GAW / Josh Garza discussion Paycoin XPY xpy.io ION ionomy. ALWAYS MAKE MONEY :)

[suchmoon]

So what's the outcome?  Dismissed or laughed at?

Fraser's lawyers submitted a huge "memorandum" explaining why they think this case should be dismissed. I guess now the other side has to respond by October 18.

Document here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.42.0.pdf

Other case documents here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.docket.html

Edit - some quotes for those who are too lazy to open the PDF:

Plaintiffs accuse Fraser, a minority investor in the Companies, of participating in an
alleged scheme by Garza and the Companies to defraud investors. They lard their accusations of
control person liability with references to Fraser’s occasional requests for information about the
Companies’ performance and business, his business relationship and friendship with Garza, and
conclusory catch-all allegations against Garza and the Companies, into which they conveniently
group Fraser. The correspondence between Garza and Fraser to which Plaintiffs point, however,
demonstrates that Fraser did not have the power to direct the management and policies of Garza
and the Companies. Rather, that correspondence reinforces Fraser’s limited role as a minority
investor who did not control the Companies’ daily operations, set their policies or determine how
their policies would be implemented. Furthermore, Plaintiffs’ Complaint does not plead with the
requisite particularity that Fraser engaged in “culpable participation” in a primary securities
violation, which is also fatal to their Section 20(a) claim. Plaintiffs’ state law claims suffer
similar deficiencies. Accordingly, the claims against Fraser should be dismissed.

The article noted that Fraser
was “backing Mr. Garza” and was “a long-time backer of Mr. Garza’s projects,” but contains
no suggestion that Fraser held any role within the Companies other than that of a financial
investor.

(this is in reference to the WSJ blog shill piece)

The Complaint fails to state a claim against Fraser because Plaintiffs have not alleged,
with sufficient particularity, facts from which it could properly be inferred that Fraser controlled
a primary violator — here, Garza and the Companies — and culpably participated in the alleged
fraud.

Plaintiffs do not allege a single
policy, procedure or method of operation undertaken by Garza or the Companies that Fraser
directed or controlled, as the law requires. See In re Alstom, 406 F. Supp. 2d at 487. Plaintiffs
do not allege that Fraser held any voting rights in the Companies, nor do they allege that a
contract or other agreement exists between Defendants that would grant him any such power.
They do not allege that Fraser asked for — let alone received — any power, rights or position in
exchange for his minority investment in the Companies. See In re BioScrip, 95 F. Supp. 3d at
740 (having “a great deal of sway” did not “rise to the level of actual control”). In short,
Plaintiffs do not allege a single cognizable fact demonstrating that Fraser actually possessed the
ability to direct the actions of Garza or the management and policies of the Companies. See In re
Flag, 352 F. Supp. 2d at 458 (exercising “powers of persuasion” does not establish “actual
control”).

And it goes on like that.

[skinnyboy]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

[suchmoon]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

Yes. But the above memorandum clearly states "Fraser, who lives and works in New York, serves as a Vice Chairman at Cantor
Fitzgerald, L.P. (“Cantor”), a well-known investment bank based in New York City."

[favdesu]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

Yes. But the above memorandum clearly states "Fraser, who lives and works in New York, serves as a Vice Chairman at Cantor
Fitzgerald, L.P. (“Cantor”), a well-known investment bank based in New York City."

may be a typo, is there something like a vice chair man? some weird naming for a janitor maybe?

[BitBanksy]

So what's the outcome?  Dismissed or laughed at?

Fraser's lawyers submitted a huge "memorandum" explaining why they think this case should be dismissed. I guess now the other side has to respond by October 18.

Document here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.42.0.pdf

Other case documents here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.docket.html

Edit - some quotes for those who are too lazy to open the PDF:

Plaintiffs accuse Fraser, a minority investor in the Companies, of participating in an
alleged scheme by Garza and the Companies to defraud investors. They lard their accusations of
control person liability with references to Fraser’s occasional requests for information about the
Companies’ performance and business, his business relationship and friendship with Garza, and
conclusory catch-all allegations against Garza and the Companies, into which they conveniently
group Fraser. The correspondence between Garza and Fraser to which Plaintiffs point, however,
demonstrates that Fraser did not have the power to direct the management and policies of Garza
and the Companies. Rather, that correspondence reinforces Fraser’s limited role as a minority
investor who did not control the Companies’ daily operations, set their policies or determine how
their policies would be implemented. Furthermore, Plaintiffs’ Complaint does not plead with the
requisite particularity that Fraser engaged in “culpable participation” in a primary securities
violation, which is also fatal to their Section 20(a) claim. Plaintiffs’ state law claims suffer
similar deficiencies. Accordingly, the claims against Fraser should be dismissed.

