All Apologies

I’ve been absent.  Trying to make a living in these tough times.  Things have been quiet for the most part.  Who’s got an update that’s worth discussing?  Anyone seen Walter golfing lately or Kelly playing volleyball?  What’s the scoop?

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42 thoughts on “All Apologies

  1. With so many sub-headings, not sure where to post this piece. Investors might find it interesting…and hopefully a precursor of what fate of justice awaits the Ng mob…

    NEW YORK (Reuters) – A Long Island man was sentenced to 25 years in prison Friday after admitting to stealing more than $195 million from thousands of investors in the course of a five-year, $400-million Ponzi scheme.

    Nicholas Cosmo, 40, was ordered by U.S. District Judge Denis Hurley to repay $179 million to more than 4,000 investors who thought they were investing in short-term commercial bridge loans through Cosmo’s two Long Island-based companies, Agape World Inc and Agape Merchant Advance.

    Instead, prosecutors said, Cosmo used new investments to pay returns to investors, in a classic Ponzi structure. Media accounts dubbed Cosmo a “mini-Madoff” following his arrest in January 2009, because of the similarity of his scheme to that of New York investment manager Bernard Madoff’s multi-billion-dollar swindle, which had been discovered only weeks earlier.

    Cosmo pleaded guilty in October 2010 to federal mail and wire fraud charges. Under federal sentencing guidelines he faced up to 40 years in prison.

    In contrast to many of Madoff’s victims, who were well-off Manhattan residents, charities and companies, prosecutors said, Cosmo and Agape preyed on working-class families, U.S. soldiers and others who wound up losing all or part of their life savings.

    “The defendant’s actions crushed the hopes and dreams of everyday citizens,” Loretta Lynch, the U.S. Attorney for the Eastern District of New York, said in a statement.

  2. My name is Gregg Ornowski and I am seeking any feedback and advice that I may be able to get. I am not an investor of any of the funds but I am the golf course superintendent for one of the investments in the portfolio, Snake River Sporting Club (Canyon Club) in Jackson Hole, WY. When the Club filed for bankruptcy in 2008 I was later contracted in March 2009 by Barney Ng/Bar-K to maintain the golf course in order to protect the Club’s value as a golf course community. I was to be paid up front each month as per an estimate of monthly costs to rent equipment, fuel, chemicals & fertilizer and payment for my labor. The first month, March 2009, I was paid in full with a personal check from Barney’s daughter. The next month I received partial payment with a personal check from Barney himself with promises that I would be paid the remaining balance the following month. I hen continued to receive partial payments on the total costs to preserve the golf course with checks from Bar-K Mortgage. I was convinced by Barney that I would be made whole by the year’s end 2009. He resigned in the fall and I never received the remainder of the money owed to me. I then was in contact with both Kelly and Walter with more promises being made to pay what was owed and also wanted me to continue my preservation efforts for the Club. That winter, as you all know, Machinac Partners were hired to manage the portfolio so I was passed on to Farley Dakan as my main contact. In April of 2010, I started to receive partial payment checks from Bar-K Mortgage to continue my efforts but it was too little to rent the necessary equipment to get the job done and in June 2010, Machinac caught wind that Wells Fargo Bank was to proceed with the foreclosure of the golf course property told me that I would no longer be needed. I sent my final invoice to Farley and Kelly in June with a response that they did not owe me anything because Barney was no longer a part of the companies and that they never made an deal with me to perform the work. Luckily most of my expenses were covered by the payments that I received throughout the 15 months but I didn’t receive anything for my labor.

    I have consulted attorneys but can’t afford to really do anything. Can I file a claim in the RE Loans bankruptcy? If so, how do I go about it? If not, is there any advice that can help me collect the money owed?

    I certainly would greatly appreciate any advice that any of you may be able to provide and I am certainly sympathetic for those who has lost so much.

    • We feel sorry for you and it just shows the extent of cheating and fraud that these entities and individuals have engaged in. You should weigh the options provided to you by the attorneys you consulted. I presume that you have no written contract.

      For all those who were showering praises on the same individuals that we’re now chasing (a lot less now compared to a year ago), this is the character of these individuals.

