Regulatory Actions
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Regulatory Actions
Currently serving as Monitor for the Monex Restitution Fund, which has been established for Monex customers who may be entitled to restitution in connection with the Consent Order [Dkt. 416] entered into by Monex and the Commodity Futures Trading Commission (“CFTC”). The Consent Order provided that Monex pay $33,000,000 as restitution to customers that experienced losses on leveraged commodity transactions after July 16, 2011. On April 3, 2023, the District Court modified the Consent Order with an Order Modifying Consent Order and Appointing Substitute Monitor [Dkt. 419] and appointed Thomas Seaman to serve as Successor Monitor. Mr. Seaman is currently establishing a process for administering and distributing the restitution funds. Future website updates will provide a timeframe for making the distribution as the Monitor’s work proceeds.
The website of the Monex Restitution Fund is found at: www.monexrestitutionfund.com
Currently serving as Receiver for scheme involving investors in the USCIS EB-5 immigrant investor program that collectively invested $75,000,000 with the expectation of obtaining permanent residency in the United States. Defendants mis-appropriated EB-5 investors’ funds. Management and disposition of senior living real estate projects. Monetized distressed and over-encumbered assets. Conducted forensic accounting. Third party litigation, including fraudulent transfers and malpractice litigation. Claims procedure in process.
Matter website: www.pdcreceiver.com
Currently serve as Receiver for a Defendant engaged in a fraud based on a purported crypto-currency based on the value of amber, a material of little to no intrinsic value. Conducted forensic accounting. Defendants raised over $200,000,000. Gross recoveries to date are approximately $70,000,000 arising from real estate accumulated by the Defendant with investor funds and recovery of fraudulent transfers. Final Judgment obtained against defendants. Significant recovery for victims anticipated.
Matter website: www.usfiareceiver.com
Receiver for a registered investment adviser involving fraud and breach of fiduciary duty.
Matter website: www.totalwealthreceiver.com
Receiver for a lender licensed by the Small Business Administration (“SBA”) to make and service SBA guaranteed loans. The Receiver managed and serviced a loan portfolio of SBA 7-A and 504 loans, and non-SBA loans. The Receiver conducted a forensic accounting. The underlying litigation was contested by the defendant. The Receiver monetized all problem loans, sold the SBA 504 program loans for a 110% of par, and sold 7-A loans for 90% of par. Receiver distributed $35 million to investor/victims, or 86% of their losses.
Matter website: www.sbcapitalreceiver.com
Federal Equity Receiver in a securities fraud enforcement action against a lender purportedly investing in medical accounts receivable and other lending activities. In excess of $1.7 billion was raised from note holder/victims who had unpaid principal in excess of $1 billion. The case was the largest receivership in the Ninth Circuit initiated in 2009. The Receiver recovered over $200,000,000 and together with actions for damages supported by the Receiver, over $400,000,000 was returned to investors. The case involved a multiplicity of duties including asset sales, debt collection, debt restructuring, operating businesses, forensic accounting, supporting criminal prosecutions, prosecuting actions for recovery of ill-gotten gains, prosecuting actions for breach of fiduciary duty, prosecuting actions for legal malpractice, among others. The Receiver conducted a forensic accounting which analyzed over $20 billion in transactions involving 258 bank accounts over a 69- month period and concluded the company operated a Ponzi-like scheme.
Matter website: www.medicalcapitalreceivership.com
Federal Equity Receiver in securities fraud enforcement action involving a Ponzi-scheme purportedly using futures trading.
Offering fraud case for a purported real estate development company. Significant mis-representation of assets. Uncooperative defendants. Volatile investor base. Liquidated land holdings in excess of $40 million. Several substantial interesting legal issues. Over thirty disgorgement actions filed. Filed suit against four separate attorneys for malpractice or other breaches of fiduciary duty. SEC won Motion for Summary Judgment and obtained judgment for $29 million against defendant largely on the basis of Receiver’s investigation and forensic accounting. Assisted with development of Plan of Distribution and expect to distribute approximately $10 million to investor victims. Supported governmental agencies in criminal actions, defendants indicted and incarcerated.
Matter website: www.carolinareceivership.com
$80 million securities fraud case with 2,600 investor victims. Ponzi scheme combined with a legitimate golf club manufacturer. Performed forensic accounting identifying recipients of ill-gotten gains; highly complex accounting, 20 bank accounts at 6 banks for 15 corporate entities, extensive use of kiting, etc. Successful prosecution of professionals. Auction. Seized real property and personal property assets. Criminal referral, defendant indicted and incarcerated.
Receiver for an online company that purports to sell a sales training program enabling customers to create online businesses and earn $100,000 in 90 days. Only one consumer out of 185,000 made $100,000, and it took 11 months. Aggrieved consumers spent $60,000,000 and received commissions of $6,000,000. Called as witness at Preliminary Injunction hearing by Defendants. The Court granted a Preliminary Injunction and confirmed Permanent Receiver.
Website: www.digitalaltitudereceiver.com
Federal Equity Receiver for a company committing consumer fraud in a sweepstakes scheme. Defendant sentenced to 87 months.
Federal Equity Receiver in an alleged consumer fraud case wherein the company purported to collect payday loan debts. The Receiver’s primary function in this matter was to cease all fraudulent and activities, wind down the affairs of the company, mitigate losses and recover funds for restitution.
Served as Federal Equity Receiver for a company operating tax relief services that collected fees in advance from consumers based on unreasonable representations of prospects for success to consumers that did not qualify for abatement of taxes. The Receiver’s primary function was to cease all fraudulent and activities, wind down the affairs of the company, mitigate consumer losses and recover funds for restitution. The Receiver administered the relatively fee consumer files that had the prospect for obtaining tax relief and sold the real property assets of the Defendant that had been procured with ill-gotten gains.
Receiver appointed to identify, seize, and liquidate assets for the benefit of investor-victims and distribute proceeds.
Managed and sold criminal defendant’s personal residence for $12,104,260 in full satisfaction of Government’s $6 million restitution judgment, IRS liens, and mortgage debt leaving a surplus for the defendant. Prior to sale, property was leased to high ranking foreign diplomat of a gulf state country.
Successfully used overbid process to orchestrate increase in purchase price from $740,000 to $859,000. Managed the property for several years and increased rents each year for the estate.
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