Following on from our last post in the series featuring extortionist and false accuser Corey John Stagg. Having reveiwed the evidence we’ve managed to establish that Stagg will soon be confronted with a serious, potentially criminal, dilemma; as will all of the false witnesses that the corrupt Christchurch cops (here after referred to as the “3C’s gang”; the biggest gang of organized criminals in New Zealand’s history), have suborned in a concerted effort to sustain false criminal allegations of fraud against two innocent businessmen (which we are advised is to be trialed at the Christchurch District Court, commencing 23 October 2012).
Their dilemma? To commit perjury or not to commit perjury. Lauda Finems dilemma? A somewhat false dichotomy; whether or not to report the conspiracy before it is played out in the Christchurch District Court.
If you’re reading this article, not having read the related material, please take the time to look at those posts as they paint a very disturbing factual picture of what a number of Christchurch police officers, crown lawyers and their associates have been up to. A picture that must be published by the fifth estate, of which Lauda Finem, its volunteers and contributors, are dedicated members.
Its official: the Blackmailer Corey Stagg is a liar; just ask his boss
Extortionist Corey John Stagg, the expose continues
Cory John Stagg; Extortionist and thug outed
Telecom New Zealand, Police, GCSB and Mark William Doyle, a man with a very shady past
GCSB & Telecom employees conspire with police, is Mark Lundy innocent?
The criminal charges invented against the businessmen are so palpably false that one piece of evidence that proves that they are false should have the legal maxim “false in one thing, false in everything” (falsum in uno, falsum in omnibus) kick in, kicking the charges to touch. We believe we surpassed that mark with the evidence we’ve unearthed inculpating the subjects of our investigation in the crime of fabricating evidence, extortionists Corey John Stagg, Mark William Doyle and various other members of a cabal we’ve nicknamed the 3C gang.
We suspect that the corrupt cops and Crown Prosecutor involved will, at the end of the prosecutions evidence being lead and cross examined, wish that they had not gone down the route they have traveled. Previous, of course that route had been safe guarded from attack by corrupt government agencies, and their related private entities, that “appear” on the surface to be acting in the interests of justice. As we go to print the New Zealand media report that a survey about New Zealanders trust in the thick blue line is at a new low. The survey found that:
“…overall, net trust in the police had fallen 11.5 per cent to 59.9 per cent during the past five years.
Comments in the survey indicate that the fall in public trust centres on the police’s management of complaints against its officers, and actions considered heavy-handed, including the Urewera and Dotcom mansion raids.”
Source: Trust in police hits new low (Fairfax)
This means that over 40% of New Zealanders do not trust their Police force, and if the survey had been held in the 3C’s patch of Christchurch, New Zealand the result would have undoubtedly been much worse. We feel that that figure of distrust will burgeon once the two businessmen are found entirely innocent of the false claims against them that were made when the key accusers, one of which is a corrupt copper, were trying to blackmail the businessmen of the sum of nearly $700,000.00.
The Roman legal maxim “falsum in uno, falsum in omnibus” originated thousands of years ago and remains a pillar of courtroom strategy today. In short, it is where a witness willfully testifies as true something the witness knows is not true, and is proven to be untrue during cross-examination, then the remaining testimony, if uncorroborated, is not credible.
Unfortunately this principle can be equally applied by the prosecution when introducing false testimony as is done in hundreds of cases as alleged by one of Stagg’s criminal conspirators Mark William Doyle. In that case, which involved Telecom staff introducing or deleting electronic communication records in order to make the evidence of those wrongly accused appear false, convictions were obtained by the 3C’s that were wholly unsafe.
Such false testimony is perjury, if the evidence is cogent and was intended to mislead, and if it can be corroborated as being false, or is proven incontestably false by other means.
This type of intentionally misleading evidence was given by corrupt New Zealand Police Officer Grant Wormald , when he denied the unlawful involvement of the GCSB in bugging Dotcom’s telecommunications.
The New Zealand Crimes Act 1961 defines perjury as being;
108 Perjury defined
(1) Perjury is an assertion as to a matter of fact, opinion, belief, or knowledge made by a witness in a judicial proceeding as part of his evidence on oath, whether the evidence is given in open court or by affidavit or otherwise, that assertion being known to the witness to be false and being intended by him to mislead the tribunal holding the proceeding.
(2) In this section the term oath includes an affirmation, and also includes declaration made under section 13 of the Oaths and Declarations Act 1957.
(3) Every person is a witness within the meaning of this section who actually gives evidence, whether he is competent to be a witness or not, and whether his evidence is admissible or not.
(4) Every proceeding is judicial within the meaning of this section if it is held before any of the following tribunals, namely:
(a) any court of justice:
(b) the House of Representatives or any Committee of that House:
(c) any arbitrator or umpire, or any person or body of persons authorised by law to make an inquiry and take evidence therein upon oath:
(d) any legal tribunal by which any legal right or liability can be established:
(e) any person acting as a court or tribunal having power to hold a judicial proceeding:
(f) a disciplinary officer, the Summary Appeal Court of New Zealand, or the Court Martial of New Zealand acting under the Armed Forces Discipline Act 1971.
(5) Every such proceeding is judicial within the meaning of this section whether the tribunal was duly constituted or appointed or not, and whether the proceeding was duly instituted or not, and whether the proceeding was invalid or not.
Under the same sub part of “misleading justice”, the New Zealand Crimes Act 1961 has the following provisions dictating and clarifying related aspects of what constitute crimes. At section 110 the Act defines the offence of a false oath that would amount to perjury if given in a witness box.
110 False oaths
Every one is liable to imprisonment for a term not exceeding 5 years who, being required or authorised by law to make any statement on oath or affirmation, thereupon makes a statement that would amount to perjury if made in a judicial proceeding.
Section 111 deals with statements or declarations made before an officer authorised to receive the statement.
111 False statements or declarations
Every one is liable to imprisonment for a term not exceeding 3 years who, on any occasion on which he is required or permitted by law to make any statement or declaration before any officer or person authorised by law to take or receive it, or before any notary public to be certified by him as such notary, makes a statement or declaration that would amount to perjury if made on oath in a judicial proceeding.
Section 112 prescribes that the offence of perjury, false oath, or false statement cannot be proven on the evidence of one witness alone, unless that evidence is corroborated by other evidence implicating the accused.
112 Evidence of perjury, false oath, or false statement
No one shall be convicted of perjury, or of any offence against section 110 or section 111, on the evidence of 1 witness only, unless the evidence of that witness is corroborated in some material particular by evidence implicating the accused.
Section 113 prescribes that fabricated evidence must have the intent to mislead the tribunal involved. Of course the intent could be present even though the evidence did not actually mislead the Tribunal.
113 Fabricating evidence
Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to mislead any tribunal holding any judicial proceeding to which section 108 applies, fabricates evidence by any means other than perjury.
Section 115 gives anyone convicted of conspiring to bring a false accusation against an innocent person a maximum penalty of 14 years imprisonment.
115 Conspiring to bring false accusation
Every one who conspires to prosecute any person for any alleged offence, knowing that person to be innocent thereof, is liable—
(a) to imprisonment for a term not exceeding 14 years if that person might, on conviction of the alleged offence, be sentenced to preventive detention, or to imprisonment for a term of 3 years or more:
(b) to imprisonment for a term not exceeding 7 years if that person might, on conviction of the alleged offence, be sentenced to imprisonment for a term less than 3 years.
Whereas section 116 gives a maximum sentence of 7 years in prison for conspiring to defeat the course of justice.
116 Conspiring to defeat justice
Every one is liable to imprisonment for a term not exceeding 7 years who conspires to obstruct, prevent, pervert, or defeat the course of justice in New Zealand or the course of justice in an overseas jurisdiction.
Section 117 formulates the process of what constitutes corrupting juries and witnesses, and at sub section (e) covers any “attempt in any other way to obstruct, prevent, pervert, or defeat the course of justice”:
117 Corrupting juries and witnesses
Every one is liable to imprisonment for a term not exceeding 7 years who—
(a) dissuades or attempts to dissuade a person, by threats, bribes, or other corrupt means, from giving evidence in any cause or matter (whether civil or criminal, and whether tried or to be tried in New Zealand or in an overseas jurisdiction); or
(b) influences or attempts to influence, by threats or bribes or other corrupt means, a member of a jury in his or her conduct as such (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(c) accepts any bribe or other corrupt consideration to abstain from giving evidence (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction); or
(d) accepts any bribe or other corrupt consideration on account of his or her conduct as a member of a jury (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(e) wilfully attempts in any other way to obstruct, prevent, pervert, or defeat the course of justice in New Zealand or the course of justice in an overseas jurisdiction.
