The Phoenix Partners

Marvel Bread combined with my doctor's plan turned out to be good for me. My blood pressure was down 20% by the end of December, and I learned to "direct" my dreams toward reliving better times with my daughter.

We all rang in a very happy New Year 2014.

Well, maybe not all of us.

Our first quarterly meeting of 2014 was more or less perfunctory. Sales, plant performance, employee morale, all were going smoothly. Then we turned to the final results of our four-year "secret data project." (I told you there would be more about this, remember?)

The tangible Pathway assets we had acquired included not only the company's properties and production equipment, but also all of its computers, servers and office equipment. And by acquiring Pathway's intangible assets, we had become the owners of all of its intellectual property, such as patents, recipes, manufacturing processes... all of its data, wherever it was. We had upgraded or replaced all of Pathway's office equipment, but we had removed all the data storage media for our "secret data project," and in a building Phoenix had leased a few miles outside of Rose Valley, a team of Dennis' former staff members, fellow victims of the Tenneson purge of Maitland who we had hired as Phoenix consultants, had been painstakingly recovering deleted data.

Arrogance breeds carelessness. We had all seen how Tenneson's managers operated when we were at Maitland, and we knew they were not as smart as they thought they were. When Arnau told us that he suspected Tenneson had used Pathway's financials to commit fraud, we knew there was no way they could have left "no proof." The mere fact that they had wiped all the drives in their computers on their way out the door as Pathway collapsed was like a neon sign that said, "something to hide here," and Dennis knew just where to look for it.

Wiping the hard drive in your computer is easy; you can download free software from the Internet for that. But wiping the drives in your servers doesn't wipe the removable drives in a rotating backup scheme, especially after you've fired the IT staff you've been treating like peons for five years. Recent data on the company's backup drives was intact. And during the first couple of years Tenneson owned Pathway the company's IT department was still running tape backups of the company's network server. Returning IT staff produced boxes of old backup tapes that had been shoved into the back of a closet, and they yielded a wealth of four and five-year-old data... once we managed to buy replacement tape drives and a copy of the now-obsolete backup software on eBay.

The data transmitted through Pathway's wireless phone and internet accounts was also a company asset. Every time one of Tenneson's people had sent or received email or text messages using their cell phones, copies of them were being held on some server in the bowels of USA Wireless for seven years... and all of those accounts now belonged to us.

And did you know that digital copy/FAX machines scan the documents you feed into them, use that scan data to make automatic resend attempts if needed and then hold it until you delete it? Tenneson's people apparently didn't.

As each new cache of data was recovered by Dennis' team, it was handed off to another team made up of Lucy's fired Maitland accountants and business analysts. Lucy's team spent three years crunching the numbers in the data that Dennis and his team recovered and reconstructing Tenneson's financial transactions, and all of our suspicions about how Pathway was used to commit fraud and then raided for every penny that could be stolen from it were confirmed.

Tenneson had used the same crooked finance team for all his illegal operations, and for five years they were operating mostly out of the finance offices at Pathway Bakeries, using Pathway's office computers, network servers, telephones and office equipment. We couldn't recreate complete data trails for every scam because Pathway systems weren't used for everything, but we recovered the emails they had exchanged while making their plans, and the numbers of the overseas accounts they used to hide money looted from Pathway and two other companies they owned, Wilson Energy and Paulsen Mining.

And then there were the records Dennis found of Tenneson's scheme to engineer the takeover of Maitland Mills.

As most everyone knows by now, during the first half of the last decade, millions of people across the US were victimized by predatory lenders, fraudulent real estate appraisers and crooked securities bundlers. At one point, almost 11% of all US home mortgages were underwater and nobody knew it until it all blew up. Most news reports will tell you that the city with the highest percentage of underwater mortgages was Newark, NJ, where some 54% of all homes were worth less than their owners owed on them. But underwater home loans represented more than 60% of all the mortgages in Rose Valley, and virtually all of them had been made to people who would have a vote in a Maitland buyout.

