$3 Billion Fraud by Tom Petters
and no mention
of Petters partner Paul Traub

www.petters-fraud.com



Dept of Justice in Delaware
 has refused
to prosecute or investigate
$300 million in Fraud by MNAT

Laser Haas provided the DE Federal Court and DE Dept of Justice irrefutable proof of 34 acts of Perjury

with other felony violations (more than 100) documenting $300 million in Fraud in the eToys bankruptcy case.

 

Not only has the Dept of Justice refused to prosecute or investigate the MNAT Law firm

The DE Dept of Justice rogue personnel punished whistle-blower Haas for $3.7 million

 

Blog on Dept of Justice Cover UP for the sake of Traub and MNAT ( here )

 

Colm Connolly is the Delaware US Attorney

 

Colm Connolly's office has refused to prosecute or investigate the MNAT Law firm's confessions to acts of Perjury and Fraud

 

 

 

 when multiple acts of Perjury and hundreds of millions in Fraud transpired (please see Connolly's DOJ resume ( here ))

 

 

 

 

Paul Traub and Michael Fox of Traub Bonacquist & Fox  confessed to supplication of False Affidavits in eToys.

See January 25, 2005 Responses of Traub's firm ( here )

 

During the March 1, 2005 hearing to address Perjury and Fraud issues the DE Bankruptcy Court directly deposed Paul Traub on the Stand as he confessed to paying Barry Gold four (4) separate payments of $30,000 each, that halted once Paul Traub planted Barry Gold within eToys as "wind-down coordinator" at $40,000 per month for 2 days work every two weeks and a promise of a bonus at the end of the case.  ( please see pg 60-69 Transcript of March 1, 2005 hearing ( here )) and Barry Gold Hiring Letter within his response ( here )

 

 

 

 

   MNAT is the Court approved counsel for the eToys Debtor and MNAT law firm confessed to supplication of false affidavits

and deceiving the Court whilst eToys is suing Goldman Sachs for hundreds of millions of dollars  (see NY Supreme Court case ebc1 (eToys) v Goldman Sachs 601805/2002)

 

   MNAT confessed on January 25, 2005 and during depositions that MNAT's "undisclosed" client is Goldman Sachs

See Feb 9, 2005 deposition of MNAT law firm ( here )

 

   The DE Bankruptcy Court states MNAT's False Affidavits and failure to disclose was deliberate (Opinion ( here )) where the Chief Justice of DE Bankruptcy Court stated that MNAT was mandated to disclose the Goldman Sachs issue ( pg 24 of Opinion).

 

   Also within the DE Bankruptcy Court October 4, 2005 Opinion it stated that MNAT had a conflict of interest (pg 26 Opinion)

 

   The DE Bankruptcy Court also concluded within the Opinion that the MNAT failure to disclose constituted real harm (pg 28 Opinion)

 

   Furthermore, the Bankruptcy Court found multiple failures to disclose a conflict of interest by MNAT and that it was not inadvertent - whilst causing real harm and the Court Ordered MNAT to disgorge the fees earned at that time.

 

 

 

 

Court permitted "pro se" Laser Haas and eToys shareholders right to depose Traub, MNAT and Barry Gold (Feb 9 2005)

 

   Barry Gold President, CEO and Plan Administrator of eToys deposition ( here )

 

   Michael Fox of Traub Law firm deposition ( here )

 

   MNAT deposition ( here )

 

 

 

 

   Disgorge Motion eToys docket item 2195 February 15, 2005 ( here )

 

 

 

 

   Within the Disgorge Motion by Asst US Trustee Frank Perch it testifies that Paul Traub etc., was forewarned not to replace Key Executives of the eToys Debtor with any connected to the retain Professionals of the eToys bankruptcy case (see parts 19 & 35 (here))

 

   The Disgorge Motion stipulated that the actions of Traub's firm was deliberate, rather than inadvertent. That Traub and Barry Gold had divided loyalties (conflicts of interest) - that real material adverse harmed had been caused. As Mr. Perch concluded that Fraud upon the Court had transpired as he requested the Court not to disgorge Traub (who had been paid $3.5 million)

