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Home My WebLink About02-5863NM (2)Stradley, Ronon, Stevens & Young, LLP By: Keith R. Dutill, Esquire Brian P. Seaman, Esquire Identification Nos. 46387 and 91024 35 Valley Stream Parkway Malvern, PA 19355 RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants. Defendant Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY C-) N CIVIL ACTION - L S rrn-- M -o rn NO. 02-5863"'?v x ..1 , s? C)-n ?Q 3 d? jP; ? -4 cn 4 -c MOTION FOR SUMMARY JUDGMENT OF PLAINTIFF, RITE AID CORPORATION Plaintiff, Rite Aid Corporation ("Rite Aid"), by and through its attorneys, Stradley, Ronon, Stevens, and Young, LLP, hereby moves this Court to grant this Motion for Summary Judgment. In support thereof, Rite Aid avers as follows: Parties Rite Aid Corporation is a corporation incorporated in the state of Delaware and has its principal place of business in Camp Hill, Pennsylvania. 2. Defendant, F&S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit, is a Florida corporation with its principal place of business at 2100 West 76`h Street, Suite 510, Hialeah, Florida 33016. 3. Defendant, Federal & State Corporate Advisors, Inc., is a Florida corporation with its principal place of business at 2100 West 76th Street, Suite 510, Hialeah, Florida 33016. 4. Defendant, Brian Eden, was the President and registered agent of Defendants F & S Corporate Advisors, Inc. and Federal & State Corporate Advisors, Inc. Eden is currently a resident of Florida. Defendant, David Koneff, is a former Manager in Rite Aid's Tax Department and is currently a resident of Pennsylvania. 6. Defendant, Daniel Semic, is the former Senior Director of Rite Aid's Tax Department and is currently a resident of Pennsylvania. Factual Background 7. Through a network of affiliated entities, Rite Aid operates retail drugstores throughout much of the United States and buys goods and services in numerous states for use in those stores. (See ¶ 9 of the First Amended Complaint (the "Complaint"), a copy of which is attached to Rite Aid's Memorandum of Law as Exhibit A; see also ¶ 9 of Defendants' Answers to Complaint, copies of which are attached to Rite Aid's Memorandum as Exhibit B, Exhibit C and Exhibit D.)1 8. In purchasing goods and services, Rite Aid is from time to time erroneously charged state sales tax despite the fact that the transactions should have been exempt from such sales tax payment under state law. (See ¶ 4 of the Affidavit of James Comitale, Esq. Exhibit B is Brian Eden's Answer to the Complaint ("Eden Answer"), Exhibit C is David Koneff's Answer to the Complaint ("Koneff Answer"), and Exhibit D is Daniel Semic's Answer to the Complaint ("Semic Answer.") ,IT _ ("Comitale Aff."), which is attached to Rite Aid's Memorandum as Exhibit E; see also Eden Answer, at ¶ 10.) 9. In order to recoup these funds, Rite Aid occasionally employs the services of outside firms which audit the sales tax payments paid by Rite Aid to individual states, identify overpayments and obtain refunds for Rite Aid from the state taxing authorities. (See Comitale Aff., at ¶ 5.) Most of these outside firms are then paid commissions based upon a percentage of the moneys actually refunded to Rite Aid. (Id.) 10. From at least 1996 until 2000, Defendant, David Koneff, held the position of Manager in Rite Aid's Tax Department, and Defendant, Daniel Semic, was a Senior Director in that same department. (See Comitale Aff., at ¶ 8; see also Eden Answer, at ¶ 11.) These individuals managed all aspects of the relationship with these outside firms, including review of all check requests from these outside tax consulting firms and verification of refunds. (See Comitale Aff, at ¶¶ 8, 9.) 11. In or about January 1996, Eden, through his company, New York Sales Tax Credit2 ("NYSTC"), began submitting requests for commission payment to Rite Aid, falsely claiming that NYSTC had obtained sales tax refunds from New York State on Rite Aid's behalf. (See Comitale Aff., at ¶ 11; see also Exhibit F to the Memorandum, which is a copy of all check requests submitted to Rite Aid for payment to NYSTC.) 12. These requests were received at Rite Aid by Koneff and/or Semic who approved the payments without verifying the validity of the requests (as required) and directed that a check be issued by Rite Aid to NYSTC in the amount of the alleged commission. (See 2 New York Sales Tax Credit is a d/b/a of defendant F & S. ' Comitale Aff., at ¶ 13; see also Exhibit F, at pg. 1; see Exhibit G, which is a copy of all checks issued by Rite Aid to NYSTC.) 13. This entire process was a fraud, however, and at no time had Rite Aid ever received any refund (or other benefit of any kind) as a result of actions taken by NYSTC. (See Comitale Af£, at ¶ 23-24.) 14. This fraud continued on a nearly monthly basis between 1996 and 2000. (Id. at ¶ 12, 15.) During this time, NYSTC submitted at least forty-four requests for payment of commissions for tax recoupment, even though they had never performed any tax related services for Rite Aid. (Id. at ¶¶ 11-12; see also Exhibit F.) 15. Each and every one of these requests were received at Rite Aid by Koneff and Semic who, despite the fact that the commission had never been earned, approved these payments and directed that checks be issued by Rite Aid to NYSTC. (See Comitale Aff., at ¶ 13; see also Exhibit G.) 16. The total sum of checks written to NYSTC by Rite Aid was $6,414,789.80, much of which Defendants, Koneff and Semic, admitting they received from F&S and NYSTC and deposited into their personal bank accounts. (See Exhibit G; see also Koneff Answer and Semic Answer, both at ¶ 36.) 17. At no time during this period was Rite Aid aware of the fraud being perpetrated by Defendants and the millions of dollars in checks that were being fraudulently approved by Koneff and Semic and issued to NYSTC. (See Comitale Aff., at ¶ 16.) Rite Aid never consented to these payments being made. (Id.) In fact, during this entire period, Defendants concealed their activities in all ways from Rite Aid. (Id.) 7 18. In 2005, the Office of the United States Attorney filed two government civil forfeiture actions in the District Court for the Middle District of Pennsylvania against Koneff (case number 1:05-CV-1101) and Semic (case number 1:05-CV-1102) for their acts in connection with the fraud described above. (See Exhibit H and Exhibit I to Rite Aid's Memorandum of Law). 19. Koneff and Semic settled these civil forfeiture actions in 2008 and agreed to forfeit more than $1 million in cash as well as several pieces of real property in Huntingdon County, PA, York County, PA, and Hampshire County, WV, which were subsequently sold by the U.S. Sheriff's Department. 3 20. In the Settlement Agreements into which Koneff and Semic entered with the United States Attorney, these Defendants agreed and verified that the property forfeited "constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. § 1341 [regarding frauds and swindles] or traceable to property involved in such transaction or attempted transactions or constituting or derived from proceeds traceable to the `specified unlawful activities' or mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses." (Id.) 21. Soon after Koneff and Semic entered into these Agreements, the Middle District Court granted two Petitions for Remittance filed by Rite Aid and ordered that Rite Aid would receive all forfeited and seized assets up to the total amount of $6,314,789.90. See Exhibit L to Rite Aid's Memorandum. 3 The Settlement Agreements in each matter are attached hereto as Exhibit J (Koneff) and Exhibit K (Semic). 22. As a result, Rite Aid recovered $1,870,144.21 from Koneff and Semic. Rite Aid, however, still records losses in excess of $4,444,645.59 and is entitled to damages in that amount. Argument 23. In its Complaint, Rite Aid pleads four causes of action against Defendants: (1) fraud; (2) conversion; (3) misappropriation of funds; and (4) civil conspiracy.4 (See Complaint.) Each of these counts is based upon the same foundation of material facts, specifically that Defendants Koneff and Semic worked together with Defendant, Brian Eden, to defraud Rite Aid of millions of dollars using a seemingly simple plan. This plan is described in detail above. (See ¶¶ 5-15 of Plaintiff's Motion.) 24. As described in detail in the attached Memorandum of Law, Rite Aid has established all necessary facts to support the elements of these four causes of action against Defendants through documentary evidence and affidavits, all of which are attached hereto. These facts (all of which are currently undisputed) are as follows: • Between January 1996 and December 1999, Eden (through his company, NYSTC) submitted at least forty-four requests for payment to Rite Aid (See Comitale Aff., at 12; see also Exhibit F); • The total sum of these forty-four check requests was $6,414,789.80 (See Exhibit F); • NYSTC submitted these requests to recover commissions it claims it earned as a result of sales tax refunds it obtained from New York State on Rite Aid's behalf (See Comitale Af£, at ¶¶ 11, 22-23); • These check requests were received at Rite Aid by Koneff and/or Semic who would approve the payments, even though they knew no commission had been earned, and direct that a check be issued 4 Rite Aid also raised a claim for fraudulent misrepresentation against Daniel Semic only, but that Court is not at issue here. by Rite Aid to NYSTC in the amount of the alleged commission (See Comitale Aff, at ¶ 13; see also Exhibit F and Exhibit G); • Each of the check requests were designated for return to and for final review by Defendant, David Koneff. (See Exhibit F); • Rite Aid was wholly unaware of the fraud and justifiably relied on the representation of its employees, Koneff and Semic. (See, Comitale Aff, at ¶¶ 10, 16); • Rite Aid issued forty-four checks to NYSTC between March 1996 and December 1999 at the direction and approval of Defendants, David Koneff and Daniel Semic (See Exhibit G); • The total sum of these forty-four checks was $6,414,789.80 (Id.); • Rite Aid at no time received any tax refunds or recoupments, or benefits from New York State as a result of any actions taken by Eden, F&S, and/or NYSTC. In fact, at no time did Rite Aid receive any benefit of any kind as the result of actions taken by these Defendants (See Comitale Aff, at ¶ 22, 23); Defendants concealed their activities from Rite Aid, which was at all times unaware of their actions. (Id. at ¶ 16); • Koneff and Semic received funds from F&S (d/b/a NYSTC) and placed those funds into their personal bank accounts that they maintained with their wives (Susan Koneff and Sharon Semic, respectively) (see Exhibit C and Exhibit D, both at ¶ 36). 25. These facts are wholly undisputed. Defendants have provided no evidence of any kind to support their blanket denials of the most significant allegations made against them and have never proffered evidence that would create a genuine issue of material fact in regards to any of the causes of action in Rite Aid's Complaint. 26. In fact, even though Rite Aid filed its Complaint more than eight years ago, the only "responses" ever provided by Defendants to "refute" these significant facts were blanket denials devoid of support of any kind and/or invocations of the Fifth Amendment. 27. Neither of these responses - if they can be classified as such - provide a basis for this Court to deny Rite Aid's motion for summary judgment as to Rite Aid's causes of action for fraud, conversion, misappropriation of funds, and civil conspiracy. Rule 1035.3(a) specifically makes clear that such blanket denials cannot serve as the basis to deny summary judgment. 28. Rite Aid is further entitled to summary judgment in that Defendants Koneff and Semic have invoked the protections of the Fifth Amendment and refuse to respond to the substantive allegations that they misappropriated funds and entered into a civil conspiracy to defraud Rite Aid of more than $6.4 million. (See ¶¶ 39, 42, & 43 to both Exhibit C and Exhibit D.) 29. It is abundantly clear why Defendants Koneff and Semic have asserted this privilege in response to these significant allegations made against them - because they knew they had misappropriated funds and because admitting that they did so may have opened them to civil liability or to criminal charges. 30. However, there is no justification for this privilege at this time. There are no criminal charges pending nor can any be filed in the future. In fact, the statute of limitations for any and all possible criminal charges against the Defendants expired (at the very latest) in 2007. See 42 Pa. Cons. Stat. Ann. § 5552 (2011). 31. In this context - a civil matter with no criminal charges pending or threatened - Defendants' invocation of this privilege has one clear consequence; for this Court to draw any adverse inference which is reasonable from the assertion of the privilege, including admission of the averments at issue.5 See Mitchell v. United States, 526 U.S. 314, 328 (1999). 5 The limitation on these sanctions is almost exclusively linked to the possibility of sanctions in a related criminal matter. Id. However, at no time were Defendants Koneff and Semic ever charged criminally with any crime in relation to its misappropriation of Rite Aid's funds. 32. Further, because the facts underlying the averments to which Koneff and Semic raised the Fifth Amendment privilege are squarely within the Defendants' personal knowledge, this Court may actually ignore any evidence proffered by Defendants on the issues in question, even if they do create an issue of genuine fact. 33. As described in detail in the attached Memorandum of Law, it is undisputed that Rite Aid has established evidence in support of its causes of action for fraud, conversion, misappropriation of funds, and civil conspiracy. It is similarly undisputed that Defendants have either refused to respond to the allegations against them or simply failed to produce evidence that would create an issue of material fact. WHEREFORE, Rite Aid demands judgment against Defendants, David Koneff, Daniel Semic, Brian Eden, F&S Corporate Advisors, Inc. (d/b/a New York Sales Tax Credit) and Federal & State Corporate Advisors, Inc. in the amount of $4,444,645.59, as well any applicable interest, costs, attorneys fees, and such other relief as the Court deems just and proper. Aith Dutill, Esquire Brian P. Seaman, Esquire Stradley Ronon Stevens & Young, LLP 35 Valley Stream Parkway Malvern, PA 19355 (610) 640-8500 Attorneys for Plaintiff, Dated: December 23, 2011 Rite Aid Corporation Stradley, Ronon, Stevens & Young, LLP By: Keith R. Dutill, Esquire Brian P. Seaman, Esquire Identification Nos. 46387 and 91024 35 Valley Stream Parkway Malvern, PA 19355 RITE AID CORPORATION, Attorneys for Plaintiff Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND V. COUNTY DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants. CIVIL ACTION - LAW NO. 02-5863 Defendant. MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT Plaintiff, Rite Aid Corporation ("Rite Aid"), by and through its attorneys, Stradley, Ronon, Stevens, and Young, LLP, hereby submits this Memorandum of Law in support of its Motion for Summary Judgment against Defendants, David Koneff, Daniel Semic, Brian Eden, F&S Corporate Advisors (d/b/a New York Sales Tax Credit), and Federal & State Corporate Advisors (together, "Defendants.") In support thereof, Rite Aid avers as follows: 1. MATTER BEFORE THE COURT Before this Court is Rite Aid's Motion for Summary Judgment on Rite Aid's claims for fraud, conversion, misappropriation of funds, and civil conspiracy brought against Defendants. II. STATEMENT OF QUESTION INVOLVED Question Involved: Is Rite Aid entitled to summary judgment on its causes of action for fraud, conversion, misappropriation of funds, and civil conspiracy when there exists no genuine issue of material fact regarding any of these counts, where Defendants have produced no evidence in support of their alleged defenses, and where Defendants Koneff and Semic have invoked the protections of the Fifth Amendment to escape providing responses to averments made against them? Sunested Answer: Yes. IV. FACTUAL BACKGROUND Through a network of affiliated entities, Rite Aid operates retail drugstores throughout much of the United States and buys goods and services in numerous states for use in those stores. (See ¶ 9 of the First Amended Complaint (the "Complaint"), a copy of which is attached hereto as Exhibit A; see also ¶ 9 of Defendants' Answers to Complaint, copies of which are attached hereto as Exhibit B, Exhibit C and Exhibit D.)t In purchasing goods and services, Rite Aid is from time to time erroneously charged state sales tax despite the fact that the transactions should have been exempt from such sales tax payment under state law.' (See ¶ 4 of the Affidavit of James Comitale, Esq. ("Comitale Aff."), which is attached hereto as Exhibit E; see also Eden Answer, at ¶ 10.) In order to recoup these funds, Rite Aid occasionally employs the services of outside firms which audit the sales tax payments paid by Rite Aid to individual states, identify overpayments, and obtain refunds for Rite Aid from the state taxing authorities. (See Comitale ' Exhibit B is Brian Eden's Answer to the Complaint ("Eden Answer"), Exhibit C is David Konetf's Answer to the Complaint ("Koneff Answer"), and Exhibit D is Daniel Semic's Answer to the Complaint ("Semic Answer.") 2 Rite Aid receives this exemption because it resells the goods and services, and the sales tax is paid by the consumer during that resale. (See Comitale Aff., at ¶ 4.) Aff., at ¶ 5.) Most of these outside firms are then paid commissions based upon a percentage of the funds actually refunded to Rite Aid. (Id.) Rite Aid's Tax Department manages all aspects of the relationship with these outside firms, including communication with the firms and verification of refunds made to Rite Aid by individual states. (Id. at ¶ 6.) Rite Aid's Tax Department also ensures that these firms are entitled to the commissions requested. (Id. at ¶ 7.) From at least 1996 until 2000, Defendant, David Koneff, held the position of Manager in Rite Aid's Tax Department (See Comitale Af£, at ¶ 8; see also Eden Answer, at ¶ 11.) Defendant, Daniel Semic, held the position of Senior Director in that same department. (Id.) These Defendants, as a manager and a director within Rite Aid's Tax Department, were given the authority to review all check requests from these outside tax consulting firms and to approve check payments to them. (See Comitale Af£, at ¶¶ 8, 9.) Put simply, both Koneff and Semic were intimately familiar with the taxation and refund procedures described above as a function of their leadership positions within the Rite Aid Tax Department. (See Comitale Aff., at ¶ 10.) In or about January 1996, Eden, through his company, New York Sales Tax Credit3 ("NYSTC"), began submitting requests for commission payment to Rite Aid, falsely claiming that NYSTC had obtained sales tax refunds from New York State on Rite Aid's behalf. (See Comitale Aff., at ¶ 11; see also Exhibit F, which is a copy of all check requests submitted to Rite Aid for payment to NYSTC) These requests were received at Rite Aid by Koneff and/or Semic who approved the payments without verifying the validity of the requests (as required) and directed that a check be issued by Rite Aid to NYSTC in the amount of the alleged commission. (See Comitale Aff., at 113; see also Exhibit F, at pg. 1 and Exhibit G, which is a 3 New York Sales Tax Credit is a d/b/a of defendant F & S. m copy of all checks issued by Rite Aid to NYSTC.) This entire process was a fraud, however, and at no time had Rite Aid ever received any refund (or other benefit of any kind) as a result of actions taken by NYSTC. (See Comitale Aff., at ¶ 23, 24.) This fraud continued for nearly four years between January 1996 and December 1999. (Id. at ¶¶ 12, 15.) During this time, NYSTC submitted at least forty-four requests for payment of commissions for tax recoupment, even though it had never performed any tax related services for Rite Aid. (Id. at IT 11, 12; see also Exhibit F.) Each and every one of these requests was received at Rite Aid by Koneff and Semic who, despite the fact that the commission had never been earned, approved these payments and directed that checks be issued by Rite Aid to NYSTC. (See Comitale Aff., at ¶ 13; see also Exhibit G.) The total sum of checks written to NYSTC by Rite Aid exceeded $6.4 million, much of which Defendants, Koneff and Semic, admit they received from F&S and NYSTC and deposited into their personal bank accounts. (See Exhibit G; see also Koneff Answer and Semic Answer, both at ¶ 36.) At no time during this period was Rite Aid aware of the fraud being perpetrated by the Defendants and the millions of dollars in checks that were being fraudulently approved by Koneff and Semic and issued to NYSTC. (See Comitale Af£, at ¶ 16.) Rite Aid never consented to these payments being made. (Id.) In fact, during this entire period, Defendants concealed their activities in all ways from Rite Aid. (Id.) In the Fall of 2002, Rite Aid began investigating whether David Koneff had been involved in a. kick-back scheme with one of Rite Aid's vendors. (See Comitale Aff., at ¶ 17.) During this internal investigation, Rite Aid discovered that Mr. Koneff had purchased large parcels of real estate and a large home, all with cash. (Id.) Around the same time, Rite Aid was contacted by the FBI in a separate investigation as to whether Rite Aid had ever made payments M to various entities, including NYSTC and another called Gates Leasing. (Id. at ¶ 18.) Rite Aid cooperated with this investigation and produced to the FBI many relevant documents, including all checks paid by Rite Aid to NYSTC. (Id.) During the internal investigation of the kick-back scheme, Rite Aid learned that Koneff had a financial interest in Gates Leasing, an entity involved in the FBI Investigation. (Id. at ¶ 19.) This discovery led to Rite Aid expanding its internal investigation. to determine the relationship, if any, between Mr. Koneff and all of the entities at issue in the FBI Investigation (including NYSTC). (Id.) As a result, Rite Aid discovered that Koneff and Semic had directed Rite Aid to make payments of more than $6 million to NYSTC, that Koneff had approved each of these requests, and that on each request was the written instruction that the check be returned to Koneff. (Id. at ¶ 20.) More significantly, Rite Aid discovered that there were no documents or other substantive support to justify the payments to NYSTC. (Id. at ¶ 21.) In fact, the investigations conducted by Rite Aid and by the FBI unearthed that at no time did Rite Aid receive any tax refunds or recoupments of aM sort from New York State as a result of any actions taken NYSTC, Brian Eden, and/or Federal & State Corporate Advisors. (Id. at ¶ 22.) It became abundantly clear at that time that Defendants had engaged in a fraud to misappropriate more than $6,414,789.80 and that Rite Aid never received any benefit of any kind as a result of any actions taken by any Defendant. (Id. at ¶¶ 22-24.) Rite Aid filed this Action promptly in December 2002. Rite Aid engaged in significant motion practice and discovery from that time until early 2005 when Defendants Koneff and Semic finally filed answers to Rite Aid's Complaint. Around that same time, the Office of the United States Attorney filed two government civil forfeiture actions in the District Court for the Middle District of Pennsylvania against Koneff (case number 1:05-CV-1101) and T11' Semic (case number 1:05-CV-1102) for their acts in connection with the fraud described above.4 The civil forfeiture actions were ongoing for more than five years, during which time Rite Aid and its representatives, officers and employees worked together with the United States Attorney to fully prosecute the action against Koneff and Semic. During this time, Rite Aid did not actively pursue this Action as it would have created a distinct duplication of efforts to the same