The maximum punishment for perjury is, like section 115 (conspiring to bring false accusation) 14 years:
109 Punishment of perjury
(1) Except as provided in subsection (2), every one is liable to imprisonment for a term not exceeding 7 years who commits perjury. (2) If perjury is committed in order to procure the conviction of a person for any offence for which the maximum punishment is not less than 3 years’ imprisonment, the punishment may be imprisonment for a term not exceeding 14 years.
Perjury requires the evidence of one witness, as long that witnesses testimony is corroborated by other evidence that the accused committed perjury.
Intimidation is not a defence to perjury in the real world, but we at Lauda Finem realize intimidation is intrinsic currency with the New Zealand Police, even when the pound was around.
Intimidation can be as powerful, and even more powerful, when it is done with subtlety. Such acts as threatening a witness with a charge, if the witness will not give evidence, could be described as the upper end of subtle coercion.
In some cases it is proper to do so, where the Police believe that the witness was, if not directly involved in the offending, aware of the offending’s occurrence, and did not come forward to report the criminal activity. Or the witness played a much lesser role in the offending. But this type of evidence is unsafe as it is settled fact that a large number of these witnesses make up testimony against the accused, and lessen their involvement in the offending. There has been occasion where the witness was in fact the person that committed the crime, and the accused was innocent.
But there is another subtle, but entirely inappropriate, way in which testimony can be obtained. That being; threatening a witness with a criminal charge, unless the witness gives testimony that is false, and given with the intent to mislead the Court and lead to the conviction of an innocent person.
That is the manner in which the 3C’s gang have pursued their malicious fabrication of evidence against the two Christchurch businessmen that desperately need the Judge at the trial to do his or her job without fear of the possible repercussions for the “3C’s gang members, and Crown Law counsel, involved in promoting the inimical agreement to save Corey Stagg, Mark William Doyle, and 3C’s gang members from facing, if convicted, a decade or more in prison, where they belong.
We at Lauda Finem also face a false dilemma. We only realized it was a false dichotomy, or the fallacy of exhaustive hypotheses, when we spoke to a 95 year old German Jewish woman who still served as maître d at a local German restaurant in Balmain Sydney. She had survived the holocaust, five births and three marriages to, in her quaint words, useless fucks, to go on and do the right thing; that being to live an honourable life. She told us always do the right thing according to your judgment, not the judgment of others.
We realized that a good person does what is right, not what other persons say is the right thing to do. If we did the right thing we would report the offending to the Police, but it would appear that that has already been done by the wrongly accused businessmen, and guess who the 3C’s gang got to investigate the allegations; the bloody corrupt cop. So reporting the offending to the 3C’s gang is in fact not the right thing to do.
Go to the mainstream media, but its members are not capable of doing the right thing because the 3C’s gang and the Crown Law counsel could attack the journalists involved and the publishing company. Additionally the mainstream media is definitely not trustworthy. So going to the mainstream media is not the right thing to do.
Maybe await the outcome of the trial, where an independent jury can judge the appropriate outcome, once it has heard all of the evidence. But wait a second, we know that juries often do not get to see all of the evidence, and clearly, on many occasions, juries make wrong decisions. So relying on a Court to get it right is not the right thing to do. And then there is the Judge. Since the wrongful conviction and murder of Jesus Christ, the infamous pontious pilate lives in infamy as the judge that sent Jesus Christ to the cross.
And that was our false dilemma, as an anti corruption site, Lauda Finem must bring to its readership evidence proving corruption as soon as it is sourced, and corroborated as being reliable.
We cannot await the corrupt system to take control and start to spin bullshit to its citizens. When we had told the old German Jewish lady the full story she laughed and said, “My countrymen told millions of their countrymen that we were being re-sited to a better place, and for them they truly meant our deaths would provide them a better Germany. My parents trusted the system and they were murdered by the system they trusted. Never ever trust a system as it is only trust that can bring your demise without an ability to fight for your freedom”.
And so we did not have a dilemma after all, because the “system” is trying to imprison two innocent men for a term of 7 years. Yes that’s right, the Crown lawyer has indicated that should the men be convicted he believes that the harshest possible sentence should be imposed. We will be publishing evidence that proves that the Crown lawyer involved is fully aware of the conspiracy; who is involved, and importantly, the specific testimony that is false. When the men are acquitted that lawyers career will be over.
Given the evidence of the level of similar criminal offending by the 3C gang, involving Crown Law, and the GCSB, and the history of not being caught, we feel that leaving these men’s lives in the hands of one Judge, and twelve members of the public is unsafe. After all thirteen is an unlucky number.
Now we move onto the fabricated evidence. Other than the blackmailers, or those likely involved in that conspiracy, we will be naming the witnesses after the trial, and disclosing to our readership their respective perjury. For the time being we will take a page out of the Crowns book and giving a number as a reference to each witness.
Witness 1 was the first franchisee. He purchased the entire Auckland and Northland area for $125,000.00. He came from an unremarkable middle management background and had been made redundant from Air New Zealand. He wanted to start up his own business in order that in five years he could derive a significant passive income, and in say ten years sell the franchise for a very considerable capital gain.
Witness 1 alleged competency in sales and sales management well above his actual abilities, and had no experience in “start ups”. He admitted a lack of initial technical knowledge, but this was to turn into a complete inability to learn what was required to complete the technical input into bid, or tender, documents enabling competing suppliers to understand the end clients telecommunication requirements. It became obvious to Witness 1 and to the franchisors that Witness 1 just did not have the ability to succeed with the business model, and then a process of working an exit strategy was required. Witness 1 had this to say, or more “rave” about the franchise business model when reporting to the franchisor;
“I have not generated any significant revenue to date due to my lack of telecommunications experience which has meant lost or missed opportunities and reliance on suppliers for specific technology or service details. My inexperience has also forced me to rely too much on the franchisor and the CHCH franchisees to get me by…. The potential to gain additional/business through these relationships is high... The client base that I have generated so far has proven that the (franchise name redacted) concept works well and cold selling is not difficult. Clients willingly accept a free assessment of their business needs and it has been a real bonus having access to a tool box of products and services from a good cross section of the telecommunications and IT industries”
In the same communication with the franchisor Witness 1 updates the franchisor as to his progress with current prospective clients, and the clients response to the franchise product range;
Video Ezy Chain
“This resulted in a favorable recommendation by the owner for all Video Ezy franchisees to use. (Franchise name redacted) now has access to 162 Video Ezy Stores with the following currently on the (franchise name redacted) books
NZ Business Excellence Foundation
“The CEO will promote (franchise name redacted) to his customers and has agreed to use the NZBEF logo on his website
Brookfields Lawyers
“The CEO (David Graham) and CFO (Bill Page) want (franchise name redacted) to assist scoping their future needs and facilitating a business solution
PacificNetwork Cargo
“The CEO (Conrad Headland) is liaising with (franchise name redacted) Auckland Broker (Stu Wilson) to determine their telecommunications needs. The staff will be doubling in size
Blue Wing Honda
“Potential for access to other companies within the Caspex Group as a result of this deal. Caspex also own Fryan Marine, Power and Marine, Intek Security Group and Blue Pacific Yamaha…
Dilworth School
“There is potential for deploying PDA’s to 500 students for their integrated learning and management. The head of Technology Rodney Ford is keen to use (franchise name redacted) to assist with guidance on utilizing the connection. Parish Green and Matt Ransfield are keen to work with (franchise name redacted) for non core technology solutions for their new and existing clients. They are also keen to work with (franchise name redacted) on education solutions that require managed Internet services and other technology solutions... (page 3 exhibit”C9”)
Diocesan School for girls
“The head of It Craig Harrison, is keen to work with (franchise name redacted) .….
Trimate Industries
“Trimate have just acquired a new company and are ready for a telecom review in January 2008. The CEO, Brett Kàtterns, is keen to use (franchise name redacted) to assist them in the integration process and to get the best out of technology…
CT Fright and Coghlan Auckland
“The GM, Kane Stevenson, is keen to work with (franchise name redacted) to leverage off the solution proposed for Coghlan….
Tourism Industry Resources NZ (TIRNZ)
“An association of small tourism businesses that get linked to (franchise name redacted) for Telco/IT needs.
Current list includes;
Abel Tasman Lodge, Andros B & B, Boundary Court Inn, Braemar House, Brookwood Lodge, Colonial Motel, Discover Tutkaka, Mt Richmond Motor inn, The Green House, Whakatoa Surf Lodge, Woodhill Forest Farm Stay, Pioneer Hospitality Group”.
It is important to note that Witness 1 identifies the importance to the franchise of the TIRNZ website which Corey Stagg unlawfully entered and changed details in order to carry out the attempted blackmail.
