Electronically Filed 04/18/2013 05:32:47 PM ET/ >LIN THE CIRCUIT COURT OF THE TENTH JUDICIAL CIRCUITIN AND FOR HARDEE COUN...
WARD, VICKI MONTFORD, MARCUM CONSULTING COMPANY, JOHNENEMARCUM, GOVERNMENT SERVICES GROUP, INC., ROBERT E. SHEETS, GIGABIT...
5. Defendant, GINA REYNOLDS ("REYNOLDS") at all times material hereto wassuijuris and a managing member of FRBA and acting...
16. REYNOLDS, PERRY, HOOVER, WHIRLS and MCGEHEE are alter egos ofFHREDI.17. FHREDI, REYNOLDS, PERRY, HOOVER, WHIRLS and MC...
Florida. At all times material hereto, MARCUM CONSULTING served as a consultant toFRBA.26. Defendant, JOHNENE MARCUM is be...
GIGABIT was sui juris, and served as a consultant to FRBA. At various times material hereto,GIGABIT purported to represent...
42. Defendant, GRADY JOHNSON ("JOHNSON") is a resident of Hardee County, aFRBA board member, a former deputy police office...
economic development, opportunities, job creation and infrastructure within the geographicboundaries of Hardee County.49. ...
54. The Transfer Agreement states that contingent upon RSIs satisfactoryperformance of its requirements for a 3 year perio...
Hendry, Highlands and Okeechobee Counties as well as the unincorporated area of Immokalee inCollier County and the tribal ...
kind services ("RSI MOU"). In return, FRBA was required to engage RSI to deploy and operatethe FRBA PROJECT. A true and co...
characterized as a "contractor" pursuing payment for goods and services while simultaneouslycharacterized as a subrecipien...
71. From January through April 2011, FRBA continued its deceptive charade andissued work authorizations to RSI, so as to c...
78. On February 3, 2012, FRBA continued its misrepresentations to RSI and issuedRSI an Award Decision letter emailed Febru...
meeting, FRBA intentionally failed and refused to execute the Compensation Agreement and theAsset Management Agreement and...
had terminated RSI from the FRBA Project; 2) the NTIA had required FRBA to seek an alternatefor its matching funds obligat...
95. FRBA breached the Settlement agreement and has failed to pay Rapid Systemspursuant to the terms of the Settlement Agre...
105. RSI has retained the undersigned attorney and is required to pay them areasonable fee associated with bringing this a...
compensatory damages, exemplary damages, diminution in value, special damages, and itsattorneys fees and costs.COUNT IV-TO...
121. This is an action for an accounting against FRBA.122. The various executed and unexecuted agreements between RSI and ...
WHEREFORE Rapid Systems, Inc., demands a constructive trust on all funds, equipment,networks associated with the Grant Awa...
138. At all times material hereto and RSI and FRBA had a confidential relationshippursuant to the RSI mou and its relation...
147. This is an action for violation of Florida Statutes §772.103, civil RICO violationsagainst the Fraud Conspirators.148...
157. As a result, RSI has been damaged.WHEREFORE Rapid Systems demands judgment against the Fraud Conspirators forcivil co...
JURY TRIAL DEMANDRSI demand a trial by jury on all issues so triable.Dated this 18lhday of April 2013.Respectfully submitt...
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Alleged BTOP/NTIA Fraud - $25M lawsuit filed over BTOP/NTIA funds in Florida

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Rapid Systems is a wireless broadband Internet service provider that entered an agreement with FRBA and others to provide broadband network support for a project developed with Broadband Opportunities Grants awarded in Florida as part of a government economic stimulus program. The grant totaled $23 Million. Rapid Systems allege in the complaint that after providing the agreed services, equipment and in-kind contributions totaling $2 Million, the FRBA and several co-defendants failed to pay Rapid Systems for any of the services or expenses rendered under the agreement. Rapid Systems is seeking to recover not only its own investment but also fees, costs and lost revenue as a result of FRBA's actions.

The grant money FRBA received is intended to develop the infrastructure needed for wireless Internet service in rural Florida counties. The program is intended to bridge the gap between large public service providers and small and often poor rural communities without the economic impact to attract private investment for wireless broadband connectivity networks.

A similar program was already funded as the North Florida Broadband Authority and has seen similar litigation and various towns and counties pulling out of the program. After three years and over $28 Million federal dollars invested in the NFBA, there are a confirmed 60 customers using the services. Both the NFBA and RFBA are currently under federal investigation. Questions of mismanagement, fraud, misinformation and misappropriating funds have dogged the grant recipients almost since their inception early in the Obama administration’s economic recovery efforts.

Rapid Systems has also included some public official in its complaint alleging a coordinated effort with the FRBA to defame the plaintiff in an effort to justify not paying the outstanding balances. The lawsuit filed in Hardee County Circuit Court details a complicated “fraud scheme” perpetrated by FRBA’s management to keep from paying out various invoices and accounts. Rapid Systems has told the court all contracted work was performed to agreed standards and payment is now due.

There was no immediate word from the court or federal authorities if the Rapid Systems suit will, in any way, affect the ongoing investigation into the FRBA or NFBA. Also, federal authorities have offered no confirmed time frame for completing their investigation. Whether the federal investigation could impact Rapid Systems and their alleged claims remains unclear.

