My name is Paul Fraynd and below is an overview of events that occurred when
The Florida Department of Financial Services (“DFS”) was appointed receiver of Aries Insurance
Company (“Aires”), an insurance company that I formed in 1983 along with other members of my
family. This is a case of being a political prisoner and of clear extortion by the State of Florida.
I was born in South America on May 3, 1956 and attended high school there. I have two
sisters and one brother. After completing high school I came to the USA and attended the University
of Miami, studying English for six months. Then I transferred to Ann Arbor, Michigan where I
attended the University Of Michigan School Of Engineering and in 1979, I graduated with a B.S. in
Electrical Engineering and a B.S. in Computer Engineering. I attended the 5 year program and
graduated with a dual degree. I have been a US Citizen for 25 years.
After my graduation, I returned to Miami, Florida and started a job working for International
Computer Systems, as the Marketing Manager. The company was one of the first computer
distributors in Florida selling Apple and IBM -PC personal computers. I combined my knowledge of
computers and marketed systems that included software and hardware. While working at this
company I had the opportunity to sell a system to an insurance and premium finance consultant and
became knowledgeable in the insurance premium finance business. Finance interested me a lot
more than selling computers and I decided to form a premium finance company that lent funds to
insured’s that could not pay their premiums up front to the insurance companies.
I formed Omega Finance Corporation in 1982 and left the computer business and went full
time in the insurance finance business. I borrowed funds from local Miami based banks in order to
finance the initial phase of the company’s development. Omega grew and soon became one of
Florida’s largest premium finance companies, with over 1500 retail insurance agents generating
finance agreements on behalf of Omega.
During 1983, competition became fierce and most insurance companies formed their own inhouse
premium finance companies. Seeing this trend, I decided to form an insurance company and
offer insurance as well as financing of the premiums through Omega’s already establish network of
producers. The minimum capital require in 1983 for an insurance company to operate was
$1,500,000. I raised the funds with a combination of family funds and bank loans to obtain the
initial funds for the finance company and the newly formed insurance company. the Aries Insurance
Company (“Aries”) came from these businesses. The finance and insurance company grew over
the years and then I formed Onyx nderwriters, Inc., in 1986, an insurance managing general agency.
I also formed Gamma djusters, Inc., a claims adjusting operation. All of the companies became subsidiaries of Onyx
Insurance Group, Inc. (“Onyx”) and in 1991 Onyx sales of insurance and finance exceeded $40
million per year. Aries had been approved to write insurance and several other states including
California, Texas, Arizona, and Utah. My father, brother and sister joined the company and also
worked for it. While I was building the Onyx Insurance Group, I also got married in 1984 and had 3
sons. Ariel - age 16, Daniel - age 13 and Alex - age 7.
In 1992 Hurricane Andrew hit South Florida and caused devastating losses to individuals and
businesses in South Florida. Onyx and Aries were Miami based companies and had a lot of risks
insured in South Florida. While Onyx saw most of their competitors go out of business because of
not being able to pay for their claims, Aries was able to pay all of its insured’s claims and remain in
business, while seeing their competitors not honor their claims.
After 1992 very few insurance companies remained in Florida willing to continue to write
insurance, mostly on property risks. Over 20 local domestic companies were liquidated by DFS
under the direction of then Insurance Commissioner Tom Gallagher. A long time friend, business
partner and confidant named Michael J. Svaldi was appointed the head of the Division in charge of
“liquidating” and “rehabilitating” insurance companies. Mr. Svaldi was appointed receiver of the
insurance companies by Gallagher. His assignment was to liquidate these companies. I met Mr.
Svaldi in 1992 when the DFS was considering selling Books of Business from insolvent insurance
companies to other insurance companies, in an effort to not continue to request funds from the
Florida Guaranty Fund known as FIGA. FIGA is a State Association that its function is to assess all
Insurance Companies for funds, on a prorate basis depending on their writings of premium in
Florida, and these funds are then used to pay claims and return premiums due from insolvent
companies to their insured’s. FIGA went insolvent as a result of the massive amounts of losses that
insolvent insurance companies had as a result of Hurricane Andrew and Mr. Gallagher and Mr.
