Securities and Exchange Commission v. Justin Moongyu Lee et al

Filing 11

JUDGMENT by Judge R. Gary Klausner, in favor of Securities and Exchange Commission against Thomas Edward Kent. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and Defendants agents, servants, employees, attorneys, and all persons in activ e concert or participation with them who receive actual notice of this Judgment by personal service or otherwise are permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the Securities Act), 15 U.S.C. § 77q(a), in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: to employ any device, scheme, or artifice to defraud; to o btain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (See order for further details). (shb)

KAREN MATTESON (Cal.
1 Email: [e-mail] Bar No. 102103)
2 CAROL W. LALLY (Cal. Bar No. 226392)
Email: [e-mail]
3 Attorneys for Plaintiff
4 Securities and Exchange Commission
Michele Wein Layne, Regional Director
Echavarria, Associate Regional
5 Lorraine Berry, Regional Trial Counsel Director
John W.
Suite
6 444 South Flower Street,90071 900
Los Angeles, California
[phone]
7 Telephone:[phone]
Facsimile:
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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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WESTERN DIVISION

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SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

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Case No. 2:14-cv-06865 RGK (Ex)
JUDGMENT AS TO DEFENDANT
THOMAS EDWARD KENT

vs.
JUSTIN MOONGYU LEE;
REBECCA TAEWON LEE;
THOMAS EDWARD KENT;
AMERICAN IMMIGRANT
INVESTMENT FUND I, LLC;
BIOFUEL VENTURE IV, LLC;
BIOFUEL VENTURE V, LLC;
NEXLAND, INC., dba NEXLAND
INVESTMENT GROUP; and
NEXSUN ETHANOL, LLC,
Defendants.

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The Securities and Exchange Commission having filed a Complaint and

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the Court’s jurisdiction over Defendant and the subject matter of this action;

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consented to entry of this Judgment without admitting or denying the allegations of

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the Complaint (except as to jurisdiction and except as otherwise provided herein in

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paragraph V); waived findings of fact and conclusions of law; and waived any right

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to appeal from this Judgment:

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I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant

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and Defendant’s agents, servants, employees, attorneys, and all persons in active

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concert or participation with them who receive actual notice of this Judgment by

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personal service or otherwise are permanently restrained and enjoined from violating

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Section 17(a) of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77q(a),

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in the offer or sale of any security by the use of any means or instruments of

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transportation or communication in interstate commerce or by use of the mails,

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directly or indirectly:

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(a)

to employ any device, scheme, or artifice to defraud;

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(b)

to obtain money or property by means of any untrue statement of a

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material fact or any omission of a material fact necessary in order to

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make the statements made, in light of the circumstances under which

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they were made, not misleading; or

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(c)

to engage in any transaction, practice, or course of business which
operates or would operate as a fraud or deceit upon the purchaser.
II.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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and Defendant’s agents, servants, employees, attorneys, and all persons in active

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concert or participation with them who receive actual notice of this Judgment by

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personal service or otherwise are permanently restrained and enjoined from violating,

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directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the

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“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder,
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17 C.F.R. § 240.10b-5, by using any means or instrumentality of interstate commerce,

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or of the mails, or of any facility of any national securities exchange, in connection

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with the purchase or sale of any security:

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(a)

to employ any device, scheme, or artifice to defraud;

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(b)

to make any untrue statement of a material fact or to omit to state a

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material fact necessary in order to make the statements made, in the light

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of the circumstances under which they were made, not misleading; or

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(c)

to engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person.
III.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil

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penalty pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and

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Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). The Court shall

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determine the amounts of the disgorgement and civil penalty upon motion of the

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Commission. Prejudgment interest shall be calculated from April 30, 2011, based on

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the rate of interest used by the Internal Revenue Service for the underpayment of

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federal income tax as set forth in 26 U.S.C. § 6621(a)(2). In connection with the

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Commission’s motion for disgorgement and/or civil penalties, and at any hearing held

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on such a motion: (a) Defendant will be precluded from arguing that he did not

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violate the federal securities laws as alleged in the Complaint; (b) Defendant may not

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challenge the validity of the Consent or this Judgment; (c) solely for the purposes of

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such motion, the allegations of the Complaint shall be accepted as and deemed true

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by the Court; and (d) the Court may determine the issues raised in the motion on the

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basis of affidavits, declarations, excerpts of sworn deposition or investigative

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testimony, and documentary evidence, without regard to the standards for summary

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judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure. In

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connection with the Commission’s motion for disgorgement and/or civil penalties,
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the parties may take discovery, including discovery from appropriate non-parties.

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IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the

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Consent is incorporated herein with the same force and effect as if fully set forth

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herein, and that Defendant shall comply with all of the undertakings and agreements

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set forth therein.

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V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for

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purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code,

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11 U.S.C. § 523, the allegations in the Complaint are true and admitted by Defendant,

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and further, any debt for disgorgement, prejudgment interest, civil penalty or other

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amounts due by Defendant under this Judgment or any other judgment, order, consent

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order, decree or settlement agreement entered in connection with this proceeding, is a

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debt for the violation by Defendant of the federal securities laws or any regulation or

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order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy

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Code, 11 U.S.C. § 523(a)(19).

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VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court

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shall retain jurisdiction of this matter for the purposes of enforcing the terms of this

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Judgment.

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VII.

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There being no just reason for delay, pursuant to Rule 54(b) of the Federal

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Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and

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without further notice.

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Dated: October 15, 2014

_______________________________
HONORABLE R. GARY KLAUSNER
UNITED STATES DISTRICT JUDGE

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