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125 West Street
Hyde Park, MA 02136
July 7, 2003
S.A. Kenneth Welch FBI - Washington Field Office
601 4th Street, NW Washington, D.C. 20535
Dear Mr. Welch,
I would like to thank you for taking the time to examine all of the documents and correspondence that I sent you last week. I am writing to request that your agency examine the legal documents and if appropriate, launch a federal investigation on the parties invoiced in my bankruptcy proceedings. The purpose of this letter is to ask for your assistance in investigating the questionable actions of Trustee Stephen S. Gray during his tenure as Trustee for V&M Management, Inc. from 1996-1999. I believe that once you examine all of the related legal materials and judicial findings that you will find grounds for a federal investigation of Mr. Gray's highly suspect activities while Trustee of V& M Management, Inc. These allegations of fraud and perjury involve false statements to the Court (see attached letter from the Bar of Overseerers) and the misappropriation of several million dollars of federal funds from the Department of Housing & Urban Development (see exhibit 1 for full details regarding Stephen Gray).
The U.S. Bankruptcy Appellate Panel For the First Circuit remanded the V&M bankruptcy case (V&M Management, Inc., Debtor, Chapter 11 Case No. 96-10123-CJK) back to the U.S. Bankruptcy Court to conduct a full evidentiary trial on two counts. Count one deals with determining who is responsible to pay the IRS taxes owed on over $2 million of profit pocketed by Trustee Gray.
Currently, the IRS holds me responsible for paying the taxes on over $2 million Trustee Gray kept for himself (Please refer to the document that was sent to you as exhibit 2 entitled BRIEF FOR RESPONDENT, in the case of Alphonse Mourad v. Commissioner of Internal Revenue, No. 7873-01, U.S. Tax Court). The IRS claims that I am the sole owner of the development, and because it is a sub chapter S corporation, no one else could profit from it. However, Judge Kenner ruled that Trustee Gray is the owner, which is debatable, and as a result of her ruling, he was allowed to qualify for a tax credit that was in excess of $12 million, which technically should belong to me, according to the IRS and their assessment that all profit and losses run with the owner of a sub chapter S corporation.
The second count deals with his negligence in devaluing the property from $10 million to $200,000, where the property was grossing in excess of $2 million a year in HUD Section 8 Federal Subsidies. Also, I was able to secure a $5.5 million mortgage from the Multi-Loan Network in order to refinance the property and pay back the creditors 100% of their money. Trustee Gray refused to support my plan to reorganize the company, despite having had the money secured. Furthermore, the Bar of Overseers concluded that Trustee Gray "filed two false, or at least grossly inaccurate, disclosure statements with the Bankruptcy Court." Gray filed two Verified Statements stating that he had no affiliation with me or V&M (the debtor), or any of V&M's or my attorneys. It is also a fact that Gray was being represented at the same exact time by Harold Murphy of Hanify & King in two other bankruptcy cases, who was also V&M's and my attorney in the V&M bankruptcy case. This is clear case of perjury.
In Exhibit Three, you will find information regarding Winter Hill Federal Savings Bank's turbulent relationship with V&M Management. The motion shows how Winter Hill Federal Savings Bank of Somerville Massachusetts, the major creditor in V&M Management's bankruptcy case, deliberately sided with Beacon Residential Properties and accepted their proposed reorganization plan which paid them considerably less than Alphonse Mourad's reorganization plan that would have paid Winter Hill in full. Judge Rouse, the original Judge in the Winter Hill case, allowed a jury trial scheduled for January 11, 2000 which would have taken place in session C. The Court then moved the case to session D, were Mourad previously had problems with the session D clerk, James Kelley, in which Kelley, who is politically biased against Mourad, had called Mourad a "thief and crook" and had accused Mourad of stealing money from V&M Management. Kelley later sided with Attorney General Harshbarger when he went for receivership of V&M's assets. Victor Aronow, V&M's attorney, filed a motion for change of session and then change of venue. Winter Hill has a long history of partaking in criminal activity, as is demonstrated by the federal inditement of former President Roy Khein. The documents will show that their fraudulent activity continued with many of its dealings with V&M Management.
The rest of the documents I have sent you (Exhibits 1-16) will explain the entire background and history of the case, which is the largest docketed bankruptcy case in the history of the U.S Bankruptcy Court in Massachusetts. The docket sheet alone is approximately 200 pages. I would like to draw your attention to the issue of federal relevance in which I believe your department has both the responsibility and the jurisdiction to investigate and prosecute. I would appreciate any assistant you may grant me.
