.

I muld

stress my camnitment to this goal is for the betterment of the


corporation as a whole, while a t the same time, this amnnitment will give me
great perscnal satisfaction.

sincerely m t t e d ,

Carolyn D Royer

P.O. BOX 601 1

ROCKV'

MD 20850

(301) 738.6500

j/\Y 13 E ~ J

CANDIDATE QUALIFICATION EXAMINATION SCORE REPORT


CANDIDATE:

CRD #

ROYER, CAROLYN DELLER

1092979

SSN:

184-36-7730

DATE:

1/15/87
I

The above named candidate has taken an examination administered by the NASD through the facilities of
the Control Data Corporation
Plato System. The performance of the candidate is shown below:
..
. , .
"

TEST:

GENERAL
. . . SECUR

EXAM DATE:

1/12/87

IPAL EXICMINATION
.

CORE:

SERIES:

24

845

GRADE:

PASS

The following table contains an analysis of the candidate's performance in each of the major sections
of the exa
s indicated by the percentage of questions in each
j

Percent corr

failed and wishes to retake this examination should


complete page one of Form U-4 and return it to the CRD, P.O.Box 6011, Rockville, MD 20850. A $50.00
examination fe

. .

BROKER DEALER #

7461

FSC SECURITIES CORPORATION


250 PIEDMONT AVE NE STE 1900
ATLANTA, GA 30365
ATTN:

DENISE M. PROPES

Institutional Investors of America, Inc.


Financing.Investments & Advisors
iUlan D. Dannsli
Managing General Parhler

January 20, 1987


HONORARY CHAIRMAN

Gm.s. Moon

,)