end. Koneff and Semic initially settled these civil forfeiture actions in 2008.5 Together, these Defendants agreed to forfeit more than $1 million in cash as well as several pieces of real property in Huntingdon County, PA, York County, PA, and Hampshire County, WV, which were subsequently sold by the U.S. Sheriffs Department. (See Exhibits J & K.) In these Settlement Agreements, Koneff and Semic agreed and verified that the property forfeited "constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. § 1341 [regarding frauds and swindles] or traceable to property involved in such transaction or attempted transactions or constituting or derived from proceeds traceable to the `specified unlawful activities' or mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses." (Id.) Throughout 2009 and 2010, the US Attorney and Sheriffs Department sold the real property owned by Koneff and Semic (which were located in Huntingdon County, PA, York County, PA, and Hampshire County, WV) for several hundred thousand dollars.6 4 The Verified Complaints of Forfeiture In Rem in each of these cases are attached hereto as Exhibit H and Exhibit I. 5 The Settlement Agreement in each matter is attached hereto as Exhibit J (Koneff) and Exhibit K (Semic). The Sheriff sold the final piece of real estate at issue (in Hampshire County, WV) in the fall of 2010. Soon after, the Middle District Court granted two Petitions for Remittance filed by Rite Aid and ordered that Rite Aid would receive all forfeited and seized assets up to the total amount of $6,314,789.90. See Exhibit L. As a result, Rite Aid recovered $1,870,144.21 from Koneff and Semic. Rite Aid, however, still records losses in excess of $4,444,645.59 and is entitled to damages in that amount. IV. ARGUMENT A. Legal Standard for Summary Jud ment Under Pennsylvania law, summary judgment is appropriate whenever the pleadings, discovery, and admissions on file, together with any affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See e.g,. McConnaug_hey v. Building Component, Inc., 637 A.2d 1331, 1333 (Pa. 1993). Pennsylvania Rule of Civil Procedure 1035.3 states when summary judgment is appropriate: After the relevant pleadings are closed ... any party may move for summary judgment in whole or in part as a matter of law: (1) whenever there are no genuine issues of any material fact as to a necessary element of the cause of action ... or (2) if, after the completion of discovery relevant to the motion, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. The Pennsylvania Supreme Court has held that a "non-moving party must adduce sufficient evidence on an issue essential to his case on which he bears the burden of proof such that a jury could return a verdict in his favor." Ertel v. Patriot News Co., 674 A.2d 1038, 1042 (Pa. 1996). "Failure to adduce this evidence establishes that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id. at 1042. Simply, to defeat a motion for summary judgment, the non-moving party must come forward with evidence showing the existence of facts central to the cause of action. Rule 1035.3 again provides in pertinent part: (a) The adverse party may not rest upon mere allegations or denials of the pleading but must file a response within thirty days after service of the motion identifying (1) one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion or from a challenge to the credibility of one or more witnesses testifying in support of the motion or (2) evidence in the record establishing the facts essential to the cause of action or defense which the motion cites as not having been produced. Id. In short, "where a motion for summary judgment has been made and properly supported, the parties seeking to avoid imposition of summary judgment must show by specific facts ...that there is a genuine issue for trial." Marks v. Tasman, 589 A.2d 205 (Pa. Super. Ct. 1991). B. Defendants Have Failed In All Ways To Provide Evidence Of Any Kind To Refute The Allegations Made Against Them. In the Complaint, Rite Aid pleads four causes of action against Defendants: (1) fraud; (2) conversion; (3) misappropriation of funds; and (4) civil conspiracy. (See Complaint.) Each of these counts is based upon the same foundation of material facts, essentially that Defendants Koneff and Semic worked together with Defendant, Brian Eden, to defraud Rite Aid of millions of dollars using a seemingly simple plan. As described above, that plan involved NYSTC (and Eden) submitting fraudulent check requests to Rite Aid for commissions they never earned and for work they never performed. (See Exhibit F.) Koneff and Semic would then approve these check requests, even though the services at issue were never provided, even though NYSTC never obtained any refunds, and even though Rite Aid received no benefit, financial or otherwise, as a result of NYSTC's effort. (See Comitale Aff., at IT 13, 22-23.) As a result of this fraudulent scheme, Rite Aid paid out more than $6.4 million in commissions that Rite Aid also raised a claim for fraudulent misrepresentation against Daniel Semic only, but that Count is not at issue here. were never earned, all of which eventually ended up in the Defendants' bank accounts. (See Exhibit G.) Rite Aid has established all necessary facts to support these causes of actions against Defendants through documentary evidence and affidavits. Defendants, on the other hand, have at no time disputed these facts as presented by Rite Aid and have provided no evidence of M kind to support their blanket denials of the most significant allegations made against them. Specifically, all of the following factual averments are undisputed: • Between January 1996 and December 1999, Eden (through his company, NYSTC) submitted at least forty-four requests for payment to Rite Aid (See Comitale Aff., at ¶ 12; see also Exhibit F); • The total sum of these forty-four check requests was $6,414,789.80 (See Exhibit F); • NYSTC submitted these requests to recover commissions it claims it earned as a result of sales tax refunds it obtained from New York State on Rite Aid's behalf, even though no refund had ever been recovered (See Comitale Aff., at ¶¶ 11, 22-23); • These check requests were received at Rite Aid by Koneff and/or Semic who would approve the payments, even though they knew no commission had been earned, and direct that a check be issued by Rite Aid to NYSTC in the amount of the alleged commission (See Comitale Aff., at ¶ 13; see also Exhibit F and Exhibit G); • Each of the checks were designated for return to and for final review by Defendant, David Koneff. (See Exhibit F); • Rite Aid was wholly unaware of the fraud and justifiably relied on the representation of its employees, Koneff and Semic. (See, Comitale Aff., at ¶¶ 10, 16); • Rite Aid issued forty-four checks to NYSTC between March 1996 and December 1999 at the direction and approval of Defendants, David Koneff and Daniel Semic (See Exhibit G); • The total sum of these forty-four checks was $6,414,789.80 (Id.); • Rite Aid at no time received M tax refunds, recoupments, or benefits from New York State as a result of any actions taken by Eden, F&S, and/or NYSTC. In fact, at no time did Rite Aid receive any benefit of any kind as the result of actions taken by these Defendants (See Comitale Aff., at T¶ 22-23); • Defendants concealed their activities from Rite Aid, which was at all times unaware of their actions. (Id. at ¶ 16); • Koneff and Semic admit they received funds from F&S (d/b/a NYSTC) and placed those funds into their personal bank accounts that they maintained with their wives (Susan Koneff and Sharon Semic, respectively) (see Exhibit C and Exhibit D, both at ¶ 36). At no time have Defendants refuted these facts established by Rite Aid. In fact, even though Rite Aid filed its Complaint more than eight years ago, the only "responses" ever provided by Defendants to "refute" these significant facts were blanket denials devoid of support of any kind and/or invocations of the Fifth Amendment. Neither of these responses - if they can be classified as such - provide a basis for this Court to deny Rite Aid's motion for summary judgment. C. There is No Genuine Issue of Material Fact In Regards To Rite Aid's Cause of Action For Fraud Against Defendants To establish a cause of action for fraud against Defendants, Rite Aid must prove only the following elements: (1) misrepresentation by Defendants of a material fact; (2) scienter; (3) intention by Defendants to induce action; (4) justifiable reliance by Rite Aid upon the misrepresentation; and (5) damage to Rite Aid as a proximate result. See, e--- Colaizzi v. Beck, 895 A.2d 36, 39 (Pa. Super. Ct. 2006). As made clear below, Rite Aid has established each of the above elements with documentary evidence and affidavit testimony. Defendants, on the other hand, have produced no evidence of any kind that would provide a defense to this cause of action and have been unable to establish the existence of a genuine issue of material fact, since none exists. For these reasons, Rite Aid is entitled to summary judgment against Defendants. As to the first element - misrepresentation of a material fact - it is undisputed that each of the Defendants misrepresented at least one material fact in perpetrating the fraud against Rite Aid. First, Eden, through his company, F&S (d/b/a NYSTC ), misrepresented that NYSTC had obtained sales tax refunds from New York State on Rite Aid's behalf (when it had never done so) and submitted at least forty-four requests for payment of commissions on those refunds. (See Comitale Aff., at ¶¶ 9, 10, 13; see also Exhibit F.) Defendants Koneff and Semic similarly misrepresented to Rite Aid time and time again that NYSTC was entitled to more than $6 million in commissions and approved dozens of fraudulent check requests, even though NYSTC had not earned those commissions. (See Comitale Aff., at ¶ 13; see also Exhibit F and Exhibit G.) At no time has any Defendant produced even a scintilla of evidence that would refute that they made these misrepresentations. In fact, despite requests for production that were directed specifically to whether Defendants made these very misrepresentations and the production of several thousand pages of documents during the course of discovery, there exists not even a shred of evidence that would refute the conclusion that Defendants misrepresented the work performed (or more accurately, not performed) by NYSTC. Even Defendants' denials of these averments in their Answers to the Complaint are completely devoid of any substance. There is no material fact at issue in regard to this element. As to the second and third elements - scienter and intention to induce action - there is again no doubt that Defendants made the misrepresentations described above intentionally and for the purpose of inducing Rite Aid to pay unearned commissions to NYSTC. The applicable evidence is incredibly clear and - more importantly - uncontradicted. Eden and F&S issued check requests for work that was never performed with the intention that checks would be issued to them by Rite Aid. (Id. at ¶¶ 12-15; see also Exhibit F). Similarly, Koneff and Semic approved these check requests, even though NYSTC had obtained no refunds and even though Rite Aid had received no benefit from NYSTC or F&S. See Exhibit F and Exhibit G). Koneff and Semic approved these requests with the knowledge and intent that Rite Aid would issue checks to NYSTC and that much of the money paid by Rite Aid would eventually end up in their own pockets.8 (See Exhibit G). Defendants have produced no evidence whatsoever to support any possible defense to Rite Aid's claims that they acted intentionally to induce action. In fact, Defendants' only response to these specific allegations was to deny them without any further explanation. Rule 1035.3(a) makes clear that such denials cannot serve as the basis to deny summary judgment. As to the final two elements -justifiable reliance and proximate damages -there is clearly no material issue of fact. As described above, between January 1996 and December 1999, Defendants concealed their activities from Rite Aid, which was unaware of their actions and unaware of the fraud being perpetrated. (See Comitale Af£, at ¶ 16.) Both Koneff and Semic were trusted members of the Rite Aid Tax Department, and Rite Aid was justified in relying upon the representations that NYSTC was entitled to commissions for services rendered. (Id. at T 8.) The cost of that justifiable reliance is clear - loss of more than $6 million. (See Exhibits F and G). There is no issue of fact, let alone a genuine issue of material fact, that Rite Aid justifiably relied on the representations made by Defendants and suffered millions of dollars of damages as a direct result. 8 In fact, both Koneff and Semic admit that they deposited funds from F&S directly into their personal bank accounts. (See 136 of both Exhibit C and Exhibit D.) It is significant to note that in 2008, both Koneff and Semic admitted in writing to the United States Government that they received at least $1.8 million in funds related to the fraud described above. Specifically, when Koneff and Semic settled the government civil forfeiture actions against them (case numbers 1:05-CV-1101 and 1:05-CV-1102), they agreed to forfeit more than $1 million in cash as well as several pieces of real property in Pennsylvania and West Virginia.9 In these Settlement Agreements, Koneff and Semic both explicitly agreed and verified that the cash and real property they voluntarily forfeited: constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. § 1341 [regarding frauds and swindles] or traceable to property involved in such transaction or attempted transactions or constituting or derived from proceeds traceable to the `specified unlawful activities' or mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses." (Id.) Both Koneff and Semic have admitted to engaging in the fraud described above and to receiving millions of dollars as a result. (Id.) All evidence of record makes crystal clear that Defendants engaged in the fraud described in Rite Aid's Complaint. Rite Aid requests that this Court enter summary judgment in its favor and against Defendants on its cause of action for fraud. D. There is No Genuine Issue of Material Fact In Regards To Rite Aid's Cause of Action For Conversion. There is similarly no genuine issue of material fact in regards to the claim that Defendants converted Rite Aid's funds for their own use. At no time have Defendants proffered any evidence to defend against Rite Aid's claim. In fact, Defendants Koneff and Semic have 9 See Exhibit J (matter 1:05-CV-1101) and Exhibit K (matter 1:05-CV-1102). admitted that they received funds from F&S - the Defendant who requested, received, and cashed the checks paid by Rite Aid - and deposited these funds into their personal bank accounts. (see ¶ 36 of both Exhibit C and Exhibit D.) For these reasons - and the reasons described below - Rite Aid is entitled to summary judgment on this cause of action. Conversion is the intentional deprivation of another's right of property in, or use or possession of, a chattel without the owner's consent and without lawful justification." 10 Shonberger v. Oswell, 530 A.2d 112, 114 (Pa. Super. Ct. 1987); citin Stevenson v. Economy Bank of Ambridge, 197 A.2d 721, 726 (Pa. 1964). Rite Aid has established all necessary elements of this tort. As described above, Rite Aid has produced evidence that Defendants Eden and F&S submitted forty-four requests for payment, even though they never performed any services for Rite Aid or recovered any refunds for Rite Aid. (See Exhibit F.) Rite Aid similarly established that Defendants Koneff and Semic approved those fraudulent requests and ordered that Rite Aid make payments that would - in great part - end up in their own pockets. (See Exhibit G; see also ¶ 36 of both Exhibit C and Exhibit D.) In doing so, these Defendants clearly intended to deprive Rite Aid of more than $6 million without their consent. (See Comitale Aff., at ¶¶ 11-16) At no time did Rite Aid consent to the actions taken by Defendants. (Id. at ¶ 16.) There is no issue of material fact in regard to this cause of action. At no time have Defendants produced evidence of any kind to suggest that Rite Aid consented to millions of dollars in payments being made to a company who was, in reality, performing no services for Rite Aid. Defendants have similarly failed to proffer evidence that they had a lawful or unintentional justification for their actions. In fact, they have provided no explanation whatsoever and have relied solely on blanket denials completely devoid of evidentiary support. Specifically, both Koneff and Semic have admitted they have no documentary evidence to support their defensesI t and Defendant, Brian Eden simply refused to respond when Plaintiff requested production of documents that supported his defenses. 12 Defendants' discovery responses have never been amended, and they have produced no documents that would create a genuine issue of material fact in regard to this cause of action. To the contrary, all evidence of record supports the notion that Defendants acted with the specific intent to deprive Rite Aid of millions of dollars. For this reason, Rite Aid is entitled to summary judgment on its claim for conversion. E. There is No Genuine Issue of Material Fact In Regards To Rite Aid's Cause of Action For Misappropriation of Funds There is no issue of material fact in regard to Rite Aid's cause of action for misappropriation of funds. As described above in regard to the claim for conversion, Rite Aid has established that Defendants misappropriated and used for their own purposes funds which were paid to F&S under false pretenses. Defendants have failed in all ways to produce evidence that would provide a defense to this claim and have done nothing more than make unsupported denials of the allegations against them. In fact, Defendants have in essence admitted to misappropriating these funds when they admitted that they received funds directly from F&S (the sham company created to receive the fraudulent payments approved by Koneff and Semic) 10 Pennsylvania law is clear that "[m]oney maybe the subject of conversion." See Shonberger, 530 A.2d at 114 (citing Pearl Assurance Co. v. National Ins. Agency, 30 A.2d 333, 337 (Pa. Super. Ct. 1943). " See Request No. 4 of the Requests for Production of Defendants. Plaintiff's Requests for Production directed to David Koneff (and Koneff s Response thereto) are attached as Exhibits M and N. Plaintiff's Requests for Production directed to Daniel Semic (and Semic's Responses thereto) are attached as Exhibits O and P. 1z Brian Eden still has not responded to discovery from Rite Aid and has produced no documents in support of his defenses (or otherwise). and deposited these funds into their personal accounts. (See ¶ 36 of both Exhibit C and Exhibit D.) Defendants Koneff and Semic have refused to respond to the allegations against them. Instead, when asked to admit or deny that they "misappropriated and used for their own purpose funds which were given to them under false pretenses," these Defendants invoked the protections of the Fifth Amendment. (See ¶ 39 to both Exhibit C and Exhibit D.) However, there is no justification for this privilege at this time. There are no criminal charges pending nor can any be filed in the future. Accordingly, this Court may draw an adverse inference against Koneff and Semic and deem the averments admitted. The statute of limitations for any and all possible criminal charges against the Defendants expired (at the very latest) in January 2007, almost four years ago. See 42 Pa. Cons. Stat. Ann. § 5552 (2011). Specifically, the statutes of limitations for any criminal charges stemming from the actions described above range from two to five years from the date of commission of those acts. Id. at § 5552(a)-(b). Since Defendants admittedly ended their fraudulent scheme sometime in December 1999, the statute of limitations would have run in December 2004 (at the latest). Even if a five year statute began when the scheme was discovered by Rite Aid and the FBI in the Fall of 2002, the statute of limitations will still have expired in the Fall of 2007, more than four years ago. In this context - a civil matter with no criminal charges pending, threatened, or possible - Defendants' continued and improper invocation of this privilege enables the Court to take an adverse inference which is reasonable from the assertion of the privilege, including admission of the averments at issue. See Mitchell v. United States, 526 U.S. 314, 328 (1999). There is currently no possible excuse for Koneff and Semic's continued invocation of the Fifth Amendment privilege. Despite the statutes of limitations on any potential criminal charges running at least four years ago, neither of these Defendants has ever amended his answer or provided a substantive response to the averments made by Rite Aid. They are now simply hiding behind this privilege to avoid admitting what they undoubtedly know to be true. Further, because the facts underlying the averment at issue - whether they "misappropriated and used for their own purpose funds which were given to them under false pretenses" - are squarely within the Defendants' personal knowledge, this Court may actually ignore any evidence proffered in the future by Defendants on the issues in question, even if they do create an issue of genuine fact. See, e.g., Commonwealth v. $23,320.00 U.S. Currency, 733 A.2d 693, 697-98 (Pa. Commw. Ct. 1999) (where a party fails to respond to facts within that party's presumed knowledge, invocation of the Fifth Amendment can erase the equivocal nature of other evidence relating to a disputed fact). There is no such issue here - since Defendants have produced no such evidence - and an adverse inference must be drawn. Simply, Defendants have failed to produce evidence that would provide a defense to Rite Aid's claim that they misappropriated funds.13 They have instead chosen to ignore this allegation by either denying the allegation without any further explanation 14 or by asserting the Fifth Amendment to avoid having to respond. There is no issue of material fact as to 13 It bears noting that Koneff and Semic have maintained the Fifth Amendment privilege in regard to these averments for nearly seven years. Even if these Defendants would suddenly want to waive the privilege and respond, it is unlikely they will be permitted to do so. See Haas v. Bowman, 2003 WL 22272922 at * 15 (Allegheny County 2003) 14 In his Answer, Brian Eden responded to Rite Aid's allegation that "he misappropriated and used for [his] own purpose funds which were given to [him] under false pretenses" by simply saying "Denied," with no further explanation whatsoever. See Exhibit B, at ¶ 39.) Defendants' misappropriation of Rite Aid's funds, and Rite Aid is entitled to summary judgment as a result. F. There is No Genuine Issue of Material Fact In Regards To Rite Aid's Claim For Civil Conspiracy Finally, there exists no genuine issue of material fact that would preclude summary judgment on Rite Aid's claim for civil conspiracy. The essential elements of this cause of action are: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; and, (3) actual legal damage. See, e.g., Phillips v. Selig. 