Note that this is NOT an official transcript. It is a summary of my interpretation of what was said. In some cases, the exact words are used. In other cases, the spoken words are paraphrased. Please refer to the audio for exactly what was said.
Unless I missed something, all words spoken were by R. Todd Neilson, the bankruptcy trustee, unless otherwise stated.
He talks about what happened starting at 11:15. He starts talking about assets at 15:40. He starts talking about me at 26:30. He talks about Hannes at 35:20. He talks about the high fees at 44:00 (and again at 52:00). He talks about clawbacks at 50:50.
Anything in italics are my comments.
| 0:00 | We've got 8 people. |
| 2:20 | We'll just sit down and talk. I talked to James Wyatt, Hannes's criminal attorney. He is a competent, well known, ethical criminal lawyer. |
| Prior to the class action lawsuit, people were complaining of a long waiting time to orders. It became very aggravating over time. | |
| There was a raid upon offices of Tulving, by the Department of Justice based out of North Carolina. They seized a number of records, but not too many of those. They seized all of the computer hard drives. | |
| 4:40 | They seized about 100,000 coins. I've done those raids. Grand juries are secret; it is a criminal violation if you divulge information. |
| 5:24 | [An attorney representing a creditor comes in.] |
| 5:40 | They had a few moments where the U.S. Attorney didn't quite understand his role, why access to records was needed. JG: I'm confused. Before R. Todd Neilson knew about this bankruptcy, the U.S. Attorney had already told Hannes' attorney that he would receive the records with 60 days. |
| 6:20 | A bookkeeper had a copy of a CD or a drive that contained accounting, we were able to get that. They have been able to access the more recent records. |
| 7:25 | The AUSA (Assistant U.S. Attorney) is Kevin. Kevin said that the 100,000 coins were virtually worthless; were appraised. Mr. Neilson asked for copy of the appraisal when done. R. Todd Neilson thinks it was a quick look/answer, with formal appraisal coming in a few weeks. |
| 8:30 | Kevin said 'there's just nothing there' |
| 8:35 | The bookkepper and another employee said that the coins were there for years and years, and they knew they were worthless. |
| 8:55 | Someone asked 'Are they not really gold?', and was concerned of the possibility that Tulving was selling fake gold. JG: Highly unlikely. They are almost certain graded base-metal coins such as quarters |
| R. Todd Neilson: "I don't know." | |
| 9:35 | R. Todd Neilson received communication from Hannes's attorney that said these could be worth a lot 'if handled right'. |
| R. Todd Neilson said 'if that means selling to unsuspecting investors, we aren't going to handle them right.' JG: Cute answer, but whoever buys them will try to sell them for the best price. | |
| 10:00 | An attorney: They could be non-bullion, with collector value, left over from tulving's rare coin days |
| 10:30 | Another attorney: Are they the UCC filing coins (CFC/A-Mark)? R. Todd Neilson: "No, I do not know that." JG: They should not be. A-Mark states that coins used as collateral are in their possession; the UCC filing refers to over 250,000 coins. We have had an opportunity to review their records. The records show assets of coins as a negative. |
| 11:15 | Let's talk about what I think happened here. This is based on a very cursory review. If you look over a period of time, there have been complaints over that entire period. JG: Presumably he means starting around late 2011, or some point after that, not the 20 years Tulving was in operation. There were complaints a long time ago, and action was taken against him, and there were "personal leins". Tulving couldn't meet payroll, he was told. JG This is odd. UCC filings show no leins against Mr. Tulving, just The Tulving Company, and those started in 2008. He was provided a personal condo, because he couldn't get income into his account, which would have been under the threat of seizure. JG: His apartment was leased starting January, 2011. |
| 12:30 | As best as we can determine, the period of time from when orders were made and served/delivered increased steadily over time. we're not sure why that is, if it was operational costs, we all know the volatility of the market, if you promised to deliver at X and it has gone down... or it goes higher, and is Y, you have to pay that increased amount. I suppose that could be an explanation. JG: I suppose it could. But the problems always got worse as the market was going down, not up. |
| 13:10 | We suspect that he became engaged in an attempt to get into commodities futures trading, and took what moneys he had and they were lost. the company he engaged in this service with was a company called A-mark. |
| 13:40 | We have been in discussions with "commodities control corporation" [CFTC]. They were looking and would look at what happened with A-mark and would provide us with that data. JG: This is crucial information! It seems to answer where the money went. |
| 14:10 | That investment went south on him. That's what precipitated everything. |
| 15:30 | I don't know what the claims are. JG: The court has a record of $3M of claims, with an estimated $20M+ in total claims. I would be very surprised if we get any kind of meaningful distribution in this case. |
| 15:40 | The assets are as follows, the best as i can determine: On books, records, Accounts Receivable, $1,089,000. Getting accounts receivable from 'people like that' is not an easy thing to do. JG: He gives no clue as to who might owe Tulving money or why, but clearly knows who they are. 'Yeah, but he owes me this; I don't have the money, etc.' |
