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Steve Kubby’s status on Facebook

10 July 2009

I just watched 6.5 million shares of my stock, which has traded as high as $1.50 a share, go up in smoke, as a result of my decision to tell the truth and resign from Cannabis Science. Our movement cannot allow itself to be discredited by public companies who are not squeaky clean. Even if it involves friends I’ve known and cherished for years, I have an obligation to expose what I believe are fraudulent activities.

He’s added a Note – I’ve reprinted the entire note here, because I can’t find it anywhere else, and Facebook is not easily accessible to everyone.

My Resignation from the Cannabis Science Board of Directors

Yesterday at 5:30pm

The challenges of launching our company, during the worst financial crisis since the Great Depression, forced us to move quickly and decisively, resulting in a lot of snap decisions and rushed actions that I felt needed to be reviewed. Hence, I recently asked our COO, Ray Carr, to perform an internal review, so we could determine what actually happened and where we are now.

In the course of his review, Ray Carr spoke by phone with Raymond Dabney, who had brought us the deal with Gulf Onshore to do a reverse merger. Our COO wanted to determine what stocks had been issued and to whom. When Mr. Carr attempted to get details about certain unusual consulting contracts, Dabney refused to provide answers and told our COO, “it’s none of your business.”

For Dabney to tell our COO what he did, was disturbing and unacceptable to Mr. Carr, and when I found out about it, disturbing to me, especially since I have been increasingly troubled by Dabney’s demands that we sign stock deals with consultants with vague responsibilities and identities. It was then that our COO advised me that he believed something might be going on that required an internal investigation of Raymond Dabney’s stock deals and the advice of our SEC attorney.

It was our Chief Science Officer, Dr. Robert Melamede, who brought Raymond Dabney to my attention and gave him a strong personal recommendation. Despite the recommendation, I did a search on Dabney and came up with this:

“In November 2005, for example, the commission suspended Ray Dabney, the president of Xraymedia, after he admitted sending out 22 false news releases about the company. Several Xraymedia directors serve on Goldmark’s board, and the two companies share the same Vancouver address, according to filings with the Pink Sheets. Xraymedia was the subject of a 2003 spam campaign, according tospamnation.info, a Web site that tracks penny-stock spam. Shares of Xraymedia are quoted on the Pink Sheets. Although barred from the Pink Sheets, Goldmark shares may still trade if a broker is willing to sell them to investors (few are).”

http://articles.moneycentral.msn.com/Investing/FindHotStocks/TheTruthBehindPennyStockSpam.aspx?page=2

Dr. Melamede and, in particular, Richard Cowan, our CFO, argued that this was only a civil infraction and had more to do with the Vancouver Exchange than any real wrongdoing on the part of Dabney.

However, before I agreed to work with Dabney, I sent our CFO to meet with him in Vancouver. Cowan reported that Dabney was perfect for us and we agreed to work with him.

Recently, I have become increasingly concerned about large blocks of S-8 free trading shares that Dabney insisted I immediately transfer to unknown individuals and companies. Due to the large amounts of stock involved and the lack of any information about the individuals and companies involved, I continually requested opinions by our Board of Directors. In each case, it was the opinion of Dr. Melamede and our CFO that these transactions were necessary and legal. Additionally, I was reassured by Dabney that his scrape with the SEC had been resolved and he had been cleared.

Despite these assurances, I became so concerned about what was happening, I refused to sign the most recent stock transfer he submitted, which awarded 850,000 shares, per year, to a company that had no clear duties and did not even have an address.

Then, when our COO told me about Dabney’s refusal to answer his questions, I decided to do a another search on Raymond C. Dabney. Within just a few minutes, I was shocked to find new information about him that is, on its own, troubling, but taken in the context of what Dabney has been doing in our company, it appears that immediate action is required.