859 A.2d 420 (Pa. Super. Ct. 2008). Proof of intent to injure absent justification is also an essential element. Skipworth v. Lead Indus. Ass'n, Inc., 690 A.2d 169, 174 (Pa. 1997); Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 472 (Pa. 1974). Rite Aid has established these elements through evidence of record, including production of relevant documents (i.e., the fraudulent check requests submitted by NYSTC and approved by Koneff or Semic and the checks issued by Rite Aid as a result) and the affidavit of James Comitale, Esq. of Rite Aid. Defendants have in no way refuted this evidence and admit they have no documents that would support their defenses. (See ¶ 4 of Exhibits M, N, O, and P.) In fact, they have done nothing more than to provide conclusory denials of the allegations made against them. Additionally, as with the averments made by Rite Aid as to its claim for misappropriation of funds, Koneff and Semic again invoked the Fifth Amendment and refused to respond to Rite Aid's averments that Defendants "combined or agreed to defraud Rite Aid and to convert and misappropriate its funds" and that they entered into this "combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds." (See Exhibits B & C at IT 42, 43.) It is again obvious why these Defendants have maintained the protections of II the Fifth Amendment for so many years. Put simply, Koneff and Semic recognize the truth of these averments and are hiding behind this privilege, even though there is no longer potential for criminal action against them. It is wholly proper, as a result, for this Court to draw an adverse inference against these Defendants and find that they entered into the very conspiracy alleged against them. See Mitchell, 526 U.S. at 328 (1999). For all of the above reasons, summary judgment is warranted. V. CONCLUSION There exists no genuine issue of material fact in regard to Rite Aid's claims for fraud, conversion, misappropriation of funds, and civil conspiracy. Rite Aid has properly established these claims with evidence of record, and Defendants have proffered no evidence of any sort in response. Accordingly, Rite Aid requests that this Court grant its motion for summary judgment and enter judgment on its behalf on Counts I thought IV in the above captioned matter. I A A46 ZIA. K R. Du '1 , Es uire Brian P. Seaman, Esquire Stradley Ronon Stevens & Young, LLP 35 Valley Stream Parkway Malvern, PA 19355 (610) 640-8500 Attorneys for Plaintiff, Dated: December 23, 2011 Rite Aid Corporation LITIGATION # 1433557 v.2 EXH?B?T A n IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., C) d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN `-' Defendants. FIRST AMENDED COMPLAINT Preliminary Statement This case involves the misappropriation from Plaintiff Rite Aid Corporation ("Rite Aid") of at least $6 million by David Koneff ("Koneff') and Daniel Semic ("Semic"), both former employees in Rite Aid's Tax Department, and co-conspirators F & S Corporate Advisors, Inc. ("F & S"), Federal & State Corporate Advisors, Inc. ("Federal & State") and their President, Brian Eden ("Eden"). Pursuant to their scheme, defendants contrived to create the appearance that F & S (d/b/a New York Sales Tax Credit) had been retained by Rite Aid to audit sales tax payments made by Rite Aid to the State of New York for the purpose of obtaining refunds for Rite Aid of tax overpayments made to the state. From 1996 through 1999, defendants Eden and New York Sales Tax Credit submitted requests for payments to Rite Aid falsely claiming to have earned them for sales tax refunds obtained for Rite Aid. These requests x were received and approved by Defendants Koneff and Semic despite the fact that New York Sales Tax Credit had not obtained any tax refunds for Rite Aid and were not entitled to any payments, a fact of which Koneff and Semic were well aware. Between January 1996 and December 1999 Koneff and Semic directed that in excess of 40 payments be made by Rite Aid to New York Sales Tax Credit totaling more than $6 million. These misappropriated funds were then shared by the Defendants Koneff, Semic, Eden, F&S, and Federal & State. Rite Aid brings the claims stated below in order to recover its funds wrongfully obtained by the Defendants. Parties 1. Rite Aid Corporation is a corporation incorporated in the state of Delaware and has its principal place of business in Camp Hill, Pennsylvania. 2. Defendant David Koneff is a former employee of Rite Aid and until April of 2000 held the position of Manager in Rite Aid's Tax Department. On information and belief, David Koneff is a resident of York County, Pennsylvania residing at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. 3. Defendant Susan Koneff is the wife of Defendant David Koneff and, on information and belief, resides with him at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. A portion of the funds misappropriated by David Koneff, Daniel Semic, Brian Eden and the corporate defendants was placed in accounts or used to purchase property that is held jointly by Susan Koneff and David Koneff. With the exception of the claim for conversion (Count II) in which she is specifically named, Susan Koneff is joined as a nominal defendant. 4. Defendant Daniel Semic is a former employee of Rite Aid and until July of 2000 held the position of Senior Director in Rite Aid's Tax Department. On information and belief, Semic is a resident of Dauphin County, Pennsylvania. 2 J 5. Defendant Sharon Semic is the wife of Defendant Daniel Semic and, on information and belief, resides in Dauphin County. A portion of the funds misappropriated by David Koneff, Daniel Semic, Brian Eden and the corporate defendants was placed in accounts or used to purchase property that is held jointly by Sharon Semic and Daniel Semic. With the exception of the claim for conversion (Count II) in which she is specifically named, Sharon Semic is joined as a nominal defendant. 6. Defendant F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit is a Florida corporation with its principal place of business at 2100 West 7601 Street, Suite 510, Hialeah, Florida 33016. 7. Defendant Federal & State Corporate Advisors, Inc. is a Florida corporation with its principal place of business at 2100 West 76 h Street, Suite 510, Hialeah, Florida 33016. 8. Defendant Brian Eden is the President and registered agent of Defendants F & S Corporate Advisors, Inc. and Federal & State Corporate Advisors, Inc. Eden is a resident of Florida. Facts Common to All Counts 9. Rite Aid has retail drugstores throughout much of the country and buys goods and services in numerous states. 10. In purchasing goods and services, Rite Aid is periodically charged state sales tax despite the fact that the transactions should have been exempt from such payment under state law. In order to recoup these funds, Rite Aid occasionally uses the services of outside firms which 1) audit the sales tax payments paid by Rite Aid to individual states; 2) identify 3 q overpayments; and 3) obtain refunds for Rite Aid from the state taxing authorities. These outside firms are paid commissions based upon a percentage of the moneys refunded. 11. Defendants Koneff and Semic, as managers within Rite Aid's Tax Department, were intimately familiar with these procedures and were in a position to abuse those procedures for personal gain. 12. On information and belief, Defendant Eden operates various companies which obtain tax refunds and credits for corporate clients and is also intimately familiar with these procedures and how they can be misused. 13. In or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate its funds. 14. According to the defendants' scheme, Eden, through his company New York Sales Tax Credit (a d/b/a of defendant F & S), submitted requests for payment to Rite Aid falsely claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds. These requests were received at Rite Aid by Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. In furtherance of this scheme, on or about April 5, 1996 Defendant Eden opened a checking account at First Union Bank, Totowa, New Jersey in the name of F & S Corporate Advisors, Inc. d/b/a New York Sales Tax Credit. Eden also rented a private mailbox at MailBoxes, Etc. in Yonkers, New York to be used as a mailing address for Rite Aid's payments to New York Sales Tax Credit. New York Sales Tax Credit had no actual place of business in New York state or, for that matter, anywhere. The Yonkers address was apparently 4 obtained solely to create the appearance that New York Sales Tax Credit was a legitimate New York-based company. 16. The Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by New York Sales Tax Credit requesting a payment in the amount of $5,000.00. According to plan, Koneff and Semic approved payment of the full amount, despite the fact that the commission had not been earned. During the balance of 1996, nine more checks in the same manner totaling more than $1 million. 17. Bank records obtained from First Union Bank and several other banks for the period January 1997 through 2000 show how defendants routed the misappropriated funds. 18. In January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500.00. Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York and was subsequently deposited by Eden or his agent into New York Sales Tax Credit's account at First Union Bank. 19. Shortly after the money was deposited into the New York Sales Tax Credit Account, Defendant Eden wrote checks on the account made payable to F & S and deposited these checks into accounts belonging to F & S at several banks in Florida. 20. Shortly after these deposits were made, Defendant Eden wrote checks on these Florida accounts made payable to Defendants Koneff and Semic thereby distributing to them their share of the misappropriated funds. On information and belief, other portions of these funds were distributed to Defendant Eden and possibly others. 21. This pattern was repeated on a nearly monthly basis over the next three years. In all, Semic and Koneff caused Rite Aid to send at least. 42 payments to New York Sales Tax Credit totaling in excess of $6 million. Rite Aid's final payment to New York Sales Tax 5 Credit was made in December 1999. Beginning at least as early as January 1997, each of these payments was first deposited into New York Sales Tax Credit's First Union Bank account and then transferred to Florida accounts belonging to F & S Corporate Advisors or another Eden company, Federal & State Corporate Advisors, Inc., before being distributed to Koneff, Semic, Eden, and possibly others. 22.. Between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds. Defendants Semic and Eden are believed to have received similar amounts. 23. Throughout this entire period, Defendants concealed their activities from Rite Aid which was unaware of their actions. Rite Aid only recently became aware of Defendants' acts following an investigation leading to the discovery of the above facts. 24. The amounts demanded herein exceed the maximum for submission to compulsory arbitration. Count I - Fraud 25. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 24 of this Complaint as though set forth here in full. 26. As described in detail above, Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming that sales tax refunds had been obtained for Rite Aid and requesting payment of commissions based upon the purported refunds. 27. These misrepresentations were intentional and'were made for the purpose of inducing Rite Aid to send funds to New York Sales Tax Credit. 6 w 28. As described in further detail above, Defendants Koneff and-Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Koneff's and Semic's misrepresentations were intentional and were made for the purpose of inducing Rite Aid to pay the funds. 30. Rite Aid justifiably relied on Defendants' misrepresentations to it and paid the funds based upon the misrepresentations. 31. As a direct result of Defendants' misrepresentations, Rite Aid has suffered substantial monetary damages and other harm to its business. 32. To the extent that any of the misappropriated assets have been placed in joint accounts held by the above defendants with others or have otherwise been transferred, Rite Aid avers that these transfers were fraudulent and requests that they be voided pursuant to the Pa. Uniform Fraudulent Transfer Act, 12 Pa.C.S.A. § 5101 et seq. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages and such other relief as the Court deems just and proper. Count II - Conversion 33. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 32 of this Complaint as though set forth here in full. 34. Defendants Koneff, Semic, Eden, F & S, and Federal & State have converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion 7 and control over the funds obtained under false pretenses from Rite Aid and by doing so without consent or lawful justification. 35. A portion of the funds misappropriated from Rite Aid was placed by David Koneff into accounts owned jointly by him with Susan Koneff. Susan Koneff subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification. 36. A portion of the funds misappropriated from Rite Aid was placed by Daniel Sernic into accounts owned jointly by him with Sharon Semic. Sharon Semic subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification. 37. As a direct and proximate cause of Defendants' conversion of Rite Aid's funds, Rite Aid has suffered and will continue to suffer monetary damages and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Susan Koneff, Daniel Sernic, Sharon Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count III - Misappropriation of Funds 38. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 37 of this Complaint as though set for here in full. 8 7 39. Defendants Koneff, Semic, Eden, F & S, and Federal & State misappropriated and used for their own purposes funds which were given to them under false pretenses. 40. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined. at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count N - Civil Conspiracy 41. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraph I - 40 of this Complaint as though set forth here in full. 42. Defendants Koneff, Semic, Eden, F & S, and Federal & State combined or agreed to defraud Rite Aid and to convert and misappropriate its funds. 43. Defendants entered this combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds. 44. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. 9 T1 Count V - Fraudulent Misrepresentation 45. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraphs 1 through 44 of this Complaint as though set forth herein full. 46. In or about July 2000, Rite Aid and Defendant Semic entered into a Consulting, Severance and Release Agreement ("Agreement") pursuant to which Semic was paid his regular rate of pay for 52 weeks and continued to receive certain benefits after the termination of his employment with Rite Aid. 47. Prior to entering into the Agreement, Semic concealed from Rite Aid his acts of misconduct as alleged in Paragraphs 1 through 39 above. 48. Semic's concealment of his misconduct constituted a material misrepresentation and was done with the intent to mislead Rite Aid and in order to induce Rite Aid to enter into the Agreement. 49. Rite Aid justifiably relied on Semic's failure to disclose material information and but for his concealment of these material facts, Rite Aid would not have entered into the Agreement. 50. As the direct and proximate result of Semic's action, Rite Aid has suffered harm in that it made severance payments to Semic and provided other benefits pursuant to the Agreement. 10 1 WHEREFORE, Rite Aid demands judgment against Daniel Semic: in an amount to be determined at trial together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. S e D. Shadowen, I.D. No. 41953 ordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Attorneys for Plaintiff Rite Aid Corporation Dated: September 15, 2003 11 M VERIFICATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing First Amended Complaint, the information contained therein has been collected and made available to me by others and said First Amended Complaint is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities. . Dated: C? ? 9 1 C, 3 By: ames J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached First Amended Complaint upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden 5 ordon A. Einhorn Dated: September 15, 2003 EXH18?T B f NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 2414436 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, : DANIEL SEMIC, SHARON SEMIC, : F & S CORPORATE ADVISORS, INC.,: NO. 02-5863 d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants DEFENDANT BRIAN EDEN'S ANSWER TO FIRST AMENDED COMPLAINT NOW COMES Defendant, Brian Eden, by and through his attorney, Nathan C Wolf, Esquire, and Answers Plaintiff's Fast Amended Complaint as follows: Parties 1. Admitted. 2. Admitted that Defendant David Koneff is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of the remainder this averment. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth that defendant Susan Koneff resides at 760 Seitz Drive, I ewisberry, Pennsylvania 17339. The remainder this averment is denied. . 4. Admitted that Defendant Daniel Semic is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the.truth of the remainder this averment. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic. Defendant Eden, after reasonable investigation, is without knowledge or information oµ 101A l sufficient to form a belief as to the truth that Sharon Semic resides in Dauphin County. The remainder this averment is denied. 6. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 7. Denied Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 8. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. It is admitted that Defendant Eden is a resident of Florida. Facts Common to All Counts 9. Admitted. 10. Admitted. 11. Admitted in part, denied in part. It is admitted that Defendants Koneff and Semic were managers within Plaintiff's Tax Department. However the remainder of the averment is denied as Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 12. It is admitted that Defendant Eden operated various companies which obtained tax refunds and credits for corporate clients. The remainder of the averment is denied. 13. Denied. 14. Denied. 15. Denied. 16. Denied. 17. Denied. 18. Denied. 19. Denied. 20. Denied. 21. Denied. 22. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 11 F 23. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 24. Admitted. Count I - Fraud 25. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 24 of this Answer to Plaintiff's First Amended Complaint as though set forth here in full. 26. Denied. 27. Denied. 28. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 29. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 30. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 31. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 32. Denied as a conclusion of law to which no response is required. To the extent: that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count II - Conversion 33. Denied. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 32 of Defendant Eden's Answer to Plaintiff's First Amended Complaint as though set forth here in full. 34. Denied. 35. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this avennent. 36. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 37. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count III - Misappropriation of Funds 38. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 37 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full 39. Denied. 40. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to forin a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count IV - Civil Conspiracy 41. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 40 of Defendant Eden's Answer to Plaintiff's First Amended Complaint as though set forth here in full. 42. Denied. 43. Denied. 44. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count V - Fraudulent Misrepresentation 45. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 44 of Defendant Eden's Answer to Plaintiff's First Amended Complaint as though set forth here in full. 46. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 47. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 48. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. IR 49. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 50. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim to the extent that it would attach any liability to the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this actions and counsel fees, in addition to any other relief that the Court deems appropriate. Dated. October , 2004 Nathan C. Wolf, Esquire Attorney for Defendant Eden Supreme Court ID #87380 37 South Hanover Street, Suite 201 Carlisle, PA 17013 (717) 241-4436 VERIFICATION I, Nathan C. Wolf, Esquire, deposes and says that I am the attorney for Defendant Brian Eden, and that while I do not have personal knowledge of all the facts recited in the foregoing Defendant Brian Eden's Answer to Plaintiff's First Amended Complaint, the information contained therein has been collected and made available to me by others and said Answer to Plaintiff's Fast Amended Complaint is true and correct to the best of my knowledge, information and belief at this. point in time and is therefore verified on behalf of Defendant Brian Eden. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unswom falsification to authorities. Dated: October , 2004 C 7,olf, Esquire ,for Defendant Eden CERTIFICATE OF SERVICE I, Nathan C. Wolf, Esquire, hereby certify that I have served a true and correct copy of the attached Defendant Brian Eden's Answer to Plaintiff's First Amended Complaint upon the following persons via fast class mail: Gordon A. Einhorn, Esquire Hangley, Aronchick, Segal & Pudlin 30 North Third Street, Suite 700 Harrisburg, PA 17101-1701 Attorney for Plaintiff Rite Aid Corporation David J. Foster, Esquire Leslie M Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Dated: October ?, 2004 t O ? r m Z o a co Q z c. 4i 0 0 N (L) v ? a j M 0 A G o o w ? ?+ o? ~ 0 Wcn ;o a L? ,4 00 EXH?B?T ? `a. Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 Attorney for Defendants David & Susan Koneff and Daniel & Sharon Semic RITE AID CORPORATION IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNA. V. NO. 02-5863 N DAVID KONEFF SUSAN KONEFF DANIEL SEMIC, SHARON SEMIC, '= " s= F&S CORPORATE ADVISORS, INC., - d/b/a NEW YORK SALES TAX CREDIT, J x ? FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants -{ -- - ANSWER OF DEFENDANT DAVID KONEFF AND NOW comes the Defendant David Koneff, by and through his attorneys, Costopoulos, Foster & Fields, and respectfully avers in answer to the Complaint as follows: 1. Admitted. 2. Admitted except that Defendant's position at Rite Aid was as Sales Tax Manager. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff, and they reside together at 760 Seitz Drive, Lewisberry, PA 17339. 4. Admitted. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic. 6. After reasonable investigation, Defendant is without knowledge or information ofllglDq sufficient to form a belief as to the truth of the allegations in paragraph 6. 7. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8. 9. Admitted. 10. Upon information and belief, it is denied that, in purchasing good and services, Rite Aid is periodically charged state sales tax, and that Rite Aid uses the services of outside firms to recoup such state sales taxes. 11. Denied that Defendant Koneff was intimately familiar with these procedures and was in a position to abuse those procedures for personal gain. 12. On information and belief, it is admitted that the Defendant Eden operated various companies which identified and assisted in obtaining tax refunds and credits for corporate clients. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remainder of this paragraph. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment that in or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate funds. 14. The Defendant denies that, according to the Defendant's scheme, Eden, through his company New York Sales Tax Credit, submitted requests for payment to Rite 2 Aid falsely claiming that sales tax refunds have been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds, and that these requests were received at Rite Aid by Defendants Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 15. 16. Defendant denies that the Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by the New York Sales Tax Credit requesting a payment in the amount of $5,000. Denied that, according to plan, Koneff and Semic approved a payment of the full amount, despite the fact that the commission had not been earned. Defendant cannot address the remaining allegation in paragraph 16 as it does not make sense. