Washington cease and desist order

Curiously, the cease and desist order has not been mentioned in any news reports

In addition to the FTC action, on May 28, the Washington Department of Financial Institutions, Securities Division filed a cease and desist order against Fortuna Alliance, Augie, Libby and their employees and agents. The administrative order to cease and desist from: violations of the anti-fraud section of the Washington Securities Act; offering or selling securities requiring registration; and selling securities requiring the registration of brokers and salespersons. In the conclusions of law in the order, the Securities Division found that: Fortuna "memberships" were actually "an investment contract, an investment of money or other consideration in the risk capital of a venture; or participation in a profit sharing arrangement." The sale of Fortuna "securities" was in violation of the law because Fortuna, Augie and Libby failed to disclose facts, made untrue statements and engaged in fraudulent business practices. According to the cease and desist order, some of the facts that Fortuna failed to disclose included: The collapse of Fortuna's predecessor and prototype, The Whole Earth Alliance. Based on Whatcom County Court documents and the cease and desist order, The Whole Earth Alliance sounds remarkably similar to The Fortuna Alliance. Beginning in 1992, The Whole Earth Alliance also never made it out of the "pre-launch" phase, was promoted with claims of "sophisticated computer systems to serve members" which were supposed to be in operation by June 1, 1992 -- approximately the same date as Libby filed her sovereign citizen papers while fending off the series of property foreclosures. The Whole Earth Alliance appears to have collapsed of its own weight without any assistance from law enforcement or regulators. There is no record in Whatcom Superior Court files of any proceeding against The Whole Earth Alliance other than this one civil lawsuit. The lawsuit brought by two investors in The Whole Earth Alliance who successfully sued for the return of a $36,000 cash payment. According to the plaintiff's complaint, the payment was made with the understanding that terms and conditions would be made shortly thereafter. When this did not occur, they asked for their money back and were refused. The lawsuit was decided in favor of the couple in February, 1993. Augie and Libby were ordered to pay back the $36,000 as well as court costs and attorney's fees. In addition, the summary order states that Fortuna, Augie and Libby misrepresented Augie's claims about his academic background. Neither the Bernard Baruch College nor the Chubb institute were able to provide the Securities Division with any record of Delgado having graduated from either school. Furthermore, the so-called "NPO" (Non-Profit Organization) fund, which was also known as the "Fortuna Alliance Childhelp Charity Fund," did not seem to exist. According to the Securities Division, they could find no trace of such a fund having been established or funded by Fortuna Alliance. Curiously, the cease and desist order has not been mentioned in any news reports. According to a the Washington Attorney General's office of consumer protection in Bellingham, no press release was made available along with the order. This writer attempted to contact the Securities Division, but though voice-mail messages were exchanged, no conversation about the cease and desist order occurred. What is most significant about the administrative order from the Securities Division is that although it is a summary order and Fortuna may request a hearing to defend themselves, a violation of the order would be a criminal offense. The FTC temporary restraining order is only a civil action, although a violation of the order could constitute contempt of court.

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