The article noted that Fraser
was “backing Mr. Garza” and was “a long-time backer of Mr. Garza’s projects,” but contains
no suggestion that Fraser held any role within the Companies other than that of a financial
investor.

(this is in reference to the WSJ blog shill piece)

The Complaint fails to state a claim against Fraser because Plaintiffs have not alleged,
with sufficient particularity, facts from which it could properly be inferred that Fraser controlled
a primary violator — here, Garza and the Companies — and culpably participated in the alleged
fraud.

Plaintiffs do not allege a single
policy, procedure or method of operation undertaken by Garza or the Companies that Fraser
directed or controlled, as the law requires. See In re Alstom, 406 F. Supp. 2d at 487. Plaintiffs
do not allege that Fraser held any voting rights in the Companies, nor do they allege that a
contract or other agreement exists between Defendants that would grant him any such power.
They do not allege that Fraser asked for — let alone received — any power, rights or position in
exchange for his minority investment in the Companies. See In re BioScrip, 95 F. Supp. 3d at
740 (having “a great deal of sway” did not “rise to the level of actual control”). In short,
Plaintiffs do not allege a single cognizable fact demonstrating that Fraser actually possessed the
ability to direct the actions of Garza or the management and policies of the Companies. See In re
Flag, 352 F. Supp. 2d at 458 (exercising “powers of persuasion” does not establish “actual
control”).

And it goes on like that.

Thanks Suchmoon for the summary. So basically Fraser is dissociating himself from this mess...

[owlcatz]

Yes, and from reading that PDF, his lawyers seem to have done a decent job of it, IMO. I mean, they do bring up the fact that the guy was basically clueless as to what was going on. I can only imagine how burned that guy must feel. Maybe it's Homero's way of paying him back for something? It's all just so weird when you really look at the whole picture. Thanks for the links suchmoon!

[suchmoon]

Yes, and from reading that PDF, his lawyers seem to have done a decent job of it, IMO. I mean, they do bring up the fact that the guy was basically clueless as to what was going on. I can only imagine how burned that guy must feel. Maybe it's Homero's way of paying him back for something? It's all just so weird when you really look at the whole picture. Thanks for the links suchmoon!

Well, the lawyers of course had to try this motion to dismiss but it's not a done deal yet. IANAL but I hope the plaintiffs' lawyers can come up with a good enough response for the case to go forward. Would be weird if this gets thrown out. For one, Stu could have ended the whole thing if he just pulled the plug on Garza's finances at any point so he clearly "controlled the primary violator". Was he aware of the fraud or not - not sure if they can determine that without proper discovery, including depositions of Garza and everyone else involved. Unless Garza has been paid off or otherwise coerced to take the fall.

[BitBanksy]

I hope the plaintiffs' lawyers can come up with a good enough response for the case to go forward. Would be weird if this gets thrown out.

Yeah it will move forward. The plaintiffs' lawyer (Susman and Godfrey) toke the case on a "no win no fee" basis and I doubt they would do so without a careful and thorough consideration of all the facts. At the end, if they loose against GARZA/FRASER, they don't just loose a possible compensation but credibility as the No. 1 boutique litigation law firm in the states. Looking forward to the plaintiff's motion now...

[maildir]

Thanks for securing the docs. bit disappointing in my view. Pretty much a whine-fest over and over, "minority share holder"  only "financial backer" over and over gain,  pretty clear their tactic to drill that home into the Judge's mind.

The thing is thought this is of course all after the fact. Before the picture was pretty clearly painted wall street blog, press releases words used "partner" "founder" [his own words], his linkedIN had "gaw miners" under current [cannot find or recall if it indicated a title] Homer's words my "best friend" "my partner" etc etc. All early on when it was used to rope people in. I even posted the blurb here from the email recently discovered Uncle Stu insisted he be called a partner or early founder or some shit like that.

So that is the picture that was painted to the public before it broke. Now whether after the fact suddenly Uncle Stu can throw his arms in the air and say well I had zero involvement whatsoever and was just a "minority shareholder" and only a "financial backer" seems to me to be a bit late.  It may very well be true and it may very well not be provable at all that he had any control over this primary whatever it is they call it. But isn't it too late? Are not the victims of the fraud a result of him the not saying strongly enough BEFORE they were roped in that they had zero control and zero input on the direction? The wsj blogs, the press releases, the others, sure didn't make it crystal clear back then before people invested and lost everything. He can't have his cake and eat it too.

