UNITED STATES DISTRICTCOURT SOUTHERN DISTRICTOF … · 0 196 Franchise Injury 0 385 Property Damage Leave Act 0 895 Freedom ofInformation 0 362 Personal Injury- ProductLiability 0

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO.

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

MICHAEL J. MCNERNEY,

Defendant.

COMPLAINT

Plaintiff Securities and Exchange Commission alleges as follows:

I. INTRODUCTION

1. The Commission brings this action to restrain and enjoin Defendant Michael J.

McNerney, the former attorney for Mutual Benefits Corporation, from violating the federal

securities laws. This action arises from the massive offering fraud MBC and its principals

conducted that bilked at least $1 billion from more than 30,000 investors worldwide. From late

1994 through the date of the Commission's emergency action against MBC in May 2004, the

Company offered unregistered securities in the form of fractional interests in discounted life

insurance policies known as viatical settlements.

2. In connection with the sale of these securities, MBC and its principals made

numerous misrepresentations and omissions to investors about, among other things, the

profitability and rates of maturity of the policies, the process by which life expectancies on the

policies were determined, the use of investor proceeds, and the disciplinary histories of MBC's

Case 1:12-cv-21627-XXXX Document 1 Entered on FLSD Docket 04/30/2012 Page 1 of 11










IV.

Retention of Jurisdiction

Further, the Commission respectfully requests that the Court retain jurisdiction over this

action in order to implement and carry out the terms ofall orders and decrees that it may enter, or

to entertain any suitable applicationor motion by the Commission for additional relief within the

jurisdiction of this Court.

April 30, 2012 By:

Respectfully submitted,

Robert K. Levenson ô

Regional Trial CounselFlorida Bar No. 0089771

Direct Dial: (305)982-6341E-mail: levensonr(a),sec.gov

Amie Riggle BerlinSenior Trial Counsel

Fla. Bar No. 0630020

Direct Dial: (305)982-6322

Linda S. Schmidt

Senior Counsel

Florida Bar No. 0156337

Direct Dial: (305) 982-6315

Attorneys for PlaintiffSECURITIES AND EXCHANGE

COMMISSION

801 Brickell Avenue, Suite 1800Miami, Florida 33131Telephone: (305) 982-6300Facsimile: (305)536-4154

11


js44 (Rev 09..) CIVIL COVER SHEET

The JS 44civil cover sheet and the information contained herein neither replace nor supplement the filing and service ofpleadings orotherpapersasrequired bylaw, except asprovidedby local rules ofcourt This form, approved by the Judicial Conference ofthe United States in September 1974, isrequired for the use ofthe Clerk ofCourt for the purpose ofinitiatingthe civil docket sheet. (SEEINSTRUCTIONS ONNEXTPAGE OF THIS FORM.)

I. (a) PLAINTIFFSSECURITIES AND EXCHANGE COMMISSION

(b) County of Residence of First Listed Plaintiff

DEFENDANTS

McNERNEY, MICHAEL J.

County of Residence of FirstListed Defendant Miami-Dade(EXCEPTIN U.S. PUINTIFF CASES)

NOTE:

(IN U.S. PUINTIFF CASESONLY)

IN LAND CONDEMNATION CASES. USE THE LOCATION OFTHE TRACT OF LAND INVOLVED.

(C) Attorneys (Firm Name. Address, andTelephone Number) . . .Robert K/Levenson, Secunties and Exchange Commission, 801 BnckellAvenue, Suite 1800, Miami, FL 33131, 305-982-6322

Attorneys (IfKnown)

II. BASIS OF JURISDICTION (Place an "X" inOne Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Placean "X"inOneBoxforPlain,i3(ForDiversity ('ases Only) andOneBoxfor Defendant)

PTF DEF PTF DEF

Citizenof This State 0 I K I Incorporated or Principal Place 0 4 0 4ofBusiness In This State

OC I U.S. GovernmentPlaintiff

O 2 U.S. Government

Defendant

0 3 Federal Question(U.S. GovernmentNot a Party)

O 4 Diversity(Indicate C'itizenshipofParties in ItemIII)

Citizen ofAnother State

Citizen or Subject ofaForeign Country

O 2 O 2 Incorporatedand Principal Placeof Business In Another State

O 3 O 3 Foreign Nation

a 5 a 5

O 6 0 6

IV. NATURE OF SUIT (Place an "X"in One Box Only)h-%~-.SE7GONTRAGFJ..-?-.'CS^5 vzt.^ûs-s .• :-.::.34roRTS«ce-ir-iv-zê.:;^'.:. f^TORITCITORE/PENAIiTY - j I UL BANKMJETCK^ - OTHER STATUTES: 1

O 110 Insurance PERSONAL INJURY PERSONAL INJURY 0 625 Drug Related Seizure 0 422 Appeal 28 USC 158 0 375 False Claims Act

O 120 Marine 0 310 Airplane 0 365 Personal Injury - of Property 21 USC88I O 423 Withdrawal 0 400 State Reapportionment

• 130 Miller Act O 315 Airplane Product Product Liability 0 690 Other 28 USC 157 0 410 Antitrust

O 140Negotiable Instrument Liability• 320 Assault, Libel &

0 367 Health Care/

Pharmaceutical

0 430 Banks and Banking

0 150 Recovery ofOverpayment PROPERTY RIGHTS* 0 450 Commerce

& Enforcement ofJudgment Slander Personal Injury O 820 Copyrights 0 460 Deportation