CHAIRLLINoFrnEmARD
*
a d w. I-h

Mr. Stan Caterbone


Financial Management Group
1775 Oreqon Pipe

DIRECTORS

~~~~~.~
~

k.
v*. P&n(
k t x hB=+.NYC
C u U

Fo-.

ur. A

*.

oyimy.

I..

CAYIW I-. co.


F~-u.s. hrnbnvdca
40

Re:

Mortgage Loans
Commercial and Residential

Dear Stan:

&
"
.
.
"
A

Chi,"""
An- W..'"I

C*.
rO u i r m a n norpied
C-nth
d Arrri.

In reference to the above captioned subject, enclosed


please find a synopsis of our lending programs. We
are very interested in business in your part of the
Country. I will also be in a position to do some
other business with you through the bank we just
purchased in 60-90 days.
Very truly yours,

Allan D. Dannatt
President
ADD/slh
Enclosure

777 North Eldridge Parkway. Suite 730

Houston. Texas 77079

LOAN HIFTFOLJO
aJFEimRA!iE~vrms

ma
10 yrs.

Variable

5 yrs.
7 yrs.

Fixed
Fixed

&
e
225 bp wer
03F o r 300 bp
wer 1 yr T- ill

Pay R a t e

Fee

Amortization

Stating

1-2 pts.

30 Y e a r s

1-2 pts.
1 3/4 pts.

30 Y e a r s
30 Y e a r s

@ 9%

9.5%
9.65%

Fived Rates a l s o available a t 325 basis pints wer c

o T-Bill

Retail, O f f i c e , Industrial
10 yrs.

Variable

5-7 yrs.

Fixed
Fixed

1oyrs.

300-350 bp wer
1 yr. T-Bill o r
250 bp wer 03F

1-2 pts.

30 Y e a r s

8.75%
9%

Par-1 pt.
Par-1 pt.

30 Y e a r s
30 Y e a r s

Similar terns available f o r m i n i wx&mses,


homes and ACLF f a c i l i t i e s .
Forwarrl,
available.

q,
open-ended

hotels, mobile home parks, nursing

and covered construction


Maxmm loan to value of 809.

loans are also

W e are a r n m t l y seeking t o plrchase $500 million in


Sale Leasebacks
p r q e r t i e s nationwide leased to nationally listed public corporations w i t h good
credit ratings. Leases r r p ~ s tbe NNN with a minimJm of a 10 year tenn. Mininnnn

cash h
t

$5-$500111.

REMICS
Beginning in the 2nd W X t e r of 1987, I I A will be placing $100 million
a m n t h into real estate investment mortgage conduits. Innn&iate urdbg lcans
w i l l be made on all types of I n s t i t u t i o n a l quality property.

Fates quoted are test available and m y vary depending on location and quality
I

of product.

Planning Consultants
Oregon Pike Lamaster, PA 17601 717-569-1100

ROBERT E. KAUFFMAN
PRESIDENT

January 20, 1987

Hibbard Brown & Co., Inc.


7855 Walker Drive
Suite 6 2 0
Greenbelt, Maryland 20770
Dear Pete:
I have discussed our visits with the other two partners and the
initial reactions have been favorable. I am going to give you my
interpretations of our meeting along with some minor changes my
partners would like to see. Hope to hear from you soon.
A.

Payout
We would like to work with a financially sound entity and would
like to cap our payout at 90 percent on all products with a
pass-through of the ticket charge from SSC to HB Inc.
We would like it understood that no other firms be offered a
higher payout. We would further request that we receive a 2
percent overwriting on all shops we bring directly to HE Inc.
as oppossed to becoming a part of FMG. If these independent
"shops" are at less than 90 percent payout, we would like an
additional 1 percent for every 5 percent under 90 percent these
shops are being paid.

0.

Territory
It would be our understanding that we could veto any hires in
the state of PA and that we would need to approve all direct
contracts (outside FMG) in that state. It is further understood
that at any time FMG may solicit other HE Inc. shops in PA to
come under our contract/services.

Securities Transactions thmugh FSC Securities Corporati-n


A Registered BmkerIDtaler
Member NASD
Member SIPC

c.

Stock
-

i s to receive a 20 percent interest i n HB Inc. a s recognition


of its production to the bottom line equity value of HB Inc.
10 percent based upon a preThis number may be adjusted
determined production schedule over the next five years.
FMG

Prod in Mil

--t

7
-

o+

10%

6- 20

- 3 3 0

30

10%

10

20

30

Full Years
F M G i s to receive credit for direct volume a s well a s for volume
where a 2+percent overwriting i s generated for referring independent shops.
FMG

D.

i s to receive the stock at n o charge.

Divorce Planning
1.

Should F M G volume drop below two million in volume, HB Inc.


would have the right to sever relations from F M G and buy back
stock earned at book value.

2.

Should F M G leave HB Inc. any time within five years (unless


sale o f HE Inc. occurs sooner), F M G rould also leave with
HB Inc. any equity attributed to i t s o w n business. F M G
would retain both equity and overwriting on direct relationships
they referred t o HE Inc.
Example:

3.

leaves producing 4 million after 4 years


Referred shops produce 2 million

FMG

a.

FMG

retains 1/3 o f 10 percent share or 3.3 percent o f stock

b.

FMG

retains 2 percent overwriting o n 2 million or $40,000

If our relationship survives five years, we would set the


earned equity percentage attained and reconfirm other
agreements.

MINUTES OF THE 1/26/87 MEETING OF


THE BOARD OF DIRECTORS
The

Board

of

Directors

meeting

Oregon Pike, Lancaster, Pennsylvania


January, 1987.
PRESENT :
Robert E. Kauffman

on

was
the

held
26th

at
day

1755

of

Stanley J. Caterbone
Michael M. Hartlett
constituting a quorum of the Board.
The Meeting was called to session and minutes recorded
by Stanley J. Caterbone.
TOPICS DISCUSSED
Review.of the Business Plan
Weaknesses:
a. Specialists
b. RIA Fees
c. Improve client services
d. Organize marketing
e. Profitability
The Board of Directors should be expanded to five
(5) persons. This was agreed upon unanimously and the followi~g
persons were nominated:
a. P. Alan Loss
b. Robert Long Jr.
c. Peter Poneros
d. Richard Braverman
e. Carolyn Royer
f. Kenneth Ray
g. Scott Robertson
h. Harry Radcliffe

I t was agreed upon that the election of t h e additional

Board

of

Directors

at 4:00 p.m.

would

take

place

on

February

This would involve a one ( 1 ) year term.

The Meeting was adjourned.

4,

1987

Qxative Finance Campany


P.O. Box 4412
Lancaster. PA 17604

Hi* Ascciates, LTD.


Tom Kyle

1861 William Pem Way


Iaraster, PA 17601
February 3, 1987
Dear Tom:

,l

As per your recent mane conversation w i t h Bob brig, I would like to give
you scane information reganiing cur lenling ability. I have been selected to
represent a group of Institutiondl Investors that are htemsb3 in projects in
the Eastern part of the acRmtry. We are able to finance projects ranging in
s i z e of $3 t o $100 million.
hrojeds include aparbe&s,
retail, office,
hdwtrial,
health care f a c i l i t i e s , mabile hare parks, hotels and mini
warehouses.
Underwriting can be very f a s t and can often times be approved in
14
days froan time of application.
follow^ is list of underwriting
r q h x m m t s ; pro forma, rent r o l l , financial statemnts, resume of borrower,
and s c a n e under
~
certain c a d i t i o n s an MAI Wraisal. For new a m s t n ~ c t i o n
a sales agreement and cost brealcdowns are r q u i r d .
a copy of our portfolio. I hope that w e on do h i n e s s
provide
ycmr financing for your next: project, o r possibly prwide
together and
a r e f h n c i q package f o r ycur existing portfolio.
I appreciate the
opportunity to work w i t h you.
~slclosed is

W e may be reached a t the following nlrmber; (717) 569-5555

TO: BaARD OF D l X C l D E

FINANCJAL IGmGmm GEmP,

Em.

RE: WKER DEALER WWGER


A t this time I feel it is appropriate t o preserrt the Boazd of Directors w i t h an
qdate & reiteration of my godl to
the Broker DBaler Branch of F h c i a l

Management

c;ruop, m.

As i n i t i a l l y stated in my meim dated 12/30/86 & presented to the Principals a t


FMG, I would like to pusue establishing a strang, organized locdl situation to
clear our c u r r a t brokerage b u s h e s .
. I \

I u n d ~ t h a t a l e t o m a n y c h a n g e s i n t h e l a s t ~(FMG)
w mybe

cbngirq our a x r s e fran the plrsuit of an FMG broker dealer.

For that reason I would like to point ak t h a t we have invested a good deal of
mney i n the ADP system. It i s currently able t o allm u s direct order entry.
A t this time scumne needs to organize a system so that we can begin to u t i l i z e
this f e a h r e .

mst

of ycu knm that I was responsible f o r the inplementation of the BTS & DNS
us a-t
retrieval & order entry. I q l e t e d t h i s task
w i t h i n the nnnth of J m , while a t the same time obtauung my series #24
license. I would like the opportunity to amtinue in the direction of
hplemsnting the f u l l services we have a t our dispmal t h r a q h ADP.
system w h i c h all-

..

For the corporate good I feel the direction we w i l l plrsue in the area of the
Broker Dealer should be established by the E ! c a d of Directors.

If this dkection is to continue and/or to plrsue a strang aperation here a t


Financial Mmagemxtt Group I am requesting that I be considered for this
position.
'Ihank Y o u for your time and consideration.

sincerely Sukmitted,

Carolyn D Royer

MINUTES OF THE 2 / 1 0 / 8 7 MEETING OF


THE BOARD OF DIRECTORS

The Board of Directors meeting was held at 1755


Oregon Pike, Lancaster, Pennsylvania on the 10th day of
February, 1 9 8 7 , at 4:25 p.m.
PRESENT:
Robert E. Kauffman
Stanley J. Caterbone
Michael M. Hartlett
Robert Long, Jr.
P. Alan Loss
constituting a quorum of the Board.
The Meeting was called to session by Michael Hartlett
and minutes recorded by Stanley Caterbone.
TOPICS DISCUSSED
Robert Kauffman asked for input regarding his letter
to Carolyn Royer.
The Board unanimously suggested that
the said letter be rewritten with more positive style and
softer tones.
The letter to Lynn Wood regarding the securities
problems was addressed and the following issues are to be
resolved by FSC:
a. direct entries
b. wireless mutual fund transactions
c. increased payout to our group
1. 8 0 % as of 1 / 1 / 8 7
2. 9 0 % in the future
1

The topic of the purpose of the visit from Don Aultman


and Steve Franklin was discussed:
a. inform Robert Kauffman of his release from FSC
contract
b. make Robert Kauffman an offer for a position
with FSC
The financial position of company was discussed
and it was recognized that revenues are lagging by as much
as eight (8) weeks.
The company is operating at a deficit
and the following solutions were mentioned:
a. Hire additional, better qualified people
b. Negotiate better margins
c. Use new product
1. local syndication
2. insurance contracts
Broker Dealer subject was discussed
a. Hibbard Brown offer was looked at and we decided
t? persue in more detail.
b. The deal with
Integrated Recourses was not
looked upon as being a possible alternative.
Robert R. Long adjourned the meeting at 6:30 p.m.
until February 11, 1987 at 4:00 p.m. to continue to discuss
the offer by Hibbard and Brown.

COLUbBIA ASSET MANAGEMENT CORP.


IXVESTbENT BANKERS

TWINING OFFICE CENTER


715 TWINING ROAD SUITE 116
DRESHER. PA 19025

Scott Rabertson
Financial Management Group
1755 Oregon P i k e
Lancaster , P A 17601
February 1 0 1987

Dear Scott :
Enclosed i s a vrrite up o n the prcxperty w e discussed.
The owner desires to refinance for a minimum of
$2,500,000 o n a non-recourse assumable basis.
It i s
understood that the enclosure is ta b e forwarded to a
private investor in Texas and is not to b e shown to
anyone else.

I f this is handled to our satisfaction, I would b e


pleased to submit additional properties for your clients
cc-nsideratinn.

Leonard M. Shendell

MINUTES OF THE 2/11/87 MEETING OF


THE BOARD OF DIRECTORS

The Board of Directors meeting was continued at 1755


Oregon Pike, Lancaster, Pennsylvania on the 11th day of
February, 1987 from the previous Board Meeting held on
the 10th day of February, 1987. Meeting held at 3:40 p.m.
PRESENT:
Robert E. Kauffman
Stanley J. Caterbone
Michael M. Hartlett
Robert Long, Jr.
P. Alan Loss
constituting a quorum of the Board.
I

TOPICS DISCUSSED
Mr. Peter Hibbard was present regarding a merger with
Hibbard Brown.
After four (4) months of considerations,
we are interested in persuing a relationship
a. Due Delligence: Department is growing and
they
do attempt to screen and filter only sound products.
1. Syndication 46M will help us syndicate
b. Product:
All funds will wire order minimum 5,000
c. Custodian Accounts
1. State Street, Recourses Trust, Delaware
d. Variable Annuity -Most of ours
Our Want .List:
a. Wire order materials
b. Naked options, straddles, etc.
c. Revise forms
d. No forms charges
e. Ticket charges pass through

Mr. Peter Hillard gave a brief history of B/D


At present there are sixty ( 6 0 ) representatives, intentions
of adding forty (401 in the next three (3) months.
$10 million by year end
The Board approved the loan of $10,000 to Gail Turner
for the start up costs of her office.
The
5:30 p.m.

Meeting

was

adjourned

by

Robert

E.

Kauffman

at

February 1 3 , 1987

Stanley 3. Caterbone
Financial Management Group
1 7 5 5 Oregon Pike
Lancaster, PA 17601
Re:

Carter Manor Associates

Dear Stan:
Enclosed is a Loan Request for Carter Manor Associates for the
Refinancing of two particular properties that it currently owns
and we would appreciate you consideration of this matter. Please
note that the terms in the Loan Request are negotiable.
If you have any questions, please do not hesitate to contact me.
Sincerely,

Enclosure

REAL ESTATE DEVELOPMENT I BUSINESS ACOUISITIONS


)

1681 Crown Avenue 1 PO Box 8200 i Lancasler PA 17604 11717) 395-7100

,>.

'

BARRY L . SCHUTTLER and ASSOCIATES


5501 TWIN KNOLLS ROAD SUITE 101 COLUMBIA, MARYLAND 2104
BALTIMORE 995-4084
WASHINGTON 621-566
COLUMBIA 992-3446

February 13, 1987

Again my apologies!

I can place the order for you for the tabs if


you are having problems locating a reasonable
price on ther?. What you may want to do, if
you plan on ?reducing Plans immediately, i s
to take some of ours and we will replenish when
your order is completed.
Feel free to call should you have additional
questions.

SECURITIES OFFERED T H R O U G H FSC SECURITIES CORPORATION


A REGISTERED BROKER DEALER

MEMBER NASD/SIPC

Meet the Specialists


in Helping You Prepare for
Your Financial Independence.

M E R T L KAUrrYW

ICNLLWWLEll.CFV
E.MMVr.-

STANLEY J. C A m E

EnanhrnRrM

P. A U N U s

bmdFM*vl",n*

ROBERT R UYIO. JR.


Spsllll*

The Finincia1 Management Group Specialists are experienced


professionals with the knowledge and resources available in ONE

- - .Maximize your wealth


.Minimize your taxes
-Improve your investment
coordinate your personal and

business financial planning

A. Tax Planning & Prepamtion B. Financial Planning


C. Estate Planning
D. Retirement Planning

IRA'S, KEOGH'S
E. Investment Analysis. Implementation & Management
F. Insurance Analysis, Planning & Implementation
G. Legal Services
H. Real Estate Services

A B C D E F G H

A
..

-.."a.--

"I.*

Eden Park 11,1755 O w o n P l b


L d n ~ s l e rPA
, 17601

F~mncialManagement Group, L~,-J


1755 Oregon Pike

(717) 569-4100
(800) 322.1 128

S.CurIt&s ~ r i n ~ c r k mthrough
s
FSC SIKYrll~esC ~ N ~ ~ I O ~
A Rsgbtemd Bmkbr/Cmaler
Mmnbar NASD
Member SIPC

COMMONWEALTH OF PENNSYWANIA
ROBERT P. CASEY

ROBERT M. LAM
ch.innan

Governor

FREDERICK H. PUNK