I think that might be what it all hinges on. Yes now today, there is no proof at all that he had any control whatsoever, no but before, the picture sure was painted that he was deeply involved and more than a hands off financial backer. More than likely many people trusted it all thinking that "what could go wrong" with such a prominent experienced respected businessman involved.

I will be interested to see the outcome of this aspect. Technically and legally is it correct that under that specific, we find out only today, well after the fraud has been committed that indeed he had zero control and was indeed nothing more than a financial backer therefore it must be dismissed, or because before the fact, it was painted by himself and Homero that he was much more than that, more important and what really counts in this particular case and in the charge against him by the plaintiffs [actually have to read again what it is they charge him or accuse him of in this respect].

At the same time I am wondering if this too is nothing more than a tactic. Yes, lets accuse Uncle Stu of this outlandish claim that we all know is not true or correct and is definitely not provable, in order to make him vehemently deny it, which then will force Homero to come in and try to point the finger at Uncle Stu in order to share the blame? So they are intentionally pitting him against Homero  in order for Homero to spill the beans for them? Uncle Stu pleads complete ignorance, Homero enters the fray with "some" proof that Uncle Stu knew "somethings" etc. LOL. If so quite crafty.

One thing is for sure and I read them myself as I am sure many others did, its not as cut and dry as this defense makes it seem to be. Uncle Stu most certainly did not cut him 200,000 dollar check, fuck of to Cape Cod and twiddle his thumbs and "on occasion ask a for numbers" or whatever.

There are complicated discussions about shares in all of this, in GAW, in Zenminer, in Great AUK, in the town house he was renting out, all between Uncle Stu and Homero. Share swap talks, loan swap and debt between the business entities, etc. How to payback,  off-set, forgive one from another. Quite complicated and quite a lot more involved than just some silent partner who wrote a check once or twice and sat back and had no further involvement. Lot of information in those emails about all of this.

So on the one hand a lot more financial involvement than the defense makes out, a lot more involvement in creating an impression he was involved in it all vs. that specific law quoted where it must be shown that he was actually in control some way or another.

Overall in my view the defense is seems rather thin. Zero idea legally the importance of harping over and over again that that definition in that specific law of "control" cannot be met because it never was, is the crux of the matter. Again need to read the overall accusation whether plaintiff's claim is that he did have control and should have known better and nothing more. Which I don't think the charge is at all. Maybe a very small part of it.

Very interesting to see how it plays out. Lying Fucker Homero, still needs to appear and we have to see what he says about it all. So they have to respond to this by the 18 October. Cannot see immediately when Homero's time is up [it it is the 28th or 9th] which ever case plaintiffs wil delay in order for Homero to say what he has to say then proceed from there. Here one has to wonder if they are in cahoots.  Where Uncle Stu's lawyers have advised Homero not to say a single word about his involvement [pay off maybe? foot his legal bills?], do not implicate or fortify plaintiff's claims or else. Or if they really are completely disassociated and no longer on any terms and Homero will spill the or some beans, so that Uncle Stu shoulders some of the claimed funds, which for sure no matter what Homero's defence is, he will be liable for.

This aspect will be the drama we seek: what will Homero do?  

edit: no edit - no apologies  atrocious structure going on in that wall of text.

[maildir]

Right here, another clear cut example:

http://blogs.wsj.com/moneybeat/2014/12/01/bitbeat-under-fire-gaw-miners-ceo-garza-takes-on-his-critics/

As for the charge that GAW is a Ponzi scheme, Mr. Garza pointed out that his principal partner, Cantor Fitzgerald Vice Chairman Stuart Fraser, in whose name the patent for one of Wall Street’s most important bond trading programs is listed, has “got more to lose than all of us combined.” He added, “Why would a guy that already has a ton of money, and would get thrown in jail if he was involved in anything sketchy, be involved in a scam?”

Nice words to rope everyone in to the fraud "partner" "principal partner" even, "founder" ... etc. so what was the public supposed to know back then? That was really, it was all white lies, there is and never was proof that Uncle Stu was nothing more than a hands off silent partner?    C'mon Mr. Judge. Got Uncle Stu changing that other press release to make it sound like he was more involved that he was. Which of course we all only find out now, long after the fact?? 


Q:

What is a principal partner?

