Franchise Pick

44 opinions for Franchise Complaint: Lyons & Wolivar Investigations

• michael webster
  Jul 3, 2008 at 8:07 pm

  Uh, really.

  You based your entire decision on this one question?

  Highly unlikely - stop making it worse for your next attorney.

• sean
  Jul 4, 2008 at 8:18 am

  Michael:

  One question? He said he had a list of thirty questions:

  The list of some thirty questions that I asked them in our final meeting before deciding to get involved answered everything I needed to know about their franchise. But again, I was given misinformation and lied to.
  A close family member of mine was a fraud investigator with a company similar to this. These companies use deception to discredit insurance claims on a regular basis - sometimes justifiably, sometimes not. Why follow someone around for a week, hoping to get incriminating footage when you can put a 40 lb. bag of potatoes on their car hood, then film them taking it off when they come out of the supermarket? You’re done in an hour, bill the client for two days and everyone’s ahead of the game (except the poor dude whose claim was dismissed for free potatoes). They routinely deliver bogus packages or call under bogus premises to verify identities.

  They deceive people for a living all day long. It’s not hard to believe that they might stretch the truth in the franchise sales process. I know after a while in that business it’s hard to remember what the truth is.

• Rod
  Aug 7, 2008 at 8:42 pm

  On 6/24/08 I was surfing the internet looking for information about franchise fraud. I checked out the website at www: Rip-offreport.com and read the article posted under Report #1602. This was about the franchise business Speedy Sign-A-Rama, USA.

  When I read the details of the alleged rip-off I noticed a great similarity to the experiences I’ve endured after buying into a Lyons & Wolivar Investigations franchise, also known as L&W Investigations (L&W). In fact, both bogus franchise businesses appear to be modeled after the same basic scam. This leads me to believe many franchises are probably set-up to rip people off this way and they essentially do so with criminal immunity.

  I won’t go into the details other than to say the tactics used by Sign-A-Rama are the same ones used by L&W. These are clearly fraudulent enterprises set-up with criminal intent from the very beginning. However, I’ve learned the hard way that law enforcement agencies won’t touch these cases with a 10-foot police baton. These are some of the agencies I’ve reported this crime to so far: the FBI, Orange County CA Sheriff’s Office, Orange County District Attorney’s Office, Orange County Grand Jury, U.S. Postal Inspector, the Redding CA Police Department, the Shasta County District Attorney’s Office, the FTC, and my congressman.

  In each case I was either ignored and received no reply from the agencies or was told it wasn’t a criminal matter. The Redding P.D. and Shasta DA’s Office told me they didn’t have jurisdiction although I reside here. Thus, I’ve been denied my civil right to be a crime reporter or whistle blower. One of the most frustrating aspects for me is that I began reporting this crime in September 2004 and franchisees are still being ripped-off.

  In fact, I was recently contacted by a retired RCMP officer who bought a territory in Canada for $200,000. He suspected he’d been defrauded, but didn’t realize the extent until I sent him all my documentation. He said L&W never disclosed any information about the group of 11 ex-franchisees who’ve been engaged in a legal battle with them since around March 2006.

  Our attorneys took this case on contingency and have reportedly spent over $1,000,000 of their own money to keep it alive. L&W has applied the same tactics used by Sign-A-Rama to delay and outspend us. The retired officer was dumbfounded to learn that U.S. law enforcement allowed this crime to continue and claim him as a victim even after I reported it fully to every proper authority I could think of a long time ago. He plans to report this crime in Canada, but meanwhile, franchises are still being sold.

  I noticed that one of our ex-franchisees has posted a rip-off report on this website and I’d like to add this one as well. However, my main question is why won’t law enforcement agencies investigate and stop these criminal enterprises? Surely they all understand the elements of fraud. Why do these White Collar criminals keep getting away with defrauding honest citizens who, like me, didn’t think this could happen in America?

  I also reported this crime to several news agencies, but no one helped us. If this website has contact with legitimate investigative reporters I’d be willing to cooperate with them to get the story out and warn others.

• Rod
  Aug 8, 2008 at 9:15 am

  Revised Victim/Witness Statement for the L&W Case

  Submitted by:
  Rod Lotspeich
  CA PI License #23591
  Date: 7/16/08
  Email: RWLotspeich@hotmail.com

  Synopsis:

  In April 2003 my wife and I spent $70,000 to purchase the northern California and southern Oregon territories of a new franchise business called Lyons & Wolivar Investigations (L&W). At that time L&W advertised on their website, through printed material and/or through statements made by their personnel, that the Chief Executive Officer (CEO), Neal Lyons, had a Masters Degree in Business Administration (MBA) from Harvard University.

  Two high profile, retired FBI special agents, Rick Hahn and Jim Norman, were also touted as members on the Board of Directors. They were supposed to have significant input and control over how the business was conducted.

  Mike Wolivar was promoted as a former Marine Corps Officer, FBI agent and successful private investigator. Franchisees were supposed to follow his established procedures to handle cases and run their own offices.

  In September 2004 I learned from an ex-franchisee, Ron Bruns, that Wolivar, Hahn and Norman had all legally resigned from L&W in March and April 2003, before we even signed our franchise contract. L&W personnel never told us about this material fact. Up until I spoke on the phone with Bruns I thought Wolivar, Hahn and Norman were still board members, but didn’t do much to earn their keep. Of course, we would never have signed our fraudulent contract if Lyons told us the business no longer included these three or that he was just kidding about his MBA.

  I first reported this crime to FBI Agent Andy Gruninger in the Las Vegas Office on 9/20/04. I emailed my victim statement to him which I believe gave ample probable cause that L&W has been a fraudulent enterprise from the very beginning. I also included hearsay I gathered from Bruns and another ex-franchisee, Sharon Heimbach (now Pins).

  In addition, I asked Heimbach to write out a victim statement for me so I could illustrate how L&W was using a common scheme and design to defraud franchisees, collect their upfront fees, terminate them, and then sell the territories again. I sent this to Agent Gruninger as well.

  When I talked to Bruns he said he’d been fighting a legal battle with L&W for over a year and had spent more than $30,000 just trying to get to arbitration. He said L&W consistently used delay tactics, probably to exhaust his funds and force him to drop the case.

  Heimbach told me she tried to fight L&W at first too, but after paying around $15,000 to her lawyer she had to give up.

  At first, I assumed Hahn and Norman had been duped by Lyons into lending a false credibility to his scheme and didn’t realize the extent of L&W’s criminal activities. However, Bruns told me he phoned Wolivar and Hahn when he first realized Lyons intended to defraud him.

  He told them both the full details of the crime and asked them to intercede for him with Lyons, so he could get his $100,000 franchise fee back. But instead of reacting like Good Samaritans, Wolivar and Hahn told Bruns they had legally extricated themselves from L&W and couldn’t help him. Neither of these former FBI agents told Bruns to report this crime. Nor did they offer to report it themselves. They didn’t lift a finger to help. Why not?

  After I sent my report to Agent Gruninger, L&W agreed to enter arbitration with Bruns, but not Heimbach or me. We’d have to start from scratch and pay more attorney fees for that kind of justice. Bruns was still communicating with me and said he expected to get his full franchise fee back, plus attorney’s fees, and maybe punitive damages. However, after his arbitration he refused to answer my emails or phone calls. Thanks pal.

  Even though I fully reported this crime to the FBI and later to the Orange County Sheriff’s Office and Orange County District Attorney’s Office, no one even took a crime report from me, much less launched a criminal investigation. Franchises continue to be sold.

  Eventually, we had a group of about 11 disgruntled ex-franchisees who believed we’d been defrauded. One of our members had a personal connection with a law firm and they agreed to take our case on contingency. Otherwise, few of us could have afforded legal help.

  Since law enforcement chose to abandon us our lawyers were the first to contact Wolivar, Hahn and Norman. They all agreed to write sworn statements for us if we’d sign waivers promising not to sue them in civil court. I wondered why they needed that kind of guarantee before they’d simply tell the truth.

  In March 2006 Wolivar, Hahn and Norman made their declarations which corroborated virtually all the facts I’d already presented to law enforcement.

  Remember, we bought our franchise in April 2003. I first reported this crime to Agent Gruninger in September 2004. Today is 7/16/08. We still haven’t made it through arbitration, nor has a crime report been taken. Our attorneys have reportedly spent over $1,000,000 of their own money to keep this case alive. Time flies when you’re having fun.

• Rod
  Aug 8, 2008 at 9:23 am

  The Elements of Fraud

  Before I go into the details of my Revised Victim/Witness statement I’d like to start with some definitions of fraud copied from the internet. The first section below is taken from the article on Fraud posted on the Wikipedia on-line encyclopedia.

  In criminal law, fraud is the crime or offense of deliberately deceiving another in order to damage them – usually, to obtain property or services unjustly. Fraud can be accomplished through the aid of forged objects. In the criminal law of common law jurisdictions it may be called “theft by deception,” “larceny by trick,” “larceny by fraud and deception” or something similar….

  Fraud can be committed through many methods, including mail, wire, phone, and the internet (computer crime and internet fraud)….

  Fraud, in addition to being a criminal act, is also a type of civil law violation known as a tort. A tort is a civil wrong for which the law provides a remedy. A civil fraud typically involves the act of intentionally making a false representation of a material fact, with the intent to deceive, which is reasonably relied upon by another person to that person’s detriment. A “false representation” can take many forms, such as:

  A false statement of fact, known to be false at the time it was made;

  A statement of fact with no reasonable basis to make that statement;

  A promise of future performance made with an intent, at the time the promise was made, not to perform as promised;

  A statement of opinion based on a false statement of fact;

  A statement of opinion that the maker knows to be false; or

  An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion.

  “Special knowledge” in this case means knowledge or information superior to that possessed by the other party, and to which the other party did not have equal access….

  More Definitions of Fraud from the Internet

  1. crime of cheating somebody: the crime of obtaining money or some other benefit by deliberate deception.

  2. somebody who deceives: somebody who deliberately deceives somebody else, usually for financial gain.

