investigative report evidence of fraud at healthy family farms (hff)

P.I. License #: 25570

P.O. Box 398 · Tujunga, CA 91043-0398 · Tel 818-352-6274 · Fax 818-352-1273 September 30, 2010 Our File No: HH810016 REVISED REPORT Barry R. Edwards, Esquire Spiegelman and Edwards

Re: Sharon Palmer

Dear Mr. Edwards: Our assignment in this matter was to perform a comprehensive investigation to include a background check on plaintiff, Sharon Palmer. We were provided with her name and various street addresses as well as the results of the previous inquires. We had the opportunity to meet with your principal as well as with Attorney Nemeroff at Mr. Nemeroff’s office. Thereafter, we proceeded with various inquiries, to include an extensive background investigation on Ms. Palmer and her enterprises, a lengthy interview with an informant, David Weinardt, the son of Ms. Palmer, detailed interviews with two witnesses in Fair Oaks and obtained detailed written statements from them, initial research inquiries and contact at Chino Valley Egg and Ideal Meats. This research was all conducted after we reviewed the extensive file materials provided by the client. Our report of developments follows.

SHARON PALMER AKAs: Sharon A. Palmer, Sharon Ann Palmer, Sharon Dorsopalmer, Sharon A. Weinhardt, Sharon Winehart, Sharon A. Dorso, Sharon Palmer Ross SSN: As provided DOB: 04/14/1960 We began our investigation by running a residential history for the address provided for plaintiff, Sharon Palmer. It shows her most recent address is 30662 Belle Maison Laguna Niguel, CA 92667-5547, from October 1993 - June 2010. She was issued her social security number in the State of California between 01/01/1975 and 12/31/1976. In addition, she has also used two other social security numbers under her aliases.

[email protected]

Sharon Palmer Report of September 30, 2010 Page # 2

ADDRESS HISTORY Subject has resided in the Southern California area since 1988. The following is that address history per the databases utilized (we are aware of her residence at the Farm):

30662 Belle Maison, Laguna Niguel, CA 92677 (08/1993-07/2010) 777 Hopper Canyon Road, Fillmore, CA 93015 (11/2004-05/2010) 6780 Wheeler Canyon Road, Santa Paula, CA 93060 (07/2008-05/2010) 10558 Des Moines Avenue, Porter Ranch, CA, 91326 (02/2001-02/2008) 22250 Pine Crest Road, Agoura Hills, CA 91301 (02/2002-11/2004) 2010 Crow Canyon Pl, Suite110, San Ramon, CA 94583 (02/1991-08/2001) 19710 Ventura Boulevard, Woodland Hills, CA 91364 (08/1999-08/1999) 4507 Park Verona, Calabasas, CA 91302 (03/1996-01/1999) 28651 Springfield Drive, Orange, CA 92667 (03/1993-03/1996) 221 Erbes Road, Apt.102, Thousand Oaks, CA 91362 (09/1995-09/1995) 33 Bellwood Drive, Feasterville-Trevose, PA 19053 (11/1990-01/2003) 62 Country Club Lane, Langhorne, PA 19047 (11/1987-10/2000) 507 Park Verona, Calabasas, CA 91302 (03/1996-12/1997) 1222 Highland Avenue, Langhorne, PA 19047 (02/1985-12/1991) 7 Pine Valley Ct, #B, Pittsburgh, PA 15239 (11/1990-12/1990) 1420 Bridgetown Pike, Langhorne, PA 19047 (12/1988-12/1988)

RELATIVES & ASSOCIATES Relatives: Judith Bliszcs, 70 Vicki Bliszcz, 59 Joseph Bliszcz, 65 Judith Copil, 48 Judith A. Palmer, 54 Linda A. Palmer, 51 Michele D. Dorso Nicholas J. Dorso, 28 David Weinhardt, 50 Associates: Judith Dorso, 51 Marcella L. Foden, 89 Glendon Nicholas, 30 Robert Prince, 38 Luma Sam Reihani Lum, 33


Jennifer Price, 30 EMPLOYMENT There were no current employment records found in our initial background check for Sharon Palmer. However, we did find prior records and these are listed below:

Health Family Farms 7777 Hopper Canyon Road, Fillmore, CA 93015 PO Box 1055, Fillmore, CA 93016-1055 September 1, 2004 - January 1, 2005 Kennedy Western University (Address and years of service were not provided in the report.) Torch & Torch Certified Shorthand Reporters, Inc. Malibu Court Reporters 2250 Pinecrest Road, Agoura Hills, CA 9101-2866 July 1 - September 2008