Svaldi made an attempt to sell off their Books. FIGA eventually issued Bonds and raised the funds
needed to pay all claims. No Books of Business were sold because the terms imposed by Mr.
Gallagher were unrealistic. I told this to Mr. Gallagher and he got upset at me. He wanted to sell
unearned premium reserves to Aries on a Homeowners Book of Business from one of the insolvent
companies, Guardian Property and Casualty, but refused to pay the unearned premium reserve to our
company. I told him I could not do this transaction at the terms he proposed and we had a parting of
the ways. Because I did not accept his proposal, I expected future retaliation. This would come in
the form of regulatory pressure, fines and constant regulatory harassment and abuse of power.
After surviving Hurricane Andrew, Aries was sitting on a great opportunity. It could grow in
writings because there was very little competition and it only needed to increase its capital. Aries
looked for additional capital to grow and it secured a capital contribution from it lead Reinsurance
Company General Reinsurance Corp. (“Genre”). Genre contributed $10 million to Aries for a 20%
stock ownership in Onyx Insurance Group, Aries Insurance Company’s parent company.
The shortage in insurance companies willing to write homeowners in Florida after
Hurricane Andrew was so large that Tom Gallagher had started a state owned and managed
insurance association known as The Residential Joint Underwriting Association (“RPCJUA”)
and its mission was to insure homes and condominiums that could not obtain insurance in the
private market. Also, the Florida Windstorm Underwriting Association (“FWUA”) had been in
place to write the wind risk of the home and the RPCJUA would write the property of the home
or condo. So an insured would end up with two policies, the RPCJUA would insure the property
and liability and the FWUA would insure the wind. Most of the officers and directors for these
state owned companies were personally handpicked by Tom Gallagher.
A scandal broke up in the RPCJUA when, under the direction of Tom Gallagher, a managing
general agency known as Smissi was formed and then DFS Chief Examiner, John Kummer was
appointed President of it. Massive corruption, self dealing, mismanagement, bribes and more were
soon uncovered at the General Agency that was underwriting policies for the RPCJUA and the
FWUA and the company was forced to disband. Another best friend and confidant of Tom
Gallagher was behind the wrong doings at the scandal riddled MGA, James Bax.
Onyx and Aries grew for the next 5 years by 15% each year and the companies were thriving.
Bill Nelson had been elected Insurance Commissioner, replacing Tom Gallagher and Onyx had a
good relation with DFS under Bill Nelson’s direction. Onyx Insurance Groups’ combined premium
writings for the year end 2000 reached $100 million and employed over 600 employees. It’s net
worth exceeded $20 million. These were the 5 most prosperous years of Onyx and Aries.
Tom Gallagher was running for Insurance Commissioner again and Gallagher and Michael J.
Svaldi reappeared at the Aries Offices asking for political contributions for Gallagher’s re-election
campaign. In fear of future regulatory retaliation, Onyx contributed to Gallagher’s campaign fund.
This was also true for most insurance companies under the regulatory oversight of DFS. Gallagher
would request contributions from all. Those that didn’t follow with considerable contributions
would face examiner’s at their offices, billing $20,000 to $30,000 per month for as long as one year.
In 1999, Gallagher was re-elected again as Insurance Commissioner and took over as the
head of DFS. By then, the homeowner’s insurance problem in the State was out of control. The
RPCJUA and the FWUA had grown so much that their ability to pay for losses if another hurricane
were to strike Florida was not there. Several actuaries and other storm damage forecasters had said
that another major hurricane hitting Florida would result in the RPCJUA and the FWUA going
insolvent and they could phase an insolvency that could exceed $10 billion dollars if the hurricane
would hit a major city in the East or West coast of Florida. Mr. Gallagher decided to combine both
of these insurance pools into one entity and Citizens Property Insurance Company was formed. It
combined all of the risks written by the RPCJUA and the FWUA into one entity run by the same
officers and directors appointed by Gallagher back when the RPCJUA and the FWUA were formed.
