Professional Documents
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Flowers Nev It T Glendale
Flowers Nev It T Glendale
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1 PROOF OF SERVICE
2 I am over the age of 18 years and not a party to this action. My business address is:
3 U.S. SECURITIES AND EXCHANGE COMMISSION
444 S. Flower Street, Ste. 900, Los Angeles, CA 90071
4 Telephone No. (323) 965-3998; Facsimile No. (213) 443-1904
5 On July 27, 2018, I caused to be served the document entitled DECLARATION OF
CARLYN IRWIN on all the parties to this action addressed as stated on the attached
6 service list:
7 ☐ OFFICE MAIL: By placing in sealed envelope(s), which I placed for
collection and mailing today following ordinary business practices. I am readily
8 familiar with this agency’s practice for collection and processing of correspondence
for mailing; such correspondence would be deposited with the U.S. Postal Service on
9 the same day in the ordinary course of business.
10 ☐ PERSONAL DEPOSIT IN MAIL: By placing in sealed envelope(s),
which I personally deposited with the U.S. Postal Service. Each such envelope was
11 deposited with the U.S. Postal Service at Los Angeles, California, with first class
postage thereon fully prepaid.
12
☐ EXPRESS U.S. MAIL: Each such envelope was deposited in a facility
13 regularly maintained at the U.S. Postal Service for receipt of Express Mail at Los
Angeles, California, with Express Mail postage paid.
14
☐ HAND DELIVERY: I caused to be hand delivered each such envelope to the
15 office of the addressee as stated on the attached service list.
16 ☐ UNITED PARCEL SERVICE: By placing in sealed envelope(s) designated
by United Parcel Service (“UPS”) with delivery fees paid or provided for, which I
17 deposited in a facility regularly maintained by UPS or delivered to a UPS courier, at
Los Angeles, California.
18
☐ ELECTRONIC MAIL: By transmitting the document by electronic mail to
19 the electronic mail address as stated on the attached service list.
20 ☒ E-FILING: By causing the document to be electronically filed via the Court’s
CM/ECF system, which effects electronic service on counsel who are registered with
21 the CM/ECF system.
22 ☐ FAX: By transmitting the document by facsimile transmission. The
transmission was reported as complete and without error.
23
I declare under penalty of perjury that the foregoing is true and correct.
24
25 Date: July 27, 2018 /s/ John B. Bulgozdy
JOHN B. BULGOZDY
26
27
28
EXHIBIT A
Case 3:17-cv-01456-JAH-JLB Document 34-2 Filed 07/27/18 PageID.247 Page 7 of 58
Carlyn Irwin
Senior Advisor
Cornerstone Research
Exhibit A
Page 1
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Table of Contents
I. Qualifications ...................................................................................................................... 1
II. Introduction ......................................................................................................................... 2
III. Scope of Assignment .......................................................................................................... 2
IV. Summary of Opinions ......................................................................................................... 3
V. Bases for Opinion ............................................................................................................... 3
VI. Proceeds from the Securities Transactions ......................................................................... 4
VII. Personal Benefits Obtained by Mr. Flowers and by Mr. Nevett from the Securities
Transactions ........................................................................................................................ 4
A. Credit Card Lifestyle Expenses .............................................................................. 5
B. Lifestyle Expenses Paid by Related Bank Accounts .............................................. 6
C. Analysis of Funds Available to Finance Lifestyle .................................................. 8
VIII. Conclusion .......................................................................................................................... 9
Exhibit A
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I. Qualifications
Exhibit A Page 1
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II. Introduction
5. I have been retained by counsel for the Securities and Exchange Commission (“SEC” or
Plaintiff) to provide expert testimony in the matter Securities and Exchange Commission v. Troy
Joseph Flowers et al.1 The Defendants of this litigation include:
a. Troy Joseph Flowers;
b. Sean Paul Nevett; and,
c. Fruition, Inc. (f/k/a Seacoast Advisors, Inc. (“Seacoast”)), for which Mr. Flowers
is the sole owner and president.2
6. Counsel for the SEC retained me to analyze information and data produced in this matter
related to the Defendants’ proceeds from certain investment activities, charges and payments on
credit cards, bank account transactions as well as their cash available for personal lifestyle.
Specifically, I have been asked to (1) calculate the proceeds from the allegedly fraudulent
transactions involving securities of Artec Consulting Corporation (“Artec”) and Licont
Corporation (“Licont”) between 2012 and 2014 (the “Securities Transactions”), (2) provide a
reasonable approximation of the personal benefits Mr. Flowers and Mr. Nevett obtained from the
Securities Transactions. As such, I have been asked to analyze financial records and documents
related to:
a. Brokerage statements of various individuals and related entities produced in the
instant matter;
b. Tax returns of various individuals and entities related to Mr. Flowers and Mr.
Nevett;
c. Bank account statements of various individuals and entities related to Mr. Flowers
and Mr. Nevett (“Related Bank Accounts”); and,
1 Securities and Exchange Commission v. Troy Joseph Flowers et al., Case No ‘17CV1456 JAH JLB, United States
District Court, Southern District of California, filed July 19, 2017 (“Complaint”).
2 Complaint, ¶¶ 7–9.
Exhibit A Page 2
Page 4
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10. In conducting my analyses and forming my opinions, I have relied on information from
sources reasonably relied upon by experts in my field. I have also relied upon my education and
my own professional judgment and expertise. Specifically, I have relied on the Defendants’
Exhibit A Page 3
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financial data and documents, including brokerage statements, credit card statements, bank
records, and tax returns. A complete list of the information I relied upon is attached as Exhibit
B.
11. As mentioned above, I have been provided with account statements for various brokerage
accounts held in the names of the Defendants, their family members, and related entities (the
“Brokerage Statements”). At the request of counsel for the SEC, I was asked to calculate the
gross proceeds (“Gross Proceeds”) and pre-tax proceeds net of the acquisition and transaction
costs (“Pre-Tax Proceeds”) from to the allegedly fraudulent transactions involving shares of
Artec that occurred between November 5, 2013 and September 19, 2014 (“Artec Period”) and
Licont that occurred between September 5, 2012 and February 28, 2013 (“Licont Period”). The
Brokerage Statements are related to 13 individual accounts (“Brokerage Accounts”) held at
various financial institutions, including Glendale Securities, Inc., E*TRADE, Stock USA,
Charles Schwab, Wilson Davis & Company, and H. Beck, Inc.