  3. something intended to deceive: something that is intended to deceive people.

  mail fraud: A fraudulent act involving misrepresentations made through the United States Postal Service for financial benefit.

  wire fraud: A fraudulent act involving misrepresentations made via telephone or other form of electronic communications.
  Fraud is defined to be “an intentional perversion of truth” or a “false misrepresentation of a matter of fact” which induces another person to “part with some valuable thing belonging to him or to surrender a legal right”.

  In addition to the traditional criminal definition of fraud, there are many regulatory laws that have very specific rules that must be complied with. If you do not follow these rules to the letter, you could be charged with and convicted of fraud.

  Act or course of deception, an intentional concealment, omission, or perversion of truth, to

  (1) gain unlawful or unfair advantage,

  (2) induce another to part with some valuable item or surrender a legal right, or

  (3) inflict injury in some manner.

  Willful fraud is a criminal offense which calls for severe penalties, and its prosecution and punishment (like that of a murder) is not bound by the statute of limitations.

  In order to understand and appreciate this case I think, in addition to an upfront definition of fraud, I should add a relevant quote from Vincent Bugliosi. I used this to open a chapter in my novel which I’ll paste here.

  Chapter 7

  Adrift in a Sea of Incompetence and Indifference

  Incompetence is rampant in our society, from presidents on down. Vincent Bugliosi

  Men are accomplices to that which leaves them indifferent. George Steiner

  99% of lawyers give the rest a bad name. Larry the Cable Guy

  Before I ever heard of L&W I read the book, Outrage, by Vincent Bugliosi. The subtitle is, The Five Reasons Why O.J. Simpson Got Away With Murder. For those who may not be familiar with Mr. Bugliosi I’d like to quote from the brief biography at the end of his book.

  Vincent Bugliosi received his law degree in 1964 from the UCLA Law School, where he was president of his graduating class. In his career as a prosecutor for the Los Angeles County District Attorney’s office, he won 105 out of 106 felony jury trials. His most famous trial was the Charles Manson case, which became the basis of his book Helter Skelter. But even before the Manson case, in the television series The D.A., actor Robert Conrad patterned his starring role after Bugliosi.

  Both Helter Skelter and his subsequent Till Death Do Us Part won Edgar Allan Poe Awards for best true-crime book of the year. Bugliosi’s most recent true-crime book, And the Sea Will Tell, was #1 on the New York Times hardcover bestseller list. All three books have been adapted for network television.

  According to Bugliosi,

  I start out with the assumption that a lawyer in a criminal case is going to be incompetent, substantially so. I find my assumption to be rarely wrong. Yet society starts out with the very opposite assumption. I happen to know society is wrong, dead wrong. In fact, it is so bad that the only adjective I’ve been able to come up with in the lexicon that adequately describes it is “staggering.” It’s so common that I expect it, and when I find competence, I am always pleasantly surprised.

  It is not my purpose in this book to convince people of this reality. If the reader isn’t aware of the prevalence of incompetence, I certainly won’t be able to disabuse him of his sheltered view in a few paragraphs. But people can’t do the simplest things right. For instance, I travel a lot, and I always assume that room service is going to forget something, whether it is water, cream for my coffee or butter for my bread, a knife, fork, or spoon, part of the order, etc. And room service is a simple, repetitive, day-in-and-day out task that people with an IQ of 60 should be able to perform. But the people making these errors, many of whom are students working their way through college, don’t have low IQs. There is no reason to believe, in fact, that their IQs are any lower than those of people going to law school.

  How often have you been in a parking garage and found that the signs directing you to the exit are grossly inadequate? They’re too small, or partially obstructed, or not in the obvious place they should be in. Or after one exit sign, the next one is so far ahead that you have already taken a wrong turn where there was no sign to guide you. And so forth. Putting adequate signs up has to be fairly simple, and the person has all the time in the world to do it. And does anyone really think that those who are responsible for putting up these signs (or highway signs, which are so often very bad, and undoubtedly have contributed to many, many deaths throughout the years) are mentally retarded? No, they’re just incompetent. Normal people.

  Have you ever moved into a brand-new home? Aren’t there one hundred defective things, many of which require your calling the workers out three or four times to fix once and for all? Do you really believe all these carpenters, plumbers, electricians, etc. are morons? Of course not. They are perfectly normal, incompetent people. It is just too much for them to do their job well, even though the work they do is relatively simple work they do every working day, and it’s almost mechanical, necessitating very little thinking.

  How about all the consumer products that are difficult to operate because whoever manufactured them was too incompetent to make it easy? Or the instructions that are hopelessly confusing and sometimes flat-out wrong? In fact, many of today’s fancy, gadgety consumer goods aren’t nearly as easy to operate as were their simpler predecessors.

  Apparently, the brainy manufacturers haven’t gotten it through their skulls that the only purpose of virtually all products is their utility. And that frills should be added, if at all, only to enhance the product’s utility, not at its expense.

  How about the large office buildings either without street numbers on them or with numbers located on the building in such a way they are difficult to see from the street? Or floors and room numbers at some hotels which require an Indian guide to find? Or the recorded voice in the shuttles at some airports that are virtually impossible to hear or understand? Do you really believe the airport administrator has a much lower IQ than the average lawyer?

  ….There are of course thousands of other examples of incompetence. These are but a few.

  If incompetence is so endemic in our society, even among people doing simple, repetitive things with a lot of time in which to do them, doesn’t common sense tell you that the incompetence is going to be even more common and pronounced with trial lawyers who deal with different witnesses in every case, with different facts and evidence, who are constantly forced to think on their feet under pressure of time, and who have an opponent who is trying to thwart and negate their every move? Yes, common sense tells you this. But this is not the way society sees it.

  I think Mr. Bugliosi may have the key to why the L&W Franchise Fraud has continued so long. I believe every law enforcement agency or individual I’ve dealt with while trying to report this crime has been incompetent and derelict in their duty, except for FBI Special Agent Andy Gruninger in the Las Vegas, NV office. The reasons for this will evolve throughout this statement.

• Rod
  Aug 8, 2008 at 9:26 am

  Revised Victim/Witness Statement

  I was in the process of trying to finalize my Victim/Witness Statement when I came across some disturbing information about franchise fraud which I’d like to briefly include here. I’ve been writing notes, letters and memos about this case for several years now and my material has gotten longer and more tedious.

  I’m going to piece past documents together to emphasize my thesis that the franchise industry is extremely vulnerable to White Collar criminals. This is true primarily because U.S. law enforcement agencies refuse to take action. My goal is to illustrate our case against Lyons & Wolivar Investigations, also known as L&W Investigations (L&W) and to have a document I can email to others who may be interested. I especially want to give other potential franchisees fair warning about the hell unscrupulous franchisors can inject into your life once you sign your contract and pay your fees. As I’ve learned the hard way, most of us can’t afford to fight them in civil court.

  In addition, the only reason these scams continue unimpeded is because law enforcement, in general, treats them as a civil, not criminal, matter. I don’t believe that’s true. Fraud is fraud, whether it’s committed by a franchisor or a welfare recipient. Look what the FBI did to poor Martha Stewart over what was essentially a victimless crime. Her only violation was save her own $40,000 and lie to the special agents. But someone wanted to make an enormous example out of her and she actually got a six-month prison sentence. When you compare the magnitude of L&W’s crimes against Stewart’s actions it’s laughable.

  To clarify my position I want to quote from the article entitled, The Victims’ Rights Movement, listed on Wikipedia.

  The “victims’ rights” movement began in a response to the spread of two beliefs. The first was the perception that the legal system was more concerned with the protection of the constitutional rights of criminal offenders and alleged offenders than they were the victims of their offenses.

  This was especially inflamed by numerous lawsuits alleging unconstitutional conditions in many U.S. jails and prisons, and a strong emphasis on the education and rehabilitation of those who were incarcerated, especially beginning in the late 1960s and 1970s.

  Advocates wanted to see affirmative help for crime victims to be at least as extensive as that provided to the offenders, and for victims to receive compensation from offenders whenever this was practicable. The second stimulus was the spread of the belief, bolstered by prominent stories in the media, that the number of released or paroled offenders returning to attack their original victims or victims’ families was increasing, in some cases in retaliation for having reported the original offense.

  Most state victims’ rights amendments provide for the prosecutors to stay in touch with the victims and their families during all stages of prosecution, and to stay in touch with them post-conviction to advise them of events such as parole hearings, applications for pardons or other forms of executive clemency or relief, and similar news.

  They may require that any pay received by an offender while incarcerated go at least in part to compensate the victims….

  I believe every person who ever bought an L&W franchise has been the victim of fraud. I believe every law enforcement individual or agency that’s refused to take a crime report and investigate this crime has been derelict in their duty. I believe we have a legitimate lawsuit against them as well as L&W.

• Rod
  Aug 8, 2008 at 9:29 am

  The Franchise Fraud

  At this point I want to introduce some information from the book, The Franchise Fraud, by Robert L. Purvin, Jr. He’s described on the book jacket as “the founder and Chairman of the Board of Trustees of the American Association of Franchisees and Dealers, as well as a noted and respected attorney and expert on franchising and franchise law.”

  I’m going to quote from the book without giving footnotes or endnotes.

  This book demonstrates that the franchising industry has portrayed a seriously false and fraudulent image….

  In truth, as often as not, franchising provides neither safety nor business ownership; sometimes the franchisor is the enemy instead of the protector.

  This book expresses a story that needs to be told; it exposes a side of franchising, the dark side, that has rarely been revealed….

  This book is not about the criminal element that is present in any industry. Although I have met my share of black hearted franchisors (and also some black hearted franchisees), the basic premise of The Franchise Fraud is that the abuses in franchising largely emanate from a natural order dictating inevitable corruption when there is a critical imbalance in economic power….

  Too often, franchising is a fraud.

  Through franchising, as many dollars have been bilked from an unsuspecting public as have been earned when the industry fulfills its enormous promise. Believing themselves protected by federal and state laws, unwary investors have gobbled up hundreds of thousands of franchises….Bedazzled by Department of Commerce statistics ‘alleged’ to verify that 95 percent of all franchisees are successful, would-be entrepreneurs grab for the brass ring of business ownership through franchising….