Source Lawsuit: http://cdn.l2net.com/dl/BTOP_NTIA_FRBA_Lawsuit_KraigBeahnCopy_FSReduced.pdf

FierceTelecom: http://www.fiercetelecom.com/story/florida-provider-rapid-systems-inc-sues-frba-25-million-alleging-fraud-misc/2013-04-25

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Alleged BTOP/NTIA Fraud - $25M lawsuit filed over BTOP/NTIA funds in Florida

  1. 1. Electronically Filed 04/18/2013 05:32:47 PM ET/ >LIN THE CIRCUIT COURT OF THE TENTH JUDICIAL CIRCUITIN AND FOR HARDEE COUNTY, FLORIDACIVIL DIVISIONRAPID SYSTEMS, INC., a Florida corporation,Plaintiff, CASE NO.:DIVISION:FLORIDA RURAL BROADBANDALLIANCE, LLC, a Florida limited liability company,FLORIDAS HEARTLAND REDI, INC.,a Florida non-profit corporation, NORTHWEST FLORIDABUSINESS DEVELOPMENT COUNCIL, INC.,A Florida non-profit corporation, d/b/a OPPORTUNITYFLORIDA, GINA REYNOLDS, an individual,JIM BROOK, an individual, RICHARD MARCUM,an individual, AL PERRY, an individual, JOEY HOOVER, anindividual, TRACY WHIRLS, an individual, PAUL MCGEHEE,an individual, CRYSTIE CAREY VOEHL, an individual,JOHNNY EUBANKS, an individual, BYRON WARD, an 5individual, VICKIMONTFORD, an individual, n.MARCUM CONSULTING COMPANY, a Texascorporation, JOHNENE MARCUM, an individual, gGOVERNMENT SERVICES GROUP, INC., «a Florida corporation, ROBERT E. SHEETS, an individual, ^GIGABIT SQUARED, a Delaware corporation, MARK ANSBOURY gan individual, and GRADY JOHNSON, an individual, HENRY SKUHLMAN, an individual, and FRANK KIRKLAND, an *individual. ^Defendants. ®/OoCOMPLAINT AND DEMAND FOR JURY TRIAL *(003oPlaintiff, RAPID SYSTEMS, INC., by and through its attorneys, files this Complaintagainst FLORIDA RURAL BROADBAND ALLIANCE, LLC, FLORIDAS HEARTLANDREDI, INC., NORTHWEST FLORIDA BUSINESS DEVELOPMENT COUNCIL, INC., GINA •£REYNOLDS, JIM BROOK, RICHARD MARCUM, AL PERRY, JOEY HOOVER, TRACYWHIRLS, PAUL MCGEHEE, CRYSTIE CARIE VOEHL, JOHNNY EUBANKS, BYRON1
  2. 2. WARD, VICKI MONTFORD, MARCUM CONSULTING COMPANY, JOHNENEMARCUM, GOVERNMENT SERVICES GROUP, INC., ROBERT E. SHEETS, GIGABITSQUARED, MARK ANSBOURY and GRADY JOHNSON and states:NATURE OF THE ACTION1. This action arises out of, inter alia, actions, misrepresentations, omissions,misappropriations, fraud, double-dipping, illegal trade practices, violation of public trust, sexualpromiscuity and other circumstances surrounding grant monies awarded to the FLORIDARURAL BROADBAND ALLIANCE, LLC, and administered by the NationalTelecommunications and Information Administration and defined herein as the ("FRBA FraudScheme")- This is an action by RAPID SYSTEMS, INC., to seek relief from the FRBA FraudScheme and the deceptive actions, artifice and outright fakery of the fraudulent conspiratorsdefined herein.2. RAPID SYSTEMS, INC. seeks damages against Defendants in an amountexceeding $25,000,000.00 together with interest, costs, and attorneys fees and where applicableand for which there is no legal remedy, injunctive relief.PARTIES3. Plaintiff, RAPID SYSTEMS, INC. ("RSI"), is a corporation organized and dulyexisting pursuant to applicable Florida law, having its principle places of business inHillsborough County and Hardee County, Florida.14. Defendant, FLORIDA RURAL BROADBAND ALLIANCE, LLC ("FRBA") is aFlorida limited liability company, with its principle place of business in Jackson County, Florida.1RSI is a full service internet and information technology company, that provides, inter alia, fixed wireless, DSL,outsourced IT services and wireless broadband engineering and installation services.2
  3. 3. 5. Defendant, GINA REYNOLDS ("REYNOLDS") at all times material hereto wassuijuris and a managing member of FRBA and acting individually.6. Defendant, JIM BROOK ("BROOK") at all times material hereto was sui jurisand a managing member of FRBA and acting individually.7. Defendant, RICHARD MARCUM ("RICHARD MARCUM") at all timesmaterial hereto was suijuris and a managing member of FRBA and acting individually.8. REYNOLDS, RICHARD MARCUM and BROOK are the alter egos of FRBA.9. FRBA, REYNOLDS, RICHARD MARCUM and BROOK are collectivelyreferred to as the "FRBA Conspirators".10. Defendant, FLORDAS HEARTLAND REDI, INC. ("FHREDI") is a non-profiteconomic development corporation duly organized in Florida, with its principle place of businessin Highlands County, Florida. At all times material hereto, FHREDI was a managing member ofFRBA.11. Defendant, REYNOLDS, at all times material hereto was sui juris and an officerand agent of FHREDI and acting individually.12. Defendant, AL PERRY, ("PERRY") at all times material hereto was suijuris andan officer and agent of FHREDI and acting individually.13. Defendant, JOEY HOOVER ("HOOVER"), at all times material hereto was suijuris and an officer and agent of FHREDI and acting individually.14. Defendant, TRACY WHIRLS ("WHIRLS"), at all times material hereto was suijuris and an officer and agent of FHREDI and acting individually.15. Defendant, PAUL MCGEHEE ("MCGEHEE"), at all times material hereto wassuijuris and a managing member of FHREDI and acting individually.3