80% of the loans made to Rose Valley homeowners had come from a Los Angeles based lender, CountryWay Bank. From 1999 until 2004, the period during which America's most toxic mortgages were issued, seven of the twelve members of the board of CountryWay Bank were also shareholders in Tenneson Equity Partners. And all seven of them had resigned or "retired" from the board by the time CountryWay had failed and gone into FDIC receivership.

Troy Tenneson and his partners had carried out a systematic plan to push enough Maitland Mills shareholders into financial distress to make the company susceptible to a carefully timed buyout offer. They conspired to ruin half the people in our town so that they could take over one company.

"Motherfuckin' sonsa bitches," Lucy muttered.

"Oh. Sorry," she said, her face turning scarlet as she realized that she had said it aloud. None of us had ever heard anything like that come out of Lucy's mouth before.

"That's ok," Dennis replied, "I said the exact same thing when I saw this."

Marty and I were just speechless.

We turned all the data we had recovered over to the federal government's newly formed Consumer Financial Protection Bureau and explained to them how we had come by it. In the next three months, we explained it again to the Federal Trade Commission, the Securities and Exchange Commission, the Internal Revenue Service and the Federal Reserve. And then to their equivalent state agencies in Illinois, Oregon, Texas, Wyoming and Nevada.

April 12, 2014

DOJ, SEC and IRS level fraud and tax evasion charges against Tenneson Equity Partners CEO Tenneson

The U.S. Department of Justice, the U.S. Securities Exchange Commission and the U.S. Internal Revenue Service have announced charges and an asset freeze against Troy Tennneson and Tenneson Equity Partners LLC, saying that they operated the former Pathway Bakeries of Kelton, IL, Wilson Energy, Inc. of Dallas, TX, Paulsen Mining, Inc. of Cheyenne, WY as the centerpiece of a $3.2 billion fraud scheme.

"Our complaint alleges that Tenneson's business model was a sham," added Steven Perkin, director of the SEC's enforcement division. "The only way Tenneson was able to make loan payments was by continually obtaining additional fraudulently borrowed money."

The Justice Department says Tenneson falsified revenues and asset values in order to obtain loans secured by company assets. In reality, the Justice Department says Tenneson operated a scheme in which fraudulently borrowed money was used to pay previously defrauded lenders.

"The SEC is seeking return of allegedly ill-gotten gains with interest and financial penalties," according to the commission.

"Our complaint further alleges that Tenneson used a web of layered companies and offshore bank accounts to conceal the proceeds of his fraud," said Eduard Buscante, director of the Internal Revenue Service's Chicago Regional Office. "Tenneson used the scheme to line his pockets with millions of defaulted dollars and conceal them for purposes of tax evasion."

A federal court hearing is next scheduled for Dec. 29. The IRS has requested that the asset freeze continue.

The trials lasted over a year, during which Tenneson repeatedly proclaimed that all the data being used as evidence against him was "faked." Dennis and Lucy testified about the forensic work their staffs had done to recover the Pathway data, and Tenneson's defense was never able to explain how the "faked" data had included actual numbers for bank accounts in the Bahamas, the Cayman Islands, Belize and Luxembourg that contained over a billion dollars that had never been reported as income to the IRS.

They just didn't see it coming.

June 24, 2015

CEO sentenced for fraud and tax evasion

The former CEO of Tenneson Equity Partners was sentenced to 60 years in prison for fraud, and tax evasion Friday in federal court.

Troy D. Tenneson, 58, founded Tenneson Equity Partners in 1985. At its peak, the business owned and managed five companies throughout the United States.

Tenneson was convicted of conspiracy and falsifying revenues and asset values in order to fraudulently obtain loans secured by company assets. The fraudulently borrowed money was used to make payments to previously defrauded lenders.

Tenneson was also convicted of concealing the proceeds of his fraud to evade taxes.

