Corruption Among the Krilich Klan

Dr. Jackie R See, M.D., F.A.C.C., has been slandered by the Krilich Family 

Robert R. Krilich Sr., Robert R. Krilich Jr. and Barbara L. Krilich Barry.

Let’s see where the chips fall in this underhanded, double dealing story of greed.
First of all the characters in this story:
• Robert R. Krilich Sr. served 9 years of a 10 year sentence for  federal racketeering
• Robert R. Krilich Jr. served 3 1/2 years for bank fraud
• Barbara L. Krilich Barry forced to resign from HCCA, sanctioned by the SEC
• Mayor Richard Sarallo served 6 months for tax evasion
• Terrance Pearson, Krilich’s bag man, served 12 months for tax evasion.

Robert Krilich Sr.

The following facts are not in dispute.

This case centers on a piece of property located in Sumner County, Tennessee, known as "Foxland." In 1994, Krilich owned Foxland and entered into an agreement to transfer Foxland to Health Care Corporation of America, Inc. ("HCCA"), in exchange for some HCCA stock. Krilich and HCCA also agreed that they would not record the deed transferring Foxland from Krilich to HCCA until HCCA had registered the stock with the Securities and Exchange Commission. It was during this time frame that Barbara L Krilich, a director, chief financial officer and treasurer of Hexagon Consolidated Companies of America, Inc. ("HCCA"), was a defendant in a case brought by the SEC, for filing false and misleading reports that overstated HCCA assets… more on this story below. 

In 1996, a real estate developer named Jimmy Stinson approached Krilich about buying Foxland. At first, Krilich told Stinson that HCCA owned Foxland, even though there was no recorded deed transferring the property from Krilich to HCCA. Acting upon this representation of facts by Krilich, Stinson entered into negotiations with HCCA to buy Foxland. HCCA then approached appellant Atchley, a real estate broker, who drew up a contract of sale between HCCA, as seller, and Stinson, as buyer. HCCA and Stinson signed Atchley's contract on May 8, 1997, agreeing that the purchase price for Foxland would be $16 million, Stinson would immediately pay HCCA $1,000 in earnest money, and HCCA would pay Atchley a commission of 6%, or $960,000, upon completion of the sale. 

In February of 1997, however, a few months before Stinson and HCCA signed the Foxland sale contract, Krilich signed and recorded a deed transferring Foxland from himself to defendant RK Company, a company he controlled. RK being the company that sued Dr. See for $500K… more on that story as well. HCCA learned of Krilich's action in April of 1997, when it finally recorded its own earlier-signed deed, which had transferred Foxland from Krilich to HCCA. Thus, when HCCA entered into the May, 1997 contract to sell Foxland to Stinson, HCCA and Atchley both knew that there existed a potential title dispute. 

Atchley addressed this potential title dispute in the HCCA/Stinson contract by adding certain language under the heading "Miscellaneous Conditions." Specifically, the contract provided:

[HCCA] hereby discloses that as of the date of the signing of this contract, the title to [Foxland] is the subject of pending negotiation and possible litigation with [Krilich], and at this time is not a clear and marketable title. This contract is contingent upon [HCCA] resolving all questions and issues regarding title, and obtaining clear and marketable title in order to transfer to [Stinson] clear and marketable title. If title is not made clear and marketable, this contract is null and void, and [HCCA] and [Stinson] shall hold each other harmless, and earnest money will be refunded to [Stinson]. 

At the time the contract was signed, HCCA and Atchley were hopeful that the title dispute with Krilich would be quickly resolved.

Unfortunately, HCCA's hope was false. HCCA and Krilich are currently litigating ownership of title to Foxland in the United States District Court for the Middle District of Tennessee. In October of 1997, it became clear to Stinson that HCCA was unable to timely meet the "miscellaneous condition" of "obtaining clear and marketable title." Accordingly, Stinson sought and obtained the return of his $1,000 earnest money. Stinson and HCCA never consummated their deal, so Atchley never received her expected $960,000 in commission. Stinson has since contracted with RK Company to purchase Foxland. 

After it became clear to Atchley that Krilich's actions had worked to deprive her of nearly one million dollars in commission, Atchley sued the defendants for procurement of breach of contract, in violation of Tennessee law. The district court had diversity jurisdiction over this case pursuant to 28 U.S.C. §1332, and we have jurisdiction over Atchley's timely appeal pursuant to 28 U.S.C. §1291. 

