Securities and Exchange Commission v. Harrison Schumacher et al

Filing 45

STIPULATED PRELIMINARY INJUNCTION ORDER by Judge Dean D. Pregerson. (SEE DOCUMENT FOR FURTHER DETAILS) (vv)

CHARLES D. STODGHILL
Email: [e-mail]
MATTHEW F. SCARLATO
Email: [e-mail]
100 F Street, NE
Washington, DC 20549
Tel: [phone] (Stodghill)
Tel: [phone] (Scarlato)
Fax: [phone]
LOCAL COUNSEL:
KRISTIN ESCALANTE, Cal. Bar No. 169635
Email: [e-mail]
444 S. Flower Avenue, 9th Floor
Los Angeles, CA 90071
Telephone: [phone]
Attorneys for Plaintiff
Securities and Exchange Commission
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

Case No. 2:15-06388-DDP (RAOx)
STIPULATED PRELIMINARY
INJUNCTION ORDER

vs.
HARRISON SCHUMACHER; PAUL
MYSYK; QUANECO, LLC; and
QUANTUM ENERGY, LLC,
Defendants, and
QUANECO ENERGY HOLDINGS,
LLC; FAT CHANCE OIL & GAS;
ANV, LLC; and TARA
SCHUMACHER,
Relief Defendants.

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Plaintiff Securities and Exchange Commission (“SEC”) and Defendants
Harrison Schumacher (“Schumacher”), Quantum Energy LLC (“Quantum”), and
Quaneco, LLC (“Quaneco;” collectively, “Defendants”) hereby consent and stipulate
to the preliminary injunction provided for below pursuant to Rule 65(b) of the
Federal Rules of Civil Procedure, and Section 20(b) of the Securities Act of 1933
(“Securities Act”), 15 U.S.C. § 77t(b).
The entry of this Stipulated Preliminary Injunction is without prejudice to the
SEC moving in the future for additional preliminary relief, to Defendants moving in
the future to vacate or modify this Stipulated Preliminary Injunction, or to further
stipulations of the parties. No issue of fact is resolved by the entry of this Stipulated
Preliminary Injunction. No admission of wrongdoing is admitted or implied.
With these understandings, the parties stipulate and consent to the following
Stipulated Preliminary Injunction.
I.
IT IS HEREBY ORDERED that the Defendants, and their officers, agents,
servants, employees, attorneys, subsidiaries and affiliates, and those persons in active
concert or participation with any of them who receive actual notice of this Order, by
personal service or otherwise, and each of them, be and hereby are restrained and
enjoined from, directly or indirectly, in the absence of any applicable exemption:
A.

unless a registration statement is in effect as to a security, making use of
any means or instruments of transportation or communication in
interstate commerce or of the mails to sell such security through the use
or medium of any prospectus or otherwise;

B.

unless a registration statement is in effect as to a security, carrying or
causing to be carried through the mails or in interstate commerce, by any
means or instruments of transportation, any such security for the purpose
of sale or for delivery after sale; or

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C.

making use of any means or instruments of transportation or
communication in interstate commerce or of the mails to offer to sell or
offer to buy through the use or medium of any prospectus or otherwise
any security, unless a registration statement has been filed with the SEC
as to such security, or while the registration statement is the subject of a
refusal order or stop order or (prior to the effective date of the
registration statement) any public proceeding or examination under
Section 8 of the Securities Act, 15 U.S.C. § 77h

in violation of Section 5 of the Securities Act, 15 U.S.C. § 77e.
II.
IT IS FURTHER ORDERED that the Defendants, and their officers, agents,
servants, employees, attorneys, subsidiaries and affiliates, and those persons in active
concert or participation with any of them, who receive actual notice of this Order, by
personal service or otherwise, and each of them, be and hereby are restrained and
enjoined from, directly or indirectly, in the offer or sale of any securities, by the use of
any means or instruments of transportation or communication in interstate commerce
or by the use of the mails:
A.

employing any device, scheme or artifice to defraud;

B.

obtaining money or property by means of any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading; or

C.

engaging in any transaction, practice, or course of business which
operates or would operate as a fraud or deceit upon the purchaser;

in violation of Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).
III.
IT IS FURTHER ORDERED that the Defendants, and their officers, agents,
servants, employees, attorneys, subsidiaries and affiliates, and those persons in active
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concert or participation with any of them, who receive actual notice of this Order, by
personal service or otherwise, and each of them, be and hereby are restrained and
enjoined from, directly or indirectly, in connection with the purchase or sale of any
security, by the use of any means or instrumentality of interstate commerce, or of the
mails, or of any facility of any national securities exchange:
A.

employing any device, scheme or artifice to defraud;

B.

making any untrue statement of a material fact or omitting to state a
material fact necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading; or

C.

engaging in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person;

in violation of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5
thereunder, 17 C.F.R. § 240.10b-5.
IV.
IT IS FURTHER ORDERED that Schumacher, and his officers, agents,
servants, employees, attorneys, subsidiaries and affiliates, and those persons in active
concert or participation with him, who receive actual notice of this Order, by personal
service or otherwise, and each of them, be and hereby is restrained and enjoined from,
directly or indirectly, from acting as an unregistered broker in violation to Section
15(a) of the Exchange Act, 15 U.S.C. § 78o(a).
V.
IT IS HEREBY FURTHER ORDERED that the Defendants, and each of their
agents, servants, employees and attorneys and those persons in active concert or
participation with them who receive actual notice of this Order by personal service or
otherwise, including facsimile transmission, electronic mail, or overnight delivery
service, are hereby prohibited from soliciting, accepting, or depositing any monies
from actual or prospective investors in connection with any offering of securities.

