Motion for Appointment of Receiver

: ':!' ;.. ... ).:.:, ( y;t y ,2. (

UNITED STA'FES DISTRICT T

SOUTHERN DISTRICT OF FLORIDA

(NASE NO.:

80633C';-

FILED BY D.C.

MAt 1 3 2218

'uzklLll'lîpt%i. n. orra. -,,,vl

SECURITIES AND EXCHANGE COM IWISSION,

Plaintiff,

NATURAL DIAM ONDS INVESTM ENT C0 .,EAGLE FINANCIAL DIAM OND GROUP lNC

A/K/A DIAM ANTE ATELIER,

ARGYLE C01 ,N LLC,

JOSE ANG EL AM AN,

HAROLD SEIGEL, AND

JONATHAN H . SEIGEL,

Defendants, and

H.S. M ANAGEM ENT GRO UP LLC,

GOLD 7 OF M IAM I, LLC,

W INNERS CHURCH INTERNATIONAL INC.

OF W EST PALM BEACH , FLORIDA,

FREDERICK D. SHIPM AN, AND

W HITNEY SHIPM AN,

Relief Defendants.

/

M O TION FOR APPOINTM ENT O'' RECEIVER AND M EM ORANDUM OF LAW

Plaintiff Securities and Exchange Comm ission m oves this Court for an Ortler appointing a

Receiver over Defendant Argyle Coin, L1aC (t'Argyle Coin'' or the t'Company''), with full and

exclusive power, duty, and authority to: adnlinister and manage their business affails, funds, assets,

causes of action and any other property of Argyle Coin; m arshal and safeguard all of the assets of

Argyle Coin; and take whatever aetions are necessary for the protection of the investors. For the

reasons set forth below, in order to protect investors, it is essential that the Court appoints a

Receiver over Argyle Coin.

ln connection with this request to appoint a Receiver over Argyle Coin, the Comm ission

believes Jeffrey Schneider is best-suited to handle this matter. Mr. Schneider has already been

Case 9:19-cv-80633-RLR Document 7 Entered on FLSD Docket 05/13/2019 Page 1 of 4

appointed Monitor over co-Defendants Natural Diamonds lnvestment Co. (ttNatural Diamonds'')

and Eagle Financial Group lnc. (tûEag1e'') in the related case, Round v. Natural Diamonds, 1 8-cv-

81 1521, which is pending in this Court. As set forth in the Complaint and M otion for Tem porary

Restraining Order in this proceeding, Eagle, Natural Diamonds, and Argyle Coin have operated as

one multi-tiered Ponzi scheme. Argyle Coin investor funds have been comm ingled with Eagle

and Natural Diam onds investors' funds, and their bank accounts are used itlterchangeably.

Because these entities are linked and essentially operate together and share funds and accounts,

having the same Receiver appointed who is already the M onitor for Eagle and Natural Diam onds

will best sel've the investors.

The Com mission attaches M r. Schneider's credentials to this motion. The interests of

investors would best be served by appointing Schneider to serve as Receiver over Argyle Coin.

His letter and resum e indicate he has extensive experience in securities and receivership m atters.

The Receivership will involve detenuining how to resolve or continue the businesses, locating

assets and investor funds, and accounting and asset managem ent, am ong other tasks, a Receiver

with M r. Schneider's extensive expelience is essential.

M oreover, M r. Schneider is willing to significantly discount his and his tinzl's current

hourly rates. He is willing to significantly discount his hourly rate to $395 an hour. Additionally,

his counsel will also provide this sam e discount. Not only will these considerable rate reductions

substantially reduce the costs of the Receivership to defrauded investors, they are collectively

lower rates than the other candidates offered.

Accordingly, the Com mission requests that the Coul't appoint M r. Schneider as Receiver

over Argyle Coin.


M EM OR ANDUM OF LAW

The Court should appoint a Receiver over Argyle Coin with full and exclusive power, duty,

and authority to: adm inister and m anage their business affairs, funds, assets, causes of action and

any other property of LottoNet and Relief Defendants', m arshal and safeguard all of the assets of

Argyle Coin; and take whatever actions are necessary for the protection of the investors.

The appointm ent of a Receiver is a well-established equitable rem edy available to the

Commission in civil enforcement proceedings for injunctive relief.l The appointment of a

Receiver is particularly appropriate in cases such as this where a corporation, through its

m anagem ent, has defrauded m embers of the investing public.z In such cases, without the

appointment of a Receiver to maintain the status quo, the corporate assets will be subject to

diversion and waste to the detrim ent of those who were induced to invest in the fraudulent schem e.3

A Receiver is appropriate to protect the public interest when it is obvious that those in control of

an entity who have inflicted serious detriment in the past must be ousted.4

Argyle Coin has received about $2.78 million of investors' funds.Argyle Coin has not

paid investors their promised investm ent returns, and has dissipated investor funds for personal

use, to cover negative account balances the Natural Diamonds and Eagle bank accounts, and for

use in a Ponzi schem e to pay Natural Diamonds and Eagle investors their purpol-ted investm ent

returns. At this juncture, Argyle Coin need a Court-appointed Receiver to act in their best interests

and to m axim ize value for defrauded investors.

1 See, e.g., SEC v. First Financial Group t?f Texas, 645 F.2d 429, 438 (5th Cir. 198 1)., see also

Section 22(a) of the Securities Act of 1933, l 5 U.S.C. j 77v(a), and Section 27 of the SecuritiesExchange Act of 1934, l 5 U.S.C. j 78aa.

2 First Financial Group ofTexas, 645 F.2d at 438.3 Id. See also R.J Allen (f Associates, Inc., 386 F. Supp. 866, 891 (S.D. Fla. 1974).4 SEC v. Bowler, 427 F .2d 190, 198 (4th Cir. 1970).

3


CONCLUSION

For the forego ing reasons, the Commission requests that the Court grant its request for the

appointm ent of M r. Schneider, Esq. as Receiver over Argyle Coin. A proposed orcler is subm itted

herewith.

M ay 13, 2019 Respec lly submitted,

k. .

5 tf' .I

Am i Riggle Berlin

Seni r Trial Counsel

Florida Bar No. 630020

Direct Dial: (305) 982-6322Direct email: [email protected]

Attolmey for Plaintiff

SECURITIES AND EXCHANGE COM M ISSION80l Brickell Avenue, Suite 1800

M iam i, Florida 33131

Telephone: (305) 982-6300Facsilnile: (305) 536-4154

Certification of Counsel

Counsel for the Comm ission did not confer with Argyle Coin regarding the requested

relietl since in order to prevent further dissipation of assets, we are seeking this relief in connection

with an ex parte Temporary Restraining Order that we are ing un al.

. Z


23 l Sou th Biscayne Blvd.2 2nd Flool , Citigroup CenterMiallli, Florida ($3 l3lPhtllle; 305.403.8788Fax: 305.403 8789

M ay 2, 2019

VlA ELECTRONIC M AIL

Amie Riggle Berlin, Esq.Senior Trial Counsel

M iam i Regional Office

U.S. Securities and Exchange Commission801 Brickell Avenue, Suite 1800M iam i, Florida 33131

RE: SEC v. Jose W-tla, Harold J'effet Jonathan Seïfe/. Arzvle Coink LLC. et al.

Dear M s. Berlin'.

This letter responds to your inquiry regarding my interest and qualifications to serve, ifselected, as a court-appointed receiver in colmection with the action to be initiated by the United

States and Exchange Commission (i$SEC'') against Jose Aman, Harold Seigel, Jonathan Seigel,Argyle Coin, LLC, and others in the United States District Court for the Southern District ofFlorida.

l very much appreciate being considered to serve in this important capacity. l believe thatl am uniquely qualified to serve as receiver in this case, because 1 currently serve - as set forth

more fully below - as Comorate M onitor for Natural Diamonds Investment Co. and EagleFinancial Diamond Group, lnc., two additional entities controlled by Jose Aman, Harold Seigcl,

Jonathan Seigel, in a case pending in the United States District Court for the Southern District ofFlorida.

I will first discuss, in Section 1, my qualitications and experience to serve as receiver inthis case. ln Section 2, 1 will discuss nly law firm 's resources and experience to handle this

matter; the legal tcam that 1 would assemble; and the fee reductions that l have agreed to provide.

Section 3 contains my certification that l have not been the subject of any disciplinary action byany professional or licensing authority, and that l have not been the subject of any governmentsanctions (or any sanctions at all, for that matter).

nvww,lklsg.com

Case 9:19-cv-80633-RLR Document 7-1 Entered on FLSD Docket 05/13/2019 Page 1 of 7

Amie Riggle Berlin, Esq

Senior Trial Counsel

U.S. Securities and Exchange Commission

Page 2

1. M y qualiieations and experiencm

Enclosed for your review is my resume. As you can sce from my resume, I am the current

Chair of my firm's Receivership Practice Oroup. l have served in that capacityr, or as Co-chair,since my firm 's inception. I also served as Co-chair of the Receivership Practice Group at my

previous law firm. I am also managing partner of my firm (and have been since my firm'sinception).

Throughout the course of my zs-year-plus career, I have served as receiver in actions

brought by the United States Securities and Exchange Commission CdSEC''), the CommodityFutures Trading Commission (GCCFTC'') the Federal Trade Commission CtFT(2'') the State ofAlabama, Office of the Attorney General (tiAlabama AG''), and the State of Florida, Office of theAttorney General (itFlorida AG''). I have been appointed by District Courtjudges located in theNorthern District of Alabama, the Northern District of Illinois, and the Southern District of Florida.

I have also been appointcd by state court judges located throughout the State of Florida.

I have also acted as Iead or special counsel to SEC, CF-I'C and FTC receivers in numerouseight-figure and nine-figure receiverships. I also served in that capacity at my previous law Grm .

In that regard, and throughout the course of my career, 1 have served as receiver in actions brought

by the FTC, the Securities and Exchange Commission (ç:SEC''), the Commodity F'utures TradingCommission (t:CFTC'')s and the Oftice of the Attorney General (:iAG'') lbr the states of Floridaand Alabama. I have also served, on numerous occasions, as lead counsel to SEC, CFTC andFTC receivers in seven and eight-figure receiverships. 1 have also served as lead counsel for a

class of ilwestors in a nine-figure l'eceivership; in that case alone, l helped to recover approxiluately

$75 lnillion - representing a 100% recovery - for that group of investors. In the Jay Peak case,for example, which is a currently-pending $450 million EB-5 fraud case, the Iargest in thc country,I am special counsel to the Receiver and we have already recovered over $163 million to bedistributed to the victim s in that case.

Indeed, throughout the course of my career, I have been fortunate enough to help to

recover well over $250 million lbr defratlded victims in Ponzi schemes and other frauds. Myresume also details my backgrotmd in commercial litigation. real estate litigation, and securitieslitigation, a1l of which is pertinent to my qualifications to serve as a court-appointcd receiver in

an action brought by the FTC. l am, of course, adm itted to practice law in the State ofFlorida,and before the United States District Court for the Southcrn and M iddle Districts of Florida.

