STEVEN T. ADAMS, ESQ., BAR ID #130846
JAMES D. HEPWORTH, ESQ., BAR ID #132910
ADAMS, HALL & HEPWORTH
1299 Ocean Avenue
Suite 900
Santa Monica, California 90401
Telephone: (310) 260-8801

DOUGLAS W. DESMARAIS
SMITH & DOWNEY, P.A.
One W. Pennsylvania Avenue, Suite 950
Baltimore, Maryland 21204
Telephone: (410) 321-9000

Attorneys for Plaintiff Gold & Silver Reserve, Inc.

SUPERIOR COURT FOR THE STATE OF CALIFORNIA

IN THE COUNTY OF LOS ANGELES

Plaintiff, Gold & Silver Reserve, Inc. (hereinafter "G&SR"), brings the following claims against defendants and for reason therefore states as follows:

SUMMARY OF THE CASE

1. G&SR is a well-established and thriving internet-based business that created and marketed e-gold ^TM, which is a secure - and therefore increasingly popular - electronic currency backed by the universally accepted commodity of gold (as well as certain other precious metals). E-gold currency is issued by e-gold, Ltd., a Nevis corporation. Title to the gold that backs the e-gold currency is held in The e-gold Bullion Reserve Special Purpose Trust (the "Trust"); the gold is physically stored in safety in treasury grade vaults by thirg-party custodians such as JP Morgan, Chase & Co. in London and Transguard in Dubai; it is audited from time-to-time by Ernst & Young, LLP; and the operations of e-gold and the Trust function under the auspices of an independent escrow agent, currently the Central Escrow Agency Ltd., an Ontario, Canada company, which is controlled by the same principals who control Central Funds of Canada, an internationally known and respected family of mutual funds which specialize in the investment in precious metals (the "Escrow Agent").

2. During the period from its inception through present, G&SR has enjoyed great recognition for its product, much acceptance from the public and ever-increasing sales/market share. During the period 1999-2000, Jackson Trading Company (hereinafter "JTC"), provided G&SR with management and other services, specifically, with the personnel it needed to conduct its business, including the marketing of its products and the further development of its business.

3. In July, 1999, JTC hired defendant Charles Evans as its Executive Vice-President of Business Development. In that position, Charles Evans worked to develop business plans and development strategy for the benefit of JTC and G&SR. JTC employed Defendant Charles Evans at its Melbourne, Florida office until JTC terminated that employment on October 12, 2000. Thereafter, in December 2000, G&SR acquired JTC in a statutory merger by which the assets of JTC were transferred to G&SR. In accordance with California Corporations Code § 1107, and similar statutes in Florida and Delaware, G&SR is the surviving corporation following merger and has succeeded to all rights and property of JTC, including its rights and action against Defendant, set forth herein. (JTC and G&SR will, where applicable, be used interchangeably throughout this Complaint.)

4. During the course of Defendant Charles Evans' employment with JTC, and in conjunction with his responsibilities as Executive Vice President of Business Development, Charles Evans regularly participated in business planning meetings in which he was privy to highly confidential and proprietary information regarding JTC's business development plans for G&SR.

5. During the course of Defendant Charles Evans' employment with JTC, Charles Evans conspired unlawfully with Defendants , Ian Grigg and others as yet unnamed for the purpose of diverting business development opportunities away from G&SR and to other business entities in which the Defendents had a financial interest.

6. Subsequent to Defendant Charles Evans' termination, he, along with Defendants , Ian Grigg and others as yet unnamed, sought to interfere unlawfully with G&SR's existing and prospective business relations for the purpose of diverting business development opportunities away from G&SR and to other business entities in which Defendants had a financial interest.

7. JTC employed Defendant , the wife of Defendant Charles Evans, during the same time frame as her husband. During the course of Defendant ' employment with JTC, and in conjunction with her responsibilities as an employee of JTC, regularly participated in business planning meetings in which she was privy to highly confidential and proprietary information regarding JTC's business development plans for G&SR. Prior to Defendant ' termination, she conspired unlawfully with Defendants Charles Evans, Ian Grigg and others unnamed for the purposes of diverting business development opportunities away from G&SR and to other business entities in which the Defendants had a financial interest.