12. Based on my review of the Brokerage Statements, I identified approximately 180
transactions involving Artec during the Artec Period and approximately 260 transactions
involving Licont during the Licont Period. In total, the Gross Proceeds from the sale
transactions amounted to $4,035,389.3 During the same period, the Pre-Tax Proceeds amounted
to $3,684,954.4 Attached hereto as Exhibit C is a summary of the relevant transactions involving
Artec and Licont.
VII. Personal Benefits Obtained by Mr. Flowers and by Mr. Nevett from the Securities
Transactions
13. I have also been asked to opine on the personal benefits Mr. Flowers and Mr. Nevett
obtained from the Securities Transactions. Based on my review of information available to me
in this matter, including credit card and bank statements, the enterprises of Mr. Flowers and Mr.
Nevett were operating jointly. For example, as described in Section VII.C, funds were
3 See Exhibit C.
4 See Exhibit C.
Exhibit A Page 4
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transferred to and from bank accounts and credit cards of related entities. Therefore, I have
derived the personal benefits obtained by Mr. Flowers and by Mr. Nevett based on an analysis of
their lifestyle expenses incurred on the Amex Card.
14. A reasonable approximation of the personal benefits from the Securities Transactions
obtained by Mr. Flowers was $1,673,745 and by Mr. Nevett was $2,010,869. Such
approximations are conservative because they do not include personal benefits related to lifestyle
expenses incurred on the Related Bank Accounts of at least $327,101 that cannot be apportioned
between the two individual defendants based on information available to me.
15. Based on my review of the Amex Statements available to me, I have identified charges
net of credits amounting to $4,216,426 during relevant months of 2012, 2013, and 2014.5 These
total charges amounted to $683,654 in 2012, $1,456,107 in 2013, and $2,076,666 in 2014.6
During the same period, I have identified payments to the Amex Card made by Mr. Flowers of
$1,673,745 and by Mr. Nevett of $2,010,869, which coincide with proceeds of the Licont and
Artec securities transactions. As described in more detail in Section VII.B below, the Amex
Card received several substantial payments from the bank accounts of Seacoast and Checkpoint
Marketing, Inc. during 2012 and 2014.
16. Based on my work described herein, in my opinion, the payments made on the Amex
Card represent a reasonable approximation of the personal benefits obtained by Mr. Flowers and
by Mr. Nevett from the Securities Transactions. The charges incurred and payments made by
Mr. Flowers and Mr. Nevett on the Amex Card during the period are summarized in Exhibit D.
17. Below, I provide examples of significant expenses that appear unrelated to business
enterprise of the Defendants and thus personal in nature that were listed on the Amex Statements.
The majority of the personal expenses below are related to luxury travel.
a. Mr. Nevett used the business credit card to pay for luxury vacations from
Waterways Travel. He incurred expenses of $17,784 and $112,105 in November
5 Months are limited to credit card statements produced in the current matter. 2012 total reflects charges from
statements ending the months between September and December; 2013 total reflects charges from statements
ending the months between January and March, and November and December; 2014 total reflects charges from
statements ending the months between January and November 2014.
6 See Exhibit D.
Exhibit A Page 5
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2013 and October 2014, respectively.7 Similarly, between September 2012 and
July 2014, Mr. Nevett charged $340,386 to Tavarua Island Tours, an all-inclusive
resort island in Fiji.8 This total was split across twelve transactions ranging
between $10,350 and $47,610.
b. Mr. Nevett also used the credit card for other personal travel expenses. For
example, he spent $138,900 on “derby box” expenses between December 2012
and April 2014; $17,420 at the Sanderson Hotel in London in February 2013;
$13,030 on a flight booked through American Express travel in December 2012;
and $8,420 at the Peninsula Tokyo Hotel in May 2014.9
c. Additional personal charges include $5,724 spent by Shannon Nevett at Ortho
Mattress #65 in Encinitas, California in December 2014.10
d. Troy Flowers charged $4,435 at Country Motor Sports in December 2012; $1,280
at Garage Door Enterprises in March 2013; $1,109 at the Lodge Torrey Pines in
January 2014; and $5,400 at Hip Appeal (Men’s/Women’s Clothing) in
September 2014.11
Examples of lifestyle expenses incurred individually by Mr. Flowers and Mr. Nevett on the
Amex Statements during the period are summarized in Exhibit E.
18. As discussed above, I was also asked to review statements of Related Bank Accounts to
identify transactions that appear to be personal in nature. Based on my review, personal benefits
related to lifestyle expenses of at least $327,101 were incurred on the Related Bank Accounts.
Due to the limited information available on the bank statements, I am unable to perform an
apportionment of those personal expenses between the two individual defendants.
Exhibit A Page 6
Page 8
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19. I identify below examples of significant lifestyle expenses incurred in Related Bank
Accounts, including the bank account of Checkpoint Marketing, Inc., between September 2012
and October 2014.
a. Similar to the Amex Card, the Related Bank Accounts include several charges
that appear related to personal travel expenses. For example, approximately
$24,000 was withdrawn from a Related Bank Account to pay Tavarua Island
Resort between September and October 2012.12 Similarly, expenses related to
trips to Las Vegas between October 2012 and September 2014 totaling over
$20,700 were also reflected on Related Bank Accounts.13
b. The Related Bank Accounts also include payments made in relation to housing
and car expenses. For example, between October 2012 and October 2014, online
payments for a “home mortgage” and Chase home finance loan payment total
more than $150,000.14 Moreover, monthly payments of approximately $3,500 to
Ferrari Financial were completed between September 2012 and April 2014.
These payments amount to just over $65,300 during this timeframe. Similarly,
payments of approximately $14,380 were made to Audi Finance between
December 2013 and October 2014.