Commissioner

NANCY L. DIANA

secrasry
EUOTT KLElN
Chid Car-

Pennsylvania Securltler Commluion


333 Market Street
Harrlrburg, PA 17101-2209
Telephone: (717) 7876061

S t a d e y J. Giterhme, President
F M G Advisory, Inc.
1755 OrPike
Lancaster, PA 17601
IWESBENT AWISER APPLICANT:

P M G Advisory, Inc. (=)


1755 OrPike

Lancaster, PA 17601

Dear M r . Caterme:
This w i l l ackno#ledge receipt of yam subnission on February 20, 1987. In this
respect, before further consideration can be givm, it w i l l be necessary to provide
the follauiq:

)
h

1. Attached is a ccpy of a letter dated October 24, 1986 wherein w e requested


rtain infornation w i t h r e s p e d to Fm;'s application. To date, question 18 of
our October 24, 1986 l e t t e r has not been answered. I n this respct, furnish a
of those permns who will provide investmnt advice in FWuqlvania to
nclude, i f not previously filed, a ccropletd Schedule D of Fonn AW for each
such individual. This infornation is requested with reference to yan
affimmtive r e s p m e to question 17.A.(4), Form AW-Part I wherein you indicate
Em; enploys "10 or m x e persons" w l n p e r m i n w s t m n t &vimry fmctions.

&

2.

Reference i s nade to y a ~ rrespnse to qmstion 1.A.. Form ALYV-Part 11. The


responses, as presented, accamt for only 80%of m's Mal advisory billings.
W r d Form AW to -de
d i s c l e u r e as to &at -titutes
the r-iniq
20%.

3.

W i t h reference

4.

An affirmative respome to question 2.G.. Porn AW-Part 11 requires disclosure


on s&edule F. A m r d Schedule F accordimly.

to your affirnative response to q u e s t b 1.A. (8). Form AW-Part


I1 an3 the required disclosure on Shedule F, it appears that the information,
as presented, dces not povide a descripticn of the timing services of FMG. . .
W d Schedule F to include a description as required. The description s b l d
include, a t a mininum, any fees M d . 1 are d-arged to the c l i e n t w i t h respect to
timing, i.e., a witchiq fee.

"\

OFFICES

1109 STATE OFFICE BUILDING, PHILADELPHIA. PA 191304088; Telephone 215-56C-205


806 STATE OFFICE BUILDING. PITTSBURGH. PA 15222-1210; Telephone 412-565-5003

F M G Pdvisory, Inc.
February 24, 1987
pase 2
5.

%ference i s made to question 12, Pbrm AW-Rut 11. In this respect, the
follcuirq i s requested:
a.

With reference to Section I1 of FM;'s "CLPXT AGREFMWT" wherein it states,


"'Ihe client m y authorize FM; Pdvisary, Inc. to i n i t i a t e wit*
of
imrestmnts between W s .
as to why this
to question 12.A.,
information build not require an
R., C., o r D, Porm AIN-Part 11.

. .-,

b.

With reference to yw affirmative r e s p n s b ~ & e s t i m12.B.. Fonn AWPart 11, it is noted that Medule F states, "Clients are under m
obligation to plrchase or s e l l seclurities thrmgh FSC Securities mrp.,
Mw,
i f FSC Securities Corporation executes any transactions, fees
already paid to the applicant." Inasnu& as t h i s statement does not appear
to be q l e t e , amnd Schedule F in order to provide ccrrplete disclosure as
to what m y happen to "fees already paid to the applicant".
C

An affirmative response to question 13.A.. mrm AW-Part I1 requires disclosure


Amenil Schedule F accordingly.
-

on Schedule F.

After review of the Shedule D for Mid-ael M. Flartlett, the follcwhq


discrepancies are noted:

a.

Schedule D reflects M r . H a r t l e t t w i l l becane a CFP in 3/87.

b.

Item 6 on Schedule F reflects Mr. Hartlett received his Certified Financial


Planner designation in the eprirg of 1985.

c.

Schedule D reflects Mr. Hartlett is a vice president of PMG Advisory, Inc.

d.

I t e m 6 on Schedule F reflects "Mr. H a r t l e t t w i l l serve as secretary of FMG


Pdvisory, Inc.

In view of the abwe, it w i l l be necessary to amend the appropriate docments in


order to reflect accurate and consistent inform?itim.
8.

Attached i s a aipy of our l e t t e r dated January 13, 1987 wherein we reqwsted


additional information with respect to m's ~ p l i c a t i m . As of this date, a
response to the follaving questions hks not keen received:
a.

vherein we requested an a p M m as to why certain "affiliated


mnpanies" had not been identified under question R.C., Form AW-Part 11.
(X1estirn 2

W i t h respect to PMG's "CLIISNT -",

it is noted that page 2 states, " I t is


undentccd that representatives of
M s o r y , Inc., mC Securities mrporation or other affiliated c a p n i e s , including the abwe-Mmed representative,
w i l l receive a share of that anmission, in addition to the abwe intrduction
fee." In this respect, it i s the opinion of staff that these affiliated
ccrrpanies should be nisclosed under R.C., Form AW-Part 11.

F M G Advisory, Inc.
February 24, 1987
page 3
b.

m e s t i o n 3, wherein we requested informtion on Financial MaMgement Grmp,


Ltd. (m).In this respect, it is noted that ymr response on February
20, 1987 states,
Financial MaMgem?nt Graap, Ltd. i s a canpany prwidiw
financial services to individuals and small business. Financial
M n a g a e n t Group, Ltd. ams a l l of the cutstam%ng stock of Fm;
Advisory, Inc. Financial M a n a g m t Grmp, Ltd. pmvides
insurance an3 securities products to its clients a d is a x r e n t l y
using I332 Securities as its registered broker-dealer.
I n addition to prwidiq securities products t o its clients, it is noted
that the Shedule Ds f o r Messrs. C a t e r h e , K a u f m , and Hartlett r e f l e c t
under question #6, BUSINESS BAQ(-,
that FM;L i s a "financial plannirq"
firm. I n vied o the above information, provide an ophim as t o v h y F?GL
i s not registered under the Pennsylvania S e a x i t i e s A c t of 1972.

c.

Question 6, requested information w i t h respect to Financial Planning


Consultants (FPC), Lancaster, PA. Inasrmch as PPC i s referenced on M r .
FhrUett's Schedule D, as subnitted on Deenker 18, 1986, ard on Schedule
F, a s sulmitted on Febmiry 20, 1987, urder i t e m 6 (Michael Miles
H a r t l e t t ) , BIlSINESS BA(XGJDU?lD, it i s requested that Mr. Hartlett provide,
v i a *m;, a detailed description of F'FC's plan of tusiness to include the
duties ard responsibilities of Michael Hartlett as a p l m r for t h a t firm.

NOE: Men a m d i n g Form A W , cmplete all mded pages i n full ard circle the
mnker of t h e i t e m being amended. Each amedmentmst include an emcution
page w i t h an original m a l s i g n a h r e and Mtarization.
f l w l d ycu need any additional infornation and/or c l a r i f i c a t i o n , please feel free t c
call m direct a t (717) 787-5675.
I n the event a mnplete response to the infoma*
requested abcnre i s not received
w i t h i n s i x t y days fran receipt of this letter, the application m y be placed before
the C a n & & . oso
n t h a t it nay consider issuing a Denial f o r M o r m n t O r d e r
pursuant to Section 602.022 of the Pennsylvania Securities A c t of 1972.
Very t r u l y yaas,

Paul M. S d u a r t ~ ,A
Division of Licensing

(3ERTIFIED MAIL
m
r
w RECEIPT R m I E S l m

Director

FBI Pro.bes Kugel


Contracts with
N.Carolina Cities
Several Towns Unhappy with Delays;
Kugel Says He'll Fulfill Pacts
Lancasler developer

Owen Kugel, whose rev~taliration succea in domtom

lancaster helpcd him land


%imilsr confram in at least
seven states, is bein inverti.
Bald by, t k , ~ e d e r a fBureau
Of Investlgatron for downtown
revitalization pro'eets in
North Carolina. FBf omcia;
sav.
Robert Pence, in charge
OrNorth Carolina FBI opera.
tiotb. said (he investiflahen
centers on whether Kugel's
OK Assmiales firm based
here is involved in -mail
fraud, wire fraud or any other
typeofrraud.,,
lle added thal Ule use of
interstate racilities, as well as
the use of funds in interstate
eom,yeree,wouldbr studied.
I can confirm that we

are looking into the matter to


determine if an federal laws
have been vioited:. added.

Daniel Womiak, a senior FRI


agent a t Ute bureau's GWM.
boro. N.C.. omce today.
omcials in a t least flve
North Camlina cities sa
they.re dissatisilied w i d
Kugel's prfarmanee on the
contracis and each has asked
him to returnhis w,mfee.
Kugel this mornin& tm
the New Era that he has been
aware of the investigation for
several w e d s and that he is
y p e r a t i n g with authorities
100 percent, in the interest
of &etttg It wrapped up
quie ly
"We know" the outcome
"can on1 be successful from
our standipo' ~nt."he said.
Kuge s a d he did not

know how the FBI got in.


volved in the situation. EX.
Plainin the contracts, he
said i f
d w t ( foum
thmugh on contract pmmis.
es. '.we give the money
back."
On the advice of dis attnr.
W .Alvin B. Lewis Jr.
Kugel wwld not discuss thd
status of the develo
Pro*
underway in

Carolina.

?%h'

Pence said the investiga.


t i ~ began
l
about M days ago.
But Kugel's former vice pres]dent. who arranged the
North Carolina contracts and

OWEN KUGEL
39 NORTH MARKET STREET
LANCASTER PA 17603
717-299-4371

2 M a r c h 1987

To:

S t a n l e y J. Caterbone
President
FMG A d v i s o r y , I n c .
E d e n P a r k II
1755 O r e g o n P i k e
Lancaster, - PA 17601
717-569-41 00

From :

Owen K u g e l

Subject:

M o r t g a g e Financing.

T h i s follows up o n o u r 17 F e b r u a r y meeting a b o u t 112ortgage


Financing f o r o u r upcoming development projects.

I h a v e selected a g r o u p o f 11 p r o j e c t s f o r w h i c h we h a v e completed
pre-development w o r k a n d w h i c h a r e r e a d y f o r d e b t placement;
a n d a t t a c h e d t h e c u r r e n t financial p r o j e c t i o n s o n each.
1 h a v e assumed a 65/35 D e b t l E q u i t y s p l i t , a 9.00% r a t e o f
interest, a 30 y e a r term, a n d a o n e p o i n t o r i g i n a t i o n fee. Note
t h a t t h e L o a n t v a l u e u s i n g a 9 " s a p R a t e averages 56.54%.
Note also t h a t 1 h a v e i n c l u d e d a 2.50% D e b t Placement Fee f o r
y o u r e f f o r t s in p l a c i n g t h i s debt; w h i c h w o u l d t o t a l $433,592
f o r t h e package.
L e t me k n o w if t h e r e i s i n t e r e s t and, if so, what a d d i t i o n a l
information y o u w i l l need.
Regards,

msrlattachments

'

'
.
.

I--

In
u-

n DrDw

newsletter
MARCH 24,1987

6 Month
1 Year
2 Year
3 Year
4 Year
5 Year
7 Year
10 Year

Other 0 ' s Available


10 Year Zero Csupon $500
olll Mark if interested.

4/l/97

Yeild 7.90%

l&u~C. T. -,
ex-divisional m g e r of ID6/AM E 'lamjest office,
has joined F K . Tan w i l l be developing an office in MN/St. Paul as
well as d t i n g nationdlly for m.
Barry Schuttler and Bob Kauffman are intexviewhg and p r e p r j n g to
bagin an -type
office in l?X@s% area. W e plan to raise mney
in the same manner as in PA and use the same basi~marketing~lan.

Thmas Asselin of Cleanvataer, Florida has joined FIG.


with me in Florida and was a tap p
w a t ICE, and FSC.

Tcan mrked

As of early today, he reahed a negvtiated accord with n i k k m d - a


of Wash. D.C. to be an: new b-er.
We w i l l finalize our
agreement x + b a we have final contracts and have ampleted our due
diligence on their amp2ury.
Please keep an: offices as dean and neat as pcesible, it says the
right things to cur clients.
m

Qooked Oak Rmmacy, Inc.


is a soall d
t
y dnag store with
prsonal service.
Prescription piclaq .and delivery service to our
office is available for ycur wnvience. Also those who are in a
hurry and tiant wmethirg different they have delicia sandwiches by
Kelly's Deli.
They are lccated just a short distance f m our
office in Qwlced OakVillage. Store h m are 9 to 6 weekdays and
9 to 1 on Saturday. mir @one mm$er is 560-1710.

MINUTES O F THE 3 / 2 6 / 8 7 MEETING OF


THE BOARD OF DIRECTORS

The Board

of

Directors

m e e t i n g was

Pike,

Lancaster,

Pennsylvania

on

the

1987.

The M e e t i n g was h e l d a t 1 1 : 2 5 a . m .

held a t
26th

day

1755 Oregon
of

March,

PRESENT :
R o b e r t Kauffman
R o b e r t Long
P.

A l a n Loss

Michael H a r t l e t t
Stanley Caterbone
c o n s t i t u t i n g a quorum o f t h e B o a r d .
TOPICS DISCUSSED
H i b b a r d Brown P r o p o s a l
A.

Agreement now s a t i s f a c t o r y

1.

20% o f H i b b a r d Brown

2.

Loan:

3.

E x c l u s i v e t o s t a t e o f PA

4.

A l l o v e r r i d e s a r e u n d e r FMG

5.

Perpetual override f o r r e p s introduced outside

Stock

1 8 Months f o r $ 2 5 , 0 0 0

o f FMG t h a t g o d i r e c t .
Board o f D i r e c t o r s M e e t i n g s
A.

Have a m e e t i n g e v e r y f o u r t h week

B.

F o l l o w i n g Dates:
April

16,

1987

8:00

a.m.

at

the

office

of

Jeff

Jamouneau, o u r C o r p o r a t e A t t o r n e y .
1.

Purpose

May 5 , 1987

to

d i s c u s s r e s t r u c t u r e of

8:00 a . m .

J u n e 2 , 1 9 8 7 8 : 0 0 a.m.

orgar~izatiorl

a.m.

a t Dempsey's

t o 10:OO a.m.

a t Dempsey's

t o 1O:OO

C.

Agree t o b r i n g
J e r r y Bavero
Tom T u c k e r

Satellites

to

Board

Keetings:

Richard Podlasek
R i c h a r d Volpe

The M e e t i n g was a d j o u r n e d by R o b e r t Long a t 12:45 p.m.

FlNANClAL SERVICE
CORPORATION
ATLANTA CENTER
250 PIEDMONT AVENUE N.E.. SUITE 2100
ATLANTA. GEORGIA 30365
I100 521-6500

K 3 i N 8. KEEBLE
PREYCXNT

March 26. 1987

Mr. Robert E. Kauffman


Financial Management Group, Ltd.
1755 Oregon Pike
Lancaster. PA 17601
Dear Bob :
Steve Franklin, Don Aultman, and others have brought to my attention their
recent correspondence and conversations with you concerning your present
status, and that of others. vith our Company.
I

Your recent letter stating that you propose to attempt to transfer the
licenses of some of our representatives to Bibbard Brown, Inc.. possibly as
soon as April 1, 1987. prompts me to vrite this letter to you. on a very
urgent basis.
During the period from early 1985 until January 31. 1987. you vere an officer
of FSC Securities. Up until October 1986 you vere Senior Vice President of
Financial Service Corporation. For this entire period you vere paid a
substantial salary and expenses. Also during this period you vere a
registered representative, the last four months serving as an MFA in Lancaster
(vhile being paid as an officer of FSC Securities Corporation). This dual
relationship called for an unusual amount of trust in you on the part of FSC,
as our letter agreement of October 7. 1986, stated.
Your contractual and fiduciary obligations to us in these capacities include
the following:
1.

You oved and owe FSC and FSC Securities Corporation a strong duty of
fidelity vhich vould prohibit your solicitation or enticement of
their employees and representatives to become employees or
representatives of some other brokerldealer or employer in
competition with FSC.

2.

Your Employment Agreement vith the Company specifically provides


that you would not engage the services of any of our representatives
into any other brokerldealer without giving us 90 days notice (the
purpose of which obviously vould be to allow us to talk with these
representatives).

I I;iI
I

Mr. Robert E. Kauffman


March 26, 1987
Page 2

3.

Said employment also specifically provides that no such change


should be made with respect to representatives outside the Lancaster
MFA, for a period lasting through September 30, 1989, or two years