LICENSES There were no licenses found in our initial background check for Sharon Palmer. ASSETS (Homes and Businesses owned) We are aware that Sharon Palmer has been associated with Healthy Family Farms, LLC. Research through the Secretary of State, Nevada has data (please see attached) as follows: Status: Active Type: Domestic Limited-Liability Company Qualifying State: NV NV Business ID: NV20071521971 File Date: 11/13/007 Entity Number: E07696902007-0 List of Officers Due: 11/30/2010 Registered Agent Information Name: Nevada State Corporate Network, Inc. Address: 777 N. Rainbow Boulevard, Suite 250, Las Vegas, NV 89107 Agent Type: Commercial Registered Agent - Corporation Jurisdiction: Nevada Status: Active Financial Information: No stock records found for this company. Managers: Larry Otting, Tom Palmer, Jennifer Prince, 6780 Wheeler Canyon Road, Santa Paula, CA 93060


Managing Member: Sharon Palmer, 6780 Wheeler Canyon Road, Santa Paula, CA 93060. In one index she showed as a Manager rather than managing member. We checked with the State of California and the company is not registered as an LLC company in California either as a California LLC or as a Nevada company. Additonal Nevada entities involving Sharon A. Palmer (documentation is enclosed): Canadian Capital Credit Corp American Lending Corp. The Stratosphere Group, Ltd. DMV The California Department of Motor Vehicles reports that Sharon Palmer was issued a California Drivers License #A8875638 on date 04/13/2010 and expiring 04/15/2015. It describes our subject as a female 5’4” in height, weighing 160 pounds with brown eyes and brown hair, born 4/14/1960. She also held a California ID Card which expired 4/14/2006. Her record showed four (4) violations which are listed as follows: Violation Date: 01/17/2010 Conviction Date: 06/23/2010 License Plate: 50MBW7 Vehicle Code: 2153A -- Red/Stop-Fail to Stop at Limit Line Court/Issuing Agency: Ventura Docket #: 0512589 Violation Date: 01/20/2009 Conviction Date: 04/30/2009 License Plate: 7X96331 Vehicle Code: 23123A -- Hand-held Wireless Telephone: Prohibited Use Court/Issuing Agency: Ventura Docket #: 9517121 Violation Date: 08/28/2008 Conviction Date: 03/05/2009 Vehicle Code: 40508A (Failure to Appear) Court/Issuing Agency: Ventura Docket #: 8594765 Violation Date: 06/27/2008 Conviction Date: 12/30/2008 License Plate: 7X96331


Vehicle Code: 4000A1 -- Unregistered Vehicle on Highway/Parkway Court/Issuing Agency: Ventura Docket: 8574828 Her Driver’s license was suspended effective 1/7/2009 through 3/5/2009 and is now active. COURTS As our subject has resided in the states of California and Pennsylvania, we carried out court searches in these states. The following list might contain records that may not be our subject. Los Angeles Superior Court - Civil Case No.: 09C01204 Filed On: 03/30/2009 Santa Monica Courthouse Jeffrey Lapins VS Sharon Ann Palmer -- This is a Breach of Contract case. Case was disposed by default judgment in the amount of $20,000 against Sharon Ann Palmer and Healthy Family Farm. (Our subject) Case No.: SC075973 Filed On: 02/19/2003 Santa Monica Courthouse Janice Bentley VS David Weinhardt and Sharon Palmer -- This is a Motor Vehicle - PIPD/WD case. Case was dismissed -- Other 03/04/2004. Case No.: 02X00309 Filed On: 11/07/2002 Malibu Courthouse W.A.S.T.E.C., Inc. VS Sharon A. Palmer -- This is a Small Claims case. Case was disposed by judgment. Case No.: 02V10141 Filed On: 10/31/2002 Van Nuys Courthouse West Deborah Jean VS Sharon Ann Palmer -- This is a Small Claims case. Case was dismissed by Court order. Case No.: BL039199 Filed On: 06/06/2000 Central Civil West Courthouse Sharon Gratzer aka Sharon Elizabeth Palmer VS Michael Gratzer -- This is a Registration of Foreign Support case. It does not appear to involve our subject. Case is pending.