A judge in this case, The Honorable Kathleen McDonald O'Malley, United States District Judge for the Northern District of Ohio, had this to say 

"Healthcare Center of America, Inc. v. Krilich, case nos. 3:97-0716 and 3:97-0717 (consolidated). The lawsuits surrounding the transfers of Foxland are not the only federal cases in which Krilich has been a party. See, e.g., United States v. Krilich, 159 F.3d 1020 (7th Cir. 1998), cert. denied, 120 S.Ct. 42 (1999) (affirming Krilich's convictions for fraud and RICO violations, predicated on bribery, in relation to a land development scheme); United States v. Krilich, 126 F.3d 1035 (7th Cir. 1997) (after Krilich allegedly filled in wetlands without a permit, in violation of the Clean Water Act, he entered into a consent decree with the Environmental Protection Agency, but then failed to meet his obligations); United States v. Krilich, 470 F.2d 341 (7th Cir. 1972), cert. denied, 411 U.S. 938 (1973) (affirming Krilich's convictions for income tax evasion and willfully filing a false income tax return); Summit Tax Exempt L.P. II v. Berman, 1989 WL 152796 (S.D.N.Y. July 19, 1989) (granting sanctions against Krilich for, inter alia, filing a frivolous counterclaim). Krilich has also litigated in state courts. See, e.g., Yearwood, Johnson, Stanton & Crabtree, Inc. v. Foxland Development Venture, 828 S.W.2d 412 (Tenn. Ct. App. 1991) (affirming default judgment entered against Krilich for having failed to comply with court orders); Stura v. Krilich, 274 N.E.2d 657 (Ill. Ct. App. 1971) (affirming quiet title action in favor of plaintiff)." 

Read UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT, concerning the above. 

Krilich was also been accused of bribery going back as far as 1960. 

In 1985 Oakbrook Terrace Mayor Richard Sarallo, was bribed by Krilich so Krilich could obtain a $135 million bond issue from the west suburb for a huge construction project. Sarallo pleaded guilty to tax evasion and was sentenced to six months in prison, but denied he ever received a bribe by Krilich. Prosecutors also asked the court to demand that Krilich forfeit $15M and his country club. 

On February 5, 1997, the Chicago Tribune reported that Krilich’s attorneys accused the prosecutor at his trial of lying… well now isn’t that the pot calling the kettle black. Seems it is okay for the defense to lie, but not the plaintiff. 

Here is another instance of the deceitfulness of Mr. Krilich. Follow this link for additional information on the case;  Krilich vs American National Bank & Trust co.

KRILICH v. AMERICAN NAT. BANK AND TRUST CO. 

778 N.E.2d 1153 (2002) 

Appellate Court of Illinois, Second District. October 10, 2002. 

 (A) That on said real estate as set forth in the [NORTH] BARRINTON CONTRACT, BONGI could construct fifteen (15) single family residences;

(B) That the real estate constituting the purchase was of a size sufficient to create individual septic fields for each of fifteen (15) lots and further that the content, quality, consistency and capacity of the soil was suitable for the construction of septic fields sufficient for the construction of fifteen (15) single family residences. 

(C) That subdivision and other approvals from the Village of North Barrington, the County of Lake and other governmental bodies would be a routine matter and could be completed within a period of several months after closing." 

The counterclaims further allege that Krilich intentionally deceived Bongi, Bongi reasonably relied upon the statements, and Bongi incurred substantial damages when it could not obtain zoning approval for the project. Bongi's pleadings also allege that Krilich failed to pay the amounts due under the first contract modification. 

On March 30, 1999, Krilich filed a motion to dismiss the misrepresentation and fraud counterclaims under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 1998)). Krilich conceded that he made the statements as alleged. However, he argued that Bongi unreasonably relied upon the statements because (1) they were statements of law, (2) they were statements of future facts, and (3) Bongi waived its contractual right to cancel the agreement upon the occurrence of the events that allegedly caused Bongi's damages. On June 8, 1999, Judge Austin granted the motion to dismiss the misrepresentation and fraud counterclaims. 