These two State Insurance pools faced mismanagement abuses, self dealings by its employees,
officers and directors and they all combined to form one happy family at Citizen. Mr. Gallagher
knew this for years but these employees were all his friends and political cronies, so Gallagher did
nothing about it. This combination was fertile ground for the issues facing Citizen today.
By June of 2001, Onyx continued to grow and again looked to raise additional capital to
support its growth. Onyx considered doing an IPO. Wall Street was extremely interested in
Insurance Stocks and Onyx considered it to be a good next step to continue funding its growth.
Onyx obtained a valuation in 2001 by the firm of Payne Weber/USB and the value of Onyx
stock was valued at over $100 million. Onyx was considering selling 30% of its shares in the public
market for $35 million. This would provide the capital needed for the continued growth of the
companies.
Aries became one of the largest Florida insurers and the public offering was going to be a
success. Aries focused selling insurance to the small to medium risks for automobile and
commercial insurance. Everything was going very well but DFS continued to put pressure on Aries
and made some unusual demands. One of the demands was that Aries replace its CFO of 15 years by
one recommended by DFS. At Mr. Wayne Johnson, DFS head of Insurance Company Solvency,
insistence and recommendation, I replaced Steve J. Bacon, Aries’ CFO for Lisette Lozano. Miss
Lozano worked for DFS in the liquidation and rehabilitation division for many years under Mr.
Michael J. Svaldi. Miss Lozano was hired by Aries as the new CFO in early 2000 and replaced the
existing CFO. Everything was looking very good as Onyx prepared itself to go public.
Until September 11, 2001, the World Trade Center terrorist attack occurred. Insurers and
Reinsurers were devastated from the losses and several of Aries’ reinsurers were severely impacted
by this event. The reinsurers started after 9/11, to delay claim payments back to Aries. Aries would
only assume a small percentage of the risk on each insurance policy it wrote. Aries would re-insure a
large portion of every risk. For example, if the risk was worth $1 million, Aries would issue the
policy for the total amount of $1 million but would re-insure $900,000 of the risk’s value with its
reinsurers. Aries would also share the premium collected from the Insured with the reinsurers. So if
Aries reinsured say 90% of the risk it would also pay 90% of the premium to the reinsurers. When a
loss occurred, it would pay the full $1 million and it would recover $900,000 from its reinsurers.
Aries continued to meet all of its claims obligations but its reinsurers were not reimbursing Aries for
their proportionate share of the losses. A large reinsurance accounts receivable was developing in
Aries Books. Aries reported to DFS on a quarterly basis and the first indication of this problem was
reported by Aries to DFS in its September 30, 2001 statutory financial statement filed with DFS on
November 15, 2001.
Aries continued to pay all losses and by year-end 2001 the reinsurance receivable was
exceeding $40 million, due Aries. The reinsurance companies were also regulated by DFS under the
direction of Tom Gallagher and we decided to meet with Tom Gallagher I his office in Tallahassee
and discuss the problems facing Aries. We brought up the problem to the regulators as soon as it
became clear to us that we could not collect the accounts receivable from the reinsurers. Lissete
Lozano, the Aries CFO came to see me in early 2002 and she tendered her resignation. She gave me
a couple of reasons for her action, mainly too much pressure and the high work load and claimed she
was looking at another job opportunity at the request of Tom Gallagher and Michael J. Svaldi.
Mr. Svaldi was working as an outside consultant by then, and was working on the
rehabilitation of a company named Union America Insurance Company and he had offered Lissete
Lozano the CFO position. Lissete left Aries and went to work for Union America, a job that did not
last and wasn’t very rewarding to Miss Lozano and far from what she had envisioned.