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 17. 18. Defendant denies that in January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500. Denied that Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 18. , 19. After reasonable investigation, Defendant is without knowledge or information 3 sufficient to form a belief as to the truth of the allegations contained in paragraph 19. 20. As to the allegations of paragraph 20, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 21. Denied that this pattern (as set forth in the proceeding paragraphs) was repeated on a nearly monthly basis over the next three years. Denied that Rite Aid's final payment to New York Sales Tax Credit was made in December 1999. Upon reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 21. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments that between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds, and that Defendants Semic and Eden are believed to have received similar amounts. 23. Defendant denies that the Defendants concealed their activities from Rite Aid. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 23. 24. The allegations of paragraph 24 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 25. No answer required. 26. Defendant denies that Defendants Eden and F & S submitted numerous 4 rn _ payment requests to Rite Aid falsely claiming the sales tax refunds had been obtained from Rite Aid and requesting payment of commissions based upon the purported refunds. 27. The averments of paragraph 27 are denied. 28. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 29. 30. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 30. 31. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 31. 32. The allegations contained in paragraph 32, are conclusions of law which. require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 5 WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 33. No answer required. 34. Denied that Defendants converted Rite Aid's money as set forth in the Complaint and denied that Defendant obtained funds under false pretenses from Rite Aid as set forth in the Complaint. 35. Admitted that Defendant Koneff placed funds from F & S into joint accounts owned jointly by him and Defendant Susan Koneff. Denied that Susan Koneff converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the monies in these accounts, without consent or lawful justification. 36. Defendant believes and therefore avers that the allegations contained in paragraph 36 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 37. Denied that Rite Aid suffered loss as a result of the Defendants' conversion as alleged in this Complaint. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 38. No answer required. 39. As to the allegations of paragraph 39, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 6 10 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 41. No answer required. 42. As to the allegations of paragraph 42, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 43. As to the allegations of paragraph 43, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 45. No answer required. 46. The Defendant believes that the allegations contained in paragraph 46 apply to co-defendants only and requires no answer pursuant to Pennsylvania Rules of Civil Procedure. 47. - The Defendant believes that the- allegations contained in paragraph 47 apply to co-defendants only and requires no answer pursuant to Pennsylvania Rules of Civil 7 el . k Procedure. 48. The Defendant believes that the allegations contained in paragraph 48 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. 49. The Defendant believes that the allegations contained in paragraph 49 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. 50. The Defendant believes that the allegations contained in paragraph 50 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. NEW MATTER 1. The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 8 .- 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. 6. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the claims herein be dismissed. Respectfully submitted, David J. Foster, quire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street(P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 -Attorney for Defendant Dated: January , 2005 9 a. VERIFICATION I, David Koneff, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. David Koneff . Dated: k \Z? "or CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhom, Esquire SCHNADER, HARRISON SEGAL & LEWIS, UP 30 North Third Street, Suite 700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation By: ~WJ David J. Foste , quire Dated: January I Y , 2005 EXH18?T ID s Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 Attorney for Defendants David & Sinn Koneff and Daniel & Sharon Se€dic RITE AID CORPORATION Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants IN THE COURT OF COMMO N APL S r't '+?? CUMBERLAND COUNTY, $MA.-v` NO. 02-5863 ANSWER OF DEFENDANT DANIEL SEMIC 1. Admitted. 2. Admitted except that Defendant Koneff's position at Rite Aid was as Sales Tax Manager. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff. 4. Admitted. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic, and they reside together in Dauphin County. 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 6. 7. After reasonable investigation, Defendant is without knowledge or information 01 11465- m sufficient to form a belief as to the truth of the allegations in paragraph 7. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8. 9. Admitted. 10. Upon information and belief, it is denied that, in purchasing good and services, Rite Aid is periodically charged state sales tax, and that Rite Aid uses the services of outside firms to recoup such state sales taxes. 11. Denied that Defendant Semic was intimately familiar with these procedures and was in a position to abuse those procedures for personal gain. 12. On information and belief, it is admitted that the Defendant Eden operated various companies which identified and assisted in obtaining tax refunds and credits for corporate clients. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remainder of this paragraph. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment that in or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate funds. 14. The Defendant denies that, according to the Defendant's scheme, Eden, through his company New York Sales Tax Credit, submitted requests for payment to Rite Aid falsely claiming that sales tax refunds have been obtained from New York State and 2 TIF requesting payment of commissions based upon the amount of the purported tax refunds, and that these requests were received at Rite Aid by Defendants Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 15. 16.. Defendant denies that the Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by the New York Sales Tax Credit requesting a payment in the amount of $5,000. Denied that, according to plan, Koneff and Semic approved a payment of the full amount, despite the fact that the commission had not been earned. Defendant cannot address the remaining allegation in paragraph 16 as it does not make sense. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 17. 18. Defendant denies that in January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500. Denied that Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 18. 19. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 19. 3 y- 20. As to the allegations of paragraph 20, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 21. Denied that this pattern (as set forth in the proceeding paragraphs) was repeated on a nearly monthly basis over the next three years. Upon reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 21. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments that between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds, and that Defendants Semic and Eden are believed to have received similar amounts. 23. Defendant denies that the Defendants concealed their activities from Rite Aid. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 23. 24. The allegations of paragraph 24 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 25. No answer required. 26. Defendant denies that Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming the sales tax refunds had been obtained from Rite Aid and requesting payment of commissions based upon the purported refunds. 4 27. The averments of paragraph 27 are denied. 28. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 29. 30. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 30. 31. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 31. 32. The allegations contained in paragraph 32 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfufly requests that judgment be entered in his favor and that the Complaint be dismissed. 5 33. No answer required. 34. Denied that Defendants converted Rite Aid's money as set forth in the Complaint and denied that Defendant obtained funds under false pretenses from Rite Aid as set forth in the Complaint. 35. Defendant believes and therefore avers that the allegations contained in paragraph 35 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 36. Admitted that Defendant Semic placed funds from F & S into joint accounts owned jointly by him and Defendant Sharon Semic. Denied that Sharon Semic converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the monies in these accounts, without consent or lawful justification. 37. Denied that Rite Aid suffered loss as a result of the Defendants' conversion as alleged in this Complaint. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 38. No answer required. 39. As to the allegations of paragraph 39, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. 6 rn WHEREFORE,. Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 41.. No answer required. 42. As to the allegations of paragraph 42, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 43. As to the allegations of paragraph 43, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 45. No answer required. 46. Admitted. 47. Denied that prior to entering into the agreement, Defendant concealed from Rite Aid his acts of misconduct as alleged in the Complaint. 48. Denied; see answer to #47 above. 49. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations set forth in paragraph 49. 50. After reasonable investigation, Defendant is without knowledge or information 7 sufficient to form a belief as to the truth of the allegations set forth in paragraph 50. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. NEW MATTER The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. 6. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the claims herein be dismissed. 8 TIF Respectfully submitted, David J. Foster Esquire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 ---Attorney for Defendant Dated: January /Z , 2005 9 s VERIFICATION I, Daniel Semic, hereby verify that the facts set forth in the foregoing document are true and convect to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. Daniel Semic Dated: /A ?-? CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER, HARRISON SEGAL & LEWIS, LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation By: David J. Fos , Esquire Dated: January ?y , 2005 jAlj3jw E ?wo _ _ __ w _ RITE AID CORPORATION, Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants. COMMONWEALTH OF PENNSYLVANIA ) ) ss.. COUNTY OF CUMBERLAND ) IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW NO. 02-5863 James Comitale, Esq., being duly sworn, deposes and says: 1. I am over 18 years of age and have never been convicted of a crime. 2. I have personal knowledge of the facts stated in this Affidavit, which are true and correct. 3. I am the Vice President and Assistant General Counsel of Rite Aid Corporation, which, through a network of affiliated entities, operates retail drugstores throughout much of the United States and buys goods and services in numerous states. 4. In purchasing goods and services, from time to time Rite Aid is erroneously charged state sales tax despite the fact that the transactions should have been exempt from such sales tax payment under state law. Rite Aid receives this exemption because it resells the goods and services, and the sales tax is paid by the consumer during that resale. 5. In order to recoup these funds, Rite Aid occasionally uses the services of outside firms which audit the sales tax payments made by Rite Aid to individual states, identify whether Rite Aid overpaid sales tax, and obtain refunds for Rite Aid from the state taxing authorities. Most of these outside firms are paid commissions based upon a percentage of the sales tax actually refunded. 6. An entity known as F&S Corporate Advisors (d/b/a New York Sales Tax Credit) ("NYSTC") purported to be one of these outside firms and claimed to be performing such services for Rite Aid. 7. During the timeframe of the transactions and events giving rise to this lawsuit, Rite Aid's Tax Department managed all aspects of Rite Aid's relationships with firms such as NYSTC. This included all communications with these firms as well as verification of the work performed, the commissions requested, and the benefits allegedly conferred on Rite Aid. 8. David Koneff and Daniel Semic were employed by Rite Aid between 1996 and 2000. During that period, David Koneff held the position of Manager in Rite Aid's Tax Department, and Daniel Semic held the position of Senior Director in the Tax Department. -2- 9. Both Koneff and Semic, as a manager and a director in Rite Aid's Tax Department, were provided with authority regarding commission payments to outside firms who audited sales tax payments, including review of all check requests from these firms and verification that Rite Aid had received the tax refunds claimed. 10. Both Koneff and Semic were intimately familiar with these procedures, and Rite Aid relied on them to perform these duties honestly and accurately. 11. In or about January 1996, Rite Aid began receiving check requests from NYSTC for payment of commission for sales tax refunds NYSTC claimed to have obtained from New York State on Rite Aid's behalf. 12. Between 1996 and 2000, NYSTC submitted at least forty-four check requests for payment of commissions, all of which are attached hereto as Exhibit A. 13. Each of these requests was received at Rite Aid by Koneff and/or Semic, who approved the payments and directed that a check be issued by Rite Aid to NYSTC in the amount of the alleged commission. 14. On each of these forty-four requests was the specific handwritten instruction that the commission check to NYSTC was to be returned to David Koneff when completed. 15. Between 1996 and 2000, Koneff and/or Semic directed that at least forty- four checks be issued to NYSTC. (These checks are all attached hereto as Exhibit B.) 16. During this period, Koneff and Semic concealed their activities from Rite Aid. In fact, Rite Aid was wholly unaware that Koneff and Semic were directing that these payments be made to NYSTC and never consented to their actions. -3- 17. In or about the Fall of 2002, Rite Aid began investigating whether David Koneff had been involved in a kick-back scheme with a certain vendor. During this internal investigation, Rite Aid discovered that Mr. Koneff had purchased large parcels of real estate and a large home, all with cash. 18. Around the same time, Rite Aid was contacted by the FBI in a separate investigation as to whether Rite Aid had ever made payments to various entities, including NYSTC and another called Gates Leasing. Rite Aid cooperated with this investigation and produced to the FBI many relevant documents, including all checks paid by Rite Aid to NYSTC. 19. During the internal investigation of the kick-back scheme involving Koneff, Rite Aid learned that Koneff had a financial interest in Gates Leasing, an entity involved in the FBI Investigation. This discovery led to Rite Aid expanding its internal investigation to determine the relationship, if any, between Mr. Koneff and all of the entities at issue in the FBI Investigation (including NYSTC). 20. As a result, Rite Aid discovered that Koneff and Semic had directed and caused Rite Aid to make payments of more than $6 million to NYSTC, that Koneff had approved each of these requests, and that on each request was the written instruction that the check be returned to Koneff: 21. Most importantly, Rite Aid discovered that there were no documents or other substantive support to justify the payments to NYSTC. In fact, Rite Aid concluded that none of the commissions represented by the checks attached hereto as Exhibit B were earned by NYSTC. -4- 22. The investigations conducted by Rite Aid and by the FBI unearthed that at no time did Rite Aid receive any tax refunds or recoupments of any sort from New York State or any other state or taxing authority as a result of any actions taken by NYSTC, Brian Eden, and/or Federal & State Corporate Advisors. 23. In fact, Rite Aid never received any benefit of any kind as a result of any actions taken by NYSTC, Brian Eden, or Federal & State Corporate Advisors. 24. In all, Rite Aid's investigation revealed that Koneff and Semic had entered into a fraudulent scheme with NYSTC and Brian Eden to misappropriate funds from Rite Aid. Rite suffered damages in the amount of approximately $6,414,789.80 as a result of this fraud. Signed under penalty of perjury this 5 h day of December, 2011 Cam- s J. C tale, Esq. Sworn to before me this ? day of December 2011 Notary Public LMULBROR RW 1?OTARYPUBLIC +IDCO. JANE 1 2012 -5- y (( X !;\;. .*] "li3jo F OWN* s 3 t, ''i6'y+ tir?vo?CE aEcove . fi vENoc*, 0. r -IM COL t)ur,. DAM ? coax ,w liel" war uL ?w: F iURA 10 TAX DEPT, FORM 247D Rev. Will INV. RECD MDSE. RECD DUE DATE _"' VEN. NO. 1 0?t1EFERENCE NO. 111 . 1 1 N* • 121 12; 291 .. 1' a. .s t alOlfiTJON GOOF - 12M G0011 i.. 9 • CAID1T MFMO ?. IIOYA<TIEf • ?,y1011TA0E 7. CONIMKEIONs f'• INCO1111ECT 9IL1.ING 4. PRI=ES 9 • OTNIIJI ' S. INTEREST 9 DAMAGE i NET = 1 ml •Z Y I INVOICE RECEIVED MERCHANDISE RECEIVED FOMA 247 DUE DATE 21 VENDOA NO. REFERENCE NO REY ttld7 a (12`i7) (tt-22) E'?Titl' 3-0 INV. "a 30.36 wv. W E 37-Q AOCOtwr CODE 41-0 I CDC. 49 D. cR sp DROSS 61-6@ A ET W72 10-7-40,91, ? ? * 1 ' .rwROrsw..a.ewuw.r. FORM 2470 Rev. GnS INV. RECD MDSE. RICO - DUE GATE VIN. N0Z11 REFERENCE NO. 412 17? its 221 123 291 r c,'.EN711Y MO. 374 INV. NO. 70 26 INV DATE 37-40 ( ACCT COOS 41 • 46 loot CO. 49 to CO. SO GROSS 51 611. 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ATE NIT NlTAII 1099 050. O11Of! OM M 7 77 t0 .INVr. CO -. CO s NT11r, OAT! ACCT CODL S/ b! A 3! N s 0 M0. INV NO N as tr?yr A 5 ! ! ] `I L r.'' ? ? ? d?. a 1r a rr. •ii) 07' J y J 3?,??4 O? k '(? O V 6?f S? /?1? ? ?• 7 _., /-- j D4K? Ziar d rye ? - L ?": c .x r r Ike; r ?6fi1z 1380 - ?'` . L t-, L, 4J J,.CJ 'aTj ?,', t C- ?? y t T! {rAj +C { yak i. -4? t AF •'? L ?tiT tttd,,y s t ei Heis q `b ' t? Y• T ?' Nit ? - `?? rS A ? ? ? ? - .F r ?- >•."^!' i t\?'kA'? : w?l?v, .b *2t ? ? ? r'¢ ?}5 ? r ?h wi w t A ,:, t t ? t4 c ? r d r r ti k?; s» kL x s1 ?s`+`'t ? `?? ? a t? s ?y?: '+j.• .+ ate.. b"L w ?' { `^v v?TVr i?wL';=YVk?;a?rr? ?•±r,,TesrlT?+?,r., > s ,.: s? rIC?'' r f i +.•?•?'; r F ?+ f - tA ? i r? U.r Yfr??}, r r4:t t". a14 1 r`Ys''t.a°r= `?...?:.? Sr y? 4r r>{iSf?a'r i4?2 'ar?rf?t#J.?. ?.A+t - .. \ `• YYYsss .: - :;'l' ... _.. ? _C...k .+.. ?ob?...Y'."Y ?C ?: _.? ..... ?+, ? _:jf::t?.?lV - .+ ¢?iG?Y-T _. - ?t. ??w_'tr? ~?? .irta?"t•i?? YAJ? 112 17,?ri?t?fij:?` 4lf1•+22?:"9j? Tr J1 ti; .??• ?l..t, L?=? , ,'r, v7j j•J Room ?.,i+.l'J K•i y ?xirl#f v'?,? r. i, i4?i. NT/ir INV. 11O:INV. ND. DATt? ACCT CODE' G. Co. Chou 013c NET IItTAII. p .? ,.: 27 •s0 At•At`..:. N .90 t1•N '99.4It N !2. ?: 73 ?,0... 30 EXHIBIT G Account. - -Check - -Amount CD ROM ID. __.... -- - :- - .... _._ -- --- - - - -, 601801640 14256 $147,600.00 Dace 03/27/96 ITM CHASE MANHATTAN BANK, N.A. RITE AID HDOTRS. CORP. 50-937/213 RITE APDO HDOTRS. 31. 65 CORP. 0000014256 HARRISBURG BOX PA 171050042 PAY EXACTLY: E$--****147 r 600.00* ONE HUNDRED FORTY SEVEN THOUSAND SIX HUNDRED DOLLARS AND NO/100 F NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 R4---v" L Va I 0'00000 14 2 56Na 1:0 2 1 309 3 791: 60 PwSwO &-&tion@ 600014 7600000' A, - - - : - uz L ff ff ?f .f ff ?? f.f f??f f•ff f•?a 1ff. 11 I? 14 {,.? {.f 1 I of L I?? 14 f 4 F I o c :!5 rn c? p o ? co ? y rr ` f0 -1? 7 S N ?R W .1 m a C:)!3 Z5 co of . "2601M M4 ' ' Ap * 08 03 , t F w-q. ' W I f ? ? ' f C M B - - - - @t1r{?i.. t3lu :. 1 CecAmount ROM ID ,Account 601801640 16977 $136,729.00 G RITE AID HDQ?TRS. CORP. 50-071 ,3 Date RITE APO BOR 316 5 ro?1 6977 04/11/96 HARRISBURG PA 171050042 PAY EXACTLY: S****136 729.00* 11 THE OME MANHATTAN MW, N.A. ONE HUNDRED THIRTY SIX THOUSAND SEVEN HUNDRED TWENTY NINE DOLLARS AND NO/100 F-NSW YORK SALES TAX CR -I TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS KY. 10704 L p'00000 i 69 7 ?y 1:0213093791: &0 &waw016ti0a' $000 l 3 6 7 29001' W" p SIX w t?j _„o O _ w0 J ? 143124 ! ? 7t °° ?j O '? '`0 Diu 17 r'+ FIRST FffJt7,ITT AP %96' 18 cm :?,:.,w_ ......y.d NESTERf%Tm Cd1E3 .., 7 CD RON? ID 601801640 21995 $164,324.00 ® RITE AID HDOTRS. CORP. 50-WM3 Daw RITE APO BO%T 3165 ORP. 000=1995 lqqwp- 04/30/96 HARRISBURG PA 171050042 PAY EXACTLY: $****164, 324.00* THE CHASE MANHATTAN BANK, N.A. ONE HUNDRED SIXTY FOUR THOUSAND THREE HUNDRED TWENTY FOUR DOLLARS AND N01100 I- NEW YORK SALES TAX CR TO THE 9 7.6 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY -10704 L M00000 2 &9951' 1:0 2 i 3093?91: 60 &m&'w0 L6ti0a' 6''001643 VOW SRiit1 i9t 9'.w'06/.96 : It CA .B. UTICA 0598-! . Ai• Aj n r ??i Lrf- ldi.. did 18i l3 --.~--z -o c Y .. MY 96 06 oe cue -? w.? Cp- fl.Y. - - t 0 ? P L r u o Account Check - -----Amount CD ROM . ID _ ------ - , i 601801640 23915 $97,555.00 Date 05/13/96 CHASE MANHATTAN BANK, N.A. RITE AID HDOTRS. CORP. "-"T/v3 RITE AIPDO "' 3165 ORP. X3915 HARRISBURG PA 171050042 PAY EXACTLY: $*****97, 555.00* NINETY SEVEN THOUSAND FIVE HUNDRED FIFTY FIVE DOLLARS AND NO/100 I-NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L i #000000239&5115 1:02&3093791: 60 im8@,l0 1640#0 100009 7 5 5 5004' i F.R.6. UTICA 6213-1 16364i?881, E 06 ?ae. FUB-RA 515 ifiil bLVIY ?.? lum m lu U532 . C M B ; { N.Y. isut Ls' E.qC w T -- 601801640 29100 $162,033.10 ® RITE AID HDOTRS. CORP. 50-W/213 Date RITE AIP0 BOX'3165 ORP 0 X100 06/03/96 HARRISBURG PA 171050042 $****162, 033.10* PAY EXACTLY: CHASE MANHATTAN BANK, N.A. ONE HUNDRED SIXTY TWO THOUSAND THIRTY THREE DOLLARS AND 10/100 FNEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 Y -1YONKERS NY 10704 L 0000000 29 &001' 1:02&3093791: 60 IMSM0 L 6401• x1000 L6 2013 10.0 #6/" v WWI OR ?.n I UTICA K . s ? +$ [y . E %,W 06 5 jL Uil Fl?6-- f ; CMB - f n E, N.Y. t! tl F., x s' L 4 9 f- f b oo?° w If ---- 601801640 33379 $165,530.00 RITE AID HDOTRS. CORP. 50-937/213 Date PO BOX 3165 0000033379 07/01/96 HARRISBURG PA 171050042 PAY EXACTLY: * * * * 16 5 5 3 0.0 0 ME OWE MANHATTAN BANK, N.A. ONE HUNDRED SIXTY FIVE THOUSAND FIVE HUNDRED THIRTY DOLLARS AND N01100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 L YONKERS NY 10704 N800000 3 3 3 ?9N' 40 2 i 309 3 ?ql: 60 im8m0 L 640N' x''00 16 5 5 3000x' r. FVfr 13 - o . UT.I CA, n ° cm o R - - M2001461( ?l @ IM ru-m J i Im BLVD ..., - - JV qe' 1 °' y w 7i N CMB w _ :$1WR ACUSE, N.Y. ail l.f Ci C.i 4: C c; 2 7 Account- Check 601801640 39358 $189,970.00 RITE AID HDOTRS. CORP. 50-MM3 Date PO BOX 3165 0000039= 07/30/96 HARRISBURG PA 171050042 PAY EXACTLY: $****189 970.00* THE CHASE MANHATTAN BANK, N.A. ONE HUNDRED EIGHTY NINE THOUSAND NINE HUNDRED SEVENTY DOLLARS AND N01100 F NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER of SUITE 225 YONKERS NY 10704 L. J 000000 39 3 SBw 1:0 2 i 309 3 ?9s: 60 Lw8•0 We0r 91'00 18 9 9 700010 pp6?9pp6 ?S ?S?