following termination of your employment.

4. During this time, as an employee of the company, you owed FSC a


strong duty not to solicit other FSC HFAs into your Lancaster MFA in
order to join your program with a competitive brokerldealer.
5.

Your duties to FSC included an obligation not to accept an extension


of your salary while in Lancaster after you had begun to solicit our
representatives to leave FSC.

We expect to hold you strictly accountable for these obligations, through


legal action if necessary.
Meanwhile, we plan to continue talking to our representatives currently under
contract, whose relationships with us we value highly. Whatever decisions
they may be in the process of making, should be made on the basis of all the
facts so that careers are not unfairly prejudiced. At the same time, we would
welcome an orderly and businesslike termination process in your case, and
others who may choose to join you, leaving all to engage in competition,
fairly and in good faith.
We hope that, after studying this letter carefully, you vill not proceed
rashly.
We need to know from you before April 1st whether we can disengage without
further hostility on your part, or whether we will be compelled to take legal
I
act ion.
-

Yours sincerely,

/ ~ o h n B. Keeble

FINANCIAL SERVICE
CORPORATION
ATLANTA CENTER
2 5 0 P I E D M O N T A V E N U E N . E . SUITE 2 1 0 0
ATLANTA. GEORGIA 3 0 3 6 5
I4Wl 5 2 1 - 6 5 0 0

March 26, 1987

To Associates of t h e L a n c a s t e r MFA
We have become aware d u r i n g t h e p a s t s e v e r a l weeks t h a t Bob Kauffman has
determined t o s e v e r h i s r e l a t i o n s h i p w i t h PSC, and t h a t he has been t a l k i n g
w i t h a number of our r e p r e s e n t a t i v e s about j o i n i n g him w i t h a n o t h e r
b r o k e r l d e a l e r . We a r e w r i t i n g you i n t h e hope of avoiding any
misunderstanding between you and t h e Company, which may work t o t h e
disadvantage of both of u s .
I

F i r s t , we want you t o know t h a t you a r e a valued r e p r e s e n t a t i v e of t h i s


Second, we want a f u l l
Company, and want v e r y much f o r you t o s t a y w i t h us.
o p p o r t u n i t y t o d i s c u s s t h e s i t u a t i o n w i t h you t o avoid any p o s s i b l e
misunderstanding. And p a r t i c u l a r l y we want you t o h e a r our s i d e of t h e
s i t u a t i o n w i t h r e s p e c t t o Bob Kauffman.
We have w r i t t e n Bob today s t a t i n g our p o s i t i o n w i t h regard t o him, and e n c l o s e
a copy of our l e t t e r , s o t h a t you may be advised of t h a t p o s i t i o n . We would
welcome a c a l l from you confirming your d e c i s i o n t o remain w i t h u s o r
e x p r e s s i n g any concerns t h a t you may have w i t h r e g a r d t o Bob Kauffman's p l a n s .
We w i l l continue our e f f o r t s d u r i n g t h e next few d a y s t o c o n t a c t you.
W
e would l i k e v e r y much a c o n t i n u i n g , p r o d u c t i v e and c o r d i a l r e l a t i o n s h i p w i t h
you f o r many y e a r s t o come.
We apologize f o r t h e form of t h i s l e t t e r , but w e r a n o u t of time.
Yours s i n c e r e l y ,

John B. Keeble

Stephen G. F r a n k l i n

Donald S. Aultman

JOHN M. C I C A L A SR.
DEVELOPER

22nd & Boardwalk


North Wildwood N . J. 0 8 2 6 0
December 1 2 , 1 9 8 6
Dear P r o p r i e t o r :
Due t o y o u r e x c e l l e n t r e p u t a t i o n a s a s u c c e s s f u l member o f New
J e r s e y ' s S o u t h S h o r e b u s i n e s s c o m m u n i t y , we a r e d e l i g h t e d t o
i n v i t e you t o p a r t i c i p a t e i n a n e x c i t i n g new v e n t u r e : SEAPORT
VILLAGE.

SEAPORT V I L L A G E h a s b e e n d e s i g n e d a s a u n i q u e a n d p i c t u r e s q u e
shopping complex s i t u a t e d a t 22nd S t r e e t i n North Wildwood.
The
complex i s now under c o n s t r u c t i o n on a r e b u i l t , widened p i e r
t h a t w i l l e x t e n d 500 f e e t o u t from t h e boardwalk t o w a d s t h e
ocean. The development, s c h e d u l e d f o r c o m p l e t i o n i n t i m e f o r t h e
s t a r t o f t h e S p r i n g , 1987 season, w i l l f e a t u r e a t o t a l of f o r t y
s p e c i a l t y and f o o d s h o p s . T h e s e s p a c e s a r e now a v a i l a b l e f o r
a n n u a l r e n t a l , a t p r e - c o n s t r u c t i o n p r i c e s r a n g i n g f r o m $30 t o $ 3 6
p e r s q u a r e f o o t . Types of b u s i n e s s e s i n c l u d e d w i l l b e c a r e f u l l y
chosen t o i n s u r e s u c c e s s f o r a l l .

A p e r f o r m a n c e a r e a w i l l be b u i l t a t t h e end o f t h e p i e r . T h i s
a r e a , t o i n c l u d e l i v e t e l e v i s i o n and r a d i o f a c i l i t i e s , w i l l s e r v e
a s t h e s i t e f o r ' p o p u l a r e n t e r t a i n m e n t and o t h e r e v e n t s d e s i g n e d
t o a t t r a c t l a r g e numbers of p e o p l e t h r o u g h o u t t h e s e a s o n as well
a s continued media coverage. Restrooms and o t h e r p u b l i c
a m e n i t i e s w i l l a l s o be included t o help i n c r e a s e f o o t t r a f f i c . A
large
s t a i r w a y w i l l permit beach access.
An e x c i t i n g
a d v e r t i s i n g and p r o m o t i o n campaign i s p l a n n e d t o c a l l a t t e n t i o n
t o SEAPORT VILLAGE.

According t o r e c e n t demographic s t u d i e s , t h e number o f a f f l u e n t


s i n g l e s , c o u p l e s and f a m i l i e s v i s i t i n g North Wildwood e a c h summer
i s r a p i d l y i n c r e a s i n g - along w i t h t h e i r p e r c a p i t a spending.
The o t h e r p i e r s i n t h e a r e a a r e a l l Amusement P i e r s . T h u s ,
S e a p o r t V i l l a g e i s a f i r s t of i t s k i n d - and a n a t u r a l s i t e f o r
t h e r e l o c a t i o n o r e x p a n s i o n of y o u r b u s i n e s s .
T h u s f a r we h a v e a p p r o a c h e d B e n e t t o n , S w a t c h , A t h l e t e ' s F o o t ,
Gimmee J i m m i e s Cookies and Banana R e p u b l i c , a s w e l l a s a s e l e c t
g r o u p of l o c a l b u s i n e s s e s s u c h a s y o u r s t h a t would b e b e s t s u i t e d
t o o u r c o n c e p t and would have t h e g r e a t e s t c h a n c e o f s u c c e s s .
S i n c e r e n t a l s p a c e i s l i m i t e d , we w i l l a c c e p t r e s e r v a t i o n s on a
f i r s t - c o m e , f i r s t - s e r v e d b a s i s . An a r c h i t e c t u r a l r e n d e r i n g of
S e a p o r t V i l l a g e i s e n c l o s e d f o r your f u r t h e r i n f o r m a t i o n .

Our r e p r e s e n t a t i v e , E l l e n Libman, w i l l b e i n y o u r a r e a i n t h e
n e x t two weeks.
S h e w i l l c a l l on y o u t o p r o v i d e you w i t h
a d d i t i o n a l i n f o r m a t i o n . Of c o u r s e p l e a s e f e e l f r e e t o c o n t a c t me
a t anytime.
Sincerely,

li

Planning Consultants
Omgon Pike &nuster, M 17601 717-569-4100

ROBERT E. KAUFFMAN
PRESIDENT

Mr. Jahn B. Keeble

FSC Seaxities
250 Piedim& A v e . , N.E.
A t l a n t a , Georgia 30365
Dear John:

for your letter of March 26, 1987.


It was very
enlighening.
I, of canse, have n, interest in getting into any
legal acticm w i t h anyone, partiaIlarly hhere both parties would be
hurt and only the legal repxesentatives wculd make m y . I knaw
that yau are not easily drawn into litigation and see no need for it.

Thank

ycxl

Bncezning your points, allm me t o respand.


1.

I am not irRerested in d t j n g o r p r r s u i n g o t h e r ~ ~ c ~ ~ ~
when I a f f i l i a t s w i t h another b-er.

2.

I am open to a period of time


yau could solicit whawer you
want to stay withFSC. I cannot coerce representatives to join
with me anyway.

3.

I did not s o l i c i t -tatives

t o leave FSC while under salary

a t FSC.
While ycu need same relief fnm the possibilities of solicitation by
me
your ather MFA1s, I need to be treated as others wfio have left
I app-te
your willingness to have Don Aultmn
upon my

-.

and myself work that out.


I also appreciate your interest i n a
peaceful tzansition as per our phme conversation.

R.E. Kauffman

Sccvrfties r r a n n n i o n r t h m q h FSC Securities C-ration


A RnJstcmd B r o k ~ r l ~ l e r
Member NASD
Member SlPC

Planning Consultants
Omgon Pike &nuster, M 17601 717-569-4100

ROBERT E. KAUFFMAN
PRESIDENT

Mr. Jahn B. Keeble

FSC Seaxities
250 Piedim& A v e . , N.E.
A t l a n t a , Georgia 30365
Dear John:

for your letter of March 26, 1987.


It was very
enlighening.
I, of canse, have n, interest in getting into any
legal acticm w i t h anyone, partiaIlarly hhere both parties would be
hurt and only the legal repxesentatives wculd make m y . I knaw
that yau are not easily drawn into litigation and see no need for it.

Thank

ycxl

Bncezning your points, allm me t o respand.


1.

I am not irRerested in d t j n g o r p r r s u i n g o t h e r ~ ~ c ~ ~ ~
when I a f f i l i a t s w i t h another b-er.

2.

I am open to a period of time


yau could solicit whawer you
want to stay withFSC. I cannot coerce representatives to join
with me anyway.

3.

I did not s o l i c i t -tatives

t o leave FSC while under salary

a t FSC.
While ycu need same relief fnm the possibilities of solicitation by
me
your ather MFA1s, I need to be treated as others wfio have left
I app-te
your willingness to have Don Aultmn
upon my

-.

and myself work that out.


I also appreciate your interest i n a
peaceful tzansition as per our phme conversation.

R.E. Kauffman

Sccvrfties r r a n n n i o n r t h m q h FSC Securities C-ration


A RnJstcmd B r o k ~ r l ~ l e r
Member NASD
Member SlPC

For

,nfL

1142 ELIZABETH AVENUE

BOX 4665

LANCASTER. PENNSYLVANIA

17604

17171 397-6174

April 9, 1987

Mr. Robert Kauffman, President


FINANCIAL PLANNING CONSULTANTS
1755 Oregon Pike
Lancaster, PA 17601
Dear Mr. Kauffman:
First, I would like to express my thanks for the co-operation and excellent
service rendered by Harry E . Radcliffe, a member of your orgainzation. The
response Harry has given to my specific goals has been extremely satisfying.
Due to Harry's display of concern and manner of handling my personal investments, I made the introduction to Mrs. Patti M. Rottmund.
Mrs. Rottmund is the owner of Conestoga Fuels, Inc.. Currently the company
and Mrs. Rottmund are searching for an accounting f i n to assist in the
management of the corporate money. Due to Mr. Radcliffe's patience and
ability to explain financial matters to Patti Rottmund, we had been considering utilization of Financial Planning Consultants to aid in Conestoga
Fuels, Incorporated's financial planning.
-

Harry arranged a meeting with Mr. Robert Long, another member of your firm.
After discussing the proposed plan for growth of the corporation and utilization of various assets with Mr. Long and Mr. Radcliffe, we were pleased with
the "team' concept.
This finally has lead to the matter at hand. I wanted Bob Long to prepare my
personal income tax returns for the year 1986. All the information was
compiled and in his hands in February 1987. To date, the work is not completed.
Harry has, on several occasions, asked the status of my returns, and I have
called to be told "it is on the list to be completed."
If
my
is
on

this is the type service the corporation would receive, I am not bettering
position. Therefore, I am of the opinion Financial Planning Consultants
not the proper group to retain for either a personal of corporate adviser
financial matters.

I regret this decision due to the find working relationship with Mr. Harry
Radcliffe. However, your financial group is not delivering your entire product,
service. Should you wish to discuss the situation, please feel free to call.

For

,nfL

1142 ELIZABETH AVENUE

BOX 4665

LANCASTER. PENNSYLVANIA

17604

17171 397-6174

April 9, 1987

Mr. Robert Kauffman, President


FINANCIAL PLANNING CONSULTANTS
1755 Oregon Pike
Lancaster, PA 17601
Dear Mr. Kauffman:
First, I would like to express my thanks for the co-operation and excellent
service rendered by Harry E . Radcliffe, a member of your orgainzation. The
response Harry has given to my specific goals has been extremely satisfying.
Due to Harry's display of concern and manner of handling my personal investments, I made the introduction to Mrs. Patti M. Rottmund.
Mrs. Rottmund is the owner of Conestoga Fuels, Inc.. Currently the company
and Mrs. Rottmund are searching for an accounting f i n to assist in the
management of the corporate money. Due to Mr. Radcliffe's patience and
ability to explain financial matters to Patti Rottmund, we had been considering utilization of Financial Planning Consultants to aid in Conestoga
Fuels, Incorporated's financial planning.
-

Harry arranged a meeting with Mr. Robert Long, another member of your firm.
After discussing the proposed plan for growth of the corporation and utilization of various assets with Mr. Long and Mr. Radcliffe, we were pleased with
the "team' concept.
This finally has lead to the matter at hand. I wanted Bob Long to prepare my
personal income tax returns for the year 1986. All the information was
compiled and in his hands in February 1987. To date, the work is not completed.
Harry has, on several occasions, asked the status of my returns, and I have
called to be told "it is on the list to be completed."
If
my
is
on

this is the type service the corporation would receive, I am not bettering
position. Therefore, I am of the opinion Financial Planning Consultants
not the proper group to retain for either a personal of corporate adviser
financial matters.

I regret this decision due to the find working relationship with Mr. Harry
Radcliffe. However, your financial group is not delivering your entire product,
service. Should you wish to discuss the situation, please feel free to call.

Management Group, LTD

TO:

Bavero
Schuttler
Volpe

April 14, 1987

Cur next board of di.re3mr-s meeting will be held on Tuesday,


May 5, 1987, at m y ' s Restaurant. We would like you to attend if
at all pssible.
If rut, please discuss the topics at hand with
Mike, Stan or me prior to the meeting.
At that meeting we plan:
1. An uplate of Fm; f m inception

a. budget review
b. goal achievmt analysis
2. A discussion of Profit Participation Plan in the form of

stock bonuses for prcducers


3. A

discussion of corporate legdl advice concerning the


formation of a separate ccwparnl to function nationally

4.

A discussicm of any newsworthy plans naw in developent such


as
private
take-down
-ps
and
illmmme
relationships

R.E. Xauf?imn

a: s. Qterbone

M. Hartlett
R. Long
A. Loss

Advisory
11, 1755 Oregon Pr*e

TO:
FROM :
DATE:

Lancaster, PA 17601

717-569-4100

Representatives
Stanley Caterbone
April 21, 1987
FMG

Attached please find the billing procedure that will be used


by the FMG Advisory and Accounting.
Please submit this form to Lynn and a statement will be sent
to .the client.

newsletter
A P R I L

14,

1 9 8 7

Insmame Manual
m t l y begun t o prt together the contents f o r our Innuance Sezvioes
'Ihe purpose is to have the necessary information to help all -T~S
becoane familiar w i t h the procedures f o r all of our primary insurance carriers.