Examples of lifestyle expenses incurred by Mr. Flowers and Mr. Nevett in the corporate bank
account during the period are summarized in Exhibit F.
20. Moreover, my review of the Related Bank Accounts’ statements indicates that the
enterprises of Mr. Flowers and Mr. Nevett were operating jointly, including funds that were
transferred to and from bank accounts and credit cards of related entities. Specifically, I
identified various transfers of funds among related entities to transfer proceeds from the
Securities Transactions described in Section VI above.
21. For example, I found that certain proceeds from Securities Transactions in the Glendale
Securities, Inc. account of Seacoast were transferred to the Checkpoint Marketing, Inc. bank
account. Based on my review, the transfers to Checkpoint Marketing, Inc. incurred indirectly via
intermediate transfers through the bank accounts of Seacoast and Kavame Holdings, Inc. As
Exhibit A Page 7
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mentioned above, the funds in the Checkpoint Marketing, Inc. bank account were used for
various personal transactions, including payments to Ferrari Financial. Moreover, Funds from
the bank accounts of Checkpoint Marketing, Inc. and Seacoast were used to make several
substantial payments to the Amex Card. Exhibit G presents an illustration of transfers between
brokerage accounts and bank accounts. Exhibit H presents payments made to the Amex Card
from the bank accounts of Checkpoint Marketing, Inc. and Seacoast.
22. In addition to Securities Transactions, I analyze whether Defendants had other income
sources available to fund their lifestyle. Analysis of Mr. Nevett’s, Mr. Flowers’, and Seacoast’s
tax returns for the years 2012 through 2014 indicates that the Defendants’ income–other than the
product of the Securities Transactions described above–was substantially insufficient to support
payments made to the Amex Card and personal expenses incurred on related entities’ bank
accounts in 2012, 2013, and 2014. Specifically, the Defendants declared the following adjusted
gross income to the Internal Revenue Service:
a. Sean and Shannon Nevett’s joint adjusted gross income was $118,655 in 2012,
$124,952 in 2013, and $125,723 in 2014.15 The main sources of their income
during this period were wages and pass-through income from two S Corporations.
b. Troy Flowers and Kelly D Clark’s joint adjusted gross income was $306,039 in
2012, $289,630 in 2013, and $312,074 in 2014.16 The main sources of their
income were wages and pass-through income, including capital gains, from
Seacoast and two other S Corporations.
c. In 2012 and 2013, Seacoast generated substantial capital gains from the sale of
securities that were mostly offset by ordinary business losses. Specifically,
Seacoast’s total capital gains (i.e., long-term and short-term) totaled $638,960,
and $2,764,624 in 2012 and 2013, respectively.17 Moreover, the reported ordinary
business loss was $406,255 and $2,695,461 in the same years.18 Conversely, in
15 See Exhibit I.
16 See Exhibit I.
17 See Exhibit I.
18 See Exhibit I.
Exhibit A Page 8
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2014, Seacoast generated total capital losses of $3,222,104 and business income
of $258,612.19
23. These income figures, which are shown in more detail in Exhibit I, demonstrate that the
Defendants’ did not have the means other than the product of the Securities Transactions
described above to support the lifestyle expenses reflected in payments made to the Amex Card
and personal expenses incurred on the Related Bank Accounts in 2012, 2013, and 2014.
VIII. Conclusion
24. A reasonable approximation of the personal benefits from the Securities Transactions
obtained by and by Mr. Flowers $1,673,745 and by Mr. Nevett was $2,010,869. Such
approximations are conservative because they do not include personal benefits related to lifestyle
expenses incurred on the Related Bank Accounts of at least $327,101 that cannot be apportioned
between the two individual defendants based on information available to me.
25. Moreover, I have reviewed fraud claims made by the bankruptcy trustee related to Mr.
Nevett’s bankruptcy filing. Based on my review, I found that such claims were consistent with
my analysis of the brokerage, credit card, and bank accounts produced in the current matter. A
copy of the complaint filed by the bankruptcy trustee is included in Exhibit J.
___________________________________
Carlyn Irwin
19 See Exhibit I.
Exhibit A Page 9
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Exhibit A
ACADEMIC BACKGROUND
RANGE OF EXPERIENCE
More than twenty years of litigation consulting and expert witness experience, including analyzing
economic, financial, causation, and accounting issues in context of damages claims, valuing businesses,
and conducting financial forensic analysis in a wide variety of commercial disputes. Has experience in
broad range of industries including real estate, medical devices, technology, entertainment, consumer
products, and financial and professional services. Has worked with clients and counsel throughout the
litigation process during all phases of the litigation process. Examples of testimony and casework
experience include:
Financial Forensic Analysis—Reconstructing financial records, tracing transactions through
corporate reporting systems, and reviewing financial records (including tax returns) to assess
consistency and reliability as part of corporate investigation as well as complex civil and
criminal litigation involving white collar matters as well as allegations of fraudulent
conveyances, breach of contract, money laundering, and fraud. Has provided expert
testimony regarding financial misstatements, fraudulent/preferential transfers, and
misappropriation of assets.
Contract and Tort Claims—Analyzing loss causation and damages issues and performing
business valuations in breach of contract and tort causes of action, including breach of
fiduciary duty, alter ego, Lanham Act violations, false advertising, and unfair business
competition. Has analyzed compensatory damages as well as claims for statutory and
restitution or disgorgement damages.
Intellectual Property Disputes—Addressing damages issues in patent, copyright, and
trademark infringement as well as trade secret misappropriation disputes. Specific expertise
in estimating lost profits, unjust enrichment, and reasonable royalty damages, including
analysis of loss causation and apportionment issues.
Valuation Services – Providing opinions of value for businesses, intellectual property, and
other intangible assets in the context of litigation, economic loss analysis, and partner
disputes.