  In reality, the odds in favor of success are not nearly as rosy as the franchising industry maintains, and the risks of business ownership are substantial for franchised businesses….

  While the conventional wisdom talks about the protective relationship of a franchisor to its franchisees, virtually every court case decided in the United States has ruled that a franchisor has no fiduciary obligations to its franchisees. Instead, U.S. courts have agreed with franchisors that franchise agreements are ‘arm’s length’ business transactions.

  In their selling efforts franchisors claim to be partners and mentors in the franchisee’s corner. In the franchise agreement, however, the story changes; franchisors invariably deny any binding protective duties to their franchisees. Once in court, franchisors argue they are merely sellers of goods and services owing no special duties of care or support to their franchisees….

  The franchising industry suffers from something I call ‘systemic fraud.’ It is the industry wide representation, supported by questionable Department of Commerce statistics, that a franchised business is built on a foundation of gold (or ‘Golden Arches’) and that franchising is a sure way for an entrepreneur to own a business. The many myths about franchising have been spawned and spread by the franchising industry. Make no mistake, when a myth is represented as truth, and relied on by unknowing investors to their detriment, the result is fraud…

  The representation by the franchising industry that buying any franchise is a guarantee of business success is false and irresponsible. It is The Franchise Fraud….

  The Franchise Fraud also represents that franchisees are protected by federal and state law, and therefore franchisees can buy with confidence from franchisors who have complied with various laws. The plain truth is the franchise laws, allegedly designed to protect investors, really protect the franchisors whose powerful lobbies have turned the structure and interpretation of franchise legislation to their own benefit….

  Without exception, so-called franchise investment laws lack important protections that are usually present in statutes designed to protect investors and consumers. For example, there are no minimum standards that franchisors must meet to qualify to sell a franchise. Nor are there any investor suitability requirements to be met by prospective franchisees that might prevent the offer of speculative ventures to unwary or unsophisticated investors. Minimum investment requirements have been basic investor protections in federal and state securities laws for almost 70 years. No such laws protect franchisees….

  Although the typical franchise agreement states the franchisee is an independent contractor, (in essence, in business for him or herself), most franchisees have fewer rights than employees, and may more closely resemble indentured servants…The most common complaint of franchisees is that they are given no support from their franchisors, nor are they allowed to operate independently….To stay in business, the franchisor must continue selling franchises….

  Some franchise systems actually churn their franchises; that is, force a franchisee out of business so the same franchise can be resold over and over again for additional franchise fees. Churning in the stock market has been illegal since the depression, but many major franchisors thrive on the practice….

  The most brutal manifestation of The Franchise Fraud, however, occurs on a franchisee’s termination, or attempted termination, of the franchise relationship. Only when a franchisee tries to go independent or change brands is it discovered how “indentured” (rather than “free”) the relationship really is. Many franchise agreements claim to own the business on termination, or claim the right to buy the business for a price substantially below market value….

  Most of the chapters in this book describe and analyze various manifestations of The Franchise Fraud. The Franchise Fraud, does not appear in exactly the same way in every franchise system. But in all its manifestations, there is one important common element: The Franchise Fraud exists because franchisees lack sufficient market power, economic power, or political power to stop it. In the absence of countervailing market power for franchisees, franchisors are able to wield enormous control over their franchise systems. Until franchisee market power is developed, The Franchise Fraud will continue unabated….

  Based on the astounding dollars that flow from the payment of franchise fees, The Franchise Fraud may be the greatest fraud ever perpetrated on the American public. The target of The Franchise Fraud is the middle class. Franchising targets that great body of working Americans who have managed to accumulate $25,000 to $500,000, and who long to own their own business. In 1993, Entrepreneur reported that the average franchisee “has a net worth of $329,704 before investing in a franchise.”….

  The tragedy of franchise victims is the magnitude of their losses. Typically, franchisees bet the farm when they buy a franchise. Accordingly, when they lose their investment, it is not like dropping a few thousand dollars in the stock market. Usually it means the family home, life savings, and maybe credit rating. Often it means starting over with an albatross of huge debt and bad credit around the former franchisee’s neck….

  I recently had a conversation with a lawyer with the Federal Trade Commission. We were talking about franchisee losses, and I was expressing my alarm at the magnitude of the size and the consequences of a typical franchise failure. The FTC lawyer responded to my comments by noting a fact that had never occurred to me: Virtually every franchisor ‘prequalifies’ prospective franchisee candidates by performing a complete evaluation of their credit and financial circumstances. Effectively, every franchisor is aware of exactly how much money the franchisee has to lose before the franchise is ever sold….

  In my experience, the number one complaint of dissatisfied franchisees is their franchisor’s lack of guidance and support….

  Franchise terminations happen for many diverse reasons. Usually the desire to end the relationship (for both Parties) is economic—the relationship is not profitable (or sufficiently so) for either or both parties. When the franchisor terminates the agreement, it usually claims the franchisee has violated a ‘material’ provision of the franchisee agreement giving cause for the termination. More often than not, the franchisee is behind in royalty payments, but as will be seen hereafter…the franchisor has many options to choose from when termination is desired….

  Some franchisors set their franchisees up for failure so that the franchisor can open a company-owned store in successful markets or avoid unsuccessful markets….

  Keep in mind that one of the major advantages of expansion through franchising is achieving risk-free venture capital from franchisees….

  Franchisors are increasingly discovering they can take advantage of the expendability of their franchisees to generate substantial revenues from the sale of franchises and to engineer a franchise network into a company-owned network….

  An extremely high percentage of the injured franchisees who see me in my law practice are hopeful I can represent them on a contingent fee basis. They have seen the late night television ads for personal injury attorneys who will work on a straight contingency, and believe franchise lawyers will (or can) work on the same basis.

  Unfortunately, the practice of contingent fee legal services can rarely be employed in the franchising context. Indeed, the perception that contingent fee attorneys are taking risks for their clients is a myth. No attorney will accept a case on a contingency if there is a risk of losing. The vast majority of contingent fee cases are settled quickly out of court, and those that actually go to trial are inevitably the result of an attorney’s misjudgment in accepting the case….

  Arbitration clauses are also highly favored by the courts as an effective means to lower the cost of franchise disputes. Unfortunately, arbitration clauses have the practical impact of substantially reducing judgments. In fact, proponents of arbitration argue this is a very important justification for the procedure. The problem is that civil suits provide (and exposure to large jury judgments establishes) a deterrence to a franchisor’s abusive practices….

  Even more importantly, most arbitrators will not allow the joinder of multiple franchisee plaintiffs in a single arbitration, thus completely blunting the franchisee’s ability to level the playing field by joining forces with other franchisees who have shared a similar injury…

  If I had read The Franchise Fraud instead of Franchising for Dummies, I certainly would never have bought an L&W franchise in the first place. Unfortunately, the author of the book doesn’t explain why law enforcement agencies don’t get involved. But without the threat of criminal prosecution there’s little deterrence for franchise crooks like Lyons.

• Rod
  Aug 8, 2008 at 9:32 am

  Franchise Buyer Beware

  The following information is condensed and copied from report #1602 posted on the website: www:Rip-offreport.com.

  The article is about the franchise business, Speedy Sign-A-Rama, USA. The unidentified author exposes the modus operandi of what might be a fairly common practice in the world of franchising. I’m including it here to show it doesn’t take a Harvard grad to form a fraudulent empire.

  In the book, The Franchise Fraud… the author said that franchisees should not expect to find justice in the courts. Simply put, the scams were too slick for courts and law enforcement to understand. The author, Robert Purvin, should know what he is talking about — he is a lawyer who represented franchisees — and he still does.

  Let’s face it, what attracts people to a franchise is not to have the high cost of getting started in a business, which includes the time it takes to learn the business, and franchising is supposed to reduce the risk of failure. Look at the motto you constantly see from franchises: ‘You are in business for yourself but you are not by yourself.’

  It is bad enough that franchisors in general sell this lie by building up misleading government statistics and cleverly hiding the awful truth of failure. But the really bad franchisors actually want you to fail.

  The Morrises’ sad tale of woe began in 1995 when Richard W. Morris (RWM) and his wife Claudine (CAM) went to a ‘business opportunity’ show in Phoenix, Arizona. There they went to many booths, among them Sign-A-Rama (SAR). The salesman said that there were really three companies at the booth: 3M, Minuteman Press and SAR….

  SAR courted the Morrises, and eventually sold them a franchise that opened In Phoenix on March 1, 1996….

  The Morrises operated the business for about five months. They lost money every month. The amount varied from month to month, but it always seemed they lost about $5,000 per month. This was true even though they were doing exactly what the franchisor said they should do. Rather than wait until they were broke, they decided to sell the franchise and cut their losses. SAR found a buyer, and the new owner took over March 1, 1997. Little did the Morrises know that this was part of the business plan of SAR.

  Not long after opening the business, the Morrises went to a Regional Meeting of SAR franchisees. In retrospect it was a curious meeting because all the franchisees in attendance were at a general meeting when the president of the company, Ray Titus, threatened all franchisees not to get into a legal battle with SAR. He bragged to the audience of franchisees that SAR will spend $300,000 if they must to win, but win they will and you had best not tangle with them. The exact words used by Titus: ‘Don’t mess with us.’

  What a curious thing to say when everyone was supposed to be happy with their franchise and making money. Titus the Younger (Titus the elder, is Roy Titus, his father)….went into quite a bit of detail explaining that once in a while somebody has a franchise that is not successful and needs to sell it…but you don’t just want to close the doors and leave. You have too much money invested, and you probably will have to pay the lease on the store even if it is not open. Above all else, though, don’t think about going to court against SAR.

  So, what to do? Well, sell it of course, said the younger Titus, and, SAR being the gracious folks they are, will even help you do so. That part is true. The re-sale program is an integral part of their scam. The franchisees in attendance were told this was rare. But it isn’t rare. Titus the Younger lied. They charge a hefty fee every time they have a re-sale. Of course, that was not on the minds of anyone there. At least, not anyone the Morrises met.