8. Subsequent to Defendant ' termination, she, along with Defendants Charles Evans, Ian Grigg, and others as yet unnamed, sought to interfere unlawfully with G&SR's existing and prospective business relations for the purpose of diverting business development opportunities away from G&SR and to other business entities in which Defendants had a financial interest.

9. Defendant Ian Grigg is the president of Systemics, Inc., a business incorporated in Anguilla with which G&SR has entered into substantial contractual relations.

10. Both during and subsequent to the course of Defendants and Charles Evans' employment with JTC, Defendant Ian Grigg conspired unlawfully with defendants , Charles Evans, and others as yet unnamed for the purpose of diverting business development opportunities away from G&SR and to other business entities in which Defendants Charles Evans, , and Ian Grigg had a financial interest.

11. Pursuant to California Corporations Code § 1107, and and [sic] similar statutes in Florida and Delaware, and as the surviving corporation following its merger with JTC, G&SR has brought this action for the substantial damage that it has suffered in its business as a result of Defendants' wrongful conduct.

JURISDICTION AND VENUE

12. This Court has jurisdiction in this matter pursuant to the California Code of Civil Procedure ("CCP") § 410.10 and the California Constitution, Article VI, § 10.

13. Venue is proper in this Court pursuant to CCP § 395 because it is the county in which Defendant Charles and reside, and in which Defendant Grigg regularly conducts business.

14. G&SR is a Delaware corporation which, with great investments of time, money and resources, originally developed the e-gold ^(R) system. Through its online OmniPay services (explained more fully below) G&SR is also the primary distributor for e-gold, Ltd (hereinafter "EGL"), serving the wholesale exchange market and qualified retail customers.

15. Charles Evans is a former employee of JTC, which has ceased to exists following its December 2000 merger with G&SR. On information and belief, Defendant Charles Evans is a resident of the State of California.

16. is a former employee of JTC, which has ceased to exists following its December 2000 merger with G&SR. On information and belief, Defendant Charles Evans is a resident of the State of California.

17. Upon information and belief, Defendant Ian Grigg is a resident of the country of Anguilla, who regularly conducts business in the State of California.

18. Plaintiff does not know the true names and capacities of defendants designated as Does 1 through 10, inclusive, and therefore sues such defendants by such fictitious names pursuant to California Code of Civil Procedure § 474. Plaintiff will amend its complaint when the true identities of said defendants are revealed or become known.

FACTUAL ALLEGATIONS

I. GOLD AND SILVER RESERVE, INC.

19. By way of background, e-gold, Ltd. is the world's first electronic currency designed for borderless, electronic business transactions. The e-gold currency enables the worldwide use of gold as money. It merges the digital efficiencies of an electronic payment system with a universally acceptable basis of value. Advantages of e-gold include immediate settlement, low transaction codes, non-repudiation of payments, no financial risk, bi-directional payments, and automation support.

20. G&SR, through its OmniPay system, enables customers to keep their money in their e-gold account, free of any financial risk, but to use the value to pay anyone, anywhere, in any one of various different currencies. Omnipay extends the usefulness of EGL by seamlessly integrating it with existing payment systems. Customers use e-gold to make direct payments to the ever-growing multitude of businesses and individuals that accept it. For payments who do not yet accept e-gold directly, customers may use Omnipay.

21. G&SR accepts only bank wires from its customers, thereby eliminating the risk of receiving fraudulent payment from unknown sources. EGL does not accept any payments in national currencies and does not even have a bank account. The only way for a person to obtain e-gold is to purchase it from G&SR or one of many independant exchange providers or to be paid in e-gold for goods and services provided by that person.

II. DEFENDANT CHARLES EVANS' WRONGFUL CONDUCT

22. During the course of his employment with JTC, Defendant Charles Evans worked fo JTC as its employee with the understanding and appreciation that the relationship between the parties was a confidential one, particularly with regard to his duty of loyalty to JTC/G&SR.

23. During the course of his employment with JTC, Defendant Charles Evans wrongfully contacted competitors of G&SR and other third parties without the authorization of JTC or G&SR for the purpose of diverting business away from G&SR and to other business entities in which Defendant Charles Evans had a financial interest. Defendant Charles Evans engaged in this and other wrongful conduct for the purpose of personal gain and attempted to conceal his wrongful confuct from JTC and G&SR by reporting to that he was engaged in proper employment activities, when, in fact, he was engaged in activities designed to benefit himself and harm his employer.