If Witness 1 had been able to close these deals he would have most likely paid for the entire cost of his franchise. The remuneration under the franchise system was unequaled in the industry as was the ability to do business with any customer or supplier or bring any combination of suppliers together in one bid and contract. The franchise model and contractual agreements with suppliers meant that Witness 1 could approach any client of say Telecom and resign the client to telecom and still obtain significant income. Resigns got significant income. No other model offered income at the level of the franchise that Witness 1 purchased. And the lying prick knows it.
We have hard copies of emails from the blackmailer Corey Stagg that indicate how much he believed in the business model, before he realized that he was not capable of running a business that required leadership skills, and did not have the money to survive. This email is from blackmailer Corey Stagg to a prospective contractor and is copied to one of Stagg’s future blackmail victims.
The email fairly reflects the unique capacity for the (franchise name redacted) model to better reward the company, the franchise owner, and the front line account executives, than any Telco KPI, or any other franchise model.
From: Corey Stagg [mailto:corey@(redacted).com]
Sent: Saturday, 16 February 2008 10:59 a.m.
To: alistair.n@xtra.co.nz
Cc: ‘(Businessman wrongly accused and subject to Stagg’s blackmail)
Subject: (franchise name redacted)
Importance: High
Hi Alistair,
Firstly, welcome on board, I am amped with having you as part of my team and I know that we are going to set Canterbury on fire.
Probably, for the first time in your life you are going to get paid what you are worth, and considering that your earning potential is uncapped, and I don’t move the goal posts mid game, you will enjoy the new adventure and I know you will step up to the challenge.
From: Corey Stagg
Sent 4 April 2008
Subject: Armstrongs – Signed Terms of Understanding
Importance: High
Attachments: AMG – (franchise name redacted) Signed Terms of Understanding.pdf
The world is a beautiful place, I have attached the signed (franchise name redacted) – Terms of understanding.
I have a scheduled meeting between Matthew & Martyn from Armstrongs & Alan & Andrew from Telstra Clear on Tuesday @3.15pm
I also have further information about Armstrongs that will add more revenue to (franchise name redacted) .
Another email from a Mr Steve Hansford, who was involved in making suggestions to the 3C gang as to how they could intimidate yet another witness. The email is dated 4 December 2007 when Mr Hansford had paid over a $10,000.00 deposit for the Otago, and Southland, franchises;
4 December 2007
(name redacted)
Sound bite for the Mag! Congrats on being selected by the way.
Having a passion for communications I’m really excited to become a part (franchise name redacted) and what I feel is a fresh new approach to the market. Customers now have the ability to ‘Shop” across many different suppliers at one place with no bias and consequently make a truly informed decision. The telecommunications industry is moving forward and evolving at a rapid pace, all challenges that the innovative (franchise name redacted) model is perfectly suited to meeting. I see a future where the customer will dictate the terms not the supplier.
Steve Hansford
To us, these comments (stated before things went pear shaped, and the likes of Stagg, Doyle, and Hansford started inventing allegations of fraud, general dishonesty, and intimidation against the franchisors), meant all men thought the business model was an absolute cracker.
Importantly there exists independent corroboration as to the franchises product range and rewards system making the business model worth far more than the amount paid to the franchisor by Witness 1.
Insolvency Practitioners McDonald Vague, a very large Auckland based firm of accountants that specialize in corporate and personal insolvency were appointed liquidators of the franchisor in January 2010. Six monthly reports on the liquidators progress were completed and filed with the New Zealand Companies Office and can be found on line.
Of major interest to us here at Lauda Finem is the fact that a creditor paid the liquidators to investigate the allegations of blackmailer Corey Stagg to see if any personal liability could be slanted home to the directors. A liquidators report was completed dated 22 June 2012.
As part of that report, extensive file notes were generated from her evaluation of the business model by an industry expert. The independent and highly experienced insolvency accountant confirmed the following facts from her investigations in the following file notes;
“A creditor has specifically requested that the liquidators investigate any liability that the directors may have relating to the operation of the company from the date of its incorporation to the date of its liquidation. The creditor has requested that the liquidators specifically inquire into the operation of the company relating to corporate governance pursuant to sections 4, 131,133, 134, 135, 136, 137, and 297 to 301 of the Companies Act 1993. In short the liquidators have been asked to investigate and report on whether the directors operated the company;
- a. Recklessly
- b. To the benefit of the directors or other parties related to the directors, at the cost or loss of creditors, or other parties.
- c. In a manner that would engage a personal liability to creditors to the company [other than those creditors that held personal guarantees]”
In order to consider this, the liquidators have sought independent advice on the estimated value of each franchise.
The liquidators have been made aware that a director is subject to charges by the Police and make no assessment on any validity, or otherwise of those matters. However the director involved has been asked to, and has supplied, the disclosure of witness statements relating to the Police charges against him, and where those statements assist will refer to in this investigation.
THE COMPANY’S [FRANCHISES] ORIGINAL VIABILITY
The concept
The company’s concept and what seems to be a market leading initiative. The documentation shows substantial promise to generate large levels of income for a relatively modest investment.
The concept saw the company originally contract [on a non-exclusive basis], with nearly 40 individual Telco and IT suppliers to on-sell telecommunication and IT wares to all commercial end users. The company had major Telco and ISP providers contracted such as Telecom, Vodafone, Telstra Clear, Compass, Snap, Call Plus, Orcon, and Maxnet plus a further 30 or so more suppliers.
The company operated to sell franchises to investors, or owner operators, which facilitated retail sales, with supply partners paying success fees to the company, and with the company then paying 80% of the entire margin onto the franchises. The business model offered retail client’s the ability to tender business to contracted [non exclusive] suppliers, with the franchisee recommending particular bids. The service was free to the client with successful supply partners paying significant commission. (See Partners and Fee Structures document “A”)
The liquidators commissioned an external party to analyse the models of other franchises and to compute the likely realistic value of each (franchise name redacted) franchise. This exercise suggests that Otago was worth $300,000, Waikato $550,000, Auckland $2.25 million, Canterbury $800,000 (Refer Appendix 4).
So there you have it in a nutshell. Somehow the 3C gang and the Crown are alleging that blackmailer Corey Stagg was defrauded for handing over about $50,000 in real terms for a franchise worth $800,000. It does make sense that Stagg would demand nearly $700k if he thought the two businessmen could resell the Canterbury franchise for around that figure. But of course Stagg had failed to run what appears to be a no brainer, and so was hardly in the position to call the shots unless he had a corrupt copper in his back pocket. The liquidators report goes into extensive detail as to what intellectual property came with the franchise sold to blackmailer Stagg and Witness 1;
Proprietary hard copy, and electronic form information, documentation, data, analysis and proposal tools
The Liquidators have been supplied with a significant amount of the company’s proprietary hard copy, and electronic form information, documentation, data, analysis and proposal tools (refer Appendix 2 for listing)
The company’s directors have dedicated hundreds of thousands of dollars in man hours to designing and implementing an impressive and unique business model that was fully supported hard copy, electronically, and online.
The Liquidator appears satisfied that the only value in the franchise were the tools that enabled the franchisees to generate incredible streams of income which of course were the supply agreements. The Liquidator comes to the following conclusions when comparing other franchises to the franchise the subject of the blackmail and the false charges for fraud;
Comparable Franchise opportunities
The only value in the company’s franchise was the large number of unique non-exclusive contracts and proprietary tools. To put this into perspective, we have obtained advice/information to suggest that exclusive Compass franchise’s, are sold from $28,568.00 for Coronet Peak, to $64,394.00 for the likes of Dunedin. With the Compass model, the large cities such as Auckland, Christchurch, and Wellington, are separated into areas. For example, Waitakere, Franklin, Albany, Auckland metro, and Botany. (See Compass Franchise Documents “B”)
Refer Appendix 3 for further analysis on the Compass franchise area pricing.
The (franchise name redacted) model
The (franchise name redacted) model was similar in several ways to the Compass model. Both held registered trade marks. The incentive was higher payments when business was closed and then some payments at other intervals varying from I to 2 to 6 months to 18 months. This variance depended on the roll out, deployment, and activation of income streams for the supplier.
The significant advantage for (franchise name redacted) to engage initial interest was that it represented every important Telco supplier, which was unique in the market. An (franchise name redacted) franchise tendered to all the major suppliers who could supply to client specification, and such suppliers through, either economy of scale, or market leading technology, could come up with savings, whilst offering innovative services to clients.
Under the unique contractual terms enjoyed by (franchise name redacted), franchisees could be paid when signing up an incumbent client. This does not occur in the Compass franchise model. Additionally, certain customer specifications that could be tendered could result in 4 to 5 suppliers (see Mike Pero solutions documents marked “L”), that would not otherwise have done business with each other, being involved. Again this ability to literally pamper clients with options was unique to (franchise name redacted).
