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IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT IN AND FOR COLLIER COUNTY
STATE OF FLORIDA, OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS, Plaintiff, v. ACTIVELIGHT, INC. f/k/a ACTIVISION TV, INC., a Delaware corporation, DAVID GOTHARD, an individual, AD MEDIA DISPLAYS, INC., a Wyoming corporation, ACTIVISION DISPLAYS, INC., a Nevada corporation, LOCKE CONSULTING GROUP, INC., a Nevada corporation, CONNECT HDTV, INC., a Florida corporation, ADCO FINANCIAL CORP., a Nevada corporation, ACTIVELIGHT TV, LLC, a Florida limited liability company, and DENICE HETKOWSKI, an individual, Defendants. _______________________________________/
Case No. __________________
COMPLAINT
1. Plaintiff, STATE OF FLORIDA, OFFICE OF THE ATTORNEY GENERAL,
DEPARTMENT OF LEGAL AFFAIRS, brings this civil action under the Florida RICO
(Racketeer Influenced and Corrupt Organization) Act, Chapter 895, Florida Statutes; the Florida
Securities and Investor Protection Act, Chapter 517, Florida Statutes; the Florida Deceptive and
Unfair Trade Practices Act, Chapter 501, Part II, Florida Statutes; and the Florida Anti-Fencing
Act, Sections 812.012-812.037, Florida Statutes, against Defendants as set more fully below, and
alleges:
Complaint Page 1 of 85
Filing # 21850642 Electronically Filed 12/22/2014 09:58:30 AM
I. INTRODUCTION
2. The Defendants engaged in a pattern of racketeering and other illegal activity in Florida
from at least 2003 until the present, stealing millions of dollars from people across the country.
The Defendants transferred patents between themselves, solicited investors based upon
numerous false representations about these patents, the companies, and the Defendants’ products
(which to date have produced no sales or revenues), then stole investors’ money, and repeated
their scheme. Defendants then created fraudulent documents in order to operate what is known
as a “patent assertion entity” operation, collecting millions in illegally-obtained monies from
third parties based upon false pretenses and fraudulent documents.
3. The Department brings this civil action to impose all available civil remedies against the
Defendants, subject to the rights of innocent persons, including Defendants’ victims.
II. PARTIES
4. Plaintiff, OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL
AFFAIRS, STATE OF FLORIDA (“DEPARTMENT”), is authorized to bring this action by
Section 895.05(5), Florida Statutes; Section 517.191, Florida Statutes; Section 501.207, Florida
Statutes; and Section 812.035(5), Florida Statutes.
5. Defendant DAVID GOTHARD is a natural person that has resided in Florida since at
least 2002. GOTHARD is sued individually because he was a direct participant in the improper
dealings alleged herein and committed unlawful acts. GOTHARD is also sued as the alter ego of
the business-entity Defendants (ACTIVELIGHT, INC., LOCKE CONSULTING GROUP, INC.,
AD MEDIA DISPLAYS, INC., CONNECT HDTV, INC., ACTIVISION DISPLAYS, INC.,
ADCO FINANCIAL CORP., and ACTIVELIGHT TV, LLC) (hereafter the “Alter Ego
Defendants”):
Complaint Page 2 of 85
a. GOTHARD held himself out to be a director and officer of the Alter Ego
Defendants, and unilaterally controlled the formation, day-to-day operations, assets,
liabilities, and lifespan of the Alter Ego Defendants;
b. GOTHARD commingled the funds and assets of the Alter Ego Defendants, as well
as his personal funds. For example, GOTHARD solicited and received funds from
investors. These investors believed they were investing in companies that sold products
and had an intellectual property portfolio. GOTHARD would receive these monies,
deposit them in his personal account, and use them for his own purposes. None of these
investments were recorded on any corporate books or records;
c. The Alter Ego Defendants were used by GOTHARD to unlawfully solicit and usurp
investors’ funds;
d. Defendants CONNECT HDTV, INC. and ADCO FINANCIAL CORP., and
ACTIVELIGHT TV, LLC do not have any liquid assets;
e. Defendants AD MEDIA DISPLAYS, INC. and ACTIVISION DISPLAYS, INC. do
not have any assets because GOTHARD ultimately diverted the assets to Defendant
ACTIVELIGHT, INC. to defraud investors of AD MEDIA DISPLAYS, INC. and
ACTIVISION DISPLAYS, INC. of their equity investments, and to defraud creditors of
these companies, depriving creditors of their interest and/or principal;
f. ACTIVELIGHT, INC. is severely under-capitalized. It has faced multiple lawsuits
from employees and/or independent contractors, vendors, and its agents for unpaid bills.
The few assets of Defendant ACTIVELIGHT, INC. (the Patents as described more fully
below) are so severely encumbered by a 24% interest-rate loan (providing an income
Complaint Page 3 of 85
stream that benefits GOTHARD and not investors), that the assets are essentially
worthless;
g. GOTHARD admitted in the course of the DEPARTMENT’s investigation that
Defendant LOCKE CONSULTING GROUP, INC. is his “doing business as” name;
h. GOTHARD transferred the few assets of the Alter Ego Defendants (the Patents as
described more fully below) among the Alter Ego Defendants he controlled to steal from
investors and hide his wrongdoing;
i. GOTHARD used the Alter Ego Defendants as a shell, instrumentality or conduit for
the concealment of personal business activities and for the business of another
corporation as set forth more fully below;
j. GOTHARD manipulated the assets and liabilities between the Alter Ego Defendants
so as to concentrate the assets in ACTIVELIGHT, INC. and the liabilities in AD MEDIA
DISPLAY, INC. and ACTIVISION DISPLAYS, INC;
k. GOTHARD used the Alter Ego Defendants as a subterfuge of illegal transactions, as
set for more fully herein;
l. GOTHARD used the Alter Ego Defendants to attract and deceive investors by
inflating the size of the operations, which has never produced any revenue;
m. The Alter Ego Defendants operating in Florida all used the same address for business
operations; and
n. The Alter Ego Defendants shared the same officers and directors.
6. Defendant HETKOWSKI is a natural person that has resided in Florida since at least
January, 2012. HETKOWSKI is sued individually because she was a direct participant in the
improper dealings alleged herein, and conspired with other principals to commit unlawful acts.
Complaint Page 4 of 85
HETKOWSKI was a director and officer of the Alter Ego Defendants. She has continuously
been employed with one or more of the Alter Ego Defendants since at least January 1, 2003.
7. Defendant ACTIVELIGHT, INC. (f/k/a Activision TV, Inc.) (hereafter ACTIVISION
DELAWARE), a foreign corporation, was incorporated in Delaware on or about October 10,
2006. It was authorized to transact business in the State of Florida on or about September 7,
2007. Its headquarters and principal place of business is located at 5400 Yahl Street, Suite C
and/or D, Naples, Florida 34109. ACTIVISION DELAWARE is also vicariously liable for the
intentional actions of GOTHARD alleged in this Complaint because ACTIVISION
DELAWARE represented to investors that GOTHARD was its agent; investors relied on that
representation; and investors acted upon representations by ACTIVISION DELAWARE and
suffered detriment. ACTIVISION DELAWARE approved GOTHARD’s actions alleged in this
Complaint or ratified the actions of GOTHARD. ACTIVISION DELAWARE is also
vicariously liable for the intentional actions of GOTHARD alleged in this Complaint because
ACTIVISION DELAWARE acknowledged that GOTHARD would act for ACTIVISION
DELAWARE; GOTHARD accepted the undertaking of acting for ACTIVISION DELAWARE,
and ACTIVISION DELAWARE controlled or approved of GOTHARD’s actions.
8. Defendant AD MEDIA DISPLAYS, INC. (hereafter “AMD”), a foreign corporation, was
incorporated in Wyoming on or about July 6, 1999. AMD was registered to transact business in
Florida since on or about February 13, 2004. On or about January 11, 2008, AMD withdrew its
authority to transact business or conduct affairs in Florida. On or about August 1, 2013, AMD
filed another application to transact business in Florida, falsely stating that the date it first
transacted business in Florida was “none.” Its headquarters and principal place of business is
Complaint Page 5 of 85
located at 5400 Yahl Street, Suite G, Naples, Florida 34109. ACTIVISION DELAWARE held
out AMD to be a subsidiary of ACTIVISION DELAWARE.
9. Defendant ACTIVISION DISPLAYS, INC. (f/n/a Activision TV, Inc.) (hereafter
“ACTIVISION NEVADA”), a foreign corporation, was incorporated in Nevada on or about
October 23, 2000. ACTIVISION NEVADA had facilities in Naples, Florida, and conducted its
marketing activities from Florida, but does not appear to have registered to transact business in
Florida. Its status as a Nevada corporation is “revoked.” Defendant ACTIVELIGHT, INC. held
out ACTIVISION NEVADA to be a subsidiary of ACTIVISION DELAWARE.
10. Defendant CONNECT HDTV, INC. (f/n/a Activision Systems, Inc. and f/n/a Activision
TV Inc.) (hereafter ACTIVISION FLORIDA), a domestic Florida corporation, was incorporated
on or about August 31, 2006. It was administratively dissolved on or about September 28, 2012
for failure to file its annual report. Its headquarters and principal place of business was located at
5400 Yahl Street, Suite C, Naples, Florida 34109. Defendant ACTIVISION DELAWARE held
out ACTIVISION FLORIDA as a subsidiary of ACTIVISION DELAWARE.
11. Defendant ACTIVELIGHT TV, LLC (hereafter ACTIVELIGHT TV), a foreign limited
liability company, was organized under Delaware law on or about November 16, 2007. It was
authorized to transact business in the State of Florida on or about April 11, 2011. Its authority to
transact business in Florida was administratively dissolved on or about September 27, 2013 for
failure to file its annual report. Its headquarters and principal place of business was located at
5400 Yahl Street, Suite C, Naples, Florida 34109, and 2089 Pine Ridge Road, Naples, Florida
34109. Defendant ACTIVISION DELAWARE held out ACTIVELIGHT TV to be a subsidiary
of ACTIVISION DELAWARE.
Complaint Page 6 of 85
12. Defendant ADCO FINANCIAL CORP (hereafter ADCO FINANCIAL), a foreign
corporation, was incorporated in Nevada on or about February 7, 2005. ACTIVISION
DELAWARE held out ADCO FINANCIAL to be a subsidiary of ACTIVISION DELAWARE.
Its status as a Nevada corporation is “revoked.”
13. Defendant LOCKE CONSULTING GROUP, INC. (hereafter “LCG”), a foreign
corporation, was incorporated in Nevada on or about December 22, 1998. It was registered to
transact business in Florida on or about December 5, 2002. Its registration to transact business in
Florida was revoked on or about September 16, 2005 for failure to file its annual report. It filed
another application to transact business in Florida on or about March 24, 2011, and falsely stated
that the first date it transacted business in Florida was March 1, 2011. It was reinstated to
transact business in Florida on or about March 24, 2011. Its headquarters and principal place of
business is located at 5400 Yahl Street, Suite C, Naples, Florida 34109. Its status as a Nevada
corporation is “revoked.” GOTHARD transacts business under LCG’s name, and LCG transacts
corporate business under GOTHARD’s name.
14. Unless otherwise noted in this Complaint, generic reference to “Defendants” in this
Complaint does not include reference to Defendant HETKOWSKI. Defendant HETKOWSKI is
being sued individually, but for a conspiracy to violate the Florida RICO Act, detailed below.
III. CO-CONSPIRATORS
15. The DEPARTMENT’s investigation is continuing. The Defendants are affiliated with
numerous business entities that may have participated in a pattern of racketeering conduct. The
DEPARTMENT conducted a pre-suit investigation after receiving tips from investors, but many
of the Defendants’ tactics are still unknown to the DEPARTMENT due to the large number of
documents that were not produced, are no longer available, or produced in a state of disarray.
Complaint Page 7 of 85
Defendants’ conduct was also conducted over many U.S. states. The undersigned deposed
GOTHARD before filing suit pursuant to the DEPARTMENT’s pre-suit investigatory powers;
however, GOTHARD invoked his right against self-incrimination. The DEPARTMENT reserves
the right to name some or all of these persons as defendants at a later date.
IV. JURISDICTION AND VENUE
16. This Court has general jurisdiction pursuant to Section 48.193(2), Florida Statutes, over
Defendant GOTHARD and HETKOWSKI because they reside in Florida.
17. This Court has general jurisdiction pursuant to Section 48.193(2), Florida Statutes, over
Defendants AMD, ACTIVISION NEVADA, ACTIVISION DELAWARE, ACTIVISION
FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG because they are either
headquartered in Florida and/or operated all or a substantial portion of their business out of
Florida. Alternatively, this Court has specific jurisdiction pursuant to Section 48.193(1), Florida
Statutes, over Defendants GOTHARD, HETKOWSKI, AMD, ACTIVISION NEVADA,
ACTIVISION DELAWARE, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO
FINANCIAL and LCG because they committed tortious acts within Florida, and caused injury to
persons in Florida, as set forth more fully in this Complaint.
18. Venue is proper as to all Defendants pursuant to Section 47.011, Florida Statutes, and
Section 47.021, Florida Statutes, because one or more of them reside or are headquartered in
Collier County, Florida, and because the cause of action accrued in Collier County as set forth
throughout this Complaint.
19. This Court has subject matter jurisdiction pursuant to Section 895.05, Florida Statutes;
Section 812.035, Florida Statutes; Section 26.012, Florida Statutes; and Section 517.191, Florida
Statutes.
Complaint Page 8 of 85
V. ACTS COMMON TO ALL COUNTS
A. The AMD Scheme
1. GOTHARD Obtains Intellectual Property
20. Shortly before incorporating AMD, GOTHARD filed a utility patent application
(09/132,456) on August 11, 1998 with the United States Patent and Trademark Office entitled
“Remote Control Electronic Display System.” While this application was later abandoned, it is
the parent application for the following patents used by the Defendants to entice and defraud
investors:
a. U.S. Patent number 6,215,411, entitled “Remote Control Electronic Display System”
(patent application filed February 8, 2000; patent awarded April 10, 2001) (hereafter the
“’411 Patent”).
b. U.S. Patent number 6,384,736, entitled “Remote Control Electronic Display System”
(patent application filed April 21, 1999; patent awarded May 7, 2002) (hereafter the “’736
Patent”).
c. U.S. Patent number 7,369,058 entitled “Remote Control Electronic Display System”
(patent application filed June 21, 2004; patent awarded May 6, 2008) (hereafter the “’058
Patent”).
d. U.S. Patent number 8,330,613 entitled “Remote Control Electronic Display System”
(patent application filed May 6, 2008; patent awarded December 11, 2012) (hereafter the
“’613 Patent”).
21. The ’411 Patent, the ’736 Patent, the ’058 Patent, and the ’613 Patent are hereafter
referred to as the “Remote Control Electronic Display System Patents.”
22. The Remote Control Electronic Display System Patents relate to common, ubiquitous
business practices described by agents of the Defendants as “generally relate[d] to remote control Complaint
Page 9 of 85
digital signage technology.” Defendants have used these patents to demand the payment of
monies from businesses across industries, from restaurants, theaters, banks, hotels, even a
motorcycle manufacturer. In one demand letter to a restaurant, agents of the Defendants
described the restaurant’s infringement of the Remote Control Electronic Display System Patents
as follows:
Activision has learned that [you] … are infringing one or more claims of the Activision Patents by using remotely controlled digital signage products and services that practice the patented solution (the “Accused Instrumentalities”). The Accused Instrumentalities include but are not limited to [your] digital display network digital signs. The Accused Instrumentalities infringe at least claim 1 of the '058 Patent by virtue of a combination of features. In particular, for example, the Accused Instrumentalities consist of multiple components which together comprise a display system covered generally by the Activision Patents and specifically, the '058 Patent. In particular, the Accused Instrumentalities consist of generally flat display panels with an outer housing. Further, the Accused Instrumentalities are operated and controlled by a computer running software which controls the content and scheduling of the images via Content Manager software. The computer also runs the Content Player software which displays the images on the Accused Instrumentalities display. Together, these components comprise the patented Remote Control Electronic Display System found in at least claim 1 of the '058 Patent. (emphasis added).