More than a year later, Bongi filed two additional affirmative defenses, alleging that (1) the North Barrington contract was unenforceable because Krilich used duress and business compulsion while negotiating the second modification of the original agreement and (2) Bongi was entitled to a setoff against any amount that Krilich might recover because Krilich had breached the first contract modification. Bongi also amended the counterclaims to include a second breach of contract count based on the duress allegation. 

Specifically, Bongi alleges that Krilich employed duress and business compulsion during the negotiations of the second contract modification by threatening to breach the parties' Covington Cove contract, an unrelated residential real estate development contract executed on May 18, 1988. Pursuant to the Covington Cove contract, Krilich was to sell Bongi 153 "fully improved lots" in the Village of Carol Stream. The agreement required Krilich to complete certain public subdivision improvements, and Bongi alleges that Krilich coerced Carl Bongiovanni, Bongi's president, to execute the second modification of the North Barrington contract by delaying completion of the improvements and withholding a letter of credit for the Covington Cove project. Bongi contends that Krilich knew that Bongi owed more than $5 million on outstanding mortgage loans on the Covington Cove project and that any delays in the construction would threaten the project. Bongi seeks at least $5 million on the duress counterclaim. 

Robert R. Krilich Jr. was sentenced to 3 ½ years for bank fraud. He admitted to taking part in 14 financial scams involving $1.4 million, Robert Krilich Jr., told a federal judge, “I am a crook who can't be trusted with money or credit”.

Barbara L. Krilich Barry, the daughter of Krilich Sr., in 1998 was instrumental in convincing her father, unbeknownst to Dr. See, to invest $500K in Harvard Scientific Corp, while Krilich was still in prison for the aforementioned crimes. 

 Barbara Krilich, was a defendant in a case brought by the SEC. The Securities and Exchange Commission ("Commission") deemed it appropriate that public administrative and cease-and-desist proceedings be instituted against Barbara L. Berry, CPA pursuant to Section 21C of the Securities Exchange Act of 1934 and Rule 102(e)(1)(iii) of the Commission's Rules of Practice. On November 1, 1996, Berry was appointed as a director, the chief financial officer and treasurer of Hexagon Consolidated Companies of America, Inc. ("HCCA"). On May 5, 1997, Berry resigned as a director, and on May 20, 1997, Berry tendered her resignation as HCCA's CFO and treasurer; however, at the request of HCCA's chief executive officer, she continued in these capacities until late-August 1997. Berry continued as an outside accounting consultant to HCCA until January 7, 1998. Berry willfully aided and abetted and caused HCCA's violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 there under through her participation in preparing false and misleading quarterly and annual reports which she caused HCCA to file with the Commission. The quarterly and annual reports, which were filed with the Commission from December 1996 through November 1997, overstated HCCA's assets from 119% to 95,920%. 

RK (Robert Krilich) Company vs Jackie R. See MD. During a trial between RK Company (Krilich) the plaintiff, and Dr. Jackie R. See, the defendant, Krilich testified at trial that he had Edward B. Bartoli set up his Common Law Trust before going to prison. Randall L. Hite, attorney for the defense notified the United States Attorney of the Northern District of Illinois in writing of Krilich's involvement with Bartoli based on the direct trial testimony. Mr. Hite contacted Mr. Bartoli in prison in early 2011 re the connection to Krilich, which Bartoli confirmed, and then Mr. Hite died suddenly March 13, 2011. All legal records of Mr. Hite remain in Probate Court and are unavailable. Mr. Hite’s untimely death has placed a pall on this case. The findings by the court concerning the failure to include relevant documents could be dismissed when Mr. Hite’s legal records are released from probate. It is very possible that Mr. Hite’s illnesses could have been cause for such documents to be delivered in an untimely manner, or not at all. Mr. Bartoli was sentenced to 10 years in prison for his part in a decade-long scheme to market and sell sham domestic and foreign trusts through the Aegis Company to some 650 wealthy taxpayer clients. Bartoli is just another ounce of weight on the Krilich plate of injustice. As we look at ‘Lady Justice’ with her balanced scales one wonders how the scales would look with Krilich on one plate and Dr. See on the other. Unbalanced? Most assuredly. 

HCCA, as recent as 2003, was still being sanctioned by the SEC. The Administrative Law Judge, James T. Kelly, stated the following; “I conclude that it is necessary and appropriate for the protection of investors to revoke the registration of the common stock of HCCA, pursuant to section 12(j) of the Exchange Act. It is ordered that the registration of the common stock of Hexagon Consolidated Companies of America, Inc., is revoked, pursuant to Section 12(j) of the Securities Exchange Act of 1934.” 