I t w i l l be an easy reference guide to:
1) Underwriting t
s
2) P r d u c t s & Carriers
3) Processing Procedures
4) Contact Persons
5) Ccanpensation
My gcal is to have this in your hands w i t h i n 30-45 days. This w i l l help a l l of
us w r i t e mre b s u r a x e w i t h less effort. -Stan Qtm%cm
W e have
Manual.

P l a n n h Demrtmnt
the f i r s t week of operation
f o r $1500.00 from Scott Robertson
anyone would like same ideas on
happy to share saane of t h e i r ideas.
After

t h e Planning Department has received a plan


and R i M ~ e r m n - - C o n g r a t u l a t i o n s . If
h m to use our plan, they would be mre than
--Stan Qterkone

Retirement Plan
For a l l persons awaiting cxn Retirement Plan, I m y have hit the ja-!
I am
s t a r t i n g to negotiate ard recruit the
thathas developed the retirement
plan f o r a MAJOR brokerage house. mis plan is regarded as one of the best in
the irdustry. L e t s keep our fingers crossed. --Stan Qtexkone
-

New Off ice Potential


W e have begun talks w i t h a m j o r Redl Estate finn in York PA that w i s h e s us to
sydicate a new building in the dmarea. They are very interest4 in

taking this project into Financial Senrice Center w i t h FM; as a canpany sponsor
and tenant.
W e w i l l be lcoking to &t
planners and brokers f o r that area.
Anyone w i t h contacts should contact myself o r Bab Kauffman. Your help is
greatly appreciated.

-Stan Caterbone

Real Estate Fruiects


I have secured a source
million and above.
Any
refinancing such projects
available.
C a l l me i f
states. -Stan Qte?&one

--

of mortaaae funds f o r lame real estate miects. 2


anyi
n
in f'L-iaiking'or
m y be good .-p
'Ihere are finders fees
you need any more information. Available in all
persons having

Marketins Seminars
Anyone who is plarvling Seminars f o r t h e i r marketing plan please contact Alan
Loss. Seminars t h a t are available:
1) Half-Time Seminar
2) Successful Money MaMgement Seminar
3) Product Sponsored Seminar

Meetins

A brief reminder that an office meeting is s&eduled for 8:30-10:OO AM i n our


conference rwm this Wednesday April 15th, and also in two weeks on Wednecry
April 29th. -Bob Kauffman

Board of Directors
?his week vour board of directors w i l l be d i s a ~ ~ ~ iwith
n g the m p r a t e
attorney thec o r e form for us to:
1) Fersue wntxacts w i t h represa-katives autside of PA.
2) Provide an Equity Participation prcqram f o r F?n%cers.
e -type
capital raising for other locations with& violating
3) m
certain security laws.

It remains an exciting time, as this new business begins to take form. So marry
apportunities, so mch to do, so mch to get organized and developed. Is it
fun! -Bob X a u f m

t -

Assets

in the IF'S W i t v Pool are

nclw

in all capitdl letters, rather than

MINUTES OF THE 4/16/87 MEETING OF


THE BOARD OF DIRECTORS

The Board

of

Directors Meeting was held at

offices of McNees, Wallace and

Nurick,

100

the

Pine Street,

Harrisburg, Pennsylvania on the 16th day of April, 1987.


PRESENT :
Robert Long
Robert Kauffman

P. Alan
Stanley
Michael
I
Jeffrey
constituting a quorum of

Loss
J. Caterbone
Hartlett
Jamouneau, Esq.
the Board.

TOPICS DISCUSSED
Corporate Structure for National Expansion
Because of the growth potential

on

national

level, we needed to research the alternatives


to
our
present
organizational structure that
would allow additional equity participation from
other large groups, ie. Barry Schuttler
Tom Turner
Form

FMG National, Inc.

This entity would own


100% of Hubbard/Brown Stock.
FMG, Ltd. would
retain 100% ownership of FMG National, Inc.
The above would be conducive for equity
participation
the concept.

'

and

also

foz

marketing

The

followir~g topics will be consj.dered

for shareholder

vote within the next thirty days:


Formation of FMG National Inc.
Directors Liability
Exemption of By Laws for above
Closing current offering

A 5:l

Stock Split

~ e % f r eJamouneau
y
advised on subjects of the R.I.A.
%

P. Alan Loss adjourned the meeting at 10:15

a.m.

LICENSED REAL ESTATE BROKER

P. 0.BOX 2300. PINELAND, FLORIDA 33945

PHONE (813) 283-106'

April 29, 1987

Stan Caterbone
1755 Oregon Pike
Lancaster, PA 17601
Dear Stan,
Enclosed is a contract, and supporting documents for the purchase of Useppa
Village Unit #lo-Left. Please sign all the documents where indicated and
return all three (3) documents to me together with a check in the amount of
$100.00made payable to the Useppa Property Company Escrow Account.
If you should have any questions, I can be reached at the Club, (813) 2831061.
\

Sincerely yours,

Sales Associate
JRKIjnj

Enclosures

May 2, 1987
I

of this dmmmt is to recollect a l l activities that I've been


involved w i t h i n Financial Planning and the formation of Financial Ma~gement
G r m p , to verify and doarment seine of the activities that I've been involved in
to date.
WpupOSe

I ' m afraid that as w e go further and further there w i l l be a need for such
information especially w i t h what has h a m this past week w i t h our corporate
officers and board. F i r s t I would l i k e to begin back in ti-&very beginning so
that the f u l l scope of our activities seem to f i t into ane place and also so
that
of the issues that have mme up are tied into what has happmd up to
this point.

First of a l l , I started in the Financial Plback in 1982. After


getting out of the amtracting kusiness I took six weeks and traveled across
the country and came back and decided to get into the financial services
Being that several relatives have had dealings w i t h IDS, Investors
industry.
Diversified -ices,
I called the local branch in
upon finding the
manager Mmed R & e r t Kauffinan. Bab spent -time
withme, decided he w i s h e d
to hire me, and that began the process.
I was

actually licensed in 1982 for securities and l i f e and was p t under the
mnagement of Bob Kauffman. Shortly thereafter, I would say probably in Jwe
or July, Bab was pmmDted and took a division in Tampa, Florida. Myself and
)three o r four other individuals who were under m g e m e n t decided that w e
wanted to fom a g r w p together so w e talked to anather district manager,
Staren H. and decided that, i f he would allm, we kcdd like to plt an office
together w i t h him.
A t this time w e did not have an office and he was mrkjng
out of a sndll office in Millersville. 'Ihe people who were with me was myself,
Mike Hartlett and Alan Loss. The three of us were very, very large producers,
especially Mike and Alan.
The three of us were probably larger than Steve's
district a t that time, so a t that point we located an office a t 255 Wer
Avenue, we walked under Staren H. district which increased his inmme by a t
least 30% to 40% pthat -&ion.
After being involved in the business I decided that firrancial planning should
be wre abjective and fee based, so I became one of the larger fee producers
using fees as w e l l as mmnisSion incane. A t about the same time, I became
involved i n the IntermtiAssociation of Financial Planners. A t that time
the local chapter was just being fonwd and I volunmy services to help
on the board.
Menbrs of the board, a t that time, was just being formed and
headed by John Herr.
I became m t i v e vice president and virtually helped
run the chapter and
build it to its largest m
p
. lhat gave m e
as f a r
the apportunity t o meet other people, broaden my horizons and *tian
as the financial planning h3ustry and just haw the hleperdent planners f i t
into the stream of the industry. I had quite a b i t of activity and did alot
for the local chapter and became very involved.

helm

mer the next several years I made a very gwd living. I was never a very big
pmducer, althmgh one of the bigger ones in the Harri.skurg division. But I
was not the biggest, but the premier fee producer for the division and was om
of the leading in the camtry a t that time. I shortly became kmmledgable of
the other pmfucts available in the financial services industry and learned
very quickly that it w a s virtually inpossible to have one canpany manufacture
and produce ccpnpetitive products across the line. A t this the I was setting
l
e Amstrong
up a dhmr meeting for the IFP that was going to sbax2ase A
who was one of the premier planners i n the cumtry. She was very visible and
very widely m. I set up a dinner meeting for her khich attracted close of
om hundred
p r o f e s s i o n a l s a n d o t h e r p e o p l e t o a ~ . l h i s w a s f o u r o r five
times larger that any ather meetirg the chapter had ever had. A f t e r the
meeting I was involved in a -ion
w i t h Alex regarding the financial
planning h l d z y and my aspirations of what was cutside of a pmpriety
envimmnmt.
I told her that I was thinking of lMking a m e and asked her i f
she had any suggestions of wha to q e a k to. A t this point in time, we were all
i n Butler Avenue and Bob Kaufhan was in Georgia, running a division of ID6
back there.
He, a t this time, had become one of the l a q e s t divisional
n g e r s and had shwn very high pm&active
recruith-q skills. He was running
one the largest shop= intheScuthEastandwasbexdtqveryprofitable for
II1S. Alex suggested that I c a l l a gentlwen by the name of John &&le who was
then president of Financial Services COT. a bmkerjdealer based in A t l a n t a ,
Georgia. A t this the Bob Kauffman was probably, as unfamiliar i f not mre
unfamiliar, of the irdependent e n v k m e n t available to the Fimrcial Services
Industry. Specifically Financial Planners.

I phaned Bob a n d t o l d h i m t h a t I w a s ~ i n g t o l o a l c a n d ~ ~ t e l s e w a s l ~ o u t
there."
Before this time, a ccuple months prior, I atb&& a career
conference in Florida with IRS. A t one p i n t I was in a roam w i t h Bob Ihufhan
and R
' mt TUmr, who was the biggest divisicmal l ~ ~ g aet this
r
time with ID6.
I began to disc;uss my dissatisfaction with the ccmparry and the way that they
op=rate and I suggested to them that it pmbably would not be too difficult to
duplicate an organization instead of bebg built araYd a proprietary that was
built solely amund a non-proprietary product. A t the time they both leaked a t
w and I don% m m a k e r i f they l a w , k u t the idea really didn't redlly
interest them, and it just rolled off their shailders. Right after this
meeting is whenIhadthedinnermeetingvithAlexandIsetupthemeetingin
A s I usually did, I always leaked a t Bob Kaufhan as my mentor. H e
virtually w w o f f t h e s t r e e t s a n d m m e a w a y t o w m y i n a w a y
that I never
I a u l d w. I always respected Bob as a very good
sal.esnan, seeming to have a very high financial intellect and I looked up to
him as he taught me alot. So I got on the phone and told him I was going to
v i s i t an imkpn%& planner i n Atlanta.
A t this time, Bob was bemning
dissatisfied with the management of ID6 and was not very happy with the way
they were using him to build areas. Vihen the areas would become profitable to
him they waild mehimtoanotherdistressedamatobebuiltup. Sohewas
doing a l l the work and ID6 was making a l l the mmey because they waild plt i n a
m a ~ g e rfor less money and so on and so forth.
Atlanta.

Bob then told rn that he may be willing to go intD the meeting w i t h me under
the asslrmption that I did not tell them who he was o r who he was w i t h . I
called J&n m l e and told him I wanted to cane dawn and v i s i t him, being
referred by Alex and he was very nice mer the @mne, giving me a cordial
invitation to cane down and actually had me set up the meeting w i t h Ray S m i t h
who was one of the sales ~ g e r s .I set up a two day meeting w i t h myself and
this anonymxls person, Bab KaufBnm.
W e spent two daysatFSCandwhat
essentially happened is that they became infatuated w i t h Bob's recruiting
skills.
On the spat they offered Bcb a position within the a m p n y as far as
recruiting and head of sales manqement of FSC.
I resigned fm m6 January 1985.
Bob m i n d a t ID6 and fnm Octaber to
March w a s negatiating his position and pay and his -tion
w i t h FSC. By
March he actually decided to resign fmn ID6 and he was a k a r h d into the
corporate structure of FSC. January Ist I resigned fmm IS. I was Upstairs
w i t h Mike Harllett, sharing an office space and the rest of district w i t h Alan
Lms was still dwEbks.
A t this time, I began to build my independent
practice of Financial Planning. Basically I took 95% of my clients fmm IC6
and began working w i t h them. Bob began working i n the national recruiting for
FSC and started attracting IDS people to FSC.

the Fall of 1985 I had became w i n t e d w i t h my business l i f e , not


learning m,lonely being hkprk3ent and I became frustmted. I knew that
no one in Lancaster was doing a very high quality m i c e rqardbg Financial
laming and Financial Services.
Tb me, lancaster seemedtobeahighly
attractive market w i t h alot of wealth being spread cut amDng alot of different
players.
No one was being creative
r " lg their efforts it was just three
o r four brokerage houses, insurance agents, banks and irdependent planners but
iw one had a very strcarg p i t i o n or d a b a x e in the financiae services
By

-.

I visited w i t h Bcb Kauffman in the Fall of 1985 as I usually did every ccuple
mths ard told him I wished to do scwthing else. A t t h a t time he asked me i f
I wanted t o cane dam to Atlanta and help him work on the concept of o n p n y
awned shops.
W h a I was dawn there, he mmtioned severdl positions i n the
corpration that I may be ini n and he set up a meeting w i t h me and
Steve Franklin.
Stwe m t l y needed smmw to m a ~ g eh i s national sales
office so khj dawn there I spoke to him, just t o verify w h a t was available.
A t this meeting, Steve Fmnklin more of less indicated t h a t I was a ~~kuned
cut
who was just leaking for a place to go. Ncrthing ever happen& and I
left the meeting w i t h very l i t t l e respect for Steve Franklin.
Bob offered me a position w i t h i n his mnpany owned store, writing cases doing
p l m , doingsaneotherthings. CIhatwasearlyOctober. F o r t h e n e x t t h r e e o r
four weeks I prepared myself, relwtmtly, for the transition and moved to
Atlanta and tried to maintain clients up he^^ as well, and plrsue whatever Bob
was doing down in Atlanta. A s th went on I f e l t I really didn't wish to move
away fmn the area and that maybe the opportunity down there wasn't what I
thought it was, o r wasn'twhat Bab said it was.

On Nw&
27 or 28 of 1985, I had a meeting w i t h Bob I c a u f m and Mike
Hartlett a t 1 4 x b n r s m u n t on the Rahrerstawn M,
Ianaster, PA. 'me
pupose of the meeting was to find art i f we a u l d collectively p r t together
xmething in Iancaster w i t h regards to f h i a l planning. I wwld say that
e t i n g was mre of an effort on my part than anyone especially Mike Hartlett.
Mike was, a t this time, also inrlependent, l e f t ID6 anl follckied me to FSC along
w i t h Bob.
?he meetingwas on themorning a t 9:00 a.m. and we dkmxxxdwhat
options we had as far as w i n g sanething tcgether in Iancaster. I guess the