Exhibit A
Page 1 of 4
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CARLYN IRWIN, MBA, CPA/CFF/ABV/CEIV, CFE
Senior Advisor
PROFESSIONAL ACCREDITATIONS
Certified Public Accountant (CPA), California, State Board of Accountancy, April 2001
Certified in Financial Forensics (CFF), American Institute of Certified Public Accountants,
July 2008 (inception of credential)
Certified Fraud Examiner (CFE), Association of Certified Fraud Examiners, March 2011
Accredited in Business Valuation (ABV), American Institute of Certified Public Accountants,
August 2015
Certified in Equity and Intangible Valuation (CEIV), American Institute of Certified Public
Accountants, January 2018
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CARLYN IRWIN, MBA, CPA/CFF/ABV/CEIV, CFE
Senior Advisor
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CARLYN IRWIN, MBA, CPA/CFF/ABV/CEIV, CFE
Senior Advisor
PROFESSIONAL MEMBERSHIPS
Member, California Society of Certified Public Accountants, including Forensic Services
Section
Member, American Institute of Certified Public Accountants, including Forensic and
Valuation Services Section
Member, Association of Certified Fraud Examiners
SPEAKING ENGAGEMENTS
Lost Profits and Damages Calculation: Everything You Need to Know in 2018, The
Knowledge Group, Panelist, January 2018.
Cornerstone Research, Consumer Finance Class Actions and Enforcements, Moderator,
November 2016
University of Southern California, Leventhal School of Accounting, Accounting Ethics,
Guest Speaker, Spring 2016 and Fall 2016
FIRM-WIDE SERVICE
Cornerstone Research, Analyst Compensation Committee, 2007 to 2014
Cornerstone Research, Risk Management Committee, 2002 to 2007
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Exhibit B
Documents Considered by Carlyn Irwin
Document Title, Bates Numbers Document Date
Legal Pleadings
Complaint, Securities and Exchange Commission v. Troy Joseph Flowers, Sean Paul Nevett, and July 19, 2017
Fruition, Inc. (f/k/a Seacoast Advisors, Inc.)
Complaint for Avoidance and Recovery of Fraudulent Transfers and Disallowance of Claim, with December 14, 2017
Exhibits, In re: Sean Paul Vevett and Shannon Lee Nevett, Leslie T. Gladstone v. Troy Flowers et al.
Complaint Objecting to Debtor’s Discharge Pursuant to 11 U.S.C. §§ 727(a)(3) and 727(a)(5), In re: March 28, 2018
Sean Paul Vevett and Shannon Lee Nevett, Leslie T. Gladstone v. Troy Flowers et al.
Tax Returns
Amalfi Coast Capital, Form 1120S, U.S. Income Tax Return for an S Corporation 2012 - 2013
Blue Monkey Holdings, Inc. Form 8879-S, IRS e-File Signature Authorization for Form 1120S 2015
Blue Monkey Holdings, Inc., Form 1120S, U.S. Income Tax Return for an S Corporation 2012 - 2015
Checkpoint Marketing, Inc., Form 1120, U.S. Corporation Income Tax Return 2012 - 2015
Checkpoint Marketing, Inc., Form 8879-C, IRS e-file Signature Authorization from Form 1120, 2015
Fruition Inc., Form 1120S, U.S. Income Tax Return for an S Corporation 2014
Nevett Irrv Ins Tr No One 02282000, Marvin Woodring Ttee, Trustee, Form 1041, U.S. Income Tax 2014
Return for Estates and Trusts (1)
Nevett Irrv Ins Tr No One 02282000, Marvin Woodring Ttee, Trustee, Form 1041, U.S. Income Tax 2014
Return for Estates and Trusts (2)
Nevett Irrv Ins Tr No One, Marvin Woodring Ttee, Form 1041, U.S. Income Tax Return for Estates and 2012
Trusts (1)
Nevett Irrv Ins Tr No One, Marvin Woodring Ttee, Form 1041, U.S. Income Tax Return for Estates and 2012
Trusts (2)
Nevett Irrv Ins Tr No One, Marvin Woodring Ttee, Form 1041, U.S. Income Tax Return for Estates and 2013
Trusts (1)
Nevett Irrv Ins Tr No One, Marvin Woodring Ttee, Form 1041, U.S. Income Tax Return for Estates and 2013
Trusts (2)
Seacoast Advisors, Inc., Form 1120S, U.S. Income Tax Return for an S Corporation 2013
Sean P. Nevett and Shannon Nevett, Form 1040 U.S. Individual Income Tax Return 2012 - 2014
Troy Flowers and Kelly D. Clark, Form 1040, U.S. Individual Income Tax Return 2012 - 2016
Exhibit A Page 1 of 3
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Document Title, Bates Numbers Document Date
Bank Statements
Chase Bank Statement for Checkpoint Marketing, Inc. for September 1, 2012 through October 31, 2014,
Acct No. xxxxxx7491
SEC-JPMCB-P-0000349-1284
Chase Bank Statement for Bula Holdings, Inc. for May 1, 2012 through May 31, 2012, Acct No.
xxxxx8713
SEC-JPMC-P-0002286-306
Chase Bank Statement for Bula Holdings, Inc. for September 1, 2012 through June 26, 2013, Acct No.
xxxxx8713
SEC-JPMC-P-0002307-420
Wells Fargo Analyzed Business Checking Statement for Seacoast Advisors, Inc. for May 1, 2012
through May 31, 2012 , Acct No. xxxxxx2464
SEC-WFB-E-0001708-16
Wells Fargo Analyzed Business Checking Statement for Seacoast Advisors, Inc. for August 1, 2012
through April 30, 2015, Acct No. xxxxxx2464
SEC-WFB-E-0001717-805
Wells Fargo Analyzed Business Checking Statement for Bula Holdings, Inc. for July 25, 2013 through
April 30, 2015, Acct No. xxxxxx7374
SEC-WFB-E-0001501-52
Wells Fargo Combined Statement of Accounts for Amalfi Coast Capital for August 1, 2012 through
April 30, 2015, Acct No. xxxxxx2480
Wells Fargo Analyzed Business Checking Statement for Kavame Holdings, Inc. for July 25, 2013
through February 29, 2016, Acct No. xxxxxx6014
SEC-WFB-E-0001501-52
Chase Bank Statement for Azul Holding, Inc. for September 1, 2012 through July 31, 2013, Acct No.