  Later the Morrises learned from some of these attendees that they were in dire financial straights, their stores had been for sale for a long time, and they did not know how long they could hold on. In fact, the Morrises learned several of the franchise owners they visited before buying had lied to them about the business because they wanted to sell their stores and stop losing money.

  Finally, the Morrises got out of the losing franchise and the ‘closing’ of the sale took place February 11, 1997, at the store. The closing was rushed. In fact, the closing had been postponed twice by SAR. When they finally did show up, they were an hour late for the appointment. In other words, the Morrises think SAR set up the closing to induce rushing, presented many papers that were signed, and due to the time constraints none were read by either the new buyers or the Morrises. (One of those ‘I’ll never do that again’ stories).

  The new owner took over March 1, 1997. Poor sucker. He and his wife only lasted about a year, too. He lost money every month and had to sell. He said that he lost about $5,000 per month. He sold to the third owner and the third owner took over in July of 1998. Normally, one would think this would be the end of the story. The Morrises stopped losing money, the store was gone, and life goes on. But that is not the end of the story.

  So how did the Morrises learn about the scam? Back on March 20, 1997, Mario Altiery (a Regional Vice President (RVP) of Sign-A-Rama) came to RWM’s office and threatened RWM that if RWM did not pay the royalties allegedly due of about $2,000 that Sign-A-Rama would move the store and leave RWM & CAM with the balance of the five year lease where the store was located, because, Altiery said, ‘You are still on the lease.’ That would be close to $100,000.

  Until this happened, RWM had believed the SAR line of business was good but the Morrises simply could not run this business. When the threat happened, RWM thought this is not the way an ethical business conducts operations and began an investigation of Sign-A-Rama.

  That decision to investigate SAR triggered a vicious attack by SAR, as you shall see. They did not want the scam known, and certainly did not want their past and present franchisees to know what the Morrises were about to learn.

  The FTC requires franchisors to disclose the names of former owners. But only for the preceding 12 months. Even then, it is very difficult to locate these former franchisees. It is virtually impossible for a potential franchisee to make an accurate assessment of the viability of the franchise business through this examination.

  In addition, and listen to this, the franchisors do not consider a store to have failed unless it actually closes its doors. So, if the store remains open for five years and during that time has had five owners, four of whom went broke and the fifth is close to it, that store is not counted as a failure.

  To the Morrises, and probably to most people, that was really at least an 80% failure rate. The FTC permits this type of misrepresentation, and that is why the public sees franchisors give such outrageous numbers as 97% success rate. Keep this in mind as you read about the Morris investigation into SAR because they found an incredible number of sold and resold and resold and sold again franchises.

  The results of the investigation were incredible. In short, in the Morrises’ opinion, it revealed a pattern by Sign-A-Rama of selling a franchise, virtually designing the operation so the franchisee would go broke, convince the poor franchisee it was his own fault, and then offer to save the day by re-selling the franchise. In this process many innocent franchise purchasers lost their entire life savings, their retirement money, and even their homes that they mortgaged to try to keep their SAR business going. The tragic stories of bankruptcy and broken homes because the marital partners could not stand the strain created by the franchise, and one person even thinks it killed his father. That story was in the newspapers.

  Not only did SAR drive their franchisees to the brink of financial disaster, and beyond, then convince (or try to convince) them it was their own fault, they protected themselves with a release. As part of the sale arranged by SAR to save the drowning franchisee, SAR would require that the franchisee sign a release so if the then broke franchisee sued SAR for fraud, SAR could hold up the release and call ‘Kings X.’ A pretty slick plan and one that has worked for its principals for 30 years….

  Robert Purvin, in his book, The Franchise Fraud, says that most people have ‘an idyllic picture of hope and faith, and of confidence in the American system of justice. …Unfortunately, in my more than 20 years in the practice of law, I have developed a new perspective on Blind Justice. I still see justice as blind. But the blindfolds no longer represent the lack of bias. Rather the presence of it.’

  He goes on to explain: ‘I don’t mean to indict our judicial system, but the following maxim certainly is a fated truth: Money buys better justice…. Purvin reports that it is not uncommon for a franchisor to spend $300,000 in a $30,000 dispute. Interesting, $300,000. The same figure used by Titus the Younger at the regional meeting mentioned above. As it turned out, SAR probably spent $100,000 suing the Morrises, who defended themselves without a lawyer for most of the proceedings….

  Robert Purvin was right. You will not find justice in the courts. Average people simply cannot afford the legal help needed to fight franchisors who will spend hundreds of thousands of dollars to crush opposition….

  I read the article about Sign-A-Rama on 6/24/08. That’s when I first learned about The Franchise Fraud and the author, Robert L. Purvin, Jr. I ordered the book from Amazon.com that day. I also made a search on Lyons & Wolivar Investigations on Rip-offreport.com and found the following posting from a terminated L&W franchisee.

• Rod
  Aug 8, 2008 at 9:34 am

  Rip-Off Report by Terminated L&W Franchisee from Northville, MI

  I and a lot of other people around the U.S. purchased franchises for ‘L&W Investigations’ (formerly known as ‘Lyons & Wolivar Investigations’ based in CA and now) currently out of Westborough, MA. We are currently involved in a legal dispute with them as a joint group of franchisees claiming they committed misrepresentation and fraud.

  My decision to purchase (my second franchise) was based on a year and a half search of current, new start up and franchised businesses. I decided on the L&W franchise as I believed it to be unique, related to my own personal experience, somewhat easy to operate from home and primarily because of what I was told by L&W owners and personnel.

  Because I had owned prior businesses, including another franchise, I knew where my concerns lied and knew what to ask of the franchisor. The problem was that I did not get truthful answers from the franchisor. Another problem was that because it was a newer concept in franchising there were not many people to ask about the franchisor, its track record, successes, failures, etc. I spoke to the half a dozen people currently involved but all told me they were very new and could not give me a lot of quality information.

  Therefore, I based a lot of my decision to get involved in this franchise on the representations and information supplied by the franchisor. The three main owners at that time, Neal Lyons, Stuart Larimer and Scott Crowell all gave adequate (and apparently rehearsed) answers to any questions I or my wife asked.

  The list of some thirty questions that I asked them in our final meeting before deciding to get involved answered everything I needed to know about their franchise. But again, I was given misinformation and lied to.

  A main question I asked the franchisor (with my wife in the room as a witness at the time) was there any former/pending or on-going litigation/arbitrations/disputes I needed to know about? Their answer, ‘No’. This was a lie, because I later found out that they had, in fact, been in arbitration with at least one other franchisee and were in dispute with at least two or three other franchisees that were threatening to sue them at the time I was performing my due diligence. If I had received a truthful answer then I would not have bought an L&W franchise to begin with. Unfortunately, I believed that the franchise agreement/UFOC and franchise law would protect me. It didn’t. Apparently, I found out after that franchisors do not have to disclose arbitration/lawsuits etc. if they determine it is not warranted.

  I was given financial information that was not accurate, told other branches were making serious profit, that top-notch former FBI agents would provide initial and on-going training/support, that the franchisor had multiple major national accounts and were adding new ones everyday and that they were somehow different from all the other investigative firms in the industry because of their unique ‘reports’ and ‘processes’. Some of this was misrepresentation but a lot was out and out dishonesty.

  To date I know of more than a dozen franchisees whom some have spent their entire life savings in purchasing an L&W franchise that have gone broke, lost their homes, faced divorces, and have severe life threatening health problems due to these lies and misrepresentations by L&W and its owners and employees.

  There was a mediation between our legal counsel and their insurance company lawyers. The mediator sided with us and suggested the insurance company settle our claim. The insurance company refused. Because the mediation was non-binding we had no choice but to proceed. Since then the case has dragged on in court with the franchisor’s latest tactics including their appeal to the court to have their names ‘personally’ removed from the case (as if they are not personally responsible…yeah right!)

  We will continue pushing on until we get a settlement whether it is through the courts or through the arbitration process.

  I am writing this to let people know that they need to do their own investigation of this company before getting involved with them. And most importantly, do not to believe anything that the owners or employees tell you. If you want the truth, ask around first, talk to all of their current and former franchisees and you’ll see what I mean.

  After reading this Rip-Off Report I thought it was a good way to warn others. One of L&W’s chief tactics is to intimidate franchisees by threatening to sue them for slander or libel if they badmouth the business. That’s why potential franchisees, performing their due diligence, don’t get to hear the other side of the Franchise Fraud story. Therefore, I added my own Rip-Off Report. I also inadvertently typed the date as 6/24/09 instead of 6/24/08

  Rip-Off Report by Terminated Franchisee from Redding, CA

  On 6/24/09 (08) I was surfing the internet looking for information about franchise fraud. I checked out the website at www: Rip-offreport.com and read the article posted under Report #1602. This was about the franchise business Speedy Sign-A-Rama, USA.

  When I read the details of the alleged rip-off I noticed a great similarity to the experiences I’ve endured after buying into a Lyons & Wolivar Investigations franchise, also known as L&W Investigations (L&W). In fact, both bogus franchise businesses appear to be modeled after the same basic scam. This leads me to believe many franchises are probably set-up to rip people off this way and they essentially do so with criminal immunity.

  I won’t go into the details other than to say the tactics used by Sign-A-Rama are the same ones used by L&W. These are clearly fraudulent enterprises set-up with criminal intent from the very beginning. However, I’ve learned the hard way that law enforcement agencies won’t touch these cases with a 10-foot police baton. These are some of the agencies I’ve reported this crime to so far: the FBI, Orange County CA Sheriff’s Office, Orange County District Attorney’s Office, Orange County Grand Jury, U.S. Postal Inspector, the Redding CA Police Department, the Shasta County District Attorney’s Office, the FTC, and my congressman.

  In each case I was either ignored and received no reply from the agencies or was told it wasn’t a criminal matter. The Redding P.D. and Shasta DA’s Office told me they didn’t have jurisdiction although I reside here. Thus, I’ve been denied my civil right to be a crime reporter or whistle blower. One of the most frustrating aspects for me is that I began reporting this crime in September 2004 and franchisees are still being ripped-off.

