SIST subsidiary alleges 'racist conspiracy;' Mayor: 'Horrible fabrications' in complaint filed in bankruptcy court

The Shawano Leader/December 4, 2010

A subsidiary of Samanta Roy Institute of Science and Technology, Inc. has filed a complaint in federal court alleging the Shawano Leader and nearly two dozen other individuals and entities are part of a racist conspiracy led by Shawano Mayor Lorna Marquardt.

The complaint was filed November 22 in U.S. Bankruptcy Court in Delaware as part of the Chapter 11 bankruptcy case of SIST subsidiary Midwest Properties of Shawano, LLC.

It accuses Marquardt and other officials of devising schemes to destroy SIST businesses and "bring about the demise of SIST personnel."

According to the complaint, "these individuals and entities directed by their leader, Defendant Lorna Marquardt, embarked on a blatant and illegal discriminatory campaign against Plaintiff/Debtor on the basis of race and religion in violation of state and federal law."

SIST founder Avraham Cohen, formerly R.C. Samanta Roy, is of East Indian descent.

The complaint refers to Shawano as "a neo-Nazi type of region where it is believed people of other races and religions have no right to life" and maintains the area is "known for its White Supremacist feelings and Jim Crow mentality."

It accuses Marquardt of forming a "secretive, racist organization whose sole function is to wage psychological, physical and financial war" against SIST and its affiliates.

According to the 88-page complaint filed by attorney Rebekah Nett, the conspiracy includes local officials, state and federal court judges, law enforcement, the Shawano business community and the media.

"SIST and its affiliates have requested a Senate investigation into the criminal activities and hate crimes of Defendant Lorna Marquardt and other officials," the complaint states.

The complaint was filed in response to a motion from the U.S. Trustee's office urging the court to dismiss Midwest's bankruptcy petition, convert it to Chapter 7 or appoint a Chapter 11 trustee to oversee the matter.

In a letter to the court from Nett accompanying the complaint, Nett accused the trustee of "attempting to blindside this Court with totally unmeritorious legal arguments that do not apply to the facts of this case."

The complaint alleges Marquardt and her "secretive, racist group" were responsible for a litany of crimes, including attempted murders, bombings, death threats, physical beatings, harassment, vandalism, robberies, burglaries, slander, defamation, business disparagement and business interference.

It also alleges Marquardt orchestrated bimonthly "hate meetings" attended by local officials and members of the media, including Leader reporter Tim Ryan.

Marquardt said the complaint "is so outrageous it is difficult to comment on it."

"I am being accused of sending my emissaries to shoot arrows through their windows and start trees on fire," Marquardt said. "It is being said I have orchestrated and attended hate meetings, and that I have actually committed hate crimes! They also accused me of having their utility meters changed with ones that have increased their usage tenfold overnight. There are pages and pages of horrible fabrications and I just can't imagine anyone submitting something this bogus to the federal court."

The complaint accuses the Shawano Leader of publishing propaganda against SIST on behalf of Marquardt and alleges an October 2004 series of articles was intended to incite violence against SIST and its subsidiaries.

Along with the Shawano Leader and its parent company Wolf River Media, LLC, other media named as defendants include WLUK-TV of Green Bay and parent company Lin Television Corp., as well as news reporter Lou Hillman; Young Broadcasting and WBAY-TV of Green Bay; Journal Broadcast Group and WGBA-TV of Green Bay; Gray Television Group and WSAW-TV of Wausau; Scripps Media, Inc. and WMAR-TV of Baltimore, Maryland.

However, the complaint specifically requests damages from only two of those entities.

"Plaintiff/Debtor requests this court to enter judgment against Fox 11 and NBC 26 for damages caused by its intentional and reckless disregard for truth, injurious falsehoods, and business disparagement," the complaint states.

The complaint then goes on to outline an alleged conspiracy of business disparagement and injurious falsehood involving the Shawano Leader, WBAY-TV, WSAW-TV and WLUK-TV before repeating its request that the court enter a judgment against Fox 11.

It is not the first time SIST or one of its subsidiaries have alleged in federal court that Marquardt was head of a racial conspiracy aimed at destroying the organization or running it out of town.

SIST CEO Naomi Isaacson filed a brief on behalf of Midwest Properties making those accusations in July, though at the time no damages were being sought in connection with the allegations.

Similar court documents were filed in a U.S. District Court case involving a civil suit brought by Southwest Guaranty, Ltd. against SIST and its subsidiary U.S. Acquisitions and Oil, Inc.

U.S. District Judge Rudolph Randa remanded that case back to Shawano County Circuit Court. In his ruling he also chastised and sanctioned SIST for filing court documents containing "fantastic and delusional" allegations.

Midwest Properties was originally 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.

However, Midwest Properties removed itself from the appeal and filed independently in U.S. Bankruptcy Court in Milwaukee. The case was subsequently sent back to the Delaware court.

The bankruptcy petition 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.

Midwest Properties 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.

According to the complaint, payments were made for the first year directly to the mortgage holder, Fox Communities Credit Union (FCCU).

The complaint alleges the Broders, "working as agents for Shawano Mayor Lorna Marquardt," subsequently convinced Midwest Properties to make payments directly to them due to a bank change.

The complaint maintains Midwest paid the Broders $5,000 a month for three years under the assumption they were using the money to pay off the mortgage.

FCCU filed suit against the Broders in 2008, 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 February 2009, FCCU was granted foreclosure, allowing the sale of the apartment buildings. The sale was delayed by the SIST bankruptcy filing in March of last year and subsequently by the separate filing by Midwest Properties.

The complaint filed by Midwest Properties Monday accuses FCCU of colluding with Marquardt and the Broders and asks the bankruptcy court to void FCCU's note and mortgage as illegal. It also seeks compensatory and punitive damages and attorney's fees from Marquardt, the City of Shawano, the Broders and FCCU.

The complaint also names the credit union's attorneys, along with Business Lending Group of Appleton and two of its employees.

Other defendants named include the City of Shawano, Shawano Municipal Utilities, Wisconsin Energy Corp., Shawano City Administrator Jim Stadler, City Clerk/Treasurer Marlene Brath, Alderman Woody Davis and Wescott Town Chairman Mike Schuler.

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