M y most recent significant appointmcnt was a case brought by both the FTC and the AG

styled Federal Trade Commission tzrll State ofFlorida vJ. lnbo'tnd Call Experts LLC, et al.The lnbound Call case was an allegcd computer soRware protection scam that tm-geted the

elderly. The entities generated over $100 million from literally thousands of consumers. Atthe time of my appointmént, lnbotmd Call was still an operating emity. Indeed, it was one of

LEVINE KELLOGG LEHMAN SCHNEIDERTGROKSMAN LLP201 South Biscayne Boulevard, 22nd Floor, Citigrour Center, Miami, Florida 33131 ' Main: 305.403.8788 ' Fax: 305.403.8789


Amie Riggle Berlin, EsqSenior Trial Counsel

U.S. Securities and Exchange Convnission

Page 3

many operating entities placed in receivership that were then providing teclm ical supportservices from multiple locations to well over 1,000 consumers. The main location was a stand-

alone building that housed over 500 employccs and operated 24 houp a day. A second Iocationwas several miles away and housed approximately 50 employees. Technical support services

wcre also being provided throtlgh third-party call centers located in the Philippines, theDominican Republic, Jamaica, and Honduras. ln addition, the defendants m ade it known at

the outset of the case that they planned on challeng. ing the FTC'S and the AG's entitlement to

ilzjunctive relief. It was, therefore, critical that I maintain the status quo during the pendencyof the receivership.

Utilizing thc resources of my firm, I dispatched several team s to seize control of the various

locations and m anaged to prevent chaos from erupting as I bliefed approximately 500 employees

on thc enforcement action that had been broujht, the order that had been issued, my role asreceiver, and what to expect dttring the pendency of the action. 1 was thereafter able to locate

and secure the assets - while at the same time managing the entities' oqerations - until the Courtheld a several-day hearing on the FTC'S and the AG's entitlement to inlunctive relief (at which ltestified). Because the entities had taken remedial measures before the initiatiof of thereceivership, thus eliminating the risk of contipuing harm, the Court agreed that there was alikelihood of success but disagreed that there was a need to continue the receivership, so the Court

restored operations to the defendants and asked that l hold a fund to compensate the victims ($2million). Importantly, there was not a single complaint - by the Courq the F'FC, the AG, theconsumers, or the defendants - about tlle way in which l ran the entities during the hiatus. lnother words, there was a seamless transition from Inbound Call's pre-receivership operations, to

my management of the entities during the pendency of the receivership, and then back to thedefendants after the Court so ordered. l was thereafter ordered by the District Court Judge to act

a, M onitor - for a period of two years .- to ensure that the defendants are complying with their

obligations under a Pennanent lnjunction that was eventually issued.

Since the lnbound Call case, I have been appointed in a number of reccivership cases

locatcd throughout the country, including:

* Federal Trade Cb-zrlf-uftan and State ofAlabama v.ç. Troth Solutions, lnc., et al., acase brought by the FTC and the Alabama AG in the United States District Court

for the Northern District of Alabama;

@ Federal Trade Commission and State ofFlorida vJ. Big Dog Solutions L IC, a casebrought by the FTC and the Florida AG in the United States District Court for theNorthern District of lllinois;

. Ofhce of the Attorney General, State of Florida vJ. Go Ready Calls Marketing,LLC, et aI., a casc brought by the AG in Palm Beach County, Florida;

LEVINE KELI,OGG LEHMAN SCHNEIDER + GROSSMAS LLP201 South Biscayne Boulcvard, 22''d Floor, Citigroup Center. Miami, Florida 33 13 l ' Main: 305.403.8788 ' Fax: 305.403.8789


Amie Riggle Berlin, EsqSenior Trial CounselU.S. Securities and Exchange Commission

Page 4

* Ofhce ofthe Attorney Gencrl/, State ofFlorida và'. f earn More A/irïtz, f 1C, a cmsebrought by the AG in Broward County, Florida;

@ Ojhce ofthe Attorney General, State ofAlabama vJ. American Plumbing dr Septic,et al., a case brought by the Alabama AG in Calhoun County, Alabama;

* Ojhce ofthe Attorney General, State ofFlorida vxç. Richard A/èyer and LawrenceForno, P.A. , a case brought by the AG in Browm'd County, Florida; and

* Ofhce ofthe Altorney General, State ofAlabama v-ç. TY Green 's Akumge Therapy,Inc., et Jl, a case brought by the Alabama AG in M adison County, Alabama.

As stated above, l was also recently appointed to serve as Corporate M onitor for NaturalDiamonds and Eagle Financial in a case pending in the United States Distrid Court for theSouthern District of Florida styled Round v.:. Natural Diamonds lnvestment Company and Eagle

Financial Diamond Group, Inc. Since being appointed on March 28, 2019, 1 have met with andinterviewed the principals and a number of investors and creditors; l have sent countless demand

letters to recipients of investor funds and diamonds', and 1 have securcd - without the need for

litigation - over 100 dinmonds. I have also obtained possession of three djumping'' horses thathave an estimated six-fgure value. I have secured the premises at which the defendants did

business. I have obtained $100,000 from an investor group that received those funds from thedefendants within the past ninety days. I have opened an account in my nam e as CorporateM onitor. And 1 am negotiating with an entity that received upwards of seven-figures in diamonds.

Before the forgoing appointments, l served as receiver in SEC and CFTC actions styled

Securities and Exchange Ctarnn:gd/rpn v-&. Trade-ll C, et al. and Comlnodity Flzfz/raj' TradingCommission vâ'. Trade-L L (l, c/ 611. The Trade action involved approxiluately $30 million and anumber of complicated tinancial transactions. ln that case, I brought a number of fratldulent

transfer lawsuits m1d seized and liquidated homes, apm-tments, cars, jewelry, and other valuables.I also testiied at the CFTC'S trial on damages against two of the individual defendants; the District

Court accepted m y figures and praised our work. ln the Trade case, we ultimately recovered and

distributed (with the assistance of the SEC and the CFTCS of course) approximately 34% in twoyears, and then closed the case.

Just before the Trade case, 1 served as co-lcad counscl for the receiver in an SEC action

styled Securities twx/ Exchange Commission vs'. Pension Fund of America, L . C., et. (zl ThePension Fund action involved over $125 million and an incredibly-colnplicated flow of moneybetween the United States and Latin America. ln that case, l tried a four-day contempt trial thatregulted in a strongly-worded fnding of contempt against one of the defendants. 1 mn also happy

LEVINE KELLOGG LEHMAN SCHNEIDER +GROSSMAN LLP201 South Biscayne Boulevard, 22..0 Floor, Citigroup Center, Miami, Florida 33131 - Main: 305.403.8788 Fax: 305.403.8789


Amie Riggle Berlin, Esq

Senior Trial CounselU.S. Securities and Exchange CommissionPage 5

to repol-t that, in the Pension Fund case, we recovered approximately $40 million, most of whichhas already been distributed to the victinls of the fraud.

Just bcfore the Pension IJund case, l served as lead. counsel for the receiver in an SEC

action styled Securities and Exchange trtlmm/-qçjtln v.:. Viatical Capital, lnc.. et. t'#. The Viatical

Capital case involved approximately $5(..h million and required us to reconstruct the flow of moncyamong 50 different entities. In the Viatical Capital case, we have recovered (again, with theassistance of the SEC) approximately $30 million; a1l of that money has already been distributedto the victims of the fraud.

Just before the Viatical Capital case, I served as lcad cotlnsel for the receiver in an action

brought by both the SEC and the CFR'C styled Securities and Exchange C'tprnr/7/,î-çft?h/t-rtll?c-olf/fc.î'

Ftttures TrJltàr?g Comlnission v-ç. Sunstate FAS Inc., et. al. The Sunstate case involvedapproximately $30 million. W e worked closely with both the SEC and the CF'I'C. W e alsocoordinated our efforts with the United States Attorneys' Oflice. W ith the help of my testimonyat the sentencing hearing, the principal protagonist of the fraud in the Sunstate case was sentencedto over tive years.

ln addition, my practice tbr the past twenty-five years has been concentrated in complexfinancial litigation in both lkderal and state courts and in arbitration proceedings. I routinely

lhigate - as lead trial counsel - complex business disptltes and have represented individuals andentities in securities matters, class actions, bankruptcy litigation, and international Iitigation andarbitration.

Based on this in-depth experience in both receivership and complex litigation cases, I

believe that 1 am uniquely suited to quickly and efficiently administer both large and complexreceivership cases, as well as smaller cases that require speed and efticiency. I have also beeninvolved in countless cases against ''profiteers'' and other recipients of transfers from receivership

entities.

II. M y Firm .

M y 1aw tirm is a sophisticated boutique Grm. W e are a1l former çtbig (girm'' attorneys,having spcnt decadcs at large Jirms wolking on large, complex m atters. but we pride ourselveson having created a firm that provides the same level ofsophistication at a fraction ofthe expcnse.

lndeed, we founded the firm on that premise; large, complex matters do not require multiplelevels of lawyers and should not entail the exorbitant cost structurc associated with large lawfirms.

l have a number of litigation partners that have worked with me on the variousreceivership cases throtlghout the years. They are expcricnced in this area and have no learning

curve when it comes to receivership Imatters. I also have incredibly-bright associates that have

LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMAN LLP20l South Biscayne Boulevard, 22nd Floor

, Citigroup Center, Miami, Florida 331 3 l ' Main: 305,403.8788 ' Fax: 305,403.8789


Amie Rigglc Bcrlin, Esq

Senior 'l'rial Counsel

U.S. Securities and Exchange CommiRsion

Page 6

also worked with 1ne on our receivership cases. 1 also have two paralegals that specialize in

rcceivership work. lndeed, one of my paralegals has an M BA and helped me adnninistcr the $30-million claims process in the Trade case. That was an enormous undertaking, and because ofhcr 1ow hourly rate, we were able to keep the expenses of that case to a minimum .

In shod, I havc spent the vast majority of my Iegpl career working on receivership matters,and my colleagues have as well. W e lklly appreciate the challenges of these casess pallicularlyin the early stages. Facilities need to be secured', bank accounts need to be frozen; assets needto be located and lnarshalled; electronic infonnation needs to be protected; investors need to be

notifed; a11 while running the day-to-day operations of the receivership entities. I have beenthere many times, as have my colleagues.

I also appreciate the importance of managing the expenses of a l'eceivership. W e considerreceivership work to be an honor and a privilege. It is public service work for w'hich we mustsignificantly reduce the hourly rate we charge typièal commercial clients, because my goal,

nattu-ally, is to maximize recoveries to the victims. To that end, my current hourly rate is $665.00an hcmr. For purposes of sening as Corporate M onitor for Natural Diamonds and Eagle

Finmwial, however, l agreed to reduce my rates to $450.00 per hour, and l insisted that myprofessionals to do the same. For purposes of serving as Receiver, I am willing to reduce my

rates even ful-ther to $395.00 an hour. 1 will also insist that my professionals do the same. lnaddition, while pm-tners of my tirm normally have hotlrly ratcs that range from $435.00 to $665.00

per hotlr, I would agree to reduce my partners' rates (01- the rates of padners at outside tirmsrepresenting mc) to $350.00 pcr hour. Associates of my firm normally havc hourly rates thatrange from $350.00 to $430.00 per hour. If appointed, associates of my lirm (o:r at outside lirmsrepresenting me) would be capped at $275 per hotu-. Paralegals would be billed at $150.00 perhour. W herever possible, I will attempt to use those professionals with the lowest billing rate.And, of course, I would cap al1 of the foregoing rates during the lifk of the case.