Case No.: BC216504 Filed On: 09/09/1999 Stanley Mosk Courthouse John W. Rogers Jr. VS Polo Financial Services and Sharon Palmer Ross--This is an Other Real Property Rights case. Property in question was reconveyed back to Plaintiff. Default judgment after Prove-Up 09/18/2000. Case No.: BC206764 Filed On: 03/09/1999 Stanley Mosk Courthouse William Agranoff VS Polo Financial Services, Inc. (Sharon Palmer among additional named Defendants)-- This is an Other Complex-Not Tort or Complex case. Case was dismissed -- Other 04/21/2000. Case No.: 99M00613 Filed On: 01/12/1999 Stanley Mosk Courthouse Edna Bruce VS Sharon Palmer -- This is a Small Claims case. Case was disposed. Case No.: BC19678 Filed On: 08/21/1998 Stanley Mosk Courthouse United General Title Insurance Company VS Edward Rostami, et al. (Sharon Palmer Ross an additional named Defendant) -- This is an Other Promissory Note/ Collections case. Cased was dismissed - Other 03/03/1999. Case No.: BC182221 (Case related also to BC165497) Filed On: 12/03/1997 Stanley Mosk Courthouse Eleanor Patricia Coppola VS Edward Rostami, et al. (Sharon Palmer Ross an additional named defendant) -- This is a Commercial Complex-Not Tort or Complex case. Other judgment 10/02/2000 This appears to be a key civil case on questionable prior mortgage acitivities.) Case No.: BC181049 Filed On: 11/12/1997 Stanley Mosk Courthouse Bankers Trust Company VS Polo Financial Services, et al.(Sharon Palmer aka Sharon Palmer Ross an additional named Defendant) -- This is an Other Complex-Not Tort or Complex case. Case was dismissed for lack of prosecution- Petn O/C 12/02/1998. Case No.: TC010353 Filed On: 06/06/1997


Stanley Mosk Courthouse Mary Bush VS Polo Financial Services, et al. (Sharon Palmer an additional named Defendant) -- This is an Other Real Property Rights case. Case was dismissed for lack of prosecution 10/17/2000. Case No.: 97V15476 Filed On: 05/28/1997 Van Nuys Courthouse West Carnahan & Associates, Corp. VS Sharon Palmer Ross -- This is a Small Claims case. Case was disposed. Case No.: BC169035 Filed On: 04/09/1997 Stanley Mosk Courthouse Sierra Capital Acceptance VS Polo Financial Services, Inc. et al. -- This is a Declaratory Relief Only case. Default judgment after Prove-up 11/13/1997. Case No.: SC043553 Filed On: 08/02/1996 Santa Monica Courthouse Dorothy V. Horton VS Kiss International Mortgage, Inc. et al.(Sharon Palmer an additional named Defendant) -- This is an Other Complex-Not Tort or Complex case. Other judgment 06/12/1998. Case No.: 136022 Filed On: 06/21/1991 West Los Angeles Courthouse Albert Shelon VS Sharon Palmer (unsure if this Small Claims matter involved our subject.) Case was disposed. Los Angeles Superior Court - Criminal Case No.: MAL9MB00874-01 Filed On: 03/27/2009 Malibu Courthouse Charged with Vehicle Codes 14601.1(A) Driving When Privilege Suspended or Revoked for Other Reasons; 4000(A)(1)(Registration Required) Court Disposition Date: 11/16/2000 Court Disposition: Bail Forfeiture Superior Court of California, County of Ventura - Criminal Case No.: 00M095175


Filed On: 09/27/2000 The Ventura Hall of Justice Charged with Vehicle Code 22349A -- Excessive Speed Court Disposition Date: 11/16/2000 Court Disposition: Bail Forfeiture Case No.: 99M051556 Filed On: 05/17/1999 The Ventura Hall of Justice Charged with Vehicle Code 22349A -- Excessive Speed Court Disposition Date: 07/19/1999 Court Disposition: Dismissed Case No.: 93M027508 Filed On: 03/11/1993 The Ventura Hall of Justice Charged with Vehicle Code 22349 -- Excessive speed Court Disposition Date: 07/19/1999 Court Disposition: Dismissed Case No.: 95M007786 Filed On: 01/20/1995 The Ventura Hall of Justice Charged with Vehicle Code 22349 -- Excessive speed Court Disposition Date: 05/03/1993 Court Disposition: Dismissed Case No.: 2005553856 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 5200 -- Display of license plate Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2006628438 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 25251(b) -- Disabled vehicle on roadway, failure to activate flashing signal lamps. Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2006643058 Filed On: Not provided The Ventura Hall of Justice


Charged with Vehicle Code 24600(b) -- Taillamp-two -- all vehicles manufactured after 1/1/58, except motorcycles, trailers, and semitrailers less than 30 inches wide. Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2008052827 Filed On: Not provided The Ventura Hall of Justice Charged with BP 175000 -- False and Misleading Statements Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2008594765 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 24600(b) -- Taillamp-one -- required all such vehicles. Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2008629025 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 21461(a) -- Traffic control sign, failure to obey regulatory provisions. Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2005547512 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 22349(b) -- Exceeding 55 mph speed limit on a two-lane undivided highway. Court Disposition Date: Not provided Court Disposition: Not provided Case No.: 2010512589 Filed On: Not provided The Ventura Hall of Justice Charged with Vehicle Code 21453(a) -- A driver facing a steady circular red signal alone shall stop at a marked limit line, but if none, before entering the crosswalk on the near side of the intersection or, if none, then before entering the intersection, and shall remain stopped until an indication to proceed is shown, except as provided in subdivision (b). Court Disposition Date: Not provided Court Disposition: Not provided


