Tom Lawler's 100 page Hissy Fit

8/10/2019 Tom Lawler's 100 page Hissy Fit

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FILED IN CLERK'S OFFI EU . S . f X C . Aliania

Mm 2 4 zettIN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGM ^^^^^ ^^YfkATLANTA DIVISION

SECURITIES AND EXC HAN GECOMMISSION

Plaintiffvs.

Thomas J , Lawler and FR EE DO MFOUNDATION USA L L C dbaFREEDOM CLUB USA,

Defendant(s),

DIVINE SPIRIT L L C ,ORDER PROCESSING L L C

PROSPERITY SOLUTIONS L L C , andV I O L E T BLESSINGS L L C ,

Relief Defendant(s).

Civil Action FileNo. l:14-CV-02468-AT

DEFENDANT'S SUPPLEMENTALPLEA DING / DECLA RATI ON /MOTION TO AMEND / R E L I E FFROM JUDGMENT

DEFENDANT'S SUPPLEMENTAL PLEADING / DECLARATION

MOTION TO AMEND / R E L I E F FR OM JUDGMENT

In accordance with Fed. R. Civ. P. 15(d), Rule 59(e) and Rule 60, Defendant

Thomas J. Lawler, Pro Se, and under duress, hereby submits this

SUPPLEMENTAL PLEADING / DECLARATION / MOTION TO

Case 1:14-cv-02468-AT Document 32 Filed 11/24/14 Page 1 of 36


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AMEND / RELIEF FROM JUDGMENT. Defendant must be allowed to

establish grounds for the admission of additional and newly discovered

information and evidence found during ongoing research and the attached

DECLARATION (See Exhibit A) to be considered under Fed. R. Civ. P.

15(d) and likewise under Rule 60. Defendants wish to correct clear error and

prevent manifest injustice as allowable under Rule 59(e). Defendant

employs Rule 15(d) and Rule 60 to enter new evidence that occurred to

Defendants in support o f arguments and seeks Amendment of Judgment

Denying DEFENDANT'S MOTION TO RECONSIDER ORDER

DENYING MOTION TO DISMISS as well as relief from ORDER ON

MOTION FOR TRO. A party may also seek relief from a final judgment for

"any other reason that justifies rel ie f" Rule 60(b)(6). For this, among other

reasons. Defendant Thomas J. Lawler respectfully submits the following:

SUMMARY AND B R I E F IN SUPPORT

1. In an effort to not restate in entirety, all previous submissions to

this Court by Defendant are hereby incorporated as i f fully set forth herein.

2. Defendant(s) proceed under great duress and have been denied

the court appointment of legal counsel and denied adequate fmancial



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provision to secure legal counsel in order to provide for and present a proper

defense. Defendant(s) have been denied due process.

3. Aside from Defendants' denial of due process, Defendant

maintains that Plaintiff has offered NO real valid basis or evidence, as it

relates to a "Private Club" or otherwise to bring said allegations against a

Private Club or its Founder, Members, Agents, et al. This question was

asked by the Court to the Plaintiff in a previous telephone hearing and

Plaintiff responded to the negative. Plaintiff should be compelled to support

this important point under the law.

4. Plaintiff is not a Private Club Member and thus is sorely

deficient in facts that only Private Club Members possess via ongoing

members' only conferences, Q & A and active participation in their own

studies. Plaintiff has not studied specific topics in question nor disproved

such theories, processes, and information. It is easy to discredit that which

one does not understand. There is no basis for the allegations of FRAUD.

There are hundreds of other 3''' party resources to support Defendant's basis

of information and administrative process and the long standing legal

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process o f the Notarial Protest. One need not be a Private Club Member to

study the many independent resources available but certainly must be a

participating Private Club Member to know and understand all of the facts,

which Plaintiff does not.

5. Plaintiff is not an injured party.

6. Benefits/services/programs, including the Administrative

Remedy, are not marketed or available to the general public. Private Club

Membership may be extended through invitation.

7. Plaintiff has engaged in egregious, reckless actions by

knowingly and intentionally ignoring, omitting and bastardizing substantial

truth and facts thereby bringing great harm upon the very people they state

they purport to be protecting by and through the ongoing TEMPORARY

RESTRAINING ORDER, ASSET FREEZE, AND OTHER EQUITABLE

RELIEF, as well as asserting their own spin of language and untruths in

order to proffer false and void allegations, among other things.

8. Defendants maintain that the Plaintiff has not established a

prima facie case but rather eloquently influenced the Court with their own

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"spin" and language, with no proof to the contrary of Mr. Lawler's

testimony, complaining fraud and accusations of "scienter" where they lack

understanding and knowledge. Plaintiff has in fact not proven "fraud" or the

intent and clearly has disproved their own accusations that Mr. Lawler acted

with a great deal of "scienter". By Mr . Lawler's testimony alone, one can

see his willingness to share whatever supportive facts and information he has

leamed over the years. Most of which may be researched and confirmed

through many independent resources. It is indeed difficult to gain enough

knowledge and understanding of the facts in one conversation, in one day

through one resource alone.

9. Plaintiff has infringed upon Defendant's First Amendment

rights.

PARTIES

10. Plaintiff: SECURITIES AND EXCHANGE COMMISSION

("COMMISSION" OR "SEC"),

11. Defendant(s): Thomas John Lawler, Defendant, Pro Se,

domiciled in the State of Georgia, FREEDOM FOUNDATION USA LLC

dba FREEDOM CLUB USA ("THE CLUB"), registered in the state of

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Nevada, VIOLET BLESSINGS LLC, ORDER PROCESSING LLC and

DIVINE SPIRIT LLC, each registered in the state of Missouri.

JUDICIAL NOTICE

7. Defendant(s) claim all rights at all times and waive none of

them at any time for any cause or reason.

8. Defendant(s) claim substantial Due Process rights to have

Findings of Facts and Conclusions of Law published with any order of this

court.

9. Thomas Lawler, Defendant, Pro Se, who is unschooled in law,

asks the court to take Judicial Notice of the enunciation of principles as

stated in Haines v. Kerner. 404 U.S. 519, wherein the court has directed that

those who are unschooled in law making pleadings and/or complaints shall

have the court look to the substance of the pleadings rather than the form.

10. Plaintiff(s) reserve the right to supplement and/or amend as

needed.

JURISDICTION AND VE NU E

11. Defendant continues to challenge jurisdiction and venue.

Plaintiff has placed an incorrect emphasis on an unassociated jurisdiction.



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Change of jurisdiction has previously been established and ignored. Parties

await Order from The Common Law International World Court for removal

of this matter.

FACT AND L E G A L BASIS

12. Defendants' have been denied Due Process. Defendant Lawler

comes before the Court, under duress, Pro Se, due to the fact that this Court

has DENIED him a court appointed attomey and additionally ordered a

TEMPORARY RESTRAINING ORDER, still in force as of this date,

disallowing enough Uquidity of ftinds to secure proper legal representation,

that which far exceeds what this Court has allowed as available. Since all

other named Defendants are non-living entities, cannot speak for themselves

and can only be represented by Court recognized legal counsel, they too

have been denied proper legal counsel by the unjust restraint and freeze of

available fiinds. There is no valid fact entered to support the severity of

order of action.

13. Mr. Lawler d id not appear in person at the scheduled hearing on

August 8, 2014 due to the restraint and deprivation of legal counsel so as not

to fiirther incriminate himself, not being schooled in law, procedure or



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technicality. He continued his unsuccessful effort to secure legal counsel. He

did, however, appear via telephone, was in fact patched through to the

proceeding, via telephone. The quality of the call was poor and was

terminated by an act of God in short order due to a thunderstorm and power

outage. Mr. Lawler called the court and explained the situation as power

retumed to the presiding Judges aide, Amy. No acknowledgment,

reschedule or retum call was provided by the court. For the record, Mr.

Lawler did not simply "skip the hearing" as was stated in PLAINTIFF'S

RESPONSE TO DEFENDANTS' MOTION TO RECONSIDER ORDER

DENYING DEFENDANTS' MOTION TO DISMISS. Another non trath

which seems

to be rampant throughout Plaintiffs pleadings.

