Jean E. Allan

309 Waukewan Road

Center Harbor, NH 03226

603-279-6425

January 9, 2009

[Sent as attached document via e-mail]

Mr. David Kotz – Inspector General

Office of Inspector General

U.S. Securities and Exchange Commission

Civil Rights & Civil Liberties Complaints

Office of the Inspector General

U.S. Department of Justice

950 Pennsylvania Avenue, N.W.

Room 4706

Washington, D.C. 20530

RE: Issues to include in sweeping review of SEC Investigations practices and procedures.

Dear Inspector Generals:

Please consider this a follow-up communication to my last letter addressed to Natasha Dandridge and dated 12/29/08. I was prompted to write this case history letter after spending this afternoon listening to the Congressional Hearings that were Chaired by Congressman Kanjorski’s Capital Markets Sub-Committee. In his opening statement Congressman Kanjorski said the purpose of the hearing was that Congress needed to understand “How Bernard Madoff, did it!” The rest of the Committee members to a one cited ‘loss of confidence’ in the capital markets as their major issue of concern.

Also, at the hearing OIG Kotz promised that he would look at ‘all the tips’. There was also a statement alluding to the issue of possibly more regulation if warranted. With respect to that statement, I would point to the herein case study. In this Darwinian world of global capitalism there will always be predators and prey; and neither, more legislation, nor, regulation will succeed in instilling moral integrity into the predator; nor knowledge and investment savvy into the prey.

Since the breaking of the Glass Steagal barrier the concept of ‘investing’ which by definition contains a risk element, and the concept of ‘saving’, which by current law and regulation should be protected from risk, have been blurred. Mr. Goldstein, the only victim witness at the hearing was under the impression that SIPIC was a better insurance policy than the FDIC as it’s statements of assurances would return up to $500,000 of his principal. Mr. Goldstein is not alone in this misconception.

As I understand the object lesson of this ‘sweeping review’, it is to first determine how Bernard Madoff ‘Did it’, and then to consider internal issues within the SEC as to how better to detect the ‘predators’ while at the same time better educating the ‘prey’.

The following personal case study is my contribution to this ‘review’. My purpose herein is to lay- out facts and findings already in evidence via documents and affidavit testimony with respect to what I have found to be prior related schemes in which I was the equal opportunity target, and where the internal policies and procedures of the SEC and DOJ failed.

The front man of the segment of the organized global capital financial scheme that targeted American insurance industries was Alan Teale. By 1994, Alan Teale had been indicted and died in prison. However, the legacy of his ‘networking or pyramid scheme’ appears to have survived and lives on in the name of Bernard Madoff, and the many ‘feeder firms’.

NOTE: The case study below has been written in narrative form for ease of reading and comprehension. The supporting documents to these summary statements are available in case records in several Federal and State Courts; along with other documentation that should exist in the files of the US DOJ, SEC, FBI, Department of State and FDIC. And, copies of this documentation are in safe keeping in case any of the heretofore-mentioned files have been purged, or other wise cannot be located.

NASD Direct Participation Broker Dealer

In 1983, after being a real estate broker, I decided to widen my business opportunities by becoming a licensed NASD Direct Participation Broker Dealer. I incorporated a separate NASD DPP Broker Dealer company named INAMAN. It was a wholly owned subsidiary of my primary real estate company, Business Assets Management, Inc., located on High Street, Portsmouth, New Hampshire. By late 1983, INAMAN was opened for business.

INAMAN’S first client was a former business associate and client of mine. I had just completed a construction management contract for his company, Business Helicopters. The job entailed the design, permitting and construction of a private corporate aviation complex, named Flight One, at the Manchester Airport, Londonderry, New Hampshire.

My client’s request was that I perform due diligence on a real estate limited partnership offering by a company called Blondheim. Mr. David Williams was the principal general partner and Raymond Nolan was a minority partner in the general partnership. My client told me that several of his business associates had purchased limited partnerships for one hundred thousand dollars each. He was considering doing the same.

Shortly after I began my due diligence analysis, I recognized the offering to be a Ponzi scheme. [A complete description of the scheme and the schemers can be found in USA v David Williams/Blondheim. Several cases were tried in both US District Court in New Hampshire and New Hampshire Superior Courts. Mr. Williams was convicted and sentenced for 15 years. Many of my client’s business associates suffered financial losses. The authorities assured me that my role a ‘whistle-blower’ in uncovering the Blondheim Ponzi scheme would be protected. For whatever reasons, it was not, and I became a target of the organized criminals that had been backing the scheme. This case study is a cautionary tail for all ‘whistle-blowers’.]