San Bernardino Superior Court – Criminal: Case No.: 001457RATW Filed On: 09/26/2003 San Bernardino Courthouse Charged with a Citation. Superior Court of California - County of Santa Clara -- Civil: Case No.: 1-97-CV-769792 Filed On: 11/25/1997 Old Courthouse Schuler VS Rostami -- This is a Fraud- Unlimited case. Case was dismissed. FEDERAL COURT RESEARCH A search was conducted of the indices of the Federal District Court system. A list of cases was located and they are as follows: Case No.: 5:99-mj-00275-PVT-1 Filed On: 09/17/1999 United State District Court, California North District (San Jose) USA v Rostami -- This is a Travel in Interstate Commerce from the State of California with the Intent to Avoid Prosecution. Case involved Rostami only. Case was dismissed. Case No.: 2:98-ap-02955-ER Filed On: 10/21/1998 U.S. Bankruptcy Court, Central District of California (Los Angeles) Gerald W. Fraus Jr. VS Polo Financial Services, Inc., et al. (Sharon Palmer an additional named Defendant)-- This is a Validity/Priority/Extent Lien case. This involved an allegation of civil fraud. Case No.: 2:97-cv-05316-TJH-CT Filed On: 07/18/1997 United State District Court, Central District of California TMS Mortgage Inc. VS Polo Financial Services Inc., et al. (Sharon Palmer Ross an additional named Defendant)-- This is a Racketeer/Corrupt Organization case. Judgment against Defendants Case No.: 2:95-cv-05684-DTMc Filed On: 08/23/1995 United State District Court, Central District of California


Cynthia A. Anderson VS Polo Financial Services, et al. -- This is a Fraud or Truth-in-Lending case. Case was dismissed. BANKRUPTCIES, LIENS & JUDGMENTS A search was performed for bankruptcies, liens and judgments associated with plaintiff, Sharon Palmer. The following bankruptcies, liens, and judgments are listed as follows: Bankruptcies: Case No.: 0513470 Chapter 13 Filed On: 10/12/2005 Disposition Date: 12/05/2005 California Central Santa Barbara Case No.: 0512159 Chapter 13 Filed On: 08/03/2005 Disposition Date: 10/19/2005 California Central Santa Barbara Case No.: 0415066 Chapter 7 Filed On: 07/28/2004 Disposition Date: 12/28/2004 California Central Woodland Hills Case No.: 0220101 Chapter 11 Filed On: 11/13/2002 Disposition Date: 06/16/2004 California Central Woodland Hills Case No.: 0216935 Chapter 13 Filed On: 08/02/2002 Disposition Date: 07/17/2002 California Central Woodland Hills Liens and Judgments: Filing #: 20090923001582140


Filing Type: Judgment Lien Filed On: 09/23/2009 Ventura County Court, CA Creditor: The Merc in Golden, LLC Amount: $115,168 Filing #: 20090427000665330 Filing Type: Federal Tax Lien Filed On: 04/27/2009 Ventura County Court, CA Creditor: Internal Revenue Service Amount: $13,427 Filing #: 200608070165775 Filing Type: State Tax Lien Filed On: 08/07/2006 Ventura County Court, CA Creditor: The State of California Amount: $6,577 Filing #: 991443547 Filing Type: State County Lien Filed On: 08/02/1999 LA County/Recorder of Deeds, CA Creditor: State of California Amount: $1,749 Filing #: 296102154 Filing Type: State Tax Lien Filed On: 03/01/1996 Orange County - Recorder of Deeds, CA Creditor: State of California Amount: $4,477 Filing #: 9302944 Filing Type: State Tax Lien Filed On: 12/28/1994 Contra Costa County Court, CA Creditor: State of California Amount: $3,281 Filing #: 89-20364 Filing Type: Federal Tax Lien Filed On: 04/05/1989