Should tlze case require the selwices of forensic specialists or accountants, my finn has

worked closely with sevcral botltique firms. 1 am confident that I will be able to expedite their

retention as well as seek substantial discounts from their standard hourly rates. I will also make

sure that they also agree to seek court approval (and FTC approval) before instituting any changesin the discounted billing rates.

111. Conclusio: and Certification.

Again, I am honored to be considered to serve in this very important capacity. lt would

be a privilege to serve as receiver in this case. I hereby certify that I have not been thc subject ofany disciplinary action by any professional or licensing authority, and that l have not been the

subject of any govenAment sanctions (or any sanctions at all, for that matter). ln view of my

LEVINE KELLX G LEHMAN SCHNEIDER + GROSSMAS LLP201 South Biscayne Boulevard, 22nd r'joor, Citigroup Center. Miami, Florida 33 l 3 1 ' Main: 305.403.8788 Fax: 305.403.8789


Amie Riggle Berlin, EsqSenior Trial Counsel

U.S. Securities and Exchnnge CommissionPage 7

experience, I am confident that l will achieve the objectives of the FTC and the District Court, ifappointed.

Thank you very mpch for your consideration.

Si erely 7

Jeffr y C. Sc neider, .A.

LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMAN LLP20l South Biscayne Boulevard, 22nd Floor, Citigroup Ccntcr, Miami, Florida 33131 ' Main: 305.403.8788 ' Fax: 305.403.8789


JEFFREY C.SCHNEIDERFOUNDING PARTNER

7$J- ' ''jyi'. Jeff is an accomplished trial Iawyer whose pfactice focuses on high-stakes business litigation, receiverships. and

)t'' ' i ternational arbitration Jeff is one of the Firm's founding padners. and has been the Firm's Managing Partne? since its.)) . fl .,1> ' inoeption. uleff also chairs the Firm's Receivership Practice Group.'.(k/) ( .-jyrt Jeff has been tfying complex

, high-risk. eight-and-nine-figure cases in federal and state trial courls, and in arbitralion' ': proceedings. for over twenty-five years. Jeff has worked on some of the Iargest fraud cases in histtxy. either as Iead trial

' counsel. as feceiver. or as counsel to the receiver.t.

Jeff has also served as receiver in actions brought by the Secufities and Exchange Commission. the Federal TradeCommissiœ . the CGnmodity Futures Trading Commission, and the Oftice of the Altorney General. Jeff has beenappointed by Districl Courl judges in lhe Northern District of Alabama. the Northern District of lllinois and lhe SouthernDistrict of Florida. and by state court iudges in Miami-Dade, Broward. and Palm Beach counties.

Throughout lhe course of his career, Jefl has helped to recover well over $275 million for defrauded viclimsl including a..

' '

$104 million recovery in the Mutual Benefits fraud and a $150 million recovefy in the Jay Peak fraud. Jeff is known tor hiscfeative and passionale approach to Iitigation, and is considered an expert on Ponzi schemes an'd fraud cases.

e I .Y''e*M.=

D I x5.493.87%

F l = .493.87%

PRACTICE AREAS

Jeff has also represented some ot the country's Iargesl title insurers as outside counsel on complex mortgage fraudcases, and has tried those cases in federal and state court actions.

Jeff ha& been recognized by virlually every publication and peer-review organization thal exists. and has twice receivedthe giami Daily Business Review's ''Most Effective Lawyers'' award (having been nominated fctlr Iimes).

Jeff is a frequent lecturef in the areas of receivership Iiligation and international litigation and arbitralion.

B*r*l#q* R--= ' > AREAS OF EXPERI E NCECG* ' tWRme l Lif' M'

. Bankruplcy and BeceivershipsEM L* complex Commercial Litigation@' - --.er1 ue> & Afbltrahm . EB-s LitigalionB-el- tlo n @ lnternationaf Litigation & Afbitrafiœ

..-- l-jj. * Securities Liligation11* I@ Title lnsurance Litigatiœ

AW ARDS AND RECOGN ITIO NS

. Listed in The B- tl-aF -s lAle ka in the areas of commercial Iiligalion and Bankruptcy and Creditor Debtor Rights/Insolvency and Beorganizalion Law, 2013-2018 Editions.

. Received M* i Dall R'-' SeWae''2017 Most Effective Lawyers'' award in the area of receiverships andrecsivership Iitigation.

k ', ,1@ Received M* IX WBUn- Neeâe K05 Most Effective Lawyers award in the area of class action Iitigation.* Finalist for MèmiiAlyalslness &ee <''2O07 Most Elfective Lawyers'' award in the area of bankruptcy andreceiverships.

* Finalist for M- iA lkA- - & e >''2010 Most Effective Lawyers'' award in the area of complex business Iitigation.@ Named one of *12 to Watch in :012.' by .y'alfaeMagazjne* Listed in Fbrkia FzwekFlorida Legal Elite, 2004-2018 Editions, representing 1he top 2% of 1he 541000 Florida Bar

Members,

* Listed in lhe S* #) Fe *' L- alGuMe%'bTnp Lawyers'' Iisld 2009-2018 Editions.@ Listed in Fbrkk &llv l..aw.> , 7006-2018 Editions, repfesenting the top 5% of Florida attorneys.@ Listed in e : * F.#'= * andl* W shmals, Honors Edition,* Listed in .R-* ' : TF G le l-a- list. 2012-2018 Editions.

* MartindalmHubbell ''AV'' Bated (the highest available rating).. Senior Editor ol The FkwMa l.aw'&ee e* Recipient of the Achievement Award in Scholarship from the University of Florida Schx l of Law.* Authored the article, ''Becerdly enacted Federal Legislation Provlding Moral Rights to Visual ArtistsjM published ln ''The

Fkr'e LawRèvlew'b Vol. 43, No.1. January 1991.

LEVINEKELtoocLEHMANSCHNEIDEA.GRossMaNutr2Q1 M IU yr- M - -rd

K* l. F*e 33131


JEFFREY C. SCHNEIDERFOUNDING PARTNER

zs.j(. -lx. ' '.. 7'i) wq réyë ;h7i SIG NI FICANT REPRESENTATIO NS AN D APPO I NTM ENTS' )t?:r'..

.: ,t!# RECEIVERSH IP W ORKwr

' '

* Ja# Inc. al?d Q - Special counsel to 1he receiver in the Iargest EB-5 fraud in the history of the United States,involving more than K 0 foreign inveslors owed in excess of $400 million, Helped to secure a $150 mllion recovery frœngaymond James.

* Mllip M** - Apminted W the Commodity Futures Tfading Commission lo serve as a Federal equity receiver in a $25million fraud. The action was m nding in the United Slates District Court for the Soulhern District of Florida. Testified al the

'

CFTC'S trial on damages. and had fecommendalions accepted by the District Court Judge.

' * TœW LC- Appointed by the Securities and Exchange Commission to serve as a Federal equity receiver. The action waspending in the United Stales Districl Courl fo? 1he Southern Dislrict of Florida. Brought a number ol fraudulent transfer and

''claw-back'' iawsuits and located, marshalled, secured, seized, and liquidated hGnes. apartmYts. cars. jewelry, and otherE l ctml Valuables.o j xu xazw . Inbotmd Call ExpM s - Appointed by the Federal Trade Commission and the Office of the Attorney Ge eral to serve as a

y j xs.. .:,p% Federal equily receiver. The entities in receivership generated over $100 miljion from thousands of consumers. At the timeof appointment, lnbound Call employed over 500 employees from two locations in South Florida and provided technicalsupport services in the Philippines, the Dominican Republic, and Honduras. Thereafter apm inted as Federal Monitor for

two years to monitor compliance wilh Permanenl Injunction.PZACTICE AREAS. Fmm Stzzlknm lnc. - Apx inted by the Federal Trade Commission and the Office of the Attorney General to serve as a

*Rd R@œier.e: Federal equily receiver. The action was filed in the United States District Court for the Norrhern Districl of Alabama.Cm le c@mfBe l LRIIWOR . rr Help IM* tAç- Appointed by the Federal Trade Commission and the Office of the Atlorney General to serve as aEF5L1**@n Federal equily receiver. The aclion was filed in lhe United States District for the Northern Distric! of lllinois,

Ornemd LiKglelm &Ad#eahm . Go 8* Cah Narkalkr- Appointed by the Office of the Attorney General to serve as state court receiver. The actix isRe'Nlrdtle: Ll*aetm currently pending in Palm Beach Gounty, Florida. Helped lo recover over $1 million from Banc of America Merchant'rlt. In-- oeu*gaetm services, represenling a full recovery to aII affecled consumers.

. L- e a Media- Apx inted by the Office of the Attorney General to serve as state court receiver. The action is currentlypending in Broward County. Fkwida,

. Americv R'- H Z/ Metals- Lead trial counsel to the receiver of a precious metals boilef room. The action was filed in theUnited States District Court fof the Southern District of Florida. The action was initiated by the Federal Trade Commission.

* The fM/ca Gmup- Lead trial counsel to the receiver of a fraudulent boiler room. The action was filed in the United StatesDislrict Court for 1he Southern Dislrict of Florida. The action was initiated by 1he Federal Trade Commission.

@ Amante- Lead trial counsel to the receiver of a fraudulent boiler room. The action was filed in the United States DislrictCourt for the Southern Districl of Florida The aclion was initialed by the Securities and Exchange Commission.

* K Bal 8m a#t/ Cœr a* - Represented class representatives in the Mutual Benefits receivership proceeding pendingin !he Unlls.d Stales Distric! Courl for the Southern Dislrict of Florida. After Spss than one yeaï of litigalion. 1he court relurned

$104 million dollars to aII members of the class.. Viatical al Inc. - Lead trial counsel to the receiver of Viatical Capitall Inc. and its affillates arising out of their fraudulentsale of $59 million in securilies. This aclion was filed in the United States District Courl for the Middle District of Florida.Helped lo return millions ol dollars lo the defrauded victims.

* Anmrltelpa fà'sx ? 1nc. - Lead trial counsel to the receiver in an action pending in the United States DistridCourt for the Southern District of Florida. The action was initiated by the Federal Trade Commission. Worked closely with1he Federal Trade Comrrission and the Assislant United States Attorney, resulting in a criminal conviction against tNeprincipal protagonist of the fraud.

. &M & - , lnc. - Lead trial Gounsel lo 1he receiver in an action filed in the United States Oistrict Court for the SouthernDistrict of Florida, The action was initiated by 1he Federal Trade Commission.

. Na* - (;œ - e /, llm. - Lead trial counsel to the receiver in an action pending in the United States District Court forlhe Southern District of Florida. The action was initiated by the Federal Trade Commiuion.

@ M# œ , Inc. - Lead trial counsel lo the receiver in seMeral actions arising out of its fraudulent sale of securities pending in

the United States District Court for the Soulhern Dislrict of Florida. The Court returned over $5 milqion lo defraudedinvestors. Worked closely with the Securilies and Fxchange Commission and the Assistant United States Attorney,

resulting in a criminal corwiclion against the princie l protagonist of 1he fraud.

B@ - W iatM. lnc. - Lead trial counsel to the receiver in several aclions arislng out of a shut-down of theseentities by the Federal Trade Commission pending in the United States Dislrid Court for the Southefn District of Flofida.