23. While the Remote Control Electronic Display System Patents are presumed to be valid
under federal patent law, and the validity of these patents is not in question in this proceeding,
there is evidence to suggest that GOTHARD based these patents on widely available products in
existence before GOTHARD applied for the patents (and as observed by GOTHARD at
technology trade shows), and that GOTHARD did not disclose relevant prior art to the patent
examiner when he prosecuted the ‘411, ‘736, and ‘058 Patents.
24. On or about November 10, 2003, GOTHARD filed a patent application relating to a high
resolution digital display system with recording capability. On or about June 20, 2006, the
Complaint Page 10 of 85
United States Patent and Trademark Office granted the application, and issued U.S. Patent
number 7,064,672 entitled “High Resolution Digital Display System with Recording Capability”
(hereafter the “‘672 Patent”).
25. On or about February 2, 2011, GOTHARD filed a patent application relating to an
interactive media display. On or about May 6, 2014, the United States Patent and Trademark
Office granted the application, and issued U.S. Patent number 8,717,316 entitled “Interactive
Media Display” (hereafter the “‘316 Patent”).
2. Defendants Begin “The AMD Scheme”
26. GOTHARD incorporated AMD on or about July 6, 1999. GOTHARD and AMD held
AMD out to be a corporation that was incorporated to further the research, development and
marketing of the flat panel plasma display technology developed and patented by GOTHARD,
and that could bring into production and market a “multiple ad” Digital Plasma Display and
Digital Plasma HDTV System. According to GOTHARD and AMD, AMD would manufacture
and market the displays, and arrange lease/rental agreements with supermarkets, drug stores, and
trade shows display companies in addition to pursuing licensing and royalties agreements using
the Remote Control Electronic Display System Patents. In reality, AMD has never had any
revenues or facilities capable of manufacturing these products on any profitable scale.
27. Shortly after incorporating AMD, on August 1, 1999, LCG purportedly entered into an
exclusive license agreement with AMD, whereby LCG “as the owner of certain patents and
know-how pertaining to remote control electronic display systems” would license to AMD on a
worldwide, exclusive basis the ability to produce and market certain licensed products and
components of such products.
Complaint Page 11 of 85
28. Beginning at a time unknown to the DEPARTMENT and known only by the Defendants,
but no later than September, 2003, AMD began to target investors. Many of these investors were
elderly and had little understanding of the technology involved, if any.
29. AMD referred to itself as “AMD” to investors. Upon information and belief, this
initialism was used by Defendants to confuse investors by conflating itself with a well-known
(and successful) technology company named Advanced Micro Devices, which is also commonly
referred to as “AMD” and trades under the New York Stock Exchange symbol “AMD.”
30. Beginning on or about September, 2003, AMD misrepresented to potential investors that
the company was soon preparing to become a publicly-traded company.
31. Beginning on or about September, 2003, AMD misrepresented the potential investment
returns of AMD, telling potential investors it was a six-month slam dunk.
32. Beginning on or about September, 2003, AMD misrepresented the safety of investing in
AMD, telling potential investors it was “no risk” and a “9 out of 10,” with “10” being the least
risky.
33. Beginning on or about September, 2003, AMD misrepresented the timing of investment
returns, telling potential investors they would receive their money back in 90 days.
34. In 2003, AMD and GOTHARD used GOTHARD’s past familial connections with
religious organizations to solicit investors, misrepresented to potential investors that AMD was
going to spread “the gospel.”
35. As a debtor, AMD and GOTHARD executed unsecured loans with investors in the form
of “convertible debentures,” but have not recorded many of these investments in its corporate
books, and have not kept track of investors’ identities or interest owed on their corporate books.
Under the terms of the debenture, the holder of the debenture (the creditor, many of whom were
Complaint Page 12 of 85
individuals) could “electric [sic] to convert Debenture” by converting the debt into shares
through the issuance of “multiple trenches [sic]” of various principal amounts.
36. AMD and GOTHARD would unilaterally decide the form of investors’ investments. In
at least one instance, an investor transferred additional monies in 2004 to AMD under the same
terms as a previous investment (a convertible debenture). AMD and GOTHARD unilaterally
made the decision to send stock certificates to the investor, telling the investor that stock would
give the investor the “best of both worlds.”
37. Defendants commingled their debts. When investors of AMD would demand their
investments back, ACTIVISION DELAWARE, AMD, and GOTHARD would acknowledge the
debt, and referred to purchases of AMD stock as “deposits,” and falsely stated that investors
could get a “refund” if they sent a certified letter requesting same. ACTIVISION DELAWARE
and AMD would then ignore such requests.
38. Beginning at a time unknown to the DEPARTMENT and known only by the Defendants,
but no later than September, 2003, AMD and GOTHARD solicited investors in AMD, but did
not reveal GOTHARD’s criminal past involving securities violations to investors of AMD.
39. Defendants created multiple private placement memoranda to distribute to investors.
These memoranda contained false statements, and were created by impunity by Defendants to
stimulate investors’ interest and to try to give the impression that the Defendants’ operations
were legitimate. Upon information and belief, the memoranda were created (detailing a bogus
“offering” of shares) whenever the Defendants felt they could lure a large investor. This
allegation is supported by the sheer number of memoranda that were created, detailed more fully
below.
Complaint Page 13 of 85
40. Beginning at a time unknown to the DEPARTMENT, but no later than March 1, 2004,
GOTHARD and AMD created and subsequently distributed a document entitled “Private
Placement Memorandum” to potential investors, which purported to offer 500,000 shares of
preferred stock at $1.50 per unit (1 share), with a $10,000 minimum investment (hereafter “2004
Memorandum”).
41. A true and accurate copy of the 2004 Memorandum is attached as Exhibit 1 to this
Complaint.
42. The 2004 Memorandum was prepared for investors interested in purchasing shares of
AMD.
43. The 2004 Memorandum made the following representations to investors:
a. AMD was incorporated in July 1999 “to further the research, development and
marketing of the flat panel plasma display technology developed and patented by the
Company’s founder [GOTHARD].”
b. GOTHARD licensed his patents to AMD, including the ‘411 Patent and the ‘736
Patent. AMD had also “just received word from legal council [sic] that the third patent
has been allowed . . . .”
c. According to AMD’s “Descripiton [sic] of Business,” AMD’s principal product line
was the “Activision ™ Systems,” which are the advertising display system and Digital
HDTV. The Activision Systems “has been extensively tested in the Marketplace [sic] . . .
.” The “Activision Systems consist of two main computer-controlled, gas plasma, flat
panel display systems, that are patented, and contain proprietary software.” The
Activision Systems “have the ability to be connected by modem to the Company offices,
allowing remote control for the displays without involvement of client personnel.”
Complaint Page 14 of 85
d. AMD’s Research and Development Department was bringing to market its new
Digital HDTV product in the fall of 2004.
e. AMD had a favorable long-term competitive outlook “due to the lack of intellectual
property held by competitors,” and AMD would extend patent licensing rights into
Europe, Japan and Canada. AMD’s licensing and royalty fees were “expected to be in
excess of 50% of the Company’s gross revenue in the next three to four years.”
f. AMD’s target market included large retailers such as supermarkets and chain stores,
drug stores, trade shows, and exhibit halls.
44. Beginning at a time unknown to the DEPARTMENT, but no later than March 1, 2005,
AMD created and subsequently distributed a similar document entitled “Private Placement
Memorandum” to potential investors, which purported to offer 500,000 shares of common stock
at $1.00 per unit (1 share), with a $5,000 minimum investment (hereafter “2005 Memorandum”).
45. A true and accurate copy of the 2005 Memorandum is attached as Exhibit 2 to this
Complaint.
46. The 2005 Memorandum was prepared for investors interested in purchasing shares of
AMD.
47. The 2005 Memorandum made the following representations to investors, many of which
were similar to the 2004 Memorandum:
a. AMD was incorporated in July 1999 “to further the research, development and
marketing of the flat panel plasma display technology developed and patented by the
Company’s founder [GOTHARD].”
Complaint Page 15 of 85
b. GOTHARD licensed his patents to AMD, including the ‘411 Patent and the ‘736
Patent. AMD had also “just received word from legal council [sic] that the third patent
has been allowed . . . .”
c. According to AMD’s “Descripiton [sic] of Business,” AMD’s principal product line
was the “Activision ™ Systems,” which are the advertising display system and Digital
HDTV. The Activision Systems “has been extensively tested in the Marketplace [sic] . . .
.” AMD’s product line “consists of two main computer-controlled, gas Plasma/LCD flat
panel display systems that are patented, and contain proprietary software.” AMD’s
display systems “have the ability to be connected by modem to the Company offices,
allowing remote control for the displays without involvement of client personnel.”
d. AMD’s Research and Development Department was bringing to market its new
Digital HDTV product in the fall of 2005.
e. AMD had a favorable long-term competitive outlook “due to the lack of intellectual
property held by the competition.” AMD’s licensing and royalty fees were “expected to
be in excess of 50% of the Company’s gross revenue in the next three to five years.”
f. AMD’s target market included large retailers such as supermarkets and chain stores,
drug stores, trade shows, and exhibit halls.
48. The 2004 and 2005 Memoranda were replete with material misrepresentations:
a. The purported reason for incorporating AMD was also used by other Defendants,
including ACTIVISION NEVADA, as set forth more fully below.
b. The licensing arrangement between GOTHARD and AMD was subject to the whim
of GOTHARD, who repeatedly transferred the patents, and created licensing agreements,
Complaint Page 16 of 85
with different entities to maximize investments for his personal benefit, but to the
detriment of investors.
c. AMD had no intention of sharing any licensing profits with its investors.
d. AMD’s “product line,” to the extent it existed, was not functional, and had not been
“extensively tested in the Marketplace [sic]” or elsewhere.
e. AMD did not have the capability to bring to market a Digital HDTV product in the
fall of 2004 (per the 2004 Memorandum), or the fall of 2005 (per the 2005
Memorandum).
f. AMD did not have the capability to extend patent licensing rights into Asia and
Europe, and AMD was not going to realize any such licensing and royalty fees.
49. To date, AMD has received no revenue from its patent licensing; has not licensed its
intellectual property to unrelated third parties; has not sold any products in the marketplace,
much less tested them in the marketplace; and has not received any revenue from any of its
products.
50. Defendants made false representations about AMD’s business relationships to investors,
falsely telling investors that AMD was working with Fujitsu on a new generation of flat panel
technology, that the new glass plasma displays would be brighter, last longer, and consume less
energy, and that it was having ongoing discussions with Fujitsu to incorporate the Companies
[sic] technology into their [sic] displays at the factory. In the (March) 2004 Memorandum,
AMD told investors that this technology first appeared in the summer of 2004 [sic]. In the 2005
Memorandum, AMD told investors that this technology first appeared in the “summer of2002
[sic].”
Complaint Page 17 of 85
51. Beginning on a date unknown to the DEPARTMENT and known only by the Defendants,
but no later than 2005, Defendants made false representations about interest by other companies
in acquiring AMD. When investors made inquiries about the status of their investments in
AMD, Defendants made false representations, including false statements that Cisco, Microsoft,
Intel and/or Dell Computer were interested in acquiring AMD.
52. Defendants misrepresented to investors the number of products AMD was producing and
its production capabilities, falsely stating to investors that it was producing 100 units a week at a
production plant in Ohio. When an investor visited the so-called “production plant” in 2006, he
found a nearly vacant airport hangar with two men working on a “prototype,” and was told that
production was not ready. In the course of the DEPARTMENT’s investigation, AMD denied
having any facility in Ohio.
53. Unbeknownst to investors of AMD, Defendants then transferred the ‘411 and ‘736
Patents on or about April 28, 2006, out of Defendant LCG (the purported licensor of the patents
to AMD) and into ACTIVISION NEVADA. Despite the alleged transfer of intellectual property
outside the exclusive license purportedly granted to AMD, Defendants continued to disburse
stock certificates in AMD, and received monies from AMD investors. The transfer of
intellectual property outside of the exclusive license purportedly given to AMD robbed AMD of
any value, especially since it had no customers or working installations of its products, or any
revenues of any kind.
54. Beginning on a date unknown to the DEPARTMENT and known only by the Defendants,
but no later than June, 2006, Defendants ran the ACTIVISION NEVADA scheme (detailed in
the next section of this Complaint) in conjunction with the AMD scheme to increase the amount
of money it was fraudulently taking from investors. After collecting monies from AMD
Complaint Page 18 of 85
investors, on a date unknown but no later than December, 2006, Defendants decided to terminate
AMD’s operations and switch to the ACTIVISION DELAWARE scheme. AMD, however,
continued to receive investor funds while they also ran the ACTIVISION NEVADA scheme
until a date unknown, but no earlier than March, 2007.
55. Since AMD knew its stock was worthless, it would disburse its worthless stock
certificates with impunity, including handing them out to unsuspecting investors, employees,
officers, board members and/or consultants.
56. It is not possible to quantify the number of AMD investors or the extent of their
investments at this time due to the lack of records produced by AMD in response to the
DEPARTMENT’s subpoenas, and the state of disarray in which they were produced, in addition
to AMD’s practice of commingling funds. However, AMD’s own records suggest that over $1
million was received from the AMD Scheme.
57. Upon information and belief, switching to the ACTIVISION NEVADA scheme avoided
the scrutiny of federal and state regulators, and helped the Defendants avoid detection.
Employees of AMD automatically assumed the status of ACTIVISION DELAWARE
employees.
58. In a sworn deposition given by GOTHARD on July 23, 2012, GOTHARD gave sworn
testimony that AMD is “dormant, yes, but I kept it alive,” and that “we’ll keep that one [AMD]
for the digital signs, and license people through that, which we’re doing now.” This sworn
statement was false. AMD did not have any employees from May 17, 2007 to the present,
withdrew from transacting business in Florida from January 11, 2008 until August 12, 2013, and
has not licensed anything to anyone.
Complaint Page 19 of 85
B. The “ACTIVISION NEVADA Scheme”
59. Defendants began looking at using the name “Activision” in 1999. Upon information and
belief, Defendants chose the “Activision” name because it contains the name of an unrelated
(and successful) company named Activision Publishing, Inc., which has developed, marketed,
and distributed hundreds of popular video and computer game products since 1979, including
Call of Duty ® and Guitar Hero ®. Defendants used the “Activision” name to capitalize on the
brand recognition of Activision Publishing, Inc., using internet keywords and metatags on
ACTIVISION DELAWARE’s website. For example, the Defendants advertised the use of their
products to play games such as World of Warcraft ®, a game produced and distributed by an
affiliate of Activision Publishing, Inc.
60. ACTIVISION NEVADA was incorporated in October 2000. It was the first of no fewer
than three domestic corporations in various U.S. states with the name “Activision TV, Inc.” that
co-existed at the same time (the others being defendants ACTIVISION DELAWARE and
ACTIVISION FLORIDA). These three “Activision TV, Inc.” companies commingled funds,
used their tax identification numbers interchangeably for corporate filings, and were controlled
by GOTHARD. Upon information and belief, the Defendants repeatedly used “Activision” in
their corporate names to confuse investors, to hide monies and assets from investors, and to
evade detection.
61. Unbeknownst to the AMD investors, while the AMD Scheme was running Defendants
were also running the same scheme under the name ACTIVISION NEVADA.
62. LCG’s transfer of the ‘411 and ‘736 Patents to ACTIVISION NEVADA on or about
April 28, 2006, without the knowledge of AMD investors, gave credence to the ACTIVISION
Complaint Page 20 of 85
NEVADA Scheme, which in turn treated and marketed the intellectual property as a valuable
asset.
63. Beginning at a time unknown to the DEPARTMENT, but no later than June 15, 2006,
ACTIVISION NEVADA created and subsequently distributed a document to potential investors
entitled “Private Placement Memorandum,” which purported to offer “securities” in the form of
“Convertible Debenture [sic] with Warrants,” with a $30,000 minimum investment (hereafter
“2006 Memorandum”).
64. A true and accurate copy of the 2006 Memorandum is attached as Exhibit 3 to this
Complaint.
