IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT … · IN THE CIRCUIT COURT OF THE TWENTIETH...

First Amended Complaint

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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. 2014-ca-2774

FIRST AMENDED 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:

Filing # 33349133 E-Filed 10/16/2015 03:50:29 PM


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I. INTRODUCTION

2. The Defendants engaged in a pattern of racketeering and other illegal activity in Florida

from at least 2003 until the present as set forth more fully below.

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. Unless otherwise indicated, all actions of

GOTHARD described in this Complaint occurred in, or emanated out of, Florida. 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”):

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


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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. CONNECT HDTV, INC. and ADCO FINANCIAL CORP., and ACTIVELIGHT

TV, LLC do not have any liquid assets;

e. 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 now severely under-capitalized. It has faced multiple

lawsuits from employees and/or independent contractors, vendors, and its agents for

unpaid bills. The few purported assets of ACTIVELIGHT, INC. (the Patents as

described more fully below) are so severely encumbered by a 24% interest-rate loan

(providing an income stream that benefited GOTHARD and not investors), that the assets

are essentially worthless;

g. GOTHARD admitted in the course of the DEPARTMENT’s pre-suit investigation

that LOCKE CONSULTING GROUP, INC. is his “doing business as” name;


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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 owes over $200,000 in back rent to their commercial landlord; 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.

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,


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2006. It was registered to transact business in the State of Florida on or about September 7,

2007. Its authority to transact business in the State of Florida was revoked on or about

September 25, 2015. Its headquarters and last known principal place of business is 5400 Yahl

Street, Suite C and/or D, Naples, Florida 34109. Unless otherwise indicated, all actions of

ACTIVISION DELAWARE described in this Complaint occurred in, or emanated out of,

Florida. 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. Unless otherwise indicated, all actions of

AMD described in this Complaint occurred in, or emanated out of, Florida. 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.” On or about February 23, 2015

(shortly after the filing of this lawsuit), AMD again withdrew its authority to transact business or


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conduct affairs in Florida. Its headquarters and last known principal place of business is 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 Adco Leasing, Inc., f/n/a Adco

Financial, Inc., f/n/a Activision TV, Inc.) (hereafter “ACTIVISION NEVADA”), a foreign

corporation, was incorporated in Nevada on or about October 23, 2000. Unless otherwise

indicated, all actions of ACTIVISION NEVADA described in this Complaint occurred in, or

emanated out of, Florida. ACTIVISION NEVADA had facilities in Naples, Florida, and

conducted its marketing and sales 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. Defendant AMD also held out ACTIVISION NEVADA to be a wholly-owned

subsidiary of AMD.

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


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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, and was to be a full service technology business for homes and

businesses, selling installations, computers, and repair and maintenance services to the home and

business market in the southern Florida.

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 wholly-owned subsidiary of ACTIVISION

DELAWARE that arranged financing for customer purchases. ACTIVISION NEVADA also

held out ADCO FINANCIAL to be a wholly-owned subsidiary of ACTIVISION NEVADA to

arrange financing for customer purchases. 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 last known

principal place of business is 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.


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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.

a. The Defendants are affiliated with numerous other business entities, which may

have participated in a pattern of racketeering conduct.

b. 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.

c. The undersigned deposed GOTHARD before filing suit pursuant to the

DEPARTMENT’s pre-suit investigatory powers; however, GOTHARD invoked his right

against self-incrimination and did not answer any substantive questions.

d. 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

GOTHARD and HETKOWSKI because they reside in Florida.

17. This Court has general jurisdiction pursuant to Section 48.193(2), Florida Statutes, over

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,


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this Court has specific jurisdiction pursuant to Section 48.193(1), Florida Statutes, over

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.

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 or owned at various times by GOTHARD,

LCG, AMD, ACTIVISION NEVADA, the Locke International Trusts (described in subsection

V.D.) and ACTIVISION DELAWARE:


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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 ACTIVISION DELAWARE as “generally relate[d] to

remote control digital signage technology.”

a. Beginning on a date unknown to the DEPARTMENT, but from at least 2010 to 2014,

GOTHARD, the Locke International Trust, and ACTIVISION DELAWARE have used

these patents to solicit the payment of monies from businesses across industries, including

restaurants, theaters, banks, hotels, and a motorcycle manufacturer.

b. As one example, in a demand letter to a restaurant (Glory Days Grill) dated March 15,

2013, Farney Daniels P.C. (agents of GOTHARD and ACTIVISION DELAWARE)


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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

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”).


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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.

a. 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, as set forth in Exhibits 1 and 2.

b. GOTHARD and AMD held out AMD as a corporation that could bring into

production and market a “multiple ad” Digital Plasma Display and Digital Plasma HDTV

System, as set forth in Exhibits 1 and 2.

c. According to GOTHARD and AMD, AMD would manufacture and market the

displays, as set forth in Exhibits 1 and 2.

d. According to GOTHARD and AMD, AMD would arrange lease/rental

agreements with customers, as set forth in Exhibits 1 and 2.

e. According to GOTHARD and AMD, these customers included supermarkets,

drug stores, and trade shows display companies, as set forth in Exhibits 1 and 2.

f. According to GOTHARD and AMD, AMD would pursue licensing and royalties

agreements using the Remote Control Electronic Display System Patents, as set forth in

Exhibits 1 and 2.

g. In reality, AMD has never had any revenues or facilities capable of manufacturing

these products on any profitable scale.


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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.

28. Beginning at a time unknown to the DEPARTMENT but known by GOTHARD and

AMD, 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 from at least 2003 until at least May 18,

2007.

a. AMD refers to itself as “AMD” in Exhibit 1 and Exhibit 2.

b. AMD was operating out of Naples, Florida at the time, and had its sales office in Naples,

Florida.

c. The DEPARTMENT does not know all the potential investors that received Exhibits 1

and 2, because the DEPARTMENT deposed GOTHARD during its pre-suit investigation of

all of the Defendants, but GOTHARD refused to answer any questions relating to the

operation of AMD on the grounds that his answers might incriminate him, and because the

DEPARTMENT subpoenaed records from AMD during the DEPARTMENT’s pre-suit

investigation that would include all copies of Exhibits 1 and 2, but AMD did not produce all

copies.

d. Upon information and belief, the initialism “AMD” was used intentionally by

GOTHARD and AMD from at least 2003 until at least May 18, 2007 to confuse investors in

a material way by conflating AMD with a well-known (and successful) technology company


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named Advanced Micro Devices, which is also commonly referred to as “AMD” and trades

under the New York Stock Exchange symbol “AMD.”

e. GOTHARD knew about the existence of the company named Advanced Micro Devices

because on or about February 15, 2011, ACTIVISION DELAWARE stated publicly that

ACTIVISION DELAWARE had “teamed up” with “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.

f. By creating investor confusion, GOTHARD and AMD gave the appearance to the

investing public that AMD was a legitimate business investment, as described throughout

this Complaint.

g. Further information is not available to the DEPARTMENT because the DEPARTMENT

deposed GOTHARD during its pre-suit investigation of all of the Defendants, but

GOTHARD refused to answer any questions relating to the operation of AMD on the

grounds that his answers might incriminate him.

30. Beginning on or about September, 2003, AMD and GOTHARD misrepresented to

potential investors, including investor R.N.,1 that the company was soon preparing to become a

publicly-traded company. GOTHARD would later use this sales technique scheme, known as a

“Pre-IPO” scheme (telling investors that a lucrative, initial public offering was forthcoming)

over the next decade to solicit investors in the AMD Scheme, the ACTIVISION NEVADA

Scheme, and the ACTIVISION DELAWARE Scheme, as set forth more fully below, to obtain

and use monies unlawfully.

1 The undersigned counsel is contemporaneously serving upon counsel for the Defendants a list of investors’ names used in this Complaint, by paragraph, pending the resolution of the DEPARTMENT’s Motion for Protective Order Under Section 517.2015(2), Florida Statutes (Dkt 55) (filed Feb. 6, 2015) (still pending).


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31. Beginning on or about September, 2003, AMD misrepresented the potential investment

returns of AMD, telling potential investors such as R.N. that AMD was a six-month slam dunk.

32. Beginning on or about September, 2003, AMD misrepresented the safety of investing in

AMD.

a. AMD told potential investor R.N. before R.N. invested in 2003 that AMD was “no risk”

and a “9 out of 10,” with “10” being the least risky.

b. On or about March, 2004, GOTHARD told investor E.W. in Florida (before E.W.

invested in AMD) that AMD was a “sure thing.”

33. Beginning on or about September, 2003, AMD misrepresented the timing of investment

returns, telling potential investors such as R.N. that they would receive their money back in 90

days.

34. Beginning on or about 2003, AMD and GOTHARD used GOTHARD’s connection with

religious organizations to target and solicit investors, such as R.N., R.L. and E.W., and made

material misrepresentations that AMD was going to spread “the gospel,” and also that proceeds

of AMD would go towards a church in Naples, Florida that he (and other investors such as R.L.

and E.W.) attended.

a. After receiving proceeds from churchgoers, GOTHARD stopped his attendance at church

and stopped communicating with these investors on or about 2005.

b. Further information is not available to the DEPARTMENT because the DEPARTMENT



grounds that his answers might incriminate him, and the DEPARTMENT has no record of

any religious institution receiving any proceeds from AMD.


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c. On a date unknown to the DEPARTMENT, but known by GOTHARD, GOTHARD

handed potential investor R.L. a brochure for the Activision System after church, telling

R.L. that “God told me to give this to you.” R.L. later invested in AMD on or about June,

2005.

d. Further information is not available to the DEPARTMENT because the DEPARTMENT



grounds that his answers might incriminate him, and refused to answer questions about the

identities of AMD investors.

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

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 (R.N.) 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. ACTIVISION DELAWARE, AMD, and GOTHARD commingled their debts.

a. As one example, AMD investor K.C. bought $5,000 in shares of AMD in 2005.

b. AMD did not keep any record of an investment by K.C. on its corporate books.