xxxxxx0711
SEC-JPMC-P-0000268-356
Chase Bank Statement for Lighthouse Holdings Enterprises, Inc. for March 30, 2013 through September
302014, Acct No. xxxxx9075
SEC-JPMC-P-0000459-716
Brokerage Statements
H. Beck, Inc. Brokerage Account Statement for Seacost Advisors Inc. for the Statement Period
November 12, 2013 through September 30, 2014, Account No. xxx-xx2151
EPROD-000000001; EPROD-000000010
H. Beck, Inc. Brokerage Account Statement for Rising Sun Holdings LLC. for the Statement Period May
1, 2014 through September 30, 2014, Account No. xxx-xx6756
EPROD-0000000030; EPROD-0000000044; EPROD-0000000069; EPROD-0000000087; EPROD-
0000000106
Charles Schwab, Schwab One Trust Account of Troy J Flowers Ttee, Lila Cari, U/A DTD 12/15/2003
for the Statement Period November 1 – 30, 2012, Account No. xxxx-x525
EPROD-0000000408
E*Trade Financial Pro Elite Investment Account for Nancy J Flowers for the Statement Period February
1, 2013 – February 28, 2013, Account No. xxxx-7991
EPROD-0000000263
Glendale Securities, Corporation Account for Bula Holdings Inc. for the Statement Period January 1,
2013 – January 31, 2013, Account No. XXX-XXX84-15 RR FPM
EPROD-0000000161
Exhibit A Page 2 of 3
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Document Title, Bates Numbers Document Date
Glendale Securities, Corporation Account for Bula Holdings Inc. for the Statement Period October 1,
2012 – October 31, 2012, Account No. XXX-XXX68-15 RR FPM
EPROD-0000000215
Glendale Securities, Corporation Account for Bula Holdings Inc. for the Statement Period September 1,
2012 – September 30, 2012, Account No. XXX-XXX84-15 RR FPM
EPROD-0000000153
Glendale Securities, Corporation Account for Seacoast Advisors Inc. for the Statement Period December
1, 2012 through January 31, 2013, Account No. XXX-XXX68-15 RR FPM
EPROD-0000000132; EPROD-0000000197
Glendale Securities, Corporation Account for Seacoast Advisors Inc. for the Statement Period September
1, 2012 through November 30, 2012, Account No. XXX-XXX68-15 RR EC2
EPROD-0000000183; EPROD-0000000231; EPROD-0000000245
Glendale Securities, Inc. Account Statement for Bula Holdings Inc. for the Statement Period March 1
through May 31, 2014, Account No. xxxxx456
EPROD-0000000364; EPROD-0000000377; EPROD-0000000392
Glendale Securities, Inc. Account Statement for Seacoast Advisors Inc. for the Statement Period
November 1, 2013 through February 28, 2014, Account No. xxxxx439
EPROD-0000000330; EPROD-0000000336; EPROD-0000000343; EPROD-0000000350
Glendale Securities, Inc. Account Statement for Seacoast Advisors Inc. for the Statement Period May 1 –
31, 2014, Account No. xxxxx439
EPROD-0000000357
Glendale Securities, Individual Account for Dennese L. Flowers for the Statement Period September 1,
2012 through September 30, 2012, Account No. XXX-XXX77-14 RR FPM
EPROD-0000000257
Stock USA Execution Services Inc., Corporation Account for Bula Holdings Inc. for the Statement
Period April 1, 2013 – April 30, 2013, Account No. XXX-XXX90-13 RR EPH
EPROD-0000000613
Stock USA Execution Services Inc., Corporation Account for Seacoast Advisors Inc. for the Statement
Period August 1, 2013 – August 31, 2013, Account No. XXX-XXX10-14 RR EPC
EPROD-0000000462
Stock USA Execution Services Inc., Individual Account for Dennese L. Flowers for the Statement
Period February 1, 2013 – February 28, 2013, Account No. XXX-XXX40-19 RR EPC
EPROD-0000000418; EPROD-0000000569
Wilson Davis & Company, Cash Account Applications;
Wilson Davis & Company, Account Statement for Azul Holdings Inc for the Statement Period January
1, 2012 through December 31, 2013, Account No. xxx493
Wilson Davis & Company, Account Statement for Bula Holdings Inc for the Statement Period March
21, 2012 through June 30, 2015, Account No. xxx509
Wilson Davis & Company, Account Statement for Amalfi Coast Capital for the Statement Period
January 1, 2012 through March 31, 2015 and June 1, 2015 through June 30, 2015, Account No. xxx636
Wilson Davis & Company, Account Statement for Seacoast Advisors Inc for the Statement Period
January 1, 2012 through March 31, 2015 and June 1, 2015 through June 30, 2015, Account No. xxx875
Wilson Davis & Company, Account Statement for Sano Holdings Inc for the Statement Period January
1, 2012 through April 30, 2013 and June 1, 2013 through June 30, 2015, Account No. xxx035
Wilson Davis & Company, Account Statement for Kay Holdings Inc for the Statement Period January 1,
2012 through June 30, 2015, Account No. xxx419
Wilson Davis & Company, Account Statement for Kay Strategies Inc for the Statement Period January
1, 2012 through March 31, 2015, Account No. xxx418
Wilson Davis & Company, Account Statement for Robert and Kelly Wheat for the Statement Period
January 1, 2013 through September 30, 2013, Account No. xxx430
EPROD-000001616
Exhibit A Page 3 of 3
Page 18
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Exhibit D
American Express Statements
Payments and Expenses by Individual
2012 – 2014[1]
Note:
[1] Payments and Expenses are limited to credit card statements produced in the current matter: statements ending September – December 2012, January – March 2013,
November – December 2013, and January – November 2014.
[2] Payments do not include the September 2012 statement payment for August 2012.
[3] Expenses are net of credits.