+iR/3+9?6? .Ry.L)r Y i T `iR °t t ?0312014 7 "6 ?yb' 08 . ? CM6. _ _ N.Y. o N iY 0 V N y .. W A&66iirit M66k Amount RONN. ID 601801640 45073 $72,826.00 RITE AID HDOTRS. CORP. i0 9s? /m3 Deft PO BOX 3165 0000OM73 ' HARRISBURG PA 171050042 09/04/96 $*****72,826.00* PAY EXACTLY: CHASE NAIMMTTAN BANK, N.A. SEVENTY TWO, -THOUSAND EIGHT HUNDRED TWENTY SIX NpL?100 NEW YORK SALES TAX CR TO THE 97 6 MCLEM AVE ORDER OF SUITE 225 ?I L YONKERS NY 10704 0000004 50 7 3#' 1:0 2 i 30 9 3 7 91: 60 iM8w0 L 6160101 .000 7 28 2 600 ' L. 09/Yf/9l6 19' SR11?2 892 F.R.B.' UTICA. Ang- Lit CMD _ NY. ?. w t C't iv L_V 6 t.. 2 9 "I Account - - CTieck -- - -- Amount . CD ROM ID 601801640 51802 $63,061.00 mmmam ® RITE AID HDOTRS. CORP. 50-937/213 • owe PO BOX 3165 0=0518M ` 10/29J96 HARRISBURG PA 171050042 PAY EXACTLY: $*****63,061.00* 7HE CHASE NANNATTAN SANK, N.A. SIXTY THREE THOUSAND SIXTY ONE DOLLARS AND N01100 NEW YORK SALES TAX CR -I TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 U200000500205 1:0 213093 791: 60 &mfiw0 i640Nm •'0006306 L0010 R.B. UT I CA fLS i - T-21 G 03- ?.._ ?43124 f 4 14 U-I r-J N ? Account Check _Mount.. 7.CD_ kOM 601801640 441083 $89,500.00 ! ® RITE AID HDCTRS. CORP. S"37M3 Date PO BOX 3165 OOOM1O83 101/16/97 HARRISBURG PA 17105-0042 $*****89,500.00 THE CHASE MANHATTAN SAW, N.A. PAY EXACTLY: r EIGHTY NINE THOUSAND FIVE HUNDRED DOLLARS AND N01100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L J x'00004410830 1:021309379s: 60 Lvu8m0 LG40v 000008950000e F M R B UTI?A . . . . 9213-8599-1 - o D .00 7--Va tv '< w g Z co W a Ink f 5 i9Y 05 3 t 0 12014 r rv r ym $ H ? ? ? M B - 1 mm +u N.Y. C •y N L? ? 4 lT. ?.f •?{ J.. tit r Account. _ _. C7zeck` . Amount CD X013 _?...____ ____ 601801640 454025 $168,934.00 RITE AID HDOTRS. CORP. "- D" PO BOX 3165 0000454025 • 01/29/97 HARRISBURG PA 17105-0042 $****168,934.00* THE CHASE MANHATTAN BANK, N.A. PAY EXACT'LY' ONE HUNDRED SIXTY EIGHT THOUSAND NINE HUNDRED THIRTY FOUR DOLLARS AND NO/100 NEW YORK SALES TAX CR 'f 976 MCLEAN AVE TO THE SUITE 225 E 225 ORDER OF YONKERS NY 10704 a L n50000454025#0 a:0 2 1 309 3 79e: 601mflw0i640u' , .00016893400.0 @Z/'9519T l? SR'iR192 . - F.R.B.. UTICA c an-awl- 77 r r_ =z: L a ter?" ^'n v` ,'.-... ,. t?t..., .. W ra ?031?414 i F4 *05 mm lu WACUS , N.Y. ?. ci C Z ci i:i .7 f CD0 2 N W?O N A Account Amount. 601'801640 499622 $85,569.00 RITE AID HDOTRS. CORP. r Dade PO BOX 3165 OOM9%22 03/05/97 HARRISBURG PA 17105-0042 PAY EXACTLY: $*****85,569.00* CHASE NANHATTAN BANK, N.A. EIGHTY FIVE-THOUSAND FIVE HUNDRED SIXTY NINE DOLLARS AND NO/100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L v8000016999220 1:0 2 L 3093?91: 60 L•8lm0 W60r x'0008 5 5 6 900+' z. P 1 O E UTICA S? . R B 6Z13-v5B8-f Am O --r r_-r.--= :,? . Q om, BkR O X 201 4! t 11 P A-M ON lu C? S_ VJCLM29 N.Y. ccount Check Amount CD ROM YD 01801640 551164 $85,664.70 RITE AID HDQTRS. CORP. So-937M3 FTw Dau PO BO X 3165 0ON551164 04/10/97 HARRISBURG PA 17105-0042 PAY EXACTLY: $ * * * * * 8 5 , 6 64.7 0 E MANHATTAN BANK, N.A. EIGHTY FIVE THOUSAND SIX HUNDRED SIXTY FOUR DOLLARS AND 70/100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 G L J B'000055LL64w l:O2L30'43?9l: 60L-8mOL616DN' . 0008 566.?0e m WZ#W' ' V WW 663 ? F.R.$.- UTICA ?:Co A xz to "3 1467x! 'q7' 184,,,. ? ft 10AC SE . • A. ti cf L '?' a el I b, 601801640 609200 $53,600.00 RITE AID HDOTRS. CORP. 50-"TM3 PO BOX 3165 0000609200 ' HARRISBURG PA 17105-0042 $*** 53,600.00* A.--- -- -PAY DW CTLY: FIFTY THREE THOUSAND SIX HUNDRED DOLLARS AND NO/100 F _NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L 1@00006092000* 1:0213093791: 60 Lw8w0 16400' x'000 5 3 6000W Z - ? a `? Z40 % 11 ?QG0 674 C1 IV -4 WIN lu- i :? .:. _ __ , N.Y.. eke : , .T. N.Y. Account 601801640 633214 $34,049,505.00 RITE AID HDOTRS. CORP. 931 3 Dace PO BOX 3165 00006332f 4 qCMASIE 06/05/97 HARR ISBURG PA 17105-0042 4,495.00 PAY D(ACTLY --- -- -- ATTAN BANK, N.A.-. .. THIRTY. FOUR THOUSAND FOUR HUNDRED NINETY FIVE DOLLARS AND NO/100 F- NEW YORK SALES TAX CR AVE MCLEAN TO THE SUUI 9TE 225 E 225 ORDER OF YONKERS NY 10704 a L J #000006 3 3 214#a 1:0 21309 3 791: 601m8w01640P i o"000 3449 500 ' 2 m w ?031201 674 -csa ••? Pi" 06M94E : ! 1 ? 7GtQgA-16t?-` - . ---? B - ..., i'z? m. L . - s N.Y. ?... -Accou'nt'-Check -Amoiunt-_ ROM ID 601801640 680007 $55,220.00 SO- RITE AID HDOTRS. CORP. '213 Coe PO BOX 3165 0000680007 ` 07/09/97 HARRISBURG PA 17105-0042 $*****55,22Q.00 7W CHASE MANHATTAN SANK, N.A. PAY EXACTLY: FIFTY FIVE THOUSAND TWO HUNDRED TWENTY DOLLARS AND NO/100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L J-. 0000068000 70 1:0213093791: 60 LmwBwD L 6l.0N' . x'000 5 5 2 2000Hr' 97Ic7J9t r 003:: .:_ F.R.B. UT I CA co V Tolm W - all '97 22 ?-_ - C M13 N.Y . .. Hr. Z i. . z a° w x P%-4 Account --?- deck ----- Amount CD ROM ID -?? - --_-------= 601801640 715657 $160,700.00 I RITE AID HDOTRS. CORP. 50-MM3 ® Date PO BOX 3165 0000715657 08/06/97 HARRISBURG PA 17105-0042 PAY EXACTLY: $ * * **160,700.00 THE CHASE MANHATTAN BANK, N.A. ONE HUNDRED SIXTY THOUSAND SEVEN HUNDRED DOLLARS AND NO/100 NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 ---------------------------- L J . 090000 7 1 56 5 70 1:0 2 i 309 3 791: 60 &mBmD &64000 WPM' V SRM 00'. F.R.B. UTICA :??3?i2a=? Wis.. -tom .to ?1 '9Y '19 N.Y. $,'00160 700001' G a ,c .o w x ;c w 14NO l if 0 r, i .a L. i S 1 A&663 nt Check .... 'A--mou'nt'- 01801640 748559 $178,000.00 6 RITE AID HDOTRS. CORP. m3 ® Date PO BOX 3165 OM74559 09/04/97 HARRISBURG PA 17105-0042 THE CHASE MANHATTAN BANK N. A. PAY EXACTLY: S#*t*178,000.00* ONE HUNDRED SEVENTY EIGHT THOUSAND DOLLARS AND N01100 F- NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 a YONKERS NY 10704 L . 00000 7 48 5 S W i:0 2 L 30 9 3 7 91: 60 L-6-O L 61.ON' FOO L ?600000,o' x'0000?485590 1:02L3093791: 60 LBO L61-0119 0,Do&78000001 F.R.B. UTICA . 6213-06-1 :r rs t? I r? 0% SDN 091197 01 18 66471 ?03120i4674"- 66471 0102546 1,3864,1,94, to 64/16/9? : 03 y: Z(A Za s o40 ;ZL -4 Y' 601801640 787227 $110,000.00 Date ' 110/07/97 THE CHASE MANHATTAN BANK, N.A. RITE AID HDOTRS. CORP. PO BOX 3165 HARRISBURG PA 17105-0042 PAY EXACTLY: $ ONE HUNDRED TEN THOUSAND DOLLARS AND N01100 NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 L 0000787227 100000?8? 2 2?" 1:0 213093?91: 601m8,m0 &64010 .0'0011000000.x' 10/21M 0 v m *3 ` t F.R.B. UTICA -.c l?13-059A-1 Sri. lA - %9 '21 c. T4t0i11?t ' C B , u N.Y. 2 m 1 Account--- 601801640 879760 $139,000.00 RITE AID HDOTRS. CORP. ate PO BOX 3165 WW879760 • 12/,19/97 HARRISBURG PA 17105-0042 $****139,000.00* CHASE MANHATTAN SAW, N.A. PAY EXACTLY: ONE HUNDRED THIRTY NINE THOUSAND DOLLARS AND N01100 F NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 a L 11'00008797LOO 1:02&3093791: 60 P118W0 W60"a .#'00 L 390000060 e1/" V SRW 613 120-twi ' ?? " it 1 W r 17.+ 2 z: 2 e ? w vn 103121,014 41 06 c._ . -: ? -16/98 . - _ - - • r C N.Y. ?ao 1 Account--- - - --Chev7c - ---Mount- CD ROM ID - ----------- - - - ,-- -- -- 601801640 915106 $173,929.00 ---- ---- --- --------- RITE AID HDOTRS. CORP. ® Date PO BOX 3165 OOM15106 01/19/98 HARRISBURG PA 17105-0042 i$****173,929.0 THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED SEVENTY THREE THOUSAND NINE HUNDRED TWENTY NINE DOLLARS AND N01100 (- NEW YORK SALES TAX CR ' 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 11,0000915 L06w 1:02&3093791: 60 im8¦,0 i640r •000 1 7 39 2900x' 9213-9308-1 • ? - - - - • ? ? - ,? ?? O CZ. ?Q 1201 67 L-..-. a 91l8wa.: N 5 Lj N.Y. .._._. _._. :__..... 0. CA ;Fi - t Account Ziec7c Amount CD ROM ID 601801640 973681 $172,258.00 RITE AID HDQTRS. CORP. 0000973681 Date The CAaw Mae\a11ae Beet. N.A. e 03/04198 W937/213 1 1 PAY EXACTLY: ' 1 1 1 I FNEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 , eD00097368 &N' e:02&3093791: 601-8w0 i640N' e000 L7 2 258001' z M ` to ? ' r=-g sr ? reds ~?' ? ? k0312014674 _ `'r " MR '9P' 13 .c m?utn.w > ' C m N Nava RITE AID HDOTRS. CORP. so-72+3 Date PO BOX 3165 0001014943 i E04/07/98 HARRISBURG PA 17105-0042 PAY EXACTLY: S****193,509.00* THE CHASE MN BANK, N.A. ONE HUNDRED-NINETY THREE THOUSAND FIVE HUNDRED NINE - - - -- - DOLLARS AND NO/100 (^ NEW YORK SALES TAX CR r TOTHE 976 MCLEAN AVE SUITE 225 E 225 ORDER OF YONIMRS NY 10704 N'000 W 149430 402L3093794 601«w8-0 i6%0r , %00019350900x# wl'" jr mm m .. ?." ? ? a 03 1201 674 F1118-IiA W13ARP 1 -"' . : • • 101% NJ __ .- ,r -- C M 8 .. . - - %D r z w. ...Account Check.__.._ .. __..Amoiirit CD-??ROW -ID 601'801640 1050136 $175,600.00 RITE AID HDOTRS. CORP. Date PO BOX 3165 00010MI 36 05/06/98 HARRISBURG PA 17105-0042 $****175,600.00 THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED-SEVENTY FIVE THOUSAND SIB HUNDRED DOLLARS AND NO/I00 (i NEW YORK SALES TAX CR 976 MCLEAN AVE TOTHE ORDER OF SUITE 225 ..--YONKERS NY 10704- _.... - /' (_ N'000 l0 50136 ' 1:0213093791: 60 &wfiw0 i 6 ti0N' 8000 1 7 5 6000010 i Li•.zri.r Z- °. W031201467 IU N1A1 EIM • . - E; WX ?. V 0 .- pt Account Cae ck_.._.._.....__._.Amount 601801640 1084335 $174,500.00 RITE AID HDOTRS. CORP. Date PO BOX 3165 0001084335 PTKCNASE 06,/03/98 HARRISBURG PA 17105-0042 4,SOQ.QQ MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED SEVENTY FOUR THOUSAND FIVE HUNDRED DOLLARS AND NO/100 (-' NEW YORK SALES TAX CR 976 MCLEAN AVE TOTHE SUITE 225 ORDER OF YONKERS NY 10704 a L -? #8000 L08 4 3 3 5u' o:0213093791: 60 L0"BMlO L 640l' eoo L 74 50000 ' 022! tyj .DD1 11103 20 A6?? _:..04 :.... _ x IBM NAP:- - r--; %ill-molpi _... - . ---... - --- . _>-- ---? ccount - - C?ieck-he.._ Amount 601$01640 1125888 $177,500.00 RITE AID HDOTRS. CORP. Date PO BOX 3165 00011258M 07/09/98 HARRISBURG PA 17105-0042 THE CHASE MANHATTAN SANK, N.A. PAY EXACTLY: ONE HUNDRED SEVENTY SEVEN THOUSAND FIVE HUNDRED ' . . . . . . . - . . DOLLARS AND N01100 F NEW YORK SALES TAR CR 976 MCLEAN AVE TOTHE SUITE 225 ORDER OF YONKERS NY 10704 L J rOOD i i 2 5888~ 1:02&3093791: 60 iw8w0 i 6%0r .rDO i ? ? 50000.' z +8 82xi-iW F "312014 --r FUB-Idl -.. •.- t ; JY '98" I6 m: fi - CMB 0 Account Check - Amount CD ROM ID 1 601801640 1159006 $179,300.00 RITE AID HDQTRS. CORP. 'Date PO BOX 3165 0001159006 w 0 08 HARRISBURG PA 17105-0042 ** P**179,300.00 THE cwtSE MANHATT PAY EXACTLY: ONE HUNDRED SEVENTY NINE THOUSAND THREE HUNDRED DOLLARS AND N01100 YORK SALES TAX CR MCLEAN AVE „? ` TO THE E 225 Y ORDER OF ERS NY 10704 x'000 & & 59006~ 1:0 2 & 309 3 ?91: 60 &m8m0 & 6%0N' 51,00 1 7 9 3000080 @8? YN v sm 06 0 l 922-459@-1 Hi003 ZQ 14 =AG:'gg' m 0 Account :Check. CD 607801640 1194064 $179,500.00 ® y..,.... , .?". RITE AID HDOTRS. CORP. Date PO BOX 3165 0001194064 09/08/98 HARRISBURG PA 17105-0042 $****179,500.00 1NE CHASE MNNATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED SEVENTY NINE THOUSAND FIVE HUNDRED DOLLARS AND NO/100 NEW YORK SALES TAX CR TOTHE 976 MCLEAN AVE ORDER OF SUITE 225 YONKERS NY 10704 L... 0000 L L916064M 1:0 2 1 309 3 791: 60 iM8m0 &G16j3' . 8,500 0950000.8 - J _ O 1 SE" 5 2;0 ;NY. !01640 1223822 $189,100.00 RITE AID HDQTRS. CORP. <J1J1J Date - PO BOX 3165 0001223822 10/05/98 HARRISBURG PA 17105-0042 $****1891100.00* THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY NINE THOUSAND ONE HUNDRED DOLLARS AND NO/100 NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 Y ORDER OF YONKERS NY 10704~ L J a'D001 2 2 38 2 2u' 1:0 2 i 309 3 79l: 6019.8-10 i 640na 0000 18 4 1000060 16/H M AP SM 683 rc --, ,m. tyj 6ZI3.6588-2 _. _• -i _..r O c 2 w 10-031 V I o74 P;? 2.0 rm_%A "T 'qf? 09 !1 008 F nt Check Amount CD ROM ID 640 1259847 $182,000-00 RITE AID HDOTRS. CORP. 0001259847 ffDat p0 BOX 31 65 8 HARRISBURG PA 17105-0042 .LW $*** *182,000.00* THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY TWO THOUSAND DOLLARS AND N01100 F- NEW YORK SALES TAX CR MCLEAN SUITE 225 TO THE 976 AVE E 225 ORDER OF YONKERS. NY 10704 a L u9000 1 2 598 b WO 1:0 2Z 309 3 791: 60 i«-8»-D i 6 kOO 8100 18 200000.,' ]]/]6/96 V SUR5 693 ? 0213-6:566-1 g; ? pin- flam- p3 t4-'. Es'R%Yi..: ....,.. -?. D M 1666iat .. Check Amount- 'CD ROM ID 1601801640 1289132 $184,400.00 RITE AID HDOTRS. CORP. -Date PO BOX 3165 0001289132 12/02/98 HARRISBURG PA 17105-0042 $****184,400.00 THE CHASE MANHATTAN BANK, N. A. PAY EXACTLY: ONE HUNDRED EIGHTY FOUR THOUSAND FOUR HUNDRED DOLLARS AND NO/100 F- NEW YORK SALES TAX CR 976 MCLEAN AVE TOTHE SUITE 225 ORDER OF YONKERS NY 10704 Q L -J 0000 i 28913 2r 1:0 2 i 3093?9@. 60 &-a-0 i640N' 11100 La 4b000010 Z 1?Jb9/98 . ? 7? SAiRS 613. ? ? Co a0 _.... s. _ - - ............ six L is=_ NY......::: E ::r a-.4. 5 -.a . L =r -J) Account Check -Amoui '-- CD ROM ID .. __ -- ,601801640 1324190 $183,000.00 1 RITE AID HDOTRS. CORP. pate PO BOX 3165 0001324190 QW 01/04/99 HARRISBURG PA 17105-0042 $****183,000.00* THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY THREE THOUSAND DOLLARS AND N01100 r' NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 L 4O.if?55:_ _ _ _ _ _.. -tom IN000 1 3 24 190V 1:0213093?91: 60Lal8M0i6400 10001830000090 bu:???'o3i o?oooaEo .P55.1 OS -06 99- ?O W31 11? A *W 11 F11J? 3AI1S C M B . r r _s 1 t. %,0_'. Account Cfie -kAmount M ID 601801640 1389668 $186,600.00 RITE AID HDOTRS. CORP. ?19?g Date PO BOX 3165 ' 03/03/99 HLRRISBURG PA 17105-0042 $****1$6,600.0 THE CHASE MANHATTAN BANK, N. A. PAY EXACTLY: ONE HUNDRED EIGHTY SIX THOUSAND SIX HUNDRED DOLLARS AND NO/100 (- NEW YORK SALES TAX CR 976 MCLEAN AVE A ' TO THE SUITE 225 - • Y a ORDER OF YONKERS NY 10704 toe - •. L- - - -- J u'000 i 389666' o:0 213093?91: L0 i-8Nl0 W60r 9"0018660000.0 ON199 Vona 03. -_ J iI =31 FGMB ? cm IS eye,, v_F.3r? - _ f Date 04/06/99 THE CHASE MANHATTAN BANK, N.A. I-- aulftiml RITE AID HDOTRS. CORP. PO BOX 3165 0001425933 HARRISBURG PA 17105-0042 $****181,000.00* PAY EXACTLY: ONE HUNDRED EIGHTY ONE THOUSAND DOLLARS AND N01100 (- NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY ".0704 L. ?:.z-.e y v 00001425933' 1:02&3093791: 601?8?0i6ti0u' 00001810000060 ! J 66/" : • 1p SRM 693 03 1.11 91331499 7 : > ' ?• M 2 . $ 0 z? • ? X Q m _ - - -- Account- Check Amount CD RAM-ID 601'801640 1459360 $185,000.00 RITE AID HDOTRS. CORP. Date PO BOX 3165 0001459364 05/03/99 HARRISBURG PA 17105-0042 $****185,000.0 THE CHASE NANHATTAH BANK, N. A. PAY EXACTLY: ONE HUNDRED EIGHTY FIVE THOUSAND DOLLARS AND N01100 F NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE S 225 ORDER OF SUITE 225 YONKERS NY 10704 x000 3459360N' 1:0 213093494 60 im8.0 &L'sor .x'00185000004' ?' 2 coo syloc, My Account-- Check - - Amount - - - CD ROM ID 601801640 1492235 $188,400.00 RITE AID HDOTRS. CORP. Date PO BOX 3165 000149=35 ' 06/01/99 HARRISBURG PA 17105-0042 Fs** **188,400.00* THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY EIGHT THOUSAND FOUR HUNDRED DOLLARS AND NO/100 (-- NEW YORK SALES TAX CR ? 976 MCLEAN AVE TO THE SUITE 225 `ORDER OF YONKERS NY 10704 a L x'000 VA 2 2 351' 1:0 2 i 3093?9l: 60 i-8M0 W60v' d'00 Las 4000011' - f kwl" v SRO on @Zf3-0566-t . ss r to 0 Account 601'801640 1525370 $189,150.00 • •• _ . - no: nr?x.n'g1.Jiltl9iLZRITE AID HDQTRS. CORP. Date PO Box 3165 0001525370 9 07/01/99 HARRISBURG FA 17105-0042 $****189,150.00 THE CHASE NANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY NINE THOUSAND ONE HUNDRED FIFTY DOLLARS AND N011 00 (- NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 L x500015253?0p' 1:0213093?94 601sa8w0i640' . .000 189 1 5000.' elm/" 2 SRW 693 0 6213-m1 o. .r '? O,i RITE AID HDOTRS. CORP. oate PO BOX 3165 OW1561474 08/04/99 HARRISBURG PA 17105-0042 $****185,000.00 THE CHASE NANMTTAN BANK, N-A. PAY EXACTLY: ONE HUNDRED EIGHTY FIVE THOUSAND DOLLARS AND NO/100 (r NEW YORK SALES TAX CR TO THE .976 MCLFAN A :'E ORDER OF SUITE 225 YONKERS NY 10704 L rDDD 15b i4?4a' e:0243093791: bD i-8•D Llsor '000 IF- 500000e 1 c zr6i W03 l f -- z a00 fit Account Check Amount CD ROM ID 601801640 1600336 $188,000.00 I Date • 09/10/99 THE CNM E NAMMTTAN BANK, N.A. RITE AID HDOTRS. CORP. PO BOX 3165 000160=6 HARRISBURG PA 17105-0042 $****188,000.00 PAY EXACTLY:. ONE HUNDRED EIGHTY EIGHT THOUSAND DOLLARS AND NO/100 (-" NEW YORK SALES TAX CR 976 MCLEAN AVE TO THE SUITE 225 ORDER OF YONKERS NY 10704 L 7 I I&-J-a-ex ? V40 00001600336V 40 213093791: 60 imB-O i61.0e .000 3B600000.f' p i G W TV v W Z9 = 152f Wr snz o 1 0 g ? . cQo Account '- Che_ ck ' Amount ?D R6M ID 601801640 1616721 $183,000.00 W&W 'n13 ' RITE AID HDQTRS. CORP. _ Date PO BOX 3165 0041616721 09/29/99 HARRISBURG PA 17105-0042 $****183,000.00 THE CHASE MANHATTAN BANK, -N.A. PAY EXACTLY: ONE HUNDRED EIGHTY THREE THOUSAND DOLLARS AND N01100 NEW YORK SALES TAX CR TOTHE 976 MCLEAN AVE SUITE 225 ORDER OF YONKERS NY 10704 a roDOi6L642W ?:02L3()g3?91: 601-13mOi61601' .e00 i8 30000000 16)" r SM W ° ° VAI i z OF _L --- U I I cm Mr 54A =i -•.a m O - m < m r, _K A X100 v cn vt A m m D \ i / Z?? z i T Account Check. - - -AmVunt -•--- CD ROM I D --_. 601801640 1647437 $186,000.00 . ??? riesa:nintti•L .. _ RITE AID HDOTRS. CORP. s 1213 Date PO BOX 3165 0001647437 ' ? 10/27/99 HARRISBURG PA 17105-0042 ***186,0001.001 THE CHASE MANHATTAN BANK, N.A. PAY EXACTLY: ONE HUNDRED EIGHTY SIX THOUSAND DOLLARS AND N01100 (- NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE SUITE 225 ORDER OF YONKERS NY 10704 Q "9000 & 6 6 7 y 3 7"9 ?:0 2 & 309 3 ?9o: 60 &wj3wo & 6 40"9 .,900 &8600000.,' 6833?0?.?96-1 . ` . L=.r Lti '-s?? T? . p mu st ?031 f 1 1-4 zz f .S °. z a 0 7 ?0... cr% ?•ra? ? r < 'm tr. v+ T r ?. M x I Account .Ch6c'- Amount._..... -- 601801640 1685174 $196,000.00 i RITE AID HDOTRS. CORP. °a? PO BOX 3165 0001685174 12/01/99 HARRISBURG PA 17105-0042 $****196,000.00 THE CHASE NA"TTAN BANK, N. A. PAY EXACTLY: ONE HUNDRED NINETY SIX THOUSAND DOLLARS AND N01100 . (^ NEW YORK SALES TAX CR TO THE 976 MCLEAN AVE ORDER OF SUITE 225 - --- - -- YONRERS NY 10704 - L 110000 &G85 L 7409 1:0213093791: GO &mam0 &G40a' .000 &960000010 JZ/?A7/99 v SRBB w . r i L t all?? . - 20619" - - -- IE g ? O 0 . ?s o W-c 05 m o m c N cn ? i d ? 7t rte, J 5 m . r Z ? EXH?B?T H T Cie J R Dawusrn6WS-11 Red ffiW ftge l aff114 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA, ) No. V. ) (Judge Contents of Fulton Bank ) Account No. 3632-28686 in the ) names of David and/or Susan J. ) Koneff, contents of Charles Schwab ) IRA Account No. 6132-4807 in the ) name of David Koneff, contents of ) Charles Schwab IRA Account No. ) 5184-8499 in the name of David ) and/or Susan Koneff, contents of ) Charles Schwab IRA Account No. ) 3190-3541, real property located at ) 760 Seize Drive, Lewisberry, York ) County, Pennsylvania and all ) appurtenances thereon; 6.384 Acres ) of real property located on Tillie Drive, ) Hampshire County, West Virginia and ) all appurtenances thereon; and ) 3.118 Acres located on Tillie ) Drive, Hampshire County, West ) Virginia and all appurtenances ) thereon, Defendants. ) (Electronically filed) VERIFIED COMPLAINT OF FORFEITURE IN REM The United States of America, by and through its counsel, Thomas A. Marino, United States Attorney for the Middle District of Pennsylvania, and James T. Clancy, Assistant United States Attorney, files this Verified Complaint of Forfeiture in rem, J R DEW" IFiW WJl31 r PPaqe 2 of U respectfully alleging on information and belief the following: 1. This Court has jurisdiction over this matter by virtue of 28 U.S.C. §§ 1345 and 1355. 2. This is a civil action in rem brought to enforce the provisions of 18 U.S.C. § 981(a)(1)(C), which provides for the forfeiture of United States currency and real property which constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. § 1341 or traceable to property involved in such transactions or attempted transactions, or constituting or derived from proceeds traceable to the "specified unlawful activities" of mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses. 3. The defendant property is as follows: a. contents of Fulton Bank Account No. 3632-28686 in the names of David and/or Susan J. Koneff; b. contents of Charles Schwab IRA Account No. 6132- 4807 in the name of David Koneff; C. contents of Charles Schwab IRA Account No. 5184- 8499 in the name of David and/or Susan Koneff; Case J R D 69 -11 Fibd65MMM ft9e 3 cf114 d. contents of Charles Schwab IRA Account No. 3190- 3541; e. real property located at 760 Seize Drive, Lewisberry, York County, Pennsylvania and all appurtenances thereon; f. 6.384 Acres of real property located on Tillie Drive, Hampshire County, West Virginia and all appurtenances thereon; and g. 3.118 Acres located on Tillie Drive, Hampshire County, West Virginia and all appurtenances thereon. 4. The facts and circumstances supporting the seizure and forfeiture of the defendant property are as follows: 5. Rite Aid Corporation (Rite Aid) is a corporation whose primary business is the operation of retail drug stores throughout the United States. Rite Aid's headquarters is located in Camp Hill, Pennsylvania, within the Middle District of Pennsylvania. Cwe J R D &*-11 Fi led ffiMr P*je 4of 114 6. Federal and State Corporate Advisors, Inc. (F & S) was a corporation whose primary business was the administration of job tax credit programs for large corporations. F & S was located in Hialeah, Florida. 7. Brian Eden was the President and registered agent of F & S. Eden, on behalf of F & S, contracted with Rite Aid to obtain state and federal tax credits for Rite Aid. On December 19, 2003, Eden pled guilty to an indictment in the Northern District of Ohio, which charged him with violations of mail fraud, money laundering and conspiracy to defraud the United States in Criminal Case Numbers 5:03CR415, 5:03CR418 and 1:04CR75. 8. Daniel Semic was employed with Rite Aid Corporation as Senior Director of Taxes from May 1985 through July 2000. On September 4, 2002, Semic cooperated with federal agents by providing information related to the criminal investigation in this matter. 9. David Koneff was employed with Rite Aid Corporation from 1972 through March of 2000 and served as Sales Tax Manager from 1988 through March 2000. On September 4, 2002, qF Koneff cooperated with federal agents by providing information related to the criminal investigation in this matter. 10. Between early 1996 and December 1999, in the Middle District of Pennsylvania and elsewhere, Brian Eden, his company F & S, David Koneff and Daniel Semic conspired to defraud Rite Aid Corporation through various means including mail and wire fraud. The conspirators' intent and purpose was to defraud Rite Aid, its Board of Directors, its shareholders, and its investors by implementing a variety of means and schemes to effectuate an illegal purpose and misappropriate funds for their own personal benefit. 11. Rite Aid occasionally uses the services of outside firms to identify refunds or credits for various state and federal taxes paid by Rite Aid. These outside firms are paid commissions based upon a percentage of the moneys refunded or credits identified. 12. As the Director of Taxes and Sales Tax Manager respectively, Semic and Koneff identified and encouraged Rite Aid to participate in tax credit programs. It was the responsibility of the Tax Department to identify such programs and the ,y t:a?e R D 614811 IFftd r PA9e 6 df114 responsibility of the Human Resources Department to administer them. 13. Eden operated various companies which obtained tax refunds and credits for corporate clients. Eden was intimately familiar with these procedures and how they could be misused. 14. In 1992 or 1993, Eden, on behalf of his company, Florida Sales Tax Credits (FSTC), solicited Rite Aid regarding tax credit programs in Florida. Subsequently, Semic and Koneff encouraged Rite Aid to hire FSTC. Thereafter, Rite Aid entered into a contract with FSTC. 15. In or about 1994 or 1995, Koneff, Semic, and Eden devised a scheme to defraud Rite Aid and misappropriate its funds. Eden, through F & S, submitted requests for payment to Rite Aid claiming fraudulently inflated commissions based upon the amount of the purported tax credits obtained for Rite Aid. These requests were received at Rite Aid by Koneff and Semic, who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid. Koneff, Semic and Eden shared equally in the inflated commission payments. Additionally, Eden, Semic and (".asp J. R DQUMTI*049-11 FMO X113 MM Page7OF114 Koneff agreed that for every additional program Semic and Koneff provided to Eden, Eden would take twenty (20) percent of the commission for overhead expenses and the three would share equally in the remaining eighty (80) percent commission. This agreement encompassed state and federal tax programs and other job programs. 