  4. 4. 16. REYNOLDS, PERRY, HOOVER, WHIRLS and MCGEHEE are alter egos ofFHREDI.17. FHREDI, REYNOLDS, PERRY, HOOVER, WHIRLS and MCGEHEE arecollectively referred to as the "FHREDI Conspirators."18. Defendant, NORTHWEST FLORIDA BUSINESS DEVELOPMENT COUNCIL,INC., is a non-profit economic development corporation duly organized in Florida, doingbusiness as OPPORTUNITY FLORIDA ("OPPORTUNITY FLORIDA"). At all timedmaterial hereto, OPPORTUNITY FLORIDA was a managing member of FRBA.19. Defendant, JOHNNY EUBANKS ("EUBANKS"), at all times material heretowas suijuris and a managing member of OPPORTUNITY FLORIDA and acting individually.20. Defendant, BYRON WARD ("WARD"), at all times material hereto was sui jurisand a managing member of OPPORTUNITY FLORIDA and acting individually.21. Defendant, VICKI MONTFORD ("MONTFORD"), at all times material heretowas suijuris and a managing member of OPPORTUNITY FLORIDA and acting individually.22. Defendant, RICHARD MARCUM, is believed to be a resident of South America.At all times material hereto, prior to leaving the United States was sui juris and as an officer ofOPPORTUNITY FLORIDA, and acting individually.23. EUBANKS, RICHARD MARCUM, WARD and MONTFORD are alter egos ofOPPORTUNITY FLORIDA.24. OPPORTUNITY FLORIDA, EUBANKS, RICHARD MARCUM, WARD, andMONTFORD are collectively referred to as the "OPPORTUNITY Conspirators."25. Defendant, MARCUM CONSULTING COMPANY ("MARCUMCONSULTING"), is a Texas corporation having its principle place of business in Panama City,4
  5. 5. Florida. At all times material hereto, MARCUM CONSULTING served as a consultant toFRBA.26. Defendant, JOHNENE MARCUM is believed to be a resident of South America.At all material times hereto, prior to leaving the United States, JOHNENE MARCUM was suijuris and an officer, employee or agent of MARCUM CONSULTING and acting individually asan accountant for FRBA and OPPORTUNITY FLORIDA.27. Defendant, RICHARD MARCUM, prior to leaving the United States, was anofficer, employee or agent of MARCUM CONSULTING and acting individually.28. JOHNENE MARCUM and RICHARD MARCUM are alter egos of MARCUMCONSULTING who absconded to South America.29. MARCUM CONSULTING, JOHNENE MARCUM, RICHARD MARCUM arecollectively referred to as the "MARCUM CONSPIRATORS."30. Defendant, GOVERNMENT SERVICES GROUP, INC. ("GSG"), is a for profitcorporation duly organized in Florida. At all material times hereto, GSG served as a founder ofFRBA, as a consultant on behalf of FHREDI and OPPORTUNITY FLORIDA for the purposesof organizing FRBA.31. Defendant, Robert E. Sheets ("SHEETS") at all times material hereto was suijuris and a director of GSG and acting individually32. SHEETS is the alter ego of GSG.33. GSG and SHEETS are collectively referred to as the "GSG Conspirators."34. Defendant, GIGABIT SQUARED ("GIGABIT") is a Delaware corporationhaving its principle place of business in Washington D.C. At all material times hereto,5
  6. 6. GIGABIT was sui juris, and served as a consultant to FRBA. At various times material hereto,GIGABIT purported to represent RSI to the NTIA without RSIs authorization.35. Defendant, Mark Ansboury ("ANSBOURY") at all times material hereto was suijuris and an officer of GIGABIT and acting individually.36. ANSBOURY is the alter ego of GIGABIT.37. GIGABIT and ANSBOURY are collectively referred to as the "GIGABITConspirators."38. Defendant, CRYSTIE CAREY VOEHL ("VOEHL"), at all times material hereto,was sui juris and served as general counsel for FRBA and GSG, and mislead RSI that she andher firm was representing their interests as she engaged in a pattern of malfeasance, sex andpromiscuity with RSI employees (ultimately leading to marriage to a RSI employee) to misleadRSI while providing improper and inappropriate legal advice for RSI and preparing documentson behalf of RSI.39. At all times material hereto, John Doe(s) are yet unnamed co-conspirators, agents,law firms and fiduciaries who acted contrary to their authority, interest and duty in furtherance ofone or more aspects of the FRBA Fraud Scheme.40. FRBA, FRHREDI, OPPORTUNITY FLORIDA, MARCUM CONSULTING,GSG AND GIGABIT are all mere instrumentalities, employed for improper purposes, includingbut not limited to missapropriation of Federal grant monies, double dipping, for the betrayal oftrust of RSI and to perpetuate a fraud against RSI.41. The FRBA Conspirators, the FHREDI Conspirators, the OPPORTUNITYConspirators, the MARCUM Conspirators, the GSG Conspirators, the GIGABIT Conspiratorsand the VOEHL are defined herein as the "Fraud Conspirators."6
  7. 7. 42. Defendant, GRADY JOHNSON ("JOHNSON") is a resident of Hardee County, aFRBA board member, a former deputy police officer, boat captain and mouthpiece and hasnefariously acted with the Fraud Conspirators to injure RSI while misleading and thereforeviolating the public trust.43. At all times material hereto, all actions of the Fraud Conspirators, the JohnDoe(s), VOEHL and JOHNSON were actions of each other and of the other both individually,jointly and severally, in multiple combinations thereof, contrary to their authority, interest andduty to further the Fraud Scheme and damage RSI and to secure an advantage as a group overRSI that they could not have attained by acting individually.44. At all times material hereto, RSI has complied with all conditions precedent withbringing this action.45. RSI has retained undersigned counsel and are required to pay them a reasonablefee for their services.JURISDICTION AND VENUE46. This Court has jurisdiction over this matter for damages in excess of Twenty FiveMillion Dollars ($25,000,000.00), exclusive of interest, costs, and attorneys fees.47. Venue is proper in Hardee County because the causes of action asserted hereinaccrued in Hardee County.FACTUAL BACKGROUNDHardee County EDA Grant and RSI Performance Based Transfer Agreement48. The Hardee County Economic Development Authority ("HC EDA") pursuant toFlorida Statutes, is authorized to establish the Infrastructure/Job Creation Grant Program toprovide grants to qualified for-profit and not-for-profit entities to fund projects that provide7