      Even as cheaters, they didn’t have the conscience to not hoodwink people who are lesser privileged and earn their $ by working hard and through honesty.

  3. It looks like the Madoff family will be in the news a lot in the coming days. Bernie’s daughter-in-law has written a book:
    http://www.huffingtonpost.com/stephanie-madoff-mack/stephanie-madoff-mack-end-of-normal-memoir_b_1024463.html

    She was on 20/20, which you can currently watch http://abcnews.go.com/2020/ (It will probably be archived to some other link after the next new episode airs tomorrow.) There were some bright news bits, like where the trustee was suing all of the relatives, even the toddler grand-daughter, for gifts and money they had received. (So far, Madoff victims have received about 5 cents on the dollar back from all of the seized property.)

    Perhaps my sensitivity has been dulled of late, but I felt like most of her interview was a self-serving effort to talk about what innocent victims she and Mark Madoff were in all of this. It’s really hard to summon a lot of sympathy when images of the opulent lifestyle is flashed across the screen, knowing it was paid for with stolen money. While her book may contain some interesting insider bits of info, it feels like the book is another Madoff effort to drain money from people. (If I read it, I’ll look for a used copy or the library because I don’t want to give the Madoff clan any royalty money.) It’s unfortunate that her husband killed himself last year, leaving her and his ex wife to raise his 4 kids. If he really was so horrified by what his father had done, maybe he could have lived and given part of his earnings to the victims fund.

    Ruth Madoff wife will be on 60 minutes this Sunday, here is a preview:
    http://www.cbsnews.com/8301-18560_162-20126063/bernard-and-ruth-madoff-attempted-suicide-says-ruth-in-her-first-interview/
    Talking about how she and Bernie tried to kill themselves. Yea, I’m not exactly moved by her interview either. Boo hoo that the Madoff family feels like victims.

    Barbara Walters recently interviewed Bernie in prison for two hours, no cameras allowed, but from her reports he sounds like as much of an arrogant SOB as he ever was, talking about how prisoners all respect him in there and treat him like a Mafia boss, and he’s really happy, thanks to his therapist. I’m surprised nobody has shanked him yet.

    • For anyone following the Oshima class action, here is an update.

      A First Amended Complaint was filed on November 1, 2011.
      The theories of liability against Greenberg Traurig and Wells
      Fargo Capital are clarified.

      Plaintiff Yoko Oshima has been replaced with Gordon Noble, an
      investor from Tiberon. Mr. Noble, his family and his business are
      invested at about $1.45 million.

      The plaintiffs and two defendants filed individual statements about
      the case for the November 8, 2011, Case Management Conference.
      They are worth reading.

      The Judge read the statements and the First Amended Complaint and
      then issued a Tentative Ruling continuing the November 8, 2011, Case
      Management Conference to January 26, 2012.

      The Tentative Ruling states that the attorneys have violated the Court’s
      rules and the Judge suggests that all the attorneys read the rules and
      follow them.

      • Mr. Brower, how can we see the complaint that was filed. I would really like to see the theories of liability against the above. Can anyone cut and past these docs or it that asking a lot? Appreciate all you can offer.

          • I wouldn’t apologize to Mr. Brower for anything ABV. I suspect (suspicion only, mind you) that Mr. Brower is the primary (read ‘only’) reason why Barney Ng is no longer a named defendant in the Class Action lawsuit. Why is that Mr. Brower? What explanation could there possibly be for deleting Barney Ng – actually I mean what ‘believable’ explanation could there be?(other than the fact that he (Barney) has provided you with loads of information designed to place all blame on everyone involved, except, of course, himself! Anyone who says “innocence” is dreaming. Either that or I want some of whatever it is you’re smoking!

      • There was a second class action filed today in
        Alameda County Superior Court.

        The Plainitiff is Dr. Frederic Mendes, a retired pathologist
        from San Francisco.

        The attorney for the Plaintiff and the class is Randall
        Aiman-Smith. His offices are in Oakland.

        The case number is RG 11 – 603095.

        The scanning was not very good. It is difficult to read
        most of the Complaint.