14. A l l Defendants have been denied the right and ability to

provide for, much less present, a proper legal defense. Hence, Thomas J.

Lawler presents Pro Se.

15. Attached is a supplemental DECLARATION OF TRUTH,

submitted by Thomas Lawler. (See Exhibit A)

16. Defendant submits supplemental information, fact and law in

support under Fed R. Civ. P. Rule 15. As taught and pubHshed, by Georgia

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Perimeter College, accredited by the Southem Association of Colleges and

Schools Commission on Colleges, the first paragraph of Article I : Bill of

Rights,

rhttp://facstaffgpc.edu/~wbroadwe/State&Local%20Ch.%202.r)df),:

"Article I: Bill of Rights of The GeorgiaConstitution guarantees no Georgian will hedeprived of Life, Liberty, or Property

without Due Process of law. This basicallymeans, a citizen must:- be notified of intended govt, action,- have a right to a hearing,- be able to dispute the state s action,- call witnesses and present evidence, and- have the benefit of legal counsel.

(emphasis added)

Defendant(s) in this matter have been intentionally deprived of the benefit of

legal counsel.

17. During an event hosted Oct. 30, 2009, by the UNC Center on

Poverty, Work and Opportunity in Chapel Hill , N.C, Associate Justice

Patricia Timmons-Goodson noted that the United States is one of the few

Westem democracies that do not guarantee the right to counsel in civil cases.

That should not be acceptable for a country that has "assumed the mantle of

equality," said Gene R. Nichol, past Dean of UNC's law school. "You can

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call it justice because someone in a robe decides the case," said George

Hansen, the executive director of Legal Aid of North Carolina, "but really,

there's no adversarial process taking place." It would not be difficult to

establish a prima facie case when no adversarial process takes place", as was

the case in this matter. Defendant looks to the Court to reconsider whether or

not a prima facie case is indeed established. Defendant is not repackaging or

rearguing points but rather should be heard and considered, since they were

not, when deciding whether or not the Plaintiff did in fact establish a prima

facie case. Defendant asserts it was not.

18. Plaintiff offers NO valid basis or evidence to estabhsh this

cause of action much less continue their effort to support their void

allegations, as they relate to a "Private Club" or otherwise in order for the

Court to proceed against a Private Club or its Founder, Members, Agents, et

al. When asked by Judge Totenberg during the emergency phone hearing, i f

he had any experience or case law as it relates to a "CLUB", counsel for

Plaintiff, Pat Huddleston, I I responded to the negative. Plaintiff should be

compelled to support this important point under the law.



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19. A l l Club benefits/services/programs, none of which are

"investments", are offered ONLY to Club Members who have chosen their

own path of education. Club benefits/services/programs are NOT offered or

open to the general public. Plaintiffs allegations of "Unregistered

Securities" are void of any valid, legal basis.

20. Defendant argues and clearly disproves the securities allegation.

The supplemental information, facts and law must not be ignored.

21. "Howey Test". Justice Murphy formulated one of the U.S.

Supreme Court's earliest tests to determine whether an instrument qualifies

as an "investment contract" for the purposes of the Securities Act (which

later came to be referred to as the Howey test): The "Howey Test" clearly

proves that the contracts in question do not meet at least 3 of the 4 prongs of

the test: Plaintiff offers NO valid basis or evidence to establish this cause of

action much less continue their effort to support their void allegations, as

they relates to the actual noted cause of "Securities Fraud" and the

allegation, specifically "COUNT I - UNREGISTERED OFFERING OF

SECURITIES. Plaintiffs allegation is void of any vaHd findings of material

fact and fails the very test that their allegation is based upon. No registration



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statement need be filed or in effect as there was and is no offering of

securities.

22. Since the definitions of "Investment" and "Security" are so

broad, the authorities utilize these phrases/law as a catch-all whenever

convenient, as well as the widely used "Howey Test". In this matter, there is

1) no investment money (Club Members pay for administrative services

provided), 2) due to an expectation of profits (there are none expected or

promised, member must acknowledge in writing that services are provided

as "best efforts"), 3) there is a common enterprise obligated to cure the

judgments processed (which is the United States Department of Treasury

and NOT the Defendant(s) and 4) does NOT depend solely on the efforts of

a third party (but does depend on individual education, documentation,

information and the accuracy thereof and calculations of what they deem is

correct, provided by each individual who wish to engage the administrative

services and process, with no promise of outcome, along with The United

States Department of Treasury and what they deem is just and proper in each

individual instance).

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23. To draw a parallel, i f one engages a resume service/recruiter,

for example, who touts that their service is superior, that they have expertise,

information or connections where others do not (choosing to keep that

confidential and proprietary) and would help one to obtain the monetary

salary level or result they desire - would that service provider/contract also

then be guilty of selling a security? Would it also be deemed fraudulent

and/or deceptive i f that individual did not obtain desired results? One did

spend money, for an organization's or individual's services, wishing to

achieve a certain monetary results derived from the efforts of the service

provider. This, a parallel drawn demonstrating the broad application or

misapplication that can occur. This parallel can apply to most any service

organization or service provider i f one wishes to enhance the circumstance

to f i t their need.

24. Plaintiff also uses the term "ill-gotten gains" to describe monies

paid, categorizing all as such, and calls for the disgorgemenf of same

alleging that all Defendants and Relief Defendants have been unjustly

enriched. Perhaps the cost of doing business and related expenses have been

overlooked by the Plaintiff

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earning a return on the purchase price"(Op. 7),

not to use the phones, and ETS raised the money touse in operating the business. ""Second, it is sufficient for the required

"common trading" element if the interests are"offered and sold to a broad segment of the

public," as were the ETS units. 494 U.S at 68. ""Third, because Edwards promoted them as

"investments," the ETS units meet the"fundamental essence of a 'security.'" Id at 68-69."

26. First, in this matter, funds were not generated or used to fmance

investments but were generated were used to pay for services provided.

Secondly, the Club offers and sells nothing to the general public with the

exception of Private Club Memberships. Benefits/Services/Programs are

available only to Private Club Members. Third, the Club does NOT promote

"investments" or "securities".

27. Plaintiffs allegations of "Unregistered Securities" are void of

any valid, legal basis.

28. Furthermore, Plaintiff is attempting to conduct a mere witch

hunt with total disregard of true fact or lack of education or both. With

specific regard to the "Administrative Remedy" ("A/R"), the process by

which these void allegations are based, the facts are indisputable that

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administrative services are provided to effect a long standing, legal process

called "Notarial Protesf. NOTARIAL PROTEST, as defined in BLACK'S

LAW DICTIONARY FIRST EDITION:

"PROTEST. 2. A notarial act, being a formal statement in writing made by anotary under his seal of office, at the requestof the holder of a bill or note, in which suchbill or note is described, and it is declared

that the same was on a certain day presented for payment, (or acceptance, asthe case may be,) and that such payment oracceptance was refused, and stating thereasons, if any, given for such refusal,whereupon the notary protests against all

parties to such instrument, and declares thatthey will be held responsible for all loss ordamage arising from its dishonor. "

29. One must be a Club Member to engage in this process and

utilize these administrative services. A Club Member may engage this

process and utilize these administrative services as well as a number of other

Club benefits/services/programs, at their will , (subsequent to their own

research and conclusions), which is a part of their Membership Contract, and

in accordance with the rules and specific details of each level of service. One

cannot question that there is most certainly a strict intent of understanding

and meeting of the minds after reviewing agreements. All administrative

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services are provided to Members on a best effort basis. There is NO

promise of outcome, resuh, for services performed. There is no promise for

payment of benefit derived from any benefit/service/program. Payment is for

the administration of the service provided. Further, it is not a requirement as

a Private Club Member to participate in any one of the many programs.

Participation is solely by choice, subsequent to one's own research,

education, decision and ultimately information and calculation that they

themselves provide. Ignoring these facts would be the Plaintiffs own

admission to knowingly, intentionally and/or recklessly omitting and/or

disregarding truth and fact.

