RE: Multiple violations of fraud regulations by International Automated
Systems, Neldon Johnson, Randale Johnson, John doe 1-10.
This is a summary of allegations of corporate and
individual stock fraud by International
Automated Systems (trading symbol IAUS-Pink Sheets),
by corporate principals Neldon Johnson and
Randale Johnson, and by persons unknown referenced as John Doe 1-10.
Details and documentation of each allegation are contained in
ALLEGATION 1-VIOLATION OF COURT INJUNCTION FOR PREVIOUS STOCK FRAUD
Both Neldon and Randale Johnson, principals of IAUS are under
permanant court injunction to refrain from violations of US securities
law. Both these persons are in flagrant violation of this injunction,
and should be found in contempt of court.
ALLEGATION 2-FRAUD ON THE COURT
Neldon and Randale Johnson avoided the payment of millions
of dollars inl fines and disgorgement of ill gotten gains by swearing
under oath as to their inability to pay such fines and disgorgement. In
fact both Neldon and Randale had substantial assets hidden in offshore
accounts and in corporate accounts-used as personal piggy banks-making
their sworn statement a fraud on the court, and meriting a charge of
contempt. Subsequent to the grant of relief by the court both
parties acquiired substantial real estate holdings and a $300,000
Cessna aircraft with no visable means of support or income. The relief
defendants named in the SEC complaint, all immediate family members of
Neldon Johnson, were let off scott free, despite their illegal profits
from the scam.
ALLEGATION 3-MULTIPLE 10-B FRAUD OFFENSES
Since 2001 or therabouts, both Neldon Johnson and Randale
Johnson have been engaged in an elaborate fraud scheme to deceive the
investing public through the repeated release of public statements
regarding their supposed "solar technology". These public
statements at all times used the instrumentalities of interstate
commerce, and were not only false and misleading but in most cases were
blatant lies. The Johnsons were aided and a betted in this fraud by
John Does 1-10, who used e-mail and telephone lists to further
the fraud. On knowledge and belief at least five Does personally
profited from such efforts.
ALLEGATION 4-SALE OF UNREGISTERED SECURITIES
In each and every filing with the Securities and Exchange
Commission International Automated Systems has alluded to and
documented the sale of securities from an "Escrow Account," the
proceeds of which were used to fund corporate operations. In
fact, International Automated Systems has not registered securities for
sale to the public, nor have they stated that such securities were
exempt from registration. This is a clear violation of the Act.
On or about 2005, International Automated Systems began marketing a
security sold as a tax shelter to the general public, and has collected
close to one million dollars in "deposits" on these unregistered
securities. The claims made in this unregistered offering were not, and
could not be fulfilled, since International Systems has no functioning
solar technology for which the tax credit could be claimed.
International Automated Sysems was aided and abetted in this offering
by John Doe 1, believed to be Greg Shephard, a resident of Utah, and a
nationwide network of commissioned sales persons recruited by Shephard,
none of whom, on knowledge and belief, were registered brokers.
Shephard went so far as to include detailed tax return preparation
instructions in the sales and promotional materials for these
unregistered securities, which were illegally sold in flagrant
violation of the Act, and in flagrant violation of Internal Revenue
Service regulations. Lincoln Pearson AKA John Doe 2 and a
resident of Arkansas was one of many participants in the illegal
marketing of these securities, going so far as to incorporate an entity
to further his illegal activities, and actively used the
insstumentalities of interstate commerce to further his scheme. The
illegal acttivities of this network are extensively documented and can
be obtained by contacting xxx@xxx.
ALLEGATION 5-RAMPANT VIOLATIONS OF REGULATION FD and STOCK MANIPULATION
Neldon Johnson, Randale Johnson, and John Doe 1-10 have at all
times since 2001 maintained a clandestine list of e-mail and telephone
contacts used to disseminate supposed "insider" information regarding
upcoming corporate announcements. This communication has been used
to manipulate the stock price of International Automated Systems
on multiple occasions as detailed in the graphs and data lists below.
On knowledge and belief Greg Shephard and an anonymous
message board poster with the alias MaddDawg were active and paid
participants in this scheme, and profited both by direct payment for
services, and by the illegal use of insider information to profit from
stock trading. Other John Does were also involved in this illegal
scheme. Extensive documentation of this illegal activity is available
to the SEC from firstname.lastname@example.org, and such documentation will show a clear
pattern of manipulation of the price and trading volume of IAS stock.
ALLEGATION 6-CORPORATE LOOTING
On at least two occasions Neldon Johnson has looted the corporation of
shareholder funds for his exclusive and personal benefit. I n one
case he awarded himself 100 million favorably priced options in
exchange for "patents and patents pending" which in fact remained the
property of the Johnson Family Trust. Some of the referenced options
have been excersised and sold for Johnson's beneficial interest.
In another case Johnson used corporate funds to capitalize a failed
"self check" grocery, including the purchase of a building which the
company now leases from Johnson for an amount grossly exceeding it's
fair market value. On knowledge and belief, one half of that leasehold
payment is applied to Johnson's alimony payments to his former spouse.
ACTION IS REQUIRED
The ongoing fraud committed by Neldon Johnson, Randale Johnson,
and John Does 1-10 has resulted in the theft of tens of millions of
dollars from the investing public. If the SEC is committed to
maintaining integrity in public markets, then they will act with all
deliberate speed to end this fraudulent activity. The SEC has recently
claimed to be taking a more aggressive approach to fraud
investigations. We will believe that when we see it.