24. During the course of Defendant Charles Evans' employment with JTS, and subsequent thereto, Charles Evans conspired unlawfully with Defendants , Ian Grigg, and others as yet unnamed for the purposes of diverting business development opportunities away from G&SR and to other business entities in which Defendant Charles Evans had a financial interest.

III. DEFENDANT , WRONGFUL CONDUCT

25-27 repeats 22-24.

IV. DEFENDANT IAN GRIGG'S WRONGFUL CONDUCT

28. Defendant Ian Grigg worked actively with Defendants Charles Evans and to interfere wrongfully with Plaintiff's existing business relationships with its clients. Defendant Ian Grigg engaged in this and other wrongful conduct for the purpose of personal gain for himself and Defendants Charles Evans and causing substantial injury to G&SR.

29. Defendant Ian Grigg conspired unlawfully with Defendant Charles Evans, , and others as yet unnamed for the purpose of diverting business development opportunities away from G&SR and to other business entities in which Defendants Charles Evans, and Ian Grigg had a financial interest.

FIRST CAUSE OF ACTION
(Breach of the Duty of Loyalty)
(Against Defendant Charles Evans)

30. Plaintiffs incorporate the allegations made in Paragraphs 1 through 29 as if stated herein in their entirety.

31. Under both California and Florida law, Defendant Charles Evans owed JTC (now G&SR) a duty of loyalty.

32. Defendant Charles Evans breached that duty by interfering with G&SR's economic relationships as described above.

33. As a proximate result of Defendant Charles Evans' conduct, G&SR suffered damages in an amount to be proven at trial.

34. The conduct of Defendant Charles Evans in breaching his duty of loyalty was intentional, willful, and calculated to cause damage to G&SR's lawful business. The conduct of Defendant Charles Evans was perpetrated with actual malice and ill will toward G&SR, and with the intentional and improper purpose of causing damage. There was no justifiable cause for Defendant Charles Evans' actions. As a result, an award of punitive damages against Defendant Charles Evans is warranted.

SECOND CAUSE OF ACTION
(Breach of the Duty of Loyalty)
(Against Defendant )

35-39 repeats 30-34.

THIRD CAUSE OF ACTION
(Unfair Business Practice)
(Against Defendant Charles Evans)

40. Plaintiffs incorporate the allegations made in Paragraphs 1 through 39 as if stated herein in their entirety.

41. The conduct of Defendant Charles Evans described above constitutes an unfair trade practice in violation of Business and Professions Code section 17200.

42. As a result of defendant Charles Evans conduct. G&SR has suffered damages and is entitled to the injunctive relief sought herein.

FOURTH CAUSE OF ACTION
(Unfair Business Practice)
(Against Defendant )

43-45 repeats 40-42.

FIFTH CAUSE OF ACTION
(Unfair Business Practice)
(Against Defendant Ian Grigg)

46. Plaintiffs incorporate the allegations made in Paragraphs 1 through 45 as if stated herein in their entirety.

47. The conduct of Defendant Ian Grigg described above constitutes an unfair trade practice in violation of Business and Professions Code section 17200.

48. As a result of defendant Ian Grigg's conduct, G&SR has suffered damage and is entitled to the injunctive relief sought herein.

SIXTH CAUSE OF ACTION
(Tortious Interference with Prospective Advantage)
(Against Defendant Charles Evans)

49. Plaintiffs incorporate the allegations made in Paragraphs 1 through 48 as if stated herein in their entirety.

50. G&SR had established relationships with numerous clients and businesses that utilized G&SR's services to the substantial benefit of G&SR. Defendant Charles Evans knew of these relationships as a result of his employment relationship with JTC.

51. The conduct of Defendant Charles Evans as described above was designed to disrupt the economic relationships between G&SR and its clients, and indeed, the relationships were disrupted as a result of Defendant Charles Evans' interference in that prospective customers and merchants have declined to do business with G&SR as a result of the conduct of Defendant Charles Evans in communicating the JTC/G&SR trade secrets to others.