65. The 2006 Memorandum was prepared by ACTIVISION NEVADA to lure investors.
66. The 2006 Memorandum was not produced to the DEPARTMENT in its investigation,
despite the fact that the DEPARTMENT subpoenaed documents that would have included the
2006 Memorandum. The DEPARTMENT has a copy of the document because it obtained it
from an investor in ACTIVISION NEVADA.
67. The 2006 Memorandum made the following representations to investors of ACTIVISION
NEVADA, copying many passages from AMD’s 2004 and 2005 Memoranda verbatim
(including typographical errors):
a. ACTIVISION NEVADA was incorporated in October 2000 “to further the research,
development and marketing of the flat panel plasma display technology developed and
patented by the Company’s founder [GOTHARD].”
b. ACTIVISION NEVADA has patents, including the ‘411 Patent and the ‘736 Patent.
The ‘411 Patent and the ‘736 Patent are described as “the company’s patents.” Also,
“[s]even additional patents including four foreign patents are in various stages of being
Complaint Page 21 of 85
issued,” and ACTIVISION NEVADA anticipates that these patents will issue “within the
next six to eighteen months.” ACTIVISION NEVADA plans “to extend license rights
for its products world wide [sic].”
c. According to ACTIVISION NEVADA’s “Descripiton [sic] of Business,”
ACTIVISION NEVADA has a standard flat panel display system with “it’s [sic] patented
‘Works in a Drawer’ that has been extensively tested in the marketplace, known as
Activision ™ Systems.” The Activision™ Systems, which are the digital advertising
display system and Digital HDTV, are the principal product lines.
d. ACTIVISION NEVADA’s product line “consists of two main computer-controlled
devices, the gas plasma, flat panel display system and the LCD system.” The
Activision™ System is “digitally controlled.”
e. ACTIVISION NEVADA’s HDTV product line was being introduced the summer of
2006.
f. ACTIVISION NEVADA had a favorable long-term competitive outlook “due to the
lack of intellectual property held by competitors and the high cost of entry into this
market.” ACTIVISION NEVADA’s business plan was based on obtaining funds through
licensing and royalties.
g. ACTIVISION NEVADA’s target market included large retailers such as
supermarkets and chain stores, hotels, lodging, drug stores, malls and restaurants.
h. ACTIVISION NEVADA was going public “this year [in 2006],” at which point
additional funds would be raised through a secondary offering.
68. The 2006 Memorandum from ACTIVISION NEVADA, just like the 2004 and 2005
Memoranda from AMD that preceded it, was replete with material misrepresentations:
Complaint Page 22 of 85
a. The purported reason for incorporating ACTIVISION NEVADA was the same reason
also used by other Defendants in the AMD Scheme.
b. The licensing arrangement between GOTHARD and ACTIVISION NEVADA was
subject to the whim of GOTHARD, who repeatedly transferred the patents, and created
licensing agreements, with different entities to maximize investments for his personal
benefit, but to the detriment of investors.
c. ACTIVISION NEVADA’s “product line,” to the extent it even existed, was not
functional, and had not been extensively tested in the marketplace or elsewhere.
d. ACTIVISION NEVADA did not have the capability to bring to market a Digital
HDTV product in the summer of 2006.
e. ACTIVISION NEVADA had no intention of sharing any licensing profits with its
investors.
f. ACTIVISION NEVADA did not have the capability to extend patent licensing rights
worldwide.
69. ACTIVISION NEVADA sold at least 10 debentures for $30,000 each by June 2006.
ACTIVISION NEVADA falsely promised to pay interest at grossly, above-market interest rates
of 20% per annum, compounded annually, when it knew it could not pay such interest rates.
ACTIVISION NEVADA has not kept track of the interest accruing on these debentures in its
corporate books or financial records, and has no intention of repaying it.
70. Due to the lack of production of any records of ACTIVISION NEVADA by Defendants,
it is not possible to quantify the number of investors or the extent of their investments at this
time. However, records obtained by the DEPARTMENT indicate that ACTIVISION NEVADA
received over $300,000 from the ACTIVISION NEVADA Scheme.
Complaint Page 23 of 85
71. Unbeknownst to investors of AMD or ACTIVISION NEVADA, shortly after
ACTIVISION NEVADA obtained investor monies, Defendants then transferred the ‘411 and
‘736 Patents out of ACTIVISION NEVADA on or about October 6, 2006, and into
GOTHARD’s name to begin the ACTIVISION DELAWARE scheme. Upon information and
belief, switching to the ACTIVISION DELAWARE scheme avoided the scrutiny of federal and
state regulators, and helped the Defendants avoid further detection.
C. The “ACTIVISION DELAWARE Scheme”
72. ACTIVISION DELAWARE executed articles of incorporation on or about October 6,
2006, and filed the articles with the Delaware Department of State on October 10, 2006, listing
5400 Yahl Street, Suite D, Naples, Florida as the mailing address of the incorporator.
ACTIVISION DELAWARE would later take various positions on the date of its incorporation,
telling investors orally and in presentations to them that it had incorporated in 2005. When
GOTHARD was deposed on July 23, 2012 in a trademark dispute (brought by Activision
Publishing, Inc.), he falsely stated under oath that ACTIVISION DELAWARE was incorporated
in 2005.
73. In filings with the Florida Department of State, ACTIVISION DELAWARE falsely
stated that the first date it transacted business in Florida was September 1, 2007. ACTIVISION
DELAWARE applied in Florida to transact business in Florida as a foreign corporation on
September 7, 2007.
74. Beginning at a time unknown to the DEPARTMENT and known only by the Defendants,
but no later than December 2006, Defendants created and subsequently distributed a document to
potential investors entitled “Private Placement Memorandum,” which purported to offer units of
Complaint Page 24 of 85
common stock at $1/unit (where each unit consists of one share of common stock), with a $5,000
minimum investment (hereafter “December 2006 Memorandum”).
75. A true and accurate copy of the first page of the December 2006 Memorandum is
attached as Exhibit 4 to this Complaint.
76. A complete copy of this document was not produced to the DEPARTMENT by the
Defendants. The first page of the December 2006 Memorandum purports to offer 2,000,000
shares of common stock of ACTIVISION DELAWARE for $1.00 per share.
77. Beginning at a time unknown to the DEPARTMENT and known only by the Defendants,
but no later than January 1, 2007, Defendants created and subsequently distributed a document
entitled “Private Placement Memorandum” to potential investors, which purported to offer
2,000,000 units of common stock at $1/unit (where each unit consists of one share of common
stock), with a $5,000 minimum investment (hereafter “January 2007 Memorandum”).
78. A true and accurate copy of the January 2007 Memorandum is attached as Exhibit 5 to
this Complaint.
79. Beginning at a time unknown to the DEPARTMENT and known only by the Defendants,
but no later than July 15, 2007, Defendants created and subsequently distributed a document
entitled “Private Placement Memorandum,” which purported to offer 2,000,000 units for $1/unit
(where each unit consists of one share of common stock), with a $10,000 minimum investment
(hereafter “July 2007 Memorandum”).
80. A true and accurate copy of the July 2007 Memorandum is attached as Exhibit 6 to this
Complaint.
81. Each unit consisted of one share of common stock and one warrant to purchase one share
of common stock at any time until July 15, 2012 at an exercise price of $1.25, “subject to
Complaint Page 25 of 85
adjustment.” The warrants are redeemable by ACTIVISION DELAWARE at $.05 per warrant if
the average of the closing bid price of the common stock, as reported by NASDAQ exceeds
$2.00 per share (subject to adjustment) for a certain period of time.
82. The January 2007 Memorandum and July 2007 Memorandum (collectively “2007
Memoranda”) were prepared by ACTIVISION DELAWARE to lure investors.
83. The 2007 Memoranda made the following representations to investors:
a. “AMD was formed to [sic] for the purpose of manufacturing and marketing the flat
panel display technology for the remote control electronic display systems developed by
Mr. Gothard,” but since “AMD was unable to raise the necessary operating capital with
which to pay its obligations to Mr. Gothard or to market the technology or devices
created using the patent rights licensed to it” GOTHARD formed ACTIVISION
DELAWARE on October 10, 2006 “for the purpose of raising funds to market the
technology represented by the patents.”
b. ACTIVISION DELAWARE holds several patents, and the patents are “valuable
assets.” The patents include the ‘411 Patent, the ‘736 Patent, and the ‘672 Patent, which
covers the “Works in a Box™” product. ACTIVISION DELAWARE relies on licensing
revenues.
c. ACTIVISION DELAWARE’s target markets are the retail (supermarkets, chain drug
stores, department stores), hospitality and government.
d. ACTIVISION DELAWARE’s primary products and services (currently in its third
generation of design) are: 1) its digital ready Computer Integrated Television (CIT); 2)
its patented Works-In-A-Box™ computer; and 3) its Digital Media Delivery Systems.
Complaint Page 26 of 85
i. The CIT is a plasma or LCD television with a small format computer (the
patented “Works-in-a-Box™”);
ii. The “Works-in-a-Box™” (WIB) is a component of the CIT which is being
marketed as a separate product that can be combined with customers’ existing flat
panel display to permit delivery of advertising, information, programming, and
entertainment to retail and individual consumers. The WIB was formerly known as
the “Works-In-a-Drawer” product.
iii. The Digital Media Delivery System (DMDS) products are a complete turn-key
solution combining hardware, software, content, content management and
connectivity for narrowcast applications. It can be combined with CIT’s and
communications systems to offer a one-stop package for creating, managing and
delivery advertising content and information.
e. Demand for ACTIVISION DELAWARE’s products and services are “varied and
immense.”
84. The 2007 Memoranda were replete with misrepresentations:
a. The formation of ACTIVISION DELAWARE presented no advantage over AMD in
raising operating capital, other than fraudulently “reselling” the value of the same
property (here, intellectual property and products that did not work) repeatedly to
investors.
b. The licensing arrangement between GOTHARD and ACTIVISION DELAWARE
was subject to the whim of GOTHARD, who repeatedly transferred the patents, and
created licensing agreements, with different entities to maximize investments for his
personal benefit, but to the detriment of investors.
Complaint Page 27 of 85
c. ACTIVISION DELAWARE had no intention of repaying any investors’ principal
through its licensing efforts.
d. ACTIVISION DELAWARE’s products, to the extent they even existed, were not
functional and have not produced any revenue. Any marketplace “demand” was due to
GOTHARD’s misrepresentations about the products’ capabilities.
85. Defendants made false representations to investors about the nature of ACTIVISION
DELAWARE’s facilities and its manufacturing capabilities. For example, in a letter addressed
to “Stockholders” dated August 24, 2007, GOTHARD falsely told investors that it had expanded
its production capabilities in its Toledo (OH) facility, and that it “opened an office in the
Washington DC area for Government [sic] contracts and patent work.” During the course of the
DEPARTMENT’s investigation, ACTIVISION DELAWARE denied having any Washington,
D.C.-area facility, and it does not appear to have had any government contracts.
86. A true and accurate copy of the August 24, 2007 letter is attached as Exhibit 7 to this
Complaint. Exhibit 7 was not produced to the DEPARTMENT in its investigation, despite the
fact that the DEPARTMENT subpoenaed documents, which included correspondence, sent to
investors. In fact, Defendants did not produce any correspondence to or from investors. The
DEPARTMENT has a copy of the document because it obtained it from an investor.
87. The August 24, 2007 letter made the following false representations about ACTIVISION
DELAWARE and the extent of its partnerships to investors, none of which were true:
a. ACTIVISION DELAWARE had entered into contracts with two software companies
for content creation and delivery as well as content management;
Complaint Page 28 of 85
b. ACTIVISION DELAWARE had teamed up with Kerner/Lucas to develop 3-D TV
and advertising displays (without glasses). Upon information and belief, ACTIVISION
DELAWARE was referring to Kerner 3D Technologies and Lucasfilm;
c. ACTIVISION DELAWARE has a new manufacturing partner in Silicon Valley,
California, and they have the capability of producing ACTIVISION DELAWARE’s
“Works in a Drawer” in large volumes at competitive prices.
d. ACTIVISION DELAWARE had a glass panel company in China that it will be
buying its monitors from to meet the demand for ACTIVISION DELAWARE’s products
at competitive prices.
88. Shortly after disseminating the August 24, 2007 letter, internal documents of
ACTIVISION DELAWARE reference yet another 2007 private placement memorandum
(purportedly from September 18, 2007), not produced to the DEPARTMENT in its investigation.
Upon information, the placement offered 3,000,000 Units at $1.00 per Unit, where each Unit is
one share of ACTIVISION DELAWARE’s “common and one Class A Warrant to purchase one
share of common stock at $1.25 per share.”
89. The DEPARTMENT has obtained another private placement memorandum dated March
1, 2009 (hereafter “2009 Memorandum”).
90. A true and accurate copy of the 2009 Memorandum is attached as Exhibit 8. Exhibit 8
was not produced to the DEPARTMENT in its investigation, despite the fact that the
DEPARTMENT subpoenaed all documents sent to investors of ACTIVISION DELAWARE.
91. The 2009 Memorandum purports to offer 80 “bridge-to-market” Units. Each unit was
$25,000 per unit, and the minimum investment was one unit. Each unit “consists of a
Promissory Note bearing interest at eight percent (8%) per annum and a Royalty Right returning
Complaint Page 29 of 85
an additional $37,500 per unit [for a total of $2,000,000] and redeemable Warrants to purchase
25,000 shares of Common Stock (the “Warrants”)” of ACTIVISION DELAWARE.
92. The 2009 Memorandum made the following representations to at least one investor on a
date unknown to the DEPARTMENT:
a. ACTIVISION DELAWARE is “now set to reap a rich harvest of licensing
arrangements with major partners in digital Broadcast and Narrowcast (POP) on LCD
and plasma screens, advertising over the internet, and the emerging markets worldwide in
the HD and 3-D arenas.”
b. ACTIVISION DELAWARE “provides a competitively priced digital media delivery
system (DMDS) for use in a wide variety of applications in both the Narrowcasting Point
of Purchase (POP) and Broadcasting (HDTV/IPTV) markets.”
c. “Together with the DMDS, [ACTIVISION DELAWARE’s] patented Computer
Integrated Television (CIT) and ‘Works-in-a-Box’ (tm) (WIB) provide the basis for its
In-Room Convergence System solutions for the hospitality industry (more than 2 million
rooms in the US alone), its Digital Signage solutions for stores, malls, and convention
centers, and its home TV solutions.”
d. ACTIVISION DELAWARE “is currently negotiating a strategic relationship with the
leading developer of 3-D technology for digital displays. Together, this team will develop
the technology to display 3-D video content using [ACTIVISION DELAWARE’s]
patented Computer Integrated Television (CIT) system.”
e. “The Activision strategic initiative expects to achieve the ‘Holy Grail’ for 3-D
viewing (i.e. superior quality with no glasses needed) in the fourth quarter 2009, with
production units available in 2010.”
Complaint Page 30 of 85
f. ACTIVISION DELAWARE is deploying its In-Room Convergence System solution
with the Miramar at Waikiki Hotel, “followed by other Oahu hotels accessible via line-
of-sight.”
g. ACTIVISION DELAWARE “is involved in licensing discussions with a satellite and
cable TV providers to provide the set-top-box [sic] which [sic] enables digital broadcast
as well as 3-D viewing of TV content to millions of home consumers who subscribe to
the satellite and cable TV networks.”
h. ACTIVISION DELAWARE “expects significant revenue from the licensing of IDTV
technology.”
i. ACTIVISION DELAWARE “expects to show positive cash flow within six to eight
months, and several millions of dollars of annual revenues (at 30%-40% margins) within
eighteen months from hotel revenue combined with advance license payments received
from satellite and cable TV providers and Narrowcast revenue. In supporting both the
TV providers as well as the hospitality industry, [ACTIVISION DELAWARE] will
become a major set-top box and IDTV provider.”
j. ACTIVISION DELAWARE “will complete installations in Hawaii in early second
quarter 2009. In the second and third quarters 2009, [ACTIVISION DELAWARE] will
expand on its success in Hawaii and expand installations in the Caribbean and in Europe
under contracts that are currently being negotiated. During the second half 2009 and into
2010, [ACTIVISION DELAWARE] will continue with new installations in Hawaii,
mainland U.S., the Caribbean, and Europe. In the second quarter 2009, [ACTIVISION
DELAWARE] expects to complete licensing agreements with at least one satellite and/or
cable TV provider. In 2010, [ACTIVISION DELAWARE] expects to complete licensing
Complaint Page 31 of 85
agreements with several more satellite and cable TV providers and to expand its
installation operations. [ACTIVISION DELAWARE] expects to see significant returns
on its 3-D technology in 2010 and following years. In 2011 and 2012, [ACTIVISION
DELAWARE] will continue expanding its presence in the hospitality, Narrowcasting,
and home TV markets.”
k. “Recognizing that the market for digital TV is so large that [ACTIVISION
DELAWARE] cannot possibly grow fast enough to be a major player in the critical
transition period just ahead, [ACTIVISION DELAWARE] has identified two strategies
to proceed . . . .”
l. “After the first two patents had issued which focused primarily on digital advertising
and delivery systems [upon information and belief, the ‘411 Patent and the ‘736 Patent],
the Company engaged Synergy Management Group, Inc. of British Columbia, Canada to
complete an extensive appraisal of these patents. This was done to establish a value on
the technology in order to raise money. The valuations ranged from a low of $43,005,000
to a high of $57,031,000, averaging out at $49,048,000. Since that time, two additional
patents have issued which are focused heavily on IPTV/IDTV for the hotel and home
markets. The Company feels these patents are more than double the valuation of the first
two patents.”