SUFFOLK.ss BOSTON, MASSACHUSETTS
AFFIDAVIT OF LEONARD M. KRULEWICH
I, Leonard M. Krulewich, under the pains and penalties of perjury state:
1. Alphonse Mourad approached my office to represent either himself or V & M Management, Inc. a Massachusetts corporation which was a pending Chapter 11 case in the United States Bankruptcy Court for the District of Massachusetts.
2. Mr. Mourad provided me with various materials, among which were transcripts of court proceedings in the Massachusetts Superior Court as well as a copy of the transcript of a recent hearing in the Bankruptcy Court, the result of which a Chapter 11 Trustee was appointed ny Judge Kenner of the Bankruptcy Court, relieving Mr. Mourad of the daily operations of the V & M Management, Inc., the owner of a residential development known as Mandela.
3. The review of the Superior Court proceedings left me with a conclusion that Mr. Mourad was being treated unfairly by the Boston Redevelopment Authority ("BRA") and the City of Boston. Some correspondence which was included in the materials showed that a good faith effort to satisfy tax claims had been made by V & M after a finding by the Superior Court that V & M was subject to Mass. Gen. Laws Ch. 121A. It appeared that several offers, which were at first accepted by the City of Boston and the BRA, were thereafter rejected after tender of the settlement proceeds. There was, however, never a finding, by any Court of the Commonwealth, as to the exact liability for unpaid 121A assessments, nor was there ever a finding of what credits V & M was entitled to for the payments made. The only Court finding was that the BRA was hostile to the transfer of ownership of Mandela (to Edmund Shamsi) and that it, the BRA, imposed a number of onerous conditions to the transfer (see decision by Patrick J. King, Associate Justice in Shamsi v. V & M Management. Suffolk Superior Court Civil Action No: 87-5547.
4. A review of the Bankruptcy Court hearing on the appointment of the Trustee showed a lack of knowledge of the rules of evidence by all counsel as well as the Court. There are numerous instances where the Court allowed testimony that was hearsay (e.g., allowing testimony by a state tax examiner who had no personal knowledge of the facts, did not prepare the document from which he testified and had no knowledge (other than the document came from an attorney) as to who prepared such a document. The Court also allowed testimony from the previously appointed Examiner who had not completed his findings but was allowed to testify as to disbursements to Mr. Mourad without knowing of any payments made to V & M by Mr. Mourad (clearly harmful error when the Court decided that a Trustee should be appointed as a result of the report). There was also a failure by counsel to show that the alleged transfers took place more than four years prior to the date of the Bankruptcy.
5. Furthermore, counsel failed to object to the testimony of Saul Schapiro, counsel to the BRA. The cross examination of Attorney Schapiro was incompetent and failed to raise the issues of his prejudices to Mr. Mourad or Mr. Schapiro's involvement in the attempted sale of Mandela to Edmund Shamsi.
6. I find it quite inconceivable that debtor's counsel failed to take an appeal from the appointment of the Trustee. There were so many errors in the Court's findings based upon the objectionable evidence that, not only would the District Court have reversed the decision, but there would have been a possibility the District Court would have retained the case and revoked the transfer to the Bankruptcy Court. The failure to take the appeal and the suggestion that Mr. Mourad prosecute the appeal pro se. amounts, in my opinion, to negligence.
7. Which brings this matter to a final point. That is, counsel recommended that Mr. Mourad not file a proof of claim for his own indebtedness. There is no reason for recommending such a move. If the debtor (V & M) were to propose a Plan of Reorganization, and such a Plan required a waiver by Mr./ Mourad of any claims that he may have, then the Plan should provide for such a waiver. However, to recommend that Mr. Mourad not fie a claim, especially after counsel failed to take an appeal, is grossly negligent and amounts, almost to an intent to deprive a client of his rights. Counsel cannot argue that he did not represent Mr. Mourad because he had a conflict (as a result of representing V & M). He never disclosed to Mr. Mourad that he did not represent Mourad, nor did he recommend that Mourad retain independent counsel. Instead, he told Mourad not to file a proof of claim. As a result of not filing the claim, the Bankruptcy Court (as well as the District Court), determined that Mourad had no right to argue any motion in Court.