Prothonotaries' Offices in all Counties, PA Creditor: Not provided in report. Amount: $11,383 INTERNET RESEARCH In addition to the customary investigative databases used, we ran an Internet search on Sharon Palmer and have attached several articles on our subject. The articles cover felony convictions for Sharon Palmer-Ross in Santa Clara court in 2000 where she pled guilty to 2 felony counts of conspiracy to commit elder fraud and two felony counts of conspiracy to commit grand theft. She was to receive 16 months prison at sentence. Santa Clara Felony case # is C9936278. A second article covers federal felony charges filed in LA against Palmer, who was convicted of loan fraud and received 3 years probation and 4 months’s home detention. David Weinhardt By pre-arrangement, we met with the captioned individual, son of Sharon Palmer and her previous husband, in Ventura. David Weinhardt is a self-acknowledged convicted felon with time spent in prison where he became affiliated with the Aryan Brotherhood. He is apparently still affiliated with that prison gang. He is a young male Caucasian, muscular and heavily tattooed. The meeting with David took place after he contacted your client and agreed to provide information on his mother. In the interview, David indicated that on Monday mornings his mother drives a gray van to Chino Valley Eggs in Alhambra and leaving between 7:00 and 9:30 a.m. and normally was purchasing somewhere around 30 120 dozen eggs. David indicated that the tags were removed from the eggs which were then sold for twice as much. He described them as large brown eggs which were taken from large flats of eggs and packed into the Healthy Family Farms cartons. David indicated that the eggs were marked up double and sold to "Jarris", as well as in Malibu, Santa Monica, and Hollywood. He indicated that they were sold to someone named Sara Bachman. If the eggs were not being picked up by Sharon Palmer in the gray van, that they might be picked up by Chris and his wife. They use a full Dodge diesel with Texas plates, silver/dark blue in color.


David indicate that Sharon had just purchased 600 egg laying chickens and that she was buying scratch egg laying feed at Santa Paula Feed and Hay. He did mention that organic alfalfa was being used. He also mentioned that his mother had borrowed $3,000.00 from James Stewart for food for the chickens. As regard the meat, he indicated that on Monday and Thursdays, that meat was being obtained from Ideal Meats on Parthenia. This included the chicken, lamb, pork and beef necessary to fill orders. David indicated that Sharon no longer has Cornish game hens or ducks. He noted that all of the purchased meats were bagged with twisted ties rather than being in vacuum-sealed bags. He also noted that the packaging bags in which the meat was picked up were being placed in the dumpster. He estimated $3,000 to $4,000 a week in chickens. As regard schedule, he stated that the runs to get eggs and chickens took place on Monday between 6:00 a.m. and 9:00a.m. On Tuesdays, there was a trip to Santa Barbara and Wednesdays to QTA. Butchering done at the farm involved the use of vacuum seals and staples. He was estimating $10,000.00 a month sales in meat and $10,000.00 a month sales in eggs. He advised that the sales included the Hollywood Farmers Market on Sundays and that the produce being sold was being advertised as organic. David said that he spent time on the farm until he left three months ago. He also indicated that Sharon has a $3,000,000.00 judgment against Copper Canyon Farms in Fillmore. He stated that there was no water on the farm and that an attempt to raise chickens there resulted in numerous dead birds. He also indicated that the chickens raised there were not organically raised. He spent four years at that farm with his mother. David appeared to be very hostilely disposed towards his mother and declined to explain why. He indicated that his mother left his father completely broken in Philadelphia.


He also indicated that in the various scams, his mother was actively doing them. He described her as heartless and thriving off the lying and her image. She did not use drugs and he indicated that in his estimation she was a very strong woman. He also mentioned that the county had shut down the milk operation due to legal problems with the lack of pasteurization. For identification, David provided his date of birth of 11/20/83. We since learned, that he was, some time subsequent to the meeting, picked up in Ventura and charged with burglary. It is our understanding that he had made bail in that matter and we have not spoken with David since nor been contacted by him. Gaylord Wagner Post Office Box 2893 Fair Oaks, California 95628 We were able, utilizing John Reed, to have an extensive and detailed series of interviews conducted with Gaylord Wagner and, as will be covered below, Judi Von Schleifer, his wife. After completing the interviews, we drafted declarations and met with Mr. Wagner and Ms. Von Schleifer at Ms. Von Schleifer's mother's residence. Gaylord Wagner was an alert and cooperative individual who appears to be in his late 40s. He would make at least an above average witness if called upon to testify. In the interview and statement, Mr. Wagner affirmed that the majority of the eggs Sharon Palmer sold Rawesome were not from chickens raised at Health Family Farms, but rather were purchased from Nichols Eggs and repackaged for sale. It was Gaylord Wagner's understanding that the eggs were not organic. He was also aware that the feed for the chickens, on at least four instances, consisted of commercial feed which contained both corn and soy and which was not organic. The commercial feed was fed to meat producing and egg laying chickens. On several occasions, Mr. Wagner's wife, Judi, in his presence, confronted Sharon Palmer about the shipments of commercial chicken feed. On two occasions, Sharon Palmer told Judi that the commercial feed was shipped in error. On the final occasion, Judi spoke with James Stewart from Rawesome about commercial feed being used for the chickens and showed him a slip providing the contents of the feed. James Steward became upset and spoke with Sharon and, not long thereafter, Sharon fired Judi Von Schleifer and Gaylord Wagner. Gaylord believed that the communication to James Stewart regarding commercial feed was what led to the termination.


