An affidavit filed in Milwaukee by the Samanta Roy Institute of Science and Technology has entered into the federal court record SIST's wide-ranging allegations of a vast racial conspiracy headed by Shawano Mayor Lorna Marquardt.
Though it is not the first time SIST has linked its financial difficulties to claims of a choreographed vendetta headed by the mayor, it may be the first time the allegations have been entered in such detail in a sworn public court document.
The affidavit filed by SIST CEO Naomi Isaacson maintains Marquardt's "tentacles" control local and national media as well as state and federal judges, financial institutions and even the FBI. Isaacson states in the affidavit that SIST has requested a Senate investigation into the matter.
"The affidavit is filled with lies, distortions, and false information," Marquardt said Friday. She said the allegations were particularly disturbing because an affidavit is intended to be a sworn statement of fact.
"It is incomprehensible to me that an affidavit like this would be filed in a federal court, or any court," Marquardt said. "No one should be subjected to such outrageous character assassination and humiliation, and I am angered and disgusted."
Previously, Isaacson has issued press releases accusing Marquardt of using the Shawano Police to harass businesses owned by SIST and its subsidiaries. She also issued a statement blaming the mayor for concocting a "hit list" of local officials that authorities in November 2008 claimed originated from SIST.
In her affidavit, Isaacson claims Marquardt was furious that the FBI last summer turned up no evidence of a crime in that investigation and "ordered them to reopen the file."
Isaacson filed the affidavit in Wisconsin's Eastern District of the U.S. Bankruptcy Court in Milwaukee on July 16 in connection with a secondary Chapter 11 bankruptcy filing by SIST subsidiary Midwest Properties of Shawano, LLC.
Midwest Properties was already part of a bankruptcy petition filed by SIST and six of its subsidiaries in Delaware last year. That petition was dismissed in federal court. SIST is appealing the ruling. Isaacson's affidavit maintains the Delaware dismissal was the result of Marquardt's influence over U.S. Bankruptcy Court Judge Kevin Gross.
The new bankruptcy petition filed in Milwaukee centers around a land contract entered into by Midwest Properties in 2004 to purchase two apartment buildings in the City of Shawano owned by Robert and Shannon Broder.
Under the contract, Midwest agreed to purchase the apartment buildings for $575,000, with a down payment of $100,000. The remaining $475,000 was to be paid in monthly installments of $5,000 with a 6.25 percent annual interest rate. The contract also called for Midwest to make its payments to the mortgage holder, Fox Communities Credit Union (FCCU), until the mortgage was paid off, after which any remaining balance on the land contract would be paid to the Broders.
According to Isaacson's affidavit, payments were made for the first year directly to FCCU.
"Thereafter," Isaacson claims, "the Broders, working as agents for Shawano Mayor Lorna Marquardt, convinced us that we needed to make payments directly to them due to a bank change." Isaacson maintains SIST paid the Broders $5,000 a month for three years under the assumption they were using the money to pay off the mortgage.
Robert Broder could not be reached for comment Friday afternoon.
Isaacson states SIST was not informed until 2008 that the mortgage was delinquent.
"Obviously, FCCU was part of the conspiracy," the affidavit states.
FCCU filed suit against the Broders, naming Midwest Properties as a defendant with a subordinate claim on the apartment properties. FCCU was subsequently granted a default judgment and its legal counsel, the Van Lieshout Law Office, was appointed as receiver. (In June of this year, Steve Kruegar, an attorney with Van Lieshout, was also appointed receiver of the USA International Raceway owned by another SIST subsidiary, U.S. Acquistions and Oil, Inc.)
In February 2009, FCCU was granted foreclosure, allowing the sale of the apartment buildings to go forward. However, the action was put on hold due to the Delaware bankruptcy filings a month later, in March 2009, which also preempted a scheduled foreclosure sale of three Shawano gas stations owned by SIST subsidiary, Midwest Oil of Wisconsin.
With the dismissal of the Delaware bankruptcy case, and the court's denial of a stay against any civil action during the appeal, the foreclosure of the apartment buildings moved forward and a sheriff's sale was scheduled for July 14. However, the sale was once again headed off by the July 13 bankruptcy filing in Milwaukee.
Isaacson's affidavit was filed in response to FCCU's emergency motion to dismiss the new bankruptcy filing.
After several paragraphs stating her objections, Isaacson offers the court "a brief history" behind the Milwaukee and Delaware filings that continues for 13 pages. Most of those 13 pages consist of SIST's allegations of a religious and racially motivated conspiracy headed by Marquardt.
According to Isaacson, the attorneys representing FCCU are part of secret, bi-monthly meetings convened by Marquardt to plot the demise of SIST and its founder Avraham Cohen, formerly R.C. Samanta Roy, who is of Indian descent.
Isaacson maintains the secret meetings held in Shawano are also attended by various city officials, Shawano County judges, media and local business people. According to Isaacson, those meetings have been taking place since 2003.
Kruegar could not be reached for comment Friday afternoon.
Isaacson also alleges in the sworn affidavit that Marquardt:
Ordered Fire Chief Doug Knope to "start needlessly replacing HVAC units" in the apartments of the two buildings at a cost of $100,000.
Directed the Chamber of Commerce to cancel the membership of SIST businesses.
Directed police to look up license plate numbers of hotel visitors, call the visitors and inform them the hotels are owned by a cult.
Dissuaded potential tenants from renting empty commercial properties owned by SIST.
Conspired to take control of the racetrack property through the appointment of a receiver.
Bruce Scott, the attorney representing Midwest Properties, also filed an objection to the emergency motion to dismiss the new bankruptcy petition.
Scott also blames the Delaware dismissal on "racial and religious prejudice and discrimination."
Scott is listed in a 2007 filing with the Wisconsin Department of Financial Institutions as a member of SIST's Board of Directors.
A telephone hearing on the motion to dismiss scheduled to be heard Friday afternoon has been continued to July 30.