  8. 8. economic development, opportunities, job creation and infrastructure within the geographicboundaries of Hardee County.49. The Hardee County Industrial Authority ("HC IDA") is authorized under FloridaStatutes, as a public instrumentality for the purposes of industrial development, to finance andrefinance projects for public purposes to foster economic development in Hardee County.50. On November 13, 2009, the HC IDA and RSI submitted an EDA JointApplication to the Hardee County Board of County Commissioners for the construction andmaintenance of broadband infrastructure, and related services to serve Hardee County, and theoperation of affordable broadband services to residences, businesses and anchor institutions inHardee County, Florida, ("HC BROADBAND NETWORK").51. On February 2, 2010, the HC EDA by way of a Grant Award Agreement ("GrantAward Agreement") awarded the HC IDA a $2 million reimbursement grant for funding of theHC Broadband Network project. A true and correct copy of the Grant Award Agreement isattached hereto and incorporated herein as Exhibit "A."52. Appended to the Grant Award Agreement as Exhibit B, is a Synopsis of HardeeBroadband Project, which clearly reflects that the award was subject to a "[performance basedcontract between the Industrial Development Authority and Rapid Systems including transfer ofinfrastructure."53. In March, 2010, consistent with the Grant Award Agreement, HC IDA enteredinto a performance based equipment transfer agreement ("Transfer Agreement") with RSI todescribe the rights, interests and obligations of HC IDA and RSI regarding the HCBROADBAND NETWORK. A true and correct copy of the Transfer Agreement is attachedhereto as Exhibit "B."8
  9. 9. 54. The Transfer Agreement states that contingent upon RSIs satisfactoryperformance of its requirements for a 3 year period, after such period, title to and ownership ofequipment purchased for the HC BROADBAND NETWORK will transfer from the HC IDA toRSI.Broadband Technology Opportunities Program55. The Broadband Technology Opportunities Program ("BTOP") is a $4.7 billioncompetitive grant program funded through the American Recovery and Reinvestment act of 2009and administered by the National Telecommunications and Information Administration("NTIA").56. The NTIA administers the BTOP within three project categories, to wit, 1)comprehensive community infrastructure; 2) public computer centers; and 3) sustainable broadband adoption. The awards are intended to facilitate the integration of broadband andinformation technology into state and local economies.Florida Rural Broadband Alliance57. On March 16, 2010, FHREDI, OPPORTUNITY FLORIDA, VOEHL and GSG,created FRBA. FRBA was formed with the purported goal and purpose of building a broadbandnetwork to provide Broadband Services to the rural and economically disadvantagedcommunities known as rural areas of critical economic concern located throughout 15 countieswithin the State of Florida (The Northwest RACEC is commonly referred to as the NWRACECand the Southern Central RACEC is commonly referred to as the SCRACEC..58. The NWRACEC includes Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson,Liberty and Washington Counties. The SCRACEC is comprised of DeSoto, Glades, Hardee,9
  10. 10. Hendry, Highlands and Okeechobee Counties as well as the unincorporated area of Immokalee inCollier County and the tribal lands of the Seminole Tribe of Florida.59. On March 23, 2010, FRBA, through GSG, submitted a Broadband InfrastructureApplication ("Grant Application") for project funding under BTOP for the purpose of buildinga wireless broadband middle mile network ("FRBA PROJECT").60. Generally, BTOP requires at least a 20 percent non-Federal match toward the totaleligible project costs ("Match Requirement"). With regard to the Grant Application, FRBAneeded a total of $10,456,000.00 in matching contributions to satisfy its Match Requirement. Ofthat amount, $6,000,000.00 was to be paid in cash by a strategic partner, XIOCOM Wireless.The remaining $4,456,000.00 was to come in the form of "in kind" contributions by HC IDA andRSI contributing the full use of and availability of the HC BROADBAND NETWORK.The FRBA Fraud Scheme61. In order to induce HC IDA to participate in as a "project partner" with FRBA onthe FRBA PROJECT, FRBA, on March 23, 2010, entered into a Memorandum of Understandingwith HC IDA regarding HC IDAs contribution to FRBA of an indefeasible right of use of thecompleted HC BROADBAND NETWORK ( HC IDA MOU"). In return, FRBA, on behalf ofHC IDA, was to provide and pay for third party providers for "backbone capacity" for the FRBAPROJECT and the HC BROADBAND NETWORK for a five year term. Further, FRBA was touse its "partnership" with HC IDA to facilitate the location of a data center within HardeeCounty. A true and correct copy of the HC IDA MOU is attached hereto as Exhibit "C."62. In order to induce RSI to participate as "project partner" with FRBA on the FRBAPROJECT, FRBA, also on March 23, 2010, entered into a Memorandum of Understanding withRSI regarding RSIs commitment to provide a matching investment of cash, equipment and in-10