        • Thanks for letting us know. This suit is for the class (1) All persons who purchased or held a membership interest in R.E. Loans and received a promissory note(s) from R.E. Loans in exchange for such membership interest on or after November 1, 2007, and (2) all persons who purchased or otherwise obtained or held a promissory note(s) issued by Mortgage Fund ’08

          When REL was bartered over to Wells Fargo, did some people get an actual physical piece of paper that was stated as a promissory note, or were they all in some sort of de facto “promissory note” status by the actions of converting shares? I don’t think we got a physical promissory note on the REL investments, although I know Walter issued them on some other funds. Without such a note, would people be excluded from this class action suit?

          • Thanks for the info Mr. Brower. At least in this Complaint Barney Ng is a named defendant – for the moment anyway. How refreshing!!!!

            To Kmum – to my knowledge people who were members of R.E. Loans when the Exchange Agreement was effected in 2007 did in fact receive a promissory note signed by Walter Ng theoretically secured by a UCC-1 financing statement in which Development Specialists Inc. was named as the Secured Party as Collateral Agent for the Noteholders.

  4. Hmm… I will have to dig through files again, ask others I know who were in the fund, because I don’t recall receiving one, and I’d had an REL acct for years at that time. I know people in other categories, like out of state Walter Ng Investors, and Sienna investors who got them but didn’t mention an REL promissory note.

    • I am an R.E. Loans LLC investor. In my files I have a big white envelope that contains the following:
      1. A cover letter dated Nov. 15, 2007 signed by Walter Ng and Bruce Horwitz. It says that the following is enclosed:
      a. Exchange Agreement b. secured Promissory Note and Security Agreement, and c. a current statement for my account.
      They are respectively as follows:
      a. a thick stack of papers with a light blue cover and back sheet stapled together, and dated November 1, 2007
      b. two groups of several pages with an embedded signature page, by Walter Ng, in the secured promissory note group. The Security Agreement has a signature page signed by Walter Ng two times; once as Grantor and once as “Accepted and Acknowledged by Secured Parties”. On this latter page, another signature line was left blank. It was for “Accepted and Acknowledged By Collateral Agent:”
      c. A single sheet showing my personal amount, and a grand total for all investor/noteholders.
      Hope that helps.

      • The Promissory Note was from R.E. Loans.

        The exchange changed the status of the investors
        from members of an LLC to note holders. As
        members of an LLC, the investors had the right to
        sue Walter, Bruce, Kelly and B-4 Partners for breach
        of fiduciary duty and anyone else for aiding and
        abetting a breach of fiduciary duty.

        Some attorneys believe that the investors lost that
        right on November 1, 2007, when the investors became
        note holders. If so, the 4-year statute of limitations for
        all breach of fiduciary duty claims expired last week
        on November 1, 2011.

        The out-of-state investors did not receive that set
        of documents. Instead, they received a letter from
        Walter Ng and his personal promissory note. In
        essence, the out-of-state investors’ accounts were
        “taken” by Walter Ng and he “gave” the out-of-state
        investors his personal note.

        • I don’t get it Mr. Brower. Are you saying there is no case against the fund managers because of the conversion in 2007? Grant it the 4 year statute is up but that would have been if there were no charges or misrepresentation to begin with right? Confusing of which only the laws can spell out.

  5. Thanks for the breakdown on docs rtish.

    As for the 4-year statute of limitations deadline, I assume that’s why the Mendes class action was filed Nov. 1st, to preserve some option. It’s generous of them to go forward with that, because so many investors didn’t, (and some probably still don’t,) realize that there may be a crime committed.

    Walter and Kelly were telling people that things would turn around in a year or two and they expected to be back to business as usual. Of course they omitted the part where they paid out millions to their friends and family. Some investors who had trusted them for decades were patiently waiting it out, unaware that there would be no money coming in the future. In retrospect, it seems they were just stalling for time.

    I think some people have been waiting for criminal charges to be filed to confirm what they have long suspected. It’s unfortunate that the FBI, SEC, etc. take so long to investigate that the statute of limitations has passed, but hopefully they have other methods to help the victims, if there is anything left to recover.

  6. Yes, big thank you’s to the Mendes family!

    Can someone clarify if the Mendes case would cover people who were *only* invested in R.E. Loans, LLC and not in MF ’08?