8. Mourad lost his entire life's savings in V & M and should be compensated as a result of the negligence of counsel.
SIGNED UNDER THE PAINS OF PERJURY MARCH 2, 1998,
KRULEWICH & ASSOCIATES
ATTORNEYS AT LAW
50 Staniford Street * P.O. Box 8190 * Boston, Massachusetts 02114 * (617) 367-1200 * FAX: (617) 367-6736
November 3, 1997
125 West Street
Hyde Park, MA 02136
Re: V&M Management, Inc.
Dear Mr. Mourad:
Confirming our telephone conversation, I had attempted to have a telephone conversation with Attorney Harold Murphy on October 9,1996 at about 5:00 p.m. Although he was not available, I left a message for him wherein I suggested that he should have had you file your own proof of claim and that an appeal from Judge Kenner's decision to appoint a trustee was appropriate. Further, I suggested that his actions may be considered malpractice and to avoid an action, that he reconsider the appeal. A letter was sent to attorney Murphy the following day.
I received Mr. Murphy's Motion to Withdraw immediately following my letter and telephone conversation which motion was allowed by Judge Kenne^efore any opposition could have been filed.
Leonard M. Krulewich
KRULEWICH & ASSOCIATES
A TTORNEYS AT LAW
50 Staniford Street * P.O. Box 8190 * Boston, Massachusetts 02114 * (617) 367-1200 *
FAX: (617) 367-6736
October 10, 1996 HAND DELIVERED
Harold Murphy, Esq. Hanify & King One Federal Street
Boston, MA 02110
Re: Mandela Apartments
V & M Management, Inc. Case # 96-10123-CJK
I am sorry that we missed each other on the telephone, this afternoon, however, I will make this letter short and sweet.
Al Mourad has been referred to this office to represent him, individually, for the purposes of buying the Mandela housing. He explained that he contacted Frank Kirby to represent him in the filing of a Chapter 11 after losing a request for a preliminary injunction in the Superior Court to stop a foreclosure by one of his secured creditors. He further advises that Frank, due to his health, was unable to continue with the representation and referred the matter to you.
Since the filing, I understand that Joe and Alan Braunstien were appointed examiners and made some incredible findings which were not justified by the books and records of the debtor but simply appeared to be problemical because of the number of transactions.
Furthermore, I understand that a motion was brought by the Boston Redevelopment Authority for the appointment of a Trustee. Based upon what appears to be argument but without factual support (and testimony by an attorney who also appeared as counsel, even though it is prohibited by the Canons of Ethics), Judge Kenner appointed a Trustee, who, I understand is attempting to sell the property.
Finally, I understand that you refused to take an appeal of Judge Kenner's decision; that you drafted a Notice of Appeal for Mr. Mourad to sign, but that you are aware of the Trustee's Motion To Dismiss the appeal (which I believe should be denied because the Trustee lacks standing and, in any event, has a conflict). For all this work, you have received a retainer of $25,000.00 from the Debtor. While it is likely that your fees generated by the time spent on this case may be near or more than the retainer received, I have a serious problem with the fact that the fee was earned, at all. With all the work performed, I cannot see a benefit to the Debtor. In fact, I see that the Debtor is in a worse position than it was when the case was filed. A Trustee has been appointed, who, it appears, has no intention of making any repairs to the property and appears to want to allow the HUD Section 8 agreement (the so-called HAP contract) to be extended without increases in rent, and has no present intent of attacking the 121A assessment by the BRA.
I ask you, what can be done to protect this Debtor? At the very least, I believe that you should either substitute V & M as a party to the appeal or file a Motion to Join Into the Appeal Late. The amount of the work is limited since the statement of issues.has already been filed. You should proceed to object to an extension of the HAP contract unless there is an agreement by HUD to give the Debtor the underfunded reserves to pay an agreed amount to the BRA. Finally, you should seek a decision determining that the action brought by Nicosia was frivolous and supported by forged documents. The damages arising out of the Nicosia foreclosure were the immediate cause of the filing and the amount of the damages can be substantial.
If you fail to take some remedial measure, I don't know what actions Mr. Mourad will likely take; however, whatever it is will surely be no good for anyone.
Please talk to me after reviewing this letter as time is clearly of the essence.
Very truly yours,
Leonard M. Krulewich