* %lnsAte FX l<. - Lead trial counsel to the receiver in several aclions arising out of Sunstate's securities fraud in SœthFlorida pending in the United States District Court for the Southern District of Florida. Worked closely with the Securities andExchange Commission and the Assistant United States Attorney. resulling in a criminal conviction against a principal

protagonist of 1he fraud. Testified at the senlencing hearing.

LEVINEKEttoccLEHMANSCHNEIDEIOGROSSMANLLP201 Sœ* K= F1@ œuY o

HM RKr. Cio eœ teKe i' Fe d. 33131


JEFFREY C. SCHNEIDERFOUNDING PARTNER

l()q' 'LLLLL' .1; 4 t' ''kt.).

S TRIAL oRK, 4tt''î :

'' * F- / â2*-- Lead trial counsel fof Fannie Mae in connection with a preiiminary injunction proceeding against the Ben Ezra

' & Katz law firm. The preliminary injunction was issued. and subsequently affirmed by the appellate court,. 0 2** re - Lead trial counseil for Chicago Titje in a multi-million-dollar reformation action tried in the United StatesDistrict Court for the Southern District of Florida. The proceeding was setlled after the trial.

* F# # % W Ti'* - Lead trial counsel for Fidelity in a seven-figure adion pending in state court in Broward County,Florida. The case was one of first impfession in 1he slate of Florida. Prevailed on summary iudgment, which was thereahes

' affirmed on appeal, resufting in Fidelily not havipg to pay any mone# to the Plaintifl.- * Gkmb Var#e#Y - Lead trial counsel for an American entity against claims by a publicly-traded Bussian entiN invoiving

mining rights in excess of $100 million. The proceeding was seltled after a onœweek trial.@

EIY* G-

D l 30.4:3.87*F I 3e5.403.87%

@ aC# - Lead trial counsej tor a Canadian entity against claims by an American entity involving ten million dollars oncommodities shipped from Russia. The proceeding was setlled aher a two-week trial.

* F* lslp d- Co-lead lrial oounsel for the Plaintiff in a foreclosure action involving money Iaundering allegations against a

national bank. The case was tried and judgment was issued in favor of-the Plaintiff, and lhereaher affirmed on appeal.œ Cearrl&al P l*n - Lead trial counsel for Carnival in a breach of contract and fraud action pending in the United StatesDistrict Court for the Southern District of Florida. The case was settled successfully lor Carnival a few weeks betore trfal.HlP 'faa/l: Plan tl/F/orWa, Inc. - Lead trial counsel for HIP in actions arising out of providef and other agreemenls. All of thecases were favorably settled before trial.

* neI Oae- Lead trial counsel for Personnel One in a maltef pendingDistrict of Florida alleging violations of the Americans With Disabilities Act.

in the Uniled Slates District Courl for the SoutherrThe matter was setlled without Personnel One

PM CTICE AREM

On- e ReC- Cœ- ML-

EB-6 ti+ lkm> &

6** * kltie eTœ 1':*1e*0* LNgMlœ

having to nay any money.

@ J/lN'e SnfY - Lead tfial counsel in an Arbitration in wbish allegations ol brpach of fiduciary duty and mismanagemantwere made, The matter was favorably seltled before trial.

* H- W practW Mm age Y l- Lead lrial counsel for Premier Practice Management in several actions against formerphysicians associated with the practice alleging breach of conlract. breach of non-competition provisions, and violations of

trade secret Iaws,Lightech S/e e n/r,s of Nty#? America - Lead trial counsel for Lightech in an action accusing Lightech of violating non-compete provisions and trade secrel Iaws. The matter was settled without Lightech having to pay any mone#.> Oflice Sn/lzemf- Lead trial counsel for Benchmark in an action pending in the United States District Court forthe Southern District of Florida in which Benchmark was accused of violaling non-compete wovisions, non-K licitation

provisions. and trade secret Iaws. The matter was favorably settled just a few days before the preliminary injunction hearing,Palmy Ranch Deye/tpme/)t Ltd' - Represented, along with another member of the Fifm, Palmer Banch in several actions

pending in Sarasota County, Floridap including an acliœ that was tried befofe a jury.

BAR AND COURT ADM ISSIO NS

* Florida@ United Slates District Court for the Southern and Middle Districts of Florida* United States Bankruptcy Court for the Southern District of Florida@ United States Court of Appeals for lhe Eleventh Circuit* United States Supreme Court

EDUCATION

* Florida State University (B.S.. Double Major: Economics and Polilical Science). University of Florida School of Law (J.D., with honors)

PROFESSIONAL AND COM MUNITY INVOLVEM ENT

. TNa Florida 8a/, Mcmbar

@ National Association of Federal Eiquity Receivers, Full Membership (limited to those who have served as receiver in mattersof material size and complexlty)

@ Board of Directors of Dade County Bar Association, Young Lawyers Section, Former Member

e American Bar Association, Member

LEVINEKsLkoGcLEHMANSCHNEIDER+GaossuANttr201 Se h 1= F1: Kml- rd22nd Rer Cid- C 'MI* . FIe . 33131


JEFFREY C.SCHNEIDERFOUNDING PARTNER

XU?''# V '' 'V%.a ''IJ' : ;'t.% .(Q. ' .j' y

(:$t@,' N$ .k -'. ,,43. !. k fe r;,f. @ xp *'#' . N, * - u.A - z

.

. , z e 1:-''

sotps yt- loa trc.xt casoz 1...,-..t .'---.-.a- ,.... ...,.,. ..' Itr :.

z . . E '

# 1.,$ w ' , a .v ,Ratmd ay o, . . , . ' '

. 'N. B x vt j. xjxtyo.lspef Ixlult rs n- & kqv 41 j g'.WEI . ..y . ; #11m. '<1.

$%. ,1/.10, :'o #.%N '

Et- -

D l l*s.4p3.#FD

F I :O&4*.r*

PRACTICE AREAS

O W RW W P'

cm . a... . ujo ooEB.5Llt%*

Ir%me d LiteHl &ArbY

%= * L> n

Te lM e*- LK* n

LEVINEKELLOGGLEHMANSCHNEIDEIwGROSSMANLL,201 > * Rl*eep* Be e

22M F* , Ce> p Cen*rMle i. FKY. 33131


CONFLICTS OF INTEREST AND BACKGROUND INFORM ATION

l am providing the Securities and Exchange Commission C%commission'') with the followingconflict of interest and backgrolmd information concerning Jeffrey C. Schneider. the

(Receiver/Distribution Fund Admilzistrator/Distribution Consultantl in connection with theaction to be initiated by the United States and Exchange Commission (ttSEC'') against JoseAman. Idarold Seizel. Arjtyle Coim LLC. l agree to supplem ent this inforlnation if any of theinformation herein changes, within thirty days of such change. 1 agree to provide such otherConflict of Interest information as requested by the Comm ission or its staff, and to take such

steps as reasonably requested by the Commission or its staff in order to mitigate any conflicts

that the Commission or its staff determine may exist, in their sole discretion. (Attach additionalsheets as necessary.)

(If provided for a retained professional or other agentz) This information is provided forJeffrev C. Schneider, who serves as Feceiver to the (Receiver/Distribution FundAdministrator/Distribtltion Consultantq in the above referenced case.

Except where otherwise noted, for purposes of the information request below, tûyou''means you as an individual, as well as any spouse or dependents, and separately, any

firm, partnership, joint venture, or other business in which you are an officer or director,or in which you have a substantial financial interest.

Except where otherwise noted. this information is requested for any responsive matters existinR

during. the last five vears. Also. if during the course of v. our duties v. ou become awarc of-responsive information conccrninM # potential claimant in the matter listed above. you must

promptlv sunplement vour response tp disclose that information:

1. List a1l contracts, consulting engagements, employm ent, scrvice as an ofticer or director,or other work of any kind you have perform ed for any defendant/respondent in this matter, or

any of its parents, subsidiaries, or other affiliates, or any claimant in this matter. Include anyresponsive matters existing during the last ten years. None.

2. List any tinancial interests in or with the defendant/respondent, its parents, subsidiaries,

or other affiliates, or any claimant in this matter (e.g., stocks, bonds, options, other debt or equityinterests, partnerships, retirement plans). None.

3, List all other personal or professional relationships or interests in or with thedefendant/respondent, its parents. subsidiaries, or other affiliates, or with any of their officers or

directors, or any clairriant in this matter, not listed above. Nonc.

4. List a11 matters in which you have been retained as a Receiver, Distribution FundAdm inistrator, Distribution Consultaxt, or as a subcontractor, agent or other service provider, in

connection with any civil action or adm inistrative proceeding by the Comm ission. Plemse see

letter submitted simultaneouslv hereM/ith.


5. List al1 other prior or existing cases, matters, or proceedings in which the Commissionhas an interest, in which you have been retained or served as a witness, consultant, or other

expert. Please see letter subm itted sirpultaneouslv herewith.

6. ldentify any disciplinary proceedings, felony criminal indictment or information (orequivalent formal charge) or a misdemeanor criminal information (or equivalent formal charge),civil proceedings or actions against you personally by any Federal, state, local, or foreign entitiesafld the results of those proceedings. lnclude any responsive matters regardless of when theyarose. None.

7. ldentify any actual or potential conflicts of which you are aware, regardless of when theym'ose, that are not identitied or addresscd in paragraphs 1 through 5 above, but that may affectthe performance of your duties under this appointment. None.

If you believe any of the infbrmation provided in response to these requcsts is non-public orcontidential, you may request confdential treatment by the Commission pursuant to the

procedures set forth at 17 C.F.R. j 200.83.

Under pcnalty of perjurs I declare that I have examinedthe information given in thisstatem ent, and attached hereto, and. to the best of my knowledge and belief, it is true,correct, ahd com plete. I understand that any material misstatements or omissions

made by m e her - in y attaehments herdo constitute criminal violations,

punishable u r 1 .S.C 1001.

By:

Si atttre

Name: Jeff C. Schnei erTitle: Pro oscd Receiv

On behalf of:Receiver/Distribution Fund Administrator/Distribution Consultant

Jose Amanv Harold SeiRela Jonathan Seiael. ArRyle Coin. LLCDefendant/Respondent Name

2


BILLING INSTRUCTIONS FOR RECEIVERS IN CIVIL ACTIONSCOM M ENCED BY THE U.S. SECURITIES AND EXCHANGE COM M ISSION

Except where inconsistent with guidelines established bythe applicable district orcircuit

courq thc undersigned hereby represents thaq if appointed receivcr in a civil action commenced

by the U.S. Securities and Exchangc Commission (the ''SEC'' or the ''Commission''), each

application for professional fees and expenscs (the ''Application'') subrnitted by the

receiver, including all contractors and/or professionals rctained by t he receiver, will

comply with these billing instructions (the ''Billing Instructions''). Undersigned

further represents that any deviation from the Billing Instructions w lll be described in

writing and subm itted to the SEC at least 30 days prior to the Gling of the Application

with the Receivership Court. Following its receipt and review of proposed applications,

as described in section A.2 below, the SEC may object to deviations and charges with

which it does not agrce.