  In fact, I was recently contacted by a retired RCMP officer who bought a territory in Canada for $200,000. He suspected he’d been defrauded, but didn’t realize the extent until I sent him all my documentation. He said L&W never disclosed any information about the group of 11 ex-franchisees who’ve been engaged in a legal battle with them since around March 2006.

  Our attorneys took this case on contingency and have reportedly spent over $1,000,000 of their own money to keep it alive. L&W has applied the same tactics used by Sign-A-Rama to delay and outspend us. The retired officer was dumbfounded to learn that U.S. law enforcement allowed this crime to continue and claim him as a victim even after I reported it fully to every proper authority I could think of a long time ago. He plans to report this crime in Canada, but meanwhile, franchises are still being sold.

  I noticed that one of our ex-franchisees has posted a rip-off report on this website and I’d like to add this one as well. However, my main question is why won’t law enforcement agencies investigate and stop these criminal enterprises? Surely they all understand the elements of fraud. Why do these White Collar criminals keep getting away with defrauding honest citizens who, like me, didn’t think this could happen in America?

  I also reported this crime to several news agencies, but no one helped us. If this website has contact with legitimate investigative reporters I’d be willing to cooperate with them to get the story out and warn others.

  I’m pretty much a computer bonehead, but I was able to post my report. However, I noticed that I gave the wrong year and hoped I could go back into the Rip-Off Report and correct it. While trying to do that I decided to revise all my documentation about this case and post more on the website. However, I guess my writing style didn’t meet acceptable standards and I couldn’t get any more information posted. So, I decided just to revise my own Victim/Witness Statement and try to present my case against U.S. law enforcement as well as L&W in that manner.

• Rod
  Aug 8, 2008 at 9:37 am

  Attempted Rip-Off Report Updates

  When I wrote my previous “Rip-Off Report” I wasn’t planning to add any more statements, other than to correct the date from 6/24/09 to 6/24/08. I hope that was just a “typo” on my part and not an indication of imminent dementia. However, the more I thought about all the honest citizens who’ve been victimized by this fraudulent franchise scam the more I wanted to blow the whistle on these White Collar criminals.

  In addition, I want to blow the whistle on all the law enforcement personnel and agencies that violated my civil rights by refusing to even take a crime report from me, much less launch a criminal investigation. I first reported this crime to the FBI on 9/20/04. Next, I reported it to the Orange County CA Sheriff’s Office on 10/2/04. However, it may help clarify my motives and writing style if I share some pertinent aspects of my background before I continue.

  I’m a retired police officer from the Las Vegas Metropolitan Police Department (LVMPD) where I served for 23 years. I had to retire a little too early because I was diagnosed with multiple sclerosis (MS) in 1986 and by 2002 I was becoming too physically impaired to work safely anymore. The only thing the department could do to accommodate me would have been to let me continue working as an Investigative Assistant. That wouldn’t have been a bad job, but it would mean a drastic cut in pay which would also affect my pension in a substantially negative way.

  I also need to make a confession here about my naiveté before I proceed. I was 100% convinced O.J. Simpson would be found guilty for murder at his criminal trial. I even confidently proclaimed this to anyone who’d listen right up to the end. Yeah, I’m that guy.

  Well, I was 100% certain the FBI would investigate Lyons & Wolivar Investigations (L&W) for fraud too. Part of my reasoning had to do with the fact that while I was a detective with LVMPD I was assigned to the
  Criminal Apprehension Team (CAT). This was a joint task force made up of three LVMPD detectives, one sergeant and four FBI counterparts. One of my former partners, Special Agent Andy Gruninger, was still assigned to the FBI office when I started writing my report. I phoned him and explained the circumstances. He said I could write my account, email it to him, and he would forward it to the appropriate office in southern California where L&W was headquartered at the time.

  However, he also told me there might be a “threshold amount of loss” necessary before the FBI would open a case. I asked him what that meant and he said, for example, maybe there has to be at least a $1,000,000 loss before they will do anything. I told him that would be like a sexual assault detective waiting until he had three or four cases on a suspect before he’d check it out.

  But I was still confident the FBI would want to get involved because two prominent, well-respected, retired FBI agents were advertised as being on the Board of Directors for L&W. I told Andy that was the only reason I
  even considered this franchise, because I knew it couldn’t be a rip-off with them in charge.

  At LVMPD we could write an Officer’s Report about a particular incident. Unlike an Arrest Report or Declaration, we could include personal opinion and name possible suspects to help further an investigation. Thus, I tried to write my Investigative Report in that manner also realizing it would become part of my personal witness statement. In addition, since I thought it was the only thing I’d have to write about this case and because it was going to my former partner, I allowed myself to have a “smart ass attitude” to a certain extent. Just like when I scoffed at O.J.’s innocence.

  So, retelling this story has become more complicated logistically. I’ve been writing letters, memos and notes for the last four or five years. I’m going to use much of this material to make my case, but also to cover my ass. My goal is to legally expose the hell that a fraudulent franchise can inflict. I want to blow the whistle and warn others. I also want to get the press involved because I think that’s the only way the major players will ever be forced to explain their actions.

  However, if you’ve read the article about the “Speedy Sign-A-Rama, USA” franchise posted on the website “www:rip-offreport.com,” you know that pissed-off franchisors can be pretty intimidating. I found out the hard way. Therefore, I’m going to start a series of “Rip-Off Reports” which I’ll post on the website over time. I don’t know how much material I can include under one posting so I’ll try to keep my updates brief enough to fit. Plus, unfortunately for me, and anyone who might choose to read this information, there’s no way anymore to make this long story shorter.

  I hate to give away the plot too soon, but it will be easier to explain the fraudulent franchise tactics this way. Furthermore, shortly after I sent my report to the FBI and tried some ineffective police tactics on two L&W staff members, the L&W attorney accused me of extortion, libel, slander, political incorrectness, and bloviating without a license, among other heinous acts.

  Just like in the Sign-A-Rama case an unscrupulous attorney was quite willing to allow his clients to perjure themselves in Orange County Superior Court in order to get a restraining order on me, so I couldn’t warn others. Then he billed me over $10,000 for his attorney fees, placed a lien on my house, and eventually collected the money plus interest. Ouch.

  In the restraining order L&W personnel swore under oath they were all afraid I was psychologically unstable and probably violent. Plus, since I was a retired cop they figured I likely had guns and maybe a permit to carry them concealed. Therefore, they were terrified I was planning to drive eight hours to Laguna Hills, CA, shoot them all, and even try to get their family members too. I’ll include portions of their statements later so you can see I’m not making all this up.

  Anyway, since I was 100% certain the FBI was already investigating L&W I didn’t worry about fighting the restraining order. Plus, since they’d defrauded me out of $70,000 I couldn’t afford to hire an attorney to represent me in Orange County.

  Furthermore, I was in contact with two other ex-franchisees who had tried to fight the legal battle with L&W. One was already down another $30,000 and the other was out $15,000 and had given up. Plus, L&W knew all about my health issues and must’ve known it was very unlikely I could even make the trip, much less ambush them.

  I didn’t show up for court and lost by default. L&W also terminated my franchise based on this court decision even though we had an arbitration clause in our fraudulent contract. I had also been 100% certain that could never happen in America.

  My purpose in giving all this seemingly extraneous information is because I wouldn’t be surprised if these boneheads eventually see this material posted on “Rip-Off Report.com” and then go after me again. I know these criminals can manipulate the court system to screw with me, because I don’t have the money to fight them.

  So first, I’m going to include material from a memo I wrote for an attorney after L&W’s lawyer first began attacking me. I believe this will show I’m not necessarily crazy and I had a perfect right and perhaps even an obligation to initiate this complaint against L&W.

  I’m going to use people’s real names because I’m telling the truth. Let the chips fall where they may.

  L&W executives, Neal Lyons, Stuart Larimer and Scott Crowell all perjured themselves on their sworn statements to get the restraining order on me. Their attorney, Gary King, has no excuse for not recognizing this.

  This wouldn’t have been so bad, except King then billed me $10,065 for his legal fees. This action was dated 1/19/95. I wasn’t too concerned about that except King then placed a lien on our home demanding payment. King eventually had me summoned to Shasta County court on 9/11/06 and I was compelled to pay him that amount plus interest.

  Although we didn’t have any discretionary income to hire an attorney now we had to seek legal help. I wrote the below listed memo to a local attorney to explain my actions.

• Rod
  Aug 8, 2008 at 9:41 am

  Internet Definitions of Criminal Negligence and Civil Negligence

  However, before I start adding more of my personal documentation I’d like to list some definitions of Criminal Negligence and Civil Negligence taken from the internet. I believe these terms describe acts committed or omitted by Mike Wolivar, Rick Hahn, Jim Norman, Gary King, Justin Alvarez, FBI Assistant Special Agent in Charge William Woerner, FBI Agent Mark Montgomery, Orange County Sheriff’s Detective Schatzle, Redding Police officers: Chief Moty, Captain Mundy, Sergeant Ostrowski, Sergeant Stainburg, and Shasta County District Attorney’s Investigator Mike Baxter.

  There are others, but these are the ones I know received at least my Investigative Report. Woerner, Montgomery, Stainburg and Baxter all received copies of my 131 pages of bound documentation and still refused to help.

  Any one of these people could have at least tried to stop the L&W franchise fraud if they had reported the crime or taken a crime report themselves and conducted an investigation. Due to their incompetence and negligence all past and current franchisees have been further victimized.

  The following information is taken from Wikipedia the on-line encyclopedia:

  In the criminal law, criminal negligence is one of the three general classes of mens rea (Latin for “guilty mind”) element required to constitute a conventional as opposed to strict liability offense.

  It is defined as: careless, inattentive, neglectful, willfully blind, or in the case of gross negligence what would have been reckless in any other defendant.

  To constitute a crime, there must be an actus reus (Latin for “guilty act”) accompanied by the mens rea.

  Negligence shows the least level of culpability, intention being the most serious and recklessness of intermediate seriousness, overlapping with gross negligence.