93. None of these statements in the 2009 Memorandum were true:
a. ACTIVISION DELAWARE did not have any licensing arrangements with major
partners, nor did it have the ability to realize revenue through sales, advertising over the
internet, or any emerging markets worldwide in the HD and 3-D arenas.
Complaint Page 32 of 85
b. ACTIVISION DELAWARE could not have a functional digital media delivery
system (DMDS).
c. ACTIVISION DELAWARE did not have a working CIT or WIB, nor did it have any
solutions for the hospitality industry, digital signage solutions (which, according to
GOTHARD’s prior sworn testimony in a trademark dispute, was supposed to be revenue
realized by AMD), or the home.
d. ACTIVISION DELAWARE was not negotiating a strategic relationship with the
leading developer of 3-D technology for digital displays.
e. ACTIVISION DELAWARE was not going to achieve the “Holy Grail” for 3-D
viewing, nor would it have, or produce, any such units the following year (2010).
f. ACTIVISION DELAWARE was not deploying its In-Room Convergence System
solution at the Miramar at Waikiki Hotel, “followed by other Oahu hotels accessible via
line-of-sight.”
g. ACTIVISION DELAWARE was not involved in licensing discussions with a satellite
and cable TV providers to provide any set-top box for digital broadcast to millions of
home consumers who subscribe to the satellite and cable TV networks.
h. ACTIVISION DELAWARE did not expect significant revenue from the licensing of
IDTV technology.
i. ACTIVISION DELAWARE did not expect to show positive cash flow within six to
eight months, and several millions of dollars of annual revenues (at 30%-40% margins)
within eighteen months from any source, much less hotels.
j. ACTIVISION DELAWARE was not going to expand on its success in Hawaii or
expand installations in the Caribbean and in Europe, nor were any contracts currently
Complaint Page 33 of 85
being negotiated. It was not going to “continue” with new installations in Hawaii,
mainland U.S., the Caribbean, or Europe.
k. ACTIVISION DELAWARE’s valuation was grossly overstated and had no
reasonable basis in fact.
94. On or about October 13, 2009, HETKOWSKI invited several investors to a stockholder
meeting. The purpose of the meeting was to discuss the performance of “Activision.”
HETKOWSKI told investors that new developments were taking place in the company “in this
economic downturn.” Upon information and belief, by “Activision” HETKOWSKI was
referring to ACTIVISION DELAWARE. At the meeting, at least one investor was told that
ACTIVISION DELAWARE was in excellent position, expanding its facilities, moving into new
markets, and expected to provide investors with excellent returns in the near future. None of
these statements were true, and HETKOWSKI, GOTHARD, and ACTIVISION DELAWARE
knew they were not true.
95. The balance sheets and profit and loss statements provided by ACTIVISION
DELAWARE to the DEPARTMENT in its investigation are in such a state of disarray as to
make the true financial condition of the company incomprehensible. Upon information and
belief, the balance sheets and profit and loss statements do not accurately reflect the financial
condition of the company.
96. Defendants continued to make false representations about ACTIVISION DELAWARE
and the extent of its partnerships to investors in 2011 and 2012:
a. On or about July 2012, Sysco [sic] was going to partner with ACTIVISION
DELAWARE.
Complaint Page 34 of 85
b. ACTIVISION DELAWARE had “teamed up” with Microsoft and “AMD” to create a
set top box of the future. Upon information and belief, ACTIVISION DELAWARE was
referring to Advanced Micro Devices, not Defendant AD MEDIA DISPLAYS, INC, and
there were/are no such partnerships.
97. Defendants continued to make the following false representations that ACTIVISION
DELAWARE’s products and services worked in 2012:
a. Beginning at a time unknown to the DEPARTMENT and known only by the
Defendants, but no later than January 2012, the Defendants represented that
Fountainstone [sic] Theater [sic] was ACTIVISION DELAWARE’s “first Narrowcasting
solution for the Goodrich chain of twenty-seven (27) theaters” and that ACTIVISION
DELAWARE’s “digital signage in the lobby of the theater will display local and national
advertisements and upcoming movie trailers.” The equipment was not supplied by
GOTHARD until approximately the summer of 2009 and never worked properly.
Fountain Stone Theaters, Inc. returned all of the money for the pre-paid advertising to the
local businesses.
b. Beginning at a time unknown to the DEPARTMENT and known only by the
Defendants, but no later than March 12, 2012, Defendants represented that ACTIVISION
DELAWARE was installing its interactive “In-Room System” in four Anna Maria Island
Resorts. According to ACTIVISION DELWARE, the In-Room System was supposed to
provide guests a personal on-screen menu offering “a new level of service – from
selecting movies to finding restaurants and local events – to surfing the internet – all from
the privacy and convenience of an in-room 40 inch HDTV with a built-in computer.”
While ACTIVISION DELAWARE installed televisions and “Activision ™ System”
Complaint Page 35 of 85
boxes in rooms at two resorts, the system did not work and was never operational. To
promote this bogus, non-working installation of ACTIVISION DELAWARE’s products,
Defendants created a press release with a digitally-altered photograph featuring the
principal of the Anna Maria Island Resorts standing in front of what appears to be a
working installation of an ACTIVISION DELAWARE product. The press release also
attributes quotations to the principal of the Anna Maria Island Resorts touting the success
of the installation by ACTIVISION DELAWARE. However, the picture and quotations
were false and created by the Defendants, and the principal of the Anna Maria Island
Resorts did not participate in the creation of the fake press release or authorize its
dissemination.
c. Beginning at a time unknown to the DEPARTMENT and known only by the
Defendants, but no later than January 2012, Defendants represented that ACTIVISION
DELAWARE was installing its products and services in the Queen Kapiolani Hotel in
Honolulu, Hawaii. Upon information and belief, this system did not work and was never
operational.
98. ACTIVISION DELAWARE made false representations that its public offering was
imminent since 2007, and that it was having discussions with its underwriter to “find the right
vehicle and set a date.” On or about January 2012, ACTIVISION DELAWARE again made
false representations that it was exploring the viability and timing to potentially list on the
“Frankfurt Exchange [sic], followed later by a listing on the New York Stock Exchange.”
99. Defendants made the following false representations about ACTIVISION
DELAWARE’s product sales or potential sales to investors:
Complaint Page 36 of 85
a. On or about August 24, 2007, GOTHARD told investors that it entered the medical
display business.
b. On or about January 2012, Defendants represented that Fountainstone [sic] Theater
[sic] was ACTIVISION DELAWARE’s “first Narrowcasting solution for the Goodrich
chain of twenty-seven (27) theaters” and that ACTIVISION DELAWARE’s “digital
signage in the lobby of the theater will display local and national advertisements and
upcoming movie trailers.”
c. On or about January 2012, Defendants represented that ACTIVISION DELAWARE
was planning to implement its system in the Peacock Hotel in San Francisco.
100. Defendants made the following false, unrealistic and inflated financial predictions about
ACTIVISION DELAWARE to investors that had no reasonable basis in fact:
a. On or about September 2010, ACTIVISION DELAWARE stated to investors that it
would be worth between $253 million and $319 million in “year 2 after roll out” of
ACTIVISION DELAWARE’s products and services, and between $2.446 and $2.899
billion in year four after roll out.
b. It utilized the services of Synergy Management Group Ltd., a company purportedly
operating out of Beijing, Hong Kong, and Vancouver, to generate a Business Valuation
Report in January 2012. Upon information and belief, ACTIVISION DELAWARE
circulated this business valuation report to the public, including potential investors,
repeating the unrealistic projections it made in its September 2010 business plan.
ACTIVISION DELAWARE was initiating its rollout phase, and estimated that it would
have total revenues of over $12 million in year one after “roll out,” rising to over $392
million in year four. As of January, 2012, the valuation of ACTIVISION DELAWARE
Complaint Page 37 of 85
“for the USA and Canada . . . has been quantified at a range of $193 million to $238
million.”
101. Defendants made false reports to ACTIVISION DELAWARE investors about the
performance of ACTIVISION DELAWARE’s stock. For example, investor B.B. believed she
was purchasing $2,500.00 of ACTIVISION DELAWARE stock in 2011 for $.50/share. Her
check to GOTHARD cleared on or about September 2011. GOTHARD gave her false reports
about the performance of the stock, telling her in 2012 that the stock was worth more than
$7.00/share. In reality, the stock, which was not even recorded in the corporate records, was
worthless.
102. Defendants made false representations about ACTIVISION DELAWARE’s corporate
structure to investors beginning on a date unknown and continuing until at least 2012.
ACTIVISION DELAWARE held out Activelight, LLC (upon information and belief, it was
referring to ACTIVELIGHT TV), ADCO Financial, ACTIVISION NEVADA, ACTIVISION
FLORIDA, and AMD to be subsidiaries to artificially inflate the size and sophistication of
ACTIVISION DELAWARE. Upon review of the corporate records of AMD and ACTIVISION
FLORIDA, these statements are false.
103. ACTIVISION DELAWARE attempted to solicit investors in 2011 at an investors’
conference, making the following false representations to investors:
a. ACTIVISION DELAWARE “leads the hospitality industry in the delivery of Real
interactive in-room solutions that fuse the computer, Internet and TV . . . .”
b. ACTIVISION DELAWARE is a “technology and services company, which designs,
manufactures, licenses and markets its products, has ten patents and patents pending with
over 200 claims that cover the new technology.”
Complaint Page 38 of 85
c. “Activision Systems™ is a registered trademark.”
d. ACTIVISION DELAWARE can produce the CIT, DMDS products, and electronic
kiosk systems.
e. ACTIVISION DELAWARE “offers a turn-key solution and one-stop-shop for both
its products and services.”
f. ACTIVISION DELAWARE “has a 24-hour help desk which is staffed seven days a
week and a service representative available to fix unexpected problems within hours
and without hassle to its customers.”
g. ACTIVISION DELAWARE has “signed a commercial agreement with hotel Queen
Kapiolani in Hawaii with 315 rooms and is in process of deploying the ATV solution
(hotel guest rooms and the digital signage).”
104. ACTIVISION DELAWARE continued to solicit investors through 2013.
105. The DEPARTMENT subpoenaed documents that identify investors of ACTIVISION
DELAWARE. According to the corporate records of ACTIVISION DELAWARE, the last stock
transaction shown on the corporate books of ACTIVISION DELAWARE was made no later
than 2009. These records are false. The DEPARTMENT is conducting a manual review of the
bank accounts of the Defendants. In direct conflict to the corporate records of ACTIVISION
DELAWARE, Defendants received monies from investors in 2010 and 2011 to purchase stock.
For example, investor B.B.’s check to GOTHARD cleared on or about September 2011.
GOTHARD deposited the check into his personal account and never transferred the funds.
GOTHARD used B.B.’s funds for his own personal benefit. Her investment was never recorded
in any corporate records, and Defendants did not produce any details about the transaction to the
DEPARTMENT.
Complaint Page 39 of 85
106. After Activision Publishing, Inc. brought a lawsuit that accused ACTIVISION
DELAWARE of trademark infringement and fraudulently registering a trademark for
“Activision,” ACTIVISION DELAWARE changed its name to ACTIVELIGHT, INC. on or
about January 31, 2014.
107. Due to the disarray of ACTIVISION DELAWARE’s subpoenaed financial records and
ACTIVISION DELAWARE’s practice of commingling funds, it is not possible to quantify the
number of investors or the extent of their investments at this time. This is especially true given
that many ACTIVISION DELAWARE records were not produced to the DEPARTMENT in
response to its subpoenas. However, ACTIVISION DELAWARE’s own records suggest that
over $2 million was received from the ACTIVISION DELAWARE Scheme.
D. The “Fraudulent Document Scheme”
108. GOTHARD was a “Limited Trustee” of a trust instrument dated April 26, 2007 and titled
the “Locke International Trust.” As Limited Trustee, GOTHARD had limited powers under the
Locke International Trust. GOTHARD was also the settlor of the Locke International Trust.
109. Beginning on a date unknown to the DEPARTMENT, but no later than May 18, 2007,
Rosanna Corallo (CORALLO) was the Individual Trustee of the Locke International Trust.
110. From on or about April 26, 2007 until July 26, 2012, the Locke International Trust
purportedly owned the title to the ‘411 Patent and the ‘736 Patent. It also purportedly owned the
‘058 Patent from at least the time it was granted (May 6, 2008) until July 26, 2012. It also
purportedly owned the patent application of what would become the ‘613 Patent until July 26,
2012. The transfer of these patents into the Locke International Trust had occurred without the
knowledge of AMD investors or ACTIVISION NEVADA investors.
Complaint Page 40 of 85
111. On or about August 25, 2011, ACTIVISION DELAWARE entered into a Loan and
Security Agreement (hereafter “Loan”) with Hamilton Capital LLC, a Delaware limited liability
company (hereafter “Hamilton Capital”).
112. A partial, true and correct copy of the executed Loan is attached as Exhibit 9 to this
Complaint. The DEPARTMENT subpoenaed a copy of the Loan from ACTIVISION
DELAWARE, but ACTIVISION DELAWARE did not produce copies of the schedules that
were a key part of the Loan, which identified more investors than shown by the inaccurate
corporate records produced by ACTIVISION DELAWARE to the DEPARTMENT.
113. The Loan was not to exceed $5,000,000, and the first initial advance was $3,200,000.
The promissory note, executed by ACTIVISION DELAWARE and Hamilton Capital on or
about the same day (hereafter “Note”), required interest on the principal amount of the Loan at a
rate equal to 24% per annum.
114. A true and correct copy of the executed Note is attached as Exhibit 10 to this Complaint.
115. Many of the existing investors of AMD, ACTIVISION NEVADA, and ACTIVISION
DELAWARE were not apprised of the Loan and Note. Investors in ACTIVISION DELAWARE
that invested after the execution date of the Loan and Note were not told of the Loan and Note,
which rendered their investments worthless given the Note’s 24% interest rate.
116. ACTIVISION DELAWARE received proceeds under the Note and Loan. Of the
$3,200,000 disbursed, the initial net proceeds to ACTIVISION DELAWARE were over
$1,200,000.00.
117. As a condition of the Loan, ACTIVISION DELAWARE had to grant Hamilton Capital a
first priority security interest in all of its property.
Complaint Page 41 of 85
118. As a condition of the Loan, the Locke International Trust (which purportedly owned the
Patents) had to grant Hamilton Capital a first priority security agreement granting Hamilton
Capital a first priority perfected security interest in all of the Locke International Trust’s assets.
The assets of the Locke International Trust included multiple shares of ACTIVISION
DELAWARE, the Remote Control Electronic Display System Patents, the ‘672 Patent, and the
‘316 Patent.
119. Under the Loan, ACTIVISION DELAWARE had to commit to prosecute and defend
patent infringement cases relating to the Remote Control Electronic Display System Patents, the
‘672 Patent, and the ‘316 Patent (collectively “Patents”).