Exhibit A
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Exhibit E
American Express Statements
Examples of Large Lifestyle Expenses
2012 – 2014[1]
Statement
Closing Date Date Individual Amount Description
11/19/2014 10/20/14 Sean Nevett $112,105 WATERWAYS TRAVEL, INSANTA MONICA
1/20/2014 12/27/13 Sean Nevett $47,610 TAVARUA ISLAND TOURSBUELLTON
2/17/2014 1/22/14 Sean Nevett $43,263 TAVARUA ISLAND TOURSBUELLTON
5/20/2014 4/28/14 Sean Nevett $39,330 TAVARUA ISLAND TOURSBUELLTON
12/20/2013 11/30/13 Sean Nevett $36,610 AQUARIUS TOURS LTD NADI
2/17/2013 1/23/13 Sean Nevett $36,225 TAVARUA ISLAND TOURSBUELLTON
3/20/2013 3/16/13 Sean Nevett $35,437 AQUARIUS TOURS LTD NADI
6/19/2014 5/21/14 Sean Nevett $32,240 TAVARUA ISLAND TOURSBUELLTON
7/20/2014 6/23/14 Sean Nevett $32,240 TAVARUA ISLAND TOURSBUELLTON
11/19/2013 11/11/13 Sean Nevett $29,839 TAVARUA ISLAND TOURSBUELLTON
3/20/2013 3/1/13 Sean Nevett $22,500 THOROUGHBRED DERBYJEFFERSONVILL
1/20/2014 12/23/13 Sean Nevett $22,500 DERBY BOX
2/17/2014 1/21/14 Sean Nevett $22,500 DERBY BOX
3/20/2014 2/24/14 Sean Nevett $22,500 DERBY BOX
4/18/2014 3/25/14 Sean Nevett $22,500 DERBY BOX
3/20/2013 2/26/13 Sean Nevett $22,494 TAVARUA ISLAND TOURSBUELLTON
3/20/2013 2/26/13 Sean Nevett $20,700 TAVARUA ISLAND TOURSBUELLTON
11/19/2013 11/6/13 Sean Nevett $17,784 WATERWAYS TRAVEL, INSANTA MONICA
2/17/2013 2/14/13 Sean Nevett $17,420 SANDERSON (HOTEL) LONDON
1/20/2013 12/24/12 Sean Nevett $16,561 21 C MUSEUM HOTEL LOUISVILLE
6/19/2014 5/21/14 Sean Nevett $15,500 HIP APPEALMEN'S/WOMEN'S CLOTHING
7/20/2014 7/1/14 Sean Nevett $15,500 HIP APPEALMEN'S/WOMEN'S CLOTHING
1/20/2013 12/22/12 Sean Nevett $15,000 THOROUGHBRED DERBYJEFFERSONVILL
10/19/2012 10/1/12 Sean Nevett $13,157 TAVARUA ISLAND TOURSBUELLTON
12/20/2012 12/13/12 Sean Nevett $13,030 AMERICAN EXPRESS TRAPHEONIX
Exhibit A
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Exhibit E
American Express Statements
Examples of Large Lifestyle Expenses
2012 – 2014[1]
Statement
Closing Date Date Individual Amount Description
11/19/2012 10/23/12 Sean Nevett $12,938 TAVARUA ISLAND TOURSBUELLTON
2/17/2014 1/20/14 Sean Nevett $11,400 DERBY BOX
12/20/2013 11/23/13 Sean Nevett $10,418 AQUARIUS TOURS LTD NADI
9/19/2012 8/23/12 Sean Nevett $10,350 TAVARUA ISLAND TOURSBUELLTON
9/19/2012 8/22/12 Sean Nevett $10,000 Capri Elementary 167 Leucadia
5/20/2014 4/22/14 Sean Nevett $8,420 THE PENINSULA TOKYO
11/19/2012 10/28/12 Sean Nevett $8,284 WYNN LAS VEGAS HOTELLAS VEGAS
10/19/2012 9/21/12 Sean Nevett $7,242 MOR FURNITURE FOR LESAN DIEGO
1/20/2014 12/20/13 Shannon Nevett $5,724 ORTHO MATTRESS #65 ENCINITAS
4/18/2014 3/31/14 Sean Nevett $5,419 ENAGIC DOT COM
10/20/2014 9/24/14 Troy Flowers $5,400 HIP APPEAL
MEN'S/WOMEN'S CLOTHING
4/18/2014 4/8/14 Sean Nevett $5,071 STEIN ERIKSEN LODGE PARK CITY
6/19/2014 6/1/14 Sean Nevett $5,040 CALIFORNIA HEALTHSPAENCINITAS
1/20/2013 12/31/12 Troy Flowers $4,435 COUNTRYMOTORSPORTS
10/20/2014 10/8/14 Shannon Nevett $2,449 PENINSULA HOTEL CHICCHICAGO
1/20/2014 12/20/13 Troy Flowers $2,051 Na Hoku Inc
3/20/2013 2/20/13 Troy Flowers $1,280 GARAGE DOOR ENTERPRISAN DIEGO
10/20/2014 9/26/14 Troy Flowers $1,215 ORBITZ.COM
1/20/2014 1/1/14 Troy Flowers $1,109 LODGE AT TORREY PINELA JOLLA
Note:
[1] Examples of expenses are limited to credit card statements produced in the current matter: statements ending September – December
2012, January – March 2013, November – December 2013, and January – November 2014.