A:
Quick Answer
A principal partner in a business is the partner that represents the firm. Usually, a principal partner's decisions are representative of the all the partner's interests, and often speaks on behalf on the entire firm.
 


Little White Lies, to lure in more money isn't fraud? 

[suchmoon]

Garza was supposed to respond by September 5 and the request for extension was thrown out. Maybe there is something in that meeting report (doc #40) that allows him more time, not sure.

Re WSJ: it's funny how the defense lawyers referenced the first blog post as proof that Fraser was merely "backing Mr. Garza” but obviously forgot to mention the second one. No doubt most of these "rebuttals" are similarly selective, not to mention that the leaked e-mails and other public sources represent only a tiny part of what a proper discovery could... ummm... discover.

Edit: Garza was not part of the meetings. Not sure why he's silent.

[RoomBot]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?

Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

[owlcatz]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?

Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

Sadly though, it's not up to any of us. Some random judge will decide it. Hooray USA.

[Phildo]

Right here, another clear cut example:

http://blogs.wsj.com/moneybeat/2014/12/01/bitbeat-under-fire-gaw-miners-ceo-garza-takes-on-his-critics/

As for the charge that GAW is a Ponzi scheme, Mr. Garza pointed out that his principal partner, Cantor Fitzgerald Vice Chairman Stuart Fraser, in whose name the patent for one of Wall Street’s most important bond trading programs is listed, has “got more to lose than all of us combined.” He added, “Why would a guy that already has a ton of money, and would get thrown in jail if he was involved in anything sketchy, be involved in a scam?”

Nice words to rope everyone in to the fraud "partner" "principal partner" even, "founder" ... etc. so what was the public supposed to know back then? That was really, it was all white lies, there is and never was proof that Uncle Stu was nothing more than a hands off silent partner?    C'mon Mr. Judge. Got Uncle Stu changing that other press release to make it sound like he was more involved that he was. Which of course we all only find out now, long after the fact?? 


Q:

What is a principal partner?

A:
Quick Answer
A principal partner in a business is the partner that represents the firm. Usually, a principal partner's decisions are representative of the all the partner's interests, and often speaks on behalf on the entire firm.
 


Little White Lies, to lure in more money isn't fraud? 

People can, and will, claim that the line in the wsj blog about Fraser's involvement is just as accurate as the information in those posts about the data center, how many bitcoins they had, and all the other horseshit involved.

There's a huge difference between Fraser being intimately involved, and the guy saying that he had miners that could mine on 2 pools at once saying that they were involved.

I don't remember what the emails said, and who knows what will be turned up in discovery, but pointing to a blog post that we all knew was full of bullshit the second it was posted probably isn't going to get anyone anywhere.

[owlcatz]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?
Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

Sadly though, it's not up to any of us. Some random judge will decide it. Hooray USA.

you are correct in that it is not up to you. you and suchmoon are both stupid bitches if you think stuart or garza will do any jail time. this is an american court case. money equals innocent in america.

Maybe so SKERMY, but then again I'm not too worried about it, no effect on my life at all, just entertainment. As for yourself, you obviously have some sort of other vested interest in it since you are always defending these scumbags. Sucks to be you, have a great life!  

yeah just ask madoff or martha stewart

Yeah, that ^^^ too.

[maildir]

"minority investor"  "just a financial backer"  "no control whatsoever"  "knows nothing about the crypto space" 

Hand crafted with love and care by Stuart A Fraser

http://archive.is/VWRa2 

"Although relatively new, cryptocurrency is shifting the economic paradigm and that is reason enough for traditional financial organizations to start taking this seriously," said co-founder and early investor, Stuart Fraser, Vice Chairman and partner, Cantor Fitzgerald, L.P. "With the marrying of innovation, technology, finance and regulation -- I believe that cryptocurrency can provide a value proposition that has never before been contemplated in global commerce and thus has the real possibility of being a viable mainstream currency accepted by the masses around the globe."

[maildir]

 

Subject: RE: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 16:09:23 -0500
From: STUART FRASER <aukster@msn.com>
To: Josh Garza <josh@btc.com>



maybe I should be "identified" as a founding Investor? ...said Stuart
Fraser, co-founder/early investor and Vice Chairman......

Subject: RE: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 13:56:31 -0500
From: STUART FRASER <aukster@msn.com>
To: Josh Garza <josh@btc.com>



sure

Subject: Fwd: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 13:54:52 -0500
From: Josh Garza <josh@btc.com>
To: Stuart Fraser <aukster@msn.com>



are you cool with this?