The independent analyst contracted by the Liquidator delved into the manner in which the franchisees such as blackmailer Stagg, and his staff would have been paid. The following information about the franchises ability to generate substantial income would seem to indicate that only a really poor performing sales person would not be able to etch out a very good living ‘plodding’ rather than going for bust.
“The amount of income of the franchise relates directly to sales achieved. Having obtained research of the industry monthly sales targets for average acquisition sales account manager we can assume the following. Monthly targets for small to medium enterprises to corporate accounts vary between $12k and $16k of billing per month. Having compared the company’s Supply Partners and Fee Structures commission and payment agreements with other industry norms, our adviser has concluded that, a salesperson meeting the target of say $16,000.00 monthly billings [less the franchise fee of 20%, and over a 36 month contract] would generate for the franchise annually:
1. Compass x 16k x 12 = $504,480.00-20% = $403,584.00
2. Telstra x 16k x 12 = $276,480.00-20% = $221,184.00
3. Call Plus x 16k(x 12) = $253,440.00-20% = $202,752.00
Payment of Account Executives
This indicates that the company’s reward model was significantly greater to sales account executives that could sell the industry average [or standard] of$16k in monthly billings. In effect if a sales executive earned the franchisee $403,584.00 of revenue from compass contracts per annum, he or she could be paid at 50% of net income the amount of $201,792.00 instead of a ceiling of $100k under the industry norm of 60% salary and 40% capped commission.
We have email correspondence from various persons that worked with, or owned (franchise name redacted) franchises, which fairly reflects the unique capacity for the (franchise name redacted) model to better reward the company, the franchise owner, and the front line account executives, than any Telco OTE (“on target earnings”), or any other franchise model. The following three communications from Mr Corey Stagg the previous owner of the Canterbury franchise, and Mr Steve Hansford, the previous Dunedin Franchise owner respectively (refer Appendix 4 for email content) support this.
Finally the Liquidator states the reasons for the franchises failure which squarely blame the actions of the blackmailers, and their reasons for blackmail; that being that they purchased the franchises with insufficient experience, ability, and a complete lack of sufficient financial backing, and had no way with which to accuse the franchisors of any wrongdoing, other than to invent it, and then threaten to use the false allegations, should they not be paid a massive amount of money, or in their eyes, the real value of the franchise that they themselves could not run;
“THE REASONS FOR FAILURE
The concept should have succeeded and obtained strong returns for those that invested. As to its long term, or on-going viability, prospects were excellent assuming commitment by franchisees.
The directors, whilst comprehending that they had designed and implemented [to launch stage], a very unique and saleable product, they sold the franchises under value, and to under funded and under resourced persons. Clear evidence of this is found in Messrs Stagg and Hansford only being able to fund $60,000.00 and $40,000.00 of the initial purchase price respectively. Whilst Witness 1 paid the full purchase price for the Auckland and Northland franchise, we are advised that this money was borrowings, and that the Auckland franchise if sold in two or three parts at a combined value of say $750,000.00 would have certainly jump started the company forward. The sale of any franchise should have also included the proviso that the purchaser had sufficient funds to run the franchisees for at least two years.
The fact that none of these fundamental blocks were in place is made out in communication from Auckland Franchisor Witness 1;
“I have not generated any significant revenue to date due to my lack of telecommunications experience which has meant lost or missed opportunities and reliance on suppliers for specific technology or service details. My inexperience has also forced me to rely too much on the Franchisor and the CHCH franchisees to get me by…. The potential to gain additional/business through these relationships is high… The client base that I have generated so tar has proven that the (franchise name redacted) concept works well and cold selling is not difficult. Clients willingly accept a free assessment of their business needs and it has been a real bonus having access to a tool box of products and services from a good cross section of the telecommunications and IT industries
The recurring theme throughout the documents that we have viewed is that the Auckland franchisor was completely inexperienced, and whilst comprehending the value of the model, was not prepared to invest the appropriate sums to make the business generate the income that it obviously could. The Christchurch franchisee, whilst allegedly experienced, was wholly underfinanced, and in trouble before he opened his doors.
The Liquidators are quite clear that once the two biggest franchisees had been sold at huge undervalue, and to two persons that simply did not have the wherewithal to make a success of a start up venture of such magnitude, the entire model was doomed unless sufficient funds could be found through a capital injection from an investor. Of course we at Lauda Finem are just as aware from the evidence that we have seen that blackmailer Stagg knew that if the businessmen succeeded at doing this and resold the Canterbury franchise, and the new franchisee made a success of this, he would be seen as a loser, and would have no gripe against the franchisor. Blackmailer Stagg knew that the franchise model was worth a lot more than he had paid for it, and therefore, he still felt that it was his to sell, even though he had failed and abandoned the franchise only having paid a low deposit on the original purchase price. The Liquidators agree;
The directors, once having sold the franchises to these two persons were in a place, that could not have ended up differently, but for the sale of 50% of the business, or even more, to a well-funded speculator. Our discussions with the directors indicate that whilst this was considered, they did not have enough time to effect this opportunity when the deal with Mr Steve Hansford fell through, with any monies obtained spent on legal bills.
We understand there was a bitter falling out between Mr Stagg and the directors where Mr Stagg attempted to get the directors to buy his Canterbury franchise back at a significantly higher value than he had paid [Mr Stagg had only paid around $72,000.00 [GST inclusive] at that stage. Mr Stagg in a letter that we hold [see letter marked “H”] clearly threatens “further embarrassment” should the directors not agree to the immediate payment, and release of Mr Stagg from significant financial obligations. (Businessman’s name deleted) alleges that Mr Stagg threatened to make a complaint to the Police, and we are aware that this occurred through contact by the Police with this office. (businessman’s name deleted) informs that he has made various complaints to the Police about the theft of company records by Mr Stagg and a complaint of attempted blackmail, but all of his complaints have been ignored.
The Liquidators are clearly aware of the blackmail attempt of the businessmen by Stagg and others and the impact that Blackmailer Stagg’s unlawful entry of the Compass and TIRNZ sites in order to further his demands for $700,000.00 in blackmail had on the businessmen both mentally and financially:
“Mr Stagg lost his franchise in June 2008 and went to work for Compass. We understand from the director that Mr Stagg contacted various suppliers to the company informing the suppliers that the director was dishonest and would be in prison by Christmas. This destroyed numerous contractual relationships. Whilst at Compass, it is alleged by (businessman’s name deleted) that Mr Stagg carried out his threat to “further embarrass” the company and allegedly unlawfully entered the Compass Computer System to then unlawfully enter the Tourism Industry Resource NZ (“TIRNZ”) Computer system in order to change the company’s contact details to a homosexual pornography site. (businessman’s name deleted) obtained the Police investigation file. It would appear that Mr Stagg, if we accept what other independent witnesses have said to the Police, was the only person capable of committing the unlawful access to the TRINZ site. The Police have not charged anyone relating to the offending.
The company failed from the lack of sufficient investment, the under value revenue from the sales of franchises, and the acts of disgruntled franchisees/others leading to a large number of the suppliers cancelling supply agreements.
The Liquidators clear the honest businessmen of any wrong doing whatsoever, and that there is no remaining personal liability to any creditors. Further the liquidators indicate that blackmailer Corey John Stagg had been given forecasts and not actuals as falsely alleged by Stagg as part of his blackmail attempt;
“CONCLUSIONS
In conclusion, in answer to the creditors request for an investigation in to whether the directors operated the company;
i. Recklessly
ii. To the benefit of the directors or other parties related to the directors, at the cost or loss of creditors, or other parties.
iii In a manner that would engage a personal liability to creditors to the company [other than those creditors that held personal guarantees]
We cannot find any evidence that suggests the directors operated the company recklessly, or in anyway dishonestly, or with bad faith. There appears to be no evidence of dishonesty involved, and if the respective franchisees had delivered on their end of the contract, the company should have succeeded.
The documentation provided to franchisees was substantial. Forecasts were provided and each franchisee took a risk in a start up company and were responsible for their own due diligence. It is not unusual for a company to not succeed if sufficient capital is not injected at the outset.
As a final point we note that the previous franchise owners have sought full compensation for reimbursement of all monies paid to (franchise name deleted) for the purchase of the franchises. We are aware that they allege that they were informed that the accounts given to them were actual’s. In the case of all of the franchises sold by the company, they were start-ups with no previous business attached. Having reviewed the communications between the franchisees and the company and considered the statement’s made to the Police we cannot locate any evidence that would suggest that this was the case. All evidence indicates that the franchisees were shown forecasts. This explains why they were able to secure the franchises at significant undervalue.