bsic reason for the meeting was to see i f Mike Hartlett wished to do sanething
together w i t h us. A t this time I was qmating my practice, Mike was aperating
his practice, anl the only
we had in amumn w a s a reception man
adjoining ax offices.
A t thistimeBobsawthatifwecculdputsawthbg
together in Lancaster he omld pmbably f u l f i l l same of his recruiting
-ts,
giving h i m a place to actually xecmit people to rather than
using FSC in Atlanta. So that began the process of w i n g together a shop in

lancster and Cerrtral PA.

I b e s a n t o recruit fran that point forward into our so called plarvling firm.
A t this time the plarvling firm was going to be caprised of financial
Sane of the f i r s t pecplethatItall#dtowasMonaRishel,Dick
and Bab Lnrg. I spoke to other plannezs-about joining our firm and
then I got the idea of adding other professionals mainly legal, a m - ,
& estate and ma@ insurance. It was then that I got the idea for the one
stop financial firm.
Tbmeitseemedapprmt-thatitwasimportanttohave
a l l the individuals working tagether collectively
manage one financial

planners.

-,

'

'affairs.
It didn't seem that d i f f i d t to accaylish that i f yau had the riqht
irdividuals willing to take the risk of a t t m p t h q such a project sod who had
the clientele where they didn't have to rely on attracting new clientele.
Well, ~ t h i n g l e d t o a M t h e r a n d w e s o o n b e g a n t o r e n U i t ~ a t ~ ~ a n d
sizable grcup of individuals. I prcbably was responsible for d t i n g 90% of
the local people and artside pecple, Mike was mrking with Rick Volp in
F h i l a d e l m who he w o w w i t h a t ID6, and a hcst of others. T h e i n i t i a l core
was myself, Mike, Mma, Dick Sherisahn.
A t thistimeIranintoSattRobertsonattheZhreeMilelhsewhowasworking
with Asset Mamgement.
I expressed the idea to him and he became interested
and became one of wr pecple. I also talked to Gmmlyn Royer who was w i t h Pru
Bache and she was interested in joinhg. By February we had a fairly large
group of people who were willing to ammit. F i r s t thing we had to do was find
facilities and Mike f d the place available a t the OregcPl Pike location which
was just urder -on.
A t f i r s t we were looking for 2,000 square feet to
hcuse f w or five i n a i v i d ~ ~ LA~t. this time I talked to Tim Lanza, people a t
the legdl firm, and Danny Beqer as f a r as doing me thing with real
estate.
It was s q p x e 3 to beanaperationfinancedandsqportedbyFSC.
horn December until May FSC was pranking furd to f h m c e the aperation. We
nedd start up funks for fur nit^^?=, caymter systems, salaries for myself and
Mike for ranaging the -tion.
Mat happerred &ing this t h was that FSC
was constantly premising us financing and we had yet to receive any actual
m ~ n e yand the invoices d t t e d w e r e never paid by FSC.

Bob ~ ~ a u f f u n n
was the liaison and -tly
was being directed by Stare
Franklin ard Jdyl m l e . F'ran what I have learned over the past several years
was that they never really interded to finance the aperation brt they were
strirqirq us along ard using us to recruit other people to the operation.
After we rexuited ten o r more people it became apparent t h a t Mike o r myself
g e an operation. We also
did not have the managing skills required to l ~ ~ such
learned we l o s t our financial backing, so we had to figure out what to do with
A t this time we decided to raise the capital a.u-selves,
finance the
financing.

And
operation auselves with quity we raised thmqb the planners.
essentially we learned that no one i n the industry, or very few actually awn
their awn business but are only a distrikrtion for a f i n a d a l product. W e a l l
have seen bmkr/dealers b e b g b a q h t and sold for very sizable m t s of
m y , usually in the vacinity of $1 of quity for $1 of gross ccrmnission
inmne.
We began to see t h a t we were seeing anyi&em hran $1 million of gross
amnksion imxms per year w i t h the grcrup that we had. In the grarp was Ken
Ray and some very m t i v e and talented people.
cur m e e t h p and discussiuns d c h w e r e very long, durable and
mpn L&omber t o May I probably spent every other evening with Bob
tiresame.
i n Atlanta trying to pt this deal together.

Tbx@mt

L e t me go over a couple of other things that had happened up to that time that
I f d ljke mentianed in this document, before I fozget. Back in the sunmer of
u
s
e of
1985, I was contacted by Jdyl Fhilips fmn Blue Pall National Bank. m
)ny v i s i b i l i t y w i t h the local chapter of the IFP J d m wanted to call me and look
a t the o p t i c u s of Blue Bas11 National Bank becane involved in Financial
Planning.
Jchn called a meeting w i t h me ah3 I believe he was looking for
scanmne to head a Financial deparbnent with inside Blue Pall National Bank o r
contract w i t h s ~ n e o n e outside. I had 1-1/2 bar with J d m and his suborbant,
whcan I can't remember his name, I believe it was Joe. H e was the vice
president of the trust m t , I believe. m
y a f t e r the meeting they
did not have the fiath o r the confidence that I was the right person or they
didn't believe t h a t this was really what they wanted to do. But I have never
M firm them s i n .

Fall of 1985, before our initial meeting, a f t e r I &idea


that I was not goin g
t o relocate in Atlanta, I began to look for other options in
One of
those were t h a t a couple people pt me in tmd w i t h several banks. One was
Joe S. with -th
National Bank and another was Meridian Bank. Both of
those irdividuals received
calls fmn peoplekl I did business w i t h
stating that I was looking for s a n & h g
ard asking that they give me an
btemiew. None of them !could wen goive me an interview. I received a letter
fmn C c m k m e d t h s
t
a
m t h a t they had no pasitions c p a a t this time, but
they would keep my ram on f i l e .
Fmm Meridian, I don't believe I wen
received a letter.
aLis is oneof t h e r e a s o n s t h a t I d o n f t h a v e v e r y ~
respect for banks, or people whowork inbanks. I d o n f t w i s h t o d w e l l into
this subjed, but because of several of these eposides I just don't have mch
respect for bankers, o r banks what so ever.

-.

was going to receive 60,000 shares, I was to receive 40,000 shares andMike
was to receive 40,000. Also, Mike ard I w e r e to receive $3,000 per month and
Bob $5,000 per mnth. Bab and I had a deal as I did not believe he shaild have
more of the canparry than I because I pit it together. We had an agreement
&ereby
I could buy 10,000 shares of his 20,000 a t anytime a t cost so we would
both have 50,000 shares. I had papers drawn u p t o that, however, whenwe began
t o have problens, I l e f t things drop by the wayside.

Back in Februaq 1986, I became g o d friends w i t h Mary Lynn D i F o l c a , Kevin's


sister ard Mike's wife. We were always g c d friends, but back then when Kevin
left, we
very close because I spent alot of tim with them. Mary Iynn
was a t the time, 30 years old with three children, and she was always very tied
dam with the kids, basically a housewife. She never really had a job, never
worked.
I t w a s h a r d forherbecauserrmtof her other frienlswerecutworking
and had 01-eers. I a s k e d h e r i f s h e W d l i k e t o M p m e o u t f o r a f e w h o u r s
a we& doing general clerical an3 typing. She was very excited. I tho~@tit
was a chance for me to get S(II*~thirqs done ard I liked Mary Lynn alot d we
got along and I thx&t it was a chance for me to get a few extra things done.
I took her on in February and before too long she was working 30 hours a week.
She had a babysitter lined up for the kids, ard it was very encanraging for me
to see her do this because it gave her the confidence for the f i r s t time that
she could do spnethhq other than just have children. She was having a great
time and I was having a great time and.= enjoyed working with Baeh other. A t
that time, Bob invited .Mike and I down to the annual confererms in !Iwsm,
Arizorn ard w i t h the conferenoe amangments we were allawed to take saneone,
such as your spouse. I asked Mary Iynn i f she wanteA to go and I don't believe
she was ever on a plane before and she asked Mike and he said it waild be good
for her t o meet scme of these peqle and get: involved w i t h a career. We ended
up d a m a t Tucson ard that was i n A p r i l 2 a n d w e s p e n t f m o r f i v e d a y s
there.
Upon meeting Bob ItoldhimIwasbringingMaryLynnoutandIhew
from the start that this was a sore spot. First of a l l she was married d he
couldn't urdershtd what she was doing cut there w i t h me. Semnl of a l l he
didn't appreciate the whole s i b t i a n when he met her he said scauethbq to the
effect that she looked very young.
After the secand day w e were a l l g c d
ard she was getthq a l a q very w e l l w i t h W and Pam. In fact, Pam
friends
confided things in her that I kmm Pam never told anyone. It looked as thcaigh
they liked, or a t least pretmxkd to like Mary Lynn and so anyway we all had a
Bcb, myself, andMikespent&of
w r t i m inindividualprivate
good time.
meetings trying t o pt this deal together and work cut the details -idly
with FSC.

think it was back a t this time-we r e a l i z e d that Bob was probably going to
fran management and cannit and cane up to Lancaster. I think one of the
reasons whyMaryLynn andIbecameveryclosewasthatsheremindedmesonuch
of my mother i n t&
way that she handled her kids, family and I became
infatuated w i t h that.
I liked her alot. Wt haFpened was that Mike and Bob
resented the fact that we had so rmch fun while we worked. We got m r k done,
but we went out t o lunch for an hour or so and we really enjayed things. To
I

resign

'

them that had no place in business. For me, as 1as I got my work done, I
f e l t better about my work ard it worked art for the best. mis w a s a problem
an3 w i l l ccmne up later.

into the building, they wmld not a l l m Mary Iynn to be back in my


haever, Nancy A. 's desk was right ma& up against Mike's door. lhis
start& all the problem w i t h Mary Lynn. She saw that and she wished to work
for me, and they were not goiiig to let her. It just started problem fmn day
one and it had a tmmxdms impact on the relationship between me, Mike and
Bob.
'Ibis was the straw that broke the camels back as f a r as cur relationship
was wncen-ed.
Ever sincethathKpenedwestoFpedcamunicating. matwas
the f i r s t m e i n trying to rescind m y i n p r t a n d m y o m t m l s o f a r a s t h e
campany was c0ncxm-d.
As f a r as the staff was ooncerned they had a feeling
that the staff should be treated as dirt and made this urderstxm3 many times to
me
this is against a l l my philasophy of life. For months, because of this
attitude, Mere were problems with the staff. It was because of this t h a t the
staff didn't respect them, and it was just a formths.
We w e d

section,

July and August, Bab w a s still d m in Atlanta and I was doing


the work i n lancaster. Fmn J a n u a ~
until
~
Januray I took one day off
for Memrial Day, one day for July 4th, one day for labor Day and cme day for
'Ihanksgiving.
Mike H a r t k t t took off two of three becks, leaving m e to tend
the shop.
I was always the care doing all the work, recruiting, stock
offering,labor m a t t e r s , drew up all the amtmcts, drew up the offering
w i t h the help of the attorney. It was fiwry t h a t I was the only one
raising the mney
probably 808 of the furls. I was the only care of the
principals who had outsiders investing i n the canpany. Ihe most they did: Bob
Kauffman raised $5,000 frun his father in law, so not d y did I pit my cwn
mney i n I risked that of my clients. But they w e r e willing to a a q t t h a t up
front.
A carple times it came down to either me getting the m m q fmn my
clients o r us not having the financial a b i l i t y to pay off sane of the capital
resources that we had.
W i n g June,

most of

~~

W i n g %pteubr we began to have pmblems w i t h Mazy Lynn and the staff and
'Ihis was the beginning of them hying to reduoe and dilute my control of
the canpany as f a r as input was cancerned.
It was a very emotional and
d
r
a
m expsriexe a f t e r a l l t h e w o r k I d i d t o p l t t h i s a l l t o g e t h e r t o f i n d
those twowere trying to plsh me cut. Itrsachedthepointinoctoberor
Noventer where they actually asked me i f I wanted to "get out." 'Ihqr indicated
that I was not right for m a ~ g & ,
m a ~ g e m e n twas nat right for me, t h a t I
wasn't having fun and all this and that. Mnst of t h a t was due to their action
as f a r as their trying to dilute me and weaken my umfidenz. lhey c0Ntantly
made fun of me i n f m n t of all the other planners a t meetings and it was just
ugly.
'Ihey also t r i e d to internqj my relationship w i t h Mary LyM w h i c h was
ruthirq mxe than a very p e r s a d , deep fri-p.

me.

No care lamws this, kR the trauma was so heavy that I went mxier the care of a
Hospital, beginning N m m h e r and I was suffering a
psychologist a t St. J@
severe case of depression. Eecause of d z @ r e n i a being f a v d in my family,
I was not afraid to go seek psydmlogical camseling. I was on medication for
three months.

In September they had it in their minds that they were going to get r i d of Mary
Lynn.
And they tried every opporbmity, finally in N o v e n h r a week before
Thanksgiving, they fired Mary LyM. W i t h o u t cause, for no reason, other than
they just wanted her art ard felt she was incapable of whatever. It actually
reached the point wfiere Bob andMikewhenarnurr].politickingthebrokersto
s q p r t them t h a t M a r y L y M w a s n u t d o i n g h e r j o b w h i c 3 1 w a s m t t r u e . Shehad
the canplete w
r
t of a l l the brokers. Maybe a t times there was a case wfwe
sawom was unhappy w i t h her perfommce, but in general it was a ploy, a plot,
fabricated by Mike and Bcb.

their attarpt to lmy me out and get rid of me so far as my Oontrol and my
interest, I held cut reluctantly often times mxlering i f I were going to give
in an3 by 0lristma.s I decided I wnuld stick it cut. 'Ihere
not other
alternatives, kR the nwney they offered me to get out was $2,50 a share which
canes out to $100,0000.
Iwantednopartsof it, s o b y J a n u a r y I d e c i d e d t o
stay.

After

Bob h a d s e v e r a l c a n v e r ~ a t i ~ ~ l ~ w i t h B o b I c n g s a y i n g t h a t h e w a s ~ i e d a b o u t m y
v
i
a
l efforts and that I was heocming slack. Ihe whole reason was
that they were hamering me daJnandbeatingmeupineverywaytheycculd,
cktmying my confidence. AftarIspenttimeandeffortardIbelieved inso
nu& of Wmt I'd done, and they were trying to take this away franme and get
me art of the picture.

Thraqh N o v and
~
Decc&er
there were meetings between myself, Scott
R c h r k x m , Alan Loss, Bob Long and (luo1ynFlayer rqanibq the activities and
the ~ S t y l e s o f M i k e a n d B o b . ~ w e r e v e r y ~ , w e r e n o t v e r y
trusting and I was always in the middle between the managerwt and financial
planners.
I had relatiMships with everyone and I believe that this -tend
Bob and Mike ard they tried t o g e t m e c u t o f thepicture, kttheplanners