He was present when James Stewart stated that he had given Sharon at least $40,000.00 and probably twice that to get proper commercial feed. The acquisition of proper feed, per what Gaylord saw, did not occur. In addition to his own observation, Gaylord also spoke with Cody (David Weinhardt) or Rene who affirmed that the only feed ever given to the chickens was a commercial feed. He stated that the chickens as well as the goats and turkeys were in pens and were never free range despite this being stated to the operation at Rawesome. So far as Gaylord Wagner knew, the majority of the eggs were being purchased from Nichols, repackaged at Healthy Family Farms and delivered to Rawesome. It was Gaylord's estimation, that the chickens being raised on the farm for meat, were not being raised in sufficient volume to match with the amount of meat being sold by Sharon Palmer weekly. It is our understanding that the chickens, from hatchling to butcher, take approximately eight weeks. There was only one batch of chickens being raised at a time. Despite this, Sharon Palmer was supplying meat from full-grown chickens weekly. It was Gaylord Wagner's observation that, although Sharon Palmer promised one lamb a month, one lamb was being provided weekly to Rawesome. It was not possible for this volume of lamb to be coming from Healthy Family Farms. This was also true for ducks. In addition, Sharon Palmer was advertising milk-fed pork. In fact, the pigs were getting fed commercial grain which was not organic. In addition, as there was no propane to produce hot water, the milk machines were never cleaned with hot water as per legal standards. The reason there was no propane, was that Sharon did not pay for propane. In addition to the above, Gaylord, during the six weeks that he worked at the farm, observed that the meat chicken/henhouses had accumulated approximately six to eight inches of chicken excrement on the floor as they were not being cleaned weekly. This created a significant fly problem and the mounded excrement was high enough that it blocked the doors from opening into the pen. It was Gaylord's understanding that the eggs that Sharon obtained from Nichols Eggs were not organic. Gaylord also observed when 500 "rescue" organic chickens were brought to the property. They were not segregated from the other chickens and they died at the rate of 50 to 100 daily for the first few days until, after two weeks, only one-third were left. Chicken bodies were left outside


for a period of 24 to 48 hours before disposal and the dead chickens were simply thrown in the dumpster. A copy of the executed declaration of Gaylord Wagner is enclosed and the original declaration we are maintaining on file. Judi Von Schleifer Post Office Box 2893 Fair Oaks, California 95628 As it turns out, Judi Dawn von Schleifer is the wife of Gaylord Wagner. She is an opera singer and, although not born Jewish, works for the "High Holidays" as a cantor. Judi Dawn von Schleifer was also interviewed in detail and a detailed statement was prepared based on the interview. Ms. von Schleifer is very detail oriented and, despite the interview and the preparation of the statement following the interview, she went through the statement prepared for her in great detail and made numerous small changes. A copy of that document is enclosed and the original we are maintaining on file. Ms. von Schleifer indicated that she was introduced to Sharon Palmer by James Stewart and that when she first met Ms. Palmer in August, 2008 and asked Sharon what she needed help with. Sharon replied, "I need money." She began fundraising efforts by identify and developing contact information for investors and determining the amounts that the investors would be willing to invest in an organic farm. This information was given to Sharon Palmer who made the actual arrangement with the investors as to how much they would invest and what return was being promised them. It was Judi's understanding that each of the investors were promised a 12 percent return on their money to be paid back within three to six months. Sharon indicated that she was "on track" to get a U.S. Department of Agriculture loan between $900,000.00 and $1,000,000.00. Judi said that she never saw any paperwork pertaining to the loan. Judi's fundraising assistance permitted Sharon to raise $500,000.00 to help in purchasing the farm. Judi and her husband worked on the farm from late April, 2009 until June, 2009 when they were terminated by Sharon Palmer for disclosing that she was using commercial feed for the animals on the farm rather than the organic feed that she represented was in use. Judi indicated that so far as Rawesome was concerned, that Sharon represented to Rawesome and James Stewart that the eggs being sent were organic and that the chickens being supplied for meat were fed organic feed, were free range and were not fed any feed with soy or corn products. It was also indicated that the eggs had never been refrigerated.


