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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 assistance you may grant me.
U.S. Department of Justice
Federal Bureau of Investigation
Washington, D. C. 20535-0001
February 23, 2004
Mr. Alphonse Mourad 125-127 West Street HydePark,MA02136
Dear Mr. Mourad:
Your letter addressed to the Federal Bureau of Investigation (FBI), dated February 5, 2004 has been referred to me for reply.
The concern which prompted you to write is certainly understandable; however, we are unable to determine from the information you provided whether a violation of Federal law within our investigative jurisdiction has occurred. If you have specific details which you believe would enable us to make such a determination, you should furnish them to a representative of our Boston Office located at Suite 600, One Center Plaza Boston, MA 02108.
I am forwarding a copy of your letter to that Office for its information.
Public Corruption/Governmental Fraud Unit
125 West Street
Hyde Park, MA 02136
March 17, 2004
Public Corruption Fraud Unit, Room 3117
935 Pennsylvania Avenue, N.W.
Washington, DC 20535-0001
Dear Ms. Ferrick,
I am appreciative that you are willing to review the facts of this case. As you may recall, on March 11, 2004, we spoke over the telephone my Chapter 11 proceeds here in Boston. I am writing in reference to the letter of Unit Chief, Nancy Nelson. I called the FBI to set-up an appointment to review the attached documents that display incidences of fraud and perjury, however, the Boston office clearly expressed to me that they were not interested in investigating this case. As I have exhausted all of my options in Massachusetts, I am now seeking the support of your office in Washington. I am forwarding to you the court documents that both I and others involved in this case feel clearly display acts of gross misconduct and perjury that have taken place in the Ch.11 federal bankruptcy case of my former company, V&M Management, Inc.
From the onset of my relationship with my attorney's, Harold H. Murphy and Donald E. Farrell of the law firm/partnership of Hanify & King, I feel the firm and its representatives are guilty of professional malpractice, negligence, failure of representation, failure to appeal the Bankruptcy Court's April 1, 1996 appointment of Chapter 11 Trustee over V&M Management, Inc., breach of duty, breach of contract, fraud, excessive fee charging and conspiring, with Stephen Gray, the Court-appointed Chapter 11 Trustee. These actions have deprived me of my property and right to reorganized my sub chapter S corporation. As a result of the (mis)representation, negligence, and breach of duties, and conspiracy with Trustee Stephen Gray, I have lost fifteen years of hard work, an asset now valued at over $20 million. The following will shed light upon Murphy, Farrell, Hanify & King, and Gray for their breaches, misrepresentations, negligence, fraud, conspiracy, and deliberate disregard of Mourad's rights and interests. These actions were taken by the above mentioned parties to financially maximize on this bankruptcy proceeding.
Mourad came to know about the relationship between Murphy and Gray for the first time when attorney David M. Lipton informed him, in October of 1997, that he had heard through an attorney friend of his that Murphy had been representing Trustee Gray in the case of In re: American Shipyard Corporation, Case No.11-96-11753, in the Rhode Island Bankruptcy Court, while simultaneously representing Mourad and V&M Management chapter 11 bankruptcy case. Attorney Lipton's October 30, 1997 Affidavit is attached as Exhibit "1." Obviously, this was an indication of a major conflict. Mourad's nephew went to the Rhode Island Bankruptcy Court to look up the American Shipyard case. Sure enough, Stephen Gray's June 14, 1996 application to employ Harold Murphy was granted on July 15, 1996, while Murphy was still the counsel of record for V&M Management, and after Gray had been appointed as Chapter 11 Trustee to V&M, on April 2, 1996. The June 14, 1996 Application of Chapter 11 Trustee For Employment of Counsel, June 14, 1996 Affidavit of Harold Murphy In Support of Motion For Employment, and the July 15, 1996 Order Granting Trustee's Application To Employ Counsel, are attached as Exhibits "2, 3, & 4."
In light of this new evidence, Mourad had his nephew go to the Bankruptcy Court in Boston to see if Murphy had represented Gray in any other cases. He found that Harold Murphy and Hanify & King represented Stephen Gray, in his capacity as Chapter 7 Trustee, in the case of In re: Neponset River Paper Company f/k/a, Patriot Paper Corporation, Case No. 93-12482-CJK. This case was pending before the same Bankruptcy Judge, Carol J. Kenner, who appointed Gray as the Trustee for V&M. Therefore, she (Judge Kenner) must have known of the prior Murphy representation of Gray at the same time she (Kenner) appointed Gray. This case had been ongoing before Mourad hired Harold Murphy to represent V&M in January of 1996, and Murphy proceeded to represent Gray in the Patriot Paper case and V&M simultaneously, in the same court room, and in front of the same Judge (Carol J. Kenner), without notifying Mourad of his relationship with Gray. Stephen Gray's May 20, 1994 Application For Employment of Counsel is attached as exhibit "5" and Murphy's May 20, 1994 Affidavit in Support of Application For Employment in the Patriot Paper Corp. case is attached as Exhibit "6."
As part of the Trustee appointment process, Gray was required to make certain disclosures, Bankruptcy Rule 2007.1. Gray submitted an April 5, 1996 Verified Statement (See Exhibit "7") and an April 10, 1996 Amended Verified Statement (See Exhibit"8"), that he (Gray) had no connection to V&M or V&M's attorneys. It is a fact that Gray's Verified Statements are false and perjurious, but only Murphy knew that, and he failed to disclose the Murphy-Gray connection and prior representation, or to object to Gray's appointment.
