Russell D. Garrett, WSBA #18657 1 Jordan Ramis, P.C.

Of Attorneys for Chapter 7 Trustee 2 1499 SE Tech Center Place, Suite 380 Vancouver, WA 98683 3 Telephone: (360) 567-3900 Facsimile: (360) 567-3901 4 5 6 7 8 9 In re: 10 MARK A. LEONARD, 11 Debtor.

HON. PAUL B. SNYDER Location: Vancouver Chapter: 7

UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT TACOMA No. 13-43836 - PBS

12 RUSSELL D. GARRETT, CHAPTER 7 TRUSTEE, FOR THE ESTATE OF MARK 13 A. LEONARD Adversary Proceeding No. 14 15 16 v. Plaintiff, COMPLAINT TO DENY DISCHARGE (11 U.S.C. 727 (a)(2)(A) and (a)(2)(B), 727(a)(3), 727(a)(4) and 727(a)(5))

17 MARK A. LEONARD, 18 19 Defendant. For its Complaint against defendant Mark A. Leonard (Leonard), the

20 Chapter 7 Trustee (Plaintiff) alleges: 21 22 1.

J URISDICTION AND VENUE

The Court has jurisdiction over this adversary proceeding pursuant to Fed. R.

23 Bankr. P. 7001 and 28 U.S.C. 157 and 1334. 24 2. The matters in controversy in this proceeding arise under 11 U.S.C. 727.

25 This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(H) and (b)(2)(J).

COMPLAINT TO DENY DISCHARGE -

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3.

Venue in this district is proper pursuant to 28 U.S.C. 1409.

DESCRIPTIONS OF THE PARTIES

4.

Leonard filed a voluntary Chapter 7 on 06-07-13 in the United States

4 Bankruptcy Court District of Washington, Case No. 13-43836-PBS (Main Case). 5 5. Plaintiff is the Chapter 7 Trustee in the Main Case and has standing to bring

6 this action. 7 8 6.
FACTUAL ALLEGATIONS COMMON TO ALL CLAIMS

At all relevant times material herein, Leonard has acted as the President of

9 Tytan Intl, which engaged primarily in the importation and sale of Chinese tractors and 10 tractor implements. 11 7. Tytan Intl filed Chapter 7 bankruptcy in the United States Bankruptcy Court

12 District of Washington on November 7, 2013, as Case No. 13-46948-BDL (Tytan 13 Bankruptcy). Leonard acted as the authorized agent of Tytan Intl to file the petition on 14 behalf of Tytan Intl and declared under penalty of perjury that the information contained in 15 the petition, schedules and related statement of financial affairs was true and correct. 16 8. In or around June 2009, Leonard formed Tytan Holdings, Inc. (Tytan

17 Holdings), to operate as a publically traded holding company. 18 9. Tytan Holdings is denominated as a penny stock company under rules

19 promulgated by the U.S. Securities and Exchange Commission and listed on the OTC 20 Bulletin Board under the symbol TYTN PK. 21 10. Tytan Holdings business is, in part, to acquire agricultural equipment

22 manufactures and environmental technologies. 23 11. Tytan Holdings acquired Tytan Intl as a wholly owned subsidiary in or

24 around December 2009. 25

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12.

At the time Tytan Holdings acquired Tytan Intl in or around December 2009,

2 Leonard was the sole shareholder of Tytan Intl. 3 13. As part of Tytan Holdings acquisition of Tytan Intl stock from Leonard,

4 Leonard transferred 50,000 preferred Series A Shares to each of his daughters, Heather S 5 Jaeger and Holly A King for no value. 6 14. At all relevant times material herein, Leonard has served as Chief Executive

7 Officer of Tytan Holdings. 8 15. At all relevant times material herein, Leonard acted as the controlling

9 stockholder of Tytan Holdings. 10 16. Leonard is the majority shareholder (500,000 of the 1,000,000 shares) of the

11 preferred Series A stock of Tytan Holdings. 12 17. At all relevant times material herein, Tytan Intl and Tytan Holdings were

13 headquartered at 5225 Meeker Drive, Kalama, Washington 98625 (the Commercial 14 Property). 15 18. As Chief Executive Officer of Tytan Holdings, Leonard signed and issued

