The Personal Financial Statement Revisited

During their initial solicitation by a JustCircuit "representative" of Chisholm in January of 2009, the plaintiffs in the Bardfield case rather prudently requested more information about the state of Chisholm's finances before investing. In response to this request, JustCircuit arranged for a "Personal Financial Statement" (PFS) of Johnny Chisholm to be sent to the victims on January 31, 2009. Naturally, Bardfield and Carver relied heavily on this Chisholm PFS, "certifying himself to be a person of means with a net worth of 11.6 million dollars," when they made their fatal decision to loan him $200,000 to fund One Mighty Weekend 2009.

We've seen this PFS before; it was an Exhibit to the initial court filings back on June 1, 2009, and it was one of the first documents I posted to Facebook way back when I started following all this on June 2. Here it is again:



One obvious falsity in the PFS, which we all immediately noticed back in June, was that the line under "Liabilities" for "Legal Claims" was left blank; in addition, in the box with the question "Are you a defendant in any suits or legal action?" was written "NO."

Now right there we had evidence of fraud...both criminal and civil. Because as we all know (thanks to Tony Hayden at The Circuit Dog), Chisholm was indeed embroiled in at least one lawsuit back then: DeForest vs. Chisholm. But was there any other fraudulent information in this PFS as well?

Well, it turns out, there was. On October 5, 2009 the plaintiffs in the Bardfield case filed a voluminous amount of documents, in support of new motions for default against both Chisholm and CPCE. And contained therein were some new revelations about the accuracy of this PFS, gleaned from a deposition of Chisholm accountant Robert Hayslette in late June:


Now, it was my intention to bring this new info to everyone's attention back on October 5; indeed on October 6 I had written a brief preview post on Facebook announcing the discovery, and that a more full report was on the way. But then, later that day on October 6, something else happened, which, kind of stole the spotlight, I guess you could say...bankruptcy.

Anyways, fast forward to today, and as I'm working on finishing up the timeline, in order to make it complete I realize that I really need to get some of this neglected October 5 information out. Hence, this revisitation.

So, with apologies for being a couple months tardy, here's the totality of what was known wrong with the "Personal Financial Statement" as of October 5, 2009:

1) "Defendant Chisholm claimed not to have been a defendant in any lawsuits or legal actions. When in fact, at the time, Defendant Chisholm was a defendant in the related case of Ray DeForest v. Johnny Chisholm Global Events, LLC and Johnny Chisholm, individually, Case No. 3:08cv498-MRC/EMT, and he had post-judgment recovery proceedings pending against him in McBride Construction Inc. v. Johnny Chisholm, Doyle G. Yeager, Emerald City of Pensacola, Inc., Chisholm Properties of Pensacola, LLC, Chisholm Properties Circuit Events, LLC, Case No. 2005-CA-002063. (DE 1-Verified Complaint at para. 24; Exh. C)."

2) "Certain related entities, which were listed as assets on the Personal Financial Statement, were involved in at least two pending bankruptcy filings and a third was filed soon thereafter...(Hayslette Depo. 125-26);"

3) "Additionally, other false statements on the Financial Statement would have been known by Defendant Chisholm at the time include but are not limited to: listing false assets, including assets that transferred to his minor daughter (Hayslette Depo. at p. 156-57);"

4) "failing to list a series of notes for loans in the amount of 1.2 million dollars (Hayslette Depo. at 78, 80, 81, 85)...as set forth, Defendant Chisholm failed to identify the bankruptcy of 800 Bourbon LLC. Not only did he forget to identify the filing, in the Statement he listed more than one million dollars in equity on the property when in fact, it was in bankruptcy because he was in default of his mortgage...debts Defendant Chisholm obtained when he purchased the parties."

5) "not identifying second mortgages; unsubstantiated out of date valuations (Hayslette Depo. at p. 141);

6) "for the properties owned by Chisholm Properties of Pensacola, Mr. Chisholm listed himself as 100% owner when in fact, he had sold half of his interest to Bobby Warner;"

7) "He also knew of sizable credit card debts which he failed to list (Hayslette Depo. at p. 156-57)"

Once again, all of the October 5 documents, including the referenced portions of the Hayslette deposition, can be found here.