30. The fact remains that there was no valid basis and is still no

valid basis for Plaintiffs allegations. There are not sufficient facts to

support allegations that there are "securities" involved. Plaintiff

SECURITIES AND EXCHANGE COMMISSION has no legal basis and

allegations are void of legal standing or merit and truth and should not be

accepted as such. There are no proven violations of the Securities Act of

1933 and in fact are disproven in Paragraphs 21-23 herein. While, "on a

motion to dismiss, a complaint is viewed in the light most favorable to the

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plaintiff," anything can be well-pleaded, but the facts of the matter must be

true. The SEC has not proven a prima facie case of violations of the

antifraud provisions of federal securities laws and therefore should not be

given the forum to continue a void COMPLAINT and RESTRAINING

ORDER, ASSET FREEZE, AND OTHER EQUITABLE RELIEF. They

have proven nothing more than a Private Club, offering and providing

educational and administrative services/programs/benefits and Private Club

Members engaging in same as they so choose, subsequent to their own

research, and whose participation plays a role in the very outcome of each of

the various services/programs in which they engage.

31. Plaintiff inappropriately and untruthfully uses and assert their

own language, such as "investment" and "promise", among other phrases,

that are not used, not referred to, not mentioned, insinuated or otherwise

intended by anyone other than themselves. The Club does not advocate,

allow or perpetuate such language. In fact. Club contracts and

documentation clearly absolve themselves of same. I f Defendants became

aware of individuals engaging in untruthful language as such, that would



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and provided education and information and 3' '' party materials for Club

Members to do their own research and draw their own conclusions.

Defendant(s) have made no known untrue statements of fact nor leamed

omissions during the course of providing information and resources. The

Club may stand accused only of "leading" and not "misleading" Private

Club Members to do their own research, due diligence and form their own

conclusions based on many other resources. Members continue to provide

additional resources for the benefit of other fellow Club Members. Much of

the information and education offered by the Club was and is in fact

contributed by Club Members. We are a Club of Club Members and not

"investors" as is referred to and misstated throughout Plaintiff documents

and Court Orders.

34. Defendant(s) have not engaged in transactions, practices and

courses of business of fraud and deceit. Defendants have openly engaged in

processes of researched tmths and fact. The use of means or

instmmentalities of interstate commerce ... directly and indirectly, is

admitted as there was no fraud or deception or any reason to hide as one

might do i f in fact there were something unlawful to hide.

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35. In the case of a complaint, involving one who can only be a

Club Member (the Plaintiff is not a Club Member nor injured party), in the

event of a dispute, all Club contracts clearly define Arbitration and United

States Arbitration and Mediation Rules of Arbitration as the only remedy.

The Commission is neither a Private Club Member nor an injured party. As

a matter of fact, to date, there have been no known complaints brought forth

by any Club Member. Not one individual to date has exercised that option or

claimed injury.

36. In Paragraph 4. of Plaintiffs APPLICATION FOR

TEMPORARY RESTRAINING ORDER, ASSET FREEZE, AND OTHER

EQUITABLE RELIEF, Plaintiff refers to certain information as "spinning a

tale", in Paragraph 5., Plaintiff refers to certain information shared by

Defendant as a "fantastical story" and in Paragraph 12, there is reference to

"the scam". Further, in Plaintiffs COMPLAINT FOR INJUNCTIVE AND

OTHER RELIEF, Page 5., under FACTS, A. refers to "The Investment

Scheme. Paragraphs 19 - 21, fiirther poorly attempts to define bits and

pieces of information and education; none of which has been proven as

factual or true by Plaintiff. Plaintiff presents no factual evidence disproving

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or to the contrary nor enjoins in the suppression the millions of publications,

websites, organizations, individuals, etc., sharing and pubUshing the same

and/or closely related information.

37. There is much evidence to demonstrate the validity of facts as

leamed, known and believed trae by Mr. Lawler in his testimony. It would

be impossible to prove herein all information and facts in what has taken

years of study. Defendants supplement with evidence of trath and fact to

support their "fantastical story". One cannot dispute these facts. Defendant

offers more than adequate trath and fact to disprove fraud.

38. Modern Money Mechanics, A workbook on Bank Reserves and

Deposit Expansion, published by the Federal Reserve Bank of Chicago, is a

well known publication that describes how the banks create all money from

the "borrowers" signature on a promissory note (not from the bank's assets

or from its depositors). It is called "fractional banking". As stated in Modem

Money Mechanics:

"Of course, they (the banks) do not really pay outloans from the money they receive as deposits. Ifthey did this, no additional money would becreated. What they do when they make loans is toaccept promissory notes (loan contracts) in

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exchange for credits (money) to the borrower's

transition accounts.39. As an example, a deposit of a promissory note in the amount of

10 thousand dollars ($10,000) creates an expansion to 100 thousand dollars

($100,000), at a 10 percent reserve requirement. The "borrowers" signature

gave undisclosed permission for the bank to create the loan value ($10,000)

on its books as an asset without spending a dime. These funds were then

deposited by the seller (home owner, car dealer, school, etc.) to their bank

for further loans repeating the process over and over with each new bank

holding back the 10 percent reserve requirement (or prevailing Federal

Reserve rate) additively totaling $100,000 from the original $10,000 loan.

The "borrowers" signature just created 100 thousand dollars that was

fractionalized by the bank's conversion of your signature and promissory

note. 9 times any deposit can be created out of thin air. The bank not only

loaned back to you from the very deposit you made but also, got paid

multiple times through a credit from the Federal Reserve to the banks

reserve account and through pooling and securitization and the selling of the

asset backed security, as just two examples. The conversion continues to

perpetuate each time the "borrower" makes payment on an already paid

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account. As a matter of fact, this is not the Defendant's rule, spin or process,

but that of the Federal Reserve's Modem Money Mechanics. (Refer to

Exhibit C, Modem Money Mechanics, pages 7 - 1 1 ) .

40. Further, damages for "borrowers" who have paid again on a

paid "loan", is the fraud and basis for the Administrative Remedy, the

Notarial Protest.

41. Defendant also offers a copy of two of several communications

to the United States Treasury and President Barack Obama as preparation for

processing the administrative services performed. Great care was taken

"not" to bring harm to any banks or the US Treasury with payment of the

AR claims. These claim payments will cost neither the banks, taxpayers nor

the US Treasury even one dime with our proprietary process nor create any

new debt. This demonstrates the tmth, intent and integrity of the

Administrative Remedy. Further support is provided of the veracity of

Defendant's communications to members and prospective members by "The

National Economic Security and Reformation Act" compiled by Nancy

Detweiler, M . Ed, M . Div. This research thoroughly validates the fraudulent

banking practices, the illegal IRS, the unlawful Federal Reserve and more.

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This is not a "story" or a "spin" but is the pathway for remedy. (See Exhibits

D & E )

42. Bank statements clearly show all funds deposits and all

expenditures. Mr . Lawler has never taken a salary or commission from club

proceeds in the life of the club. He has an agreement to borrow on occasion

at a 5 percent annualized rate for personal use which has averaged from

$5,000 to $10,000 per year. Mrs. Lawler has a similar agreement and has

borrowed approximately $5,000 or less per year for the 10 years of her

related work. There are no lavish vehicles, no fancy home or lavish

vacations. The Lawler's have occupied their single residence for 29 years

with 2 vehicles of 95,000 and 160,000 miles respectively. Funds received by

the Club were used to support the organization, usual and customary

expenses and overhead, and the multiple benefits/services/programs, serving

Club Members. There are no hidden funds, no personal luxuries. Bank

statements and funds activity has been excruciatingly reviewed, transfers of

funds reasonably explained with no evidence of misuse of Club funds or

hidden funds that the Plaintiff seems to have convinced the Court, despite

reviewing bank statements to the contrary. Yet the Plaintiff continues to

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muster some believability for Court consideration and continuation of an

unjust cause void of any real fact to support their position, inflicting ongoing

harm and hardship on the Defendant(s). Absent any real, factual evidence to

support these allegations, this is, in fact, "spinning a tale" and a "fantastical

story", to quote the Plaintiff.