    Also, since the 4-year statute of limitations has run out, does that mean that the November 15, 2011 deadline granted to requestors for filing complaints to not allow discharge of the Ng debt (on the individual case) is no longer relevant for R.E. Loans only investors?

    Boy this is sure confusing!

    Many thanks, as always.

      • Thanks for the clarification RWB.

        Since the complaint does include RE Loans investors, it seems that Randall Aiman-Smith is one of the attorneys who does not believe the statue of limitations ended on Nov 1. I think that there may still be people who are isolated from communicating with other investors, and not be aware that they could be victims of a crime, let alone that their statue of limitations has expired.

        Many only got the first hint of a serious problem in June when the got mailed a notification that Walter filed for bankruptcy, and still don’t know the full story. If one called the office for information, Kelly had been telling a whole different story.

  7. So far I have to case files in Alameda County: They are RG11593201 and RG11603095. Is there another case filed that I don’t have? If so could someone please post the case #. Much appreciated.

    • You have the two Alameda class action cases.

      RG 11 – 593201 was filed on August 31, 2011,
      and a First Amended Complaint was filed on
      November 1, 2011. Ms. Oshima was dropped
      as a lead plaintiff and replaced by Mr. Noble.
      The case is currently assigned to Dept. 17.

      RG 11 – 603095 was filed on November 4, 2011,
      and a First Amended Complaint was filed the
      same day. The plaintiffs are Dr. Mendes, Nancy
      Rapp, Phillip Cantor and Irene Lee. Mr. Brown
      was added as co-counsel. The case is
      currently assigned to Dept. 20, but it is
      reasonable to expect it will be reassigned to
      Dept. 17.

  8. I’ve attempted to follow the RE Loans fiasco from attending the “town hall” meetings, the meeting at the Lafayette Park Hotel, where a presentation was made by a law firm, and now information that another law firm from out of state will be representing all of the investors in a class action lawsuit. I’ve returned the FBI questionnaires of all our family members who were investors. I’m still unclear whether we are all represented in this class action and we are now in a wait-and-see mode or if these other cases, ie, Dr. Mendes, et al, are going to trial in an attempt to get their money back, but the rest of us will be left out in the cold?? Can anyone enlighten me on this situation?

    • No, the Mendes case will not go to trial ahead of the case filed by the
      Phoenix attorneys because both cases are class actions.

      It is hard to predict the exact sequence but it is likely both class actions
      will be assigned to one judge, Department 17. At some point, that judge
      will decide which case is the lead case, who is the lead counsel, and who
      is the lead plaintiff. The judge will also have to decide if there is a class
      and whether there are subclasses.

      It is also possible that other law firms will file additional class actions. If
      so, the procedure will be the same. There will still be a lead case and
      lead counsel.

      • Thank you for the prompt reply. So if I am understanding correctly, at this point individually there are no forms for us to submit to be included in the class action? If it is certified, we will automatically be a member of the class action, and may or may not get some percentage of our money returned down the line? And in the best of all worlds, the FBI will file criminal charges against all of the partners at ReLoans, the criminal courts will find the partners guilty of criminal conduct, and the partners will be ordered to make restitution? And, hopefully, be sent to prison. I realize this is optimistic, but I’m just trying to get a sense of what is possible in the next 3 to 5+ years. Thank you.

        • As to the class actions, you are correct. If the class is certified,
          then you will receive a notice which will explain an opt out
          procedure. If you do not opt out, you remain a member of
          the class and wait for further notices.

          As to the FBI, you are partially correct. The FBI will forward its
          case to the United States Attorney and he will decide to file or not
          to file. If a criminal complaint is filed, you must ask your CPA or tax
          preparer to determine if you qualify for a tax refund under IRS Code
          165.

          And, of course, you must file your proof of claim in each bankruptcy
          proceeding.

          • I should have added that if the United State Attorney files
            a criminal complaint, and if you qualify for the IRS Code 165
            tax refund, and if you pick the 95% option, then you must opt
            out of the class action. If you pick the 75% option, then you
            can be a member of the class.

            Recovery will be piecemeal. Some investors might receive
            more than 100% of their investment when the class action
            recovery, the IRS tax refund and the bankruptcy distributions
            are added together.