According to Judi's understanding, many of the eggs that Sharon sold to Rawesome as raised at Healthy Family Farms, were in fact purchased from Nichols Eggs in Arcadia. It was Judi's observation, as well as her husband's, that the eggs from Nichols were repacked into boxes and then sold to Rawesome as organic. It was Judi's belief that the eggs were not organic. The information provided by Judi corroborated that of her husband as regards to four shipments of commercial feed at least one of which was obtained from downtown Santa Paula. The feed contains both soy and corn. Judy von Schleifer recalls speaking of James Stewart from Rawesome about the feed and showing him the tickets showing the actual ingredients. After James became upset and spoke with Sharon, Judi and her husband were fired by Sharon Palmer. It was her belief that the firing occurred because she had told James Stewart about the commercial feed. She also recalled Sharon telling her that James Stewart had given her money to buy proper organic feed but she did not. Judi von Schleifer observed that the commercial feed which had been shipped to the farm was used to feed both the meat chickens and the egg-laying hens. During the time that she worked at the farm, all of the feed used was commercial and she never saw any organic feed being used. In addition to the feed situation, Ms. von Schleifer observed that the hens, chickens, goats and turkeys were all in pens. None of them were pastured or free range, despite this the allegation to the Rawesome customers that they were. In addition to the eggs raised from chickens being fed commercial feed at the farm, the remainder of the eggs being sold were from Nichols. Ms. von Schleifer had the same observation as her husband, that the volume of chicken meat being sold was far more than the amount of chickens being raised at the ranch could possibly provide. In addition to the farmers markets, Sharon sold to a buyer's club which Judi had helped set up for the farm and also to Mama Raw Company. Judi also recalls seeing the rescued chickens and watch them die off at a rate of approximately 50 to 100 per day. She did not share the observation of her husband that the volume of lamb being sold to Rawesome far exceeded that which could be produced at the farm. She did agree that the volume of duck being sold exceeded the farm's ability to produce. She also indicated that the milk-fed pork was being fed goat milk but also commercial grain.


She also noted that the milk machine was not being cleaned with hot water as there was no hot water to circulate through the system. When she spoke with Sharon about this, Sharon advised that she did not have the money to pay for propane to heat the water. She was aware that James Stewart had given money to Sharon on two occasions to buy a proper pasteurizer to meet the state requirement for her Grade A dairy license, but that Sharon never got the machine as she used the money given to her for it for other bills. When we asked Judi about the Nichols eggs that were being resold as Healthy Family Farm's eggs, she described them as large brown eggs. EGG RESEARCH As a result of our research, we learned that both Nichols Eggs and Chino Valley Eggs, were being sold at the same location, 5611 Peck Road, Arcadia, 91006, telephone 626-652-0890. Interestingly, we also learned that Steve Nichols was the owner of both operations. When we called, we found his employee to be extremely cautious in speaking with us. We were told that Steve Nichols was out of the country and we have made arrangements to meet with him on September 14, 2010 on his return. We carried out an interview with an employee at Chino Valley Eggs. We were advised that Chino Valley provides commercial eggs in sizes ranging from small to medium, large, extra large and jumbo. It was also indicated that Chino Valley Eggs supplies organic eggs only in brown eggs in sizes from medium to jumbo. The internet research we did included the allegation that the Nichols Egg Ranch feed their free-range chicken nothing but organic feed. This does not appear to be the case from the information we were given by the Nichols employee. We subsequently proceeded to 5537 Peck road, Arcadia where Steve Nichols operates both Nichols Eggs and Chino Valley Eggs. There was a retail store facility at which eggs were sold by the dozen and by the flat (30) eggs. We saw commercial and organic eggs which were brown in color. The organic eggs were only being sold by the dozen at a cost of $3.50 per dozen. The commercial flats of eggs were sold at $1.99 per flat. We spoke with the sales lady at the retail store counter, Ms Alicia Escobar. She recognized Sharon Palmer’s name as a customer and said that as far as she knew, Ms Palmer was buying commercial eggs.


We spoke with David Will, Steve Nichols General Manager. Mr. Will agreed to research invoices on Ms Palmer, but recalled that she had bounced a check on them and that he thought she was buying eggs from other companies . He subsequently contacted us by phone and advised that Sharon Palmer had not purchased eggs from the company in at least six months. He confirmed that Ms Palmer was buying 10-15 cases of commercial (non-organic eggs), jumbo browns. He specifically recalled seeing her making purchases in the retail store and putting the eggs in her vehicle. He saw her driving a brown “dually” pick-up at one point and on other occasions a grayish passenger van with the tracing of old decal letters (since removed) still visible. It was his understanding that Sharon paid cash for her purchases. She certainly was required to pay cash after she gave a bad check to the store for a purchase. Mr. Will recalled that Sharon Palmer spoke with him at one point as she wanted a break in the price she was paying for eggs. He had a vague recollection that Sharon mentioned she was buying eggs for the Boy Scouts or Girl Scouts, he was not quite sure. He recalled that she purchased eggs from the retail store for at least a year, comprising all of 2009 and into early 2010. He recalled seeing her buying eggs perhaps every few weeks. She has not bought eggs from the retail store in about 6 months. Mr. Will surmised that she must be buying eggs elsewhere, but had no specifics. As she was buying from the retail store only there was no record maintained of her purchases.