wxlld not allcu this because the planners did not trust Bob and Mike w i t b a r t
havingme to keep them on balance.

I raised most of

the nomy, d t e d lnost of the people, p t the offering


together, pit the ampter system tcgether, workedwithall the
ampter softwa??=, and a c t u d l l y . came up with the name Firnncial Management
(;mup and the idea of having a l l the subsidiaries doing different things. My
involvement was very deep, pmbably deeper than anyone in the organization.

memo-

W - m I w a s p l t t i n g a l l t h i s t o g ~ , I w a s i n ~ w i t h A l n Y u l a tItalked
.
abaR having nnr@age,
banking a part of a t I was doing. Nathing ever
happened bebeen the two of us, but in ~anuaryI received a call fran Al askhq
me to see i f I a d d place any mrtgages in the east coast. H e was willing to
pay me xmghly one half a point and this was a t a time, because of the
activities of Bob and Mike, that I tku$~tI would give this a t r y to give me
sane secwity. Should saoething f a i l i n the canpany, I would have sanething to
f a l l back an. A t this time I involved Scott IInbertscn and Bob ~cngand I told
them we would form a three way w
p and we wnuld work an a real estate
project on cur awn. ' I h e r e a s o n I t o l d n o o n e a b c u t t h i s w a s t h a t t h i s w a s m y
ace card in case Bob and Mike ever really threw n~ out. I was mt going to give
&em any r e l a t i m s h i p , and I j u s t TIE&&
sane d t y .

we were really doing was lwkirg for 1of 2 millicm dollars and up to
refinance or finance new and existing realestateprojects. Wemadeafew
calls, finding that ax rates are very anpetitive.
A l was mre of less
letting me get plqged into the major Savings and Loans and Inswaxe
mnpanies.
Wefam3cuttherewereveryfewpeopleinthearea, i f a n y a t a l l
who could a q u b s the terms. We began having a great deal of success and what
we found was that almcst everyone was allawing us to bid on their project. We
created a campany called C!rekive Finance Caopany so that we would not a p x e
Fm; t o any l i a b i l i t i e s as far as cur activities. W e agreed fmn the beginning
that FIG wxild receive a m t a g e of cur activities ~IXI
we figured 15%was
f a i r since we actually mnufacturd the pIoduct wfiere FIG *en cut and used
othex manufactured products. We didn't feel they were entitled to a 20 30%
split.
What

of cur amtmzts was w i t h Tony Bongoivi in New York. He a t one time dated
Scott's
sister apprmhmtely ten years ago.
Scott maintained a loose
relationship w i t h Tony, calling him one= in a while regarding business m a t t e r s
and business activities. Scott called Tony one day atcut a real estate project
that he i3mught
Tony said no, but he my have another
project that we would be interested in. Scott asked m e to go up to New York
with him to talk abcxlttheprojectand1 askedwhat itwas. He indicatedit
was a mwie.
I was very reluctant and hesitant to do this because nnvies t o
me, tax shelters, scans, not very econcmic type investment. Me being very
comxvative was not attracted, but I decided to go anyway just to get cut of
town, mre or less just to get away.
(Xle

I got up t h e n I was totally amazed a t the caliber and the people who we
were associating w i t h .
What I found cut was that we were working w i t h the
leading recolding s h d i o in the world. T h e r e d t i a l s , their acccnplidxm~ts
were @enmaml- they were just it. I'm not going to spend alat of time of
this because just the battcm line is what is inporbnt here. After seeing the
project wfien I lcoked a t what Tony was doing, and fran a business perspective
there were just so nary elewnts in this project that were just truly amazing
to me so far as distribution and markeI5.g and riskand eveqtAi.q else.
Bottan line was a pruluct that was worth 15 to 20 million dollars being made
for 4 million w i t h the ability to be one of the -1
movie, video projects
of the years.
biten

a l l ycu have the leading recoxding studio in the world working on the
scan3 for the project that was going to include a follaw up of Tony's previous
band who- was BM Javi who was alreacty one of the hottest thing in nusic as far
as alkum sales.
Then you have the fact that he was going to digitize the
was
never done before in the nnvie industzy a t a time when the
recording which
vidm market is just going bananas. N o t only that, hut the label that signed
the banl m MN.
You put a l l this together and ycu've got a penmend
business w i t h alot of apportunity
F i r s t of

seeing this, I ammitt& myself to the project not kmwing h o , where or haw we
were going t o raise 4 million dollars but I beliwed in the project so mplch. I
guess because I saw alot of the same elements used in F% in this project, and
even more.
I got instincts when I raised money for Em; I was still very
concerned with the risk elements to my investo~sbut when I looked a t this
project the risk was even less. Iess risk, m r e protection with this project
so I believed in this project. We spent seven or eight weeks developing the
packaging the product for the investors, things have hapxwd during that time
that f e l l into place perfectly
the a r t i c l e in lblling Stone, the marketing.

is May 4 t h a t 4:30 a.m. and there is no d a b t inmyminlwith the articles


in Rolling Stone that we have the money for the m i e . lhat project in itself
w i l l pmbably p t us in the forefront of the n
e
industry within
It

eight W.
It is mird b o g g l i n g a s f a r a s h t o n c a a e o f t h i s , b u t t h e
project is done, we did sanethjrq, we did not use Fm;, they w i l l receive no
I guess what I'm saying ik that because of the way Bob and Mike treated
split.
me or plshed me to go cut and do things, that did not involve Em; and I did not
feel that they did not deserve to becarre a part of these things. Fran the
beginning I knew Em; was going to get their piece.

L e t me go back to an earlier developlwt a m c e m h g the E!mker+er.


We of
course thought in the begthat we would becarre ax own broker/dealer.
However, after long, bard discussion, we were to the pint of getting a license
for brokerldealer, we decided we did not have the admhktmtive capacity to
N f i l l what we waild need to a-lish
the broker/dealer. Back in Nwember,
-,
Bcb started soliciting other -/dealer,
l c o k h ~for
~ three things;
service, high pay cut, and
equity.
We knew that we had t o own our
brolerldealer kusiness.
'Ihere were two players that we came a
m one was
Iiikkml-m cut of wshhqhl DC and the other was Financial P l a m e ? s Group
which really involves sane of the premier financial planners of the cumtry,
B i l l I b q l e r , Wayne Webster, so on and so forth.

The Iceogler grarp was strcng, large, y a q and they were doing nxghly 20
million dollars of gross canmission incane per year but there were saoe people
in the organizaticm we did not feel ccmfortable with. Hikbaxd Brrx~nwas a new
start up, starting up when we did, was a s p l i t f m a previous bmker/Mer in
D.C.,
that involved f m a syrdiotor to a -/dealer
that no one knew
anything a?xut. However, they really enticed us w i t h a very attractive equity
deal.
Bob maintained most of the cmmmications and mmt of the research
involved in this project.
It was brcqht to us in January w h i c h was IpuFplly
20% of their stock . w i t h 90% payout , territorial with override for aqthirg
that w e did.

0fthethingsImtshaildbedoneisthatscmeaneMdbedownthere
1
a t their t m d i q department, along with the capability of FSC. I tried
to get people down there several tims and I suggestd Qmlyn Royer because of
what had haFpened to her.
Finally Peter Pnneros and Ken Ray bent down, and
this was probably during U a x h . Anyway, this whole thing was dcne w i t h very
l i t t l e mmmicaticn as f a r as me, Bob and Mike. lbre of less, Bob wculd go
cut and do scanethirq and wculd fee3 back to us, but we redlly had very l i t t l e
involvement with what we into do w i t h M Bnmn. One thing Bob
irdmted w a s t h a t i f w e b e n t d o w n t o K i b b a r d m w e w c u l d n o t f i n d i r m c h , they
were just starting up, they were new, they had rmghly 10,000 sq. foot of
office space, a few staff people and the system of operation. He did feel they
w e r e capable of fulfilling cur needs.
One

the transformation of licensing fmpn FSC to Hilhxd-Bnmn and we


prcbably had 60% to 70% of the in house w l e to FSC, Alan Inss, Scott
Robertsan, Rich Bravenuan, Keith Waters, R x M Dellinger, Kazly Radcliffe, along
with Barry Schuttler and sapne of the other satelites. A t this point Tan 'I\uner
was free ard clear and he was looking for scsne direction. By the week of A p r i l
19th
Tcm was up v i s i t k g with Bob all week seeking that direction and he was
also visiting w i t h Hibbard Bnmn so it looked l i k e Tan wculd also b e a m
involved.
We began

I also negotiated the courtship of Tony Pascoti and got him involved.
Fran the perid of A p r i l 1st on, wfien we began transferring license, one of the
main

EXPANDED EOAIlD METIKG


May 5, 1987

Jerry Bavero

In A t t e x h x e :

Stan caterbane

Mike naruett
AlanLDss

m
Bob K a u f m

XM Ray

-er
Richard Volp
Meeting opened by Bob Kauffinan

A.

N k r e we are tcday

~~

Week article on conveniexe Wtxies largest


1. S t a n graJth in5mtry for next ten years. Financial Management Group is
a wnvenience i d w t z y .

Mortgage Ebmkerage contacts leading to distressed properties


symiication pxsibilities. Ccmercial -y
located from insumwe
capmies and Savings and Ioans. Accamt fram $2,000,000 and up.
2.

3.

Eawie.

4.

McCormick.

Raise $4,000,000.

Tony Bongiwi.

Sports figure fjnancial planning

in retum for

agents contracts.
Service

B.

IFS. DyMtwownedby IFS. Barry Schuttlers IFS enhancement.


wants to design a system which would coordinate all three of
the above. ISIS developent w e l l under way. XM Ray reports c q y
w r i t e mrk done for llEkrsanal BrokerI1 software. C o s t approximate
$10,000 per site. $100 per month maintain fee for s a t e l l i t e distri1.

Stan

bution.
C.

T h i n g Service; Ken Ray


1. Monitors mutual M offering switch protections done for both
stocks and mutual funds. 1/2 of 1% fee charge.

1. Express the p t e n t i a l for linking Dynatax t o IFS for benefits of


coordinating tax preparation an3 client review.

1.

ming w e l l .

Good

profit scurce.

1. mkhg book for us to cutline licensing procedures,


a ~ l i c a t i a n s ,insurance canpany information.

A.

Bab Kauffmn raises question: Shcmld F h i a l Mmgement


be
~withachievingequitycninsurancebusinessinex~e
for v o l m ? Shaild we limit the nrmber of c a p a n i s ?
1. ShGild we ,py htere&d in reinsmame program.
risks.

a.
b.

2.

Down side

Limit planners -on


of objectivity.
harder to s e l l FIG i n the firture because of latent
l i a b i l i t y &e to losses extending fnmn lass of business
and adverse insumme risk.

Mi.&

VoteOutcoPne-Notto~auSel~e~with~hSXaXx2.

Retain cur objectivity.

1. Eemett W i l 1 k m - s prqject.

1.6 million needed.

Bennett Williarrs

is major tenant.
2.

Downtclwn Kistorical project w i l l prcbably be a joint venture

instead of a sytxiication.

.
Bob Larq reports on active participation p a r b s d uP.
Partnership investors and Financial Management Gmup to have a
g
gm
p structure. W i l l pass alcslg 99% of tax lcsses to
rs. Financial Managenwit Gmup to keep 10%of cash f l m ,
20% of back erd. Designsd for investors with joint inam2 urder
$100,000, for single irdividuals w i t h inxme under $50,000.

3.

C.

Satellite Offices
1. Columbia, &tryland

a.

Barry has a m t a n t , attorney, mortgage broker, insurance


agency an3 real estate a f f i l i ates....nwving along well.

a.

W e are lwkhg to develop a Harrishmg office which could


include F e t e r Labella, Davidwn and Valencia and a miscellanecxls grarp of brakers caning fnxn E.F. Hutton and Merrill
Lynch.

b.

3.

A.

Frojected time frame six months away.


for offices.

Olrrently looking

Reading, FFmSylMnia
a.

Rich Podlasek. Close to recruiting Bob Caukins. Reports


of a large grcllp of
.I people m t l y w i t h Hackett
-/Dealer.

a.

Jerry try*

to recruit Bab JWmxe and Ben Clements

Report on trip to HBC

1. Barry Schttler; no problems e m z m t a d thus far that he h m s


of.
2. Jerry Bmrero; HBC staff is themajorpmblemarea. IXle
Diligence L&prbmt is very week. Pmducb
to be available
kut is light.
3. KenRay; H B C l a c k s ~ i e w e d t r a d e r s . OaYzrnedabartHBC
being unable to serve the brokers business. Wants a detailed
p-of
howtorectify~~ctradingpmblemswithatimeframe
for capletion.

4. Questicm. ShaildwestaywithHBCorreapencnxsearchfor
alternatives?

a.

Decision. Tu work
inthreemonths.

pmblenrs and reassess situation

K E N N E PROPERTY
~Y
CORPORAT~ON
A Subsidiaw of Kennedy Health Cars Foundation

May 6, 1987

Mr. Stan Caterbone


1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:
This correspondence is to address our previous conversations
regarding the refinancing of some commercial real estate that I
am currently managing for Kennedy Property Corporation. At that
time, you had requested information on each of the buildings so
as to determine the feasability of this endeavor.
Of the four properties listed, three are owned by Kennedy
Property Corporation and the fourth is owned by Professional
Medical Management, Inc. Both companies are subsidiaries of the
Kennedy Health Care Foundation.
Enclosed you will find a description on each property. This is
accompanied by the current lease schedule for each property and
an income statement for Kennedy Property Corporation.
If after reviewing this package you believe that favorable fixed
terms can be provided, please contact me at your earliest
convenience.
Sincerely,

Michael Lawson
Property Manager
ML/~
Enclosures

P.O.Box 1015 ' 100 Egg Harbor Road ' Turnersviile. N.J. (W012 ' 604589.3300 Ext. 421

8'

MICHAEL LAWSON
Property Manager
P.O. rn 101s
im E Q nubor
~
M.
1wmn.Il..
WJ mot1

Richard P. Sllva, CLU


Regonal D~rector

May 12, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, PA
17601
Dear Stan:
Per our conversation I think it is important that I shift the responsibility for contact to you. As I stated my time is as valuable as yours
and I cannot justify continual contact without a reciprocal effort.
Should you choose to access Alexander Hamilton Life as a general agent
for maximum support and compensation I will be more than happy to discuss this with you, however I do not feel that we should pursue any
conversation until you are in a position to make a definitive commitment.

Richard P. Silva, CLU


jah

In atterdance: Mike Hartlett


Bab Kauffman

m m

Alan Loss
Absent:

Stan Caterbone
Concern wer relationship with Hib$ard

W O N :

I.

BraJn

Corp.

as a Ebmkr/Dealer.

Should Financial Management Group (FM;) be affiliated with them.

p5TING OPENED BY BDB IGWmMAN


A.

LDok a t all d o n s .
1.

Wty. Hihbard BImm Corp. (HBC) waild offer 20%ownership in


the Bmker/Dealer and 24%of UCC. (The parent). 'Ihe UCC stock
is to be used for national recruiting who would not be directly
awned by FIG, kR FM; would have partial clwnership.