We decided to meet with Mr. Tom Gallagher in early 2002 and traveled to Tallahassee along
with my father and sister. We met with Mr. Gallagher and discussed at length our current situation at
Aries and asked him for his assistance in helping Aries with the problems it was facing with the
nonpayment of account receivables from it reinsurers.
Mr. Gallagher suggested that we place Aries in his hands and agree to have DFS rehabilitate
Aries. r. Gallagher indicated that if we appointed DFS as the receiver for Aries he could provide
us with the help we needed. We thought about this proposal and believed that Mr. Gallagher was
sincere about his proposal, but were soon to find out that it was all a big scam to have us place Aries
in his hands without a fight and have the DFS and all of Gallagher’s consultant friends take over
Aries asset’s and feed of them like a school of sharks would feed from a piece of meat that would fall
in their infested waters. allagher assured us that this was a joint effort by DFS and the Aries executives, in
rehabilitating Aries and assist it getting back on its feet. What occurred after this was the opposite
and it came unexpected to us but eventually we would learn that this was Mr. Gallagher’s M.O. and
it was done to many companies in the past 25 years that DFS would take over with the pretense of
rehabilitation to find themselves in liquidation soon after that.
After our meeting with Mr. Gallagher in Tallahassee, Mr. Svaldi came to visit me at Aries
and continued to pursue the concept of allowing DFS to rehabilitate Aries and offer his “consulting
services” to Aries. This consulting turned out to be nothing more than having a spy from Tom
Gallagher in our company.
On May 9, 2002, the Aries directors agreed to place Aries in rehabilitation and allow DFS to
be appointed trustee. Mr. Svaldi assured us that this was the right thing to do in order to save Aries.
On May 13, 2002, an army of armed security guards and over 20 employees of DFS and
consultants came to the Onyx’s offices in Miami and took over effective-physical-control of all of
the companies under Onyx Insurance Group. Only Aries was going to be rehabilitated but DFS took
over the entire operation. The security force that descended on Onyx was right out of a movie when
armed commandos take over a hostile place. We soon learned that the security contract was awarded
to an Israeli firm very close to Gallagher and at a cost of $150,000 per month. We checked on
alternative bids and there was none.
This Israeli owned security firm was hired without competitive bidding and the cost was 3
times greater than other proposals that we obtained. Mr. Gallagher would not make a change even
though Aries would save $100,000 per month. Aries was also saddled with many other expenses
including 20 to 30 DFS employees added to the Aries expenses, a reinsurance consultant from the
Norman Reitchman Company named Saul Greenfield at a cost of $50,000 per month, outside
accountants at a cost of $25,000 per month, William Thompson and Andy Kaplan; a computer
consultant of $10,000 per month. The Aries expenses after May 2002 were increased at the request
of Tom Gallagher by over $600,000 per month. Several political friendly law firms were added to
represent Aries and all received very profitable engagement agreements with an hourly rate plus a
contingency fee based on recoveries.
Within two weeks of DFS arrival, we realized that DFS was not in our offices to rehabilitate
Aries, they were there to liquidate the company and rape Onyx and Aries from all of their assets. In
asking Svaldi what was going on his words were “they eat what they kill.” Prior to DFS taking over
Aries, there was an order in place to let go over 100 DFS employees from the rehabilitation and
liquidation division but that stopped as soon as DFS got a hold of Aries. Now everyone’s job was
safe. In discussions with Svaldi about the actions of DFS he responded “Tom Gallagher ask me why
was I consulting for a company that he was going to shut down? Gallagher knew from the day of our
meeting in his office in Tallahassee and envisioned way before this meeting that he always intended
on doing what he did to Onyx and Aries. Taking down companies and awarding lucrative consulting
and representation agreements to political friends of Gallagher was the way things were done at the
Gallagher’s camp. This was the way Gallagher paid his political friends. He never cared one minute
what would happen to the owners who built the companies with their own money and a lot of hard
work. He has destroyed other companies for over 20 years in similar ways!