Undersigned acknowledges that all applications for compensation are interim and

are subject to a cost bencst review and fnal review at thc close of the receivership. At

the close of the receivership, the receiver will Gle a Gnal fee application, describing in

detail the costs and benefits associated with aIl litigation and other actions pursued by the

receiver during the course of thc rcceivership.

Undersigned acknowledges that. to the extent requested by the SEC, interim fee

applications may be subject to a holdback in the amount of 20% of the amount of fees

and expenses for each application filed with the Courti. The total amounts held back

during the course of the receivership will Ix paid out at the discretion of the court as part

of the final fee application submitted at the close of the receivership.

V.1 0.01 .08


SEC Receîvership Billing Instructionsa pg- 2 of l l

A. CERTIFICATION

Each Application must contain a Certification by the Applicant that:

the Certifyilkg Professional has read the Application;

(b) to the best ()f the Applicant's khowlcdge, information and beliefformed after reasonable inquiry, the Application and alI fees and

expenses therein are true and accurate and comply with the Billing

Instructions (with anyexceptions specifically noted inthe Certificationand described ln the Application);

alI fees contained in the Application are based on the rates listed in theApplicant's fee schedule attached hereto and such fecs are reasonable,

nccessary and commensurate with the skill and experience required for

the activity performed;

(d) the Applicant has not included in the amount for whichreimbursement is sought the amortization of the cost of any

investment, equipment, or capital outlay (except to the extentthat any such amortization is included within the permitted

allowable amounts set fodh herein for photocopies and facsimile

transmission); and,

in seekingreimbursement for a service which thc Applicantjustifablypurchased or contracted for from a third party (such as copying,imaging, bulk mail, messenger service, overnight courier, computcrized

rcsearch, or title and Iien searches), the Applicant requestsreimbursement only forthe amount billed to the Applicant by the third-

party vendor and paid by the Applicant to such vendor. If such

services are performed by the receiver, the receiver will certify thatit is not making a profit on such reimbursable service.

2. At Icast 30 days prior to the filing of the Application with the Court, the

Applicant will provide to SEC Counsel a complete copy of the proposed Application,

together with all exhibits and relevant billing information in a format to be provided by SEC

staff.

' 4 4 3 'B.

TheReceiverorothercedif-yingprofessional shall beprcsent atanyhearing to


SEC Receivership Bllting lnstructions, p:. 3 of l 1

consider the Application.

C. CO NTENT OFAPPLICATIO N

The following information Inust be provided in the Application'.

lnformation aboutthe Applicant and the Application.

(a) the time period covered by the Application;

(b) the date the receiver was appointed, the date of the orderapproving employment of the Applicant, and the date servicescommenced',

the names and hourly rates of all Applicant's profkssionals and

paraprofessionals (the ''Fee Schedule''); and,

(d) whether the Application is interim or flnal, and the dates ofprevious orders on interim Applications along with amounts

requested and the amounts allowed or disallowed, all amounts of

previous payments, and amount of any allowed Applications

which remain unpaid.

Case Stattls (Narrative).

(a) The amount of cash on hand, the amount and nature of accruedadministrative expenses, and the amount of unencumlaered funds

in the estate;

(b) Summary of the administration of the case, including ali fundsreccivcd and disbursed, and when the case is expected to close;

Summary of creditor claims proceedings, including a description

of establishcd or anticipated procedures for: (i) providing notice toknown and unknown claimants; (ii) receipt and review of claims;(iii) making recommendations to court for paymcnt or denial ofclaims; and, (iv) snal disposition of claims. This summary shouldalso include the status of such claims proceedings afïer they have

been comlnenced;

(d) Description of assets in the receivership estate, includingapproximate or actual valuations, anticipated or proposed

dispositions, and reasons for retaining assets where no dispositionis intended; and,

2.


SEC Receivership Billing lnstructions, pg, 4 of 1 l

(e) Description of liquidated and unliquidated claims held by thereceiver, including the need for forensic and/or investigatory

resources; approximate valuations of claims; and anticipated or

proposed methods of enforcing such claims (including likelihoodof success in: (i) reducing the claims to judgment; and, (ii)collecting suchjudgments).

Current and Pi-evious Bitlings.

(a) Total compellsation and expenses requested and any amountts)previously requested;

(b) Total compcllsation and expenses previously awardecl by thecourt; and,

(c) ' Total hours billed and total amount of billing for each person whobilled time dlaring the period for which fees are requested.

Standardized Fund AccountinR Repod.4.

The SEC'S Standardized Ftlnd Accounting Report (''SFAR'') submitted by the

Receiver for the most recent quarter shall be attached to any fee application as ''Exhibit

A 11

D. TIM ERECORDSREQUIREDTO SUPPORTFEEAPPLICATIONS

Each professional ancliparaprofessional mustrecordtime in incrementsoftenths

ofanhour,andmustkeepcontemporaneoustilnerecordsonadailybasis.

Time records must set forth in reasonable dctail an appropriate narrative

description of the services rendcred. W ithout limiting the foregoing, the description should

include indicationsofthepadicipants in,aswell asthescopeyidentification and purpose of the

activity that is reasonable in the circumstances.

The Application should separately describe each btlsiness enterprise or

litigation matter (i.e., ''Project'') for which outside professionals have been employed. For

example, separatc litigationmauerssiltouldbesetoutindividually intheApplication as


SEC Receivership B i lling Instructions, pg. 5 of l l

individual Projects and each such Project should contain Activity Categories as described in

Sections D.4 and D.5 below. Each Project Category should contain anarrative summary ofthe

following information:

4.

adescription ofthe project, its necessity and benefit to tbe estate andthe status of the project including pending litigation for whichcompensationand/orreimbursementofexN nsesisrequelited;

(b) identification ofeach person providing services ontheproject; and

a statement of the number of hours spent and the amount of

compensation requested byprofessionals and paraprofessionals on the

project.

In recording time, each professional and paraprofessional may, subject

to Section D.5 immediately below. describe in one entry the nature of the services rendercd

during that day and the aggregate tilne expended for that day in an ''Activity Category'' (as

described in section D.5.a and D.5.b, below) without delineating the actual time spent on

each discrete activity in an Activity Category, provided. however, single time entries of

more than one hour in an Activity Category that include two or more activities must include a

notation of the approximate time spent on each activity within the Activity Category.

5. Time records shall be in chronological order by Activity Category.

Only one category should be used for any given activity and professionals and

paraprofessionals should make their best effort to be consistent in their use of

categories. This applies both within and across Grms. Thus, it may be appropriate for

all professionals to discuss the categories in advance and agree generally on how

activities will be categorized. Evecy effortshould bemadeto usethe Iisted categories inthe

first instance and to coordinate the use of additional categories with other professionals in the

case. Notwithstanding the above, aII catcgories mustcorrespond withthe SEC'S SFAR. The


SEC Receivership Billing lnstructions, pg. 6 of l I

time information reflected on the Application shall also be supplied to the SEC'. Counsel in an

electronic format as directed by SEC staff.

Lezal Activities. The lbllowing categories are generally

more applicable to attorneys but may be used by all professionals w'here

appropriate.

ASSET ANALYSIS AND RECOVERY. ldentification and review of potential

assets including causes of action and non-litigation recoveries.

ASSET DISPOSITION. Sales, Ieases, abandonment and related transaction

work. W here extended series of sales or other disposition of' assets is

contemplated, a separate catcgory should be established for each majortransaction.

BUSINESS OPER ATIONS. lssues related to operation of an ongoing

business.

CASE ADM INISTRATIO N. Coordination and compliance activities,

including preparation of reports to the court, investor inquiries, etc.

CLAIM S ADM INISTM TION AND OBJECTIONS. Expenses

formulating, gaining approval of and administering any claims procedure.

EM PLOYEE. BENEFITS/PENSIONS. Review issues such asseverance, retention, 40lK coverage and continuance ofpension plan.

(b) Financial Activities. The following categories are generally

more applicable to accountants and Gnancial advisors, but may be uscd by aII

professionals where appropriate.

ACCOUNTING/AUDITING. Activities related to maintaining and auditing

books of account, preparatioll of Gnancial statements and account analysis.

BUSINESS ANALYSIS. Preparation and review of company business plan;

devclopment and review of strategies; preparation and review of cash tlow

forecasts and fcasibility studiies.

CORPORATE FINANCE. Review financial aspects of potential mergers,

acquisitionsanddisposition ofcompanyorsubsidiaries.

DATA ANALYSIS. M anagement information systems review, installation and


SEC Receiversbip Billing lnstructions, pg. 7 of 1 1

analysis, construction, maintenance and reporting of significant case financial data,

lease rejection, claims, etc.

STATUS REPORTS. Preparation andrequired by the court.

review of periodic reports as may be

LITIGATION CONSULTING. Providing consulting and expert witness

services relating to forensic accounting; etc.

FORENSIC ACCOUNTING. Reconstructing books and recorcls from pasttransactions and bringing accounting currentitracingand sourcingassets.

TAx ISSUES. Analysis oftax issues and preparation of state and federal tax returns.

VAI,UATION. Appraise or rcview appraisals of assets.

E > 1 .4 ,

Presentation of Feesand Expenses inApplication.

(a) AII fees and expenses must be necessary and reasonable;excessive charges will not be paid. 'l'0 the extent that anApplicant seeks reimbursement of expenses, the Application shall

include a categorization of such expenses along with an exhibit

sum marizing the total expenses for the period covered by the

Application.

(b) Charges for Iitigation will be paid only if the litigation isreasonably likely to produce a net economic benefit to the estate.

W ith respect to each litigation matter, the Applicant shall certify

that the Applicant determined that the action was likely to produce

a net econonlic benetit to the estate, based on reviews of: (i) thelegal theories upon which thc action was based, including issues

of standing; (ii) the likelihood of collection on any judgmentwhich might be obtaincd; and, (iii) alternative methods of seekingthe relief, such as the retention of counsel on a contingency basis.

Retention of counsel on a contingency fec basis should be pursued

where the Receiver (after consulting with SEC Counsel)concludes that retention of counsel under the approved fee

schedule would produce a lesser economic benefk to the

receivership estate. The receiver should memorialize these cost-

benefit analyses, through communications with the receiver's

counsel, as support for thc engagement of such counsel.

(c) lnvoices and/orbills foreach expense item forwhich reimbursement


SEC Reccivership Billing lnstructions, pg. 8 of l 1

is sought mtlst be kept for seven (7) years after the close of thereceivership. Such support shall be provided on request to the

court and the SEC. and in appropriate circumstances to any party

in interest provided that, where applicable, privilege or

confidentiality can be preserved. '

(d) Time spent preparing fee applications, or any documentation insupport thereof, may not be charged to the receivership estate.

Allowablç allt Non-Allowable Reimbtlrsable Expenses.

(a) Filinc Fees Process Scrvice Fees. Witness Fees apd Expc: Witness Fees.

Filing fees (including for necessary adversaries), process service fees, witness

fees, and expert witnessfees (subjcct to court approvalof thc employment of any

professionals and the reasonablencss of such fees) shall be allowable to the extent of the

actualcostincurred bytheApplicant.

(b) Court Reporter Fees and Transcrips..

.court reporter fees and copies of transcripts shall be allowable to the extent of the

actual cost incurred by the Applicant,

Lien and Title Searches.