120. Proceeds from this licensing effort were to go into accounts. Disbursement of the
proceeds from licensing of the Patents went first to Hamilton Capital, who received 15%, then to
Hamilton Capital for the reimbursement of all sums owing to it, then to Hamilton Capital for
unpaid interest, then to Hamilton Capital for the reduction of the principal balance of the Loan.
ACTIVISION DELAWARE was to receive any amounts remaining. To date, of these proceeds,
ACTIVISION DELAWARE has received nothing, AMD has received nothing, and
ACTIVISION NEVADA has received nothing.
121. The first advance was deposited into a controlled account and was subject to a budget.
122. The Loan and Note has been profitable to defendants GOTHARD and HETKOWSKI,
who received wages and/or cash advances.
123. The effect of the Loan and Note was to provide the individual Defendants with monies in
the form of cash, salaries and travel money, but deprived the shareholders of AMD,
ACTIVISION NEVADA, and ACTIVISION DELAWARE of any benefits. While a few
Complaint Page 42 of 85
creditors have been paid a small fraction of their principal investment, none of them have been
made whole.
124. The Loan and Note would not have closed without the use of the corpus of the Locke
International Trust, which purportedly owned the Patents (or predecessor applications) from on
or about April 26, 2007 until July 26, 2012.
125. In order to secure the benefits of the Loan and Note, Shari Boyer (BOYER), GOTHARD,
and HETKOWSKI executed a second trust instrument dated April 26, 2007 (but executed years
later on or about July 5, 2011), which was also titled the “Locke International Trust” (hereafter
“Second Locke International Trust”). GOTHARD, HETKOWSKI, and BOYER tried to pass off
the Second Locke International Trust as the original (April 26, 2007) Locke International Trust.
126. BOYER also holds herself out as Chief Operating Officer of “Locke Consulting
Company, Inc.” Upon information and belief, by “Locke Consulting Company, Inc.” BOYER is
referring to Defendant LOCKE CONSULTING GROUP, INC., which is the fictitious name of
the business GOTHARD uses to conduct his personal business.
127. A true and correct copy of the Second Locke International Trust is attached as Exhibit A
to Exhibit 11 (Trustee’s Certificate).
128. The document purporting to be the Second Locke International Trust was a document
created on or after July 5, 2011, could not retroactively create a trust on April 26, 2007, and was
invalid to create a trust since it did not have any corpus (which was in the original Locke
International Trust).
129. In order to secure the benefits of the Loan and Note, BOYER, GOTHARD, and
HETKOWSKI executed a Trustee’s Certificate on or about August 25, 2011.
130. A true and accurate copy of the Trustee’s Certificate is attached as Exhibit 11.
Complaint Page 43 of 85
131. In the Trustee’s Certificate, Defendants GOTHARD and HETKOWSKI falsely certified
to the following:
a. They were the sole trustees of the Locke International Trust;
b. The document they attached to the Trustee’s Certificate was a true, correct, and
complete copy of the (April 26, 2007) Locke International Trust;
c. There were no amendments to or alterations or modifications to the Locke
International Trust; and
d. They can lawfully execute documents on behalf of the Locke International Trust.
132. BOYER, GOTHARD, and HETKOWSKI were not the sole trustees of the Locke
International Trust.
a. Beginning on a date unknown to the DEPARTMENT, but no later than May 18,
2007, CORALLO was the Individual Trustee of the Locke International Trust.
b. The Locke International Trust did not provide for the removal of the Individual
Trustee CORALLO. Additionally, CORALLO did not resign as trustee, nor was she
removed pursuant to any provision of the Florida Trust Code (specifically, Sections
736.0705 and 736.0706, Florida Statutes).
c. As a result, the First Amendment to Locke International Trust (described in paragraph
134, below) did not remove and replace CORALLO as trustee under Florida trust law.
CORALLO is the Individual Trustee of the Locke International Trust from April 26,
2007 to the present.
d. In the alternative to subparagraph (c), if CORALLO was removed as Individual
Trustee by the First Amendment to Locke International Trust, HETKOWSKI would be
the sole Individual Trustee from December 16, 2009 to the present.
Complaint Page 44 of 85
133. Contrary to the representations by GOTHARD and HETKOWSKI in the Trustee’s
Certificate, the document they attached to the Trustee’s Certificate was the Second Locke
International Trust, and was not a true, correct, and complete copy of the (April 26, 2007) Locke
International Trust.
134. Contrary to the representations by GOTHARD and HETKOWSKI in the Trustee’s
Certificate that there were no amendments to the Locke International Trust, GOTHARD had
indeed attempted to amend the Locke International Trust on or about December, 2009 (hereafter
“First Amendment to Locke International Trust”) as settlor. HETKOWSKI knew of this
attempted amendment as well, as she accepted the purported appointment as Individual Trustee.
135. A true and correct copy of the First Amendment to Locke International Trust is attached
as Exhibit 12, which the DEPARTMENT obtained independently of its pre-suit subpoenas to the
Defendants.
136. Contrary to the representations by GOTHARD and HETKOWSKI in the Trustee’s
Certificate, they could not execute documents on behalf of the Locke International Trust.
a. They were not the trustees under the Locke International Trust.
b. The Second Locke International Trust did not confer any authority to BOYER,
GOTHARD, and HETKOWSKI since the patents were corpus of the original Locke
International Trust.
137. As a condition of the Loan, GOTHARD alone executed the Security Agreement as
“Trustee/Settelor” [sic] of the Locke International Trust on or about August 25, 2011 (hereafter
“Security Agreement”). GOTHARD falsely represented that as the Debtor under the Security
Agreement, the Second Locke International Trust was the “sole and exclusive owner of the entire
and unencumbered right, title and interest in and to all Intellectual Property [which included the
Complaint Page 45 of 85
Patents] purported to be owned by Debtor, free and clear of any Liens, including without
limitation licenses and covenants by Debtor not to sue third persons.”
138. A true and correct copy of the Second Locke International Trust Security Agreement is
attached as Exhibit 13.
139. GOTHARD and the Second Locke International Trust did not solely own the Patents, nor
was any such ownership unencumbered. On the contrary, the Patents were encumbered by the
interests of the innocent victims of the AMD Scheme, the ACTIVISION NEVADA Scheme, and
the ACTIVISION DELAWARE Scheme.
140. As a condition of the Loan, GOTHARD, by himself as the trustee of the Locke
International Trust executed a Patent Security Agreement on or about August 25, 2011 (hereafter
“Patent Security Agreement”). GOTHARD falsely represented that as the Grantor under the
Patent Security Agreement, he could grant a security interest in the Patents.
141. A true and correct copy of the Patent Security Agreement is attached as Exhibit 14.
142. To meet its commitments ACTIVISION DELAWARE tried to sell licenses to these
Patents to a wide range of businesses including restaurants, banks, hotels, and a motorcycle
manufacturer.
143. When ACTIVISION DELAWARE made its sales pitches to businesses in order to extract
payments for patent licenses, ACTIVISION DELAWARE’s agents told businesses that
“Activision’s founder, Mr. David Gothard, is an inventor and businessman long applauded and
honored for his history of innovation and for his successful career. Mr. Gothard’s ingenuity is
the driving force behind the creation of systems and products for delivery of dynamic digital
display solutions provided by Activision.” Casting aside the opinions contained in these
statements, the factual content of these statements were false, as GOTHARD has a criminal
Complaint Page 46 of 85
history and has not created any systems or products that were installed in working order. In
addition, these letters misrepresented that “Activision is the owner, by assignment, of all right,
title, and interest in the Activision Patents.” These statements were also false since the victims
of the Defendants had the right, title, and interest in the Patents.
144. While the Defendants did not reveal the amounts of the licensing agreements with third
parties relating to the Patents to the DEPARTMENT, according to one public source the
Defendants have obtained over $3.1 million in settlements, in the following amounts:
a. $100,000 from Richardson Electronics in 2010;
b. $75,000 from Tek Panel, Inc. in 2010;
c. $750,000 from NEC Display Solutions of America in 2011;
d. $400,000 from AdSpace Networks, Inc. in 2012;
e. $72,170 from Waste Management in 2013;
f. $24,375 from Tedeshi Food Shops, Inc. in 2013;
g. $9,000 from Colbea Enterprises in 2013;
h. $250,000 from AdFlow Networks in 2013;
i. $15,000 from Cianbro in 2013;
j. $10,500 from Tri Star Energy LLC in 2014;
k. $20,000 from Drake Petroleum Company in 2014;
l. $190,000 from Carmike Cinemas Inc. in 2014;
m. $250,000 from SoloHealth Inc. in 2014;
n. $375,000 from NanoNation in 2014;
o. $80,000 from Cinemark in 2014;
p. $340,000 from Four Winds Interactive in 2014;
Complaint Page 47 of 85
q. $120,000 from YesCo in 2014; and
r. $25,000 from Nevada Property 1 in 2014.
145. All conditions precedent necessary to the filing of this action have been fulfilled.
146. The DEPARTMENT took sworn oral testimony of GOTHARD regarding the allegations
in this Complaint on October 23, 2014. GOTHARD refused to answer a single substantive
question, invoking his right against self-incrimination.
VI. Fraudulent Concealment/Equitable Estoppel
147. Fraudulent concealment, a species of equitable estoppel in Florida, precludes Defendants
from asserting a statute of limitations defense in this matter.
148. To the extent that Defendants claim that the DEPARTMENT’s filing is late, Defendants
bear responsibility for the late filing.
149. Defendants affirmatively and fraudulently concealed the AMD Scheme, the
ACTIVISION NEVADA Scheme, the ACTIVISION DELAWARE Scheme, and the Fraudulent
Documents Scheme.
150. The DEPARTMENT served pre-suit investigative subpoenas to Defendants
ACTIVISION DELAWARE, AMD, and ACTIVISION FLORIDA on or about December 6,
2013. It was not until the DEPARTMENT received responsive documents on or about February
11, 2014 (after granting GOTHARD’s requests for extensions), and compared and contrasted
them to other investors’ documents, that it could have learned of its cause of action against the
Defendants. The DEPARTMENT exercised due diligence in pursuit of its legal rights and,
despite such diligence, failed to uncover the possible existence of the violations alleged in this
Complaint until at least on or about February 11, 2014.
Complaint Page 48 of 85
151. Defendants effectively, affirmatively, and fraudulently concealed the existence of the
violations alleged in this Complaint through the following actions, among others:
a. misrepresenting to investors their sales,
b. misrepresenting to investors their operations,
c. misrepresenting to investors that their products worked,
d. misrepresenting to investors who their customers were,
e. misrepresenting to investors their manufacturing capabilities,
f. misrepresenting to investors their locations,
g. misrepresenting to investors their business partnerships or relationships,
h. misrepresenting to investors their rates of return,
i. misrepresenting to investors the stock price,
j. misrepresenting to investors their intellectual property portfolio,
k. misrepresenting to investors their bogus initial public offerings,
l. misrepresenting to investors the safety of their investments,
m. misrepresenting to investors the timing of returns and payoff dates,
n. misrepresenting to investors that they had a religious mission,
o. misrepresenting to investors customer demand for their (non-working) products,
p. misrepresenting to investors interest by foreign investors,
q. misrepresenting to investors the extent to which they performed product testing,
r. misrepresenting to investors other companies’ interest in acquiring them,
s. creating false documents,
t. creating multiple companies, many with the same name,
u. moving assets secretly across entities,
Complaint Page 49 of 85
v. giving pretextual reasons for overdue loan or note payments,
w. hiding GOTHARD’s criminal past relating to securities, and
x. comingling assets and debts in a misleading manner.
152. By taking affirmative steps to conceal from investors the omissions and
misrepresentations, Defendants prevented and deterred any meaningful inquiry or investigation
by investors that would have disclosed Defendants’ fraudulent common course of conduct.
153. Defendants did not produce all responsive documents to the DEPARTMENT’s
investigative subpoenas. Many documents that were produced were missing key portions.
Defendant GOTHARD also did not answer questions in response to a subpoena for oral
testimony.
154. Defendants’ pattern of racketeering activity, securities fraud, and theft was by its nature
inherently self-concealing.
155. The affirmative acts of Defendants alleged in this Complaint were wrongfully concealed
and were carried out in a manner that precluded detection.
156. The DEPARTMENT could not have discovered the pattern of conduct at an earlier date
by the exercise of reasonable diligence because of the practices and techniques of secrecy
employed by Defendants to fraudulently conceal and to avoid detection of their activity.
157. Upon having reasonable suspicion of the existence of Defendants’ alleged pattern of
racketeering activity, the DEPARTMENT exercised due diligence by promptly investigating, to
the extent permitted by law, the facts giving rise to the claims asserted herein.
158. None of the facts or information available to the DEPARTMENT prior to February 11,
2014, if investigated with reasonable diligence, could or would have led to the discovery of the
pattern of racketeering activity alleged herein. It was not until the DEPARTMENT received
Complaint Page 50 of 85
multiple complaints with supporting documentation that it was revealed, for example, that
multiple domestic corporations named “Activision TV, Inc.” were running parallel investment
schemes, repeatedly selling the same property. As a result of Defendants’ and their co-
conspirators’ fraudulent concealment of their alleged pattern of racketeering activity, the running
of any statute of limitations has been tolled, suspended, or otherwise rendered unavailable with
respect to any claims the DEPARTMENT has as a result of the conduct alleged in this
Complaint.
VII. ADDITIONAL TOLLING UNDER A TOLLING AGREEMENT
159. All claims in this Complaint brought by the DEPARTMENT against ACTIVISION
DELAWARE, ACTIVISION NEVADA, ACTIVISION FLORIDA, AMD, ACTIVELIGHT TV,
ADCO FINANCIAL, LCG, GOTHARD, and the Locke International Trust have been further
tolled from April 23, 2014 to the date of the filing of this Complaint pursuant to an executed
tolling agreement with these parties.
COUNT I: VIOLATIONS OF THE FLORIDA RICO ACT (Section 895.03(1), Florida Statutes)
(Use of Proceeds from a Pattern of Racketeering) (Defendants GOTHARD, ACTIVISION DELAWARE, AMD, LCG, ACTIVISION FLORIDA, ACTIVISION NEVADA, ADCO FINANCIAL, and ACTIVELIGHT TV)
160. This is a claim for civil relief for violations of Section 895.03(1), Florida Statutes, against
Defendants GOTHARD, ACTIVISION DELAWARE, AMD, LCG, ACTIVISION FLORIDA,
ACTIVISION NEVADA, ADCO FINANCIAL, and ACTIVELIGHT TV (hereafter for purposes
of Count I the “Count I Defendants”).
161. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
162. At least two of the following incidents occurred, creating a pattern of racketeering:
Complaint Page 51 of 85
a. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in AMD as defined by Chapter 517,
Florida Statutes, directly or indirectly, GOTHARD employed devices, schemes, or
artifices to defraud, in violation of Section 517.301(1)(a)(1), Florida Statutes.
GOTHARD operated the AMD Scheme beginning on a date unknown and known only
by the Defendants, but no later than September 2003, and continuing until the present.
The AMD Scheme, set forth more fully above in Section V.A., was structured so as to
give the appearance to potential/existing investors that AMD was positioned to reap
profits from the value of the Patents and other products using the Patents. Based on these
representations, investors invested monies in the AMD Scheme until a date unknown to
the DEPARTMENT and known only by the Defendants, but no later than March, 2007.
