The United States Securities and Exchange Commission initiated a review of my company, SB Capital, in 2011 based upon a past investor's complaint. The investor, Lee Emerson, had lost seven lawsuits against me or SB Capital (her own, or on behalf of investors that she represented). Angry, bitter, and I think clinically crazy, she then went on a letter writing campaign to SEC for 18 months. SEC never informed me of this, and I had no opportunity to rebut false information that she presented to SEC during that period (you can validate this information if you like by researching court filings from 2010 - 2011 against SB Capital, or against Mark Feathers). As background, my company, SB Capital, formed and managed a nationally licensed Small Business Administration ("SBA") guaranteed direct lender, called "Small Business Capital". From 2010, when we were first licensed, to 2012, when our operations were interrupted, we made approximately $110 million in small business loans around the United States.
In June 2012 SEC initiated a civil complaint in San Jose Federal District Court. SEC did this under seal. Not a single financial illustration about my investment funds were accurate. It was perjury, in fact, on the part of SEC's certified public accountant, as SEC's "expert (and sole) witness", who manufactured blatantly false information. Through Freedom of Information Act filings I demonstrated to the courts that SEC's CPA had full awareness that his sealed financial representations were false, grossly misleading, and perjury. The actual legal term to describe his actions were "judicial deception". Two federal judges and magistrates (Paul Grewal and Paul Whyte) later ruled that SEC's CPA, Roger Boudreau, as well as the SEC and all of its employees (including its prosecutors in my civil actions) had full and complete sovereign immunity for every one of their false and grossly misleading sealed filings. Whyte then retired after he ruled against me. The perjury of SEC's CPA and the federal equity receiver - employed under seal - allowed my assets and $45 million of my investor's monies to be seized. Even worse, the court ruled in the first ten days after the sealed filings that I would not be allowed legal fees. Without a securities attorney and my own CPA to assist me, and with no prior legal experience, it took me three months to process filings ON MY OWN with the court of the scope and depth of the perjury. The court ordered that $200,000 in legal fees be held in reserve to reimburse me for my legal fees, "should I win the case" (while doing so on my own, and without an attorney. If you do a records search you'll find that no individual appears to have ever been allowed to go to a trial by a federal judge against the SEC while representing themself. It's a rigged system).
After SEC lost a very serious motion against me for "witness tampering" in federal court (SEC initiated this motion because I actually talked to my investors and told them the truth after our operations were halted...at the hearing I was forced to represent myself at the hearing without benefit of any counsel). I also showed the court that SEC falsely represented - under seal where it could not be seen or disputed - their requested federal equity receiver as a "licensed CPA", and I also showed that the receiver had also falsely advertised himself as such, with SEC's knowledge. Shortly after losing the witness tampering motion, and losing another motion to try to force my wife to testify unwillingly against me, SEC then also lost to me at my personal bankruptcy trial, where I once again represented myself without any attorney. The bankruptcy trial was forced because I contested SEC's lien from its civil action against me, and because I was also forced to go through this process in order to avoid a foreclosure on my family's home of 17 years). My investors submitted hundreds of filings and letters for several years' time, writing the court stating their belief in gross misconduct of SEC, and the receiver, and asked that the funds be returned to my control.
I drew SEC's ire time, and time again. The solution to this for SEC was that it then provided the same false information to the U.S. Department of Justice, which then convened a sealed grand jury proceeding using this same false information, which then indicted me. (You can validate all of my assertions by researching federal court records using my name or SB Capital),.
So, I was represented for the next two years by a career public offender, Rita Bosworth, a Stanford Law School grad with an outsized ego, who refused my request to admit in court hearings that she had no prior experience in accounting law, or in securities law. After incarceration in maximum security prisons for 14 months, wearing shackles from head to toe for many, many days and weeks, and after subsisting on food that should not even be served to a disease infested rat during all of that period (cold disgusting thick-sliced bologna sandwiches served for more than 400 straight evenings), and while being incarcerated for crimes which I did not commit, I finally accepted a "plea", under the advice of newly appointed counsel. For, I also learned during my 14 months how rigged the federal legal process is against defendants with a public defender.
Why did I take a plea for a crime which I did not commit? I did this rather than face a 65% or greater chance of losing at trial, and being sentenced to ten or more years prison, according to published federal statistics readily obtained, and because:
1. Juries immediately assume guilt of any party that has been charged by the government.
2. My legal team would be outnumbered by the government's legal team by 3:1
3. All government prosecutors and government witnesses have essentially full immunity for every false statement that they make in court.
Offered a "plea" of as low as 21 months time, and with 14 months time served already behind me, and with a credit for "good conduct" of several more months, it was a no-brainer to accept a "plea" for a crime manufactured by the government for the purposes of a sentencing hearing. The assistant U.S. attorney, Timothy Lucy, prosecuting my case actually quit (in disgust with the system it appears) after I accepted my plea and before my sentencing hearing.
Not a single investor, of more than 300 investors, showed up at my sentencing hearing for a single count of "mail fraud" to say a single negative thing about me. The judge paid no heed to that fact. Mail fraud is a catch-all term, by the way, employed by the government (along with "wire fraud" and "conspiracy" often at times when there is no actual evidence of wrongdoing but they cannot back out of a situation for embarrassment and due to time and government taxpayer monies wasted).
Anyways, my family was broken up, my house was lost, and my business destroyed. I took a plea in order to be re-united with my teenage boys as soon as possible, not when they were in their twenties, and rather than stand my ground with the odds against me in a court of law where the facts are only those presented to a jury with no experience in accounting or securities law, and provided by federal employees and prosecutors with immunity for every past, present, and future lie.
I was incarcerated around the country from 2017 through 2019, and released in July 2019. I have a 100% service (US Navy) connected VA disability rating. Despite this, and despite 20+ years of documented medical history, the US Bureau of Prisons withheld my medical treatment for more than five months when I reported from a maximum security pre-trial prison to a "camp" in Atwater, CA. I filed a formal protest. Five months later, and after full blown symptoms of my medical condition (psoriatic arthritis) at their worst pain levels (9 out of 10), medical treatment was initiated, but I was rewarded for my formal protest by being shipped over the next three weeks in full body shackles by diesel bus and erratic back and forth flights around the country, through federal prison facilities in Southern California, Oklahoma City, and Chicago. I was placed into the "general population" of violent drug and organized crime offenders during that period, and warned by others that if I released my non-violent background to the hardened criminals that I traveled with, I would be shanked out of jealousy and resentment. So I kept my mouth shut during that three week travel period of shackles covering me head to foot, when I was often also shackled to prisoners adjacent to me as well. Visualize trying to even go to the bathroom with those circumstances.
I am a nationally recognized SBA lending expert. During my litigation period I gained additional experience turning around several companies in bankruptcy or near-bankruptcy. have resumed SBA consulting to banks and credit unions, and marketing consulting to small businesses. I am also co-authoring a book in an area of consumer behavioral economics which should be published early next year. With the support of family and friends, I am making good progress getting back on my feet.
That's my story.