16. As a result of the arrangement made with Eden, Semic and Koneff created a business entity known as D 8. D Financial Consultants to receive payment for their portion of the fraudulently inflated tax credit commissions. Eden suggested that they incorporate their business in Florida and opened a bank account on behalf of D 8v D Financial Consultants at a bank located in Florida. Semic maintained the checkbook and had signature authority on the account. Eden made deposits into this bank account and informed Semic of the amounts. Semic and Koneff received several thousand dollars per month from the deposits into this account. 17. In 1996, as the scheme continued, Semic and Koneff began receiving payroll checks drawn from F 8v S. Eden would mail (.a®e 3M4WMWMR DQamw n6WI3 1 wed ®59.31UAM 8 dF 114 the payroll checks to Koneff for distribution. These checks were made payable to Semic and Koneff individually. Semic and Koneff received the payroll checks through 2000 in amounts totaling at least $130,000 to Koneff and at least $47,000 to Semic. 18. Beginning in 1996, in order to carry out a new scheme to obtain money from Rite Aid, Eden, Semic and Koneff established New York Sales Tax Credits (NYSTC), a bogus shell entity created to receive funds from Rite Aid for their personal use. The three agreed to divide the funds .equally. Eden established a bank account at First Fidelity Bank, N.A. (later known as First Union National Bank) in Bronx, New York to receive the funds. When unaccounted-for checks came to Rite Aid, Koneff and Semic caused false journal entries to be made in Rite Aid's books and records and transferred the funds to an estimated sales tax account that they controlled. Thereafter, they submitted check requests to Rite Aid payable to NYSTC. These checks were sent to NYSTC at a Mail Boxes, Etc. address established by Eden in New York and thereafter deposited in the NYSTC bank account at First Fidelity Bank. Once the funds were deposited, Eden, Semic and Koneff t e e J R Ddanrn6M" F11ed O5?/311/? R39e 9 aF 11 4 used the money for their own personal benefit. Between January 1996 through December 1999, approximately $6,415,639.80 was deposited in the NYSTC bank account and ultimately shared by Eden, Semic and Koneff. 19. Semic and Koneff received $240,000 through NYSTC to purchase a commercial building located in Harrisburg, Pennsylvania. Semic purchased this building for personal use and did utilize it for personal use. Portions of the building were also leased by Semic and Koneff under the name Gates Leasing. At the end of 1999, Koneff wanted to end his relationship with the Gates Leasing project. Koneff received $250,000 through NYSTC. Semic sold the property in early 2002 and received $230,000 from the sale. 20. Semic and Koneff participated with Eden in finding additional ways to use the money from NYSTC. Eden next incorporated a company named Cornerstone South, Inc., for purposes of purchasing and renting properties located in a real estate development called Doral Woods Allotment in Kissimmee, Florida. Approximately $750,000 was funneled from Rite Aid J R D &484 FiledGUMM05 P9e 110 Gff 114 through NYSTC to purchase these properties. Semic maintained possession of the Cornerstone South checkbook and received monthly statements from Eden. Semic prepared deposit tickets and sent them to Eden for deposit into the bank account. The properties turned a profit and Semic, Koneff and Eden reported rental income. In addition to investing in Cornerstone South, Inc., Semic purchased a home in the Doral Woods Allotment with personal funds and subsequently sold the property making a profit. 21. Eden also .suggested that the three establish a construction company to build in the same development as their rental properties. An unknowing third party was appointed as the president and general contractor for the company. This individual would contact Semic at his Rite Aid office and request funding as needed. An estimated $1,000,000 was invested in this company through NYSTC. Semic traveled to Kissimmee, Florida sporadically and visited the construction site. Approximately six to twelve homes were built including a model home. Semic received approximately one-third of the profits from the sale of the model home and the vacant lots. The construction company !r. C.a 3 R DQame n6M8-11 Red 1U/ 1111 Gf 114 subsequently was sold to another general contractor. Based on the foregoing, the United States of America has probable cause to believe that the defendant property in the name of David Koneff, Susan Koneff and or their representatives constitute proceeds traceable to the specified unlawful activities of mail fraud and wire fraud in violation of 18 U.S.C. § 1341 or traceable to property involved in such transactions or attempted transactions or conspiracy to commit any or all of the above offenses. The United States does not request authority from the Court to seize the defendant real property at this time. The United States will, as provided by 18 U.S.C. §985(b)(1) and (c)(1): 1. post notice of this Complaint on the defendant real property, and 2. serve notice of this action on the defendant real property owner along with a copy of this Complaint, and 3. file a lis pendens notice in county records of the defendant real property's status as a defendant in this in rem forfeiture action. I- 3 R D &484 FledffiMMA05 Page 112 4114 Title 18, United States Code Section §985(c)(3) provides that, because the United States will post notice of this Complaint on the defendant real property, it is not necessary for the Court to issue an arrest warrant in rem, or to take any other action to establish in rem jurisdiction over the defendant real property. Title 18 U.S.C. §985(b)(2) clearly states that "the filing of a lis pendens and the execution of a writ of entry for the purpose of conducting an inspection and inventory of the property shall not be considered a. seizure under this subsection." WHEREFORE, the United States of America prays that the Court: A. Issue warrants of arrest in rem for the defendant bank accounts; B. Authorize the United States to file a lis pendens on the subject real property; C. Authorize the United States to post the subject real property with a copy of the Complaint and Notice of Legal Action; (.tee R Dd?oiaaen?04' 91 =05 ftwel3dfM D. Authorize the United States to serve notice of this action on the defendant real property owners with a copy of this Complaint; E. Provide due notice be given to all parties to appear and show cause why the forfeiture should not be decreed; and F. Enter judgment declaring the aforementioned defendant property be condemned and forfeited to the United States of America for disposition according to law. Respectfully submitted, THOMAS A. MARINO UNITED STATES ATTORNEY By: s./James T. Clancy JAMES T. CLANCY ASSISTANT U.S. ATTORNEY 228 Walnut Street Harrisburg, PA 17108 (717)221-4482 Fax: (717)221-2246 James. Clancy@usdoj.gov PAS4339 :I QBDiDPMR DdNxmw*&41?11 FjbdO5GVAW a 114 dF 114 VERIFICATION I, James T. Clancy, Assistant United States Attorney, declare under penalty of perjury as provided by 28 U.S.C. § 1746, that the foregoing Complaint for Forfeiture In Rem is based on reports and information furnished by the Drug Enforcement Administration and everything contained therein is true and correct to the best of my knowledge. Dated: May 31, 2005 s James T. Clanc JAMES T. CLANCY Assistant U.S. Attorney Ir- __ EXHIBIT 7 Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA, ) No. ) V. ) (Judge Contents of Crown Classic Bank ) Account No. 1010100718058 in the ) names of Daniel Semic, Jr. and/or ) Sharon L. Semic; contents of ISI ) Financial Group, Inc. Account No. ) 204066 in the names of Daniel ) Semic, Jr. and/or Sharon L. Semic; ) contents of ISI Financial Group, Inc. ) IRA Account No. 203063 in the names ) of Daniel Semic, Jr. and/or Sharon L. ) Semic; contents of ISI Financial ) Group, Iris. Account No. 203061 in ) the names of Daniel Semic, Jr. and/or ) Sharon L. Semic; $356,407 in United ) States currency that represented ) deposits to American Express ) Financial Services, American Express ) Financial Advisors, and/or IDS ) American Express under Client ) Account No. 17744093, and ) approximately 2.42 acres of real ) property known as Parcel No. ) 36-07B-09, Penn Township, ) Huntingdon County, Pennsylvania, j and all appurtenances thereon, ) Defendants. ) (Electronically filed) Page 1 of 14 VERIFIED COMPLAINT OF FORFEITURE IN REM The United States of America, by and through its counsel, Thomas A. Marino, United States Attorney for the Middle District of T Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 2 of 14 Pennsylvania, and James T. Clancy, Assistant United States Attorney, files this Verified Complaint of Forfeiture in rem, respectfully alleging on information and belief the following: 1. This Court has jurisdiction over this matter by virtue of 28 U.S.C. §§ 1345 and 1355. 2. This is a civil action in rem brought to enforce the provisions of 18 U.S.C. § 981(a)(1)(C), which provides for the forfeiture of United States currency and real property which constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. § 1341 or traceable to property involved in such transactions or attempted transactions, or constituting or derived from proceeds traceable to the "specified unlawful activities" of mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses. 3. The defendant property is as follows: a. contents of Crown Classic Bank Account No. 1010100718058 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; b. contents of ISI Financial Group, Inc. Account No. 'r Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 3 of 14 204066 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; C. contents of ISI Financial Group, Inc. IRA Account No. 203063 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; d. contents of ISI Financial Group, Inc. Account No. 203061 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; .::.. e. $356,407 in United States currency that represented deposits to American Express Financial Services, American Express Financial Advisors, and/or IDS American Express under Client Account No. 17744093; and f. approximately 2.42 acres of real property known as Parcel No. 36-07B-09, Penn Township, Huntingdon County, Pennsylvania, and all appurtenances thereon. 4. The facts and circumstances supporting the seizure and forfeiture of the defendant property are as follows: T Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 4 of 14 5. Rite Aid Corporation (Rite Aid) is a corporation whose primary business is the operation of retail drug stores throughout the United States. Rite Aid's headquarters is located in Camp Hill, Pennsylvania, within the Middle District of Pennsylvania. 6. Federal and State Corporate Advisors, Inc. (F & S) was a corporation whose primary business was the administration of job tax credit programs for large corporations. F & S was located in Hialeah, Florida. 7. Brian°Eden was the President.andi.-registered agent of F & S. Eden, on behalf of F & S, contracted with Rite Aid to obtain state and federal tax credits for Rite Aid. On December 19, 2003, Eden pled guilty to an indictment in the Northern District of Ohio, which charged him with violations of mail fraud, money laundering and conspiracy to defraud the United States in Criminal Case Numbers 5:03CR415, 5:03CR418 and 1:04CR75. 8. Daniel Semic was employed with Rite Aid Corporation from May 1985 through July 2000 serving as Tax Manager, Director of Taxes and ultimately Senior Director of Taxes. On September 4, 2002, Semic cooperated with federal agents by 9- Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 5 of 14 providing information related to the criminal investigation in this matter. 9. David Koneff was employed with Rite Aid Corporation from 1972 through March of 2000 and served as Sales Tax Manager from 1988 through March 2000. On September 4, 2002, Koneff cooperated with federal agents by providing information related to the criminal investigation in this matter. 10. Between early 1996 and December 1999, in the Middle District of Pennsylvania and elsewhere, ; Brian Eden, his company F & S, David Koneff and Daniel Semic conspired to defraud Rite Aid Corporation through various means including mail and wire fraud. The conspirators' intent and purpose was to defraud Rite Aid, its Board of Directors, its shareholders, and its investors by implementing a variety of means and schemes to effectuate an illegal purpose and misappropriate funds for their own personal benefit. 11. Rite Aid occasionally uses the services of outside firms to identify refunds or credits for various state and federal taxes paid by Rite Aid. These outside firms are paid commissions based upon Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 6 of 14 a percentage of the moneys refunded or credits identified. 12. As the Director of Taxes and Sales Tax Manager respectively, Semic and Koneff identified and encouraged Rite .Aid to participate in tax credit programs. It was the responsibility of the Tax Department to identify such programs and the responsibility of the Human Resources Department to administer them. 13. Eden operated various companies which obtained tax refunds and credits for corporate. clients. Eden was intimately familiar with these procedures and how they could be misused. 14. In 1992 or 1993, Eden, on behalf of his company, Florida Sales Tax Credits (FSTC), solicited Rite Aid regarding tax credit programs in Florida. Subsequently, Semic and Koneff encouraged Rite Aid to hire FSTC. Thereafter, Rite Aid entered into a contract with FSTC. 15. In or about 1994 or 1995, Koneff, Semic, and Eden devised a scheme to defraud Rite Aid and misappropriate its funds. Eden, through F & S, submitted requests for payment to Rite Aid claiming fraudulently inflated commissions based upon the amount Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 7 of 14 of the purported tax credits obtained for Rite Aid. These requests were received at Rite Aid by Koneff and Semic, who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid. Koneff, Semic and Eden shared equally in the inflated commission payments. Additionally, Eden, Semic and Koneff agreed that for every additional program Semic and Koneff provided to Eden, Eden would take twenty (20) percent of the commission for overhead expenses and the three would share °equally in the remaining. eighty (80) percent commission. This .:, agreement encompassed state and federal tax programs and other job programs. 16. As a result of the arrangement made with Eden, Semic and Koneff created a business entity known as D & D Financial Consultants to receive payment for their portion of the fraudulently inflated tax credit commissions. Eden suggested that they incorporate their business in Florida and opened a bank account on behalf of D & D Financial Consultants at a bank located in Florida. Semic maintained the checkbook and had signature authority on the account. Eden made deposits into this bank fi Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 8 of 14 account and informed Semic of the amounts. Semic and Koneff received several thousand dollars per month from the deposits into this account. 17. In 1996, as the scheme continued, Semic and Koneff began receiving payroll checks drawn from F & S. Eden would mail the payroll checks to Koneff for distribution. These checks were made payable to Semic and Koneff individually. Semic and Koneff received the payroll checks through 2000 in amounts totaling at least $130,000Ao Koneff and at least $47,000 to Semic. 18. Beginning in 1996, in order -to carry out a new scheme to obtain money from Rite Aid, Eden, Semic and Koneff established New York Sales Tax Credits (NYSTC), a bogus shell entity created to receive funds from Rite Aid for their personal use. The three agreed to divide the funds equally. Eden established a bank account at First Fidelity Bank, N.A. (later known as First Union National Bank) in Bronx, New York to receive the funds. When unaccounted-for checks came to Rite Aid, Koneff and Semic caused false journal entries to be made in Rite Aid's books and records and transferred the funds to an estimated sales tax account m Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 9 of 14 that they controlled. Thereafter, they submitted check requests to Rite Aid payable to NYSTC. These checks were sent to NYSTC at a Mail Boxes, Etc. address established by Eden in New York and thereafter deposited in the NYSTC bank account at First Fidelity Bank. Once the funds were deposited, Eden, Semic and Koneff used the money for their own personal benefit. Between January 1996 through December 1999, approximately $6,415,639.80 was deposited in the NYSTC bank. account and ultimately shared by Eden,. Semic. and Koneff. 19. Semic and Koneff received $240,000 through NYSTC to purchase a commercial building located in Harrisburg, Pennsylvania. Semic purchased this building for personal use and did utilize it for personal use. Portions of the building were also leased by Semic and Koneff under the name Gates Leasing. At the end of 1999, Koneff wanted to end his relationship with the Gates Leasing project. Koneff received $250,000 through NYSTC. Semic sold the property in early 2002 and received $230,000 from the sale. 7 Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 10 of 14 20. Semic and Koneff participated with Eden in finding additional ways to use the money from NYSTC. Eden next incorporated a company named Cornerstone South, Inc., for purposes of purchasing and renting properties located in a real estate development called Doral Woods Allotment in Kissimmee, Florida. Approximately $750,000 was funneled from Rite Aid through NYSTC to purchase these properties. Semic maintained possession of the Cornerstone South checkbook and received monthly.,statements from Eden. Semic prepared deposit.-tickets, and sent them to Eden for deposit into the bank account. The properties turned a profit and Semic, Koneff and Eden reported rental income. In addition to investing in Cornerstone South, Inc., Semic purchased a home in the Doral Woods Allotment with personal funds and subsequently sold the property making a profit. 21. Eden also suggested that the three establish a construction company to build in the same development as their rental properties. An unknowing third party was appointed as the president and general contractor for the company. This individual would contact Semic at his Rite Aid office and request funding as Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 11 of 14 needed. An estimated $1,000,000 was invested in this company through NYSTC. Semic traveled to Kissimmee, Florida sporadically and visited the construction site. Approximately six to twelve homes were built including a model home. Semic received approximately one-third of the profits from the sale of the model home and the vacant lots. The construction company subsequently was sold to another general contractor. Based on the foregoing, the United States of America has probable cause to believe that the defendant property in.-the name of David Koneff, Susan Koneff and or their representatives constitute proceeds traceable to the specified unlawful. activities of mail fraud and wire fraud in violation of 18 U.S.C. § 1341 or traceable to property involved in such transactions or attempted transactions or conspiracy to commit any or all of the above offenses. The United States does not request authority from the Court to seize the defendant real property at this time. The United States will, as provided by 18 U.S.C. §985(b)(1) and (c)(1): Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 12 of 14 1. post notice of this Complaint on the defendant real property, and 2. serve notice of this action on the defendant real property owner along with a copy of this Complaint, and 3. file a lis pendens notice in county records of the defendant real property's status as a defendant in this in rem forfeiture action. Title 18, United States Code Section §985(c)(3) provides that, t because the United States willpost notice of this Complaint on the defendant real property, it is not necessary for the Court to issue an arrest warrant in rem, or to take any other action to establish in rem jurisdiction over the defendant real property. Title 18 U.S.C. §985(b) (2) clearly states that "the filing of a lis pendens and the execution of a writ of entry for the purpose of conducting an inspection and inventory of the property shall not be considered a seizure under this subsection." WHEREFORE, the United States of America prays that the Court: A. Issue warrants of arrest in rem for the defendant bank accounts; Case 1:05-cv-01102-SHR Document 1-1 Filed 05/31/2005 Page 13 of 14 B. Authorize the United States to file a Iis pendens on the subject real property; C. Authorize the United States to post the subject real property with a copy of the Complaint and Notice of Legal Action; D. Authorize the United States to serve notice of this action on the defendant real property owners with a copy of this Complaint; E. Provide due notice be given to all parties to appear and show cause why the forfeiture should not be decreed; and F. Enter judgment declaring the aforementioned defendant property be condemned and forfeited to the United States of America for disposition according to law. Respectfully submitted, THOMAS A. MARINO UNITED STATES ATTORNEY By: s/James T. Clancy _ JAMES T. CLANCY ASSISTANT U.S. ATTORNEY 228 Walnut Street Harrisburg, PA 17108 (717)221-4482 Fax: (717)221-2246 James.Clancy@usdoj.gov PA54339 EXH18?T I Case 1:05-cv-01101-SHR Document 68 Filed 04/24/08 Page 1 of 6 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA v: NO. 1: CV-05-1101 (Judge Rambo) Contents of Fulton Bank Account No. 3632-28686 in the names of David and/or Susan J. Koneff, et a!. Defendants. (Electronically filed) SETTLEMENT AGREEMENT AND CONSENT DECREE FOR FORFEITURE COMES NOW the United States of America, by and through its counsel, Martin C. Carlson, Acting United States Attorney for the Middle District of Pennsylvania, and James T. Clancy, Assistant United States Attorney, and David and Susan Koneff, individually and through their counsel, David Foster, Esquire, and enter into the following Settlement Agreement and Consent Decree in this matter. On May 31, 2005, a civil action was instituted against. the defendant property. Subsequently, the Claimants filed a Motion to Case 1,:05-cv-01101-SHR Document 68 Filed 04/24/08 Page 2 of 6 Stay the Civil action until the criminal status of the claimants had been clarified and/or resolved. In an effort to resolve the claims of David and Susan Koneff ("Claimants") without further time and expense to the parties, the Claimants hereby agree, consent and stipulate to accept the, return of the following assets in settlement of the civil forfeiture action: 1) Charles Schwab IRA Account No. 6132-4807 in the amount of $234,989.75; 2) Charles Schwab IRA Account No. 3190-354lin the amount of $89,938.95; and 3) Any unspent portion of the fees held by Costopoulos, Foster and Fields. The Claimants further agree, consent, and stipulate to knowingly and voluntarily forfeit the remaining assets to the United States of America as follows: 1) Fulton Bank, Account #3632-28686 in the amount of $1.0,057.1.0; 2) Charles Schwab Account #: 5184-8499 in the amount of $709,642.97; Case 1:05-cv-01101-SHR Document 68 Filed 04/24/08 Page 3 of 6 3) Real property located at 760 Seitz Drive, Lewisber'ry, York County, Pennsylvania; 4) 3.118 Acres of Property on Tillie Drive, Hampshire County, West Virginia; and 5) 6.384 Acres of Property located on Tillie Drive, Hampshire County, West Virginia. With respect to the Charles Schwab IRA accounts being returned to the Claimants, the Claimants understand that they will receive and to accept the full principal