We're on the record on October 19, 1999, at 9:30 a.m. I'm Kelli Chan," the tape begins. "I'm a member of the Enforcement Division of the Central Regional Office of the Securities and Exchange Commission. I am an officer of the Commission for purposes of this proceeding. This is an investigation by the United States Securities and Exchange Commission in the matter of Oakleaf International, matter number D-2174A, to determine whether there have been violations of certain provisions of the federal securities laws. I am in the Commission's Salt Lake District Office, at 50 South Main Street, Suite 500, Salt Lake City, Utah, today to take the testimony of Robert Dark, which was scheduled to commence at 9 a.m. The court reporter and I have been here since approximately 8:50 a.m. today. It is now 9:30 a.m., and Mr. Dark has not appeared."
Chan, an SEC investigator who traveled from Denver to Salt Lake City to record this monologue, is becoming familiar with being stiffed by people connected with Oakleaf International, an Arizona-based investment company.
In early October, the SEC issued six subpoenas in five different states, requesting bank statements and accounting records connected to Oakleaf International, a self-described "worldwide enhancement fund." Chan and two other Denver-based investigators believe the company could be bilking hundreds of investors nationwide by promising mountain-sized returns, according to court documents. Just how much cash is rolling in and how many people are involved remains unknown; investigators won't elaborate on their ongoing efforts.
But court records that indicate Robert Dark, aka Clyde Bob Dark, was promising drool-instigating annual returns of 120 percent on investments as small as $1,294. Dark, along with five other people in locations stretching from Washington to Minnesota, instructed investors to wire checks to Meliorations Management Team, which, like Oakleaf, is not registered with the SEC.
If Chan was feeling unappreciated in Salt Lake City, she certainly wasn't getting much more love on October 15 when she received a fax from the man representing the Oakleaf six. His name and title are -- take a deep breath here -- Shawn Talbot Rice, Overseer, Counselor of the Society of the Israelite Mosaic Paternal Ethic (SIMPE), A Religious Corporation Sole, Counselor for Oakleaf and Meliorations and their Private Club, PrivateAssets.com.
In his correspondence, Rice thanked Chan and her colleagues for the "alleged subpoenas" on behalf of his clients but politely declined the "generous" invitations. Rice dismissed the subpoenas as "administrative nonsense" and, to the bewilderment of SEC investigators, disputed the jurisdiction of what he calls USA INC.
"For deeply held philosophical and religious beliefs," Rice concluded, "I hearby state that my allegiance to this private club is supercedeous to any alleged allegiance to the UNITED STATES, its agencies, etc, et al. and is only subservient to the God of Abraham, Isaac and Jacob."
For good measure, each of Rice's clients sent along a signed fax that suggested, "If you have any further questions, please refer them to my counsel, Shawn Talbot Rice, Overseer." In a subsequent letter, Rice added that his clients are beyond the SEC's jurisdiction. "Their allegiance to our private club is based upon the Torah. This allegiance is higher than any alleged allegiance to your administrative agency's company, or its sureties."
Rice's secretary said the Overseer was teaching seminar classes all week long and unavailable for comment, but Rice later left a voice-mail message requesting documents detailing full financial disclosure from Westword before agreeing to an interview. Rice is a busy man; aside from his religious duties, he also serves, according to a group called Team Law, as the "governor" of Arizona.
By the word of its Web site, Team Law is a nationwide political group that helps "beneficiaries" (for a fee of $595) learn how to eliminate taxes, maintain landowner rights and protect their families. The group holds elections and claims to have a full-time office in Denver, yet, not surprisingly, there is no operating license listed with the secretary of state. Team Law's highest-ranking member, "Senator Madsen," lives in Arapahoe County, though his first name and phone number are unavailable. Madsen served as the "governor" of "Corp. Colorado" before assuming his senatorial seat late last year. Currently, he's running for the President of the United States and, if elected, promises to abolish taxes, return the country to the gold standard and appoint at least three judges to the Supreme Court.
Team Law was not mentioned in court documents, and SEC investigators would not confirm or deny whether the group was included in the scope of their investigation.
Though Rice, who also refers to himself as the Presiding Patriarch, was not specifically named in the SEC investigation, other ventures in which he and his confederates are involved are coming under scrutiny by the SEC. One such entity is the World Community Educational Society, an online college for budding investors and precious-metal traders.
After signing up and handing over fees and personal information, students can listen to recorded classes on "Estate Planning and Asset Protection," "Introduction to Private Economics" and, curiously, "Contracts With the Corporate Government." Students may trade precious metals through a link called e-gold. The user hands over account information and is privy to gold, silver and platinum trading online.
One can even listen in on "Fireside Chats" from J.W. Zidar, the society's "Longtime Global Financialist and Fund Manager." Zidar may be the school's luminary, but SEC investigators also believe the Arizonan is a part-owner in Oakleaf International.
SEC attorney Amy Norwood says she can't go into detail about Oakleaf, not only because her investigation is still ongoing, but because the nature of the organization is still so vague. "Their offering materials don't specify how they work, how they make a return. So we don't really know." When a Westword reporter posing as a potential investor reached Oakleaf International, the telephone conversation was cut short when the reporter was unable to name a personal referral.
Another company associated with Rice and Zidar is PrivateAssets.com, which can still be accessed on the Web. The site is simply a company logo that asks users to click on it for more information to become a member; it also reminds users to mention the person who referred them.
Meanwhile, investigators are quickly growing frustrated with Rice and his devotees, who continue to stonewall -- even taunt -- the SEC.
After Chan returned from Salt Lake City, she and Norwood fired off warnings to the Oakleaf gang via Federal Express insisting that the group disclose documents by November 4 or face a hearing in Federal District Court. Upon receipt, Rice sent back an underlined passage from the book "The Life of George Washington" along with this response: "In light of your inquisition, as opposed to an investigation, you may find the enclosed enlightening."
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In a fax dated "October 22, 1999 A.D.," the passage recounted a battlefield scene where General George Washington refuses to accept a letter from his British counterparts since the heading is addressed to "George Washington, Esquire." Washington reasoned the correspondence was not worthy since it did not acknowledge his proper title as General, the moniker bestowed upon him by Congress. Faithful to this concept, Rice has since delegated the duty of correspondence to "Jeffery Allen Cady, Scribe for Presiding Patriarch."
The tact has not amused Norwood. "When we send out a subpoena, we expect them to be complied with. And if people don't comply with them, then we go out and enforce them."
On November 5, the SEC won a ruling from United States District Judge Lewis T. Babcock, who issued an order demanding that Rice and his clients appear in court in Denver on December 23. An appearance is unlikely -- something Chan is well aware of.
"It's now 9:35 a.m.," she huffs at the end of her taped recording in Utah. "And Mr. Dark has not appeared. We will go off the record at 9:35 a.m."