0 IS1 Medicare Act O 330 Federal Employers' Product Liability O 830 Patent 0 470 Racketeer Influenced and

O 152Recovciy ofDefaulted Liability 0 368 Asbestos Personal 0 840 Trademark Corrupt Organizations

Student Loans • 340 Marine

• 345 Marine Product

Liability

Injury ProductLiability

PERSONAL PROPERTY

O 480 Consumer Credit

(Excl. Veterans) c-»r/^v f^ EABOR raar:^-' i tCSOGIAKSEGURITY S O 490 Cable/Sat TV

0 153 Recovery ofOverpayment 0 710 Fair Labor Standards 0 861 HIA( 1395ff) H 850 Securities/Commodities/

ofVeteran's Benefits 0 350 Motor Vehicle O 370 Other Fraud Act 0 862 Black Lung (923) Exchange

0 160 Stockholders'Suits 0 355 Motor Vehicle 0 371 Truth in Lending 0 720 Labor/Mgmt. Relations O 863 DIWC/DIWW (405(g)) 0 890 Other Statutory Actions

O 190 Other Contract Product Liability O 380 Other Personal 0 740 Railway Labor Act 0 864 SSID Title XVI 0 891 Agricultural Acts

O 195Contract Product Liability 0 360 Other Personal Property Damage 0 751 Family and Medical 0 865 RSI (405(g)) 0 893 Environmental Matters

0 196 Franchise Injury 0 385 Property Damage Leave Act 0 895 Freedom of Information

0 362 Personal Injury - Product Liability 0 790 Other Labor Litigation Act

Med. Malpractice O 791 Empl. Ret. Inc.Security Act

0 896 Arbitration

vmMwsmsBROVEKmmm £E3CIWIilUGHTS!^3S.^ EERISONERPJCTITIONSC jD^FEDERMiasecsurrs^ 0 899 Administrative Procedure

0 210 Land Condemnation 0 440 Other Civil Rights 0 510 Motions to Vacate 0 870 Taxes (U.S. Plaintiff Act/Review or Appeal of

0 220 Foreclosure 0 441 Voting Sentence or Defendant) Agency Decision

0 230 Rent Lease & Ejectment 0 442 Employment Habeas Corpus: 0 871 IRS—Third Party 0 950 Constitutionality of0 240 Torts to Land 0 443 Housing/

Accommodations

0 445 Amer. w/Disabilities -

0 530 General

O 535 Death Penalty0 540 Mandamus & Other

26 USC 7609 State Statutes

O 245 Tort Product Liability >^z3WimGRxnomzi^0 290 All Other Real Property 0 462 Naturalization Application

Employment 0 550 Civil Rights 0 463 Habeas Corpus -0 446 Amer. w/Disabilities - 0 555 Prison Condition Alien Detainee

Other 0 560 Civil Detainee - (Prisoner Petition)

0 448 Education Conditions of

Confinement

0 465 Other ImmigrationActions

V. ORIGIN (Place an "X" inOne Box Only)Gf1 Original O 2 Removed from O 3 Remanded from O 4 Reinstated or

Proceeding State Court Appellate Court Reopeneda 5

Transferred fromanother district(specify)

O 6 MultidistrictLitigation

VI. CAUSE OF ACTION

VII. REQUESTED INCOMPLAINT:

Cite the U.S. Civil Statute under which you are filing (Donotcitejurisdictionalstatutes unless diversity):,ile the U.S. Civil statute under wnicn you are tiling15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5

Brief description ofcause:Aiding and abetting Section 10(b) of the Securities & Exchange Act of 1934 & Rule 10b-5 thereunder

O CHECK IF THIS IS A CLASS ACTIONunder FRCP. 23 Perm In]

DEMAND S CHECK YES only ifdemanded in complaint:

JURY DEMAND: O Yes ECNo

VIII. RELATED CASE(S)IF ANY

(See instructions):judge |_jon- Federico A. Moreno DOCKET NUMBER 04-cv-60573

DATE SIGNATURE OF ATTORNEYjDF RECORD

«K<w^FOR OFFICE USE ONLY

RECEIPT* AMOUNT APPLYING 1FP JUDGE MAG. JUDGE

Case 1:12-cv-21627-XXXX Document 1-1 Entered on FLSD Docket 04/30/2012 Page 1 of 2


AO 440 (Rev. 12/09) Summons in a Civil Action

UNITED STATES DISTRICT COURTfor the

__________ District of __________

)))))))

Plaintiff

v. Civil Action No.

Defendant

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address)

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if youare the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 ofthe Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney,whose name and address are:

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.

CLERK OF COURT

Date:Signature of Clerk or Deputy Clerk


AO 440 (Rev. 12/09) Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE

(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

’ I personally served the summons on the individual at (place)

on (date) ; or

’ I left the summons at the individual’s residence or usual place of abode with (name)

, a person of suitable age and discretion who resides there,

on (date) , and mailed a copy to the individual’s last known address; or

’ I served the summons on (name of individual) , who is

designated by law to accept service of process on behalf of (name of organization)

on (date) ; or

’ I returned the summons unexecuted because ; or

’ Other (specify):

.

My fees are $ for travel and $ for services, for a total of $ .

I declare under penalty of perjury that this information is true.

Date:Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:


Documents

UNITED STATES DISTRICTCOURT SOUTHERN DISTRICTOF … · 0 196 Franchise Injury 0 385 Property Damage Leave Act 0 895 Freedom ofInformation 0 362 Personal Injury- ProductLiability 0