| 16:30 | in the office, office furniture, hard drives, computers, etc. The Secret Service seized the hard drives, I doubt we will ever get back. |
| 17:04 | unknown: Is there info we need to access on the hard drives? R. Todd Neilson: I doubt they will let me examine them. But they may provide image of hard drives. We got a lot of it. |
| We got ~$27,000 from the auction, we'll take costs off of that, get some back from that. | |
| There are supposedly inventories at other locations, we have been told. Was told by Hannes' criminal lawyer that there is some inventory at XYZ company. we will contact the company. JG: It is unclear if he is referring to the 281,659 (PCGS graded common non-bullion) coins that A-Mark claims to have in their possession, that belong to The Tulving Company. That's a public record that R. Todd Neilson knows about, so is this different inventory? | |
| 19:25 | We have received a significant number of inquiries from people wanting to buy the 800#, mailing list, URLs. The problem is title-wise, they want to come in and look at them, I said they are gone, they are on a hard drive, The hard drive is gone. I think we can work something out. See if we can push the price up a bit. JG: He doesn't mention 'the price'. Those assets have significant value (likely well more than the $27K of stuff auctioned off). The customer list is property of the estate; I cannot imagine that the Secret Service can seize it and not supply a copy at some point in the future; creditors would likely sue the government if that were the case. |
| 20:15 | An attorney: What gave the Secret Service jurisdiction? R. Todd Neilson: I imagine it was mail fraud. |
| 21:05 | Another attorney who represents various creditors: I imagine the bank records were seized, to find out what happened to the money, Does the Department of Justice do that or Mr. Neilson? She understands wires were being sent until the day of closing. |
| 21:35 | R. Todd Neilson: AUSA's office did not seize a significant number of hard documents. I suspect they have some bank statements. We agreed, we did an inventory for them, because there were like 75 boxes. We would box them up, but not do a real inventory. We agreed we would box them up, set them at a separate location. AUSA wanted them shipped to North Carolina. R. Todd Neilson said he would if they pay. They didn't know if they would want them. It's just $70/mo for a semi-secure location. |
| 23:00 | We have the bank statements, got them from the bank. within a week or two of his appointment. They have not spent a good deal of time looking at them. JG: I'll bet within an hour I could give you a very good idea of what went on. But it is creditors who care about what happened, not R. Todd Neilson. |
| 23:30 | The account was negative when we got it. there was a cancelled check in process, a bad check or some problem, $600,000 or $250,000 or something in the red. The check was for $659,125, the balance in the bank account was -$286,201.23 (e.g. in the red) as of the date the bankruptcy was filed. We will receive it. Net of about $300,000. In a month, 6 weeks. |
| 24:25 | An attorney: Do you know where the check originated? Is it someone who is now a creditor? I don't know if they were creditors or not. There was a mix-up or problem with the coins. As a result, there was a dispute. BOA provided money, the cashiers check was not honored, they granted credit. In limbo. JG: If it is a creditor, it is not one who filed a BBB/BCA complaint or who has filed a Proof of Claim form yet. |
| 25:30 | They are looking to see if they have E&O (Errors and Omissions) insurance (doubt they do), if there were financial institutions that knew what was going on; i don't know that. JG: Interesting. Tulving's bank knew about concerns of fraud for at least 1-2 months before Tulving closed. This suggests that they may have some responsibility to creditors. Why else would you pay professionals to look into it? |
| 25:55 | An attorney: There were documents on the website about insuring shipping of coins. R. Todd Neilson: Maybe you could send that info. We can look at that. JG: It's just for coins in transit, but in either case, I've got plenty of information on who they used for insurance over the years and how much they paid for the policies, if anyone wants to know. |
| 26:30 | Let's talk a bit about the claims. There is an individual by the name of Josh Gibbons who has I don't know what relationships he has had. I am going to assume that it is all, that my last communication to him was that I am going to assume that what he is trying to do is an act of a good samaritan, he has no claims here. He has taken upon himself to be a conduit for a number of creditors. I clearly have gotten under his skin. There is a lot of misinformation in this section; see the main Tulving page for my responses to all his misinformation about me. |
| 27:15 | I have a standard and a policy I have had over a number of years, i won't deal with people unless they are a creditor or an attorney representing a creditor or some party in interest. I'm not going to talk to someone who comes off the street and says 'let me tell you how to do things.' I've got enough people who have a stake here that have anted up that can tell me how to do things. |
| 27:45 | He apparently felt like, and I did say it is obvious you don't have any bankruptcy experience, based upon the questions you are asking me. So I said i am going to disregard, you are not going to be the filter to a number of creditors, I'm not going to do that. |