Exhibit A
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Exhibit F
Checkpoint Marketing Corporate Bank Account Statements
Examples of Large Lifestyle Expenses
September 2012 – October 2014
Statement
Type of Withdrawal Closing Date Date Amount Description
Electronic Withdrawal 4/30/13 4/15/13 $14,174 Online Payment to Landsystems
Electronic Withdrawal 12/31/12 12/26/12 $7,265 Online Transfer to Hmg…8235
Electronic Withdrawal 10/31/12 10/4/12 $7,000 Online Transfer to Hmg…8235
Electronic Withdrawal 3/29/13 3/13/13 $7,000 Online Payment to Mortgage …8235
Electronic Withdrawal 9/30/13 9/19/13 $7,000 Online Payment to Mortgage 8235
Electronic Withdrawal 12/31/13 12/20/13 $7,000 Online Payment to Mortgage 8235
Electronic Withdrawal 2/28/14 2/24/14 $7,000 Online Payment to Mortgage 8235
Electronic Withdrawal 8/29/14 8/27/14 $7,000 Online Payment to Mortgage 8235
Electronic Withdrawal 7/31/13 7/25/13 $6,992 Chasehomefinance Ln Pmt
Electronic Withdrawal 11/30/12 11/14/12 $6,919 Online Transfer to Hmg…8235
Electronic Withdrawal 1/31/13 1/2/13 $6,919 Online Transfer to Hmg…8235
Electronic Withdrawal 2/28/13 2/6/13 $6,919 Online Payment to Mortgage …8235
Electronic Withdrawal 10/31/14 10/27/14 $6,900 Online Payment to Mortgage 8235
Electronic Withdrawal 4/30/13 4/5/13 $6,862 Ferrari Financia Loan Pmt
Electronic Withdrawal 8/30/13 8/5/13 $6,847 Ferrari Financia Loan Pmt
Electronic Withdrawal 4/30/13 4/15/13 $6,700 Online Payment to Mortgage …8235
Electronic Withdrawal 6/28/13 6/4/13 $6,700 Online Payment to Mortgage …8235
Electronic Withdrawal 10/31/13 10/7/13 $6,700 Online Payment to Mortgage 8235
Electronic Withdrawal 12/31/13 12/27/13 $6,700 Online Payment to Mortgage 8235
Electronic Withdrawal 2/28/14 2/28/14 $6,700 Online Payment to Mortgage 8235
Electronic Withdrawal 4/30/13 4/4/13 $6,659 Online Payment to Mortgage …8235
Electronic Withdrawal 6/30/14 6/5/14 $6,500 Online Payment to Mortgage 8235
Electronic Withdrawal 6/30/14 6/25/14 $6,500 Online Payment to Mortgage 8235
Electronic Withdrawal 9/30/14 9/4/14 $6,500 Online Payment to Mortgage 8235
Debit Card 9/28/12 9/11/12 $6,333 Tavarua Island Resort
Exhibit A
Page 23
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Exhibit F
Checkpoint Marketing Corporate Bank Account Statements
Examples of Large Lifestyle Expenses
September 2012 – October 2014
Statement
Type of Withdrawal Closing Date Date Amount Description
Debit Card 9/28/12 9/4/12 $6,205 Tavarua Island Resort
Debit Card 12/31/13 12/30/13 $6,180 Gca Venetian Palazzo R Las Vegas
Debit Card 9/28/12 9/11/12 $5,893 Tavarua Island Resort
Debit Card 10/31/12 10/16/12 $5,571 Tavarua Island Resort
Electronic Withdrawal 12/31/13 12/27/13 $5,030 Online Payment to Landsystems
Electronic Withdrawal 12/31/13 12/30/13 $4,795 Online Payment to Landsystems
Electronic Withdrawal 1/31/13 1/2/13 $4,081 Online Payment to Landsystems
Electronic Withdrawal 4/30/14 4/8/14 $3,500 Online Payment to Mortgage 8235
Electronic Withdrawal 4/30/14 4/30/14 $3,500 Online Payment to Mortgage 8235
Electronic Withdrawal 12/31/12 12/3/12 $3,459 Ferrari Financia Loan Pmt
Electronic Withdrawal 4/30/14 4/3/14 $3,459 Ferrari Financia Loan Pmt
Electronic Withdrawal 1/31/13 1/30/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 2/28/13 2/28/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 10/31/13 10/9/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 11/29/13 11/4/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 12/31/13 12/13/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 12/31/13 12/31/13 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 2/28/14 2/10/14 $3,444 Ferrari Financia Loan Pmt
Electronic Withdrawal 9/28/12 9/25/12 $3,429 Ferrari Financia Loan Pmt
Electronic Withdrawal 10/31/12 10/30/12 $3,429 Ferrari Financia Loan Pmt
Electronic Withdrawal 12/31/12 12/28/12 $3,429 Ferrari Financia Loan Pmt
Electronic Withdrawal 5/31/13 5/28/13 $3,429 Ferrari Financia Loan Pmt
Electronic Withdrawal 6/28/13 6/12/13 $3,429 Ferrari Financia Loan Pmt
Electronic Withdrawal 2/28/14 2/28/14 $3,429 Ferrari Financia Loan Pmt
Debit Card 9/30/13 9/24/13 $3,115 Gca The Cosmopolitan O Las Vegas
Exhibit A
Page 24
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Exhibit F
Checkpoint Marketing Corporate Bank Account Statements
Examples of Large Lifestyle Expenses
September 2012 – October 2014
Statement
Type of Withdrawal Closing Date Date Amount Description
Debit Card 9/30/13 9/24/13 $3,115 Gca The Cosmopolitan O Las Vegas
Debit Card 9/30/14 9/29/14 $3,111 Gca Sls Las Vgas
Debit Card 10/31/12 10/22/12 $3,090 Gca Venetian Palazzo R Las Vegas
Electronic Withdrawal 6/30/14 6/25/14 $2,749 Online Payment to Landsystems
Debit Card 1/31/13 1/14/13 $2,296 American Ai Dallas TX
Electronic Withdrawal 9/30/14 9/23/14 $2,273 Online Payment to Landsystems
Debit Card 11/29/13 11/18/13 $2,105 Gca Caesars Palace Las Vegas NV
Electronic Withdrawal 9/30/13 9/20/13 $2,036 Online Payment to Landsystems
Electronic Withdrawal 10/31/14 10/31/14 $2,036 Online Payment to Landsystems
Electronic Withdrawal 9/30/14 9/5/14 $1,847 Online Payment to Landsystems
Debit Card 3/29/13 3/7/13 $1,650 Surf Ride Inc Solana Beach CA
Electronic Withdrawal 12/31/13 12/31/13 $1,366 Audi Fincl
Electronic Withdrawal 12/31/13 12/19/13 $1,301 Audi Fincl
Electronic Withdrawal 1/31/14 1/10/14 $1,301 Audi Fincl
Electronic Withdrawal 2/28/14 2/25/14 $1,301 Audi Fincl
Electronic Withdrawal 4/30/14 4/2/14 $1,301 Audi Fincl