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c. After not hearing from AMD, K.C. demanded his investment back on or about

December, 2009.

d. On or about May 13, 2011, ACTIVISION DELAWARE, AMD, GOTHARD, and

HETKOWSKI acknowledged K.C.’s investment, referred to purchases of AMD stock as

“deposits,” and made the material misrepresentation to investor K.C. that he could get a

“refund” from ACTIVISION DELAWARE if he sent a certified letter requesting same.

e. ACTIVISION DELAWARE, AMD, GOTHARD, and HETKOWSKI then ignored

K.C.’s requests for a return of his investment from on or about May 13, 2011, until the

present.

f. The false statement was made by ACTIVISION DELAWARE, AMD, GOTHARD, and

HETKOWSKI.

g. ACTIVISION DELAWARE, AMD, GOTHARD, and HETKOWSKI knew or should

have known that the statement was false, because K.C.’s investment was not a deposit, and

because they had no intention of refunding K.C.’s investment, and have not refunded K.C.’s

investment.

h. The substance of the false statement was that investor K.C.’s investment was a deposit,

that he could have his money refunded to him.

i. The time frame in which the false statement to investor K.C. was made was on or about

May 13, 2011.

j. The context in which the statement was made was a request by an investor (K.C.) as to

the status of his investment and demand for his money back from companies AMD and/or

ACTIVISION DELAWARE, and company representatives GOTHARD and HETKOWSKI,


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who then gave the investor reassurances that his investment was recognized, safe, available,

and refundable.

k. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to answer any questions relating to the operation of ACTIVISION

DELAWARE or AMD on the grounds that his answers might incriminate him, and because

the DEPARTMENT subpoenaed records from ACTIVISION DELAWARE and AMD

during the DEPARTMENT’s pre-suit investigation, but ACTIVISION DELAWARE and

AMD did not produce or identify these communications relating to K.C. and ACTIVISION

DELAWARE and AMD.

38. Beginning at a time unknown to the DEPARTMENT but known by AMD and

GOTHARD, but no later than September, 2003, and continuing until the present, AMD and

GOTHARD solicited investors in AMD, but did not reveal GOTHARD’s criminal past involving

securities violations to investors of AMD.

39. AMD, ACTIVISION NEVADA, ACTIVISION DELAWARE, and GOTHARD created

multiple private placement memoranda to distribute to investors from at least March 1, 2004 (see

Exhibit 1) until at least March 1, 2009 (see Exhibit 8).

a. These memoranda contained material, false statements, and were repeatedly created by

AMD, ACTIVISION NEVADA, ACTIVISION DELAWARE, and GOTHARD to stimulate

investors’ interest and to give the impression that the operations of AMD, ACTIVISION

NEVADA, and ACTIVISION DELAWARE were legitimate. Upon information and belief,

the memoranda were created (detailing a bogus “offering” of shares) whenever AMD,

ACTIVISION NEVADA, ACTIVISION DELAWARE, and GOTHARD felt they could


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lure a large investor. This allegation is supported by the sheer number of memoranda that

were created, detailed more fully below.

b. The false statements in the memoranda were made by AMD, ACTIVISION NEVADA,

ACTIVISION DELAWARE, and GOTHARD.

c. The substance of the false statements is identified below in paragraphs 48, 68, 84, and 93.

d. AMD, ACTIVISION NEVADA, ACTIVISION DELAWARE, and GOTHARD knew, or

should have known, that these statements were false.

e. The time frame in which these false statements were made was from at least March 1,

2004 until at least March 1, 2009.

f. The context in which the statements were made was an offer by a company representative

(GOTHARD) and companies (AMD, ACTIVISION NEVADA, and ACTIVISION

DELAWARE), to potential investors and/or existing investors.

g. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to answer any questions relating to the operation of AMD,

ACTIVISION NEVADA or ACTIVISION DELAWARE on the grounds that his answers

might incriminate him. Also, the DEPARTMENT subpoenaed records from AMD,

ACTIVISION NEVADA (as a company named “Activision TV, Inc.”) and ACTIVISION

DELAWARE during the DEPARTMENT’s pre-suit investigation, but AMD and

ACTIVISION DELAWARE did not produce all of their memoranda, including Exhibit 8,

and ACTIVISION NEVADA did not produce any documents at all.

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


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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.”

d. AMD’s Research and Development Department was bringing to market its new

Digital HDTV product in the fall of 2004.


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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”).


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].”

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 . . . .”


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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 ACTIVISION

NEVADA and ACTIVISION DELAWARE, 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,

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.


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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; and

has not received any revenue from any of its products.

50. GOTHARD and AMD made material false representations about AMD’s business

relationships to investors on or about March 1, 2004 (see Exhibit 1) and on or about March 1,

2005 (see Exhibit 2), 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].”

a. The false statement was made by GOTHARD and AMD.

b. The substance of the false statement was that AMD had a business relationship with a

well-known and successful company (Fujitsu) and was working with Fujitsu on new, break-

through display technology, and that it was having ongoing discussions with Fujitsu to


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incorporate the Companies [sic] technology into their [sic] displays at the factory. The other

false statement was that a product appeared in the summer of 2004 before the 2004

Memorandum was written (in March, 2004).

c. GOTHARD and AMD knew, or should have known, that these statements were false.

d. The time frame in which the false statement was made was from on or about March 1,

2004 and March 1, 2005.

e. The context in which the statement was made was a financial solicitation by a company

representative (GOTHARD) and a company (AMD), to induce potential investors.

f. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to any questions relating to the operation of AMD or whether AMD

was working with Fujitsu on the grounds that his answers might incriminate him, and

because the DEPARTMENT subpoenaed records from AMD during the DEPARTMENT’s

pre-suit investigation, but AMD did not produce any documentation that supported any such

agreements with Fujitsu, or that GOTHARD or AMD had any technology that was

marketable to Fujitsu, or otherwise not already available to Fujitsu.

51. Beginning on a date unknown to the DEPARTMENT but known by AMD and

GOTHARD, but no later than 2005, GOTHARD and AMD made material false representations

to investors R.N. and K.C. about interest by other companies in acquiring AMD. When investors

made inquiries about the status of their investments in AMD, GOTHARD and AMD made false

representations, including false statements to R.N. and K.C. that Cisco, Microsoft, Intel and/or

Dell Computer were interested in acquiring AMD.



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b. The substance of the false statement was that Cisco, Microsoft, Intel and/or Dell

Computer was interested in acquiring AMD, when Cisco, Microsoft, Intel and/or Dell

Computer had no interest in acquiring AMD.


d. The time frame in which the false statement was made was from on or about 2005.

e. The context in which the statement was made was a financial solicitation by a company

representative (GOTHARD) and a company (AMD), to potential investors, as well as an

update by a company representative (GOTHARD) and a company (AMD), to existing

investors.



GOTHARD refused to answer any questions relating to the operations of AMD, or whether

he told any investors that Cisco, Microsoft, Intel and/or Dell Computer was interested in

acquiring AMD on the grounds that his answers might incriminate him, and because the

DEPARTMENT subpoenaed records from AMD during the DEPARTMENT’s pre-suit

investigation, but AMD did not produce any documentation that supported any such interest

by Cisco, Microsoft, Intel and/or Dell Computer.

52. GOTHARD and AMD made material misrepresentations to investors regarding the

number of products AMD was producing and its production capabilities, falsely stating to

investor R.N. on or before 2006 that it was producing 100 units a week at a production plant in

Ohio. When investor R.N. 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


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not ready. In the course of the DEPARTMENT’s investigation, AMD denied in 2014 that it ever

had a facility in Ohio.


b. The substance of the false statement was that AMD was producing, or had the capability

to produce, 100 units a week at a production plant in Ohio, when it did not.


d. The time frame in which the false statement was made was from on or about 2006.

e. The context in which the statement was made was an update by a company representative

(GOTHARD) and a company (AMD), to its investors.



GOTHARD refused to answer any questions relating to the operations of AMD, or that he

had told an investor that AMD had a facility capable of producing 100 units a week, on the

grounds that his answers might incriminate him, and because the DEPARTMENT

subpoenaed records from AMD during the DEPARTMENT’s pre-suit investigation, but

AMD specifically denied having a facility in Ohio.

53. Unbeknownst to investors of AMD, GOTHARD, ACTIVISION NEVADA and LCG

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 this

apparent transfer of intellectual property outside the exclusive license purportedly granted to

AMD, AMD continued to disburse stock certificates in AMD, and AMD unlawfully received

monies from AMD investors after April 28, 2006. The transfer of intellectual property outside of


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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 but known by HETKOWSKI,

GOTHARD, ACTIVISION NEVADA, AMD and ACTIVISION DELAWARE, but no later than

January 12, 2006, GOTHARD and ACTIVISION NEVADA began the ACTIVISION NEVADA

Scheme (detailed in the next subsection of this Complaint) in conjunction with the AMD Scheme

to increase the amount of money it obtained from investors, and to avoid the scrutiny of

securities regulators and investors.

a. While the ACTIVISION NEVADA Scheme was operating, AMD and GOTHARD

continued to receive AMD investor funds under the AMD Scheme until an unknown date,

but no earlier than March, 2007, while GOTHARD also ran the ACTIVISION NEVADA

Scheme.

b. Operating the ACTIVISION NEVADA Scheme in conjunction with the AMD Scheme

had the intent, and effect, of soliciting and receiving investors’ funds for two companies that

were supposed to perform the same functions, selling the same products, and had the same

intellectual property portfolio, without investors’ knowledge or approval of these competing

and conflicting interests.

c. After collecting monies from AMD investors, beginning on a date unknown but no later

than December, 2006, GOTHARD and AMD decided to wind down the AMD Scheme and

switch to the ACTIVISION DELAWARE Scheme, described in Section V.C.

d. By operating multiple schemes, GOTHARD has confused investors as to what has

happened to their investments:


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i. AMD investor R.R. (who is also GOTHARD’s commercial landlord for the

Alter Ego Defendants) believes, incorrectly, that AMD changed its name, and

became Activision TV, Inc., which then became “Activelight and AMD Global.”

ii. AMD investor K.C. believes, incorrectly, that AMD changed its name to

“Activision.TV” in 2006 or 2007.

iii. AMD investor, and former employee or independent contractor of AMD, J.C.

believes, incorrectly, that AMD changed its name to Activision in 2007.

e. The material false statements and omissions were made by GOTHARD, AMD and

ACTIVISION NEVADA to all of their respective investors during the time period in this

paragraph.

f. GOTHARD, AMD and ACTIVISION NEVADA knew, or should have known, that these

statements were false.

g. The substance of the false statements was that AMD and ACTIVISION NEVADA were

separately viable investment vehicles, and the omissions were to AMD and ACTIVISION

NEVADA investors that AMD and ACTIVISION NEVADA were receiving funds at the

same time for the same products and intellectual property portfolio.

h. GOTHARD, AMD, and ACTIVISION NEVADA were responsible for the omissions,

who gained additional funds than they would have absent the omission.

i. The time frame in which the false statements were made was from on or about January,

2006, until on or about March, 2007. The time frame in which the omissions were made

was from on or about January, 2006 until the present.

j. The context in which the statements were made was a financial solicitation by a company

representative (GOTHARD) and a company (AMD and ACTIVISION NEVADA), to all of


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their respective investors during this time period. The context in which the omissions were

made was a financial solicitation by a company representative (GOTHARD) and a company

(AMD and ACTIVISION NEVADA), to all of their respective investors during this time

period, as well as omissions by a company representative (GOTHARD) and a company

(AMD and ACTIVISION NEVADA) to all of its existing shareholders.

k. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to answer any questions relating to the operation of AMD,

ACTIVISION NEVADA, or ACTIVISION DELAWARE on the grounds that his answers

might incriminate him, and because the DEPARTMENT subpoenaed records from

ACTIVISION NEVADA during the DEPARTMENT’s pre-suit investigation, but

ACTIVISION NEVADA did not produce any records.