It does not say its coming from cantor

*Josh Garza*
*CEO- *GAW Corp

---------- Forwarded message ----------
From: *Harrison Wise* <harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>>
Date: Fri, Nov 21, 2014 at 12:46 PM
Subject: Re: ICO/Paycoin release draft - Please Review
To: Josh Garza <josh@btc.com <mailto:josh@btc.com>>
Cc: Amber Messer <amber@geniusesatwork.com
<mailto:amber@geniusesatwork.com>>, Christina Sarracino
<christina@wisepublicrelations.com
<mailto:christina@wisepublicrelations.com>>, John McCartney
<john@wisepublicrelations.com <mailto:john@wisepublicrelations.com>>


Also, let's not forget that we also need blessing on Stuart's quote as
noted in the latest draft:

“Although relatively new, cryptocurrency is shifting the economic
paradigm and that is reason enough for traditional financial
organizations to start taking this seriously,” said Stuart Fraser, Vice
Chairman and partner, Cantor Fitzgerald L.P. “With the marrying of
innovation, technology, finance and regulation - I believe that
cryptocurrency can provide a value proposition that has never before
been contemplated in global commerce and thus has the real possibility
of being a viable mainstream currency accepted by the masses around the
globe.”


Thanks

H



Harrison Wise
Wise Public Relations, Inc. <http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>


On Fri, Nov 21, 2014 at 12:11 PM, Josh Garza <josh@btc.com
<mailto:josh@btc.com>> wrote:

I think its ok (there is nothing wrong with it) I would just
question the content.

Assuming regular every day people are going to read it, why not
write it that way? Mention that is will work with credit cards, and
hundreds of thousands of merchants?

I just dont think it really says anything (in its current form).
Maybe I dont get it.

Anyways, thats my view


*Josh Garza*
*CEO- *GAW Corp

On Fri, Nov 21, 2014 at 12:03 PM, Harrison Wise
<harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>> wrote:

Josh - need your blessing/input on this release draft asap -
https://docs.google.com/a/wisepublicrelations.com/document/d/1PW_PHrKUjCJPJYQvqZ_KstkXK8DnZSr-YI5lE58V57Q/edit

Please advise.
H

Harrison Wise
Wise Public Relations, Inc. <http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>


On Thu, Nov 20, 2014 at 4:15 PM, Harrison Wise
<harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>> wrote:

Josh - need your feedback/blessing on this asap:

https://docs.google.com/a/wisepublicrelations.com/
<http://wisepublicrelations.com/>document/d/1PW_PHrKUjCJPJYQvqZ_KstkXK8DnZSr-YI5lE58V57Q/edit

Our plan is to release widely on Monday and we need to get
this into hands of relevant tech media and those we met with
yesterday by Tomorrow/Friday morning to properly queue it up.

Please feel free to make any edits directly to this shared
doc or let us know what changes need to be made.

Best,
Harrison

Harrison Wise
Wise Public Relations, Inc.
<http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>

 


 

 
 
 

[maildir]

[owlcatz]

Oh nice work!  This made me really laugh though, from that draft link in your post above:

[maildir]

All right there, nice and neatly summarized:

https://archive.is/0vo3g#20%

here is what I am thinking, we will create a equal partnership (50/50) in our holding company "Geniuses At Work Corporation", you can have the voting power (I dont care).

but the two have financial dealings which see Garza selling a 41% share of his operation to Fraser

Stuart Fraser of Cantor Fitzgerald

Text messages and emails between Garza and Stuart Fraser reveal a friendship dating back an unknown number of years. Seeing him as the father he never had, Garza texts Fraser:


Just wanted to thank you for all your have done. Much of who I have become today is because of you. I did not have much of a father growing up, and you have very much been that for me throughout much of my life. Love you buddy, josh

More than love, Garza comes across as desperate for the admiration and respect of his mentor. Not only does Garza buy Fraser a car for Christmas, but the two have financial dealings which see Garza selling a 41% share of his operation to Fraser as well as organising various loans.

Discussing one of their deals, Garza writes to Stuart and includes a document detailing his investment in GAW Miners:


Hey,

Take a look at this when you get a chance, I would like to get things cleaned up between us.

Like I mentioned, my goal is to get the 200k loan paid to you by July 4th. And the 210k loan to Scott by July 18th.

While there is still time on both loans, I would like to get them cleared up.

Regarding the deal between us. If you remember our original agreement was 240k over a 24 months period to be equal partners on any "new venters" in the same time period.