3.

High degree of input into w r p r a t e decisions.


sst on the board.

4.

We waild have a

'Ihey inlicated that they should be able to service our

business.
B.

Risk i f we leave HBC.


1.

'Ihe core of planning shqs in the n a t i d wrpbratian auild be


i n danger due to their decision to stay where they are as

opposed to mning w i t h FM;.


2.

3.
C.

'ItyO

R k e n t h l loss of revae. FM; could lose $1,000,000 in G U if


Schutler,
(as an individual), Rdlasek, and Tucker would
not cane along. lhis wnuld result in a loss of reverrue of at
least $5,000 per month, $60,000 per year.

of leverage when M i n g w i t h a &oker/Dealer.


risks i f we stav w i t h HBC.

1.

'Ihey do not service our business - we wculd lose people due to


poor servics and lack of responsiveness.

2.

We would not build our hiness as fast as we would like to.

D.

!Be board aarees to divide the issues into

1.

mvoteonwheulertostaywithHBC.

2.

Tu loak a t other &oker/bder

two rarts.

@CUE.

Are we m i n g fozward o r backward and is the Broker/Dader


going to help help us o r hurt us and for
lcmg?

Bob Long;

Bob K a u f m ; Can we continue cur tusiness day to day? Y e s . But it


w i l l r q u i r e mre of a x daily inpt and personal managenm-lt.

BobKauffman; mlathashappenedinthelasttendaystochan@the
boards decision t h a t ms reached in the extended
dated May 5, 1987.

Alan Ioss;

Gave perspective of joint meeting in Maryland. Was


amcemed about the lack of cammication between Fete
Hibbard and Rick Fwcm. H e f e l t there was alot of
disorginization w i t h HEC but ci-~a positive note he feels
like they wanted to work things cut.

E3Zb Umg;

Indicated that he sees the securities area as k i n g the


focal point of our pmblem. He doesn't perceive there
to be a servicing pmblan w i t h M u t u a l FU%~.S,Annuities,
etc.

Alan

Again poses w o n ; Do we have other alternatives to a


Braker/Dealer?

k6.S;

Bob Kauffman; Y e s , we have Planner Securities C;roup (PSG), Financial


Service Corporation (FSC), an3 Integrated Rsowces.

ooncernedabouttheduediligenceatHBC. Aretheystrong
enough t o do local d c a t i o n . Why wasn't more due
diligence done in choosing a Em&x/Dealer.

Alan Loss;

Mike Iiartlett; Basic question is where are our priorities? Do we want

.
Bob KaufBnm:

maxinun service o r maxinun equity participation.

What is

mostimportant.

reason for o w choice of HEC was in direct response


to our stock brokers not wanting to leave Secwities

(Xlr

setuemerrt Cow. (SSC)

Management Group, LTD


,

111-

Omgon Pike Lancashr, M 17601 717-569-5555

b v i d R. Schod, President
Bennett Willians, Inc.
30 East King Stre&
Office ax 1364
Yak, PA 17405
Dear Dave:

Enclosed is a prcpsal for ycur splicaticn. Please go wer its contents and
mi*,
we sharld get together to discuss the project
in person. I will be away until the 18th of May.

wfw you are finished

I lock forxmd to hearing frcw ycu.

Stanley J. cat333xme

President
SJC: lmk

cc: file
Robert J. BeNer, Jr.

BENNET WILLIAMS / SYNDICATION

11. Services and functions of FtG, Ltd.


FtG I and Bennet Williams
111. Structure of Syndication

IV.
V.

Costs of Syndication +Financial S e


4krwd-t d :lIh m s
Financial Senrice Center

m6.

center

SCOPE OF

m s m

The following is a proposal to Bennet Williams, Inc. to pmvide the


syndication and marketing of the 1.5 million office building to be constructed
i
n downtown York, PA.
This proposal is an attempt to describe the role and
function of Financial Management Group, LTD (FMG), the Syndicator, Bennet
Williams, Inc. the General Partners and FMG I the Limited Partnership.
The purpose of the project is to raise the necessary capital
approximately 1.5 million (excluding syndication fees) and to m g e the
partnership through its, tirety until it is dissolved. As per previous
conversations, the b u i l g i l l be fumle3 conpletely f- pprcceeds
without using and debt, 'ch will provide a steady stream of income, projected
to be between 9% - 12%,dth the possibility of refinaxing the project around
the seventh year i
n order to return the original capital back to the investors.
L-

that

FMG will also consider developing a Financial Sexvice Center, similar to


wkj,
r-n.~ts & - > k c * .
WLCI'LC B - L +
U:((?-I WilL b C

icka d d i
yorh.

:<

~ I G Y C I

'

JCQ,C

-b-u.rj/lw c r p , n

eY

7)

~ A L Q~

-J-

( l Ci

U L S ~ ~ C T

~ j $ ~6,~r1 1 n c s r

11.

FUNCTION OF

BENNGT WILmmE

- mE GENEmL PARmEE

(G.P.)

The General Partner (GP) w i l l be responsible f o r the folliwing:

A).

Development - The G.P. w i l l be responsible f o r a l l development


involved in the project.

B).

construction

C)

D).

- The G.P.

w i l l be r e s p n s i b l e f o r all construction

phases associated w i t h the project.

Leasing All leasing r e q m n s i b i l i t i e s w i l l be of the G.P.


The
G.P. w i l l have the task of obtaining 100% occupancy of t h e building
in a reasonable and timely fashion. The G.P. w i l l also be
r e s p n s i b l e f o r determining the f a i r market value of the space
and f o r a t t r a c t i n g a t t r a c t i v e tenants w i t h favorable leasing
agreements t o maintain a favorable and healthy cash flaw.

Management - Tne G.P. w i l l be rspmsible f o r the rcanagement of


both tenants and the building in order t o obtain maximum

appreeiati-+the-proje&-forAuhrcprofib
fukre

/I'

r c c : A ; o - yiven

Guersbte

\ n co me
~ C . , - . O ~ C L

co cd;

h o e 5-

11.

FUNCTION OF

BENNGT WILmmE

- mE GENEmL PARmEE

(G.P.)

The General Partner (GP) w i l l be responsible f o r the folliwing:

A).

Development - The G.P. w i l l be responsible f o r a l l development


involved in the project.

B).

construction

C)

D).

- The G.P.

w i l l be r e s p n s i b l e f o r all construction

phases associated w i t h the project.

Leasing All leasing r e q m n s i b i l i t i e s w i l l be of the G.P.


The
G.P. w i l l have the task of obtaining 100% occupancy of t h e building
in a reasonable and timely fashion. The G.P. w i l l also be
r e s p n s i b l e f o r determining the f a i r market value of the space
and f o r a t t r a c t i n g a t t r a c t i v e tenants w i t h favorable leasing
agreements t o maintain a favorable and healthy cash flaw.

Management - Tne G.P. w i l l be rspmsible f o r the rcanagement of


both tenants and the building in order t o obtain maximum

appreeiati-+the-proje&-forAuhrcprofib
fukre

/I'

r c c : A ; o - yiven

Guersbte

\ n co me
~ C . , - . O ~ C L

co cd;

h o e 5-

'Ihe follaiing is a description of the structure of the partnership. ?he


Partnership w i l l be registered by the Securities and Exchange Carranission a s a
Private Placement Regulation D, W e 144 Offering. ?his w i l l limit the number
of investors t o 35.
A

Bennet Williams Inc.

FIG, Ltd.

-s*W

- General Farher

P v l o r - k j l h ~&S

,-Equity: '26% ok
Income:
5%of N e
/

Equity:
ItIcome:

LQM :

75%
75%of N e t Proceeds
88% of: a h go- )-+a acb-l d e v c l y ~ c ~ t .

IV. COST AND FEES

m , ~ t d . w i l l receive
of the
-,1;?n~associated with

capital raised in order to perfom the


the project.
This includes all legal,
accounting a n d m & % i n g fundions needed.

necessary

77

cd ;,la f l c o c L - ~
w i l l go in;*

y a c

/jlThis means approximately 88%of the-&capital


This
includes
a
l
l
legal,
accounting,
printing, wketing, e+mc of
W
i
p
u -(
b " ' & & @ ~ i ~ -h-tt,r;,
ht-io. $(\L pJrLVM
W:LI
hC
-the ' * o l t i ' u ~ ~ k e ~a~,IbU~ Je ~ ,,?L ~~ ~ " ~ b - j .
'11 I

FEiANCIAL SERVICE

cmmm

Financial Management Group,


will
t o develop a Financial
Service Center similar t o the lancaster Office in the building being
syndicated.
FMG has develop a N1 Service Financial Center that provides a l l
of
the relative services necessary t o manage the financial a f f a i r s of
individuals,
businesses and institutions.
The Center w i l l include the
following sevices:
1.

Financial Planning

2.

Investwrit and Portfolio Management

3.

Accounting and Tax Preparation

4.

R e a l Estate Services

5.

Legdl Services

6.

msrance services

7. Inves-t

and Mortgage Banking

Financial Management Group, LTD w i l l structure the Center similar t o that


of the Iancaster location w i t h the exception t h a t Bennet W i l l i a m s w i l l have a
role in the formation and the operation of the Center. F E w i l l provide the
recruiting and m g e m e n t of the operation and w i l l use the current system
that have keen developed and used in Lancaster.
me ownership w i l l be
structurd among FMG, Bennet W i l l i a m s , and the other Major Players that wish t o
get involved.
Enclosed is an original Business Plan that outlines the concept
in
m e
detail.

HIBBARD BROWN

&COMPANY,INC.

May 11, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:
It appears as though we keep missing each other on the
phone. This is a short note just to advise you that I am sending
up a list of the standard items that we request when we do due
diligence on a private placement.
The reason for my wanting to contact you before sending this
list is that at the present time I am unsure of the structure and
nature of the offering.
I would like you to provide me with the
following:
1. Who is the General Partner?
2. Has counsel for the partnership been chosen? (If not, I
would prefer to make a recommendation to insure speed in
completion of the documents.)

3.
What is the structure of the offering (public, private,
Reg D, 504, 5 or 6)?
4.

Has an independent accountant been obtained?

5.

Is it your intention to take down the whole deal?

If
we need to discuss this matter on the telephone.
necessary,
we should make an appointment for that
phone
conversation.
I will wait to hear your response to these questions and
look forward to hearing from you.

Sincerely,

Ti?/.Richard P. Brown
President

Menzh.r N A S D

M e n h ~ rSlfC

7855 Walker Drive


Suite 620
Greenbelt. Mayland 20770
(301)220.0111

May 11, 1987

Mr. Stan Caterbone


Financial Management Group, Ltd.
Eden Park I1
1755 Oregon Pike
Lancaster, Pennsylvania 17601
Dear Stan:

I was unable to reach you today by phone, but felt immediate


communication was important enough to enclose this short note in
a Federal Express package already being sent to your offices.
I

I became fully aware of your proposed date to have the York


Private Placement on the street at our joint meeting Friday of
last week.

Having put together several private placements, I am sure


that we can meet this deadline, if we coordinate our activities.

I look forward to hearing from you as soon as possible.


Sincerely,

President

UNIVERSAL
"."

May 14, 1987

Mr. Peter Kit$ard


~Brown&Ccnpvvly

7855 W
W Drive
Greenbelt, Maryld 20770
Dear Fete:

As ycu h-w fma cur phone amversation, I feel very poorly about the
Fm; Board of D i r e c t o r ' s decision to leave Hibbard BraJn. Neither
Mike M e t t or I shard the feelings of scmne "key pxducersl1 that
lang-term service shortfalls would exist. We also felt that your
people were bath amptent and intemsted in providing good mice.
Given time, our feelings were that ycu wculd be able to semi= the
needs of a hiqh volume office.
I am very concerned about the attiand mrale of your people
n q a r c l i q the x x x x n t ixrn of events. It wculd be ,wen mre unjust of
Fm; to leave the olblameolon HB anployees for pmr service. In my
opinion, there existed an ovemcsction to sane system @lens w i t h
mch relationship unlerrrmung by PIhad persanal
considerations in mind. mat is a l l !

..

.
I

I believe that I did my level best to avoid the votq and I also did
level best t o m a v t h e v o t e . I r e g r e t t h a t I failedandthatmy
me lrmst be associated w i t h the deckion d announcement
Correspondence.
A t this tine, I am so^ throughthe feelings and
messages sent to nre in this action. I hope you can urxkstand and
that your staff can also I1I.derstand.
I give you my best w i s h e s for the future and believe yau w i l l succeed
i n proving this to be a bad decision by FlG.

Robert E. Kauffman

SC'IDCO PRODUCTS GO.-4Contmued)


mlas!.c

Consumer Video RWUZUh v . (I)

Sack Dn I11

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Park R w . NJ 076%
T l l W1-9301WO
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3651. YX(. 267s
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Coml%nen!alFtbre Drum (1)


R?. mtr. 18% P--.v

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Paper Stak Dealer.. Inc. (1)

s.1.c; 2291

Oennlr M tavanaugn
Russell Cleary
John H. Dsnaelr
Gwrge H. Dtxon
Rsnald K. Gamey
Roben C, Gtlmore
F. 1. Heliell8nger. I1
Burleqn E. Jacobs
George W. Mead. 11
W~llharnG. Pnciilpr
W811tarnW. Sltnson
Donald F. Swanson
W l N l ~ nR. Wallm

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SORG PRINTING CO.


~
111 8 t h Avo.
New York. NY 10011
Tel.: 212-741-6600
~

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NY

SOR W O T C )

CCmpDnent PIOM~IS Lhv. ()I


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9s.: 166.544.272

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F,scaI Yearend: 5131186


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Galben B Soro n7nm ad
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Roy A. Cardi;(&es.)
Harold Cmney I E x w V P . 6 SKI

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Johnh MonNUI

Sow Magnetic RoduOI Co. (1)


t.-

SONV CORPORATION OF AMERICA


(Wholly-Owned Sub. of Sony Corp.. Tokyo.

Japan)
Executive Headquarters. S W. 57th St.
New York. NY 10019
7el.: 212-371-5800
NY
Nat(onal Opera. Headqtr.
Sony Drive
Park Ridge. N J 07656
1 el.: 201-930-1000
SriE+NYSE
PS Bo Ci MW Ph Ts)
Assets: S5.345.%7.0~
LlabLlrs: 13.132.561.000
Nef mmn 12.212.9BO.000
W r O r . Sic: S6.701.816.000
Enp- 43.000
Mlr 6 S k r 01 E * N D n r r Equrp.. lnrmmmtr 6

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5065
N n o Ohga (Uun Bd.)
Kenp T s v a (Chm 6 -1
EJT 0111cer)
Nw' Vander Dusren (Rar 6 Chel Opn, On-)
V ~ z h a dE a r (EIBC. V P.&)
Flben h l l s n (Exec V P)
Kocht Twnda (Exec. V.P.+s.
6 E m )
John Slerr. (Sr V P - H v m n RewnrcnJ
J Ph8l.p SUci 19
. VPJ
Kennelh Nees ( V P 4
. Sec)
Chns Wab. N P G M . Refs 1
F.a.l* LEMn W P 6 Gen Cnnrrer)

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Board of Dlrtnom
Roben L. sorp
Eugene Blanc. Jr.
Eugene Bkm. ~ r .
Ncholas Cawto
Roy A Cardta
Dons S Cunnlon
DOM P a e r s
AIben W. VanQ

.
I
-

S O 0 LINE CORPORATION
56% Owned by Canadian Pacific Ltd.
Soo Unt Bldg.
MinneaooI#%MN 55440
-. ~.
Ma1ling'~ddiess: P.O. Box 530
Mlnneapollr. MN 5 s u o
Tel.: 612-347-8000
MN
SOO-(NYSE)
&see: S1.138.205.m
Lntdrles: S830.327.m
Net Wath. W7.878.000
A p m Sk.: 161757OWO
Ew: 73x1
~ransmtsndinp
bn+av
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DQnrvS M. Cauamnruph (avn 6 Qref Ex-.
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SOUNDESIGN CORPORATION
Harbor Financial Center. Plaza T w o
Jersey Clty. N J 07302
Ttl.: 201-434-1050
DEArrefs: S74.132.~0
Llab;blder: S40.902.m
Net W m h : s33.230.m
WO..
s1s.: I2W.OOO.000
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Mlr. OT T~~YSIOI
Rad'or 6 MW WS.
S.1.C; 36