 

   Then Mark Kenney makes moot Frank Perch's efforts and another $100 million in fraud occurs - which Mark Kenney also defends (please see Obstruction of Justice by Mark Kenney ( here ) and ( here )

 

   Both Asst US Trustee Frank Perch and Dept of Justice Deputy Director of Executive Office US Trustee's Resigns ( here )

 

 

 

 Dept of Justice Trial Attorney
Mark Kenney
gives Paul Traub

 

   Less than ten (10) days after Asst US Trustee Frank Perch Motion's to Disgorge Paul Traub's law firm ( here ) - the Dept of Justice in DE gives Paul Traub's firm (TBF) unlawful, implied, blanket, immunity and the promise of continued blindness by the Dept of Justice US Trustee's office - breaking the Law of Section 327(a) - 28 USC 586(a)(3)(F) and 18 USC 3057(a) ( here )

 

   The exact wording of the arbitrary & capricious effort to obfuscate the issues under "color of law"

 

 

   Laser Haas was not beguiled by this subterfuge - to the contrary - he was encourage to look deeper - in order to determine what would motivate the Dept of Justice personnel (while the Court also decided to be willfully blind) - to go through such overtly - blatant defiance of the Code/ Rule of Law and Breach of Fiduciary Duty (violating 18 USC 1346) - utilizing Taxpayer entrusted positions to assault the Constitution of the United States and Break the Law for the obvious benefit of Organized Criminal activity known in Bankruptcy circles as a "Bankruptcy Ring".

 

 

 

   Discovery of additional
$100 Million in Fraud
involving MNAT law firm

 

   Being motivated and enraged by the flagrant abuse of power and position - witnessing full scale cronyism and corruption; Laser Haas dug deeper into the US Trustee Handbook and Guidelines (the US Trustee Manual ( here ) and the Legal commands on Felony prosecution of Bankruptcy Fraud ( here ) and ( here )

 

   Haas then discovered that Barry Gold had been misleading when questioned by eToys shareholders about connections to Traub and the shareholders petitioned the Court for the right to pursue the parties if additional investigations led to discovery later (here).  With additional discoveries of connections of Traub, Barry Gold and MNAT with Bain = the issue being that eToys had sold almost the entire entity to Bain/ KB for discounts in the tens of millions.

 

   When Haas discovers that Barry Gold and Paul Traub worked for Bain affliliated parties in Stage Stores ( here ) that was immediately before the eToys bankruptcy case - whilst also learning that MNAT was representing Bain in the $100 million dollar cash payment in the Kay Bee Toys bankruptcy case (DE Bankr 04-10120) - Laser Haas reported the additional Perjury and Fraud to that Court.

 

   As usual - the Dept of Justice Trial Attorney in DE - Mark Kenney - stepped up to the plate and Obstructed Justice again by successfully petitioning the DE Court to strike and expunge Haas ( here )

 

 

 

 

   Laser Haas had received direct correspondence from Lawrence Friedman - the Director of the Executive Office of the United States Trustee in Washington DC - that his staff was on top of the mendacity and would handle it accordingly.

 

   Director Friedman had removed Region 3 Trustee, Roberta DeAngelis with a Press Release dated December 22, 2004 ( here )

 

   Coincidently December 22, 2004 was the very day of the Emergency Hearing to address eToys Perjury ( Transcript ( here ))

 

   Then, also seeming to confirm Director Friedman's promise, Asst US Trustee Motioned to Disgorge TBF $1.6 million ( here )

 

   When the Disgorge Motion was made moot by DE Dept of Justice Mark Kenney has screamed to Director Friedman

 

   Then another $100 million in fraud was discovered with more than 34 acts of Perjury to cover it all up.