Electronic Withdrawal 5/30/14 5/1/14 $1,301 Audi Fincl
Electronic Withdrawal 6/30/14 6/2/14 $1,301 Audi Fincl
Electronic Withdrawal 6/30/14 6/26/14 $1,301 Audi Fincl
Electronic Withdrawal 7/31/14 7/23/14 $1,301 Audi Fincl
Electronic Withdrawal 8/29/14 8/28/14 $1,301 Audi Fincl
Electronic Withdrawal 10/31/14 10/3/14 $1,301 Audi Fincl
Electronic Withdrawal 5/31/13 5/1/13 $1,018 Online Payment to Landsystems
Electronic Withdrawal 1/31/14 1/30/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 2/28/14 2/26/14 $1,018 Online Payment to Landsystems
Exhibit A
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Exhibit F
Checkpoint Marketing Corporate Bank Account Statements
Examples of Large Lifestyle Expenses
September 2012 – October 2014
Statement
Type of Withdrawal Closing Date Date Amount Description
Electronic Withdrawal 4/30/14 4/2/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 4/30/14 4/30/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 5/30/14 5/20/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 6/30/14 6/25/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 7/31/14 7/22/14 $1,018 Online Payment to Landsystems
Electronic Withdrawal 8/29/14 8/27/14 $1,018 Online Payment to Landsystems
Total $327,101
Exhibit A
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Case 3:17-cv-01456-JAH-JLB Document 34-2 Filed 07/27/18 PageID.275 Page 35 of 58
Exhibit H
Examples of American Express Payments
from Related Entity Bank Accounts
2012 – 2014[1]
Statement
Closing Date Date Related Entity Amount
9/30/12 9/19/12 Checkpoint Marketing, Inc. $119,197
10/31/12 10/16/12 Checkpoint Marketing, Inc. $50,000
10/31/12 10/19/12 Checkpoint Marketing, Inc. $25,200
11/30/12 11/15/12 Checkpoint Marketing, Inc. $18,834
11/30/12 11/19/12 Checkpoint Marketing, Inc. $145,000
12/31/12 12/20/12 Checkpoint Marketing, Inc. $259,336
1/31/13 1/22/13 Checkpoint Marketing, Inc. $188,024
2/28/13 2/6/13 Checkpoint Marketing, Inc. $175,000
2/28/13 2/19/13 Checkpoint Marketing, Inc. $37,657
2/28/13 2/25/13 Checkpoint Marketing, Inc. $75,000
3/29/13 3/1/13 Checkpoint Marketing, Inc. $70,000
3/31/13 3/13/13 Seacoast Advisors, Inc. $143,470
3/31/13 3/19/13 Seacoast Advisors, Inc. $50,802
11/30/13 11/20/13 Seacoast Advisors, Inc. $200,000
12/31/13 12/19/13 Seacoast Advisors, Inc. $291,774
1/31/14 1/17/14 Seacoast Advisors, Inc. $193,871
2/28/14 2/7/14 Seacoast Advisors, Inc. $95,000
2/28/14 2/19/14 Seacoast Advisors, Inc. $50,568
3/31/14 3/17/14 Seacoast Advisors, Inc. $178,037
4/30/14 4/17/14 Seacoast Advisors, Inc. $49,872
5/31/14 5/16/14 Seacoast Advisors, Inc. $75,000
5/31/14 5/20/14 Seacoast Advisors, Inc. $12,500
6/30/14 6/18/14 Seacoast Advisors, Inc. $232,852
9/30/14 9/17/14 Seacoast Advisors, Inc. $100,000
Note:
[1] American Express credit card statements are limited to statements produced in the current
matter: statements ending September – December 2012, January – March 2013, November
– December 2013, and January – November 2014.
Exhibit A
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Exhibit I
Defendants' Adjusted Gross Income and Ordinary Business Income
2012 – 2014
Note:
[1] Sean and Shannon Nevett reported income from the S Corporation Blue Monkey Holdings in 2012 – 2014 and from the S Corporation Aloha Restaurant
Concepts, Inc. in 2014.
[2] Tax includes federal underpayment penalties for 2012 and 2014 and state underpayment penalties for 2012 – 2014 for Troy Flowers and Kelly D Clark.
California state tax is unavailable for Sean and Shannon Nevett in 2012.
[3] Troy Flowers and Kelly D Clark reported income from the S Corporations Fruition Inc. and Amalfi Coast Capital in 2012 – 2014 and from the S Corporation
Rising Sun Holdings Inc. in 2014.
[4] Fruition Inc. was known as Seacoast Advisors Inc. until 2014.
Exhibit A
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Exhibit J
Exhibit A
Page 31
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Exhibit J
Exhibit A
Page 32
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Exhibit J
Exhibit A
Page 33
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Exhibit J
Exhibit A
Page 34
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Exhibit J
Exhibit A
Page 35
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Exhibit J
Exhibit A
Page 36
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Exhibit J
Exhibit A
Page 37
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Exhibit J
Exhibit A
Page 38
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Exhibit J
Exhibit A
Page 39
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Exhibit J
Exhibit A
Page 40
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Exhibit J
Exhibit A
Page 41
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Exhibit J
Exhibit A
Page 43
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Exhibit J
Exhibit A
Page 44
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Exhibit J
Exhibit A
Page 45
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Exhibit J
Exhibit A
Page 46
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Exhibit J
Exhibit A
Page 47
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Exhibit J
Exhibit A
Page 48
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Exhibit J
Exhibit A
Page 49
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Exhibit J
Exhibit A
Page 50
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Exhibit J
Exhibit A
Page 51
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Exhibit J
Exhibit A
Page 52