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 GOTHARD, AMD, and ACTIVISION


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NEVADA avoid detection. Employees of AMD automatically assumed the status of Activision

TV, Inc. employees.

58. In a sworn deposition given by GOTHARD in Naples, Florida, 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, and GOTHARD knew it was false. According to

AMD in its response to the DEPARTMENT’s pre-suit subpoena (submitted with a cover letter

under GOTHARD’s name and signature), AMD did not have any employees from May 17, 2007

“to the present” (where the response date was February, 2014). It also withdrew from

transacting business in Florida from January 11, 2008 until August 12, 2013, and has not

licensed anything to anyone for value.

B. The “ACTIVISION NEVADA Scheme”

59. GOTHARD began looking at using the name “Activision” in 1999. Upon information

and belief, GOTHARD chose the “Activision” name because it contains part of 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.

a. Throughout 2011, GOTHARD and ACTIVISION DELAWARE sent Business Plans

from Naples, Florida, to potential investors (including M.D.) in ACTIVISION


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DELAWARE, stating that ACTIVISION DELAWARE had a “great marketing advantage

and instantaneous brand awareness due to the wildly known Activision Blizzard Inc [sic]

games publisher name. Activision Blizzard Inc [sic] has revenues of $3 billion.

Discussions are in progress to obtain a significant payment for Activision Blizzard to

purchase the trademark from Activision TV.”

b. These Business Plans were sent to investors to entice them to invest in ACTIVISION

DELAWARE.

c. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to answer any questions relating to the operation ACTIVISION

DELAWARE on the grounds that his answers might incriminate him, and because the

DEPARTMENT subpoenaed records that would include these 2011 Business Plans from

ACTIVISION DELAWARE, but ACTIVISION DELAWARE did not produce them and

specifically denied having any investors or stock transactions in its corporate ledger after

2009. The DEPARTMENT only has a copy of these business plans, and knows the

identities of these 2011 investors, because it obtained them from investors.

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 ACTIVISION DELAWARE and ACTIVISION

FLORIDA). These three “Activision TV, Inc.” companies commingled funds, commingled bank

accounts, used their tax identification numbers interchangeably for corporate filings, and were

controlled by GOTHARD. Upon information and belief, GOTHARD, ACTIVISION NEVADA,

ACTIVISION DELAWARE, and ACTIVISION FLORIDA repeatedly used “Activision” in their


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corporate names to confuse investors, to hide monies and assets from investors, and to evade

detection, as set forth more fully in this Complaint.

61. Unbeknownst to the AMD investors, while the AMD Scheme was running GOTHARD

and ACTIVISION NEVADA were also running the same scheme under the name ACTIVISION

NEVADA beginning on a date unknown to the DEPARTMENT, but no later than January 12,

2006.

62. The transfer of the ‘411 and ‘736 Patents by GOTHARD, LCG, and ACTIVISION

NEAVADA to ACTIVISION NEVADA on or about April 28, 2006, without the knowledge of

AMD investors, gave credence to the ACTIVISION NEVADA Scheme for potential investors of

ACTIVISION NEVADA. ACTIVISION NEVADA marketed the intellectual property as a

valuable asset.

a. In a document titled “Business Overview 2006,” dated January 12, 2006, and sent to

potential investor J.M., ACTIVISION NEVADA described the ‘411 and the ‘736 patents as

“The Company’s issued patents . . . .”

b. There is no evidence that ACTIVISION NEVADA owned the ‘411 and the ‘736 patents

on January 12, 2006.

c. In response to interrogatories issued by the DEPARTMENT in this civil action,

ACTIVISION NEVADA served unsigned answers to these interrogatories on or about

September 21, 2015, falsely stating that “Activision Displays, Inc. was a shell Company and

had no interest in the Patents” and “Activision Displays, Inc. never owned Patents.”

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

(such as J.C.) entitled “Private Placement Memorandum,” which purported to offer “securities”


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in the form of “Convertible Debenture [sic] with Warrants,” with a $30,000 minimum

investment (hereafter “2006 Memorandum”).


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 during the DEPARTMENT’s pre-suit investigation. 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

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


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‘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:

a. The purported reason for incorporating ACTIVISION NEVADA was the same reason

also used by GOTHARD and AMD 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


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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. Just like the misrepresentations AMD made to its investors in 2004 and 2005,

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 to investor J.C. 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 any

interest.

a. ACTIVISION NEVADA has also issued stock to investors, including investor J.C. (who

owns 400,000 shares), but has not recorded any these transactions on its corporate records.

b. In response to interrogatories issued by the DEPARTMENT in this civil action,

ACTIVISION NEVADA served answers to these interrogatories on or about September 21,

2015, falsely stating that “[t]here were no shares issued in the name of Activision Displays,

Inc.” (where Activision Displays, Inc. was formerly known as Activision TV, Inc.).


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70. Due to the lack of production of any records of ACTIVISION NEVADA during the

DEPARTMENT’s pre-suit investigation, or discovery conducted to date, it is not possible to

quantify the number of investors or the extent or nature of their investments at this time. Further

information is not available to the DEPARTMENT because the DEPARTMENT deposed

GOTHARD during its pre-suit investigation of all of the Defendants, but GOTHARD refused to

answer any questions relating to the operation of ACTIVISION NEVADA on the grounds that

his answers might incriminate him. However, records obtained by the DEPARTMENT indicate

that ACTIVISION NEVADA received at least $300,000 from the ACTIVISION NEVADA

Scheme during its operation.

71. Unbeknownst to investors of AMD or ACTIVISION NEVADA, shortly after

ACTIVISION NEVADA unlawfully obtained investor monies, GOTHARD and ACTIVISION

NEVADA then transferred the ‘411 and ‘736 Patents out of ACTIVISION NEVADA on or

about October 6, 2006 “for $10,” and into GOTHARD’s name to begin the ACTIVISION

DELAWARE scheme.

a. GOTHARD used ACTIVISION NEVADA funds to pay for fees relating to the transfer

of the Patents into GOTHARD’s name.

b. After GOTHARD and ACTIVISION NEVADA transferred the Patents to GOTHARD

individually, GOTHARD continued to use ACTIVISION NEVADA’s accounts to pay for

fees related to the Patents, including during March and April, 2007.

c. Upon information and belief, switching to the ACTIVISION DELAWARE scheme

(detailed in the next subsection) avoided the scrutiny of federal and state regulators, and

helped GOTHARD, AMD, ACTIVISION NEVADA, and ACTIVISION DELAWARE

avoid further detection.


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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, through HETKOWSKI as its corporate Secretary, that the first date it transacted business

in Florida was September 1, 2007. ACTIVISION DELAWARE and HETKOWSKI knew this

statement was not true because it operated in Naples, Florida, since a date unknown, but no later

than January 1, 2007, according to Exhibit 5. ACTIVISION DELAWARE, through

HETKOWSKI as its corporate Secretary, did not apply to transact business in Florida as a

foreign corporation until on or about September 7, 2007.

74. Beginning at a time unknown to the DEPARTMENT but known by GOTHARD,

ACTIVISION NEVADA and/or ACTIVISION DELAWARE, but no later than on or about

December 2006, GOTHARD, ACTIVISION NEVADA and/or ACTIVISION DELAWARE

created and subsequently distributed a document to potential investors G.A., S.B., J.B., L.J., J.M.

and S.M., T.M., J.M. and A.M., P.M. and L.M., R.M., R.D., B.S., D.W., D.T., D.J., and J.M.,

and possibly others, entitled “Private Placement Memorandum,” which made material

representations to investors and purported to offer units of common stock at $1/unit (where each


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unit consists of one share of common stock), with a $20,000 minimum investment (hereafter

“December 2006 Memorandum”).

a. During the DEPARTMENT’s pre-suit investigation, ACTIVISION DELAWARE

represented to the DEPARTMENT that the December 2006 Memorandum related to

investors in ACTIVISION DELAWARE.

b. Monies from these investors were not placed into an escrow account in violation of the

terms of the December 2006 Memorandum (or in any Bank of America account). Nor were

the funds held until May 31, 2007 pending the outcome of the offering. Instead, the

investors’ funds were immediately deposited into ACTVISION NEVADA’s money market

and business accounts with Fifth Third Bank from December 16, 2006 until May, 2007.

i. HETKOWSKI and GOTHARD were signatories on these accounts as corporate

officers of ACTIVISION NEVADA, and immediately used these funds for their

own benefit.

ii. GOTHARD continued to use these ACTIVISION NEVADA funds to pay for

fees relating to the Patents, which he and ACTIVISION NEVADA had

transferred into GOTHARD’s name individually.

iii. These investors’ funds in ACTIVISION NEVADA accounts were also used to

pay debts of AMD on or about March, 2007.

c. Further information, such as the author or disseminator or date disseminated, is not

available to the DEPARTMENT because the DEPARTMENT deposed GOTHARD during

its pre-suit investigation of all of the Defendants, but GOTHARD refused to answer any

questions relating to the operation of ACTIVISION NEVADA or ACTIVISION



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DEPARTMENT subpoenaed all memoranda sent from ACTIVISION DELAWARE and

ACTIVISION NEVADA to investors during the DEPARTMENT’s pre-suit investigation,

but ACTIVISION DELAWARE and ACTIVISION NEVADA did not produce the entire

document.

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

ACTIVISION DELAWARE or ACTIVISION NEVADA during the DEPARTMENT’S pre-suit

investigation of all of the Defendants. The first page of the December 2006 Memorandum

purports to offer 2,000,000 shares of common stock of a company named “Activision TV, Inc.”

for $1.00 per share.