While operating the AMD Scheme, GOTHARD then operated other schemes designed to
reap the same alleged profits from the same Patents, and transferred Patents outside of
any licenses AMD had. GOTHARD continues to employ this scheme to the present. By
continuing to perpetuate the AMD Scheme, GOTHARD gives investment advice to
existing investors that creates the appearance to AMD investors that their investment
has/had value, which it does not. GOTHARD’s scheme perpetuates the AMD Scheme,
leading investors to retain their investments.
b. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of AMD as defined by Chapter 517,
directly or indirectly, GOTHARD obtained money or property by means of untrue
statements of a material fact or omitted material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made, not
Complaint Page 52 of 85
misleading, in violation of Section 517.301(1)(a)(2), Florida Statutes. Beginning on a
date unknown and known only by the Defendants, but no later than September 2003, and
continuing until a date unknown to the DEPARTMENT and known only by the
Defendants, but no later than March, 2007, GOTHARD obtained monies for AMD from
investors by misrepresenting to investors the extent of AMD’s sales, its operation, that its
products worked, the identities of its customers, its manufacturing capabilities, its
locations, its business partnerships or relationships, its investors’ rates of return, its
intellectual property portfolio, that it had a pending initial public offering, the safety of
investing in AMD, the timing of returns and payoff dates, that AMD had a religious
mission, customer demand for their (non-working) products, interest in AMD by foreign
investors, the extent to which they performed product testing, and other companies’
interest in acquiring AMD.
c. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that AMD was worthless, and
that GOTHARD was operating multiple schemes in violation of Section 517.301(1)(c),
Florida Statutes. GOTHARD created false writings and documents and used them, such
as Exhibits 1 and 2, and also made false statements or representations during the
execution of the AMD Scheme that concealed the ACTIVISION NEVADA Scheme and
the ACTIVISION DELAWARE Scheme. GOTHARD knew these writings and
documents and statements were false.
d. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in ACTIVISION NEVADA as defined by
Complaint Page 53 of 85
Chapter 517, Florida Statutes, directly or indirectly, GOTHARD employed devices,
schemes, or artifices to defraud, in violation of Section 517.301(1)(a)(1), Florida Statutes.
GOTHARD operated the ACTIVISION NEVADA Scheme beginning on a date unknown
and known only by the Defendants, but no later than May, 2006, and continuing until the
present. The ACTIVISION NEVADA Scheme, set forth more fully above in Section
V.B., was structured so as to give the appearance to potential investors that ACTIVISION
NEVADA was positioned to reap profits from the value of the Patents and other products
using the Patents. Based on these representations, investors invested monies in the AMD
Scheme until a date unknown to the DEPARTMENT and known only by the Defendants,
but no later than June, 2006. While operating the ACTIVISION NEVADA Scheme,
GOTHARD then operated other schemes designed to reap the same alleged profits from
the same Patents, and transferred Patents outside of any licenses ACTIVISION
NEVADA had. GOTHARD continues to employ this scheme to the present. By
continuing to perpetuate the ACTIVISION NEVADA Scheme, GOTHARD gives
investment advice to existing investors that creates the appearance to ACTIVISION
NEVADA investors that their investment has/had value, which it does not. GOTHARD’s
scheme perpetuates the ACTIVISION NEVADA Scheme, leading investors to retain
their investments.
e. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of ACTIVISION NEVADA as defined by
Chapter 517, directly or indirectly, GOTHARD obtained money or property by means of
untrue statements of a material fact or omitted material facts necessary in order to make
the statements made, in the light of the circumstances under which they were made, not
Complaint Page 54 of 85
misleading, in violation of Section 517.301(1)(a)(2), Florida Statutes. Beginning on a
date unknown and known only by the Defendants, but no later than June, 2006, and
continuing until a date unknown to the DEPARTMENT and known only by the
Defendants , GOTHARD obtained monies for AMD from investors by misrepresenting to
investors the extent of ACTIVISION NEVADA’s sales, its operation, that its products
worked, its manufacturing capabilities, its locations, its business partnerships or
relationships, its investors’ rates of return, its stock price, that it had a pending initial
public offering, and customer demand for their (non-working) products.
f. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION NEVADA
was worthless, and that GOTHARD was operating multiple schemes in violation of
Section 517.301(1)(c), Florida Statutes. GOTHARD created false writings and
documents and used them, such as Exhibit 3, which was a copy of the same false
documents used in the AMD Scheme. GOTHARD also made false statements or
representations during the execution of the ACTIVISION NEVADA Scheme that
concealed the AMD Scheme and the ACTIVISION DELAWARE Scheme. GOTHARD
knew these writings and documents and statements were false. GOTHARD also created
multiple domestic companies with the name “Activision TV, Inc.” that served to confuse
investors and hide his schemes, and secretly moved assets across these entities.
g. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in ACTIVISION DELAWARE as defined
by Chapter 517, Florida Statutes, directly or indirectly, GOTHARD employed devices,
Complaint Page 55 of 85
schemes, or artifices to defraud, in violation of Section 517.301(1)(a)(1), Florida Statutes.
GOTHARD operated the ACTIVISION DELAWARE Scheme beginning on a date
unknown to the DEPARTMENT and known only by the Defendants, but no later than
January, 2006, and continuing until the present. The ACTIVISION DELAWARE
Scheme, set forth more fully above in Section V.C., was structured so as to give the
appearance to potential/existing investors that ACTIVISION DELAWARE was
positioned to reap profits from the value of the Patents and other products using the
Patents. Based on these representations, investors invested monies in the ACTIVISION
DELAWARE Scheme until a date unknown to the DEPARTMENT and known only by
the Defendants, but no later than August, 2011. While operating the ACTIVISION
DELAWARE Scheme, GOTHARD then operated the ACTIVISION NEVADA Scheme,
which was designed to reap the same alleged profits from the same Patents. GOTHARD
continues to employ this scheme to the present. By continuing to perpetuate the
ACTIVISION DELAWARE Scheme, GOTHARD gives investment advice to existing
investors that creates the appearance to AMD investors that their investment has/had
value, which it does not. GOTHARD’s scheme perpetuates the ACTIVISION
DELAWARE Scheme, leading investors to retain their investments. GOTHARD also
solicited funds on behalf of ACTIVISION DELAWARE (including investors B.B., D.T.,
K.M.) in 2010 and 2011. GOTHARD told these investors they were buying stock in
ACTIVISION DELAWARE. GOTHARD then deposited these funds from the investors
of ACTIVISION DELAWARE (including the funds of investors B.B., D.T., K.M.) into
his personal banking account, and did not record any of these investments in the
Complaint Page 56 of 85
corporate records of ACTIVISION DELAWARE. He then spent these monies for his
own personal use.
h. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of ACTIVISION DELAWARE as defined
by Chapter 517, directly or indirectly, GOTHARD obtained money or property by means
of untrue statements of a material fact or omitted material facts necessary in order to
make the statements made, in the light of the circumstances under which they were made,
not misleading, in violation of Section 517.301(1)(a)(2), Florida Statutes. Beginning on a
date unknown and known only by the Defendants, but no later than May, 2007, and
continuing until a date unknown to the DEPARTMENT and known only by the
Defendants, but no later than August, 2011, GOTHARD obtained monies for
ACTIVISION DELAWARE from investors by misrepresenting to investors the extent of
ACTIVISION DELAWARE’s sales, its operation, that its products worked, the identities
of its customers, its manufacturing capabilities, its locations, its business partnerships or
relationships, its investors’ rates of return, its intellectual property portfolio, that it had a
pending initial public offering, the timing of returns and payoff dates, customer demand
for their (non-working) products, interest in ACTIVISION DELAWARE by foreign
investors, the extent to which they performed product testing, and other companies’
interest in acquiring ACTIVISION DELAWARE. GOTHARD also deposited investors’
funds (including the funds of investor B.B., D.T., K.M.) and into his personal banking
account, and did not record any of these investments in the corporate records of
ACTIVISION DELAWARE. He then spent these monies for his own personal use.
Complaint Page 57 of 85
i. Beginning on a date unknown and known only by the Defendants, but no later than
January 2006, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that GOTHARD was operating
multiple schemes in violation of Section 517.301(1)(c), Florida Statutes. GOTHARD
created false writings and documents and used them, such as Exhibits 4-8, and also made
false statements or representations during the execution of the ACTIVISION
DELAWARE Scheme that concealed the AMD Scheme and the ACTIVISION
DELAWARE Scheme. GOTHARD knew these writings and documents and statements
were false.
j. Beginning on a date unknown and known only by the Defendants, but no later than
August, 2011, and continuing until January, 2012, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION
DELAWARE was not a viable investment in violation of Section 517.301(1)(c), Florida
Statutes, and that AMD and ACTIVISION NEVADA had interests in the Patents.
GOTHARD created false writings and documents and used them, and also made false
statements or representations during the execution of the ACTIVISION DELAWARE
Scheme, holding out Activelight, LLC (upon information and belief, ACTIVELIGHT
TV), ADCO Financial, ACTIVISION NEVADA, ACTIVISION FLORIDA, and AMD
to be subsidiaries of the ACTIVISION DELAWARE and to artificially inflate the size
and sophistication of ACTIVISION DELAWARE. GOTHARD knew these writings and
documents and statements were false.
k. GOTHARD received cash or cash equivalents from investors in ACTIVISION
DELAWARE (including the funds of investor B.B., D.T., K.M.) in 2010 and 2011.
Complaint Page 58 of 85
These investors were buying stock in ACTIVISION DELAWARE. It was GOTHARD’s
duty to make in the books of ACTIVISION DELAWARE an accurate record of this stock
transaction. GOTHARD omitted from the corporate records a true record of this
transaction. Furthermore, he failed to make entries of these transactions with the intent to
defraud: he transferred these funds into his personal banking account, and did not record
any of these investments in the corporate records of ACTIVISION DELAWARE. He
then spent these monies for his own personal use. These actions violated Section 817.15,
Florida Statutes (making false entries, etc., on books of corporation).
l. The AMD Scheme, the ACTIVISION NEVADA Scheme, and the ACTIVISION
DELWARE Scheme were systematic ongoing courses of conduct from 2003 to the
present, with intent to defraud one or more persons, or with intent to obtain property from
one or more persons by false or fraudulent pretenses, representations, or promises or
willful misrepresentations of a future act. The AMD Scheme, the ACTIVISION
NEVADA Scheme, and the ACTIVISION DELWARE Scheme operated by GOTHARD
defrauded and obtained cash or cash equivalents from investors in each of these
companies in excess of $50,000, in violation of Section 817.034(4)(a), Florida Statutes.
m. The AMD Scheme, the ACTIVISION NEVADA Scheme, and the ACTIVISION
DELWARE Scheme were systematic ongoing courses of conduct beginning on 2003
until a date unknown to the DEPARTMENT but no later than April, 2013, with intent to
defraud one or more persons, or with intent to obtain property from one or more persons
by false or fraudulent pretenses, representations, or promises or willful
misrepresentations of a future act. In furtherance of GOTHARD’s fraudulent conduct
and deception to obtain and appropriate investors’ property in the AMD Scheme, the
Complaint Page 59 of 85
ACTIVISION NEVADA Scheme, and the ACTIVISION DELWARE Scheme,
GOTHARD communicated with investors using the telephone and the U.S. Mails. The
value obtained by GOTHARD from investors using these communications was $300 or
more, in violation of Section 817.034(4)(b), Florida Statutes.
n. GOTHARD obtained a promissory note for ACTIVISION DELAWARE from
Hamilton Capital using the Fraudulent Documents Scheme, detailed more fully above.
GOTHARD’s intent was not just to defraud Hamilton Capital, but also defraud investors
in AMD, ACTIVISION NEVADA, and ACTIVISION DELAWARE. GOTHARD made
false or fraudulent representations or pretenses on or about August, 2011 to Hamilton
Capital, that GOTHARD, BOYER, and HETKOWSKI were the sole trustees of the
Locke International Trust; that the document they attached to the Trustee’s Certificate
was a true, correct, and complete copy of the original Locke International Trust; that
there were no amendments to or alterations or modifications to the Locke International
Trust; that they can lawfully execute documents on behalf of the Locke International
Trust; that the Second Locke International Trust was the “sole and exclusive owner of the
entire and unencumbered right, title and interest in and to all Intellectual Property [which
included the Patents] purported to be owned by Debtor, free and clear of any Liens,
including without limitation licenses and covenants by Debtor not to sue third persons;”
that the Patents were unencumbered by any other interests; and that GOTHARD, by
himself as the trustee of the Locke International Trust, could grant a security interest in
the Patents. Each of these false pretenses constituted a separate violation of Section
817.54, Florida Statutes (obtaining promissory note by false representation).
Complaint Page 60 of 85
163. Of those incidents that did occur, at least two of them had the same or similar intents
(repeatedly selling the value of the Patents), results (obtaining the value of the Patents from
multiple investors across multiple companies), accomplices (GOTHARD and HETKOWSKI),
methods of commission (by using the same, false investor memoranda) or were interrelated by
distinguishing characteristics and were not isolated incidents.
164. Count I Defendants, with criminal intent received proceeds derived, directly or indirectly,
from the pattern of racketeering activity, from investors.
165. Count I Defendants used or invested, directly or indirectly, such proceeds or the proceeds
derived from the investment or use thereof, in the establishment and operation of the enterprise
in violation of Section 895.03(1), Florida Statutes, including but not limited to creating accounts
with financial institutions, paying salaries, creating investor documents, creating business plans,
travelling, etc., the further descriptions of which cannot be ascertained by Plaintiff at the time of
filing this Complaint.
166. Count I Defendants, at the time they received the proceeds, knew the source of the
proceeds or had their suspicions aroused but deliberately failed to make further inquiry as to the
source of the proceeds.
167. The enterprise was an ongoing organization, formal or informal, of AMD, ACTIVISION
NEVADA, ACTIVISION DELAWARE, and the Locke International Trusts, and functioned
both as a continuing unit and has a common purpose of engaging in a course of conduct:
unlawfully soliciting investors, obtaining their monies, and hiding their conduct.
168. Due to the extensive predicate acts committed by the Count I Defendants, none of whom
have been currently charged criminally, there is nothing to prevent them from continuing to
execute their schemes.
Complaint Page 61 of 85
169. The board of directors and/or GOTHARD, acting on behalf of the business-entity Count I
Defendants, in conducting the affairs of the businesses, have authorized or engaged in conduct in
violation of Section 895.03, Florida Statutes. To prevent future criminal activity, the public
interest requires the charter of the business entities in Florida forfeited, the dissolution of the
business, and the certificate authorizing a foreign corporation to conduct business within the state
permanently revoked.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Order divestiture of Count I Defendants of any interest in any enterprise;
B. Permanently enjoin the Count I Defendants from engaging in any activities involving or
connected with the solicitation and collection of investments or securities;
C. Permanently enjoin the Count I Defendants from violating, aiding or abetting the
violation of, and conspiring to violate any provisions of the Florida RICO Act.
D. Impose reasonable restrictions upon the future activities or investments of the Count I
Defendants, including, but not limited to, prohibiting any Count I Defendant from engaging in
the same type of endeavor as the enterprise in which the Count I Defendants was engaged in;
E. Order the dissolution of the enterprise;
F. Order the forfeiture of the charter of a corporation organized under the laws of Florida,
and the revocation of the certificates authorizing a foreign corporation to conduct business within
Florida;
G. Order forfeiture of all property, including the Patents and cash, used in the course of,
derived from, or realized through the conduct of the Count I Defendants, subject to the rights of
any innocent persons duly established in this cause, pursuant to Section 895.05(2), Florida
Statutes;
Complaint Page 62 of 85
H. Order the Count I Defendants to divest or disgorge any ill-gotten proceeds;
I. Retain jurisdiction to direct the proper distribution of the proceeds of forfeiture pursuant
to Section 895.09, Florida Statutes;
J. Award Plaintiff costs of investigation and litigation, including attorney fees, as may be
taxable by law; and
K. Award other relief the Court deems appropriate.
COUNT II: VIOLATIONS OF THE FLORIDA RICO ACT (Section 895.03(3), Florida Statutes)
(Conduct of or Participation in an Enterprise) (Defendant GOTHARD)
170. This is a claim for civil relief for violations of Section 895.03(3), Florida Statutes, against
Defendant GOTHARD.
171. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
172. GOTHARD was employed by and/or associated with Defendants AMD, ACTIVISION
NEVADA, and ACTIVISION DELAWARE.
173. GOTHARD conducted, participated in, directly or indirectly, such enterprise by engaging
in at least two of the incidents described in paragraph 162 above, which is hereby incorporated
by reference.
174. Of those incidents that did occur, at least two of them had the same or similar intents
(repeatedly selling the value of the Patents), results (obtaining the value of the Patents from
multiple investors across multiple companies), accomplices, methods of commission (by using
the same, false investor memoranda) or were interrelated by distinguishing characteristics and
were not isolated incidents.