52. Defendant Charles Evans' interference with G&SR's economic relationships constituted an unfair trade practice in violation of Business and Professions Code section 17200.

53. As a proximate result of Defendant Charles Evans' conduct, G&SR suffered damages in an amount to be proven at trial.

54. The conduct of Defendant Charles Evans in interfering with G&SR's economic relationships was intentional, willful, and calculated to cause damage to G&SR's lawful business. The conduct of Defendant Charles Evans was perpetrated with actual malice and ill will toward G&SR, and with the intentional and improper purpose of causing damage. There was no justifiable cause for Defendant Charles Evans' actions. As a result, an award of punative damages is warranted.

SEVENTH CAUSE OF ACTION
(Tortious Interference with Prospective Advantage)
(Against Defendant )

55-60 repeats 49-54.

EIGTH CAUSE OF ACTION
(Tortious Interference with Prospective Advantage)
(Against Defendant Ian Grigg)

61. Plaintiffs incorporate the allegations made in Paragraphs 1 through 60 as if stated herein in their entirety.

62. G&SR had established relationships with numerous clients and businesses who utilized G&SR's services to the substantial benefit of G&SR. Defendant Ian Grigg knew of these relationships as a result of his relationship with Defendants Charles Evans and .

63. The conduct of Defendant Ian Grigg as described above was designed to wrongfully disrupt the economic relationships between G&SR and its clients, and indeed, the relationships were disrupted as a result of Defendant Ian Grigg's interference in that prospective customers and merchants have declined to do business with G&SR.

64. As a proximate result of Defendant Ian Grigg's conduct, G&SR suffered damages in an amount to be proven at trial.

65. The conduct of Defendant Ian Grigg in interfering with G&SR's economic relationships was intentional, willful, and calculated to cause damage to G&SR's lawful business. The conduct of Defendant Ian Grigg was perpetrated with actual malice and ill will toward G&SR, and with the intentional and improper purpose of causing damage. There was no justifiable cause for Defendant Ian Grigg's actions. As a result, an award of punative damages is warranted.

NINTH CAUSE OF ACTION
(Civil Conspiracy)
(Against Defendant Charles Evans)

66. Plaintiffs incorporate the allegations made in Paragraphs 1 through 65 as if stated herein in their entirety.

67. Defendant Charles Evans entered into an agreement and/or understanding, and otherwise conspired with, Defendants , Ian Grigg and others as yet unnamed to tortiously interfere with Plaintiff's business.

68. In furtherance of the conspiracy, Defendant Charles Evans fraudulently concealed from Plaintiff material facts regarding his actions that were introduced to deceive and defraud Plaintiff.

69. As a direct and proximate result of Defendant Charles Evans's tortious acts committed in furtherance of the above-referenced conspiracy, Plaintiff has suffered substantial damages and is entitled to the relief sought herein.

TENTH CAUSE OF ACTION
(Civil Conspiracy)
(Against Defendant )

70-73 repeats 66-69.

ELEVENTH CAUSE OF ACTION
(Civil Conspiracy)
(Against Defendant Ian Grigg)

74. Plaintiffs incorporate the allegations made in Paragraphs 1 through 73 as if stated herein in their entirety.

75. Defendant Ian Grigg entered into an agreement and/or understanding, and otherwise conspired with, Defendants Charles Evans, and others as yet unnamed to tortiously interfere with Plaintiff's business.

76. In furtherance of the conspiracy, Defendant Ian Grigg fraudulently concealed from Plaintiff material facts regarding his actions that were introduced to deceive and defraud Plaintiff.

77. As a direct and proximate result of Defendant Ian Grigg's tortious acts committed in furtherance of the above-referenced conspiracy, Plaintiff has suffered substantial damages and is entitled to the relief sought herein.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs G&SR seeks judgement against Defendants Charles Evans, and Ian Grigg for:

1. Compensatory damages (consisting of general and special damages) in an amount to be proven at trial;

2. An award of punitive damages;

3. Injunctive Relief

4. Reasonable attorneys' fees and costs of suit;

5. Costs incurred herein; and

6. Such other and further relief as justice may require.

JURY DEMAND

Plaintiffs hereby demand a trial of their claims against all defendents by jury.