  The distinction between recklessness and criminal negligence lies in the presence or absence of foresight as to the prohibited consequences.

  Recklessness is usually described as a ‘malfeasance’ where the defendant knowingly exposes another to the risk of injury. The fault lies in being willing to run the risk.

  But criminal negligence is a ‘misfeasance or ‘nonfeasance’ (see omission), where the fault lies in the failure to foresee and so allow otherwise avoidable dangers to manifest.

  In some cases this failure can rise to the level of willful blindness where the individual intentionally avoids adverting to the reality of a situation (note that in the United States, there may sometimes be a slightly different interpretation for willful blindness).

  The degree of culpability is determined by applying a reasonable person standard. Criminal negligence becomes “gross” when the failure to foresee involves a “wanton disregard for human life” (see the discussion in corporate manslaughter).

  The test of any mens rea element is always based on an assessment of whether the accused had foresight of the prohibited consequences and desired to cause those consequences to occur.

  The three types of test are:

  subjective: where the court attempts to establish what the accused was actually thinking at the time the actus reus was caused;

  objective: where the court imputes mens rea elements on the basis that a reasonable person with the same general knowledge and abilities as the accused would have had those elements; or

  hybrid: i.e. the test is both subjective and objective.

  The most culpable mens rea elements will have both foresight and desire on a subjective basis.

  Negligence arises when, on a subjective test, an accused has not actually foreseen the potentially adverse consequences to the planned actions, and has gone ahead, exposing a particular individual or unknown victim to the risk of suffering injury or loss.

  The accused is a social danger because he or she has endangered the safety of others in circumstances where the reasonable person would have foreseen the injury and taken preventive measures. Hence, the test is hybrid.

  What is the reasonable person standard?

  This is not a real person but a legal fiction, an objective yardstick against which to measure the culpability of real people. For these purposes, the reasonable person is not an average person: this is not a democratic measure.

  To determine the appropriate level of responsibility, the test of reasonableness has to be directly relevant to the activities being undertaken by the accused.

  What the ‘average person’ thinks or might do would be irrelevant in a case where a doctor is accused of wrongfully killing a patient during treatment. Hence, there is a baseline of minimum competence that all are expected to aspire to.

  This reasonable person is appropriately informed, capable, aware of the law, and fair-minded. This standard can never go down, but it can go up to match the training and abilities of the particular accused.

  In testing whether the particular doctor has misdiagnosed a patient so incompetently that it amounts to a crime, the standard must be that of the reasonable doctor. Those who hold themselves out as having particular skills must match the level of performance expected of people with comparable skills. When engaged in an activity outside their expertise, such individuals revert to the ordinary person standard.

  This is not to deny that ordinary people might do something extraordinary in certain circumstances, but the ordinary person as an accused will not be at fault if he or she does not do that extraordinary thing so long as whatever that person does or thinks is reasonable in those circumstances….

  The following information was taken from various internet postings:

  Negligence is a legal concept in the common law legal systems usually used to achieve compensation for injuries (not accidents). Negligence is a type of tort or delict (also known as a civil wrong). However, the concept is sometimes used in criminal law as well.

  Negligence is generally defined as conduct that is culpable because it falls short of what a reasonable person would do to protect another individual from a foreseeable risk of harm. Through civil litigation, if an injured person proves that another person acted negligently to cause his injury, he can recover damages to compensate for his harm.

  Proving a case for neligence can potentially entitle the injured plaintiff to compensation for harm to their body, property, mental well-being, financial status, or intimate relationships.

  However, because negligence cases are very fact-specific, this general definition does not fully explain the concept of when the law will require one person to compensate another for losses caused by accidental injury.

  Further, the law of negligence at common law is only one aspect of the law of liability. Although resulting damages must be proved in order to recover compensation in a negligence action, the nature and extent of those damages are not the primary focus of negligence cases….

  Once it is established that the defendant owed a duty to the plaintiff/claimant, the matter of whether or not that duty was breached must be settled.

  The test is both subjective and objective. The defendant who knowingly (subjective) exposes the plaintiff/claimant to a substantial risk of loss, breaches that duty.

  The defendant who fails to realize the substantial risk of loss to the plaintiff/claimant, which any reasonable person in the same situation would clearly have realized, also breaches that duty.

  Breach of duty is not restricted to professionals or persons under written or oral contract; we all have a duty to take reasonable care for others and their property. Anyone who unreasonably runs a risk that results in harm to others or their property, breaches their duty of reasonable care….

  For a defendant to be held liable, it must be shown that the particular acts or omissions were the cause of the loss or damage sustained. Although the notion sounds simple, the causation between one’s breach of duty and the harm that results to another can at times be very complicated.

  The basic test is to ask whether the injury would have occurred but for, or without, my breach of duty. Even more precisely, if a breaching party materially increases the risk of harm to another, then the breaching party can be sued to the value of harm that he caused….

  Criminal Negligence

  A person acts with “criminal negligence” with respect to a result or to a circumstance described by a statute defining an offense when (he/she) fails to perceive a substantial and unjustifiable risk that such result will occur or that such circumstance exists.

  The risk must be of such nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation….

  Negligence

  Negligence is defined as a party’s failure to exercise the prudence and care that a reasonable person would exercise in similar circumstances to prevent injury to another party. When a party’s negligence results in another party’s injuries, the latter has the legal right to seek restitution from the former.

  Cases involving negligence are also known as torts, or injury committed on the person or property of another which forms the basis of a civil lawsuit. Through a civil lawsuit, one party seeks money from another for some wrong that was committed.

  Civil lawsuits may be filed on behalf of the party who was injured by another person’s negligence. The injured party is the plaintiff in a civil negligence case and the defendant is the negligent party. In order to seek relief for damages the plaintiff must show, by a preponderance of the evidence, that the defendant’s negligence caused the losses in question.

  There are four elements of a negligence case that the plaintiff must prove. The plaintiff in a negligence case must prove the following in order to be awarded restitution for their losses:

  1. that the defendant had a duty of care;

  2. that the defendant failed to uphold this duty;

  3. that this negligence led to the plaintiff’s injury or death;

  4. and the actual damages that were caused by the injury.

  When the plaintiff is able to prove these elements of a negligence case, they may be awarded compensation for their damages.

  The reparations in a negligence case are intended to place the plaintiff in the same position they were in prior to the tort.

  A person who has suffered as a result of another’s negligence may be able to seek restitution for medical expenses, property damage, partial or permanent disability, loss of income or earning potential, and pain and suffering.

  Damages can be awarded by a judge who presides over the negligence case or through a settlement agreement formally reached between the two parties.

  There are many common types of negligence that give a viable basis for civil legal action. Civil cases involving negligence can include:

  vehicle accidents (including cars, motorcycles, bikes, trucks, boats, etc);

  defective products (including baby products, medical devices, etc.);

  medical and legal malpractice;

  nursing home negligence; slip and fall or premise injuries;
  dog bites; work related injuries; exposure to toxic materials; and cases of wrongful death….

  Each state creates and enforces laws regarding negligence. All jurisdictions have a statute of limitations that provides a timeframe during which a civil claim can be filed. These statutes can vary by state and circumstance. If you or a loved one has suffered because of another person’s negligence, you may wish to explore your legal options. In some cases, negligence suits can be filed separate from criminal proceedings when applicable….

  As I move through my documentation of this case I’ll endeavor to provide evidence of these types of negligence. However, until law enforcement or a legal authority questions and demands answers from these people their crimes and omissions will continue.

• Rod
  Aug 8, 2008 at 9:46 am

  Memo Written for a Local Attorney

  I’m writing this memo to explain the tactics I’ve used in trying to resolve this case. My primary argument is that Lyons & Wolivar Investigations, Inc. (L&W) has perpetrated felony fraud against at least three franchisees, including my wife and me. The other two franchisees are Ron Bruns in Wisconsin and Sharon Heimbach (now Pins) in Dallas, TX. I’ve also learned there’s another victim who wants to remain anonymous at this time.

  My approach has been to handle this case like a police investigator without the benefit of a badge or legal jurisdiction. Thus, I haven’t been allowed to interview any of the potential witnesses or suspects. However, from the beginning, I was convinced the FBI would be anxious to open their own investigation, because two of their retired agents have been manipulated to establish and continue the fraud.
  My goal was to get as much information and evidence as possible, so I could jump start their investigation with ample probable cause for criminal court purposes. I believe I have this right as a citizen and victim, but moreover, I have this right and perhaps even an obligation, as a licensed private investigator (P.I.) in California.

  According to the California Business and Professions Code Section 7521 a CA P.I. may make an investigation for the purpose of obtaining information with reference to:

  (a) The identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputation, or character of any person.

  (b) The location, disposition, or recovery of lost or stolen property

  (c) The cause or responsibility for fires, libels, losses, accidents, or damage or injury to persons or to property.

  (d) Securing evidence to be used before any court, board, officer, or investigating committee.

  For the purposes of this section, a private investigator is any person, firm, company, association, partnership, or corporation acting for the purpose of investigating, obtaining, and reporting to any employer, its agent, supervisor, or manager, information concerning the employer’s employees involving questions of integrity, honesty, breach of rules, or other standards of performance of job duties.

  Based on my training and experience as a police officer and detective with the Las Vegas Metropolitan Police Dept. (LVMPD) for 23 years, I surmised that the two youngest members of L&W’s Board of Directors, Stuart Larimer and Scott Crowell, would be the most likely suspects to cooperate with the investigation. I believed they would probably have first hand knowledge of the criminal elements and be inclined to tell the truth when they learned the FBI would become involved.

  At first, I believed these two were simply young businessmen who had temporarily gone astray and probably didn’t realize the criminal nature of the situation. I believed the CEO, Neal Lyons, was calling all the shots and these guys just went along. I considered them “lesser” suspects and hoped to persuade/scare them into cooperating with my investigation before the FBI got involved and they were forced to. This is a routine police tactic similar to how narcotics officers handle street drug dealers to go after and convict main suppliers.