 

   Haas contacted Director Friedman again who Resigned ( here )

 

 

 

 

   After Director Friedman resigned, then - Speciously - Roberta DeAngelis was promoted to the position of Acting General Counsel of the Dept of Justice EOUST in Washington DC in charge of investigating US Trustee failures.

 

   The promotion was quietly kept a secret until after Haas discovered the issue in 2007 - where a press release on Roberta DeAngelis being placed - Back IN - as Region 3 Trustee over DE was released May 2008 after Region 3 Trustee Stapleton Resigned ( here )

 

   The Dept of Justice of DE and Roberta DeAngelis from Washington D C - in an act of imprimatur - abused their position, clout and entrusted authority by perpetrating Fraud upon the Court with a Dept of Justice brief that stated Falsely that Haas was a non party and the eToys shareholder had an extremely slim possibility of success against the Court's approval of the Stipulation to Settle that was giving Paul Traub immunity ( see US Trustee pleading to the 3rd Cir ( here )).

 

 

 

 

   The real issue is - Haas and the eToys shareholders were instructed by the FBI, OSC, SEC, Public Integrity Section, OPR, OGE, US Postal Service, President Bush Corp Fraud Task Force ,etc., to send Memo's of the Fraud and Perjury to the General Counsel of the Dept of Justice US Trustee program and the local US Attorney.

 

 

 

 

The Region 3 Trustee - who replaced DeAngelis in 2004 - when Haas first reported the Perjury and Fraud

Resigns after the FBI raids the OSC's office and Scott Bloch's home   

 

Those two parties are Roberta DeAngelis - who is extensively knowledgeable on the subject matter at hand - having gone before Congress in 2004 reporting on conflicts of interest and Disqualification of Professionals ( here )

 

   Roberta DeAngelis has a new Asst US Trustee - Andrew Vara- who also is extensively knowledgeable on non disclosure and disqualification issues - having been cited many times about his famous case of In re Cold Metal ( here )

 

 

 

 

   For some inexplicable reason both Dept of Justice personnel - Mark Kenney and Roberta DeAngelis - seem to have a vested interest in protecting this case from investigation and are overtly Obstructive - whilst Breaching their Fiduciary Duties to save Traub and MNAT from investigation or prosecution.

 

   This - mind you - after the US Trustee's office has testified in the Court docket record that Traub was forewarened ( parts 19 and 34 ( here )) not to do the very felony violation - that he not only went ahead and did anyway - he collaborated with MNAT and Barry Gold to deliberately deceive the Court and hid the Hiring Letter ( Exhibit at the end of Gold's response ( here ))

 

   The Hiring Letter of Barry Gold contains a drafted clause where Barry Gold could willfully choose - whether or not - of his own volition - to apply to the Court - where he had an inducement (Bribe) that he would then receive the President and CEO position at $40,000 per month (for only 2 days work every two weeks) and he would also receive a Bonus at the end of the case.

 

   This - mind you - whilst Traub and Barry Gold were also working with Goldman Sachs owned company (that they have Never Ever mentioned of In re Cosmetics Plus in NY).

 

   At the same time Barry Gold has testified that Jack Bush (CEO of Bain's IdeaForest) ( and Director at Bain's/Romney Stage Stores) - where it also just so happens that Michael Glazer was a stock holder and Director of Stage Stores - Michael Glazer was the CEO of Bain's Kay Bee Toys - when Barry Gold, Traub and MNAT negotiated the sales of eToys assets to Bain/ KB.

 

   Also Barry Gold, Traub and Xroads LLC all have undisclosed connections to Wells Fargo/ Foothill Capital - where Traub, as the attorney of the Unofficial Creditors in Fall/Winter 2000 of eToys while Foothill Capital gave a $40 million dollar loan to eToys in November 2000 ( when eToys already knew it was filing bankruptcy). Wells Fargo/ Foothill Capital transacted over $100 million before eToys filed in March 2001.