One paragraph in an SEC report, dated August 8, 2008, on Dabney is especially disturbing:

“The Commission’s complaint further alleges that, from July 2005 to September 2006, Alliance, Richard Dabney, Raymond Dabney, Young, Smith, and O’Neal participated in an unregistered distribution of Alliance securities through a series of purported stock offerings by Alliance to North American Funding, Inc. (NAF), a Texas corporation controlled by Smith. According to the complaint, Raymond Dabney, Young, and Smith arranged for Alliance to issue stock to NAF in offerings that purportedly were exempt from registration. The complaint alleges that, in fact, the transactions between Alliance and NAF were not exempt from registration and were merely a device to evade the registration provisions of the federal securities laws. According to the Commission’s complaint, the stock was immediately distributed to third parties and sold into the market, without being paid for by NAF. Richard Dabney, an officer and director of Alliance, and O’Neal enabled Alliance to engage in those transactions by providing the necessary corporate resolutions and legal opinions, respectively. The Commission’s complaint also alleges that Young, Smith, and O’Neal received some of the Alliance stock through the unregistered distribution and sold it into the market without registration or a valid exemption from registration. According to the complaint, Lewis, Richard Dabney, and Raymond Dabney received a portion of the proceeds that Young obtained by selling the Alliance stock.”
<http://www.sec.gov/litigation/litreleases/2008/lr20676.htm&gt;

Frankly, this seems to be exactly what Dabney is doing now, with our company. I then advised our COO that we had a fiduciary responsibility to conduct an immediate, confidential internal investigation of Raymond Dabney, to determine the following:

1. Are the stock deals arranged by Dabney legal?

2, Is the stock issued to the consultants that Dabney has recommended being distributed to third parties and sold into the market, without being paid for or properly registered, or exempted by us, as happened in the previous stock offerings by Alliance to North American Funding, Inc. (NAF)?

3. Given that Dabney never disclosed his history of SEC complaints about his attempts to create phony schemes to evade federal securities laws, are we still bound by contracts he created and had us sign, such as the Control Shareholder’s Agreement? That agreement gives Dabney a major role in the operation and decision making of the company, a role he would never had been allowed to assume, had I known the truth about him.

4. What legal options and obligations do we have to deal with this situation?

The results of that investigation are in and it appears that the level of fraud and illegal activities, as well as bogus or incompetent filings, appears to be systemic.

Yesterday, the Dabney group took actions to remove me as a Director, that are clearly a violation of Nevada state law. Dabney and group then contacted the investors and vendors of CSI to tell them I had been removed. By these two actions, I believe this group has so damaged CSI and its reputation, that I have no choice but to resign and do what I can to protect future investors by ending any appearance of support for CSI.

Also, I’ve learned that Dabney et al have issued themselves preferred stock, without my knowledge, any proper authorization, placing themselves in a majority position. If the CEO and COO are being left out of such fundamental actions as the issuance of stock, then the Dabney group is acting so far out of the law that I am again compelled to remove myself.

Furthermore, based on what we learned from our internal investigation, I now believe that the two court cases against CSI are not bogus as we all believed, but are actually the fault of Dabney’s failure to provide proper contracts or safeguards to assure a legal closing of his deal.

Another major problem is S-8 stock issuance with I believe was based on a fraudulent attempt to circumvent SEC rules with bogus contracts and fraudulent misrepresentation of services rendered, in order to create the appearance of legal activity, that was really intended to channel money back to Dabney and to the company.

These is also the matter of the Dabney group directing one of our investors to deposit $200,000 into our company lawyer’s CDN Trust account. However, the account to which our investor was told to deposit the $200,000 was NOT our corporate attorney’s trust account, but was actually Mr. Dabney’s own private attorney’s trust account. Mr. Dabney had attempted the same illegal diversion of funds a few days prior and had been warned by me that he had no authority and to cease any further activities, yet he brazenly repeated his attempt to divert these funds with the assistance of two of our CSI Directors, Richard Cowan and Robert Melamede.

I spoke to Annie Chan, secretary to Jeffry Wing, a Vancouver lawyer about the attempted diversion of funds. She told me that although Wing is Mr. Dabney’s personal attorney, he has not done any work for my company, nor, to her best knowledge was such a transfer known or authorized by Jeffry Wing. Mr. Wing and Ms. Chan can be reached at 604 689-2828. believe Mr. Dabney committed bank fraud by representing the account our investor was supposed to send money to was a Cannabis Science trust account when that is clearly not the case. So from my point of view, this attempt to divert funds appears to tie Mr. Dabney and his group to bank fraud, stock fraud, violation of the BC SEC order against him and attempted embezzlement. Not just once, but twice.