One man that has made millions representing companies in the hands of DFS under
Gallagher’s command is Thomas Tew with the law firm of Tew, Cardenas, in Miami. Tom Tew has
made over $100 million in legal fees over the years representing companies in liquidation under
engagements granted by Gallagher.
All one needs to do is look on the DFS web site of companies in rehabilitation or liquidation
under Gallagher’s vein and you will see all of the names of companies that have suffered the same
consequences as Aries did. I can name from memory Union America Insurance Company,
Underwriters Guarantee Insurance Company, Superior National Insurance Company, First Miami
Insurance Company, South Eastern Insurance Company (there are many more . . . ).
Once DFS takes over an insurance company, the same pattern of mismanagement, waist of
company assets, self-dealing, awarding of lucrative claims handling contracts, legal engagements,
computer processing contracts and literally every aspect of operating the company in liquidation is
awarded to political friends of Tom Gallagher. These actions are all over Citizens Property
Insurance Company. What a coincidence that Michael J. Svaldi is one of Citizen’s founding
directors! And as usual, when some of their dirty deeds start becoming public, Mr. Gallagher refers
the matter “to his criminal division” so that an investigation is made on the owners of the company.
The investigation ultimately leads to a bogus indictment in order to discredit the owners and cover
his tracks. This is what occurred at Aries and is occurring at Citizen’s Property Insurance Company
and has occurred in most of the other companies Gallagher has taken over.
I tried to reason for over a month after the May 09, 2002 seizure of the Onyx Companies with
Tom Gallagher and Michael Svaldi about what was occurring at Onyx and it went on deaf ears.
Aries expenses for operating went up dramatically and soon into the rehabilitation process of
Aries, DFS filed a motion to liquidate Aries. This occurred only 3 weeks into the rehabilitation
process and I brought it up to Mr. Svaldi who asked Tom Gallagher why a liquidation order had been
filed. The order was reversed; it was too soon to do what it was standard operation procedure at
DFS. Gallagher had made several appearances with the press indicating that “regulations were
working with the Aries Management to Rehabilitate the Company” and soon Mr. Gallagher reversed
the order and the order miraculously reversed in the court docket of the Aries receivership case.
Probably Mr. Gallagher realized that we would make too much noise if he made his plan to obvious
and decided to wait longer to liquidate the company, besides, Aries had $100 million in assets and its
cash reserves were above $25 million and all of them would have to be used up until DFS could
succeed at obtaining a liquidation order. Most orders filed in Leon County Court by DFS would
automatically get approved by the courts. Most orders were submitted in ex-parte motions (meaning
one side present in court only) and DFS would file the orders without advising our attorneys in
writing, as the law requires with copies of the motions and orders to our attorneys and would simply
attend the hearing and give the Judge their side of the story.
Other actions taken by DFS were: selling of non-Aries assets to third parties and keeping the
funds collected for allegedly “the estate of Aries.” DFS has refused and has never provided any
detail accounting of the estate to us or anyone else. (This is true with other liquidated insurance
companies).
DFS employees moved in to the Onyx mail room and intercepted all incoming mail and took
all checks coming in the mail for non-Aries companies and divided the funds to DFS accounts. DFS
sold the Onyx Underwriters Book of Automobile business to Mercury Insurance Group for a minor
one-time payment. The Book had over 300,000 automobile insurance policies worth easy several
million dollars and it sold it for less than $100,000 and never even gave credit to Onyx for the
payment received by Mercury Insurance.