  11. 11. kind services ("RSI MOU"). In return, FRBA was required to engage RSI to deploy and operatethe FRBA PROJECT. A true and correct copy of the RSI MOU is attached hereto andincorporated herein as Exhibit "D."63. The HC IDA MOU and the RSI MOU became a guise for FRBA to splice intothe HC BROADBAND NETWORK so as to exempt the FRBA PROJECT from environmentalassessment requirements, thereby enabling FRBA to tout the "shovel ready" nature of the FRBAPROJECT. As more fully illustrated below, FRBA never intended to fulfill its obligations underthe HC IDA MOU or the RSI MOU.64. On August 1, 2010, FRBA was awarded the amount of $23,693,665 ("GrantAward"). Following the Grant Award, GSG initially served as the General Manager of theFRBA PROJECT for a consulting fee of $10,000.00 per month.65. Under Federal law, with regard to the Grant Award, at all times material heretoFRBA was known as a "recipient" and was subject to strict reporting requirements and awardconditions regarding "subrecipients" and "contractors". The roles of each are characterized asfollows:A subrecipient is involved in the substantive activities of the awardedproject to accomplish BTOP purposes. Terms and conditions from thegrant award flow down to the subrecipient; andA contractor provides goods and services to benefit the grant recipient. Acontractor does not seek to accomplish a public benefit; rather, it pursues itsown commercial objectives.66. At all times material hereto, FRBA was aware of RSIs equitable ownership of theHC BROADBAND NETWORK transmission equipment pursuant to the Transfer Agreement,and was further aware that RSI could not, without authorization from NTIA, be simultaneously11
  12. 12. characterized as a "contractor" pursuing payment for goods and services while simultaneouslycharacterized as a subrecipient receiving a grant award.67. On November 11, 2010, entered into an amendment to its ManagementAgreement with GSG, authorizing payment to GSG of a Capital Improvement ProgramAdministrative Fee equal to 13% of the Grant Award and 2) payment of 3% of the Grant Awardto GSG as a "grant compliance fee." Thus, GSG was to be compensated for consulting fees inthe amount of $10,000 per month 16% of the total Grant Award, the unconscionable sum of$3,790,986.40.68. On December 1, 2010, FRBA and RSI entered into a Contract forConsulting/Professional Services ("Consulting Contract") relative to the FRBA PROJECT. Atrue and correct copy of the Consulting Contract is attached hereto as Exhibit "E." However, atall times FRBA was aware that it would not be able to secure payment for RSIs services as a"contractor" without further authorization from NTIA in light of its "in-kind contribution".69. With knowledge as to the Federal requirements, it appears that FRBAs realpurpose was to embark on a clandestine, fraudulent course of conduct, including self-dealing anddouble-dipping, intended to misappropriate monies from the Grant Award, thereby enrichingitself and the other FRBA Conspirators, while simultaneously fraudulently deceiving RSI as toits status on the Project.70. In furtherance of FRBAs fraudulent course of conduct, while paying consultingfees totaling $10,000.00 per month to GSG, plus the unconscionable monthly pro rata "grantcompliance fee" FRHEDI and OPPORTUNITY FLORIDA were being paid fees in the amountof $8,500 per month to themselves cloaked as administrative and community outreach funds.12
  13. 13. 71. From January through April 2011, FRBA continued its deceptive charade andissued work authorizations to RSI, so as to continue to fraudulently procure RSIs services on theProject. True and correct copies of the work authorizations are attached hereto as CompositeiExhibit "F."72. In July 2011, GSG was terminated by FRBA as manager of the BroadbandDevelopment Project. Continuing the pattern of misappropriation of the Grant Award, FRBAbrought in another consultant, Gigabit Squared, for a monthly fee of $50,000.00.73. On September 15, 2011, FRBA and RSI executed a letter of intent regardingentering into a formal subrecipient agreement.74. On January 4, 2012, VOEHL misrepresented to RSI that she was the principlepoint of contact with RSI regarding to negotiating a subrecipient contract with NTIA.75. On January 8, 2012 VOEHL misrepresented to RSI that NTIA required that anyRSI subrecipient contract must have a termination clause for convenience.76. On January 13, 2012 Doug Kinkoph, BTOP CCI Director for the NTIA sent aPerformance Improvement Plan (PIP) Letter to FRBA stating FRBA must provide a copy of afully executed subrecipient agreement with RSI by February 27,2012.77. On January 31, 2012 FRBA commissioned RSI as a contractor, via a PurchaseOrder, to slice into the HC Broadband Network in order to supply wireless broadband service toHighlands County and initiate the incorporation of the FRBA Project into the HCBROADBAND NETWORK. In good faith reliance upon the Purchase Order, RSI removed theequipment owned by HC BROADBAND NETWORK and replaced it with FRBA equipment.No payments were made by FRBA for the engineering, operation, monitoring or removal of theequipment ("Disputed Equipment").13