  Therefore, my first contact with L&W about this matter was when I wrote a memo with the heading, “Lotspeich Investigations,” to Scott Crowell and Stuart Larimer on 9/18/04. I emailed this to them at their respective offices. I tried to scare them into cooperating with me by telling them what I thought the FBI would do when they investigated the case. I used politically incorrect language, because I was trying to get information from suspects.

  I tried to use the “Good Cop/Bad Cop” technique, much exaggerated on TV shows and movies. However, since I couldn’t “haul them down to the station for questioning,” and I didn’t have a partner, I tried to play both roles via email. I intentionally chose to contact them in this manner so I would have a written record of my tactics and their replies.

  If you read the full memo in context you’ll see that I never make any personal threats against them, but warn them what probably would happen if the FBI investigated them criminally. I mention how this would hurt their business and embarrass them personally. But I said the FBI would be the ones conducting this, not that I would be doing anything about it.

  I also honestly believed these two were probably innocent of criminal intent at that point and I really wanted them to come clean while they could, for their own sakes. I asked Crowell and Larimer to write out voluntary statements and mail them to me so I could document the fact they cooperated before the FBI forced them to. I wanted to scare them and solidify the case, but I also thought it would save them a lot of grief in the future.

  I wrote this memo intending to include it in my report to the FBI. Thus, I was leading up to a “ruse” where I hoped to convince them that if they would settle out of court and return our franchise fees, I wouldn’t involve the FBI. However, I knew from the beginning that there might be other victims and I believed the FBI had to be notified so they could clear the retired agents’ names of any wrong doing. Using a ruse is also a common police tactic to legally further a criminal investigation.

  My argument here is that I never had any criminal intent in dealing with L&W, because the FBI was going to receive the case. Thus, I believed it would be impossible to accuse me of bribery or extortion.

  In fact, I looked up the definitions for these terms on the internet in case I was accused of this. I looked them up again for this memo and will include some main points to show that I understood what the criminal elements were.

  EXTORTION - The use, or the express or implicit threat of the use, of violence or other criminal means to cause harm to person, reputation, or property as a means to obtain property from someone else with his consent. USC 18….

  My offer not to report L&W to the FBI was a ruse on my part to encourage them to settle out of court. My opinion was that I was dealing with criminals and lying and trying to scare them was simply normal police procedure.

  From the beginning my intention was to encourage L&W to refund, at least, the full franchise fees due the victims of their fraud. However, I also sought to obtain, if possible, additional money to cover the extra costs incurred by the victims while trying to receive justice.

  Furthermore, shortly after I sent my first memo to Larimer and Crowell, Ron Bruns told me the L&W attorney contacted his attorney and offered to settle out of court by refunding $50,000 to him instead of the full $100,000.
  Thus, it was also my intention, when asking for more than our original franchise fees, to at least have a number I could come down from for negotiation purposes. Therefore, when I later asked for a $100,000 refund for myself, while I felt this was fair for the financial and emotional hardships endured, I also thought it would at least encourage L&W to offer me my full refund, instead of cutting it in half like they were doing for Bruns.

  My intention in asking for this additional money wasn’t to extort more than was owed to us, it was a negotiation tactic, similar to when somebody, for example, asks for $300,000 when selling their house, but knows, in advance, they will actually accept $250,000 if that’s the best deal they can get. I would have been glad to accept our $70,000 back and be through dealing with L&W.

  I also sent my report and this memo to the FBI office in Las Vegas on 9/20/04. Crowell and Larimer chose not to reply and evidently showed the memo to the L&W attorney.

  On 9/21/04 I sent another memo under “Lotspeich Investigations” to Crowell and Larimer. I also attached a copy of my investigative report showing probable cause. In this memo I tried to persuade them that L&W should refund the three victims’ franchise fees with a punitive amount tacked on to cover all the suffering and financial hardship we endured after being defrauded by them.

  I tried to make Crowell and Larimer think I wouldn’t send my report to the FBI if they would just give us back our money. Please remember, at this point I was still just writing to these two individuals knowing that the FBI would also get the same information.

  I used a “tough guy” tone of voice with them and harsh language, so they’d believe I’d never submit this to the FBI. I explained the concept of how the “punishment should fit the crime” and said this meant that we “probably shouldn’t cut off the heads of shoplifters.”

  This was, to me, an obvious and sarcastic exaggeration—the “Bad Cop” voice. However, L&W has tried to interpret this as a threat that I might be planning to cut off their heads or something equally sinister.

  Then I asked them what punishment or sentence they thought they deserved. If you read this memo in context you’ll see again that I never make any personal threats against them. My threats only predict what the FBI and the courts might do with them.

  On 9/22/04 I sent my last memo to only Larimer. I had learned earlier from another franchisee, Ron Bruns, that when he attended training at L&W they had taken him on a surveillance where they were supposed to follow a female, workers compensation claimant. Bruns later found out this woman was actually married to one of the L&W officers. I thought he told me it was Larimer’s wife.

  I aimed this memo specifically at Larimer and intentionally insulted him (Bad Cop) for involving his wife in fraudulent activity to dupe Bruns. I thought this might be ample incentive for Larimer to cooperate, because the FBI would also end up interviewing his wife. However, Larimer simply denied this in a brief email and I learned from Bruns that it was actually Crowell’s wife who fraudulently posed as a claimant.

  I sent an email back to Larimer apologizing for accusing his wife (Good Cop), but noting that he was the one who set up the fraudulent surveillance, (Bad Cop). I also asked him to warn Crowell about this situation, because his wife would end up being interviewed (Good Cop).

  Again, if you could read this memo in full context you’d see that while I express my anger and disapproval toward Larimer, I never personally threaten to do anything to him or his wife. This was my last attempt to get Larimer to cooperate.

  I received a nasty letter from the L&W attorney and my last email to Larimer and Crowell was to say that I didn’t want to speak with their attorney and that I wanted our communication to be via email so I’d have a record for my report. I called their attorney a “do-do head” in the memo to indicate my disdain and tease them (Bad Cop) for reacting like big babies. (Current Note: You can pronounce that “doe-doe” or “due-due).

  Since I didn’t achieve my first investigative goal—settling out of court for a full refund of our $70,000—I then sent copies of my report to the other, active franchisees asking for their help and hoping to find other victims. This wasn’t an attempt on my part to damage their business prospects. I just hoped, as a group, the other franchisees would pressure L&W into doing the right thing. Only one person, the other victim mentioned, contacted me.

  I also sent copies of my report to other employees at L&W trying to get them to help us and warn them about the fraudulent activity. In addition, I sent a copy to an investigative reporter in Orange County, but I’ve never heard anything back from him. I hoped, if the reporter began snooping around, that L&W might choose to settle out of court.

  I was later contacted by a detective from the Orange County Sheriff’s office who told me Scott Crowell had tried to file extortion charges against me. I spoke to the detective on the phone and told him my side of the story. He apparently agreed that I hadn’t committed any crimes.

  When I didn’t hear anything back from the FBI I began to fear they weren’t going to look into the case. Therefore, I sent a copy of the report to the Fraud Detail at the Orange Co. Sheriff’s office. I later received a message on my phone answering machine from a fraud detective who said he had looked into the case and determined that it was a civil matter.

  (Added note): This was Detective Schatzle at (714) 647-7030.

  Upon hearing that I figured he must have contacted the retired FBI agents and learned they were still somehow involved with L&W, so the fundamental part of my fraud case was blown out of the water.

  I phoned him back and asked him what he learned. He said he spoke with the L&W attorney who also faxed him a copy of our franchise agreement. Thus, he claimed it was a civil, not a criminal matter. I asked him if he had contacted the retired FBI agents or any of the suspects or witnesses. He said he didn’t need to as long as there was a signed contract.

  I basically told him that was “bullshit” and asked to speak to his supervisor. However, he told me he was the supervisor and refused to let me speak with his sergeant or lieutenant. I asked him who I could complain to about his shoddy detective work and he said (sarcastically), “Write a letter to the sheriff.”

  I did write a letter to the sheriff and also wrote one, with my full report to the Orange Co. District Attorney’s Office. I never received a reply from either.

  When I received notice that L&W was trying to get a restraining order against me I chose not to hire an attorney, because we can’t afford the expense. I really didn’t care if they could convince a judge that I was scaring them, because I didn’t plan to try any more tactics. If I can’t get the FBI, the Orange Co. Sheriff’s Office or the Orange Co. DA’s Office to even open the case or phone me, there’s nothing more I can do.

  However, now L&W is trying to sue me for their legal fees and that’s why we’ve had to seek legal counsel. Plus, I tried to send a letter to the judge hearing this case, but it was returned to me unread. I’m including this letter below, parts of which I’ve quoted above, to show that I tried to inform the judge of my side of the story and avoid defaulting on this civil case.

  The L&W attorney accuses me of libel and slander as well as extortion in the case he filed with Judge Glass. Thus, I’m including definitions taken from the internet to prove otherwise.

  LIBEL - Published material meeting three conditions: The material is defamatory either on its face or indirectly; The defamatory statement is about someone who is identifiable to one or more persons; and, The material must be distributed to someone other than the offended party; i.e. published; distinguished from slander.

  DEFAMATION - An act of communication that causes someone to be shamed, ridiculed, held in contempt, lowered in the estimation of the community, or to lose employment status or earnings or otherwise suffer a damaged reputation. Such defamation is couched in ‘defamatory language’. Libel and slander are defamation.

  Although defamation is primarily governed by state law, the First Amendment safeguards for freedom of speech and press limit state law….

  To determine whether a statement implies a factual assertion, courts examine the totality of the circumstances

  Next they turn to the specific context and content of the statements, analyzing the extent of figurative or hyperbolic language used and the reasonable expectations of the audience in that particular situation.

  Finally, they inquire whether the statement itself is sufficiently factual to be susceptible of being proved true or false….

  My Argument

  My contention is that I have only written what I believe to be readily verifiable facts gathered from Ron Bruns, Sharon Heimbach and my own investigation. I intentionally wrote my report in a format aimed at solving a criminal case. I dealt directly with Larimer and Crowell only and used a “Good Cop, Bad Cop” approach based on my training and experience. I used a “ruse “and “rough” language to further my legal investigation. I didn’t worry about being politically correct, because I’m telling the truth and trying to get criminals to snitch each other off.

