We continue to be asked been asked why did the Elliott Companies and Sun Village Resorts decide to work with James Catledge and the Impact Companies?
A detailed summary of the Impact relationship is outlined below. Further information has now surfaced that it was not just our companies and the clients to whom James Catledge and Impact made misrepresentations to. The also have made misrepresentations in their mortgage documentation, and possibly thier insurance and annuities divisions. There may also be Multi Level Marketing or pyramid sales violations that Impact have also committed in the United States.
As it turns out, this is not have been the first time that they have done this. Catledge and Impact have been associated with other projects and may still be involved with projects that regulatory licensing is not being followed and where they have interests.
The Elliott Companies provided fully compliant disclosure documentation for Impact to use at all times at great costs. Catledge and Impact were terminated by Elliott/Sun Village Resorts in June of 2008.
The History of James Catledge and the Fraudulent Impact Misrepresentations
Fred and Derek Elliott were introduced to Catledge in 2004. Catledge was the president of what was understood to be legitimate financial services company offering mortgages, annuities, insurance, mutual funds and real estate/time share products out of Henderson Nevada. Catledge owned and still owns a web of network marketing companies known by various names such as Impact, Inc. ("Impact"), ImpactNetWorth.com, ImpactAmerica, Impact-America.com, Impact Lending, Impact Corporate, Impact Holdings, Inc., Net Worth Solutions, Inc., ("Solutions"); Impact Net Worth, LLC, ("Net Worth,", Impact Net Worth, ImpactNetWorth.com (collectively "Impact Entities").
The introduction was made by a Michael Fitzpatrick, who was an investor of EMISVI and EMI Cofresi Developments Inc. who knew the Elliotts wanted to expand the Sun Village Resort.
Catledge represented to Derek Elliott, and later to Fred Elliott, that he had a strong sales team and was fully experienced and licensed in sales of real estate products, insurance, mortgages and annuities which the Elliotts and the Elliott Companies discovered later to be a false and material representation upon which the Elliotts and the Elliott Companies detrimentally relied when entering into contractual relationships with Catledge and the Impact entities as described below.
In or around 2004-2007, certain of the Elliott Companies contracted with and otherwise allowed Catledge and the Impact Entities and their representatives, through exclusive sales agreements, to offer and sell resort-related vacation ownership products to individuals in various jurisdictions including the United States.
Purchasers could purchase time-share interests known as "The Residence" or fractional ownership interests at either Cofresi or Juan Dolio.
Regardless of which location and which product, all purchases of resort-related vacation ownership products offered by the Elliott Companies came through Catledge and his Impact Entities and agents.
Importantly, as a requirement for Catledge and the Impact Entities and agents to sell such resort-related vacation ownership products, Catledge and the Impact Entities were required to hold valid state and federal regulatory licenses.
Catledge and the Impact agents made affirmative and fraudulent representations and provided false documentation to the Elliott Companies and their attorneys that appeared to show that Catledge and the Impact agents did have valid state and federal regulatory licenses when, in fact, they did not.
However, in January 2006, the Elliott Companies discovered that Catledge and the Impact Entities and agents did not have valid state and federal securities licenses, nor did they have state time share licenses. The Elliott Companies further discovered that Catledge and the Impact Entities and agents had provided false documentation to the Elliott Companies (upon which the Elliott Companies reasonably relied) suggesting that Catledge and the Impact agents did have valid regulatory licenses.
Specifically, the Corporate Defendants discovered that (1) Catledge's registration with an NASD member brokerage firm was terminated as of July 13, 2005, (2) Impact was not an NASD member brokerage firm, (3) neither Catledge nor any other member of Impact held a current valid regulatory license and did not have real estate licenses.
Upon discovery of Catledge and the Impact agents' failure to hold proper regulatory licenses, the Elliott Companies demanded that Catledge and the Impact agents immediately obtain proper valid regulatory licenses. However, after several promises made by Catledge, and hundreds of thousands of dollars spent by the Elliott Companies to prepare compliant documentation (which Catledge and the Impact Entities failed to use) Catledge and the Impact agents were ultimately unable or unwilling to get proper licensing.
Accordingly, on October 17, 2008, the Elliott Companies (called the Elliott Group) issued a demand letter (the "Demand Letter") upon Catledge and the Impact Entities pursuant to which the malfeasance discovered by the Elliott Companies was detailed.
Specifically, the Elliott Companies advised Catledge as follows:
As you know, Impact/Net Worth have "sold" considerable amount of Elliott product over the last four or so years. In doing so, Impact/Net Worth and James Catledge personally have received payment of tens of millions of dollars in commissions.
Demand letter from the Elliott Group to James Catledge/Impact on October 17, 2008.
http://www.scribd.com/doc/26441962
Through the Demand Letter, the Elliott Companies demanded Catledge and Impact/Net Worth pay $29,000,000 as a result of the losses and damages incurred by the Elliott Companies because of the malfeasance, breach of contract, negligence and bad faith of Impact/Net Worth.
In October 2008, Catledge, in an effort to deflect attention away from himself, and in order to take revenge on the Elliotts for asserting claims against him, began a brutal campaign to discredit and destroy the Elliotts and their companies with litigation and defamatory publicity spanning multiple jurisdictions.
James Catledge was successful in manipulating a group to follow him through his cult-like activity and succeed in wiping out the Cofresi and Juan Dolio properties in the Dominican Republic and a company that had a 20 year history on the island.
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