77. Beginning at a time unknown to the DEPARTMENT but known by ACTIVISION

DELAWARE, but no later than on or about January 1, 2007, ACTIVISION DELAWARE

created and subsequently distributed a document entitled “Private Placement Memorandum” to

potential investors, which made material representations to investors and 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”).

a. Further information, such as the date of dissemination or recipients of the January 2007

Memorandum, is not available to the DEPARTMENT because the DEPARTMENT deposed

GOTHARD during its pre-suit investigation of all of the Defendants, but GOTHARD

refused to answer any questions relating to the operation of ACTIVISION DELAWARE on

the grounds that his answers might incriminate him, and because the DEPARTMENT

subpoenaed all memoranda sent from ACTIVISION DELAWARE to investors during the


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DEPARTMENT’s pre-suit investigation, but ACTIVISION DELAWARE did not produce

all memoranda.

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 but known by ACTIVISION

DELAWARE, but no later than July 15, 2007, ACTIVISION DELAWARE created and

subsequently distributed a document entitled “Private Placement Memorandum,” which made

material representations to investors and 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”).

a. Further information, such as the date of dissemination or recipients of the July 2007

Memorandum, is not available to the DEPARTMENT because the DEPARTMENT deposed

GOTHARD during its pre-suit investigation of all of the Defendants, but GOTHARD

refused to answer any questions relating to the operation of ACTIVISION DELAWARE on

the grounds that his answers might incriminate him, and because the DEPARTMENT

subpoenaed all memoranda sent from ACTIVISION DELAWARE to investors during the


all memoranda.

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

adjustment.” The warrants are redeemable by ACTIVISION DELAWARE at $.05 per warrant if


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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.

i. The CIT is a plasma or LCD television with a small format computer (the

patented “Works-in-a-Box™”);


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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 unlawfully “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.

c. ACTIVISION DELAWARE had no intention of repaying any investors’ principal

through its licensing efforts.


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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 as set forth more fully

in this Complaint.

85. GOTHARD and ACTIVISION DELAWARE made material 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.

a. The false statements were made by GOTHARD and ACTIVISION DELAWARE to

investors, including E.J. and J.M.

b. The substance of the false statements was that ACTIVISION DELAWARE had

expanded its production capabilities in its Toledo (OH) facility, when it had not, and that it

“opened an office in the Washington DC area for Government [sic] contracts and patent

work” when it did not.

c. The time frame in which the false statements were made was from on or about August

24, 2007.

d. The context in which the statements were made was an update of the financial condition

of a company (ACTIVISION DELAWARE) by a company (ACTIVISION DELAWARE)


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and a company representative (GOTHARD) to investors, to create excitement among

investors and to get them to retain their investments.

e. Further information is not available to the DEPARTMENT because the DEPARTMENT




DEPARTMENT subpoenaed correspondence from ACTIVISION DELAWARE to investors

during the DEPARTMENT’s pre-suit investigation, but ACTIVISION DELAWARE did

not produce any copies of this document.

86. A true and accurate copy of the August 24, 2007 letter is attached as Exhibit 7 to this

Complaint.

87. In the August 24, 2007 letter, GOTHARD and ACTIVISION DELAWARE made the

following material false representations to investors such as E.J. and J.M. about ACTIVISION

DELAWARE and the extent of ACTIVISION DELAWARE’s partnerships with third persons 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;

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.


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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.

e. The false statements were made by GOTHARD and ACTIVISION DELAWARE to

investors, including E.J. and J.M.

f. The substance of the false statements was that ACTIVISION DELAWARE had the

partnerships listed in this paragraph, when it did not.

g. The time frame in which the false statements were made was from on or about August

24, 2007.

h. The context in which the statements were made was an update of the financial condition

of a company (ACTIVISION DELAWARE) by a company (ACTIVISION DELAWARE)

and a company representative (GOTHARD) to investors, to create excitement among

investors and to get them to retain their investments.

i. Further information is not available to the DEPARTMENT because the DEPARTMENT




DEPARTMENT subpoenaed correspondence from ACTIVISION DELAWARE to investors


not produce this document or any such third-party contracts.

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.


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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

during the DEPARTMENT’s pre-suit investigation.

91. The 2009 Memorandum sent by ACTIVISION DELAWARE to at least one investor

(J.C.) made material representations and purported 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

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.

a. Further information is not available to the DEPARTMENT because the DEPARTMENT




DEPARTMENT subpoenaed all memoranda from ACTIVISION DELAWARE to investors


not produce any version of this document.


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92. ACTIVISION DELAWARE made the following material representations in the 2009

Memorandum to at least one investor (J.C.) on or about March 1, 2009, the exact date being

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.”


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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 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


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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.”

m. Further information is not available to the DEPARTMENT, such as the number or

identity of the recipients, because the DEPARTMENT deposed GOTHARD during its pre-

suit investigation of all of the Defendants, but GOTHARD refused to answer any questions

relating to the operation of ACTIVISION DELAWARE on the grounds that his answers

might incriminate him, and because the DEPARTMENT subpoenaed all memoranda from

ACTIVISION DELAWARE to investors during the DEPARTMENT’s pre-suit


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investigation, but ACTIVISION DELAWARE did not produce any version of this

document.

93. The material statements made by ACTIVISION DELAWARE in paragraph 92 to

investor J.C., or to any other investor, from the 2009 Memorandum were not 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.

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 in 2012, 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.


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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 being

negotiated. It was not going to “continue” with new installations in Hawaii, mainland U.S.,

the Caribbean, or Europe, because it did not have any installations.

k. ACTIVISION DELAWARE’s valuation was grossly overstated and had no reasonable

basis in fact.

l. ACTIVISION DELAWARE knew, or should have known, that the statements in

paragraph 92 were false.

m. The context in which these statements were made was to potential investors (such as J.C.)

by a company (ACTIVISION DELAWARE) in order to solicit an investment.

n. Further information is not available to the DEPARTMENT because the DEPARTMENT




DEPARTMENT subpoenaed records from ACTIVISION DELAWARE during the


this memorandum, and the documents it did produce do not support any of the assertions

made in this paragraph by ACTIVISION DELAWARE to any investors, including J.C.


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94. On or about October 13, 2009, HETKOWSKI sent a letter invitation to a limited number

of ACTIVISION DELAWARE investors, including R.M. and C.R., for an informal stockholder

meeting on or about October 25, 2009, in her capacity as Secretary of ACTIVISION

DELAWARE. HETKOWSKI listed her return address as Naples, Florida. The purpose of the

October 25, 2009, meeting was to discuss the performance of “Activision.”

a. In her October 13, 2009 letter, 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.

b. At the meeting, at least one investor (E.J.) was told by ACTIVISION DELAWARE 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.

c. The material, false statements and omissions were made by HETKOWSKI, GOTHARD,

and ACTIVISION DELAWARE.

d. The substance of the false statements was that new developments were happening for

ACTIVISION DELAWARE, and that it was in excellent position, expanding its facilities,

moving into new markets, and expected to provide investors with excellent returns in the

near future, when these statements were not true.

e. HETKOWSKI, GOTHARD, and ACTIVISION DELAWARE knew, or should have

known, that these statements were false.


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f. The persons responsible for the omissions were HETKOWSKI, GOTHARD, and

ACTIVISION DELAWARE, who retained more investors’ funds than they would have

absent the omission.

g. The time frame in which the false statements were made was from on or about October

13, 2009 to October 25, 2009.

h. The context in which the statements were made was an update by a company

(ACTIVISION DELAWARE) and company representatives (HETKOWSKI and

GOTHARD) to a limited number of existing investors (C.R., R.E., and E.J.) regarding the

company’s (ACTIVISION DELAWARE) performance.

i. Further information is not available to the DEPARTMENT because the DEPARTMENT






all copies of the October 13, 2009 letter.

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.


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96. ACTIVISION DELAWARE and GOTHARD continued to make material, false

representations about ACTIVISION DELAWARE and the extent of its partnerships to investors

in 2011 and 2012 as follows:

a. On or about July 2012, GOTHARD stated in a sworn deposition in Naples, Florida,

that Sysco [sic] was going to partner with ACTIVISION DELAWARE.

i. The false statement was made by GOTHARD.

ii. The substance of the false statements was that Sysco was going to partner with

ACTIVISION DELAWARE, when this statement was not true.

iii. The time frame in which this false statement was made was on or about July

2012.

iv. The context in which the statements were made was a sworn deposition in which

GOTHARD had to tell the truth in defending a trademark challenge by Activision

Publishing, Inc. against ACTIVISION DELAWARE.

v. Further information is not available to the DEPARTMENT because the

DEPARTMENT deposed GOTHARD during its pre-suit investigation of all of

the Defendants, but GOTHARD refused to answer any questions relating to the

operation of ACTIVISION DELAWARE on the grounds that his answers might

incriminate him.

b. On or about February 15, 2011, ACTIVISION DELAWARE stated publicly on a

website that it 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.


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i. The false statement was made by ACTIVISION DELAWARE.

ii. The substance of the false statements was that ACTIVISION DELAWARE had

“teamed up” with Microsoft and “AMD” to create a set top box of the future,

when this statement was not true.

iii. The time frame in which this false statement was made was on or about February

15, 2011.

iv. The context in which the statements were made was a statement by a company

(ACTIVISION DELAWARE) to the public, including investors and potential

investors, regarding its future projects with well-known companies.

v. Further information is not available to the DEPARTMENT because the




incriminate him, and because the DEPARTMENT subpoenaed records from

ACTIVISION DELAWARE during the DEPARTMENT’s pre-suit investigation,

but ACTIVISION DELAWARE did not produce records of these statements, or

any documents that would support the statements’ veracity.