One of the reasons that I could easily spot the Blondheim Ponzi scheme was that the properties involved were local and I could personally view the real estate assets. Subsequent to my discovering the Blondheim Ponzi scheme, I began a more careful due diligence on all the other Prospectuses that my office received and notice too many similarities to make me comfortable in many recommendations, if any. One of the bothersome issues was the way the Partnerships were being financed. So I continued to concentrate on my primary real estate consulting and sale’s business.

Sometime in late 1985 a lawyer - whom I now know to have represented several clients that were stung by the Blondheim bust - said he wanted to list a client’s property with me. He said it was a development opportunity, and additionally gave me a list of potential developers. I took the listing. [The property was located in North Woodstock, New Hampshire, and has later become known as the High Birches Mountain Spring Water property, which is the central asset of all of my subsequent complaints to SEC, USDOJ, FDIC and Department of State, among several State authorities, as well as a multitude of civil actions.]

After listing the property I contacted the potential developer buyers whom were on the proffered list. One of the contacts was a Reginald P. Danboise [Danboise], a dentist by profession, but with a construction and development business on the side. His associate was the same Raymond Nolan [Nolan] from the Blondheim case. By that time the authorities had exonerated Nolan as a cooperative and innocent party; or so I was led to believe at that time.

In any event Nolan assured me that Danboise was an interest buyer in the No. Woodstock parcel and that he was a legitimate developer. I was taken to several prior sold out residential projects as an offer of proof. Danboise agreed to put an option on the No. Woodstock land, if my company Business Assets Management, Inc. [BAM] agreed to partner with him during the permitting process. David Gottesman was the lawyer for the partnership. It was agreed that the partnership would dissolve after the permitting process was completed.

However, by early 1986 it became apparent that the property, which by then was an asset owned by Senter Cove Development Co., Inc., was also a marital asset; and, Danboise determined, as was his right in the agreement, to buy my company out of the partnership, which he did. BAM contracted to continue to complete the permitting process for an equity position in the project. Soon after Danboise gained sole possession he gave a first mortgage to Plymouth Guaranty Bank, Plymouth, New Hampshire. The primary shareholder of Plymouth Guaranty Bank was Milo Pike, a former employer of mine. (I had quit my employment at his company Pike Industries, Inc. in 1980, due to sexual harassment issues. I did not bring formal charges at that time. However at the same time I quit, Milo Pike had been indicted on bid rigging charges. I am of the opinion and belief based upon verbal communications that Milo and others in the company, to include his then in-house counsel Edward Fitzgerald, that they believed and were acting upon the suspicion that it was I who blew the whistle on the bid rigging.) Unbeknownst to me until years later, Milo and his associates had incurred financial losses in the Blondheim bust. By mid-1986 it was public knowledge that I had been the Blondheim whistle-blower. A decade later I learned that Danboise had also been a close associate of the Blondheim Ponzi schemers, but that information came too late to change my fate in 1986.

Shortly after the first Plymouth Guaranty mortgage was in place, Danboise informed me that he and his wife/ business partner Bonnie were getting a divorce. They had agreed to sell all their business assets as part of their financial settlement. BAM was offered 100% of the stock of the Senter Cove Development Co. Inc. [Senter] that was the sole owner of the property in No. Woodstock, which by now was almost completely permitted and valued at $5.2 million.

My business attorneys, McLane Graf Law Offices, refused to represent BAM in the purchase of Senter, and in fact dumped me as a client without any explanation. Attorney William Shaheen agreed to represent BAM at the stock purchase closing. [A decade later I had reason to believe that Attorney Shaheen had a conflict, which he never revealed to me at the time of the sale. His legal services were compromised.] However, the stock of Senter was purchased in March 1987 for $150,000 cash and note and the assumption of the first mortgage and contractor fees. BAM had several offers in hand to purchase the permitted project, which by that time was called High Birches, prior to purchasing the stock of Senter. Contractually the Danboises’ were to remain on the Plymouth Guaranty first mortgage until such time the project was either sold or refinanced.

Within weeks Plymouth Guaranty reneged on its commitment to fund the bond for the road permits, and in fact, made a demand call on the first mortgage. BAM needed to replace the first mortgage financing quickly. Stephen Oakes, of Oakes Financial, who offered to refinance the Plymouth Guaranty first mortgage including additional funds that would allow the permitting process to be finalized, approached BAM. The new loan was for $1.56 million. [Again unbeknownst to me Oakes was a front for Richard A. Cabral; another Blondheim Ponzi schemer that had suffered financial loses after I blew the whistle on the Blondheim Ponzi scheme. I found out a decade later that Cabral was also a partner with the attorney who listed the No. Woodstock land with me in the first place. Also a decade or so later I was informed that the Patriarch Crime family had a interest in the Blondheim Ponzi scheme. It is public hearsay that the New Hampshire ‘crime family’ representative was a client of the Shaheen Gordon Law Offices: A clear conflict of interest.]