16 Consolidated Financial Statements in 2010, 2011, and 2012, which included statements that 17 Tytan Intl and/or Tytan Holdings owned over 1.8 million dollars in inventory and $230,242 18 in equipment. 19 19. As Chief Executive Officer of Tytan Holdings, Leonard executed each

20 Consolidated Financial Statement and certified that such disclosures did not contain any 21 untrue statement of material fact or omit to state any material fact. 22 20. Beginning in February 2011, Tytan Holdings engaged in a series of exchanges

23 under Rule 504 of Regulation D, as it relates to the Securities Act of 1933 (504 24 Exchanges) in which Tytan Holdings offered and sold its Common Stock to E-Lionhart and 25 Associates, LLC, Fairhills Capital and TJ Management, LLC.
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21.

According to Leonards sworn testimony at 341(a) hearings held in both the

2 Main Case and subsequent 2004 examination in the Main Case held on December 20, 2013, 3 Tytan Holdings received only $400,000 from the 504 Exchanges. 4 22. According to Leonards sworn testimony at 341(a) hearing and the 2004

5 examination, the capital generated from the 504 Exchanges referenced in Paragraph 21 was 6 exclusively used to reduce corporate debt and for the purchase of new inventory. 7 23. According to the 2011 Consolidated Financial Statement filed by Tytan

8 Holdings, it raised approximately $900,000 from the 504 exchanges in 2011 and the funds 9 were used to purchase new inventory, increasing Tytan Holdings and/or Tytan Intls assets 10 by 27.9%, from $1,914,572 in 2011 to $2,447,928. 11 24. According to the Pacific Continental Bank statements subpoenaed by the

12 FDIC, approximately $725,000 from the 504 exchanges was deposited directly into Tytan 13 Holding and Tytan Intl bank accounts. 14 25. According to the Pacific Continental Bank statements, Leonard used a portion

15 of the funds to fund his personal expenses and caused a large portion of the funds to be wired 16 to various trading companies in China. 17 26. According to Leonards sworn testimony at 341(a) hearings and the 2004

18 examination, Tytan Intl stopped operating its business on or around November 7, 2013, the 19 date it filed bankruptcy. 20 27. According to Leonards sworn testimony at the same 341(a) hearings and 2004

21 examination, all remaining assets of Tytan Intl subject to the FDICs security interest are 22 properly accounted for on the Schedules in the Tytan Bankruptcy and are currently stored at 23 the Commercial Property. 24 25
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28.

Leonard has concealed and transferred a portion of the FDICs Collateral to

2 SW Tractors, a business located in Chehalis, Washington and continues to import tractors 3 and related parts from China and conduct business. 4 29. As recently as November 2013 and January 2014, Leonard has imported

5 equipment from China under the name of the Truper Corporation (Truper Corp), an entity 6 owned and operated by Leonard. 7 30. According to Leonards sworn testimony at the 341(a) hearings and 2004

8 examination, Truper Corp has no bank accounts, no assets and does not conduct business. 9 31. Leonard has represented to third parties within the past six months that Truper

10 Corp actively acts as an agent and importer for dealers, including Tytan Intl and Southwest 11 Tractors. 12 32. Leonard has failed to adequately disclose and testified falsely as to assets and

13 liabilities in the Main Case schedules, including without limitation, his ownership of a house 14 subject to a governmental lease near Hermisillo, Mexico, ownership of antique firearms, 15 transactions involving his two daughters, and an alleged security interest granted to China 16 National United Equipment Co., and the value and business operations of Truper Corp. 17 18 19 20 21 1.
CLAIMS FOR RELIEF RELATED TO DENIAL OF DISCHARGE FIRST CLAIM FOR RELIEF 11 U.S.C. 727(a)(2)(A) and (a)(2)(B) (Transfer and Concealment of Assets)

The Plaintiff incorporates the allegations and assertions of fact in Paragraphs

22 1 32 set forth above, as if fully set forth herein. 23 2. Leonard has, with the intent to hinder, delay or defraud, transferred, removed,

24 destroyed or concealed or has permitted to be transferred, removed, destroyed or concealed, 25 property of the Estate within one year before the date of the filing of this petition.
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3.