Dr. See has never been convicted of any type of crime be it fraud, tax evasion, racketeering, bribery, etc. 

Let us look at the transcript from the U.S appeals court, seventh circuit. 

First of all the good news is that the former CEO of Harvard Scientific, Thomas E. Waite, who can clarify what is misleading and untrue about this will now step up and tell the truth. He was not present at the trial as he was devastated by the whole thing after they bankrupted him and still they persecuted him further. Mr. Hite, having empathy for Mr. Waite, did not subpoena him for the original trial. Only Mr. Hite, who is now deceased, can answer why. 

 Mr. Waite met with the now deceased attorney of record Randall L. Hite, in 2011 and clarified many untruths that the "appeal transcript" misstates. For example: they only quote transcripts that were critical of Dr. See and friendly regarding the Krilich depositions that were submitted without Mr. Hite being able to examine or refute said depositions. Medhat Gorgy of Pyramid Labs in Costa Mesa was the main perpetrator in the depositions, and the Judge accepted his deposition without Mr. Hite ever being able to ask a single question to refute his lies and distortions. Gorgy was unable to attend as was "out of the country" the court was notified a week or so before the trial, according to the opposing attorneys and the Judge bought it. 

Mr. Waite has repeated this to Dr. See by phone this week, and it is part of his depositions that were scheduled and rescheduled many times. They are in the public record many times. 

The transcript conveniently leaves out the fact that Dr, See did not submit the "IND" to the FDA. 

The transcript also leaves out the fact that the October, 1997 meeting was called by the regulatory expert the company hired for the regulatory filings and Dr. See was asked to be present by this expert, Lorenz Hoffman, since it is Dr. See’s patent that was the subject of the company's product. Dr. See had nothing to do with the FDA submission as it was the expert’s job to manage that. 

Another untruth reported in a most inflammatory manner regarding Dr. See. The FDA did not notify the company of any investigations until they showed up unannounced in the spring of 1998. On January 1, 1998 Thomas Waite came on board as the CEO. He had almost daily conversations with the FDA regarding the minutes of the meeting since Lorenz Hoffman, the regulatory expert was asked to leave because he mislead the company regarding his presentation in Washington D.C. and Thomas Waite made various comments regarding the progress of these talks as required by the SEC. 

Another inflammatory misstatement… an alleged report was regarding clinical trials two Urologists were running in Las Vegas under the advice of yet another regulatory expert hired by the company. It should now be noted that Dr.See never did any clinical trials or supervised any clinical trials for Harvard Scientific or was or have been cited for any deficiencies ever by the FDA. 

The announcement in May, 1998 that the patent office had allowed for issuance a patent that Dr. See filed for the company for a female product, is a gross confabulation of the facts. 

Thomas Waite had confirmation from the FDA, based on his almost daily contact with the FDA, that the company could drop the initial IND and file a Phase I-II combined clinical trial new IND that they would accept. A world famous Physician had agreed to come on Board working with Thomas Waite to file this new Phase I-II IND. Thomas told this fact time after time during his depositions and communications with the Krilich people, and confirmed this again with Dr. See. The topical application was under development by someone other than DR. See, and this was announced by Mr. Waite, as required by the SEC. 

The truth during this period of time to complete the new Phase I-II clinical trial protocol, Thomas Waite offered to not do any further clinical trials until it was submitted. This did not involve DR. See in any way, as the world renowned Physician was going to head up the new Phase I-II clinical trial. 

One could go on and on debunking he transcript item by item. 

Chicago has been rife with racketeering, bribery, bank fraud and tax evasion since the days of prohibition, and apparently still is. Bribery was so rampant and imbedded in Chicago politics and the judiciary system that the only way Al Capone was sent to prison was for tax evasion. Capone’s deep involvement in political malfeasance prevented his prosecution for many other types of criminal activities for which he was tried and found not guilty. Sound familiar? 

Let the reader follow the links and make his own decision. How is justice served when on one hand we have a family embroiled in criminal activities and on the other hand a man revered by his peers for his humanitarian quest to eradicate pain and suffering, a man who has dedicated his life to helping others. 

Do your due diligence dear reader, follow the links within this blog and come to your own conclusions.