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Earn a bounty with information about Russ Whitney by John T. Reed Copyright 2002, 2003 by John T. Reed Last update 6/7/03 There are several federal laws that provide bounties or rewards or the equivalent of bounties for certain information or lawsuits. Federal income taxes Section 7623 of the Internal Revenue Code authorizes the Secretary of the Treasury to pay rewards to those who help detect and/or prosecute tax cheats. If you have any information that Russ Whitney has cheated on his income taxes, send it to the IRS. Their tax fraud hot line is 800-829-0433. If they use it successfully, they may pay you a reward. There is no set reward amount, although you often hear the figure 10%. The basic idea is that the IRS wishes to encourage such information. They will acknowledge receipt of your information and tell you

one way or the other if they will be rewarding you for it. Inside information trading This is the crime Martha Stewart made famous. In general, persons who have inside formation about a public company may not buy or sell shares of that stock unless they first register that information, which makes it public. The news stories about Martha Stewart have suggested that she knew Imclone was about to be told publicly that they would be denied approval of an important new drug. Arguably, she and others sold before the news became public to avoid the likely decline in stock price. The head of Imclone has pleaded guilty to insider trading. She got indicted for covering up her behavior in that incident. The stock in her company went down by a half a billion as a result. If you report an apparent illegal inside trade by Russ Whitney to the SEC, you are eligible to collect a bounty of up to 10% of the amount of improper profits he is forced to give back. 17 CFR '§'§201.61 to 201.68 The Web page for the SEC' Inside Information Bounty Program is at https://www.sec.gov/divisions/enforce/insider.htm. There is a general complaint center at SEC. Their address and fax number are SEC Complaint Center, 450 Fifth Street, NW, Washington, DC 20549 202-942-9634 and their complaint Web page is https://www.sec.gov/complaint.shtml. Racketeering As with many laws, RICO has a misleading name. RICO stands for the Racketeer Influenced and Corrupt Organizations Act (18 USC 1961-4). The name conjures up images of the Godfather. The law is not confined to mobsters at all. Rather, it simply is triggered whenever a person or organization commits two or more acts of mail fraud (18 USC 1341) or wire fraud (18 USC 1343) in a ten-year period. Mail fraud is ""¦obtaining money or property by means of false or fraudulent pretenses, representations, or promises"¦" involving the mail in any way. Wire fraud is the same, only it requires the transimission of some sound by wire in interstate commerce. I think that' the Congress' way to describe a phone call or fax. Nowadays, it may cover Internet as well. If you listen to a dial-up modem, you can hear a rushing sound of the data being transmitted. Arguably, that, too, would be wire fraud. Do Russ Whitney or his companies commit mail fraud or wire fraud? I do not know. I do know that he owns a telemarketing company and uses telemarketing. I also know that he has a Web site. Sale of books, tapes, and printed newsletters generally require use of the mail. That' part of the requirement. The other question is are there any misrepresentations? The Better Business Bureau has given Whitney an unsatisfactory rating in part because of misrepresentations. They also rated him unsatisfactory because of not giving refunds. To the extent that he or his firm represented that they would give refunds, not giving them when the customer has complied with the refund terms sounds like another misrepresentation. In general, mail fraud and wire fraud are crimes and crimes are prosecuted only by government prosecutors, namely the U.S. Attorney. But sometimes, the government is concerned that their resources are too limited to deter the crimes in question enough. In those cases, they add a clause to the law that enables civilians to become "prosecutors" of a sort by giving them a legal right to file a civil suit for those same crimes and providing a financial incentive to do so. So-called "civil RICO" is such a law. 18 USC 1964 permits civil (private) suits for RICO violations. It also provides incentive by entitling the winning plaintiff to triple damages. I do not want to encourage suits against Whitney or anyone else without good grounds. I feel I was sued by Whitney without good grounds and I filed a motion so stating. Rule 11 of the Federal Rules of Civil Procedure says it is illegal to file a suit unless you have investigate both the facts and the law and made sure the suit is warranted by both. So if you plan to sue Whitney under RICO or any other law, make sure you have good grounds. False Claims Act Another federal law that encourages private citizens to sue is the False Claims Act. In this law, if you win, you get a large reward. I see less likelihood that Whitney would come under this, but it' worth looking into. The main chance would be his use of and his advocacy of the use of federally related improvement loans and mortgages in his so-called "overfinancing" techniques. The False Claims Act generally relates to persons getting money from the federal government improperly"”or not paying the federal government as much as they were supposed to. John T. Reed, a.k.a. John Reed, Jack Reed, 342 Bryan Drive, Alamo, CA 94507, Voice: 925-820-7262, Fax: 925-820-1259, www.johntreed.com

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