43. Evidence in support of the "emergency" actions taken against

the Defendants and Relief Defendants, were derived from a one sided story,

presented in a most enticing manner, including language and enhancements

far beyond that of the truth. The evidence offered by the Plaintiff included a

DECLARATION OF MATTHEW MCNAMARA and a DECLARATION

OF KARAZ S. Z A K I Attachments 1 and 2, respectively.

44. The DECLARATION OF MATTHEW MCNAMARA refers to

sworn testimony of both Thomas and Diane Lawler, both of whose

testimony was taken while under great duress, being grilled by multiple

parties and without the benefit of legal counsel. The DECLARATION

regurgitates and highlights certain chosen excerpts and establishes that there

is no securities registration. Questions seemed to escalate into a financial

and taxation witch hunt, revealing reasonably explained supported staff and

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business expenditures and focusing heavily on minor personal expenditures,

no salary noted, or any real unusual activity noted. Defendant Thomas

Lawler's testimony reveals cooperation and explanation, under great duress,

revealing years of research, and great belief in same and contact with the

"Treasury" with reference to the "ARs". Private Members, of which Mr.

McNamara is not, who engage administrative services, understand their own

obligation to do their own due diligence and proceed and that at no time are

promised any outcome. They are afforded administrative services for a fee.

Al l information, charts, figures, etc. is based on information that individuals

submit according to their calculations and is what is passed along to the

Treasury for consideration and payment.

45. The DECLARATION OF KARAZ S. ZAKI, CPA, employed

by the "Commission", reveals a cursory review of ten bank accounts,

identifying authority signatories, deposits and transfers, and a few specific

focal transactions, including a few personal transfers, not including any

salary paid to Mr. Lawler, since there was none. Just a vanilla summary of

sums, dates and select transactions. A l l of which were questioned and

explained under oath by Mr. Lawler. The DECLARATION of KARAZ S.

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ZAKI is merely one of accounting. Again, provides no legal basis in support

of Plaintiffs allegations Accounts were thoroughly reviewed during

Defendant's grilling and testimony.

46. Clearly there were and are no grounds for restraint of funds,

asset freeze or any other equitable relief The TEMPORARY

RESTRAINING ORDER, which was founded on mere supposition and void

of any wrongdoing or factual evidence to support such extraordinary

measures much less the allegations proffered by the Plaintiff, remains in

effect to date and should immediately be lifted.

47. Plaintiff and this Court have sorely infringed upon Defendant(s)

First Amendment rights by ordering suppression of certain information and

statements, orally or in writing, statements of which have not been rebutted,

have not been proven as not facttial supported by any material fact to the

contrary and thus stands as material fact. Certain statements and information

that have been researched and made public for years and can be found in

many resources, publications and other websites. Yet the Defendants are

suppressed and denied their First Amendment rights to speak on these

matters. Are all those who have done their due diligence and communicate,

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either written or verbally on these same matters to be suppressed as well?

Are they all deemed fraudulent?

48. One can easily search the intemet and YouTube videos where

thousands of resources may be found and explored, specific to the very

information that we are being unduly restrained from sharing and in large

part what these void "Fraud" charges are based upon. A l l , including

Defendants' information, is provided for and is intended as information and

education only, for those who choose to do their own research.

49. In the landmark case of Reno v. American Civil Liberties

Union, 521 I L S . 844 the Supreme Court found, in summary, that the

Intemet was a "protected" form of communication in roughly the same way

that a book was. It had the added benefit of additional protection, since it

was an on-demand method of communication.

50. We are a Club that offers a great deal of information on many

different topics, we implore those who are uneducated to do their own due

diligence and findings of fact in order to draw their own conclusions.

However, suppression and denial of First Amendment rights is no doubt a

serious matter.

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SUMMARY

51. Defendants have offered more than adequate argument and

credible grounds to amend judgment and for relief The Commission has no

real interest in this matter and has not established good cause to continue.

The allegations are void and without merit and standing and thus, as a matter

of law, must be reconsidered and dismissed. Plaintiff simply cannot be

allowed to holler Fraud as a remedy for lack of education or understanding.

Fraud has not been proven. It is clear that the Plaintiff moved this Court on

assumption, without adequate findings of fact and in a most expedited

manner, in concert with the deprivation of the Defendant(s) to secure and

provide adequate legal defense. The ability for the Defendant(s) to secure

legal counsel at all has been denied and fiirther railroaded. The Court based

its decision on a one sided, skewed story, unethical spin, contrived language

and assumption, presented by the Plaintiff to fit their need. The story spun

and the continuance of an action void of substantial evidence in support is a

travesty.

52. In a trial last November, 2013, Judge Duffey, in THE UNITED

STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF

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GEORGIA ATLANTA DIVISION, rejected insider trading charges of a

defendant who had a longtime friendship with a chief executive. I n S.E.C. v.

Schvacho, on January 7, 2014, the Court found for the Defendant because

the SEC did not meet the burden of proof

53. While the natures of the matters clearly differ, the law does

not. The SEC failed to meet the burden of proof in this matter.

54. It is a known fact that the Commission did not enjoy a winning

year i n 2014, with several notable losses taking center stage and would look

to put a winning feather in their cap. In one article published by Law360,

New York on June 09, 2014, Thomas Gorman, former SEC trial counsel is

quoted saying, " I f you don't have the facts, you don't have the facts".

55. In consideration of the overwhelming argument and

supplemental Pleading showing that the Plaintiff was unable to prove their

claims and did not meet the burden of proof to establish a prima facie case,

but was nothing more than a preponderance of one sided twisted bits of

information spun into a palatable presentation to suit their needs, and as a

matter of law, this action should be dismissed and the Plaintiff sanctioned

for misuse of law and deceptive practices, at the very least.

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56. As a final note, the Defendant(s) may never recover from the

harm inflicted by this action.

PTj A V F R F OR R E L I E F

Defendant(s) seek the following relief:

12. Relief of Judgment by way of an Order lifting aU restraints and

releasing in its entirety, all pending Orders against Defendants in this

matter, including ORDER TO SHOW CAUSE, TEMPORARY

RESTRAINING ORDER, ORDER FREEZING ASSETS AND FOR AN

ACCOUNTING, ORDER PROHIBITING DESTRUCTION OF

DOCUMENTS, AND ORDER EXPEDITING DISCOVERY. The Club is

an operation of about 10,000 private memberships encompassing about

20,000 people. Club Members, none of which are complaining parties, are

being unduly harmed alongside the Defendants and Rehef Defendants.

13. Amendment of judgment DENYING Defendants' Motion To

Reconsider Order DENYING Defendants' Motion to Dismiss and an order

GRANTING dismissal with prejudice.

14. Court fees and any and all costs of this action against the

Defendants; and.

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15. Any other relief the court deems just and proper.

Dated this 2V day of October, 2014.

/s/ Thomas J. LawlerThomas J. Lawler5077 Tanaga CourtStone Mountain, GA 30087

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C E RT I F I C AT E OF COMPLIANCE

In accordance with Local Rule 7.1D and 5.1C, I hereby certify that the

foregoing has been prepared using Times New Roman 14 point font.

This ay of October, 2014.