Finally the Liquidators confirm that they believe that Stagg and Hansford are indebted for the remaining part of their respective purchase prices. For Blackmailer Stagg this would around $100,000.00, and for Hansford it would be a similar sum. When the charges are thrown out, Lauda Finem understands that summary judgment applications will be made by the Liquidators. A tort could be brought against Stagg personally for ruining the business, and when successful could see all creditors repaid in full which is, apparently the businessmens wish;
“The liquidators consider the franchisees are indebted to the company in liquidation for unpaid fees/expenses and breach of agreement. Any action will be withheld until the outcome of the current legal proceedings. The claim is likely to be for an amount in excess of $200K against 2 franchisees.”
So as you can see from the liquidators report, it is obviously their opinion that there is no evidence that the honest businessmen had mislead any of the franchisees, and that once the false charges are dealt with, they will with urgency seek to recover all monies owed by the likes of Stagg and Hansford. Remember what Hansford’s concern was to the 3C gang member about him not having a legitimate legal claim in the civil arena where the burden is the balance of probabilities;
Email Hansford to 3C gang member dated 8 March 2010
Hi (3C gang members name redacted for now)
I am not sure that I can do this as I don’t believe that I’m a creditor until after we’ve proven our case, and that my claim would just be ignored. I had an agreement with them, which I haven’t seen and am not sure was ever finalized to walk away [sic] from 10K if they walked away from the franchise agreement. As you’ll recall they were trying to get the remaining 112K from me using the agreement. At this stage there wasn’t any involvement from any type of organization such as yours and I already spend $7k on legal costs, and this seemed the best course of action to make it go away…there lawyers, I think it was the 2nd did this…anyway give me a call to discuss this if you have time.
Just out of curiosity, if they did try to use these documents to collect the 112k then can you charge them with blackmail or similar?
I mean after all, they did come after me pretty hard for this money, and I think you’ll find it was [name redacted] who was chasing this…
Regards Steve Hansford”
Mr Hansford; the Liquidators will be coming after you pretty hard once the fabricated evidence is exposed during the upcoming trial. Now if Hansford knew that he would not be successful in the civil arena, why would the 3C gang feel that they could be successful in an arena that requires a much higher burden of proof.
By now our regular readership will know that the 3C gang has a unique form of evidence accumulation. The formulae is quite simple, and it has to be for the “thick blue line” to be able to follow.
Firstly, before commencing an investigation, make sure that you can conspire with the complainant.
Secondly fabricate the extent of the level of allegation against the victim to include the principal offence, but to also add other false elements such as association with gangs, intimidation and victimization, physical and mental abuse, and a “lifestyle” of dishonesty.
Thirdly, once the second element is in place find other willing witnesses who are prepared, with 3C gang protection in place, to give false testimony.
Fourthly, once the third element is in place, find witnesses that can be intimidated to give false testimony.
Now we have already covered a witness that was intimidated (previous post). Now we cover the third element of what is normal 3C gang criminal activity. That being to find other willing witnesses who are prepared, with 3C gang protection in place, to give false testimony. That is what Witness 1 is about to do in order that he will, if successful, be able through the corrupt Crown, to seek $125,000.00 in compensation he does not deserve.
Blackmailer Stagg stated the following in his statement to the 3C gang about his trip to Auckland in 2007 to meet with Witness 1;
“Flew to Auckland in December and stayed with Witness 1 Witness 1 who is the Auckland franchisee. We discussed how our respective businesses were going. We both agreed that it was difficult, or near impossible to reach the same dollar figures that (businessman’s [Stagg’s blackmail victim) name redacted) l had produced during the previous year.
This led us to other discussions about how could he have reached these figures. We drew a blank at the time – but it left me thinking about it. I also assumed that Witness 1 had received the same profit and loss statement as me, albeit for 3 months less, as Witness 1 purchased the Auckland franchise on April 2nd 2007. Because I assumed that Witness 1 had the same figures as me, I had no reason to question them, I was more concerned about how (franchisors name redacted) had made so much money when both Witness 1 and I weren’t.
Blackmailer Stagg had to invent a concern shared by both men when, clearly, from the previous advices of Witness 1, Witness 1 knew why he was failing. He didn’t know the product and couldn’t close. Witness 1 was also not prepared to pay wages, or otherwise invest further in the product and the brand. This statement by Stagg does not lie well with Witness 1’s comments to the franchisor mentioned earlier in this article;
“I have not generated any significant revenue to date due to my lack of telecommunications experience which has meant lost or missed opportunities and reliance on suppliers for specific technology or service details. My inexperience has also forced me to rely too much on the Franchisor and the CHCH franchisees to get me by…. The potential to gain additional/business through these relationships is high… The client base that I have generated so far has proven that the (franchise name redacted) concept works well and cold selling is not difficult. Clients willingly accept a free assessment of their business needs and it has been a real bonus having access to a tool box of products and services from a good cross section of the telecommunications and IT industries”
Blackmailer Corey Stagg in April 2008 (4 months after allegedly talking with Witness 1 about his concerns) had this to say about the franchise model;
“Subject: Armstrongs – Signed Terms of Understanding
Importance: High
Attachments: AMG – (franchise name redacted) Signed Terms of Understanding.pdf
The world is a beautiful place, I have attached the signed (franchise name redacted) – Terms of understanding.
I have a scheduled meeting between Matthew & Martyn from Armstrongs & Alan & Andrew from Telstra Clear on Tuesday @3.15pm
I also have further information about Armstrongs that will add more revenue to (franchise name redacted).
Witness 1 also believed in the worth of his franchise area being somewhere in the vicinity of between $500,000.00 and $750,000.00. These figures were thought to be bargains. This is also reflected in blackmailers Staggs email dated 2 months after the alleged conversation between blackmailer Stagg and Witness 1 took place;
From: Corey Stagg [mailto:corey@(redacted).com]
Sent: Saturday, 16 February 2008 10:59 a.m.
Cc: ‘(businessmans name redacted)
Subject: (franchise name redacted)
Importance: High
Hi Alistair,
Firstly, welcome on board, I am amped with having you as part of my team and I know that we are going to set Canterbury on fire.
Probably, for the first time in your life you are going to get paid what you are worth, and considering that your earning potential is uncapped, and I don’t move the goal posts mid game, you will enjoy the new adventure and I know you will step up to the challenge.
Now we know that Blackmailer Stagg is a liar, because his boss at Compass has been recorded giving this opinion. But clearly there is evidence that blackmailer Stagg did not have the conversation he alleged he did with Witness 1 in December 2007 because his attitude many months later was that the business model of the franchise was unique and very valuable with the potential to earn all concerned income they had only previously dreamed of. And remember Mr Hansfords advices as at 4 December 2007, or about the same time that Blackmailer Stagg alleged met with Witness 1;
Having a passion for communications I’m really excited to become a part (franchise name redacted) and what I feel is a fresh new approach to the market. Customers now have the ability to ‘Shop” across many different suppliers at one place with no bias and consequently make a truly informed decision. The telecommunications industry is moving forward and evolving at a rapid pace, all challenges that the innovative (franchise name redacted) model is perfectly suited to meeting. I see a future where the customer will dictate the terms not the supplier.
We at Lauda Finem agree with Witness 1, blackmailer Stagg and Mr Hansford, and indeed the Liquidator, and the Liquidators industry specialist, that the franchise business model was fucking outrageously good. Lets take a look at what the businesses would have been worth if they had contracted businessmen or women that could actually have succeeded. This is where it really starts to fall apart for Mr Stagg and the 3C gang. The industry specialist reports;
Otago
Probably the easiest to value due to it best being sold as a single franchise. Using the qualifier of 126,000 persons as a unit, and then tripling the value of a Compass franchise [as a minimum indicator given the much greater number of core IT suppliers], Otago was a significantly larger franchise area than just Dunedin. As the Otago area has 193,803 [See New Zealand in Profile, Population and demography; Statistics New Zealand “E”], people the following formulae obtains the [rounded] value of;
193,803 ÷ 126,000 = 1.538 × $64,394.00 = $99,037.00 × 3 = $297,113.00 [Adopt $300,000.00]
Waikato
The Waikato area is expanding rapidly given its relative proximately to Auckland, it being a major agricultural powerhouse, and the ability for large and medium sized business to relocate for lower overheads.
As already indicated we believe that the prescribed Link value for Waikato was as a result of having the problem of the ludicrous previous sale at $20,000.00 to Mr McQuoid. At 382, 716 population the Waikato region [See New Zealand in Profile, Population and demography; Statistics New Zealand “F”], was an attractive investment for the right investors and managers.