  14. 14. 78. On February 3, 2012, FRBA continued its misrepresentations to RSI and issuedRSI an Award Decision letter emailed February 8, 2013 but dated February 3, 2012,("Deployment Award Letter") relative to the following services:• Construction Management portions of scope excluding Project Management;• Outside Plant Site/Tower Engineering and Professional Engineering Services;• Engineering Drawings /Build Plans• Data Center Installation79. On February 27, 2012, VOEHL, prepared a memorandum on RSIs behalf toNTIA to get approval for RSI to work as a vendor with the NTIA.80. In furtherance of the FRBA Fraud Scheme, FRBA, on February 27,2012 obtainedauthorization from the NTIA to classify Rapid Systems role in the project as that of a contractorrather than a subrecipient. Thus, while purporting to act in the best interests of RSI so as tosecure payment on RSIs behalf, FRBA was actually positioning RSI for termination withoutpayment.81. In March 2012, FRBA fraudulently represented to RSI that it was willing to enterinto a Construction Management, Deployment Engineering and Data Center InstallationAgreement ("Deployment/Data Center Agreement"). A true and correct copy of theDeployment/Data Center Agreement is attached hereto as Exhibit "G." The Deployment/DataCenter Agreement was never executed by the parties.82. On April 30, 2012 FRBA representatives met with the principles of RSI. FRBArepresented to RSI that the meeting was an attempt to mutually resolve the outstanding paymentsowed to RSI. Once again, FRBA and RSI negotiated a Compensation Agreement("Compensation Agreement") and an Asset Management Agreement, true and correct copies ofwhich are attached hereto as Exhibit "H." Notwithstanding reaching agreement during the14
  15. 15. meeting, FRBA intentionally failed and refused to execute the Compensation Agreement and theAsset Management Agreement and no payment was made to RSI.83. Unbeknownst to RSI at the time, on June 24, 2012, VOEHL forwarded an emailto the NTIA and GIGABIT which reveals FRBAs fraudulent intent to dishonor its commitmentsto RSI under the RSI MOU, the Deployment Award Letter and the above referenced letter ofintent and purchase orders. A true and correct copy of the email is attached hereto as Exhbit "I."84. On August 15, 2012, FRBA, in furtherance of its fraudulent scheme, submittednotice to RSI, (purportedly pursuant to the unexecuted Deployment/Data Center Agreement) ofRSIs suspension from the FRBA Project and requesting all of RSIs work product relating to theFRBA Project ("Suspension Letter"). A true and correct copy of the Suspension Letter isattached hereto as Exhibit "J.85. On September 10, 2012 REYNOLDS sent a complaint to the FCC alleging thatFRBA administrated FRBA FCC licenses without FRBA permission. The license to which shewas referring was not FRBAs license. JOHNSON and REYNOLDS have been constantlycalling the FCC in a further attempt to damage RSIs reputation in our industry."86. On or about September 13, 2012, FRBA made demand to HC IDA that certainequipment on the HC IDA towers be returned to FRBA and further notified HC IDA that itwould be terminating Level 3 service.87. On November 16, 2012 Highlands County notified RSI to remove every piece ofequipment in Highlands County. Upon information and belief, FRBA is continuing to disparageRSI and interfere with RSI business relationships and customers.88. In January, 2013, FRBA, by letter to the HC IDA and Hardee County Board ofCounty Commissioners (Termination Letter"), FRBA fraudulently represented that 1) FRBA15
  16. 16. had terminated RSI from the FRBA Project; 2) the NTIA had required FRBA to seek an alternatefor its matching funds obligation; and 3) it intended to terminate the "backbone capacity" forHardee County. A true and correct copy of the Termination Letter is attached hereto as Exhibit"K." However, as an "in-kind contributor" RSI could not merely be terminated from the Projectwithout FRBA facing the possibility of losing its matching funds obligation.89. At no time prior to January 2013 had NTIA required FRBA to obtain an alternatefor its matching funds obligation. Therefore, the Termination Letter contains a bold facemisrepresentation to both the HC IDA and Hardee County Board of Commissioners andevidences FRBAs nefarious intent to hijack the HC BROADBAND NETWORK withoutmeeting its obligations under either the HC IDA MOU or the RSI MOU.90. While the Termination Letter was provided to the FHREDI Board Members andthe OPPORTUNITY FLORIDA Board Members, it was not provided to RSI, reflecting FRBAscontinuing pattern of clandestine, deceitful and fraudulent actions against RSI.91. On January 24, 2012, FRBA filed State of Florida Uniform Commercial CodeFinancing Statements among the public records of Hardee County, Instruments numbered201325000483 and 201325000502, thereby encumbering the Disputed Equipment and subjecttowers and effectively hijacking the HC BROADBAND NETWORK. A true and correct copyof Instrument 201225000483 is attached hereto as Exhibit "L."COUNT I - BREACH OF CONTRACTFRBA92. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.93. This is an action against FRBA for breach of contract.94. On date RSI and FRBA entered into the Compensation Agreement attachedhereto as part of Composite Exhibit "H."16
  17. 17. 95. FRBA breached the Settlement agreement and has failed to pay Rapid Systemspursuant to the terms of the Settlement Agreement.96. As a result of FRBAs breach RSI has been damaged.97. Rapid Systems has retained the undersigned attorney and is required to pay thema reasonable fee associated with bringing this action.WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURALBROADBAND ALLIANCE, LLC, for all damages it has sustained including but not limited tocompensatory damages, exemplary damages, special damages, and its attorneys fees and costs.COUNT II - SLANDER OF TITLEFRBA98. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.99. This is an action for slander of title against FRBA.100. RSI owns an equitable interest in the Disputed Equipment and operates the HCBROADBAND NETWORK.101. FRBA has taken the position in litigation pending in Hardee County that it has alien on the Disputed Equipment and network towers. Specifically, FRBA has sought to quashRSI liens associated with the equipment claiming some superior right and title.102. These statements have disparaged RSIs title in the Disputed Equipment andrights regarding the HC BROADBAND NETWORK.103. These statements are not true as RSI has never surrendered its title to the DisputedEquipment or its rights regarding the HC BROADBAND NETWORK as it has not been paid forthat Disputed Equipment.104. These statements have caused RSI to be damaged.17