Tenneson was ordered to pay $3.2 billion in restitution to the lenders and other creditors he defrauded,

In addition to Troy Tenneson, the seven other partners of Tenneson Equity Partners and more than a dozen of their employees were indicted on the same charges. All were either convicted or allowed to plead guilty to lesser charges in exchange for testifying about how Tenneson and his partners directed their illegal actions. We were disappointed, however, when the DOJ decided that the predatory mortgage scheme Tenneson had carried out on the citizens of Rose Valley, like the rest of the nationwide mortgage scandal, consisted only of civil violations and no one would face criminal charges for any of it.

The government instituted criminal forfeiture actions against Tenneson Equity Partners and its principles. $2.8 billion in cash came from the offshore accounts. The company's business assets and the conspirators' personal assets - investments, homes, yachts, private jets, cars, etc., - were also seized and ordered sold.

Phoenix Partners LLC received a whistleblower award from the IRS for 30% of the total amount recovered from Troy Tenneson and the other principles of Tenneson Equity Partners. The award won't be paid out until all the assets have been disposed of, which may take years due to all the ongoing appeals, but if our estimates are correct, at $960 million it will be the largest such award in history. Our scheme to bring down Troy Tenneson by bringing his victimized businesses back from the dead will end up making a profit of nearly $600 million.

Although my ex-wife had been employed in the Maitland Mills finance group under Tenneson's ownership she was not charged in any of Tenneson's crimes. The court allowed her to keep the $500,000 in cash, the $1.6 million LA condo, and several cars that Tenneson had put in her name when she married him. Until she is released, all her assets are being managed by a court-appointed guardian due to her lack of family members willing to assume responsibility for them and she can only access what can be deposited into her commissary account each month. She still has another three years to serve before she's eligible for parole, but when she gets out she won't end up as penniless "kitchen help."

Arnau Soulis died peacefully in his sleep on October 2, 2015. He was ninety-one years old. No evidence had ever been found that Troy Tenneson was behind his son's death or any other crimes than financial; despite all his bluster, the man had turned out to be a toothless lion. But we hoped that seeing Tenneson locked up for a long time had provided Arnau with some measure of satisfaction, because ultimately Arnau and Paul had been right: Tenneson's greed had been the driving force behind all the suffering that had followed in his wake.

Arnau's memorial was a very private affair, consisting of his daughter-in-law, his two grandchildren and several lifelong friends. We did not attend, as his wish to the end was that no one outside our small band of conspirators should ever connect him or his money to Phoenix Partners, LLC. It would keep us safe from whatever enemies he might have made in his past, and Sofie and his grandchildren safe from whatever enemies we might make in our future. The media reported that Arnau had left several million dollars to various charitable foundations, and that the only other heirs to his vast shipping empire were his daughter-in-law and his grandchildren.

Several weeks after the reading of the will, we met with Sofie in the Timberline condominium.

"Arnau has bequeathed his interest in Phoenix Partners to me," Sofie told us, "So we will continue to be business partners for as long as we all find it mutually agreeable." She handed us each a document, which proved to be a financial statement, and we were surprised as all hell to see what it said.

"One billion dollars...?" Lucy gasped. Added to the funds already in the Phoenix accounts, our one-eighth interests in the company amounted to more than $200 Million each.

"Arnau's final investment," Sofie confirmed. "He told me that of all the many things he had put his money into, Phoenix was the one he was most proud of. It is ironic that no one outside this room will ever know that he made it.

"And he left you this letter..."

To my dear friends,

By now Sofie will have informed you of my final deposit into the Phoenix accounts. I know you will do good things with it.

I want the four of you to know how thankful I am for having known you and for what you have done for me. I do not only speak of bringing about justice for my Andre. I also speak of what you have done for my soul.

Since I met and loved my Manon I have tried to become a better man so that I might be worthy of her, but I have always doubted my success at this. You have allowed me to live my final days fighting on the side of the angels, and I pray I have finally redeemed myself so that I may be permitted to see my wife and son again. For that I am eternally grateful to you all.

Thank you.

Forever your friend,

Arnau

P.S. Save as many of them as you can.

"And so," Sofie asked with a smile, "Who are we to be saving next...?"