/s/ Thomas J. LawlerThomas J. Lawler5077 Tanaga CourtStone Mountain, GA 30087

34



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C E RT I F I C AT E OF S E RV I C E

I hereby certify that on November 2V\ 2014, I mailed the foregoing

document with the Clerk of this Court and served the same, via U.S. Postal

Service on the following:

PAT HUDDLES TON, H , SR . T R I A L COUNSELU.S. SECURITIES AND EXCHANGE COMMISSION950 East Paces Ferry, N.E., Suite 900Atlanta, GA 30326-1382

MATTHEW McNAMARA950 East Paces Ferry, N.E., Suite 900Atlanta, GA 30326-1382

ICARAZ ZAKI950 East Paces Ferry, N.E., Suite 900Atlanta, GA 30326-1382

G R E G O RY SM OLER950 East Paces Ferry, N.E., Suite 900Atlanta, GA 30326-1382

MADISON G RAHAM LOOM ISRegional Trial Counsel950 East Paces Ferry, N.E., Suite 900Atlanta, GA 30326-1382

FREEDOM FOUNDATION U SA L L C

Dba F REEDOM CLUB USARegistered AgentLaughlin Associates, Inc.9120 Double Diamond ParkwayReno, NV 89521

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DIVINE SPIRIT L L C

Registered AgentIncorp Services2847 S. Ingram Mi l l Road, Suite AlOOSpringfield, MO 65804-4006

ORDE R PROCESSING L L CRegistered AgentIncorp. Services, Inc.2000 Riveredge Parkway, NW, Suite 885Atlanta, G A 30328

PROSPERITY SOLUTIONS L L CRegistered AgentJudith Harris950 Herrington Road, C 197Lawrenceville, GA 30044

V I O L E T BLESSINGS L L Cc/o Diane Lawler5077 Tanaga CourtStone Mountain GA 30087



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IN THE UNITED STATES DISTRICT COURTF O R THE NORTHERN DISTRICT OF GEORGIAATLANTA DIVISION

SECURITIES AND EXCHANGECOMMISSION

Plaintiffvs.

Thomas J . Lawler and F R E E D O MFOUNDATION U SA L L C dbaFREEDOM CLUB USA,

Defendant(s),

DIVINE SPIRIT LLC,ORDER PROCESSING LLC

PROSP ERITY SOLUTIONS L L C , andV I O L E T BLESSINGS LLC,

Relief Defendant(s).

Civil Action File

No. l:14-CV -02#8 -AT

DECLARATION O F Thomas Lawler

I , Thomas J. Lawler, in accordance with 28 U.S.C. 1746, do

declare as follows:

1. My name is Thomas J. Lawler.

hereby

Case 1:14-cv-02468-AT Document 32-1 Filed 11/24/14 Page 1 of 74


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2. I am over 18 years of age and legally competent to make thi^

Declaration.

3. I am the Founder of Freedom Foundation USA LLC dba FreMom

Club USA and the Manager of Divine Spirit LLC and Order |

Processing LLC.

4. have not knowingly or intentionally misguided or misquote^ any

researched fact.

5. I have always been open and cooperative in sharing information and

answering all questions to the best of my knowledge and belief.

6. I have provided live Q & A on weekly conference calls for Ivlembers

and prospective Members to receive M l disclosure and ask ^ y

questions of their choosing,

7. I believe that I have always acted in the best interest of the

Membership and all disbursed funds have been spent to furtlier the

objectives of the members and Membership.

8. In Ught of this SEC situation, we have had to suspend commjinication

with the Treasury and delay forward progress toward Member

settlements.

9. To date, there has been no payment forthcoming from the Treasury

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10.1 have always advocated that Private Club Members and prdspective,rd

tial study

Members do their own due diligence and have provided man|y 3

party resources for their research.

11 .The Member must verify that they have completed a substan|;

and proven understanding of the basis of the Administrative flemedy,

related history and full information before providing data an^

engaging services.

12.Members are clearly advised and must agree at multiple stagbs

(Member Agreement, at order placement and on intro and mijmber

conference calls), that there is no promised outcome and all ^ervices

are provided on a best efforts basis.

13.Industry and case law research is the foundation fo r the calci^lation of

settlement which ultimately will be settled by the United Stal

Treasury.

14.Based on the administrative package submitted to the Treast^, I am

confident that settlement calculations provided by individual^ are just

and will be acceptable by the Treasury.

15.1 am confident in these statements based upon a proprietary process

whereby it will cost neither the Treasury nor the Tax Payer a^iythingand add zero to any debt.

es

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16.1 have spent U years and tens of thousands or hours researct^g

sources from credible authors, lecturers, articles, papers and jreatises.

Sources include but are not limited to:

a. G. Edward Griffin (The Creature from Jekyll Island)

b. Nancy Detweiler, M.Ed., M.Div. (History of NESAR^)

c. Dr. Harvey F. Bernard (Draining the Swamp)

d. Eric Madsen, Trustee (Team Law)

e. Black's Law (Multiple Editions)

f. Bi l l Benson (The Law That Never Was)

g. Rep. James Traficant, Jr. (Ohio) gune 1933 Bankruptcy o f the

United States, HJR 192, 73 * Congress)

h. Paul Andrew Mitchell, B.A., M.S. (14* & 16* Amendment

Fraud)

i . Louis McFadden, Chairman of the House Banking ani

Currency Committee in the 1930s

j . Congressman Charles A. Lindberg, Sr. (Money Trust

Investigation)

k. Board of Governors (The Federal Reserve Act)

1. Sam Bouman (Real Freedom)



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m. Russell L . Munk, Assistant General Council, Department o f

Treasury (Federal Reserve Notes are not dollars)

n. And hundreds more

I declare under penalty of perjury that the foregoing is true and

best of my knowledge and belief

SIGNED this 21 day of November, 2014.

cortecttothe

Thomas J. La\vler

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Freedom Club USAEarly Bronze Membership Agreement

4002 Hwy 78, Suite 530-321, SnellviUe, GA 30039

This Independent Contractor Agreement (the "Agreement") is made and entered between an independentcontractor, hereafter referred to as "Member", and Freedom Foundation USA, LLC (FFUSA) dba Freedom ClubUSA (FCUSA), a Nevada Limited Liability Company with a primary office located 2533 N. Carson St., CarsonCity, Nevada, 89706 with primary mailing office at 4002 Hwy 78, Suite 530-321 , Snellville, 30039, hereafterreferred to as "FCUSA" or "Company". Upon acceptance by both parties, this agreement replaces any existingAmbassador, Referrer or Consultant Independent Contractor agreement between the parties for all futurebusiness. FFUSA and FCUSA are synonymous throughout this agreement.

FCUSA, upon verification and deposit of member funds thru the online order form and at the sole discretion ofFCUSA, will activate such Member into Freedom Club USA Early Bronze Program.

Member dues are as follows:

Membership dues are $300 annually or 1000 lifetime. The annual membership includes the member, spouseand their children living with them up through college age at time of membership acceptance by FCUSA. Norenewal fees are due for annual memberships until "interim or Administrative Remedy (AR) funding" takes place.Upon funding, each individual within the family will continue their membership but convert to an individuallifetime membership and unique member number upon submission of their first Administrative Remedy (AR)from which 1,000 will be deducted one time and automatically renew annually thereafter with no furthermembership payments due.

Club benefits:

Your membership in Freedom Club USA is a non-voting membership and is limited to use of clubbenefits. No ownership, other duties or obligations apply to your membership other than stated herein.

Member has full access to all club education programs and all future programs at the posted fees.

Member has access to these programs for the length of their membership beginning from the date ofacceptance by FCUSA of this agreement.

Member may extend their membership for each additional year or for life at the then currentmembership fee upon club approval.

Membership applies to an individual only (each spouse or child of legal age must acquire their ownmembership).

Current and upcoming programs include but are not limited to education regarding: mortgages, creditcards, student loans, car loans, IRS, CRA, prosperity training, wellness programs and health products oras added, removed or adjusted at the discretion of FCUSA.

Members are required to complete FCUSA Study Guides to receive backend payment.

All programs are the member's processes until assigned to FCUSA for processing and payment, and are offeredon a best effort basis with no guarantee expressed or implied on any program, current or future. Onceassigned to FCUSA, they are held and controlled by FCUSA for the life of the process. Member payments for alleducational processes are payable to "Freedom Foundation USA" via money order or cashier's check.Membership Agreement is accepted only after review of your "Membership Application" by FCUSA and emailconfirmation.

Membership dues and program costs are not refundable or transferable. Upon funding of your first AR orcommissions, a lifetime membership fee, QE and Coaching will be assessed and deducted from your account.