97. ACTIVISION DELAWARE continued to make the following material, false

representations that ACTIVISION DELAWARE’s products and services worked in 2012:

a. Beginning at a time unknown to the DEPARTMENT but known by ACTIVISION

DELAWARE, but no later than January 2012, ACTIVISION DELAWARE represented

to potential and existing investors that Fountainstone [sic] Theater [sic] was

ACTIVISION DELAWARE’s “first Narrowcasting solution for the Goodrich chain of


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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.”


ii. The substance of the false statement was ACTIVISION DELAWARE had a

working installation in a theater and was a solution for a chain of theaters, when

this statement is not true.

iii. ACTIVISION DELAWARE knew, or should have known, that this statement

was false.

iv. The equipment referenced in this statement was not supplied by ACTIVISION

DELAWARE and 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. Eventually, Fountain Stone Theaters,

Inc. discarded the hardware as “junk.”

v. The time frame in which the false statement was made was on or about January,

2012.

vi. The context in which the statements were made was by a company

(ACTIVISION DELAWARE) in its 2012 business valuation, which was used by

ACTIVISION DELAWARE to disseminate information about ACTIVISION

DELAWARE to current and potential investors of ACTIVISION DELAWARE.

vii. Further information is not available to the DEPARTMENT because the




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but ACTIVISION DELAWARE did not produce any documents that would

support the statements’ veracity.

b. Beginning at a time unknown to the DEPARTMENT but known by ACTIVISION

DELAWARE, but no later than on or about March 12, 2012, ACTIVISION

DELAWARE represented that ACTIVISION DELAWARE was installing its interactive

“In-Room System” in four Anna Maria Island Resorts.

i. According to ACTIVISION DELAWARE, 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.”

ii. ACTIVISION DELAWARE installed televisions and “Activision ™ System”

boxes in rooms at two resorts, but the system did not work and was never

operational.

iii. To promote this bogus, non-working installation of ACTIVISION

DELAWARE’s products, ACTIVISION DELAWARE created a press release

with a digitally-altered photograph featuring the principal of the Anna Maria

Island Resorts (D.T.) standing in front of what appears to be a working

installation of an ACTIVISION DELAWARE product.


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iv. The press release also attributes quotations to the principal of the Anna Maria

Island Resorts (D.T.) touting the success of the installation by ACTIVISION

DELAWARE.

v. However, the picture and quotations were false and created by ACTIVISION

DELAWARE, and the principal of the Anna Maria Island Resorts (D.T.) did not

participate in the creation of the fake press release or authorize its dissemination.

vi. The false statement was made by ACTIVISION DELAWARE.

vii. The substance of the false statements was ACTIVISION DELAWARE had a

working installation in a hotel, when this statement is not true.

viii. ACTIVISION DELAWARE knew, or should have known, that this statement

was false.

ix. The time frame in which the false statement was made was on or about March

12, 2012.

x. The context in which the statements were made was by a company

(ACTIVISION DELAWARE) to existing and potential investors.

xi. Further information is not available to the DEPARTMENT because the






but ACTIVISION DELAWARE did not produce records of these statements, or

any documents that would support the statements’ veracity.


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c. Beginning at a time unknown to the DEPARTMENT but known by ACTIVISION

DELAWARE, but no later than January 2012, ACTIVISION DELAWARE represented

that ACTIVISION DELAWARE was installing its products and services in the Queen

Kapiolani Hotel in Honolulu, Hawaii.

i. Upon information and belief, this system did not work and was never

operational.

ii. The false statement was made by ACTIVISION DELAWARE.

iii. The substance of the false statements was ACTIVISION DELAWARE had a

working installation in this hotel, when this statement is not true.

iv. ACTIVISION DELAWARE knew, or should have known, that this statement

was false.


2012.












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d. On a date unknown to the DEPARTMENT, but after March, 2011, GOTHARD and

ACTIVISION DELAWARE told investor M.D. that ACTIVISION DELAWARE had

secured contracts with hotel chains in Thailand and was moving forward and that business

was looking good.

i. The false statement was made by ACTIVISION DELAWARE and GOTHARD.

ii. The substance of the false statements was ACTIVISION DELAWARE had

contracts with hotels in Thailand, and that the business was looking good, when

these statements were not true.

iii. GOTHARD and ACTIVISION DELAWARE knew, or should have known, that

this statement was false.

iv. The time frame in which the false statement was made was after March 2011.

v. The context in which the statements were made was by a company

(ACTIVISION DELAWARE) and a company representative (GOTHARD) to an

investor (M.D.).

vi. Further information is not available to the DEPARTMENT because the







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98. GOTHARD and ACTIVISION DELAWARE made material, false representations that its

public offering was imminent since 2007:

a. On or about August 24, 2007, GOTHARD and ACTIVISION DELAWARE told

unnamed “stockholders” that ACTIVISION DELAWARE had “top of the line staff

members” which was “very important for the company when we go public” and that

ACTIVISION DELAWARE was having discussions with its underwriter to “find the right

vehicle and set a date.”

i. The false statement was made by ACTIVISION DELAWARE and GOTHARD

to stockholders, such as E.J. and J.M.

ii. The substance of the false statements was that ACTIVISION DELAWARE was

going public, when this statement is not true.



iv. The time frame in which the false statement was made was on or about August

24, 2007.


(ACTIVISION DELAWARE) and a company representative (GOTHARD) to

update and excite investors such as E.J. and J.M.

b. On or about February, 2011, Shari Boyer (BOYER) told P.E.P. about ACTIVISION

DELAWARE, and that ACTIVISION DELAWARE was going public soon and that she

could make a lot of money. Shortly thereafter, but on a date unknown, P.E.P. met with


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GOTHARD in his Naples, Florida office, and GOTHARD and ACTIVISION DELAWARE

told P.E.P. that ACTIVISION DELAWARE was a solid company and moving forward to

go public soon, and that P.E.P. could purchase stock and make a lot of money.


to P.E.P.


going public soon and would make a lot of money, when this statement is not

true.



iv. The time frame in which the false statement was made was on or about

February, 2011.



potential investor P.E.P.

c. On or about March, 2011, GOTHARD and ACTIVISION DELAWARE falsely told

potential investor M.D. that ACTIVISION DELAWARE was going public soon, and that

the shares would be worth $5 a share when he took ACTIVISION DELAWARE public.


to M.D.


going public soon and that the shares would be worth $5 a share, when this

statement is not true.


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iv. The time frame in which the false statement was made was on or about March,

2011.



potential investor M.D.

d. On or about April 2011, GOTHARD and ACTIVISION DELAWARE falsely told

investors K.M. and K.M. that ACTIVISION DELAWARE was going to take off and that if

they invested now they could make money when his company went public, and that

ACTIVISION DELAWARE’s initial public offering would be no later than September,

2011.


to K.M. and K.M.


going public no later than September, 2011, and they could make money if they

invested.



iv. The time frame in which the false statement was made was on or about April,

2011.


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potential investors K.M. and K.M.

e. On or about May 6, 2011, GOTHARD and ACTIVISION DELAWARE falsely told

investor S.S. that he was off to the United Kingdom for meetings to “get things started in

Europe.”


to S.S.


getting business ready in Europe.



iv. The time frame in which the false statement was made was on or about May 6,

2011.



potential investor S.S.

f. On or about June, 2011, GOTHARD and ACTIVISION DELAWARE falsely told

investors C.J.G. and S.E. that if they invested in ACTIVISION DELAWARE, they could

make a lot of money when the stock goes public in one year.


to C.J.G. and S.E.


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going public in one year and that C.J.G. and S.E. could make a lot of money.



iv. The time frame in which the false statement was made was on or about June,

2011.



potential investors C.J.G. and S.E.

g. On or about December 19, 2011, GOTHARD and ACTIVISION DELAWARE falsely

told investor P.F. that GOTHARD had met with underwriters in Berlin and was going to

take ACTIVISION DELAWARE public on the Frankfurt Exchange, and that he would be

back in Germany the following month for ACTIVISION DELAWARE to go public.


to P.F.


that GOTHARD was taking ACTIVISION DELAWARE public on the Frankfurt

Exchange shortly.




December 19, 2011.


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investor P.F.

h. On or about January 2012, ACTIVISION DELAWARE made false representations to

unknown investors 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.”

i. The false statement was made by ACTIVISION DELAWARE to unknown

investors.


going to potentially be listed on the Frankfurt Exchange, followed by the NYSE.



iv. The time frame in which the false statement was made was on or about January,

2012.


(ACTIVISION DELAWARE) to investors.

i. On or about March 7, 2012, GOTHARD and ACTIVISION DELAWARE falsely told

AMD investor B.B. that the European Union was not a good place to start an initial public

offering (IPO), so ACTIVISION DELAWARE has decided to go public on the Hong Kong

Exchange, which worked well for ACTIVISION DELAWARE’s venture into Asia in 2012

and in particular, Thailand.

i. The false statement was made by GOTHARD and ACTIVISION DELAWARE

to investor B.B.


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going public in Hong Kong, and had a venture into Asia in 2012.



iv. The time frame in which the false statement was made was on or about March 7,

2012.



investor B.B.

j. On or about March 26, 2012, GOTHARD and ACTIVISION DELAWARE falsely told

ACTIVISION DELAWARE investor P.F. that his outstanding shares would be included

“with the new shares when we go public” and that “we are in the process of completing

this.”


to investor P.F.


in the process of completing an IPO.



iv. The time frame in which the false statement was made was on or about March

26, 2012.


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investor P.F.

k. On a date unknown to the DEPARTMENT, GOTHARD and ACTIVISION

DELAWARE falsely told investor R.R. that ACTIVISION DELAWARE was going public

on a Canadian exchange.


to investor R.R.


going public on a Canadian exchange.



iv. The context in which the statements were made was by a company


investor R.R.

l. Further information is not available to the DEPARTMENT because the DEPARTMENT






any documents that would support the statements’ veracity or the existence of any

shareholders after 2009. Moreover, ACTIVISION DELAWARE had executed a loan and


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note with a 24% interest rate in August, 2011, placing ACTIVISION DELAWARE in a

“vulnerable” position given the interest rate of the loan and note, which eventually went into

default.

99. GOTHARD and ACTIVISION DELAWARE made the following material, false

representations about ACTIVISION DELAWARE’s product sales or potential sales to investors:

a. On or about August 24, 2007, GOTHARD and ACTIVISION DELAWARE told

investors that it entered the medical display business.

i. The false statement was made by GOTHARD and ACTIVISION DELAWARE.

ii. The substance of the false statements was ACTIVISION DELAWARE had

entered the medical display business, when this statement is not true.



iv. The time frame in which the false statement was made was on or about August

24, 2007.

v. The context in which the statements were made was an update of the financial

condition of a company (ACTIVISION DELAWARE) by a company


investors.





incriminate him, and because the DEPARTMENT subpoenaed correspondence


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from ACTIVISION DELAWARE to investors during the DEPARTMENT’s pre-

suit investigation, but ACTIVISION DELAWARE did not produce this document

or produce any documents that would support the statements’ veracity.

b. On or about January 2012, ACTIVISION DELAWARE 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.”


ii. The substance of the false statements was ACTIVISION DELAWARE had a

working installation in a theater and was a solution for a chain of theaters, when

this statement is not true.


was false.

iv. The equipment referenced in this statement was not supplied by ACTIVISION

DELAWARE and 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.