In the case of In re Carlton House of Brockton, Inc. & Paula Wyner, case No.'s 93-21122-CJK and 93-21123-CJK, Judge Kenner suspended Attorney Neal E. Satran for failing to disclose adverse interests. Judge Kenner found that "despite his knowledge of these adverse interests Satron had not disclosed them in the affidavit he submitted pursuant to F.R. Banr.P. 2014 (a) in support of the Committee's application for his employment. Rather, he had averred that he was disinterested and that he represented no interest materially adverse to the estate." In the case of V&M Management, Inc., perjury was committed upon the Court to conceal the adverse interest and conflicting relationship between Gray and Murphy. This is far more unethical. Judge Kenner's February 20, 1996 Memorandum of decision is attached as Exhibit "9."
Bankruptcy specialist, attorney Leonard M. Krulewich, of Krulewich & Associates, has offered the true nature of the misrepresentation, showing the unlawful negligence committed by Harold Murphy in his own sworn March 2, 1998 Affidavit. Attorney Krulewich has studied this case for over a year, and found there to be "so many errors in the Court's findings based upon objectionable evidence that, not only would the District Court have reversed the decision in an appeal (had Murphy filed for one, which he refused to do), 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." Attorney Krulewich also goes on to say "To recommend that Mr. Mourad not file a proof of 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." Attorney Krulewich's Affidavit is attached as Exhibit "10." Krulewich also wrote a letter to Murphy on October 10, 1996, asking Murphy to, at the very least, substitute V&M as a party to the appeal or file a motion to Join Into the appeal late. He also stated in the letter "I have a serious problem with the fact that (legal) fee was earned at all. With all of the worked performed, I cannot see a benefit to the Debtor." Krulewich's October 10, 1996 letter to Murphy is attached as Exhibit "11." On the same October 10, 1996 day that Kruelwich sent Murphy his letter, Murphy submitted his withdrawal from the V&M case and Judge Kenner allowed it on the same day without a hearing or a justifiable reason. See Murphy's October 10, 1996 Motion to Withdraw, and Judge Kenner's Order to Allow it attached as Exhibit "12."
After this misrepresentation was disclosed to the creditors of the case, they collectively filed an October 31, 1997 a Motion entitled- Joint Emergency Motion of Creditors and Parties at Interest For an Emergency Stay, and For Relief Fro, and to Revoke the September 26, 1997 Order Confirming the reorganization Plan, and to Retroactively Remove Trustee Gray, and to Vacate the September 19, 1997 Orders Allowing Fees to Gray and to Hanify and King, and Order Those Fees Returned, For The Serious Breach, and Undisclosed Conflict of Interest in Having Attorney Harold Murphy and Hanify & King Simultaneously Represent Stephen S. Gray In A Rhode Island Bankruptcy While Murphy was Still Counsel to the Debtor, V&M Management, In This Proceeding. See said Motion attached as Exhibit "13." On November 30, 1998, a hearing in this regard was held. Please see transcript of hearing on a joint emergency motion of creditors attached as Exhibit "14."
On August 2, 1997, Attorney Arthur H. Goldsmith, a creditor in the V&M case, filed an Affidavit about how Trustee Gray devalued the property and misused and abused his authority. Attorney, Goldsmith's Affidavit is attached as Exhibit "15."
In conclusion, it would be greatly appreciated if your office would undertake an investigation of these matters. The corruption that has, and continues to occur in the City of Boston and in the U.S. Bankruptcy Court must come to an end. With your help, we can make it happen. I am enclosing a recent article from the Wall Street Journal that identifies the types of bankruptcy fraud I discuss in this letter.
EXHIBITS IN SUPPORT OF THE PERJURY AND FRAUD OF TRUSTEE, STEPHEN GRAY AND THE DEBTOR'S ATTORNEY HAROLD MURPHY WHO REPRESENTS THE FIRM HANIFY & KING.
Exhibit 1: Affidavit of David M. Lipton, esq.
Exhibit 2: Stephen Gray's June 14, 1996 application to employ Harold Murphy in the American Shipyard case.
Exhibit 3: June 14, 1996 Affidavit of Harold Murphy In Support of Motion For Employment in the American Shipyard case.
Exhibit 4: July 15, 1996 Order Granting Trustee's Application To Employ Counsel in the American Shipyard case.
Exhibit 5: Stephen Gray's May 20, 1994 Application For Employment of Counsel in the Patriot Paper Corp. case.
Exhibit 6: Murphy's May 20, 1994 Affidavit in Support of Application For Employment in the Patriot Paper Corp. case.
Exhibit 7: Gray's April 5, 1996 Verified Statement in the V&M Management case.
Exhibit 8: Gray's April 10, 1996 Amended Verified Statement in the V&M Management case.
Exhibit 9: Judge Kenner's February 20, 1996 Memorandum of decision.
Exhibit 10: Attorney Krulewich's Affidavit.
Exhibit 11: Krulewich's October 10, 1996 letter to Murphy.
Exhibit 12: Murphy's October 10, 1996 Motion to Withdraw and Judge Kenner Order to Allow it.
Exhibit 13: Joint Emergency Motion of Creditors and Parties at Interest For an Emergency Stay, and For Relief Fro, and to Revoke the September 26, 1997 Order Confirming the reorganization Plan, and to Retroactively Remove Trustee Gray, and to Vacate the September 19, 1997 Orders Allowing Fees to Gray and to Hanify and King, and Order Those Fees Returned, For The Serious Breach, and Undisclosed Conflict of Interest in Having Attorney Harold Murphy and Hanify & King Simultaneously Represent Stephen S. Gray In A Rhode Island Bankruptcy While Murphy was Still Counsel to the Debtor, V&M Management, In This Proceeding
Exhibit 14: November 30, 1998 transcript of hearing on a joint emergency motion of creditors.
Exhibit 15: Attorney, Goldsmith's August 2, 1997 Affidavit.
Exhibit: STEPHEN S. GRAY