Costs:

Annual membership: $300

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Lifetime membersi i ip: 1000 one timeFinancial Access Service: $300 one timeFull Pay Programs: $2700 eachBooster 1: $1000Booster 2 : 1000B Programs: $1200 eachQE: 795Coaching: $495

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I. R U L E S OF DISBURSEMENT

1. Early Bronze members may purchase Administrat ive Remedy (AR) educational programs as desiredwith the cost of the remedy credited back to the member during their backend payout.

2. Special Early Bronze Payouts: Should the Early Bronze member submit one or more ARsand pay in 7 days (US) or 14 days (International) prior to Full Bronze Membership webannouncement, the member will lock in the EARLY BRONZE higher rates on ail their ARsubmissions for the life of their membership. Submission of an AR during this phase willalso complete sooner and will likely accelerate the funding payout. Should the Early Bronzemember not submit an AR prior to Full Bronze Membership web announcement, their ARs willdefault to the normal "Payout" amounts below. The member may choose a "B" program ontheir first AR submission only to lock in Early Bronze rates with the exception their "B" programwill pay out as indicated below.

> .A."* \ |i j Nil fif

Credit Cards, Auto and

Student Loans

Programs S 2.700Pnyout S 250.000Early Bronze

Programs S 2.700 Iprograms $ 2,700Payout S 250.000 jPayout $ 100,000Early Bronze Early Bronze $ 150,000

Booster 1 S 1,000Early Bronze

Booster 1 S 1,000 Booster 1 $ 1,000Early Bronze Early Bronze $ 250,000

Booster 2 S 1.000Early Bronze

Booster 2 $ 1,000 Booster 2 $ 1,000Early Bronze Early Bronze $ 350,000

B Program S 1.200Payout

B Program S 1.200 B Program $ 1,200Payout IPayout $ 50,000

3. When FCUSA receives the proceeds from funding source, FCUSA will disburse monetaryfunds due Member within 10 business days of receipt.

Once FCUSA has received your payment and approved your membership, you are entitled to use allclub benefits. Some club benefits (QE and Coaching require an additional fee but will be deductedfrom your first AR payout). The membership payment date shall be the date upon which yourmembership will begin and from which all club renewals will be calculated. Please contact yourambassador should you have questions about the program or visit www.freedomclubusa.com.

CONTRACTURAL SHARING: FCUSA does not condone contractual sharing of member's backend

distributions with any referring parties. Should the member have contracted with any source (writtenor verbal) prior to or after signing of this agreement for purposes of sharing backend proceeds fromthe sale, trading or other benefit from your AR from the FCUSA program: your agreement with FCUSA will be null and void all monies paid for educational programs, dues or services wil l not be refunded to member all work on your educational program will cease. no further disbursements will be made to member. All third parties involved in the contractual sharing will be excluded from FCUSA membership and

processes and if already involved in a process, no payout or refund will be issued to the thirdparties.

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By accepting your membership with FCUSA, you are acknowledging all these terms and conditions.

[[. N O N - D I S C LO S U R E / N O N - C O M P E T E

Recitals

A. "FCUSA" wishes to provide "Member" certain educational information pertaining to debtresolution/equalization including, but not limited to: mortgages, credit card, car loans, studentloans, IRS and other programs plus all variations of these. This includes all communication ofinformation between the parities in any form whatsoever, including oral, written and machine-readable form, pertaining to the above.

B. "FCUSA" is providing this educational information to "Member" for the purpose of providing assetreclamation and asset protection information, which is to be confidential and regards saidinformation to be as a trade secret. FCUSA desires to protect those parts from unauthorizeddisclosure or use (such confidential trade secret parts being hereafter collectively referred to as"Information").

C. "FCUSA is willing to disclose "Information" to "Member" on the terms and conditions set forthherein.

D. "Member" agrees not to compete with "FCUSA" or disclose "Information" per the terms andcondition set forth herein.

E. Should "Member" wish to contract as an Ambassador with FCUSA; the "Member" can applyonline.

111 AGREEMENTS

Therefore, "FCUSA" and "Member" agree as follows:

1. "Member" shall:a. (1 ) Not disclose "I nformation" of "FCUSA" to any other person and (2) use the

same degree of care to maintain th e "Information" confidential as "Member"would use in maintaining Me mbers own confidential Informati on, bu t always atleast to a reasonable degree of care;

b. Use the "Information" only fo r the above purpose;c. No t compete wit h "FCU SA" by utilizing "FCUSA" educational pr ocesses fo r their

own use or to sell such educational processes to any third party without theexpress written permission of "FCUSA";

d. Upon any termination, within fifteen (15) days following request of "FCUSA",return to "FCUSA" all documen tatio n, copies, notes, diagrams, computer

storage media and other materials containing an y portion of the "Information",or confirm to Owning Party, in writing, t he destruction of such materials;e. No t allow any "non members" to 3 wa y or take part in "member's only" calls or

information nor divulge "Member" onl y login or passkeys to non members.

2. Disclosure. This agreement imposes no obligation on "Member" with respect to any portionof th e "Information" received from "FCUSA" which (a) is or becomes generally known orpublicly available other than by unauthorized disclosure, (b) is independently developed by"Member" or (c) is disclosed by "FCUSA" to a third party without a duty of confidentiality onth e third party.




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3. Confidentiality. "CONFIDENTIAL" includes, but is not limited to all written an d verbalcommunication provided to "Member" by any means .

4. Property. The "Information" shall remain th e sole property of "FCUSA". "FCUS A" makesno representation with respect to, and does not warrant an y "Information" provided under this

agreement, bu t shall furnish such in good faith. Without restriction th e generality of theforgoing, "FCUSA" makes no representations or warranties, w hether written or oral, statutory,express or implied with respect to the "Information" which may be provided hereunder,including without limitation, any warranty of merchantability or of fitness for a particularpurpose. "FCUSA" shall not be liable for any special, incidental or consequential damages ofan y nature whatsoever resulting from a receipt or use of the " Information" by the "Member".

5. Breach. In th e event of a member breach or threatened breach or intended breach o fthis Agreement by "Member", "FC USA" may proceed with terminatio n of the membershi p asoutlined in Breach and Termination below.

6. License. "Member" will no t export, directly or indirectly, any technical data acquired from"FCUSA" or any produc t utilizing any such data to any country fo r which the U.S. G overnment

or any agency thereof at the time of export requires an export license or other governmen talapproval, without first obtaining such license or approval from "FCUSA".

7. Rights. The Rights an d obligations of the parties under this Agree ment may not be sold,assigned or othenwise transferred. By signing this docume nt wit h my electronic signature I,th e Assigno r "Member", without recourse, irrevocably assign to Freedom Foundation USA,LLC, the assignee, its successors and assigns, all Administrative Remedies (AR) theyprocess on my behalf together with th e property descript ions and properly secured, an d alsoall the rights including rights of holder in due course, title an d interest of the Assignor of andto the assets desc ribed in the AR.

8. Privacy: IVlember agrees to not d isclose to any parties ou tside of their di rect family,F C U S A an d essent ial financial parties regarding an y amount or percentage a memberhas received a s a result of any educational process offered by FCUSA.

9. Inoui r ies . Member agrees to respond to any inquiries from law enforcement or legalauthorities or courts that vou are under a non-disclosure contract an d canno t divul ge anydetails of this agreement or with whom it is made. Any violation of these non-disclosurerules can mean reduction of any of member 's back -end payouts to a minimum of 10%at the discretion of FCUSA.




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1 0 . Entrapment. Member agrees to disclose in writing to FCUSA headquarters that if true, themember is an agent f or Federal, State, o r Local agencies being officially or unofficially on amission of entrapment or for any investigative purposes im mediately upon or before enteringinto this agreement.

1 1 . Relationship of Parties. Contractor is an independent contractor of the Company .Nothing in this Agreement shall be construed as creating an emplo yer-em ployee relationship,as a guarantee of future employment or engagement, or as a limitation upon either party'ssole discretion to terminate this Agreement at any time without caus e. Contractor further,agrees that, if the Contracto r determi nes that he/she is a "taxpayer," or is a party made"liable," then th e Contractor shall be responsible fo r all of Contractor's federal and state taxes,withholding, social security, insurance, and other benefits.