Finally in August 1988 the all the necessary permits had been granted to complete the construction of the High Birches real estate development project. The permits included, among others, water and sewer. The water permit gave permission to draw up to 500,000 gallons of water per/day to satisfy the needs of the permitted real estate development, which had anticipated the construction of a condominium hotel and up to 400 residential dwellings. No more than three days later, an abutter made a legal claim for 58 of the 120-acre property. Upon further investigation by my then lawyers, Merrill & Broderick, after filing a Petition to Quiet Title, it was agreed that the abutter’s claim was valid.

The High Birches real estate development project was ruined. The lawsuits began. The clear solution was for Senter to purchase the out parcel that had been claimed by the abutter, while at the same time, it prepared to sue the surveyors and engineers. The out parcel was purchased on September 11, 1989. However, unbeknownst to BAM, Senter, and me, in October 1989, the engineers and certain corporate creditors and corporate lawyers Devine Millimet Stahl and Branch along with litigation lawyers Shaheen Gordon conspired among themselves. In one instance Shaheen Gordon failed to show up for court hearing against the first mortgagee, Cabral. And, in another matter Shaheen Gordon allowed a Devine Millimet lawyer to file an illegal agreement with the second mortgagee, BankEast. The BankEast agreement was recorded in several New Hampshire Registry of Deeds.

At the same time, Devine Millimet continued to represent BAM, Senter and me in an effort to either refinance or sell the stock of Senter Cove. In the refinancing effort Devine introduced me to a finance company allegedly owned by Mr. John Iuele. Mr. Iuele assured me that he could get refinancing for me with several insurance companies and perhaps even Drexel Burham Lambert (sic – error in draft named EF Hutton). For several months Mr. Iuele met with me and called me with respect to his progress. At one time I was instructed to bring all the permitted documents to a business, which I did. [Years later I found that the business was affiliated with the Blondheim Ponzi schemers. In fact, years later I discovered that John Iuele was really Whitey Bulger, the crime boss of the Winter Hill Gang, and top echelon informant for the FBI.]

While I was still working with John Iuele he introduced me to, and I played tennis with John Iuele, and a man named Gus, whom I now have reason to believe was Cadillac Frank Silemmi, a Capo of the Patriarca crime family and Blondheim Ponzi schemer. Shortly after giving John Iuele $6,000 for processing fees for the refinancing, and after getting a highly likely to finance letter from Drexel Burham Lambert, John Iuele disappeared leaving me with a caution that I was in harms way. I immediately filed complaints with the New Hampshire Attorney General. To my knowledge there was no investigation. I did not recognize the true identity of John Iuele until 1995 shortly before his trial in absentia in US District Court, Massachusetts.]

After the Iuele financing fell through, Devine Millimet introduced me to another client, Martyn Redman. At first Mr. Redman claimed to be representing a company that had major real estate holdings in Portugal. He was also affiliated with a financing group located in Garden City New York. The company was called Metro Funding and the principal was Benny Maniscalco. Redman also claimed to represent a company called Consolidated Funding. And, another called Parthenon.

After several false starts Mr. Redman finally settled on a purchase and sales agreement where the purchaser would be a company called First Equity Insurance Company and was headquartered in Dallas Texas. Devine Millimet was in the process of doing the legal work for the insurance company’s Form A requirements. As part of the purchase agreement First Equity pledged publicly traded stock from its capital surplus in the amount of one million dollars. Devine lawyers informed BAM that Merrill Lynch had verified the pledged stock in a company called ECOTECH as being valued at around one million dollars.

On or about February 1991, BAM, Senter and me, as guarantor, entered into superseding agreements with all the creditors, secured and unsecured, of the High Birches project. All creditors agreed upon a schedule of replacement assets in lieu of their existing mortgages. The terms of the Creditors’ Agreement was found to be satisfactory to First Equity. Devine Millimet represented First Equity and my companies and me personally in the sale.

By March 1991, it was clear that First Equity had defaulted. Mr. Redman had disappeared. In accordance with the purchase and sales agreement, I took the pledged ECOTECH stock to Merrill Lynch with instructions to sell it in traunches so as not to flood the market. I had been told the stock was lightly traded. The first traunch sold and the funds were earmarked for the creditor’s escrow account that was being held by Attorney Barton Solomon, brother of Karen McGinley.

A Mr. Miller, who had claimed to Devine Millimet that the stock had been stolen, stopped the second traunch sale of ECOTECH stock. Several conversations ensued between Devine lawyers and Mr. Miller who had also identified himself as an attorney. Merrill then informed me that the market had collapsed for the ECOTECH stock. I immediately filed a formal complaint with the Boston Office off the SEC. A Mr. Steve Cohen contacted me. He said he could not tell me what had happened, but perhaps I could guess. I guessed that the stock was a fraud. I had guessed correctly.

Blondheim Ponzi Schemers in Cahoots with Alan Teale