      • Robert,

        I am restrained from communicating with the class as a whole so I
        can’t engage in this public discussion anymore until I have court permission.

        I have a very different view of where the Mendes case is headed.

        If anyone wants to discuss it privately the can call my office at
        925-872-1049 I do not anwser calls that have caller ID blocked.

        Richard E. Brown

        • On November 15, 2011, I predicted that the Mendes case
          would be reassigned to Judge Brick and that both class
          actions would be before the same judge.

          That happened today.

      • I don’t know how or why someone,(my guess is probably you, Mr. Brower), convinced Andy Friedman’s firm,- the Phoenix firm,which filed the first -class action, – to delete Barney Ng as a Defendant in the class action,they filed, but while the Phoenix firm has a very good class action track record, especially viz the law firm, Greenberg Traurig,which IS a real and important target defendant, Mr. Brown’s class action complaint.in addition to naming that law firm and WFF as defendants,, also includes Barney Ng as a named defendant – a defendant initially named by the Phoenix law firm but subsequently deleted by their First Amended Complaint. Why was Barney Ng excluded as a defendant in theiir class action? I wonder – could Mr. Brower can shed some light on that question? But I suggest we should all remember Barney Ng’s involvement in all this:( theoretically as President of Bar-K Inc. but actually apparently holding himself out to the world as President of RE Loans, LLC); Barney Ng’s selection of the properties (frequently in violation of the restriction in the Offering Cicular which, I believe until 2007, requiired that loans made by RE Loans, LLC;be made only on California properties);- properties that Barney Ng described as “best of breed” but which , as we all now know, are now actually worth a fraction of the loan amount;; Barney Ng’s selection of the borrower; Barney Ng’s valuation of the properties on which loans were made; Barney Ng’s negotiation of the loan terml;; Barney Ng’s responsibility, as President of Bar K, Inc. to assure lien priority of the loan made; Barney Ng’s responsibility to collect payment of the loans; Barney Ng’s receipt of loan fees (M$$$$) paid by the Borrower, but paid from monies loaned by RE Loans, LLC to the borrower;Barney Ng’s negotiation of loans from RE Loans, LLC to entities Barney Ng owned and/or controlled, i.e. the Siena Resort and Casino and the Contra Costa property (loans which he never paid); Barney Ng’s negotiation,(together with his attorney daughter and attorney son-in-law) of the LOC for RE Loans LLC with Wells Fargo Foothill AND Barney Ng’s responsibility to honor the guaranty letter he signed, along with his father, to the RE RENO LLC investors. We can only hope that Mr. Brown’s class action – because it includes ALL appropriate parties – , including Barney Ng, – will be the ‘lead’ case if the ‘lead case’ senario described by Mr. Brower is an accurate one.

        • Good question Dilly….while I’m not an investor involved, but maybe behind the scenes, Barney was granted some sort of immunity to testify against the others?

          • It’s not unusual in government investigations to make a deal with one of the players in exchange for information, so it’s not out of the realm that it could have happened in this as well. Perhaps the law firm felt that the case wasn’t as strong against Barney, or Barney’s lawyers filed a bunch of counter actions which made them reconsider. There could be other reasons that we’ll never know.

            Don’t forget there are a lot of government investigations underway, from different agencies, and if a person makes a deal with one agency for leniency, it doesn’t automatically mean all of the other agencies are going to play along. So there is still the possibility that we’ll one day see all of the Ng’s arrested, mansions liquidated, etc.

  9. Thank you again for your further explanation. My family and I each received a “Notice of Possible Dividend” in re the US Bankruptcy Court of Walter J Ng and Maribel Ng. It also mentions filing a proof of claim as you point out in the above remarks. We have never filed a proof of claim. I went to the website indicated on the notice, but it doesn’t indicate what form to use, nor was one attached to the letters. This is very frustrating and confusing. I’m fearful we’ll all be automatically excluded or file incorrect papers. Or we are ignorant of other bankruptcy proceedings that require proof of claim. So far we have received only this notification as far as filing a claim in Case No. 11-45175 RLE 7.
    The only paperwork we have submitted so far has been to the FBI.