2012.




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c. On or about January 2012, ACTIVISION DELAWARE represented that ACTIVISION

DELAWARE was planning to implement its system in the Peacock Hotel in San Francisco.



implementing its system in a hotel, when this statement is not true.


was false.

iv. The time frame in which the false statement was made was on or about January,

2012.






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d. On or about June, 2011, GOTHARD and ACTIVISION DELAWARE told potential

investors C.J.G. and S.E. that ACTIVISION DELAWARE’s products were used in grocery

stores.


ii. The substance of the false statements was ACTIVISION DELAWARE’s

products were used in grocery stores.



iv. The time frame in which the false statement was made was on or about June,

2011.


(ACTIVISION DELAWARE) and a company representative (GOTHARD),

which was used by ACTIVISION DELAWARE to disseminate information about

ACTIVISION DELAWARE to potential investors of ACTIVISION

DELAWARE.


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e. On or about March, 2011, GOTHARD and ACTIVISION DELAWARE told potential

investor M.D. that ACTIVISION DELAWARE’s products were in grocery stores and

hotels, and that hotels were using its products to provide online services to hotel guests.

GOTHARD also told M.D. that ACTIVISION DELAWARE was making money from its

contracts with hotels and grocery stores.


ii. The substance of the false statements was ACTIVISION DELAWARE’s

products were used in grocery stores and hotels, and were profitable.



iv. The time frame in which the false statement was made was on or about March,

2011.




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potential investor M.D to disseminate information about ACTIVISION

DELAWARE.








support the statements’ veracity, and specifically denied having any such

revenues.

100. ACTIVISION DELAWARE and GOTHARD made the following material, false, and

unrealistic financial statements 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.


ii. The substance of the false statements was that ACTIVISION DELAWARE had

a valuation of hundreds of millions in two years that would explode to billions in

year four, when this statement is not true.


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was false.


September, 2010.


(ACTIVISION DELAWARE) in its 2010 business plan, which was used by









but ACTIVISION DELAWARE did not produce this document.

b. ACTIVISION DELAWARE 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.

i. Upon information and belief, ACTIVISION DELAWARE circulated this

business valuation report to the public, including potential investors, repeating the

unrealistic valuation projections it made in its September 2010 business plan.

ii. Synergy Management Group Ltd. does not appear to have a presence in the

United States, and does not appear to employ accountants. Instead, it advertises


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that it performs consulting and marketing services, advertising its services to

companies like ACTIVISION DELAWARE to “Inspire Investors” in order to

attract and keep investors.

iii. Synergy Management Group Ltd. relied on information, documentation, and

reports supplied by ACTIVISION DELAWARE, and did not perform an

independent audit or appraisal.

c. The Business Valuation Report in January 2012 states that 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 “for the USA and Canada . . . has been

quantified at a range of $193 million to $238 million.”


ii. The substance of the false statements was that ACTIVISION DELAWARE

would have millions in revenues in “year one,” rising to hundreds of millions of

dollars in “year four,” and is valued at hundreds of millions of dollars.


was false.

iv. Months prior to the creation of the Business Valuation Report, as set forth more

fully in this Complaint, ACTIVISION DELAWARE executed a loan and note for

up to $5 million at an interest rate of 24%, which placed ACTIVISION

DELAWARE in a “vulnerable” position, and later went into default on or about

August, 2014.


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v. The Business Valuation Report in January 2012 makes no mention of the 24%

interest rate of the note or the purported collateralization of all of the property of

ACTIVISION DELAWARE under the loan.

vi. The time frame in which the false statement was made was on or about January,

2012.

vii. The context in which the statements were made was by a company




viii. Further information is not available to the DEPARTMENT because the







support the statement’s veracity.

d. On or about March 26, 2012, GOTHARD and ACTIVISION DELAWARE told investor

P.F. that “[w]e just completed an appraisal of the company in January and it came in at

$238,000,000, which is much higher than we expected.”



appraised, and is valued at hundreds of millions of dollars.


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this statement was false. Months prior to the creation of the Business Valuation

Report, as set forth more fully in this Complaint, ACTIVISION DELAWARE

executed a loan and note for up to $5 million at an interest rate of 24%, which

placed ACTIVISION DELAWARE in a “vulnerable” position, and later went into

default on or about August, 2014.


26, 2012.



disseminate information to an investor (P.F.).





incriminate him, and because the DEPARTMENT subpoenaed documents such as

this correspondence, but was not produced by ACTIVISION DELAWARE to the

DEPARTMENT’s pre-suit investigation.

e. On or about March 2, 2015, GOTHARD told investor R.R. that GOTHARD had a plan to

repay R.R., and possibly other investors, and to pay back all overdue commercial rent owed

by the Alter Ego Defendants by exchanging foreign currency into dollars. Upon

information and belief, GOTHARD was referring to Iraqi currency (dinars).

i. The false statement was made by GOTHARD.


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ii. The substance of the false statements was that GOTHARD had the ability to

repay investors with an exchange of foreign currency, when he does not.

iii. GOTHARD knew, or should have known, that this statement was false.


15, 2015.


representative (GOTHARD) to an existing investor.





incriminate him, and because the DEPARTMENT deposed R.R., who refused to

provide additional information about the transaction to the DEPARTMENT

because R.R. had agreed with GOTHARD not to disclose details about the alleged

exchange of foreign currency.

101. GOTHARD and ACTIVISION DELAWARE made material, 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 by GOTHARD, HETKOWSKI, or ACTIVISION

DELAWARE, was worthless.


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a. The false statement was made by GOTHARD and ACTIVISION DELAWARE.

b. The substance of the false statement was that investor B.B. had stock on the corporate

records of ACTIVISION DELAWARE, and that the stock was worth more than

$7.00/share.

c. The time frame in which the false statement that B.B. had stock was on or about 2011,

and the time frame in which the false statement that the stock was worth more than

$7.00/share was made was on or about 2012.

d. The context in which the statement was made was a financial solicitation by a company

representative (GOTHARD) and a company (ACTIVISION DELAWARE), to an individual

(B.B.), and an update by a company representative (GOTHARD) and a company

(ACTIVISION DELAWARE) to an individual (B.B.) as to the performance of her stock.

e. Further information is not available to the DEPARTMENT because the DEPARTMENT






any record of B.B.’s investment.

102. GOTHARD, ACTIVISION DELAWARE, ACTIVELIGHT TV, ADCO FINANCIAL,

ACTIVISION NEVADA, ACTIVISION FLORIDA, and AMD made material, false

representations at various times about the corporate structure of ACTIVISION DELAWARE to

investors beginning on a date unknown to the DEPARTMENT and continuing until at least

January, 2012, as follows:


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a. On or about August 19, 2011, GOTHARD, ACTIVELIGHT TV, ACTIVISION

DELAWARE, ACTIVISION FLORIDA, ACTIVISION NEVADA, and ADCO

FINANCIAL, held out ACTIVELIGHT TV to be the subsidiary of ACTIVISION

DELAWARE responsible for “retail.” ACTIVISION DELAWARE represented to

Hamilton Capital that it alone controlled ACTIVELIGHT TV.

b. On or about August 19, 2011, GOTHARD, ACTIVELIGHT TV, ACTIVISION


FINANCIAL held out ACTIVISION FLORIDA to be the subsidiary of ACTIVISION

DELAWARE responsible for “software.” ACTIVISION DELAWARE represented to

Hamilton Capital that it alone controlled ACTIVISION FLORIDA.

c. On or about August 19, 2011, GOTHARD, ACTIVELIGHT TV, ACTIVISION


FINANCIAL held out ADCO FINANCIAL to be the subsidiary of ACTIVISION

DELAWARE responsible for “finance.” ACTIVISION DELAWARE represented to

Hamilton Capital that it alone controlled ADCO FINANCIAL.

d. On or about August 19, 2011, GOTHARD, ACTIVELIGHT TV, ACTIVISION


FINANCIAL held out ACTIVISION NEVADA to be subsidiary of ACTIVISION

DELAWARE responsible for “content.” ACTIVISION DELAWARE represented to

Hamilton Capital that it alone controlled ACTIVISION NEVADA.

e. On or about January, 2012, GOTHARD, ACTIVELIGHT TV, ACTIVISION

DELAWARE, ADCO FINANCIAL, ACTIVISION NEVADA, ACTIVISION FLORIDA,

and AMD held out “Activelight, LLC” (upon information and belief, it was referring to


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ACTIVELIGHT TV), ADCO FINANCIAL, ACTIVISION NEVADA, ACTIVISION

FLORIDA, and AMD to be subsidiaries of ACTIVISION DELAWARE.

f. GOTHARD, ACTIVELIGHT TV, ACTIVISION DELAWARE, ADCO FINANCIAL,

ACTIVISION NEVADA, ACTIVISION FLORIDA, and AMD made these

misrepresentations to Hamilton Capital and other unknown persons to artificially inflate the

size and sophistication of ACTIVISION DELAWARE.

g. Upon review of the corporate records of ACTIVISION DELAWARE, AMD and

ACTIVISION FLORIDA, the statements in (a)-(e) of this paragraph are false.

h. Further information is not available to the DEPARTMENT because the DEPARTMENT


GOTHARD refused to answer any questions relating to the operation of ACTIVELIGHT

TV, ACTIVISION DELAWARE, ADCO FINANCIAL, ACTIVISION NEVADA,

ACTIVISION FLORIDA, and AMD on the grounds that his answers might incriminate him,

and because the DEPARTMENT subpoenaed records from ACTIVISION DELAWARE,

AMD and ACTIVISION FLORIDA during the DEPARTMENT’s pre-suit investigation, but

ACTIVISION DELAWARE, AMD and ACTIVISION FLORIDA did not produce any

documents that would support the statements’ veracity, and withheld the misrepresentations

made in subparagraphs (a)–(e), above, from the DEPARTMENT in its pre-suit

investigation.

103. ACTIVISION DELAWARE solicited an unknown number of investors in 2011 at an

investors’ conference, making the following material, 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 . . . .”


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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.”

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).”

h. Further information is not available to the DEPARTMENT because the DEPARTMENT






any documents relating to its attendance at a 2011 conference.