90k of the 240k has been paid to me, I have shown that in the table in the spreadsheet. Leaving a balance of 150k owed to me.

I have invested 85k of my cash in to GAW Miners to date. Our records show you have invested 135k (outside of the 400k in loans being paid back to you). Please let me know if you have a different amount.

That would make a 50k difference in our equity investment (in your favor). We can handle this one of two ways. Either I can have the company send back 50k to you, this would equalize our investment at 85k.

Or, you can send me 50k of the 150k balance to me (reducing your balance to me to 100k) and I will invest that in to GAW Miners to match your investment of 135k.

Either is fine with me, let me know what you want to do.

Naturally, depending on the outcome, we need then need to clean up the balance still owed to me. I would like to either continue the 10k a month payments, or handle it in some other way.

Our equity of GAW Miners would stand at 41% each. Leaving 18% to be used to raise additional money, employees, etc.

Let me know if I missed anything, I would like to get this behind us

Josh

Discussing money that Garza alleged Stuart Fraser needed to keep out of sight, he writes to his staff members Juliette Dunlevy and Dan Pease:


Hello,

Stuart needed to keep money “out of sight” a few weeks ago, so he borrowed it from me.

Because of that, he is not in a position to move any money around for a few months.

As such, he has asked that the company pay me back, and he will pay back the company in a few months. The amount is 150k.

Please characterize it as a loan to him.

Thank you for your attention and discretion. And yes, even millionaires borrow money from each other

Lamenting the sale of almost half of GAW Miners to Stuart Fraser, Garza writes:


I was thinking after our call.

We should figure out how we want to handle things between us going forward, for not other reason so that we are on the same page. We dont really ever talk about it, but we should, its has not be revised for years.

I think its important that we figure how we want to handle things as new things have been developed (some with your investment, and some without) And it will become confusing if we dont sort it out now. LIke you said, money changes everything.

I propose a simple solution, we split every system and company in half. I am both aware of the value of all you have invested in the past to get us here. As well as the value of the systems and companies (GAW Labs and VP) I have built. In its current course (even without Dan), GAW Labs will have over 3m in contracts by the end of the year.

The exception would be GAW HSI, which would you would own 80% of. I dont feel right about splitting GAW because of what you have invested. But I will continue to grow its value.

Going foard, here is what I am thinking, we will create a equal partnership (50/50) in our holding company "Geniuses At Work Corporation", you can have the voting power (I dont care). I will put in everything I have built:

– My equity stake in CP
– Any patents Joe or I create
– My entire voice platform
– The new App system (the one we talked about at Mt snow)
– smart-tech
– GAW Labs
– Joe deal (I know you probably figure this is assumed, but the equity in GAW Labs (voice system) is how we are doing the deal)

In other words, I would split every deal and every system I have developed with you.

Here is what I would like:

– 10k per month investment paid to Geniuses at Work Corporation for 24 months (to pay myself with). I have coninued to lower my salary over the last few years (not complaining about)
– Forgive the hillcrest debt (around 230k)
– Allow me to live down the investment you made in GAW in the past. I feel so bad every time its brought up. I will still/always continue to try and recoup your losses.
– The 150k that you have already agreed to, per the term sheet we reviewed at your house. But I would like for this to only be a "*one time*" infusion. On other words, its *not* perpetual, and there is *no* exsepction of farther investment
– Help with Howard on CP

Hope you feel these are fair and reasonable terms. They are meant to be a starting point of a discussion. I think its important that we clear this up and move forward.

I am sure you get tired of hearing it. But I can never thank you enough for all you have done and continue to do. I am proud of everything we have done this year. GAW HSI, Smart-Tech, and GAW Labs are all cash flow positive. And we could have not gotten here without your support.

I cant tell you how important it was for me to feel like I could "do it"!

Garza gets no response from Fraser, so he emails him again and again. Finally, Garza relents and wishes to continue with the original deal he made with Fraser to which Fraser says thanks. Garza writes:


I thought a lot about it.

Obviously I never thought when I made the deal that I would end up giving up half a company this successful. But, like you said, it could have gone either way. And one of the many things you taught me was to always honor your deals, the good and bad ones.

Yes I have worked hard to build this company, but I would not here where I am today without you. No question in my mind.

So in light of all that, let's finish the deal as planned. You can pay out the rest of the cash to me, and I will issue you the 41% you deserve. If it's cool with you, let's keep each of us at 41% so there is equity avaliable for investors.

Sounds good?