| 28:15 | And so he told creditors, people he was been in touch with, that I was unresponsive, and wouldn't deal with him. And that he found out that it was vital to file a creditor's list, that I was shirking my responsibility, that it must be filed by a certain date. I said that is not true, and i don't know where you are getting this, other than you are probably Googling something. It's just not true. |
| 28:45 | I said we will provide, and we are very careful about the claims in this estate, but what happened is he suggested to his minions that they start sending me E-mails and that they start calling me, I have 15 calls I haven't returned, 20 E-mails I have responded back to every single one of them. I will return every call. If the creditors want to talk to me, that is what I am there for. And I told him, in the future that I am not going to deal with someone who doesn't understand things. He has no skin in this game. I'll talk to creditors all day, but i am not going to talk to someone like that. |
| 29:40 | So I am getting pushed back from a number of creditors who are associated with him, saying we want him to represent us, and I say he is not a lawyer. I think we have gone a ways towards solving that, and I said we have set up a website. and it is called tulvingbankruptcy.com. Here is my first report that I will be finalizing today. We will have references to proof of claims, filings that have taken place, that will be uploaded on a regular basis, we will have schedules, detailing proofs of claim, we will have notices, those types of things that people can understand. |
| 30:35 | Unknown: do you anticipate setting a claims bar date or is that just going to be after the conversion? |
| 30:45 | We have a conversion motion tomorrow, then after that a bar date will be set. JG: It has since been set, to September 30, 2014. A bar date to me in these matters is a very important date, but I am very liberal in these things. Ford, Microsoft, etc. have rafts of attorneys to determine when to file proof of claim, if they do not file it on time, I say too bad so sad, you don't get a claim. In an instance like this, I generally bend over backwards. I cannot unilaterally accept claims, but can file a motion saying we want them allowed. most of the time I am going to be very liberal. |
| 32:25 | We have a lower level staff person, she keeps a list. I have received communications from various government agencies, state and federal, that say that they have lists of the investors. We have lists in the books and records, and proofs of claims that have been filed. We will take all of those, and we will make a creditors' list. JG: This is a repeated theme; he seems to think creditors are worried that they won't find out about the bankruptcy. The only people who should be concerned about not finding out about the bankruptcy are those that haven't found out yet, who he is not and cannot address. |
| 33:10 | I don't know that it will occur immediately; we want to do a good job. we want it to be fair. |
| 33:35 | We will file that, make a notice list, that will go out to everyone saying 'file a proof of claim, if you haven't already.' Staff people have called and said 'I've got this poor woman who has called 10 times, and cannot get this proof of claim filled out, and I've said 'Well, I'll fill it out for them.... so just fill it out and file it'. I don't want to do that for everybody. |
| 34:40 | I generally ask for supporting documentation. |
| 35:20 | I want to come back to Mr. Tulving and what has happened so far. He wanted to appear by phone. The U.S. Trustee said it was up to Mr. Neilson; he said he doesn't like those, he wants Mr. Tulving present. He might just plead the 5th to everything. R. Todd Neilson told Tulving he should be a man and face people. |
| 37:20 | Either you take the 5th, or you do not; you don't pick-and-choose which questions to plead the 5th to. |
| 37:35 | Mr. Tulving was concerned about his safety; that is why they have a marshall in the back (of the room) and metal detectors. |
| 37:50 | R. Todd Neilson once did a 341 meeting with 500 crazy, mad, kill-type investors, and that guy came. |
| 38:35 | I doubt that I will ever see Mr. Tulving |
| 38:50 | I talked to his lawyer to see if I could talk to Mr. Tulving, he said no. I don't really care. JG: Well, some of us would be very interested in hearing what he might have to say. |
| 39:20 | An attorney: Has Secret Service served the Grand Jury subpoena yet? R. Todd Neilson: I suspect his criminal attorney will accept service. |
| 39:45 | Mr. Tulving will want to say that he has cooperated. If he is convicted, and pleads guilty, there is a scale, that depends on the amount of the loss, the creditors, cooperation; that is how they set the sentence. |
| 40:40 | I have assisted in putting more people in jail since I left the FBI than when i was in the FBI. |
| 40:55 | R. Todd Neilson in criminal cases will write a letter to the judge saying that the person cooperated; Tulving's attorney is smart enough to know that. |
| 42:15 | They always hope to say that they cooperated. |
| 42:20 | In most instances, they say they are the only one who can untangle things. But it is usually possible to figure things out by looking at the documents. |
| 42:50 | If he offers to cooperate, they will be glad to let him, but they think he will not. |
| 43:00 | An attorney: Going back to the insurance policy issue, did anyone identify if a broker or a fidelity bond was issued to this company? R. Todd Neilson: I don't know, but we will take the lead on that. I have asked, and gotten 'i don't know' as an answer. |