    • I’m not exactly sure if my most recent post was referred to Richard from Robert, but I just tried calling the number listed above and the voice mail of “Denise” picked up. I’m reluctant to leave a message of such a sensitive nature, and perhaps it’s a coincidence that my post is threaded with Richard’s most recent post. Are you able to answer my question, Robert? Or do I need to try calling Richard?

    • There is a little bit of information in an earlier thread here:
      https://barkinvestors.wordpress.com/2011/09/02/proof-of-claim-forms/

      But as you’ll see, we’re mostly self-help around here. You have until February to get those in, so there’s time to collect the info you need.

      Nobody has mentioned the creditor’s meeting next Monday, at the Federal building, 10am. I guess Walter will be there, since it’s his bankruptcy? Given the lack of attention here on the blog, I doubt it will be as well attended as the previous meeting for the chapter 11 last summer.

      • Thank you for responding. I realize this is a self-help group, and thank goodness I found the link. There was mention of a sample by Gordon Noble on how to fill out this form. It certainly is short, but still confusing. As investors in RE Loans, are we considered secured or unsecured? I hate to botch the whole thing since we have a number of family member investors so we’ll be submitting multiple claims.

      • Is this a CREDITORS MEETING or a STATUS CONFERENCE. When I went to the Status Conference October 25, 2011 at 3:00 o’clock in Oakland only Walter’s MANY attorneys were thereto ensure their payday. No Walter. No Belle. The conference took five minutes. It was a three hour round trip for me. A total waste of time. HOW DID YOU GET NOTIFICATION OF THIS UPCOMING MONDAY MEETING. THANK YOU FOR A RESPONSE.

        • Notice came in the mail.

          Meeting of Creditors.
          December 5 ,2011 10 a.m.
          Office of U.S.Trustee
          1301 Clay st..Rm 680N. Oakland, CA 94612

          Case #11-45175 RLE 7

          It’s also posted on the Tracy Green website in the final update.

          http://omnimgt.com/cmsvol/cmsdocs/pub_40971/272820_status%20update%20110811.pdf

          Status Update
          November 8, 2011
          The Court converted this case to a chapter 7, and Fred Hjelmeset has been appointed as the Chapter 7 trustee. A new meeting of creditors has been scheduled for December 5, 2011 at 10:00 a.m. The Court set February 3, 2012 as the deadline to file a complaint objecting to the discharge or the dischargeability of debt. If you already filed such a complaint, you do not need to file a new one. At this time the court has not asked for claims to be filed. The trustee will ask the court to set a deadline to file proofs of claim at a later date. If you already filed a proof of claim, you will not need to file a new claim.
          The conversion of the case effectively disbands the committee, and therefore, this website will no longer be updated.

          • I also found it on the bankruptcy court calendar for the trustee Fred Hjelmeset. Oh boy, another round with Attorney Kaplan. It’s unfortunate that John Robie and Equitatus have not been posting new entries on their blogs, because that will probably result in a lower turnout

            http://www.canb.uscourts.gov/calendars/341/oak/hjelmeset/341-calendar-fred-hjelmeset-120511-oakland

            Oakland

            Trustee: Hjelmeset, Fred
            Chapter 7
            Oakland U.S. Trustee Off
            Office of the U.S. Trustee
            1301 Clay St. Room 680N
            Oakland, CA
            341 Hearing Date: 12/05/2011 Time: 10:00AM
            Case Number Name Attorney
            11-45175 Walter J Ng Gary M. Kaplan
            Maribel Ng

  10. If we filed a proof of claim last August do we need to refile by the 2-22-2012 date now that it is a Chapter 7? Or do our previous filings “roll over”? I see that the case number: 11-45175 is still the same, although now RLE 7 has been added.

    • The Tracy Green website suggested that we didn’t need to file if we already had, although I would still look further. There is the creditor’s meeting we’re all invited to for Walter’s chapter 7 at ten am on Monday morning at the Federal Building. I’m guessing this will be like the previous one, where people can ask him questions. Perhaps the trustee will clarify if we have to refile.

      I recall a lot of confusion for the earlier filing, on whether we were secured or unsecured, and should we include the interest to the date of bankruptcy filing. If new information should change whatever one entered in those areas before, then I believe you could refile.

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