Within the year prior to filing the Individual Bankruptcy, Leonard has with the

2 intent to hinder, delay or defraud, transferred, removed, destroyed or concealed or has 3 permitted to be transferred, removed, destroyed or concealed his own property and/or 4 property of the Estate. 5 6 7 8 9 1. 4. Because of the foregoing, Leonards discharge should be denied.
SECOND CLAIM FOR RELIEF 11 U.S.C. 727(a)(2)(B) (Transfer and Concealment of Assets)

The Plaintiff incorporates the allegations and assertions of fact in Paragraphs

10 1 32 set forth above, as if fully set forth herein. 11 2. Since the filing of the Main Case, Leonard has with the intent to hinder, delay

12 or defraud his creditors transferred, removed, destroyed or concealed or has permitted to be 13 transferred, removed, destroyed or concealed his own property. 14 15 16 17 18 1. 3. Because of the foregoing, Leonards discharge should be denied.
THIRD CLAIM FOR RELIEF 11 U.S.C. 727(a)(3) (Failure to Preserve Records)

The Plaintiff incorporates the allegations and assertions of fact in Paragraphs

19 1 32 set forth above, as if fully set forth herein. 20

2. Leonard has concealed, destroyed, mutilated, falsified and failed to keep and

21 preserve recorded information, including books, documents, records, and papers, from which to 22 ascertain his true financial condition and business transactions without justification. 23 24 25
COMPLAINT TO DENY DISCHARGE -

3.

Because of the foregoing, Leonards discharge should be denied.

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FOURTH CLAIM FOR RELIEF 11 U.S.C. 727(a)(4) (False Oath)

The Plaintiff incorporates the allegations and assertions of fact in Paragraphs

5 1 32 set forth above, as if fully set forth herein. 6 2. Leonard has knowingly and fraudulently, in or in connection with this

7 proceeding, made false oaths and accounts, including without limitation failure to disclose 8 assets and liabilities on bankruptcy schedules signed under penalty of perjury and false 9 testimony at the 341 (a) hearings and 2004 examination, all of which are material facts that 10 Leonard had a duty to disclose. 11 3. The oaths were made with the specific purpose of perpetrating a fraud on the

12 Court, its creditors and the Plaintiff. 13 14 15 16 17 1. 4. Because of the foregoing, Leonards discharge should be denied.
FIFTH CLAIM FOR RELIEF 11 U.S.C. 727(a)(5) (Failure to Explain Loss or Deficiency)

The Plaintiff incorporates the allegations and assertions of fact in Paragraphs

18 1 32 set forth above, as if fully set forth herein. 19 2. Leonard has failed to explain satisfactorily the loss and deficiency of assets

20 including the loss of assets he had prior to the bankruptcy, the cash or proceeds he had from 21 the sale of stock, and other cash received pre-petition. 22 23 24 25
COMPLAINT TO DENY DISCHARGE -

3.

Because of the foregoing, Leonards discharge should be denied.

WHEREFORE, the Plaintiff prays for the following relief:

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A.

On Plaintiffs First Claim for Relief; Judgment denying Leonards discharge

2 pursuant to 11 U.S.C. 727 (a)(2)(A) and (a)(2)(B). 3

B. On Plaintiffs Second Claim for Relief; Judgment denying Leonards discharge

4 pursuant to 11 U.S.C. 727 (a)(2)(B). 5

C. On Plaintiffs Third Claim for Relief Judgment denying Leonards discharge

6 pursuant to 11 U.S.C. 727(a)(3). 7

D. On Plaintiffs Fourth Claim for Relief Judgment denying Leonards discharge

8 pursuant to 11 U.S.C. 727(a)(4). 9

E. On Plaintiffs Fifth Claim for Relief Judgment denying Leonards discharge

10 pursuant to 11 U.S.C. 727(a)(5). 11 12

F. G. For Plaintiffs costs and disbursements incurred herein. For such further relief as the Court deems just, equitable or appropriate under the

13 circumstances. 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT TO DENY DISCHARGE -

DATED this 20th day of February, 2014.

JORDAN RAMIS, P.C.

By: /s/ Russell D. Garrett Russell D. Garrett, WSBA #18657 Of Attorneys for Chapter 7 Trustee

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