Complaint Page 63 of 85
175. The enterprise was an ongoing organization, formal or informal, of AMD, ACTIVISION
NEVADA, ACTIVISION DELAWARE, and the Locke International Trusts, and functioned
both as a continuing unit and has a common purpose of engaging in a course of conduct:
unlawfully soliciting investors, obtaining their monies, and hiding it.
176. Due to the extensive predicate acts committed by GOTHARD, who is not currently
charged with any criminal wrongdoing, there is nothing to prevent him from continuing to
execute his schemes.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Order divestiture of GOTHARD of any interest in any enterprise;
B. Permanently enjoin GOTHARD from engaging in any activities involving or connected
with the solicitation and collection of investments or securities;
C. Permanently enjoin GOTHARD from violating, aiding or abetting the violation of, and
conspiring to violate any provisions of the Florida RICO Act.
D. Impose reasonable restrictions upon the future activities or investments of GOTHARD,
including, but not limited to, prohibiting GOTHARD from engaging in the same type of
endeavor as the enterprise in which GOTHARD was engaged in;
E. Order the dissolution of the enterprise;
F. Order the forfeiture of the charter of a corporation organized under the laws of Florida,
and the revocation of the certificates authorizing a foreign corporation to conduct business within
Florida;
G. Order forfeiture of all property, including the Patents and cash, used in the course of,
derived from, or realized through the conduct of GOTHARD, subject to the rights of any
innocent persons duly established in this cause, pursuant to Section 895.05(2), Florida Statutes;
Complaint Page 64 of 85
H. Order GOTHARD to divest or disgorge any ill-gotten proceeds;
I. Retain jurisdiction to direct the proper distribution of the proceeds of forfeiture pursuant
to Section 895.09, Florida Statutes;
J. Award Plaintiff costs of investigation and litigation, including attorney fees; and
K. Award other relief the Court deems appropriate.
COUNT III: VIOLATIONS OF THE FLORIDA RICO ACT (Section 895.03(4), Florida Statutes)
(Defendant HETKOWSKI)
177. This is a claim for civil relief for violations of Section 895.03(4), Florida Statutes, against
Defendant HETKOWSKI.
178. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
179. HETKOWSKI, with GOTHARD, in some way or manner, came to a mutual
understanding to try to accomplish a common and unlawful plan, namely to engage in a pattern
of racketeering activity described in paragraph 162, which is hereby incorporated by reference.
180. HETKOWSKI knowingly and willfully became a member of such conspiracy.
181. At the time HETKOWSKI joined such conspiracy, she did so with the specific intent to
participate in the affairs of the enterprise with the knowledge and intent that GOTHARD or his
agents would engage in at least two incidents of racketeering described in paragraph 162, as part
of a pattern of racketeering activity:
a. HETKOWSKI participated in the affairs of ACTIVISION DELAWARE. On about
October 13, 2009, HETKOWSKI invited several investors to a stockholder meeting. The
purpose of the meeting was to discuss the performance of “Activision.” HETKOWSKI
told investors that new developments were taking place in the company “in this economic
downturn.” Upon information and belief, by “Activision” HETKOWSKI was referring Complaint
Page 65 of 85
to ACTIVISION DELAWARE. At the meeting, investors were told that ACTIVISION
DELAWARE was in excellent position, expanding its facilities, moving into new
markets, and expected to provide investors with excellent returns in the near future.
None of these statements were true, and HETKOWSKI knew they were not true.
b. HETKOWSKI participated in the Fraudulent Documents Scheme, executing
documents on or about August, 2011, she knew to be false, including the Trustee’s
Certificate and the Second Locke International Trust.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Order divestiture of HETKOWSKI of any interest in any enterprise;
B. Permanently enjoin HETKOWSKI from engaging in any activities involving or
connected with the solicitation and collection of investments or securities;
C. Permanently enjoin HETKOWSKI from violating, aiding or abetting the violation of, and
conspiring to violate any provisions of the Florida RICO Act.
D. Impose reasonable restrictions upon the future activities or investments of
HETKOWSKI, including, but not limited to, prohibiting HETKOWSKI from engaging in the
same type of endeavor as the enterprise in which HETKOWSKI was engaged in;
E. Order the dissolution of the enterprise;
F. Order the forfeiture of the charter of a corporation organized under the laws of Florida,
and the revocation of the certificates authorizing a foreign corporation to conduct business within
Florida;
G. Order forfeiture of all property, including the Patents and cash, used in the course of,
derived from, or realized through the conduct of HETKOWSKI, subject to the rights of any
innocent persons duly established in this cause, pursuant to Section 895.05(2), Florida Statutes;
Complaint Page 66 of 85
H. Order HETKOWSKI to divest or disgorge any ill-gotten proceeds;
I. Retain jurisdiction to direct the proper distribution of the proceeds of forfeiture pursuant
to Section 895.09, Florida Statutes;
J. Award Plaintiff costs of investigation and litigation, including attorney fees; and
K. Award other relief the Court deems appropriate.
COUNT IV: VIOLATIONS OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT
(Section 517.301, Florida Statutes) (Defendants GOTHARD, ACTIVISION DELAWARE, AMD, LCG, ACTIVISION FLORIDA, ACTIVISION NEVADA, ADCO FINANCIAL, and ACTIVELIGHT
TV)
182. This is an action for multiple violations of the Florida Securities and Investor Protection
Act, Section 517.301, Florida Statutes, against Defendants GOTHARD, ACTIVISION
DELAWARE, AMD, LCG, ACTIVISION FLORIDA, ACTIVISION NEVADA, ADCO
FINANCIAL, and ACTIVELIGHT TV (hereafter for purposes of Count IV the “Count IV
Defendants”).
183. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
184. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in AMD as defined by Chapter 517, Florida
Statutes, directly or indirectly, GOTHARD employed devices, schemes, or artifices to defraud,
in violation of Section 517.301(1)(a)(1), Florida Statutes. GOTHARD operated the AMD
Scheme beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present. The AMD Scheme, set forth more fully above
in Section V.A., was structured so as to give the appearance to potential/existing investors that
AMD was positioned to reap profits from the value of the Patents and other products using the
Complaint Page 67 of 85
Patents. Based on these representations, investors invested monies in the AMD Scheme until a
date unknown to the DEPARTMENT and known only by the Defendants, but no later than
March, 2007. While operating the AMD Scheme, GOTHARD then operated other schemes
designed to reap the same alleged profits from the same Patents, and transferred Patents outside
of any licenses AMD had. GOTHARD continues to employ this scheme to the present. By
continuing to perpetuate the AMD Scheme, GOTHARD gives investment advice to existing
investors that creates the appearance to AMD investors that their investment has/had value,
which it does not. GOTHARD’s scheme perpetuates the AMD Scheme, leading investors to
retain their investments.
185. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of AMD as defined by Chapter 517, directly or
indirectly, GOTHARD obtained money or property by means of untrue statements of a material
fact or omitted material facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, in violation of Section
517.301(1)(a)(2), Florida Statutes. Beginning on a date unknown and known only by the
Defendants, but no later than September 2003, and continuing until a date unknown to the
DEPARTMENT and known only by the Defendants, but no later than March, 2007, GOTHARD
obtained monies for AMD from investors by misrepresenting to investors the extent of AMD’s
sales, its operation, that its products worked, the identities of its customers, its manufacturing
capabilities, its locations, its business partnerships or relationships, its investors’ rates of return,
its intellectual property portfolio, that it had a pending initial public offering, the safety of
investing in AMD, the timing of returns and payoff dates, that AMD had a religious mission,
Complaint Page 68 of 85
customer demand for their (non-working) products, interest in AMD by foreign investors, the
extent to which they performed product testing, and other companies’ interest in acquiring AMD.
186. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that AMD was worthless, and that
GOTHARD was operating multiple schemes in violation of Section 517.301(1)(c), Florida
Statutes. GOTHARD created false writings and documents and used them, such as Exhibits 1
and 2, and also made false statements or representations during the execution of the AMD
Scheme that concealed the ACTIVISION NEVADA Scheme and the ACTIVISION
DELAWARE Scheme. GOTHARD knew these writings and documents and statements were
false.
187. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in ACTIVISION NEVADA as defined by
Chapter 517, Florida Statutes, directly or indirectly, GOTHARD employed devices, schemes, or
artifices to defraud, in violation of Section 517.301(1)(a)(1), Florida Statutes. GOTHARD
operated the ACTIVISION NEVADA Scheme beginning on a date unknown and known only by
the Defendants, but no later than May, 2006, and continuing until the present. The
ACTIVISION NEVADA Scheme, set forth more fully above in Section V.B., was structured so
as to give the appearance to potential investors that ACTIVISION NEVADA was positioned to
reap profits from the value of the Patents and other products using the Patents. Based on these
representations, investors invested monies in the AMD Scheme until a date unknown to the
DEPARTMENT and known only by the Defendants, but no later than June, 2006. While
operating the ACTIVISION NEVADA Scheme, GOTHARD then operated other schemes
Complaint Page 69 of 85
designed to reap the same alleged profits from the same Patents, and transferred Patents outside
of any licenses ACTIVISION NEVADA had. GOTHARD continues to employ this scheme to
the present. By continuing to perpetuate the ACTIVISION NEVADA Scheme, GOTHARD
gives investment advice to existing investors that creates the appearance to ACTIVISION
NEVADA investors that their investment has/had value, which it does not. GOTHARD’s
scheme perpetuates the ACTIVISION NEVADA Scheme, leading investors to retain their
investments.
188. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of ACTIVISION NEVADA as defined by
Chapter 517, directly or indirectly, GOTHARD obtained money or property by means of untrue
statements of a material fact or omitted material facts necessary in order to make the statements
made, in the light of the circumstances under which they were made, not misleading, in violation
of Section 517.301(1)(a)(2), Florida Statutes. Beginning on a date unknown and known only by
the Defendants, but no later than June, 2006, and continuing until a date unknown to the
DEPARTMENT and known only by the Defendants , GOTHARD obtained monies for AMD
from investors by misrepresenting to investors the extent of ACTIVISION NEVADA’s sales, its
operation, that its products worked, its manufacturing capabilities, its locations, its business
partnerships or relationships, its investors’ rates of return, its stock price, that it had a pending
initial public offering, and customer demand for their (non-working) products.
189. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION NEVADA was
worthless, and that GOTHARD was operating multiple schemes in violation of Section
Complaint Page 70 of 85
517.301(1)(c), Florida Statutes. GOTHARD created false writings and documents and used
them, such as Exhibit 3, which was a copy of the same false documents used in the AMD
Scheme. GOTHARD also made false statements or representations during the execution of the
ACTIVISION NEVADA Scheme that concealed the AMD Scheme and the ACTIVISION
DELAWARE Scheme. GOTHARD knew these writings and documents and statements were
false. GOTHARD also created multiple domestic companies with the name “Activision TV,
Inc.” that served to confuse investors and hide his schemes, and secretly moved assets across
these entities.
190. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security in ACTIVISION DELAWARE as defined by
Chapter 517, Florida Statutes, directly or indirectly, GOTHARD employed devices, schemes, or
artifices to defraud, in violation of Section 517.301(1)(a)(1), Florida Statutes. GOTHARD
operated the ACTIVISION DELAWARE Scheme beginning on a date unknown to the
DEPARTMENT and known only by the Defendants, but no later than January, 2006, and
continuing until the present. The ACTIVISION DELAWARE Scheme, set forth more fully
above in Section V.C., was structured so as to give the appearance to potential/existing investors
that ACTIVISION DELAWARE was positioned to reap profits from the value of the Patents and
other products using the Patents. Based on these representations, investors invested monies in
the ACTIVISION DELAWARE Scheme until a date unknown to the DEPARTMENT and
known only by the Defendants, but no later than August, 2011. While operating the
ACTIVISION DELAWARE Scheme, GOTHARD then operated the ACTIVISION NEVADA
Scheme, which was designed to reap the same alleged profits from the same Patents.
GOTHARD continues to employ this scheme to the present. By continuing to perpetuate the
Complaint Page 71 of 85
ACTIVISION DELAWARE Scheme, GOTHARD gives investment advice to existing investors
that creates the appearance to AMD investors that their investment has/had value, which it does
not. GOTHARD’s scheme perpetuates the ACTIVISION DELAWARE Scheme, leading
investors to retain their investments. GOTHARD also solicited funds on behalf of ACTIVISION
DELAWARE (including investors B.B., D.T., K.M.) in 2010 and 2011. GOTHARD told these
investors they were buying stock in ACTIVISION DELAWARE. GOTHARD then deposited
these funds from the investors of ACTIVISION DELAWARE (including the funds of investors
B.B., D.T., K.M.) into his personal banking account, and did not record any of these investments
in the corporate records of ACTIVISION DELAWARE. He then spent these monies for his own
personal use.
191. In connection with the rendering of investment advice or in connection with the offer,
sale, or purchase of any investment or security of ACTIVISION DELAWARE as defined by
Chapter 517, directly or indirectly, GOTHARD obtained money or property by means of untrue
statements of a material fact or omitted material facts necessary in order to make the statements
made, in the light of the circumstances under which they were made, not misleading, in violation
of Section 517.301(1)(a)(2), Florida Statutes. Beginning on a date unknown and known only by
the Defendants, but no later than May, 2007, and continuing until a date unknown to the
DEPARTMENT and known only by the Defendants, but no later than August, 2011, GOTHARD
obtained monies for ACTIVISION DELAWARE from investors by misrepresenting to investors
the extent of ACTIVISION DELAWARE’s sales, its operation, that its products worked, the
identities of its customers, its manufacturing capabilities, its locations, its business partnerships
or relationships, its investors’ rates of return, its intellectual property portfolio, that it had a
pending initial public offering, the timing of returns and payoff dates, customer demand for their
Complaint Page 72 of 85
(non-working) products, interest in ACTIVISION DELAWARE by foreign investors, the extent
to which they performed product testing, and other companies’ interest in acquiring
ACTIVISION DELAWARE. GOTHARD also deposited investors’ funds (including the funds
of investor B.B., D.T., K.M.) and into his personal banking account, and did not record any of
these investments in the corporate records of ACTIVISION DELAWARE. He then spent these
monies for his own personal use.
192. Beginning on a date unknown and known only by the Defendants, but no later than
January 2006, and continuing until the present, GOTHARD knowingly and willfully concealed
or covered up, by his schemes, a material fact that GOTHARD was operating multiple schemes
in violation of Section 517.301(1)(c), Florida Statutes. GOTHARD created false writings and
documents and used them, such as Exhibits 4-8, and also made false statements or
representations during the execution of the ACTIVISION DELAWARE Scheme that concealed
the AMD Scheme and the ACTIVISION DELAWARE Scheme. GOTHARD knew these
writings and documents and statements were false.
193. Beginning on a date unknown and known only by the Defendants, but no later than
August, 2011, and continuing until January, 2012, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION DELAWARE was
not a viable investment in violation of Section 517.301(1)(c), Florida Statutes, and that AMD
and ACTIVISION NEVADA had interests in the Patents. GOTHARD created false writings and
documents and used them, and also made false statements or representations during the
execution of the ACTIVISION DELAWARE Scheme, holding out “Activelight, LLC” (upon
information and belief, ACTIVELIGHT TV), ADCO Financial, ACTIVISION NEVADA,
ACTIVISION FLORIDA, and AMD to be subsidiaries of the ACTIVISION DELAWARE and
Complaint Page 73 of 85
to artificially inflate the size and sophistication of ACTIVISION DELAWARE. GOTHARD
knew these writings and documents and statements were false.