Absolutely nothing was being done by Gallagher or DFS to collect on the reinsurance. The
main reason Gallagher took over the company (Aries) was to collect the reinsurance and absolutely
nothing was being done or was ever done. No effort to collect on the reinsurance was done by the
consultant collecting $50,000 per month! All that occurred in the so called “rehabilitation effort at
Aries” was to add more and more consultants to do work on Aries. Friendly real estate brokers and
appraisers were engaged to sell off the Aries and Onyx real estate assets. A typical scheme was to
have the property appraised for1/3 of its value and have it sold through a “friendly broker” to a real
estate company formed by Gallagher’s friends or fronts and to sell the property at the reduced price
and then have the new company “flip” the property for its market value. This occurred at Aries with
6 acres of land located in Opalocka, Florida. The property was appraised by Gallagher’s people for
under $600,000, sold for this amount even though we provided an MAI appraisal for $1,600,000.
Consultants and brokers as well as attorneys and “friendly” claims adjusting companies all took a
bite on Aries assets until there were none left.
The biggest abuse that occurred at Aries was awarding Miss Lisette Lozano the handling of
all claims during the liquidation phase of Aries. By November 2002 Aries ran out of funds and DFS
filed for liquidation. This was a necessary step so that the Florida Insurance Guarantee Association
“FIGA” could become liable to pay all outstanding claim losses and return premiums to Insureds.
Miss Lozano incorporated in November 2001 a company in Florida called Lozano Adjusting
Services, Inc. and this company billed over $120 million in to FIGA to pay claims. Part of the funds
went directly to Lozano Adjusting Services, Inc., for the job of adjusting the claims and the rest of
the funds were used to pay claims. Lozano’s incentive was to pay claims fast and the larger the
claim paid, the larger her fee was. Out of $120 million paid to in claims by Lozano at least 50% was
paid in very generous payments of losses to insured’s. Payments made of losses not covered because
DFS had destroyed the integrity of the Aries computer database and many claims were paid without
verifying coverage and many other fraud PIP claims were paid without care whether the treatments
were real or not. Her goal was to just send money to insured’s or medical PIP clinics and to spend
the funds from FIGA. DFS failed to collect over $50 million from Aries reinsurers and inflated the
claim payments through the Lozano claims operation to cause a total FIGA payout of over $150
million.
It was much easier and profitable for the adjusting company to get money from FIGA and pay
out claims than properly adjust claims and deny “not covered” claims or collect reinsurance payment
on losses.
If DFS and Lozano would have done their job properly, FIGA’s responsibility for Aries
losses would have been much, much less than the amount claimed by FIGA was spent on Aries to
date. I am sure that the shareholders of Lozano Adjusting Services were not interested in saving
FIGA any funds. As a matter of fact, DFS made a second request to FIGA for an additional $100
million to complete the liquidation of Aries but when FIGA balked and started asking questions,
DFS soon enough advised FIGA that the initial funding was going to be enough! The DFS and
company actually attempted to defraud FIGA of $100 million additional funds on top of the $150
million that was already used to date. No one has questioned the Lozano Adjusting Services
finances and I am sure that doing so will reveal how Mr. Gallagher’s cronies use these “friendly”
adjusting companies to defraud FIGA and the estate of insolvent companies of millions of dollars.
Perhaps billions in the case of Citizen Property Insurance Company! It’s the same M.O.!
During 2003, FIGA began to ask questions to Tom Gallagher about what occurred at Aries
and why $150 million had been used and remained unaccounted for.
Under the pressure (from FIGA) Gallagher took his usual route - - “it was stolen by the Aries
principals.” “And we are going to criminally prosecute them for it,” Gallagher said!
This again is Gallagher’s solution to problems that might compromise him or his cronies.
Well into 2004, after the alleged investigations performed by Mr. James Cobb, Assistant
Statewide Prosecutor and Lieutenant Mark Dee and Captain Satner of the DFS Insurance Fraud
Division, a massive fraud had been discovery at Aries.