12. Free Will. Member is participating in this educational process and any subsequenteducational process, solely on their own behalf and of their own free will.

1 3 . Indemnification. The Member agrees to indemnify and hold harmless FCUSA , FreedomClub USA, FFUSA, Freedom Foundation USA, LLC and their officers, directors, employees,consultants, referrers, ambassadors representatives, members and agents from an y an d allclaims, damages, failure to perform, breach of contract, or any othe r potential liabilityregarding the benefits and services as offered by FCU SA. ". "FCUSA" agrees to operate ingood faith and put fo rth a best effort t o monetize th e administrative remedy / AR judgments.Al l processes/programs and/or services ar e provided to member on a best efforts basis.FCUSA reserves the right t o amend this agreement from time-to-time with any newprovisions binding to both parties as is necessary to memorialize accuratel y this agree mentbetween Member and FCUSA and accurately depict the agreement between FCUSA andmember an d to maximize the administrative remedies- pa youts of the Member and FCUSA .

"Member" hereby agrees, warrants and attests that they will provide true and accurateinformation, at all tim es, to the best of their knowledge, and will a t no time knowingl y and/orwillfully misrepresent, or provide false, misleading, or inaccurate information.

"Member" agrees that they ar e solely responsible fo r the validity and accu racy of any and allinformation provided to "FCU SA" Freed om Club USA and/or "FFUSA " Freedom FoundationUSA, LLC, e t a l .

14. Death or Permanent Incapacity of "Member" / "Member Successor".

"Successor" is defined as any one na tural person claiming a lawful interest in "FCUSA "benefits of a deceased or permanently incapacitated "FCUS A Member".

"Permanent Incapacity" is defined as the inability to act on one's ow n behalf, includin g but notlimited to permanent confusion, permanent lack of consciousness or other disability renderingindividual permanently void of capacity to act and/or make decisions wit h no reasonableexpectation of meaningful recovery. Must be confirmed in writing by a competent MedicalDoctor.

"Interest" is defined as access/ownership/control of existing benefits of deceased ClubMember as detailed in "FCUSA" agreem ents and docum entatio n.

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"Benefits" ar e defined as any existing programs/processes/admi nistrativeremedies/accounts/membership/written, verbal & recorded information reserved for membersonly, in which deceased or permanently incapacitated Member was a participant and otherbenefits as may be available to Club Members.

In the event of "Member's" death or permanent incapacity, "Member' s" designated"Successor" may step forth. "FCUSA" will only recognize designated "Successor" as set forthin "Member's" most current, existing Letter of Wishes on file with "FCUSA". At the time o fpresentment, "Successor" must provide all information and documenta tion required asoutlined in FCUSA SUCCESS OR INSTRUCTIONS IN THE CASE OF DEATH O RPERMANENT INCAPACITY OF FCUSA MEMBER.

"Successor" must become a "Member" of "FCUSA" and remain a "Member" in good standing."Successor" will be bound by the same agreements an d limitations, including but not limitedto , non-disclosure and code of ethics of "FCUSA" Mem bershi p. Should my "Successor"

choose not to accept my Letter of Wishes an d "FCUSA" agreem ents, with all benefits andresponsibilities, the proceeds and control of my membership and all related benefits andassets will default to "FCUSA" for their discret ionary use.

"Successor" must contact "FCUSA" within 90 days of death or permanent incapacitation of"FCUSA Member" after which time the proceeds and control of "Member's" membership andal l related benefits and assets will default to "FCUSA" fo r their discretionary use.

15 . Breach Defi ned. Should Contracto r act or cause any action(s) against Compa ny, legal orother, or speak, write, email, post articles, fonward articles of any content or performs anaction or causes an action to occur that disparages, defames , brings harm, injures, discredi tsor dishono rs Company, these actions will be construed as a Breach of this agreement b yContractor.

16 . Remedy for Breach. The parti es hereto agree that, in the event of breach or threatenedbreach of any covenants of Contractor, the damage or imminent dama ge to the value and thegoodwill of the Comp any's b usiness shall be inestimable, and that therefore an y remedy atlaw or in damages shall be inadequat e. Accordingly, the parties he reto ag ree that theCompany shall be entitled to injunctive relief against Contractor in the event of any brea ch o rthreatened breach of any of such provisi ons by Contractor, in addition to any other relief(including damages) available to the Compan y under this Agreemen t or under law.

Additionally, upon such breach by Contractor, th e Compa ny ma y exercise its right to

terminate such Contractor with no further compensatio n fo r commissions and no payment sfo r any administrative remedies submitted or to be submitted a nd will provide no refunds t oContractor.

17 . Termination. Either party may terminate this agreement without cause. FCUSA mayterminate any membership do to any violations of this agreement including a breach of orthreatened breach of this contract.

Termination witho ut cause: Should Contractor elect t o end their Member status, they will bepaid for all commissio ns and submi tted paid programs up to their resignation date.




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Termination with cause: Should Contractor be removed due to breach, all unpaidcommissions will be forfeited to Company. All educational processes submitte d or in processwill be forfeited to Company. No refunds will be provided to Contractor fo r any fees paid to

Company.

Notifications of termination may be sent via Emai l, US Mail o r f ax to the last known add res sof the other party.All items in this agreement regarding N O N - D I S C L U S U R E / N O N - C O M P E T E , disputes andprivacy will survive termination of this agreement .

18. Entire Agree ment . This Agree ment, contains th e entire agreement and understandingbetween the parties hereto an d supersedes any prior or contemporaneous written or oralagreements, representations an d warrantie s betwee n them respecting the subjec t matte rhereof.

19 . Disputes. In the event a dispute shall arise between th e parties to this agreement, it ishereby agreed that the dispute shall be referred to the American Arbitration Association oralternate service by agreement of the parties. The Federal Arbitrat ion Act shall govern thearbitration procedure and no t any on e single law of any particular state law. The parties agre ethat any arbitration shall be held by an arbitrator with experi ence in contract and common lawand the hearing shall be held in the closest county of the FCUS A business off ices forarbitration in accordance with th e applicabl e United States Arbitration an d Mediation Rules ofArbitration. T he arbitrator's decision shall be final and legally binding and judgm ent may b eentered thereon.

In an y ruling and /or award th e arbitra tor shall provide a written opinion of the facts andconclusions of law and follow applicable la w and judicial precedent.

Each party shall be responsible for its share of the arbitration fees in accordance with theapplicable Rules of Arbitration. In the event a party fails to proceed with arbitration,unsuccessfully challenges th e arbitrator's aw ard, o r fails to comply with the arbitrator's a ward ,th e other party is entitled to costs of suit, including a reasonable attorney's fee for having tocompel arbitration or defend or enforce the award. This arbitration cl ause st ands as anindividual agreement, which is incorporated herein for the enforcement of the MembershipAgreement(s), Non-Disclosure/Non-Compete Agreement and any disputes arising thereof.

20. Power or Attorney. This agreem ent shall also serve as a Power of Attorney from theMember to FCUSA to execute any and all document s necessary to obtain an d monetizeMember AR judgments-education processes.2 1 . Previous Agreements. This Agreement supersedes all previous agreemen ts. ThisAgreement is binding upon both partie s and upon th e manager, direct ors, officers, employ eesan d agents of each. This Agreement is effective as of the later date of execution, namely thedate of acceptance of membership by FCUSA an d will cont inue i ndefinitely; unlessterminated on thirty (30) days written notice by either party or immediately by breach of thisagreement. However, "Member's" obligations of confidentiality an d restrictions on the use ofth e "Information" disclosed by "FCUSA" shall survive termination of this A greem ent.




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By accepting your membership with FCUSA, you are acknowledging all these term s andconditions and any updates to this agreement and yo u also ag ree to bind your successorsand/or assigns to this Agreement.

22 . Severability. If any term , provision, coven ant or condition of this Agreement, or theapplication thereof to any person, place or circumstance, shall be held to be invalid,unenforceable or void, the remainder of this Agreement an d such te rm, provision, covenantor condition as applied to other persons, places an d circumstance s shall rema in in full forceand effect.