194. Unless the Count IV Defendants are permanently enjoined from engaging further in the
acts and practices alleged herein, the continued activities of the Count IV Defendants will result
in irreparable injury to the public for which there is no adequate remedy at law. The public
interest also favors the entry of injunctive relief to protect the public and investors from the
Count IV Defendants’ fraudulent scheme.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Entry of judgment in its favor against the Count IV Defendants;
B. Permanently enjoin current and future violations of Chapter 517, Florida Statutes, by the
Count IV Defendants, freezing the bank accounts of the Count IV Defendants;
C. Entering other injunctive relief, including restitution and disgorgement of any ill-gotten
gain by the Count IV Defendants;
D. Assess the maximum civil penalties against the Count IV Defendants under Section
517.191(4), Florida Statutes;
E. Order the dissolution of the Count IV Defendants;
F. Award attorneys’ fees and costs to Plaintiff;
G. Order such other and further relief that this Court deems just and proper.
COUNT V: VIOLATIONS OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT
(Section 501.201 et seq., Florida Statutes) (Defendants GOTHARD, ACTIVISION DELAWARE, AMD, LCG, ACTIVISION FLORIDA, ACTIVISION NEVADA, ADCO FINANCIAL, and ACTIVELIGHT
TV)
195. This is an alternative count to Count IV for multiple violations of the Florida Deceptive
and Unfair Trade Practices Act, Section 501.201 et seq., Florida Statutes, against Defendants
Complaint Page 74 of 85
GOTHARD, ACTIVISION DELAWARE, AMD, LCG, ACTIVISION FLORIDA, ACTIVISION
NEVADA, ADCO FINANCIAL, and ACTIVELIGHT TV (hereafter for purposes of Count V the
“Count V Defendants”). This action is in excess of $15,000, exclusive of attorneys’ fees and
costs. Should the investments or securities described in paragraphs 184 through 193 not qualify
as an “investment” under Section 517.301(2), Florida Statutes, or a “security” under Section
517.021(21), Florida Statutes, then the conduct described in Count IV is a violation of the
Florida Deceptive and Unfair Trade Practices Act.
196. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
197. Section 501.204(1), Florida Statutes, declares that unfair or deceptive acts or practices in
the conduct of any trade or commerce are unlawful.
198. The Count V Defendants have committed the following acts or practices that are unfair,
deceptive, or unconscionable in willful violation of Chapter 501, Part II, Florida Statutes:
a. GOTHARD employed devices, schemes, or artifices to defraud, in violation of
Section 501.204(1), Florida Statutes. GOTHARD operated the AMD Scheme beginning
on a date unknown and known only by the Defendants, but no later than September 2003,
and continuing until the present. The AMD Scheme, set forth more fully above in
Section V.A., was structured so as to give the appearance to potential/existing investors
that AMD was positioned to reap profits from the value of the Patents and other products
using the Patents. Based on these representations, investors invested monies in the AMD
Scheme until a date unknown to the DEPARTMENT and known only by the Defendants,
but no later than March, 2007. While operating the AMD Scheme, GOTHARD then
operated other schemes designed to reap the same alleged profits from the same Patents,
Complaint Page 75 of 85
and transferred Patents outside of any licenses AMD had. GOTHARD continues to
employ this scheme to the present. By continuing to perpetuate the AMD Scheme,
GOTHARD gives investment advice to existing investors that creates the appearance to
AMD investors that their investment has/had value, which it does not. GOTHARD’s
scheme perpetuates the AMD Scheme, leading investors to retain their investments.
b. GOTHARD obtained money or property by means of untrue statements of a material
fact or omitted material facts necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading, in violation of Section
501.204(1), Florida Statutes. Beginning on a date unknown and known only by the
Defendants, but no later than September 2003, and continuing until a date unknown to the
DEPARTMENT and known only by the Defendants, but no later than March, 2007,
GOTHARD obtained monies for AMD from investors by misrepresenting to investors
the extent of AMD’s sales, its operation, that its products worked, the identities of its
customers, its manufacturing capabilities, its locations, its business partnerships or
relationships, its investors’ rates of return, its intellectual property portfolio, that it had a
pending initial public offering, the safety of investing in AMD, the timing of returns and
payoff dates, that AMD had a religious mission, customer demand for their (non-
working) products, interest in AMD by foreign investors, the extent to which they
performed product testing, and other companies’ interest in acquiring AMD.
c. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that AMD was worthless, and
that GOTHARD was operating multiple schemes in violation of Section 501.204(1),
Complaint Page 76 of 85
Florida Statutes. GOTHARD created false writings and documents and used them, such
as Exhibits 1 and 2, and also made false statements or representations during the
execution of the AMD Scheme that concealed the ACTIVISION NEVADA Scheme and
the ACTIVISION DELAWARE Scheme. GOTHARD knew these writings and
documents and statements were false.
d. GOTHARD employed devices, schemes, or artifices to defraud, in violation of
Section 501.204(1), Florida Statutes, with respect to ACTIVISION NEVADA investors.
GOTHARD operated the ACTIVISION NEVADA Scheme beginning on a date unknown
and known only by the Defendants, but no later than May, 2006, and continuing until the
present. The ACTIVISION NEVADA Scheme, set forth more fully above in Section
V.B., was structured so as to give the appearance to potential investors that ACTIVISION
NEVADA was positioned to reap profits from the value of the Patents and other products
using the Patents. Based on these representations, investors invested monies in the AMD
Scheme until a date unknown to the DEPARTMENT and known only by the Defendants,
but no later than June, 2006. While operating the ACTIVISION NEVADA Scheme,
GOTHARD then operated other schemes designed to reap the same alleged profits from
the same Patents, and transferred Patents outside of any licenses ACTIVISION
NEVADA had. GOTHARD continues to employ this scheme to the present. By
continuing to perpetuate the ACTIVISION NEVADA Scheme, GOTHARD gives
investment advice to existing investors that creates the appearance to ACTIVISION
NEVADA investors that their investment has/had value, which it does not. GOTHARD’s
scheme perpetuates the ACTIVISION NEVADA Scheme, leading investors to retain
their investments.
Complaint Page 77 of 85
e. GOTHARD obtained money or property from ACTIVISION NEVADA investors by
means of untrue statements of a material fact or omitted material facts necessary in order
to make the statements made, in the light of the circumstances under which they were
made, not misleading, in violation of Section 501.204(1), Florida Statutes. Beginning on
a date unknown and known only by the Defendants, but no later than June, 2006, and
continuing until a date unknown to the DEPARTMENT and known only by the
Defendants , GOTHARD obtained monies for AMD from investors by misrepresenting to
investors the extent of ACTIVISION NEVADA’s sales, its operation, that its products
worked, its manufacturing capabilities, its locations, its business partnerships or
relationships, its investors’ rates of return, its stock price, that it had a pending initial
public offering, and customer demand for their (non-working) products.
f. Beginning on a date unknown and known only by the Defendants, but no later than
September 2003, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION NEVADA
was worthless, and that GOTHARD was operating multiple schemes in violation of
Section 501.204(1), Florida Statutes. GOTHARD created false writings and documents
and used them, such as Exhibit 3, which was a copy of the same false documents used in
the AMD Scheme. GOTHARD also made false statements or representations during the
execution of the ACTIVISION NEVADA Scheme that concealed the AMD Scheme and
the ACTIVISION DELAWARE Scheme. GOTHARD knew these writings and
documents and statements were false. GOTHARD also created multiple domestic
companies with the name “Activision TV, Inc.” that served to confuse investors and hide
his schemes, and secretly moved assets across these entities.
Complaint Page 78 of 85
g. GOTHARD employed devices, schemes, or artifices to defraud in violation of
Section 501.204(1), Florida Statutes, with respect to investors in ACTIVISION
DELAWARE. GOTHARD operated the ACTIVISION DELAWARE Scheme beginning
on a date unknown to the DEPARTMENT and known only by the Defendants, but no
later than January, 2006, and continuing until the present. The ACTIVISION
DELAWARE Scheme, set forth more fully above in Section V.C., was structured so as to
give the appearance to potential/existing investors that ACTIVISION DELAWARE was
positioned to reap profits from the value of the Patents and other products using the
Patents. Based on these representations, investors invested monies in the ACTIVISION
DELAWARE Scheme until a date unknown to the DEPARTMENT and known only by
the Defendants, but no later than August, 2011. While operating the ACTIVISION
DELAWARE Scheme, GOTHARD then operated the ACTIVISION NEVADA Scheme,
which was designed to reap the same alleged profits from the same Patents. GOTHARD
continues to employ this scheme to the present. By continuing to perpetuate the
ACTIVISION DELAWARE Scheme, GOTHARD gives investment advice to existing
investors that creates the appearance to AMD investors that their investment has/had
value, which it does not. GOTHARD’s scheme perpetuates the ACTIVISION
DELAWARE Scheme, leading investors to retain their investments. GOTHARD also
solicited funds on behalf of ACTIVISION DELAWARE (including investors B.B., D.T.,
K.M.) in 2010 and 2011. GOTHARD told these investors they were buying stock in
ACTIVISION DELAWARE. GOTHARD then deposited these funds from the investors
of ACTIVISION DELAWARE (including the funds of investors B.B., D.T., K.M.) into
his personal banking account, and did not record any of these investments in the
Complaint Page 79 of 85
corporate records of ACTIVISION DELAWARE. He then spent these monies for his
own personal use.
h. GOTHARD obtained money or property from ACTIVISION DELAWARE investors
by means of untrue statements of a material fact or omitted material facts necessary in
order to make the statements made, in the light of the circumstances under which they
were made, not misleading, in violation of Section 501.204(1), Florida Statutes.
Beginning on a date unknown and known only by the Defendants, but no later than May,
2007, and continuing until a date unknown to the DEPARTMENT and known only by
the Defendants, but no later than August, 2011, GOTHARD obtained monies for
ACTIVISION DELAWARE from investors by misrepresenting to investors the extent of
ACTIVISION DELAWARE’s sales, its operation, that its products worked, the identities
of its customers, its manufacturing capabilities, its locations, its business partnerships or
relationships, its investors’ rates of return, its intellectual property portfolio, that it had a
pending initial public offering, the timing of returns and payoff dates, customer demand
for their (non-working) products, interest in ACTIVISION DELAWARE by foreign
investors, the extent to which they performed product testing, and other companies’
interest in acquiring ACTIVISION DELAWARE. GOTHARD also deposited investors’
funds (including the funds of investor B.B., D.T., K.M.) and into his personal banking
account, and did not record any of these investments in the corporate records of
ACTIVISION DELAWARE. He then spent these monies for his own personal use.
i. Beginning on a date unknown and known only by the Defendants, but no later than
January 2006, and continuing until the present, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that GOTHARD was operating
Complaint Page 80 of 85
multiple schemes in violation of Section 501.204(1), Florida Statutes. GOTHARD
created false writings and documents and used them, such as Exhibits 4-8, and also made
false statements or representations during the execution of the ACTIVISION
DELAWARE Scheme that concealed the AMD Scheme and the ACTIVISION
DELAWARE Scheme. GOTHARD knew these writings and documents and statements
were false.
j. Beginning on a date unknown and known only by the Defendants, but no later than
August, 2011, and continuing until January, 2012, GOTHARD knowingly and willfully
concealed or covered up, by his schemes, a material fact that ACTIVISION
DELAWARE was not a viable investment in violation of Section 501.204(1), Florida
Statutes, and that AMD and ACTIVISION NEVADA had interests in the Patents.
GOTHARD created false writings and documents and used them, and also made false
statements or representations during the execution of the ACTIVISION DELAWARE
Scheme, holding out Activelight, LLC (upon information and belief, ACTIVELIGHT
TV), ADCO Financial, ACTIVISION NEVADA, ACTIVISION FLORIDA, and AMD
to be subsidiaries of the ACTIVISION DELAWARE and to artificially inflate the size
and sophistication of ACTIVISION DELAWARE. GOTHARD knew these writings and
documents and statements were false.
k. GOTHARD committed theft of investor funds pursuant to Fla. Stat. § 812.014(1) by
knowingly obtaining money from investors with the intent to either temporarily or
permanently deprive the persons of the money and appropriate the money to his own use
or the use of others not entitled to the use of the money.
Complaint Page 81 of 85
199. The acts and practices of the Count V Defendants have caused injury, damages, and
prejudice to consumers and the public and constitute unconscionable acts or practices or unfair or
deceptive acts and trade practices within the intent and meaning of Section 501, Part II, Florida
Statutes.
200. Defendant GOTHARD is a direct participant in the activities of the Count V Defendants.
201. Unless the Count V Defendants are temporarily and permanently enjoined from engaging
further in the acts and practices alleged herein, the continued activities of Defendants will result
in irreparable injury to the public for which there is no adequate remedy at law. The public
interest also favors the entry of injunctive relief to protect the public and investors from the
Defendants’ fraudulent scheme.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Entering judgment in its favor and against the Count V Defendants;
B. Entering temporary and permanent injunctions enjoining current and future violations of
Chapter 501, freezing Defendants’ bank accounts;
C. Appointing a receiver;
D. Entering other injunctive relief;
E. Assessing civil penalties against Defendants;
F. Ordering disgorgement of the proceeds received by the Count V Defendants;
G. Ordering divestment or forfeiture of assets;
H. Ordering restitution;
I. Awarding damages;
J. Dissolving the Count V business-entity Defendants;
K. Awarding attorneys’ fees and costs to Plaintiff, and
Complaint Page 82 of 85
L. Such other and further relief that this Court deems just and proper.
COUNT VI: VIOLATIONS OF THE FLORIDA ANTI-FENCING ACT (Section 812.014, Florida Statutes)
(Defendant GOTHARD)
202. This is a claim for civil relief for violation of Section 812.014, Florida Statutes, against
Defendant GOTHARD.
203. Plaintiff realleges and incorporates by reference herein the allegations contained in
paragraphs 1 through 159, above.
204. Beginning on a date unknown and known only by the Defendants, but no later than April,
2011, and continuing until a date unknown to the DEPARTMENT and known only by the
Defendants, but no earlier than August, 2011, GOTHARD solicited funds on behalf of
ACTIVISION DELAWARE (including investors B.B., D.T., K.M.). GOTHARD told these
investors they were buying stock in ACTIVISION DELAWARE. Investors B.B., D.T., and
K.M. believed they were buying stock in ACTIVISION DELAWARE.
205. GOTHARD then knowingly obtained or used, or endeavored to obtain or use, the
property of investors B.B., D.T., and K.M. with intent to, either temporarily or permanently,
deprive these investors of a right to his property or a benefit therefrom, or appropriate the
property to GOTHARD’s own use or to the use of a person not entitled thereto, in violation of
Section 812.014, Florida Statutes.
206. GOTHARD deposited these funds from the investors of ACTIVISION DELAWARE
(including the funds of investors B.B., D.T., K.M.) into his personal banking account, and did
not record any of these investments in the corporate records of ACTIVISION DELAWARE. He
then spent these monies for his own personal use.
WHEREFORE, the DEPARTMENT requests the following relief:
A. Order divestiture of GOTHARD of any interest in any enterprise; Complaint
Page 83 of 85
B. Permanently enjoin GOTHARD from engaging in any activities involving or connected
with the solicitation and collection of investments or securities;
C. Permanently enjoin GOTHARD from violating, aiding or abetting the violation of, and
conspiring to violate any provisions of the Florida Anti-Fencing Act;
D. Impose reasonable restrictions upon the future activities or investments of GOTHARD,
including, but not limited to, prohibiting GOTHARD from engaging in the same type of
endeavor as the enterprise in which GOTHARD was engaged in;
E. Order the dissolution of the enterprise;
F. Order forfeiture of all property, including the Patents and cash, used in the course of,
derived from, or realized through the conduct of GOTHARD, subject to the rights of any
innocent persons duly established in this cause, pursuant to Section 812.035(2), Florida Statutes;
G. Order GOTHARD to divest or disgorge any ill-gotten proceeds;
H. Retain jurisdiction to direct the proper distribution of the proceeds of forfeiture pursuant
to Section 812.035, Florida Statutes;
I. Award other relief the Court deems appropriate.
JURY TRIAL DEMAND
Plaintiff hereby demands a trial by jury on all issues so triable.
///
Complaint Page 84 of 85
PAMELA JO BONDI Attorney General s/ Nicholas J. Weilhammer Nicholas J. Weilhammer Assistant Attorney General FBN 479322 R. Scott Palmer Chief of Complex Enforcement FBN 220353 Office of the Attorney General PL-01 The Capitol Tallahassee, Florida 32399-1050 Telephone: (850)414-3300 Facsimile: (850) 488-9134 Primary: Nicholas.Weilhammer@myfloridalegal.com Secondary: Kelly.LaMendola@myfloridalegal.com
Complaint Page 85 of 85
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