The cost for lien and title searches (whether done in-house or by an outside vendor) is

allowable tothe extent ofthe actual cost incurred by, orinvoiccd to, the Applicant.

(d) Photocopving.

Photocopying shall be allowable at a cost not to exceed $. l 5 per page. The

Applicant shall set fot-th in its fce application the total number of copies. Outside vendor

photocopying charges are allowablc at the actual cost invoiced to the Applicant.

Necessary copies obtained from the Clerk of the Cotlrt (including certified copies) or from

the approved court copyservice will be permitted atthe actual cost incurred bythe Applicant.


SEC Receivership Billing lnstructions, pg. 9 of l 1

The Applicant shall not retlect on the Application any copies for which the

Applicant has been, or expccts to be, reimbursed (eg., payment from an opposing party for

document production from which the Applicant has been reimbursed).

Postajte. Overnight Delivered Conrier/M essenger Services.

and outside courier/messenger servêces

are reimbursable for the actual cost incurred, if reasonably incurred. Charges should be

mininaizedwlaeneverpossible. Forexlàmple,couriers/messengers andovernightclclivery

service should be used only when tirst-class mail is impracticable.

The cost of postxge, overnight delivery,

(9 Telenhone.

Long distance telephone charges are allowable to the Applicant for the actual

cost invoiced from the telephone carrier. Charges for local telephone exchange

service and cellular telephone service shall not be reimbursable.

(g) Facsimile Triansmission.

A charge for outgoing facsimile transmission to Iong distance telephone numbers

are reimbursable at the lower of (a) toll charges or (b) if such amount is not readily

determinable, $1 .ooperpagefordomtlsticandsz.oo perpage forinternational transmissions.

Charges for in-coming facsimiles are not reimbursable. The Application shall state the

total number of pages ofthcoutgoingtransmissions.

(h) Compqtçrized Research.

Computerized legal research services such as Lexis and W estlaw are rcimbursable

to the extent of the invoiced cost from the vendor, however if such service is provided on a

monthly or other periodic rate, proportional usage shall not be reimbursable.

(i) Parking.


SEC Receivership Billing Instructionsy pg. l 0 of l I

Reimbursement forparking is allowable, including parking by a professional to

attend courtproceedings, depositions orcaseconferences, parking at the airport, and

client and third party parking (ilncluding validation).

U) Travel Expenses and Meals.

for destinations within a twenty (20)

mile radius of the Applicant's office including mileage, taxis, etc. and meals

(including staff meals) will not be reimbursed. M ileage charges for out-of-town

travel (outside a twenty (20) mile radius of the Applicant's office) with one's own car

Local travel time and related expenses

are rcimbursable at the lesser of the amount customarily charged clients or the amount

allowed by the Internal Revenue Service for per milc deductions. For purposes of

the foregoing, the Applicant's office shall be the office in which the person incurring the

travel expense is Iocated.

a twenty (20) mile radius of the Applicant's

offlce is reimbursable at 50% of the Applicant's regular billing rate. The reimbursement

of long distance travel expenses is subject to the following limitations: (1) the Applicant

Long distance travel time outside

shall seek and use the Iowest airfare or train fare availablé to Applicant; (2) luxury

accommodations and deluxe meals are not reimbursable; (3) personal, incidental charges

such as telephone and laundry are not reimbursable unless necessary as a result of a

reasonably unforeseen extended stay not due to the fault of tbe traveler; and (1) each out-of-

pocket travel and allowable miscellëaneous administrative expense excccding $75 requires

a receipt that is to be attached to the invoice.

(k) Word Processing. Doctlment Preparation. Data Processin..Prootkeading, Secretarial and Other Staff Services.


SEC Receivership Billing Instructions, pg. 1 l of 1 l

Secretarial, library, word processing, document preparation (other than by professionals or

paraprofcssionals), data processing, and other staff services (exclusive of paraprofessional

services), including overtime forthe foregoing, are not reimbursable. Charges for proofreading for

typographical or similar crrors are not reimbursable whether the services are performcd by a

paralegal, secretary, or temporary staff.

(l) Communications with Investors.

W here appropriate, the estate should promptly create a website, and update the website

as appropriate, to provide information as to the activities and condition of the estatc to investors.

In addition, any necessary basic communications with investors should be hanclled by clerical or

paralegal staff (or cotparatively paid stao to the extent possible. Expenses stemming from a

failure to comply with this policy will not be submitted.

Date: M av 2. 20 l 9

Can ' te for Appointment as Receiver in

' l tion Comm l ed by theU.S. ecurities nd change CoI Iyssion

Jeffre C. Schneider, P. .Levin Kcllogg Lehman hn -der + Grossman LLP20l So th Biscayne Blkd.i i Center - 22nd FloorC t grot p

M iam i, Florida 33l 3 l

Elmai l : icsfz-lk lsg-con:

Telejhone: 305-403-8788Facslmile: 305-403-8789


UNITED STATES DISTRIC T

SOUTHERN DISTRICT OF F A

CASE NO .:

80633Tv- vaw.zot-

SECURITIES A#D EXCHANGE COMAIISSION,

Plaintiff, l.'c' s r L, e c r..-f 1 lRvt-tl e 5' 4 ( d ) t l'. z.> l-n cat t e 1- ( s . )t = a. >'1 . 7 . . . .s . . s. a . .

? a - . .: , 'j < . a jj'S f''1 .'8 't l 1 i u I 1. i t t : ! <

'

.1 %. t 3. t k .z .

' -.- - - )J t.,-5 u' '' 3- - > ; .w..,x..-,.....e- j .% 17 C C 1 1 -E k.* d a t e ) -

..: i a j ! ) 4 r j. :) (?, ..( .j. t lj y : ( k ') t 11 ') ()) j'e j) . > . . ) t t . . , wwop- ., . pV.

NATURAL DIAM ONDS INVESTM ENT CO.,

EAGLE FINANCIAL DIAM OND GROUP INC.

AX A DIAM ANTE ATERLIER,ARGYLE COlN, LLC,

JOSE ANGEL AM AN,HAROLD SEIGEL, AND

JONATHAN H. SEIGEL,

Defendants, ttnd

SEALED

NO7' SEALED

H.S. M ANAGEM ENT GROUP LLC,

GOLD 7 OF M IAM IS LLC,W INNERS CHURCH INTERNATIONAL INC.

OF W EST PALM BEACH, FLORIDA,

FREDERICK D. SHIPM AN, ANDW HITNEY SHIPM AN,

Relief Defendants.

ORDER GM NTING PLAINTIFF SEIM.URITIES AND EXCHANGE COM M ISSION'S

M OTION FOR APPOINTM ENT OF RECEIVER

W HEREAS, Plaintiff Securities and Exchange Comm ission has filed a motion for the

appointment of a Receiver over Defendant Argyle Coin, LLC (t:Argy1e''), with full and exclusive

power, duty, and authority to: adm inister amd manage the business affairs, funds, assets, causes in

action and any other property of Argyle', m arshall and safeguard a11 of their assets', and take whatever

actions are necessary for the protection of investors',

W HEREAS, the SEC has m ade a sufticient and proper showing in support of the relief

requested',


W HEREAS, the SEC has submitted tlze credentials of a candidate to be appointed as Receiver

of al1 of the assets, properties, books and records, and other items of Argyle (ttlteceivership Entity''),

including any properties, assets and other items held in their names or their plincipals' names, and the

SEC has advised the Court that this candidate is prepared to assume this responsibility if so ordered

by the Court;

IT IS

is hereby appointed Receiver over the

Receivership Entities, their subsidiaries, successors, and assigns, and is hereby authorized,

empowered, and directed as follows:

THEREFORE ORDERED AND ADJUDGED that

1. General Powçrs and Duties of Receiver

l . The Receiver shall have al1 powers, authorities, rights and privileges heretofbre

possessed by the officers, directors, managers and general and lim ited partners of the entity

Receivership Parties under applicable state and federal law, by the governing charters, by-laws,

articles and/or agreements in addition to a11 powers and authority of a receiver at equity, and a1l

powers conferred upon a receiver by the provisions of 28 U.S.C. jj 754, 959 and 1692, and

Fed.R.CiV.P. 66.

The tnlstees, directors, oflri cers, managerss em ployees, investment advisors,

accountants, attorneys and other agents of the Receivership Entity are hereby dismissed and the

powers of any general partners, directors and/or managers are hereby suspended. Such persons

and entities shall have no authority with respect to the Receivership Entity's operations or assets,

except to the extent as may hereafter be expressly granted by the Receiver. The Receiver shall

assume and control the operation of the Receivership Entity and shall pursue and preserve all of

their claim s.


No person holding or claim ing any position ofany sol't with any of the Receivership

Entity shall possess any authority to act by or on behalf of any of the Receivership Entity.

4. Subject to the specific provisions below, the Receiver shall have the following

general powers and duties:

To use reasonable effbrts to determine the nature, location and value of all

property interests of the Receivership Entity, including, but not lim ited tos

monies, funds, securities, credits, effects, goods, chattels, lands, prem ises,

leases, claim s, rights and other assets, together with all rents, profits,

dividends, interest or other income attributable thereto, of whatever kind,

which the Receivership Entity own, possess, have a beneficial interest in, or

control directly or indirectly (tilteceivership Property'' or, collectively, the

ûtReceivership Estates''l'5

B. To take custody, control and possession of a11 Receivership Property and

records relevant thereto from the Receivership Entity; to sue for and collect,

recover, receive and take into possession from third parties al1 Receivership

Property and records relevant thereto;

To manage, control, operate and m aintain the Receivership Estates and hold

in his possession, custody and control all Receivership Property, pending

further Order of this C-ourt;

D. To use Receivership Property for the benefit of the Receivership Estates,

making payments and disbursements and incurring expenses as may be

necessary or advisable in the ordinary course of business in discharging his

duties as Receiver;

E. To take any action which, prior to the entry of this Order, could have been

taken by the officers, directors, partners, managers, trustees and agents of

the Receivership Entity;

To engage and em ploy persons in his discretion to assist him in carrying out

his duties and responsibilities hereunder, including, but not limited to,

accountants, attorneys, securities traders, registered representatives,

financial or business advisers, liquidating agents, real estate agents, forensic

experts, brokers, traders or auctioneers;

To take such action as necessary and appropriate for the preservation of

Receivership Property or to prevent the dissipation or concealm ent of

G.


Receivership Property;

H. The Receiver is authorized to issue subpoenas for docum ents and testim ony

consistent with the Federal Rules of Civil Procedure',

To bring such legal actions based on law or equity in any state, federal, or

foreign court as the Receiver deem s necessary or appropriate in discharging

his duties as Receiver',

To pursue, resist and defend al1 suits, actions, claim s and demands which

m ay now be pending or which may be brought by or asserted against the

Receivership Estates; and,

K. To take such other action as may be approved by this Coul't.

II. Acces: to Inform ation

The individual Receivership Entity and the past and/or present officers, directors,

agents, managers, general and lim ited partners, trustees, attorneys,accountants and em ployees Of

the entity Receivership Entity, as well as those acting in their place, are hereby ordered and directed

to preserve and turn over to the Receiver fol4hwith all paper and electronic information of, and/or

relating to, the Receivership Entity and/or allReceivership Property; such inforluation shall

include but not be limited to books, records, docum ents, accounts and all other instruments and

Papers.