  The only audiences I have written to are fellow franchisees, current employees of L&W, law enforcement agencies and one newspaper reporter. Each of these audiences, at the least, received what I believe is a thorough documentation of sufficient probable cause to show that L&W has committed fraud. I haven’t undertaken this investigation just to harass, extort or libel the suspects. I’m trying to solve a crime and secure just compensation for three victims who are out over $270,000.

  I personally accused Neal Lyons of lying, because that’s a fundamental element of fraud and it’s clear that he lied to Bruns, Heimbach and me, orally and with printed material. This can be easily verified with a few phone calls to Bruns, Heimbach and the retired FBI agents. Also, Bruns has established many of Lyons’ lies through the arbitration process and has them on record.

  SLANDER - A false defamation (expressed in spoken words, signs, or gestures) which injures the character or reputation of the person defamed; distinguished from libel.

  Except for speaking with my wife, a few relatives and friends, Bruns and Heimbach, my accusations are written down and I stand by them.

  That’s my introduction to the rest of this case. As explained earlier I tried to post this as a “Rip-Off Update” on the “Rip-Off Report” website, but it was evidently rejected. That’s why I decided to reorganize my material into this Revised Victim/Witness Statement.

• Rod
  Aug 8, 2008 at 9:52 am

  Introduction to Bound Documentation

  I’d also like to provide an introduction to what I call my bound documentation. I started this booklet with a letter to Judge Jack Halpin. I naively thought he’d want to read it and I hoped to highlight some main points for his edification.

  Judge Jack Halpin, Dept. 4
  Superior Court of California,
  County of Shasta
  Reference case # 06CV0808
  Order to Appear for Examination

  Your Honor, 9/8/06
  I’ve been ordered to appear in your court on 9/11/06. The incidents which have led to this point began around March 2003. So far, I’ve been unable to get any law enforcement agencies to open an investigation on what I can prove to you today is clearly a case of felony fraud.

  Sir, my wife and I are currently being represented by the law offices of Leeds, Morelli and Brown, located in New York. There are at least 11 other franchisees involved in an arbitration dispute with the business organization, Lyons & Wolivar Investigations (L&W).

  We conferred with our attorney on this matter and he told us we probably have no option, but to pay the $10,065.00 that Mr. Olsen and his associates are demanding.

  Our lawyer told us he tried to explain to Mr. Olsen why it was unfair for L&W to pursue this matter. However, Mr. Olsen apparently has instructions to carry out this assignment and collect the full amount.

  Our attorney didn’t offer to represent us here although we’ve paid an $8,000 retaining fee. We can’t afford to hire a local attorney. Our attorney also didn’t advise us if we would be able to tell our side of the story and present our documentation in court. So I’ve prepared this material without knowing if you can even consider it. I don’t mean to waste the court’s time.

  However, if you can consider my evidence, I can prove fairly briefly and conclusively that the corporation which is demanding over $10,000 now in your courtroom was founded upon and has always been a fraudulent franchise scheme.

  I can show you a concise advertising piece which gives the executive profiles of the L&W board of directors. This was mailed to us in March or April, 2003. We paid $70,000 to purchase our franchise territory in northern California and southern Oregon.

  Sir, I have sworn declarations, obtained by our attorney, from three of these men, stating conclusively, that they were, in fact, never participating members of this business. In fact, they had all legally extricated themselves from L&W before we even signed our contract.

  If you can just read the advertising piece and the statements from these “board members,” you will clearly see the business was a fraud from the very beginning. Two of these “board members” are retired FBI agents.

  The action before you today is the result of L&W seeking a restraining order on me after I learned about the fraud and reported it to the FBI in September 2004. Unfortunately for me and all the people who bought territories afterwards, the FBI didn’t investigate the case. I never learned why.

  In addition, I can prove here that the three L&W executives: Neal Lyons, Scott Crowell and Stuart Larimer all lied in their sworn statements to initiate this restraining order, which was filed in Orange County, CA.

  Furthermore, your honor, I believe there is probable cause to believe that L&W’s attorney, Gary King, knew that Lyons, Crowell and Larimer lied. If you can eventually read all my documentation, you’ll see that rather than advising his clients to quit defrauding franchisees, King allowed these three to perjure themselves, so they could get a restraining order on me and thus keep their fraudulent enterprise going.

  Your honor, I’m a retired police officer from Las Vegas with 23 years of experience. I know the elements of fraud. I tried to report this crime to the FBI, Orange County Sheriffs Office, Orange County District Attorneys Office, the Federal Trade Commission, the California Board of Corporations and lastly to the Redding P.D. Either I was ignored and received no reply or I was advised it was a civil matter.

  Sir, if you can please, at least, look at the executive profiles provided and the sworn statements from three of those men, you’ll know this is fraud. Based on that, it will be easy to show that Lyons, Crowell and Larimer all lied in their statements in support of this restraining order.

  Frankly, I’m almost amazed that after defrauding me of $70,000, lying to obtain a restraining order and placing a lien on my house, that L&W is still trying to nail me for this money.

  Judge Halpin, I’ll try to organize and introduce my documentation to make it as clear as possible. Again, if you’re allowed to review this material, I would ask that you try to get it into the court record, because I believe King, Lyons, Crowell and Larimer will have to answer to Judge Geoffrey T. Glass, Dept. 22, Superior Court of California, County of Orange, reference his case # 04CC10513. They clearly presented him with lies.

  I was summoned to Judge Glass’ court on 11/2/04. Since my $70,000 was fraudulently taken, I didn’t have money to hire an attorney to attend. In addition, I have multiple sclerosis and didn’t want to drive 8 hours to Orange County, get a motel room and then try to find the courthouse. Plus, I honestly believed the FBI was investigating the case and I didn’t care if L&W got a restraining order on me.

  However, in addition to getting the restraining order on me by default, L&W also terminated my franchise agreement with the same action, even though we had an arbitration clause in our contract.

  Sir, I’ve included what I believe is a very professional and well written “Statement of Facts,” provided by our attorney for arbitration. This will be in the last portion of my documentation. This will clearly corroborate the main details of my argument and show that L&W and Gary King have used similar tactics on other fraud victims.

  Sincerely,

  Rod Lotspeich

  Following this letter I included the “Executive Profile” page I photo copied from an L&W advertising brochure. I still have an original brochure for evidence. There are pictures and profiles of Neal Lyons, Mike Wolivar, Richard S. “Rick” Hahn, Jim Norman, and Mark W. Green. I never met Green and don’t know who he is, so I won’t list all his accolades.

  Lyons, who bears an uncanny resemblance to Snidely Whiplash from the Dudley Do-Right cartoons, gets top billing. His title is Chief Executive Officer and Chairman of the Board. His profile reads as follows:

  In August 2002, Neal Lyons and Mike Wolivar formed Lyons & Wolivar. Previously, Mr. Lyons served as CEO for VEXCORP, a state-of-the-art communications company specializing in worldwide videoconferencing.

  Earlier, during his 25 years in retailing, Mr. Lyons worked with Reebok International, Intershoe Corporation, Kinney Shoe Corporation and most recently, Vans, Inc. At Vans, he quadrupled the size of the athletic shoe manufacturer’s retail division to encompass several hundred stores and launched 12 skateparks. He was also instrumental in presentations to Wall Street and investment houses.

  An expert in corporate development and finance, Mr. Lyons has successfully implemented corporate acquisitions and mergers.
  He is a member of Harvard Business School and active in numerous community programs. In addition, he serves on the Board of Directors for Special Olympics and for Surfparks LLC.

  Next on the totem pole we have Mike Wolivar, Senior Vice President.

  A licensed Private Investigator since 1990, Mike Wolivar has conducted more that 5,200 surveillances in all parts of the United States.

  I admit when I first read the figure 5,200 I had my doubts. Let’s see, if Mikey did one surveillance everyday, with no days off, he could do about 30 per month. My calculator shows that 5,200 divided by 30 = 173.333 months. 173 divided by 12 = 14.41 years.

  It was 2002 when this brochure came out. Mikey had been a PI since 1990. That probably means he accomplished all that work in 12 years. However, maybe he’s a real hard charger and could finish 10 surveillances each day. That way he could still find some free time for his wife and kids. At any rate I figured he must be a major workaholic.

  He has owned and operated Wolivar & Associates, Inc. for over a decade. During that time, he established a reputation for putting together teams of top quality surveillance and undercover investigators.

  Mr. Wolivar has served as an officer in the U.S. Marine Corps, on the staff of U.S. Senator Bob Dole, and with government agencies including the Federal Bureau of Investigation.

  In addition to his duties at Lyons & Wolivar, he continues to serve as President and Chairman of Wolivar & Associates.

  Next on the L&W team we have Rick Hahn, Board of Directors, Training Staff.

  Rick Hahn became a licensed Private Investigator in California after a distinguished FBI career that spanned 32 years. He retired from the Bureau in 1999 from the post of Senior Supervisory Agent for the Long Beach, California office.

  Notably, Mr. Hahn served as a forensic investigator for Pan Am Flight 103 and the 1993 bombing of the World Trade Center. In 1995, he was called upon to oversee the processing of the crime scene at the Murrah Federal Building in Oklahoma City.

  Since 9/11, he has made numerous appearances on radio and television as a law enforcement and terrorism expert on such programs as Live with Geraldo Rivera, NBC News, Dateline, Hardball, and MSNBC News.

  Last, but not least, I introduce Jim Norman, Board of Directors, Franchise Case Support Specialist.

  Now a licensed Private Investigator, Jim Norman was an FBI Special Agent for over 30 years. Even after his retirement in 1999, he continues to serve the Bureau as a speaker to law enforcement groups.

  Mr. Norman has an exceptional level of expertise in investigative techniques, encompassing virtually every type of criminal activity within the FBI’s jurisdiction. He was also an FBI Bomb Technician/Po