 

 

 

 

   The famous case of In re Bucyrus 94-20786 ( E D Wisc 1994) resulted in the Milbank & Tweed firm being disgorged their entire $1.9 million - the loss of a lawsuit for more than $20 million and the incarceration of Gellene - where a book was written on the case entitled "Eat what you kill" ( here )

 

   More than $300 million in Fraud is continuous and DE Dept of Justice refuses to address

 

   The $100 million of Wells Fargo has never come under preferential review. A preferential crime!

 

   Haas also discovered $2 million in undisclosed cash assets that eToys VP David Haddad was hiding - a crime of Collusion to Defraud an Estate - that is so severe the only requisites to provided proof of the crime is the existence of a Bankruptcy case and the failure to report the asset.

 

   MNAT - Paul Traub and Barry Gold refused to allow Haas to present buyers for the Public entity of eToys because Bain/ KB - their "undisclosed" client did not want a Public Company.

 

   MNAT- Traub - Barry Gold all have "undisclosed" connections to Goldman Sachs - where eToys sued Sachs for $millions in CA that was settled - and the N Y Supreme Court case MNAT handed over to Traub under the pretense that such would avoid a Conflict of Interest (NY Supreme Court case 601805/2002) - the case is purportedly worth $300 to $500 million.

 

 

 

 

   The attorney for Goldman Sachs ( Jeremy Bates) that was going after Traub and MNAT extensively ( here ) has now vanished. He seemed to put forth an honorable effort and now S&C law firm and MNAT simply state they do not give out the information on him

 

   The Creditors Committee Co Chairmans were (after Mattel Director retired) - Scott Henkin of Fir Tree - Jim Brown of Fisher Price and Larry Durant of RR Donnelly

 

   Larry Durant worked with Traub and Barry Gold in Florida Bankruptcy cases long before eToys occured and he vanished when Haas sought his answers to the crimes.

 

   Jim Brown was hauled away from Fisher Price when he began to look into the Perjury and Fraud for the Creditors

   (Please remember Bain, Prentice and Kay Bee all own the only powerhouses left for the Toy Industry)

 

   And Scott Henkin - he told Haas that Henkin and others gave their "off the record' approval to the Barry Gold - Paul Traub connection

 

   When Haas informed the DE Dept of Justice of this - Scott Henkin threatened Haas - to which Laser Haas informed Scott Henkin and DE Dept of Justice he had recorded Henkin, as well as Gordon Robinson of the SEC stating that Mark Kenney told the SEC not to start an Official Investigation.

 

   Scott Henkin is now Senior Exec at D E Shaw and D E Shaw - Laminar Portfolio's owns eToys  ( here)  - that owns the Parent Company on NASDQ (stock symbol KIDS) - that also just so happens to own eToys. ( also see items pg 18 ( here )

 

   Paul Traub, MNAT and Barry Gold refused for Haas to do a deal with parties on Toy International/ Playco International that would have gotten eToys 100 percent return on $50 million in inventory and had potential Public merger persons.

 

   Paul Traub reported to the Creditors Committee and Haas that eToys was getting 24 percent and To International was getting 30 percent from Ozer Group.

 

   That the Bank was also upside down (under secured) in the Loan to Playco - when Haas informed the Creditors that he had a party willing to pay 69 percent for Playco and merge it with eToys public company (including Scholastic) - Ozer dropped out and another bidder came up to 70 percent.

 

   Traub failed to inform Haas that he was acting as the Creditors Comm counsel in Playco

 

   Also - Traub and Barry Gold had a working relationship with Ozer Group - who owned part of the Bank of Paragon in Playco.

 

   The Other Bank that owned part of Paragon with Ozer and the rest of the loans to Playco - was Wells Fargo

 

   Ozer immediately closed thereafter and the head of Ozer went to work for Xroads

 

 

 

 

   As you can see there are more than enough reasons for a Federal investigation into the eToys case. For some inexplicable reason the Dept of Justice has Never Ever mentioned the confessions to false affidavits or non disclosure of conficts of interest of MNAT.