amount of the Charles Schwab accounts, without any accrued interest. In return, the United States has agreed to release the Claimants from any tax liability regarding the real property located at 760 Seitz Drive, Lewisberry, Pennsylvania. The parties agree that, with respect to any outstanding taxes o-vved for 760 Seitz Drive, Lewisberry-, Pennsylvania, those taxes shall be paid out of the proceeds realized from the sale of this property. The defendant property constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. §1341 or traceable to property involved in Case 1:05-cv-01101-SHR Document 68 Filed 04/24/08 Page 4 of 6 such transactions or attempted transactions, or constituting or derived from proceeds traceable to the "specified unlawful activities" or mail fraud, wire fraud, or conspiracy to commit. any or all of the above offenses. Claimants further assert that no other party has an equitable or legal interest in any of the aforementioned property agreed to and consented to be forfeited. Claimants and their heirs, executors, administrators or assigns agree to withdraw, waive and consider settled any and all complaints, claims, demands, rights and causes of action which they may have or may hereafter acquire against the United States, its agents, servants and employees on account of the incident or circumstances giving rise to the claim they have pending against the United States in the above-captioned matter. Claimants further agree to sign any and all documents necessary to effectuate the forfeiture of the aforementioned asset. Claimants agree to make no claim against the United States or any of its agencies or employees, including claims for attorney fees and costs of litigation of this case. Claimants and their attorney Case 1:05-cv-01101-SHR Document 68 Filed 04/24/08 Page 5 of 6 agree to waive any right to attorneys fees and costs that they may have under the Equal Access to Justice Act, 28 U.S.C. 3 2412 or any other provision of law. Claimants hereby waive the service of any papers and pleadings upon them and consent to David Foster, Esquire at 831 Market Street, Lemoyne, PA 17043 as being their agent for the acceptance of any further pleadings or papers to be served thereupon. Claimants and their heirs, executors, administrators or assigns further agree to indemnify and hold harmless the United States, its agents, servants and employees from any and all causes of action, claims, liens, rights, or subrogated or contribution interests incident to or resulting from further litigation or the prosecution of claimant by Claimant or his heirs, executors, administrators or assigns against any third party or against the United States. This Settlement Agreement contains a complete description of the agreement between the parties. All material representations, understandings and promises of the parties are contained in this Case 1:05-cv-01 101 -SHR Document 68 Agreement. Filed 04/24/08 Page 6 of 6 This Settlement Agreement must be signed by claimants and counsel and returned to the United States Attorney's Office on or before April 21, 2008. Otherwise, the United States reserves the right to withdraw this agreement. SIGNED AND AGREED: 4-7-06 By: ma&? C. Date MARTIN C. CARLSON Acting U. S. Attorney Lt 3 d _ Dat DAVID KON F Claimant Date SUSAN KONEFF Claimant Date DA D F ER, Esq. Attorney for Claimants 0000 EXH?B?T K Case 1:05-cv-01102-SHR Document 62 Filed 06124/08 Page 1 of 6 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA V. NO. 1: CV-05-1102 (Judge Rambo) Contents of Crown Classic Bank Account No. 10 10 100718058 in the names of Daniel Semic, Jr. and/or Sharon L. Semic, et al. Defendants. (Electronically filed) SETTLEMENT AGREEMENT AND CONSENT DECREE FOR FORFE'?IBE COMES NOW the United States of America, by and through its counsel, Martin C. Carlson, Acting United States Attorney for the Middle District of Pennsylvania, and James T. Clancy, Assistant United States Attorney, and Daniel and Sharon Semic, individually and through their counsel, David Foster, Esquire, and enter into • the following Settlement Agreement and Consent Decree in this matter. On May 31, 2005, a civil action was instituted against the defendant property. Subsequently, the Claimants filed a Motion to Case 1:05-cv-01102-SHR Document 62 Filed 06/24/08 Page 2 of 6 Stay the Civil action until the criminal status of the claimants had been clarified and/or resolved. In an effort to resolve the claims of Daniel and Sharon Semic rClaimants") without further time and expense to the parties, the Claimants hereby agree, consent and stipulate to accept the return of the following assets in settlement of the civil forfeiture action: 1) Contents of ISI Financial Group, Inc. IRA Account No. 203063 in the names of Daniel Semic, Jr., and/or Sharon L. Semic. The Claimants further agree, consent, and stipulate to knowingly and voluntarily forfeit the remaining assets to the United States of America as follows: 1) Contents of Crown Classic Bank Account No. 10 10 100718058 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; 2) Contents of ISI Financial Group, Inc. Account No. 204066 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; 3) Contents of ISI Financial Group, Inc. Account No. Case 1:05-cv-01102-SHR Document 62 Filed 06/24/08 Page 3 of 6 203061 in the names of Daniel Semic, Jr. and/or Sharon L. Semic; 4) $356,407.00 in United States currency; and 5) Approximately 2.42 acres of real property known as Parcel No. 36-07B-09, Penn Township, Huntingdon County, Pennsylvania and all appurtenances thereon. The defendant property constitutes or is derived from proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. §1341 or traceable to property involved in such transactions or attempted transactions, or constituting or derived from proceeds traceable to the "specified unlawful activities" or mail fraud, wire fraud, or conspiracy to commit any or all of the above offenses. Claimants further assert that no other party has an equitable or legal interest in any of the aforementioned property agreed to and consented to be forfeited. Claimants and their heirs, executors, administrators or assigns agree to withdraw, waive and consider settled any and all complaints, claims, demands, rights and causes of action which Case 1:05-cv-01102-SHR Document 62 Filed 06/24/08 Page 4 of 6 they may have or may hereafter acquire against the United States, its agents, servants and employees on account of the incident or circumstances giving rise to the claim they have pending against the United States in the above-captioned matter. Claimants further agree to sign any and all documents necessary to effectuate the forfeiture of the aforementioned asset. Claimants agree to make no claim against the United States or any of its agencies or employees, including claims for attorney fees and costs of litigation of this case. Claimants and their attorney agree to waive any right to attorneys fees and costs that they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412 or any other provision of law. Claimants hereby waive the service of any papers and pleadings upon them and consent to David Foster, Esquire at 831 Market Street, Lemoyne, PA 17043 as being their agent for the acceptance of any further pleadings or papers to be served thereupon. Claimants and their heirs, executors, administrators or assigns further agree to indemnify and hold harmless the United Case 1:05-cv-01102-SHR Document 62 Filed 06/24/08 Page 5 of 6 States, its agents, servants and employees from any and all causes of action, claims, liens, rights, or subrogated or contribution interests incident to or resulting from further litigation or the prosecution of claimant by Claimant or his heirs, executors, administrators or assigns against any third party or against the United States. This Settlement Agreement contains a complete description of the agreement between the parties. All material representations, understandings and promises of the parties are contained in this Agreement. This Settlement Agreement must be signed by claimants and counsel and returned to the United States Attorney's Office on or Case 1:05-cv-01102-SHR Document 62 Filed 06/24/08 Page 6 of 6 before 2008. Otherwise, the United States reserves the right to withdraw this agreement. SIGNED AND AGREED: (0.Z?-O5 By: ?•?S Date MARTIN CA LSO Ac A me D? e DANIEL S MIC, JR. Dat Claimant O Date SHARON IC Claimant G l ? a? Date DAVID FO ER, Esq. Attorney for Claimants EXHIBIT L • U.S. DepartmenTof Justice Criminal Division Washington, D.C. 20530 APR 13 2009 Brian P. Seamen, Esquire Stradley Ronon 2600 One Commerce Square Philadephia, PA 19103 Re: Petition for Remission of Forfeiture for Approximately $1,774,168.67 and The Proceeds of the Sales of Two Real Properties United States v. Contents of Crown Classic Bank Account #1010100718058 in the Names of Daniel Semic and /or Sharon Semic, et al. (M.D. Pa.) Civil Case No.: CV-04-9929 Asset Identification No.: 05-FBI-003232/003241/003233/003236/003238/ 003239 / 003245 / 003248 / 003249 Petitioner: Affiliated FM Insurance Company Dear Mr. Seamen: The Petition for Remission of Forfeiture you filed on behalf of your client, Affiliated FM Insurance Company (Affiliated), has been granted up to the amount of $6,314,789.80. Because the anticipated proceeds from the sale of the assets forfeited to the United States in this case is insufficient to compensate Affiliated fully, Affiliated will receive the net proceeds from the forfeiture after payment of government expenses. Should the aggregate value of recompense Affiliated receives for its losses in this case (e.g., remission, civil judgments or settlements before attorney's fees, or restitution payments) ever exceed $6,314,789.80, then Affiliated must return to the Assets Forfeiture Fund any such excess up to the amount of this and any other remission in this case. Acceptance of this grant signifies acceptance of this condition. This decision does not constitute a determination as to the priority or validity of any ownership interest the Affiliated may claim in the property as against any other party, and the allowance of this petition is subject to the rules and regulations set forth in 28 C.F.R. § 9.7 (2008). 2 Payment will be made by mail by the U.S. Marshals Service, Middle District of Pennsylvania, Federal Building, Washington Avenue and Linden Street, Room 231, Scranton, Pennsylvania 18501, phone number (570) 346-7277. Sincerely, Richard Weber, Chief Asset Forfeiture and Money Laundering Section By: Alice W. DA y, Acting Deputy Asset Forfeiture and Money Laundering Section cc: James T. Clancy Assistant U.S. Attorney Middle District of Pennsylvania Financial Litigation Unit U.S. Attorney's Office Middle District of Pennsylvania Michael Regan U.S. Marshal Middle District of Pennsylvania Steven Jobe, Acting Unit Chief Asset Forfeiture Unit Federal Bureau of Investigation EACH M--. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. . PLAINTIFF'S FIRST SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS TO DEFENDANTS DAVID AND SUSAN KONEFF Pursuant to Pennsylvania Rule of Civil Procedure 4009.11, Plaintiff Rite Aid Corporation ("Rite Aid") propounds the following requests for production of documents to Defendants David and Susan Koneff. DEFINITIONS The following definitions and instructions apply to each of the discovery requests set forth herein, and are deemed to be incorporated in each of said requests: 1. The term "you" or "your" means David and/or Susan Koneff. 2. The term "document" shall be construed to the broadest extent permitted and means, without limitation, any written, printed, typed, photostatted, photographic, computerized, recorded or otherwise reproduced communication or representation, whether comprised of letters, words, numbers, pictures, sounds or symbols, or any combination thereof. This definition includes copies or duplicates of documents contemporaneously or subsequently created that have any non-conforming notes or other markings. Without limiting the generality of the foregoing, the term "document" includes, but is not limited to, correspondence, memoranda, notes, records, letters, envelopes, telegrams, messages, studies, analyses, contracts, agreements, working papers, summaries, statistical statements, financial statements or work papers, accounts, analytical records, reports and/or summaries or investigations, trade letters, press releases, comparisons, books, calendars, diaries, articles, magazines, newspapers, booklets, brochures, pamphlets, circulars, bulletins, notices, drawing, diagrams, instructions, notes or minutes of meetings, or other communications of any type, including inter and intra- office communications, questionnaires, surveys, charts, graphs, phonograph recordings, films, tapes, computer and word processor disks, data cells, drums, print-outs, all other data compilations from which information can be obtained (translated, if necessary, into usable form), and any preliminary versions, drafts or revisions of any of the foregoing. 3. The terms "communicate" and "communication" shall mean and include every manner or means of disclosure, transfer, or exchange, and every disclosure, transfer or exchange of information whether orally or by document or face-to-face, by telephone, telecopier, mail, computer communication, personal delivery or otherwise. 4. The terms "referring," "relate," "related," "refer," "referred," "concerning," "concern," "concerned" and "relating" mean, without limitation, referring to, relating to, having any relationship to, pertaining to, evidencing or constituting evidence of, whether directly or indirectly, or in whole or in part, the subject matter of the particular Request. 5. The connectives "and" and "or" shall be construed either disjunctively or conjunctively as necessary to bring within the scope of the discovery request all responses that might otherwise be construed to be outside of its scope. 6. The plural of any word shall include the singular and the singular shall include the plural. The masculine shall include the feminine. INSTRUCTIONS The following definitions and instructions apply to each of the discovery requests set forth herein, and are deemed to be incorporated in each of said requests: 1. If any part of a document is responsive to any request, the whole document is to be produced. 2. The present tense shall be construed to include the past tense and the past tense shall be construed to include the present tense as necessary to bring within the scope of the requests any documents that might otherwise be construed as outside their scope. 2 fi toad 3. Any alteration of a responsive document, including any marginal notes, handwritten notes, underlining, date stamps, received stamps, endorsed or filed stamps, drafts, revisions, modifications and other versions of a final document is a separate and distinct document and it must be produced. 4. If you file a timely objection to any portion of a request, definition, or an instruction, provide a response to the remaining portion. 5. The terms defined above and the individual requests for production and inspection should be construed broadly to the fullest extent of their meaning in a good faith effort to comply with the Federal Rules of Civil Procedure and the Local Rules. 6. These discovery requests are continuing and require supplemental responses, if you obtain additional information called for by any request between the time of the original response and the time set for trial. Each supplemental response shall be served on Defendants' counsel no later than thirty (30) days after the discovery of the additional information, and in no event shall any supplemental response be served later than the day before the first day of trial. 7. In producing documents and other materials, you are requested to furnish all documents or things in your possession, custody or control, regardless of whether such documents or materials are possessed directly by you or your directors, officers, agents, employees, representatives, subsidiaries, managing agents, affiliates, investigators, or by your attorneys or their agents, employees, representatives or investigators. 8. Documents are to be produced in full; redacted documents will not constitute compliance with these requests. If any requested document or thing cannot be produced in full, produce it to the extent possible, indicating which document or portion of that document is being withheld and the reason that document or that portion is being withheld. 9. In producing documents, you are requested to produce a copy of the original of each document requested together with copies of all non-identical versions and/or drafts of that document. If the original of any document cannot be located, a copy of a copy shall be provided in lieu thereof, and shall be legible and bound or stapled in the same manner as the original. 10. If you object to any request or part of any request because of a privilege, you and/or the attorney asserting the privilege must enumerate (i) the type of document, e.g., letter or memorandum; (ii) the general subject matter of the document; (iii) the date of the document; and (iv) such other information as is sufficient to identify the document for a subpoena duces tecum, including, where appropriate, the author of the document, the addresses of the document, and any other recipients shown in the document, and, where not apparent, the relationship of the author, addresses, and recipients to each other;. If any document :requested herein is withheld based on a claim that such document constitutes attorney work product, please identify the litigation in connection with which the document and the information it contains was obtained and/or prepared. 11. If you refuse to produce a document on the ground that compliance would be unduly burdensome, set forth the specific reasons for such objection, including the number and nature of documents needed to be searched, the location of the documents, and the number of person-hours and costs that would be involved in conducting the search. DOCUMENT REQUESTS Document Request No. 1: All documents constituting or referring or relating to communications between you and Daniel Semic, Sharon Semic, Brian Eden, Mrs. Brian Eden, F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit, and Federal & State Corporate Advisors, Inc. from January 1995 to the present. Document Request No. 2: All documents referring or relating to Brian Eden, Daniel Semic, Sharon Semic, New York Sales Tax Credit, Federal & State Corporate Advisors, Inc. or F & S Corporate Advisors, Inc. Document Request No. 3: All documents referring or relating to any funds received by you from Brian Eden or any Brian Eden related entity including but not limited to, F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit, Federal and State Corporate Advisors, Inc., Gates Leasing, Inc., Summit Group of America, Inc., Athena Holdings, Inc. and any other entity in which Brian Eden or a family member of Brian Eden holds or held a legal or equitable interest. Document Request No. 4: All documents referring or related to the actions of the defendants described in Paragraphs 13 through 23 of Plaintiffs First Amended Complaint. Document Request No. 5: All of your bank statements and cancelled checks for the years 2001, 2002 and January through May, 2003. Document Request No. 6: All statements of your account that you received from any stock broker, brokerage house or investment advisor since January 1, 1996. Document Request No. 7: All documents referring or relating to any purchases or sales by you of any real property since January 1, 1996. Document Request No. 8: All documents referring or relating to any holdings, purchases or sales by you of securities of any kind including, but not limited to, stocks, bonds, and annuities since January 1, 1996. Document Request No. 9: All documents referring or relating to Plaintiff's alleged fraudulent conduct referred to in paragraph 4 of your New Matter. Document Request No. 10: All documents referring or relating to Plaintiff's alleged illegal conduct referred to in paragraph 5 of your New Matter. 4 i Document Request No. 11: All documents referring or relating to the allegation in paragraph 6 of your New Matter that the property alleged in the Complaint to be taken by Defendants was not the lawful property of the Plaintiff. Document Request No. 12: All documents constituting, referring or relating to communications with the office of the U.S. Attorney for the Middle District of Pennsylvania, the Northern District of Ohio, or the Southern District of Florida Document Request No. 13: All documents referring or relating to Gates Leasing, Inc., Summit Group of America, Inc., or Athena Holdings, Inc. Document Request No. 14: All documents not previously produced that refer or relate to assets that you directly or indirectly own or control (in whole or in part). aniel Segal, I.D. No. 26218 Steve D. Shadowen, I.D. No. 41953 Gordon A. Einhom, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: February 15, 2005 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Plaintiff's First Set of Requests for Production of Documents to Defendants David and Susan K.oneff upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire 37 South Hanover Street, Suite 201 Carlisle, PA 17013 Attorneys for Defendant Eden ,G 4`n A. Einhorn Dated: February 15, 2005 E)-. H?B?T N Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 Attorney for Defendants David & Susan Koneff and Daniel & Sharon Semic RITE AID CORPORATION Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. NO. 02-5863 RESPONSE OF DEFENDANTS DAVID AND SUSAN KONEFF_ TO PLAINTIFF'S FIRST SET OF REQUEST FOR PRODUCTION OF DOCUMENTS 1. None. 2. None. 3. None. 4. None. 5. Other than bank statements already in the possession of the Plaintiff, none. 6. None other than what has been provided to Plaintiff regularly since June 2003 through counsel. 7. See attached. 8. None. 9. None. 0 31 oglas' 10. None. 11. None. 12. Objected to the extent that it seeks material that is protected by the attorney- client privilege. Without waiving said objection, counsel does have possession of correspondence between counsel for this defendant and John D. Sammon, Esquire, Assistant U.S. Attorney for the Northern District of Ohio, and Kim Douglas Daniel., Esquire, Assistant U.S. Attorney for the Middle District of Pennsylvania. Defendant does not object to the release of this correspondence to plaintiff's counsel should (1) plaintiff's counsel agree to maintain the confidentiality of said correspondence, and (2) plaintiffs counsel obtain written consent from the Attorney General's offices for the Northern District of Ohio and the Middle District of Pennsylvania for the release of this correspondence to plaintiffs counsel. 13. None. 14. None. Respectfully submitted, David J. Foster, wire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 ---Attorney for Defendant Dated: March S , 2005 CERTIFICATE OF SERVICE I, Tiffany M. Miller, a secretary for the law offices of Costopoulos, Foster & Fields, hereby certify that on this t day of March, 2005, a true and correct copy of the foregoing document was served upon all counsel of record by: Hand Delivery X First Class Mail, Postage Pre-Paid Certified Mail, Return Receipt Requested Fax Transmission Overnight Mail at the following address(es) and/or number(s): Gordon A. Einhorn, Esquire Steve D. Shadowen, Esquire HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 Attorneys for Plaintiff Rite Aid Corporation By: COSTOPOULOS, FOSTER & FIELDS Rift Tiffany ter N D. Z r 4 T wym o Im m caw n Dn D Z N D N ? ? v o? CA) ? ?> m z N 95 1 ? a ?sw a w to N RR ?o N g S? R t 0 36 R g ?M I R m? $ g cis r-z f m -4 Q co o V P' 3 It03 s[ O 1 01 3 0 ?C i ??, ?; .? ~? ? 3 °' ? ?g ?? a?n°`g?aa ?"g? ?