E-mail from Howell Woltz

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Woltz email August 26, 2004[edit]

From: Howell Woltz [1]
Sent: Thursday, August 26, 2004 7:09 PM
To: Steve Kirsch
Subject: Interesting

Dear Steven,

You have asked for corrections, or you will assume that your projections of "truth" are correct. So far, nothing regarding myself that you have said is true, other than the references to sites that show me speaking to S.T.E.P., our professional group, etc., so I'm taking you at your word as a "stand-up" sort of guy to keep your promise to correct. You somehow missed that I am also an international professor at the MBA school in Davangere, India (Bapuji Instititute). It's on the web too, under their "faculty" heading. Must not have revved up that search engine hard enough to get down to the good stuff. You also missed the Eagle Scout and God and Country award site. You must be more thorough. I earned both by the age of 13, along with Boys State, being a Commissioner under Gov. James G. Martin, and a founder of the Republican Task Force under Reagan. Not that big on Republicans these days, but I've been there.

On your conjecture/charges, for which you've sought "corrections":

1. I am not, nor have I ever been an owner of Winning Stock Picks, as you have stated. I did not register their sites, (as you also now know, but have failed to acknowledge publicly). I contacted TuCows, using an attorney from Ft. Myers that called to sue us, as advisor on how to do so, as I don't even know how. They were told that if I/we were the registrars, we could also shut them down. Only then did they correct. Thanks to this, I've now learned, not only how to register a website address, but how to shut one down! Still, however, in contrast to your published statement, I have never been responsible for registering a website, but I do now know how now, if ever I need to, for which I thank you (and the attorney from Ft. Myers). 2. Had you taken the time to check out your "Aha!!" the other day, you would have found that Mr. Russo, the attorney that you spoke with on my cell phone, and have been copying, was hired to "intervene" on our behalf in CFTC Case 04-1512 (see www.cftc.gov). Please read it before you make further conjecture that makes our firms appear to be perpetrators.

You lose all credibility for the few that care enough to follow all of this when you unfairly intimate that we "did" something. It is truly hurtful to see your "glee" in blaming us, when all you had to do was read the case and you would see that we are the victims. We, sadly, are about the only victim. A dishonest trader, Coyt A. Murray, and a complicit accounting firm owned by J. Vernon Abernethy (both of Gastonia, NC) have been charged by the CFTC in this case of commodities fraud. It's a "mini-Enron", worthy of your skills as an investigator. Interestingly enough, Abernethy, as a former legislator and Republican party treasurer seems to have been successful in keeping this scandal (which has cost our firms and investors millions of dollars) from being reported, until just last week. I was the person that called the newspapers and asked why they were protecting him. We're not that different, you and I, except our foundation is in India and yours in is California, and I don't want to run for office.

My clients lost over $3 Million (if the CFTC's reports are correct), and we still have $18.1 Million being held by them, though no Sterling company is implicated, charged, or involved, other than as the biggest "patsy" in the Murray /Abernethy's scam. I wish you had time to expose guys like these that really hurt people but don't get charged or indicted. The "good ole boy" network in Gastonia has not breathed a word since they seized the trading firm in late March until I humiliated them into doing so last week. A "blurb" appeared in the Gaston Gazette, for what the CFTC is calling "one of the largest scams in America this year". The CFTC is self-funded by fines, and has no interest in criminal charges, so we, (again), have requested the detectives in Gastonia to begin to research this near ancient case and put these guys in jail where they belong. I called Detective Wilson (again) yesterday. Between installing a new Chief, and the parties accompanying his installation, he has not really had time to look into it, but promised that he will soon. The CFTC was shocked when we asked them if they had done so, as they may not be able to get their "fines" if a criminal case is started. So much for justice. 3. You qeustioned my "abroad" status. I lived in Haiti for 12 straight years, with stints in the Far East and Italy. My offices are in Anguilla, St. Lucia and Nassau. My wife is Trinidadian, as are my chiIdren. I've lived abroad or in New York most of my adult life, but I've had my get away in NC for 22 years as a place to come to and rest. It is a cabin, built in 1853, from hand-hewn "forest pine" logs, a type of tree which no longer exists here. It started its life as a two stall, "dog trot" barn, with two tiny lofts for hay, and I couldn't see it torn down, so I built a house around it to protect it.

Also, my mother is not far away so I get to see her when I'm in, (if you call her, like you have everyone else, I'll call yours too and tell her what a mean boy you've been, so don't!). When I can, every chance I get, I come here and spend a few days. You questioned my "vacation home". Well, this is it. That's what it's been for well over two decades.

It is now on the market, as we've bought a place in Nassau, and I can't afford both. Through the work permit legislation, I've been a resident of the Bahamas for some time, but have applied to move that to "permanent residency", which I'm informed has been approved. My family has done business there (The Bahamas), since the late fifties. We owned three businesses in Freeport for decades, and have been in the financial services sector in Nassau for many years as well. 3. If you really seek the truth, why don't you ask, instead of attack? You might learn more.