6.

with the Court and serve upon the Receiver and the Commission a sworn statement, listing: (a) the

identity, location and estimated value of all Receivership Property; (b) all employees (andjob titles

W ithin ten (10) days of the entry of this Order, the Receivership Entity shall file

thereot), other personnel, attorneys,accountants and any other agents or contractors of the

Receivership Entity', and, (c) the names, addresses and amounts of claims of all known creditors

of the Receivership Entity.

Within thirty (30) days of the entry of this Order, the Receivership Entity shall file

with the Court and sel've upon the Receiver and the Commission a sworn statement and accounting,


with complete docum entation, covering the period from January 201 7 to the present:

Of all Receivership Property, wherever located, held by or in the name of

the Receivership Entity, or in which any of them, directly or indirectly, has

or had any beneficial interest, or over which any of them maintained or

maintains and/or exercised or exercises control, including, but not lim ited

to: (a) all securities, investments, funds, real estate, automobiles, jewelryand other assets, stating the location of each; and (b) any and al1 accounts,including all funds held in such accounts, with any bank, brokerage or other

financial institution held by, in the name of, or for the benefit of any of

them , directly or indirectly, or over which any of them maintained or

maintains and/or exercised or exercises any direct or indirect control, or in

which any of them had or has a direct or indirect beneticial interest,

including the account statements from each bank, brokerage or other

financial institution;

ldentifying every account at every bank, brokerage or other financial

institution: (a) over which Receivership Entity have signatory authority; and(b) opened by, in the name of, or for the benetit of, or used by, theReceivership Entity;

ldentifying all credit, bank, charge, debit or other deferred payment card

issued to or used by each Receivership Defendant, including but not limited

to the issuing institution, the card or account numberts), all persons orentities to which a card was issued and/or with authority to use a card, the

balance of each accoltnt and/or card as of the most recent billing statem ent,

and a1l statem ents fol' the last twelve months;

Of all assets receivecl by any of them from any person or entity, including

the value, location, alld disposition of any assets so received',

Of a11 funds received by the Receivership Entity, and each of them, in any

way related, directLy or indirectly, to the conduct alleged in the

Comm ission's Com plaint. The subm ission must clearly identify, am ong

other things, al1 in&estors, the securities they purchased, the date and

amount of their investments, and the current location of such funds',

Of all expenditures exceeding $1,000 made by any of them, including those

m ade on their behalf by any person or entity; and

E.

Of all transfers of assets made by any of them .


8. Within thirty (30) days of tlle entry of this Order, the Receivership Entity shall

provide to the Receiver and the Commission copies of the Receivership Entity's federal incom e

tax returns for 2015 through present with al1 relevant and necessary underlying documentation.

9. The individual Receivership 'Entity and the entity Receivership Entity's past and/or

present officers, directors, agents, attorneys, managers, shareholders, employees, accountants,

debtors, creditors, managers and general alld limited partners, and other appropriate persons or

entities shall answer under oath to the Receiver all questions which the Receiver may put to them

and produce all documents as required by the Receiver regarding the business of the Receivership

Entity, or any other m atter relevant to th' e operation Or administration of the receivership or the

collection of funds due to the Receivership Entity. ln the event that the Receiver deem s it

necessary to require the appearance of the aforementioned persons or entitys the Receiver shall

make its discovery requests in accordance with the Federal Rules of Civil Procedure.

10. To issue subpoenas to eompeltestim ony of persons or production of records,

consistent with the Federal Rules of Civil Procedure and applicable Local Rules, except for the

provisions of Fed.R.CiV.P. 26(d)(1), concerning any subject matter within the powers and duties

granted by this Order.

The Receivership Entity is required to assist the Receiver in fulfslling his duties and

obligations. As such, they m ust respond promptly and truthfully to a11 requests for infonnation

and documents from the Receiver.

111. Access to Books. Records and Accounts

The Receiver is authorized to take immediate possession of all assets, bank

accounts or other financial accounts, books and records and a11 other documents or instruments

relating to the Receivership Entity. A11 persons and entities having control, custody or possession

6


of any Receivership Property are hereby directed to tunz such property over to the Receiver.

The Receivership Entity, as well as their agents, servants, employees, attonzeys,

any persons acting for or on behalf of the Receivership Entity, and any persons receiving notice of

this Order by personal service, facsimile transm ission or otherwise, having possession of the

property, business, books, records, accounts or assets of the Receivership Entity is hereby directed

to deliver the same to the Receiver, his agellts and/or employees.

l4. A1l banks, brokerage firm s, financial institutions, and other persons or entities

which have possession, custody or control ofany assets or funds held by, in the name of, or for the

benefit of, directly or indirectly, and of the Receivership Entity that receive actual notice of this

Order by personal service, facsimile transm ission or otherwise shall:

Not liquidate, transfer, sell, convey or otherwise transfer any assets,

securities, funds, or accounts in the nam e of or for the benefit of the

Receivership Entity except upon instructions from the Receiver',

B. Not exercise any fonn of set-off, alleged set-off, lien, or any fonn of self-

help whatsoever, or refuse to transfer any funds or assets to the Receiver's

control without the permission of this Court;

Within five (5) business days of receipt of that notice, file with the Courtand serve on the Receiver and counsel for the Comm ission a certitied

statement setting forth, with respect to each such account or other asset, the

balance in the account or description of the assets as of the close of business

on the date of receipt of the notice; and,

Cooperate expeditiotlsly in providing information and transferring funds,

assets and accounts to the Receiver or at the direction of the Receiver.

1V. Access to Real and Personal Propertv

1 5. The Receiver is authorized to take immediate possession of a11 personal property of

the Receivership Entity, wherever located, including but notlim ited to electronically stored

information, computers, laptops, hard drives, external storage drives, and any other such mem ory,


media or electronic storage devices, botjks, papers, data processing records, evidence of

indebtedness, bank records and accounts, savings records and accounts, brokerage records and

accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments,

contracts, mortgages, furniture, office supplies and equipment.

The Receiver is authorized t(, take immediate possession of a11 real property of the

Receivership Entitys wherever located, including but not lim ited to all ownership and leasehold

interests and fixtures. Upon receiving actual notice of this Order by personal service, facsim ile

transmission or otherwise, all persons other than law entbrcement ofticials acting within the course

and scope of their official duties, are (witllout the express written permission of the Receiver)

prohibited from: (a) entering such premises; (b) removing anything from such premises', or, (c)

destroying, concealing or erasing anything ()n such prem ises.

ln order to execute the express and implied terms of this Order, the Receiver is

authorized to change door locks to the prem ises described above. The Receiver shall have

exclusive control of the keys. The Receivership Entity, or any other person acting or pum orting

to act on their behalf, are ordered not to cllange the locks in any manner, nor to have duplicate

keys made, nor shall they have keys in thèil' possession during the term ofthe receivership.

18. The Receiver is authorized to open a1l mail directed to or received by or at the

oftices or post office boxes of the Receivership Entity, and to inspect all mail opened prior to the

entry of this Order, to determ ine whether items Or information therein fall within the mandates of

this Order.

V. Notiçe to Third Parties

19. The Receiver shall promptb' give notice of his appointment to all known officers,

directors, agents, employees, shareholders, creditors, debtors, managers and general and limited

8


partners of the Receivership Entity, as the Receiver deem s necessary or advisable to effectuate the

operation of the receivership.

20. A11 persons and entities owing any obligation, debt, or distribution with respect to

an ownership interest to any Receivership Defendant shall, until further ordered by this Court, pay

all such obligations in accordance with the terms thereof to the Receiver and its receipt for such

payments shall have the sam e force and effect as if the Receivership Defendant had received such

paym ent.

2 1 . ln furtherance of his responsibilities in this matter, the Receiver is authorized to

communicate with, and/or serve this Order upon, any person, entity or goverflment oftice that he

deems appropriate to inform them of the status of this matter and/or the financial condition of the

Receivership Estates. A1l government offices which maintain public files of security interests in

real and personal property shall, consistent with such office's applicable procedures, record this

Order upon the request of the Receiver or the SEC.

The Receiver is authorized to instruct the United States Postmaster to hold and/or

reroute mail which is related, directly or indirectly, to the business, operations or activities of any

of the Receivership Entity (the tûlkeceiver's Mail''), including all mail addressed to, or for the

benefit of, the Receivership Entity. The Postmaster shall not comply with. and shall im mediately

report to the Receiver, any change of address or other instruction given by anyone other than the

Receiver concerning the Receiver's M ail. The Receivership Entity shall not open any of the

Receiver's M ail and shall immediately tun'l over such mail, regardless of when received, to the

Receiver. All personal mail of any individual Receivership Entity, and/or any mail appearing to

contain privileged information, and/or any mail not falling within the m andate of the Receiver,

shall be released to the named addressee by the Receiver.The foregoing instructions shall apply

9


to any proprietor, whether individual or entity, of any private mail box, depository, business or

service, or mail courier or delivery service, hired, rented or used by the Receivership Entities. The

Receivership Entity shall nOt open a new mailbox, or take any steps or make any anungements to

receive mail in contravention of this Order, whether through the U.S. m ail, a private mail

depository or courier service.

23. Subject to payment for services provided, any entity furnishing water, electric,

telephones sewage, garbage or trash removal services to the Receivership Entity shall m aintain

such service and transfer any such accounts to the Receiver unless instructed to the contrary by the

Receiver.

VI. Iniunction Aaainst Interference with Receiver

24. The Receivership Entity and all persons receiving notice of this Order by personal

service, facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly

taking any action or causing any action to be taken, without the express written agreem ent of the

Receiver, which would:

lnterfere with the Receiver's efforts to take control, possession,

management of any Receivership Property; such prohibited actions include

but are not limited to, using self-help or executing or issuing or causing the

execution or issuance of any court attachm ent, subpoena, replevin,

execution, or other process for the purpose of im pounding or taking

possession of or interfkring with or creating or enforcing a lien upon any

Receivership Property;

B. Hinder, obstruct or otherwise interfere with the Receiver in the perform ance

of his duties; such prohibited actions include but are not lim ited to,

concealing, destroying or altering records or information',

Dissipate or otherwise dim inish the value of any Receivership Property;

such prohibited actions include but are not lim ited to, releasing claim s or

disposing, transferring, exchanging, assigning or in any way conveying any

Receivership Property, enforcingjudgments, assessments or claims against

1 0


any Receivership Property or any Receivership Defendant, attempting to

modify, cancel, tenninate, call, extinguish, revoke or accelerate (the duedate), of any lease, loan, mortgage, indebtedness, security agreement orother agreem ent executed by any Receivership Defendant or which

otherwise affects any Receivership Property; or,

lnterfere with or harass the Receiver, or interfere in any mamzer with the

exclusive jurisdiction of this Court over the Receivership Estates.

D.

25. The Receivership Entity shall cooperate with and assist the Receiver in the

perform ance of his duties.

The Receiver shall prom ptll' notify the Court and SEC counsel of' any failure or

apparent failure of any person or entity to ctlmply in any way with the tenns of this Order.