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104. According to email correspondence obtained by the DEPARTMENT from an investor

(D.T.), GOTHARD and ACTIVISION DELAWARE continued to solicit investors through

2013.

a. Further information is not available to the DEPARTMENT because the DEPARTMENT




DEPARTMENT subpoenaed all correspondence from ACTIVISION DELAWARE to

investors during the DEPARTMENT’s pre-suit investigation, but ACTIVISION

DELAWARE did not produce any email communications with investors.

105. The DEPARTMENT subpoenaed documents that identify investors of ACTIVISION

DELAWARE during the DEPARTMENT’s pre-suit investigation. According to the corporate

records of ACTIVISION DELAWARE, the last shareholder transaction shown on the corporate

books of ACTIVISION DELAWARE was made no later than 2009.

a. These are material, false records kept by ACTIVISION DELAWARE.

b. The substance of the false statements was ACTIVISION DELAWARE did not have any

investors after 2009, when this statement is not true.

c. In direct conflict to the corporate records of ACTIVISION DELAWARE, Defendants

received monies from investors in 2010 and 2011 to purchase stock.

d. For example, investor B.B.’s check to GOTHARD cleared on or about September 2011.

GOTHARD deposited the check into his personal account, and GOTHARD used B.B.’s

funds for his own personal benefit.


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e. B.B.’s investment was never recorded in any corporate records, and ACTIVISION

DELAWARE did not produce any details about the transaction to the DEPARTMENT.







any corporate records that reflected any shareholder transaction after 2009.

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 Documents 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. The


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April 26, 2007 Locke International Trust makes no mention of HETKOWSKI or Shari Boyer.

Upon information, GOTHARD did not even know Shari Boyer on April 26, 2007.

109. Beginning on or about April 26, 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.

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 during the DEPARTMENT’s pre-suit investigation, 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.


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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.

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.


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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 have been profitable to GOTHARD and HETKOWSKI, who

received wages and/or cash advances.

123. The effect of the Loan and Note was to provide GOTHARD and HETKOWSKI with

monies in the form of cash, salaries and travel money, but deprived the shareholders of AMD,

ACTIVISION NEVADA, and ACTIVISION DELAWARE of such benefits. While a few

creditors have been paid a small fraction of their principal investment, none of them have

received their principal.

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, in Florida), 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


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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).

a. Since the Second Locke International Trust did not create a trust, any subsequent

action taken pursuant to, or on behalf of, the Second Locke International Trust is

invalid.

b. When the DEPARTMENT deposed GOTHARD during its pre-suit investigation,

GOTHARD refused to answer any question relating to the Locke International Trust

or the Second Locke International Trust, and refused to answer any question about the

ownership of the Patents, on the grounds that his answers may incriminate him.

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.

131. In the Trustee’s Certificate, executed in Florida, GOTHARD and HETKOWSKI falsely

certified to the following material statements:

a. They were the sole trustees of the Locke International Trust;

b. The document attached to the Trustee’s Certificate was a true, correct, and complete

copy of the (April 26, 2007) Locke International Trust;


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c. There were no amendments to or alterations or modifications to the (April 26, 2007)

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


a. Beginning on May 18, 2007, CORALLO was the Individual Trustee of the Locke


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.

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



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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

AMD, ACTIVISION DELAWARE, and ACTIVISION FLORIDA.


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


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 made material, false representations 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 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.


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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. The Second Locke International Trust purported to transfer the Patents to ACTIVISION

DELAWARE on or about July 26, 2012, but had no ability to do so. To meet its commitments

under the Loan and Note, ACTIVISION DELAWARE then 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 solicited payments for patent licenses from

businesses throughout 2013, ACTIVISION DELAWARE’s agents (law firm Farney Daniels)

told businesses throughout 2013 the following:

a. “Activision’s patented technology allows it to offer digital media delivery systems far

superior to those of its competitors.”

b. “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.”

c. “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.”


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d. In addition, these letters materially misrepresented ownership of the Patents, stating that

“Activision is the owner, by assignment, of all right, title, and interest in the Activision

Patents.”


ii. These statements were also false since the victims of AMD, ACTIVISION

NEVADA, and ACTIVISION DELAWARE had the right, title, and interest in the

Patents, and because the Second Locke International Trust had no corpus to

assign or otherwise transfer.

iii. ACTIVISION DELAWARE knew, or should have known, that these statements

were false.

iv. The time frame in which the false statement was made was throughout 2013.


(ACTIVISION DELAWARE) to businesses.




operation of ACTIVISION DELAWARE or the ownership of the Patents on the

grounds that his answers might incriminate him.

144. While ACTIVISION DELAWARE did not reveal the amounts of the licensing

agreements with third parties relating to the Patents to the DEPARTMENT in its pre-suit

investigation, according to one public source ACTIVISION DELAWARE has obtained over

$3.1 million in settlements, in the following amounts:

a. $100,000 from Richardson Electronics in 2010;


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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;

q. $120,000 from YesCo in 2014; and

r. $25,000 from Nevada Property 1 in 2014.

s. Further information is not available to the DEPARTMENT because the

DEPARTMENT deposed GOTHARD during its pre-suit investigation of all of the

Defendants, but GOTHARD refused to answer any questions relating to the operation of

ACTIVISION DELAWARE on the grounds that his answers might incriminate him.

145. All conditions precedent necessary to the filing of this action have been fulfilled.


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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 all of the

Defendants from asserting a statute of limitations defense in this matter.

148. To the extent that any Defendant claims that the DEPARTMENT’s filing is late,

GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD, ACTIVISION NEVADA,

ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG bear

responsibility for the late filing as set forth in this Section.

149. GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD, ACTIVISION

NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG

affirmatively and fraudulently concealed the AMD Scheme, the ACTIVISION NEVADA

Scheme, the ACTIVISION DELAWARE Scheme, and the Fraudulent Documents Scheme, as

set forth in paragraph 151, which is hereby incorporated by reference.

150. The DEPARTMENT served pre-suit investigative subpoenas to ACTIVISION

DELAWARE, AMD, and ACTIVISION FLORIDA on or about December 6, 2013.

a. It was not until the DEPARTMENT began to receive responsive documents on or about

February 11, 2014 (after granting GOTHARD’s requests for extensions), and then again on

June 11, 2014, and compared and contrasted them to other investors’ documents, that it

could have learned of its cause of action against all of the named Defendants.


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b. 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.

c. GOTHARD, ACTIVISION DELAWARE, and AMD submitted fabricated federal

securities filings to the DEPARTMENT during its pre-suit investigation relating to the

registration of the shares of ACTIVISION DELWARE and AMD. The United States

Securities and Exchange Commission has no record of these purported filings.

d. GOTHARD, ACTIVISION DELAWARE, and AMD produced to the DEPARTMENT

fabricated, backdated agreements, such as a purported Sub-License Agreement dated

January 1, 2006, between AMD and ACTIVISION DELAWARE, which had not even been

incorporated on this date.

e. The DEPARTMENT has obtained other false documents created by GOTHARD and

AMD, such as a letter sent by GOTHARD and AMD to Washington state regulatory

officials on AMD letterhead dated August, 2011. During the DEPARTMENT’s pre-suit

investigation, AMD told the DEPARTMENT it had no operations or employees on this date.

151. GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD, ACTIVISION

NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG

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, as set forth in paragraphs 48, 93, 99, and 143,

which are hereby incorporated by reference for the purposes of alleging fraudulent

concealment;


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b. misrepresenting to investors the nature of their operations, as set forth in paragraphs 35-

37, 39, 50-52, 54, 58, 59, 60, 61, 67, 68, 74, 84, 93, 100, 102, and 105, which are hereby

incorporated by reference for the purposes of alleging fraudulent concealment;

c. misrepresenting to investors that their products worked, as set forth in paragraphs 48, 93,

97, 99, and 103, which are hereby incorporated by reference for the purposes of alleging

fraudulent concealment;

d. misrepresenting to investors who their customers were, as set forth in paragraphs 26, 53,



e. misrepresenting to investors their manufacturing capabilities, as set forth in paragraphs

26, 52, 85, and 87, which are hereby incorporated by reference for the purposes of alleging


f. misrepresenting to investors their locations, as set forth in paragraph 85, which is hereby

incorporated by reference for the purposes of alleging fraudulent concealment;

g. misrepresenting to investors their business partnerships or relationships, as set forth in

paragraphs 50, 87, 92, 93, 96, and 102, which are hereby incorporated by reference for the

purposes of alleging fraudulent concealment;

h. misrepresenting to investors their rates of return, as set forth in paragraphs 31, 37, 92, and

94, which are hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

i. misrepresenting to investors the stock price, as set forth in paragraph 101, which is

hereby incorporated by reference for the purposes of alleging fraudulent concealment;


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j. misrepresenting to investors their intellectual property portfolio, as set forth in paragraphs

53, 62, 67, 68, 71, 83, 84, 110, 136, 139, and 143, which are hereby incorporated by

reference for the purposes of alleging fraudulent concealment;

k. misrepresenting to investors their bogus initial public offerings, as set forth in paragraphs



l. misrepresenting to investors the safety of their investments, as set forth in paragraphs 32

and 37, which are hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

m. misrepresenting to investors the timing of returns and payoff dates, as set forth in

paragraph 33, which is hereby incorporated by reference for the purposes of alleging


n. misrepresenting to investors that they had a religious mission, as set forth in paragraph

34, which is hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

o. misrepresenting to investors customer demand for their (non-working) products, as set

forth in paragraphs 83, 84, and 87, which are hereby incorporated by reference for the


p. misrepresenting to investors the extent to which they performed product testing, as set

forth in paragraphs 48, 49, 68, and 84, which are hereby incorporated by reference for the



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q. misrepresenting to investors other companies’ interest in acquiring them, as set forth in

paragraph 51, which is hereby incorporated by reference for the purposes of alleging


r. creating false documents, as set forth in paragraphs 39, 48, 68, 96, 97, 98, 128, 131, 136

and 150, which is hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

s. creating multiple companies, many with the same name, as set forth in paragraph 60,

which is hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

t. moving assets secretly across entities, as set forth in paragraphs 62 and 110, which is

hereby incorporated by reference for the purposes of alleging fraudulent concealment;

u. hiding GOTHARD’s criminal past relating to securities, as set forth in paragraphs 38 and

143, which are hereby incorporated by reference for the purposes of alleging fraudulent

concealment;

v. commingling assets and debts in a misleading manner, as set forth in paragraphs 5, 37,