As for information about anyone I deal with, the Privacy Act of 1971 requires jail time of up to 10 years, and as much as $500,000 per offence in fines. When you seek to have us discuss who we may or may not deal with, I'm not sure you know what you're asking. We can't and won't do so. No "yes", no "no". You'll continue to get nothing.

Your casting of me and the firms for which I work are not correct. If you care to continue those representations, we must use the Regulatory regimes to complain, as it is simply not just or true, Steven. You promised to correct, so here is your chance, and I thank you for it.

Meanwhile, in a gesture of goodwill, I have shared with you who we are, and who we are not, and hope you take the information in the spirit in which it was given.

As to your "smoking gun" (Remember, "Aha!!")? Here is the article from the famous "Gaston Gazette", that was just published, at long last, and much of my "pushing" after all of these months since Murray and Abernethy were busted by the CFTC. Please note the date. It took me this long just to get someone to print the truth, while you get "conjecture" out all over the world in one day. Help me get the word out about these guys, why don't you? Please!:

Agency alleges commodities fraud - Aug. 20, 2004 Former lawmaker, Gastonia company sued in federal court BY KEVIN ELLIS Gazette City Editor GASTONIA — Few might connect a suite office in Gastonia with a financial investment center, but for several years Tech Traders Inc. reported it had developed a system to produce astonishing returns in the commodities futures market. But now the Commodity Futures Trading Commission alleges that Tech Traders Inc. fooled investors with the help of a former state lawmaker from Gastonia, J. Vernon Abernethy, a certified public accountant. Abernethy said Thursday he did nothing wrong. Instead of big gains of more than 100 percent, Tech Traders lost millions of dollars, the commission alleges in a civil lawsuit filed earlier this year in U.S. District Court in New Jersey. The commission alleges Abernethy allowed himself to become involved in soliciting investors and reported double-digit profits for most months when in fact the company experienced huge losses. Abernethy knew that Tech Traders used the profits he verified to lure in more investors, the government alleges. Abernethy said his calculations followed the directions spelled out in the contract he signed with Tech Traders. "It’s not that I did anything wrong, it’s that my work was used wrong," Abernethy said. "That is their position," Abernethy said about the commission’s charges, "but that is just an alleged statement." From June 2001 through March 2004, Tech Traders accepted more than $47 million from a variety of entities for investment in a so-called "super fund," according to court papers filed by the commission. Tech Traders lost more than $7 million in exchangetraded commodity futures contracts and foreign currency contracts in that time, the government alleges. Another $20 million appears to have dissipated or been misappropriated by Tech Traders and its president and CEO Coyt E. Murray of Tega Cay, S.C., the commission alleges. The commission, an independent agency of the federal government, only has civil enforcement powers, said regional associate counsel Scott Williamson, who works in the agency’s Chicago office. No criminal charges are pending, Williamson said. Murray has an unlisted telephone number and could not be reached for comment. Messages left with his attorneys, Mel Falis and Marty Kaplan, who work for the same New York law firm, were not immediately returned. Abernethy, 59, who served in the state House from 1986 until 1992, when he made an unsuccessful bid for state auditor, said he has already spent $42,000 in legal fees and does not have any more money to spend for lawyers. "There’s so many trading violations today and the penalties and the fees are so high that it just becomes totally unaffordable," Abernethy said. Stacks of paper several inches thick covered Abernethy’s kitchen table. Some of them had to do with the allegations the Commodity Futures Trading Commission made against him and others with the rules and procedures for someone to follow if they planned to represent themselves. He said he awakens at 5:30 a.m. most mornings and doesn’t go to bed until 2:30 a.m., going through the charges against him. "I’m licensed to practice (accounting). I don’t want anyone thinking I’m not. I did a small tax return this morning, but this is my life now," said Abernethy, who works out of his North Chester Street home. "This is the hand I’m dealt with in this situation and this is how I have to deal with it." The others named as defendants in the lawsuit plan to lay the blame on Tech Traders, Murray and Abernethy, according to Sam Abernethy, the New York lawyer representing Vincent Firth of Medford, N.J., who is the president of Equity Financial Group, and Robert Shimer of Leesport, Pa., the legal counsel for a commodity pool operated by Equity. "Our clients were duped, if in fact the trading was as the commission alleges, into believing this was successful trading activity," said Sam Abernethy, who is not related to J. Vernon Abernethy. He alleges Abernethy helped continue the misinformation by verifying that Tech Traders earned profits. Firth and Shimer allegedly brought in approximately $15 million in investments from a pooled group of investors, according to the government. Some of that money belonged to them and their family, their lawyer said. The Commodity Futures Trading Commission also has changed its attitude, filing an amended complaint on July 24 that places more blame on Tech Traders and Abernethy’s role, Williamson said. Abernethy went to work for Tech Traders in October 2001 and through February 2004 reported to the other investors, including the other defendants, that the company was enjoying returns of approximately 10 percent per month, according to court records supplied by Williamson. For example, Tech Traders showed an aggregate loss of $533,000 in September 2003, while Abernethy reported a gain of 10.31 percent; an aggregate loss of $699,000 in January 2004 was reported as a gain of 9.02 percent. "It appears inconceivable that Abernethy could have checked the monthly statements and not come to the conclusion that Tech Traders was losing money hand over fist," states a court brief filed Aug. 12 by Williamson. "He deliberately shut his eyes to information that Tech Traders’ trading accounts were losing money when it was right in front of him," the court brief filed by Williamson states. The court brief also states Abernethy held himself out to be an independent reviewer while soliciting investors, creating a conflict of interest. The level of money involved makes this case a large one for the commission, Williamson said. Tech Traders’ assets have been put in receivership, a legal action where the court appoints a trustee, in this case Chicago attorney Steve Bobo, to manage the business. Howell Woltz, who said he was a native of North Carolina who now operates The Sterling Group based out of the Bahamas, said his investment and insurance businesses contributed about $18.1 million, although the government puts that figure at around $13 million. "We’re the victims," Woltz said. "They were trading our money and sending our firms very nice gains — 8 percent to 9 percent— and corroborating it with an independent accounting firm. "It all looked very credible," Woltz said. Future exchanges aim to transfer the risk of price fluctuations from people who don’t want the risk, such as farmers or metals processors, to speculators who are willing to take a gamble on making big profits. Major commodities markets are based in Chicago and New York. "With the advent of computers and electronic trading, people can trade from anywhere in the world," Williamson said. "They just happened to be in the Carolinas." In 1996, the State Board of Certified Public Accountant Examiners censured Abernethy and placed him on one year probation following a business dispute between him and a seafood company. Abernethy agreed to pay the company $500 restitution and perform 150 hours of community service as part of a deferred prosecution in the 1994 criminal case. Abernethy predicted he’d survive this latest predicament. "I’m a man of faith and I believe my destiny will be determined not by this," Abernethy said, "but by my God and how I ultimately deal with it." [Image:08262004_120251_0.bmp]