VIl. Stav of Litization

27. As set forth in detail below, the following proceedings, excluding the instant

proceeding and al1 police or regulatory actions and actions of the Commission related to the above-

captioned enforcement action, are stayed until further Order of this Court:

A1l civil legal proceedings of any nature, including, but not limited to, bankruptcy

proceedings, arbitration proceedings, foreclosure actions, default proceedings, or other

actions of any nature involving'. (a) the Receiver, in his capacity as Receiver; (b) anyReceivership Property, wherever lclicated; (c) any of the Receivership Entity, including

subsidiaries and partnerships; or, (d) any of the Receivership Entity's past or presentofficers, directors, m anagers, agents, or general or limited partners sued for, or in

connection with, any action taken by them while acting in such capacity of any nature,

whether as plaintiff, defendant, third-party plaintiff, third-party defendant, or otherwise

(such proceedings are hereinafter referred to as tçAncillary Proceedings'').

The parties to any and all Ancillary Proceedings are enjoined from commencing or

continuing any such legal proceeding, or furom taking any action, in connection with any such

proceeding, including, but not lim ited to, the issuance or employm ent of process.

29. Al1 Ancillary Proceedings are stayed in their entirety, and all Courts having any


jurisdiction thereof are enjoined from taking or permitting any action until further Order of this

Court. Further, as to a cause of action accrued or accruing in favor of one or m ore of the

Receivership Entity against a third person or party, any applicable statute of lim itation is tolled

during the period in which this injunction against commencement of legal proceedings is in effect

as to that cause of action.

Vlll. Manaainz Assets

30. For each of the Receivership Estates, the Receiver shall establish one or m ore

custodial accounts at 4 federally insured bank to receive and hold all cash equivalent Receivership

Property (the ûûReceivership Fundf').

31. The Receiver may, without further Order of this Court, transfer, compromise, or

otherwise dispose of any Receivership Property, other than real estate, in the ordinary course of

business, on terms and in the manner the Receiver deem s m ost beneficial to the Receivership

Estate, and with due regard to the realization of the true and proper value of such Receivership

Property.

32.

engage a broker for sale or lease, cause the sale or lease, and take all necessary and reasonable

actions to cause the sale or lease of all real property in the Receivership Estates, either at public or

Subject to Paragraph 33, the Receiver is authorized to locate, list for sale or lease,

private sale, on terms and in the manner the Receiver deem s most beneticial to the Receivership

Estate, and with due regard to the realization of the true and proper value of such real property.

33. Upon further Order of this ('.oul4, pursuant to such procedures as may be required

by this Court and additional authority such as 28 U.S.C. jj 2001 and 2004, the Receiver will be

authorized to sell, and transfer clear title to, all real property in the Receivership Estates.

The Receiver is authorized to take a11 actions to manage, maintain, and/or wind-


down business operations of the Receivership Estates, including making legally required paym ents

to creditors, employees, and agents of the Receivership Estates and comm unicating with vendors,

investors, governmental and regulatory authorities, and others, as appropriate.

lX. Investiaate and Prosecute Claim s

35. Subject to the requirement, i11 Section Vl above, that leave ofthis Court is required

to resume or commence certain litigation, the Receiver is authorized, empowered and directed to

investigate, prosecute, defend, intervene in or otherwise participate in, compromise, and/or adjust

actions in any state, federal or foreign coul't or proceeding of any kind as may in his discretion,

and in consultation with SEC counsel, be advisable or proper to recover and/or conserve

Receivership Property.

36. Subject to his obligation to expend receivership funds in a reasonable and cost-

effective manner, the Receiver is authorized, empowered and directed to investigate the manner in

which the financial and business affairs of the Receivership Entity were conducted and (after

obtaining leave of this Court) to institute such actions and legal proceedings, for the benefit and

On behalf of the Receivership Estate, as the Receiver deems necessary and appropriate; the

Receiver may seek, among other legal and equitable relief, the imposition of constructive trusts,

disgorgement of profitss asset turnover, avoidance of fraudulent transfers, rescission and

restitution, collection of debts, and such other relief from this Court as may be necessary to enforee

this Order. W here appropriate, the Receiver should provide prior notice to Counsel for the

Comm ission before com mencing investigations and/or actions.

The Receiver hereby holds, and is therefore empowered to waive, a11 privileges,

including the attorney-client privilege, held by all entity Receivership Entities.

38. The receiver has a continuing duty to ensure that there are no conflicts of interest


between the Receiver, his Retained Personnel (as that tenzz is defined below), and the Receivership

Estate.

XI. m nkruptcv Filinz

39. The Receiver may seek authorization of this Court to tile voluntary petitions for

relief under Title 1 1 of the United States Code (the ûtBankruptcy Code'') for the Receivership

Entity. lf a Receivership Defendant is placed in bankruptcy proceedings, the Receiver may

become, and may be empowered to operate each of the Receivership Estates as, a debtor in

possession. ln such a situation, the Receiver shall have all of the powers and duties as provided a

debtor in possession under the Bankruptcy Code to the exclusion of any other person or entity.

Pursuant to Paragraph 4 above, the Receiver is vested with management authority for all entity

Receivership Entity and may therefore file and manage a Chapter 1 1 petition.

40. The provisions of Section '711 above bar any person or entity, other than the

Receiver, from placing any of the Receivership Entity in bankruptcy proceedings.

Xl. Liabilitv of Receiver

41. Until further Order of this Cou14, the Receiver shall not be required to post bond or

give an undertaking of any type in connection with his tiduciary obligations in this matter.

The Receiver and his agents, acting within scope of such agency (ttRetained

Personnel'') are entitled to rely on a11 outstanding rules of law and Orders of this Court and shall

not be liable to anyone for their own good faith compliance with any order, rule, law, judgment,

or decree. In no event shall the Receiver ol' Retained Personnel be liable to anyone for their good

faith compliance with their duties and responsibilities as Receiver or Retained Personnel, nor shall

the Receiver or Retained Personnel be liabLe to anyone for any actions taken or omitted by them

except upon a finding by this Court that they acted or failed to act as a result of malfeasance, bad

14


faith, gross negligence, or in reckless disregard of their duties.

43. This Court shall retain jurisdiction over any action filed against the Receiver or

Retained Personnel based upon acts or omissions comm itted in their representative capacities.

44. In the event the Receiver decides to resign, the Receiver shall tirst give written

notice to the Commission's counsel of record and the Court of its intention, and the resignation

shall not be effective until the Court appoints a successor. The Receiver shall then follow such

instructions as the Court may provide.

Xll. Recom m endations and Reports

45. The Receiver is authorized, empowered and directed to develop a plan for the fair,

reasonable, and efticient recovery and liquidation of all remaining, recovered, and recoverable

Receivership Property (the tklwiquidation Plan'').

Within thirty (30) days aftel'' the end of each calendar quarter, the Receiver shall

file and serve a full report and accounting of each Receivership Estate (the ktouarterly Status

Reporf'), reflecting (to the best of the ReceiA'/rer's knowledge as of the period covered by the report)

the existence, value, and location of all Receivership Property, and of the extent of liabilities, both

those claim ed to exist by others and those the Receiver believes to be legal obligations of the

Receivership Estates.

47. The Quarterly Status Report shall contain the following:

A summ ary of the operations of the Receiver;

B. The amount of cash on hand, the am ount and nature of accruedadministrative expenses, and the am ount of unencum bered funds in the

estate-!h

A schedule of a1l the Receiver's receipts and disbursements (attached asExhibit A to the Quarterly Status Report), with one column for the quarterlyperiod covered and a second column for the entire duration of the

receivership;

15


A description of al1 known Receivership Property, including approximate

or actual valuations, anticipated or proposed dispositions, and reasons forretaining assets where no disposition is intended;

A description of liquidated and unliquidated claims held by the

Receivership Estate, including the need for forensic and/or investigatory

resources; approxim ate valuations of claim s; and anticipated or proposed

methods of enforcing such claims (including likelihood of success in: (i)reducing the claims b:) judgment; and, (ii) collecting such judgmentsl;

A list of a11 known creditors with their addresses and the amounts of their

claims',

The status of Creditor Claims Proceedings, after such proceedings havebeen commenced; and,

H. The Receiver's reconlm endations for a continuation or discontinuation of

the receivership and the reasons for the recommendations.

48. On the request of the Comm ission, the Receiver shall provide the Commission with

any documentation that the Com mission deems necessary to m eet its reporting requirements, that

is mandated by statute or Congress, or that is otherwise necessary to further the Com mission's

mission.

X111. Fees, Expenses and Accountines

49. The Receiver need not obtain Court approval prior to the disbursement of

Receivership Funds for expenses in the ordinary course of the adm inistration and operation of the

receivership. Further, prior Court approval is not required for paym ents of applicable federal, state

or local taxes.

50.

assist him in carrying out the duties and responsibilities described in this Order. The Receiver

shall not engage any Retained Personnel without first obtaining an Order of the Court authorizing

The Receiver is authorized t() solicit persons and entities (ttltetained Personnel'') to

such engagement.

The Receiver and Retained Personnel are entitled to reasonable compensation and

16


expense reimbursement from the Receivership Estates as described in the tiBilling Instructions for

Receivers in Civil Actions Commenced by the U.S. Securities and Exchange Commission'' (the

dtBilling lnstructions'') agreed to by the Receiver. Such compensation shall require the prior

approval of the Court.

52. Within forty-five (45) days aher the end of each calendar quarter, the Receiver and

Retained Personnel shall apply to the Cour't for compensation and expense reim bursement from

the Receivership Estates (the ûûouarterly Fee Applications''). At least thirty (30) days prior to tiling

each Quarterly Fee Application with the Court, the Receiver will serve upon counsel for the SEC a

complete copy of the proposed Application, together with a11 exhibits and relevant billing information

in a format to be provided by SEC staff.

53. Al1 Quarterly Fee Applications will be interim and will be subject to cost benefit

and final reviews at the close of the receivership. At the close of the receivership, the Receiver

will file a tinal fee application, describing in detail the costs and benetits associated with al1

litigation and other actions pursued by the Receiver during the course of the receivership.

54. Quarterly Fee Applications may be subject to a holdback in the amount of 20% of

the amount of fees and expenses for each application filed with the Court. The total am ounts held

back during the course of the receivership will be paid out at the discretion of the Court as part of

the final fee application subm itted at the close of the reeeivership.


Each Quarterly Fee Application shall:

A. Comply with the term s of the Billing lnstructions agreed to by the Receiver',

and,

Contain representations (in addition to the Certification required by the

Billing Instructions) that: (i) the fees and expenses included therein were

incurred in the best interests of the Receivership Estate; and, (ii) with theexception of the Billing Instructions, the Receiver has not entered into any

agreem ent, written or oral, express or implied, with any person or entity

concerning the am ount of compensation paid or to be paid from the

Receivership Estate, or any sharing thereof.

B.

56. At the close of the Receivership, the Receiver shall subm it a Final Accounting, in

a format to be provided by SEC staff, as well as the Receiver's final application for compensation

and expense reimbursement.

DONE AND ORDERED this day of M ay 2019, at ,

Florida.

UNITED STATES DISTRICT JUDGE

Copies to: Am ie Itiggle Berlin, Esq.Senior Trial CounselSeculities and Exchange Comm ission

801 Brickell Avenue, Suite 1800

M iam i, Florida 33131

Facsimile: (305) 536-4154Email: [email protected] Plaintly

18


Documents

Motion for Appointment of Receiver