 

   MNAT represents Goldman Sachs in DE - Goldman Sachs is exposed to $300 or $500 million in the eToys NY Supreme Ct lawsuit.

 

   The fact that MNAT said it "handed" over the case to Traub is akin to Capone handing over his prosecution to Nitty.

 

   MNAT also failed to inform the DE Court of the fact it handled the Romney/Bain/ Learning Co merger with Mattel ( here )

 

   Of the many key issues (including Romney was managing/ owner of Bain and Sankaty at the time) - is the fact that Mattel was the number one creditor of eToys.

 

 

 

   How the power center exists to make all this happen is the fact that there is also a Bain affiliated friendly family with one sister who was at eToys (then Sears/ Kmart) who had a brother that was Exec VP at Mattel and another brother as Senior Exec of Goldman Sachs.

 

   In neither the Disgorge Motion, the Stipulation to Settle or the 3rd Circuit case (07-2360) where MNAT is a Cross Appellant - not ONE time does the Delaware Dept of Justice address the MNAT issues.

 

   To the contrary - the DE Dept of Justice even goes out of its way and states in the Public Docket Record ( footnote in brief page 2 (that is page 9 of the pdf ( here )) - as the Dept of Justice actually confesses in the Record that it did not and will not address the MNAT issues as if such was a Cardinal Sin!

 

   The Dept of Justice Region 3 Trustee resigned and has now again been replaced with the infamous Roberta DeAngelis - who has already demonstrated a deep intent to never prosecute MNAT ( see US Truste press release ( here ) and ( here )).

 

   The Region 3 Trustee resigned from her position after Laser Haas asked the question on his website- is Region 3 Trustee Kelly B Stapleton related to the 3rd Circuit Judge Walther K Stapleton.

 

   The significance being Judge Walter K Stapleton was a former partner of the MNAT law firm.

 

   Greg Werkheiser, the lead counsel in eToys case - clerked for 3rd Cir Court Justice Roth

 

 

 

 

   Colm Connolly clerked for Judge Walther K Stapleton and then went to the US Attorney;s office in DE ( see Colm resume ( here ))

 

   Then Colm F Connolly became a partner with MNAT in 1999 - 2001 ( resume ( here ))

 

 

 

 

   When Haas learned that Roberta DeAngelis was the Acting General Counsel and that the US Attorney had failed to inform him that he was a partner with the MNAT law firm - Haas then reported the conflicts, ethics and criminal violations to the US Attorney in CA ( here ) and ( here )

 

   The California US Attorney (Tom O'Brien) never responds to Haas - however, the Los Angeles Times did release a story entitled "Shake-up roils federal prosecutors" ( here )

 

   It seems Tom O'Brien had a need to redirect the Dept of Justice efforts on Public Corruption when the response to Haas was due.

 

   He walked into a staff meeting, belittled the efforts of career prosecutors and said then did not develope enough cases ( HELLO)

 

   Then CA US Attorney immediately disbanded the Public Corruption Unit and Threatened career prosecutors ( see story ( here )).

 

   AG Mukasey and Tom O'Brien stated the dismantling of the Public Corruption Unit was to make the DOJ more efficient !!!!!!!!

 

 

 

 

   We found out that US Attorney Colm Connolly was also apparently bitten by the "non-disclosure" virus - in not informing us that we were sending the information to his designate (Asst USA Ellen Slights) - Mr. Connolly's reward (that also led to proof of his culpability) for his great ability to be a keeper of the Constitutional Law and act in Good Faith? - he was nominated as a DE Federal Judge ( here )

 

 

   Paul Traub acquired his position to prosecute the Goldman Sachs case for MNAT by submitting a False Affidavit but the Court said that - despite the fact MNAT and TBF have confessed to supplication of 34 false affidavits - that no Perjury was documented and the Court refused to refer the matter to the US Attorney (as is required by 18 USC 3057(a) and the Judicial Canon's of Conduct 3(B)3  (Opinion pg 52 ( here )   for if it was Officially referred to Colm F Connolly then he would have to had Officially replied.