382,716 ÷ 126,000 = 3.037 × $64,394.00 = $195,592.17 x 3 = $586,776.51 [Adopt $550,000.00]
Auckland
The Auckland Area, [in the (franchise name redacted) franchise sold to Witness 1], included Auckland and all areas north of Auckland. This population base is truly massive and growing steadily. Adding Northland at 148,470 to Auckland’s 1,354,900 gives the franchise a base massive population of 1,503,370, [See New Zealand in Profile, Population and demography; Statistics New Zealand “G”]
1,503,370 ÷ 126,000 = 11.93 × $64,394.00 = $768,317.00 × 3 = $2,304,952.00 [adopt $2.25m]
Canterbury
We do not take into account for the purposes of our calculations the more recent natural disaster events in Canterbury. Notwithstanding the recent events in Canterbury rebuilding will involve substantial IT opportunities that probably would not have presented previously and the (franchise name redacted) model would have offered business opportunities to the franchise holder, and unequalled choice to its suppliers. At the last census in 2011 Canterbury’s population stood at 521, 832; [See New Zealand in Profile, Population and demography; Statistics New Zealand “H”]
521,832 ÷ 126,000 = 4.14 × $64,394.00 = $266,689.00 × 3 = 800,067.00 [Adopt $800,000.00]
In reaching these valuations we also hold cashflow projections that were presented to the franchisees prior to their decision to purchase.
As it relates to the industry norm of $16,000.00 monthly billings to stay employed as an account executive, we note with surprise the that first years cashflow projected income based on accrual accounting is only representative of one account manager working.
The second year’s forecast was more realistic of the income generation that would result, if sufficiently able and funded persons had purchased the franchises. It would appear that the franchisees knew that they could sell the franchises for significantly more than their respective purchase prices, even without operating them successfully. The following communications clearly indicate this belief;
- Undated letter from Mr Stagg to the company directors [early May 2008] seeking $295,000.00, plus release from owing the remaining $90,000.00 from the original purchase price, and various other matters paid, or obligations released, that would indicate Mr Stagg thought that the Canterbury franchise was worth around the $500,000.00 mark. [See document F”]
- Mr Stagg had attempted to sell 50% of the Canterbury franchise for around $76,000.00, half to be in cash, and half to have been paid in the sale value of half ownership in a supplier to his Canterbury franchise. This sale would have been at undervalue, but we understand from documentation that we hold that Mr Stagg was completely under resourced when he purchased the Canterbury franchise. However the prospective purchaser had this to say about the (franchise name redacted) model; [see document “G”]
I make this offer in two parts, firstly as a partnership, as I see it I bring technical capability which will compliment your sales skills. This partnership would give you access to my clients, and vice versa. The ongoing work (and revenue) from HRI would also be shared equally, as part of the partnership.
Secondly as there is obviously a real value associated with your shareholding, I believe an agreeable sum would be $38,000. I see this sum being paid with an initial deposit of $14,000 and the balance paid on a monthly basis at a rate of $2,000 per month for 12 months.
- Letter from Witness 1 to the company’s director Mr (redacted), wherein Witness 1 supplies certain statistical information, in support of his belief that the Auckland franchise he owned could have been split into two, if not three areas, that would be sold off separately at a combined value of 3.2 times what Witness 1 had paid for the franchise a short period earlier. We would support this position as the best way forward for numerous reasons, but in short the value of Auckland, according to Witness 1, for a quick sale at significant undervalue was $400,000.00. [see document “H”]
Corroborating evidence as to the value of an (franchise name redacted) franchise
Operational Telco companies are sold with an EBIT [earnings before interest taxes,] of 4 to 6. That is to say that if a company earned a million in revenue after expenses, [but without deducting interest and taxes from that net amount] a prospective purchaser would pay between four and say six million as a purchase price. This is the case in the sale of Telstra Clear to Vodafone. [see document marked “I”]
In the case of all of the franchises sold by the company, they were start-ups with no previous business attached. Therefore we must look at what was being sold to the prospective franchisee. In the case of the company it was access to a comprehensive and completely unique “magic box” of suppliers and related business tools that would enable prospective clients to be engaged on a “we represent everyone basis”. It is clear from the correspondence that we hold in the company’s files that all franchises fully understood the intrinsic value of the non-exclusive supply agreements being the core value of the company’s franchises. To use an analogy, if (franchise name redacted) had been selling new cars, it was able to sell direct to the public, any model of car available in New Zealand, with the added bonus of enjoying the ability to tender to the chosen suppliers with those suppliers not being aware as to who else was tendering.
If the franchises had been operating successfully with an EBIT of say $150,000.00 we believe that an EBIT of 6 to 7 could have been applied due to the unique ability of the model to exponentially expand within a short period of time to a far greater level of income. At $150,000.00 of gross profit, but prior to taxes, an EBIT of 6 or 7 would have given the business a value range of $900,000.00 to $1,050,000.00. At a gross profit of $1,000,000.00 an EBIT of say 4 to 5 would give a sale value in the range of $4,000,000.00 to $5,000,000.00. It should also be mentioned that the (franchise name redacted) model was to bring on stream a residential product.
New Zealanders spent $4.91 billion [$4,910,000,000.00] on Telco products last year and if (franchise name redacted) had obtained say 5% of the market, ($245,500,000.00], the income to the company would have been [using say an averaged 12% margin];
$245,500,000.00 @ 12% [margin] = $29,460,000.00.
The following table indicates income up to 5% of the market;
1% = $ 5,892,000.00 – 20% $1,178,400.00 to (franchise name redacted) NZ = $4,713,600.00 to franchises
2% = $11,784,000.00 – 20%$2,356,800.00 to (franchise name redacted) NZ = $9,427,200.00 to franchises
3% = $17,676,000.00 – 20% $3,535,200.00 to (franchise name redacted) NZ = $14,140,800.00 to franchises
4% = $23,568,000.00 – 20% $4,713,600.00 to (franchise name redacted) NZ = $18,854,400.00 to franchises
5% = $29,460,000.00 – 20% $5,892,000.00 to (franchise name redacted) NZ = $23,568,000.00 to franchises
It would seem clear from the second years projected turnover figures given to the franchisees [during their DD period] that the business model was aiming for less than 1% of the Telco market at the end of the 2nd year of operation. From what we understand to be the case from various email communications, and other statements, that we hold on file from the likes of Witness 1, Mr Stagg and Mr Hansford, it would appear that various chartered accountants and franchise specialist lawyers engaged in due diligence could not fault the projections. We understand that Mr Stagg worked in the Telco industry and knew the impact of multipliers. We are of the same position. If the model had been implemented properly we have no doubt that all concerned would have made significant income, and had a saleable asset worth 20 to 40 times what they had initially paid.
As an example Mike Pero started as a one man band and then, when at his businesses alleged height sold his business for $15,000,000.00. The company was sold to Gould Holdings, and when Gould Holdings floated the company the result was that the issued shares sold for a value of $22,000,000.00 on a projected EBIT of $2.7m [on revenue of $14,000,000.00] giving it a multiplier of 8.14. We note that Mike Pero only had four major suppliers being ASB, NB, ANZ, and Westpac.
At 5% of the market the (franchise name redacted) NZ franchise company would have been worth [with an EBIT of say 8], and imputing a profit margin of 50%, the following values at sale might have been achievable;
(franchise name redacted) NZ $5,892,000.00 – 50% O/E = $2,946,000.00 x EBIT 8 = $23,568,000.00”
Lauda Finem decided to get input from a chartered accountant here in Sydney, and she read the previous content of the liquidators report and could not find fault in it as far as the numbers are concerned. She dumbed it down as being this. If the numbers supplied by the victims of Stagg’s blackmail attempt had been actuals then there are two glaringly obvious problems. Firstly in any due diligence period there would have been a raft of requests for source business records, and their supply. Literally hundreds of questions would have been asked for more material, and possible a valuation requested by a funder. Secondly if the franchise brought by Blackmailer Stagg had profits as indicated then the price for the franchise would have been significantly higher. As a crude but telling example she stated who in the hell sells a franchise earning $150,000.00 a year net for say $135,000.00 plus GST. She confirmed that in Australia such earnings from such a unique and innovative business model would attract a price of over a million dollars, not taking into account the massive potential. She also stated that as the same forecasts and accruals were given to Witness 1, where there had not been a previously ran business, then it is clear that the documents were accrual and forecasts, and largely irrelevant to the consideration of buying the business. The businesses value appeared to be in the 40 or so non-exclusive contracts, and the IT IP, which appeared to her mind to be very extensive. The industry specialist engaged by the liquidator reports that IP as being;
Proprietary hard copy, and electronic form information, documentation, data, analysis and proposal tools
- Fully functioning proprietary analysis software and;
- Fully functional electronic commissions calculator and;
- Customer Relationship Management [CRM] Software that operated as a central information hub for interaction between head office and the company’s franchisees and their respective broker network and;
- brochure-ware such as standardised flyers and A4 flyers and SRA3 folding brochures including advertising for recruitment of brokers.