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Mr. Will arranged for us to speak with Jose Cisneros the Operations Manager. Mr. Cisneros recalled having contact with Ms Palmer. He said she would check with him once in a while if the retail store didn’t have enough commercial eggs to sell. Per this witness, Ms Palmer was buying up to a pallet of eggs at a time amounting to up to 900 dozen eggs. She would normally buy jumbo brown commercial but if there were not enough jumbo eggs, she would buy medium, large or extra large eggs (brown commercial). In a follow-up contact he estimated that Ms Palmer was buying 40-50 flats of eggs, with 15 dozen eggs comprising a flat. This would total out to 600 – 750 dozen eggs, somewhat less than a full pallet, per Mr. Cisneros. It was his understanding that Ms Palmer had a retail store or farm. She bought eggs for cash. (We checked these figures with Mr. Will who indicated that a flat of eggs would be 2 to 3 dozen eggs. There would be 5 flats per case and 60 cases of eggs in a pallet amounting to perhaps 750 dozen eggs. This would arithmetically match with the 600 or so dozen commercial eggs estimated by Mr. Cisneros. NOTE: Mr. Will estimated 10-15 cases per purchase only, which would amount to around ¼ pallet.)


We learned that the availability of eggs depended upon how many eggs were needed for the company’s large accounts (big companies). It was the eggs left over from sales to the large accounts that were sold in the retail store. There were never enough organic eggs left over to sell in quantity through the retail store. Mr. Cisneros advised that Nichols could not help Sharon Palmer with organic eggs. Approximately 5 or 6 months ago, there was a period of lower egg production at Nichols resulting in eggs not being available for sale through the retail store. At that time, Mr. Cisneros suggested Sharon Palmer try Hogbert Egg Farm in Fontana. Since that time, Sharon Palmer had not come back. Ideal Meat and Provision 18425 Parthenia Place Northridge, California 91325-3307 Telephone: 818-886-9733 Our initial Internet research indicated that Ideal Meats is a commercial meat processor. There was no initial indication in our internet research that the company provided organic meat. We have thus far made two visits to Ideal and have worked our way up the company's hierarchy. In our contact with the company representative, we were told that they normally provided commercial meat, but that, by arrangement, it would be possible to get organic chicken. We spoke with the owner of the company, Mr. John Vad, who confirmed that Sharon Palmer was a customer. He said that he checked with his attorney and can give out no further information on any of his clients without a subpoena HOLLYWOOD FARMERS MARKET We made a visit to Hollywood Farmers Market on September 5, 2010 to inspect the eggs being sold. They appear to be brown eggs. GENERAL RESEARCH It is our understanding through informal contact with a dairy farmer who researched converting his farm to organic that a period of seven years was required of the soil not having chemicals/chemical fertilizers applied to it before it could be use for pasturage or crops to feed the cows. COMMENTS We have found our investigation to date has developed what appears to be conflicting information.


At minimum, we have indication that Sharon Palmer was purchasing meat and eggs outside and repackaging and selling those items as being raised at Healthy Family Farms. There have been allegations that the meat she was purchasing outside and the eggs she was purchasing outside were not organic. We have preliminary cooroboration of this. One individual making this allegation was her son David Weinhardt. In the course of our interview with him, David Weinhardt made mention of a previous occasion in which his mother requested, and he complied with her request to provide false information in a previous litigation matter involving a farm owned by an affiliate of the Hell's Angels. David indicated that he perjured himself in that matter to help his mother and that he required the intervention of someone fairly high up in the hierarchy in the Aryan Brotherhood, speaking with someone up in the hierarchy of the Hell's Angels, to calm down the problem with the Hell's Angel harmed by his perjured testimony. We have confirmed that Sharon Palmer was purchasing meat from Ideal Meats which normally sells commercial meat products with organic meats being a special order item. We have also determined that Sharon Palmer was purchasing brown jumbo commercial eggs from Nichols Eggs/Chino Valley eggs during 2009 into early 2010. To date there is confirmation of Sharon Palmer’s 2 felony convictions, one in Santa Clara in a state case and the second in Federal Court in LA. We have initial documentation that Healthy Family Farms, LLC is an active Nevada LLC not registered in California as a foreign LLC, with Larry Otting named, among others in a manager’s capacity for the LLC.

Respectfully submitted,

By:

Mitch Hermann Encl.

investigative report evidence of fraud at healthy family farms (hff)

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