  18. 18. 105. RSI has retained the undersigned attorney and is required to pay them areasonable fee associated with bringing this action.WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURALBROADBAND ALLINCE, LLC, for all damages it has sustained including but not limited tocompensatory damages, exemplary damages, special damages, and its attorneys fees and costs.COUNT III - FLORIDAS UNFAIR AND DECEPTIVE TRADE PRACTICES ACTFRBA106. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.107. This is an action under the Florida Deceptive and Unfair Trade Practices Act("FDUTPA") against FRBA.108. The FDUTPA renders unlawful unfair methods of competition, unconscionableacts or practices, and unfair or deceptive acts or practices in the conduct of any trade orcommerce.109. FRBA engaged in unfair practices and/or deceptive acts by representing to RSIthat it was it was intending to pay RSI for the engineering, installation, maintenance and use ofthe FRBA PROJECT, the Disputed Equipment, the HC BROADBAND NETWORK whilesimultaneously fraudulently seeking to exclude RSI from ever operating the FRBA Project.110. FRBAs actions have caused RSI actual damages in excess of Twenty FiveMillion Dollars ("$25,000,000.00).111. RSI has retained the undersigned attorney and is required to pay them areasonable fee associated with bringing this action.WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURALBROADBAND ALLIANCE, LLC, for all damages it has sustained including but not limited to18
  19. 19. compensatory damages, exemplary damages, diminution in value, special damages, and itsattorneys fees and costs.COUNT IV-TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONSHIPFRBA112. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.113. This is an action for tortuous interference with contractual relationship againstFRBA.114. RSI entered into the Transfer Agreement dated March 19, 2010, with IDA,attached hereto as Exhibit B. This agreement memorialized their extensive business relationship.115. RSI has certain legal rights as a result of the agreement.116. FRBA intentionally and without justification interfered in that ongoing businessrelationship.117. FRBA was without justification or privilege in interfering in the businessrelationship.118. RSI has been damaged as a result of the breach to this business relationship.119. RSI has retained the undersigned attorney and is required to pay them areasonable fee associated with bringing this action.WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURALBROADBAND ALLIANCE, LLC, for all damages it has sustained including but not limited tocompensatory damages, exemplary damages, diminution in value, special damages, and itsattorneys fees and costs.COUNT V - ACCOUNTINGFRBA120. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.19
  20. 20. 121. This is an action for an accounting against FRBA.122. The various executed and unexecuted agreements between RSI and FRBAinvolved extensive and/or complicated accounts, specifically the delineation of Federal grantfunds and other assets associated with the financing, operation, purchasing, installation, andmanagement of the FRBA PROJECT and the related network and equipment.123. It is not clear that the remedy at law is a full, adequate and expeditious as it is inequity.124. RSI is entitled to an accounting of all FRBA funds.WHEREFORE Rapid Systems, Inc., demands an accounting from FLORIDA RURALBROADBAND ALLIANCE, LLC, for all funds it has received, dispersed, and otherwisecontrolled as part of the grant.COUNT VI - CONSTRUCTIVE TRUST125. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.126. This is an action for constructive trust against FRBA.127. FRBA made a both an express and implied promise to RSI, that it would engageRSI to deploy and operate the FRBA middle mile network in the SCRACEC.128. In reliance thereon, RSI provided a commitment to FRBA of RSIs matchinginvestment of cash, equipment and in-kind services relative to the HC BROADBANDNETWORK.129. At all times material hereto and RSI and FRBA had a confidential relationshippursuant to the RSI Memorandum and its relationship with FRBA as a "project partner" relativeto the Grant Application.130. RSI has been unjustly enriched as a result of the transfer.20
  21. 21. WHEREFORE Rapid Systems, Inc., demands a constructive trust on all funds, equipment,networks associated with the Grant Award to FLORIDA RURAL BROADBAND ALLIANCE,LLC.COUNT VII - DEFAMATIONGrady Johnson131. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.132. This is an action against JOHNSON for defamation.133. JOHNSON made the following false and defamatory statement of and concerningRSI:That RSI was under a criminal investigation;That RSI was utilizing RSIs in-kind contribution to pull the rug out from underthe total project134. JOHNSON made these statements without reasonable care as to truth or falsity ofthose statements.135. JOHNSONS statements caused actual damage to RSI.WHEREFORE Rapid Systems, Inc. demands judgment against GRADY JOHNSON forall damages for defamation.COUNT VIII - BREACH OF FIDUCIARY DUTYFRBA136. Rapid Systems realleges and reavers paragraphs 1 through 81 as if" fully set forthherein.137. This is a cause of action against FRBA for breach of fiduciary duty.21