56, 60, 71(a), 71(b), and 74(b), which are hereby incorporated by reference for the purposes

of alleging fraudulent concealment; and

w. giving material, false, pretextual reasons for relating to loan or note payments as follows:

i. On or about April 23, 2010, GOTHARD told ACTIVISION NEVADA investor

J.C. that the “money is with the funding group and will be released when they

have cleared everything. I have NO control over the funds or when they will be

released. Be thankful we have a group that is willing to fund the company and


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stop making me out to be the bad guy,” and that “[a]s soon as I have news on the

money I’ll call you”.

ii. In the winter, 2012, AMD investors P.B. and B.B. met GOTHARD, who told

them that things were ready to happen with the company, and they would get their

money back in a couple of months, and their debentures would turn into stock

once “the company” went public.

iii. On or about December, 2014, GOTHARD told AMD investor B.B. that B.B.

would be repaid since Wells Fargo was close to giving GOTHARD a loan.

iv. These statements were made by GOTHARD.

v. These statements were false.

vi. GOTHARD knew, or should have known, that these statements were false.

vii. The context in which these statements were made was by a company

representative (GOTHARD) to existing investors.

viii. The time frame in which these statements were made is April 23, 2010, to

December, 2014.

ix. Further information is not available to the DEPARTMENT because the



operation of ACTIVISION DELAWARE or AMD on the grounds that his

answers might incriminate him, and because the DEPARTMENT subpoenaed

records from ACTIVISION DELAWARE and AMD during the

DEPARTMENT’s pre-suit investigation, but ACTIVISION DELAWARE and

AMD did not produce or identify these communications.


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152. By taking affirmative steps to conceal from investors the material omissions and

misrepresentations in paragraph 151, GOTHARD, HETKOWSKI, ACTIVISION DELAWARE,

AMD, ACTIVISION NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO

FINANCIAL, and LCG prevented and deterred any meaningful inquiry or investigation that

would have disclosed their fraudulent common course of conduct.

153. AMD, ACTIVISION DELAWARE, ACTIVISION NEVADA, and ACTIVISION

FLORIDA did not produce all responsive documents to the DEPARTMENT’s investigative

subpoenas. Many documents that were produced were missing key portions, as set forth more

fully in this Complaint. Defendant GOTHARD also did not answer any substantive questions in

response to a subpoena for oral testimony.

154. The pattern of racketeering activity by GOTHARD, HETKOWSKI, ACTIVISION

DELAWARE, AMD, ACTIVISION NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV,

ADCO FINANCIAL, and LCG, the securities fraud and deceptive and unfair trade practices by

GOTHARD, ACTIVISION DELAWARE, AMD, ACTIVISION NEVADA, ACTIVISION

FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG, and theft by GOTHARD was

by its nature inherently self-concealing.

155. The affirmative acts of GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD,

ACTIVISION NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL,

and LCG, alleged in this Complaint, specifically in paragraph 151, 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 GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD, ACTIVISION


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NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG to

conceal and to avoid detection of their activity as set forth in this section.

157. Upon having reasonable suspicion of the existence of the alleged pattern of racketeering

activity by GOTHARD, HETKOWSKI, ACTIVISION DELAWARE, AMD, ACTIVISION

NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT TV, ADCO FINANCIAL, and LCG, 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 activity alleged herein.

a. It was not until the DEPARTMENT received 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.

b. As a result of the concealment by GOTHARD, HETKOWSKI, ACTIVISION

DELAWARE, AMD, ACTIVISION NEVADA, ACTIVISION FLORIDA, ACTIVELIGHT

TV, ADCO FINANCIAL, and LCG 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,


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ADCO FINANCIAL, LCG, GOTHARD, and the Locke International Trust have been further

tolled from April 23, 2014 to the date of the filing of the original Complaint (December 22,

2014) 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

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:

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


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the DEPARTMENT and known only by the Defendants, but no earlier 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

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 earlier 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 and would contribute to a church, customer demand for their (non-working)


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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

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 January, 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

ACTIVISION NEVADA Scheme until a date unknown to the DEPARTMENT and

known only by the Defendants, but no earlier than June, 2006. While operating the


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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

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 GOTHARD

and ACTIVISION NEVADA, GOTHARD obtained monies for ACTIVISION NEVADA

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.


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f. 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 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

omissions 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,

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


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DELAWARE Scheme until a date unknown to the DEPARTMENT and known only by

the Defendants, but no earlier than August, 2011. While operating the ACTIVISION

DELAWARE Scheme, GOTHARD also 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

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


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continuing until a date unknown to the DEPARTMENT and known only by the

Defendants, but no earlier 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

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 omissions during the execution of the ACTIVISION DELAWARE

Scheme that concealed the AMD Scheme, the ACTIVISION NEVADA Scheme and the

ACTIVISION DELAWARE Scheme. GOTHARD knew these writings and documents

and statements were false.


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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 ACTIVISION DELAWARE and to artificially inflate the size

and sophistication of ACTIVISION DELAWARE. GOTHARD knew these writings and


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.

These investors were buying stock in ACTIVISION DELAWARE. It was GOTHARD’s

and HETKOWSKI’s duty to make in the books of ACTIVISION DELAWARE an

accurate record of this stock transaction. GOTHARD and HETKOWSKI omitted from

the corporate records a true record of this transaction. Furthermore, GOTHARD failed to

make entries of these transactions with the intent to defraud: he transferred these funds

into his personal banking account in 2010 and 2011, 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).


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l. The AMD Scheme, the ACTIVISION NEVADA Scheme, and the ACTIVISION

DELAWARE 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 DELAWARE Scheme in Sections V.A, V.B.,

and V.C., 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

DELAWARE Scheme were systematic ongoing courses of conduct beginning on 2003

until a date unknown to the DEPARTMENT but no earlier 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

ACTIVISION NEVADA Scheme, and the ACTIVISION DELAWARE 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 in Section V.D.

GOTHARD’s intent was not just to defraud Hamilton Capital, but also defraud investors


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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).

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 and the companies), 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.


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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.

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:


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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;

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.


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COUNT II: VIOLATIONS OF THE FLORIDA RICO ACT (Section 895.03(3), Florida Statutes)

(Conduct of or Participation in an Enterprise) (Defendant GOTHARD)


Defendant GOTHARD.



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 and the companies), 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.

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.


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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;




Florida;


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;

H. Order GOTHARD to divest or disgorge any ill-gotten proceeds;



J. Award Plaintiff costs of investigation and litigation, including attorney fees; and



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COUNT III: VIOLATIONS OF THE FLORIDA RICO ACT (Section 895.03(4), Florida Statutes)

(Conspiracy or endeavor to violate 895.03(1), (2), or (3))

(Defendant HETKOWSKI)


Defendant HETKOWSKI.



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

to ACTIVISION DELAWARE. At the meeting, investors were told that ACTIVISION

DELAWARE was in excellent position, expanding its facilities, moving into new


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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 agreed with GOTHARD to maintain the corporate records, including

stock ledgers of AMD, ACTIVISION NEVADA, and ACTIVISION DELAWARE.

These stock ledgers did not account for all investors of AMD, ACTIVISION NEVADA,

and ACTIVISION DELAWARE, and did not account for any investors of ACTIVISION

DELAWARE after 2009.

c. 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.


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;




Florida;


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derived from, or realized through the conduct of HETKOWSKI, subject to the rights of any


H. Order HETKOWSKI to divest or disgorge any ill-gotten proceeds;



J. Award Plaintiff costs of investigation and litigation, including attorney fees; and


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”).



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


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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 earlier 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.


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 earlier 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’


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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 and would contribute to a church, 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


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.


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 January, 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


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representations, investors invested monies in the ACTIVISION NEVADA Scheme until a date

unknown to the DEPARTMENT and known only by the Defendants, but no earlier 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,


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.


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 GOTHARD and ACTIVISION NEVADA, GOTHARD

obtained monies for ACTIVISION NEVADA 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.


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January, 2006, 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 omissions 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.


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 earlier than August, 2011. While operating the


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ACTIVISION DELAWARE Scheme, GOTHARD also 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 corporate records of ACTIVISION DELAWARE. He then spent these monies for his own

personal use.


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 earlier 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


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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.


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 omissions

during the execution of the ACTIVISION DELAWARE Scheme that concealed the AMD

Scheme, the ACTIVISION NEVADA Scheme and the ACTIVISION DELAWARE Scheme.

GOTHARD knew these writings and documents and statements were false.



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


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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 ACTIVISION DELAWARE and 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.


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.


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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

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.



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


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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 earlier 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,


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 earlier 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


pending initial public offering, the safety of investing in AMD, the timing of returns and

payoff dates, that AMD had a religious mission and would contribute to a church,

customer demand for their (non-working) products, interest in AMD by foreign investors,


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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


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),

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



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 January, 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

ACTIVISION Scheme until a date unknown to the DEPARTMENT and known only by

the Defendants, but no earlier 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


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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. 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 GOTHARD

and ACTIVISION NEVADA, GOTHARD obtained monies for ACTIVISION NEVADA

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

January, 2006, 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


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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 omissions during the

execution of the ACTIVISION NEVADA Scheme that concealed the AMD Scheme 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. 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 earlier than August, 2011. While operating the ACTIVISION

DELAWARE Scheme, GOTHARD also 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


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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.

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 earlier 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


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’


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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

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 omissions during the execution of the ACTIVISION DELAWARE

Scheme that concealed the AMD Scheme, the ACTIVISION NEVADA 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


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 ACTIVISION DELAWARE and to artificially inflate the size


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and sophistication of ACTIVISION DELAWARE. GOTHARD knew these writings and


k. GOTHARD took investor funds 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.

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.


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;


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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

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.



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


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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.


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 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;


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


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


I. Award other relief the Court deems appropriate.


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JURY TRIAL DEMAND

Plaintiff hereby demands a trial by jury on all issues so triable.

Respectfully submitted this 16th day of October, 2015, 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: [email protected] Secondary: [email protected]

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on October 16, 2015, a true and correct copy hereof

was served by an automatic email generated by the Florida Courts E-Filing Portal to all

parties entitled to receive electronic service in this matter:

Mark B. Cohn, Esq. Attorney for all Defendants 3021 Airport Pulling Road North

Suite 202 Naples, FL 34105-3077 [email protected]; [email protected] [email protected]

s/ Nicholas J. Weilhammer Attorney

IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUIT … · IN THE CIRCUIT COURT OF THE TWENTIETH...

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