Dabney and his group claim they are partners with me, under the terms of a Control Shareholders Agreement I signed. However Dabney’s name appears nowhere in the document. The legal opinion of our corporate attorney, Faiyaz Dean, is that Dabney has no authority to say or do anything under the Control Agreement. According to Mr. Dean, there are at least three clauses that in the Control Agreement that nullify Dabney’s claims. Yet, in fact, Dabney has installed himself as COO, refusing to release files to us, using his own phone number and email to answer all inquiries to Cannabis Science. Dabney has done this with the full support of Melamede and Cowan, who appear to have entered into an agreement to take over CSI through unauthorized and fraudulent activities.

As long as my name is associated with Cannabis Science, innocent investors who know me and my reputation, will be investing their hard earned dollars into a company that is deceptive and fraudulent. Given what I have learned about the activities of Dabney, Melamede and Cowan, I believe it is my duty to resign and call attention to what I believe is an criminal conspiracy to defraud our investors.

Steve Kubby
July 9, 2009

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Recently, the Admiral hit “Reply All:” in response to Karlan’s whine.  Makes one wonder if the Admiral actually meant to show the world the puling wuss that Karlan really is.

On 5/2/09, dankarlan@earthlink.net <dankarlan@earthlink.net> wrote:


Friends —
Given my insistence on following rules, the report from the Judicial Committee, and the apparent low regard within the LP for actually following rules — and especially given the high regard within the LP for certain people who openly exhibit their willingness to ignore our rules — I invite each of you to convince me that I have a role to play within the LP. Clearly, even trying to improve those rules, a burden I have enthusiastically shouldered, will be futile.
I note that the Judicial Committee’s decision is not just evidence of a thorough willingness to ignore rules when they are uncomfortable. It has also inspired those so willing to consider themselves vindicated and those who choose to follow the rules are fair game. Even being right and in the majority is not sufficient defense.
Dan Karlan
And the Admiral replied –
Dan –
Hang in there!! Your sage and experienced counsel is essential and much appreciated. I have often wondered how you were able to so thoughtfully combine your knowledge of the rules with a practical effort to help us understand what those rules meant to us.
Yes, there are colleagues who may or may not know the rules, but decide in any case to take a path based on who knows what sort of logical distortion.  That probably won’t change – and the By-Laws update you are working on for 2010 will most likely not be 100 per cent agreeable to all – but I am confident that you and your team can produce a package which is sensible, professional, useful and reflects the appropriate rules.
Thank you for yor service in making liberty a watchword.
All the best,
Michael C Colley
To recap – Dan Karlan rigidly follows the rules.  Too rigidly.
And he thinks he’s tight.  Err, right.  I meant right.  But you knew that.
And believes in the tyranny of the majority.

Mr. Chair,

I have long been an admirer of yours for all that you have given to the LP.  I honor your contributions and always will, in spite of what I write today.  Because I do respect what you have done for the LP, this e-mail is one of the most difficult pieces that I have ever had to write.

I believe that you have made a grave error in the matter of Mr. Lee Wrights by not asking the LNC for the 2/3 vote required to unseat an At-Large Member “for cause.”  Your decision to do so has unnecessarily angered members and created division in a time when we need unity the most. Hours of time that could have been spent going after renewals and new members has instead been spent in an effort to replace or reinstate an activist who has also given much to the cause of liberty.

After all is said and done, you have taken this course of action because you believe that Mr. Wrights has been “rude.”  Although you admit that you haven’t seen the APRC posts, you’ve taken someone else’s word that he has been “uncivil.”  I am a member of the APRC and have read every one of Mr. Wrights posts.  I can’t recall a single one that was “uncivil.”  Blunt, maybe.  Straightforward certainly. “Uncivil”?  No.  If you wish, I will forward each and every post that Mr. Wrights has made so that you can make your own assessment rather than taking someone else’s word for it.

“Rude” is when you swear at someone at the top of your lungs, with liberal use of expletives and the “f” word.  “Uncivil” is when your wife is pleading in the background for you to stop—and still you continue.  “Rude” is when you give a long-term friend this treatment in your capacity as National Chair when they, in their capacity of campaign manager for a presidential candidate, inquire about a defamatory press release.  “Uncivil” is when you lose your temper and are totally out of control.  Indeed, at that level I would call the behavior “abusive.”