 

   Michael Fox and Paul Traub disbanded from each other and Traub is now at Dreier LLP - as for Harold Bonacquist of Traub Bonacquist & Fox (TBF) - we do not know - when we asked to depose him they said go find him - for the NY State Bar list's his contact as the US Embassy in the Philippines ( here )

 

 

 

 

   Paul Traub, MNAT and Barry Gold drafted the Plan that the Administrator ( Barry Gold) could hire whom ever he wanted, pay him whatever he wanted and that the Administrator could settle all items under $1 million without the Court's permission ( thus we have no idea who got the $45 million eToys did have).

 

   Stage Stores that had director Jack Bush, Director Michael Glazer and is owned by non other than former Presidential hopeful Mitt Romney - was also Co-Debtor with a company entitled Liquidity Solutions.

 

   Strangely enough - Liquidity Solutions bought up many of the Creditors claims in eToys in a coincidental timing - right after Barry Gold was planted within eToys.

 

   There is a provision in the Code - for the sake of finality - that when all other items are settled - the last creditor standing receives all that remains.

 

 

 

   Laser Haas
came on board eToys
by Court approval -

 

   Haas halted those transactions and had Bain/KB pay $10 million for eToys .com - $6.9 million for inventory - $10 million for assets - $200,000 per month for eToys to send out emails to customers and assisted in getting back over $45 million in cash into the eToys case.

 

   Traub, MNAT and Barry Gold - negotiated the $10 million dollar sale for eToys.com down to $3 million - when Haas asked to see the Books n Records so that he could submit a final billing for CLI - Barry Gold, Traub and MNAT refused - even after Haas put in a Motion under Fed R Bankr Proc 2004 - the DE Dept of Justice simply ignored Haas.

 

 

 

 

   When Haas did and the WSJ article came out (July 25 2005) - the Court rescheduled Haas's CLI $3.7 million dollar claim - then permitted Haas''s approved counsel (Brad Brook) to withdraw - then Traub, Gold and MNAT stated to the Court that Haas gratiously waived his right to be paid and held a hearing to dismiss Haas where the Judge denied "due process" and refused the new counsel Haas had at the hearing from speaking ( Transcript of hearing ( here )).

 

   Haas appeals the Order to toss out the $3.7 million dollar claim without a hearing and the DE Bankruptcy Court heads off the Haas appeal with the Opinion and corresponding Order of October 4, 2005 that gives the Court's approval of the Immunity to Traub ( here ) and ( here )

 

   Both Haas and the eToys shareholder appeal the Judges Order and the DE Bankruptcy Court actually refuses to Transmit the appeal - whilst the Judge holds a hearing on December 1, 2005 on whether or not to permit the appeal issues to go forward.

 

 

 

 

 

   Armed with the immunity granted Paul Traub by the Dept of Justice - he goes anywhere and everywhere he wants and makes deals that always seem to lead to disaster. As attorney for Kmart equity holders the only person that made out was Ron Burkle

 

   When a shareholder in Stage Stores (Dov Avni) who held $4500 worth of stock - pointed out Traub's fraud to us - Dov Avni was sanctioned by the Court for more than $300,000 and had the US Marshal's sent after him.

 

 

 

 

   Paul Traub was with Petters forming Petters Group Worldwide and Traub's law office in NY 655 Third Ave was the address for Ubid and Fingerhut.

 

   Petters is now in jail without Bond - Paul Traub's connections to Petters has totally vanished - and they seized all the assets of Petters except Fingerhut.

 

   For some reason eToys was suing Fingerhut - the lawsuit was settled - then Petters/ Traub owned Fingerhut.

 

   Now $3billion in fraud has transpired by Petters and Fingerhut stated that Petters no longer owns them.

 

   No proof has been entered into the Court docket records yet - but four of Petters associates have pleaded guilty.

 

   With the only evidence that Petters may not no longer own Fingerhut is this little press release that Fingerhut has new money.

 

 

 ( here )