This is the first article we've been able to find in America about this scandal except the CFTC's own website. Amazing.

Can't you "branch out" and go after these guys, Steven? They've really hurt people, and no one is going after them.

Howell W. Woltz, TEP

My reply[edit]

From: Steve Kirsch
Sent: Thursday, August 26, 2004 10:54 PM
To: 'Howell Woltz'
Subject: RE: Interesting


Nice to hear from you again.

regarding your history, the page is already too long and, as a service to readers, I've tried to limit what is said to that what might be relevant to the story. Sadly, my history as a boy scout and your history did not make the cut. Perhaps I'll create an "unabridged" version of the story someday.

However, if you like, I'd be more than happy to post your email so that readers can read your response and the excellent article you forwarded. Is that OK with you?

as far as specifics, I'm more than happy to make changes, but there are some issues with the points you raised which I would like clarification on in order to effect changes:

1. I can't find where I have stated you are the "owner" of Winning Stock Picks as you claim. What I wrote was "Howell is associated with the website registration info for WSP" which is true. Where is the "owner" reference?

2. I do not know the person who registered the site. If you know who did, please let me know who did and how you know this. That would certainly help put you in a better light in the writeup.

3. Do you know Jeremy Jaynes and/or Richard Rutkowski and/or Bryan Kos or anyone directly associated with these people? If so, please specify how.

4. I never said your firm was a perpetrator in Shasta. I said your firm was involved. Your employee Jack Vernon Abernethy was involved and he was involved in your firm as well. Jack is definitely quite a guy. And your firm had money that is tied up. I did not have time to investigate whether your firm was innocent or guilty. The judge in your case I guess didn't either. I only reported the factual statement that your firm was "involved." I'm sure you'd agree that having Abernethy on your payroll constitutes involvement.

5. I don't want to run for office either!

6. Your email doesn't state where you and your family live most of the time. Are you saying that you and your immediate family only spend a few days a year in North Carolina and, for example, that you are all now in the Bahamas? For example, approximately how many days in the last year was your residence in North Carolina occupied by a member of your immediate family?

7. There is no Privacy Act of 1971. There is a Privacy Act of 1974 which is 5 USC 552a, and that only applies to federal agencies which the Sterling Group is not. So under what statute are you claiming you cannot provide me the information and what is the statute that has the penalties you cite? I could not find that.

8. Can you explain how your firm's address came to be listed as the registrant for the site and how your firm's address came to be listed as the address to send your membership fees to? That certainly seems suspicious, doesn't it? Having an explanation I can put on my website for this would be great.

9. I assume Worldwide Picks LTD is a IBC and you are the registered agent. Is that correct? Did you register it? That is a matter of public record. In addition, who were the directors specified? or did you list the names and addresses of all the officers? Again, this is a matter of public record so I do not understand your hesitation in providing this. Please explain.

I have a couple of other questions, but let's get these out of the way first.