23 . Construction. The headings and captions of this Agreement are provided forconvenience only and ar e intended to have no effect in construing or interpreting thisAgreement. The language in all parts o f this Agreement shall be in all cases construedaccording to its fair mea ning and not strictly f or or against either party.

24 . Non-waiver. No failure or neglect of either party hereto in any instance to exercise anyright, power or privilege hereunder or under law shall consti tute a waiver of any other right,power or privilege or of the same right, power or privilege in an y other instance. All waiversby either party hereto must be contained in a written instrument signed by the party to becharged and, in the case of the Comp any, by an officer of the Com pany or other perso n dulyauthorized by the Comp any.

25. Disclaimer. FCUSA does not provide nor is it responsible for providing tax, legal,accounting or financial advice. FCUSA urges members to retain such expe rts f or properadvice. It is also de eme d that both parties have signed this a g r e e m e n t . The Member b yelectronic acknowledgement and FCUSA by drafting this d ocumen t.

26 . IN WITNESS THEREOF, th e Parties hereto have duly execut ed this Contr act the da y andyear per the online registration date and the Signature (typed) on that form shall be deemedto be an executed contract upon th e acceptance by FCUSA via a member number assignedand emailed to prospect.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION, WHICH AFFECTSYOUR LEGAL RIGHTS AND MAY BE ENFORCED BY THE PARTIE S.

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A Workbook oh Bank Reserves and Deposit Expansion

Federal Reserve Bank of Chicago



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Modern Money Mechanics

The purpose of this booklet is to describe the basic

process of money creation in a pactional reserve" banking system. The approach taken illustrates the changes

in bank balance sheets that occur when deposits in banks

change as a result of monetary action by the Federal

Reserve System the central bank of the United States.

The relationships shown are based on simplifying

assumptions. For the sake of simplicity, the relationships

are shown as if they were mechanical, but they are not,

as is described later in the booklet. Thus, they should not

be interpreted to imply a close and predictable relation

ship between a specific central bank transaction and

the quantity of money.

The introductory pages contain a brief general

description of the characteristics of money and how the

U.S. money system works. The illustrations in thefol-

lomng two sections describe two processes: first, how

bank deposits expand or contraci in response to changes

in the amount of reserves supplied by the central bank;

and second, how those reserves are affected by both

Federal Reserve actions and other factors. A final sec

tion deals wifh some of the elements that modify, at least

in the short run, the simple mechanical relationship

between bank reserves and deposit money.

Money is such a routine part of everyday living thatits existence and acceptance ordinarily are taken for granted. A user may sense that money must come into beingeither automatically as a result of economic activity or asan outgrowth of some govemment operation. But just howthis happens all too often remains a mystery.

What Is Money?If money is viewed simply as a tool used to fecilitate

transactions, only those media fliat are readily accepted inexchange for goods, services, and other assets need to beconsidered. Many tilings from stones to baseball cards have served tiiis monetary function through the ages.Today, in the United States, money used in titmsactions ismainly of tiiree kinds currency (paper money and coins

in tiie pockets and purses of the public); demand deposits(non-interest-bearing checking accounts in banks); andother checkable deposits, such as negotiable order ofwitiidrawal (NOW) accounts, at all depository institutions,including commercial and savings banks, savings and loanassociations, and credit unions. Travelers checks also areincluded in tiie definition of b-ansactions money. Since $1in currency and $1 in checkable deposits are freely convertible into each other and botii can be used directiy forexpenditures, they are money in equal degree. However,only tiie cash and balances held by tiie nonbank public arecounted in tiie money supply. Deposits of tiie U.S. Treasury, depository institutions, foreign banks and officialinstitutions, as well as vault cash in depository institutionsare excluded.

This transactions concept of money is the one designated as M l in the Federal Reserve's money stock statistics. Broader concepts of money (M2 and M3) include Mlas well as certain otiier financial assets (such as savingsand time deposits at depository institutions and shares inmoney market mutual funds) which are relatively liquidbut believed to represent principally investments to tiieirholders ratiier than media of exchange. While funds canbe shifted feirly easily between transaction balances andthese other liquid assets, titie money-creation process takesplace principdly through transaction accounts. In tiieremainder of this booklet, "money" means Ml.

The distiibution between the currency and depositcomponents of money depends largely on tiie preferencesof tiie public. When a depositor cashes a check or makesa cash witiidrawal through an automatic teller machine, heor she reduces flie amount of deposits and increases tiieamount of currency held by tiie public. Conversely, whenpeople have more currency than is needed, some is retumed to banks in exchange for deposits.

While currency is used for a great variety of smalltransactions, most of the dollar amount of money payments in our economy are made by check or by eledronic

2 Modem Money Mechanics



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transfer between deposit accounts. Moreover, currencyis a relatively small part of tiie money stock. About 69percent, or $623 billion, of tiie $898 billion total moneystock in December 1991, was in the form of tiansactiondeposits, of which $290 billion were demand and $333

billion were other checkable deposits.What Makes Money Valuable?

In tiie United States neitiier paper currency nordeposits have value as commodities. hitrinsicaBy, a dollarbill is just a piece of paper, deposits merely book entiles.Coins do have some intiinsic value as metal, but generallyfer less than tiieir fece value.

What, then, makes tiiese nstilmentschecks,paper money, and coins acceptable at fece value inpayment of att debts and for otiier monetary uses? Mdnly,it is the confidence people have that they will be able toexchange such money for other financial assets and forreal goods and services whenever they choose to do so.

Money, like anything else, derives its value fi-om its scarcity in relation to its usefulness. Commodities or services are more or less valuable because there are more orless of them relative to tiie amounts people want Money'susefiilness is its unique ability to command other goodsand services and to permit a holder to be constantly readyto do so. How much money is demanded depends onseveral fectors, such as the total volume of h:ansactionsin the economy at any given time, tiie payments habits ofthe society, the amount of money that individuals andbusinesses want to keep on hand to take care of unexpected ti^sactions, and tiie foregone earnings of holdingfinancial assets in the form of money rather tiian some

otiier assetConti-ol of the quantity of money is essential if its

value is to be kept stable. Money's real value can be measured only in terms of what it will buy. Therefore, its valuevaries inversely with flie general level of prices. Assuminga constant rate of use, if the volume of money grows morerapidly than tiie rate at which tiie output of real goods andservices increases, prices will rise. This will happen because there will be more money than there will be goodsand services to spend it on at prevailing prices. But if, onthe otiier hand, growtii in the supply of money does notkeep pace wtii tiie economy's current production, thenprices will fell, the nation's labor force, factories, and otiier

production facilities will not be fiilly employed, or botii.Just how large the stock of money needs to be in

order to handle the ti^sactions of the economy withoutexerting undue influence on tiie price level depends onhow intensively money is being used. Every transactiondeposit balance and every dollar bill is a part of somebody's spendable funds at any given time, ready to moveto other owners as ti^sactions take place. Some holdersspend money quickly after tiiey get it making tiiese fimdsavailable for other uses. Otiiers, however, hold money forlonger periods. Obviously, when some money remainsidle, a larger total is needed to accomplish any givenvolume of transactions.

Who Creates Money?Changes in tiie quantity of money may originate wth

actions of tiie Federal Reserve System (tiie centi^ bank),depository institutions (principally commercial banks), ortiie public. The major control, however, rests witii the

cenh^ bank.The actual process of money creation takes place

primarily in banks.' ./^ noted earlier, checkable liabiEtiesof banks are money. These liabilities are customers' accounts. They increase when customers deposit currencyand checks and when tiie proceeds of loans made by tiiebanks are credited to borrowers' accounts.

In flie absence of legal reserve requirements, bankscan buUd up deposits by increasing loans and inveshnentsso long as tiiey keep enough currency on hand to redeemwhatever amounts the holders of deposits want to convertinto currency. This unique athibute of the banking business was discovered many centimes ago.

It started with goldsmitiis. As early bankers, theyinitially provided safekeepmg services, making a profit fi-omvault

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