  22. 22. 138. At all times material hereto and RSI and FRBA had a confidential relationshippursuant to the RSI mou and its relationship with FRBA as a "project partner" relative to theGrant Application.139. FRBA breached that fiduciary duty by its participation in the Fraudulent Scheme.140. Rapid Systems has been damaged as a result of this breach.WHEREFORE Rapid Systems demands judgment against FLORIDA RURALBROADBAND ALLIANCE, LLC, for all damages it has incurred as a result of the breach offiduciary duty including but not limited to compensatory damages, together with interest, costsand such other relief as the Court deems just and proper.COUNT IX - QUIET TITLEFRBA141. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.142. This is an action for quiet title against FRBA.143. RSI holds equitable title to the Disputed Equipment.144. FRBA has clouded or a asserted a claim on Rapid Systems superior ownershipinterest in the property by filing State of Florida Uniform Commercial Code FinancingStatements as more fully set forth in paragraph 91 herein.145. It is unclear that RSI has an appropriate remedy at law as it does in equity.WHEREFORE Rapid Systems, Inc., demands judgment against FLORIDA RURALBROADBAND ALLIANCE, LLC for all damages it has incurred as a result of the cloud andclaim it has placed on the property and demands removal of all claims, associated therewith.COUNT X - RICO CIVILFRBA Fraud Conspirators146. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.22
  23. 23. 147. This is an action for violation of Florida Statutes §772.103, civil RICO violationsagainst the Fraud Conspirators.148. The Fraud Conspirators were part of an enterprise which they were associatedwith in committing various crimes including, but not limited to, perjury, double-dipping GrantAward monies and misappropriating and converting Grant Award monies.149. As part of this enterprise and in furtherance thereof, the Fraud Conspiratorsengaged in a pattern of racketeering activity.150. This activity included the Fraudulent Scheme, the Fraud Conspirators having thesame accomplices, results, or intents.151. RSI was damaged as a result of this activity.WHEREFORE Rapid Systems, Inc. demands judgment against the Fraud Conspirators,for violation of Florida Civil RICO statues §§772.103 et al. including all compensatory damages,together with interest, costs and such other relief as the Court deems just and proper.COUNT XI - CIVIL CONSPIRACYFRBA Fraud Conspirators152. RSI realleges and reavers paragraphs 1 through 91 and 136 through 140 as if fullyset forth herein.153. This is an action for civil conspiracy against the Fraud Conspirators.154. The Fraud Conspirators acted in concert to accomplish an unlawful purpose oraccomplish some purpose by unlawful means, namely, the breach of fiduciary duty and the actsset forth herein in furtherance of the FRBA Fraud Scheme.155. Each of the Fraud Conspirators acted overtly in pursuance of the conspiracy.156. Each act done in support of a conspiracy by one of the Fraud Conspirators is anact for which each is jointly and severally liable.23
  24. 24. 157. As a result, RSI has been damaged.WHEREFORE Rapid Systems demands judgment against the Fraud Conspirators forcivil conspiracy including compensatory damages, together with interest, costs, and such otherand further relief as the Court deems just and proper.COUNT XII - BILL OF DISCOVERY158. RSI realleges and reavers paragraphs 1 through 91 as if fully set forth herein.159. This is an action for discovery against Henry Kuhlman ("Kuhlman") and FrankKirkland ("Kirkland").160. Kuhlman and Kirkland have had significant dealings with the JOHNSON and theother Fraud Conspirators and RSI believes they have made disparaging statements about RSI infurtherance of the Fraud Scheme.161. To date RSI has been unable to verify Kuhlman and Kirklands statements andextent of involvement in the FRBA Fraud Scheme.162. RSI is informed and believes that Kuhlman and Kirkland have possession ofrecords regarding their involvement in the Fraud Scheme as well as communications with JOHNDoe(s) and other third parties (yet unknown to RSI) that are disparaging and defamatory to RSI.163. RSI has no means of discovery of this information.164. RSI intends to bring an action for defamation, tortious interference with businessrelationships, and civil conspiracy, but does not know the names of the persons, specificstatements, and other relevant facts that are being concealed by Kuhlman and Kirkland.WHEREFORE RSI demands judgment against Henry Kuhlman and Frank Kirklandpermitting discovery and or depositions to obtain the information requested and granting it anyand all other relief the court deems just and proper under the circumstances.24
  25. 25. JURY TRIAL DEMANDRSI demand a trial by jury on all issues so triable.Dated this 18lhday of April 2013.Respectfully submitted,Is/ Philip A. BeachDANIEL A. NICHOLAS, ESQ.Florida Bar No.: 847755BRADLEY S. BELL, ESQ.Florida Bar No.: 184306DOUGLAS J. COLLINS, ESQ.Florida Bar No.: 025838WILLIAM A. TIEDER, ESQ.Florida Bar No.: 063451PHILIP A. BEACH, ESQ.Florida Bar No.: 750751NICHOLAS & BELL, P.A.201 E. Kennedy Blvd., Suite 850Tampa, FL 33602Telephone: (813)637-9200Facsimile: (813) 464-2925Attorneys for Plaintiff25

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