- Business model qualification templates [discovery document] and;
- Comprehensive Proprietary Sales Documentation not limited to;
- Operations Manual which included;
- Services documents that included;
- Discovery document [DD01]
- Request For Proposal documents [RFP01]
- Services Recommendation [SRM01]
- Account Analysis XLS [AA01]
- Broker Forecast [BF01]
- Tender Evaluation Document
- Commercial-Corporate Request For Proposal
- Commerical–Corporate Services Recommendation proposal
- Client Engagement Form
- Operations Documents that included;
- Franchise Operations Manual [FM01]
- Supply Partners and Fees Structure [SPF01]
- Supply Partners List [SPL01]
- Glossary of Terms [GT01]
- Training Manual [TM01]
- Prospect To Payment [P2P01]
- Personnel Documents that included;
- Mutual Confidentiality Agreement [MCA01]
- Brokers Support Resource [BSR01]
- Code Of Ethics [COE01]
- Business Sales Commission Plan [COMM01]
- Contract For Broker [CNTBR01]
- Marketing Documents that included;
- Broker Phone Script [PH01]
- Broker Visit Script [VT01]
- Broker and BSR Add [BAD01]
- Broker Opportunity [BOP01]
- Sales Brochure
- Logo [LOGO01]
- Toll Free 0800 (redacted) geographically routed to nearest franchise.
- Yellow Pages Template
- Administration Documents that included;
- With Compliments [WC01]
- Letterhead [LH01]
- Fax Coversheet [FC01]
- Answer Message [AM01]
- Email Signature [ES01]
- Invoice Template [Inv01]
- Colours and Fonts [CF01]
- Expenses Claim Form [XPC01]
- Petty Cash Reimbursement Form [PCR01]
Now it would appear clear that the franchise model was a winner but was fucked up by involving a bunch of dishonest conniving pricks such as blackmailer Stagg. But what of Witness 1’s testimony when approached by blackmailer Stagg and the 3C gang. Well Witness 1 decides to initially tell the truth, and then when the truth cannot succeed, he rolls over and tells some massive “porky pies” at the obvious behest of the 3C gang.
The wrongly accused businessmen were denied access to certain statements given by Witness 1, and for very good reason. The Witness 1 statements released in disclosure [until recently] were a signed statement dated 19 December 2009, and an unsigned statement that is not dated, but which was released in initial disclosure. The unsigned statement was disclosed to (names of businessmen redacted), as it was faxed to Advantage Advocacy Limited on 16 November 2009. What is suspicious about the unsigned statement is that it was supplied a month earlier than the signed statement, and Lauda Finem believes that the statement was written by either a 3C gang member, with Stagg’s input, or by Stagg, with 3C gang members input.
This is the very reason why the 3C gang member did not want the first signed statement of Witness 1 released and kept it ‘secreted’ away from the defendants. This statement is dated 30 November 2009 or over a month after (names of businessmen redacted) been charged with the Witness 1 offending. From these facts Lauda Finem can see the following concerns arising;
If the initial unsigned statement is “allegedly” built from communication between Witness 1 and 3C gang member, when and how did this communication occur?
What proof exists that the “alleged” communication, enabling the lengthy statement to be taken, did occur?
Where are the handwritten notes taken by the author of the statement?
Why didn’t the 3C gang member just obtain a signed initial statement, which would be the only way in which matters should normally progress?
Where is the formal complaint signed by Witness 1? [remembering 3C gang members advice to the wrongly accused that this is the normal course before Police will investigate alleged offending such as Stagg’s blackmail]
Why did 3C gang member not disclose the first signed statement from Witness 1?
Why has 3C gang member seen fit to “redact” a large amount of exculpatory content that was in the initial signed Witness 1 statement from the second signed Witness 1 statement?
How does 3C gang members behavior not represent a breach of section 13(3)(c)(ii) of the Criminal Disclosure Act 2008 in that they have not disclosed the content of a verbal statement by Witness 1?
As an example of what has been redacted by 3C gang member, consider the following material being removed, from the signed statement by Witness 1 which was unlawfully withheld by 3C gang member’s, and not present in the two initially released statement’s by Witness 1, and its impact in relation to the competing claims;
[Signed copy of Witness 1’s statement that was not disclosed]
“Figures provided by (redacted) suggested a solid return on investment. Copies of these figures are attached together with an unaudited profit and loss statement for the Christchurch operation.
[3C gang members initial unsigned statement that was disclosed which does not have the word “unaudited”]
Figures provided by (redacted) suggested a solid return on investment. A copy of these figures are attached, together with a profit and loss statement for the Christchurch operation covering the 6 months of operation.
The word “unaudited” has been purposefully removed because it infers “no implied or actual warranty as to accuracy”.
[Signed copy of Witness 1’s statement that was not disclosed]
“I requested the actual accounts of the business on two occasions; however (businessman’s name redacted) told me that these were not available due to the short length of time that the business had been operating”
How can Witness 1 conceivably ask for actuals on two occasions? Surely if you are told once in a relatively short period of due diligence you do not ask again. But most importantly Witness 1 states that “he did ask for actuals” and was told that they “were not available” which means that there can no longer exist an allegation that (names of businessmen redacted) presented figures claiming they were actuals. Clearly 3C gang member understood the importance of this admission, and in furtherance of his conspiracy to falsely accuse (names of businessmen redacted) the scumbag removed it.
[Signed copy of Witness 1’s statement that was not disclosed]
“The projected figures were then presented to our accountant Graham Chapman and franchise lawyer Stewart Germann for assessment”
[3C gang members “reconfigured” unsigned statement that was disclosed]
“The figures were presented to our accountant Graham Chapman and franchise lawyer Stewart Germann, both of Auckland”
This content was removed because 3C gang member knew that the content was crucial to prove the businessmen were innocent of providing “actuals” as claimed. Witness 1 clearly states that he was given “projected figures for assessment” by his accountant, and not “actuals”.
This is further clear evidence that 3C gang member is tampering with evidence, not that this saves Witness 1 from being complicit within the conspiracy, as Witness 1 would have understood the relevance and importance of the redaction and its import to whether Witness 1 had a claim either in the civil or criminal Courts.
It must be said that Witness 1 rewriting the (franchise name redacted) Franchise Agreement means that Witness 1 would not have a case in the civil arena as the clauses effectively stipulate an adversarial position of “caveat emptor”.
What did Witness 1s accountant advise him, and on what information?. Surely that’s important when Witness 1 is alleging fraud?. Again the 3C gang did not ask Witness 1’s accountant because they knew what his answer would have been; the same as blackmailer Stagg’s mortgage broker has stated; that being that Stagg knew there were no actuals;
I met with both Corey and his wife Dione at their home that is situated in the suburban area of Bromley Christchurch. From the records I retain the address I met both Corey and Dione was 151 St Johns Road. Corey explained that he wanted to obtain finance for the purchase of the Canterbury franchise of (franchises name) and asked me to look through a prospectus given to Corey by (businessman’s name).
I looked through the prospectus and noted that there were business cashflow forecasts and projections contained in the document, and Corey confirmed that that was the information given to him by (businessman’s name), and that he could not obtain actual accounts. I confirm that I arranged finance for Corey to purchase the franchise on that clear understanding.
It is clear that Witness 1 wants his money back and wants to ride on the back of the conspiracy to falsely allege fraud, as he has agreed to the redaction’s and signed the misleading statement.
[Signed copy of Witness 1’s statement that was not disclosed]
“Most of the information presented at the interviews was verbal, however an unaudited profit and loss statement was provided to me, plus future projections, which showed the business to be profitable.
[3C gang members reconfigured unsigned statement that was disclosed]
Most of the information was verbal, however some figures were provided ultimately outlining the business projections as profitable.
Again 3C gang member commits to mislead a Court of justice by removing evidence that indicates that “only unaudited accounts and future projections” were given to Witness 1. 3C gang member “invents” that most of the communication was “verbal”, so that it is easier to fabricate lies.
Clearly the businessmen were honest and upfront with Witness 1, so why would any different behavior be followed with blackmailer Stagg. IT DEFIES COMMONSENSE. COMMONSENSE has the same meaning as the words LIKELY REALITY. In following paragraphs it will become obvious that the purchasers understood that the only value in the franchise was, as found by the liquidator;
- the 44 non exclusive supplier agreements
- the IP and sales systems [which were considerable]
- the support and IT experience offered
And that all other allegations as to undertakings etc are false for the purposes of blackmail.