| 44:00 | There have been some creditors objecting that my lawyers are too expensive; we have a hearing tomorrow about that. I respect that. This case is going to be very difficult, to do what creditors want and have money left over. |
| 44:50 | I've dealt with cases, we can eat case money up so fast it is scary. |
| 45:10 | [Mr. Tulving's attorney needs to leave] |
| 45:30 | We're going to need certain things done. I've held off the accounting firm because I do not know what needs to be done there yet, and I don't want to consume all the money. We could consume $1,000,000 in a heartbeat because things are so messy, and messes cost money. |
| 46:15 | I have been spending most of my time doing this. I have received spewing venom about how I will get paid and nobody else will. I'm sure I will be writing off a substantial portion of my fees, because there is not enough money here to warrant my time. |
| 47:00 | I'm comfortable writing off my time, but not with getting venomous E-mails about how I will get paid when I am not getting paid. I'm doing the best i can. JG: He will get paid, it just may be less than he wants. And for the record, I have never suggested anyone contact him about high fees (although I respect those that have). |
| 47:25 | I've talked to law firms, they politely declined. I got this law firm because i have sent them millions of dollars of business over the years and I said 'you owe me.' JG: Yet he also says 'I want to use the people I know', and one attorney said she knows of several firms who would have been interested. |
| 47:55 | An attorney: We've looked at the bank records, there's a lot of data there, one of the first things to do would be to have an accountant look at it. Frying to figure out movements between accounts. |
| 48:35 | We have engaged accountants, we can do that, again we have to be careful, the $200-$300/hr days are long gone. A lot of lawyers bill over $1,000/hr. We have accountants with my firm, they know exactly what they are doing, as efficiently and inexpensively as can be done. I want to get my arms around everything first. |
| 49:35 | First, write demand letters to people we feel owe us money. |
| 49:45 | Mr. Tulving said he wanted to cooperate on preferences, where someone gets paid within 90 days you can go after that money. It can go back a number of years if they do it with total intent to delay the fraud, etc. |
| 50:00 | [sarcastically] I'm sure the creditors will be excited to hear that you [Mr. Tulving] are going to cooperate in helping claw back their money, you will further indear yourselves to them with that. We'll look at that, I'm generally not too excited about doing that in businesses like this, I will if I have to. |
| 50:30 | In other instances I have been able to go back and get millions and millions of dollars. That's not #1 on our list. |
| 50:50 | Unknown: My understanding is that most of the creditors paid before they got their gold, there may be troubles showing it is an antecedant debt. R. Todd Neilson: if they are getting gold, then that is not a preference, it is an exchange. It's not something I am excited about doing, but I have a duty, I'll look at it. |
| 52:00 | An attorney: I represent a number of clients who are extremely upset about the rates that are going to be charged. Did you endeavor to find a local firm, I spoke to several that seemed interested in the case. will attorneys be travelling to hearings and charging, or appearing telephonically? R. Todd Neilson: I want to use the people I know, that I have used for years. I will not hire because rates are lower. I have the right to hire counsel. when time comes for fee applications, they have the right to make their thoughts known. |
| 54:00 | The partners that make $500/hr in accounting aren't the ones that do the work. The blended rate even on bigger cases is $350/hour or something like that. We push the work down as low as we can. I'm sure if I called them and said I hired someone else, they would be relieved. |
| 55:00 | Let's see how this goes, see what happens, trust me that I am going to be very careful about that. If there are any chances of telephonic appearances, we will do that. |
| 55:20 | At attorney: I filed the first objection. It wasn't a matter of second guessing. We were invited to file those objections. The creditors look at these costs, how bad a hit are we going to take on these expenses? If you took it in another way, that wasn't intended. |
| 56:40 | I wasn't angry. We'll let the judge decide. |
| 57:05 | I will subject what we have done and will do to the scrutiny of the court. If we have to sue somebody, I'm amenable to looking at other alternatives. There are some firms that are less. We'll keep that in mind. |
| 58:45 | An attorney: I've been on opposite side of PSZ&J, I think they are quite efficient, and would not second-guess them. |
| 59:20 | All I ask is that we have civil discussions. I have not had civil discussions with Mr. Gibbons. We may agree to agree to disagree, that's a hard thing I have to teach my children. JG: I agree it would be nice if he was civil. I had nothing to do with the objections that were filed, and I believe all the E-mails I sent were civil. Anyone can read them and decide. |
| 1:00:45 | Many creditors will call, say I do not understand. I have no problem talking with them. |
| 1:01:40 | I understand how difficult this is for people. Mr. tulving will get no sympathy from me. |
| 1:03:20 | Sometimes judges do not know what is going on unless someone files something. |
(C) Copyright 2010-2019 About.Ag