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VI.
IT IS FURTHER ORDERED that, except as otherwise ordered by this Court,
the Defendants, and their officers, agents, servants, employees, attorneys, subsidiaries
and affiliate, and those persons in active concert with them, who receive actual notice
of this Order, by personal service or otherwise, and each of them, be and hereby are
restrained and enjoined from, directly or indirectly, transferring, assigning, selling,
hypothecating, changing, wasting, dissipating, converting, concealing, encumbering,
or otherwise disposing of, in any manner, any funds, assets, securities, claims or other
real or personal property, including any notes or deeds of trust or other interest in real
property, wherever located, of Defendants Quantum and Quaneco, or their
subsidiaries or affiliates, owned by, controlled by, managed by or in the possession or
custody of any of them and from transferring, encumbering dissipating, incurring
charges or cash advances on any debit or credit card of the credit arrangement of
Defendants Quantum and Quaneco, or their subsidiaries and affiliates.
VII.
IT IS FURTHER ORDERED that, except as otherwise ordered by this Court,
an immediate freeze shall be placed on all monies and assets (with an allowance for
necessary and reasonable living expenses to be granted only upon good cause shown
by application to the Court with notice to and an opportunity for the SEC to be heard)
in all accounts at any bank (including, without limitation, Wells Fargo), financial
institution or brokerage firm or Internet or “e-commerce” payment processor, all
certificates of deposit, and other funds or assets, held in the name of, for the benefit
of, or over which account authority is held by the Defendants, including but not
limited to the accounts listed below:

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Bank Name

Account Name

Account
Number

Wells Fargo

Quantum Energy LLC Revenue Account

xxxxxx4619

Wells Fargo

Director, Office of State Lands, Fbo Quest

xxxxxx9099

Operating, LLC
Wells Fargo

Quantum Energy LLC Operating Account

xxxxxx 2888

Wells Fargo

Quantum Energy LLC Main Account

xxxxxx 2896

Wells Fargo

ANV, LLC

xxxxxx 2920

Wells Fargo

Fat Chance Oil and Gas LLC

xxxxxx 0780

Wells Fargo

Quaneco Energy Holdings, LLC

xxxxxx5604

Wells Fargo

Quaneco, LLC Operating Account

xxxxxx2813

Wells Fargo

Quantum Energy LLC General Account

Xxxxxx2904

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This preliminary injunction does not apply to any gifts of money or personal property
Mr. Schumacher receives from family or friends for necessary and reasonable living
expenses or attorneys’ fees, and Mr. Schumacher may open up a bank account to
receive these funds. Provided, however, that Mr. Schumacher may not accept any
gifts of money or personal property that are derived from funds obtained from any of
the other Defendants named in this Order or entities controlled by said Defendants.
VIII.
IT IS FURTHER ORDERED that, except as otherwise ordered by this Court,
each of the Defendants, and their officers, agents, servants, employees, attorneys,
subsidiaries and affiliates, and those persons in active concert or participation with
any of them, who receive actual notice of this Order, by personal service or
otherwise, and each of them, be and hereby are restrained and enjoined from, directly
or indirectly: destroying, mutilating, concealing, transferring, altering, or otherwise
disposing of, in any manner, any documents, which includes all books, records,
computer programs, computer files, computer printouts, contracts, emails,
correspondence, memoranda, brochures, or any other documents of any kind in their
possession, custody or control, however created, produced, or stored (manually,
mechanically, electronically, or otherwise), pertaining in any manner to the
Defendants.

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IX.
IT IS FURTHER ORDERED that the time periods, notice provisions, and
other requirements of Rules 26, 30, 33, 34, 36 and 45 of the Federal Rules of Civil
Procedure and the corresponding Local Rules of this Court shall apply to all parties in
this matter following entry of this Order.
X.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction over this
action for the purpose of implementing and carrying out the terms of all orders and
decrees which may be entered herein and to entertain any suitable application or
motion for additional relief within the jurisdiction of this Court.

IT IS SO ORDERED.

Dated: December 08, 2015

________________________________
UNITED STATES DISTRICT JUDGE

Presented by:
Charles D. Stodghill
Matthew F. Scarlato
Attorney for Plaintiff
Securities and Exchange Commission
James W. Spertus
Attorney for Defendants

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