By now you probably recognize yourself, in your capacity of National Chair, verbally abusing my campaign manager, Mr. Wrights, in a telephone conversation that took place in late May, 2008.  After that conversation, Mr. Wrights came to me in shock. “I can’t believe I’ve just lost a good friend over this,” he told me.  His distress was so extreme that I made him repeat as much of the conversation as he could remember so that I could help him come to terms with it.  I too was shocked and hurt. After all, you were really angry at me and simply lit into Mr. Wrights, who was acting as my representative.

Perhaps I should have lodged a formal complaint about your bad behavior.  I can tell you that it was not a pleasant feeling walking into the Denver convention knowing that it’s Chair was not at all neutral, but highly prejudiced against me.  It was especially difficult because of my admiration and respect for all that you’ve contributed to the LP over the years.

Yes, you apologized to Mr. Wrights a week or so after this incident. Mr. Wrights generously forgave you and quite literally welcomed you back as his friend with open arms. It never even occurred to Mr. Wrights to hold a grudge; he loves you too much for that.

Too bad for Mr. Wrights and the Libertarian Party that you don’t feel the same way.

You readily accepted Mr. Wrights’ forgiveness for your abusiveness.  You then have the nerve to call HIM “uncivil” and write:  “For him (Mr. Wrights) to expect courtesy while treating others so badly is hypocritical.”  I’m sorry to have to point this out, Mr. Chair, but that’s like the pot calling the kettle black.

In the meantime, you have turned a deaf ear when certain members of staff and others on this Board have treated both Mr. Wrights and myself with disdain.  Mr. Wrights made a formal complaint to you on this list; you never answered him.  I pointed out the problem to you in a more confidential setting; you promised action, but never let me know if such action had been taken.  It once again seems that your comments about courtesy are “rules for thee, but not for me.”

If you have issues with Mr. Wrights behavior, or what he publishes, the proper course is to speak to him about it. Disregarding the will of the delegates and violating the bylaws are not proper courses of action for your complaint.

As you justly point out, the Chair should not be expected to remind LNC members of their renewal status.  In this particular case, however, you were honor-bound to do so because of your own past bad behavior as National Chair and the forgiveness extended to you by Mr. Wrights.  Had you extended the same courtesy to Mr. Wrights that he extended to you, we would now be building the Party instead of tearing it down.

I invite you to demonstrate your integrity and compensate Mr. Wrights by publically voting “yes” on the motion to reinstate him.   He has quite literally paid his dues.  It’s time for you to pay yours.

Why?

Much of the current Libertarian National Committee is corrupt and ruining our party.

We. Want. It. Back.

First, they came after Angela Keaton.

Now it’s Lee Wrights.

Applicants Sought For LNC Vacancy

Understanding the History Behind the Current Leadership of the Libertarian Party

Removal of Lee Wrights from Libertarian National Committee appealed to Judicial Committee

Starr claims Wrights wasn’t eligible when we elected him at Denver.

Wrights’ ex-wife refutes claims that he was mailed notices.

Why?  Redpath = Psychopath. He’ll tear this party down because he’s little 2nd grade feelings are hurt.  Yet, he’s a bully and an @$$#0!3 himself.

Wrights talks at LPTN convention.

Look at some other interesting points-

  • Redpath is also bylaws
  • Karlan is chair of bylaws
  • Starr is also bylaws
  • Carling (intimately intertwined with Starr) is bylaws, platform, LNC parliamentarian.

This small group of power-hungry goons are running everything in this party.  They elect the bylaws and platform committee members.  They believe they can overturn your election of At-Large Representatives (witness Wrights and Keaton), and they are currently trying to push through a bylaws proposal that would get rid of regional reps.

You see, they can’t get rid of the regional reps.  Only the state chairs of the region can do that.

But if they’re all elected at-large, then the Kings of the Libertarian Party can send anyone to the dungeon.

They can spend your donations on Republican candidates, or on conservative conferences without any oversight.

Wrights and Keaton were their biggest critics.  Ruwart and Hawkridge are next.  And since this has started with Wrights, Porter and Ryan have gotten to be vocal critics.