_?a ..4 7?s''`d??x ? N W 0 w If VERIFICATION I, David Koneff, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. David Koneff Dated: 31 C CS VERIFICATION I, Susan Koneff, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unworn falsification to authorities. Susan Koneff Dated: -? k 0 0-!S- vAlj3Jw ? it kor IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. NO. 02-5863 PLAINTIFF'S FIRST SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS TO DEFENDANTS DANIEL AND SHARON SEMIC Pursuant to Pennsylvania Rule of Civil Procedure 4009.11, Plaintiff Rite Aid Corporation ("Rite Aid") propounds the following requests for production of documents to Defendants Daniel and Sharon Semic. The following definitions and instructions apply to each of the discovery requests set forth herein, and are deemed to be incorporated in each of said requests: 1. The term "you" or "your" means Daniel and/or Sharon Semic. 2. The term "document" shall be construed to the broadest extent permitted and means, without limitation, any written, printed, typed, photostatted, photographic, computerized, recorded or otherwise reproduced communication or representation, whether comprised of letters, words, numbers, pictures, sounds or symbols, or any combination thereof. 6?l151 os? This definition includes copies or duplicates of documents contemporaneously or subsequently created that have any non-conforming notes or other markings. Without limiting the generality of the foregoing, the term "document" includes, but is not limited to, correspondence, memoranda, notes, records, letters, envelopes, telegrams, messages, studies, analyses, contracts, agreements, working papers, summaries, statistical statements, financial statements or work papers, accounts, analytical records, reports and/or summaries or investigations, trade letters, press releases, comparisons, books, calendars, diaries, articles, magazines, newspapers, booklets, brochures, pamphlets, circulars, bulletins, notices, drawing, diagrams, instructions, notes or minutes of meetings, or other communications of any type, including inter and intra- office communications, questionnaires, surveys, charts, graphs, phonograph recordings, films, tapes, computer and word processor disks, data cells, drums, print-outs, all other data compilations from which information can be obtained (translated, if necessary, into usable form), and any preliminary versions, drafts or revisions of any of the foregoing. 3. The terms "communicate" and "communication" shall mean and include every manner or means of disclosure, transfer, or exchange, and every disclosure, transfer or exchange of information whether orally or by document or face-to-face, by telephone, telecopier, mail, computer communication, personal delivery or otherwise. 4. The terms "referring," "relate," "related," "refer," "referred," "concerning," "concern," "concerned" and "relating" mean, without limitation, referring to, relating to, having any relationship to, pertaining to, evidencing or constituting evidence of, whether directly or indirectly, or in whole or in part, the subject matter of the particular Request. 5. The connectives "and" and "or" shall be construed either disjunctively or conjunctively as necessary to bring within the scope of the discovery request all responses that might otherwise be construed to be outside of its scope. 6. The plural of any word shall include the singular and the singular shall include the plural. The masculine shall include the feminine. INSTRUCTIONS The following definitions and instructions apply to each of the discovery requests set forth herein, and are deemed to be incorporated in each of said requests: 1. If any part of a document is responsive to any request, the whole document is to be produced. 2. The present tense shall be construed to include the past tense and the past tense shall be construed to include the present tense as necessary to bring within the scope of the requests any documents that might otherwise be construed as outside their scope. 2 3. Any alteration of a responsive document, including any marginal notes, handwritten notes, underlining, date stamps, received stamps, endorsed or filed stamps, drafts, revisions, modifications and other versions of a final document is a separate and distinct document and it must be produced. 4. If you file a timely objection to any portion of a request, definition, or an instruction, provide a response to the remaining portion. 5. The terms defined above and the individual requests for production and inspection should be construed broadly to the fullest extent of their meaning in a good faith effort to comply with the Federal Rules of Civil Procedure and the Local Rules. 6. These discovery requests are continuing and require supplemental responses, if you obtain additional information called for by any request between the time of the original response and the time set for trial. Each supplemental response shall be served on Defendants' counsel no later than thirty (30) days after the discovery of the additional information, and in no event shall any supplemental response be served later than the day before the first day of trial. 7. In producing documents and other materials, you are requested to furnish all documents or things in your possession, custody or control, regardless of whether such documents or materials are possessed directly by you or your directors, officers, agents, employees, representatives, subsidiaries, managing agents, affiliates, investigators, or by your attorneys or their agents, employees, representatives or investigators. 8. Documents are to be produced in full; redacted documents will not constitute compliance with these requests. If any requested document or thing cannot be produced in full, produce it to the extent possible, indicating which document or portion of that document is being withheld and the reason that document or that portion is being withheld. 9. In producing documents, you are requested to produce a copy of the original of each document requested together with copies of all non-identical versions and/or drafts of that document. If the original of any document cannot be located, a copy of a copy shall be provided in lieu thereof, and shall be legible and bound or stapled in the same manner as the original. 10. If you object to any request or part of any request because of a privilege, you and/or the attorney asserting the privilege must enumerate (i) the type of document, e.g., letter or memorandum; (ii) the general subject matter of the document; (iii) the date of the document; and (iv) such other information as is sufficient to identify the document for a subpoena duces tecum, including, where appropriate, the author of the document, the addresses of the document, and any other recipients shown in the document, and, where not apparent, the relationship of the author, addresses, and recipients to each other;. If any document requested herein is withheld based on a claim that such document constitutes attorney work product, please identify the litigation in connection with which the document and the information it contains was obtained and/or prepared. 3 _-T__ 11. If you refuse to produce a document on the ground that compliance would be unduly burdensome, set forth the specific reasons for such objection, including the number and nature of documents needed to be searched, the location of the documents, and the number of person-hours and costs that would be involved in conducting the search. DOCUMENT REQUESTS Document Request No. 1: All documents constituting or referring or relating to communications between you and David Koneff, Susan Koneff, Brian Eden, Mrs. Brian Eden, F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit, and Federal & State Corporate Advisors, Inc. from January 1995 to the present. Document Reauest No. 2: All documents referring or relating to Brian Eden, David Koneff, Susan Koneff, New York Sales Tax Credit, Federal & State Corporate Advisors, Inc. or F & S Corporate Advisors, Inc. Document Request No. 3: All documents referring or relating to any funds received by you from Brian Eden or any Brian Eden related entity including but not limited to, F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit, Federal and State Corporate Advisors, Inc., Gates Leasing, Inc., Summit Group of America, Inc., Athena Holdings, Inc. and any other entity in which Brian Eden or a family member of Brian Eden holds or held a legal or equitable interest. Document Request No. 4: All documents referring or related to the actions of the defendants described in Paragraphs 13 through 23 of Plaintiff's First Amended Complaint. Document Request No. 5: All of your bank statements and cancelled checks for the years 1996, 2001, 2002 and January through May, 2003. Document Request No. 6: All statements of your account that you received from any stock broker, brokerage house or investment advisor since January 1, 1996. Document Request No. 7: All documents referring or relating to any purchases or sales by you of any real property since January 1, 1996. Document Request No. 8: All documents referring or relating to any holdings, purchases or sales by you of securities of any kind including, but not limited to, stocks, bonds, and annuities since January 1, 1996. Document Request No. 9: All documents referring or relating to Plaintiff s alleged fraudulent conduct referred to in paragraph 4 of your New Matter. Document Request No. 10: All documents referring or relating to Plaintiff s alleged illegal conduct referred to in paragraph 5 of your New Matter. 4 Document Request No. 11: All documents referring or relating to the allegation in paragraph 6 of your New Matter that the property alleged in the Complaint to be taken by Defendants was not the lawful property of the Plaintiff. Document Request No. 12: All documents constituting, referring or relating to communications with the office of the U.S. Attorney for the Middle District of Pennsylvania, the Northern District of Ohio, or the Southern District of Florida Document Request No. 13: All documents referring or relating to Gates Leasing, Inc., Summit Group of America, Inc., or Athena Holdings, Inc. Document Request No. 14: All documents not previously produced that refer or relate to assets that you directly or indirectly own or control (in whole or in part). Document Request No. 15: All documents referring or relating to the Consulting, Severance and Release Agreement entered into by Daniel Semic and Rite Aid. aniel Segal, I.D. No. 26218 Steve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: February 15, 2005 CERTIFICATION OF SERVICE 9 This is to certify that I served a true and correct copy of the attached Plaintiff's First Set of Requests for Production of Documents to Defendants Daniel and Sharon Semic upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire 37 South Hanover Street, Suite 201 Carlisle, PA 17013 Attorneys for Defendant Eden ;ordon A. Einhorn Dated: February 15, 2005 =m I r Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 RITE AID CORPORATION Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants Attorney for Defendants David & Susan Koneff and Daniel & Sharon Semic IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. NO. 02-5863 RESPONSE OF DEFENDANTS DANIEL AND SHARON SEMIC TO PLAINTIFF'S FIRST SET OF REQUEST FOR PRODUCTION OF DOCUMENTS 1. None. 2. None. 3. None. 4. None. 5. None. 6. None other than what has been provided to Plaintiff regularly since June 2003 through counsel. 7. None. 8. See answer to #6 above. 9. Counsel has voluminous documents and materials in his possession - T responsive to this request which is available for inspection at his office. 10. See answer to #9 above. 11. See answer to #9 above. 12. Objected to the extent that it seeks material that is protected by the attorney- client privilege. Without waiving said objection, counsel does have possession of correspondence between counsel for this defendant and John D. Sammon, Esquire, Assistant U.S. Attorney for the Northern District of Ohio, and Kim Douglas Daniel., Esquire, Assistant U.S. Attorney for the Middle District of Pennsylvania. Defendant does not object to the release of this correspondence to plaintiff's counsel should (1) plaintiff's counsel agree to maintain the confidentiality of said correspondence, and (2) plaintiff's counsel obtain written consent from the Attorney General's offices for the Northern District of Ohio and the Middle District of Pennsylvania for the release of this correspondence to plaintiff's counsel. 13. None. 14. None. 15. See attached. Respectfully submitted, David J. Foster; quire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 ---Attorney for Defendant Dated: March 7 1 2005 CERTIFICATE OF SERVICE I, Tiffany M. Miller, a secretary for the law offices of Costopoulos, Foster & Fields, hereby certify that on this day of March, 2005, a true and correct copy of the foregoing document was served upon all counsel of record by: Hand Delivery X First Class Mail, Postage Pre-Paid Certified Mail, Return Receipt Requested Fax Transmission Overnight Mail at the following address(es) and/or number(s): Gordon A. Einhorn, Esquire Steve D. Shadowen, Esquire HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 Attorneys for Plaintiff Rite Aid Corporation By: COSTOPOULOS, FOSTER & FIELDS any M. Mi er any CONSULTING, SEVERANCE AND RELEASE AGREEMENT Rite Aid Corporation, hereafter, the "Company," and Dan Semic, hereafter the "Employee," have mutually agreed that his full-time regular employment will terminate effective , subject to the terms and conditions of the Consulting, Severance and Release Agreement set forth below. CONSULTING. Notwithstanding the Agreement, the parties hereby enter into the following contractual relationship: For a period of four (4) months, commencing , the Employee agrees to perform services for the company in an "on call, as needed" basis. It is understood and agreeable that the Employee may undertake new employment responsibilities apart from the company, and that the company does not have an exclusive right to his employment services. The Employee will make himself available for such emergencies as might require his specialized services. The severance benefits set forth below are in consideration of the Employee's agreement to make himself reasonably available on this basis for four (4) months. It is agreed and understood that the Company will compensate the Employee for all time spent performing services for the Company. His compensation will be $100.00 per hour, to be documented and submitted for payment by the Employee to the Company on a monthly basis. The Company agrees to reimburse the Employee for reasonable and documented business expenses associated with performing these services. 2. SEVERANCE PAYMENT. The Employee shall receive the severance payment as set forth below. The company shall: a. Continue to pay the Employee at their regular rate of pay through 52 weeks, paid out in regular biweekly intervals; and, b. Continue to pay its share or portion of the health or dental premium through the severance period, if the Employee elects coverage and is not covered under another plan; subject to earlier termination of coverage at such time as he/she becomes eligible to receive medical and/or dental benefits due to employment by a new employer. It is the responsibility of the Employee to immediately notify the company of coverage effective dates by a new employer. RELEASE. In consideration of the terms and provisions of this Agreement, Employee hereby knowingly and voluntarily on behalf of Employee and Employee's spouse and dependants, if any, as well as Employee's representatives, heirs, executors, administrators, grantees, assigns and successors-in-interest, and each of them, forever relieves, releases and discharges Rite Aid Corporation, including its respective subsidiaries, (the "Company') and its respective predecessors, successors, heirs, assignees, owners, members, attorneys, representatives, affiliates, officers, directors, agents, employees, servants, executors, administrators, accountants, shareholders, investigators, employee benefit plans and trustee and any and all other related individuals and entities, from any and all claims, debts, liabilities, demands, obligations, liens, promises, acts, agreements, costs and expenses (including, but not limited to, attorney's fees), damages, actions and causes of action, of whatever kind or nature, including, without limitation, any statutory, civil or administrative claim, or any claim, arising out of acts, whether known or unknown, suspected or unsuspected, fixed or contingent, apparent or not, including, but not limited to, any claims based on, arising out of, related to or connected with Employee's employment with, or termination of employment from, the Company, including, but not limited to, any claims arising from federal, state or local laws which prohibit discrimination of the basis of race, national origin, religion, age, sex, marital status, pregnancy, disability, perceived disability, ancestry, sexual orientation, family or personal leave, or any other form of discrimination, or from laws such as worker's compensation laws which provide rights and remedies for injuries sustained in the workplace, or from any common law claims of any kind, including, but not limited to, contract, tort, or property rights, including, but not limited to, breach of contract, breach of the implied covenant of good faith and fair dealing, Page 1 tortious interference with contract or current or perspective economic advantage, fraud, deceit, breach of privacy, misrepresentation, defamation, wrongful termination, tortious infliction of emotional distress, loss of consortium and breach of fiduciary duty, violation of public policy and any other common law claim of any kind whatever, any claims for severance pay, sick leave, family leave, vacation, life insurance, bonuses, health insurance, disability or medical insurance or any other fiinge benefit or compensation, or from any and all rights or claims arising under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et _M. C VARN') and the Employee Retirement Income Security Act of 1974 C ERISA'); rovid however, that the foregoing Release shall not extend to amounts to be paid to Employee under the express terms of this Agreement. 4. Aae Discrimination in Emplovment Act (ADEA). The Employee acknowledges that they have been advised by this written notice to confer with an attorney regarding this Release Agreement. Subject to the notice and waiting periods set forth below, the Employee specifically agrees that the release provisions set forth in paragraph three (3) above specifically apply to any claims under the Age Discrimination in Employment Act (ADEA). The Employee is advised that they shall have seven (7) days following the execution of this Release Agreement in which to revoke this Release Agreement, and that such Release Agreement shall not become effective or enforceable until this seven (7) day revocation period has expired. Upon revocation, the Employee shall return all sums paid to them pursuant to this Release Agreement. 5. To comply with the Older Workers Benefit Protection Act of 1990, the Employee is advised of the legal requirements of the Act, which are fully incorporated in this Agreement, as follows: a. This Agreement is written in lay person's terms, and the Employee understands and comprehends its terms; b. The Employee has been advised of their right to consult an attorney to review this Agreement in paragraph four (4) above, and has had the benefit of an attorney throughout this process; C. The Employee does not waive any rights or claims that may arise after the date this Agreement is executed; d. The Employee is receiving consideration beyond anything of value to which they already are entitled; and, c. The Employee has twenty-one (21) days to consider this Agreement. 6. Employee and Employer mutually agree that they will not disclose or cause to be disclosed in any way the terms of this Agreement or the fact that such Agreement exists, except to your spouse or significant other, attorney or accountant, or for the purpose of enforcing this Agreement, should that ever become necessary. Employee further agrees that they will cooperate fully with the Company in connection with any existing or future litigation involving the Company, whether administrative, civil or criminal in nature in which and to the extent the company deems there cooperation necessary. 7. Employee agrees they shall not use or disclose any confidential or proprietary information of the Company concerning its business, employees, operations, systems, finances, resources, clients or prospects, including, without limitation, information with respect to the Company's risk management procedures, client insurance programs and the costs thereot policy expiration dates and other financial or risk information about clients, at any time or for any purpose Page 2 Ir- whatsoever, or disclose any such information to any person at any time, or for any purpose whatsoever. Employee agrees that for one-year following termination, they will not, directly, solicit, divert, or take away, in whole or in part, any clients or prospects of the Company who were solicited or serviced directly by you or by anyone directly under your supervision, or with whom you had any business relationship, within the one (1) year period prior to your termination of employment. Employee also agrees during this one-year period, not to solicit any employee of the Company to terminate his or her employment with the Company for the purpose of working for you or any competitor of the Company. 9. This Agreement contains the entire agreement and understanding concerning the subject matters between the parties and supersedes and replaces all prior agreements, whether written or oral, express or implied, concerning the subject matters hereof but excluding any claim for benefits which may be due Employee in the normal course under any employee benefit plan of the Company which provides benefits (other than severance benefits) after termination of employment. 10. This agreement shall inure to the benefit of and shall be binding upon the Company, and its successors and assigns, the Employee and his hens, executors and personal representatives. 11. Employee hereby agrees to immediately return to Company all Company property. 12. Employee understands this Agreement is not an admission of liability by any party. 13. Employee acknowledges that the effective date of their employment termination is 7/15/2000. 14. Employee acknowledges that, in the case of any dispute arising out of this Agreement the Laws of the Commonwealth of Pennsylvania shall apply. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS READ THIS AGREEMENT. EMPLOYEE REPRESENTS AND AGREES THAT EMPLOYEE FULLY UNDERSTANDS THE RIGHT TO DISCUSS ALL ASPECTS OF THIS AGREEMENT WITH THE EMPLOYEE'S PRIVATE ATTORNEY, THAT TO THE EXTENT DESIRED EMPLOYEE HAS AVAILED HIMSELF OF THIS RIGHT, AND THAT EMPLOYEE IS VOLUNTARILY ENTERING INTO THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT BY BEING GIVEN THIS AGREEMENT TO REVIEW, EMPLOYEE HAS BEEN ADVISED IN WRITING TO CONSULT WITH COUNSEL PRIOR TO EXE THIS AG .PLEASE THIS AGREEMENT CAREFULLY. IT CONT S A REL F KNO UNKNOWN CL 7,,y /,,,, Si of Employee Dated Printed Name of Employee via Signature and Title of Rite Aid Representative //JT P,6,< 50 w 1 HgtZ2 )313 u2G %, 12/10 Address of Employee "7 y/tea Dated Page 3 VERIFICATION I, Daniel Semic, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. d v Daniel Semic Dated: /?O ZQ-S?i- VERIFICATION I, Sharon Semic, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unworn falsification to authorities. Sharon Semic Dated: '3110/ as CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached upon the following persons, by U.S. Mail (postage prepaid) on the date stated: David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOs, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Brian Eden 211 Arega Street Sebastian, FL 32958 F&S Corporate Advisors, Inc./NY Sales Tax Credit 2100 West 76`x' Street Suite 510 Hialeah, FL 33016 JAA ?ian P. Se an Dated: December 23, 2011 LITIGATION # 1367473 v.l