[Signed copy of Witness 1 statement that was not disclosed]
“One the basis of our due diligence and the verbal and written projections presented by (names of businessmen redacted), my wife and I purchased the Auckland franchise on the 2nd April 2007.
[3C gang members reconfigured unsigned statement that was disclosed]
We purchased the franchise on 2nd April 2007 with a territory covering Auckland and Northland including the Coromandel peninsula.
This is the most damning redaction made by 3C gang member and Witness 1 as “it encapsulates” what actually occurred. Only verbal and written “projections” were presented to Witness 1 during his due diligence period. THERE ARE NO STATEMENTS ABOUT ACTUALS.
[Signed copy of Witness 1’s statement that was not disclosed]
“It was then brought to my attention by Corey Stagg, that the original figures provided by (redacted) were over represented. This information was backed up by the discovery of computer records covering the period leading up to the purchase of the Auckland franchise.
“Over represented’ as against “misrepresented”. Figures in “projections” can be “over represented” in that they did not occur for all number of reasons.
Whereas a “misrepresentation” is crudely a lie about an actual fact, and can never be referred to as ‘over represented’.
And why did 3C gang member redact the statement “this information was backed up by the discovery of computer records covering the period leading up to the purchase of the Auckland franchise”. This was redacted by 3C gang member because it proved;
- 3C gang member was attempting to prosecute persons with “stolen records”, and which records 3C gang member knew were stolen by Stagg in furtherance of an attempt at blackmail of (names of businessmen redacted) by Stagg.
- 3C gang member knew that Stagg had stolen records to destroy and/or hide records that would have served to ‘thwart” Stagg’s attempts at blackmail of (names of businessmen redacted).
- 3C gang member knew that evidence that proved that 3C gang member knew that Stagg was wholly dishonest, and had acted criminally to secure material for blackmail, would prove that 3C gang member had perverted the course of justice in firstly, building a false allegation against Rene Bell in the Compass offending, and then secondly, fabricating evidence that would mean that 3C gang member felt that he had sufficient reason to allege [to any independent person looking at the Compass file] that 3C gang member could not charge Stagg even if he thought it had been Stagg. Unfortunately for 3C gang member he did not succeed in this regard, and his efforts are telling against him; See Queen v John Buchanan Dewar.
The final signed statement from Witness 1 of 18 December 2009 contains some further material that is not included in either of the two earlier signed and unsigned statements, but otherwise mirrors the content of the unsigned statement that was given in initial discovery to (names of businessmen redacted) on or around the time that (names of businessmen redacted) were charged, but which was faxed to Advantage Advocacy Limited on 16 November 2009. This is to say that where the two statements are similar, they have had the material indicating the innocence of (names of businessmen redacted) redacted.
However Witness 1 does state the following making out a complaint in his initial signed statement of 30 November 2009,
“We have since realized that their main aim was to “get rich quick” on other peoples money. It was blatantly obvious to us that following settlement and the 30 day “exit clause” had elapsed, (businessman’s name redacted) was often unavailable and (businessman’s name redacted) transferred most of our queries to (name redacted).
Now somethings not right here. Remember these comments from the same lying cheating reprobate;
My inexperience has also forced me to rely too much on the Franchisor and the CHCH franchisees to get me by…. The potential to gain additional/business through these relationships is high… The client base that I have generated so far has proven that the (franchise name redacted) concept works well and cold selling is not difficult.
In direct conflict Witness 1 continues in his statement to the 3C gang;
Unfortunately their actions have put my family and other families through considerable emotional and financial stress. This situation has cost my family dearly and resulted in not only the loss of the purchase price of the business but also the loss of the income over and above that figure. The impact on my family has been immeasurable as my wife was at one stage unable to work and suffered health problems as a result of the stress
The end result of all of this is that (names of businessmen redacted) have duped me out of the purchase price of $125,000 for (franchise name redacted) Auckland franchise, plus the loss of one years income of approximately $120,000.
Furthermore, they have caused significant stress to my family and me, and I had no choice but to seek alternatively employment.
We believe that (names of businessmen redacted) should be held accountable for their fraud and at the very least should refund all monies to the (franchise name redacted) Franchisees”
Witness 1s comments are clearly the work of blackmailer Stagg and 3C gang member “infecting” Witness 1 with the belief that if Witness 1 “plays along”, (names of businessmen redacted), as a result of being convicted, will repay the purchase price of Witness 1s Auckland franchise to Witness 1 by order of the Court.
Witness 1 has a significant problem in the way that he has ‘co-operated” with Stagg and 3C gang members. We have written evidence in emails and other communications that prove Witness 1s statements are completely untrue as to Witness 1s actual position long after he had purchased and attempted to operate the franchise.
One of the businessmen offered to run the franchise for Witness 1 until it could be sold, and a deal was nearly done to that affect. Lauda Finem has a significant number of documents to prove that the wrongly accused businessmen did everything they could to assist the failing franchises. To end this article we must return to the abilities of blackmailer Stagg. Remember what Stagg’s boss at Compass, Joanne Harris stated about Stagg [also noted in our recent post “Its official: the Blackmailer Corey Stagg is a liar; just ask his boss“];
X Would you would you be surprised if Corey Stagg had actually attempted to blackmail um um [names of businessmen victims] for five hundred thousand
JH [laughs strongly] Not at all Coreys un Coreys a very different sort of guy, yep hes um yep, no hes um, that wouldn’t surprise me at all, not at all, not at all
X So all of those things, he was going around saying that he had lost three or four hundred thousand dollars.
JH Oh yeah, he was a liar, definitely he was a liar um yeah, yep no, he only worked for us for a month or so and um I was doing him a favour then, because he had no income coming in so um so yeah, but saw through him fairly quickly.
X What was his sales performance like when he was with you guys.
JH I don’t think he sold anything
X Right so piss poor
X Now after the compass offending and he wasn’t charged he had ruined the company he asked for six hundred and seventy five thousand dollars in written communications alleging that he had losses of 235 thousand in trading, and pain and suffering was a hundred and forty five, loss of profits was a hundred and forty five and value of his time was a hundred and forty five, now who asks for six hundred and seventy five thousand dollars and gives nothing back
JH Yeah
X except for he was going to withdraw the allegations he had made to the police
JH Hmmm Oh dear
X Yeah, unfortunately the boys have been charged by the police umm and we have got evidence that clearly proves that it was’nt P & L’s. We had the Police officer not give disclosure. The only time we got disclosure was when we threatened to go, well we did write to the IPCA and the Solicitor General, and we got the release of this file now um the detective who had interviewed those two guys has also been going around and intimidating witnesses.
JH really
X Yeah yeah
JH God
X So we have got evidence of that as well and what we have got from Mr Staggs financier who actually arranged the loan for the purchase of the franchise when he only paid sixty thousand dollars for, as a down payment, he has given us an affidavit saying that he was, he was, when he financed the, the thing, Stagg knew that they were forecasts, they weren’t actuals
JH Hmmm dear
X And that was his actual financier
JH Hmmm
X So obviously
JH Good God…..
The following excerpt from an eternal document generated by one of the franchisors staff, when questioned by the franchisors as to why Stagg’s projections were not coming in in closed business when Stagg had stated the deal was 100% finished, says it all really. Stagg was a better organized blackmailer than he was a salesman’s fucktard;
“No paperwork received – to follow up with Jo
No paperwork received – to follow up with Jo
No paperwork received – to follow up with Jo
No paperwork received – to follow up with Jo
No paperwork received – known as Eve on crime
No paperwork received – known as Eve on crime
No paperwork received – Corey following up
No paperwork received – Corey following up
Corey to re-present
Corey to re-present
Corey to re-present
Corey to follow up
Corey to find
Corey to confirm RFS
Corey to confirm RFS
Cancelled Client not happy
Cancelled Client not happy”
There are 17 contracts that Stagg has stated were completed ready for collection where in fact 2 had cancelled, one Stagg couldn’t find, 8 contracts Stagg had no paperwork on, and 4 contracts Stagg was to re-present. Nothing is more powerful than the truth, and Lauda Finem presents that product on a daily basis.
Veritas Numquam Perit, Vincit Omnia Veritas
Related articles
- Extortionist Corey John Stagg, the expose continues (laudafinem.wordpress.com)
- Its official: the Blackmailer Corey Stagg is a liar; just ask his boss (laudafinem.com)
- Cory John Stagg; Extortionist and thug outed (laudafinem.com)
- Gcsb and Telecom Employees Conspire With Police; Is Mark Lundy Innocent? (laudafinem.wordpress.com)