Phoenix Partners, LLC Completes Purchase of Assets of Tenneson Equity Partners

Albuquerque, New Mexico, December 4, 2015

Phoenix Partners, LLC today announced that it has completed the purchase of the assets of Tenneson Equity Partners of Reno, NV. Under the terms of the Asset Purchase Agreement, Phoenix has acquired substantially all of the assets of Tenneson for approximately $528 million.

Tenneson Equity's assets were seized by the Securities and Exchange Commission and the Internal Revenue Service in connection with fraud and tax evasion actions against the company and the conviction of its chairman, Troy D. Tenneson, and consist of three businesses operated by the company: Wilson Energy, Inc. of Dallas, TX, Paulsen Mining, Inc. of Cheyenne, WY, and Maitland Mills, Inc. of Rose Valley, OR.

"Tenneson's operation of Wilson Energy and Paulsen Mining was based on environmental destruction and the displacement of indigenous peoples," commented Geoffrey Jian Lee, Managing Director of Phoenix LLC. "We will cease these operations immediately, and do everything in our power to undo the harm they committed. We will also reform the operation of the Maitland Mills, to restore it to the position it once held as a leading purveyor of the highest quality products.

"All Phoenix Partners companies will adhere to the highest standards of business integrity."

SOURCE Phoenix Partners, LLC

Wilson Energy and Paulsen Mining turned out to be shadows, nothing more than holding companies and more ways for Tenneson and his partners to steal money from investors. That turned out to actually be a good thing, because the mass destruction they had promised to unleash upon the rain forest was just another fraud. When we pulled the contracts for the rain forest deal with San Lorenze and cut loose all the thugs who'd been hired to make a show of burning out the homes of the indigenous tribes, there were barely 200 actual employees between both companies worldwide. Given what they originally hired on to do we weren't nearly as motivated to save their jobs, but we've given them a chance, if they'll work to advance the newly-formed Phoenix Environmental Group's first South American venture. It's an enormous gamble, because nobody has ever successfully replanted such a large expanse of deforested prime rainforest. But it's attracted some of the world's leading environmental scientists, and if we succeed the potential for creating jobs in environmental restoration is enormous.

And that bring us to today. I'm in the office of a warehouse on the grounds of the Maitland Mills. It's the only building in town large enough to hold all the mill's employees, current and former, and their families. This afternoon we constructed a temporary stage out of scaffolding, and right now about 70% of the population of Rose Valley, Oregon is waiting for the four of us to come out and talk to them.

We're going to start with the "Phoenix pitch," our mantra about success through dedication to quality and business integrity. We'll remind them that Maitland used to be a place that cared about the quality of the work people did, and treated them with respect and fairness. And we're going to reassure them that we can make this work, and that it shouldn't be that hard because it's the way we always used to do things.

But rebuilding Maitland isn't going to be like saving Pathway, or Marvel, or even Wilson and Paulsen. The people in those companies were all in the same boat, together, and didn't split into factions for and against selling their companies. A third of Maitland's workers were kicked out the door four years ago, not just for a few months. Yes, we hired most of the marketing, finance and technology people as Phoenix consultants and helped place other fired Maitland workers in jobs with Marvel in Portland and Spokane, and we'll offer all of them their jobs back at Maitland, but a lot of them may choose not to return. And many of those who do come home will still have hard feelings about the fact that their neighbors, coworkers and in some cases even family got dollar signs in their eyes, overextended themselves and then panicked and sold the life blood of our community out from under us.

I know that because I'm one of them. And just as I continue to work through the personal demons that have haunted me for so long, we all have to resolve our feelings, because if we don't they'll eat us alive. I'm going to talk frankly about what we let happen to our town, what it cost us and how we have to cope with our feelings about it and live and work together if we're going to put our home town right. Yes, I said, "our" home town. Using me as the public face of Phoenix turned me into the personification of all the pain this town has suffered, and in order for my words to mean anything, I have to come back here too, and try to make Rose Valley "home" again. Because if we can't, then the motherfucking sonsa bitches who did this to us still win.