Tom Gallagher and James Cobb issued joint press releases that James Cobb’s investigations
had followed the money trail and discovered a theft of $60 million by the Fraynd’s! from Aries. The
Fraynd’s were indicted on the alleged crimes and charged with numerous counts of theft,
racketeering, trust violations, etc. One million dollars on each of us was set. We were outside of the
country at the time of the Indictments, and we arraigned for the bond and flew back to the US and
surrendered. We returned to fight the case and clear our names from any accusations. We have been
in court defending ourselves for over one and a half years, have made numerous requests to the
Statewide prosecutor James Cobb, requesting the evidence that he had of the alleged theft and of the
other charges and to date he has not provided us any evidence at all that can support any of the
alleged crimes that he charged us with.
This is a case where Gallagher after being pressured by FIGA for answers on the Aries
receivership regarding the accounting of funds, simply turned it over to the statewide and had Lt. Dee
and James Cobb make up a criminal case against us with whatever they can come up with.
While the criminal case was proceeding against the Fraynd’s, Mr. Gallagher had a “buffer” as
he calls it from DFS’s wrong doings. It’s interesting to point that DFS initially filed civil actions
against the Fraynd’s for the exact alleged wrong doings of the Fraynd’s in the criminal case and lost
in civil court, unable to prove any of these allegations. DFS abandoned all civil actions. The
criminal allegations followed against the Fraynd’s by Gallagher after being unsuccessful in civil
court.
Criminal defense attorney for the Fraynds have been defending the Fraynd’s since 2004 and
have made numerous demands to the Statewide Prosecutor’s Offices and on DFS for the evidence
supporting their allegations and James Cobb nor Mark Dee have been able to provide not even one
piece of evidence that would support the alleged $60 million theft.
No evidence had been produced by Jim Cobb of the offices of Statewide Prosecutor by
October 2005 and as pressure was mounting to justify their actions, James Cobb revoked my bond
and had me arrested in November 9 of 2005 and has had me held in custody in Leon County Jail
since then. His words were clear and explained his motive for doing so and for refusing to reinstate
my bond so that I am released so that I can prepare for my defense. He openly says “he wants to
keep me in custody so that he can “shake me down” and force me and my family to accept a guilty
plea and pay back restitution in the amount of $30 million. DFS and the Office of Statewide
Prosecution cannot provide any proof that any funds were taken by the Fraynd’s from Aries yet
simply wants to extort $30 million from us. DFS took civil actions against Aries’ lender (Ocean
Bank of Miami), Aries Actuaries (Milliman International), Aries independent auditors (Weisberg and
Brausse) and are attempting to collect funds against their malpractice insurance policies. They
alleged that the experts professionals misrepresented the Books of Aries and are asking for millions
from them. DFS also sued the Fraynd’s under an AIG directors and officers insurance policy for
errors committed by the officers and directors of Aries, yet they have blamed the Fraynds for Aries
demise in their criminal action. The Fraynd’s relied on their experts to prepare and submit the
financial statements. DFS is accusing the experts but is attempting to at the same time blame the
Fraynd. It is important to note that Ocean Bank engaged a forensic accounting firm that reconciled
all funds received by Onyx and subsequently paid out to Aries and accounted for all funds being
properly paid to Aries and reflected on Aries and Onyx’s Books. These experts have proven false,
all of the accusations of DFS and the Statewide Prosecutors against the Fraynd’s. DFS and
Statewide have violated my rights, my civil liberty and simply want to prove their case right
regardless of what means it takes. DFS and Statewide claim that because this is a “political year”
they need to do this and it would be difference if their bosses were not running for the Florida
Governor’s position! They are attempting to extort $30 million from us and have decided to keep me
in custody until they wear me down and agreed to their terms. Who would think I would become a
political prisoner in America in 2006!
We were prepared to go to trial and the trial was going to commence on May 6, 2007 and the
night before the trial, James Cobb, The States lead prosecutor call our attorneys and told them that
they didn’t want to go to trial and if we would be willing to accept a guilty plea for a very reduced
charge and a short prison term. Being that the trial was going to occur in Tallahassee and the court
system in Tallahassee is very biased and very pro government, our attorneys recommended that we
take the plea and I agreed to also serve 1 year in prison so long as the rest of my family would not go to prison.
